STOCK PURCHASE AGREEMENT

Purchase and Sale Agreement

You are currently viewing:

This Purchase and Sale Agreement involves

Denver, CO | Fort Collins, CO | QLT INC | TOLMAR HOLDING, INC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: STOCK PURCHASE AGREEMENT
Governing Law: New York Date: 10/7/2009
Industry: Biotechnology and Drugs Law Firm: Latham Watkins;Holme Roberts Sector: Healthcare

STOCK PURCHASE AGREEMENT, Parties: denver co , fort collins co , qlt inc , tolmar holding inc

Exhibit 2.1

[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

STOCK PURCHASE AGREEMENT

by and between

QLT INC.

and

TOLMAR HOLDING, INC.

Dated as of October 1, 2009

TABLE OF CONTENTS


ARTICLE I DEFINITIONS			1

1.1 Definitions			1
1.2 Other Definitional Provisions			10

ARTICLE II ASSETS AND LIABILITIES OF QLT USA; PURCHASE AND SALE OF SHARES			11

2.1 Assets and Liabilities of QLT USA			11
2.2 Purchase and Sale of Shares; Purchase Price			12

ARTICLE III CLOSING			13

3.1 Closing			13
3.2 Deliveries on the Closing Date and after the Closing			13
3.3 Post-Closing Deliveries			14

ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING QLT USA			15

4.1 Organization; Corporate Records			15
4.2 No Conflicts			15
4.3 Capitalization			15
4.4 Title			16
4.5 No Subsidiaries			16
4.6 Intellectual Property			16
4.7 Litigation			17
4.8 Taxes			18
4.9 Compliance with Laws; Regulatory Matters			18
4.10 Material Contracts			20
4.11 Financial Statements			20
4.12 No Undisclosed Liabilities			21
4.13 Employee Benefit and Other Employment Matters			21
4.14 Insurance			23
4.15 Related Party Transactions			23
4.16 Real Property			23

ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER			23

5.1 Organization; Due Authorization			23
5.2 No Conflicts; Enforceability			24
5.3 Consents			24
5.4 Litigation			24
5.5 Brokers’ Fees			24
5.6 Shares			24
5.7 No Other Representations or Warranties			25


ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER			25

6.1 Organization; Due Authorization			25
6.2 No Conflicts; Enforceability			25
6.3 Consents			25
6.4 Litigation			26
6.5 Solvency			26
6.6 Securities Act			26
6.7 No Other Representations or Warranties			26

ARTICLE VII COVENANTS			27

7.1 Conduct of the Business Post-Closing			27
7.2 Required Approvals and Consents			27
7.3 Further Assurances; Further Documents			28
7.4 Noncompetition			28
7.5 HSR Fees			29
7.6 Product Reports			29
7.7 Name Change			29

ARTICLE VIII CONDITIONS TO CLOSING			29

8.1 Conditions Precedent to Obligations of Purchaser and Seller			29

ARTICLE IX ADDITIONAL COVENANTS			30

9.1 Confidentiality; Publicity			30
9.2 Availability of Records			30
9.3 Regulatory Matters			31
9.4 Tax Matters			31

ARTICLE X TERMINATION			32

10.1 Termination			32
10.2 Automatic Termination			32
10.3 Consequences of Termination			32

ARTICLE XI SURVIVAL; INDEMNIFICATION			33

11.1 Survival of Representations and Warranties and Covenants			33
11.2 Indemnification			33
11.3 Notice of Claims			34
11.4 Third Person Claims			35
11.5 Limitation on Indemnity			36
11.6 Remedies			36
11.7 Limitation on Liabilities			37
11.8 Knowledge			37
11.9 No Set-off			37
11.10 Treatment of Indemnification Payments			37


ARTICLE XII MISCELLANEOUS			37

12.1 Assignment; Binding Effect			37
12.2 Expenses			38
12.3 Notices			38
12.4 Severability			39
12.5 Entire Agreement			39
12.6 No Third Party Beneficiaries			39
12.7 Waiver			39
12.8 Governing Law; Arbitration			39
12.9 Waiver of Jury Trial			39
12.10 Injunctive Relief			39
12.11 Headings			40
12.12 Counterparts			40
12.13 Schedules			40
12.14 Construction			40
12.15 Time of the Essence			40

iii

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 1, 2009 (the “ Execution Date ”), is entered into by and between QLT Inc., a corporation formed under the laws of the Province of British Columbia, Canada (“ Seller ”), and TOLMAR Holding, Inc., a Delaware corporation (“ Purchaser ”). Each of Seller and Purchaser is sometimes referred to herein, individually, as a “ Party ” and, collectively, as the “ Parties .” All capitalized terms used herein shall have the meanings specified in ARTICLE I below or elsewhere in this Agreement, as applicable.

INTRODUCTION

WHEREAS, Seller owns 100% of the issued and outstanding shares of capital stock of QLT USA, Inc., a Delaware corporation (“ QLT USA ”); and

WHEREAS, Seller desires to sell and Purchaser desires to purchase 100% of the issued and outstanding shares of capital stock of QLT USA.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants, agreements and provisions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
DEFINITIONS

1.1 Definitions . In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below for purposes of this Agreement:

“ 10% Indemnity Cap ” has the meaning set forth in Section 11.5 .

“ 15% Indemnity Cap ” has the meaning set forth in Section 11.5 .

“ AAA ” has the meaning set forth in Section 11.3(c) .

“ Act ” means the United States Federal Food, Drug, and Cosmetic Act of 1938, as amended, and the rules, regulations and guidance documents promulgated thereunder.

“ Action ” means any claim, action, suit, arbitration, inquiry, hearing, audit, proceeding or investigation by or before any Governmental Authority or arbitrator.

