CONFIDENTIAL PROVISIONS REDACTED ASSET PURCHASE AGREEMENT

Exhibit 10.5

CONFIDENTIAL PROVISIONS REDACTED

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

PDL BIOPHARMA, INC.,

a Delaware corporation

and

EKR THERAPEUTICS, INC.,

a Delaware corporation

Dated as of February 4, 2008

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*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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LIST OF EXHIBITS, ATTACHMENT AND SCHEDULES

EXHIBITS

 

DISCLOSURE SCHEDULES

 

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “ Agreement ”) is entered into as of February 4, 2008 (the “ Effective Date ”) between PDL BioPharma, Inc., a Delaware corporation (“ Seller ”) and EKR Therapeutics, Inc., a Delaware corporation (“ Buyer ”).

RECITALS

A. Seller is engaged in the business (the “ Business ”) of developing, selling, marketing and supporting its Cardene IV ^® , Cardene SR ^® , Retavase ^® and Ularitide products (the “ CV Products ”).

B. Seller desires to sell, transfer and assign to Buyer, and Buyer wishes to acquire, all right, title and interest in and to the CV Products and certain assets related to the operation of the Business, in exchange for consideration consisting of cash and the assumption of certain Liabilities related to the Business, pursuant to the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties to this Agreement agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “ Accounts Payable ” shall mean all obligations of Seller or any of its Affiliates with respect to accounts payable and notes payable, including without limitation, those created or arising in respect of the Business.

1.2 “ Accounts Receivable ” shall mean all of Seller’s trade accounts receivable, and all notes receivable or evidences of indebtedness payable to Seller created or arising in respect of the sale of the Marketed Products.

1.3 “ Affiliate ” with respect to any party shall mean any entity that is directly or indirectly controlling, controlled by or under common control with such party.

1.4 “ Agreement ” shall have the meaning given in the Preamble.

1.5 “ Assets ” shall have the meaning given in Article 2 .

1.6 “ Assumed Contracts ” shall have the meaning given in Section 2.1(p) .

1.7 “ Assumed Liabilities ” shall have the meaning given in Section 2.3 .

1.8 “ Books and Records ” shall mean all pricing lists, customer correspondence (excluding e-mail and other electronic correspondence not readily available in hard copy) and other books and records, in any form, used solely and specifically with respect to the CV Products by Seller or any of Seller’s Affiliates.

 

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1.9 “ Business ” shall have the meaning given in the Recitals.

1.10 “ Business Employee ” shall have the meaning given in Section 5.1(a) .

1.11 “ Buyer ” shall have the meaning given in the Preamble.

1.12 “ Buyer Indemnitee(s) ” shall have the meaning given in Section 13.3 .

1.13 “ Cardene ” shall mean Cardene IV and Cardene SR.

1.14 “ Cardene Drug Product ” shall mean labeled or unlabelled vials containing the active pharmaceutical ingredient nicardipine hydrochloride.

1.15 “ Cardene IV ” shall mean each presentation of any pharmaceutical preparation (including formulation changes and production intermediates) containing the pharmaceutical product known as “Cardene IV” containing the active ingredient nicardipine hydrochloride, whether registered, marketed or in development by Seller, as of the Closing Date.

1.16 “ Cardene Packaged Product ” shall mean Cardene in the Product Inventory purchased by Buyer hereunder that is packaged and labeled for sale to the end user.

1.17 “ Cardene PMB Product ” shall mean any formulation of Cardene IV [****]*.

1.18 “ Cardene Product Inventory ” shall mean all inventory owned by Seller or its Affiliates of bulk active pharmaceutical ingredient nicardipine hydrochloride, Cardene Packaged Product and Cardene Drug Product, in existence as of the Closing.

1.19 “ Cardene SR ” shall mean each presentation of any pharmaceutical preparation (including formulation changes and production intermediates) containing the pharmaceutical product known as “Cardene SR” containing the active ingredient nicardipine hydrochloride, whether registered, marketed or in development by Seller, as of the Closing Date.

1.20 “ Claim ” shall have the meaning given in Section 13.4 .

1.21 “ Clinical Data ” shall have the meaning given in Section 2.1(k) .

1.22 “ Clinical Trial ” shall mean a clinical trial conducted by or on behalf of Seller or its Affiliates, or pursuant to any Assumed Contract, in each case in which the product Ularitide is administered to a human.

1.23 “ Clinical Trial Materials ” shall mean the product Ularitide and the placebo for this product manufactured by or on behalf of Seller or its Affiliates for use in preclinical studies or Clinical Trials, whether in bulk, formulated or finished form and whether in existence on the Effective Date or manufactured between the Effective Date and Closing Date.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.24 “ Clinical Trial Study Reports ” shall mean all reports or summaries of all data, records and documents resulting from the Clinical Trials for the product Ularitide.

1.25 “ Closing ” shall have the meaning given in Section 4.1 .

1.26 “ Closing Date ” shall have the meaning given in Section 4.1 .

1.27 “ Confidential Information ” shall have the meaning ascribed to it in the Confidentiality Agreement.

1.28 “ Confidentiality Agreement ” shall mean that certain Mutual Confidentiality Agreement between Buyer and Seller dated August 28, 2007.

1.29 “ Copyrights ” shall have the meaning set forth in Section 2.1(d) .

1.30 “[****]*” shall mean product returns, charge-backs, rebates or Medicaid, Medicare or other reimbursements, or similar claims, with respect to [****]*sold by Seller or its Affiliates for which [****]*.

1.31 “ Customer Orders ” shall mean orders for Packaged Product from customers of Seller or any of Seller’s Affiliates.

1.32 “ CV Products ” shall have the meaning given in the Recitals.

1.33 “ Drug Products ” shall mean Cardene Drug Product and Retavase Drug Product.

1.34 “ Effective Date ” shall mean the date first set forth in the opening paragraph of this Agreement.

1.35 “ Employee Benefit Plans ” shall mean any employee benefit plan, program, policy, practices, agreement or other arrangement providing benefits to any current or former employee, officer or director of Seller or its Affiliates or any beneficiary or dependent thereof that is sponsored or maintained by Seller or its Affiliates or to which Seller or its Affiliates contributes or is obligated to contribute, whether or not written, including without limitation any employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA) and any written employment, severance, retention, termination, change in control, consulting, retirement, bonus or other incentive compensation, stock purchase, stock option, stock award or other equity-based compensation, leave of absence, lay-off, cafeteria, health, accident, disability, workman’s compensation or other insurance, vacation or other employee benefit agreement, plan or policy (other than any governmental program), and any related trust, as to which Seller has or may have any obligation or liability, contingent or otherwise.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.36 “ Escrow Agent ” shall have the meaning set forth in Section 3.2 .

1.37 “ Escrow Agreement ” shall have the meaning set forth in Section 3.2 .

1.38 “ Escrow Amount ” shall have the meaning set forth in Section 3.1(c) .

1.39 “ Excluded Assets ” shall have the meaning given in Section 2.2 .

1.40 “ Excluded Liabilities ” shall have the meaning given in Section 2.4 .

1.41 “ FDA ” shall mean the United States Food and Drug Administration, or any successor agency or entity thereto that may be established hereafter.

1.42 “ FD&C Act ” shall mean the U.S. Federal Food, Drug and Cosmetics Act, 21 USC § 321 et seq , as amended.

1.43 “ GAAP ” shall mean the United States generally accepted accounting principles in effect from time to time, consistently applied.

1.44 “ Governmental Entity ” shall mean any court, tribunal, arbitrator, authority, agency, commission, regulatory, official or other instrumentality of the government of the United States or of any foreign country, any state or any political subdivision of any such government (whether state, provincial, county, city, municipal or otherwise).

1.45 “ HSR ” shall mean the United States Hart-Scott-Rodino Antitrust Improvements Act of l976, as amended, and related rules.

1.46 “ HSR Filings ” shall have the meaning given in Section 8.1 .

1.47 “ IND ” shall mean, with respect to each CV Product, the investigational new drug application identified on Attachment 2.1(e) hereto.

1.48 “ Initial FDA Approval ” shall mean the first issuance by the FDA of a written approval that [****]*.

1.49 “ Initial Purchase Price ” shall have the meaning given in Section 3.1(a) .

