UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d) of
The Securities Exchange
Act of 1934
Date of Report (Date of earliest
event reported)
May 15, 2007
VIVUS, INC.
(Exact name of registrant as
specified in its charter)
Delaware
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000-23490
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94-3136179
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(State or other
jurisdiction of incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.)
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1172
CASTRO STREET
MOUNTAIN VIEW, CA 94040
(Address of principal executive
offices, including zip code)
(650) 934-5200
(Registrants telephone number,
including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of
Assets.
On May 15, 2007,
VIVUS, Inc. (the Company) announced that it had closed the previously
announced transaction with KV Pharmaceutical Company (KV) for the grant of a
sublicense of exclusive rights to certain patents and know how related to
EvaMist pursuant to the Estradiol Development and Commercialization Agreement,
by and among the Company, FemPharm Pty Ltd. and Acrux DDS Pty Ltd., dated
February 12, 2004 (the Acrux License) and the sale of assets related to
EvaMist (the Transaction). EvaMist is
an investigational metered dose transdermal estradiol spray being developed for
the treatment of vasomotor symptoms associated with menopause. Vasomotor symptoms (hot flashes) are reported
to be among the most common medical complaints of women going through
menopause.
At the closing,
the Company received a cash payment of $10 million and the right to receive an
additional $140 million cash payment upon the approval of the New Drug
Application (NDA) for EvaMist by the U.S. Food and Drug Administration (the
FDA). The NDA for EvaMist is currently
under review by the FDA. The Company had submitted the NDA to the FDA on
September 29, 2006, with the PDUFA date being July 29, 2007. KV will be responsible for $1.5 million of
the $3.0 million product approval milestone payment due under the Acrux License
upon FDA approval of the NDA. (The Company is also eligible to receive certain
one-time milestone payments totaling to $30 million based on achieving certain
sales milestones for EvaMist.) The Company incurred $3.5 million and $66,000 of
research and development expense related to EvaMist in the year ended December
31, 2006, and the quarter ended March 31, 2007, respectively.
Under the terms of
the Transaction, KV will be primarily responsible for the manufacturing,
selling, and marketing of EvaMist. The
Company will maintain responsibility for regulatory affairs and expenses related
to the NDA through its approval by the FDA, at which time regulatory
responsibilities will transfer to KV. KV
will also assume all additional expenses and liabilities associated with
EvaMist. Other than the relationship
concerning the Transaction, the Company has no material relationship with KV.
Forward-Looking
Statements
This Current
Report on Form 8-K contains forward-looking statements within the meaning
of the Federal securities laws and is subject to safe harbors created
therein. These forward-looking
statements include, but are not limited to, those regarding the Companys expectations
regarding the likelihood and timing of the FDAs review of the NDA and the
payment of additional consideration pursuant to the Transaction.
These
forward-looking statements are subject to risks and uncertainties that could
cause actual results and events to differ materially from those expressed in
the forward-looking statements. These
risks and uncertainties include, among others, the risk that the FDA may not
approve the NDA, that sales of EvaMist may never reach the stated sales
milestones to trigger the payment of additional consideration and the risk
factors set forth in the Companys Form 10-K for the year ended December 31,
2006 and periodic reports filed with the Securities and Exchange
Commission. The Company undertakes no
obligation to update any forward-looking statements to reflect new information,
events, or circumstances occurring after the date of this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
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Description
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2.1
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Asset Purchase Agreement, by and among the Company
and K-V Pharmaceutical Company, dated as of March 30, 2007.
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Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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VIVUS, INC.
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By:
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/s/ Lee B. Perry
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Lee B. Perry
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Vice President and Chief Accounting Officer
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Date: May 21, 2007
EXHIBIT INDEX
Exhibit No.
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Description
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2.1
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Asset Purchase Agreement, by and among the Company
and K-V Pharmaceutical Company, dated as of March 30, 2007.
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Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with Rule
24b-2 of the Securities Exchange Act of 1934, as amended.
Exhibit 2.1
ASSET
PURCHASE AGREEMENT
by and among
K-V PHARMACEUTICAL COMPANY
and
VIVUS, INC.
dated as of March 30, 2007
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS
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1
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Section 1.1
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Defined Terms
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1
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Section 1.2
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Construction of Certain Terms and Phrases
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14
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ARTICLE II. PURCHASE AND SALE OF ASSETS; GRANT
OF LICENSES;
SUBLICENSE AGREEMENT
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14
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Section 2.1
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Purchase and Sale of Assets at the Closing
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14
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Section 2.2
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Excluded Assets
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16
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Section 2.3
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Retention of Assets
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17
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Section 2.4
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Assignability and Consents.
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17
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Section 2.5
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License to Seller Multi-Application Technology
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17
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Section 2.6
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Licenses to Improvements. Effective as of the
Closing:
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18
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Section 2.7
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Sublicense Agreement
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18
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Section 2.8
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Clinical Results Option
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18
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ARTICLE III. ASSUMPTION OF LIABILITIES
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19
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Section 3.1
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Assumption of Liabilities.
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19
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ARTICLE IV. PURCHASE PRICE AND PAYMENT
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21
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Section 4.1
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Purchase Price
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21
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Section 4.2
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Milestone Payments
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21
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Section 4.3
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Allocation of Purchase Price
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23
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Section 4.4
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Sales, Use and Other Taxes
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24
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Section 4.5
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Tax Withholding
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24
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Section 4.6
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Risk of Loss
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24
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Section 4.7
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Subsidiaries
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24
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ARTICLE V. CLOSING
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25
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Section 5.1
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Time and Place
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25
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Section 5.2
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Deliveries at Closing
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25
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF
THE SELLER
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26
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Section 6.1
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Organization, Etc
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26
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Section 6.2
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Authority of the Seller
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27
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Section 6.3
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Consents and Approvals
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27
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Section 6.4
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Non-Contravention
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28
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Section 6.5
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Contracts
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28
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Section 6.6
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Intellectual Property Rights
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28
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Section 6.7
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Litigation
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30
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Section 6.8
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Permits; Compliance with Law
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31
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Section 6.9
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Evamist Inventory
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33
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Section 6.10
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Suppliers
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33
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Section 6.11
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[Intentionally Deleted.]
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33
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Section 6.12
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Environmental Matters
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33
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Section 6.13
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Absence of Certain Changes or Events
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34
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Section 6.14
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Title to Assets; Sufficiency of Assets
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35
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Section 6.15
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Disclosure
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36
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Section 6.16
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Taxes.
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36
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Section 6.17
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Brokers
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37
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ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF
THE ACQUIROR
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37
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Section 7.1
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Corporate Organization
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37
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Section 7.2
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Authority of the Acquiror
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37
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Section 7.3
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Non-Contravention
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38
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Section 7.4
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Litigation
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38
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Section 7.5
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Brokers
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38
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Section 7.6
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Financing
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39
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ARTICLE VIII. COVENANTS OF THE PARTIES
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39
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Section 8.1
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Operation of the Evamist Business
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39
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Section 8.2
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Reasonable Efforts
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41
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Section 8.3
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Access; Confidentiality
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43
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Section 8.4
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Public Announcements; Confidentiality
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46
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Section 8.5
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Regulatory Matters
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46
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Section 8.6
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Bulk Transfer Laws
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49
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Section 8.7
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Covenant Not to Compete
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49
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Section 8.8
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Further Assurances
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50
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Section 8.9
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Cooperation Regarding Financial Statements; Taxes,
Etc
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50
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Section 8.10
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No Solicitation
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51
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Section 8.11
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Insurance
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52
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Section 8.12
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Tax Matters
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52
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Section 8.13
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Financial Resources
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54
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ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF THE
SELLER FOR THE CLOSING
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54
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Section 9.1
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Representations, Warranties and Covenants
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54
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Section 9.2
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No Actions or Proceedings
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54
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Section 9.3
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No Material Adverse Effects
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54
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Section 9.4
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No Proceedings
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54
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Section 9.5
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Deliveries
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55
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ii
ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR FOR THE
CLOSING
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55
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Section 10.1
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Representations, Warranties and Covenants
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55
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Section 10.2
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No Actions or Proceedings
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55
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Section 10.3
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Consents
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55
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Section 10.4
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No Material Adverse Effects
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55
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Section 10.5
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Deliveries
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55
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Section 10.6
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Proceedings
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56
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ARTICLE XI. INDEMNIFICATION
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56
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Section 11.1
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Survival of Representations, Warranties, Covenants,
Etc
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56
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Section 11.2
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Indemnification
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56
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Section 11.3
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Limitations
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60
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Section 11.4
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Exclusive Remedy
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61
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ARTICLE XII. TERMINATION
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61
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Section 12.1
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Methods of Termination
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61
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Section 12.2
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Procedure upon Termination
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62
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ARTICLE XIII. MISCELLANEOUS
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63
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Section 13.1
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Notices
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63
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Section 13.2
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Entire Agreement
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64
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Section 13.3
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Waiver
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64
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Section 13.4
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Amendment
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64
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Section 13.5
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Third Party Beneficiaries
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64
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Section 13.6
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Assignment; Binding Effect
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64
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Section 13.7
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Headings
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65
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Section 13.8
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Severability
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65
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Section 13.9
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Governing Law
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65
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Section 13.10
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Expenses
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65
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Section 13.11
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Counterparts
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65
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Exhibit A Form of Sublicense Agreement
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Exhibit B Form of Transition Services Agreement
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iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this Agreement) is
made and entered into as of March 30, 2007, by and among K-V Pharmaceutical
Company, a Delaware corporation (the Acquiror),
and Vivus, Inc., a Delaware corporation (the Seller).
RECITALS
WHEREAS, Seller is engaged in
researching, developing, marketing, and selling certain biopharmaceutical
products, including Evamist;
WHEREAS, Seller will, by the
terms of this Agreement, transfer or license to Acquiror Sellers tangible and
intangible assets and rights used by Seller in the conduct of the Evamist
Business and necessary for Acquiror to conduct the Evamist Business following
the Closing; and
WHEREAS, Acquiror has agreed to
assume the Assumed Liabilities on the terms and subject to the conditions set
forth herein.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises, covenants, representations and warranties
contained herein, and other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE
I.
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the following
defined terms shall have the meanings specified below:
Accountants
means KPMG International;
provided, however, that if KPMG International
refuses such retention, Seller and
Acquiror shall jointly select another independent accounting firm of recognized
national standing; provided, further, that in the event that the
Acquiror and the Seller are unable to agree on such an accounting firm within
ten (10) Business Days, then the accounting firm shall be selected by lottery.
Acquiror
has the meaning set forth in the preamble to this Agreement.
Acquiror
Material Adverse Effect means any state of facts, change,
development, event, occurrence, effect or condition that, individually or in
the aggregate, has had or would be reasonably expected to have a material
adverse effect on the business, assets (including intangible assets), results
of operations, liabilities (contingent or otherwise) or conditions (financial
or otherwise) of the Acquiror, except that any such state of facts, change,
development, event, occurrence, effect or condition resulting from or arising
out of or in connection with any of the following, either alone or in combination,
shall not be taken into
consideration for purposes of determining whether an
Acquiror Material Adverse Effect has occurred or arisen: (a) the announcement of this Agreement or the
pendency of the transactions contemplated hereby, (b) the performance by the
Acquiror of its obligations under this Agreement, (c) general economic
conditions in any country where the Acquirors business is conducted to the
extent that they do not disproportionately affect the Acquiror relative to
other industry participants, (d) general conditions in any industry in which
the Acquirors business is conducted to the extent that they do not
disproportionately affect the Acquiror relative to other industry participants,
(e) changes or conditions in economic, regulatory, political or capital markets
conditions generally to the extent that they do not disproportionately affect
the Acquiror relative to other industry participants, (f) any natural disaster
or any acts of terrorism, sabotage, military action or war (whether or not
declared) or any escalation or worsening thereof, (g) the Acquirors failure to
meet any financial projections in and of itself (it being understood that the
facts or occurrences giving rise or contributing to such failure may be deemed
to constitute, or be taken into account in determining whether there has been
or will be, an Acquiror Material Adverse Effect) or (h) changes in Law or GAAP.
Acrux License
means the Estradiol Development and Commercialization Agreement, dated February
12, 2004, by and among Fempharm Pty Ltd., Vivus, Inc. and Acrux DDS Pty Ltd.,
as amended.
Acrux License Assignment
Consent means the written consent of Fempharm Pty Ltd. to the
assignment and transfer of the Acrux License to the Acquiror as an Assumed
Contract pursuant to Section 2.1(a).
Action
or Proceeding means any action, suit, claim, proceeding,
arbitration, dispute, Order, inquiry, hearing, assessment with respect to fines
or penalties or litigation (whether civil, criminal, administrative or
investigative) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental or Regulatory Authority.
Adverse Determination
has the meaning set forth in Section 12.1(i).
Affiliate
means, with respect to any Person, any other Person which Controls, is
Controlled by or is under common Control with such Person.
Agreement
has the meaning set forth in the preamble hereto.
Androgen
has the meaning set forth in Section 2.5.
Applicable
Period has the meaning set forth in Section 8.7.
Assumed
Contracts means the Evamist Contracts set forth on Schedule 1.1(a)(1). Notwithstanding the foregoing, the Assumed Contracts shall not
include the Acrux License in the event that the Sublicense Agreement is
required to be executed and delivered by the parties at the Closing pursuant to
Section 2.7.
Assumed
Liabilities has the meaning set forth in Section 3.1(a).
2
Bill of
Sale means the Bill of Sale conveying the Purchased Assets from
the Seller to the Acquiror, in a form to be mutually agreed upon by the parties
prior to the Closing.
Books
and Records means all books, records, files, documents, data,
information and correspondence, including, without limitation, all records with
respect to supply sources; all pre-clinical, clinical and process development
data and reports relating to research or development of products or of any
materials used in the research, development, manufacture, marketing or sale of
products, including all raw data relating to clinical trials of products, all
case report forms relating thereto and all statistical programs developed (or
modified in a manner material to the use or function thereof) to analyze
clinical data; all market research data, market intelligence reports,
statistical programs (if any) used for marketing and sales research;
promotional, advertising and marketing materials, sales forecasting models,
medical education materials, sales training materials, web site content and
advertising and display materials; all records, including vendor and supplier
lists, manufacturing records, sampling records, standard operating procedures
and batch records, related to the manufacturing process; all data contained in
laboratory notebooks relating to products or relating to their biological, physiological,
mechanical or formula properties; all adverse experience reports and files
related thereto (including source documentation) and all periodic adverse
experience reports and all data contained in electronic data bases relating to
periodic adverse experience reports; all analytical and quality control data;
and all correspondence, minutes or other communications with the FDA owned or
held by Seller or any of its Subsidiaries as of the Closing Date.
Business
Day means a day other than Saturday, Sunday or any day on which
commercial banks located in New York are authorized or obligated by Law to
close.
Charter
Documents has the meaning set forth in Section 6.1.
Clinical Results Option
has the meaning set forth in Section 2.8.
Closing
has the meaning set forth in Section 5.1.
Closing
Date has the meaning set forth in Section 5.1.
Code
means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
Competing
Product has the meaning set forth in Section 8.7.
Confidentiality
Agreement means the Confidentiality Agreement, dated as June 2,
2006, by and between Seller and Acquiror.
Contracts
means any and all written or legally binding oral commitments, contracts,
purchase orders, sales orders, leases, subleases, licenses, easements,
commitments, arrangements, undertakings, evidence of indebtedness, security or
pledge agreements or other agreements.
Control
means:
3
(a) ownership (directly or
indirectly) of at least fifty percent (50%) of the shares or stock entitled to
vote for the election of directors in the case of a company or corporation; or
(b) the ability otherwise to
direct and control (whether directly or indirectly through one or more
intermediaries) the actions of a Person.
Corporate
Name means VIVUS, Inc. and any and all derivatives thereof.
Damages
has the meaning set forth in Section 11.2(a).
Data Package
has the meaning set forth in Section 2.8.
Default
means (i) a breach, default or violation, (ii) the occurrence of an event that
with or without the passage of time or the giving of notice, or both, would
constitute a breach, default or violation or cause an Encumbrance to arise, or
(iii) with respect to any Contract, the occurrence of an event that with or
without the passage of time or the giving of Notice, or both, would constitute
a change of control or give rise to a right of termination, modification,
renegotiation, acceleration, cancellation, or a right to receive Damages or a
payment of penalties.
Designated
Acquiror Subsidiary shall have the meaning set forth in Section 4.7.
DPT Laboratories
means the facilities of DPT Laboratories, Ltd. located at 307 E. Josephine
Street, San Antonio 78215.
Encumbrance
means any claim, mortgage, pledge, assessment, security interest, option, deed
of trust, lease, lien, levy, license, restriction on transferability, defect in
title, charge or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of Law or any conditional sale or title retention
agreement or other agreement to give any of the foregoing in the future.
Environmental Laws
means any federal, state, local or non-U.S. Law and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree, judgment, stipulation, injunction, permit,
authorization, policy, opinion, or agency requirement, in each case having the
force and effect of Law, relating to the pollution, protection, investigation
or restoration of the
environment or health and safety as affected by the environment
or natural resources, including those relating to the use, handling, presence,
transportation, treatment, storage, disposal, release, threatened release or
discharge of Hazardous Materials or noise, odor, wetlands, pollution or contamination.
ERISA Affiliate
means any entity which is (or at any relevant time was) a member of a controlled
group of corporations with, under common control with, or a member of an affiliated
service group with, Seller, as defined in Section 414(b), (c), (m) or (o) of
the Code, or under common control with Seller, within the meaning of Section
4001(b)(1) of the Employee Retirement Income Security Act of 1974, as amended.
4
Estradiol
means the compound with the chemical structure shown in Schedule 1.1(b).
Estrogen
means (i) any of the [***], [***] with [***] activity that are used for [***]
for the treatment of [***], or any derivative of [***], including the [***]
that are approved by the FDA in any form ([***]) for [***] or the treatment of
[***] or (ii) any generic compound that is a [***].
Evamist
means that pharmaceutical product consisting of an MDTS containing Estradiol,
or any other Estrogen that is added to the Field (as defined under the Acrux
License).
Evamist
Books and Records means all of the Books and Records related to
the Evamist Business owned by the Seller, but excluding the Excluded Books and
Records, and, in the case of any of the Books and Records also relating to
other businesses or assets of the Seller or its Subsidiaries, the Seller shall
have the right to redact the same with respect to such other businesses and
assets.
Evamist
Business means the research, development, regulatory approval,
manufacture, distribution, marketing, sale and promotion of Evamist in the
Evamist Territory. For clarity, the
Evamist Business shall exclude research, development or manufacturing
(including process development) activities related generally to platforms
(including MDTS) or other technologies not specific to Evamist.
Evamist
Contracts means all (i) Contracts pursuant to which Seller or
its Subsidiaries purchases any materials from any third party for use solely in
connection with the manufacture of Evamist, all of which Contracts in effect on
the date hereof are set forth on Schedule 1.1(a)(2),
(ii) Contracts relating solely to any pre-clinical or clinical trial
involving Evamist, all of which Contracts in effect on the date hereof are set
forth on Schedule 1.1(a)(2), (iii) Contracts constituting material
transfer agreements solely involving the transfer of Evamist, all of which
Contracts in effect on the date hereof are set forth on Schedule 1.1(a)(2),
(iv) Contracts relating solely to the marketing of Evamist or educational
matters relating to the Evamist Business, all of which Contracts in effect on
the date hereof are set forth on Schedule 1.1(a)(2), (v) Contracts
relating solely to the supply or manufacture of Evamist, all of which Contracts
in effect on the date hereof are set forth on Schedule 1.1(a)(2),
(vi) Contracts constituting confidentiality agreements involving solely Evamist
or the Evamist Business, all of which Contracts in effect on the date hereof
are set forth on Schedule 1.1(a)(2), (vii) Contracts
involving any royalty, licensing, partnering or similar arrangement solely
involving Evamist or the Evamist Business, all of which Contracts in effect on
the date hereof are set forth on Schedule 1.1(a)(2), (viii)
Contracts pursuant to which any services are provided to Seller or its
Subsidiaries with respect solely to Evamist or the Evamist Business, including
consultation agreements, all of which Contracts in effect on the date hereof
are set forth on Schedule 1.1(a)(2), (ix) Contracts pursuant
to which any third party collaborates with Seller or its Subsidiaries in the
performance of research or development solely of Evamist or the Evamist
Business, all of which Contracts in effect on the date hereof are set forth on Schedule 1.1(a)(2),
*** Certain information on this page
has been omitted and filed separately with the Commission. Confidential treatment has been requested
with respect to the omitted portions.
5
and (x) Contracts entered into by Seller or its
Subsidiaries from the date hereof to the Closing Date to the extent relating
solely to Evamist, the Purchased Assets or the Evamist Business.
Evamist
Copyrights means all copyrights, whether registered or
unregistered, and applications, if any, owned or used under license by the
Seller or any of its Subsidiaries exclusively related, or necessary and
primarily related, to the Evamist Business, including without limitation those
copyrights set forth on Schedule 1.1(c).
Evamist FDA Submissions means,
collectively, the Evamist IND and Evamist NDA.
Evamist Governmental Permits
means all governmental permits, licenses, registrations, NDAs, approvals and
other governmental authorizations related solely to the operation of the
Evamist Business that are held in the name of Seller or any of its
Subsidiaries, and any applications therefor and all files related thereto.
Evamist IND
means the IND for Evamist set forth on Schedule 1.1(d) as filed as of
the date of this Agreement, and all documents, data, analyses, and files
related thereto, in each case as may be updated in accordance with this
Agreement.
Evamist
Intellectual Property means (i) the Evamist Copyrights, (ii)
the Evamist Patent Rights, (iii) the Evamist Know-How, (iv) the Seller
Multi-Application Technology, (v) the Evamist Trademarks and (vi) any Software
that is embedded in hardware included in the Purchased Assets.
Evamist
Inventory means all inventories of Evamist in existence as of
the Closing Date, together with all bulk active pharmaceutical ingredient,
other raw materials, components, parts, work in process and packaging materials
owned by Seller or any of its Subsidiaries as of the Closing Date for use
solely in the operation of the Evamist Business. For clarity, Evamist Inventory shall exclude
raw materials, components, parts, work in process and packaging materials not
specific to Evamist.
Evamist
Know-How means any and all Evamist Manufacturing Know-How and
other product specifications, processes, product designs, plans, trade secrets,
ideas, concepts, inventions, manufacturing, formulations, engineering and other
manuals and drawings, standard operating procedures, formulae, flow diagrams,
chemical, pharmacological, toxicological, pharmaceutical, physical, analytical,
safety, quality assurance, quality control and clinical data, technical
information, research records, and all other confidential or proprietary
technical and business information that is currently owned or used under
license by the Seller or any of its Subsidiaries and used exclusively in the
Evamist Business as of the Closing Date.
For the sake of clarity, none of the foregoing information shall be
included in Evamist Know-How to the extent that such information is covered by
any claim of any Evamist Patent.
Notwithstanding the foregoing, Evamist Know-How shall exclude the Seller
Multi-Application Technology.
Evamist
Manufacturing Know-How means any information relating to the
manufacture of Evamist owned or used under license by the Seller or its
Subsidiaries, including without limitation the identity, amounts and assurance
quality of ingredients, the manufacturing processes and controls,
specifications, technology, inventions, assays, quality control and testing
6
procedures, know-how and trade secrets used
exclusively to manufacture, formulate, test and package Evamist for use, sale,
marketing and distribution in the Evamist Territory as of the Closing
Date. For the sake of clarity, none of
the foregoing information shall be included in Evamist Manufacturing Know-How
to the extent that such information is covered by any claim of any Evamist Patent
Rights.
Evamist NDA
means the NDA for Evamist set forth on Schedule 1.1(d) as filed as of
the date of this Agreement, and all documents, data, analyses, and files
related thereto, in each case as may be updated in accordance with this
Agreement.
Evamist NDA Approval
means approval of the Evamist NDA by the FDA allowing for the initiation of
marketing and sale of Evamist in the United States for the treatment of
vasomotor or any other similar symptoms associated with menopause.
Evamist NDA Approval Date
means the date upon which the FDA issues to Seller written notice of the
Evamist NDA Approval.
Evamist
Patent Rights means, to the extent owned or used under license
by the Seller or any of its Subsidiaries, including those Patent Rights listed
on Schedule 1.1(e), together with all registrations, applications
and renewals thereof, and any other Patents Rights that are owned or used under
license by the Seller or any of its Subsidiaries and that would be infringed by
the manufacture, sale, offer to sell or importation of Evamist in the Evamist
Territory.
Evamist
Product Improvement means (to the extent applicable), to the
extent owned by Seller or any of its Subsidiaries, any: (i) line extension of Evamist;
(ii) new indication of Evamist; (iii) composition of matter or
article of manufacture consisting essentially of an Estrogen for dermal
delivery, with or without a device suitable for dermal delivery of Estrogen;
(iv) pharmaceutical combination containing an Estrogen for dermal delivery
and another active ingredient; (v) new formulations comprising an Estrogen
for dermal deliver; and/or (vi) compositions of matter or articles of
manufacture constituting any of the foregoing or components thereof.
Evamist
Product Registrations means (i) the exemptions, approvals or
registrations which have been received by Seller or any of its Subsidiaries as
of the date of this Agreement, or which are received by Seller or any of its
Subsidiaries after the date of this Agreement but before the Closing Date, for
the manufacturing, testing, investigation, sale, use, distribution and/or
marketing of Evamist (including any NDAs or INDs), and (ii) all dossiers,
reports, data and other written materials filed as part of or referenced in any
applications for such approvals or registrations, or maintained by Seller or
any of its Subsidiaries and relating to such approvals or registrations, in
each case related exclusively to Evamist and to the extent owned by Seller or
any of its Subsidiaries as of the Closing Date.
Evamist
Purchased Intellectual Property means (i) the Evamist
Copyrights, (ii) the Evamist Patent Rights, (iii) the Evamist Know-How and (iv)
the Evamist Trademarks, in each case owned by the Seller or any of its
Subsidiaries.
Evamist
Territory means the United States, and its territories and
protectorates.
7
Evamist
Trademarks means all trademarks, trade names, trade dress,
service marks, logos and slogans, in each case whether registered or
unregistered, and all internet domain names, owned by the Seller or any of its
Subsidiaries and used exclusively in the conduct of the Evamist Business and in
any sales, promotional, marketing or advertising materials for Evamist in the
Evamist Territory, and together with all registrations, applications and
renewals thereof and the goodwill associated therewith, including without
limitation those set forth on Schedule 1.1(f); provided, however, that Evamist Trademarks
shall not include the Corporate Name of the Seller or its Subsidiaries.
Excluded
Assets has the meaning set forth in Section 2.2.
Excluded
Books and Records means all Books and Records related to human
resources and any other employee related files and records.
Excluded
Liabilities has the meaning set forth in Section 3.1(b).
Excluded
Tax Liability has the meaning set forth in Section 3.1(b)(ii).
Facility Inspection
Deadline has the meaning set forth in Section 12.1(i).
FDA
means the United States Food and Drug Administration or any successor thereto.
FDA Act
means the U.S. Food, Drug and Cosmetic Act of 1938, as it may be superseded or
amended from time to time.
FDA
Milestone Payment has the meaning set forth in Section 4.2(a).
FDA Transfer Letter
has the meaning set forth in Section 8.2(e)
Financial
Information has the meaning set forth in Section 6.11.
First Commercial Sale
means the first commercial sale of Evamist for use in the Evamist Territory
(other than for evaluation, research, testing or clinical trial purposes),
which occurs after the Evamist NDA Approval Date, by the Acquiror or its
Affiliates or sublicensees to an independent non-Affiliate third party in
exchange for cash or some equivalent to which value can be assigned.
GAAP
means United States generally accepted accounting principles.
Governmental
or Regulatory Authority means any court, tribunal, arbitrator,
authority, agency, commission, department, ministry, official or other
instrumentality of the United States or other country, or any supra-national
organization, or any foreign or domestic, state, county, city or other
political subdivision.
Hazardous Materials
means (A) any petroleum, petroleum products, byproducts or breakdown products,
radioactive materials, asbestos-containing materials or
8
polychlorinated biphenyls or (B) any chemical,
material or other substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any Environmental Law.
HSR Act
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
together with any rules or regulations promulgated thereunder.
IND
means (i) an Investigational New Drug Application, as defined in the FDA
Act and the regulations promulgated thereunder, which is required to be filed
with the FDA before beginning clinical testing of a product in human subjects,
or any successor application or procedure, (ii) all supplements and amendments
that may be filed with respect to the foregoing and (iii) all international
equivalents of the foregoing.
Indemnification
Claim Notice has the meaning set forth in Section 11.2(c).
Improvement
means (i) any improvement or modification to the design, materials,
manufacturing and/or assembly of the metered dose transdermal spray application
device reduced to practice by or on behalf of either party during the two (2)
year period after the Closing Date and/or (ii) all ideas, concepts, inventions
and the like created by either party pursuant to the services to be performed
pursuant to the Transition Service Agreement.