“ Affiliate ” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes of this definition, (a) “control” when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and the words “controlling” and “controlled” have meanings correlative to the word “control” and (b) a specified Person shall be deemed, in any event, to control any other Person if such specified Person is the beneficial owner (as defined in Rule 13d-3 of the Exchange Act) of more than 50% of the voting securities, voting ownership interests or voting partnership interests of such other Person.

“ Affiliate Resolution Agreement ” means the Affiliate Resolution Agreement by and among Purchaser, Seller and QLT USA, dated of even date herewith.

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

“ Applicable Permits ” means the permits, approvals, licenses, franchises or authorizations, including the Registrations, from any Governmental Authority held by QLT USA set forth on Schedule 1.1(a) hereto.

“ Assets ” of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, pre-paid expenses and other assets, general intangibles, equipment, inventory, goods and Intellectual Property.

“ Atrigel ^® ” means the drug delivery system consisting of flowable compositions (e.g., solutions, gels, pastes and putties) of biodegradable polymers and biocompatible solvents.

“ Atrigel License Agreement ” means the Exclusive License Agreement between QLT USA, Inc. and Reckitt Benckiser Pharmaceuticals Inc., dated August 25, 2008.

“ Atrix Acquisition Date ” means November 20, 2004.

“ Audited Financial Statements ” has the meaning set forth in Section 4.11(a) .

“ August Balance Sheet ” has the meaning set forth in Section 4.11(c) .

“ Basket Amount ” has the meaning set forth in Section 11.5 .

“ Business Day ” means any day, other than a Saturday, a Sunday or a day on which commercial banks in New York, New York, United States of America are authorized or obligated by Law to be closed.

“ Bylaws ” means the bylaws of QLT USA, as amended through the date hereof.

“ Cash Equivalents ” means securities issued or directly and fully guaranteed or insured by, or certificates of deposit with, the Goldman Sachs Financial Square Government Fund.

“ Certificate of Incorporation ” means the certificate of incorporation of QLT USA, as amended through the date hereof.

“ Claim Notice ” has the meaning set forth in Section 11.3(a) .

“ Closing ” means the closing of the purchase and sale of the Shares contemplated by this Agreement.

“ Closing Date ” has the meaning set forth in Section 3.1 .

“ Closing Date Balance Sheet ” means the consolidated balance sheet of QLT USA as of the close of business on the day immediately preceding the Closing Date.

“ Closing Date Financial Statement ” has the meaning set forth in Section 4.11(a) .

“ Code ” means the United States Internal Revenue Code of 1986, as amended.

“ Common Stock ” means the common stock, par value $0.001 per share, of QLT USA.

“ Confidentiality Agreement ” means that certain Confidentiality Agreement, dated as of February 20, 2008, between Seller and an Affiliate of Purchaser.

“ Contract ” means any written agreement, contract, understanding, arrangement, instrument, note, mortgage, indenture, guaranty, option, indemnity, warranty, deed, assignment, power of attorney, certificate, sale or purchase order, work order, insurance policy, lease, license or commitment to which a specified Person is a party or by which any of its Assets are bound.

“ Copyright ” means all registered and unregistered copyrights in both published and unpublished works, rights in mask works and mask works applications, all sui generis rights in data and databases, and any other rights of authorship in any other published and unpublished works, including all moral rights in any of the foregoing.

“ Covered Parties ” has the meaning set forth in Section 11.2(a)(ii) .

“ Damages ” has the meaning set forth in Section 11.2(a)(i) .

“ Deferred Payments ” has the meaning set forth in Section 9.4(e) .

“ Dispute Notice ” has the meaning set forth in Section 11.3(b) .

“ Distribution ” means any and all activities related to the distribution, marketing, promoting, offering for sale and selling of any product (whether directly or through other marketing licensees), including packaging, advertising, detailing, educating, planning, promoting, performing, reporting, storing, handling, shipping and communicating with Governmental Authorities and third parties in connection therewith.

“ Effective Time ” has the meaning set forth in Section 3.1 .

“ Encumbrance ” means any security interest, pledge, hypothecation, mortgage, lien, charge or other encumbrance, other than any licenses of Intellectual Property.

“ Entity ” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society or other incorporated or unincorporated enterprise, association, organization or entity.

“ ERISA ” has the meaning set forth in Section 4.13(b) .

“ ERISA Affiliate ” has the meaning set forth in Section 4.13(b) .

“ Escrow Agreement ” means the Escrow Agreement by and among Seller, Purchaser and the Escrow Agent regarding the payment of the Post-Closing Royalty Payments, in a form mutually agreed upon between the parties, to be executed following the Closing.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Excluded Assets ” has the meaning set forth in Section 2.1(a)(ii) .

“ Excluded Liabilities ” has the meaning set forth in Section 2.1(b)(ii) .

“ Excluded Liabilities Assignment, Assumption and Release Documents ” means documents reasonably satisfactory to Purchaser evidencing the assignment and assumption of all Excluded Liabilities and the full and final release of QLT USA therefrom.

“ Execution Date ” means the date set forth in the first paragraph of this Agreement.

“ FDA ” means the United States Food and Drug Administration, or any successor agency thereto.

“ Four Month Product ” means the 30.0 mg formulation comprised of leuprolide acetate in an Atrigel ^® delivery system that provides for the sustained release of leuprolide acetate over a period of about 120 days and not less than 112 days with a primary indication for the palliative treatment of prostate cancer.

“ Future Product ” means any Atrigel-based product sold pursuant to the Sanofi Agreement or MediGene Agreement.

“ GAAP ” means United States generally accepted accounting principles.

“ Governmental Authority ” means any nation or government, any provincial, state, regional, local or other political subdivision thereof, any supranational organization of sovereign states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or foreign, exercising executive, judicial, regulatory or administrative functions of or pertaining to government.

