ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

 

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF

THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED

SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION

 

Execution Copy

 

ASSET PURCHASE AGREEMENT

 

BY AND BETWEEN

 

SAVIENT PHARMACEUTICALS, INC.

 

and

 

INDEVUS PHARMACEUTICALS, INC.

 

DECEMBER 12, 2005

TABLE OF CONTENTS

 

 

i

Table of Contents

(continued)

 

 

ii

Table of Contents

(continued)

 

 

iii

 

iv

ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (the “Agreement”) is entered into as of December 12, 2005 by and between SAVIENT PHARMACEUTICALS, INC., a Delaware corporation (the “Seller”), and INDEVUS PHARMACEUTICALS, INC., a Delaware corporation (the “Buyer”). The Seller and the Buyer are referred to collectively herein as the “Parties.”

 

INTRODUCTION

 

The Seller is engaged, among other matters, in the business of manufacturing, marketing and selling an injectable testosterone product known as the Delatestryl ^® product (such business being referred to as the “Product Operations”); and

 

The Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, the Seller’s right, title and interest in and/or the right to use the Acquired Assets (as defined below), subject to the assumption by the Buyer of the Assumed Liabilities (as defined below), upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

 

ARTICLE I–

DEFINITIONS

 

1.1 Definitions .

 

Whenever used in this Agreement, the terms defined below shall have the indicated meaning:

 

“ Acquired Assets ” shall have the meaning set forth in Section 2.1(a).

 

“ Act ” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 321, et seq., as amended, and the rules and regulations promulgated thereunder.

 

“ Agreed Amount ” shall have the meaning set forth in Section 7.3(b).

 

“ Agreement ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Affiliate ” means, with respect to any Person, any Person which directly or indirectly through stock ownership or otherwise either controls, or is controlled by or under common control with, such Person.

 

“ Ancillary Agreements ” shall have the meaning set forth in Section 2.3(b).

 

“ Applicable Permits ” shall have the meaning set forth in Section 3.10.

“ Assigned Contracts ” shall have the meaning set forth in Section 2.1(a)(ii).

 

“ Assumed Liabilities ” shall have the meaning set forth in Section 2.1(c).

 

“ Assumption Agreement ” shall have the meaning set forth in Section 2.3(b)(v).

 

“ Business Day ” means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in New York, New York are permitted or required by law, executive order or governmental decree to remain closed.

 

“ Buyer ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Buyer Certificate ” shall have the meaning set forth in Section 6.2(d).

 

“ Buyer Indemnitees ” shall have the meaning set forth in Section 7.1.

 

“ Buyer Material Adverse Effect ” means any change, effect or circumstance that, individually or in the aggregate (unless otherwise noted), (a) is materially adverse to the business, financial condition or results of operations of the Buyer taken as a whole (other than changes, effects or circumstances that are the result of economic factors affecting the economy as a whole or that are the result of factors generally affecting the industry or specific markets in which the Buyer competes which factors do not materially disproportionately affect the Buyer) or (b) materially impairs the ability of the Buyer to consummate the transactions contemplated by this Agreement; provided , however , that a “Buyer Material Adverse Effect” shall not include any adverse change, effect or circumstance (i) arising out of or resulting from acts or omissions by the Buyer as contemplated by or pursuant to this Agreement, (ii) arising out of or resulting from acts or omissions of the Seller, including without limitation acts or omissions contemplated by or pursuant to this Agreement, or (iii) that is attributable to the announcement or performance of this Agreement or the transactions contemplated by this Agreement.

 

“ Change in Control ” means the consolidation, merger or other business combination (including, without limitation, a reorganization or recapitalization) of the Buyer with or into another Person (other than (A) a consolidation or merger or other business combination (including, without limitation, a reorganization or recapitalization) in which holders of the Buyer’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, at least 50% of the voting power of the capital stock of the surviving entity or entities, or (B) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Buyer).

 

“ Claim Notice ” shall have the meaning set forth in Section 7.3(b).

 

“ Claimed Amount ” shall have the meaning set forth in Section 7.3(b).

 

“ Closing ” shall have the meaning set forth in Section 2.3(a).

 

“ Closing Date ” means the date two Business Days after the satisfaction or waiver of all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby (excluding the delivery at the Closing of any of the documents set forth in Article VI).

 

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“ Closing Date Trade Inventory Days Adjustment ” means the number of days by which the Trade Inventory Days as of the Closing Date is less than or greater than thirty-four (34), as applicable, multiplied by [*] .

 

“ Closing Date Trade Inventory Statement ” shall have the meaning set forth in Section 2.5.

 

“ Closing Product Inventory ” means all of the Delatestryl ^® Vials owned by the Seller and stored at warehouses or distribution centers of [*] or [*], on the Closing Date, excluding Delatestryl ^® Vials that as of the Closing Date constitute Delatestryl ^® Product that has been returned.

 

“ Competing Product ” means any injectable dosage form of testosterone comprising 200 mg/ml available in a 5 ml multi-dose vial.

 

“ Confidentiality Agreement ” shall have the meaning set forth in Section 5.3(a).

 

“ CSA ” means the Controlled Substances Act, Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970.

 

“ Damages ” shall have the meaning set forth in Section 7.1.

 

“ DEA ” means the United States Drug Enforcement Administration.

 

“ Deferred Payment Period ” shall have the meaning set forth in Section 2.4(a).

 

“ Delatestryl ^® Net Sales ” means the excess of (a) the gross amount invoiced by the Buyer or its subsidiaries or Affiliates from or on account of sales or other dispositions of any Delatestryl ^® Product over (b) any Delatestryl ^® Net Sales Deductions. Delatestryl ^® Net Sales shall not result from any transfer among the Buyer and any of its subsidiaries or Affiliates for resale, but shall result from the resale by the subsidiary or Affiliate. Delatestryl ^® Net Sales shall be determined by Buyer in accordance with GAAP and at the time such sales are recognized as revenue by Buyer.

 

“ Delatestryl ^® Net Sales Deductions ” means, with respect to invoiced sales of Delatestryl ^® Product:

 

(i) normal, customary, cash, quantity, trade or other negotiated discounts (including volume discounts) actually given or made;

 

(ii) amounts actually paid, repaid or credited (a) for credits, charge backs, reductions or rebates (including rebates to governmental agencies or commercial buying groups), or (b) by reason of rejections, recalls, outdated products or returns (including allowance for breakage or spoilage);

 

(iii) retroactive price reductions;

 

[*]	CONFIDENTIAL TREATMENT REQUESTED

 

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(iv) sales, excise taxes, or other taxes, custom duties, and other governmental charges, and freight, shipping and shipping insurance charges; and

 

(v) allowances for bad debts and unpaid accounts in respect of the sale of Delatestryl ^® Product and reflected on the Buyer’s financial statements, provided , however , that any such allowance that is adjusted shall be reflected in the next Delatestryl ^® Net Sales Statement, and a corresponding adjustment shall be made to the next Delatestryl ^® Net Sales Statement if any such underlying invoice is subsequently paid.

