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EXHIBIT 2.01
[Execution Version]
CONFIDENTIAL
SUBJECT TO CONFIDENTIALITY AGREEMENT
================================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
QUINTILES TRANSNATIONAL CORP.,
QUINTILES BERMUDA LTD.,
QUINTILES IRELAND LIMITED,
BIOGLAN PHARMACEUTICALS COMPANY,
AND
BRADLEY PHARMACEUTICALS, INC.
JUNE 8, 2004
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TABLE OF CONTENTS
1. DEFINITIONS............................................................... 1
2. ASSETS TO BE PURCHASED.................................................... 8
2.1 Purchased Assets................................................ 8
2.2 Excluded Assets................................................. 9
2.3 Purchase Price................................................. 10
2.4 Assumption of Liabilities...................................... 11
2.5 Closing........................................................ 12
2.6 Sales, Use and Other Taxes..................................... 12
2.7 Assignability.................................................. 12
2.8 Purchase Price Adjustments..................................... 13
2.9 Allocation of Purchase Price................................... 13
3. REPRESENTATIONS AND WARRANTIES OF SELLERS................................ 14
3.1 Incorporation and Good Standing................................ 14
3.2 Authority; No Conflict......................................... 14
3.3 Financial Statements........................................... 15
3.4 Corporate Records.............................................. 15
3.5 Title to Properties; Encumbrances; Real Property............... 15
3.6 Inventory...................................................... 16
3.7 No Undisclosed Liabilities..................................... 16
3.8 Taxes.......................................................... 16
3.9 Employee Benefits.............................................. 16
3.10 Compliance With Legal Requirements; Governmental
Authorizations.............................................. 17
3.11 Legal Proceedings; Orders..................................... 17
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3.12 Absence of Certain Changes and Events......................... 17
3.13 Contracts..................................................... 18
3.14 Insurance..................................................... 19
3.15 Labor Relations............................................... 19
3.16 Intellectual Property......................................... 20
3.17 FDA Matters................................................... 21
3.18 Environmental Matters......................................... 22
3.19 Accounts Receivable........................................... 22
3.20 Customers and Suppliers....................................... 22
3.21 Brokers or Finders............................................ 22
3.22 Disclaimer of Other Representations and Warranties............ 22
4. REPRESENTATIONS AND WARRANTIES OF BUYER.................................. 23
4.1 Incorporation and Good Standing................................ 23
4.2 Authority; No Conflict......................................... 23
4.3 Certain Proceedings............................................ 23
4.4 Brokers or Finders............................................. 23
4.5 No Financing Contingency....................................... 24
4.6 Disclaimer of Other Representations and Warranties............. 24
5. COVENANTS OF THE SELLERS PRIOR TO CLOSING DATE........................... 24
5.1 Operation of Bioglan's Business................................ 24
5.2 Required Approvals............................................. 24
5.3 Efforts to Close............................................... 25
5.4 Exclusivity.................................................... 25
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE................................. 25
6.1 Required Approvals............................................. 25
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6.2 Efforts to Close............................................... 25
7. ADDITIONAL AGREEMENTS OF THE PARTIES..................................... 25
7.1 Employee Benefits; Continued Employment........................ 25
7.2 Access......................................................... 27
7.3 Products Responsibility........................................ 28
7.4 Liability for Taxes............................................ 29
7.5 Accounts Receivable............................................ 30
7.6 Quintiles Materials and Systems................................ 31
7.7 Corporate Name Change.......................................... 31
7.8 Non-Solicitation............................................... 31
7.9 Non-Competition................................................ 31
7.10 Transfers of QBermuda Assets and QIreland Assets.............. 33
7.11 Closing Date Financial Statements............................. 33
7.12 Certain Bioglan Obligations Net of Aggregate Reserves......... 34
7.13 SEC No-Action Request......................................... 34
7.14 Safety and Surveillance Call Center Services.................. 35
8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE;
CLOSING DELIVERIES..................................................... 35
8.1 Accuracy of Representations.................................... 35
8.2 Sellers' Performance........................................... 35
8.3 Sellers' Closing Deliveries.................................... 35
8.4 Financial Statements........................................... 37
8.5 No Material Adverse Effect..................................... 37
8.6 No Proceedings................................................. 38
8.7 No Injunction.................................................. 38
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8.8 HSR Act........................................................ 38
8.9 Consents....................................................... 38
9. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE; CLOSING
DELIVERIES............................................................ 38
9.1 Accuracy of Representations.................................... 38
9.2 Buyer's Performance............................................ 38
9.3 Buyer's Closing Deliveries..................................... 38
9.4 No Proceedings................................................. 39
9.5 No Injunction.................................................. 39
9.6 HSR Act........................................................ 39
10. TERMINATION............................................................. 39
10.1 Termination Events............................................ 39
10.2 Effect of Termination......................................... 40
11. INDEMNIFICATION; REMEDIES............................................... 40
11.1 Survival...................................................... 40
11.2 Indemnification by Sellers.................................... 41
11.3 Indemnification by Buyer...................................... 41
11.4 Time Limitations.............................................. 41
11.5 Limitations on Amount--Seller Indemnifying Parties............ 42
11.6 Limitations on Amount--Buyer.................................. 42
11.7 Procedure for Indemnification................................. 42
11.8 Satisfaction and Treatment of Indemnity Payments.............. 43
11.9 Certain Other Limitations..................................... 44
11.10 Indemnification Exclusive Remedy............................. 44
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12. GENERAL PROVISIONS...................................................... 44
12.1 Expenses...................................................... 44
12.2 Public Announcements.......................................... 44
12.3 Confidentiality............................................... 45
12.4 Notices....................................................... 46
12.5 Further Assurances............................................ 47
12.6 Waiver........................................................ 47
12.7 Entire Agreement and Modification............................. 47
12.8 Disclosure Letter............................................. 47
12.9 Assignments, Successors and No Third-Party Rights............. 48
12.10 Severability................................................. 48
12.11 Section Headings; Construction; Conflicts.................... 48
12.12 Time of Essence.............................................. 48
12.13 Governing Law................................................ 48
12.14 Execution of Agreement; Counterparts......................... 49
12.15 Attorney Fees................................................ 49
Exhibit Description
------- -----------
A Form of No-Action Request
Schedule Description
-------- -----------
8.4 Financial Statements
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and dated as of June 8,
2004, by and among Quintiles Bermuda Ltd., a Bermuda-registered company
("QBermuda"), Quintiles Ireland Limited, a company incorporated in the Republic
of Ireland ("QIreland"), Bioglan Pharmaceuticals Company, a North Carolina
corporation ("Bioglan"), and Bradley Pharmaceuticals, Inc., a Delaware
corporation ("Buyer"). QBermuda, QIreland, and Bioglan are sometimes referred to
herein individually as "Seller" and collectively as "Sellers." Sellers and Buyer
may each be referred to herein individually as a "Party" and collectively as the
"Parties." Quintiles is a party to this Agreement solely for purposes of the
Sections indicated below its name on the signature page hereto and, accordingly,
is deemed a "Party" for purposes of such Sections only.
RECITALS
WHEREAS, Sellers hold assets relating to certain pharmaceutical products; and
WHEREAS, Sellers desire to sell, and Buyer desires to purchase, certain assets
of Sellers on the terms and conditions set forth in this Agreement.
AGREEMENT
For good and valuable consideration, the Parties, intending to be legally bound,
agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:
"Accounts Receivable"--all trade accounts receivable and other similar
rights to payment from customers of Bioglan, including all trade accounts
receivable representing amounts receivable in respect of Products sold by or on
behalf of Bioglan.
"Affiliate"--any corporation or business entity controlled by,
controlling, or under common control with a Party to this Agreement. For this
purpose, "control" shall mean direct or indirect beneficial ownership of at
least fifty percent (50%) of the voting stock or income interest in such
corporation or other business entity, or such other relationship as, in fact,
constitutes actual control.
"ANDA"--an "abbreviated new drug application", as such term is used
under the FFDCA.
"Assumed Liabilities"--as defined in Section 2.4.
"Audited Stub Period Financial Statements"--as defined in Section
7.11(a).
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"Balance Sheet"--as defined in Section 3.3.
"Bill of Sale"--the bill of sale from Bioglan covering the Bioglan
Assets, in form and substance reasonably satisfactory to Bioglan and Buyer.
"Bioglan"--as defined in the first paragraph of this Agreement.
"Bioglan Assets"--as defined in Section 2.1(a).
"Bioglan Assignment and Assumption Agreement"--the assignment and
assumption agreement between Bioglan and Buyer covering the Bioglan Assets and
the Assumed Liabilities, in form and substance reasonably satisfactory to
Bioglan and Buyer.
"Bioglan Plans"--shall mean all Plans (a) maintained by or contributed
to by Bioglan; (b) maintained by or contributed to by Quintiles for benefit of
any Bioglan employees or former employees; (c) which cover any employees or
former employees of Bioglan; or (d) any other Plan as to which Bioglan has any
liability.
"Business Day"--any day other than a Saturday, Sunday or other day on
which banks in the State of North Carolina or the State of New York are
permitted or required to close by law or regulation.
