This Contribution Agreement
(this “Agreement” ) is made and entered
into as of September 13, 2006, by and among Tenby Pharma Inc. , a
Delaware corporation ( “Pubco” ),
Sirion Therapeutics,
Inc. , a North Carolina corporation (the
“Company” ), and each of the shareholders
of the Company listed on Schedule A attached hereto
(each, a “Contributor” and collectively,
the “Contributors” ). Certain capitalized
terms used in this Agreement are defined in Exhibit A
attached hereto and incorporated herein by reference.
Whereas, the parties desire
to set forth the terms and conditions pursuant to which:
(i) each of the Contributors holding shares of Company Common
Stock shall contribute all of its shares of Company Common Stock to
Pubco in exchange for shares of Pubco Common Stock; and
(ii) each of the Contributors holding shares of Company
Series A Preferred Stock or Company Series A-1 Preferred
Stock shall contribute all of its shares of Company Series A
Preferred Stock and/or Company Series A-1 Preferred Stock to
Pubco in exchange for shares of Pubco Series A Preferred Stock
(the contributions referred to in clauses (i) and
(ii) being collectively referred to herein as the
“Contribution” );
Whereas, immediately
following the execution and delivery of this Agreement by the
parties hereto, Pubco is entering into that certain Series A
Preferred Stock Purchase Agreement (the “Purchase
Agreement” ) with the investors listed on the
signature pages thereto (collectively, the
“Purchasers” ), pursuant to which the
Purchasers will purchase from Pubco shares of Pubco Series A
Preferred Stock (the “Stock Purchase” );
and
Whereas, insofar as the
Contribution and the Stock Purchase (collectively, the
“Transfers” ) are being made pursuant to
a single plan in exchange for shares of Pubco Common Stock and
Pubco Series A Preferred Stock that will collectively
represent at least 80% of the total combined voting power of all
classes of Pubco voting stock and at least 80% of the total number
of shares of all other classes of Pubco capital stock, it is
intended that the Transfers qualify and are treated as a tax-free
transfer under Section 351 of the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated
thereunder (the “Code” ).
Now, Therefore, in
consideration of the foregoing and the respective covenants,
agreements and representations and warranties set forth herein, the
parties to this Agreement, intending to be legally bound, hereby
agree as follows:
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1.
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Description
of Contribution.
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1.1
Contribution. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined below):
(i) each of the Contributors holding shares of Company Common
Stock shall contribute all of its shares of Company Common Stock to
Pubco in exchange for that number of shares of Pubco Common Stock
as is set forth in Section 1.3 ; and (ii) each of
the Contributors holding shares of Company Series A Preferred
Stock or Company Series A-1 Preferred Stock shall contribute
all of its shares of Company
Series A
Preferred Stock or Company Series A-1 Preferred Stock, as
applicable, to Pubco in exchange for that number of shares of Pubco
Series A Preferred Stock as is set forth in Section 1.3
.
1.2 Closing;
Effective Time. The consummation of the Contribution (the
“Closing” ) shall take place at the
offices of Pubco at 10:00 a.m. Eastern Time (the
“Effective Time” ) on the date of this
Agreement (the “Closing Date”
).
1.3
Contribution Consideration. The following consideration shall
be payable to the Contributors as a result of the Contribution:
(i) 3,327,833 shares of Pubco Common Stock (the
“Aggregate Common Stock Consideration” );
and (ii) 1,672,036 shares of Pubco Series A Preferred
Stock (the “ Aggregate Preferred Stock
Consideration ” and, together with the Aggregate
Common Stock Consideration, the “Aggregate Contribution
Consideration” ). Such Aggregate Contribution
Consideration shall be payable to the Contributors as
follows:
(a) Each
share of Company Series A Preferred Stock held by a
Contributor as of immediately prior to the Effective Time shall
entitle such Contributor to receive, in accordance with
Section 1.4 , 13.7925 shares of Pubco Series A
Preferred Stock (the “Series A Per Share
Contribution Consideration” ).
(b) Each
share of Company Series A-1 Preferred Stock held by a
Contributor as of immediately prior to the Effective Time shall
entitle such Contributor to receive, in accordance with
Section 1.4 , 12.50 shares of Pubco Series A
Preferred Stock (the “Series A-1 Per Share
Contribution Consideration” ).