 

“ Delatestryl ^® Net Sales Statement ” shall have the meaning set forth in Section 2.4(b).

 

“ Delatestryl ^® Product ” means the injectable testosterone product used to treat men with hypogonadism (testosterone deficiency) currently sold by the Seller under the name Delatestryl ^® and referenced in the NDA. For purposes of Delatestryl ^® Net Sales, “Delatestryl ^® Product” shall also include any other product marketed by or on behalf of Buyer under the Delatestryl ^® trademark.

 

“ Delatestryl ^® Vial ” means the injectable dose of Delatestryl ^® (200 mg/ml available in a 5 ml multi-dose vial) as approved in the NDA.

 

“ Designated Intellectual Property ” shall have the meaning set forth in Section 3.6(a).

 

“ DMF ” shall mean a Drug Master File as defined in 21 CFR § 314.420, including all amendments thereto.

 

“ Environmental Laws ” means all Laws relating to protection of human health and protection of the environment, air, water, or land, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any so-called “Superfund” or “Superlien” Law (including those already referenced in this definition) and any other Law having a similar subject matter.

 

“ Excluded Assets ” shall have the meaning set forth in Section 2.1(b).

 

“ Excluded Contract ” means any oral or written contract, commitment, purchase order, lease, note or other agreement to which Seller is a Party, other than the Assigned Contracts.

 

“ Excluded Records ” means all records related to (i) human resources and any other employee-related files and records, (ii) financial and accounting records not related to the Product Operations, (iii) tax files, documents, instruments, papers, books or records not related to the Product Operations, and (iv) the filing, prosecution, issuance, maintenance, enforcement or defense of any intellectual property rights not included in the Designated Intellectual Property.

 

“ Excluded Liabilities ” shall have the meaning set forth in Section 2.1(d).

 

“ Financial Information ” shall have the meaning set forth in Section 3.21.

 

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“ FDA ” shall have the meaning set forth in Section 2.1(a)(i).

 

“ FDA Approval ” means the definitive approval, clearance or authorization of the FDA that allows Seller to make, sell, promote, market and distribute the Delatestryl ^® Product for therapeutic use in humans on a lawful and commercial basis in the United States.

 

“ GAAP ” means generally accepted accounting principles as used in the United States of America, consistently applied.

 

“ Good Practices ” means compliance in all material respects with the applicable requirements contained in “Good Laboratory Practices,” “Investigational New Drug”, “Good Clinical Practices,” “New Drug, and/or “current Good Manufacturing Practices” regulations as promulgated by the FDA.

 

“ Governmental Authority ” means any governmental department, commission, board, bureau, agency, court or other instrumentality of the United States, or any state, county, jurisdiction, municipality or other political subdivision thereof.

 

“ Governmental Filings ” shall have the meaning set forth in Section 5.1.

 

“ Indemnified Party ” shall have the meaning set forth in Section 7.3(a).

 

“ Indemnifying Party ” shall have the meaning set forth in Section 7.3(a).

 

“ Information ” shall have the meaning set forth in Section 9.1(a).

 

“ Intangible Property Rights ” shall mean those set forth in Section 2.1(a)(iv).

 

“ Inventory Transition Period ” shall have the meaning set forth in Section 9.2(a).

 

“ Knowledge of the Seller ” shall have the meaning set forth in Article III.

 

“ Knowledge of the Buyer ” shall have the meaning set forth in Article IV.

 

“ Law ” means any federal, state, local or foreign law, statute or ordinance, or any rule, regulation or regulatory requirement promulgated by any Governmental Authority.

 

“ Letters of Authorization ” means letters of authorization duly executed by the holders of the DMFs set forth on Schedule 1.1 and any other DMFs referenced or which are required to be referenced in the NDA, in each case authorizing Buyer the right to reference in the NDA such DMFs.

 

“ Lien ” means any lien, charge, claim, pledge, security interest, conditional sale agreement or other title retention agreement, lease, mortgage, security agreement, right of first refusal, option, restriction, license, covenant, or other encumbrance (including the filing of, or agreement to give any financing statement under the Uniform Commercial Code or statute or law of any jurisdiction), other than (i) mechanic’s, materialmen’s, and similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social security, retirement, and similar legislation and (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business of the Seller and not material to the Seller.

 

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“ Medical Product Regulatory Authority ” means any Governmental Authority that regulates the safety, efficacy, reliability, manufacture, investigation, sale or marketing of pharmaceuticals, medical products, biologics or biopharmaceuticals, including, without limitation, the FDA and the DEA.

 

“ NDA Filing Date ” shall have the meaning set forth in Section 3.5(a).

 

“ NDA ” shall have the meaning set forth in Section 2.1(a)(i).

 

“ NDC Number ” means a National Drug Code number, as listed with the FDA.

 

“ NDA Transfer Letter ” shall have the meaning set forth in Section 2.1(e).

 

“ Net Sales Deferred Payments ” shall have the meaning set forth in Section 2.4(a).

 

“ Ordinary Course of Business ” means an action that is in compliance with applicable Laws and is consistent in nature, scope and magnitude with the past practices of Seller and its Affiliates with respect to the Product Operations.

 

“ Parties ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Person ” means an individual, a corporation, a limited liability company, a partnership, an association, a trust or other entity or organization, including a federal, state, local or foreign government or regulatory entity or political subdivision or an agency or instrumentality thereof.

 

“ Product Operations ” shall have the meaning set forth in the Introduction.

 

“ Product Records ” means all of the records (or portions thereof) relating exclusively to the Delatestryl ^® Product or the Product Operations, including all files (including all electronic data files), documents, correspondence, lists (including customer lists), drawings and specifications, marketing plans, studies (including market research and market data), pre-clinical and clinical data, regulatory and other reports (including pharmacovigilance reports), and other printed or written materials of or relating to the Product Operations held by Seller (in whatever form or medium), including (i) any correspondence with any Governmental Authority related to the use, development, marketing, distribution or sale of the Delatestryl ^® Product (including any information on adverse events, written contact regulatory reports and formal minutes with any Governmental Authority), and (ii) any documents relating to the Registrations or to the subject matter of the Registrations, in each case, for the period commencing no later than January 1, 2000, that are licensed, owned or controlled by or otherwise in the possession of Seller and except to the extent included in or primarily related to any Excluded Assets or Excluded Liabilities and excluding the Excluded Records.

 

“ Purchase Price ” shall have the meaning set forth in Section 2.2(a).

 

“ Quarter ” shall have the meaning set forth in Section 2.4(b).