Indemnified
Party has the meaning set forth in Section 11.2(c).
Indemnitees
has the meaning set forth in Section 11.2(c).
Know-How
means any proprietary or nonproprietary information directly related to the
manufacture, preparation, development (both research and clinical), or
commercialization of a product, including, without limitation, product
specifications, processes, product designs, plans, trade secrets, ideas,
concepts, inventions, formulae, chemical, pharmacological, toxicological,
pharmaceutical, physical, analytical, stability, safety, quality assurance,
quality control and clinical information, technical information, research
information, and all other confidential or proprietary technical and business
information, whether or not embodied in any documentation or other tangible
materials, but in no event shall the definition of Know-How include information
properly in the public domain as of the Closing Date.
Knowledge
with respect to (i) the Seller means the knowledge of officers or directors of
the Seller, following reasonable inquiry, with responsibility for, or
supervision of, the relevant matters, and (ii) the Acquiror means the knowledge
of the officers, directors or senior managers, following reasonable inquiry, of
the Acquiror with responsibility for supervision of the relevant matters.
Law
means any federal, state, local or foreign law, statute, code or ordinance, or
any rule or regulation promulgated by any Governmental or Regulatory Authority.
Liability
means any direct or indirect liability, obligation, claim, deficiency,
guarantee or commitment of any kind or nature (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due), including any liability
for Taxes.
9
Liability Cap
means $1,250,000 unless and until the Seller receives payment of the FDA
Milestone Payment pursuant to Section 4.2(a), and thereafter shall be
$18,750,000.
Liability Threshold
has the meaning set forth in Section 11.3(a).
MDTS means
the metered dose transdermal spray system as described in Schedule 1.1(g),
and all improvements, derivatives and modifications of such system developed by
or under authority of Seller, or Acrux DDS Pty. Ltd. or its Affiliate.
Net Sales
shall mean, with respect to a fiscal year, the total gross invoices for Evamist
sold by Acquiror and its Affiliates to independent, third party customers in
the Evamist Territory, less (a) customary trade, quantity and/or cash
discounts taken, (b) accrued rebates, adjustments and allowances, including
those amounts credited by reason of rejections, return of goods, and any
retroactive price reductions relating to Evamist, (c) amounts accrued resulting
from mandated rebate programs of the government of the Evamist Territory (or
any agency thereof), including but not limited to Medicaid and other
federal, state or local rebates, (d) accrued third party rebates and
chargebacks, or similar items, related to the sale of Evamist, (e) customs
duties and sales or similar taxes, if any, directly related to the sale of
Evamist, (f) amounts paid by Acquiror to its customers for defective Evamist
returned to Acquiror from its customers, (g) shipping and freight costs and (h)
any reasonable and customary provision for uncollectible accounts with respect
to sales of Evamist per se, to
the extent such reserve is determined in accordance with GAAP, consistently
applied across all product lines of the Person making the sales, provided in
the case of (e) and (g) such amounts are included within the gross invoiced
amounts and separately itemized.
NDA
means (i) a New Drug Application for any product, as appropriate, requesting
permission to place a drug on the market in accordance with 21 C.F.R. Part 314,
and all supplements or amendments filed pursuant to the requirements of the
FDA, including all documents, data and other information concerning a product
which are reasonably necessary for FDA approval to market a product in the
United States and (ii) all international equivalents of the foregoing.
Non-Assignable
Asset has the meaning set forth in Section 2.4(a).
No-Shop Period
has the meaning set forth in Section 8.10(a).
Notice
with respect to a party means notice actually received by an officer, director
or senior manager of the Seller, in the case of the Seller, or of the Acquiror,
in the case of the Acquiror, in each case with responsibility in the relevant
area, or delivered in accordance with the terms of the document, Law or Order
pursuant to which such notice was given.
Order
means any writ, judgment, decree, injunction or similar order, including
consent orders, of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
Ordinary
Course of Business means an action or activity that is
consistent in nature, scope and magnitude with the past practices of the Seller
and its Subsidiaries with respect to the Evamist Business.
10
Other
Bid has the meaning set forth in Section 8.10.
Patent
Assignment Agreement means the Patent Assignment Agreement to
be dated as of the Closing Date by and between the Acquiror and Seller, in a
form to be mutually agreed upon by the parties prior to the Closing.
Patent
Rights means any patent application (including any
provisionals, divisionals, continuations, continuations-in-part (to the extent
claiming subject matter invented on or before the Closing Date) and
substitutions thereof), patents issuing from or granted upon such patent
application (including patents of addition (to the extent claiming subject
matter invented on or before the Closing Date) and substitutions thereof),
reissues, extensions, reexaminations, renewal applications, supplemental patent
certificates or any confirmation patent or registration patent) and all foreign
counterparts of any of the foregoing.
Person
means any natural person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, joint venture, other business
organization, trust, entity, union, association or Governmental or Regulatory
Authority.
Post-Closing Tax Period means any Tax period beginning after the
Closing Date and the portion of any Straddle Period beginning after the Closing
Date.
Pre-Closing Tax Period means any Tax period ending on or before
the Closing Date and the portion of any Straddle Period ending on the Closing
Date.
Properties
has the meaning set forth in Section 6.12.
Purchase
Price has the meaning set forth in Section 4.1(a).
Purchased
Assets has the meaning set forth in Section 2.1.
Registered Evamist
Intellectual Property means all Evamist Intellectual Property
that has been registered, filed, certified or otherwise perfected or recorded
with or by any Governmental or Regulatory Authority.
[***] Facilities
means the facilities of [***].
Related
Agreements means the Trademark Assignment Agreement, Patent
Assignment Agreement, Bill of Sale, Transition Services Agreement, Sublicense
Agreement (only if the Sublicense Agreement is required to be executed and
delivered pursuant to Section 2.7) and duly executed and attested
assignments of transfer, or such other instruments of conveyance as may be required
by Law, sufficient to permit the proper recordation of transfer of title
ownership in all Registered Evamist Intellectual Property owned by the Seller
from the Seller or its Subsidiaries to Acquiror in accordance with this
Agreement.
Required
Permits shall have the meaning set forth in Section 6.8(a).
*** Certain information on this page has been omitted and
filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted
portions.
11
Restricted Estrogens
means any of: Estradiol, 17-beta
estradiol, 17-alpha estradiol, ethinyl estradiol or tibolone.
Seller
has the meaning set forth in the preamble to this Agreement.
Seller
Disclosure Schedule has the meaning set forth in the preamble
to Article VI.
Seller Governmental Consents has
the meaning set forth in Section 6.3(a).
Seller Material Adverse Effect
means any state of facts, change, development, event, occurrence, effect or
condition that, individually or in the aggregate, (i) is materially adverse to
the Purchased Assets or (ii) materially impairs or delays the ability of Seller
to perform its obligation hereunder, except that any such state of facts,
change, development, event, occurrence, effect or condition resulting from or
arising out of or in connection with any of the following, either alone or in
combination, shall not be taken into consideration for purposes of determining
whether a Seller Material Adverse Effect has occurred or arisen: (a) the announcement of this Agreement or the
pendency of the transactions contemplated hereby, (b) the performance by the
Seller of its obligations under this Agreement, (c) general economic conditions
in any country where the Evamist Business is conducted to the extent that they
do not disproportionately affect the Seller relative to other industry
participants, (d) general conditions in any industry in which the Evamist
Business is conducted to the extent that they do not disproportionately affect
the Seller relative to other industry participants, (e) changes or conditions
in economic, regulatory, political or capital markets conditions generally to
the extent that they do not disproportionately affect the Seller relative to
other industry participants, (f) any natural disaster or any acts of terrorism,
sabotage, military action or war (whether or not declared) or any escalation or
worsening thereof, (g) the Sellers failure to meet any financial projections
in and of itself (it being understood that the facts or occurrences giving rise
or contributing to such failure may be deemed to constitute, or be taken into
account in determining, whether there has been or will be a Seller Material
Adverse Effect) or (h) changes in Law or GAAP.
Seller Multi-Application
Technology means [***] that is currently owned by the Seller or
any of its Subsidiaries and used in both the [***] and [***] as of the Closing
Date, which are summarized on [***].
Seller Third Party Consents has the
meaning set forth in Section 6.3(b).
Software
means (to the extent applicable) computer programs, including any and all
software implementations of algorithms, models and methodologies whether in
source code or object code form, databases and compilations, including any and
all data and collections of data, and all documentation, including user manuals
and training materials, related to any of
*** Certain information on this page
has been omitted and filed separately with the Commission. Confidential treatment has been requested
with respect to the omitted portions.
12
the foregoing;
provided, however,
that Software shall not include
software that is readily purchasable or licensable and which has not been
modified in a manner material to the use or function thereof (other than
through user preferences).
Straddle
Period means
any Tax period beginning on or before and ending after the Closing Date.
Sublicense Agreement
means the Sublicense Agreement, substantially in the form attached hereto as Exhibit
A, to be effective as of the Closing Date, only if applicable pursuant to Section
2.7, by and between Seller and Acquiror, whereby Seller agrees to grant to
Acquiror an exclusive sublicense under the Licensed Intellectual Property (as
defined in the Acrux License) solely to exploit, import, export, make, have
made, develop, use, market, offer for sale and sell Evamist in the Field (as
defined in the Acrux License) and subject to the other terms and conditions set
forth therein.
Subsidiary
of a Person means any entity Controlled by that Person.
Superior Bid
means any unsolicited bona fide written offer made by a third party to
consummate a proposal for a sale, spin-off or other disposition or similar
transaction involving the Evamist Business and all or substantially all of the
Purchased Assets on terms that the board of directors of the Seller determines
in good faith, after consultation with its outside counsel and financial
advisor, and after taking into account the purchase price and other terms and
conditions of such proposal, the legal and regulatory aspects of such proposal
and the Person making such proposal, (i) to be more favorable to the Sellers
stockholders than the transactions contemplated by this Agreement and (ii) is
likely to be consummated on its terms in a timely manner.
Survival
Period shall have the meaning set forth in Section 11.1.
Taxes
means all of the following in connection with the operations of the Evamist
Business or the transactions contemplated hereby: (i) any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, value added, ad
valorem, transfer, franchise, profits, license, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax, capital
tax, customs duty or other tax, governmental fee or other like assessment
imposed by any governmental, regulatory or administrative entity or agency
responsible for the imposition of any such tax (domestic or foreign) including
any interest, penalty or addition thereon, whether disputed or not; (ii) any
Liability for the payment of any amounts of the type described in (i) as a
result of being a member of any affiliated, consolidated, combined, unitary or
other group for any Taxable period; and (iii) any Liability for the payment of
any amounts of the type described in (i) or (ii) as a result of any express or
implied obligation to indemnify any other Person.
Tax
Return means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
Termination
Date has the meaning set forth in Section 12.1(b).
13
Third
Party Claim has the meaning set forth in Section 11.2(d).
Trademark
Assignment Agreement means the Trademark Assignment Agreement
to be dated as of the Closing Date by and between the Acquiror and Seller, in a
form to be mutually agreed upon by the parties prior to the Closing.
Transfer Taxes
has the meaning set forth in Section 4.4.
Transition Services
Agreement means the Transition Services Agreement to be dated as
of the Closing Date by and between Seller and Acquiror, substantially in the
form attached hereto as Exhibit B, whereby Seller agrees to provide
assistance to Acquiror in matters related to the Evamist Product Registrations
and Evamist Business, including but not limited to making specified individuals
identified in such agreement available to Acquiror for purposes of providing
such assistance.
Treasury
Regulations means the Treasury Regulations promulgated under
the Code.
Section 1.2 Construction of Certain
Terms and Phrases. Unless the
context of this Agreement otherwise requires:
(i) words of any gender include each other gender; (ii) words using the
singular or plural number also include the plural or singular number,
respectively; (iii) the terms hereof, herein, hereby and derivative or
similar words refer to this entire Agreement; (iv) the terms Article or Section
refer to the specified Article or Section of this Agreement; (v) the
term or has, except where otherwise indicated, the inclusive meaning
represented by the phrase and/or; and (vi) the term including means including
without limitation. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless Business Days are specified.
ARTICLE
II.
PURCHASE
AND SALE OF ASSETS; GRANT OF LICENSES; SUBLICENSE AGREEMENT
Section 2.1 Purchase and Sale
of Assets at the Closing. Upon the
terms and subject to the conditions set forth in this Agreement, at the
Closing, Seller shall, on behalf of itself and its Subsidiaries, sell, convey,
assign, transfer and deliver to the Acquiror, and the Acquiror shall purchase
and acquire from Seller, all of Sellers right, title and interest in and to
the following assets, free and clear of all Encumbrances (collectively, the Purchased Assets):
(a) the
Assumed Contracts;
(b) all
Evamist Books and Records;
14
(c) all Evamist
Inventory, excluding such Evamist Inventory Acquiror elects to exclude as
designated in writing by Acquiror prior to the Closing Date;
(d) all Evamist Purchased
Intellectual Property;
(e) all Evamist Product
Registrations, excluding the Evamist FDA Submissions (subject to Section 8.5);
(f) all Evamist
Governmental Permits, to the extent legally transferable (excluding the Evamist
FDA Submissions, subject to Section 8.5);
(g) the Evamist FDA
Submissions upon transfer pursuant to Section 8.5;
(h) any other assets
related primarily to the research (including all pre-clinical and clinical
studies), development, manufacture, formulation, use, distribution, marketing,
sale and promotion of Evamist, provided, however,
that:
(i) using
the [***], the Acquiror, after the Closing, itself or through a contract
manufacturer, shall use commercially reasonable efforts to, and subject to the
terms of the manufacturing and supply contract to be entered into by and
between the Acquiror and [***], manufacture or cause to be manufactured, on
behalf of and for delivery to the Seller up to 150,000 transdermal spray
housings by January 1, 2008 and up to 150,000 transdermal spray housings by
April 1, 2008, in each case subject to the Seller providing Acquiror a written
purchase order for such quantities at least 120 calendar days in advance of the
delivery date therefor and agreement to reimburse Acquiror for its actual cost
therefor; provided, however, the Acquiror shall
not be required to take any action under this Section 2.1(h)(i) that
would interfere with, or be detrimental to, the Evamist Business as conducted
by the Acquiror following the Closing, as determined by the Acquiror in good
faith; and
(ii) with
respect to the [***] and [***] located at [***], the Acquiror, for a period of
120 calendar days after the Closing, shall use commercially reasonable efforts
to make such equipment available at its then current location for reasonable
use on behalf of the Seller in connection with the manufacturing of its testosterone
metered dose transdermal spray product, and the parties shall cooperate with
respect to the scheduling of such use such that the Seller shall have
reasonable access to such equipment as determined by the parties; provided, however, the Acquiror shall not be required to
take any action under this Section 2.1(h)(ii) that would interfere with,
or be detrimental to, the Evamist Business as conducted by the Acquiror
following the Closing, as determined by the Acquiror in good faith; provided, further, the Seller shall use commercially
reasonable efforts following the Closing to either purchase a [***] and [***]
or find an alternative arrangement with a third party for use of such [***] and
[***]; provided, further, that the Seller shall
reimburse the Acquiror for any costs incurred by the Acquiror as a result of
this Section 2.1(h)(ii).
*** Certain information on this page has been omitted
and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted
portions.
15
In addition, for clarity, the parties agree
and acknowledge that, with the exception of the foregoing [***] and [***], the
Purchased Assets shall exclude any assets used by the Seller solely in
connection with its [***]; and
(i) all rights,
claims and credits, including all guarantees, warranties, indemnities and
similar rights in favor of Seller or any of its Affiliates or any of their
respective employees to the extent relating to any Purchased Asset or any
Assumed Liability.
Section 2.2 Excluded
Assets. Notwithstanding anything to
the contrary set forth in this Agreement, the Seller shall have no obligation
to sell, convey, transfer, assign or otherwise deliver unto the Acquiror
pursuant to this Agreement, and the Acquiror shall have no obligation to
purchase or otherwise accept from the Seller pursuant to this Agreement, any of
the right, title or interest of the Seller in or to any of the assets of the
Seller other than the Purchased Assets (collectively, the Excluded Assets). Without limiting the generality of the
foregoing, the Excluded Assets shall expressly include (and, therefore, the
Purchased Assets shall specifically exclude) the following:
(a) the Corporate Name;
(b) all human resource
and other employee related files and records;
(c) all Books and
Records, other than the Evamist Books and Records;
(d) subject to Section
8.11, any insurance policies of Seller or its Subsidiaries or rights
thereunder or proceeds thereof;
(e) the Evamist FDA
Submissions (subject to Section 8.5);
(f) the Seller
Multi-Application Technology;
(g) the right to a refund
requested from the FDA for any or all of the Evamist NDA filing fee;
(h) all right, title and
interest of the Seller in and to any real property, whether owned or leased by
the Seller;
(i) all cash, cash
equivalents, marketable securities and similar cash items of the Seller,
whether or not arising from the Evamist Business;
(j) all refunds and
rights to refunds related to Taxes; and
(k) all claims, actions,
deposits, prepayments, refunds, causes of action, rights of recovery, rights of
set off and rights of recoupment of any kind or nature (including any such item
relating to Taxes) relating to the Excluded Assets.
*** Certain information on this page has been omitted
and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted
portions.
16
Section 2.3 Retention
of Assets. Notwithstanding anything
to the contrary contained in this Agreement and without limiting Section 2.8, the Seller may retain, at its expense, one
archival copy of all Assumed Contracts, Evamist Books and Records and other
documents or materials conveyed hereunder, in each case, which the Seller in
good faith determines it is reasonably likely to need access to in connection
with performing its rights and obligations under this Agreement. Without limiting Section 2.8,
access to such information shall be restricted to the Sellers legal counsel
and such employees of the Seller who have a need to know such information in
connection therewith. Upon the final performance of its rights and obligations
hereunder, Seller shall (i) if such materials relate solely to the Evamist
Business, destroy or deliver to the Acquiror such materials, and (ii) if such
materials relate to both the Evamist Business and any other business of Seller,
redact, to the extent practicable, any portion of such materials that contain
information relating solely to the Evamist Business, provided,
however, if the Clinical Results Option is exercised, the Data Package
will be excluded in the case of (i) and (ii) above.
Section 2.4 Assignability
and Consents.
(a) Notwithstanding
anything to the contrary contained in this Agreement, if the sale, conveyance,
assignment, transfer or delivery or attempted sale, conveyance, assignment,
transfer or delivery to the Acquiror of any Purchased Asset is
(i) prohibited by any applicable Law or (ii) would require any
authorizations, approvals, consents or waivers from a third Person and such
authorizations, approvals, consents or waivers shall not have been obtained
prior to the Closing Date (each, a Non-Assignable Asset), in either case, the
Closing shall proceed (subject to the parties rights under Article IX
and X, as applicable), but the
Closing shall not constitute the sale, conveyance, assignment, transfer or
delivery of such Non-Assignable Asset, and this Agreement shall not constitute
a sale, conveyance, assignment, transfer or delivery of such Non-Assignable
Asset unless and until such authorization, approval, consent or waiver is
obtained. After the Closing, the Seller
shall continue to use commercially reasonable efforts to obtain any Seller
Third Party Consent.
(b) Once authorization,
approval or waiver of or consent for the sale, conveyance, assignment, transfer
or delivery of any such Non-Assignable Asset not sold, conveyed, assigned,
transferred or delivered at the Closing is obtained, the Seller shall convey,
assign, transfer and deliver such Non-Assignable Asset to the Acquiror at no
additional cost to the Acquiror.
Notwithstanding anything to the contrary contained in this Agreement,
the Acquiror shall not assume any Liabilities with respect to a Non-Assignable
Asset until it has been assigned to the Acquiror.
Section
2.5 License
to Seller Multi-Application Technology.
Effective as of the Closing, the Seller hereby grants, on behalf of
itself and its Subsidiaries, to the Acquiror a fully paid, royalty free license
in perpetuity under the Seller Multi-Application Technology solely to exploit,
import, export, make, have made, develop, use, market, offer for sale and sell
products (other than a product for transdermal delivery of any Androgen), which
license shall be
17
exclusive as to Evamist and non-exclusive as to any
other product. For purposes of the foregoing and Section 2.6 below, Androgen means any
of the following: testosterone, androstenediol, androstenedione,
dehydroepiandrosterone, dihydrotestosterone, tibolone or any selective androgen
receptor modulator.
Section 2.6 Licenses to
Improvements. Effective as of the
Closing:
(a) the Seller hereby
grants to the Acquiror a worldwide, fully paid, royalty free, non-exclusive
license in perpetuity under Improvements owned or controlled by the Seller to
exploit, import, export, make, have made, develop, use, market, offer for sale
and sell products other than a product for transdermal delivery of any
Androgen; and
(b) the Acquiror hereby
grants to the Seller a worldwide, fully paid, royalty free, non-exclusive
license in perpetuity under Improvements owned or controlled by the Acquiror to
exploit, import, export, make, have made, develop, use, market, offer for sale
and sell products other than Competing Products.
Section
2.7 Sublicense
Agreement. In the event that the
Acrux License Assignment Consent has not been obtained as of the Closing, the
Seller shall grant to the Acquiror an exclusive sublicense under the Licensed
Intellectual Property (as defined in the Acrux License) pursuant to, and upon
the terms and subject to the conditions set forth in, the Sublicense Agreement,
effective as of the Closing.
Section
2.8 Clinical
Results Option. Notwithstanding
anything to the contrary set forth in this Agreement, in the event that the
Acquiror so elects by giving written notice thereof to the Seller prior to the
Closing (the Clinical Results Option),
the Seller shall have the right to retain a copy of all pre-clinical and
clinical trial data results obtained in the course of the development of
Evamist and all Evamist Product Registrations (collectively, the Data Package), which Seller shall
have the right to sell and transfer to a third party for such third partys
use, modification, reference and disclosure solely in connection with such
third party seeking regulatory approval to market and commercialize one or more
pharmaceutical products consisting of MDTS containing Estradiol or any other
Estrogen, which product is controlled or developed by or on behalf of such
third party, in the European Union (the Approved Uses);
provided, however, any such sale and
transfer of the Data Package shall (i) be subject to standard and customary
confidentiality obligations that limit the use thereof to the Approved Uses and
to Persons subject to similar confidentiality obligations, except in the case
of disclosure to Governmental or Regulatory Authorities which disclosure would
as a matter of Law be maintained as confidential, and (ii) provide that the
third party purchaser of such Data Package may not license, sell, dispose or
otherwise transfer the Data Package to any other Person without the prior
written consent of Acquiror (such consent not to be unreasonably withheld
conditioned or delayed), except to the extent reasonably necessary to enable
the Approved Uses (provided such usage does not involve a further transfer of
ownership of the Data Package) and in all events subject to the confidentiality
obligations described in clause (i) above.
For clarity, Seller shall have the right to retain any and all
consideration obtained from such sale and transfer of the Data Package.
18
ARTICLE
III.
ASSUMPTION
OF LIABILITIES
Section 3.1 Assumption
of Liabilities.
(a) Upon the terms and
subject to the conditions set forth in this Agreement, as of the Closing Date,
the Acquiror agrees to assume, satisfy, perform, pay and discharge each of the following
Liabilities (the Assumed
Liabilities):
(i) all
Liabilities of Seller or any of its Subsidiaries under the Assumed Contracts
(in the case of an Assumed Contract requiring third party consent to
assignment, where such consent has been obtained), but only to the extent such
Liabilities arise from any event, circumstance or condition occurring after the
Closing;
(ii) all
Liabilities with respect to the Evamist Governmental Permits that are Purchased
Assets to the extent relating to the operation or conduct of the Evamist
Business by or on the behalf of the Acquiror from and after the Closing,
excluding the Evamist NDA;
(iii) all
Liabilities for Taxes arising out of or relating to, directly or indirectly,
the Purchased Assets (including Evamist) or the ownership, sale or lease of any
of the Purchased Assets attributable to the Post-Closing Tax Period, other than
the Excluded Tax Liabilities;
(iv) the
Liability for fifty percent (50%) of the payment due to Fempharm Pty Ltd.
pursuant to Section 3.2(b) of the Acrux License; and
(v) all
Liabilities after the Closing Date arising out of or related to the Acquirors
ownership of the Purchased Assets and operation and conduct of the Evamist
Business by or for the benefit of the Acquiror.
(b) Notwithstanding
anything contained in this Agreement to the contrary, from and after the
Closing Date, the Seller shall retain all of the following Liabilities (Excluded Liabilities):
(i) all
accounts payable and other similar Liabilities of the Seller and its Subsidiaries,
excluding fifty percent (50%) of the payment due to Fempharm Pty Ltd. pursuant
to Section 3.2(b) of the Acrux License;
(ii) any
Liability incurred by the Seller in accordance with Section 8.5 in
obtaining Evamist NDA Approval;
(iii) any
Liability of Seller or any of its Subsidiaries, or any member of any
consolidated, affiliated, combined or unitary group of corporations of which
Seller or any of its Subsidiaries is or has been a member,
19
for Taxes and any liabilities for Taxes
attributable to the Purchased Assets for any Pre-Closing Tax Period (Excluded Tax Liability);
(iv) all
Liabilities of the Seller and its Subsidiaries arising out of any product
liability, patent infringement, breach of warranty or similar claim for injury
to person or property or any other claim related to the Purchased Assets or the
Evamist Business arising prior to the Closing (including all proceedings
relating to any such Liabilities);
(v) all
Liabilities of the Seller and its Subsidiaries arising out of government seizures,
field corrections, withdrawals or recalls of Evamist manufactured, transferred
or sold prior to the Closing, which are claimed prior to, on or after the
Closing Date;
(vi) all
Liabilities of the Seller and its Subsidiaries with respect to any litigation
or other claims related to the Evamist Business or Purchased Assets to the
extent arising from any event, circumstance or condition occurring or alleged
to have occurred prior to the Closing;
(vii) any
Liability of the Seller related to any product or service of the Seller or any
of its Subsidiaries other than Evamist or the operation or conduct by the
Seller or any of its Subsidiaries of any business other than the Evamist
Business;
(viii) any
Liability or obligation of Seller or any of its Subsidiaries (A) arising out of
any actual or alleged breach by Seller or any of its Subsidiaries of, or
nonperformance by Seller or any of its Subsidiaries under, any Assumed Contract
prior to the Closing or (B) accruing under any Assumed Contract prior to the Closing;
(ix) any
Liability of the Seller to the extent arising out of (i) any suit, action
or proceeding pending or, to the Knowledge of the Seller, threatened as of the
Closing, with respect to claims which arise from facts, events or circumstances
occurring prior to the Closing, or (ii) any actual or alleged violation by
the Seller or any of its Affiliates of any Law applicable to the Seller or any
of its Affiliates;
(x) any
Liability of the Seller that relates to any Excluded Asset;
(xi) any
Liability of Seller or any of its Subsidiaries or ERISA Affiliates under or
relating to (A) any employee benefit plan, or relating to wages, bonuses,
payroll, vacation, sick leave, workers compensation, unemployment benefits,
pension benefits, employee stock option or profit-sharing plans, health care
plans or benefits, phantom stock, deferred compensation or other similar plan
or arrangement, or any other employee plans or benefits of any kind, in each
case, which Seller or any Subsidiary or ERISA Affiliate has entered into,
maintains or administers or has maintained or
20
administered, to which Seller or any
Subsidiary or ERISA Affiliate contributes or has contributed or is or has been
required to contribute, or under or with respect to which Seller or any ERISA
Affiliate has or may have any Liability and (B) any actual or alleged violation
by the Seller or any of its Affiliates of any equal employment or employment
discrimination laws;
(xii) any
Liability under Environmental Laws arising out of or relating to the operation
or conduct of the Evamist Business or the use or ownership of the Purchased
Assets in the Evamist Territory, in each case, before the Closing;
(xiii) any
Liability of the Seller to any of its Affiliates; and
(xiv) any
other Liability of Seller or any of its Subsidiaries or Affiliates that is not
specifically listed as an Assumed Liability under Section 3.1(a)
(including any Liability to the extent resulting from the ownership, use,
operation or maintenance of the Purchased Assets by or on behalf of Seller
prior to the Closing, or the operation or conduct of the Evamist Business by or
on behalf of the Seller prior to the Closing).
ARTICLE
IV.
PURCHASE
PRICE AND PAYMENT
Section 4.1 Purchase
Price. As consideration for the
Purchased Assets, the grant of the license under the Seller Multi-Application
Technology pursuant to Section 2.5 and, as applicable, the grant of the
sublicense pursuant to the Sublicense Agreement, at the Closing, the Acquiror
shall:
(a) assume the Assumed
Liabilities; and
(b) pay to Seller an
aggregate amount equal to the sum of $10,000,000 (the Purchase Price).
The Purchase Price shall be payable in cash by wire
transfer of immediately available funds to an account designated by Seller to
Acquiror in writing at least two (2) Business Days prior to Closing.