“ HSR Act ” means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ In-License Contract ” means any Contract under which QLT USA has been granted any license, permission or any other right to utilize or otherwise exploit any Intellectual Property.

“ In-Licensed IP ” means the Intellectual Property that is licensed to QLT USA under or through an In-License Contract.

“ Included Assets ” has the meaning set forth in Section 2.1(a)(i) .

“ Included Liabilities ” has the meaning set forth in Section 2.1(b)(i) .

“ Indemnified Party ” has the meaning set forth in Section 11.3(a) .

“ Indemnifying Party ” has the meaning set forth in Section 11.3(a) .

“ Intellectual Property ” means any intellectual property or industrial property that may exist or be created under the laws of any jurisdiction throughout the world, including all Trademarks, Copyrights, Know-How and Patents, whether registered or unregistered, and all applications and registrations therefor (whether pending, existing, abandoned or expired).

“ Intercompany Loan Receivable ” means those certain promissory notes aggregating [*] million in principal amount, plus accrued and unpaid interest thereon, issued by Seller to QLT USA.

“ IRS ” means the Internal Revenue Service of the United States.

“ Know-How ” means all information that derives economic value from not being generally known to other Persons, all information that is proprietary or confidential to a specified Person, and any trade secrets, confidential information, know-how, and similar or analogous rights in ideas, inventions, discoveries, models, developments, improvements, procedures, processes, techniques, devices, methods, patterns, formulations, specifications, documentation, information, lists, software, data, products, technology, plans, drawings, designs, systems, research and development, materials, or technology, including all biological, chemical, clinical, manufacturing and other information or data, other than such which is or becomes the subject of a Patent.

“ Knowledge ” means, with respect to Seller, the actual knowledge of the Persons set forth on Schedule 1.1(b) hereto, and with respect to Purchaser, the actual knowledge of the Persons set forth on Schedule 1.1(c) hereto.

“ Law ” means each provision of any currently existing federal, provincial, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority, as well as any judgments, decrees, injunctions or agreements issued or entered into by any Governmental Authority.

“ Liability ” means, collectively, any indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, choate or inchoate, liquidated or unliquidated, secured or unsecured, direct or indirect, matured or unmatured, or absolute, contingent or otherwise, including any product liability.

“ Material Adverse Effect ” means any occurrence, development, change, event, condition, circumstance or effect that does or would reasonably be expected to materially and adversely affect the business, assets, financial condition, liabilities or results of operations of QLT USA or the Product Line Business, taken as a whole, but, for purposes of this definition, shall exclude: (a) any occurrence, development, change, event, condition, circumstance or effect that generally affects the industries in which QLT USA operates or the manufacture and Distribution of the Product, including changes in Laws, but does not affect QLT USA disproportionately relative to other participants in the industries in which QLT USA operates in any material respect, (b) general economic or political conditions, or events, circumstances, changes or effects affecting the securities markets generally, (c) acts of terrorism or war (whether or not declared) occurring after the date hereof, (d) changes in GAAP or regulatory accounting requirements, (e) changes arising from actions, recommendations or decisions of the FDA with respect to new drug applications, abbreviated new drug applications, supplemental new drug applications or biologics license applications of QLT USA, which do not affect QLT USA disproportionately, (f) actions by any of QLT USA’s actual or potential competitors with respect to the Product or the Product Line Business, (g) the consummation of the Transaction or the announcement of the execution of this Agreement, or (h) Seller’s compliance with the terms of this Agreement or any Other Transaction Document.

“ Material Contract ” means each Contract of QLT USA set forth on Schedule 1.1(d) .

“ Medical Product Regulatory Authority ” means any Governmental Authority that is concerned with the safety, efficacy, reliability, manufacture, investigation, sale or marketing of pharmaceuticals, medical products, biologics or biopharmaceuticals, including the FDA.

“ MediGene ” means MediGene Aktiengesellschaft.

“ MediGene Agreement ” means the Collaboration, License and Supply Agreement, dated as of April 4, 2001, between Atrix Laboratories, Inc. and MediGene, as amended pursuant to (a) the 1. Amendment of the Collaboration, License and Supply Agreement effective April 4, 2001 between Atrix Laboratories, Inc. and MediGene concerning AE Exchange, (b) the Second Amendment to Collaboration, License and Supply Agreement between Atrix Laboratories, Inc. and MediGene as of December 22, 2003 and (c) the Third Amendment to Collaboration, License and Supply Agreement dated May 17, 2006 between QLT USA and MediGene.

“ Noncompete Period ” has the meaning set forth in Section 7.4(a) .

“ One Month Product ” mean the 7.5 mg formulation comprised of leuprolide acetate in an Atrigel ^® delivery system that provides for the sustained release of leuprolide acetate over a period of about thirty (30) days and not less than twenty-eight (28) days with a primary indication for the palliative treatment of prostate cancer.

“ Ordinary Course of Business ” means, with respect to any Person, any action taken by such Person that is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person.

“ Other Transaction Documents ” means the Excluded Liabilities Assignment, Assumption and Release Documents, the Escrow Agreement, the Affiliate Resolution Agreement and the Trademark and Trade Name License Agreement.

“ Out-License Contract ” means any Contract under which QLT USA has granted a license to any Person to utilize or otherwise exploit any Intellectual Property with respect to Products.

“ Party ” or “ Parties ” has the meaning set forth in the first paragraph of this Agreement.

“ Patent ” means any United States or non-United States patent, patent application, patent disclosure, invention disclosure or other rights relating to the protection of inventions worldwide and all rights related thereto, including all original applications, reissues, reexaminations, divisionals, continuations, continuations-in-part, continuing applications, re-examinations, extensions, reissues, or renewals of any of the foregoing, and all counterparts claiming priority therefrom.