 

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“ Rebate Charges ” means amounts claimed by or under Medicaid, state rebate programs, federal government rebate programs, pharmaceutical benefit management organizations, managed care organizations and other Persons (collectively, “Rebate Parties”) as rebates under contracts between the Rebate Parties and the Seller (it being agreed that, with respect to Medicaid and state rebate programs, such amounts shall be limited to claims with respect to the Seller’s NDC Number).

 

“ Registrations ” means (i) the approvals or registrations which have been received by Seller before the Closing Date, for the investigation, sale, distribution and/or marketing of the Delatestryl ^® Product and relating to the Product Operations (including any NDAs), and (ii) all reports, data and other written materials filed as part of such approvals or registrations, or maintained by Seller and relating to such approvals or registrations.

 

“ Scientific Data ” shall have the meaning set forth in Section 3.16(a).

 

“SEC” means the Securities and Exchange Commission.

 

“ Seller ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Seller Certificate ” shall have the meaning set forth in Section 6.1(d).

 

“ Seller’s Disclosure Schedule ” shall have the meaning set forth in Article III.

 

“ Seller Indemnitees ” shall have the meaning set forth in Section 7.2.

 

“ Seller Material Adverse Effect ” shall have the meaning set forth in Section 3.1.

 

“ Seller’s NDC Number ” means the NDC Number that has been used by Seller in connection with the Delatestryl ^® Product prior to Closing.

 

“ Specifications ” shall have the meaning set forth in Section 3.15.

 

“ Taxes ” (and with correlative meanings, “ Tax ” and “ Taxable ”) means all taxes of any kind imposed by a Governmental Authority, including but not limited to those on, or measured by or referred to as income, gross receipts, financial operation, sales, use, ad valorem , value added, alternative or add-on minimum, franchise, profits, license, withholding, payroll (including all contributions or premiums pursuant to governmental social security laws or pursuant to other tax laws and regulations), employment, excise, or severance and any interest, fines, penalties, assessments or additions to tax imposed with respect to such items or any contest or dispute thereof.

 

“ Tax Returns ” means all reports, returns, schedules and any other documents required to be filed with a Governmental Authority with respect to Taxes.

 

“ Third Party Claim ” shall have the meaning set forth in Section 7.3(a).

 

“ Third Party Consents ” shall have the meaning set forth in Section 3.3(b).

 

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“ Trade Inventory ” means, as of a particular date, all of the Delatestryl ^® Vials that have been shipped by Seller to distributors, wholesalers and/or other customers listed on Section 3.12 of the Seller’s Disclosure Schedule (“Seller’s Customers”) prior to or as of such date and which, as of such date, have not yet been sold to an end user, as determined in accordance with Section 2.5.

 

“ Trade Inventory Days ” means, as of the Closing Date, the result obtained by adding:

 

(1) the number of Delatestryl ^® Vials constituting the Trade Inventory as of December 31, 2005 divided by the number of Delatestryl ^® Vials sold by Seller’s Customers for the Quarter ended December 31, 2005, multiplied by [*] and

 

(2) the dollar amount of gross sales of Delatestryl ^® Vials sold by Seller to Seller’s Customers for the period from January 1, 2006 through the day immediately preceding the Closing Date divided by [*] ;

 

and then subtracting

 

(3) the result obtained by (A) dividing (i) the product of the number of Delatestryl ^® Vials sold by Seller’s Customers for the Quarter ended December 31, 2005 multiplied by [*] , by (ii)  [*] , (B) dividing the result thereof by [*] , and (C) multiplying the result thereof by the number of days after December 31, 2005 through the day immediately preceding the Closing Date.

 

“ Trademark Assignment ” shall have the meaning set forth in Section 2.3(b)(iv).

 

“ Trademark Rights ” shall have the meaning set forth in Section 2.1(a)(iii).

 

“ Transition Services Agreement ” shall have the meaning set forth in Section 2.3(b)(vii).

 

“ Wholesaler Charges ” means amounts claimed by wholesalers of the Delatestryl ^® Product as chargebacks under contracts between group purchasing organizations, FSS and PHS (collectively, “GPOs”) and the Seller and amounts claimed by GPOs as administrative or marketing fees under contracts between GPOs and the Seller.

 

ARTICLE II–

ASSET PURCHASE

 

2.1 Purchase and Sale of Assets; Assumption of Liabilities .

 

(a) Transfer of Assets . On and subject to the terms and conditions set forth in this Agreement, at the Closing, the Seller shall sell, convey, assign, transfer and deliver to the Buyer, and the Buyer shall purchase and acquire from the Seller, all of the Seller’s right, title and interest in and to the following specifically identified assets, properties and rights of the Seller used in connection with and relating to the Product Operations (the “Acquired Assets”), free and clear of all Liens other than Liens for Taxes that are not yet due and payable and Liens arising solely by action of the Buyer:

 

[*]	CONFIDENTIAL TREATMENT REQUESTED

 

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(i) the Registrations and Applicable Permits, including without limitation the New Drug Application (No. 009-165) issued by the United States Food and Drug Administration (the “FDA”) (together with all amendments, supplements and updates thereto, the “NDA”), and the other approvals, registrations, and associated materials set forth on Schedule 2.1(a)(i) hereto;

 

(ii) (A) the contracts, licenses, agreements and other instruments related to the Product Operations set forth under the heading “Assigned Contracts” on Schedule 2.1(a)(ii)(A) hereto, (B) in the event entered into prior to the Closing, an amendment by and between Seller and Sandoz Canada Inc. (“Sandoz”) in form and substance acceptable to Buyer (provided that the form and substance thereof attached as Schedule 2.1(a)(ii)(B) hereto shall be deemed acceptable to Buyer) (the “Sandoz Amendment”), and (C) any other contracts, licenses, agreements and other instruments relating exclusively to the Product Operations and entered into after the date of this Agreement and agreed to in advance in writing by the Buyer, which agreement may be given, if at all, at the discretion of the Buyer (collectively, the “Assigned Contracts”), in each case subject to the delivery to Buyer at Closing of the Third Party Consents.