Section 4.2 Milestone
Payments.
(a) Upon such date that
the Evamist NDA Approval is granted by the FDA and the Evamist FDA Submissions
and all rights associated therewith are transferred to Acquiror pursuant to Section
8.5, Acquiror shall pay to Seller, within five (5) Business Days
thereafter, $140,000,000 in cash (the FDA
Milestone Payment).
21
(b) In the event that Net
Sales of Evamist equal or exceed $100,000,000 in any fiscal year of the
Acquiror, Acquiror shall pay to Seller, within ten (10) Business Days after the
completion of the audit of the consolidated financial statements of Acquiror as
of and for such fiscal year, but in no event later than sixty (60) days after
the end of such fiscal year, $10,000,000 in cash. For the avoidance of doubt,
the amount required to be paid pursuant to this Section 4.2(b) (if
required to be paid) shall only be paid once and, for clarity, not with respect
to every fiscal year that annual Net Sales of Evamist equal or exceed
$100,000,000.
(c) In the event that
Net Sales of Evamist equal or exceed $200,000,000 in any fiscal year of the
Acquiror, Acquiror shall pay to Seller, within ten (10) Business Days after the
completion of the audit of the consolidated financial statements of Acquiror as
of and for such fiscal year, but in no event later than sixty (60) days after
the end of such fiscal year, either (i) $20,000,000 in cash or (ii) if the
Acquiror has given written notice to the Seller prior to the Closing of its
election to exercise the Clinical Results Option, $10,000,000 in cash. For the avoidance of doubt, the amount
required to be paid pursuant to this Section 4.2(c) (if required to be
paid) shall only be paid once and, for clarity, not with respect to every
fiscal year that Net Sales of Evamist equal or exceed $200,000,000. In addition, for the avoidance of doubt, the
amounts required to be paid pursuant to Sections 4.2(b) and (c),
respectively, may be paid with respect to the same fiscal year in the event
that Net Sales of Evamist equal or exceed both $100,000,000 and $200,000,000
for the first time in such fiscal year.
(d) All payments paid to
the Seller pursuant to this Section 4.2, shall be by wire transfer of
immediately available funds to an account designated by the Seller at least two
(2) Business Days prior to the date on which such payment is required to be
paid.
(e) Within five (5)
Business Days after the completion of the audit of the consolidated financial
statements of Acquiror as of and for such fiscal year, until such time as the
Seller has received the applicable milestone payment pursuant to Section
4.2(c), the Acquiror shall provide the Seller with a report, certified by
the Acquirors Chief Financial Officer, setting forth the Net Sales (including
an itemized list of the deductions from the total gross invoices used in
calculating such Net Sales) of Evamist during such fiscal year for each country
within the Evamist Territory and the amount, if any, due pursuant to Section
4.2(b) and/or 4.2(c) with respect to such fiscal year. The Acquiror shall keep complete and accurate
records in sufficient detail to make the reports required hereunder, to confirm
its compliance with the provisions of this Section 4.2, to properly
reflect all Net Sales of Evamist and to verify the determination of all amounts
payable hereunder.
(f) Upon the written
request of the Seller, the Acquiror shall permit an independent certified
public accounting firm of recognized national standing in
22
the United States designated by the Seller
and reasonably acceptable to the Acquiror to have access during normal business
hours to such of the records of the Acquiror as may be reasonably necessary to
verify the accuracy of any Net Sales reported and amounts payable under Section
4.2(b) and (c) of this Agreement. Each party shall submit such information in
its possession or control to the accounting firm reasonably necessary for
verification of Net Sales. Any such verification shall be carried out under
customary conditions of confidentiality.
If the accounting firm determines that additional amounts were payable,
the Acquiror shall have ten (10) Business Days from the delivery of such
accounting firms written report to submit additional information to the
accounting firm, and the accounting firm will take such additional information
under consideration for a period not to exceed ten (10) Business Days.
Thereafter, if the accounting firm finally determines that Acquiror owes any
additional amounts to Seller, such amount shall be paid within ten (10)
Business Days of such determination, plus interest on such amount (from the
date such amount was originally due under this Agreement) at the six month
LIBOR rate as reported by the East Coast Edition of the Wall Street Journal on
the date such payment is due. The fees charged
by such accounting firm shall be paid by the Seller, provided,
however, that if the audit discloses that additional amounts were
owed to the Seller, then the Acquiror shall reimburse the Seller for the fees
and expenses charged by such accounting firm.
Section 4.3 Allocation
of Purchase Price. The Purchase
Price shall be allocated among the Purchased Assets, the grant of the license
under the Seller Multi-Application Technology pursuant to Section 2.5
and, as applicable, the grant of the sublicense pursuant to the Sublicense
Agreement in accordance with Section 1060 of the Code and the Treasury
Regulations promulgated thereunder, and the Acquiror and the Seller agree to (a) be bound by the allocation, (b) act
in accordance with the allocation in the preparation of financial statements
and filing of all Tax Returns (including, without limitation, filing Internal
Revenue Service Form 8594 with their United States federal income Tax Return
for the taxable year that includes the date of the Closing) and in the course
of any Tax audit, Tax review or Tax litigation relating thereto, and
(c) take no position and cause their Affiliates to take no position
inconsistent with the allocation for income Tax purposes, including United
States federal and state income Tax and foreign income Tax, unless otherwise
required pursuant to a determination within the meaning of Section 1313(a) of
the Code. The Acquiror shall
initially determine and send written Notice to the Seller of the allocation of
the Purchase Price within thirty (30) days after the Closing Date. The Seller will be deemed to have accepted
such allocation unless it provides written Notice of disagreement to the
Acquiror within ten (10) days after the receipt of the Sellers Notice of
allocation. If the Seller provides such
Notice of disagreement to the Acquiror, the parties shall proceed in good faith
to determine the allocation in dispute.
If, within ten (10) days after the Acquiror receive the Sellers Notice
of disagreement, the parties have not reached agreement, the Accountants shall
be engaged to determine the final allocation in dispute. The Seller and the Acquiror shall share
equally the fees of such Accountants. Not later than thirty (30) days prior to the
filing of their respective Internal Revenue Service Forms 8594 relating to this
transaction, each party shall deliver to the other party a copy of its Internal
Revenue Service Form 8594.
23
Section 4.4 Sales,
Use and Other Taxes. All transfer,
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes incurred in connection with the transfer and sale
of the Purchased Assets as contemplated by the terms of this Agreement,
including all recording or filing fees, notarial fees and other similar costs
of Closing, that may be imposed, payable, collectible or incurred (Transfer Taxes) shall be timely
paid by Seller. The parties hereto shall reasonably
cooperate, to the extent reasonably requested and permitted by applicable law,
in minimizing any such Transfer Taxes.
The party required by law will file all necessary Tax Returns and other
documentation with respect to any such Transfer Taxes within the time
prescribed by applicable law, and the other party will join in the execution of
any such Tax Returns and other documentation.
All costs incurred in the filing of such Tax Returns will be paid by
Seller. The Seller shall provide Acquiror with evidence satisfactory to
Acquiror that such transfer Taxes have been timely paid by the Seller.
Section 4.5 Tax
Withholding. All payments made by
Acquiror to Seller pursuant to this Agreement shall be made free and clear of
any withholding, deduction or offset.
Section 4.6 Risk
of Loss. Until the Closing, the
Seller shall bear the risk of any loss or damage to the Purchased Assets from
fire, casualty or any other occurrence.
Following the Closing, Acquiror shall bear the risk of any loss or
damage to the Purchased Assets from fire, casualty or any other occurrence.
Section 4.7 Subsidiaries. Acquiror shall, upon ten (10) Business Days
prior written notice to Seller, have the right to designate one or more of its
wholly-owned direct or indirect Subsidiaries (each, a Designated Acquiror Subsidiary) to purchase
all or any of the Purchased Assets or assume all or any of the Assumed
Liabilities so long as Acquiror shall remain liable for all of its liabilities
and obligations hereunder and under the Related Agreements; provided, however, that
Acquiror shall not be permitted to make such a designation if such designation
would, or would reasonably be expected to, (i) result in any material costs, or
any material liabilities, to the Seller or its Subsidiaries (including but not
limited to any liability for Taxes, regardless of materiality and whether
withheld at the source or otherwise), (ii) materially delay or prevent the
consummation of the transactions contemplated hereby, (iii) materially
adversely affect the obtaining of consents and approvals in connection with the
transactions contemplated hereby (or require that material consents and
approvals be resolicited) or (iv) otherwise cause the conditions to Closing set
forth in Articles IX and X hereof to not be satisfied.
24
ARTICLE
V.
CLOSING
Section 5.1 Time
and Place. Unless this Agreement is
earlier terminated pursuant to Article XII, the closing of the
transactions contemplated by this Agreement, including the purchase and sale of
the Purchased Assets and the assumption of the Assumed Liabilities (the Closing), shall
take place as promptly as practicable, but in no event later than five (5)
Business Days following satisfaction or waiver of the conditions set forth in Articles IX
and X, at 9:00 a.m., Pacific Standard time, at the offices of
Latham & Watkins LLP, 650 Town Center Drive 20th Floor, Costa Mesa, California 92626, unless
another time or place shall be agreed to by the parties (the Closing Date).
Section 5.2 Deliveries
at Closing.
(a) Closing
Deliveries by the Seller. At the
Closing, the Seller shall deliver or cause to be delivered to the Acquiror:
(i) an
original of each of the Trademark Assignment Agreement, the Patent Assignment
Agreement, the Bill of Sale, the Transition Services Agreement and the
Sublicense Agreement (only if the Sublicense Agreement is required to be
executed and delivered pursuant to Section 2.7), executed by the Seller,
and copies of all documents required to be delivered by the Seller pursuant to
the Related Agreements;
(ii) an
unredacted, fully executed copy of each of the Assumed Contracts;
(iii) assignment
and assumption agreements and/or subcontracts, as applicable, in form and
substance reasonably acceptable to the Seller and the Acquiror, assigning to
the Acquiror all rights of the Seller in and to the Assumed Contracts;
(iv) written
evidence of the receipt of all Seller Governmental Consents set forth on Schedule 6.3(a)
of the Seller Disclosure Schedule and Seller Third Party Consents set
forth on Schedule 6.3(b) of the Seller Disclosure Schedule;
(v) written
evidence (including duly executed UCC-3 forms, as applicable) that all liens
and encumbrances related to the Purchased Assets, if any, have been released;
(vi)
all forms, certificates and other documents referred to in Section 8.12(d);
and
(vii)
the certificates and other matters described in Article X.
25
(b) Closing Deliveries
by the Acquiror. At the Closing, the
Acquiror will deliver or cause to be delivered to the Seller:
(i) the
Purchase Price in immediately available funds by wire transfer to an account or
accounts that shall have been designated by the Seller not less than two (2)
Business Days prior to the Closing Date;
(ii) an
original of each of the Trademark Assignment Agreement, the Patent Assignment
Agreement, the Bill of Sale, the Transition Services Agreement and the
Sublicense Agreement (only if the Sublicense Agreement is required to be
executed and delivered pursuant to Section 2.7), executed by the
Acquiror, and copies of all documents required to be delivered by the Acquiror
pursuant to the Related Agreements;
(iii) such
instruments of assumption and other instruments or documents, in form and
substance reasonably acceptable to the Seller and the Acquiror, as may be
necessary to effect the Acquirors assumption of the Assumed Liabilities and
the Assumed Contracts; and
(iv) the
certificates and other matters described in Article IX.
(c) Further
Deliveries of the Seller. At or
promptly following the Closing, but in no event later than thirty (30) days
thereafter, the Seller shall deliver or cause to be delivered to Acquiror the
following: (i) Evamist Governmental
Consents, (ii) the Evamist Books and Records and (iii) any other Purchased
Asset which was not delivered to Acquiror on the Closing Date.
ARTICLE
VI.
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
Except as set forth in the disclosure schedule supplied
by the Seller to the Acquiror and dated as of the date hereof (the Seller Disclosure Schedule),
which Seller Disclosure Schedule identifies the Section (or, if applicable,
subsection) to which such exception relates (provided,
however, that such disclosure shall also apply to particular matters
represented or warranted in other Sections and subsections to the extent that
it is readily apparent from the text of such disclosure), the Seller represents
and warrants to the Acquiror as follows:
Section 6.1 Organization,
Etc. The Seller is duly
incorporated, validly existing and, where applicable, in good standing under
the laws of Delaware and has all requisite power and authority to own its
assets, including the Purchased Assets, and carry on the Evamist Business as
currently conducted by it. The Seller is
duly authorized to conduct its business and is in good standing in each
jurisdiction where such qualification is required to own the Purchased Assets
or conduct the Evamist Business as they are now being conducted, except where
the failure to be so qualified or in good standing would not be reasonably
expected to have a Seller Material Adverse Effect. The certificate of incorporation, bylaws or
other similar governing instruments and organizational documents (the Charter Documents)
of the Seller that have been delivered to the Acquiror on or prior to the date
hereof are effective under applicable Laws
26
and are current, correct and complete. No Affiliates of the Seller are presently or
have in the past been engaged in the development, manufacture, marketing or
sale of Evamist or the operation or conduct of the Evamist Business.
Section 6.2 Authority
of the Seller. The Seller has all
necessary corporate power and authority and has taken all actions necessary to
enter into this Agreement, to execute and deliver the Related Agreements to
which it is or will be a party and carry out the transactions contemplated
hereby and by the Related Agreements to which it is or will be a party. The board of directors of the Seller has
taken all action required by Law and the Charter Documents of the Seller and
otherwise to be taken by it to duly authorize (i) the execution and delivery of
this Agreement and the Related Agreements to which it is or will be a party and
(ii) the consummation of the transactions contemplated hereby and by the
Related Agreements to which it is or will be a party. No other corporate proceedings on the part of
the Seller are necessary to authorize this Agreement and the Related Agreements
and the transactions contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by the Seller and, when executed and delivered by the
Acquiror, will constitute a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms. When executed and delivered by the Seller,
each Related Agreement will constitute a legal, valid and binding obligation of
the Seller enforceable against it in accordance with its terms. Notwithstanding the matters set forth in this
Section 6.2, the enforceability of this Agreement and the Related
Agreements may be limited by principles of public policy and the rules of law
governing specific performance, injunctive relief or other equitable remedies.
Section 6.3 Consents
and Approvals.
(a) Schedule 6.3(a)
of the Seller Disclosure Schedule sets forth a complete and accurate list
(the Seller
Governmental Consents) of all consents, waivers, approvals,
Orders, permits or authorizations of, or registrations, notifications,
declarations, payments or filings with, any Governmental or Regulatory
Authority that are required by or with respect to the Seller in connection with
the execution and delivery of this Agreement and the Related Agreements by the
Seller or the performance of its obligations hereunder and thereunder.
(b) Schedule 6.3(b)
of the Seller Disclosure Schedule sets forth a complete and accurate list
(the Seller Third Party
Consents) of all material consents, waivers, approvals, or
authorizations of, or notices to, any third party (other than a Governmental or
Regulatory Authority) that are required by or with respect to the Seller in
connection with the execution and delivery of this Agreement and the Related
Agreements by the Seller or the performance of its obligations hereunder and
thereunder.
27
Section 6.4 Non-Contravention. The execution and delivery by the Seller of
this Agreement and the Related Agreements does not, and the performance by
Seller of its respective obligations under this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby will not:
(a) conflict with or
result in a violation or breach of any of the terms, conditions or provisions
of the Charter Documents of the Seller;
(b) assuming the receipt
of all consents, waivers, approvals, Orders, permits or authorizations of
Governmental and Regulatory Authorities, and the termination or expiration of
any waiting periods thereunder (set forth in Schedule 6.4(b) of the
Seller Disclosure Schedule) required to be obtained by the Seller and the
making of all registrations, notifications, declarations or filings with
Governmental and Regulatory Authorities, and the termination or expiration of
any waiting periods thereunder (set forth in Schedule 6.4(b) of the
Seller Disclosure Schedule) required to be made by or with respect to the
Seller, conflict with or result in a violation or breach of any term or
provision of any Law applicable to the Seller, the Evamist Business or the
Purchased Assets; or
(c) conflict with or
result in (i) a Default under, (ii) the loss of any benefit under or (iii) the
creation of any Encumbrance on any of the Purchased Assets (including any
Assumed Contract).
Section 6.5 Contracts.
(a) All Contracts
meeting the definition of Evamist Contracts are listed on Schedule
1.1(a)(2). The Assumed Contracts are valid, binding and in full force and
effect. Except as set forth on Schedule 6.5(a)
of the Seller Disclosure Schedule, the Seller and, to the Knowledge of the Seller,
any other party thereunder, has performed all obligations required to be
performed by such party under the Assumed Contracts and is not in material
breach or default under any Assumed Contract and, to the Knowledge of the
Seller, no other party to any Assumed Contract is (with or without the lapse of
time or the giving of notice, or both) in material breach or default
thereunder. The Seller has not received
any notice of the intention of any party to terminate any Assumed
Contract. Complete and correct copies of
all Assumed Contracts and amendments thereto have been made available to
Acquiror.
(b) No Contracts other
than the Evamist Contracts and the rights of Seller under the Related
Agreements are necessary for the conduct of the Evamist Business.
Section 6.6 Intellectual
Property Rights.
(a) Schedule 6.6(a)
of the Seller Disclosure Schedule lists all Registered Evamist
Intellectual Property that is owned by or licensed to the Seller.
28
(b) To the Knowledge of
the Seller, the operation of the Evamist Business, as has been and is now being
conducted, does not presently infringe or constitute a misappropriation of any
registered or unregistered patents, trademarks, copyrights, trade secrets or
other proprietary rights of any Person, and the currently contemplated
operation of the Evamist Business will not infringe or constitute a
misappropriation thereof, and neither the Seller, nor any Subsidiary thereof,
has received any written notice from any Person, or has Knowledge of, any
actual or threatened claim or assertion to the contrary or of any facts or
alleged facts which are likely to serve as the basis for any such claim or
assertion.
(c) Any registration,
maintenance and renewal fees due in connection with the Registered Evamist
Intellectual Property have been paid in a timely manner and all necessary
documents and certificates in connection with the Registered Evamist
Intellectual Property have, for the purposes of maintaining such Registered
Evamist Intellectual Property, been filed in a timely manner with the relevant
Governmental or Regulatory Authorities, provided, however,
that the foregoing representation and warranty is made only to the Knowledge of
the Seller with respect to Registered Evamist Intellectual Property licensed to
the Seller.
(d) The Evamist
Intellectual Property set forth on Schedule 6.6(a) of the Seller
Disclosure Schedule is free and clear of all Encumbrances and no Person
other than the Seller and its Subsidiaries, including any current or former
employee or consultant of the Seller and its Subsidiaries, has any proprietary,
commercial or other interest in any of the Evamist Intellectual Property, provided, however, that the foregoing representation and
warranty is made only to the Knowledge of the Seller with respect to Evamist
Intellectual Property licensed to the Seller.
There are no existing agreements, options, commitments, or rights with,
of or to any Person to acquire or obtain any rights to, any of the Evamist
Intellectual Property set forth on Schedule 6.6(a) of the Seller
Disclosure Schedule, provided, however,
that the foregoing representation and warranty is made only to the Knowledge of
the Seller with respect to Evamist Intellectual Property licensed to the
Seller.
(e) The Seller or its
Subsidiaries have the unrestricted right to assign, transfer and/or grant to
the Acquiror all rights in the Evamist Intellectual Property that are being
assigned, transferred and/or granted to the Acquiror under this Agreement and
the Related Agreements, in each case free of any rights or claims of any Person
and without payment of any royalties, license fees or other amounts to any
Person.
(f) To the Knowledge
of the Seller, there is no unauthorized use or infringement of any of the
Evamist Patent Rights by any Person.
(g) There are no Actions
or Proceedings (including any inventorship challenges) pending or, to the
Knowledge of the Seller, threatened with respect
29
to any of the Evamist Intellectual Property
nor have any such Actions or Proceedings been brought during the past three (3)
years.
(h) Solely as it relates
to Evamist, the Seller has not entered into any Contract (i) granting any
Person the right to bring infringement actions with respect to, or otherwise to
enforce rights with respect to, any of the Evamist Intellectual Property, or
(ii) expressly agreeing to indemnify any Person against any charge of
infringement of any of the Evamist Intellectual Property.
(i) The Seller has
not entered into any Contract granting any Person the right to control the
prosecution of any of the Evamist Patent Rights.
(j) None of the
Evamist Trademarks are or have been the subject of any opposition,
cancellation, abandonment or similar proceeding, and neither the Seller, nor
any of its Subsidiaries, has received any written notice from any Person, or
has Knowledge, of any actual or threatened claim or assertion to the contrary,
or of any facts or alleged facts which are likely to serve as a basis for any
such claim or assertion.
(k) To the Knowledge of
the Seller, there are no trademarks or trademark registrations or applications
of any Person that are interfering or potentially interfering with the Evamist
Trademarks set forth on Schedule 1.1(g) or any other material Evamist
Trademarks.
(l) To the Knowledge
of the Seller, there is no unauthorized use or infringement of the Evamist
Copyrights set forth on Schedule 1.1(c).
(m) Except as set forth on Schedule 6.6(m) of the Seller Disclosure
Schedule, the Seller has not granted any licenses under or to any of the
Evamist Intellectual Property or entered into any distribution or marketing
arrangements with respect to any Evamist Intellectual Property or Evamist.
Section 6.7 Litigation. Schedule 6.7 of the Seller
Disclosure Schedule sets forth a list as of the date hereof of each
pending or, to the Knowledge of the Seller, threatened suit, claim, action,
proceeding or investigation, arising out of the conduct of the Evamist Business
or against or affecting any Purchased Assets.
Except as set forth in Schedule 6.7 of the Seller Disclosure
Schedule, none of the suits, claims, actions, proceedings or investigations
listed in Schedule 6.7 of the Seller Disclosure Schedule as to
which there is at least a reasonable possibility of adverse determination would
have, if so determined, individually or in the aggregate, a Seller Material
Adverse Effect. Except as set forth in Schedule 6.7
of the Seller Disclosure Schedule, to the Knowledge of the Seller, there are no
unasserted claims of the type that would be required to be disclosed in Schedule 6.7
of the Seller Disclosure Schedule if counsel for the claimant had
contacted the Seller that if asserted would have at least a reasonable
possibility of an adverse determination.
To the Knowledge of the Seller, except as set forth in Schedule 6.7
of the Seller Disclosure Schedule, neither the Seller nor any of its Affiliates
are a party or subject to or in Default under any Order applicable to the
conduct of the Evamist Business or any Purchased Assets or Assumed Liability,
and there are no outstanding Orders of
30
any Governmental or Regulatory Authority that apply to
the Purchased Assets that restricts the ownership, disposition or use of the
Purchased Assets by the Seller or the conduct of the Evamist Business by the
Seller, in each case, in any material respect.
Except as set forth in Schedule 6.7 of the Seller Disclosure
Schedule, there is not any suit, claim, action, proceeding or investigation by
the Seller pending, or which the Seller intends to initiate, against any other
Person arising out of the conduct of the Evamist Business. Except as set forth in Schedule 6.7
of the Seller Disclosure Schedule, to the Knowledge of the Seller, there is no
pending or threatened investigation of, or affecting the conduct of the Evamist
Business or any Purchased Assets or Assumed Liability.
Section 6.8 Permits;
Compliance with Law.
(a) Schedule 6.8
of the Seller Disclosure Schedule sets forth a true and complete list of all
material authorizations, licenses, permits, certificates, approvals,
exemptions, consents, confirmations, orders, registrations, product
registrations, concessions, franchises, waivers and clearances of an
Governmental or Regulatory Authority (including all authorizations under the
FDA Act, the Public Health Services Act, the Controlled Substances Act and the
regulations of the FDA and the United States Drug Enforcement Agency
promulgated thereunder) necessary for the Seller to use, test, manufacture,
distribute, own, lease and operate the Purchased Assets and to carry on the
Evamist Business as it is being conducted as of the date hereof (the Required Permits),
and the Seller is in possession of all Required Permits and all Required
Permits are valid and in full force and effect.
(b) The Evamist Business has been and is
conducted by the Seller and its Subsidiaries in material compliance with all
Required Permits and applicable Law by which any Purchased Asset is bound.
(c) No Governmental or Regulatory Authority
has notified the Seller or any of its Subsidiaries that the Evamist Business or
the Purchased Assets were or are in violation of any Law or Required Permit or
the subject of any investigation in any jurisdiction where the Evamist Business
is conducted; and, to the Knowledge of the Seller, there are no grounds for the
same.
(d) No Governmental or Regulatory Authority
has notified the Seller or any of its Subsidiaries of any facts or
circumstances which would lead to any suspension, loss of or material
modification to any Required Permit or refusal by a Governmental or Regulatory
Authority to renew or accept for filing any Required Permit on terms less
advantageous, individually or in the aggregate, to the Seller and its
Subsidiaries than the terms of those Required Permits currently in force and, to
the Knowledge of the Seller, there are no facts or circumstances providing
grounds for the same.
(e) (i) All applications,
submissions, information, claims, reports and statistics, and other data and
conclusions derived therefrom, utilized as the basis for or submitted in
connection with any and all requests for a Required Permit
31
of the FDA or
other Governmental or Regulatory Authority relating to the Purchased Assets,
when submitted to the FDA or other Governmental or Regulatory Authority were
true, complete and correct in all material respects as of the date of
submission and any legally necessary or required updates, changes, corrections
or modifications to such applications, submissions, information, claims,
reports or statistics have been submitted to FDA and other Governmental or
Regulatory Authority.
(ii) All pre-clinical and clinical trials
conducted by or under the authority of the Seller with regard to the Purchased
Assets were and are being conducted in material compliance with experimental
protocols, procedures and controls pursuant to accepted professional scientific
standards and all applicable Laws promulgated by the FDA relating thereto,
including without limitation the FDA Act and its applicable implementing
regulations at 21 C.F.R. Parts 50, 54, 56 and 312, as amended.
(iii) There are no investigations, audits, actions or
other proceedings pending with respect to a violation by the Seller or any of
its Subsidiaries of the FDA Act or other applicable Law that would reasonably
be expected to result in administrative, civil or criminal liability, and, to
the Knowledge of the Seller, there are no facts or circumstances existing that
would reasonably be expected to serve as a basis for such an investigation,
audit, action or other proceeding, in each case with respect to the Evamist
Business.
(iv) No Governmental or Regulatory Authority has
commenced or threatened to initiate any action to withdraw the Evamist Product
Registrations or request the recall of Evamist, or commenced or threatened to
initiate any action to enjoin production of Evamist at any facility in the
Evamist Territory, nor have the Seller or any of its Subsidiaries received any
notice to such effect and, to the Knowledge of the Seller, there are no grounds
for such action.
(v) None of the employees of the Seller, the
Seller or any of its Subsidiaries, or their collective officers or agents, have
been disqualified or debarred by the FDA for any purpose, or have been charged
with or convicted under United States federal Law for conduct relating to the
development or approval or otherwise relating to the regulation of any drug
product under the Generic Drug Enforcement Act of 1992, the FDA Act or any
other similar Law or have made an untrue statement of a material fact to any
Governmental or Regulatory Authority with respect to Evamist (whether in any
submission to such Governmental or Regulatory Authority or otherwise), or
failed to disclose a material fact required to be disclosed to any Governmental
or Regulatory Authority with respect to Evamist. Neither the Seller or any of its Subsidiaries
are the subject of any pending or, to the Knowledge of the Seller, threatened
investigation in respect of the Seller of any of its Subsidiaries or its products,
by the FDA pursuant to its Fraud, Untrue Statements of Material Facts,
Bribery,
32
and Illegal Gratuities Final Policy set forth in 56 Fed. Reg. 46191
(September 10, 1991) and any amendments thereto.
Section 6.9 Evamist
Inventory.
(a) All of the Evamist Inventory (i) is free
of any material defect or deficiency and (ii) was produced or manufactured in
accordance with the specifications for Evamist as set forth in the applicable
Evamist Product Registrations and in compliance with applicable Law. The Seller at Closing will have good and marketable
title to the Evamist Inventory free and clear of any Encumbrances.
(b) The
Initial Evamist Inventory Value represents the value of the Evamist Inventory
as of February 28, 2007 and was calculated from the Sellers financial systems,
based upon the historical costs of materials, determined in accordance with GAAP consistently applied, and as set
forth in reasonable detail on Schedule 6.9(b) of the Seller
Disclosure Schedule; provided,
that for purposes of calculating the Initial Evamist Inventory Value, the
inventory of the Evamist Business shall not include any Evamist Inventory that
is damaged, defective, unusable or which otherwise fails to meet the
requirements of Section 6.9(a).
For clarity, none of the Evamist Inventory has been cleared for commercial
sale and all human uses thereof are subject to appropriate exemptions.