(c) Each
share of Company Common Stock held by a Contributor as of
immediately prior to the Effective Time shall entitle such
Contributor to receive, in accordance with Section 1.4
, 12.50 shares of Pubco Common Stock (the “Common Stock
Per Share Contribution Consideration” ).
1.4 Delivery
of Contribution Consideration.
(a) At
the Closing: (i) the Contributors will provide to Pubco
(1) completed and executed letters of transmittal in customary
form for use in effecting the surrender of all Contributed
Interests in exchange for the Applicable Per Share Contribution
Consideration, and (2) all certificates representing the
Contributed Interests held by such Contributors; and
(ii) Pubco will provide to each Contributor (A) a Pubco
stock certificate representing that number of shares of Pubco
Series A Preferred Stock representing such Contributor’s
portion of the Aggregate Preferred Stock Consideration (as
determined in accordance with Section 1.3 ), and
(B) a Pubco stock certificate representing that number of
shares of Pubco Common Stock representing such holder’s
portion of the Aggregate Common Stock Consideration (as determined
in accordance with Section 1.3 ). In lieu of any fractional
shares of Pubco Common Stock or Pubco Series A Preferred Stock
that any Contributor would otherwise be entitled to receive, such
Contributor shall be paid cash in an amount equal to the product of
(1) the number of fractional shares of Pubco Common Stock or
Pubco Series A Preferred Stock, as applicable, which such
Contributor would otherwise be entitled to receive, multiplied by
(2) $8.00.
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(b) Pubco
shall be entitled to deduct and withhold from the Applicable Per
Share Contribution Consideration payable or otherwise deliverable
to any Contributor pursuant to this Agreement such amounts as Pubco
is required to deduct or withhold therefrom under the Code or under
any provision of state, local or foreign tax law. To the extent
such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid
to the Contributor to whom such amounts would otherwise have been
paid.
1.5 Tax
Consequences. For federal income tax purposes, the Transfers
are intended to constitute a tax-free transfer of property to Pubco
within the meaning of Section 351 of the Code, and the parties
shall report the transactions contemplated by the Transaction
Documents consistent with such intent and shall take no position in
any Tax filing or Legal Proceeding inconsistent therewith. None of
Pubco, the Contributors or the Company has taken or failed to take,
and after the Effective Time, Pubco and the Contributors shall not
take or fail to take, any action which reasonably could be expected
to cause the Transfers to fail to qualify as a tax-free transfer of
property to Pubco within the meaning of Section 351 of the
Code.
1.6 Further
Action. If, at any time after the Closing Date, any further
action is determined by Pubco to be necessary or desirable to carry
out the transactions contemplated by the Transaction Documents or
to vest Pubco with full right, title and possession of and to all
Contributed Interests, the officers and directors of Pubco shall be
fully authorized (in the name of the Company, the Contributors or
otherwise) to take such action.
2.
Representations and
Warranties of the Company. Except as set forth on the Company Disclosure
Schedule, the Company hereby represents and warrants, as of the
date hereof, to and for the benefit of Pubco, as
follows:
2.1 Due
Organization; Subsidiaries; Etc. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of North Carolina and as a foreign corporation
qualified to do business in the State of Florida, and has all
necessary power and authority: (i) to conduct its business in
the manner in which its business is currently being conducted;
(ii) to own and use its assets in the manner in which its
assets are currently owned and used; and (iii) to perform its
obligations under all Company Contracts to which it is a party. The
Company, together with its predecessors, has not conducted any
business under or otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name, trade name or
other name, other than the names “Sirion Therapeutics,
Inc.” and, prior to the consummation of the Sirion/Sytera
Merger, “Sytera, Inc.” The Company is not and has not
been required to be qualified, authorized, registered or licensed
to do business as a foreign corporation in any jurisdiction other
than Florida and California. Other than RxDR, the Company has no
Subsidiaries, does not own any controlling interest in any Entity
and has never owned, beneficially or otherwise, any shares or other
securities of, or any direct or indirect equity or other financial
interest in, any Entity. RxDR is a limited liability company duly
organized, validly existing and in good standing under the laws of
the State of Florida and has all necessary power and authority:
(i) to conduct its business in the manner in which its
business is currently being conducted; (ii) to own and use its
assets in the manner in which its assets are currently owned and
used; and (iii) to perform its obligations under all Company
Contracts to which it is a party. The Company directly owns all of
the issued and outstanding membership interests of RxDR free and
clear of any liens and all of such membership interests are validly
issued and free of preemptive and similar rights. The Company has
not agreed and is not obligated to make any
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future
investment in or capital contribution to any Entity. Neither the
Company nor any of the stockholders of the Company has ever
approved, or commenced any Legal Proceeding or made any election
contemplating, the dissolution or liquidation of the
Company’s business or affairs.