"Buyer"--as defined in the first paragraph of this Agreement.
"Buyer Indemnified Party"--as defined in Section 11.2.
"Cash Equivalents"--cash and cash equivalents including without
limitation currency and coins, bank deposits and balances, certificates of
deposit, money market funds, negotiable money orders, checks and marketable
securities.
"Chargeback"--a credit, chargeback, reimbursement, purchase discount or
other payment to any pharmaceutical wholesaler or distributor in connection with
the sale of a Product by such wholesaler or distributor to a customer at a
discount price pursuant to a contract between such customer and Bioglan or its
Affiliates and/or Buyer or pursuant to the General Services Administration's
Federal Supply Schedule Program or Section 340B of the Public Health Services
Act.
"Closing"--as defined in Section 2.5.
"Closing Date"--the date on which the Closing actually takes place.
"Closing Date Balance Sheet"--as defined in Section 7.11(a).
"Closing Inventories"--as defined in Section 2.3(b).
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"Confidentiality Agreement"--the letter agreement dated January 20,
2004 between Quintiles and Buyer.
"Damages"--any loss, liability, claim, damage, or expense (including
reasonable attorneys' fees and expenses), in each case subject to the provisions
of Section 11, including without limitation Section 11.9(a).
"Disclosure Letter"--the disclosure letter delivered by Sellers to
Buyer concurrently with the execution and delivery of this Agreement.
"Drug Authorizations"--as defined in Section 2.1(a)(i).
"Encumbrance"--any charge, claim, lien, option, pledge, security
interest, right of first refusal or similar restriction.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Excluded Assets"--as defined in Section 2.2.
"FDA"--the United States Food and Drug Administration.
"FFDCA"-- the United States Federal Food, Drug and Cosmetic Act, as
amended from time to time, including all regulations promulgated thereunder.
"GAAP"--generally accepted United States accounting principles,
consistently applied.
"Governmental Authorization"--any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body"--any Federal, state, local or foreign government or
any court, administrative or regulatory agency or commission or other
governmental authority or agency.
"HSR Act"--the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"IND"--Notice of Claimed Investigational Exemption for a New Drug, as
such term is used under the FFDCA.
"Indemnified Persons"--as defined in Section 11.7(a).
"Inventories"--all inventories of Bioglan, including all finished
goods, work in process, raw materials, and all other materials and supplies to
be used or consumed by Bioglan in the production of finished goods.
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"IRC"--the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge"--with respect to (i) any of Sellers, means the actual
knowledge of the officers of Sellers following reasonable and customary
investigation by the relevant officers of Sellers with respect to the matter in
question, and (ii) Buyer, means the actual knowledge of the officers of Buyer
following reasonable and customary investigation by the relevant officers of
Buyer with respect to the matter in question.
"Know-How"--all know-how, specifications, processes, procedures,
instructions, methods, formulae, designs, plans, and trade secrets or any
similar items, whether or not in tangible form, relating to the Products.
"Legal Requirement"--any Federal, state, local, or foreign
constitution, law, statute, rule or regulation.
"Material Adverse Effect"--any event, circumstance or effect that,
individually or when taken together with all other events, circumstances or
effects relating to like matter, does or is reasonably expected to have a
material adverse effect on the business, financial condition or results of
operations of Bioglan (including the assets, liabilities and operations of
QBermuda and QIreland related to the Products), taken as a whole, or the
Purchased Assets, taken as a whole; provided, however, that in no event shall
any of the following, individually or collectively, constitute a Material
Adverse Effect: (i) any changes in general economic conditions, the financial
markets or the pharmaceuticals industry generally; or (ii) any change related to
the commencement of war or other hostilities, acts of terrorism, or any national
or international calamity affecting the United States.
"Material Contracts"--as defined in Section 3.13(a).
"NDA"--a "new drug application," as such term is used under the FFDCA.
"NDC"--a "national drug code," as such term is used under the FFDCA.
"No-Action Request"--as defined in Section 7.13.
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) any similar documents adopted
or filed in connection with the creation, formation, or organization of a Person
that is not a corporation; and (c) any amendment to any of the foregoing.
"Party" and "Parties"--as defined in the first paragraph of this
Agreement.
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"Patent Application Assignment"--the Patent Application Assignment to
be executed and delivered at the Closing by Bioglan and Buyer, in form and
substance reasonably satisfactory to Bioglan and Buyer and in proper form for
recording with applicable Governmental Bodies.
"Permitted Encumbrance"-- Encumbrances (i) resulting from taxes or
other governmental assessments or charges which have not yet become delinquent
or are being contested in good faith, (ii) that are mechanics or similar liens
incurred in the ordinary course of business; or (iii) with respect to any
contract included in the Purchased Assets, any Encumbrances reflected in the
terms and conditions of such contract.