 

(iii) the name “Delatestryl” and any variant thereof, the trademarks and trade names and all registrations thereof and all related registration applications set forth on Schedule 2.1(a)(iii) hereto and all proceeds of the foregoing and the right to sue for past, present and future infringements of any of the foregoing and all future proceeds of such suits (the “Trademark Rights”), and the domain names set forth on Schedule 2.1(a)(iii) hereto;

 

(iv) intangible property rights and all Designated Intellectual Property (other than the Trademark Rights) to the extent that such intangible property rights relate exclusively to the Delatestryl ^® Product or the Product Operations, whether or not patentable, including but not limited to patents, patent applications, inventions, discoveries, trade secrets, technical information, know-how, copyrights (including copyrights in any content, package inserts, marketing or promotional material, labeling information or other text related exclusively to the Delatestryl ^® Product or the Product Operations provided to consumers) and other confidential business information (collectively, the “Intangible Property Rights”);

 

(v) the exclusive right to satisfy all unfilled purchase orders relating to the Delatestryl ^® Product as of the Closing Date;

 

(vi) all brochures and other promotional and printed materials, trade show materials (including displays), videos, web pages, advertising and/or marketing materials, package inserts and packaging materials (all in physical form, pdf, quark, or other electronic file and camera-ready artwork), including without limitation materials containing post-marketing clinical data, in the Seller’s possession or under its control used exclusively in connection with the promotion and sale of the Delatestryl ^® Product and/or the conduct of the Product Operations;

 

(vii) all warranties and guarantees and other similar contractual rights made by third parties in favor of the Seller with respect to the Delatestryl ^® Product or the Product Operations, in each case with respect to the period following the Closing;

 

 

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(viii) copies of all customer and supplier lists, marketing studies, consultant reports, and correspondence (excluding invoices) related exclusively to the Delatestryl ^® Product or the Product Operations to the extent maintained by the Seller, and all complaint files and adverse event files related exclusively to the Delatestryl ^® Product or the Product Operations;

 

(ix) the Applicable Permits;

 

(x) the Closing Product Inventory;

 

(xi) the Scientific Data, including without limitation any rights of access that the Seller has to the Scientific Data;

 

(xii) all the goodwill of the Product Operations;

 

(xiii) all of Seller’s right, title, and interest in and to the Delatestryl ^® Product, including all rights of the Seller and its Affiliates to develop, manufacture, make and have made, offer to sell, sell, distribute, promote, and use the Delatestryl ^® Product, to the extent Seller has such rights; and

 

(xiv) all Product Records (other than the Excluded Records), to the extent not covered by any of the foregoing, provided, that Seller may retain one copy of any such Product Records, solely for legal, regulatory, Tax or accounting purposes.

 

(b) Excluded Assets . Notwithstanding anything to the contrary in this Agreement, the Seller is not selling, conveying, assigning, transferring or delivering to the Buyer any assets, properties or rights of the Seller other than those specifically identified in Section 2.1(a). All other assets, properties and rights of the Seller are not being sold, conveyed, assigned, transferred or delivered to the Buyer hereunder (the “Excluded Assets”), whether or not they are related to the Product Operations.

 

(c) Assumed Liabilities . On the basis of the representations, warranties, covenants and agreements and subject to the satisfaction or waiver of the conditions set forth in this Agreement, at the Closing, the Buyer shall assume and agree to pay, perform and discharge when due solely the following liabilities and obligations of the Seller (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due) (the “Assumed Liabilities”):

 

(i) all obligations to be performed after the Closing under the Assigned Contracts, except that the Buyer shall not assume or agree to pay, discharge or perform and Assumed Liabilities shall not include (a) any liabilities or obligations arising out of or related to any breach or default (or alleged breach or default) that occurs prior to the Closing by the Seller; or (b) any liabilities or obligations under any Assigned Contract that were incurred by Seller, or that arose or that may arise out of or relate to any event, circumstance or condition occurring, on or prior to the Closing, all of which liabilities and obligations arising from such a breaches or defaults, or events, circumstances or conditions, shall constitute Excluded Liabilities.;

 

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(ii) all liabilities and obligations under the Registrations to the extent to be performed after the Closing;

 

(iii) all liabilities with respect to all actions, suits, proceedings, disputes, claims or investigations arising out of or related to the operation of the Acquired Assets or the Product Operations after, and solely to the extent arising out of or relating to an event, circumstance or condition occurring after, the Closing;

 

(iv) all liabilities and obligations arising out of or relating to the replacement, return or refund of the purchase price of any Delatestryl ^® Product sold by or on behalf of Buyer or any of its Affiliates after the Closing;

 

(v) all liabilities and obligations arising out of or relating to any claim for breach of warranty in respect of (A) any Delatestryl ^® Product that was manufactured, distributed and sold by or on behalf of Buyer or any of its Affiliates after the Closing, or (B) any Closing Product Inventory, but in the case of clause (B) only to the extent that such claim arises out of or is attributable to Buyer’s or its agent’s direct or indirect handling, storage, alteration, treatment or other use or possession of such Closing Product Inventory following the Closing;

 

(vi) all liabilities and obligations arising out of or relating to any product liability claim involving (A) the Delatestryl ^® Product, including without limitation injury to or death of persons or damage to or destruction of property, to the extent the occurrence, use or misuse giving rise thereto, the date of manufacture, distribution and sale of the Delatestryl ^® Product involved, and the date such claims are made, took place after the Closing Date, or (B) the Closing Product Inventory, including without limitation injury to or death of persons or damage to or destruction of property, to the extent the occurrence, use or misuse giving rise thereto, the distribution and sale of the Delatestryl ^® Product involved, and the date such claims are made, took place after the Closing Date, but in the case of clause (B) only to the extent that such claim arises out of or is attributable to Buyer’s or its agent’s direct or indirect handling, storage, alteration, treatment or other use or possession of such Closing Product Inventory following the Closing; and

 

(vii) all other liabilities and obligations in respect of the Product Operations or the Acquired Assets not specifically referred to in subsections (i) through (vi) above, but only to the extent arising out of any event, circumstance or condition occurring after the Closing Date, other than Excluded Liabilities.

 

For greater clarity, the Parties acknowledge and agree that (a) notwithstanding anything to the contrary contained in this Section 2.1(c), if any liabilities or obligations that arise from any event, circumstance or condition occurring after the Closing relate to or in any way involve any Delatestryl ^® Product that has been sold, the Buyer shall only assume (and the Assumed Liabilities shall include solely) those liabilities and obligations to the extent they arise from those Delatestryl ^® Products sold after the Closing Date by or on behalf of the Buyer and Seller shall retain all liabilities and obligations arising from those Delatestryl ^® Products sold prior to the Closing Date by or on behalf of Seller; and (b) Buyer shall have no responsibility, liability or obligation hereunder, whether matured, unmatured, liquidated or unliquidated, fixed or contingent, or known or unknown, with respect to the Product Operations pertaining to the period prior to the Closing (all of which shall be Excluded Liabilities), unless it is specifically set forth in the definition of Assumed Liabilities.

 

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(d) Excluded Liabilities . Notwithstanding anything to the contrary in this Agreement, the Buyer shall not, at the Closing or at any time thereafter, be responsible for, assume or agree to pay, perform or discharge, and the Seller shall remain responsible and liable for and shall pay, perform and discharge when due, any and all liabilities and obligations of the Seller relating to Delatestryl ^® Product, the Product Operations, the Acquired Assets and under any Excluded Contract (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), other than the Assumed Liabilities (the “Excluded Liabilities”). All liabilities and obligations of or relating to Delatestryl ^® Product, the Acquired Assets or the Product Operations not being expressly assumed by the Buyer under Section 2.1(c) of this Agreement or that are under any Excluded Contract shall be retained by the Seller and are included in Excluded Liabilities.

