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EXHIBIT 2.01
[Execution Version]
CONFIDENTIAL
SUBJECT TO CONFIDENTIALITY AGREEMENT
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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
as of each of March 31, 2004 (the "Balance
Sheet"), December 31, 2003 and
December 31, 2002, in each case consisting
of all assets and liabilities of
Bioglan and, to the extent relating to the
Products, the assets and liabilities
of QBermuda and QIreland, and (b) unaudited
statements of earnings of the
Bioglan Pharmaceuticals operations of
Quintiles for each of the three months
ended March 31, 2004 and March 31, 2003,
the year ended December 31, 2003 and
the nine months ended December 31, 2002, in
each case consisting of all
operations of Bioglan and, to the extent
relating to the Products, the
operations of QBermuda and QIreland. The
unaudited financial statements of the
Bioglan Pharmaceuticals operations of
Quintiles described in Section 3.3(a) and
(b) above are correct and complete in all
material respects as at the dates of
and for the periods referred to in such
unaudited financial statements, and have
been prepared in accordance with GAAP,
consistently applied, except that they
(i) are not financials statements of a
single entity, or consolidated financial
statements for two or more entire entities
but instead reflect the (A) operating
results, assets and liabilities of Bioglan
as an entity, and (B) operating
results, assets and liabilities of both
QBermuda and QIreland, but only to the
extent that the operating results, assets
and liabilities of QBermuda and
QIreland relate to Bioglan's business, (ii)
do not contain either footnotes,
cash flows or a statement of shareholders'
equity, (iii) are subject to normal
year end audit adjustments; and (iv) may
have a presentation format that is
different from the presentation format of
audited financial statements.
3.4 Corporate
Records. The corporate records of Bioglan are correct and
complete in all material respects.
Bioglan's minute books contain minutes of all
meetings of directors and shareholders and
all actions by written consent
without a meeting by the directors and
shareholders since the date of its
incorporation and accurately reflect, in
all material respects, all actions by
the directors and shareholders with respect
to all transactions referred to in
such minutes. True and correct copies of
Bioglan's certificate of incorporation
and bylaws and all minutes of meetings or
other actions by the directors,
shareholders or incorporators of Bioglan
since its inception have been made
available to Buyer.
3.5 Title to
Properties; Encumbrances; Real Property. Except as set forth
in Section 3.5 of the Disclosure Letter,
(a) Bioglan has good, sole and
transferable title to the Bioglan Assets,
including all material properties and
assets reflected in the Balance Sheet
(other than the Know-How), QBermuda has
good, sole and transferable title to the
QBermuda Assets, QIreland has
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good, sole and transferable title to the
QIreland Assets and, to Bioglan's
Knowledge, Bioglan has good, sole and
transferable title to the Know-How, in
each case free and clear of all
Encumbrances other than Permitted Encumbrances;
(b) the material Tangible Personal
Properties used or held for use by Bioglan in
connection with its business, taken as a
whole, are in good operating condition
and are reasonably fit and usable for the
purposes for which they are being
used, ordinary wear and tear excepted; and
(c) the Purchased Assets (including,
without limitation, the Know-How included
therein) include all of the material
rights and properties used in the operation
of Bioglan's business as operated by
Bioglan during the twelve (12) months
preceding the date hereof, other than the
Quintiles Materials, the Quintiles Systems
and those rights and properties sold
or otherwise disposed of in the ordinary
course of business. Bioglan does not
own any real property or patents. Section
3.5 of the Disclosure Letter sets
forth the address of all real property
leased by Bioglan, and a list of all real
property leases related thereto. Bioglan
has made available to Buyer a true and
correct copy of each such lease. The
Parties acknowledge and agree that title to
the contracts and agreements set forth in
Sections 2.1(a)(iii), 2.1(a)(iv),
2.1(b) and 2.1(c) are subject to the rights
of the Third Parties that are the
other parties to such contracts and
agreements (in their capacities as such
other parties to, and solely pursuant to
the terms of, such contracts and
agreements).
3.6 Inventory.
The Closing Inventories consist of a quality and quantity
usable and salable in the ordinary course
of business. All Products in the
Closing Inventories were produced or
manufactured in accordance with the
specifications for such Products, including
as set forth in the Drug
Authorizations for such Products, as
applicable, and in compliance with
applicable Legal Requirements, in each case
in all material respects.
3.7 No
Undisclosed Liabilities. Bioglan has no liabilities or
obligations
except for (a) liabilities or obligations
reflected or reserved against in the
Balance Sheet, (b) current liabilities
incurred in the ordinary course of
business since the date of the Balance
Sheet, and (c) liabilities or obligations
that, individually or in the aggregate,
would not reasonably be expected to have
a Material Adverse Effect.
3.8 Taxes.
Sellers have timely filed and accurately completed in all
material respects all Tax returns or
reports as required by applicable Legal
Requirements. Sellers have paid all Taxes
shown to be due under such returns or
reports, except those contested by them in
good faith. None of Sellers has had
any Tax deficiency proposed or assessed
against it (and, to the Knowledge of
Sellers, no audit of any such return or
report is pending) nor has any Seller
executed any waiver of any statute of
limitations on the assessment or
collection of any Tax.
3.9 Employee
Benefits.
(a) Section 3.9(a) of the Disclosure Letter sets forth all
Bioglan
Plans. Copies of all Bioglan Plans have
been made available to Buyer. Neither
Bioglan nor any member of its "control
group" has ever maintained, sponsored,
contributed to, or participated in any of
the following plans or arrangements
with respect to any employees working on
behalf of Bioglan: (i) an employee
benefit plan subject to Title IV of ERISA
or IRC ss. 412 (e.g., defined benefit
pension plans); (ii) a multiemployer plan
as defined under ERISA ss. 3(37) or
ss. 4001(a)(3) or IRC ss. 414(f); (iii) an
employee benefit plan that provides
medical or other welfare benefits to
retirees
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except as required by ERISA, the IRC, or
other applicable Legal Requirement,
including, but not limited to, the
Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended; or (iv) a multiple
employer plan within the meaning of
IRC ss. 413(c) or ERISA ss.ss. 4063, 4064,
or 4066.
(b) Each of Bioglan Plans has been adopted and operated in
substantial
compliance with its terms and all
applicable Legal Requirements (including,
where applicable, ERISA and the IRC). To
Bioglan's Knowledge, none of Bioglan
Plans or any trusts relating thereto have
engaged in any transaction in
connection with which Bioglan or any
fiduciaries of any Bioglan Plans or related
trusts is or could be subject either to a
civil penalty or other liability under
Sections 502(i), 406 or 409 of ERISA or a
tax imposed by Section 4975 of the
IRC, and no event has occurred and no
condition exists with respect to Bioglan
Plans that could subject Bioglan to any
other tax or penalty under the IRC or
civil penalty or other liability under
ERISA or other Legal Requirements that
would reasonably be expected to have a
Material Adverse Effect with respect to
Bioglan.
(c) Except as set forth in Section 3.9(c) of the Disclosure Letter,
the
consummation of the transactions
contemplated by this Agreement will not (i)
entitle any current or former employee,
officer, director or independent
contractor of Bioglan to severance pay,
unemployment compensation or any other
similar payments under any Bioglan Plans or
arrangements; (ii) accelerate the
time of payment or vesting, or increase the
amount of payments or compensation
due any such person; or (iii) result in any
prohibited transaction described in
ERISA ss. 406 or IRC ss. 4975 for which an
exemption is not available.
3.10 Compliance With
Legal Requirements; Governmental Authorizations. Except
as set forth on Section 3.10 of the
Disclosure Letter, (a) Sellers are in
compliance with all applicable Legal
Requirements, except where failure to so
comply would not, individually or in the
aggregate, reasonably be expected to
have a Material Adverse Effect; and (b)
Sellers have all Governmental
Authorizations necessary for the conduct of
their respective businesses as now
being conducted unless the failure to
possess such Governmental Authorizations
would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect.
3.11 Legal
Proceedings; Orders. Except as set forth in Section 3.11 of the
Disclosure Letter and except for any
Proceeding arising on or after the date
hereof (and, to Sellers' Knowledge, not
threatened prior to the date hereof)
that would not reasonably be expected to
have a Material Adverse Effect, there
is no pending Proceeding that has been
commenced (a) by or against any Seller,
(b) relating to the Purchased Assets, or
(c) that challenges, or that may have
the effect of preventing, delaying, making
illegal, or otherwise interfering
with, any of the transactions contemplated
hereby, and, to Sellers' Knowledge,
no such Proceeding has been threatened.
Except as set forth in Section 3.11 of
the Disclosure Letter, to Sellers'
Knowledge, there is no order issued by any
Governmental Body to which any Seller, or
any asset owned, used or held for use
by Sellers in connection with their
respective businesses, is subject.
3.12 Absence of
Certain Changes and Events. Except as set forth in
Section 3.12 of the Disclosure Letter,
since December 31, 2003, each Seller has
conducted its business in the ordinary
course of business and there has not been
any:
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(a) material payment or increase by Bioglan or its Affiliates
of
any bonuses, salaries, or other
compensation to any Bioglan officer or employee
(other than in the ordinary course of
business to employees who are not managers
or officers) or entry into any material
employment, severance, or similar
agreement with any officer or employee;
(b) adoption of, or material increase in the payments to or
benefits
under, any profit sharing, bonus, deferred
compensation, savings, insurance,
pension, retirement, or other employee
benefit plan for or with any employees of
Bioglan;
(c) damage to or destruction or loss of any material asset or
property
of Bioglan, which involves material damage
or destruction or which, in the case
of damage or destruction occurring after
the date hereof, would reasonably be
expected to have a Material Adverse
Effect;
(d) sale, lease, or other disposition of any material asset or
property
of Bioglan (other than in the ordinary
course of business for fair
consideration) or mortgage, pledge, or
imposition of any Encumbrance on any
material asset or property of Bioglan
(other than Permitted Encumbrances);
(e) (i) material
modification or termination of any Material Contract;
or (ii) receipt of notice of termination of
any Material Contract, which notice,
in the case of notice received after the
date hereof, would reasonably be
expected to result in an actual
termination;
(f) indebtedness incurred for borrowed money by Bioglan;
(g) material change in the accounting methods used by Bioglan;
(h) Material Adverse Effect; or
(i) agreement by any Seller, as applicable, to do any of the
foregoing.
3.13 Contracts.
(a) Section 3.13(a) of the Disclosure Letter contains a complete
and
accurate list, and Sellers have made
available to Buyer true and correct copies,
of:
(i) each
agreement that involves expenditures or receipts
of Bioglan, or which relates to any of the
Products, in excess of Fifteen
Thousand Dollars ($15,000);
(ii) each
agreement that involves performance of services or
delivery of goods or materials for or by
Bioglan, or which relates to any of the
Products, in an amount or value in excess
of Fifteen Thousand Dollars ($15,000);
(iii) each lease,
rental or occupancy agreement, license,
installment and conditional sale agreement,
and other agreement affecting the
ownership of, leasing of, title to, use of,
or any leasehold or other interest
in, any real or personal property held by
Bioglan (except
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personal property leases and installment
and conditional sales agreements, in
each case having a value per item or
aggregate payments of less than Fifteen
Thousand Dollars ($15,000));
(iv) each agreement for capital expenditures of Bioglan in
excess of Fifteen Thousand Dollars
($15,000);
(v) any indenture, note, loan or credit agreement or other
agreement relating to the borrowing,
guaranty or collateralization of money or
indebtedness by or of Bioglan;
(vi) each
agreement related to any employment, consulting or
independent contractor relationship of any
individual with Bioglan;
(vii) each agreement
included in the Purchased Assets
containing covenants that purport to
restrict the business activity of any
Seller or limit the freedom of any such
Seller to engage in any line of business
or to compete with any Person; and
(viii) each agreement that is otherwise material to Bioglan or
its business.