“ Permitted Encumbrances ” means (a) (i) statutory liens for current Taxes not yet delinquent or (ii) Taxes being contested in good faith by appropriate proceedings and which have been appropriately reserved for on QLT USA’s balance sheet, (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising by operation of law and incurred in the Ordinary Course of Business of QLT USA relating to obligations as to which there is no default on the part of QLT USA or the validity or amount of which is being contested in good faith by appropriate proceedings, (c) pledges, deposits or other liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation) arising or incurred in the Ordinary Course of Business of QLT USA and (d) any Contract listed in Section 4.6 of the Seller Disclosure Schedule that constitutes an Encumbrance.

“ Person ” means any individual, Entity or Governmental Authority.

“ Post-Closing Royalty Amounts ” means the Royalty Amounts for sales occurring during the quarter ended September 30, 2009 and during each quarter following the Effective Time, as applicable.

“ Product ” means, collectively, the One Month Product, Three Month Product, Four Month Product and Six Month Product.

“ Product Equipment ” means, the tools and manufacturing equipment owned by QLT USA and used to test the Product as set forth on Schedule 1.1(g) hereto.

“ Product Line Business ” means the rights in and related to the Product and the Distribution of the Product.

“ Product Records ” means to the extent permitted by Law, all books and records relating to the Product, including copies of all material customer and supplier lists, account lists, call data, sales history, call notes, marketing studies, consultant reports, physician databases and correspondence (excluding invoices) with respect to the Product or the Product Line Business to the extent maintained by or in the possession of QLT USA, Seller or any other Subsidiary of Seller, and all complaint files and adverse event files with respect to the Product, provided, however, that (a) Seller may retain: (i) a copy of any such books and records to the extent necessary for Tax, accounting, litigation or other valid business purposes, (ii) a copy of any such books and records to the extent such books and records relate to the Product or Product Line Business and (iii) all books, documents, records and files prepared in connection with or relating to the Transaction, including bids received from other parties and strategic, financial or Tax analyses relating to the Included Assets or Included Liabilities, (b) any attorney work product, attorney-client communications and other items protected by privilege shall be excluded, and (c) Seller shall be entitled to redact from any such books and records any information that does not relate to the Included Assets or Included Liabilities.

“ Product Trade Dress ” means the trade dress, package designs, product inserts, labels, logos and associated artwork held by QLT USA used in connection with the Product or the packaging therefor in the Territory in the form set forth on Schedule 1.1(j) hereto, but specifically excluding all QLT USA Brands used thereon.

“ Promotional Materials ” means the advertising, promotional and media materials, sales training materials (including any related outlines and quizzes/answers, if any), trade show materials (including displays) and videos to the extent owned by and in the possession of QLT USA, Seller or any other Subsidiary of Seller, including materials containing post-marketing clinical data, if any, used for the Distribution of the Product in all or any part of the Territory (including Distribution and sales promotion information, market research studies and toll-free telephone numbers) and relating to the Included Assets, including those materials set forth on Schedule 1.1(k) hereto.

“ PTO ” means the United States Patent and Trademark Office.

“ Purchase Price ” has the meaning set forth in Section 2.2(b) .

“ Purchaser ” has the meaning set forth in the first paragraph of this Agreement.

“ Purchaser Competitive Activity ” means the distribution, marketing, licensing or sale of any Purchaser Competitive Product in the “Territory” (as defined in each of the Sanofi Agreement and MediGene Agreement, as applicable).

“ Purchaser Competitive Product ” means [*].

“ Purchaser Indemnified Parties ” has the meaning set forth in Section 11.2(a)(i) .

“ QLT USA ” has the meaning set forth in the introduction of this Agreement.

“ QLT USA Benefit Plan ” has the meaning set forth in Section 4.13(b) .

“ QLT USA Brands ” means the Trademarks, housemarks, tradenames, and trade dress owned or used by QLT USA, whether or not registered, other than the QLT USA Marks.

“ QLT USA Copyrights ” means those Copyrights set forth on Schedule 1.1(e) hereto.

“ QLT USA Domain Names ” means those domain names set forth on Schedule 1.1(f) hereto.

“ QLT USA Intellectual Property ” means the QLT USA Patent Rights, QLT USA Copyrights, QLT USA Domain Names, QLT USA Know-How, QLT USA Marks and Product Trade Dress.

“ QLT USA Know-How ” means the Know-How owned by or licensed to QLT USA.

“ QLT USA Mark(s) ” means those Trademark(s), applications and registrations therefor, and all common law rights set forth on Schedule 1.1(h) hereto, which include the Trademark “Eligard” and/or any other Trademark registered with the PTO or other equivalent Governmental Authority which is utilized by QLT USA in the Territory to identify the Product in the Territory, and all common law rights, applications and registrations therefor, and all goodwill associated therewith.

“ QLT USA Patent Rights ” means those Patents set forth on Schedule 1.1(i) hereto.

“ Registrations ” means the regulatory approvals, authorizations, licenses, applications, agreements, permits and other permissions held by QLT USA and issued by any Governmental Authority in all or any part of the Territory as set forth on Schedule 1.1(l) hereto.

“ Representatives ” means, with respect to any Person, the directors, officers, managers, employees, independent contractors, agents or consultants of such Person.

“ Royalty Amounts ” means all royalties received by QLT USA, or any successor or permitted assignee thereof, pursuant to the Sanofi Agreement and the MediGene Agreement.

“ Sanofi ” means Sanofi-Synthelabo Inc.