2.2
Certificate of Incorporation and Bylaws; Records. The Company
has delivered to Pubco accurate and complete (through the date
hereof) copies of: (i) the certificate of incorporation and
bylaws, including all amendments thereto, of the Company;
(ii) the certificate of formation and limited liability
company operating agreement, or similar organizational documents,
of RxDR; (iii) the stock records of the Company; and (iv) the
minutes and other records of the meetings and other proceedings
(including any actions taken by written consent or otherwise
without a meeting) of the holders of Company Securities, the board
of directors of the Company and all committees of the board of
directors of the Company (the items described in the foregoing
clauses “(i)”, “(ii)”, “(iii)”
and “(iv)” of this Section 2.2 being
collectively referred to herein as the “Company
Documents” ). There have been no formal meetings held
of, or corporate actions taken by, the stockholders of the Company,
the board of directors of the Company or any committee of the board
of directors of the Company, or the members of RxDR, the board of
managers of RxDR or any committee of the board of managers of RxDR,
that are not fully reflected in the Company Documents. There has
not been any violation of any of the Company Documents, and at no
time has the Company or RxDR taken any action that is inconsistent
in any material respect with the Company Documents. The books of
account, equity records, minute books and other records of the
Company and RxDR are accurate, up-to-date and complete in all
material respects, and have been maintained in accordance with
Legal Requirements and prudent business practices.
(a) The
authorized capital stock of the Company consists of:
(i) 600,000 shares of Company Common Stock, of which 266,227
shares have been issued and are outstanding; (ii) 30,600
shares of Company Series A Preferred Stock, of which 30,599
have been issued and are outstanding; and (iii) 100,000 shares of
Company Series A-1 Preferred Stock, all of which have been
issued and are outstanding. All of the outstanding shares of the
Company capital stock have been duly authorized and validly issued
and are fully paid and nonassessable. All of the outstanding shares
of capital stock of the Company and all of the outstanding
subscriptions, options, calls, warrants or rights (whether or not
currently exercisable) to acquire any shares of capital stock or
other securities of the Company have been issued in compliance with
all applicable federal and state securities laws and other
applicable Legal Requirements and all requirements set forth in the
Company Documents and Company Contracts. No shares of capital stock
of the Company are subject to a repurchase option in favor of the
Company, and the Company has never repurchased, redeemed or
otherwise reacquired any shares of the Company capital stock or
other securities of the Company. Collectively, the Contributed
Interests to be transferred by the Contributors to Pubco in
connection with the Contribution represent 100% of the shares of
outstanding capital stock of the Company.
(b) Except
as set forth on Schedule 2.3(b) of the Company
Disclosure Schedule, there are no: (i) outstanding
subscriptions, options, calls, warrants or rights (whether or not
currently exercisable) to acquire any shares of capital stock of
the Company or other securities of the Company;
(ii) outstanding securities, notes, instruments or obligations
that are or may become convertible into or exchangeable for any
shares of capital stock of the Company
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or other
securities of the Company; (iii) outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to
the capital stock of the Company; (iv) Contracts (other than
this Agreement) under which the Company is or may become obligated
to sell, transfer, exchange or issue any shares of capital stock of
the Company or any other securities of the Company;
(v) agreements, voting trusts, proxies or understandings with
respect to the voting, or registration under the Securities Act, or
any shares of the Company; or (vi) conditions or circumstances
that may give rise to or provide a basis for the assertion of a
claim by any Person to the effect that such Person is entitled to
acquire or receive any shares of the Company Securities or any
shares of the capital stock or other securities of the
Company.
(c)
Schedule 2.3(c) of the Company Disclosure Schedule sets
forth a complete and accurate list of all of the stock option plans
and other stock or equity-related plans of the Company.
2.4 Company
Financial Statements. The Company has furnished to Pubco a
complete and correct copy of the Company’s:
(i) unaudited balance sheet dated as of December 31, 2004
and the related statements of operations, shareholders’
equity, and cash flows for the twelve (12) months then ended;
(ii) unaudited balance sheet dated as of December 31,
2005 and the related statements of operations, shareholders’
equity, and cash flows for the twelve (12) months then ended;
and (iii) unaudited balance sheet dated as of June 30, 2006
and the related statements of operations, shareholders’
equity, and cash flows for the six (6) months then ended
(collectively, the “Company Financial
Statements” ). The Company Financial Statements are
complete and correct, are consistent with the books and records of
the Company and present fairly the assets, liabilities, financial
condition and results of operations of the Company, as at the dates
and for the periods indicated, have been prepared in accordance
with GAAP, and have been prepared in good faith by the
Company’s management from the books and records of the
Company. The books and records of the Company are true, accurate
and complete in all material respects.
2.5 Equipment;
Leasehold. Schedule 2.5 of the Company Disclosure
Schedule sets forth a true and complete list of all inventory,
machinery, equipment, furniture, office equipment, supplies,
materials, vehicles and other material items of tangible personal
property of every kind owned by the Company and RxDR and used in
connection with their respective businesses (the “
Company Personal Property” ). All of the Company
Personal Property and other tangible assets owned by or leased to
the Company or RxDR are in good condition and repair (ordinary wear
and tear excepted) and are adequate for the conduct of the
Company’s or RxDR’s business in the manner in which
such business is currently being conducted. Neither the Company nor
RxDR owns any real property or any interest in real property,
except for the leasehold interest created under the real property
leases identified in Schedule 2.5 of the Company
Disclosure Schedule (the “Company Leased Real
Property” ).
2.6
Intellectual Property.
(a)
Schedule 2.6(a) of the Company Disclosure Schedule
accurately identifies: (i) each item of Registered IP in which
the Company or RxDR has or purports to have an ownership interest
of any nature (whether exclusively, jointly with another Person, or
otherwise); (ii) the jurisdiction in which such item of
Registered IP has been registered or filed and the applicable
registration or serial number; and (iii) any other Person that
has an ownership
5
interest in
such item of Registered IP and the nature of such ownership
interest. The Company has provided to Pubco complete and accurate
copies of all applications and correspondence with any Governmental
Body related to each such item of Registered IP.
(b)
Schedule 2.6(b) of the Company Disclosure Schedule
accurately identifies: (i) all Intellectual Property Rights or
Intellectual Property licensed to the Company or RxDR (other than
any non-customized software that is so licensed solely in
executable or object code form pursuant to a non-exclusive,
internal-use software license or is generally publicly available on
standard terms for less than $1,000); and (ii) the
corresponding Contract or Contracts pursuant to which such
Intellectual Property Rights or Intellectual Property is or are
licensed to the Company. Neither the Contribution nor any of the
other transactions contemplated by the Transaction Documents will
materially adversely alter or impair the Company’s
Intellectual Property Rights or the Intellectual Property licensed
to the Company or RxDR.
(c)
Schedule 2.6(c) of the Company Disclosure Schedule
accurately identifies each Contract pursuant to which any Person
has been granted any license under, or otherwise has received or
acquired any right (whether or not currently exercisable) or
interest in, any of the Company IP. Neither the Company nor RxDR is
bound by, and no Company IP is subject to, any Contract containing
any covenant or other provision that in any way limits or restricts
the ability of the Company or RxDR to use, exploit, assert, or
enforce any Company IP anywhere in the world.
(d) The
Company or RxDR, as applicable, exclusively owns all right, title,
and interest to and in the Company IP, free and clear of any
Encumbrances. Without limiting the generality of the
foregoing:
(i) All documents and instruments necessary to perfect
the rights of the Company or RxDR, as applicable, in the Registered
IP have been validly executed, delivered and filed in a timely
manner with the appropriate Governmental Body;
(ii) Each Person who is or was an employee or
contractor of the Company or RxDR and who is or was involved in the
creation or development of any Company IP has signed a valid,
enforceable written agreement containing an assignment of
Intellectual Property Rights to the Company or RxDR, as applicable,
and confidentiality provisions in favor of the Company or RxDR, as
applicable, regarding the Company IP. No current or former
Representative or Affiliate of the Company or RxDR has any claim,
right (whether or not currently exercisable) or interest to or in
any Company IP;
(iii) With respect to Company IP in the form of
licenses of third party Intellectual Property and Intellectual
Property Rights, no funding, facilities or personnel of any
Governmental Body within the jurisdictions covered by the license
were used, directly or indirectly, to develop or create, in whole
or in part, such Company IP. With respect to all other Company IP,
no funding, facilities or personnel of any Governmental Body were
used, directly or indirectly, to develop or create, in whole or in
part, such Company IP;
(iv) Each of the Company and RxDR has taken all
reasonable steps to maintain the confidentiality of and otherwise
protect and enforce its rights in all proprietary
6
information
that the Company or RxDR, as applicable, holds, or purports to
hold, as a trade secret;
(v) Neither the Company nor RxDR has assigned or
otherwise transferred ownership of, or agreed to assign or
otherwise transfer ownership of, any Company IP to any other
Person; and
(vi) Neither the Company nor RxDR is, or has ever
been, a member or promoter of, or a contributor to, any industry
standards body or similar organization that could require or
obligate the Company or RxDR, as applicable, to grant or offer to
any other Person any license or right to any Company IP.