1.50 “ Intellectual Property ” shall mean (i) Patents; (ii) Licensed IP Rights; (iii) Trademarks and Trademark Registrations; (iv) Copyrights; and (v) Trade Secrets.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.51 “ Knowledge ” shall mean, whenever any representation or warranty is made by Seller or Buyer “to the Knowledge” of the Seller or Buyer, (i) the actual knowledge of the officers of the Seller or Buyer, respectively, and (ii) the knowledge that any such person referenced in clause (i) hereof, as a prudent business person, would have obtained in the usual course of the performance of his or her professional responsibilities to such party.

1.52 “ Liabilities ” shall mean liabilities of any kind or nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, liquidated or unliquidated, including but not limited to any liabilities for claims of product liability, personal injury or death, liability in tort or contract (including unripened liabilities due to past actions or sales), indebtedness, and any FDA or other Governmental Entity action or notification, and all costs and expenses (including reasonable attorneys’ fees), incurred in connection with the defense of any such claims.

1.53 “ Licensed IP Rights ” shall have the meaning given in Section 2.1(b) .

1.54 “ Litigation Cooperation Agreement ” shall mean the agreement between Buyer and Seller, substantially in the form attached hereto as Exhibit I , pursuant to which Buyer assumes control of all aspects of the Sun Litigation, Seller agrees to assist Buyer as required, at Buyer’s expense, in such Sun Litigation, and Buyer agrees to indemnify Seller with respect to Seller’s post-Closing assistance in such litigation.

1.55 “ Marketed Products ” shall mean Cardene IV, Cardene SR and Retavase.

1.56 “ Marketing and Promotional Documents ” shall have the meaning given in Section 2.1(i) .

1.57 “ Material Adverse Change ” and “ Material Adverse Effect ” shall mean any event or situation that has a material adverse change or effect, respectively, on the operations, assets, Liabilities, results of operations, cash flows or financial condition, or relations with material customers or material suppliers, of the Business, taken as a whole, other than any such change or effect resulting from or arising in connection with (i) [****]*.

1.58 “ Milestone and Revenue Payments ” shall have the meaning given in Section 3.1(b) .

1.59 “ Milestone Payments ” shall have the meaning given in Section 3.1(b) .

1.60 “ Net Sales ” shall mean, the gross invoiced sales amount of the Cardene PMB Product or any Ularitide product, as applicable, [****]*, and in each case less the following items (“ Net Sales Adjustments ”) as applicable to the Cardene PMB Product or the Ularitide product, as applicable, to the extent such items are reasonable and customary under industry practices and [****]*and are consistent in application with [****]*:

(a) actual credits or allowances granted upon returns, rejections or recalls (due to spoilage, damage, expiration of useful life or otherwise), retroactive price reductions, or billing corrections during the accounting period in which such sales are recorded;

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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(b) invoiced freight, postage, shipping and insurance, handling, export fees or tariffs, customs expenses and other transportation costs actually incurred by Buyer;

(c) credits or allowances actually granted including, without limitation, quantity, cash and other trade discounts (collectively, “ Credits ”), provided , however , Credits shall not include any credit, allowance or discount given with respect to the sale of the [****]*;

(d) taxes (including, without limitation, sales, value-added or excise taxes, but excluding income taxes imposed on the income of Buyer or its Affiliates and withholding taxes imposed on amounts payable to Buyer or its Affiliates), tariffs, customs duties, surcharges and other governmental charges incurred in connection with the production, sale, transportation, delivery, use, exportation or importation of CV Products that are incurred at time of sale or are directly related to the sale;

(e) discounts, refunds, rebates, charge backs, fees, credits or allowances (including, without limitation, amounts incurred in connection with government-mandated rebate and discount programs, third party rebates and charge backs, hospital buying group/group purchasing organization administration fees and managed care organization rebates) actually deducted from payment of invoices by customers or paid to customers during the accounting period in which such sales are recorded, offset by any such amounts that had been deducted from invoices or paid to customers in error and have been paid back to Buyer; and

(f) distribution fees and sales commissions to third parties, actually paid or incurred at the time of sale and which effectively reduce the selling price,

all in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied. For the avoidance of doubt, the transfer of any Cardene PMB Product by Buyer or its Affiliates to another Affiliate of Buyer for purposes of sale to an independent third party shall not be considered a sale; in such cases, Net Sales shall be determined based on the gross invoiced sales by such Affiliate to an independent third party, less the Net Sales Adjustments allowed under this Section.

1.61 “ Net Sales Adjustments ” shall have the meaning given in Section 1.60 .

1.62 “ NDA ” shall mean, with respect to each CV Product, the new drug application identified on Attachment 2.1(e) hereto.

1.63 “ Non Product-Specific Manufacturing Information ” shall have the meaning given in Section 2.1(g) .

1.64 “ Packaging Inventory ” shall have the meaning given in Section 2.1(v) .

1.65 “ Packaged Products ” shall mean Cardene Packaged Product and Retavase Packaged Product.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.66 “ Patents ” shall have the meaning given in Section 2.1(a) .

1.67 “ [****] *” shall mean the [****]*.

1.68 “ Product Inventory ” shall mean Cardene Product Inventory and Retavase Product Inventory.

1.69 “ Product-Specific Manufacturing Information ” shall have the meaning given in Section 2.1(f) .

1.70 “ Product Specifications ” shall mean the specifications for bulk active pharmaceutical ingredients for the respective Marketed Products, and for the respective Drug Products, as set forth in Attachments 1.70(a) and (b) , respectively.

1.71 “ Purchase Price ” shall have the meaning given in Section 3.1 .

1.72 “ Raw Materials and WIP ” shall mean all of the raw materials and work in progress owned by Seller or its Affiliates for use in the manufacture of the CV Products, in existence as of the Closing.

1.73 “ Registrations ” shall have the meaning given in Section 2.1(e) .

1.74 “ Research and Development Materials ” shall have the meaning given in Section 2.1(h) .

1.75 “ Retavase ” shall mean each presentation of any pharmaceutical preparation (including formulation changes and production intermediates) containing the active pharmaceutical ingredient reteplase, whether registered, marketed or in development by Seller or its Affiliates, as of the Closing Date.

1.76 “ Retavase Drug Product ” shall mean labeled or unlabelled vials containing the active pharmaceutical ingredient reteplase.

1.77 “ Retavase Packaged Product ” shall mean Retavase in the Product Inventory purchased by Buyer hereunder that is packaged and labeled for sale to the end user.

1.78 “ Retavase Product Inventory ” shall mean all of the inventory owned by Seller or its Affiliates of bulk active pharmaceutical ingredient reteplase, Retavase Packaged Product and Retavase Drug Product, in existence as of the Closing.

1.79 “ Revenue Payments ” shall have the meaning given in Section 3.1(b) .

1.80 “ SEC ” shall mean the United States Securities and Exchange Commission.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.81 “ Seller ” shall have the meaning given in the Preamble.

1.82 “ Seller Indemnitees ” shall have the meaning given in Section 13.2 .

1.83 “ [****] *” shall mean the [****]*.

1.84 “ Sun Litigation ” shall mean all rights relating to the patent infringement lawsuit in the United States District Court for the District of New Jersey (New Jersey Court) filed by Seller against Sun Pharmaceutical Industries Ltd. (“ Sun ”) seeking, among other things, to enjoin Sun’s infringement of Seller’s United States Patent Number 5,164,405, titled “Nicardipine pharmaceutical composition for parenteral administration” and to stay any sale of Sun’s Abbreviated New Drug Application product until at least the expiration of such patent, a related lawsuit filed by Seller in United States District Court for the Eastern District of Michigan, and all other related litigation between Seller and Sun, and any claims and counterclaims associated therewith.

1.85 “ Survival Date ” shall have the meaning given in Section 13.1 .

1.86 “ Tangible Assets ” shall have the meaning given in Section 2.1(l) .

1.87 “ Tax ” and “ Taxes ” shall mean all present or future taxes, charges, fees, levies, or other assessments including, without limitation, income, excise, property, value added, real estate, sales, use, payroll, employment, unemployment, transfer, social security, alternative, add-on minimum and franchise taxes imposed by any federal, state, county, or local government, or a subdivision or agency thereof. Such term shall include any interest, penalties, or additions payable in connection with such taxes, charges, fees, levies, duties, or other assessments.