 

(e) Registrations and Applicable Permits . On the Closing Date, the Seller shall assign or transfer to the Buyer, and the Buyer will assume, the Registrations and Applicable Permits to the extent provided in this Agreement. To the extent that the assignment or transfer of all or any portion of any Registration or Applicable Permit shall require a filing with any Governmental Authority by Seller, Seller shall, not later than the Closing Date, file the required documentation with such Governmental Authority authorizing the assignment of such Registration or Applicable Permit effective as of the Closing Date. Without limiting the generality of the foregoing, attached as Exhibit D is a copy of the letter to be duly executed by and submitted by or on behalf of Seller to the FDA on the Closing Date authorizing the transfer of ownership of the NDA from Seller to Buyer (the “NDA Transfer Letter”). As soon as practicable after the Closing and the receipt by Buyer of the FDA’s acknowledgment letter, Buyer shall execute and submit to the FDA a letter, accompanied by the NDA transfer letter, acknowledging Buyer’s commitment to assume ownership of the NDA, substantially in the form of the letter attached as Exhibit E .

 

2.2 Purchase Price and Related Matters .

 

(a) Purchase Price . In consideration of the sale and transfer of the Acquired Assets, the Buyer shall make the payments contemplated by Subsections (i) - (v) of this Section 2.2(a) to the Seller (collectively, the “Purchase Price”) and assume the Assumed Liabilities as provided in Section 2.1(c). All payments under this Agreement shall be made by wire transfer of immediately available funds to an account designated by the Seller in writing at least two (2) Business Days prior to the date that the payment is due.

 

(i) At the Closing, the Buyer shall pay to the Seller $5,000,000.

 

(ii) At the Closing, the Buyer shall also pay to the Seller an amount equal to (A) the number of Delatestryl ^® Vials constituting the Closing Product Inventory multiplied by [*] (the “Aggregate Closing Product Inventory Amount”) divided by (B) three (such quotient the “Annual Inventory Payment”).

 

[*]	CONFIDENTIAL TREATMENT REQUESTED

 

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(iii) On the first anniversary of the Closing Date, the Buyer shall pay to the Seller an amount equal to the Annual Inventory Payment.

 

(iv) On the second anniversary of the Closing Date, the Buyer shall pay to the Seller an amount equal to the Annual Inventory Payment.

 

(v) The Buyer shall make the Net Sales Deferred Payments in the manner and at the times contemplated by Section 2.4 of this Agreement.

 

(b) Allocation . The Buyer and the Seller shall use their commercially reasonable efforts to agree, as soon as practicable after Closing but in no event later than forty-five (45) days prior to the due date of filing of any IRS Form 8594 with respect to the transactions contemplated by this Agreement, to an allocation of the Purchase Price among the Acquired Assets for tax purposes in accordance with the methodology required by Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”). The Buyer and the Seller agree to file IRS Form 8594 and all Tax Returns in accordance with such allocation to the extent permitted by applicable Law. If the Buyer and the Seller cannot reach agreement on the allocation of the Purchase Price within forty-five (45) days prior to the due date of filing of any Form 8594, then the Buyer and the Seller shall jointly engage a firm of independent certified public accountants (the “ Accountant ”). The Accountant shall determine such allocation of the Purchase Price based upon its appraisal of the fair value of the Acquired Assets among which the Purchase Price is to be allocated. The Buyer and the Seller agree to promptly provide to the Accountant such information as the Accountant may reasonably request in connection with the preparation of such allocation and shall request that the Accountant prepare and deliver to the Buyer and the Seller such allocation as promptly as practicable. The Buyer and the Seller shall each pay 50% of the fees and expenses of the Accountant for its services under this Section 2.2(b). The resolution by the Accountant of the matters set forth in this Section 2.2(b) shall be conclusive and binding upon the Buyer and the Seller. The Buyer and the Seller agree that the procedure set forth in this Section 2.2(b) for resolving disputes with respect to the allocation of the Purchase Price shall be the sole and exclusive method for resolving any such disputes; provided that this provision shall not prohibit either Party from instituting litigation to enforce any ruling of the Accountant.

 

2.3 The Closing.

 

(a) Time and Location . Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Wilmer Cutler Pickering Hale and Dorr LLP in New York, New York, commencing at 10:00 a.m., New York time, on the Closing Date, or on such other date and at such other place as the Parties shall mutually agree in writing.

 

(b) Actions at the Closing . At the Closing:

 

(i) the Seller shall deliver (or cause to be delivered) to the Buyer the various certificates, instruments and documents required to be delivered under Section 6.1;

 

(ii) the Buyer shall deliver (or cause to be delivered) to the Seller the various certificates, instruments and documents required to be delivered under Section 6.2;

 

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(iii) the Seller shall execute and deliver a Bill of Sale in the form attached hereto as Exhibit A ;

 

(iv) the Seller shall execute and deliver a Trademark Assignment in the form attached hereto as Exhibit B , suitable for recordation in the United States Patent and Trademark Office (the “Trademark Assignment”);

 

(v) the Seller and the Buyer shall execute and deliver to each other counterparts of an Assignment and Assumption Agreement in the form attached hereto as Exhibit C (the “Assumption Agreement”)

 

(vi) the Seller shall deliver to Buyer a copy of the executed NDA Transfer Letter ;

 

(vii) the Seller and the Buyer shall execute and deliver to each other counterparts of a Transition Services Agreement substantially in the form attached hereto as Exhibit F (the “Transition Services Agreement”);

 

(viii) the Seller shall deliver (or cause to be delivered) to Buyer duly executed Third Party Consents substantially in the forms attached as Exhibit G ;

 

(ix) the Buyer shall pay to the Seller the portion of the Purchase Price required by Sections 2.2(a)(i) and (ii);

 

(x) the Seller shall deliver to the Buyer, or otherwise put the Buyer in possession and control of, all of the Acquired Assets of a tangible nature, including documents and data in electronic formats, to the extent that such documents and data are in electronic formats; and

 

(xi) the Seller shall update and deliver to Buyer Section 3.19 of Seller’s Disclosure Schedule such that Section 3.19 sets forth a complete and accurate list as of the Closing Date of the number of Delatestryl ^® Vials that actually constitute the Closing Product Inventory as of the Closing Date, and shall make available to the Buyer, and Buyer shall take delivery of, the Closing Product Inventory, subject to the provisions of the Transition Services Agreement.

 

The agreements and instruments referred to in clauses (iii), (iv), (v) and (vii) above are referred to herein as the “Ancillary Agreements.”