Section 6.10 Suppliers. The Seller has used reasonable business
efforts to maintain, and, to the Knowledge of the Seller, currently maintains,
good working relationships with all of the suppliers to the Evamist
Business. Schedule 6.10 of
the Seller Disclosure Schedule also specifies for the year beginning
January 1, 2006 to the date of this Agreement the names of the suppliers
to the Evamist Business. None of such
suppliers has given the Seller or any of its Subsidiaries notice terminating,
canceling or threatening to terminate or cancel any Contract or relationship
with the Seller or any of its Subsidiaries relating to the Evamist Business. To
the Knowledge of Seller, such suppliers are manufacturing and otherwise
operating in compliance with applicable FDA requirements with respect to the
products and materials supplied to Seller.
Section 6.11 [Intentionally
Deleted.]
Section 6.12 Environmental
Matters.
Except as set forth on Section 6.12 of the
Seller Disclosure Schedule:
(a) the Seller and its Subsidiaries, to the
extent related to any property or facility owned, leased or operated by Seller
in the conduct of the Evamist Business (the Properties), have obtained those Evamist Governmental
Permits required by Environmental Law and necessary for the conduct of the
Evamist Business, and the Seller and its Subsidiaries are in material
compliance with such Evamist Governmental Permits and other requirements of
Environmental Law;
33
(b) the Seller and its Subsidiaries, to the
extent related to the Evamist Business or the Properties, have not received any
written notice from any Governmental Entity or any other Person or entity
alleging a violation of, or liability under, Environmental Laws related to any
matter which has not been fully resolved; and
(c) no notice, registration, reporting or
other filing or investigation, response or corrective action is required by the
Seller or its Subsidiaries under any Environmental Law in connection with, or
as a result of, the execution and delivery of this Agreement, or the
consummation of the transactions contemplated hereby.
Section 6.13 Absence
of Certain Changes or Events.
(a) Except as set forth on Schedule 6.13(a)
of the Seller Disclosure Schedule, since December 31, 2006, there has not been
a Seller Material Adverse Effect.
(b) Except as set forth in Schedule 6.13(b)
of the Seller Disclosure Schedule or as otherwise expressly contemplated by
this Agreement or the Related Agreements, since December 31, 2006 to the date
of this Agreement, the Seller has conducted the Evamist Business in the
Ordinary Course of Business, and the Seller has not, with respect to the
Evamist Business or any of the Purchased Assets:
(i) subjected any of the Purchased Assets to
any Encumbrances;
(ii) sold, transferred, leased, subleased,
licensed or otherwise disposed of, to any third party, any Purchased Assets or
assets necessary for the conduct of the Evamist Business;
(iii) sold, licensed or sublicensed or otherwise
transferred any rights to any third party under any Purchased Assets;
(iv) entered into any Assumed Contract or accelerated,
cancelled, modified or terminated any material Assumed Contract, other than in
the Ordinary Course of Business;
(v) surrendered, revoked or otherwise terminated
any Evamist Governmental Permits, except in connection with any renewal or
reissuance thereof;
(vi) incurred Assumed Liabilities, other than in the
Ordinary Course of Business;
34
(vii) waived,
released or assigned any rights, which rights, but for such waiver, release or
assignment, would have been classified as Purchased Assets, other than in the
Ordinary Course of Business;
(viii) experienced
any damage, destruction or casualty loss (whether or not covered by insurance)
with respect to any Purchased Asset other than as a result of ordinary wear and
tear, where applicable;
(ix) delayed or postponed the payment of any Assumed
Liability outside the Ordinary Course of Business;
(x) with respect to the Purchased Assets or the
Evamist Business, made any election or change to any election in respect to
Taxes, adopted or changed any accounting method in respect to Taxes, entered
into any Tax allocation agreement, Tax sharing agreement, Tax indemnity
agreement or closing agreement, settled or compromised on any claim, notice,
audit report or assessment in respect of Taxes, consented to any extension or
waiver of the limitation period applicable to any claim or assessment in
respect of Taxes, changed any annual Tax accounting period, filed any amended
Tax Return, or surrendered any right to claim a Tax refund; or
(xi) agreed, whether in writing or otherwise, to do
any of the foregoing, except as expressly contemplated by this Agreement.
Section 6.14 Title
to Assets; Sufficiency of Assets.
(a) The Seller has, and at the Closing the
Seller will deliver to Acquiror, good and valid title to or, in the case of
licensed assets, a valid and binding license to the Purchased Assets free and
clear of all Encumbrances, a valid and binding license under the Seller
Multi-Application Technology pursuant to Section 2.5 and, as applicable,
a valid and binding sublicense under the Licensed Intellectual Property (as
defined in the Acrux License) pursuant to the Sublicense Agreement. Except as set forth on Schedule 6.14(a)
of the Seller Disclosure Schedule, no Subsidiary of the Seller owns,
beneficially or of record, or has any rights, title or interest in, to or under
any Purchased Asset or conducts any part of the Evamist Business, and there are
no employees of any Subsidiary of the Seller employed in the Evamist Business
or who perform tasks that are necessary for the proper operation of the Evamist
Business.
(b) The Purchased Assets (together with the
rights of the Acquiror and its Affiliates under the Related Agreements), the
rights granted pursuant to Section 2.5 and, as applicable, pursuant to the
Sublicense Agreement constitute all of the assets, Contracts, Required Permits,
rights and services required for the continued operation of the Evamist Business
by the Acquiror as conducted by the Seller during the past twelve (12) months.
(c) Each item of equipment which is a
Purchased Asset (other than equipment set forth on Schedule 6.14(c)
of the Seller Disclosure Schedule) is in
35
good operating
condition for the purposes for which it is currently being used, subject to
ordinary wear and tear, is free from any material defect and has been
maintained in all material respects in accordance with generally accepted
industry practice.
(d) The Seller has not experienced any
out-of-stock or back-order situation with respect to the Evamist Business
(e) The Seller does not own or control any
Evamist Product Improvements, and has not granted to any third party or enabled
any third party to make any Evamist Product Improvements.
Section 6.15 Disclosure. The Seller has made available to Acquiror all
information to the Knowledge of the Seller concerning the safety, efficacy,
side effects or toxicity of Evamist (in animals or humans), associated with or
derived from any pre-clinical or clinical use, studies, investigations or tests
of Evamist (in animals or humans) in all indications for Evamist that has been
submitted to the FDA or studied by the Seller, whether or not determined to be
attributed to Evamist.
Section 6.16 Taxes.
(a) Filing of Tax Returns. To the extent relating to the Purchased
Assets or the Evamist Business, (i) the Seller has duly and timely filed (or
caused to be filed) with the appropriate taxing authorities all Tax Returns
required to be filed through the date hereof, (ii) all such Tax Returns filed
are complete and accurate in all respects and (iii) all Taxes owed by the
Seller (whether or not shown on any Tax Return) have been paid. The Seller is
not currently the beneficiary of any extension of time within which to file any
Tax Return with respect to the Purchased Assets or the Evamist Business.
(b) Liens. There are no liens for Taxes (other than for
current Taxes not yet due and payable) on any of the Purchased Assets. None of the Purchased Assets are property
that is required to be treated for Tax purposes as being owned by any other
Person.
(c) Audits, Investigations, Disputes or
Claims. No deficiencies for Taxes
have been claimed, proposed or assessed by any taxing or other Governmental
Authority against the Seller with respect to the Purchased Assets or the
Evamist Business, and there are no pending or, to the Knowledge of the Seller,
threatened audits, investigations, disputes or claims or other actions for or
relating to any Liability for Taxes with respect to the Purchased Assets or the
Evamist Business, and there are no
matters under discussion with any Governmental Authorities, or known to the
Seller, with respect to Taxes that are likely to result in an additional
Liability for Taxes with respect to the Purchased Assets or the Evamist
Business. The Seller has delivered or
made available to Acquiror complete and accurate copies of all examination
reports and statements of deficiencies assessed against or agreed to by the
Seller since
36
December 31,
2004 with respect to the Purchased Assets or the Evamist Business. With respect to the Purchased Assets or the
Evamist Business, the Seller has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(d) Tax Sharing Agreements. There are no Tax-sharing agreements or
similar arrangements (including indemnity arrangements) with respect to or
involving the Purchased Assets or the Evamist Business, and after the Closing
Date, the Purchased Assets and the Evamist Business shall not be bound by any
such Tax-sharing agreements or similar arrangements or have any Liability
thereunder for amounts due in respect of periods prior to the Closing Date.
(e) No Withholding. The Seller has withheld and paid all Taxes
concerning the Evamist Business required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.
Section 6.17 Brokers. The Acquiror has no, and will have no,
obligation to pay any brokers (including real estate brokers), finders,
investment bankers, financial advisors or similar fees in connection with this
Agreement or the transactions contemplated hereby by reason of any action taken
by or on behalf of the Seller or any of its Subsidiaries.
ARTICLE
VII.
REPRESENTATIONS
AND WARRANTIES OF THE ACQUIROR
Except as set forth in the disclosure schedule
supplied by the Acquiror to the Seller and dated as of the date hereof (the Acquiror Disclosure Schedule),
which the Acquiror Disclosure Schedule identifies the Section (or, if
applicable, subsection) to which such exception relates (provided,
however, that such disclosure shall also apply to particular matters
represented or warranted in other Sections and subsections to the extent that
it is readily apparent from the text of such disclosure), the Acquiror
represents and warrants to the Seller as follows:
Section 7.1 Corporate
Organization. The Acquiror is duly
incorporated, validly existing and, where applicable, in good standing under
the laws of Delaware and has all requisite power and authority to own its
assets and carry the Evamist Business as contemplated by this Agreement and the
Related Agreements and is duly authorized to conduct its business and is in
good standing in each jurisdiction where such qualification is required to own
the Purchase Assets or conduct the Evamist Business as contemplated by this
Agreement and the Related Agreements, except where the failure to be so
qualified or in good standing would not be reasonably expected to have an
Acquiror Material Adverse Effect. The
Charter Documents of the Acquiror are effective under the applicable Laws and
are current, correct and complete.
Section 7.2 Authority
of the Acquiror. The Acquiror has
all necessary power and authority and has taken all actions necessary to enter
into this Agreement, to carry out the transactions contemplated hereby and to
conduct the Evamist Business as contemplated by this Agreement and the Related
Agreements. The board of directors of
the Acquiror has taken all
37
action required by Law, its Charter Documents or
otherwise to be taken by it to authorize the execution and delivery by the
Acquiror of this Agreement and the Related Agreements to which the Acquiror is
or will be a party and the consummation of the transactions contemplated hereby
and thereby. This Agreement has been
duly and validly executed and delivered by the Acquiror and, when executed and
delivered by the Seller, will constitute a legal, valid and binding obligation
of the Acquiror enforceable against it in accordance with its terms. When executed and delivered by the Acquiror,
each Related Agreement to which the Acquiror is or will be a party will
constitute a legal, valid and binding obligation of the Acquiror enforceable
against it in accordance with its terms. Notwithstanding the matters set forth
in this Section 7.2, the enforceability of this Agreement and the
Related Agreements may be limited by principles of public policy and the rules
of law governing specific performance, injunctive relief or other equitable
remedies.
Section 7.3 Non-Contravention. The execution and delivery by the Acquiror of
this Agreement and each of the Related Agreements does not, and the performance
by it of its obligations under this Agreement and each of the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby will not:
(a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the Charter Documents
of the Acquiror;
(b) assuming the receipt of all consents,
waivers, approvals, Orders or authorizations of Governmental and Regulatory
Authorities required to be obtained by the Acquiror and the making of all registrations,
declarations or filings with Governmental and Regulatory Authorities required
to be made by the Acquiror, conflict with or result in a violation or breach of
any term or provision of any Law applicable to the Acquiror; or
(c) conflict with or result in a Default
under any Contract to which the Acquiror is a party or by which the Acquiror or
any of its assets is bound or to conduct the Evamist Business as contemplated
by this Agreement and the Related Agreements.
Section 7.4 Litigation. There are no Actions or Proceedings pending,
or to the Knowledge of the Acquiror, threatened, against or in connection with
(i) this Agreement or any Related Agreement or (ii) the transactions
contemplated by this Agreement. The
Acquiror is not subject to any Order that could reasonably be expected to
materially impair or delay the ability of the Acquiror to perform its
obligations hereunder.
Section 7.5 Brokers. The Acquiror has no, and will have no,
obligation to pay any brokers, finders, investment bankers, financial advisors
or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of the
Acquiror.
38
Section
7.6 Financing. The Acquiror has, or has available to it,
sufficient financial resources so as to enable the Acquiror to satisfy its
financial obligations under this Agreement without recourse to any outside
financing other than such outside financing as the Acquiror has already secured
access to as of the date of this Agreement.
ARTICLE
VIII.
COVENANTS
OF THE PARTIES
Section 8.1 Operation
of the Evamist Business.
(a) Between the date of this Agreement and
the Closing Date, except as expressly permitted by this Agreement, the Seller
shall conduct the Evamist Business only in the Ordinary Course of Business in
substantially the same manner as previously conducted (including with respect
to research and development efforts, advertising, manufacturing, capital
expenditures and inventory levels) and use commercially reasonable efforts to
keep intact the Purchased Assets and the Evamist Business, and preserve the
relationships of the Evamist Business with customers, suppliers, licensors,
licensees, distributors, regulatory authorities and other Persons, in each
case, who are material to the Evamist Business.
Without limiting the generality of the foregoing, from the date of this
Agreement to the Closing, the Seller shall:
(i) notify the Acquiror prior to implementing
material operational decisions relating to the Evamist Business;
(ii) keep in full force and effect, without
amendment, all material rights relating to the Evamist Business;
(iii) comply in all material respects with all
requirements of Law and contractual obligations, in each case applicable to the
operation of the Evamist Business;
(iv) maintain all Evamist Books and Records;
(v) maintain the Purchased Assets in good
operating order and condition, reasonable wear and tear excepted; and
(vi) upon any damage, destruction or loss of any
Purchased Asset, apply any and all insurance proceeds received with respect
thereto to the prompt repair, replacement and restoration thereof to the
condition of such Purchased Asset before such event or, if required, to such
other (better) condition as may be required by applicable Law.
(b) Without limiting the generality of the
lead-in paragraph of Section 8.1(a), and except as set forth in Schedule 8.1(b)
or as otherwise expressly permitted by the terms of this Agreement, from the
date of this
39
Agreement to
the Closing, without the prior written consent of the Acquiror (which shall not
be unreasonably withheld), the Seller shall not:
(i) subject any Purchased Assets to any
Encumbrances;
(ii) sell, transfer, lease, sublease, license or
otherwise dispose of or grant any option or rights in, to or under any
Purchased Assets;
(iii) enter into any Contract that would have been
required to be set forth on Schedule 1.1(a)(2) if such Contract had
existed as of the date hereof, or terminate, extend or amend any Assumed
Contract set forth in Schedule 1.1(a)(1);
(iv) abandon or terminate any clinical trials relating
to Evamist (other than for safety concerns or in accordance with the terms of
existing agreements with respect to such clinical trials) or terminate the
Sellers support of clinical trials sponsored by clinical investigators with
respect to Evamist;
(v) commence, sponsor or commit to participate in
any clinical trials or investigator sponsored trials with respect to Evamist or
provide any clinical grants with respect to Evamist;
(vi) abandon any patents or patent filings or any
litigation seeking to enforce the Sellers interest in any Evamist Intellectual
Property used in the conduct of the Evamist Business;
(vii) take
any action that would, or that could reasonably be expected to, result in any
of the conditions to the purchase and sale of the Purchased Assets set forth in
Article IX not being satisfied;
(viii) to the
extent that doing so would adversely affect the Purchased Assets or the Evamist
Business, make any election or change to any election in respect to Taxes,
adopt or change any accounting method in respect to Taxes, enter into any Tax
allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing
agreement, settle or compromise on any claim, notice, audit report or assessment
in respect of Taxes, consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes, change any
annual Tax accounting period, file any amended Tax Return, or surrender any
right to claim a Tax refund; or
(ix) agree, whether in writing or otherwise, to do
any of the foregoing set forth in clauses (i) through (viii) above.
(c) The Seller shall promptly advise Acquiror
in writing of the occurrence of any matter or event that is material to the business,
assets, condition (financial or otherwise), prospects or results of the
operations of the Evamist Business.
40
Section 8.2 Reasonable
Efforts.
(a) Subject to Sections 8.2(b), and
following the date hereof, each of the parties hereto shall use its commercially
reasonable efforts to take, or cause to be taken, all action, or to do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws to consummate and make effective the transactions contemplated by this
Agreement and the Related Agreements and to cause the conditions to the
obligations of the other party hereto to consummate the transactions
contemplated hereby to be satisfied at the Closing, including obtaining all
consents and approvals of all Persons and Governmental or Regulatory
Authorities and removing any injunctions or other Encumbrances on the Purchased
Assets, impairments or delays the obtaining or removal of which are necessary,
proper or advisable to the consummation of the transactions contemplated by
this Agreement and the Related Agreements.
The parties hereto shall cooperate with each other in connection with
the taking of all actions referenced in the preceding sentence, including
providing (i) such reasonable assistance as the other party may request in connection
with its preparation of any required filings or submissions and (ii) copies of
all such filings and submissions to the non-filing party and its advisors prior
to filing or submission and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith. The Seller and the Acquiror shall have the
right to review in advance, and, to the extent practicable, each shall consult
the other on, all the information relating to the Seller or the Acquiror, as
the case may be, that appears in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the transactions contemplated by this Agreement (including any filing
contemplated by this Section 8.2(a)).
The Seller and the Acquiror may, as each deems reasonably advisable and
necessary, designate any competitively sensitive information provided to the
other under this section as outside counsel only. Such information shall be given only to
outside counsel of the recipient. In
addition, the Seller and the Acquiror may redact any information from such
documents shared with the other party or its counsel that is not pertinent to
the subject matter of the filing or submission.
(b) The Acquiror and the Seller shall
each: (i) take all actions necessary to
make the filing required of such party or any of its Affiliates under the HSR
Act within ten (10) Business Days after the date hereof; (ii) comply at
the earliest practicable date with any request for additional information or
documentary material received by such party or any of its Affiliates from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act; and (iii) cooperate with the other party in connection
with any filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated under
this Agreement commenced by either the Federal Trade Commission or the
Antitrust Division of the Department of Justice or state attorneys
general. Each of the Seller, on one
hand, and the Acquiror, on the other hand, shall be responsible for its own
legal fees for preparing its portion of the HSR Act
41
filings. For the avoidance of doubt, the Acquiror and
Seller shall share equally any required filing fees under the HSR Act.
(c) In furtherance and not in limitation of
the other covenants of the parties contained herein, each party shall use
commercially reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the consummation of the transactions contemplated
hereby under any antitrust Law. If any
administrative, judicial or legislative Action or Proceeding is instituted (or
threatened to be instituted) challenging the sale and purchase of any of the
Purchased Assets or any other transaction as violative of any antitrust Law,
each party shall cooperate and use commercially reasonable efforts to
vigorously contest and resist any such Action or Proceeding, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other Order that is in effect and that restricts, prevents or prohibits
consummation of the sale and purchase of the Purchased Assets or any other
transaction contemplated under this Agreement; provided,
however, that nothing in this
Agreement shall require the Acquiror or its Subsidiaries to commit to any
divestitures, licenses or hold separate or similar arrangements with respect to
its assets or conduct of business arrangements, whether as a condition to
obtaining any approval from a Governmental and Regulatory Authority or any
other Person for any other reason.
(d) Each party shall promptly inform the other
parties of any material communication received by such party from the Federal
Trade Commission or the Antitrust Division of the Department of Justice
regarding any of the transactions contemplated under this Agreement. Each party shall advise the other party
promptly of any understandings, undertakings or agreements that such party
proposes to make or enter into with the Federal Trade Commission or the
Antitrust Division of the Department of Justice in connection with the
transactions contemplated under this Agreement.
(e) The Seller shall (i) permit the Acquiror
and its Subsidiaries to correspond and meet with the FDA to discuss the
acquisition by the Acquiror of all Evamist Product Registrations and the
transfer of manufacturing and distribution of Evamist to the Acquiror, (ii)
include the Acquiror in any discussions with the FDA regarding any Evamist
Product Registration, (iii) if reasonably requested by the Acquiror, upon
reasonable notice, attend meetings or conference calls involving the Acquiror
or one of its Subsidiaries and the FDA related to any of the foregoing and (iv)
cooperate with Acquiror by submitting a transfer letter to the FDA, in a form
to be mutually agreed upon by the parties prior to the Closing (the FDA Transfer Letter), to have the FDA
transfer all Evamist Product Registrations to one of Acquirors Subsidiaries or
to Acquiror at such time as requested by the Acquiror in accordance with Section
8.5.
(f) Notwithstanding anything in this
Agreement to the contrary, the Acquiror shall not be required to expend money,
commence any litigation or
42
offer or grant
any accommodation (financial or otherwise) to any third party in connection
with obtaining any consent, substitution, approval or amendment required to
assign or transfer any Purchased Asset to the Acquiror. In the event any such consent, substitution,
approval or amendment is not obtained prior to the Closing, the Seller shall
continue to use commercially reasonable efforts to obtain such consent, waiver
or approval after the Closing.
(g) Without limiting any other rights and
obligations under this Section 8.2, following the date hereof, each of
the parties hereto shall use its commercially reasonable efforts to obtain the
Acrux License Assignment Consent prior to the Closing. In the event that the Acrux License
Assignment Consent is not obtained prior to the Closing, each of the parties
hereto shall continue to use commercially reasonable efforts to obtain the
Acrux License Assignment Consent after the Closing. In the event that the Acrux License
Assignment Consent is obtained after the Closing, the parties hereto agree that
the Sublicense Agreement shall terminate, and is hereby terminated, as of the
effectiveness of the Acrux License Assignment Consent.
Section 8.3 Access;
Confidentiality.
(a) From the date hereof until the Closing,
the Seller shall permit the Acquiror and its representatives to have reasonable
access, during regular business hours and upon reasonable advance notice of no
less than one (1) Business Day , to all the personnel, properties, Contracts,
Tax Returns, the Evamist Books and Records, the Assumed Liabilities or the
Evamist Business, and the Seller shall furnish promptly to the Acquiror such
information in the Sellers possession concerning the Purchased Assets, the
Assumed Liabilities or the Evamist Business as the Acquiror may reasonably
request; provided, however, that any such access shall be
conducted in a manner as not to unreasonably interfere with the operation of
the Evamist Business and the Seller shall not be required to provide any
financial, operating or other information that is not currently available
through the Sellers existing business processes and the creation of which
would be unduly burdensome on the Seller.
The Seller may redact such portions of its books and records that do not
relate to the Purchased Assets, the Assumed Liabilities or the Evamist
Business. The Seller shall instruct its
respective employees, counsel and financial advisors to provide reasonable
cooperation to the Acquiror in its investigation of the Evamist Business.
(b) The Seller shall implement procedures to
keep confidential, and cause its Affiliates and its and their officers,
directors, employees, representatives and advisors to keep confidential, all
information relating to the Purchased Assets, Assumed Liabilities and Evamist
Business, except as required by Law and except for information which is or
becomes generally available to the public other than as a result of a
disclosure by the Seller or its Affiliates and its and their officers,
directors, employees, representatives or agents. The Seller shall not disseminate any such
information other than to
43
those
employees of the Seller who have a business need to access such information (i)
in connection with the preparation of the Sellers accounting records, (ii) in
connection with the preparation of any Tax Returns or with any Tax audits,
(iii) in connection with any suit, claim, action, proceeding or investigation
relating to the Purchased Assets, the Assumed Liabilities or the Evamist
Business or (iv) in connection with the operation of the Evamist Business in
the Ordinary Course of Business prior to the Closing. Effective upon Closing, upon written request
of the Acquiror, from time to time, the Seller shall (at the Acquirors sole
cost and expense) use reasonable efforts to enforce the Sellers rights with
respect to the use and maintenance of
confidential information relating to the Evamist Business under all
confidentiality agreements between the Seller and any other potential acquiror
of the Evamist Business that were entered into in contemplation of the sale of
the Evamist Business. The Seller shall
not waive or release its rights under such confidentiality agreements with
respect to the use and maintenance of such confidential information with
respect to the Evamist Business.
(c) Information
within the Purchased Assets disclosed to the Acquiror pursuant to this
Agreement (including in the Seller Disclosure Schedule and the other Schedules
delivered pursuant to this Agreement) shall be held as Confidential Information
(as defined in the Confidentiality Agreement) and shall be subject to the
Confidentiality Agreement to the extent such information is Confidential
Information as of the date hereof.
(d) The
parties hereto, or any of their respective Affiliates or any of their
respective officers or directors, shall cooperate as may be reasonably required
in connection with the investigation and defense of any suit, action, claim,
proceeding or investigation, in each case that is adverse to a third party,
relating to the Purchased Assets, the Assumed Liabilities or the Evamist
Business; provided, however, that the requesting party shall
reimburse the non-requesting party promptly for all reasonable out-of-pocket
costs and expenses incurred in connection with any such requests, including
reasonable legal fees and costs.
(e) Following
the Closing, for so long as such information is retained by the Seller (which
shall be for a period of at least three (3) years), the Seller shall permit the
Acquiror and its authorized representatives to have reasonable access and
duplicating rights during normal business hours, upon reasonable prior notice,
to the Seller and its books, records and personnel to the extent relating to
the Purchased Assets, the Assumed Liabilities or the Evamist Business, to the
extent such access may reasonably be required:
(i) in connection with the preparation of the Acquirors accounting
records or with any audits thereof, (ii) in connection with any suit,
claim, action, proceeding or investigation relating to the Purchased Assets,
the Assumed Liabilities or the Evamist Business (other than such a suit, claim,
action, proceeding or investigation that is adverse to the Seller) or
(iii) in connection with any required regulatory filing relating to the
Purchased Assets, the Assumed
44
Liabilities or
the Evamist Business; provided that
the Acquiror shall reimburse the Seller promptly for all reasonable and
necessary out-of-pocket costs and expenses incurred by the Seller in connection
with any such request. Notwithstanding
the foregoing, the Seller need not disclose to the Acquiror any information: (i) relating
to pricing or other matters that are highly sensitive if (I) providing such
portions of documents or information, in the good faith opinion of the Sellers
counsel, would reasonably be expected to result in antitrust difficulties for
the Seller and (II) the Seller designates such information as outside counsel
and retained experts only and discloses such information to Acquirors outside
counsel and retained experts; or (ii) which the Seller is prohibited from
disclosing by applicable Law. If any
material is withheld by the Seller pursuant to the immediately preceding
sentence, the Seller shall inform the Acquiror as to the general nature of what
is being withheld. The Seller may redact
such portions of such books and records that do not relate to the Purchased
Assets, the Assumed Liabilities or the Evamist Business.
(f) Following
the Closing, for so long as such information is retained by Acquiror (which
shall be for a period of at least three (3) years), the Acquiror shall permit
the Seller and its authorized representatives to have reasonable access and
duplicating rights during normal business hours, upon reasonable prior notice,
to the Acquiror and the Books and Records included in the Purchased Assets and
the employees of the Acquiror or its Subsidiaries, to the extent that such
access may reasonably be required: (i) in connection with the preparation of
the Sellers accounting records or with any audits thereof, (ii) in connection
with any suit, claim, action, proceeding or investigation relating to the
Purchased Assets, the Assumed Liabilities or the Evamist Business (other than
such a suit, claim, action, proceeding or investigation that is adverse to the
Acquiror) or (iii) in connection with any required regulatory filing
relating to the Purchased Assets, the Assumed Liabilities or the Evamist
Business; provided that the Seller shall reimburse the Acquiror promptly for
all reasonable and necessary out-of-pocket costs and expenses incurred by the
Acquiror in connection with any such request, including reasonable attorney
fees and costs. Notwithstanding the
foregoing, the Acquiror need not disclose to the Seller any information: (A)
relating to pricing or other matters that are highly sensitive if (I) providing
such portions of documents or information, in the opinion of the Acquirors
counsel, might reasonably result in antitrust difficulties for the Acquiror and
(II) the Acquiror designates such information as outside counsel and retained
experts only and discloses such information to the Sellers outside counsel
and retained experts or (B) which the Acquiror is prohibited from disclosing by
applicable Law. If any material is
withheld by the Acquiror pursuant to the immediately preceding sentence, the
Acquiror shall inform the Seller as to the general nature of what is being
withheld. The Acquiror may redact such portions of such Books and Records that
do not relate to the Purchased Assets, the Assumed Liabilities or the Evamist
Business.
45
Section 8.4 Public
Announcements; Confidentiality.