1.88 “ Territory ” (i) for Cardene shall mean the United States of America and its possessions and territories; (ii) for Retavase shall mean Canada and the United States of America and its possessions and territories; and (iii) for Ularitide shall mean worldwide.

1.89 “ Third Party Consents ” shall have the meaning given in Section 6.4 .

1.90 “ Trade Secrets ” shall mean all technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies that are related to the Business.

1.91 “ Trademarks ” shall mean all trademarks, service marks, trade names, names, slogans, taglines, logos, design marks, trade dress, product designs, and product packaging, including all applications for and registrations of the foregoing, and including those at common law that are related to the CV Products.

1.92 “ Trademark Registrations ” shall have the meaning given in Section 2.1(c) .

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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1.93 “ Transition Services Agreement ” shall mean the transition services agreement to be entered into by Buyer and Seller, at the request of Buyer as contemplated in Section 8.7 , whereby Seller shall, for fees specified therein, provide to Buyer certain services relating to the transition of the Business.

1.94 “ Ularitide ” shall mean each presentation of any pharmaceutical preparation (including formulation changes and production intermediates) containing the active pharmaceutical ingredient urodilatin, whether registered, marketed or in development by Seller or its Affiliates, as of the Closing Date.

1.95 “ Worldwide Safety Reports ” shall have the meaning given in Section 2.1(j) .

ARTICLE 2

TRANSFER OF ASSETS; LICENSE AND SUBLICENSE

2.1 Purchase and Sale of Assets . Subject to the terms and conditions of this Agreement, Seller shall sell, transfer, assign, convey, deliver, license or sublicense, as specified below, to Buyer, or shall cause to be sold, transferred, assigned, conveyed, delivered, licensed or sublicensed, as specified below, to Buyer, and Buyer shall acquire all of Seller’s right, title and interest in and to the properties and assets of Seller identified in this Section 2.1 (collectively, the “ Assets ”).

(a) Patents . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to the patent filings related to the CV Products listed in Attachment 2.1(a) , and any patents of addition, re-examinations, reissues, extensions, granted supplementary protection certifications, substitutions, confirmations, registrations, revalidations, revisions, additions and the like, of or to said patents and any and all divisionals, continuations and continuations-in-part, and any patents issuing therefrom, as well as any patent applications related thereto (collectively, the “ Patents ”). Seller hereby retains a royalty-free right and license, including the right to sublicense, under the Patents, solely to the extent necessary for, and solely for the purposes of, performing Seller’s obligations under this Agreement and the Transition Services Agreement and only until the completion of Seller’s obligations hereunder and thereunder.

(b) Licensed IP Rights . Upon Closing, Seller shall transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights under all patents, know-how and other intellectual property rights which Seller has a right under contract to use and which are used in the Business and those intellectual property rights contained in the license agreements included as part of the Assumed Contracts or as otherwise set forth on Attachment 2.1(b) , but subject to any restrictions and obligations in such license agreements (the “ Licensed IP Rights ”). Seller hereby retains a royalty-free right and license under the Licensed IP Rights for use in the Business, solely to the extent necessary for, and solely for the purposes of, performing Seller’s obligations under this Agreement and the Transition Services Agreement, and only until the completion of Seller’s obligations hereunder and thereunder.

 

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(c) Trademark Registrations . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to all Trademarks used in the Business and as set forth on Attachment 2.1(c) , together with (i) all common law rights to the Trademarks, (ii) the goodwill of the Business symbolized by the Trademarks, (iii) all causes of actions, claims and demands or other rights for, or arising from any infringement, dilution, unfair competition, or other violation, including past infringement, dilution, unfair competition, or other violation, of the Trademarks, and (iii) all rights corresponding thereto throughout the world (the “ Trademark Registrations ”).

(d) Copyrights . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to registered and unregistered copyrights, including all related registrations, applications and common law rights, in any labels, product marketing materials or other copyrighted works related to the CV Products (the “ Copyrights ”).

(e) Registrations . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to the regulatory files and approvals, registrations and governmental authorizations, each NDA, each IND, compliance notices, licenses and permits, and any applications to the FDA or the comparable foreign law or bodies in effect or pending at the Closing Date, and all materials and information relating to the FDA and other Governmental Entity approvals for the CV Products as set forth on Attachment 2.1(e) , and all information contained therein (collectively, the “ Registrations ”).

(f) Product-Specific Manufacturing Information . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer all of Seller’s rights, title and interest in and to all of Seller’s manufacturing information (the “ Product-Specific Manufacturing Information ”) used solely and exclusively in the Business. Seller shall retain a non-exclusive license to use Product-Specific Manufacturing Information, solely for purposes of fulfilling its obligations under this Agreement and the Transition Services Agreement, and only until completion of Seller’s obligations hereunder and thereunder.

(g) Non Product-Specific Manufacturing Information . Upon Closing, Seller shall grant, or shall cause to be granted to Buyer, a perpetual, paid up, irrevocable, royalty-free, non-exclusive license, with the right to sublicense, to use, only in the Business, any manufacturing information that is used by Seller both in the Business and also in other business activities of Seller (the “ Non-Product Specific Manufacturing Information ”). Seller shall retain a non-exclusive license to use Non-Product-Specific Manufacturing Information in other business activities of Seller.

(h) Research and Development Materials . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, (i) originals of all documents and electronically stored information (excluding e-mails or other electronic correspondence not readily available in hard copy) to the extent related to the research and development of the CV Products that are owned or controlled by Seller or its Affiliates and any of their respective agents, and (ii) copies of all other documents

 

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and electronically stored information (excluding e-mails or other electronic correspondence not readily available in hard copy) to the extent related to the research and development of the CV Products (the “ Research and Development Materials ”). After Closing, Seller shall retain a right to use the Research and Development Materials, solely for purposes of fulfilling its obligations under this Agreement and the Transition Services Agreement, and only until completion of Seller’s obligations hereunder and thereunder.

(i) Marketing and Promotional Documents . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all marketing and promotional documents and information (including electronic information, but excluding e-mails or other electronic correspondence not readily available in hard copy) related to the CV Products existing on the Closing Date, owned by Seller or its Affiliates, such as customer lists, marketing and promotional plans, documents and materials, material contained on Seller’s internet sites , field force training manuals and materials, and the like, solely to the extent relating exclusively to the Business (the “ Marketing and Promotional Documents ”). Buyer’s use of the Marketing and Promotional Documents shall be subject to Section 10.12 .

(j) Worldwide Safety Reports . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all worldwide safety reports in the possession or control of Seller or its Affiliates with respect to the CV Products in existence as of the Closing (the “ Worldwide Safety Reports ”).

(k) Clinical Data . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all clinical data related to the CV Products and which is contained in Seller’s databases or otherwise in Seller’s possession or control (the “ Clinical Data ”).

(l) Tangible Assets . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, certain tangible assets, as listed in Attachment 2.1(l) (the “ Tangible Assets ”).

(m) Domain Names . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to the domain names used primarily in the Business and listed in Attachment 2.1(m) (collectively, the “ Domain Names ”).

(n) Product Inventor y. Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, the Product Inventory.

(o) Raw Materials and WIP . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, the Raw Materials and WIP.

 

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(p) Assumed Contracts . Upon Closing, Seller shall sell, transfer, assign, convey and deliver or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all rights and benefits of Seller in existence as of the Closing Date or arising after the Closing Date under the contracts listed in Attachment 2.1(p) (the “ Assumed Contracts ”), including any rights to Intellectual Property. The Assumed Contracts shall be deemed to include all purchase orders and change orders related thereto.

(q) Clinical Trial Materials . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to the Clinical Trial Materials.

(r) Clinical Trial Study Reports . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights, title and interest in and to the Clinical Trial Study Reports.

(s) Sun Litigation . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s rights relating to the Sun Litigation, including, without limitation, all documents and information and other things gathered or produced by any party in relation thereto.

(t) Books and Records . Upon Closing, Seller shall sell, transfer, assign, convey and deliver, or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer all Books and Records.

(u) Customer Orders . Upon Closing, Seller shall sell, transfer, assign, convey and deliver or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all of Seller’s right, title and interest in all unfilled orders for the CV Products, including without limitation, all unfilled Customer Orders as of the Closing Date (i.e. Customer Orders to the extent that (i) the Packaged Products at issue have not been shipped to the applicable customer as of the Closing Date and (ii) Buyer (rather than Seller or any of its Affiliates) would be paid by the applicable customer after shipment by Buyer following the Closing Date), a list of which shall be provided to Buyer within [****]* after the Closing Date.