"Person"--any individual, corporation, partnership, limited liability
company, trust, association, organization, or other entity or Governmental Body.
"Plan"--any bonus, deferred compensation, incentive compensation, stock
purchase, restricted stock, stock option, severance, hospitalization or other
medical, life or other insurance, employee welfare, supplemental unemployment
benefit, profit-sharing, pension or retirement plan, program, agreement or
arrangement or any other employee benefit plan, program, agreement or
arrangement, including without limitation any "employee pension benefit plan"
and any "employee welfare benefit plan" as those terms are defined in section 3
of ERISA.
"Proceeding"--any action, arbitration, investigation, litigation, or
suit commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Product"--each of the following pharmaceutical products:
(i) Adoxa(R)doxycycline monohydrate antibiotic tablets, in
four strengths--150mg, 100mg, 75 mg and 50mg (150 mg tablet is not currently
marketed);
(ii) Adoxa(R)doxycycline monohydrate antibiotic capsules in
four strengths--150mg, 100mg, 75 mg and 50mg (none of which is currently
marketed);
(iii) Solaraze(R), a dermatological product containing the
nonsteroidal anti-inflammatory diclofenac sodium in a 3% topical formulation;
(iv) Zonalon(TM), a doxepin topical cream;
(v) AFIRM(R), a retinol-based topical cream, available in
three strengths--1X, 2X and 3X;
(vi) B-LIFTx(R), a salicylic acid-based peel, available in
two strengths--20% and 30% peels;
(vii) A-Fil(R), an over the counter sunscreen lotion;
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(viii) Benzashave(R), a benzoyl peroxide cream, available in
two strengths--5% and 10%;
(ix) Pramegel(R), an over the
counter pramoxine topical anesthetic gel; and
(x) Theramycin Z(R), an erythromycin topical cream (which
is not currently marketed).
"Product Trade Dress"--the current trade dress of any Product as of the
Closing Date.
"Purchase Price"--as defined in Section 2.3(a).
"Purchased Assets"--as defined in Section 2.1(c).
"QBermuda"--as defined in the first paragraph of this Agreement.
"QBermuda Assets"--as defined in Section 2.1(b).
"QBermuda Assignment and Assumption Agreement"--that certain assignment
and assumption agreement between QBermuda and Buyer covering the QBermuda
Assets, in form and substance reasonably satisfactory to QBermuda and Buyer.
"QIreland"--as defined in the first paragraph of this Agreement.
"QIreland Assets"--as defined in Section 2.1(c).
"QIreland Assignment and Assumption Agreement"--that certain assignment
and assumption agreement between QIreland and Buyer covering the QIreland
Assets, in form and substance reasonably satisfactory to QIreland and Buyer.
"Quintiles"--Quintiles Transnational Corp., a North Carolina
corporation and the parent entity of each of QBermuda, QIreland and Bioglan.
"Quintiles Materials"--as defined in Section 2.2(k).
"Quintiles Systems"--as defined in Section 2.2(l).
"Regulatory Files"--the documents referenced in the complete regulatory
chronology for each NDA or ANDA, as the case may be, including the IND, NDA, and
sNDAs, as applicable, for the applicable Product, including all supplements
thereto and required regulatory files and data relating thereto in Sellers'
possession or control.
"Replacement Plan"--as defined in Section 7.1(c).
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"Sales Employees"--those Bioglan Employees who are principally employed
as sales representatives or sales managers on the date hereof and identified as
such on Section 7.1 of the Disclosure Letter.
"SEC"--the Securities and Exchange Commission.
"Seller" or "Sellers"--as defined in the first paragraph of this
Agreement.
"Seller Indemnifiable Claim"--as defined in Section 11.5.
"Seller Indemnified Parties"--as defined in Section 11.3.
"Seller Indemnifying Parties"--as defined in Section 11.2.
"sNDA"--a Supplemental New Drug Application, as such term is used under
the FFDCA.
"Tangible Personal Property"--equipment, furniture, office equipment,
computer hardware, supplies, materials, and other items of tangible personal
property (other than Inventories).
"Taxes"--all of the following: (a) any net income, withholding,
alternative or add-on minimum tax, gross income, gross receipts, sales, use,
value added, ad valorem, transfer, franchise, profits, license, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, capital tax, customs duty or other tax, governmental fee or other
like assessment, together with any interest, penalty or additional amount due,
imposed by any Governmental Body responsible for the imposition of any such tax;
(b) any liability for the payment of any amounts of the type described in clause
(a) above as a result of being a member of any affiliated, consolidated,
combined, unitary or other group for any taxable period; and (c) any liability
for the payment of any amounts of the type described in clause (a) or (b) above
as a result of any express or implied obligation to indemnify any other Person.