“ Sanofi Agreement ” means the Collaboration, License and Supply Agreement, dated as of December 8, 2000, between Atrix Laboratories, Inc. and Sanofi, as amended pursuant to (a) the First Amendment to Collaboration, License and Supply Agreement between Atrix Laboratories, Inc. and Sanofi as of December 21, 2001, (b) the Second Amendment to Collaboration, License and Supply Agreement between Atrix Laboratories, Inc. and Sanofi as of March 7, 2002, (c) the letter agreement between Atrix Laboratories, Inc. and Sanofi dated August 22, 2003, (d) the Fourth Amendment to Collaboration, License and Supply Agreement between QLT USA and Sanofi as of March 1, 2005, (e) the letter agreement between Sanofi and QLT USA dated November 14, 2007 and (f) the Sixth Amendment to Collaboration, License and Supply Agreement between QLT USA and Sanofi as of July 1, 2009.

“ SEC ” means the United States Securities and Exchange Commission.

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

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

“ Seller Competitive Activity ” means the distribution, marketing, licensing or sale of any Seller Competitive Product in the Territory.

“ Seller Competitive Product ” means [*].

“ Seller Deposit Account ” means one or more deposit accounts to be designated by Seller in a written notice to Purchaser at least two Business Days prior to the date the applicable payment is to be made; provided that, if, following the Closing Date, no new deposit account(s) is/are designated by Seller, Purchaser shall deposit the applicable payment in the deposit account(s) last designated by Seller.

“ Seller Disclosure Schedule ” means the disclosure schedules delivered by Seller to Purchaser regarding QLT USA in connection with this Agreement (it being expressly agreed that disclosure of any item or matter under any Section or subsection in such Seller Disclosure Schedule, or in attachments thereto, and documents referred to therein, shall be deemed disclosure for all purposes of ARTICLE IV to the extent such disclosure is reasonably apparent).

“ Seller Indemnified Parties ” has the meaning set forth in Section 11.2(a)(ii) .

“ Shares ” means the issued and outstanding shares of Common Stock of QLT USA.

“ Six Month Product ” means the 45.0 mg formulation comprised of leuprolide acetate in an Atrigel ^® delivery system that provides for the sustained release of leuprolide acetate over a period of about 180 days and not less than 168 days with a primary indication for the palliative treatment of prostate cancer.

“ Subsidiary ” means, with respect to any specified Person, any and all Entities controlled by such specified Person. For purposes of this definition, (a) “control” when used with respect to any Entity means the power to direct the management and policies of such Entity, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and (b) a specified Person shall be deemed, in any event, to control any Entity if such specified Person is the beneficial owner (as defined in Rule 13d-3 of the Exchange Act) of more than 50% of the voting securities, voting ownership interests or voting partnership interests of such Entity.

“ Survival Period ” has the meaning set forth in Section 11.1 .

“ Tax ” or “ Taxes ” means any and all taxes, assessments, levies, tariffs, duties or other charges or impositions in the nature of a tax (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Taxing Authority, including income, estimated income, gross receipts, profits, business, license, occupation, franchise, capital stock, real or personal property, sales, use, transfer, value added, employment or unemployment, social security, disability, alternative or add-on minimum, customs, excise, stamp, environmental, commercial rent or withholding taxes.

“ Tax Return ” means any report, return (including any information return), claim for refund, election, estimated Tax filing or payment, request for extension, document, declaration or other information or filing required to be supplied to any Taxing Authority, including attachments thereto and amendments thereof.

“ Taxing Authority ” means the IRS and any other domestic or foreign Governmental Authority responsible for the administration or collection of any Taxes.

“ Territory ” means the entire world.

“ Third Party Acquisition ” means (a) the acquisition by a Person, other than Purchaser and its Affiliates, of any interest in the Included Assets, whether by purchase, issuance or sale or other disposition of capital stock of QLT USA, sale, lease, license or other disposition of Assets of QLT USA, by merger or consolidation or otherwise, other than an acquisition of any capital stock of Seller pursuant to a merger, tender offer or otherwise, or (b) any other transaction that would prevent, interfere with or delay the Transaction.

“ Three Month Product ” means the 22.5 mg formulation comprised of leuprolide acetate in an Atrigel ^® delivery system that provides for the sustained release of leuprolide acetate over a period of about 90 days and not less than 84 days with a primary indication for the palliative treatment of prostate cancer.

“ Trademark ” means all trademarks, service marks, certification marks, Internet domain names (other than QLT USA Domain Names), trade names, housemarks, identifying symbols, designs, product names, business and company names, slogans, logos or insignia, whether registered or unregistered, all common law rights, applications and registrations therefor, and all goodwill associated therewith.

“ Trademark and Trade Name License Agreement ” means the Trademark and Trade Name License Agreement by and between Seller and QLT USA, dated of even date herewith.

“ Transaction ” means the share purchase transaction contemplated by this Agreement.

“ Transfer Taxes ” means any and all transfer, documentary, sales, use, gross receipts, stamp, registration, value added, recording, escrow and other similar Taxes and fees (including any penalties and interest) incurred in connection with the Transaction (including recording and escrow fees and any real property or leasehold interest transfer or gains Tax and any similar Tax).

“ United States ” means the United States of America.

“ WARN ” means the Worker Adjustment and Retraining Notification Act.

1.2 Other Definitional Provisions.

(a) When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.

(b) The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(d) Whenever the context requires, words of one gender include the other gender and the neuter form.

(e) References to a Person are also to its successors and permitted assigns.

(f) The word “or” is not exclusive.

(g) Unless the context requires otherwise, any definition of or reference to any Contract herein shall be construed as referring to such Contract as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein or herein).

(h) The term “dollars” and “$” means United States dollars.

(i) The word “including” means “including without limitation” and the words “include” and “includes” have corresponding meanings.

ARTICLE II
ASSETS AND LIABILITIES OF QLT USA; PURCHASE AND SALE OF SHARES

2.1 Assets and Liabilities of QLT USA .

(a) Assets .