(v) Packaging Inventory . Upon Closing, Seller shall sell, transfer, assign, convey and deliver or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer, all packaging material for the Marketed Products, including all package labels and product inserts used in connection with the Marketed Products owned or controlled by Seller or its Affiliates as of the Closing (the “ Packaging Inventory ”).

(w) Other Intellectual Property . Upon Closing, Seller shall sell, transfer, assign, convey and deliver or shall cause to be sold, transferred, assigned, conveyed and delivered to Buyer all of Seller’s rights, title and interest in and to the Trade Secrets and other intellectual property not hereto forth assigned that are used solely in the Business.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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2.2 Excluded Assets . Buyer hereby acknowledges that Seller is not transferring hereunder any assets, rights or interests of Seller or its Affiliates not specifically set forth in Section 2.1 (collectively, the “ Excluded Assets ”), including, without limitation:

(a) any contracts or agreements with any third party that are not Assumed Contracts or identified in Section 2.1(b) ;

(b) any assets or rights used in the research, development, manufacture, control, packaging or release, marketing or sale of products other than the CV Products, excluding such assets or rights of Seller or its Affiliates that were used primarily in, or were otherwise necessary for the conduct of, the Business on the Effective Date that are either (i) Assets (transferred to Buyer pursuant to Section 2.1 ) or (ii) are covered in Section 10.1(a) ;

(c) any assets or rights, including, without limitation, technical information and intellectual property, that are not used exclusively in the Business and are used in other business activities of Seller, excluding such assets or rights of Seller or its Affiliates that were used primarily in, or were otherwise necessary for the conduct of, the Business on the Effective Date that are either (i) Assets (transferred to Buyer pursuant to Section 2.1 ) or (ii) are covered in Section 10.1(a) ;

(d) equipment, computer software, and computer hardware, except as listed on Attachment 2.1(b) or Attachment 2.1(l) ;

(e) all Accounts Receivable arising on or prior to the Closing Date; and

(f) corporate records (financial statements, formation documents, stock records, board resolutions and minutes, and the like).

2.3 Assumed Liabilities . Buyer shall assume and agree to honor, pay and discharge when due only the following Liabilities of Seller (the “ Assumed Liabilities ”), and no others:

(a) all Liabilities of Seller under the Assumed Contracts, but only to the extent such Liabilities arise from any event, circumstance or condition occurring after the Closing Date;

(b) all Liabilities of Seller under the Registrations to be performed after the Closing Date, but only to the extent such Liabilities relate to any event, circumstances or conditions occurring after the Closing Date;

(c) all Liabilities relating to the Sun Litigation, other than (i) Liabilities that arise as a result of actions taken or omitted by Seller and its Affiliates on or prior to the Closing Date (unless taken or omitted with the consent of Buyer), and (ii) all fees, costs and expenses incurred by or on behalf of Seller or any of its Affiliates with respect to the Sun Litigation on or prior to the Closing Date (including attorneys’ fees);

(d) all other Liabilities (other than Excluded Liabilities) arising out of the conduct of the Business or arising out of or related to the Assets, but in each case solely to the extent such Liabilities are incurred or relate to events, circumstances, conditions, actions or

 

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activities occurring after the Closing Date, including, without limitation, any product liability, product warranty, product return, charge-back, rebate or Medicaid, Medicare or other reimbursements, or similar claim, related to the CV Products sold after the Closing Date;

(e) all [****]*;

(f) all Liabilities relating to Taxes attributable to ownership of the Assets and operation of the Business during periods beginning after the Closing Date, but not including, for the avoidance of doubt, Taxes that are payable after the Closing Date relating to taxable periods, or portions thereof, ending on or prior to the Closing Date, determined, in the case of any period that includes but does not end on the Closing Date, on a pro rata per diem basis; and

(g) all costs and expenses incurred after the Closing Date in connection with or related to the[****]*, including without limitation, any and all work or agreements related thereto, and the [****]*relating to the [****]*, [****]*.

2.4 Excluded Liabilities . Except for the Assumed Liabilities, Buyer shall not assume by virtue of this Agreement or the transactions contemplated hereby, and shall have no liability for, any Liabilities of Seller or any of its Affiliates (including, without limitation, those related to the Business) of any kind, character or description whatsoever (the “ Excluded Liabilities ”). Seller shall discharge in a timely manner or shall make adequate provision for all of the Excluded Liabilities that affect the Business, Assets or Assumed Liabilities, provided that Seller shall have the ability to contest, in good faith, any such claim of liability asserted in respect thereof by any person or entity. Excluded Liabilities shall include, without limitation:

(a) all Taxes (other than Taxes that are Assumed Liabilities) including those that result from or have accrued in connection with the operation of the Business on or prior to the Closing Date;

(b) any Liability or obligation of Seller of any nature owed to any employees, directors, former employees, agents or independent contractors, whether or not employed by Buyer after the Closing, that (A) arises out of or relates to the employment or service provider relationship between Seller or its Affiliates (or any predecessor in interest) and any such individual(s) (including, but not limited to, claims for compensation, discrimination, harassment, or retaliation and any Liability under Seller’s Employee Benefit Plans); or (B) arises out of or relates to events, circumstances or conditions occurring on or prior to the Closing Date (including the transactions contemplated by this Agreement);

(c) all Accounts Payable arising on or prior to the Closing Date;

(d) Liabilities of Seller under the Assumed Contracts that were incurred, arose or became payable on or prior to the Closing Date;

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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(e) all Liabilities of Seller and its Affiliates under the Registrations, to be performed, or which relate to any event, circumstance or condition occurring, on or prior to the Closing Date;

(f) all Liabilities with respect to accrued expenses incurred on or prior to the Closing in connection with the CV Products or the Business;

(g) all Liabilities arising out of claims of third parties for damage or injury suffered as the result of defective products sold or manufactured on or prior to the Closing Date;

(h) all Liabilities incurred (i) up through the Closing Date and (ii) after the Closing Date [****]*, in connection with or related to the [****]*, including without limitation the [****]* and of any and all work and agreements relating thereto, and the [****]* relating the [****]*; and

(i) Liabilities of Seller and its Affiliates relating to or arising under this Agreement.

2.5 Risk of Loss . All risk of loss with respect to the Assets (whether or not covered by insurance) shall be on Seller or its Affiliates up to the time of Closing, whereupon such risk of loss shall pass to Buyer.

2.6 Taxes . All applicable sales, transfer, documentary, use, stamp, filing, recording, conveyance, excise, mortgage, documentary recording taxes and other similar taxes and fees that may be levied on the sale, assignment, transfer or delivery of the Assets to be sold and transferred as provided in this Agreement shall be borne by the parties equally. The parties shall cooperate with each other and use commercially reasonable efforts to minimize such Taxes.

2.7 Third-Party Consents . To the extent that any Assumed Contract, Intellectual Property or Registration is not assignable without the consent of another party, this Agreement shall not constitute an assignment or an attempted assignment thereof if such assignment or attempted assignment would constitute a breach thereof or a default thereunder. Seller and Buyer shall each use commercially reasonable efforts to obtain the consent of [****]*, to the extent required, for the assignment of any Assumed Contracts to which it is a party. Seller shall use its commercially reasonable efforts to obtain any and all consents necessary for the effective assignment to and assumption by Buyer of the Assumed Contracts, the Intellectual Property, the Registrations and the Assumed Liabilities, including the Third Party Consents set forth on Attachment 4.2(a) hereto and the consents set forth on Schedule 6.3 of the Disclosure Schedule . All such consents shall be in writing and executed counterparts thereof shall be delivered promptly to Buyer. If any such consent shall not be obtained, Seller shall cooperate with Buyer in any reasonable arrangement designed to provide for Buyer the benefits intended to be assigned to Buyer under the relevant Assumed Contract, Intellectual Property or Registration, including enforcement at the cost and for the account of Buyer of any and all rights of Seller against the other party thereto arising out of the breach or cancellation thereof by such other party or

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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otherwise. If and to the extent that such arrangement cannot be made, Buyer shall have no obligation pursuant to Section 2.3 or otherwise with respect to any such Assumed Contract, Intellectual Property or Registration. The provisions of this Section 2.7 shall not affect the right of Buyer not to consummate the transactions contemplated by this Agreement if the condition to its obligations hereunder contained in Section 9.1 has not been fulfilled.