 

2.4 Net Sales Deferred Payments .

 

(a) The Buyer shall make payments to the Seller in the amounts set forth below for a period of three years after the Closing Date (the “Deferred Payment Period”), which payments shall be made at the times set forth in Section 2.4(b).

 

(i) The Buyer shall pay to the Seller five percent (5%) of the first $5,000,000 of cumulative Delatestryl ^® Net Sales during the Deferred Payment Period.

 

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(ii) The Buyer shall pay to the Seller ten percent (10%) of the second $5,000,000 of cumulative Delatestryl ^® Net Sales during the Deferred Payment Period.

 

(iii) The Buyer shall pay to the Seller twenty-five percent (25%) of cumulative Delatestryl ^® Net Sales during the Deferred Payment Period that exceed $10,000,000; provided, that if (and only if) cumulative Delatestryl ^® Net Sales during the Deferred Payment Period exceed $10,000,000 then, commencing in the Quarter in which cumulative Delatestryl ^® Net Sales exceeded $10,000,000, the amount payable under this Subsection 2.4(a)(iii) shall be the greater of (x) $300,000 for each remaining full year of the Deferred Payment Period (pro rated at the rate of $75,000 for each complete Quarter of any partial year of such remaining Deferred Payment Period) or (y) 25% of cumulative Delatestryl ^® Net Sales during the Deferred Payment Period that exceed $10,000,000, in either case payable quarterly in accordance with Section 2.4(b).

 

(iv) In the event Net Sales Deferred Payments (A) calculated in accordance with sub-sections (i), (ii) and (iii)of this Section 2.4do not at least equal $100,000 for the first year of the Deferred Payment Period, Buyer shall pay Seller an amount equal to the difference between $100,000 and the amount of such Net Sales Deferred Payments for such year; or (B) calculated in accordance with sub-sections (i), (ii) and (iii), and (A) of sub-section (iv) of Section 2.4 do not at least equal $300,000 for the first two years of the Deferred Payment Period, then Buyer shall pay Seller an amount equal to the difference between $300,000 and the amount of such Net Sales Deferred Payments for such two year period.

 

The payments described in this Section 2.4(a) are collectively referred to as the “Net Sales Deferred Payments.”

 

(b) Reports; Payments . The Buyer shall deliver to the Seller, within thirty (30) days after the last day of each calendar quarter that begins or ends during the Deferred Payment Period (each, a “Quarter”), a statement (each, a “Delatestryl ^® Net Sales Statement”), setting forth (i) the aggregate amount of invoiced sales for each Delatestryl ^® Product (including unit quantities) for such Quarter, (ii) the Delatestryl ^® Net Sales Deductions for the Quarter (which deductions shall be aggregated by category), and (iii) the calculation of the related Net Sales Deferred Payments. At such time as the Buyer delivers such Delatestryl ^® Net Sales Statement to the Seller, the Buyer shall also deliver to the Seller the Net Sales Deferred Payments due hereunder for the applicable Quarter. The Parties agree that the first Net Sales Deferred Payment hereunder and the associated statement shall be made by the Buyer with respect to the period commencing on the Closing Date and ending on March 31, 2006. The Parties further agree that at Buyer’s election, the Annual Inventory Payments required by Section 2.2(a)(iii) or (iv) and/or the Net Sales Deferred Payments otherwise payable to Seller may be reduced by the amounts of any (i) Closing Date Trade Inventory Value Adjustment payable by Seller in accordance with Section 2.5; (ii) payments or expenses incurred or made by Buyer in connection with any Rebate Charges or Wholesaler Charges or returns of Delatestryl ^® Products, in each case for which the Seller is financially responsible under Sections 9.5 or 9.6; and/or (iii) any other amounts that are or become due and payable from Seller to Buyer pursuant to this Agreement or any Ancillary Agreement and that are agreed to by Buyer in writing or established pursuant to a final adjudication pursuant to Section 10.17 (collectively, the “Offset Amounts”). In such event the Delatestryl ^® Net Sales Statement shall also set forth the aggregate Offset Amounts. If the

 

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aggregate Offset Amounts for any Quarter exceed the Net Sales Deferred Payment for such Quarter, then Seller shall make a payment to Buyer in an amount equal to such excess within ten (10) Business Days after the date of the delivery of the Delatestryl ^® Net Sales Statement applicable to such Quarter.

 

(c) Change in Control; Product Operations Cessation . If (i) a Change in Control occurs during the Deferred Payment Period or if the Buyer ceases the Product Operations during the Deferred Payment Period, and (ii) the Net Sales Deferred Payments calculated in accordance with Section 2.4 (a) for any remaining full calendar year of the Deferred Payment Period commencing after the effective date of the Change in Control or cessation of Product Operations) do not at least aggregate [*] then, within thirty (30) days after the end of such calendar year, Buyer shall pay Seller an amount equal to the difference between [*] and the amount of such Net Sales Deferred Payments.

 

(d) Late Payments; Collections . Any amount not paid when due under this Section 2.4 shall bear interest at an annual rate equal to the lesser of (i)  [*] , and (ii) the highest rate permitted by law.

 

(e) Books and Records; Audits . Notwithstanding Section 9.1 to the contrary, for a period of not less than [*] after the expiration of the Deferred Payment Period, the Buyer and its subsidiaries and Affiliates that sell Delatestryl ^® Product shall keep full, true and accurate books of account sufficient to determine the amounts payable pursuant to this Section 2.4. The Seller shall have the right to have the books and records of the Buyer, its subsidiaries and Affiliates audited by a qualified independent certified public accounting firm selected by the Seller, subject to the Buyer’s approval, which approval shall not be unreasonably withheld or delayed, under appropriate confidentiality provisions, to ascertain the accuracy of the reports and payments under this Section 2.4 for any year during the Deferred Payment Period ending not more than thirty-six (36) months prior to the date of such request. Such audit shall be conducted upon at least ten (10) days’ advance written notice during normal business hours, not more than once in each year, and in a manner that does not interfere unreasonably with the business of the audited entity. The accounting firm shall disclose to Seller only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. Subject to the Buyer’s right to dispute such amounts, any underpayment determined by such audit shall promptly be paid by the Buyer after delivery to Buyer of such accounting firm’s report so concluding. In the event such accounting firm concludes that amounts were overpaid by Buyer during such period, subject to Seller’s right to dispute such amounts, Seller shall promptly repay Buyer the amount of such overpayment after delivery to Buyer and Seller of such accounting firm’s written report so concluding. Upon the expiration of [*] following the end of any year the calculation of Net Sales Deferred Payments payable with respect to such year shall be binding and conclusive upon Seller and Buyer, and Buyer and Seller shall be released from any liability or accountability with respect to royalties for such year. Seller and Buyer shall treat all financial information subject to review under this Section 2.4(e) in accordance with the confidentiality provisions of this Agreement and shall cause the accounting firm selected by it to enter into a customary and mutually satisfactory confidentiality agreement with Buyer obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement. If the Buyer has underpaid an amount due under this Section 2.4 by more than the greater of (i)  [*] or (ii)  [*] of the Net Sales Deferred Payments due hereunder for the period being reviewed, the Buyer shall reimburse the Seller for the reasonable fees and costs charged by such accounting firm (with all fees and costs of the audit to be borne by the Seller in all other cases).