"Third Party"--a Person who or which is neither a Party nor an
Affiliate of a Party.
"Trademark Assignment"--the Trademark Assignment to be executed and
delivered at the Closing by Bioglan and Buyer, in form and substance reasonably
satisfactory to Bioglan and Buyer and in proper form for recording with
applicable Governmental Bodies.
"Transfer Taxes"--as defined in Section 2.6.
"Transferred Employees"--as defined in Section 7.1(a).
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2. ASSETS TO BE PURCHASED
2.1 Purchased Assets.
(a) Purchase and Sale of Bioglan Assets. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, Bioglan shall sell,
convey, assign, transfer and deliver to Buyer free and clear of all Encumbrances
(other than Encumbrances set forth in Section 3.5 of the Disclosure Letter and
Permitted Encumbrances), and Buyer shall purchase and acquire from Bioglan, all
of Bioglan's right, title and interest in and to all of Bioglan's property and
assets, including the following (but excluding the Excluded Assets):
(i) the NDAs, ANDA, pending sNDAs and INDs for the
applicable Products set forth in Section 2.1(a)(i) of the Disclosure Letter (the
"Drug Authorizations") and the related Regulatory Files;
(ii) the trademarks set forth in Section 2.1(a)(ii) of the
Disclosure Letter;
(iii) the contracts and agreements set forth in Section
2.1(a)(iii) of the Disclosure Letter;
(iv) the employment agreements set forth in Section
2.1(a)(iv) of the Disclosure Letter with respect to the Transferred Employees
and the consulting agreement for the consultant specified therein;
(v) all Know-How;
(vi) all Product Trade Dress;
(vii) all Accounts Receivable;
(viii) all Inventories;
(ix) all sales, marketing, packaging, labeling,
promotional, advertising, training and educational materials relating to the
sale of the Products;
(x) all Tangible Personal Property, including those items
described in Section 2.1(a)(x) of the Disclosure Letter (other than Tangible
Personal Property consumed or disposed of in the ordinary course of business);
(xi) subject to Section 2.2(f), all data and records,
including customer lists and records, production reports and records, financial
and accounting records, personnel records relating to the Transferred Employees
and other similar documents and records;
(xii) all Governmental Authorizations and all pending
applications therefor or renewals thereof, in each case to the extent
transferable to Buyer;
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(xiii) the domain names set forth in Section 2.1(a)(xiii) of
the Disclosure Letter;
(xiv) all copyrights associated with the Purchased Assets;
and
(xv) all patent applications owned by Sellers and
associated with the Products, being those set forth on Section 2.1(a)(xv) of the
Disclosure Letter.
All of the property and assets to be transferred to Buyer under this Section
2.1(a) are herein referred to collectively as the "Bioglan Assets."
(b) Purchase and Sale of QBermuda Assets Related to the Products. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, QBermuda shall sell, convey, assign, transfer and deliver to Buyer free
and clear of all Encumbrances (other than Permitted Encumbrances), and Buyer
shall purchase and acquire from QBermuda, all of QBermuda's right, title and
interest in and to those certain contracts or agreements of QBermuda set forth
in Section 2.1(b) of the Disclosure Letter. All of the property and assets to be
transferred to Buyer under this Section 2.1(b) are herein referred to
collectively as the "QBermuda Assets."
(c) Purchase and Sale of QIreland Assets Related to the Products. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, QIreland shall sell, convey, assign, transfer and deliver to Buyer free
and clear of all Encumbrances (other than Permitted Encumbrances), and Buyer
shall purchase and acquire from QIreland, all of QIreland's right, title and
interest in and to those certain contracts or agreements of QIreland set forth
in Section 2.1(c) of the Disclosure Letter. All of the property and assets to be
transferred to Buyer under this Section 2.1(c) are herein referred to
collectively as the "QIreland Assets."
The Bioglan Assets, the QBermuda Assets and the QIreland Assets are herein
referred to collectively as the "Purchased Assets."