ARTICLE 3

CONSIDERATION

3.1 Purchase Price . As full consideration of Seller’s sale, transfer, assignment, conveyance, delivery, license or sublicense of the Assets to Buyer, Buyer will assume the Assumed Liabilities and pay and deliver or cause to be paid and delivered to Seller, in the manner set forth in this Section, an aggregate purchase price (the “ Purchase Price ”) equal to the sum of the Initial Purchase Price set forth in Section 3.1(a) and the Milestone and Revenue Payments, if applicable, set forth in Section 3.1(b) .

(a) Initial Purchase Price . On the Closing Date, Buyer shall pay Seller Eighty Five Million United States Dollars ($85,000,000) (the “ Initial Purchase Price ”), less the Escrow Amount.

(b) Milestone and Revenue Payments . In addition to the payment made by Buyer pursuant to Section 3.1(a) , after the Closing Date, Buyer shall make the following non-refundable cash payments to Seller, in each case, subject to the satisfaction of the respective milestones:

i. Cardene PMB Product Approval Milestone Payment . Twenty Five Million United States Dollars ($25,000,000) shall become payable upon Buyer’s receipt of the Initial FDA Approval, such payment to be made promptly, and in no event later than [****]*, after receipt of such approval.

ii. Revenue Milestone Payments .

(1) Thirty Million United States Dollars ($30,000,000) payable to Seller if and when the Net Sales of the Cardene PMB Product in any twelve consecutive month period, calculated as of the end of each calendar month, first exceed Eighty Million United States Dollars ($80,000,000).

(2) Thirty Million United States Dollars ($30,000,000) payable to Seller if and when the Net Sales of the Cardene PMB Product in any twelve consecutive month period, calculated as of the end of each calendar month, first exceed One Hundred Fifty Million United States Dollars ($150,000,000).

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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(3) Each payment pursuant to subsections (1) and (2) shall, if applicable, be made promptly, but no later than [****]*, following the occurrence of the relevant milestone.

The milestone payments under subsections (i) and (ii) of this Section 3.1(b) are collectively referred to as “ Milestone Payments ”.

iii. Other Revenue Payments . Buyer shall pay to Seller, on a [****]* basis as provided in Section 3.3 , (A) an amount equal to ten percent (10%) of the Net Sales of the Cardene PMB Product from sales occurring after the Closing Date and prior to the earlier to occur of (i) December 31, 2014 and (ii) the [****]*, and (B) on a country-by-country basis, an amount equal to five (5%) of the Net Sales of any Ularitide product from sales occurring after the Closing Date and prior to the later to occur of (i) the expiration of the applicable exclusivity period in such country, and (ii) the expiration of the last Patent covering Ularitide in such country. The payments under this subsection iii of Section 3.1(b) are referred to as “ Revenue Payments ” and Revenue Payments and Milestone Payments are collectively referred to as “ Milestone and Revenue Payments ”.

(c) Deposit in Escrow . At Closing, Buyer shall deliver cash from the Initial Purchase Price in the amount of Six Million United States Dollars ($6,000,000) (the “ Escrow Amount ”) to the Escrow Agent pursuant to the Escrow Agreement, to be held and disbursed upon and subject to all of the terms and conditions set forth therein.

3.2 Method of Payment . The payments to be made pursuant to Section 3.1 shall be made by wire transfer in immediately available funds as follows:

(a) delivery of the Initial Purchase Price, less the Escrow Amount, to such account as Seller shall have designated to Buyer in writing not less than two (2) business days prior to the Closing Date, and any such payment shall be deemed to have been paid when recorded in the proper account;

(b) delivery to Wells Fargo Bank, National Association (the “ Escrow Agent ”) of the Escrow Amount in accordance with the wire transfer instructions of the Escrow Agent delivered to Buyer in writing not less than two (2) business days prior to the Closing Date. The Escrow Amount shall be held in escrow by the Escrow Agent pursuant to the terms of an escrow agreement in substantially the form of Exhibit H attached hereto (the “ Escrow Agreement ”) in order to provide a source for the payment of any [****]*. The Escrow Agreement shall provide for the release of any remaining escrow funds to Seller [****]* from the Closing Date [****]*; and

(c) delivery of the Milestone and Revenue Payments to such account as Seller shall have designated to Buyer in writing not less than two (2) business days prior to the Closing Date (or such other account as designated by Buyer after Closing delivered pursuant to the notice provision herein).

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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3.3 Revenue Payments; Reports . Buyer shall pay to Seller, [****]*, any Revenue Payments that become due. Such payments will be accompanied by a report containing the following information as it pertains to the [****]* just ended:

(a) the gross sales of the Cardene PMB Product (in the aggregate and separately stated for each selling party);

(b) the computation of the Net Sales of Cardene PMB Product actually received by Buyer based on the U.S. dollar value determined in (a) above, including an accounting of any Net Sales Adjustments from the gross sales to arrive at the Net Sales amount, and the exchange rates used for converting foreign currency to U.S. dollars in accordance with Section 3.4 hereof;

(c) the computation of earned Revenue Payments; and

(d) such other information necessary to confirm the Revenue Payments payable pursuant to Section 3.1(b)(iii) as Seller may reasonably request.

If no earned Revenue Payments are due for a [****]*, Buyer will so report. At the end of the [****]* in which the Revenue Payments are no longer due, Buyer will provide to Seller a final written report that complies in all respects with this Section 3.3 . Buyer will require each Affiliate and sublicensee to make appropriate reports to Buyer in a timely manner to enable Buyer to comply with this Section 3.3 . Buyer shall provide Seller a similar report containing the information in subsections (a) and (b) above upon payment of the Milestone Payments.

3.4 Accounting . The Net Sales used for computing the Revenue Payments payable to Seller by Buyer will be computed in U.S. dollars. If Buyer or an Affiliate or a sublicensee sells any Cardene PMB Product for currency other than U.S. currency, for purposes of calculating the earned Revenue Payments payable to Seller, Buyer will determine the Net Sales for the Cardene PMB Product in such currency and then convert the Net Sales into its equivalent in U.S. currency using the average New York foreign exchange selling rate for such currency for the month in which such sale is reported, as published by The Wall Street Journal. If such rate is not so published, the conversion will be at the average selling rate for such currency for the month in which such sale is reported, as published by a leading New York, New York bank chosen by Buyer and reasonably acceptable to Seller (such acceptance not to be unreasonably withheld, delayed or conditioned).

3.5 Records; Audits . Buyer shall keep, and shall cause its Affiliates and third party sublicensees to keep, full and accurate records and books of account containing all particulars that may be necessary for the purpose of calculating Net Sales. Such records and books of account, with all necessary supporting data, shall be kept by Buyer (or its Affiliates or sublicensees) at its place of business or at another location under Buyer’s control for the [****]* next following the end of the calendar year to which each shall pertain. Upon written request from Seller, and in no event more than (i) [****]* and (ii) [****]* of the Closing Date

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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thereafter, Buyer shall permit an independent nationally recognized accounting firm selected by Seller and reasonably acceptable to Buyer, which acceptance shall not be unreasonably withheld, delayed or conditioned, to have access after reasonable advance notice ([****]*) and during normal business hours to such records and books of account as may be reasonably necessary to verify the accuracy of the Buyer’s reports of Net Sales as provided herein. Notwithstanding the preceding sentence, Seller may make additional requests if Seller in good faith believes that there is reasonable cause to make such additional requests based on findings in prior reports. All such verifications shall be conducted at the expense of Seller. In the event any such audit concludes that adjustments should be made in Seller’s favor, Seller shall provide to Buyer a complete copy of the accountant’s written report reflecting such adjustments. Buyer shall have the right to dispute such adjustments in good faith by providing written notice of such dispute to Seller within thirty (30) days of the date on which the applicable written report is received by Buyer. Any dispute shall be resolved in accordance with the provisions of Section 14.4 . Buyer shall pay the amounts, if any, finally determined to be due (plus accrued interest thereon, from the date originally due, at the annual rate announced by the Bank of America (or any successor) as its prime rate in effect on the date that such payment was first due [****]* promptly, and in no event later than thirty (30) days after the date Buyer receives Seller’s accounting firm’s written report or the dispute is resolved in accordance with Section 14.4 , as the case may be. The fees charged by the accounting firm shall be paid by [****]* unless the audit (or final resolution, if applicable) reflects that adjustments in favor of [****]* for the [****]* or more of the aggregate amount paid or payable by [****]* to [****]* during the period, in which case [****]* shall pay the reasonable fees and expenses charged by such accounting firm, promptly after receipt of the invoice for such audit. Seller agrees that all information subject to review under this Section 3.5 is Confidential Information of Buyer and that it shall cause its accounting firm to retain all such information subject to the confidentiality restrictions set forth in this Agreement.