 

[*]	CONFIDENTIAL TREATMENT REQUESTED

 

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(f) Conduct of the Product Operations After the Closing Date . During the Deferred Payment Period, the Buyer and its Affiliates shall use commercially reasonable efforts to sell the Delatestryl ^® Product in accordance with Buyer’s business, legal, medical and scientific judgment. For purposes of the immediately preceding sentence, commercially reasonable efforts shall mean, those efforts that a similarly situated company in the pharmaceutical industry, including with similar financial and other resources and a similar product portfolio and pipeline, would use in connection with the commercialization of a pharmaceutical product of similar market and profit potential at a similar stage in product life as the Delatestryl ^® Product.

 

2.5 Closing Date Trade Inventory Value Adjustment .

 

(a) On or before January 17, 2006, Seller shall prepare and deliver to the Buyer a statement calculating the Trade Inventory Days as of the Closing Date (the “Closing Date Trade Inventory Statement”).

 

(b) During the thirty (30) day period immediately following Buyer’s receipt of the Closing Date Trade Inventory Statement, Seller shall cooperate with Buyer in all reasonable respects, and Buyer shall be permitted to have access to all related information including all 852 reports from wholesalers, to the extent reasonably necessary for the Buyer to calculate Trade Inventory Days as of the Closing Date and evaluate and verify the accuracy of the Closing Date Trade Inventory Statement. The Closing Date Trade Inventory Statement shall become final and binding upon the Buyer and Seller at the end of such thirty (30) day period, unless the Buyer objects to the Closing Date Trade Inventory Statement, in which case it shall send written notice (the “Notice of Objection”) to Seller within such period, setting forth the basis for its objection. If a timely Notice of Objection is received by Seller, then the Closing Date Inventory Statement (if applicable, as revised in accordance with this Section 2.5(b)) shall become final and binding on Seller and the Buyer on the first to occur of (x) the date Seller and the Buyer resolve in writing any differences with respect to the matters specified in the Notice of Objection and (y) the date all matters in dispute are resolved in writing by the accountants, in each case as provided below. Seller and the Buyer shall seek in good faith to reach agreement as to any such proposed adjustment or that no such adjustment is necessary within twenty (20) days following Seller’s timely receipt of the Notice of Objection. If agreement is reached in writing within such twenty (20) day period as to all proposed adjustments, or that no adjustments are necessary, Seller and the Buyer shall revise the Closing Date Trade Inventory Statement accordingly. If Seller and the Buyer are unable to reach agreement within such twenty (20) day period, then a firm of independent certified public accountants satisfactory to the Parties shall be engaged at that time to review the Closing Date Trade Inventory Statement, and shall make a determination as to the resolution of any adjustments. The determination of such accountants shall be delivered as soon as practicable following engagement of such accountants, but in no event more than twenty (20) days thereafter, and shall be final, conclusive and binding upon Seller and the Buyer, and the Parties shall revise the Closing Date Trade Inventory Statement accordingly. Seller, on the one hand, and the Buyer, on the other hand, shall each pay one-half of the fees and expenses of such accountants.

 

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(c) If the Trade Inventory Days as of the Closing Date, as set forth in the final Closing Date Trade Inventory Statement, as determined in accordance with this Section 2.5, is greater than [*] Seller shall be responsible for payment of and shall pay the Closing Date Trade Inventory Value Adjustment to the Buyer. At the election of Buyer, such payment may be made as a credit against the Net Sales Deferred Payments payable by Buyer to Seller pursuant to Section 2.4. If the Trade Inventory Days as of the Closing Date, as set forth in the final Closing Date Trade Inventory Statement, as determined in accordance with this Section 2.5, is less than [*] Buyer shall be responsible for payment of and shall pay to Seller an amount equal to the Closing Date Trade Inventory Value Adjustment.

 

2.6 Further Assurances .

 

At any time and from time to time after the Closing Date, as and when requested by any Party hereto, the other Party shall promptly execute and deliver, or cause to be executed and delivered, all such documents, instruments and certificates and shall take, or cause to be taken, all such further or other actions as are reasonably necessary to evidence and effectuate the transactions contemplated by this Agreement.

 

ARTICLE III–

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Disclosure Schedule provided by the Seller to the Buyer on the date hereof (the “Seller’s Disclosure Schedule”) shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article III. The disclosures in any section or subsection of the Seller’s Disclosure Schedule shall qualify other sections and subsections in this Article III to the extent it is reasonably clear from a reading of the disclosure that such disclosure is applicable to such other sections and subsections. The inclusion of any information in the Seller’s Disclosure Schedule shall not be deemed to be an admission or acknowledgment, in and of itself, that such information is required by the terms hereof to be disclosed, is material to the Product Operations, has resulted in or would reasonably be expected to result in a Seller Material Adverse Effect, or is outside the ordinary course of business. For purposes of this Agreement, the phrase “to the Knowledge of the Seller”, “to the Seller’s Knowledge” or any phrase of similar import shall mean and be limited to the actual knowledge of the following individuals: Christopher G. Clement, Philip K. Yachmetz, Zebulon Horowitz, David R. Benharris and John C. Petrolino. The Seller represents and warrants to the Buyer that the representations and warranties contained in this Article III are, as of the date hereof, and will be, as of the Closing Date, true and correct:

 

3.1 Organization, Qualification and Corporate Power .

 

The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to conduct business under the laws of each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities, in each case as they relate primarily to the Product Operations, makes such qualification necessary, except for any such failure to be qualified that would not reasonably be expected to result in a Seller Material Adverse Effect (as defined below). The Seller has all requisite corporate power and authority to carry on the business in which it is now

 

[*]	CONFIDENTIAL TREATMENT REQUESTED

 

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engaged and to own and use the properties now owned and used by it. For purposes of this Agreement, “Seller Material Adverse Effect” means any change, effect or circumstance that, individually or in the aggregate (unless otherwise noted), (a) is materially adverse to the Delatestryl ^® Product, the Acquired Assets or the business, financial condition or results of operations of the Product Operations taken as a whole (other than changes, effects or circumstances that are the result of economic factors affecting the economy as a whole or that are the result of factors generally affecting the industry or specific markets in which Seller competes with respect to Product Operations which factors do not substantially disproportionately affect the Product Operations), or (b) materially impairs the ability of the Seller to consummate the transactions contemplated by this Agreement; provided , however , that a “Seller Material Adverse Effect” shall not include any adverse change, effect or circumstance (i) arising out of or resulting from acts or omissions by the Seller in compliance with the terms of this Agreement, (ii) arising out of or resulting from acts or omissions of the Buyer, including without limitation acts or omissions contemplated by or pursuant to this Agreement, or (iii) that is attributable to the announcement or performance of this Agreement or the transactions contemplated by this Agreement.