(i) Included Assets . The Parties acknowledge and agree that, as of the Closing, QLT USA will hold the rights to those Assets set forth on Schedule 2.1(a)(i) (the “ Included Assets ”).

(ii) Excluded Assets . The Parties acknowledge and agree that, as of the Closing, QLT USA will not hold any rights whatsoever to those Assets set forth on Schedule 2.1(a)(ii) , and, by purchasing the Shares, Purchaser is not acquiring any rights whatsoever to the Assets set forth on Schedule 2.1(a)(ii) (the “ Excluded Assets ”).

(b) Liabilities .

(i) Included Liabilities . The Parties acknowledge and agree that, as of the Closing, QLT USA will be responsible for all Liabilities related to the Included Assets (the “ Included Liabilities ”), other than the Excluded Liabilities. For the avoidance of doubt, all Liabilities for Taxes of QLT USA as of the Closing, including without limitation all such Liabilities arising from or relating to any intercompany relationship or intercompany transaction involving QLT USA, shall be Included Liabilities.

(ii) Excluded Liabilities . The Parties acknowledge and agree that, as of the Closing, QLT USA will not (except as otherwise provided herein) be responsible for any Liabilities related to the Excluded Assets or any of the Liabilities set forth on Schedule 2.1(b)(ii) (the “ Excluded Liabilities ”).

2.2 Purchase and Sale of Shares; Purchase Price .

(a) At the Closing, upon the terms and subject to the conditions contained in this Agreement, Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the Shares free and clear of all Encumbrances.

(b) The aggregate purchase price in full payment for the Shares shall be the sum of the following amounts (the “ Purchase Price ”) and shall be paid or delivered as follows:

	(i)		(A) $20.0 million to Seller Deposit Account at the Closing,

			(B) plus a cash amount equal to the amount of cash set forth on the Closing Date Balance Sheet and held by QLT USA as of the Closing Date, to Seller Deposit Account after the Closing, on the first Business Day following the Closing Date,

			(C) plus a cash amount equal to the amount of Cash Equivalents held by QLT USA as of immediately prior to the Closing Date and converted from Cash Equivalents to cash, to Seller Deposit Account after the Closing, on the first Business Day following the Closing Date and

			(D) plus a cash amount equal to the principal amount outstanding of, and the amount of accrued and unpaid interest on, the Intercompany Loan Receivable held by QLT USA as of the Closing Date after the Closing, on the first Business Day following the Closing Date,

	(ii)		$10.0 million to Seller Deposit Account no later than the first anniversary of the Closing Date, and

	(iii)		An aggregate of $200.0 million (excluding the payments described under Sections 2.2(b)(i) and (ii) ) to Seller Deposit Account, in quarterly installments, for the quarter ended September 30, 2009 and for each full quarter thereafter, payable no later than fifty (50) days following the last date of each such quarter, with each such installment to be in an amount that is equal to 80% of the Post-Closing Royalty Amounts paid to QLT USA and/or any successor or permitted assignee thereof for such quarter, calculated in accordance with the terms of each of the Sanofi Agreement and MediGene Agreement in effect as of the Closing Date.

(c) Notwithstanding the payment terms set forth in Section 2.2(b)(iii) above, upon at least two (2) Business Days written notice to Seller, at any time or from time to time, Purchaser or an Affiliate thereof may prepay to Seller, in whole or in part, without premium or penalty, the balance of the $200.0 million not previously paid to Seller pursuant to Section 2.2(b)(iii) by depositing the amount to be prepaid into the Seller Deposit Account. For the avoidance of doubt, in the event the amount prepaid is less than the unpaid portion of the $200.0 million set forth in Section 2.2(b)(iii) , the quarterly payment obligations set forth in Section 2.2(b)(iii) above with respect to such unpaid portion shall continue as set forth therein.

ARTICLE III
CLOSING

3.1 Closing . Upon the terms and subject to the conditions of this Agreement, the Closing shall be held on the Execution Date, such date (the “ Closing Date ”) being after satisfaction or waiver of all of the conditions set forth in ARTICLE VIII at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025, unless the Parties otherwise agree. The Parties will exchange (or cause to be exchanged) at the Closing the funds, agreements, instruments, certificates and other documents, and do, or cause to be done, all of the things respectively required of each Party as specified in Section 3.2 . The Closing shall be deemed to have occurred upon receipt by Seller of the cash payment set forth in Section 2.2(b)(i)(A) on the Closing Date (the “ Effective Time ”).

3.2 Deliveries on the Closing Date and after the Closing .

(a) At the Closing, Seller will deliver or cause to be delivered to Purchaser:

	(i)		the stock certificate representing the Shares, duly endorsed in blank or accompanied by duly executed assignment documents,

	(ii)		an IRS Form W-8BEN, with parts I and II thereof completed by Seller as reasonably requested by Purchaser to establish that the payments by Purchaser to Seller pursuant to Section 2.2(b) are exempt from withholding, and duly executed by Seller,

	(iii)		written resignations of all officers and directors of QLT USA,

	(iv)		the Excluded Liabilities Assignment, Assumption and Release Documents, duly executed by all the parties thereto,

	(v)		all of the Financial Statements and supporting schedules described in Section 4.11(a) ,

	(vi)		a true, correct and complete list of each material filing and payment that, to Seller’s Knowledge and to the knowledge of Seller’s outside intellectual property counsel, must be made on or before the date that is ninety (90) days after the Closing Date with respect to the Intellectual Property set forth on Schedules 1.1(e), (f), (h) and (i) ;

	(vii)		revocations of any and all powers of attorney heretofore granted by QLT USA or Seller or any of its Affiliates that, prior to the Closing Date, Purchaser and Seller have mutually agreed are to be revoked,

	(viii)		the certificate of incorporation of QLT USA, certified by the Delaware Secretary of State on or promptly before the Closing Date, and a certificate of good standing of QLT USA issued by the Delaware Secretary of State on or promptly before the Closing Date, and

	(ix)		a certified copy of the Certificate of Amalgamation and Notice of Articles of Seller in effect as of the Closing Date.