3.6 Late Payments . Any payment owed under this Agreement that is not paid on or before the date that is [****]* following the date on which such payment becomes due pursuant to this Agreement shall accrue interest, to the extent permitted by law, at the annual rate announced by Bank of America (or its successor) as its prime rate in effect on the date that such payment was first due [****]* until the date on which such payment is made.

3.7 Allocation of Purchase Price . Prior to Closing, Buyer and Seller will make reasonable efforts to agree on an allocation of the Initial Purchase Price (and any Assumed Liabilities properly included for tax purposes) among the Assets in a manner that is consistent with the principles of Section 1060 of the Internal Revenue Code of 1986, as amended (or any successor provision of any future tax law, or any comparable provision of state, local or foreign tax law). If the parties are able to agree to an allocation of the Initial Purchase Price pursuant to the preceding sentence, Buyer and Seller will (i) act in accordance with such allocation in the preparation and filing of all Tax returns (including the preparation and filing of IRS Form 8594), (ii) take no position inconsistent with the allocation for all Tax purposes, and (iii) allocate any post-Closing payments made pursuant to Sections 3.1 or 3.3 consistent with the methodology used in such allocation. In the event that such allocation is disputed by any taxing authority, the party receiving notice of the dispute shall promptly notify the other party hereto and shall forward to such other party copies of all correspondence with such taxing authority in respect of such disputed allocation.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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ARTICLE 4

CLOSING

4.1 Closing . The Closing of the sale, transfer, assignment, conveyance, delivery, license or sublicense of the Assets to Buyer, and the consummation of the other transactions contemplated hereby shall be held at the offices of Seller (the “ Closing ”) as promptly as practicable, but no later than the date five (5) business days after all conditions (other than the respective delivery obligations of the parties) hereto have been satisfied or waived, or at such other time or date as may be agreed to by the parties to this Agreement (the “ Closing Date ”). The Closing shall have deemed to have occurred on 11:59 pm on the Closing Date.

4.2 Actions at Closing . At the Closing, sale, transfer, assignment, conveyance, delivery, license or sublicense of the Assets to Buyer will be effected by Seller pursuant to such good and sufficient instruments of conveyance, transfer and assignment as shall be necessary to transfer to Buyer good and valid title to the Assets.

(a) Deliveries by Seller at Closing . The purchase of the Assets by Buyer in accordance with the terms of this Agreement are subject to Seller’s delivery to Buyer at the Closing of the following instruments, documents, agreements and certificates:

i. the General Assignment and Bill of Sale substantially in the form attached hereto as Exhibit A (the “ Bill of Sale ”), duly executed by Seller;

ii. a counterpart of the Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit B (the “ Assignment and Assumption Agreement ”), duly executed by Seller;

iii. the Patent Assignment Agreement substantially in the form attached hereto as Exhibit C (the “ Patent Assignment Agreement ”), duly executed by Seller;

iv. the Trademark Assignment Agreement substantially in the form attached hereto as Exhibit D (the “ Trademark Assignment Agreement ”), duly executed by Seller;

v. the Domain Name Assignment Agreement substantially in the form attached hereto as Exhibit E (the “ Domain Name Assignment Agreement ”), duly executed by Seller;

vi. a counterpart of the Transition Services Agreement, substantially in the form attached hereto as Exhibit F , duly executed by Seller;

 

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vii. the Third Party Consents listed in Attachment 4.2(a) , in substantially the form attached hereto as Exhibit G , signed by an authorized representative of each of the consenting parties to such agreements, and such Third Party Consents (a) shall not be subject to the satisfaction of any condition that has not been satisfied or waived, and (b) shall be in full force and effect;

viii. a counterpart of the Escrow Agreement, , substantially in the form attached hereto as Exhibit H , duly executed by Seller and Escrow Agent;

ix. a counterpart of the Litigation Cooperation Agreement, duly executed by Seller;

x. such other documents and agreements as may be necessary to effect the transactions contemplated by this Agreement;

xi. a certificate executed by a duly authorized officer of Seller certifying that (i) each of the representations and warranties of Seller set forth in Article 6 of this Agreement that is qualified by materiality is true and correct in all respects, (ii) each of such representations and warranties that is not so qualified is true and correct in all material respects, in each case, as of the Closing Date as though made on and as of the Closing Date or, in the case of representations and warranties made as of a specified date earlier than the Closing Date, on and as of such earlier date, except that any such representation or warranty made as of a specified date shall only need to have been true and correct on and as of such date, and (iii) all of the terms, covenants and conditions of this Agreement to be complied with and performed by Seller, at or prior to the Closing have been duly complied with and performed in all material respects;

xii. a certificate of the Secretary of Seller, in form and substance reasonably satisfactory to Buyer, as to the authenticity and effectiveness of the actions of the board of directors of Seller authorizing this Agreement and the transactions contemplated in this Agreement;

xiii. evidence, in form and substance reasonably satisfactory to Buyer, that Seller has fully paid all fees, costs and expenses payable pursuant to Section 8.6 ;

xiv. for each NDA identified and each IND identified on Attachment 2.1(e) , a letter from Seller to the FDA, in form and substance reasonably satisfactory to Buyer, stating that all rights with respect to the respective application have been transferred to Buyer as of the Closing Date; and

xv. a certification as to Seller’s non-foreign status in accordance with U.S. Treasury Regulations Section 1.1445-2(b)(2).

(b) Deliveries by Buyer at Closing . The sale of the Assets by Seller in accordance with the terms of this Agreement are subject to Buyer’s delivery to Seller (unless noted otherwise) at the Closing of the following instruments, agreements and certificates:

i. the Initial Purchase Price, less the Escrow Amount;

ii. evidence of payment of the Escrow Amount to the Escrow Agent;

 

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iii. a counterpart of the Assignment and Assumption Agreement, duly executed by Buyer;

iv. a counterpart of the Transition Services Agreement, duly executed by Buyer;

v. a counterpart of the Escrow Agreement, duly executed by Buyer and Escrow Agent;

vi. a counterpart of the Litigation Cooperation Agreement, duly executed by Buyer;

vii. a certificate executed by a duly authorized officer of Buyer certifying that (i) each of the representations and warranties of Buyer set forth in Article 7 of this Agreement that is qualified by materiality is true and correct in all respects, (ii) each of such representations and warranties that is not so qualified is true and correct in all material respects, in each case, as of the Closing Date as though made on and as of the Closing Date or, in the case of representations and warranties made as of a specified date earlier than the Closing Date, on and as of such earlier date, except that any such representation or warranty made as of a specified date shall only need to have been true and correct on and as of such date, and (iii) all of the terms, covenants and conditions of this Agreement to be complied with and performed by Buyer, at or prior to the Closing have been duly complied with and performed in all material respects;

viii. a certificate of the Secretary of Buyer, in form and substance reasonably satisfactory to Seller, as to the authenticity and effectiveness of the actions of the board of directors (and shareholders, if applicable) of Buyer authorizing this Agreement and the transactions contemplated in this Agreement.

ARTICLE 5

EMPLOYMENT MATTERS

5.1 Employees .

(a) Notwithstanding the provisions of the Confidentiality Agreement, Buyer shall have the right prior to Closing to contact the employees of Seller currently employed in the Business, who are identified on Attachment 5.1(a) (each, a “ Business Employee ”), and to discuss possible terms of employment with such Business Employees and Buyer may make offers of employment, contingent on the Closing, to any of such Business Employees in its discretion. Buyer shall deliver to Seller a list of the Business Employees to whom Buyer has or intends to make offers of employment (each, an “ Identified Employee ”) at least fifteen (15) days prior to the date of the Closing. The Seller shall use reasonable best efforts to cooperate with Buyer to facilitate the hiring of the Identified Employees. Seller and its Affiliates shall not make competing offers of employment to the Identified Employees and shall, for a period of [****]*

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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from the Closing Date, refrain from, directly or indirectly, employing, engaging or seeking to employ or engage any Identified Employee that has been hired by Buyer, unless such employee (i) has resigned voluntarily at least [****]* prior to such employment or engagement (without any solicitation from Seller or any of its Affiliates) or has been terminated by Buyer after the Closing Date or (ii) responds to any general media solicitation of employment or engagement by the Seller or its Affiliate. Notwithstanding the foregoing, nothing in this Agreement shall constitute a commitment of Buyer to continue the employment of any Identified Employee for any period following the Closing Date, nor limit the right of Seller or its Affiliates to change any terms or conditions of employment of any employed Identified Employee following the Closing Date.