The agreements identified or required to be
identified in Section 3.13(a) of the
Disclosure Letter are referred to in this
Agreement as "Material Contracts."
(b) Except as set forth in Section 3.13(b) of the Disclosure
Letter,
each Material Contract is in full force and
effect and is valid and enforceable
in accordance with its terms in all
material respects.
(c) Except as set forth in Section 3.13(c) of the Disclosure
Letter,
(i) Bioglan, QBermuda or QIreland, as
applicable, is in compliance with all
material applicable terms and requirements
of each Material Contract, and, (ii)
to the Knowledge of Sellers, each other
Person that has any obligation under any
Material Contract is in compliance with all
material applicable terms and
requirements of such agreement.
3.14 Insurance.
Sellers have insurance coverage of the types and in the
amounts that Sellers reasonably believe is
adequate for their business against
such risks customarily insured against by
companies under comparable
circumstances. Sellers have made available
to Buyer a summary of such insurance
coverage, which is maintained on behalf of
Sellers by Quintiles. All such
insurance coverage is in full force and
effect, except to the extent as would
not reasonably be expected to have a
Material Adverse Effect.
3.15 Labor Relations.
To Bioglan's Knowledge, as of the date hereof, no
officer or key employee of Bioglan intends
to terminate employment nor does
Bioglan have any present intention to
terminate the employment of any of the
foregoing. No employees of Bioglan are
represented by a union or other labor
organization or covered by any collective
bargaining agreement. There is no
unfair labor practice complaint, labor
organizational effort, strike, slowdown
or similar labor matter pending or, to the
Knowledge of Bioglan, threatened
against or affecting Bioglan.
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<PAGE>
3.16 Intellectual
Property.
(a) To the Knowledge of Sellers, none of the offering for sale,
selling, marketing, making or using of the
Products by Sellers infringes or
misappropriates, and Sellers have not
received any written notice of any
infringement or misappropriation by Sellers
or the Products of, any intellectual
property rights of any Third Party.
(b) Set forth on Section 3.16(b) of the Disclosure Letter is a
description of the patents licensed by
Sellers, as licensee, with respect to any
of the Products (the "Licensed Patents"),
which Section of the Disclosure Letter
shall also identify the agreement pursuant
to which the related patent is
licensed by Sellers. To the Knowledge of
Sellers, the licensor of each of the
Licensed Patents has sufficient right,
title and interest to grant such license
to Sellers. Except as set forth on Section
3.2(c) of the Disclosure Letter,
Sellers have sufficient right, title and
interest to transfer such license to
the Buyer hereunder. To the Knowledge of
Sellers, the use by Sellers of the
technology disclosed and claimed in the
Licensed Patents does not infringe or
misappropriate, and Sellers have not
received any written notice of any
infringement or misappropriation by Sellers
of, any intellectual property rights
of any Third Party, and the Licensed
Patents are not being infringed or
misappropriated by any Third Party. To the
Knowledge of Sellers, there are no
facts or circumstances that would
reasonably serve as the basis for a claim of
invalidity or unenforceability of the
Licensed Patents.
(c) Set forth in Section 3.16(c) of the Disclosure Letter is a
description of each trademark of Bioglan
that is registered with the U.S. Patent
and Trademark Office (or other applicable
Governmental Body) or for which an
application for registration has been
filed. Except as set forth in Section
3.16(c) of the Disclosure Letter, Sellers
have no Knowledge of any adverse
claims with respect to such trademarks.
Except as set forth in Section 3.16(c)
of the Disclosure Letter, to the Knowledge
of Sellers, there are no facts or
circumstances that would reasonably serve
as the basis for a claim of invalidity
or unenforceability of such trademarks of
Bioglan. To the Knowledge of Sellers,
(i) the use of such trademarks by Bioglan
does not infringe or misappropriate,
and Sellers have not received any written
notice of any infringement or
misappropriation by Bioglan of, any
trademark or other intellectual property
rights of any Third Party, (ii) such
trademarks are not being infringed or
misappropriated by any Third Party, and,
(iii) except as set forth in Section
3.16(c) of the Disclosure Letter, all
necessary registration and maintenance
fees due in connection with such trademarks
have been paid and all necessary
documents in connection with such
trademarks have been filed with the applicable
Governmental Body.
(d) Bioglan has taken reasonable and customary measures to maintain
and
protect its confidential information and
intellectual property rights.
(e) Except for patent applications listed on Section 2.1(a)(xv) of
the
Disclosure Letter, which will be assigned
to Buyer under the Patent Application
Assignment, there are no patents or patent
applications, relating to the
Products, owned, licensed or otherwise
controlled by Sellers or any of their
current or former employees or independent
contractors.
20
<PAGE>
3.17 FDA Matters.
(a) All Drug Authorizations are current and in full force and
effect,
have been duly and validly issued, contain
no material error or omission, and
are owned exclusively by Bioglan. All
regulatory approvals or authorizations
owned by Sellers and relating to the
Products are set forth on Section 2.1(a)(i)
of the Disclosure Letter. Sellers have
complied in all material respects with
their respective obligations to report
adverse drug experiences and are in
compliance in all material respects with
all other obligations applicable to the
Products pursuant to the FFDCA and other
applicable Legal Requirements. There is
no Proceeding pending or, to the Knowledge
of Sellers, threatened seeking the
recall of any Products or the revocation or
suspension of any Drug
Authorization. Sellers have made available
to Buyer true and correct copies of
all Drug Authorizations, and there are no
material changes, amendments or other
circumstances in connection with or
relating to any of the Products that would
require the filing of any material
amendment or supplement to a Drug
Authorization or the filing of any new Drug
Authorization.
(b) To Sellers' Knowledge, the ANDA relating to Adoxa(R) is current
and
in full force and effect, has been duly and
validly issued and contains no
material error or omission. To Sellers'
Knowledge, there is no Proceeding
pending or threatened seeking the recall of
Adoxa(R) or the revocation or
suspension of the ANDA relating to
Adoxa(R). To Sellers' Knowledge, there are no
material changes, amendments or other
circumstances in connection with or
relating to Adoxa(R) that would require the
filing of any material amendment or
supplement to the ANDA relating to
Adoxa(R).
(c) Except as set forth in Section 3.17(c) of the Disclosure
Letter,
Sellers have not received or been subject
to: (i) any FDA Form 483's concerning
the Products; (ii) any FDA Notices of
Adverse Findings concerning the Products;
or (iii) warning letters or other
correspondence from the FDA or any other
Governmental Body concerning (1) the
Products in which the FDA or other such
Governmental Body asserted that the
operations of any Seller or the Products
were not in compliance with applicable
Legal Requirements in any material
respect, (2) issues arising from any
pricing issues concerning the Products,
including "best pricing" issues and
Medicaid rebates, (3) issues concerning the
Products involving financial relationships
between any Seller and any health
care provider or pharmacy, including issues
of improper payments, kickbacks,
promotional activities, speakers' fees or
continuing medical education; or (4)
any other issues in relation to the
Product, including but not limited to
marketing and promotional activities and
off-label promotion of a Product.
During Sellers' ownership or license of the
Products and, to the Sellers'
Knowledge, prior thereto, there have
bee