(b) At the Closing, Purchaser will deliver or cause to be delivered to Seller:

	(i)		by wire transfer to the Seller Deposit Account, immediately available dollar funds in an amount equal to the portion of the Purchase Price set forth in Section 2.2(b)(i)(A) , and

	(ii)		the certificate of incorporation of Purchaser, certified by the Delaware Secretary of State on or promptly before the Closing Date, and a certificate of good standing of Purchase, issued by the Delaware Secretary of State on or promptly before the Closing Date.

(c) After the Closing, on the first Business Date following the Closing Date, (i) Purchaser will deliver or cause to be delivered to Seller, by wire transfer to the Seller Deposit Account, immediately available dollar funds in an amount equal to the portion of the Purchase Price set forth in Sections 2.2(b)(i)(B) , 2.2(b)(i)(C) and 2.2(b)(i)(D) and (ii) Seller will deliver or cause to be delivered to Purchaser, by wire transfer to an account designated by Purchaser prior to the Closing, immediately available dollar funds in an amount equal to the amount due under the Intercompany Loan Receivable as of the Closing Date.

3.3 Post-Closing Deliveries . As soon as reasonably practicable following the Closing Date, but in any event within thirty (30) days thereafter with respect to (i), (iii), (iv), (v) and (vi) and within sixty (60) days thereafter with respect to (ii), Seller shall deliver or cause to be delivered to Purchaser or QLT USA, as requested by Purchaser, the following deliverables:

	(i)		all books and records of QLT USA, including all minute books (containing records of meetings of stockholders, the board of directors and any committee thereof), the stock certificate books, the stock record books for QLT USA, all Promotional Materials and all Contracts to which it is a party and by which it or the Included Assets are bound,

	(ii)		all financial documents and records of QLT USA,

	(iii)		all Product Records, all regulatory filings and all correspondence from any and all Governmental Authorities, in each case relating to any Product, the Product Line Business or other Included Asset,

	(iv)		all stability samples and related testing and other records, in each case relating to any Product, the Product Line Business or other Included Asset,

	(v)		all batch records relating to any Product, the Product Line Business or other Included Asset, and

	(vi)		all testing and other records related to any Product or the Product Line Business.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING QLT USA

Except as otherwise set forth on the Seller Disclosure Schedule, Seller hereby represents and warrants to Purchaser as of the Execution Date as follows:

4.1 Organization; Corporate Records . QLT USA is a corporation duly organized, validly existing and in good standing under the laws of Delaware. QLT USA has all requisite corporate power and authority and all licenses, permits and authorizations necessary to carry on the business in which it is engaged and to own and use the Assets owned and used by it. QLT USA is duly qualified to do business as a foreign corporation and is in good standing in every jurisdiction where such qualification is required, except where the failure to be so qualified or in good standing would not constitute a Material Adverse Effect. Section 4.1 of the Seller Disclosure Schedule contains a true, correct and complete list of all directors and officers of QLT USA. At the Closing, Seller has delivered to Purchaser true, correct and complete copies of the Certificate of Incorporation and the Bylaws. The minute books (containing records of meetings of stockholders, the board of directors and any committee thereof), the stock certificate books and the stock record books for QLT USA are correct and complete in all material respects. QLT USA is not in default under or in violation of any provision of its Certificate of Incorporation or Bylaws.

4.2 No Conflicts . The execution, delivery and performance of this Agreement and the Other Transaction Documents and the consummation of the transactions contemplated hereby and thereby:

(a) are not prohibited or limited by, do not and will not violate or contravene, do not and will not conflict with, and do not and will not result in the breach of or a default under, any provision of the Certificate of Incorporation or Bylaws,

(b) assuming all of the consents, approvals, authorizations and permits necessary for the consummation of the Transaction have been obtained and all the filings and notifications necessary for the consummation of the Transaction have been made and any waiting periods thereunder have terminated or expired, do not and will not conflict with any Law to which QLT USA is subject or by which QLT USA is bound or to which any of the Included Assets is subject, or

(c) except as does not, or would not reasonably be expected to, result in, individually or in the aggregate, a Material Adverse Effect, do not and will not violate or contravene, conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, (i) any Material Contract or (ii) any award, judgment, rule, charge, order, writ, injunction or decree of any Governmental Authority to which QLT USA is a party or by which any of the Included Assets is subject.

4.3 Capitalization . The authorized capital stock of QLT USA consists of 1,000 shares of Common Stock, of which 100 shares are issued and outstanding. There are no shares of Common Stock or other capital stock or equity securities of QLT USA issued, reserved for issuance or outstanding and no outstanding or authorized options, warrants, convertible or exchangeable securities, subscriptions, rights (including any purchase, subscription, conversion, exchange or preemptive rights), stock appreciation rights, phantom stock, profit participation or similar rights, calls or commitment of any character whatsoever to which QLT USA is a party or subject or by which QLT USA is bound requiring the issuance or sale of shares of any capital stock of QLT USA. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of QLT USA. All of the Shares have been duly authorized and validly issued, are fully paid and nonassessable and are free of any preemptive rights with respect thereto.

4.4 Title . QLT USA has good and marketable title to, a valid leasehold interest in, or a valid license or other right to use, the Included Assets, free and clear of all Encumbrances, other than the Permitted Encumbrances.

4.5 No Subsidiaries . QLT USA has no Subsidiaries. QLT USA does not own or control or have any right to acquire, directly or indirectly, any capital stock of, or other equity interest in, any Person.