(b) Prior to the Closing Date, or as promptly as possible thereafter, and not withstanding any otherwise applicable Employee Benefit Plan, Seller shall take such actions, to be in effect as of the Closing Date or as promptly as possible thereafter, as are necessary to cause all Identified Employees who accept offers of employment from Buyer (the “ Hired Employees ”) to be paid, on a pro-rata basis, any earned sales incentive compensation and other comparable pay for the period of employment ending on the date of termination of employment (including, without limitation, the applicable bonuses for 2007 that would otherwise have been payable pursuant to any Seller Employee Benefit Plan, to the extent that such bonuses have not been paid prior to Closing), as well as any accrued vacation pay, sick leave, or other payroll entitlements. Seller shall waive any notice requirements or other conditions applicable to any Hired Employee in connection with such employee’s termination of his or her employment with Seller.

(c) Seller shall take all action necessary to give any notification required by the Worker Adjustment and Retraining Notification Act (“ WARN ”), comply with any requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 and pay any and all severance, vacation, paid time off, unpaid wages, unpaid bonuses, unpaid commissions or other sums that may be due to Business Employees in connection with their termination of employment with Seller, if any, or otherwise pursuant to the terms of any of Seller’s employee benefit plan. Buyer shall provide to Seller in a timely manner any information reasonably necessary to determine whether an Identified Employee has been offered employment in a comparable position and such other information as is reasonably necessary for Seller to comply with its obligations, if any, under WARN or any similar state law, rule or regulation with respect to Seller’s termination of the employment of any Business Employees.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to the exceptions and disclosures listed in the Disclosure Schedule (including the attachments and exhibits thereto) Seller represents and warrants to Buyer as follows:

6.1 Organization and Authority . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to execute and consummate this Agreement, and such other instruments, agreements and transactions as may be contemplated hereunder and thereunder. Seller has all requisite corporate power and authority and all authorizations, licenses, permits and certifications necessary to carry on the Business as now being conducted and to own, lease and operate the

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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Assets. Seller is qualified as a foreign corporation to do business in every jurisdiction in which the nature of its business or its ownership of property requires it to be qualified and in which the failure to be so qualified would have a Material Adverse Effect. All corporate acts and other proceedings required to be taken by or on the part of Seller to authorize Seller to execute, deliver and perform this Agreement and such other instruments, agreements and transactions as may be contemplated hereunder, have been duly and properly taken, and no further action on the part of Seller or its stockholders is necessary. This Agreement has been duly executed and delivered by Seller and constitutes legal, valid and binding obligations of Seller enforceable in accordance with its terms, except as such enforceability may be subject to or limited by (i) applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the enforcement of creditors’ rights generally and (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in law or equity.

6.2 No Violation or Conflict . The execution and delivery by Seller of this Agreement and such other instruments, agreements and transactions as may be contemplated hereunder, and the consummation by Seller of the transactions contemplated hereby and thereunder will not (i) violate any law, statute, rule or regulation or judgment, order, writ, injunction or decree of any Governmental Entity applicable to Seller, or (ii) materially conflict with, result in any material breach of, or constitute a material default (or an event which with notice or lapse of time or both would become a material default) under the Certificate of Incorporation or bylaws of Seller or any agreement to which Seller is a party, (iii) materially interfere with Seller’s performance of its obligations hereunder, or (iv) result in the creation or imposition of any lien or encumbrance on Seller or the Assets, and to the Knowledge of Seller, there are currently no proceedings pending before, or threatened by, any Governmental Entity that could reasonably be expected to result in the adoption, amendment or issuance of any law, statute, rule or regulation or judgment, order, writ, injunction or decree materially adverse to the Assets or the Business.

6.3 Consents and Approvals . Except as set forth in Schedule 6.3 of the Disclosure Schedule , no notice to, declaration, filing or registration with, or authorization, consent or approval of, or permit from, any Governmental Entity, or any other person or entity, is required to be made or obtained by Seller in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, except with respect to the HSR Filings and any declarations, filings, registrations, authorizations, consents, approvals or permits which if not obtained or made have not had and would not reasonably be expected to have individually or in the aggregate a Material Adverse Effect or materially interfere with Seller’s performance of its obligations hereunder.

6.4 Assumed Contracts . Seller has made available to Buyer complete and correct copies of the Assumed Contracts and any amendments, modifications and supplements thereto. All the Assumed Contracts are in full force and effect and are valid, binding and enforceable in accordance with their terms by and against Seller, except as such enforceability may be subject to or limited by (i) applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the enforcement of creditors’ rights generally; and (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in law or equity; provided that there may be Assumed Contracts that have expired by their terms, but contain surviving

 

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rights or Liabilities that will be assumed by Buyer. Except as set forth in Schedule 6.4(a) of the Disclosure Schedule , neither Seller nor, to the Knowledge of Seller, any other party to such Assumed Contract is, or has received notice that it is, in violation or breach of or default under any such Assumed Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Assumed Contract) in any material respect. Schedule 6.4(b) of the Disclosure Schedule sets forth a list of all Assumed Contracts which require the consent or waiver of any party to such Assumed Contracts, to the Assignment of such Assumed Contract as a result of the transactions contemplated hereby (the “ Third Party Consents ”).

6.5 Title to Assets . Upon the consummation of the transactions contemplated under this Agreement, Buyer will obtain good, valid and marketable title to all the Assets, free and clear of any and all liens, encumbrances, charges, claims, pledges, or security interests of any kind (including those of secured parties). Except as set forth in Schedule 6.5 of the Disclosure Schedule , Seller beneficially owns all of the right, title or other interests to be transferred to Buyer hereunder with respect to all the Assets, and none of the Assets is leased, rented, licensed, or otherwise not owned by Seller. The transactions contemplated hereby constitute the sale and assignment of substantially all of Seller’s business relating to the CV Products.

6.6 Intellectual Property .

(a) Attachment 2.1 . Attachment 2.1 sets forth a complete and accurate list of all of the following throughout the world granted to, applied for, owned or licensed by Seller in relation to the CV Products: (i) Patents; (ii) Licensed IP Rights; (iii) Trademarks and Trademark Registrations; and (iv) Domain Names. Such list includes, where applicable, the record owner, jurisdiction and registration and/or application number, and date issued (or filed) for each of the foregoing. The inventorship of the Patents and patent applications within Intellectual Property other than the Licensed IP Rights (the “ Owned IP Rights ”) is true and correct as of the Effective Date.

(b) Title . Except as otherwise stated on Attachment 2.1 , Seller is the sole and exclusive owner of all Owned IP Rights and has the right to use the Licensed IP Rights as set forth in the applicable Assumed Contracts. Seller has the right to assign to Buyer the Intellectual Property required to be assigned to Buyer under this Agreement, subject to obtaining the third party consents listed in Attachment 4.2(a) . The Intellectual Property was either (i) developed by employees of Seller within the scope of their employment; (ii) developed by independent contractors who have vested all rights in and to such Intellectual Property to Seller pursuant to written agreements (such as by assignment or work-made-for-hire provisions); or (iii) obtained by Seller from a third party via a written agreement that transferred all rights in the Owned IP Rights to Seller or granted Seller a license to the Licensed IP Rights, as applicable. No current or former director, officer, or employee of Seller or its Affiliates (or, to the Knowledge of Seller, any of its predecessors in interest) will, after giving effect to the transactions contemplated herein, own or retain any rights to use, and will not have any claim with respect to any Intellectual Property. No royalties, honoraria or other fees are currently due and payable to any third parties for the use of or the right to use any (i) Owned IP Rights; or (ii) except as set forth in the Assumed Contracts, Licensed IP Rights.