(e)
(i) With respect to Company IP in the form of licenses from
third parties of Intellectual Property and Intellectual Property
Rights: (A) each item of Company IP that is Registered IP is
in compliance with all Legal Requirements and is valid and in full
force and effect; and (B) no application for any type of
Registered IP filed by or on behalf of the Company or RxDR has been
abandoned, allowed to lapse or rejected; and
(ii) With
respect to all other Company IP, each item of Company IP that is
Registered IP is and at all times has been maintained in compliance
with all Legal Requirements and all filings, payments and other
actions required to be made or taken to maintain such item of
Registered IP in full force and effect have been made by the
applicable deadline; and each such item of Registered IP is valid
and in full force and effect. No application for any type of
Registered IP filed by or on behalf of the Company or RxDR has been
abandoned, allowed to lapse or rejected. No item of Company IP that
is Registered IP is subject to any maintenance fees or Taxes or
actions falling due within ninety (90) days after the Closing
Date.
(f) To
the Company’s Knowledge, no Person has infringed,
misappropriated or otherwise violated or is currently infringing,
misappropriating or otherwise violating any Company IP.
(g) To
the Company’s Knowledge, none of the Company IP owned or
licensed by the Company or RxDR currently infringes,
misappropriates or otherwise violates or has ever infringed
(directly, contributorily, by inducement or otherwise),
misappropriated or otherwise violated any Intellectual Property
Right of any other Person. Without limiting the generality of the
foregoing:
(i) To the Company’s Knowledge, no infringement,
misappropriation or similar claim or Legal Proceeding is pending or
has been threatened against the Company or RxDR; and
(ii) Except as set forth on Schedule 2.6(g)(ii),
neither the Company nor RxDR is bound by any Contract to indemnify,
defend, hold harmless or reimburse any other Person with respect to
any Intellectual Property infringement, misappropriation or any
similar claim. Neither the Company nor RxDR has ever assumed, or
agreed to discharge or otherwise take responsibility for, any
existing or potential liability of another Person for the
infringement, misappropriation or violation of any Intellectual
Property Right.
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2.7
Contracts. Schedule 2.7 of the Company Disclosure
Schedule identifies each Company Contract and provides an accurate
description of the terms of each Company Contract that is not in
written form. The Company has delivered to Pubco accurate and
complete copies of all written Company Contracts. Each Company
Contract is valid, binding and enforceable by the Company in
accordance with its terms subject to: (i) laws of general
application relating to bankruptcy, insolvency and the relief of
debtors; and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. Neither the Company
nor RxDR has violated or breached, or committed any default under,
any Company Contract, and, to the Company’s Knowledge, no
other Person has violated or breached, or committed any default
under, any Company Contract. Schedule 2.7 of the
Company Disclosure Schedule provides an accurate and complete list
of all Consents required under any Company Contract to consummate
the transactions contemplated by the Transaction
Documents.
2.8
Finder’s Fee. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or
commission in connection with the Contribution or any of the other
transactions contemplated by the Transaction Documents based upon
any arrangements or agreements made by or on behalf of the
Company.
2.9 Compliance
with Legal Requirements. Each of the Company and RxDR is, and
has at all times been, in compliance with all applicable material
Legal Requirements. To the Company’s Knowledge, each of the
Company and RxDR is, and has at all times been, in compliance with
all other applicable Legal Requirements. Neither the Company nor
RxDR has ever received any notice or other communication from any
Person regarding any actual or possible violation of, or failure to
comply with, any Legal Requirement. Each of the Company and RxDR
has obtained all material permits, certificates and licenses
required by any Legal Requirement for the conduct of its business
and the ownership of its assets. Neither the Company nor RxDR is in
violation of any such permit, certificate or license, and no Legal
Proceedings are pending or, to the Knowledge of the Company,
threatened to revoke or limit any such permit, certificate or
license.
2.10 Legal
Proceedings. There is no pending Legal Proceeding, and to the
Company’s Knowledge, no Person has threatened to commence any
Legal Proceeding, that (i) involves or affects the Company or
RxDR or any of the assets owned or used by the Company or RxDR, or
(ii) that challenges the Contribution or any of the other
transactions contemplated by the Transaction Documents. No Legal
Proceeding has ever been commenced that involves or affects the
Company or RxDR or the assets owned by the Company or RxDR. There
is no Order in which the Company or RxDR is named or to which any
of the assets of the Company or RxDR is subject.
2.11 No
Undisclosed Liabilities. Neither the Company nor RxDR has any
Liabilities, except for (i) Liabilities reflected on the
Company Financial Statements, (ii) accounts payable incurred
in the ordinary course of business since the date of the last
balance sheet reflected in the Company Financial Statements, none
of which are material in nature or exceed $25,000,
(iii) Liabilities under the Company Contracts, and
(iv) Liabilities incurred in connection with the negotiation
of the Transaction Documents and the transactions contemplated
thereby.
2.12 Tax
Matters. All Tax Returns required to be filed by or on behalf
of the Company or RxDR with any Governmental Body before the
Closing Date (the “Company
8
Returns” ): (i) have been or will be filed on or
before the applicable due date (including any extensions of such
due date); (ii) have been, or will be when filed, accurately
and completely prepared in all material respects in compliance with
all applicable Legal Requirements; and (iii) have been provided or
made available to Pubco. All Taxes owed by the Company or RxDR have
been paid when due, whether or not such amounts are shown on any
Company Returns. The Company Financial Statements fully accrue all
actual and contingent Liabilities for unpaid Taxes with respect to
all periods through the date thereof and each of the Company and
RxDR has made adequate provision for unpaid Taxes after that date
in its books and records. No Company Return has ever been examined
or audited by any Governmental Body. No claim or Legal Proceeding
is pending or has been threatened against or with respect to the
Company or RxDR in respect of any Tax. There are no unsatisfied
Liabilities for Taxes, including Liabilities for interest,
additions to tax and penalties thereon and related expenses, with
respect to which any notice of deficiency or similar document has
been received by the Company or RxDR (other than Liabilities for
Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company or
RxDR, as applicable, and with respect to which adequate reserves
for payment have been established). There are no liens for Taxes
upon any of the assets of the Company or RxDR except liens for
current Taxes not yet due and payable.
2.13 Employee
and Labor Matters.
(a)
Schedule 2.13(a) of the Company Disclosure Schedule
contains a list of all of the employees of the Company and RxDR as
of the date of this Agreement and correctly reflects, in all
material respects, the nature and amount of all compensation
payable to them, their dates of employment and their positions. All
of the employees listed on Schedule 2.13(a) of the
Company Disclosure Schedule are “at will” employees.
Each of the Company and RxDR has at all times complied with all
material Legal Requirements related to the employment of its
employees. Except as set forth on Schedule 2.13 , each
of the Company and RxDR has compensated all individuals for, or
otherwise cancelled or satisfied all of its obligations with
respect to, all accrued vacation, deferred compensation and other
similar benefits. Since January 1, 2006, neither the Company
nor RxDR has increased the salary or benefits level of any of its
employees.
(b) Except
as set forth on Schedule 2.13(b) of the Company
Disclosure Schedule, there are no Plans, as defined below,
contributed to, maintained or sponsored by the Company or RxDR, to
which the Company or RxDR is obligated to contribute or with
respect to which the Company or RxDR has any liability or potential
liability, whether direct or indirect. For purposes of this
Agreement, the term “Plans” shall mean:
(a) employee benefit plans as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (
“ERISA” ), whether or not funded and
whether or not terminated, (b) employment agreements, and
(c) personnel policies or fringe benefit plans, policies,
programs and arrangements, whether or not subject to ERISA, whether
or not funded, and whether or not terminated, including without
limitation, stock bonus, deferred compensation, pension, severance,
bonus, vacation, travel, incentive, and health, disability and
welfare plans.