Except as otherwise required by applicable Law or applicable stock
exchange requirements, prior to the Closing, neither the Acquiror nor the
Seller shall, and each of them shall cause their respective Affiliates,
representatives and agents not to, issue or cause the publication of any press
release or public announcement with respect to the transactions contemplated by
this Agreement without the express prior written approval of the other party,
which approval shall not be unreasonably withheld or delayed; provided, that each of the Seller and the Acquiror may make
any public statement in response to questions by the press, analysts, investors
or those attending industry conferences or financial analyst calls, or issue
press releases, so long as any such public statement or press release is not
inconsistent with prior public disclosures, press releases or public statements
approved by the other party pursuant to this Section 8.4 and which do
not reveal non-public information about the other party. The parties hereto agree to issue separate
individual press releases, each in a form approved by the other party, to
announce the execution of this Agreement and the payment of the FDA Milestone
Payment pursuant to Section 4.2(a).
Section 8.5 Regulatory
Matters.
(a) Prosecution
of Evamist NDA. Until the Evamist
NDA Approval Date, the Seller shall control the prosecution of the Evamist NDA
before the FDA, subject to the terms and conditions of this Section 8.5. Unless and until the Evamist FDA Submissions
are assigned to the Acquiror pursuant to Section 8.5(b), the Seller
shall use efforts (consistent with the past practices of the Seller with
respect to the Evamist NDA and other NDAs of the Seller), at its expense, to
obtain Evamist NDA Approval as soon as practicable. In connection therewith, the Seller shall
continue to be the party of record with respect to the Evamist NDA and,
following the Closing, shall keep the Acquiror fully informed with respect to
the prosecution of the Evamist NDA and (i) promptly provide to the Acquiror or
its designee any correspondence from the FDA with respect thereto and (ii) no
later than ten (10) Business Days prior to the submission thereof provide to
the Acquiror or its designee any proposed correspondence to the FDA with respect
thereto, including copies of any and all underlying data to accompany any such
correspondence. Following the Closing,
the Seller shall consider in good faith any comments of the Acquiror or its
designee with respect to such correspondence and include any reasonable
comments proposed by the Acquiror.
Following the Closing, the Seller shall also notify the Acquiror of any
meetings with the FDA with respect to the Evamist NDA, and the Acquiror or its
designee shall have the right to participate in such meetings and any internal
pre-meetings with respect thereto. The
Acquiror agrees and acknowledges that, following the Closing until the Evamist
NDA Approval Date, the Seller shall have the right to use any and all Purchased
Assets solely and to the extent necessary for carrying out the Sellers right
hereunder to prosecute the Evamist NDA and obtain the Evamist NDA
Approval. Without limiting any other
obligation of the Acquiror under this Agreement, the Acquiror shall cooperate
with the Seller in the Sellers efforts to obtain Evamist NDA Approval,
including providing to the Seller all relevant data, information and material
reasonably requested by the Seller which the Seller shall not disclose to any
third Person or use except solely and to the
46
extent necessary
for prosecuting the Evamist NDA and obtaining the Evamist NDA Approval.
(b) Optional
Assignment of Evamist FDA Submissions Prior to Evamist NDA Approval. In the event that the Seller fails to use
efforts (consistent with the past practices of the Seller with respect to the
Evamist NDA and other NDAs of the Seller), to obtain Evamist NDA Approval as
soon as practicable, and the Acquiror provides at least ten (10) Business Days
prior written notice thereof to the Seller, the Seller shall promptly assign to
the Acquiror the Evamist FDA Submissions and all related files, which
assignment shall be effected by the Seller submitting the FDA Transfer Letter to the
FDA. The Seller shall cooperate with
Acquiror in obtaining the assignment and shall take all actions reasonably
requested by Acquiror necessary, proper or advisable to effectuate the
assignment. Thereafter, the Acquiror shall (i) be the party of record with
respect to the Evamist NDA and (ii) use efforts (consistent with the past
practices of the Acquiror with respect to other NDAs of the Acquiror), at its
expense, to obtain Evamist NDA Approval as soon as practicable and (iii)
provide to the Seller or the third party purchaser of the Data Package, as
applicable, such information as is necessary for implementing Section 2.8. In connection therewith, the Seller shall
reasonably cooperate with the Acquiror in accordance with the Transition
Services Agreement and the Acquiror shall keep the Seller reasonably informed
with respect to the prosecution of the Evamist NDA and consider in good faith
the Sellers comments with respect thereto and include any reasonable comments
proposed by the Seller. Without limiting any other obligation of the Seller
under this Agreement, the Seller shall cooperate with the Acquiror in the
Acquirors efforts to obtain Evamist NDA Approval, including providing to the
Acquiror all relevant data, information and material reasonably requested by
the Acquiror which the Acquiror shall not disclose to any third Person or use
except solely and to the extent necessary for prosecuting the Evamist NDA and
obtaining the Evamist NDA Approval. The Seller agrees and acknowledges that,
following the Closing, the Acquiror shall have reasonable access to and the
right to use any and all materials of Seller, whether or not such materials are
Purchased Assets, solely and to the extent necessary for carrying out the
Acquirors right hereunder to prosecute the Evamist NDA and obtain the Evamist
NDA Approval in accordance with this Section 8.5.
(c) Assignment
of Evamist FDA Submissions upon Evamist NDA Approval. Unless previously assigned to the Acquiror
pursuant to Section 8.5(b), the Seller shall transfer and assign, within
five (5) Business Days of the NDA Approval Date, to the Acquiror (A) the Evamist
FDA Submissions (including all associated rights) together with (B) all files
related thereto. Thereafter, the
Acquiror shall have all rights and responsibilities with respect to such
Evamist FDA Submissions. The foregoing
transfer and assignment shall be effected by the Seller submitting the FDA
Transfer Letter to the FDA.
(d) FDA
Contacts. From and after the
transfer by the Seller to the Acquiror of each Evamist Product Registration held
by the Seller or any of its
47
Subsidiaries
pursuant to the terms hereof, except as required by applicable Law, the
Acquiror shall be solely responsible and liable for (i) taking all actions,
paying all fees and conducting all communication with the appropriate
Governmental or Regulatory Authority required by Law in respect of such Evamist
Product Registration, including preparing and filing all reports (including
adverse drug experience reports) and responding to and answering all questions
and complaints requested by the appropriate Governmental or Regulatory Authority,
(ii) taking all actions and conducting all communication with third parties in
respect of Evamist manufactured, tested, used or distributed pursuant to such
Evamist Product Registration (whether manufactured, tested, used or distributed
before or after transfer of such Evamist Product Registration), including
responding to all complaints in respect thereof, including complaints related
to tampering or contamination, and (iii) investigating all complaints and
adverse drug experiences in respect of Evamist manufactured, tested, used or
distributed pursuant to such Evamist Product Registration (whether
manufactured, tested, used or distributed before or after transfer of such
Evamist Product Registration, as set forth in Section 8.5(e)
below). It is understood and agreed that
Seller shall be responsible for all foregoing obligations listed in this Section
8.5(d) prior to the transfer of the Evamist Product Registrations and shall
use commercially reasonable efforts to timely and appropriately fulfill such
obligations.
(e) Adverse
Experience Reports. From and after
the transfer of the Evamist FDA Submissions, the Acquiror shall be responsible
for the investigation, analysis and reporting to the FDA of any adverse
experience report or complaint in connection with the Product received by
either the Acquiror or the Seller from and after the Closing from any source
(including any patient, health care professional or other customer of the
Evamist Business), regardless of whether the Product involved in any such
adverse experience report or complaint was manufactured, tested, used or
distributed by the Seller or Acquiror.
Any adverse experience report or complaint received by the Seller
relating to the Product after the Closing shall be reported by the Seller to
Acquiror, within a sufficient time period to allow the Acquiror to comply with
its obligations to the FDA, after receipt of such adverse experience report or
complaint by the Seller. The Seller
shall cooperate with the Acquiror in connection with the investigation and
analysis of all adverse experience reports or complaints that relate to the
period before the date of the assignment of the Evamist FDA Submissions. It is understood and agreed that the Seller
shall be responsible for all foregoing obligations listed in this Section
8.5(e) prior to the
48
transfer of
the Evamist FDA Submissions and shall use commercially reasonable efforts to
timely and appropriately fulfill such obligations.
Section 8.6 Bulk Transfer
Laws. The Acquiror hereby waives
compliance by the Seller and its Subsidiaries with the provisions of any
so-called bulk transfer law of any jurisdiction in connection with the sale
of the Purchased Assets to the Acquiror.
Section 8.7 Covenant Not
to Compete.
(a) The
Seller understands that Acquiror shall be entitled to protect and preserve the
going concern value of the Evamist Business following the Closing to the extent
permitted by Law and that the Acquiror would not have entered into this
Agreement absent the provisions of this Section 8.7 and, therefore, for
the period from the date hereof until [***] ([***]) [***] following the First
Commercial Sale by or under authority of the Acquiror of Evamist in the Evamist
Territory (the Applicable
Period), the Seller and its Subsidiaries shall not, directly or
indirectly, market, promote, sell or import any Competing Products for use in
the Evamist Territory. As used herein, Competing Product means any
product that is [***] and is marketed, promoted, or sold (i) for the [***], or
any other [***] delivered by such product, or (ii) for the [***] of any [***]
delivered by such product, in each case to [***], excluding from the foregoing
products of the Seller or its Subsidiaries involving application of an [***],
provided that such direct [***] that would be effective for treating [***]. For clarity, [***] is not a Competing
Product. The Seller and its Subsidiaries
shall not provide funding during the Applicable Period to third parties for the
specific purpose of, or grant a license or other authorization to any third
party for, marketing, selling, promoting or importing any Competing Product for
use in the Evamist Territory.
(b) If
a court determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable Law, including with respect to time or space, the
court is hereby requested and authorized by the parties to revise the foregoing
restriction to include the maximum restrictions allowable under applicable Law.
Each of the parties acknowledges, however, that this Section 8.7
has been negotiated by the parties and that the Evamist Territory
*** Certain information on this page has been omitted
and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted
portions.
49
and the
Applicable Period are reasonable in light of the circumstances pertaining to
the parties.
(c) Notwithstanding
any other provision of this Agreement, it is understood and agreed that the
remedy of indemnity payments pursuant to Article XI and other remedies
at law would be inadequate in the case of any breach of the covenants contained
in Section 8.7, and, accordingly, the Acquiror shall be entitled
to equitable relief, including the remedy of specific performance, with respect
to any breach or attempted breach of such covenants.
(d) For
the avoidance of doubt, if any Person acquires Control of the Seller, whether
by stock purchase, merger or other transaction, no provision of this Section 8.7
shall apply to such acquiror or its Affiliates so long as no assets of the
Seller are used to further the marketing, sale or promotion of a Competing
Product by such acquiror, or any of its Affiliates.
Section 8.8 Further
Assurances.
(a) On
and after the Closing Date, the Seller shall from time to time, at the reasonable
request of the Acquiror, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such further conveyances, notices and
assumptions and such other instruments, and take such other actions as the
Acquiror may reasonably request, in order to more effectively consummate the
transactions contemplated hereby and to transfer fully to the Acquiror good and
marketable title to the Purchased Assets and all of the titles, rights,
interests, remedies, powers and privileges intended to be conveyed under this
Agreement and the Related Agreements (including assistance in the collection or
reduction to possession of any of the Purchased Assets).
(b) On
and after the Closing Date, the Acquiror shall from time to time, at the
reasonable request of the Seller, take such actions as the Seller may
reasonably request, in order to more effectively consummate the transactions
contemplated hereby, including the Acquirors assumption of the Assumed
Liabilities and to conduct the Evamist Business as contemplated by this
Agreement and the Related Agreements.
Section 8.9 Cooperation
Regarding Financial Statements; Taxes, Etc.
In the event that the Acquiror is required to include any audited
financial statements with respect to the Evamist Business in any filing to be
made by the Acquiror under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, with respect to or as a result of
the transactions contemplated by this Agreement, the Seller shall, at the
Acquirors sole cost and expense, (i) use commercially reasonable efforts
to provide the Acquiror with the financial statements and other information and
documents pertaining to the Evamist Business that the Acquiror will be required
by applicable rules and regulations of the Securities and Exchange Commission
to include in its filings and (ii) use commercially reasonable efforts to
cause the accountants for the Seller to promptly deliver such information and
provide access to files and work papers in connection therewith as the Acquiror
may reasonably request. For the
avoidance
50
of doubt, the Acquiror acknowledges that the Seller
has not prepared any separate financial statements specific to the Evamist
Business and is not obligated by any provision of this Agreement to prepare or
deliver any such separate financial statements specific to the Evamist
Business.
Section 8.10 No Solicitation.
(a) From
the date of this Agreement to the earliest to occur of (i) the Closing, (ii)
the termination of this Agreement or (iii) 11:59 p.m. (EST) on the sixtieth
(60th) day following the date of this Agreement (the No-Shop Period), the Seller shall not, and shall cause
its Subsidiaries and its and its Subsidiaries officers, directors, advisors
and representatives not to, directly or indirectly, (I) solicit, initiate
or encourage any Other Bid (as defined below), (II) enter into any
agreement with respect to any Other Bid or (III) participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Other Bid. In the event that the
Seller (or any of its Subsidiaries) receives any Other Bid, the Seller shall
promptly advise the Acquiror of such proposal.
As used in this Section 8.10, Other Bid means any proposal for a
sale, spin-off or other disposition or similar transaction involving the
Evamist Business or any of the Purchased Assets, other than the transactions
contemplated by this Agreement.
(b) Notwithstanding
the foregoing or anything in this Agreement to the contrary, if the Seller
receives an unsolicited Superior Bid after the expiration of the No Shop Period
under circumstances that do not arise out of a breach of the terms of Section
8.10(a), and such Superior Bid has not been withdrawn, nothing in this
Agreement shall prevent the board of directors of the Seller or any committee
thereof from participating in any discussions or negotiations regarding or
furnishing to any person any information with respect to such Superior Bid
pursuant to a confidentiality agreement which contains terms that are no less
restrictive than those contained in the Confidentiality Agreement; provided that
all such information had been or is provided on prior or concurrent basis to
Acquiror.
(c) The
Seller shall promptly (and in any event within forty-eight (48) hours) notify
Acquiror of any Other Bid, any material modifications thereto or any request
for non-public information relating to the Evamist Business or for access to
the properties, books or records of the Seller by any third party that has made
an Other Bid. The Seller shall provide notice orally and in writing and shall
identify the third party making and the material terms and conditions of, any
such Other Bid. The Seller shall keep Acquiror informed on a reasonably current
basis of the status and details (including any material changes to the Other
Bid) of any such Other Bid or request and shall provide the Acquiror with the
written materials related to the Other Bid.
51
Section 8.11 Insurance. In the event that prior to the Closing Date
any Purchased Asset suffers any damage, destruction or other loss as a result
of a casualty event, the Seller shall, after the Closing Date, (i) promptly pay
to the Acquiror all insurance proceeds received by the Seller with respect to
such damage, destruction or other loss, less any proceeds applied to the
physical restoration of such asset, and (ii) assign to the Acquiror all rights
of the Seller against third parties (other than against its insurance carriers)
with respect to any causes of action, whether or not litigation has commenced
as of the Closing Date, in connection with such damage, destruction or other
loss; provided, however, that the proceeds of such
insurance shall be subject to (and recovery thereon shall be reduced by the
amount of) any applicable deductibles and co-payment provisions or any payment
or reimbursement obligations of the Seller in respect thereof; provided, further,
that the Seller shall not be required to pay any insurance proceeds under any
insurance policy which constitutes self-insurance.
Section 8.12 Tax Matters.
(a) Books
& Records; Cooperation. The
Acquiror, on one hand, and the Seller, on the other hand, agree to furnish or
cause to be furnished to the other, upon request, as promptly as practicable,
such information and assistance relating to the Purchased Assets, including,
without limitation, access to books and records, as is reasonably necessary for
the filing of all Tax Returns by the Acquiror or the Seller, the making of any
election relating to Taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding relating
to any Taxes. Each of the Acquiror, on
one hand, and the Seller, on the other hand, shall retain all books and records
with respect to Taxes pertaining to the Purchased Assets, for a period of at
least six (6) years following the Closing Date.
At the end of such period, each party shall provide the other with at
least ten (10) days prior written notice before transferring, destroying or
discarding any such books and records, during which period the party receiving
such notice can elect to take possession, at its own expense, of such books and
records. The Acquiror, on one hand, and
the Seller, on the other hand, shall cooperate fully with the other in the
conduct of any audit, litigation or other proceeding relating to Taxes
involving the Purchased Assets. The
Acquiror, on one hand, and the Seller, on the other hand, further agree, upon
request, to use their commercially reasonable efforts to obtain any certificate
or other document from any governmental authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated
hereby).
(b) Allocation
of Taxes. Except as otherwise
provided in Section 4.4 hereof relating to Transfer Taxes, the Seller
shall be responsible for and shall promptly pay when due all Taxes levied with
respect to the Purchased Assets attributable to the Pre-Closing Tax
Period. All Taxes levied with respect to
the Purchased Assets for any Straddle Period shall be apportioned between the
Pre-Closing Tax Period and the Post-Closing Tax Period, as follows:
52
(i) in
the case of any Taxes other than Taxes based upon or related to income or
receipts, the portion allocable to the Pre-Closing Tax Period shall be deemed
to be the amount of such Tax for the entire Straddle Period multiplied by a
fraction the numerator of which is the number of days in the Tax period ending
on the Closing Date and the denominator of which is the number of days in the
entire Straddle Period, and
(ii) in
the case of any Tax based upon or related to income or receipts, the portion
allocable to the Pre-Closing Tax Period shall be deemed equal to the amount
which would be payable if the relevant Straddle Period ended on the Closing
Date.
Upon receipt of any bill for such Taxes relating to
the Purchased Assets, the Acquiror, on one hand, and the Seller, on the other
hand, shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section 8.12 together
with such supporting evidence as is reasonably necessary to calculate the
proration amount. The proration amount
shall be paid by the party owing it to the other within ten (10) days after
delivery of such statement. In the event
that the Acquiror or the Seller shall make any payment for which it is entitled
to reimbursement under this Section 8.12, the applicable party shall
make such reimbursement promptly but in no event later than ten (10) days after
the presentation of a statement setting forth the amount of reimbursement to
which the presenting party is entitled along with such supporting evidence as
is reasonably necessary to calculate the amount of reimbursement.
(c) Notices. The Seller shall promptly notify the Acquiror
in writing upon its receipt of notice of any pending or threatened federal,
state, local or foreign Tax audits or assessments relating to the income,
properties or operations of Seller that reasonably may be expected to relate to
the Purchased Assets.
(d) Withholding. At the Closing, the Seller shall deliver to
Acquiror all necessary forms and certificates complying with applicable law,
duly executed and acknowledged, certifying that the transactions contemplated
hereby are exempt from withholding under Section 1445 of the Code.
(e) Characterization
of Payments. Any payments made to
any Indemnified Party pursuant to this Agreement shall constitute an adjustment
of the consideration paid for the Purchased Assets for Tax purposes and shall
be treated as such by the Acquiror and the Seller on their Tax Returns to the
extent permitted by Law.
53
Section 8.13 Financial
Resources. The Acquiror shall
maintain financial resources consisting of cash, cash equivalents and/or
available credit facilities sufficient to enable the Acquiror to satisfy its
financial obligations under this Agreement as and when such financial
obligations become due and payable pursuant to this Agreement.
ARTICLE
IX.
Conditions
to the Obligations of THE
SELLER FOR THE CLOSING
The obligation of the Seller to effect the Closing is
subject to the satisfaction (or waiver by the Seller), at or before the
Closing, of each of the following conditions:
Section 9.1 Representations,
Warranties and Covenants. The representations and warranties of the
Acquiror contained in Article VII of this Agreement (other than the
representations and warranties of the Acquiror made with reference to a
specified date (such as the date hereof), which shall be true and correct as of
such date) that are qualified by materiality shall be true and correct in all
respects and, to the extent not so qualified, shall be true and correct in all
material respects, at and as of the Closing Date as if made at and as of such
time. The Acquiror shall have
performed in all material respects all agreements and covenants required by
this Agreement or any Related Agreements to be performed by it prior to or on
the Closing Date. The Seller shall have
received a certificate as to satisfaction of the conditions set forth in this Section 9.1 dated as of the
Closing Date and executed by a duly authorized officer of the Acquiror.
Section 9.2 No Actions or
Proceedings. No Orders prohibiting
the transactions contemplated hereby shall have been instituted and not settled
or otherwise terminated. No Law shall
have been enacted, entered, promulgated or enforced by any Governmental or
Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale.
The waiting period (including any extensions thereof) applicable to the
consummation of the transactions contemplated by this Agreement required
pursuant to the HSR Act shall have expired or been terminated.
Section 9.3 No Material
Adverse Effects. No Acquiror
Material Adverse Effect shall have occurred and the be continuing.
Section 9.4 No Proceedings. There shall not be pending any Action or
Proceeding seeking (i) to prohibit or restrain the transactions contemplated by
this Agreement or (ii) seeking to impose or confirm limitations on the Acquiror
or any of its Subsidiaries to effectively exercise full ownership of the
Evamist Business or the Purchased Assets after the Closing and to conduct the
Evamist Business as contemplated in the Agreement and the Related Agreements.
54
Section 9.5 Deliveries. The Acquiror shall have delivered or caused
to be delivered to the Seller each of the documents, materials or funds as
specified in Section 5.2(b).
ARTICLE
X.
CONDITIONS
TO THE OBLIGATIONS OF THE ACQUIROR FOR THE CLOSING
The obligation of the Acquiror to effect the Closing
is subject to the satisfaction (or waiver by the Acquiror), at or before the
Closing, of each of the following conditions:
Section 10.1 Representations,
Warranties and Covenants. The representations and warranties of the
Seller contained in Article VI of this Agreement (other than the
representations and warranties of the Seller made with reference to a specified
date (such as the date hereof), which shall be true and correct as of such
date) that are qualified by materiality shall be true and correct in all
respects and, to the extent not so qualified, shall be true and correct in all
material respects, at and as of the Closing Date as if made at and as of such
time. The Seller shall have
performed in all material respects all agreements and covenants required by
this Agreement or any Related Agreement to be performed by it prior to or on
the Closing Date. The Acquiror shall
have received a certificate as to satisfaction of the conditions set forth in this Section 10.1 dated as of the
Closing Date and executed by a duly authorized officer of the Seller.
Section 10.2 No Actions or
Proceedings. No Orders prohibiting
the transactions contemplated hereby shall have been instituted and not settled
or otherwise terminated. No Law shall
have been enacted, entered, promulgated or enforced by any Governmental or
Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale.
The waiting period (including any extensions thereof) applicable to the
consummation of the transactions contemplated by this Agreement required
pursuant to the HSR Act shall have expired or been terminated.
Section 10.3 Consents.
(a) All
Seller Governmental Consents set forth on Schedule 6.3(a) of the
Seller Disclosure Schedule shall have been obtained or made.
(b) The
Acquiror shall have received all Seller Third Party Consents and all Required
Permits necessary to effect the transactions contemplated by this Agreement and
the Related Agreements (which shall include the consents and permits set forth
on Schedules 6.3(b) and 6.8 of the Seller Disclosure
Schedule, excluding the Evamist FDA Submissions).
Section 10.4 No Material Adverse
Effects. No Seller Material Adverse
Effect shall have occurred and be continuing.
Section 10.5 Deliveries. The Seller shall have delivered or caused to
be delivered to the Acquiror each of the documents specified in Section
5.2(a).
55
Section 10.6 Proceedings. There shall not be pending any action,
litigation or proceeding by any Governmental or Regulatory Authority seeking to
(i) prohibit or restrain the transactions contemplated by this Agreement or
(ii) seeking to impose or confirm limitations on the ability of Acquiror or any
of its Subsidiaries to effectively exercise full rights of ownership of the
Evamist Business or the Purchased Assets after the Closing.
ARTICLE
XI.
INDEMNIFICATION
Section 11.1 Survival of
Representations, Warranties, Covenants, Etc. The representations and warranties of the
parties contained in Articles VI and VII hereof and in the
Related Agreements (if any) shall survive the Closing until the second
anniversary of the Closing Date; provided,
however, that the representations and warranties of the Seller in Sections
6.2, 6.14(a) and 6.16 hereof shall survive the Closing until
sixty (60) days following the expiration of the applicable statute of
limitations (with extensions, if any) with respect to the matters addressed in
such sections. The period of time a representation or warranty survives the
Closing pursuant to the preceding sentence shall be the Survival Period with respect to such
representation or warranty. The
covenants and agreements of the parties hereto contained herein shall survive
in accordance with their respective terms.
So long as an Indemnified Party gives an Indemnification Claim Notice
for such claim on or before the expiration of the applicable Survival Period,
such Indemnified Party shall be entitled to pursue its rights to
indemnification under Sections 11.2(a) or (b) hereof, as
applicable. In the event notice of any
claim for indemnification under Section 11.2(a) or (b)
hereof shall have been given within the applicable Survival Period and such
claim has not been finally resolved by the expiration of such Survival Period,
the representations and warranties that are the subject of such claim shall
survive the end of the Survival Period of such representations or warranties
until such claim is finally resolved, but such representations and warranties
shall only survive with respect to such asserted claim.
Section 11.2 Indemnification.
(a) By
the Seller. Subject to Sections 11.1
and 11.3, from and after the Closing, the Seller shall indemnify,
reimburse, defend and hold harmless the Acquiror, its Affiliates and their
respective officers, directors, employees, agents, successors and assigns from
and against any and all costs, losses, Liabilities, damages, including fines,
penalties, interest, judgments, lawsuits, deficiencies, claims, expenses
(including reasonable fees and disbursements of attorneys and other
professionals, including third party consultants) (collectively, Damages) incurred in
connection with, arising out of, resulting from or incident to (i) any breach
of, or inaccuracy in, any representation or warranty of the Seller set forth in
this Agreement, any Related Agreement or any certificate of the Seller
delivered to Acquiror at the Closing, without giving effect to any materiality
or Seller Material Adverse Effect or Knowledge qualifier therein,
(ii) the failure to perform any covenant or agreement of the Seller set
forth in this Agreement or in any of the Related Agreements, (iii) any Excluded
Asset, (iv) any Excluded Liability and (v) the Sellers breach of the
56
terms and
conditions of the Acrux License, whether or not such breach is based on facts
or circumstances in existence as of the date hereof.
(b) By
the Acquiror. Subject to Sections 11.1
and 11.3, from and after the Closing, the Acquiror shall indemnify,
defend and hold harmless the Seller, its Affiliates and their respective
officers, directors, employees, agents, successors and assigns from and against
any and all Damages incurred in connection with, arising out of, resulting from
or incident to (i) any breach of any representation or warranty of the Acquiror
set forth in this Agreement, any Related Agreement or any certificate of the
Acquiror delivered to the Seller at Closing, without giving effect to any materiality
or Acquiror Material Adverse Effect or Knowledge qualifier therein,
(ii) the failure to perform any covenant or agreement of the Acquiror set
forth in this Agreement or in any of the Related Agreements, or (iii) any
Assumed Liabilities.
(c) Procedure
for Claims. The Indemnified Party
shall give the indemnifying party prompt written notice (an Indemnification Claim Notice)
of any Damages or discovery of fact upon which such Indemnified Party intends
to base a request for indemnification under Section 11.2(a) or Section 11.2(b). Failure to give any such Indemnification
Claim Notice shall not constitute a waiver of any right to indemnification or
reduce in any way the indemnification available hereunder, except to the extent
the indemnifying party demonstrates that such failure to notify directly
increases the amount to be indemnified hereunder. Each Indemnification Claim Notice must
contain a description of the claim and the nature and amount of such Damages
(to the extent that the nature and amount of such Damages are known at such
time). The Indemnified Party shall
furnish promptly to the indemnifying party copies of all papers and official
documents received in respect of any Damages.
All indemnification claims in respect of a party, its Affiliates or
their respective directors, officers, employees and agents (collectively, the Indemnitees and each
an Indemnitee)
shall be made solely by such party to this Agreement (the Indemnified Party).
(d) Third
Party Claims. The obligations of an
indemnifying party under this Section 11.2(d) with respect to
Damages arising from claims of any third party that are subject to
indemnification as provided for in Section 11.2(a) or Section 11.2(b)
(a Third Party Claim)
shall be governed by and be contingent upon the following additional terms and
conditions:
(i) At
its option, the indemnifying party may assume the defense of any Third Party
Claim by giving written Notice to the Indemnified Party within ten (10) days
after the indemnifying partys receipt of an Indemnification Claim Notice. The assumption of the defense of a Third
Party Claim by the indemnifying party shall be construed as an acknowledgment
that the indemnifying party is liable to indemnify any Indemnitee in respect of
the Third Party Claim. Upon assuming the
defense of a Third Party Claim, the indemnifying party may appoint as lead counsel
in the defense of the Third
57
Party Claim
any legal counsel selected by the indemnifying party; provided, however,
that such counsel is reasonably acceptable to the Indemnified Party, provided, further,
that in the event that (i) a conflict of interest arises between the
indemnifying party and the Indemnified Party such that such legal counsel
cannot represent both the indemnifying party and the Indemnified Party or (ii)
the Indemnitee has been advised in writing by counsel that there may be one or
more legal defenses available to the Indemnitee Party that are different from
or in addition to that of the indemnifying party, the Indemnitee may retain its
own legal counsel at the expense of the indemnifying party and the indemnifying
party and its counsel shall cooperate with the Indemnified Party and its
counsel, as may be reasonably requested.
Except as set forth above, should the indemnifying party assume the
defense of a Third Party Claim, the indemnifying party shall not be liable to
the Indemnified Party or any other Indemnitee for any legal expenses
subsequently incurred by such Indemnified Party or other Indemnitee in connection
with the analysis, defense or settlement of the Third Party Claim.
(ii) Without
limiting Section 11.2(d)(i), any Indemnitee shall be entitled to
participate in, but not control, the defense of such Third Party Claim and to
employ counsel of its choice for such purpose; provided,
however, that such employment
shall be at the Indemnitees sole cost and expense, except as described in Section
11.2(d)(i), unless (A) the employment thereof has been specifically
authorized by the indemnifying party in writing, or (B) the indemnifying party
has failed to assume the defense and employ counsel in accordance with Section 11.2(d)(i)
(in which case the Indemnified Party shall control the defense).
(iii) With
respect to any Damages relating solely to the payment of money damages in
connection with a Third Party Claim and that will not result in the Indemnitees
or the Indemnified Partys becoming subject to injunctive or other relief for
other than money damages, and as to which the indemnifying party shall have
acknowledged in writing the obligation to indemnify the Indemnitee hereunder,
the indemnifying party shall have the sole right to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Damages, on
such terms as the indemnifying party, in its sole discretion, shall deem
appropriate, provided that, as a result of or
in connection with any such settlement each Indemnitee or Indemnified Party
shall receive a full release with respect to such claim. The indemnifying party shall not be liable
for any settlement or other disposition of Damages by an Indemnitee or
Indemnified Party that is reached without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld. If the indemnifying party chooses to defend
or prosecute any Third Party Claim, no Indemnitee or Indemnified Party shall
admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the prior written consent of the indemnifying party,
which consent shall not be unreasonably withheld.
58
(iv) Notwithstanding the
foregoing, the indemnifying party shall not be entitled to assume the defense
of any Third Party Claim (and shall be liable for the reasonable fees and
expenses of counsel incurred by the Indemnified Party in defending such Third Party
Claim) if the Third Party Claim seeks an order, injunction or other equitable
relief or relief for other than money damages against the Indemnified Party
that the Indemnified Party reasonably determines cannot be separated from any
related claim for money damages. If such
equitable relief or other relief portion of the Third Party Claim can be so
separated from that for money damages, the indemnifying party shall be entitled
to assume the defense of the portion relating to money damages.
(v) Regardless of whether the
indemnifying party chooses to defend or prosecute any Third Party Claim, the
Indemnified Party and the indemnifying party shall, and shall cause each other
Indemnitee or Affiliate of the indemnifying party, as applicable, to, cooperate
in the defense or prosecution thereof and shall furnish such records,
information and testimony, provide such witnesses and attend such conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably
requested in connection therewith. Such
cooperation shall include access during normal business hours afforded to the
indemnifying party or Indemnified Party, as applicable, to, and reasonable
retention by each such Person of, records and information that are reasonably
relevant to such Third Party Claim, and making each such Person and other
employees and agents available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder, and
the indemnifying party shall reimburse each such Person for all its reasonable
out-of-pocket expenses in connection therewith.
(e) Other
Claims. In the event any Indemnified
Party has a claim against any indemnifying party under Section 11.2(a)
or 11.2(b) that does not involve a Third Party Claim being asserted
against or sought to be collected from such Indemnified Party, the Indemnified
Party shall deliver an Indemnification Claim Notice regarding such claim with
reasonable promptness to the indemnifying party. The failure by any Indemnified Party so to
notify the indemnifying party shall not relieve the indemnifying party from any
liability that it may have to such Indemnified Party under Section 11.2(a)
or 11.2(b), except to the extent that the indemnifying party
demonstrates that such failure to notify directly increased the amount to be
indemnified hereunder. If the
indemnifying party does not notify the Indemnified Party within ten (10)
calendar days following its receipt of such notice that the indemnifying party
disputes its liability to the Indemnified Party under Section 11.2(a)
or 11.2(b), such claim specified by the Indemnified Party in such notice
shall be conclusively deemed a Liability of the indemnifying party under Section 11.2(a)
or 11.2(b) and the indemnifying party shall pay the amount of such
Liability to the Indemnified Party on demand or, in the case of any notice in
which the amount of the claim (or any portion thereof) is estimated, on such
later date
59
when the amount of such claim (or such
portion thereof) becomes finally determined.
(f) Effect
of Investigation or Knowledge. Any
claim by the Acquiror or its Affiliates or any of their respective directors,
officers, employees or agents for indemnification shall not be adversely
affected by any investigation by or opportunity to investigate afforded to the
Acquiror, nor shall such a claim be adversely affected by the Acquirors
Knowledge on or before the Closing Date of any breach of the type specified in
this Section 11.2 or of any state of facts that may give rise to
such a breach. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not
adversely affect the right to indemnification, payment of Damages or other
remedy based on such representations, warranties, covenants or obligations.
Section 11.3 Limitations.
(a) In no event
shall the Seller or the Acquiror be liable for any Damages pursuant to Section 11.2(a)
or 11.2(b), as applicable, unless and until the aggregate amount of all
such Damages exceeds $100,000 (the Liability
Threshold), in which case the Seller or the Acquiror, as
applicable, shall be liable for all such Damages in excess of the Liability
Threshold, and then not for any Damages in excess of the then applicable
Liability Cap for all claims made under such Section 11.2(a) or 11.2(b),
as applicable, in the aggregate; provided,
however, that: (A) for purposes of claims made by the
Acquiror under Sections 11.2(a)(iii), 11.2(a)(iv) or 11.2(a)(v),
the Seller shall be liable for all Damages suffered by the Acquiror without
regard to the Liability Threshold or Liability Cap; (B) for purposes of claims
made by the Seller under Section 11.2(b)(iii), the Acquiror shall be
liable for all Damages suffered by the Seller without regard to the Liability
Threshold or Liability Cap; and (C) for purposes of claims made by a party due
to the other partys fraud or willful misconduct, such party shall be liable
for all Damages suffered by the other party without regard to the Liability
Threshold or Liability Cap.
(b) Each party
agrees that it shall, and shall cause the applicable Indemnitees to, use its or
their commercially reasonable efforts to secure payment from insurance policies
available and in existence that provide coverage with respect to any Damages to
be indemnified. The amount of any
Damages recoverable by a party under Section 11.2 shall be reduced
by the amount of any insurance proceeds
actually paid to the Indemnified Party or the Indemnitee, as applicable,
relating to such claim.
(c) THE INDEMNIFICATION OBLIGATIONS OF THE
PARTIES HERETO SHALL NOT EXTEND TO PUNITIVE DAMAGES OR TO ANY INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES, INCLUDING BUSINESS INTERRUPTION,
LOSS OF FUTURE REVENUE,
60
DIMINUTION IN VALUE, PROFITS OR INCOME, OR LOSS OF
BUSINESS REPUTATION OR OPPORTUNITY.
Section 11.4 Exclusive
Remedy. Except in the event of fraud
or willful misconduct, the sole and exclusive remedy of each party with respect
to any and all claims for any breach of any representation, warranty, covenant
or other claim arising out of or relating to this Agreement, whether arising in
contract, tort or otherwise, shall be the indemnification provisions of this
Article XI, provided, however, that the provisions
of this Article XI shall not restrict the right of any party to seek specific
performance or other equitable remedies in connection with any breach of any of
the covenants contained in this Agreement or any of the Related Agreements.
ARTICLE
XII.
TERMINATION
Section 12.1 Methods of
Termination. Prior to the Closing,
this Agreement may be terminated at any time:
(a) by mutual
written agreement of the Seller and the Acquiror;
(b) by either the
Seller or the Acquiror if the Closing shall not have occurred by June 1, 2007; provided, however, that the right to
terminate the Agreement pursuant to this Section 12.1(b) shall not
be available to a party if such partys failure to perform in all material
respects any of their material obligations under this Agreement or any Related
Agreement results in the failure of the Closing to occur by such time;
(c) by either
the Seller or the Acquiror, if there shall be in effect any Law that prohibits
the Closing or if the Closing would violate any non-appealable Order, issued by
a competent Governmental Entity, that permanently restrains, enjoins or
prohibits the consummation of the transactions contemplated by this Agreement;
(d) by either the
Seller or the Acquiror, if the other party has breached any material
representation, warranty, covenant or agreement hereunder, such breach has not
been waived by the non-breaching party, and the breach has not been cured
within a period of thirty (30) days following the terminating partys written
notice of such breach and the breaching party is diligently proceeding to cure
such breach, unless such breach is not capable of cure, in which event the
non-breaching party may terminate immediately;
(e) by the
Acquiror, if a Seller Material Adverse Effect shall have occurred since the
date of this Agreement;
(f) by the
Seller, if an Acquiror Material Adverse Effect shall have occurred since the
date of this Agreement;
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(g) by the
Seller, if (i) it is not in material breach of the terms of Section 8.10(a)
or (c), (ii) the board of directors of the Seller has authorized the
Seller to enter into a definitive agreement for a transaction that constitutes
a Superior Bid, (iii) the Seller has notified the Acquiror in writing that the
Seller has received a Superior Bid and intends to enter into a definitive
agreement with respect to such Superior Bid pursuant to Section 8.10(b),
(iv) five (5) Business Days have passed since the Acquiror has received such
written notice and (v) the Other Bid remains a Superior Bid after any
amendments to this Agreement; provided, however,
that the Seller shall not have the right to terminate this Agreement pursuant
to this Section 12.1(g) prior to the expiration of the No-Shop Period.
(h) by
the Acquiror, if prior to the Closing, the Seller has breached the terms and
conditions of the Acrux License in a manner giving rise to a right of
termination under the Acrux License by Fempharm Pty Ltd. and/or Acrux DDS Pty
Ltd., whether or not such breach is based on facts or circumstances in
existence as of the date hereof; or
(i) by
Acquiror, on or before the earlier of (i) 11:59 p.m. (Eastern Daylight Saving
Time) fourteen (14) calendar days following the date hereof or (ii) 11:59 p.m.
(Eastern Daylight Saving Time) on the fifth (5th) Business Day following the date of
Acquirors inspection of the facilities of [***], located at [***] (the Facility
Inspection Deadline), if Acquiror determines in good faith that [***]
is unable to manufacture quantities of the pump component for Evamist
meeting the specifications therefor (as set forth in the Evamist NDA) to
support the launch of Evamist or provide continuity of commercial supply as
contemplated by the parties as of the date hereof (the Adverse
Determination); provided, however,
if Acquiror makes the Adverse Determination it shall promptly notify Seller
thereof, then upon written request of either party to the other party (i) the
parties shall promptly meet (whether in person or teleconference) and discuss
in good faith possible resolutions to the Adverse Determination over a period
of seven (7) calendar days and (ii) Acquirors ability to terminate this
Agreement pursuant to this Section 12.1(i) shall be extended by a period of
seven (7) calendar days following the Facility Inspection Deadline.
Section 12.2 Procedure upon
Termination. In the event of
termination of this Agreement under Section 12.1, written Notice
thereof shall forthwith be given to the other party, and the transactions
contemplated by this Agreement shall be terminated and abandoned, without
further action by the parties hereto. If
this Agreement is terminated as provided herein:
(a) each party,
if requested, will redeliver all documents, work papers and other material of
the other party and its Affiliates relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same; and
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Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has
been requested with respect to the omitted portions.
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(b) no party
hereto and none of their respective directors, officers, stockholders,
Affiliates or Controlling Persons shall have any further liability or
obligation to any other party to this Agreement, other than Section 12.2
and Article XIII; provided,
however, that nothing in this Section 12.2(b)
shall prejudice any rights, claims, or causes of action that may have accrued
hereunder or with respect hereto prior to the date of such termination,
including for breach of this Agreement (whether based upon the termination or
otherwise).
ARTICLE
XIII.
MISCELLANEOUS
Section 13.1 Notices. All Notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or by facsimile
transmission with answer back confirmation or mailed (postage prepaid by
certified or registered mail, return receipt requested) or by nationally
recognized overnight courier that maintains records of delivery to the parties
at the following addresses or facsimile numbers:
If to the Acquiror to:
K-V Pharmaceutical Company
2503 S. Hanley Road
St. Louis, Missouri 63144
Facsimile:
(314) 645-4705
Attention: Vice
President, Business Development
General Counsel
With copies to:
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, California
92626-1925
Facsimile: (714) 755-8290
Attention: Charles K. Ruck, Esq.
If to the Seller to:
Vivus, Inc.
112 Castro Street, Suite 200
Mountain View, California 94040
Facsimile: (650) 934-5389
Attention: Leland F.
Wilson
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With copies to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Facsimile: (650) 493-6811
Attention: Ian B. Edvalson, Esq.
All such Notices, requests and other communications
will (i) if delivered personally to the address as provided in this Section 13.1,
be deemed given upon receipt, (ii) if delivered by facsimile to the facsimile
number as provided in this Section 13.1, be deemed given upon
receipt by the sender of the answer back confirmation and (ii) if delivered by
mail in the manner described above or by overnight courier to the address as
provided in this Section 13.1, be deemed given upon receipt (in
each case regardless of whether such Notice, request or other communication is
received by any other Person to whom a copy of such Notice, request or other
communication is to be delivered pursuant to this Section 13.1). Any party from time to time may change its
address, facsimile number or other information for the purpose of Notices to
that party by giving Notice specifying such change to the other party hereto in
accordance with the terms of this Section 13.1.
Section 13.2 Entire Agreement. This Agreement (and all Exhibits and
Schedules attached hereto and all other documents delivered in connection herewith)
supersedes all prior discussions and agreements, both oral and written, among
the parties with respect to the subject matter hereof and contains the sole and
entire agreement among the parties hereto with respect to the subject matter
hereof. Further, the parties agree and
acknowledge that the Confidentiality Agreement shall remain in effect until,
but shall terminate effective as of, the Closing.
Section 13.3 Waiver. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver by any party hereto of any term or
condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not in the alternative.
Section 13.4 Amendment. This Agreement may be amended, supplemented
or modified only by a written instrument mutually agreed upon and duly executed
by each party hereto.
Section 13.5 Third Party
Beneficiaries. The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns and it is not the
intention of the parties to confer third party beneficiary rights upon any
other Person, except as achieved through the indemnification clause set forth
in Section 11.2.
Section 13.6 Assignment; Binding
Effect. Neither this Agreement nor
any rights, interests or obligations hereunder shall be transferred, assigned
or delegated by any party
64
hereto without the prior written consent of the other
party hereto and any attempt to make any such transfer assignment or delegation
without such consent shall be null and void; provided,
however, that (i) without the
consent of the Acquiror, the Seller may (in whole or in part) transfer, assign
and delegate its rights, interests and obligations to one or more of its
Affiliates (ii) without the consent of the Seller, the Acquiror may (in
whole or in part) transfer, assign and delegate its rights, interests and
obligations to any Affiliate of the Acquiror (including pursuant to Section
4.7 hereof), and (iii) without the consent of the Seller, the Acquiror may
transfer and assign its rights to indemnity, in whole or in part, to any
purchaser of all or substantially all of the Evamist Business; provided, further,
this Agreement is binding upon, inures to the benefit of and is enforceable by
the parties hereto and their respective successors and permitted assigns and no
transfer, assignment or delegation shall limit, affect or discharge the
assignors obligations hereunder. In
addition, notwithstanding the foregoing, either party hereto may assign this
Agreement, without the prior written consent of the other party hereto, to a
Person that succeeds to all or substantially all of such partys business or
assets related to this Agreement, whether by sale, merger, operation of law or
otherwise, provided that such assignee or transferee agrees in writing to be
bound by the terms and conditions of this Agreement.
Section 13.7 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 13.8 Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable provision
or by its severance herefrom, and (iv) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar to the terms of
such illegal, invalid or unenforceable provision as may be possible and
reasonably acceptable to the parties herein.
Section 13.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES. ALL DISPUTES UNDER, OR PERTAINING TO, THIS
AGREEMENT SHALL BE RESOLVED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS OF THE
STATE OF DELAWARE.
Section 13.10 Expenses. Except as otherwise provided in this
Agreement, each party hereto shall pay its own expenses and costs incidental to
the preparation of this Agreement and to the consummation of the transactions
contemplated hereby.
Section 13.11 Counterparts. This Agreement may be executed in any number
of counterparts and by facsimile, each of which will be deemed an original, but
all of which
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together will constitute one and the same
instrument. A facsimile copy shall be a
sufficient proof of signature, without it being necessary to produce the
original copy.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto all as of the date first above written.
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SELLER:
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Vivus, Inc.
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a Delaware corporation
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By:
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/s/ Leland F. Wilson
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Name:
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Leland F. Wilson
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Title: President and Chief Executive
Officer
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ACQUIROR:
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K-V Pharmaceutical Company,
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a Delaware corporation
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By:
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/s/ Gerald R. Mitchell
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Name:
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Gerald R. Mitchell
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Title: Vice President and Chief Financial
Officer
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Signature Page to Asset Purchase Agreement
EXHIBIT A
Form of Sublicense Agreement
EXHIBIT
A
SUBLICENSE
AGREEMENT
This SUBLICENSE
AGREEMENT (the Agreement) executed as of
[ ,]
2007 (the Effective Date) by and between KV
Pharmaceutical Company, a Delaware corporation (KVP), and VIVUS Inc., a Delaware corporation (the VIVUS). KVP and
VIVUS are each referred to herein by name or, individually, as a Party or, collectively, as Parties.
BACKGROUND
A. KVP
and VIVUS are parties to that certain Asset Purchase Agreement dated as of
March 30, 2007 (the APA) pursuant
to which KVP purchased certain assets of VIVUS related to Evamist, all on the
terms and conditions set forth therein.
B. VIVUS
is the licensee of certain patents and know-how related to Evamist pursuant to
that certain Estradiol Development and Commercialization Agreement by and among
VIVUS, FemPharm Pty Ltd. and Acrux DDS Pty Ltd. effective February 12, 2004, as
amended July 2, 2004 (the Acrux License)
and attached hereto as Attachment 1.
C. VIVUS
and KVP have agreed pursuant to the APA to enter into this Agreement pursuant
to which VIVUS grants to KVP certain sublicenses under the Acrux License, all
as set forth herein below.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements provided herein below and
other consideration the receipt and sufficiency of which is hereby
acknowledged, KVP and VIVUS hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Imported
Definitions. Capitalized terms not
otherwise defined in this Article 1 or elsewhere in this Agreement shall
have the meanings given such terms in the Acrux License.
1.2 Acrux means Acrux DDX Pty Limited,
Australian Company No 088 778 009.
1.3 Affiliate has the meaning given thereto in
the APA.
1.4 Closing Date has the meaning given thereto
in the APA.
1.5 Evamist means any Product consisting of
any MDTS containing Estradiol, or any other Estrogen that is added to the
Field, as its sole active ingredient.
1.6 FemPharm means FemPharm Pty Ltd.,
Australian Company No 088 778 018.
1.7 Law has the meaning given therein in the
APA.
1.8 Other Intellectual Property means that
Intellectual Property that is licensed to VIVUS by FemPharm and Acrux pursuant
to Section 2.1(b) of the Acrux License.
1.9 Purchased Assets has the meaning given
thereto in the APA.
1.10 Transition Services Agreement has the meaning given thereto
in the APA.
1.11 Additional Definitions. Each of the following definitions shall have
the meanings defined in the corresponding sections of this Agreement indicated
below:
Definitions
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Section
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Acrux License
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Background
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Agreement
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Preamble
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APA
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Background
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Auditing Party
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3.3.1
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Bankruptcy Code
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12.7
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Confidential
Information
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8.1
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Effective Date
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Preamble
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Indemnify
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9.4.1
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JAMS
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11.2
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KVP
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Preamble
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KVP Indemnitees
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9.4.1
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Losses
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9.4.1
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Parties
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Preamble
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Party
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Preamble
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Prior CDA
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8.3
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Term
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10.1
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Third-Party
Claim
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9.4.1
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VIVUS
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Preamble
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VIVUS
Indemnitees
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9.4.2
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1.12 Interpretation. In this Agreement: (i) words denoting the singular number include the
plural and vice versa; (ii) words denoting any gender include all genders;
(iii) words denoting natural persons include corporations, firms,
unincorporated associations, partnerships, trusts and any other entities or
groups recognized by Law; (iv) references to any Law or to any provision thereof includes
any amendment, modification, consolidation or re-enactment of, or any provision
substituted for, and all regulations and statutory instruments issued under
such Law or such provision; (v) the words written and in writing include
any means of visible reproduction of words in a tangible and permanently
visible form; (vi) references to Articles, Sections, clauses and Attachments
are references to the Articles, Sections, clauses and Agreement of this
Agreement, unless expressly stated to the contrary; (vii) references to any
Party includes such Partys successors and permitted assigns; (viii) where a
word or phrase is defined, other grammatical forms of that word or phrase have
corresponding meanings; (ix) no rule of construction applies to the disadvantage
of a Party because that Party was responsible for the preparation of this
Agreement or any part of it; (x) the headings to Articles, Sections and
Attachments are for ease of reference only and do not form part of this
Agreement or affect its interpretation; (xi) if any day appointed or specified
by this Agreement for the payment of any money or the doing of any act falls on
a day which is not a Business Day, the day appointed or specified will be the
next Business Day; (xii) a reference to a time or date in connection with the
performance of an obligation by a Party is a reference to the time and date in
San Francisco, California, USA even if the obligation is to be performed
elsewhere; and (xiii) the words including and includes will be
interpreted non-restrictively to mean including without limitation
.
2
ARTICLE 2
SUBLICENSE GRANTS
2.1 Sublicense Grants. Subject to the terms of this Agreement and
the APA, VIVUS hereby grants to KVP as of the Effective Date the sole and
exclusive (including with respect to VIVUS) sublicense, under all of VIVUSs
interest in:
2.1.1 Licensed
Intellectual Property, solely to exploit, import, export, make, have made,
develop, use, market, offer for sale and sell Evamist for use in the Field in
the Territory; and
2.1.2 Other
Intellectual Property to export, make, and have made Evamist outside the
Territory solely for importation, sale, use and other exploitation in the Field
in the Territory pursuant to Section 2.1.1. In addition, VIVUS will cooperate with KVP,
at KVPs request and expense, to seek the permission by FemPharm, for KVP to
include in the license granted under this Section 2.1.2 the right to
conduct specific development activities in particular countries outside the
Territory, solely to develop data to be used in the Regulatory Materials in the
Territory for Evamist in the Field, and marketing of Evamist in the Field in
the Territory.
2.2 Further Sublicenses. The sublicenses granted under
Section 2.1 include the right to grant sublicenses within the scope of the
licenses; provided that any such sublicensee agrees to be bound by terms and
conditions materially identical to the provisions of Sections 2.5, 2.6, 9.4.2
and 9.5 herein. Additionally, KVP shall
disclose to FemPharm in advance of any such grant of a sublicense the identity
of the proposed sublicensee and shall discuss and consider in good faith any
reasonable concerns FemPharm may have with regard to granting a sublicense to
such entity, and shall consider in good faith FemPharms suggestions to address
any of its reasonable concerns.
Notwithstanding any sublicense granted hereunder KVP shall remain fully
responsible for all of its obligations hereunder and KVP shall be responsible
for the actions of any of its sublicensees hereunder (direct or indirect), and
if any such sublicensee breaches any KVP obligation under the Agreement, such
breach will be deemed a breach by KVP.
2.3 Other.
2.3.1 The
Parties acknowledge that FemPharm and Acrux reserved for themselves
non-exclusive rights under the Licensed Intellectual Property in the Territory,
for FemPharm, Acrux or the Acrux Controlled Affiliates or any of their
respective licensees to export, make, and have made Evamist in the Territory
solely for importation, sale, use and other exploitation in the Field in a
country or jurisdiction outside the Territory.
In addition, VIVUS reserves the right to permit FemPharm to conduct
specific development activities in the Territory, solely to develop data to be
used in the Regulatory Materials outside the Territory for Evamist in the
Field, and marketing of Evamist in the Field outside the Territory; provided
that VIVUS shall grant such permission only as agreed in writing by the
Parties, such agreement not to be unreasonably withheld.
2.3.2 KVP
shall have the sole right to exercise the following rights and licenses granted
to VIVUS under the Acrux License: the rights granted to VIVUS under Section
2.5(b) of the Acrux License, the rights granted to VIVUS under Section 2.7 of
the Acrux License, the rights
3
granted to VIVUS under Section 5.2 of the
Acrux License, and the rights granted to VIVUS under Section 5.17 of the Acrux
License.
2.4 No Other Rights. Each Party acknowledges that the rights and
licenses granted under Section 2.1 and elsewhere in this Agreement are
limited to the scope expressly granted.
Accordingly, except for the rights expressly granted under this
Agreement and the APA, no right, title, or interest of any nature whatsoever is
granted whether by implication, estoppel, reliance, or otherwise, by either
Party to the other Party. All rights
with respect to Intellectual Property or technology rights that are not
specifically granted herein are reserved to the owner thereof.
2.5 Exclusivity. Until termination of this Agreement or [***]
([***]) [***] after the First Commercial Sale of Evamist, KVP hereby agrees not
to market, promote, sell or import, directly or indirectly, any Competitive
Product for use in the Territory.
2.6 Ex-Territory Sales. KVP shall not directly or indirectly market,
sell, or distribute Evamist in the Territory to any third party, including its
Affiliates, if KVP knows, or has been provided reasonable evidence, that such
Evamist provided directly or indirectly by KVP to such third party is being
marketed, distributed or sold for use outside the Territory, provided that the
sale of such Evamist in the Territory infringes a Valid Claim in the FemPharm
Patents or embodies information that is at the then-current time a trade secret
of FemPharm.
ARTICLE 3
PAYMENTS
3.1 Payment Amounts. In accordance with the provisions of
Section 3.2:
3.1.1 KVP
shall pay to VIVUS all amounts (including any interest, penalties or otherwise)
that may become payable to FemPharm under the Acrux License after the Effective
Date as a result of any activities by or under authority of KVP hereunder or
from any requests of KVP hereunder, including all royalties that may become
payable pursuant to Article 4 of the Acrux License as a result of Net Sales of
Evamist by or under authority of KVP, its Affiliates and sublicensees, provided
that KVP shall only pay One Million Five Hundred Thousand Dollars ($1,500,000)
pursuant to Section 3.2(b) of the Acrux License.
3.1.2 For
clarity, KVP shall pay VIVUS the One Million Five Hundred Thousand Dollars
($1,500,000) of the Three Million Dollars ($3,000,000) payable to FemPharm upon
occurrence of the condition set forth in Section 3.2(b) of the Acrux
License.
3.2 Payment Terms and
Reports. KVP shall pay all amounts
under Section 3.1 at least three (3) Business Days prior to the
corresponding amount becoming payable to FemPharm under the applicable
provision of the Acrux License. In
addition, KVP shall provide all reports required to be provided to FemPharm
(which reports shall meet all of the applicable requirements therefore as set
forth in the Acrux License) with respect to such payments at least three (3)
Business Days prior to the corresponding report becoming due to FemPharm under
the applicable provision of the Acrux License including Section 4.7 of the
Acrux License. It is understood that
VIVUS shall have the right to provide a copy of all such reports to FemPharm
under and in accordance with the Acrux License.
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has
been requested with respect to the omitted portions.
4
Notwithstanding the foregoing in lieu of
payment of amounts to VIVUS hereunder, KVP may upon written notice to VIVUS
elect to pay amounts otherwise due hereunder directly to FemPharm in accordance
with the Acrux License, provided that and without limiting Section 9.7 KVP
shall copy VIVUS on all correspondence and reports with respect thereto.
3.3 Audits.
3.3.1 VIVUS
or FemPharm (the Auditing Party)
may at its cost have any report referred to in Section 3.2 verified as set
forth below by a reputable firm of chartered accountants or certified public
accountants nominated by Auditing Party, and reasonably acceptable to KVP,
provided the Auditing Party completes such verification within thirty-six (36)
months of the end of the Royalty Period to which the verification relates. Upon not less than ten (10) Business Days
prior written notice given by the Auditing Party to KVP, KVP will provide the
accountants with access during KVPs normal business hours to the revenue and
sales records of KVP and its Affiliates sufficient for the purposes of
verifying the reports referred to in Section 3.2 and for the purpose of
verifying the amount of royalties paid hereunder. KVP
may request that, at its expense, a representative or agent familiar with its
record keeping systems be present at the audit to assist in the audit. A copy of the auditors report shall be
provided to KVP at the same time it is provided to the Auditing Party. Such audits will be at the expense of the
Auditing Party, except that if such audit establishes that the amount owed by
KVP for the audited period exceeds the amount actually paid by more than [***]
([***]), then KVP will pay the Auditing Partys actual out of pocket costs of
such audit.
3.3.2 The
accountants appointed under Section 3.3.1 are not authorized to, and will
not, disclose to the Auditing Party any information other than the accuracy or
inaccuracy of the reports to be verified and will be required to execute a reasonable
confidentiality agreement with KVP. In
addition, the Auditing Party may share any such report of the auditor in
confidence with FemPharm or VIVUS, as applicable.
3.3.3 Should
it be established from any report and verification referred to in this Section
3.3 that the royalties which should have been paid in respect of any Royalty
Period to which the report and verification relates are more or less than the
royalties actually paid then the difference will be remitted:
(a) to VIVUS (in the case
of the royalty paid being less than that which should have been paid) within
seven (7) Business Days; or
(b) to KVP (in the case of
the royalty paid being more than that which should have been paid) within three
(3) Business Days of VIVUSs receipt from FemPharm.
ARTICLE 4
TRANSFER OF INFORMATION / DEVELOPMENT OF EVAMIST
4.1 Transfer. Within sixty (60) days after the Effective
Date, VIVUS shall transfer to KVP without charge (except as provided in the
Transition Services Agreement) copies of all Licensed Know-How with respect to
Evamist transferred by FemPharm to VIVUS pursuant to
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has
been requested with respect to the omitted portions.
5
Section 5.2 of the Acrux License on or
before the Effective Date. Thereafter,
VIVUS shall promptly transfer to KVP without charge (except as provided in the
Transition Services Agreement) copies of any additional Licensed Know-How with
respect to Evamist that VIVUS receives from FemPharm pursuant to
Section 5.2 of the Acrux License.
4.2 Development
Responsibilities. Except as
otherwise determined by the Parties in writing or as set forth in the APA or
the Transition Services Agreement, KVP will be solely responsible for
conducting, at its own expense, all activities relating to the clinical
development, regulatory approval and commercialization of Evamist in the
Territory in the Field, using diligent, commercially reasonable efforts.
4.3 Committees. VIVUS shall designate as its representatives
to the Development Committee under Section 5.4 of the Acrux License two
(2) individuals designated by KVP from time to time in writing. Likewise, VIVUS shall designate as its
representative to the Steering Committee under Section 5.7 of the Acrux
License an individual designated by KVP from time to time in writing. In the event a Global Development Committee
is established pursuant to Section 5.14, KVP shall have the right to
designate VIVUSs appointee to such Global Development Committee. VIVUS shall
exercise its final decision right pursuant to Section 5.8 of the Acrux
License with respect to Evamist only as KVP designates in writing. For clarity, the KVP designees shall fulfill
the various rights and obligations for such committees as set forth in
Sections 5.9 5.13 of the Acrux License and KVP shall bear the costs and
expenses of its designees in their attendance and participation of any meeting
of the committees and other fulfillment of their responsibilities with respect
thereto.
4.4 Development Plan. To the extent a Development Plan is required
to be submitted to the Development Committee pursuant to Section 5.5 of
the Acrux License, KVP shall prepare such Development Plan and associated
budget (as required in Section 5.6 of the Acrux License) and may submit it
directly to the Development Committee through its designees to the Development
Committee; provided that prior to KVPs payment of the amount in accordance
with Section 4.2(a) of the APA for approval of an NDA for Evamist, KVP
shall provide such Development Plan to VIVUS for its prior review and comment
and incorporate VIVUSs reasonable comments to such Development Plan.
4.5 Data. KVP shall provide copies of all Data and
Regulatory Materials to FemPharm pursuant to Section 5.16 of the Acrux
License for FemPharms use in accordance therewith.
4.6 Development
Diligence. Except as otherwise
provided in the APA and the Transition Services Agreement, KVP shall use
diligent, commercially reasonable efforts to perform all the tasks and
responsibilities assigned to it in the Development Plan with respect to Evamist
in accordance with the development schedule set forth in the Development Plan,
in an effort to obtain all necessary regulatory approvals to launch Evamist in
the Territory.
6
ARTICLE 5
REGULATORY MATTERS
5.1 Regulatory
Materials.
5.1.1 Except
as otherwise provided in the APA and the Transition Services Agreement, KVP
shall be solely responsible for preparing and filing all Regulatory Materials
for the development of Evamist in the Territory, including carrying out all
registration and approval procedures necessary to comply with all appropriate
Laws relating to the manufacture, packaging, import, promotion, advertising and
sale of Evamist in the Territory. All
costs incurred by KVP with respect to such registrations and approvals shall be
borne by KVP. KVP acknowledges that
FemPharm has the right to review and comment on all such Regulatory Materials
prepared by KVP, including application for registration and regulatory approval
(to the extent disclosure of same does not violate confidentiality obligations)
and to the extent reasonably practicable KVP will consider all such comments
provided to KVP in advance of filing.
Similarly, to the extent that VIVUS has the right to review and comment
on all Regulatory Materials for Evamist developed by or under authority of
FemPharm or an Acrux Controlled Affiliate in the Field outside the Territory
(to the extent disclosure of same does not violate confidentiality obligations,
VIVUS shall promptly provide KVP with a reasonable opportunity to provide
comments and promptly provide (or facilitate KVP to provide directly) to
FemPharm any such comments.
5.1.2 KVP
acknowledges that FemPharm and its Affiliates and licensees (subject to the
last sentence of Section 5.16 of the Acrux License) have a right of
reference (at no cost to them) to the NDA and other Regulatory Materials filed
by VIVUS or KVP for Evamist in the Field and Territory, which right of
reference shall be solely for Australia and New Zealand as part of the
development, approval and commercialization of Evamist in the Field for such
countries.
5.2 Relationship with
Regulatory Authorities. Except as
otherwise provided in the APA and the Transition Services Agreement, KVP shall
have the sole right and responsibility for interacting with all regulatory
authorities in the Territory with respect to Evamist in the Field, including
meetings with such regulatory authorities, and responding to inquiries of and
conducting other communications with such regulatory authorities, with regard
to such Regulatory Materials or Evamist.
Further except as otherwise provided in the APA and the Transition
Services Agreement, KVP shall have the sole authority and responsibility for
all regulatory obligations regarding Evamist in the Field in the Territory,
including, but not limited to, the regulatory approval applications and
registrations and related materials, all promotional materials, labeling,
responding to medical inquiries, and complaints relating to Evamist in the
Territory, except as otherwise provided in the Development Plan, or determined
by the Development Committee. KVP shall
provide FemPharm with reasonable advance notice of, and any preparatory
material for, any hearing before, or meeting with, any regulatory authority
regarding Evamist in the Territory. KVP
acknowledges that FemPharm may request to have two (2) of its employees attend
such hearings or meetings at its own cost, and KVP will endeavor to include them
as reasonably practicable under the circumstances. Similarly, VIVUS shall notify KVP of any
corresponding notice from FemPharm with respect to any preparatory material
for, any hearing before, or meeting with, any regulatory authority regarding
Evamist outside the Territory and to the extent that VIVUS has the right to do
so, it shall allow KVPs designees to attend such hearings or meetings, at KVPs
cost.
5.3 Pharmacovigilence. KVP shall coordinate adverse event reporting
with respect to Evamist with FemPharm as may be agreed from time to time in
good faith between KVP and FemPharm.
7
ARTICLE 6
COMMERCIALIZATION / MANUFACTURE
6.1 General. KVP shall have the exclusive rights, subject
to the terms of this Agreement, to promote, market, distribute and sell Evamist
for use in the Field throughout the Territory, itself and/or through its
Affiliates and sublicensees. In
connection with the foregoing, KVP agrees to fulfill on behalf of VIVUS all of
VIVUSs obligations under Sections 8.2 8.5 of the Acrux License with
respect to Evamist accruing on or after the Effective Date.
6.2 Manufacture.
6.2.1 Except
as otherwise provided in the APA and the Transition Services Agreement, KVP
shall be solely responsible for the manufacture (itself or through third
parties) of all Evamist for development hereunder and commercialization thereof
in the Field in the Territory.
6.2.2 KVP
shall agree to supply to FemPharm needed amounts of Evamist (in final finished
and packaged form, according to the specifications of KVP in the Territory) for
use by FemPharm in developing and commercializing Evamist in the Field in
Australia and New Zealand under a mutually acceptable supply agreement on terms
that are customary and reasonable and consistent with Sections 8.6 and
14.5(a)(v) of the Acrux License. Such
Evamist supplied by KVP shall be used solely for FemPharm to develop and sell
Evamist in the Field in New Zealand and Australia. KVP shall have no obligation to supply any
Evamist other than that being developed or commercialized by KVP under this
Agreement at the then current time. The
transfer price for such Evamist shall be (i) [***] ([***]) above KVPs actual
purchase price if such Product is purchased by KVP from a contract
manufacturer; and (ii) [***] ([***]) above KVPs fully burdened manufacturing
costs, as determined consistent with KVPs standard practices applied
consistently across all its operations, if KVP manufactures Evamist.
ARTICLE 7
PATENT MATTERS
7.1 FemPharm Patents. To the extent VIVUS receives information with
respect to the FemPharm Patents relating to Evamist from FemPharm (whether
pursuant to Sections 12.1 or 12.3 of the Acrux License or otherwise), it
shall promptly provide such information to KVP.
VIVUS shall exercise its rights (i) to comment thereon with respect to
Evamist in accordance with Section 12.1 of the Acrux License as directed
by KVP or (ii) participate in any defense of the FemPharm Patents pursuant to
Section 12.3 of the Acrux License as directed by KVP using counsel
designated by KVP, all at KVPs expense.
In addition, if VIVUS has the right to prepare, file, prosecute or
maintain any FemPharm Patents relating to Evamist pursuant to Section 12.1 of the Acrux License,
it shall notify KVP and at KVPs request and expense, VIVUS shall exercise such
rights as directed by KVP using patent counsel designated by KVP. Further, VIVUS shall promptly notify KVP of
any infringement of the FemPharm Patents, and to the extent VIVUS has the right
to control the enforcement thereof with respect to Evamist, VIVUS shall
exercise such rights as directed by KVP using patent counsel designated by KVP
at KVPs expense. Without limiting the
foregoing, VIVUS shall pay to KVP all recoveries otherwise retained (net of
amounts payable to
*** Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has been requested
with respect to the omitted portions.
8
FemPharm) or received from FemPharm from the
enforcement of the FermPharm Patents with respect to Evamist.
7.2 Joint Patents. VIVUS shall promptly provide KVP with
information related to Joint Patents related to Evamist, including any such
information received from FemPharm. In
addition, VIVUS shall exercise its rights with respect to Joint Patents related
to Evamist, as requested by KVP at KVPs expense. For clarity, KVP shall pay VIVUS all amounts
reimbursable by VIVUS to FemPharm with respect to Joint Patents pursuant to
Section 12.2 of the Acrux License at least five (5) Business Days in
advance of the date such payments are due to FemPharm. Further, VIVUS shall promptly notify KVP of
any infringement of the Joint Patents, and to the extent VIVUS has the right to
control the enforcement thereof with respect to Evamist, VIVUS shall exercise
such rights as directed by KVP using patent counsel designated by KVP at KVPs
expense. Without limiting the foregoing,
VIVUS shall pay to KVP all recoveries otherwise retained (net of amounts
payable to FemPharm) or received from FemPharm from the enforcement of the
Joint Patents with respect to Evamist.
ARTICLE 8
CONFIDENTIALITY
8.1 Confidentiality;
Exceptions. Except to the extent
expressly authorized by this Agreement, the APA, the Transition Services
Agreement or otherwise agreed by the Parties in writing, the Parties agree that
the receiving Party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement
any confidential or proprietary information or materials furnished to it by the
other Party pursuant to this Agreement that are clearly marked as CONFIDENTIAL
or similar designation (collectively, Confidential
Information); provided that, all Purchased Assets shall be deemed
the Confidential Information of KVP (subject to the limitations set forth in
Sections 8.1.2 and 8.1.3).
Notwithstanding the foregoing, Confidential Information shall not be
deemed to include information or materials to the extent that it can be
established by written documentation by the receiving Party that such
information or material:
8.1.1 was
already known to or possessed by the receiving Party, other than under an
obligation of confidentiality (except to the extent such obligation has expired
or an exception is applicable under the relevant agreement pursuant to which
such obligation was established), at the time of disclosure;
8.1.2 was
generally available to the public or otherwise part of the public domain at the
time of its disclosure to the receiving Party;
8.1.3 became
generally available to the public or otherwise part of the public domain after
its disclosure and other than through any act or omission of the receiving
Party in breach of this Agreement;
8.1.4 was
independently developed by the receiving Party as demonstrated by documented
evidence prepared contemporaneously with such independent development; or
9
8.1.5 was
disclosed to the receiving Party, other than under an obligation of
confidentiality, by a third party who had no obligation to the disclosing Party
not to disclose such information to others.
8.2 Authorized Use and
Disclosure. Each Party may use and
disclose Confidential Information of the other Party as follows: (i) under
appropriate confidentiality provisions substantially equivalent to those in
this Agreement, in connection with the performance of its obligations or
exercise of rights granted to such Party in this Agreement or the APA,
(ii) to the extent such disclosure is reasonably necessary in filing for,
prosecuting or maintenance of patents, copyrights and trademarks (including
applications therefor), prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise required by applicable Law,
provided, however, that if a Party is required by Law to make any such
disclosure of the other Partys Confidential Information it will, except where
impracticable for necessary disclosures (for example, in the event of medical
emergency), give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information required to be disclosed,
(iii) in communication with existing and potential investors, consultants,
advisors (including financial advisors, lawyers and accountants) and others on
a need to know basis, in each case under appropriate and customary
confidentiality provisions under the circumstances, (iv) by VIVUS only to Acrux
and FemPharm to the extent reasonably necessary in complying with the terms of
the Acrux License, and (v) by KVP to the extent reasonably necessary in
filing for, conducting preclinical or clinical trials for, obtaining and
maintaining regulatory approvals for and manufacturing and commercializing Evamist in accordance with the terms hereof.
8.3 Prior Agreement. This Article 8 supersedes the
Confidentiality Agreement between the Parties dated June 2, 2006 (the Prior CDA) with respect to confidential
information disclosed thereunder. All
information disclosed by VIVUS under the Prior CDA shall be deemed Confidential
Information of VIVUS (except to the extent comprising Purchased Assets, which
shall be deemed the Confidential Information of KVP subject to the limitations
set forth in Sections 8.1.2 and 8.1.3) and shall be subject to the terms of
this Article 8.
8.4 Confidential Terms. Each of the Parties agrees not to disclose to
any third party the terms and conditions of this Agreement without the prior
approval of the other Party, except to advisors (including financial advisors,
attorneys and accountants), potential and existing investors, and others
(including in the case of KVP, potential and actual sublicensees under the
Licensed Intellectual Property) on a need to know basis, in each case under
circumstances that reasonably protect the confidentiality thereof, or to the
extent necessary to comply with the terms of agreements with third parties
(including the Acrux License), or to the extent required by applicable Law.
ARTICLE 9
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION
9.1 General
Representations and Warranties. Each
Party represents and warrants to the other that:
10
9.1.1 it
is duly organized and validly existing under the Laws of the jurisdiction of
its incorporation, and has full corporate power and authority to enter into
this Agreement and to carry out the provisions hereof;
9.1.2 it
is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder, and the person executing this Agreement on its behalf
has been duly authorized to do so by all requisite corporate action;
9.1.3 this
Agreement is legally binding upon it and enforceable in accordance with its
terms and the execution, delivery and performance of this Agreement by it does
not conflict with any agreement, instrument or understanding, oral or written,
to which it is a party or by which it may be bound, nor violate any material
applicable Law;
9.1.4 it
has not granted, and shall not grant during the Term, any right to any third
party which would conflict with the rights granted to the other Party
hereunder; and
9.1.5 it
is not aware of any action, suit or inquiry or investigation instituted by any
Person which questions or threatens the validity of this Agreement.
9.2 VIVUSs Warranties. VIVUS represents and warrants that as of the
Effective Date:
9.2.1 the
Acrux License as set forth on Attachment 1 is a true, correct and
complete copy of the Acrux License;
9.2.2 the
Acrux License is in full force and effect;
9.2.3 VIVUS,
and to its knowledge FemPharm and Acrux are not in breach of any material
provision of the Acrux License, and VIVUS has neither given to, nor received
from, FemPharm or Acrux notice of any such breach except as provided in the
Schedule of Exceptions attached herein as Attachment 2; and
9.2.4 VIVUS
has not received notice that it has failed to comply with, and it has not
failed to comply with any Law, in either case in a manner that will have a
material adverse affect on the rights granted to KVP under this Agreement;
9.2.5 to
VIVUSs knowledge (i) the FemPharm Patents are in full force and effect and not
subject to any pending re-examination, opposition, interference or claim of
invalidity, (ii) the FemPharm Patents are not subject to any litigation or
similar proceedings seeking the invalidity or unenforceability thereof and
there is no threat of such proceedings, (iii) there is no basis for any of the
FemPharm Patents to be held invalid or unenforceable; and
9.2.6 to
VIVUSs knowledge, there is no infringement of any FemPharm Patents.
9.3 Disclaimer of
Warranties. EXCEPT AS SET FORTH IN
THIS ARTICLE 9 OR OTHERWISE
IN THE APA, VIVUS AND KVP EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF
THIS AGREEMENT (INCLUDING THE LICENSED
11
INTELLECTUAL PROPERTY), INCLUDING ANY
WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.
9.4 Indemnification.
9.4.1 Indemnification
by VIVUS. VIVUS hereby agrees to defend, hold harmless and indemnify
(collectively, Indemnify) KVP
and its Affiliates, and its and their agents, directors, officers and employees
(the KVP Indemnitees) from and
against any liability or expense (including reasonable legal expenses and
attorneys fees) (collectively, Losses)
resulting from suits, claims, actions and demands, in each case brought by a
third party (each, a Third-Party Claim)
arising out of (i) VIVUSs negligence or willful misconduct, or (ii) VIVUSs
breach of either this Agreement or the Acrux License. VIVUSs obligation to Indemnify the KVP
Indemnitees pursuant to this Section 9.4 shall not apply to the extent
that any such Losses (A) arise from the gross negligence or intentional
misconduct of any KVP Indemnitee; (B) arise from any breach by KVP of this
Agreement; or (C) are Losses for which KVP is obligated to Indemnify the
VIVUS Indemnitees pursuant to Section 9.4.2.
9.4.2 Indemnification
by KVP. KVP hereby agrees to
Indemnify VIVUS and its Affiliates, and its and their agents, directors,
officers and employees (the VIVUS
Indemnitees) from and against any and all Losses resulting from
Third-Party Claims arising out of: (i) KVPs negligence or willful misconduct;
(ii) KVPs breach of this Agreement; or (iii) the development,
manufacture, commercialization or other exploitation of Evamist or other
exercise of the licenses granted hereunder by or under authority of KVP. KVPs obligation to Indemnify the VIVUS
Indemnitees pursuant to this Section 9.4 shall not apply to the extent
that any such Losses (A) arise from the gross negligence or intentional
misconduct of any VIVUS Indemnitee; (B) arise from any breach by VIVUS of
this Agreement; or (C) are Losses for which VIVUS is obligated to
Indemnify the KVP Indemnitees pursuant to Section 9.4.1.
9.4.3 Procedure. To be eligible to be Indemnified hereunder,
the indemnified Party shall provide the indemnifying Party with prompt notice
of the Third-Party Claim giving rise to the indemnification obligation pursuant
to this Section 9.4 and the exclusive ability to defend (with the
reasonable cooperation of the indemnified Party) or settle any such claim;
provided, however, that the indemnifying Party shall not enter into any settlement
that admits fault, wrongdoing or damages without the indemnified Partys
written consent, such consent not to be unreasonably withheld or delayed. The
indemnified Party shall have the right to participate, at its own expense and
with counsel of its choice, in the defense of any claim or suit that has been
assumed by the indemnifying Party.
9.5 Insurance. Without limiting Section 6.1, KVP shall
obtain and maintain, during the Term for a period of six (6) years thereafter,
comprehensive general liability insurance, including products liability
insurance and coverage for clinical trials, with reputable and financially
secure insurance carriers, or self insurance in a form and at levels consistent
with industry standards based upon KVPs activities and indemnification
obligations hereunder. Such liability
insurance or self-insurance shall be maintained on an occurrence basis to
provide such protection after expiration or termination of the policy itself or
this Agreement. KVP shall furnish to
VIVUS on request
12
certificates issued
by the insurance company setting forth the amount of the liability insurance
(or evidence of self insurance) and a provision that VIVUS shall receive thirty
(30) days written notice prior to termination or material reduction to the
level of coverage.
9.6 Acrux License. During the Term and subject to KVP fulfilling
its obligations hereunder including the payment of amounts in accordance with
Article 3, VIVUS shall keep the Acrux License in full force and effect. Accordingly, except as KVP may otherwise
agree, VIVUS shall not provide any notice of breach to FemPharm under the Acrux
License or otherwise terminate the Acrux License. VIVUS shall not, without the written approval
of KVP, agree to any amendment or modification of or to the Acrux License or
waive any of its rights or the obligations of FemPharm or Acrux thereunder, in
each such case that would likely have an adverse effect with respect to any of
the rights of KVP hereunder. Further
and without limiting any other provision herein, VIVUS shall promptly provide a
copy of any and all notices received by VIVUS under the Acrux License related
to the subject matter hereof or that is likely to adversely affect any of KVPs
rights or licenses hereunder. Without
limiting the foregoing, if VIVUS receives a notice of breach from FemPharm
pursuant to the Acrux License, then unless VIVUS (i) disputes such breach in
accordance with Section 15.10 of the Acrux License or (ii) provides KVP prompt
evidence of cure of such breach, KVP shall have the right to cure such breach
on behalf of VIVUS and VIVUS shall be responsible for all costs and expenses
incurred by KVP in connection with effecting such cure.
9.7 Certification. With respect to those obligations hereunder
which KVP owes directly to FemPharm hereunder, KVP shall provide to VIVUS on or
before January 1 and July 1 of each calendar year during the Term a certificate
of compliance signed by an officer of KVP stating that KVP has complied with
all such obligations.
9.8 Liquidated Damages. In the event that VIVUS breaches Section 9.6
as a result of VIVUSs termination of the Acrux License and at such time KVP is
not in material breach of this Agreement, then VIVUS shall pay as liquidated
damages an amount equal to the amounts paid to VIVUS under the APA. The Parties intend that such liquidated
damages approximate the damages that KVP would sustain as a result of such
termination. Accordingly in such event,
the liquidated damages set forth in this Section 9.8 shall be KVPs sole and
exclusive remedy for VIVUSs termination of the Acrux License.
9.9 Disclaimer of
Liability. Except with respect to a
breach of Section 9.1 through 9.4 or the exclusivity in Section 2.1 or in the event of fraud or
willful misconduct,, in no event shall either party be liable to the
other based upon this agreement for any special, consequential, indirect, or
incidental damages arising out of or related to this agreement, however caused,
on any theory of liability and whether or not such party has been advised or is
aware of the possibility of such damages.
ARTICLE 10
TERM AND TERMINATION
10.1 Term. This Agreement shall become effective as of
the Effective Date and, unless earlier terminated pursuant to the other
provisions of this Article 10, shall continue in full force and effect
until KVP has no remaining payment obligations hereunder (i.e., VIVUSs payment
13
obligations under the Acrux License with
respect to Evamist have expired) (the Term). Upon the expiration, but not earlier
termination, the licenses granted pursuant to Section 2.1 shall become
non-exclusive, fully-paid up and irrevocable.
10.2 Termination by KVP. KVP may terminate this Agreement upon
seventy-five (75) days written notice to VIVUS referencing this Section
10.2. If at any time Acrux agrees to an
assignment of the Acrux License to KVP in place of VIVUS, VIVUS consents to
such assignment and to the assumption of all rights and responsibilities under
the Acrux Agreement by KVP.
10.3 Cross Termination. This Agreement shall terminate upon the
effective date of a termination of the Acrux License, unless in the event of
such a termination by FemPharm KVP provides written notice to FemPharm agreeing
to be bound by and perform to the same extent as required of VIVUS under the
Acrux Agreement.
10.4 General Effects of
Expiration or Termination
10.4.1 Accrued Obligations.
Expiration or termination of this Agreement for any reason shall not
release either Party from any obligation or liability which, at the time of
such expiration or termination, has already accrued to the other Party or which
is attributable to a period prior to such expiration or termination.
10.4.2 General Survival.
Articles 1, 8, 11 and 12 and Section 9.4 and Section 9.5 (for the
period set forth therein) shall survive expiration or termination of this
Agreement for any reason. Except as
otherwise provided in this Article 10, all rights and obligations of the
Parties under this Agreement shall terminate upon expiration or termination of
this Agreement for any reason.
10.4.3 Return of Materials.
Within fifteen (15) Business Days after the effective date of a
termination, each Party shall destroy all tangible items comprising, bearing or
containing any Confidential Information of the other Party in its possession or
control, and provide written certification of such destruction, or prepare such
tangible items of Confidential Information for shipment to the other Party, as
such other Party may direct, at the other Partys expense; provided that the
first Party may retain one copy of such Confidential Information for its legal
archives solely for use in determining its ongoing obligations under this
Agreement.
ARTICLE 11
DISPUTE RESOLUTION
11.1 Disputes. If the Parties are unable to resolve any
dispute or other matter arising out of or in connection with this Agreement,
either Party may, by written notice to the other, have such dispute referred to
the Chief Executive Officers of the Parties for attempted resolution by good
faith negotiations within ten (10) Business Days after such notice is
received. In such event, each Party
shall cause its Chief Executive Officers to meet (face-to-face or by
teleconference) and be available to attempt to resolve such issue. If the
Parties should resolve such dispute or claim, a memorandum setting forth their
agreement will be prepared and signed by both Parties if requested by either
Party.
14
The Parties shall cooperate in an effort to
limit the issues for consideration in such manner as narrowly as reasonably
practicable in order to resolve the dispute.
11.2 Arbitration. In the event that the Parties are unable to
resolve any such matter pursuant to Section 11.1, then either Party may
initiate arbitration pursuant to this Section 11.2. Any arbitration under this Section 11.2
shall be conducted by Judicial Arbitration and Mediation Services (JAMS) in San Jose, California in
accordance with the then current Comprehensive Arbitration Rules and Procedures
of JAMS by a single arbitrator and shall be binding upon the Parties. In such arbitration, the arbitrator shall
select an independent expert with significant experience relating to the
subject matter of such dispute to advise the arbitrator with respect to the
subject matter of the dispute. If the
Parties are unable to agree on an arbitrator, the arbitrator shall be selected
by the senior executive of the San Jose office of JAMS. The costs of such arbitration (including the
arbitrator and expert) shall be shared equally by the Parties, and each Party shall
bear its own expenses in connection with the arbitration. The Parties shall use good faith efforts to
complete arbitration under this Section 11.2 within sixty (60) days
following the initiation of such arbitration.
The arbitrator shall establish reasonable additional procedures to
facilitate and complete such arbitration within such sixty (60) day
period. Nothing in this Agreement shall
limit the right of either Party to seek to obtain in any court of competent
jurisdiction any equitable or interim relief or provisional remedy, including
injunctive relief.
ARTICLE 12
MISCELLANEOUS
12.1 Governing Law. This Agreement and any dispute arising from
the performance or breach hereof shall be governed by and construed and
enforced in accordance with the Law of the State of Delaware, without reference
to conflicts of laws principles.
12.2 Assignment. This Agreement shall not be assignable by
either Party to any third party without the written consent of the other Party
and any such attempted assignment shall be void. Notwithstanding the foregoing, either Party
may assign this Agreement, without the written consent of the other Party, to
an entity that acquires all or substantially all of the business or assets of
such Party to which this Agreement pertains (whether by merger, reorganization,
acquisition, sale or otherwise) and agrees in writing to be bound by the terms
and conditions of this Agreement. No
assignment or transfer of this Agreement shall be valid and effective unless
and until the assignee/transferee agrees in writing to be bound by the
provisions of this Agreement. The terms
and conditions of this Agreement shall be binding on and inure to the benefit
of the permitted successors and assigns of the Parties. Except as expressly provided in this
Section 12.2, any attempted assignment or transfer of this Agreement shall
be null and void
12.3 Notices. Any notice, request, delivery, approval or
consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered in
person, transmitted by facsimile (receipt verified) or by express courier
service (signature required) or five (5) days after it was sent by registered
mail, return receipt requested (or its equivalent), provided that no postal
strike or other disruption is then in effect or comes into effect within two
(2) days after such mailing, to the Party to which it is directed at its
address or facsimile
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number shown below or such other address or
facsimile number as such Party will have last given by notice to the other
Party.
If to VIVUS, addressed to:
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VIVUS Inc.
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112 Castro
Street, Suite 200
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Mountain View,
California
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Attention: Leland F. Wilson
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Facsimile: (650) 934-5389
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With a copy to:
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Wilson Sonsini Goodrich & Rosati
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Professional
Corporation
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650 Page Mill
Road
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Palo Alto, CA
94304-1050
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Attention: Ian
B. Edvalson, Esq.
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Facsimile: (650)
493-6811
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If to KVP,
addressed to:
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K-V Pharmaceutical Company
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2503 S. Hanley Road
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St. Louis, Missouri 63144
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Attention: Vice President, Business Development and
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General Counsel
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Facsimile: (314) 645-4705
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With a copy to:
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Kenyon & Kenyon LLP
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One Broadway
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New York, New
York 10004
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Attention:
Charles Weiss, Esq.
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Facsimile: (212)
425-5288
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12.4 Waiver. Neither Party may waive or release any of its
rights or interests in this Agreement except in writing. The failure of either Party to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition. No waiver by either Party of any condition or
term in any one or more instances shall be construed as a continuing waiver of
such condition or term or of another condition or term.
12.5 Severability. If any provision hereof should be held
invalid, illegal or unenforceable in any jurisdiction, the Parties shall
negotiate in good faith a valid, legal and enforceable substitute provision
that most nearly reflects the original intent of the Parties and all other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in order to carry out the intentions of the
Parties as nearly as may be possible.
Such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
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12.6 Entire
Agreement/Modification. This
Agreement, including its Attachment (together with the APA and Transition
Services Agreement), sets forth all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
and supersedes and terminates all prior agreements and understandings between
the Parties including the Prior CDA and that certain Letter of Intent for
Discussion Purposes between the Parties dated February 14, 2007. No subsequent alteration, amendment, change
or addition to this Agreement shall be binding upon the Parties unless reduced
to writing and signed by the respective authorized officers of the Parties.
12.7 Bankruptcy. All rights and licenses granted under or
pursuant to this Agreement by each Party as a licensor are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of Title 11, U.S. Code
(the Bankruptcy Code), licenses
of rights to intellectual property as defined under section 101(35A) of the
Bankruptcy Code. The Parties agree that
each licensee of such rights under this Agreement shall retain and may fully
exercise all rights and elections it would have in the case of a licensor
bankruptcy under the Bankruptcy Code.
Each Party agrees during the term of this Agreement to create or
maintain current copies, or if not amenable to copying, detailed descriptions
or other appropriate embodiments, of all such intellectual property licensed to
the other Party.
12.8 Relationship of the
Parties. The Parties agree that the
relationship of VIVUS and KVP established by this Agreement is that of
independent contractors. Furthermore,
the Parties agree that this Agreement does not, is not intended to, and shall
not be construed to, establish an employment, agency or any other relationship. Except as may be specifically provided
herein, neither Party shall have any right, power or authority, nor shall they
represent themselves as having any authority, to assume, create or incur any
expense, liability or obligation, express or implied, on behalf of the other
Party, or otherwise act as an agent for the other Party for any purpose.
12.9 Force Majeure. Except with respect to payment of money,
neither Party shall be liable to the other for failure or delay in the
performance of any of its obligations under this Agreement for the time and to
the extent such failure or delay is caused by earthquake, riot, civil
commotion, war, terrorist acts, strike, flood, or governmental acts or
restriction, or other cause that is beyond the reasonable control of the
respective Party. The Party affected by
such force majeure will provide the other Party with full particulars thereof
as soon as it becomes aware of the same (including its best estimate of the
likely extent and duration of the interference with its activities), and will
use commercially reasonable efforts to overcome the difficulties created
thereby and to resume performance of its obligations as soon as practicable.
12.10 Compliance with Laws. Notwithstanding anything to the contrary
contained herein, all rights and obligations of VIVUS and KVP are subject to
prior compliance with, and each Party shall comply with, all applicable Laws,
including obtaining all necessary approvals required by the applicable agencies
of the governments of the United States and foreign jurisdictions.
12.11 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and all of which
together, shall constitute one and the same instrument.
[The remainder of this
page intentionally left blank; the signature page follows.]
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IN WITNESS
WHEREOF, the Parties have executed this Agreement in
duplicate originals by their duly authorized representatives as of the
Effective Date.
VIVUS INC.
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K-V PHARMACEUTICAL COMPANY
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Attachments:
Attachment 1: Acrux License, as
amended
Attachment 2:
Schedule of Exceptions
18
ATTACHMENT
1
UNDERLYING LICENSE AGREEMENT (as amended)
[Previously
filed as Exhibit 10.51 with the Registrants Annual Report on
Form 10-K for the year ended December 31, 2004.]
19
ATTACHMENT
2
SCHEDULE OF EXCEPTIONS
[Schedule of Exceptions has been omitted. A copy will be provided upon request by the
Commission.]
20
EXHIBIT B
Form of
Transition Services Agreement
EXHIBIT B
TRANSITION
SERVICES AGREEMENT
THIS TRANSITION SERVICES
AGREEMENT (the Agreement)
is entered into as of ,
2007 (the Effective Date) by and
between K-V Pharmaceutical Company, a Delaware corporation, having an office at
2503 S. Hanley Road, St. Louis, Missouri 63144 (together with its Affiliates, Recipient), and Vivus, Inc., a
Delaware corporation, having an office at 112 Castro Street, Suite 200,
Mountain View, California 94040 (together with its Affiliates, Service Provider). Recipient and Service Provider may be
referred to herein individually as a Party or
collectively as the Parties.
RECITALS
WHEREAS,
pursuant to an Asset Purchase Agreement, dated March 30, 2007, by and between
Recipient and Service Provider (the APA), the
Parties have entered into an agreement for the purchase by Recipient of certain
assets of Service Provider related to the product known as Evamist, all on the
terms and conditions set forth therein; and
WHEREAS,
to facilitate the transfer of assets relating to such product to Recipient,
Service Provider has agreed to provide to Recipient certain technology
transition services.
NOW,
THEREFORE, the Parties agree as follows:
1. DEFINITIONS. The following terms, when used herein with
initial capital letters, will have the meanings ascribed to such terms in this Section
1. Capitalized terms not defined
herein shall have the meanings set forth in the APA or Acrux License, as
applicable.
1.1 Acrux License means the Estradiol
Development and Commercialization Agreement by and among Service Provider,
Fempharm and Acrux DDS Pty Ltd. effective February 12, 2004, as amended July 2,
2004.
1.2 Affiliate means (i) any corporation
or other legal entity owning, directly or indirectly, fifty percent (50%) or
more of the voting capital shares or similar voting securities of a Vivus, Inc.
or K-V Pharmaceutical Company; (ii) any corporation or other legal entity fifty
percent (50%) or more of the voting capital shares or similar voting rights of
which is owned, directly or indirectly, by a Party; or (iii) any corporation or
other legal entity fifty percent (50%) or more of the voting capital shares or
similar voting rights of which is owned, directly or indirectly, by a
corporation or other legal entity which
owns, directly or indirectly, fifty percent (50%) or more of the voting capital
shares or similar voting securities of such Party. Solely for purposes of this Agreement, each
Party will be deemed not to be an Affiliate of the other Party.
1.3 FemPharm means FemPharm Pty Ltd.
1.4 Pass Through Expenses means the
reasonable and actual out-of-pocket expenses (including travel expenses)
incurred by Service Provider in performing the Services, but not including any
overhead costs, wages, salaries or benefit costs of Service Providers officers
or employees or other mark-ups.
1.5 Recipient Personnel means all employees, agents, subcontractors, and representatives
of Recipient.
1.6 Recipients Facility means the
facility located at ,
or such other location that Recipient shall notify Service Provider of in
writing.
1.7 Service Provider Personnel means all employees of Service Provider who perform
Services under this Agreement.
1.8 Services means reasonable services
related to the development, regulatory approval, clinical testing,
manufacturing and commercialization of Evamist including but not limited to the
services as described on Schedule A and requested from time to time by
Recipient during the term of this Agreement.
2. TRANSFER OF TECHNOLOGY
2.1 Transfer
of Initially Transferred Materials. As
soon as practicable after the Effective Date, Service Provider shall deliver at
no cost to Recipient at the Recipients Facility the information, documents,
equipment, software and materials set forth in Schedule B to this
Agreement, which constitute some, but not all, of the Licensed Know-How (as
defined in the Acrux License) with respect to the Evamist Business transferred
by FemPharm to Service Provider pursuant to Section 5.2 of the
Acrux License (Initially Transferred Materials).
2.2 Transfer
of Future Transferred Materials. After
the transfer of the Initially Transferred Materials, Service Provider shall
promptly transfer to Recipient without charge (except as provided herein) to a
location specified by Recipient copies of any additional Licensed Know-How
licensed under the Acrux License with respect to Evamist that Service Provider
receives from FemPharm pursuant to Section 5.2 of the Acrux License (the
Future Transferred Materials).
3. SERVICES
3.1 Provision
of Services. Service Provider will
provide the Services to Recipient during the term of this Agreement as set
forth in this Section 3.1. Except as otherwise expressly provided in this
Agreement, Service Provider will be responsible for providing appropriate
personnel and other resources required for performance of the Services.
(a) During
the Term, Service Provider will provide up to eight (8) hours of Services per
week as requested by Recipient without charge, subject to reimbursement of Service Provider for Pass Through Expenses
pursuant to Section 4.2. Any
unused hours (out of the eight (8) hour budget for a given week) will be
carried over to successive weeks. Any
additional hours of Services provided in a given week (in excess of the eight
(8) hour budget plus any additional hours carried over from previous weeks),
other than for Services related to clinical development and regulatory approval
processes provided prior to the Evamist NDA Approval Date), will be charged to
Recipient at the rate of $250 per hour.
2
(b) Notwithstanding
anything to the contrary herein, prior to the Evamist NDA Approval Date,
Service Provider will provide all reasonably requested Services related to clinical development and regulatory approval
processes without charge, subject to
reimbursement of Service Provider for Pass Through Expenses pursuant to Section
4.2.
(c) Notwithstanding
anything to the contrary herein, following the Evamist NDA Approval Date and
for up to three (3) months thereafter (but in no event beyond December 31,
2007), Service Provider will provide up to eight (8) hours per week of Services
related to the transfer of the Evamist FDA Submissions and related books and
records, as requested by Recipient, without charge, subject to reimbursement of Service Provider for Pass Through Expenses
pursuant to Section 4.2.
(d) Any
travel required in connection with performance of the Services must be
requested of and coordinated with Service Provider at least three (3) Business
Days in advance, unless exigent circumstances necessitate a shorter notice
period. In addition, travel time will
not be counted toward chargeable hours.
3.2 General
Standards of Performance. Service
Provider will provide the Services to Recipient with at least the same level of
skill, quality, care, timeliness, and cost-effectiveness as such services,
functions, and tasks were performed for Service Providers own purposes prior
to the date of execution of the APA. At
a minimum, Service Provider will perform the Services in a timely and
professional manner and in accordance with industry standards for services of
the type performed. Service Provider
will comply with all applicable international, federal, state, and local laws
and regulations, and will obtain all applicable permits and licenses, in
connection with its obligations under this Agreement.
3.3 Preferred
Providers. If requested by
Recipient, Service Provider will provide to Recipient a list of Service
Providers preferred providers of services related to the transferred Evamist
Business, and Recipient may in its discretion engage such providers to provide
services directly to Recipient.
3.4 Assistance
with Initially Transferred Materials. Upon
delivery of the Initially Transferred Materials pursuant to Section 2.1
above, and at Recipients reasonable request, Service Provider will provide to
Recipient consultation, assistance, and information as reasonably requested by
Recipient in order to, and otherwise perform the Services so as to, effect a
smooth transition of the transferred Evamist Business and related business to
Recipients Facility and to assist Recipient in understanding, using and
practicing the Initially Transferred Materials.
3.5 Assistance
with Future Transferred Materials. Upon
delivery of the Future Transferred Materials pursuant to Section 2.2,
and at the reasonable request of Recipient, Service Provider shall assist
Recipient in understanding, using and practicing the Future Transferred
Materials.
3.6 Additional
Consulting Agreement. If Recipient
so elects by written notice to Service Provider during the Term, the Parties
shall enter into a separate consulting agreement, on commercially reasonable
terms and in a mutually acceptable form, with a term effective as of January 1,
2008 and ending on December 31, 2008, providing that Service Provider shall
render
3
additional reasonable consulting services to Service
Provider related to Evamist in the amount of up to eight (8) hours per week in
exchange for a consulting fee of $250 per hour (with any travel time not
counted toward chargeable hours).
4. COMPENSATION
4.1 Charges. For any Services provided hereunder,
Recipient agrees to pay Service Provider the applicable service fees set forth
in Section 3.1 for the performance of such Services. Recipient will not be required to pay any
amounts for the Services provided hereunder other than as set forth in Section
3.1, unless approved by Recipient in advance in writing.
4.2 Pass
Through Expense Reimbursement.
Recipient agrees to reimburse Service Provider for Pass Through Expenses
incurred by Service Provider in performing the Services and invoiced to
Recipient in accordance with this Section 4. Each such
invoice will be accompanied by such supporting documentation and vouchers as
Recipient may reasonably require. Such invoices
will be due and payable within forty-five (45) days after Recipients receipt
of the invoice.
4.3 Invoicing
and Payment. Service Provider will
invoice Recipient monthly at the end of each month for the amount due under
this Agreement for that month. Such invoices will clearly specify amounts due
for each of the Services. Each such
invoice will be accompanied by such supporting documentation and vouchers as
Recipient may reasonably require. Such
invoices will be due and payable within forty-five (45) days after Recipients
receipt of the invoice.
5. CONFIDENTIALITY
5.1 Confidential
Information. Each Party shall use and
disclose Confidential Information (as defined in the Sublicense Agreement) of
the other Party obtained under this Agreement as set forth in Article 8 of the
Sublicense Agreement.
5.2 Safeguarding
Confidential Information. During the
term of this Agreement, each Party will maintain environmental, safety, and
facility procedures, data security procedures and other safeguards against the
destruction, loss, or alteration of the other Partys Confidential Information
(as defined in the Sublicense Agreement) in its possession which are no less
rigorous than those maintained by such Party for its own information of a
similar nature.
5.3 Access
to Computer Systems. If Service
Provider is given access to any of Recipients equipment, computer, software,
network, electronic files, or electronic data storage system, Service Provider
shall limit such access and use solely
to perform Services for Recipient and shall not access or attempt to access any
equipment, computer, software, network, electronic files, or electronic data
storage system, other than those specifically required to accomplish the
Services. Service Provider shall limit
such access to those Service Provider Personnel with an express requirement to
have such access in connection with this Agreement, shall advise Recipient in
writing of the name of each such employee who will be granted such access, and
shall strictly follow all Recipient security rules and procedures for use of
Recipients electronic resources. All
user identification numbers and passwords disclosed to
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Service Provider and any information obtained by
Service Provider as a result of their access to and use of Recipients
equipment, computers, software, networks, electronic files, and electronic data
storage systems, shall be deemed to be, and shall be treated as, Confidential
Information (as defined in the Sublicense Agreement) under applicable
provisions of this Agreement. Service
Provider agrees to cooperate with Recipient in the investigation of any
apparent unauthorized access by Service Provider to Recipients equipment,
computer, software, network, electronic file, or electronic data storage
systems, or any apparent unauthorized release of Recipients Confidential
Information (as defined in the Sublicense Agreement) by Service Provider
Personnel.
6. [INTENTIONALLY DELETED]
7. PERSONNEL
7.1 Service
Provider Services Manager. Service
Provider hereby designates CJ Wang as the initial Services Manager
hereunder. In addition, Service Provider
shall make available its Senior Director of Contract Manufacturing (currently
Ted Broman) to provide Services related to manufacturing and such other Service
Provider Personnel as appropriate to perform other applicable Services provided
to Recipient hereunder. The Services
Manager will be an employee of Service Provider, will devote reasonable time
and effort to managing the Services, will serve as the initial point of contact
to Recipient for all matters related to the Services, and will have day-to-day
authority for ensuring performance of the Services in accordance with the terms
of this Agreement. Any replacement of
the Services Manager will be subject to Recipients reasonable approval. Service Provider may replace the Services
Manager only if the Services Manager is unable to continue fulfilling his or
her responsibilities as such due to death, disability, or termination of
employment with Service Provider, or as otherwise agreed by the Parties.
7.2 Compensation
and Benefits. All Service Provider
Personnel providing Services under this Agreement will be deemed to be
employees solely of Service Provider for purposes of all compensation and
employee benefits and not to be employees or representatives of Recipient. Service Provider will be solely responsible
for payment of (a) all income, disability, withholding, and other employment
taxes and (b) all wages, salaries, medical benefit premiums, vacation pay, sick
pay, or other fringe benefits for any employees, agents, or contractors of
Service Provider who perform Services with Sections 8.2 and 8.3
governing any such indemnification.
Service Provider will indemnify, defend and hold Recipient as an
Indemnitee (as defined in Section 8.1) harmless against any of the
foregoing and any liability for premiums, contributions or taxes payable under
workers compensation, unemployment compensation, disability benefit, old age
benefit, or tax withholding for which Recipient may be adjudged liable as an
employer with respect to any Service Provider Personnel who perform Services. All Service Provider Personnel will be under
the direction, control, and supervision of Service Provider, and Service
Provider will have the sole right to exercise all authority with respect to the
employment, termination, assignment, and compensation of such Service Provider Personnel.
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8. INDEMNIFICATION AND INSURANCE
8.1 Indemnification. Each Party (the Indemnitor)
will hold harmless and indemnify the other Party directors, officers, employees
and agents (collectively, the Indemnitees)
from and against, and will compensate and reimburse each of the Indemnitees
for, any damages that are suffered or incurred by any of the Indemnitees or to
which any of the Indemnitees may otherwise becomes subject at any time that
relate to any claim by a third party and that arises from or results from, or
is connected with, any gross negligence or intentional misconduct of the
Indemnitor or the Indemnitors personnel in the course of its performance under
this Agreement or breach of this Agreement by the Indemnitor.
8.2 Obligations. The Indemnitor will have control of the
defense, litigation, and, subject to the conditions set forth below, settlement
of any third party claims or suits that are subject to Sections 7.3 and 8.1. An Indemnitee will have the right (subject to
the conditions set forth below), but not the obligation, to select counsel of
its choice to participate in the defense of such third party claims or suits,
in which case the Indemnitee will pay the fees and expenses of its own legal
counsel unless, in the reasonable opinion of Indemnitees legal department,
separate legal counsel for the Indemnitee and the Indemnitor is necessary or
advisable due to an actual or potential conflict of interest (in which case the
Indemnitor will pay the fees and expenses of the Indemnitees legal
counsel). The Indemnitor will not accept
a settlement of any such third party claim without the prior written consent of
the Indemnitee, which consent will not be unreasonably withheld if such
settlement involves solely the payment of money by the Indemnitor and the
Indemnitor has the ability to pay the amount required by the settlement.
8.3 Cooperation. If any claim is made against an
Indemnitor within the scope of the indemnity set forth in Sections 7.3
and 8.1, the Indemnitee will: (a) provide prompt written notice of such
third party claim to the Indemnitor; (b) provide the Indemnitor with such
assistance as the Indemnitor may reasonably request in connection with the
defense and settlement of such claim, provided that all costs and expenses incurred
by either Party will borne by the Indemnitor; and (c) promptly comply with
all terms of any resolution or settlement of such claim at the Indemnitors
expense. Failure by the Indemnitee to
comply with the obligations under this Section 8.3 will relieve the
Indemnitor of its obligations under Sections 8.1 and 8.2 only if
and to the extent that the Indemnitor can show that its ability to defend the
claim or settle the claim on favorable terms was materially prejudiced by the
Indemnitees failure to comply with its obligations under this Section 8.3.
8.4 Insurance. During the term of this Agreement each Party
will maintain insurance of the types and with the policy limits as are
appropriate for transactions of the type contemplated by this Agreement.
8.5 Disclaimer
of Consequential Damages. IN NO
EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER
BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT
LIABILITY OR OTHER TORT, OR OTHERWISE ARISING OUT OF THIS AGREEMENT.
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9. TERM AND TERMINATION
9.1 Term. The term of this Agreement will commence on
the Effective Date and will continue until December 31, 2007 (the Term).
9.2 Survival. The following provisions of this Agreement
will survive the termination or expiration of this Agreement: Sections 1, 5, 8, 9,
and 10.
10. GENERAL
10.1 Integration. This Agreement, together with the APA, the
Related Agreements and the Acrux License, supersedes all other
agreements and understandings between the Parties with respect to the subject
matter discussed herein.
10.2 Further
Assurances. Each Party agrees to
take such actions and execute such documents as are reasonably requested by the
other Party (including providing executed documents in such recordable form as
is deemed required or necessary by the other Party) to effect the purposes of
this Agreement.
10.3 Continued
Performance. Each Party agrees to
continue performing its obligations under this Agreement while any dispute is
being resolved unless and until the term of this Agreement ends.
10.4 Notices. Any notice or other communication required or
permitted to be delivered to any Party under this Agreement must be in writing
and will be deemed properly delivered, given and received (a) when delivered by
hand, or (b) two (2) business days after sent by registered mail, by courier or
express delivery service or by facsimile, in each case to the address or
facsimile telephone number set forth beneath the name of such Party below (or
to such other address or facsimile telephone number as such Party will have
specified in a written notice given to the other Parties hereto):
if to Service Provider:
112
Castro Street, Suite 200
Mountain
View, California 94040
Attention:
President
Facsimile: (650) 934-5389
if to Recipient:
2503
S. Hanley Road
St.
Louis, Missouri 63144
Attention: Vice President, Business Development
General Counsel
Facsimile: (314) 645-4705
10.5 Headings. Paragraph headings are inserted for
convenience of reference only and do not form a part of this Agreement.
7
10.6 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute the Agreement. Signatures may be transmitted via facsimile,
thereby constituting the valid signature and delivery of this Agreement.
10.7 Relationship
of the Parties. Each Party will be
deemed to be an independent contractor and not an agent, joint venturer, or
representative of the other Party.
Neither Party may create any obligations or responsibilities on behalf
of or in the name of the other Party.
Neither Party will hold itself out to be a partner, employee,
franchisee, representative, servant, or agent of the other Party.
10.8 Governing
Law; Venue
(a) This
Agreement will be construed in accordance with, and governed in all respects by
the laws of the State of Delaware (without giving effect to principles of
conflicts of laws).
(b) Except
as otherwise provided in this Agreement, any proceeding relating to this
Agreement or the enforcement of any provision of this Agreement (each a Proceeding) will be brought or otherwise commenced in any
state or federal court located in the County of New Castle, Delaware. Each Party to this Agreement:
(i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the County of New Castle, Delaware (and each appellate
court located in the State of Delaware) in connection with any such Proceeding;
(ii) agrees
that each state and federal court located in the County of New Castle, Delaware
will be deemed to be a convenient forum; and
(iii) agrees
not to assert (by way of motion, as a defense or otherwise), in any such
Proceeding commenced in any state or federal court located in the County of New
Castle, Delaware, any claim that such Party is not subject personally to the
jurisdiction of such court, that such Proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be enforced in or by
such court.
10.9 Successors
and Assigns; Parties in Interest.
Neither Party may assign this Agreement, in whole or in part, without
the consent of the other Party, such consent not to be unreasonably withheld,
provided however that the consent of the other Party shall not be required for
Vivus, Inc. or K-V Pharmaceutical Company to assign this Agreement to an Affiliate,
or to its successor in interest in connection with the transfer or sale to such
third party successor of all or substantially all of the business of such Party
to which this Agreement relates, whether by merger, sale of stock, sale of
assets or otherwise. Any purported
assignment not in accordance with this Section 10.9 shall be void.
10.10 Remedies
Cumulative; Specific Performance.
The rights and remedies of the Parties hereto will be cumulative (and
not alternative). Each Party agrees
that: (a) in the event of any breach or threatened breach by the other Party of
any covenant, obligation or other
8
provision set forth in this Agreement, such Party will
be entitled (in addition to any other remedy that may be available to it) to
pursue (i) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision, and
(ii) an injunction restraining such breach or threatened breach; and (b) no
Person will be required to provide any bond or other security in connection
with any such decree, order or injunction or in connection with any related
Proceeding.
10.11 Amendment,
Waiver. This Agreement may be
amended, modified, superseded or canceled, and any of the terms may be waived,
only by a written instrument executed by each Party or, in the case of waiver,
by the Party or Parties waiving compliance.
The delay or failure of any Party at any time or times to require
performance of any provisions shall in no manner affect the rights at a later
time to enforce the same. No waiver by
either Party of any condition or of the breach of any term contained in this
Agreement, whether by conduct, or otherwise, in any one or more instances,
shall be deemed to be, or considered as, a further or continuing waiver of any
such condition or of the breach of such term or any other term of this
Agreement.
10.12 Severability. If any provision of this Agreement is or
becomes invalid or is ruled invalid by any court of competent jurisdiction or
is deemed unenforceable, it is the intention of the Parties that the remainder
of the Agreement shall not be affected so long as the essential benefits of
this Agreement remain enforceable and obtainable.
10.13 No Third
Party Beneficiaries. No third party,
including any employee of any Party to this Agreement, shall have or acquire
any rights by reason of this Agreement.
Nothing contained in this Agreement shall be deemed to constitute the
Parties partners with each other or any third party.
10.14 Construction
(a) For
purposes of this Agreement, whenever the context requires: the singular number will include the plural,
and vice versa; the masculine gender will include the feminine and neuter
genders; the feminine gender will include the masculine and neuter genders; and
the neuter gender will include the masculine and feminine genders.
(b) The
Parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting Party will not be applied
in the construction or interpretation of this Agreement.
(c) As
used in this Agreement, the words include and including, and variations
thereof, will not be deemed to be terms of limitation, but rather will be
deemed to be followed by the words without limitation.
(d) Except
as otherwise indicated, all references in this Agreement to Sections are
intended to refer to Sections of this Agreement.
9
The
Parties to this Agreement have caused this Agreement to be executed and
delivered as of the Effective Date.
K-V Pharmaceutical Company
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Vivus, Inc.
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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10
Schedule
A
Manufacturing Support Services
Service Provider will provide reasonable support for
the manufacture and supply of Evamist as requested by Recipient, including,
but not limited to:
· assistance
in the negotiation and finalization of supply and manufacturing
agreements/arrangements related to Evamist
· supporting
any inspections by Recipient or regulatory authorities with respect to the
pharmaceutical active ingredient-related inspections at [***] or DPT
· consulting
with Recipient regarding the process line setup completed at DPT, including the
conduct of validation trials
· supporting
completion and validation of the new applicator
design
· supporting
the ordering of automated equipment for new applicator design and validation of
such equipment
· supporting
resolution of the [***] pump and actuator issues
· assistance
in technology transfers from DPT and/or [***]
· assistance
with all FDA or any other regulatory body CMC questions or the like
· assistance
in all ongoing product development work, including the pad labeling at the time
of closing of the APA
· Support
for any deficiency that might arise during the manufacture of the initial
validation and launch quantity batches.
· Consulting
with Recipient regarding the process line setup completed at DPT, [***] and [***], including the conduct of validation trails at DPT
· Consulting
and technical support for label application, qualification and FDA approval.
· Support
for any deficiency that might arise due to manufacture of any component
(applicator, actuator or vial) that might arise during the manufacture of the
initial validation and launch quantity batches.
Clinical
Services
Service Provider will provide reasonable support for
the clinical development and regulatory approval processes related to Evamist
as requested by Recipient, including, but not limited to:
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has
been requested with respect to the omitted portions.
· supporting
Recipient in answering queries by the FDA (or other governmental regulatory
authority) including but not limited to queries regarding labeling responses or
changes, chemistry, manufacturing, and controls, clinical data results, or the
clinical development, testing, manufacturing of Evamist.
· supporting
clinical data results for Evamist.
· assisting
Recipient in the transfer of clinical data, reports, case report forms,
stability reports, batch records, manufacturing feasibility studies and other
relevant clinical and development information to Recipients control
· support
for any FDA audits at the clinical sites
· providing
consulting advice time for any post-approval FDA (or other governmental
regulatory authority) commitments for further Phase IV (or equivalent) studies
that Recipient may need to conduct
Sales and Marketing Support:
Service Provider will provide counsel and consulting
support relating to the commercial launch and sales and marketing of Evamist
as requested by Recipient
Intellectual Property Support:
Service Provider will provide reasonable counsel and
consulting support relating to transfer and registration of the intellectual
property related to Evamist as requested by Recipient.
2
Schedule
B
Initially
Transferred Materials
Service Provider will transfer to Recipient the
following materials:
· New
applicator design materials for Evamist
· manufacturing
stability reports and batch records for Evamist
· manufacturing
feasibility studies for Evamist
· FDA
submissions and correspondence relating to Evamist
· clinical
data, reports, protocols and results
· automated
line equipment