2.2 Excluded Assets. Notwithstanding anything to the contrary contained
in Section 2.1 or elsewhere in this Agreement, the following assets, contracts,
and other items of Sellers (collectively, the "Excluded Assets") are not part of
the sale and purchase contemplated hereunder, are excluded from the Purchased
Assets, shall be retained by Sellers (including with respect to any obligations
thereunder), and shall remain the property of Sellers after the Closing:
(a) all Cash Equivalents;
(b) all bank accounts;
(c) all intercompany receivables between any Seller and any Affiliate
of such Seller;
(d) all minute books, stock records and corporate seals;
(e) all insurance policies and contracts and rights thereunder;
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(f) all records that Sellers are required by Legal Requirements to
retain in their possession;
(g) all personnel records (excluding proprietary information and
confidentiality agreements, work product and similar agreements, if any)
relating to Bioglan's employees other than the Transferred Employees;
(h) all claims for refund of Taxes and other governmental charges of
whatever nature;
(i) the Bioglan Plans and all rights in connection with, and assets of,
the Bioglan Plans;
(j) subject to Section 2.4(d), the employment or severance contracts,
agreements or other arrangements set forth in Sections 2.1(a)(iv) or 2.2(j) of
the Disclosure Letter to the extent relating to (i) Bioglan Employees who are
not Transferred Employees, or (ii) retention bonus payments with respect to any
Bioglan Employee;
(k) all corporate and business policies, procedures, practices,
handbooks, manuals, and similar items, which have been produced or disseminated
by or on behalf of Quintiles or its Affiliates and which Bioglan uses or holds
for use in its capacity as, or to which it has access by virtue of its status
as, a subsidiary of Quintiles (collectively, the "Quintiles Materials");
(l) all information technology and computer software systems and
infrastructure and Third Party or Affiliate products and services (including
without limitation those described on Section 2.2(l) of the Disclosure Letter)
that Bioglan uses or holds for use in its capacity as, or to which it has access
by virtue of its status as, a subsidiary of Quintiles, including without
limitation financial, tax, payroll, human resources, medical information,
adverse event and similar reporting or records systems (collectively, the
"Quintiles Systems");
(m) all right, title or interest of QBermuda in any QBermuda assets,
properties or rights not set forth in Section 2.1(b) of the Disclosure Letter;
and
(n) all right, title or interest of QIreland in any QIreland assets,
properties or rights not set forth in Section 2.1(c) of the Disclosure Letter.
2.3 Purchase Price.
(a) Subject to the terms hereof, the consideration for the Purchased
Assets (the "Purchase Price") (other than the Inventories, the consideration for
which is described in Section 2.3(b)) will be (i) One Hundred Eighty-Three
Million Dollars ($183,000,000), which shall be paid at Closing to Bioglan (for
further distribution among Sellers) by wire transfer to an account specified by
Bioglan, in immediately available funds; and (ii) the assumption of the Assumed
Liabilities, which shall be accomplished by the execution and delivery of the
QBermuda Assignment and Assumption Agreement, the QIreland Assignment and
Assumption Agreement and the Bioglan Assignment and Assumption Agreement.
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(b) At least two (2) Business Days prior to the Closing Date,
representatives of Bioglan and Buyer shall meet to determine mutually in good
faith the number of units of the Products held as Inventories by or on behalf of
Bioglan with expiration dating not less than twelve (12) months after the
Closing Date that are salable (or, in the case of samples, distributable) in the
ordinary course of business (collectively, the "Closing Inventories"). For
purposes of determining the Closing Inventories under this Section 2.3(b), all
units of AFIRM(R), A-Fil(R) or B-LIFTx(R), which Products have no expiration
date, shall be deemed to have expiration dating in excess of twelve (12) months.
The purchase price for the Closing Inventories, which shall be paid at Closing
to Bioglan by wire transfer to an account specified by Bioglan, in immediately
available funds, will be (i) the actual per unit purchase cost to Bioglan for
each Product (i.e., without overhead allocation), multiplied by (ii) the number
of units of each Product comprising the Closing Inventories. To the extent that
there are any material differences in the amount of Closing Inventories as of
the Closing Date from the amount determined prior to the Closing Date, the
Parties agree to make an appropriate adjustment payable promptly following the
Closing Date.
2.4 Assumption of Liabilities. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Buyer agrees to assume and become
responsible for the following liabilities or obligations (the "Assumed
Liabilities"):
(a) all current liabilities (other than accrued income taxes payable
and current portion of indebtedness) reflected on the Balance Sheet, or any
other current liabilities incurred by Bioglan in the ordinary course of business
between the date of the Balance Sheet and the Closing Date that (in either case)
remains unpaid in the ordinary course of business at, and is not delinquent as
of, the Closing;
(b) the obligations to customers or suppliers incurred by Bioglan in
the ordinary course of business for orders outstanding as of the Closing Date
reflected on Bioglan's books (excluding any obligations with respect to customer
deposits that are not reflected as of the Closing Date on Bioglan's books);
(c) the respective obligations of Sellers, arising after the Closing
Date, under the contracts and agreements referred to in Sections 2.1(a)(iii),
2.1(a)(iv) (with respect to Transferred Employees), 2.1(b) and 2.1(c) above
(other than obligations arising out of or relating to a breach that occurred
prior to the Closing Date);
(d) the obligations of Sellers or their Affiliates for severance
arrangements with respect to any Transferred Employee, all to the extent that
Section 7.1(g) provides that Buyer shall be obligated therefor; and
(e) the obligations of Bioglan for recalls, returns, Medicaid and state
rebates, managed care rebates, Chargebacks and other Product responsibilities,
all to the extent that Section 7.3 provides that Buyer shall be obligated
therefor.
Except for the Assumed Liabilities or as otherwise expressly provided in this
Agreement, Buyer shall not assume or otherwise be responsible for any
liabilities or other obligations of any of
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Sellers (and Sellers agree to timely pay or otherwise be responsible for all
such liabilities and obligations).
2.5 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, L.L.P. at 2500 Wachovia Capitol Center, Raleigh, North
Carolina 27601, at 10:00 a.m. (Eastern Time) on July 8, 2004, or, if later, two
(2) Business Days following the satisfaction or waiver of all conditions under
Sections 8 and 9 (other than conditions with respect to actions the respective
Parties will take at the Closing itself), or at such other time and place as the
Parties may agree. Subject to the provisions of Section 10, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 2.5 will not result in
the termination of this Agreement and will not relieve any Party of any
obligation under this Agreement.
2.6 Sales, Use and Other Taxes. All transfer,
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes (collectively, "Transfer Taxes") incurred in
connection with the transfer and sale of the Purchased Assets as contemplated by
the terms of this Agreement, including all recording or filing fees and other
similar costs of Closing, that may be imposed, payable, collectible or incurred,
shall be borne by Buyer. The Parties hereto agree to reasonably cooperate with
each other to claim any applicable exemption from, or reduction of, any
applicable Transfer Taxes.
2.7 Assignability. To the extent that the assignment
or transfer of all or any portion of any contract or Drug Authorization included
in the Purchased Assets shall require the consent of a Third Party (including a
Governmental Body), this Agreement shall not constitute an agreement to assign
any such contract or Drug Authorization if an attempted assignment without such
consent would constitute a breach or violation of such contract or Drug
Authorization and such Third Party objects thereto. In order, however, to
provide Buyer with the full realization and value of the Purchased Assets, each
of the Sellers agree that on and after the Closing Date it will, at the request
and under the direction of Buyer, in the name of such Seller or otherwise as
Buyer shall specify, take all reasonable actions and do or cause to be done all
such things as shall in the reasonable opinion of Buyer be necessary or proper
(i) to assure that the material rights of such Seller under such contracts and
Drug Authorizations shall be preserved for the benefit of, or transferred or
issued to, Buyer, (ii) to facilitate receipt of the consideration to be received
by such Seller under such contracts, which consideration shall be held for the
benefit of, and promptly delivered to, Buyer, and (iii) to enforce all material
rights of such Seller under the contracts and Drug Authorizations, including
provisions restricting or prohibiting use, transfer or disclosure of
confidential information; provided, however, that Buyer shall agree in writing
to reimburse and indemnify and hold harmless such Seller to the full extent
permitted by law or in equity for, and from any and all liabilities and expenses
arising from or in connection with, such contract or Drug Authorization except
to the extent such liabilities and expenses have resulted from actions taken or
omitted due to such Seller's willful misconduct, gross negligence or knowing
violation of law. Once the applicable third-party consent is obtained, the
Parties shall promptly enter into an assignment and assumption agreement or
other appropriate transfer documentation for such contract or Drug Authorization
at no additional cost to Buyer (other than the expenses described
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in Section 12.1). Nothing in this Section 2.7 shall in any way limit the
provisions of Sections 2.4, 5.2, 8.9 or 12.5 hereof.
2.8 Purchase Price Adjustments.
(a) To the extent that Closing Date Net Working Capital (as defined
below) exceeds Two Million Five Hundred Thousand Dollars ($2,500,000), Buyer
shall pay Sellers the amount of such excess. To the extent that Closing Date Net
Working Capital is less than One Million Five Hundred Thousand Dollars
($1,500,000), Sellers shall pay Buyer the amount of such deficit. For purposes
of this Section 2.8(a) the following terms have the meanings specified below:
"Closing Date Current Assets"--all current assets reflected on
the Closing Date Balance Sheet constituting Purchased Assets, excluding Closing
Inventories.
"Closing Date Current Liabilities"--all current liabilities
reflected on the Closing Date Balance Sheet constituting Assumed Liabilities.
"Closing Date Net Working Capital"--means Closing Date Current
Assets minus Closing Date Current Liabilities.
(b) To the extent that Sellers' Aggregate Net Sales exceed 111% of the
Aggregate Retail Sales Value (as defined below), Sellers shall pay Buyer an
amount equal to seventy percent (70%) of such excess. For purposes of this
Section 2.8(b) the following terms have the meanings specified below:
"Aggregate Net Sales"--an amount equal to the product of (i)
Net Revenues reflected on the income statement included in the Audited Stub
Period Financial Statements, times (ii)(A) the total number of calendar days in
the Comparison Period, divided by (B) the number of calendar days from January
1, 2004 through and including the Closing Date.
"Aggregate Retail Sales Value"--aggregate sales (in dollars)
of all of the Products during the Comparison Period as, and to the extent,
reported in NDCHealth's Pharmaceutical Audit Suite (PHAST) National Trends
Prescription and Institution Monthly.
Comparison Period"--the period from January 1, 2004 through
the last day of the last full calendar week preceding the Closing.
(c) All payments due under this Section 2.8, shall be paid by Sellers
or Buyer, as applicable, within fifteen (15) days after the Audited Stub Period
Financial Statements are delivered to Buyer under Section 7.11(a).
2.9 Allocation of Purchase Price. Buyer and Sellers shall use diligent
efforts to agree upon a statement (the "Allocation Statement") within ten (10)
Business Days after the date hereof, which statement shall set forth the
allocation, fair market value and useful lives of the Purchased Assets. After
the Closing, the Parties shall make consistent use of the allocation, fair
market
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value and useful lives specified in the Allocation Statement for all Tax
purposes and in all filings, declarations and reports with the IRS in respect
thereof, including the reports required to be filed under Section 1060 of the
IRC. Buyer shall prepare and deliver IRS Form 8594 to Sellers within forty-five
(45) days after the Closing Date to be filed with the IRS. In any Proceeding
related to the determination of any Tax, neither Buyer nor any Seller shall
contend or represent that such allocation is not a correct allocation.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Buyer with respect to
Sections 3.1 through 3.21, and additionally Quintiles represents and warrants to
Buyer with respect to Section 3.2 only, as follows:
3.1 Incorporation and Good Standing. Each of the Sellers is duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which such Seller is organized, with full corporate power and authority to
conduct its business as it is now being conducted and to own or use the
properties and assets that it owns or uses. Each of the Sellers is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the absence of qualification would not
constitute a Material Adverse Effect. Section 3.1 of the Disclosure Letter
contains a complete and accurate list of the states in which each of the Sellers
is qualified to do business as a foreign corporation.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation
of Seller Indemnifying Parties, enforceable against Seller Indemnifying Parties
in accordance with its terms. Upon the execution and delivery by QBermuda of the
QBermuda Assignment and Assumption Agreement, such agreement will constitute the
legal, valid, and binding obligation of QBermuda, enforceable against QBermuda
in accordance with its terms. Upon the execution and delivery by QIreland of the
QIreland Assignment and Assumption Agreement, such agreement will constitute the
legal, valid, and binding obligation of QIreland, enforceable against QIreland
in accordance with its terms. Upon the execution and delivery by Bioglan of the
Bill of Sale, the Bioglan Assignment and Assumption Agreement, the Patent
Application Assignment and the Trademark Assignment, each of such documents will
constitute the legal, valid, and binding obligations of Bioglan, enforceable
against Bioglan in accordance with the respective terms thereof. Seller
Indemnifying Parties have all requisite power and authority to execute and
deliver this Agreement and to perform their obligations under this Agreement and
the transactions contemplated by this Agreement.
(b) Except as set forth in Section 3.2(b) of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated hereby by Seller
Indemnifying Parties will: (i) violate any provision of the Organizational
Documents of any Seller Indemnifying Party; (ii) violate any Legal Requirement
applicable to any Seller Indemnifying Party or the transactions contemplated
hereby; or (iii)
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result in the creation of any Encumbrance upon any of the Purchased Assets
pursuant to the terms or provisions of, and neither will (with or without notice
or lapse of time or both) result in the breach or violation of, or constitute a
default under, any Material Contract, except in the case of clauses (ii) and
(iii) for such violation, breach, default or Encumbrance that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(c) Except as set forth in Section 3.2(c) of the Disclosure Letter, and
subject to compliance with the HSR Act, none of Seller Indemnifying Parties is
or will be required to give any notice to or obtain any approval, consent or
other authorization from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
transactions contemplated hereby.
3.3 Financial Statements. Bioglan has made available to Buyer: (a) an
unaudited balance sheet of the Bioglan Pharmaceuticals operations of Quintiles