(c) Except
as set forth on Schedule 2.13(c) of the Company
Disclosure Schedule, none of the Initial Sytera FTEs is obligated
under any Contract, or subject to any Order, that would conflict
with his or her obligation to use his or her best efforts to
promote the interests of the Company or Pubco after the Closing
Date, or that conflicts with the business of
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the Company as
presently conducted. During the past ten (10) years, to the
Knowledge of the Company, none of the Initial Sytera FTEs has been
(i) charged with, indicted for or convicted of any misdemeanor
related to moral turpitude or any felony; (ii) a party to a
proceeding with respect to any misdemeanor related to moral
turpitude or any felony; or (iii) the subject of a bankruptcy
proceeding or has been the officer or director of a company that
has been the subject of a bankruptcy proceeding. The Company is not
aware that any Initial Sytera FTE has plans to terminate his or her
employment with the Company, as a result of the Contribution or
otherwise.
2.14
Authority; Binding Nature of Agreement. The Company has all
necessary corporate power and authority to enter into and to
perform its obligations under the Transaction Documents, and the
execution, delivery and performance by the Company of the
Transaction Documents have been duly authorized by all necessary
action on the part of the Company, its board of directors and each
of its stockholders. Each of the Transaction Documents to which the
Company is a party constitutes the valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, subject to: (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors; and
(ii) rules of law governing specific performance, injunctive
relief and other equitable remedies.
2.15
Non-Contravention. Neither the execution, delivery or
performance of the Transaction Documents, nor the consummation of
any of the transactions contemplated thereby, will directly or
indirectly (with or without notice or lapse of time):
(i) result in a violation of any of the provisions of the
Company Documents; (ii) to the Company’s Knowledge,
result in a violation of, or give any Governmental Body or other
Person the right to challenge any of the transactions contemplated
by the Transaction Documents or to exercise any remedy or obtain
any relief under any, Legal Requirement or any Order to which the
Company, RxDR, or any of the assets owned, used or controlled by
the Company or RxDR, is subject; or (iii) result in a
violation or breach of, or result in a default under, with or
without notice or lapse of time, any provision of any Company
Contract.
2.16
Environmental Protection. No substances that are defined by
Legal Requirements concerning the environment as toxic materials,
hazardous wastes or hazardous substances (including without
limitation any asbestos, oils, petroleum-derived compound or
pesticides) (collectively, “ Hazardous Materials
” ) are or, to the Knowledge of the Company, have been
located in, on or about the Company Leased Real Property. To the
Knowledge of the Company, the Company Leased Real Property has not
been used for the storage, manufacture or disposal of Hazardous
Materials, and neither the Company nor RxDR has used, or provided
permission to others to use, the Company Leased Real Property for
the storage, manufacture or disposal of Hazardous Materials.
Specifically, but without limitation, to the Knowledge of the
Company, there are and have been no storage tanks located on the
Company Leased Real Property. To the Knowledge of the Company, no
Hazardous Materials have been transported off site from the Company
Leased Real Property.
2.17
Insurance. Schedule 2.17 to the Company Disclosure
Schedule contains a brief description of all insurance policies
maintained by the Company or RxDR with respect to their respective
businesses and assets and the Company Leased Real Property. Such
policies are valid, binding and enforceable in accordance with
their terms, are in full force and effect, and all premiums due
thereon have been paid.
10
2.18 Related
Party Transactions. Except as set forth on
Schedule 2.18 to the Company Disclosure Schedule, the
Company Contracts do not include any agreement with or any other
commitment to (a) any officer or director of the Company or
RxDR; (b) any individual related by blood or marriage to any
such officer or director; or (c) any Entity in which the
Company, RxDR or any such officer, director or related person has
an equity or participating interest.
(a) Each
of the Company and RxDR has been and is in compliance in all
material respects with all applicable Legal Requirements, including
the United States Federal Food, Drug and Cosmetic Act, as amended
from time to time, and all regulations promulgated thereunder (the
“FFDCA” ), in its development efforts
related to any Product or any product of RxDR (an “RxDR
Product” )and in conducting any related clinical
trials. Neither the Company nor RxDR has (i) made to the FDA
any untrue statement of a material fact regarding any Product or
RxDR Product (whether in any submission or otherwise)
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