 

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(c) All Rights Transferred . After the consummation of the transactions contemplated herein, Buyer will own all rights, title, and interest in and to or have a valid written license to use all Intellectual Property and the patents included within the Licensed IP Rights, subject to obtaining the Third Party Consents, on the same terms and conditions as Seller enjoyed immediately prior to such transactions. Except for the Third Party Consents, there is no law, contract or arrangement that would prevent Seller from assigning all licenses and rights required to be assigned under this Agreement.

(d) Sufficiency of Title . Seller is the sole and exclusive owner of or has valid right to use pursuant to a written signed agreement, free and clear of all liens with respect to Owned IP Rights and, to the Knowledge of Seller, free and clear of all liens with respect to Licensed IP Rights. To the Knowledge of Seller, the Intellectual Property constitutes all of the material intellectual property assets used in or necessary for the conduct of the Business as conducted by Seller as of the Effective Date. The Owned IP Rights, and, to the Knowledge of Seller, the Licensed IP Rights, currently used in the Business, are in each case subsisting, in full force and effect, and have not been cancelled, expired, been abandoned, or otherwise terminated, and payment of all renewal and maintenance fees in respect of the Owned IP Rights, and, to the Knowledge of Seller, the Licensed IP Rights, and all filings related thereto, have been duly made. Seller has been diligent in prosecuting all applications pending as of the Effective Date related to Owned IP Rights.

(e) Non-infringement . To the Knowledge of Seller, the manufacture, sale and distribution of each CV Product as conducted as of the Effective Date does not infringe upon, misappropriate, violate or constitute the unauthorized use of (either directly or indirectly, such as through contributory infringement or inducement to infringe) any intellectual property rights of any third party in the relevant portion of the Territory for such CV Product.

(f) Pending Claims . Except as set forth in Schedule 6.6(f) of the Disclosure Schedule , there are no pending or, to the Knowledge of Seller, threatened claims, suits, arbitrations or other adversarial proceedings before any court, agency, arbitral tribunal, or registration authority in any jurisdiction in the applicable Territory challenging Seller’s ownership or use of any Intellectual Property, or the validity, enforceability, or registrability of any Owned IP Rights or, to the Knowledge of Seller, any Licensed IP Rights.

(g) Third Party Infringement . Except as set forth in Schedule 6.6(g) of the Disclosure Schedule , to the Knowledge of Seller, no third party in any Territory in which Intellectual Property rights have been granted, is misappropriating, infringing, diluting or violating any Owned IP Rights, or to the Knowledge of Seller, any Licensed IP Rights, and no claims, suits, arbitrations or other adversarial claims have been brought or, to the Knowledge of Seller, threatened against any third party by Seller.

(h) Settlements . Except as set forth in Schedule 6.6(h) of the Disclosure Schedule , there are no settlement agreements, coexistence agreements, consents, licenses, assignments, security agreements, judgments, consent decrees or judicial or administrative decisions relating to Owned IP Rights, or to the Knowledge of Seller, the Licensed IP Rights.

(i) Confidentiality . Seller has taken commercially reasonable measures to protect the confidentiality of its Trade Secrets and Confidential Information, including requiring its employees with access to such Trade Secrets and Confidential Information and other parties having access thereto to execute written non-disclosure agreements. To the Knowledge of

 

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Seller, none of the Trade Secrets or Confidential Information have been disclosed or authorized to be disclosed to any third party other than pursuant to a non-disclosure agreement. To the Knowledge of Seller, no third party to any non-disclosure agreement with Seller is in breach, violation or default thereof.

(j) Employee Cooperation . Each present or past employee, officer, consultant or any other person who participated on behalf of Seller in the development of any of the CV Products or any of the Intellectual Property has executed a valid and enforceable agreement with Seller that (i) conveys any and all right, title and interest in and to all Intellectual Property developed by such Person in connection with such Person’s employment or contract to Seller, (ii) requires such Person, during and after the term of employment or contract, to cooperate with Seller in the prosecution of any patent applications filed in connection with such Intellectual Property, (iii) establishes a representation and covenant by such Person that no process, technique, innovation or other work product provided to Seller is or will be derived from or otherwise constitute the proprietary information of a prior employer or contractor, in contravention of any prior confidentiality agreement, and (iv) obligates such Person to keep any Confidential Information of Seller confidential both during and after the term of the employment or contract. To the Knowledge of Seller, no employee or consultant of Seller is in violation of any laws or regulations relating to Intellectual Property applicable to such employee or consultant, or any term of any employment agreement, confidentiality agreement, patent or invention disclosure agreement or other contract relating to the relationship of such employee or consultant with Seller or any prior employer or client, as the case may be.

(k) Notices . As of the Effective Date, Seller has not received any notice (including, without limitation, any [****]*) pursuant to [****]* by and between Seller and [****]*, as such agreement may be amended from time to time, and to the Knowledge of Seller as of the Effective Date, there are no facts or circumstances that could reasonably be expected to result in any such notice.

(l) Registrations; Regulatory Matters . All Registrations held by Seller with respect to the CV Products are listed on Attachment 2.1(e) . The Registrations are owned exclusively by Seller. To Seller’s Knowledge, all of the Registrations are valid and in full force and effect as of the Effective Date. The Registrations (i) are in the name of Seller; and (ii) except as set forth in Schedule 6.6(l) of the Disclosure Schedule , constitute all licenses, permits, approvals, qualifications, authorizations or requirements of any Governmental Entity in the applicable Territory necessary to manufacture and sell the Marketed Products in the applicable Territory. Seller has furnished Buyer with access to a complete copy of the NDA, including all amendments and supplements thereto. Each of the Registrations has been approved by the FDA or other relevant Governmental Entity, as the case may be, and each of the Registrations is in good standing with the FDA or other relevant Governmental Entity, as the case may be. There is no action or proceeding by any Governmental Entity pending or, to the Knowledge of Seller as of the Closing Date, threatened seeking the revocation or suspension of any Registration relating to the manufacture or sale of the Marketed Products in the applicable Territory.

*	Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.

 

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6.7 Regulatory Status of Marketed Products . Except as set forth on Schedule 6.7 of the Disclosure Schedule, there have been no recalls, withdrawals, or market replacements of the Marketed Products in the applicable Territory in the past [****]*.

6.8 Product Net Sales . Seller’s net sales of each of the Marketed Products as set forth on Schedule 6.8 of the Disclosure Schedule , for the periods specified therein, are accurate and were determined in accordance with GAAP.

6.9 Violations of Law . The utilization of the Assets and the conduct of the Business by Seller and its Affiliates and their respective agents and employees do not violate any applicable law, governmental specification, authorization or requirement or any decree, judgment, order or similar restriction binding on the Seller or any of its Affiliates in any material respect. Seller has not received notice of any Governmental Entity investigation, claim or proceeding concerning compliance matters relating to the CV Products or the Business, or the business practices of Seller or any of its Affiliates or any of their respective agents or employees, including without limitation business practices related to the pricing, promotion and manufacturing of the Marketed Products.

6.10 Litigation . Neither the Assets nor the Business is the subject of any outstanding judgment, order, writ, injunction or decree of any court, arbitrator or administrative or Governmental Entity limiting, restricting or affecting the Assets or the Business in any material aspect. Except as set forth on Schedule 6.10 of the Disclosure Schedule , there are no claims, suits, proceedings pending or, to the Knowledge of Seller, threatened in writing against Seller or any of its Affiliates or any of their respective agents or employees with respect to the Assets, Business or transactions contemplated in this Agreement.

6.11 Employees . Except as set forth in Schedule 6.11 of the Disclosure Schedule, the Business Employees listed in Attachment 5.1(a) are all the employees of Seller whose efforts and responsibilities are material to the Business. As of the Effective Date, to the Knowledge of Seller, no Business Employee and no group of Business Employees has any plans to terminate his or her employment with Seller. To the Knowledge of Seller, Seller and its Affiliates have complied with all laws relating to the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other taxes. Seller and its Affiliates have no material labor relations problem pending relating to the Business Employees and their labor relations relating to the Business Employees are satisfactory. There are no workers’ compensation claims pending against Seller or its Affiliates relating to a Business Employee nor is Seller or its Affiliates aware of any facts that would give rise to such a claim. To the Knowledge of Seller, no Business Employee is subject to any secrecy or non-competition agreement or any other agreement or r