 

3.2 Authority .

 

The Seller has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements and to consummate the transactions contemplated and perform its obligations hereunder and thereunder. The execution, delivery and performance by the Seller of this Agreement and the Ancillary Agreements and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Seller and no other further authorization or consent of the Seller or its board of directors, lenders or stockholders will be necessary. This Agreement has been, and such Ancillary Agreements will be, duly executed and delivered by the Seller and, assuming this Agreement and each such Ancillary Agreement constitute the legal, valid and binding obligation of the Buyer, this Agreement constitutes, and each such Ancillary Agreement will constitute, a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its respective terms.

 

3.3 Consents and Approvals; Noncontravention .

 

(a) Section 3.3(a) of Seller’s Disclosure Schedule sets forth a complete and accurate list (the “Governmental Consents”) of all consents, waivers, approvals, orders, permits or authorizations of, or registrations, declarations, payments or filings with, any Governmental Authority that are required by, or with respect to, Seller in connection with the execution and delivery of this Agreement and the Ancillary Agreements by Seller, the consummation of the transactions contemplated hereby and thereby or the performance of Seller’s obligations hereunder and thereunder.

 

(b) Section 3.3 (b) of Seller’s Disclosure Schedule sets forth a complete and accurate list (the “Third Party Consents”) of all consents, waivers, approvals, or authorizations of, or notices to, any Person (other than a Medical Products Regulatory Authority or Governmental Authority) that are required by or with respect to Seller in connection with the execution and delivery of this Agreement and the Ancillary Agreements by Seller, the consummation of the transactions contemplated hereby and thereby or the performance of Seller’s obligations hereunder and thereunder.

 

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(c) Except as disclosed in Section 3.3 of Seller’s Disclosure Schedule, neither the execution and delivery by the Seller of this Agreement or the Ancillary Agreements to which the Seller will be a party, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will:

 

(d) conflict with or violate any provision of the charter or bylaws of the Seller;

 

(e) require on the part of the Seller any filing with, or any permit, authorization, consent or approval of, any Medical Products Regulatory Authority or other Governmental Authority or give any Medical Products Regulatory Authority or other Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate or modify, any Registration or Applicable Permit relating to the Delatestryl ^® Product;

 

(f) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate or modify, result in the creation of any Lien upon any of the Acquired Assets, or require any notice, consent or waiver under, the Assigned Contracts or any other contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money or instrument of indebtedness (i) primarily relating to the Product Operations to which the Seller is a party or by which the Seller is bound or (ii) to which any of the Acquired Assets are subject;

 

(g) violate any order, writ, injunction, judgment or decree specifically naming, or applicable to, the Seller or any of its properties or assets; or

 

(h) violate any statute, rule or regulation or other Law applicable to the Seller or any of its properties or assets.

 

3.4 Title to Acquired Assets .

 

The Seller has good and valid title and the right to sell and transfer to the Buyer good title to all of the Acquired Assets, free and clear of all Liens except for Liens for Taxes not yet due and payable and Liens arising solely by actions of the Buyer. The delivery to the Buyer of the instruments of transfer of ownership contemplated by this Agreement will vest good title to the Acquired Assets in the Buyer, free and clear of all Liens except for Liens for Taxes not yet due and payable and Liens arising solely by action of the Buyer.

 

3.5 Regulatory Compliance .

 

(a) Section 3.5 (a) of Seller’s Disclosure Schedule sets forth a complete and accurate list of all Product Registrations. The Product Registrations are in full force and effect and, except as set forth on Section 3.5 (a) of Seller’s Disclosure Schedule, no consent of any Governmental Authority is required in connection with the transfer of any Registrations pursuant to the transactions contemplated hereby. The Seller has delivered to the Buyer true and correct

 

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copies of the NDA and all other Registrations, and of all of the annual reports to the NDA submitted to the FDA, all adverse event reports and all product complaints, in each case for all periods commencing not later than January 1, 2000, and, to the extent that Seller has such materials in its possession, has made available to the Buyer (A) copies of material written communications between the Seller or the third party manufacturer of the Delatestryl ^® Product, on the one hand, and the FDA or any other applicable Medical Product Regulatory Authority, on the other hand, since October 30, 1953 (the “NDA Filing Date”) and (B) any existing written summaries of material discussions between such parties since the NDA Filing Date, that describe matters that are material to assessing compliance of the Seller’s operation of the Product Operations or the third party manufacturer’s production of the Delatestryl ^® Product with the Act and the CSA and their respective implementing regulations, including without limitation, copies of (i) all warning letters, notices of adverse findings and similar correspondence received by the Seller or such third party manufacturer from the FDA or the DEA since the NDA Filing Date and (ii) any document concerning any significant oral or written communication received from the FDA or the DEA by the Seller or the third party manufacturer since the NDA Filing Date. Section 3.5 (a) of Seller’s Disclosure Schedule sets forth a complete and accurate list (by date) of all adverse event reports for the period commencing immediately after the date of the 2004 Annual Report through the date of this Agreement.

 

(b) The Seller’s operation of the Product Operations is in compliance in all material respects with the Act, the CSA and other comparable state and local statutes, rules and regulations applicable to the Product Operations, including, but not limited to, FDA, DEA and comparable state and local rules and regulations relating to clinical investigations, Good Practices, advertising and promotion, pre- and post-marketing adverse drug experience reporting, and all other pre- and post-marketing reporting requirements, as applicable. The Seller knows of no material adverse effects from the use of the Delatestryl ^® Product which are not disclosed in the package insert for the Delatestryl ^® Product which are required to be disclosed in the package insert for the Delatestryl ^® Product under the Act.

 

(c) Neither the Seller nor, to Seller’s Knowledge, any third party manufacturer of the Delatestryl ^® Product, is in receipt of written notice of, or is known by the Seller to be subject to, and the Delatestryl ^® Product has not been subject to, any written, adverse inspection, finding of deficiency, finding of non-compliance, compelled or voluntary recall, field notification, seizure, investigation, penalty for corrective or remedial action or other compliance or enforcement action, in each case relating to the Delatestryl ^® Product or to the facilities in which such products are developed, manufactured, packaged, collected, handled, or stored, by any applicable Medical Product Regulatory Authority. There