4.6 Intellectual Property .

(a) Included in each of Schedules 1.1(e) (QLT USA Copyrights), 1.1(f) (QLT USA Domain Names), 1.1(h) (QLT USA Mark(s)), 1.1(i) (QLT USA Patent Rights) and 1.1(j) (Product Trade Dress) is (i) the name of the owner of the Intellectual Property covered by such Schedule and (ii) the jurisdiction(s) by or in which the Intellectual Property covered by such Schedule has been issued or registered or in which an application for such issuance or registration has been filed, including the respective registration or application numbers and dates of issuance, registration or filing. Each of Schedules 1.1(e), 1.1(f), 1.1(h), 1.1(i) and 1.1(j) is a true, correct and complete list, in all material respects, of all Copyrights, domain names, Trademarks, Patents and trade dress, respectively, owned or held by QLT USA.

(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the QLT USA Intellectual Property is the subject of (A) any pending adverse judgment, injunction, order, decree or agreement restricting (i) its use in connection with the Product or Product Line Business within the Territory, (ii) assignment of such QLT USA Intellectual Property by QLT USA or (iii) license of such QLT USA Intellectual Property by QLT USA or (B) any pending litigation to which QLT USA is a party.

(c) To Seller’s Knowledge, there has been (A) no threat or claim of infringement or misappropriation of third party Intellectual Property made in writing to QLT USA or to Seller or any of its Subsidiaries relating to QLT USA; and (B) no pending litigation alleging infringement or misappropriation by QLT USA of third party Intellectual Property to which QLT USA is a party, in each of case (A) or (B), arising from (i) the practice of the QLT USA Intellectual Property in connection with the Product Line Business, (ii) the Distribution of the Product or (iii) the conduct of the business of QLT USA.

(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all QLT USA Intellectual Property used in connection with the Product or Product Line Business within the Territory is owned by or licensed to QLT USA, free and clear of all Encumbrances (other than Permitted Encumbrances).

(e) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, Seller has no Knowledge of any misappropriation or infringement of any of the QLT USA Intellectual Property used in connection with the Product or Product Line Business by any Person within the Territory. Seller has made available to Purchaser accurate and complete copies of all In-License Contracts, all of which are set forth on Section 4.6(e) of the Seller Disclosure Schedule. Each In-License Contract is legal, valid and binding, is in full force and effect and is enforceable in accordance with its terms with respect to QLT USA and, to the Knowledge of Seller, each other party thereto.

(f) Seller has made available to Purchaser accurate and complete copies of all Out-License Contracts, all of which are set forth on Section 4.6(f) of the Seller Disclosure Schedule. Each Out-License Contract is legal, valid and binding, is in full force and effect and is enforceable in accordance with its terms with respect to QLT USA and, to the Knowledge of Seller, each other party thereto.

(g) Except for the In-Licensed IP subject to the In-License Contracts set forth on Section 4.6(e) of the Seller Disclosure Schedule, QLT USA is the sole and exclusive owner of all right, title and interest in and to all QLT USA Intellectual Property used in connection with the Product or Product Line Business free and clear of all Encumbrances (other than Permitted Encumbrances).

(h) QLT USA has not initiated any claim against any Person alleging that such Person infringes, misappropriates or otherwise violates any QLT USA Intellectual Property in any material respect. To the Knowledge of Seller, no Person has infringed or otherwise misappropriated or is now infringing or misappropriating any QLT USA Intellectual Property. Since the Atrix Acquisition Date, QLT USA has not received any written communications alleging that any QLT USA Intellectual Property is invalid or unenforceable. To Seller’s Knowledge, there has been no prior use of any Product Marks by any Person that would confer upon such Person superior rights in such Product Marks. Seller has taken reasonable steps to preserve and maintain records relating to the QLT USA Intellectual Property since the Atrix Acquisition Date.

(i) No interference, opposition, reissue, reexamination or other proceeding of any nature is pending or, to Seller’s Knowledge, threatened in writing, in which the scope, validity or enforceability of any QLT USA Intellectual Property is being contested or challenged.

(j) All current and former employees, consultants and contractors of QLT USA, and any other Person involved in the creation or development of any QLT USA Intellectual Property, in each case, since the Atrix Acquisition Date, have executed a valid and enforceable QLT USA non-disclosure and invention assignment agreement and a copy of each such agreement has been made available to Purchaser.

(k) To Seller’s Knowledge, no funding, facilities or personnel of any Governmental Authority or educational institution were used, directly or indirectly, in any material respect, to develop or create, in whole or in part, any QLT USA Intellectual Property.

(l) Since the Atrix Acquisition Date, QLT USA has exercised reasonable diligence with respect to the filing, prosecution, and maintenance of all QLT USA Intellectual Property used in connection with the Product or Product Line Business. For each issued Patent within the QLT USA Intellectual Property used in connection with the Product or Product Line Business for which prosecution has taken place since the Atrix Acquisition Date, to Seller’s Knowledge: (i) all inventors have been properly identified and named, and (ii) all inventors have executed an assignment of rights to Seller or its predecessor in interest to such Patent.

4.7 Litigation . There is no (a) outstanding award, judgment, ruling, charge, order, writ, injunction or decree of any Governmental Authority or arbitrator to which QLT USA is a party or by which QLT USA is bound and to which any of the Included Assets is subject, or (b) Action pending to which QLT USA is party, or (c) to the Knowledge of Seller, Action threatened, by or against QLT USA, that individually or in the aggregate, does, or would reasonably be expected to, result in, individually or in the aggregate, a Material Adverse Effect. As of the Execution Date, to Seller’s Knowledge, there is currently no fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that would reasonably be expected to form the basis for any such Action.

4.8 Taxes . Since the Atrix Acquisition Date:

(a) QLT USA has filed when due (taking into account properly

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates