ASSET
PURCHASE AGREEMENT
ASSET
PURCHASE AGREEMENT, dated as of November 9, 2009 (this "Agreement"), by and
between Klee Pharmaceuticals, Inc., a Delaware corporation ("Klee"), Defiante
Farmacêutica, S.A., a company organized under the laws of Portugal ("Defiante" and,
together with Klee, the "Purchasing Parties"),
and Sigma-Tau Finanziaria S.p.A., an Italian corporation (solely for the purpose
of Section 6.4, Section 7.8(a), Section 7.8(e) and Section 12.17) ("Sigma-Tau"), on the
one hand, and Enzon Pharmaceuticals, Inc., a Delaware corporation (the "Seller"), on the
other hand. Klee, Defiante and the Seller are sometimes referred to
herein individually as a "Party" and
collectively as the "Parties."
W I T N E S S E T
H:
WHEREAS,
the Seller is engaged in the Business (as defined herein);
WHEREAS,
the Purchasing Parties desire to purchase from the Seller, and the Seller
desires to sell to the Purchasing Parties, the Assets (as defined herein), and
in connection therewith, the Purchasing Parties desire to assume the Assumed
Liabilities (as defined herein), all on the terms and subject to the conditions
set forth in this Agreement;
WHEREAS,
the respective Boards of Directors of the Seller and the Purchasing Parties deem
it advisable and in the best interests of their respective stockholders that the
Parties consummate the Transactions (as defined herein), upon the terms and
subject to the conditions provided for herein;
WHEREAS,
the Board of Directors of the Seller has resolved to recommend to its
stockholders the approval of the Transactions, upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS,
as additional inducement for the Seller to enter into this Agreement, Sigma-Tau
desires to assume certain obligations and guarantee the performance of certain
of the duties and obligations of the Purchasing Parties, in each case as
explicitly set forth in this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound hereby, Sigma Tau, the Purchasing
Parties and the Seller hereby agree as follows:
ARTICLE
I
DEFINITIONS AND
INTERPRETATIONS
Section
1.1 Definitions. For
all purposes of this Agreement, except as otherwise expressly provided or unless
the context clearly requires otherwise:
"Accounts Payable"
shall mean all notes and accounts payable of the Business.
"Accounts Receivable"
shall mean all notes and accounts receivable of the Business.
"Accrued Employee
Compensation, Benefits and Other Liabilities" shall mean the value of the
accrued employee compensation, benefits and other employee-related liabilities
relating to the Transferred Employees as of the Closing.
"Affiliate" or "Affiliates" shall
have the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act.
"Agreement" or "this Agreement" shall
have the meaning set forth in the Preamble and shall include the Exhibits and
Schedules hereto.
"Allocation Schedule"
shall have the meaning set forth in Section 3.5.
"Ancillary Agreements"
shall mean the Assumption Agreement, the Transition Services Agreement, the
License Agreement, the Trademark Assignment and the Patent
Assignment.
"Applicable Efforts"
shall mean, with respect to any Party, the continuous and diligent efforts
and commitment of resources of a degree and kind in accordance with such Party's
reasonable business, legal, medical and scientific judgment that are consistent
with the efforts and resources such Party and its Affiliates use, and have in
the past used, for other pharmaceutical products owned by them or to which they
have similar rights and that are of similar potential and at a similar stage in
their lifecycle, taking into account the competitiveness of the marketplace, the
regulatory structure involved and other relevant factors.
"Assets" shall mean
all of the assets, properties, contractual rights, goodwill, going concern
value, rights and claims of the Seller of the Business, wherever situated and of
whatever kind and nature, real or personal, tangible or intangible, whether or
not reflected on the books and records of Seller (in each case other than the
Excluded Assets), including the Manufacturing Assets and the Non-Manufacturing
Assets.
"Assumed Contracts"
shall have the meaning set forth in Section 2.1(b)(iii).
"Assumed Liabilities"
shall have the meaning set forth in Section 2.3(b).
"Assumption Agreement"
shall have the meaning set forth in Section 4.2(d).
"Balance Sheet" shall
mean the most recent balance sheet of the Business included in the Financial
Statements.
"Baseline Amount"
shall mean, with respect to a particular territory, the Net Receipts in respect
of the Products during 2009 in such territory, as determined in good faith by
the Seller and the Purchasing Parties not later than 30 days after the Closing
Date.
"BLA" means a
biologics license application in respect of any of the Products.
"Books and Records"
shall have the meaning set forth in Section 2.1(b)(ii).
"Business" shall mean
the business of the Seller as of the date of this Agreement and as of the
Closing Date that, directly or indirectly, (a) manufactures, markets and sells
the Products and (b) provides contract pharmaceutical manufacturing services,
excluding, in each case, the Seller's PEGylation capabilities and assets,
including Intellectual Property and Know-How related to such PEGylation
capabilities (other than as specifically applied to the Products and licensed
under the License Agreement).
"Business Day" shall
mean any day other than a Saturday, a Sunday or a day on which banks in New
York, New York, Lisbon, Portugal or Rome, Italy are closed
generally.
"Business Employees"
shall mean those employees of the Seller who are engaged in the
Business.
"Cap" shall have the
meaning set forth in Section 11.2(b)(ii).
"Cash Purchase Price"
shall have the meaning set forth in Section 3.1.
"Change of
Recommendation" has the meaning set forth in Section
7.20(c).
"Claim Notice" shall
have the meaning set forth in Section 11.4(a).
"Closing" shall have
the meaning set forth in Section 4.1.
"Closing Date" shall
have the meaning set forth in Section 4.1.
"Closing Working
Capital" shall have the meaning set forth in Section 3.4(a).
"Closing Working Capital
Schedule" shall have the meaning set forth in Section
3.4(a).
"COBRA" shall mean
continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended and codified at 29 U.S.C. §§ 1161-1169,
and Code § 4980B, and any regulations or proposed regulations issued pursuant
thereto.
"Code" shall mean the
Internal Revenue Code of 1986, as amended.
"Commercial Know-How"
shall mean Know-How of a commercial nature solely to the extent used by the
Seller in connection with the operation of the Business, including confidential
and proprietary customer lists, financial data and marketing material, but
excluding (a) all Intellectual Property and (b) all Know-How, in each case,
related to process development, whether or not used in connection with the
Business.
"Commitment Letter"
shall have the meaning set forth in Section 6.4.
"Competing Business"
shall have the meaning set forth in Section 7.5(a)(i)(4).
"Competing Proposal"
shall mean any written bona fide proposal (other than a
proposal or offer by the Purchasing Parties or any of their Affiliates) for (a)
a merger or business combination with the Seller; (b) the acquisition by any
Person (other than the Purchasing Parties or any of their Affiliates) of 25% or
more of the Assets; or (c) the acquisition by any Person (other than the
Purchasing Parties or any of their Affiliates) of 25% or more of the outstanding
Seller Common Stock. Notwithstanding the foregoing, a "Competing
Proposal" shall not include any acquisition, sale or analogous transaction for
the Seller's research and development business, or any proposal with respect
thereto.
"Confidentiality
Agreement" shall have the meaning set forth in Section 7.3.
"Consents" shall have
the meaning set forth in Section 5.5.
"Contracts" shall mean
all commitments, contracts, agreements, purchase orders, sales orders and other
legally binding arrangements, written or oral, in each case with all amendments,
waivers or other changes thereto, to which the Seller is a party, by which the
Seller is bound or to which the Assets are subject, in each case, and subject to
Section 7.17, relating exclusively to the Business or the Assets and in each
case including all rights to receive payment, goods or services and to assert
claims and take other actions thereunder (but in any case excluding the Enzon
Benefit Plans).
"Copyrights" shall
mean copyrights, copyrightable subject matter and all registrations and
applications to register the same.
"Current Assets" shall
have the meaning set forth in Section 3.2(a).
"Current Liabilities"
shall have the meaning set forth in Section 3.2(a).
"Data Room" shall mean
the electronic data room posted by the Seller at https://services.intralinks.com
as in effect at 11:59 p.m., Eastern time, on November 6, 2009, comprising the
correspondence, contracts, agreements, licenses, documents and other information
made available to the Purchasing Parties and their Representatives.
"Deductible" shall
have the meaning set forth in Section 11.2(b)(i).
"Defiante" shall have
the meaning set forth in the Preamble.
"Defiante Financial
Statements" has the meaning set forth in Section 6.11(a).
"Deed" shall have the
meaning set forth in Section 4.2(b).
"DOJ" shall mean the
Antitrust Division of the United States Department of Justice.
"EMEA" means the
European Medicines Agency.
"EMEA Approval" shall
mean, in respect of a pharmaceutical product, any and all marketing
authorization approvals granted by the EMEA, or the expiration of any
applicable
mandatory
waiting periods that are in lieu of such approvals, necessary to commercialize
such product in the countries governed by the EMEA.
"Encumbrance" shall
mean (a) any easements, licenses, covenants, rights-of-way and other similar
restrictions, including any other agreements or restrictions to which the Owned
Real Property is subject, which would be shown by a current title report or
other similar report or listing; (b) any conditions on the Owned Real Property
that may be shown by a current survey, title report or physical inspection; (c)
any zoning, building and other similar restrictions to which the Owned Real
Property is subject; and (d) the terms of the Personal Property Leases and Liens
of the lessor(s) thereunder against the Owned Real Property for sums not yet due
and payable.
"Environmental Claim"
or "Environmental
Claims" shall mean any claim, action, cause of action, investigation or
written notice by any Person alleging actual or potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
(a) the presence, or release into the environment, of any Hazardous Materials at
the Facility, now or in the past, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Law" or
"Environmental
Laws" shall mean each federal, state, local and foreign law and
regulation relating to pollution, protection or preservation of human health or
the environment including ambient air, surface water, ground water, land surface
or subsurface strata, and natural resources, and including each law and
regulation relating to emissions, discharges, releases or threatened releases of
Hazardous Materials, or otherwise relating to the manufacturing, processing,
distribution, use, treatment, generation, storage, containment (whether above
ground or underground), disposal, transport or handling of Hazardous Materials,
or the preservation of the environment or mitigation of adverse effects thereon
and each law and regulation with regard to record keeping, notification,
disclosure and reporting requirements respecting Hazardous
Materials.
"Enzon 401(k) Plan"
shall mean the Enzon Pharmaceuticals Savings and Investment Plan.
"Enzon Benefit Plans"
shall have the meaning set forth in Section 5.12(a).
"Enzon Mark and Logo"
shall have the meaning set forth in Section 2.2(g).
"ERISA" shall mean the
Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate"
shall mean any trade or business, whether or not incorporated, that together
with the Seller would be deemed a "single employer" within the meaning of
Section 4001(b) of ERISA.
"Exchange Act" shall
mean the Securities Exchange Act of 1934, as amended.
"Excluded Assets"
shall mean have the meaning set forth in Section 2.2.
"Excluded Liabilities"
shall have the meaning set forth in Section 2.4.
"Facility" shall mean
the manufacturing and related facilities of the Seller located on the Owned Real
Property.
"FDA" means the United
States Food and Drug Administration and any successor thereto.
"FDA Approval" shall
mean, in respect of a pharmaceutical product, any and all approvals or
supplemental approvals, licenses, registrations or authorizations or the
expiration of any mandatory waiting periods of the FDA necessary to
commercialize such product in the United States (including any
supplemental approvals pursuant to 21 C.F.R. § 314.70).
"Financial Statements"
shall have the meaning set forth in Section 5.6.
"Financing" shall have
the meaning set forth in Section 6.4.
"Flex Plan" shall have
the meaning set forth in Section 8.2(d).
"Form 8594" shall have
the meaning set forth in Section 3.5.
"FTC" shall mean the
United States Federal Trade Commission.
"Fundamental
Representations" shall have the meaning set forth in Section
11.1.
"GAAP" shall mean
United States generally accepted accounting principles, as in effect from time
to time.
"Governmental Entity"
shall mean a foreign, federal, state or local government, court, arbitral
tribunal, administrative agency or commission or other foreign, federal, state
or local governmental or regulatory authority or agency.
"Gross Sales" means
the gross amounts actually invoiced by the Purchasing Parties and their
Affiliates, or the Seller and its Affiliates, as applicable, in respect of the
Products.
"Hazardous Materials"
shall mean chemicals; pollutants; contaminants; wastes; toxic or hazardous
substances, materials and wastes; and other substances regulated under the terms
of similar import pursuant to Environmental Law, including petroleum and
petroleum products; natural gas liquids; asbestos and asbestos-containing
materials; polychlorinated biphenyls; lead and lead-based paints and materials;
and radon.
"HSR Act" shall mean
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
"Improvements" shall
have the meaning set forth in Section 2.1(a)(i).
"IND" shall mean
investigational new drug application numbers IND100687 and
IND100594.
"Indemnified Party"
shall have the meaning set forth in Section 11.4(a).
"Indemnifying Party"
shall have the meaning set forth in Section 11.4(a).
"Independent Accounting
Firm" shall have the meaning set forth in Section 3.4(c).
"Instrument of Assignment and
Bill of Sale" shall have the meaning set forth in Section
4.2(a).
"Intellectual
Property" shall mean all Patents, Trademarks, and
Copyrights.
"Inventory" shall have
the meaning set forth in Section 2.1(b)(vi).
"Klee" shall have the
meaning set forth in the Preamble.
"Know-How" shall mean
trade secrets and other confidential and proprietary information.
"Knowledge of the Purchasing
Parties" concerning a particular subject, area or aspect of the
respective businesses or affairs of the Purchasing Parties, shall mean the
actual knowledge of each of those persons set forth on Schedule 1.1(a), in each
case after due and reasonable inquiry under the circumstances by each such
person.
"Knowledge of the
Seller" concerning a particular subject, area or aspect of the Business
or affairs of the Seller shall mean the actual knowledge of each of those
persons set forth on Schedule 1.1(b), in each case after due and reasonable
inquiry under the circumstances by each such person.
"Law" shall mean any
and all domestic (federal, state or local) or foreign laws, rules, regulations,
orders, judgments or decrees promulgated by any Governmental Entity, including
pharmaceutical and labor laws of any location where the Business is
conducted.
"Legal Proceeding"
shall mean any action, arbitration, audit, hearing, investigation, litigation,
notice, challenge, proceeding or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Entity or arbitrator.
"Lender" shall have
the meaning set forth in Section 6.4.
"Liabilities" shall
mean any and all debts, liabilities and obligations whether accrued or fixed,
known or unknown, absolute or contingent, matured or unmatured or determined or
determinable.
"License Agreement"
shall have the meaning set forth in Section 4.2(f).
"Liens" shall mean any
and all liens, encumbrances, charges, security interests, options, claims,
mortgages, pledges, proxies, voting trusts or agreements, obligations,
understandings or arrangements or other restrictions on title or transfer of any
nature whatsoever.
For
the avoidance of doubt, Liens shall not include licenses of or other grants of
rights to use Intellectual Property.
"Lonza" shall mean
Lonza Ltd.
"Losses" shall have
the meaning set forth in Section 11.3(a).
"Machinery" shall have
the meaning set forth in Section 2.1(a)(iii).
"Manufacturing Assets"
shall have` the meaning set forth in Section 2.1(a).
"Manufacturing Assets
Purchase Price" has the meaning set forth in Section 3.5.
"Material Adverse
Effect" shall mean any change, circumstance, event, condition, occurrence
or development that, individually or in the aggregate, has had or would
reasonably be expected to have a material adverse effect on the business,
assets, results of operations or financial condition of the Business, taken as a
whole, or that prevents or materially impairs, or would reasonably be expected
to prevent or materially impair, the ability of the Seller to perform its
obligations under this Agreement or that prevents or materially impedes,
interferes with, hinders or delays, or would reasonably be expected to prevent
or materially impede, interfere with, hinder or delay, the consummation of the
Transactions, other than any changes, circumstances, events or conditions
resulting from: (a) general economic conditions in any of the markets in which
the Business operates (provided that the
Seller is not disproportionately affected as compared to other participants in
the same industry as the Seller); (b) any change in economic conditions or the
financial, banking, currency or capital markets in general (provided that the
Seller is not disproportionately affected as compared to other participants in
the same industry as the Seller); (c) any calamity or other conditions generally
affecting the medical or pharmaceutical industry (provided that the
Seller is not disproportionately affected as compared to other participants in
the same industry as the Seller); (d) acts of God or other calamities, national
or international political or social conditions, including the engagement by any
country in hostilities, whether commenced before or after the date of this
Agreement, and whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist attack; (e)
changes in Laws or interpretations thereof affecting the medical or
pharmaceutical industry in general (provided that the
Seller is not disproportionately affected as compared to other participants of
similar size and in the same industry as the Seller); (f) changes in GAAP or
interpretations thereof or other accounting principles or requirements (but not
any changes made by the Seller to its own accounting rules or procedures, other
than as required by such changes in GAAP or interpretations thereof or other
accounting principles or requirements); (g) any actions taken, failures to take
action, or other changes or events relating to the Seller, in each case to which
the Purchasing Parties have consented in writing; (h) the taking of any action
contemplated by this Agreement and the other agreements contemplated hereby; or
(i) any failure to meet any internal or public projections, forecasts or
estimates of earnings or revenues (unless such failure is due to a circumstance
that would separately constitute a Material Adverse Effect).
"Material Agreements"
shall have the meaning set forth in Section 5.9(a).
"NDA" means a new drug application filed in respect of a
Product.
"Net Receipts" shall
mean:
(a) with
respect to sales of Product in a particular territory by the Purchasing Parties
and their Affiliates and agents or the Seller and its Affiliates and agents, as
applicable, Gross Sales for such Product in such territory, less the sum of the
following items relating to such sales that are actually given to or taken by,
as applicable, the Purchasing Parties and their Affiliates and agents, the
Seller and its Affiliates and agents, or third parties that are not agents of
the Purchasing Parties and their Affiliates or the Seller and its Affiliates, to
the extent such deductions are recognized under and in accordance with
GAAP:
(i) reasonable
trade, quantity and cash discounts and rebates;
(ii) adjustments
for price adjustments, billing errors, rejected goods, returns, product recalls
and damaged goods (excluding goods damaged while under the control of the
Purchasing Parties or their Affiliates or the Seller or its Affiliates, as
applicable, or their respective licensees, sub-licensees, or
distributors);
(iii) credits,
charge-backs, rebates, reimbursements, and similar payments provided to
wholesalers and other distributors, buying groups, health care insurance
carriers, pharmacy benefit management companies, health maintenance
organizations, other institutions or health care organizations or other
customers;
(iv) rebates
or other price reductions provided to any Governmental Entity with respect to
any state or federal Medicare, Medicaid or similar programs;
(v) discounts
pursuant to indigent patient programs and patient discount programs, including
coupon discounts and co-pay assistance programs;
(vi) any
invoiced charge for freight, insurance, handling, or other transportation costs
directly related to delivery of the Products;
(vii) credits
or discounts related to sales promotions that are offered to customers in
general, such as trade show discounts and stocking allowances; and
(viii) tariffs,
duties, excise, sales, value-added or other Taxes (other than Taxes based on
income that are non-refundable); provided, however, that sales
made by the Purchasing Parties to their Affiliates or by the Seller to its
Affiliates, as applicable, shall be disregarded for purposes of calculating Net
Receipts; and provided, further, that the
foregoing deductions shall only be deducted once and only to the extent not
otherwise deducted from Gross Sales; plus
(b) with
respect to sales of a Product in a particular territory by a third-party,
unaffiliated licensee, sub-licensee or distributor of the Purchasing Parties or
the Seller, as applicable, the amount received by the Purchasing Parties or the
Seller or their respective Affiliates, as applicable, from such licensee,
sub-licensee or distributor.
"Non-Assignable Asset"
shall have the meaning set forth in Section 7.11(b).
"Non-Manufacturing
Assets" shall have the meaning set forth in Section 2.1(b).
"Notice Period" shall
have the meaning set forth in Section 11.4(c).
"ODD" shall mean an
orphan drug designation in respect of any Product.
"Order" shall mean any
award, decision, injunction, judgment, decree, order, ruling, subpoena or
verdict entered, issued, made or rendered by any court, administrative agency or
other Governmental Entity or by any arbitrator.
"Owned Real Property"
shall have the meaning set forth in Section 2.1(a)(i).
"Party" or "Parties" shall have
the meaning set forth in the Preamble.
"Patent Assignment"
shall have the meaning set forth in Section 4.2(c).
"Patents" shall mean
issued patents and pending patent applications, patent disclosures, and any and
all related divisionals, continuations, continuations-in-part, reissues,
reexaminations, and extensions thereof.
"Permits" shall have
the meaning set forth in Section 2.1(a)(vii).
"Permitted Exception"
shall mean the following exceptions and encumbrances to title insurance coverage
relating to the Owned Real Property: (a) all exceptions to title insurance
coverage that customarily or of necessity are not or cannot be removed (such as
rights or instruments that are recorded against the Owned Real Property or any
part thereof); (b) general and special real property taxes and assessments for
the current fiscal year which are not yet due and payable; (c) all exceptions to
title insurance coverage that Klee agrees in writing to accept; (d) matters that
are the obligations of tenants, subtenants or other occupants of any portion of
the Owned Real Property under any lease, sublease, license or other occupancy
agreement; (e) all title exceptions caused or created (whether directly or
indirectly) by Klee or Representatives of Klee; and (f) all Encumbrances and
other imperfections of title that individually or in the aggregate do not
materially affect the use and continued operation of the assets to which they
relate.
"Permitted Liens"
shall mean (a) Liens for Taxes not yet due and payable, or, if due, (i) not
delinquent or (ii) being contested in good faith by appropriate proceedings,
during which collection or enforcement against the property is stayed, and with
respect to which reasonable reserves have been established in accordance with
GAAP; (b) any mechanics', workmen's, repairmen's, warehousemen's, carriers' or
other like Liens arising or incurred in the ordinary course of business and
securing obligations which are not yet due or are being contested
in
good faith; (c) any title retention or security interests under conditional
sales contracts, and equipment leases with third parties entered into in the
ordinary course of business; (d) any Liens relating to purchase money
obligations; (e) any Lien securing indebtedness that is incurred by the
Purchasing Parties; and (g) any Lien arising or resulting from any action taken
by the Purchasing Parties.
"Person" shall mean a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Entity or other entity or organization.
"Personal Property
Leases" shall have the meaning set forth in Section
2.1(a)(ii).
"Pre-Closing Period"
shall have the meaning set forth in Section 5.16(b).
"Preliminary Working
Capital" shall have the meaning set forth in Section 3.2(a).
"Preliminary Working Capital
Schedule" shall have the meaning set forth in Section
3.2(a).
"Prepaid Expenses and Other
Current Assets" shall have the meaning set forth in Section
2.1(a)(ix).
"Product Data" shall
mean (a) all data, information and methods associated at any time with the
Products and its ingredients but not found in the Regulatory Approvals or
Regulatory Documentation, (b) all data and methods associated with testing of
the Products and its ingredients but not found in the Regulatory Approvals or
Regulatory Documentation, (c) all formulations of the Products used in the
manufacture of the Products and (d) all methods of manufacturing used in
manufacturing the Products, in each case to the extent owned or controlled by
the Seller and relating to the Products, in each case excluding (i) all
Intellectual Property and (ii) all Know-How, in each case, related to process
development and/or the Seller's PEGylation capabilities.
"Product Events" shall
have the meaning set forth in Section 2.3(b)(iii).
"Products" shall mean
the pharmaceutical products currently marketed and sold under the names
Oncaspar® (and any successor product thereof), Adagen® (and any successor
product thereof), DepoCyt® and Abelcet®, and any reformulations of any of the
foregoing.
"Proxy Statement"
shall have the meaning set forth in Section 7.18(a).
"Purchase Price" shall
have the meaning set forth in Section 3.1.
"Purchaser Confidential
Information" shall have the meaning set forth in Section
7.5(c)(i).
"Purchaser
Indemnitees" shall have the meaning set forth in Section
11.2(a).
"Purchaser Losses"
shall have the meaning set forth in Section 11.2(a).
"Purchaser Material Adverse
Effect" shall mean any change, circumstance, event, condition, occurrence
or development that, individually or in the aggregate, prevents or materially
impairs, or would reasonably be expected to prevent or materially impair, the
ability of the Purchasing Parties to perform their respective obligations under
this Agreement or that prevents or materially impedes, interferes with, hinders
or delays the consummation of the Transactions.
"Purchaser Plan" shall
have the meaning set forth in Section 8.2(a).
"Purchaser Termination
Fee" shall have the meaning set forth in Section 10.3.
"Purchasers'
Objection" shall have the meaning set forth in Section
3.4(b).
"Purchasers' Savings
Plan" shall have the meaning set forth in Section 8.2(c).
"Purchasing Parties"
shall have meaning set forth in the Preamble.
"Qualifying
Transaction" shall mean any (a) acquisition of the Seller by merger or
business combination transaction; (b) acquisition by any Person (other than the
Purchasing Parties or any of their respective Affiliates) of 25% or more of the
Assets; or (c) acquisition by any Person (other than the Purchasing Parties or
any of their respective Affiliates) of 25% or more of the outstanding Seller
Common Stock. Notwithstanding the foregoing, a "Qualifying
Transaction" shall not include any acquisition, sale or analogous transaction
for the Seller's research and development business, or any proposal with respect
thereto.
"Registration
Dossiers" shall mean any and all
scientific, technical and manufacturing data and documentation owned or
controlled by the Seller that is necessary or otherwise useful to obtain,
maintain and renew the Regulatory Approvals and to manufacture and commercialize
the Products.
"Regulatory
Approval(s)" means any and all approvals, registrations and
authorizations held by or for the benefit of the Seller or its Affiliates, as of
the Closing Date, from the appropriate Regulatory Authority to market,
distribute, use and sell the Products, including:
(a) all
BLAs;
(b) all
INDs;
(c) all
ODDs;
(d) all
NDAs; and
(e) any
equivalent of the foregoing in other jurisdictions.
"Regulatory Authority"
shall have the meaning set forth in Section 5.19(a).
"Regulatory
Documentation" means (a) registrations and applications for, or other
filings or submissions with respect to, the Regulatory Approvals, including
reports, data and other written materials filed by the Seller or its agent as
part of or referenced in, the Regulatory Approvals, and the Seller's risk
management plan (or any other risk management plan owned by the Seller) with
respect to the Products, (b) any other filings or submissions with respect to
the Products made with any Governmental Entity or Regulatory Authority, (c)
compliance documentation, including complaint history, compliance history
(including any field alerts, market withdrawals and recalls), pharmacovigilance,
requests for additional scientific information with respect to the Products,
manufacturing change controls, process/lab investigations, stability protocols
and test data and product development packages, (d) all annual reports delivered
by the Seller to the applicable Regulatory Authority(ies) in respect of the
Products, (e) all Registration Dossiers and (f) written communications, and
written summaries and minutes of other communications, with the FDA or other
Governmental Entities or Regulatory Authorities to the extent relating to the
Products, in each case owned or controlled by the Seller.
"Related Persons"
shall have the meaning set forth in Section 10.4.
"Representatives"
shall mean a Person's Affiliates, directors, managers, officers, employees,
agents, consultants, advisors or other representatives, including legal counsel,
accountants and financial advisors.
"Requisite Stockholder
Approval" shall have the meaning set forth in Section 5.20.
"Scientific and Regulatory
Material" shall mean all technical, scientific, chemical, biological,
pharmacological, toxicological, regulatory and clinical trial materials,
filings, registrations and information related to the Products owned or
controlled by the Seller.
"SC Oncaspar®" shall
mean a PEGylated L-Asparaginase manufactured with (a) the bulk native
L-Asparaginase obtained from Lonza or any alternate source determined by any of
the Purchasing Parties and (b) the Succinyl-Carbamate linker having the
molecular structure set forth on Exhibit I.
"SEC" shall mean the
Securities and Exchange Commission.
"Securities Act" shall
mean the Securities Act of 1933, as amended.
"Seller" shall have
the meaning set forth in the Preamble.
"Seller Common Stock"
shall mean the common stock, par value $0.01 per share, of the
Seller.
"Seller Confidential
Information" shall have the meaning set forth in Section
7.5(c)(ii).
"Seller Indemnitees"
shall have the meaning set forth in Section 11.3(a).
"Seller Losses" shall
have the meaning set forth in Section 11.3(a).
"Seller
Recommendation" shall have the meaning set forth in Section
7.19.
"Seller Termination
Fee" shall have the meaning set forth in Section 10.2.
"Shared Contracts"
shall have the meaning set forth in Section 7.17(a).
"Sigma-Tau" shall have
the meaning set forth in the Preamble.
"Solvent" shall mean,
with respect to any Person, that (a) the property of such Person, at a present
fair saleable valuation, exceeds the sum of its liabilities (including
contingent and unliquidated liabilities), (b) the present fair saleable value of
the property of such Person exceeds the amount that will be required to pay such
Person's probable liabilities as they become absolute and matured and (c) such
Person has adequate capital to carry on its business. In computing
the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become actual or matured liabilities.
"SS Oncaspar®" shall
mean a PEGylated L-Asparaginase manufactured with (a) the bulk native
L-Asparaginase obtained from Lonza or any alternate source determined by any of
the Purchasing Parties and (b) the Succinyl-Succimate linker
having the molecular structure set forth on Exhibit J.
"Stockholders'
Meeting" shall have the meaning set forth in Section 7.19.
"Straddle Period"
shall mean any taxable period beginning before the Closing Date and ending after
the Closing Date.
"Superior Proposal"
shall mean a Competing Proposal (with "25% or more of the Assets" in the
definition of Competing Proposal being replaced by "all or substantially all of
the Assets" and "25% or more of the outstanding Seller Common Stock" being
replaced by "more than 50% of the outstanding Seller Common Stock") made by any
Person on terms that the Board of Directors of the Seller determines in good
faith, after consultation with its financial and legal advisors, and considering
such factors as the Board of Directors of the Seller considers to be
appropriate, are more favorable from a financial point of view to the Seller
and/or its stockholders than the Transactions.
"Superior Proposal
Agreement" shall have the meaning set forth in Section
7.20(c).
"Survey" shall have
the meaning set forth in Section 7.27(a)(ii).
"Target Amount" shall
mean $17,938,000.
"Tax" or "Taxes" shall mean all
taxes, charges, fees, duties, levies, penalties or other assessments or
governmental charges imposed by any federal, state, local or foreign
Governmental Entity, including income, gross receipts, excise, property, sales,
gain, use, license,
custom
duty, unemployment, capital stock, transfer, franchise, payroll, withholding,
social security, minimum estimated, profit, gift, severance, value added,
disability, premium, recapture, credit, occupation, service, leasing,
employment, stamp and other taxes, and shall include (a) interest, penalties or
additions attributable thereto or attributable to any failure to comply with any
requirement regarding Tax Returns and (b) any Liability for such amounts as a
result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any other
Person.
"Tax Contest" shall
mean any deficiency, proposed adjustment, adjustment, assessment audit,
examination or other administrative or court proceeding, suit, dispute or other
claim.
"Tax Refunds" shall
have the meaning set forth in Section 2.2(b).
"Tax Return" shall
mean any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any such document prepared on a
consolidated, combined or unitary basis and also including any schedule or
attachment thereto, and including any amendment thereof.
"Termination Date"
shall have the meaning set forth in Section 10.1(b).
"Title Commitment"
shall have the meaning set forth in Section 5.16(k).
"Title Company" shall
mean Chicago Title Insurance Company.
"Trademark Assignment"
shall have the meaning set forth in Section 4.2(c).
"Trademarks" shall
mean trademarks, trade dress, service marks, logos, trade names, Internet domain
names and all registrations and applications to register the same and the
goodwill associated therewith.
"Transactions" shall
mean the transactions contemplated by this Agreement.
"Transfer Tax Returns"
shall have the meaning set forth in Section 7.7(a).
"Transfer Taxes" shall
mean all sales (including bulk sales), use, transfer, recording, ad valorem,
privilege, documentary, gains, gross receipts, registration, conveyance, excise,
license, stamp, duties or similar Taxes and fees incurred in connection with or
resulting from this Agreement and the Transactions.
"Transferred
Employees" shall have the meaning set forth in Section
8.1(a).
"Transferred Intellectual
Property" shall have the meaning set forth in Section
2.1(b)(i)(2).
"Transition Services
Agreement" shall have the meaning set forth in Section
4.2(e).
"United States" shall
mean the fifty states of the United States and its territories and possessions,
including Puerto Rico.
"Voluntary Exception"
shall mean the following types of Liens, which may encumber all or any portion
of the Owned Real Property: (a) violations against any portion of the Owned Real
Property, including the improvements thereon; and (b) general and special real
property taxes and assessments, including sewer rents or charges, which are due
and unpaid.
"Voting Debt" shall
mean indebtedness having general voting rights or that is convertible into
securities having such rights.
Section
1.2 Interpretation.
(a) Whenever
the words "include," "includes" or "including" are used in this Agreement they
shall be deemed to be followed by the words "without limitation."
(b) The
words "hereof," "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
paragraph, exhibit and schedule references are to the articles, sections,
paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.
(c) The
meaning assigned to each term defined herein shall be equally applicable to both
the singular and the plural forms of such term, and words denoting any gender
shall include all genders. Where a word or phrase is defined herein,
each of its other grammatical forms shall have a corresponding
meaning.
(d) A
reference to any party to this Agreement or any other agreement or document
shall include such party's successors and permitted assigns.
(e) A
reference to any specific legislation or to any provision of any legislation
shall include any amendment to, and any modification or re-enactment thereof,
any legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
ARTICLE
II
SALE OF ASSETS AND
ASSUMPTION OF LIABILITIES
Section
2.1 Sale and Transfer of
Assets.
(a) Sale and Transfer of
Manufacturing-Related Assets. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Seller shall sell,
convey, assign, transfer and deliver to Klee (or if any of such assets,
properties and rights are held by one or more Affiliates of the Seller, the
Seller shall cause such Affiliate(s) to sell, convey, assign, transfer and
deliver to Klee), and Klee shall purchase, acquire, receive and accept from the
Seller, free and clear of all Liens (other than Permitted Liens or
Permitted
Exceptions,
as applicable), all of the Seller's right, title and interest in and to the
following Assets (the "Manufacturing
Assets"):
(i) Owned Real
Property. The parcels of real property set forth on Schedule
5.8(c) ("Owned Real
Property"), and all of the rights arising out of the ownership thereof or
appurtenant thereto, together with all buildings, structures, facilities,
fixtures and other improvements thereto, including the Facility (collectively,
the "Improvements");
(ii) Personal Property
Leases. All leases and subleases in respect of tangible
personal property (A) located at the Facility or (B) listed on Schedule
2.1(a)(ii), and any rights appurtenant to such leases and subleases (the "Personal Property
Leases");
(iii) Machinery and
Equipment. All machinery, equipment, tools, furniture,
furnishings, vehicles, office equipment (including telecommunication equipment),
supplies, goods and other tangible items of personal property owned or leased by
the Seller and that are (A) located at the Facility, (B) used by the Seller's
field salesforce or (C) principally used in the Business (the "Machinery"), in the
case of (B) and (C) wherever situated, and including all warranties and
guarantees, if any, existing for the benefit of the Seller in connection with
the Machinery;
(iv) Books and
Records. The books and records of the Seller (including all
correspondence (including e-mail)) to the extent principally relating to the
manufacturing operations of the Business, including (A) books and records
relating to the manufacturing-related Commercial Know-How or the business,
commercial, financial, manufacturing, human resources (other than the separately
maintained medical file) or other information of the manufacturing operations of
the Business, regardless of form, including copies of any standard operating
procedures that principally apply to the production and/or packaging of the
Products, as well as all of the Seller's analytical test methods that
principally relate to the Products and validations and quality control thereof,
(B) regulatory documents, records and applications related to the Products or
the manufacturing operations of the Business, and (C) marketing materials
related to the Products and the manufacturing operations of the Business,
including tangible assets used in trade shows, but excluding Tax Returns, tax
records, work papers and the corporate books and records of the
Seller;
(v) Software. The
software set forth on Schedule 2.1(a)(v);
(vi) Contracts. Subject
to Section 7.11(b), all rights and interest of the Seller or the applicable
Affiliate of the Seller under the manufacturing-related Contracts;
(vii) Permits. To
the extent transferable and subject to Section 7.11(b), all licenses, permits,
certificates of authority, authorizations, approvals, registrations,
qualifications, waivers and similar instruments granted or issued by any
Governmental Entity ("Permits"), to the
extent related to the manufacturing operations of the Business;
(viii) Inventory. (A)
All raw materials and work in process, (B) all finished pharmaceutical products
(excluding the Products) and (C) finished Products intended for sale outside of
North America, in each case of the Business, wherever situated;
(ix) Accounts
Receivable. (A) All Accounts Receivable relating to the
contract manufacturing aspect of the Business and (B) all Accounts Receivable
relating to Products sold outside of North America;
(x) Prepaid Expenses and Other
Current Assets. Deposits (including security deposits for
electricity or telephone service or otherwise made with respect to the
Facility), prepaid expenses and other current assets (other than any prepaid
insurance) of the Business reflected on the Balance Sheet and the Closing
Working Capital Statement, except those assets that are Excluded Assets ("Prepaid Expenses and Other
Current Assets");
(xi)
Insurance
Proceeds. All third party property and casualty insurance
proceeds and all claims, causes of actions and other rights to third party
property and casualty insurance proceeds, in each case to the extent received or
receivable in respect of the Business and, in the case of product Liability
insurance proceeds, to the extent that Klee suffered the Liability for such
claim or cause of action;
(xii) Warranties. All
express and implied warranties and indemnities from suppliers of goods or
services relating to the Products, and any claims or benefits thereunder
relating to the Products (including any Inventory) sold and delivered by Klee
following the Closing Date;
(xiii)
Enforcement of
Covenants. All rights that the Seller may have to enforce
non-competition, non-solicitation and similar covenants against employees and
former employees of the manufacturing operations of the Business following the
Closing Date; and
(xiv) Other
Assets. All other tangible assets at the Facility, except
those assets that are Excluded Assets or that have been disposed of in the
ordinary course of business since the date of the Financial
Statements.
(b) Sale and Transfer of
Non-Manufacturing-Related Assets. On the terms and subject to
the conditions set forth in this Agreement, at the Closing, the Seller shall
sell, convey, assign, transfer and deliver to Defiante (or if any of such
assets, properties and rights are held by one or more Affiliates of the Seller,
the Seller shall cause such Affiliate(s) to sell, convey, assign, transfer and
deliver to Defiante), and Defiante shall purchase, acquire,
receive
and accept from the Seller, free and clear of all Liens (other than Permitted
Liens), all of the Seller's right, title and interest in and to all Assets other
than the Manufacturing Assets, except to extent the same are Excluded Assets
(the "Non-Manufacturing
Assets"), including the following.
(i) Intellectual
Property.
(1) Intellectual
Property. All right, title and interest of the Seller in and
to (A) the Intellectual Property set forth on Schedule 2.1(b)(i)(1)(A) and (B)
all Product Data;
(2) Commercial
Know-How. All right, title and interest of the Seller and its
Affiliates in all Commercial Know-How (all of such items in Section
2.1(b)(i)(1)(A) and this Section 2.1(b)(i)(2), the "Transferred Intellectual
Property");
(ii) Books and
Records. The books and records of the Seller (including all
correspondence (including e-mail)) to the extent relating principally to the
non-manufacturing operations of the Business, including (A) books and records
relating to the non-manufacturing-related Commercial Know-How or the business,
commercial, financial, manufacturing, human resources (other than the separately
maintained medical file) or other information of the non-manufacturing
operations of the Business, regardless of form, including copies of any standard
operating procedures that principally apply to the production and/or packaging
of the Products, as well as all of the Seller's analytical test methods that
principally relate to the Products and validations and quality control thereof,
(B) regulatory documents, records and applications related to the Products or
the non-manufacturing operations of the Business, and (C) marketing materials
related to the Products and the non-manufacturing operations of the Business,
including tangible assets used in trade shows, but excluding Tax Returns, tax
records, work papers and the corporate books and records of the Seller (the
foregoing items, together with the items in Section 2.1(a)(iv), the "Books and Records");
provided, however, that the
Seller may retain a copy of the Books and Records for legal and accounting
archival purposes;
(iii) Contracts. Subject
to Section 7.11(b), all rights and interest of the Seller or the applicable
Affiliate of the Seller under the non-manufacturing-related Contracts (the
foregoing Contracts, together with the Contracts in Section 2.1(a)(vi), the
"Assumed
Contracts");
(iv) Permits. To
the extent transferable and subject to Section 7.11(b), all Permits relating to
non-manufacturing operations of the Business;
(v) Accounts
Receivable. All Accounts Receivable not purchased and assumed
by Klee;
(vi) Inventory. All
finished products of the Business intended for sale within North America (such
products, together with the items set forth in Section 2.1(a)(viii), the "Inventory");
(vii) Enforcement of
Covenants. All rights that the Seller may have to enforce
non-competition, non-solicitation and similar covenants against employees and
former employees of the non-manufacturing operations of the Business following
the Closing Date;
(viii) Product-Specific
Assets. All of the Seller's rights existing on the Closing
Date and relating to the Products, including: (A) all obtained and in-process
Regulatory Approvals and all Regulatory Documentation; (B) any correspondence
with the FDA with respect to the Regulatory Approvals; (C) reports relating to
the Regulatory Approvals that have been filed by the Seller with the FDA and
adverse event reports pertaining to the Products; (D) Scientific and Regulatory
Material relating principally to the Products; (E) all post-approval studies and
all pre-clinical and clinical data; (F) reprints of all articles published in
industry publications that are related to the Products; and (G) any material
improvements to the manufacturing process relating to the Products, in each case
owned or controlled by the Seller;
(ix) Causes of
Action. Subject to Section 2.2(k), all of the Seller's rights,
claims and causes of action against third parties (whether known or unknown,
matured or un-matured, accrued or contingent), to the extent such rights, claims
and causes of action relate to the Assets or the Business, other than (A) causes
of action arising under this Agreement or the Transactions, or (B) causes of
action relating to the Excluded Assets or Excluded Liabilities;
(x) Insurance
Proceeds. All third party property and casualty insurance
proceeds and all claims, causes of actions and other rights to third party
property and casualty insurance proceeds, in each case to the extent received or
receivable in respect of the Business and, in the case of product Liability
insurance proceeds, to the extent that Defiante suffered the Liability for such
claim or cause of action;
(xi)
Warranties. All
express and implied warranties and indemnities from suppliers of goods or
services relating to the Products, and any claims or benefits thereunder
relating to the Products (including any Inventory) sold and delivered by
Defiante following the Closing Date;
(xii) Other
Assets. All other tangible Assets principally related to the
Business, except those Assets that are transferred pursuant to Section 2.1(a),
are Excluded Assets or that have been disposed of in the ordinary course of
business since the date of the Financial Statements;
(xiii) Telephone
Numbers. The telephone numbers owned by the Seller and used in
connection with the Products (such as for adverse event
reporting
and product ordering), but not the Seller's general telephone numbers or any
employee general telephone numbers; and
(xiv) General
Intangibles. All going concern value, goodwill and other
intangible rights and assets (other than with respect to Intellectual Property
of the Seller that is not Transferred Intellectual Property) relating to the
Business.
After
the Closing Date, each Party shall take all action (or shall cause its
Affiliates to take all actions) reasonably requested by the other Party to
effect the provisions of this Section 2.1. The Parties agree that
certain of the Assets relate to both the Business and the Seller's retained
businesses and that the Seller is transferring to the Purchasing Parties only
that portion of any such shared Asset that relates to the
Business. With respect to each such shared Asset, notwithstanding any
usage of "principally" or "to the extent" in Section 2.1, the Parties shall,
promptly after the Closing Date, reasonably cooperate to ensure that the
Purchasing Parties obtained that portion of each such shared Asset that relates
to the Business and the Seller retains that portion of each such shared Asset
that relates to the Seller's retained businesses.
Section
2.2 Excluded
Assets. Notwithstanding
any other provisions in this Agreement, it is expressly agreed that the Seller
shall retain, and the Purchasing Parties shall not acquire, any right, title and
interest in and to the following assets, properties or rights (the "Excluded
Assets"):
(a) Cash and Cash Equivalents;
Bank Accounts. Cash and cash equivalents, including any
marketable or other securities, and accrued interest, dividends or other
earnings thereon, wherever located, and all bank accounts, deposit and lockbox
arrangements and other locations where financial instruments or financial
records are maintained by or on behalf of the Business;
(b) Tax
Refunds. Any refunds, credits or other assets or rights
(including interest thereon or claims therefor) with respect to any Taxes (the
"Tax Refunds")
paid by the Seller or any of its Affiliates, or for which the Seller or its
Affiliates are responsible under this Agreement, relating to the Business or the
Assets;
(c) Insurance
Policies. Any insurance policies at any time in effect and any
reimbursement for, or other benefit associated with, prepaid insurance,
including insurance policies covering events occurring in whole or in part prior
to the Closing Date;
(d) Prepaid
Assets. Any reimbursement for, or other benefit associated
with, prepaid assets (including any prepaid insurance) reflected on the
Financial Statements that do not relate to the Business;
(e) Employee Benefit
Assets. Except as expressly provided in Article VIII hereof,
the Enzon Benefit Plans and all assets relating to the Enzon Benefit
Plans;
(f) Rights Under
Agreements. Except as expressly provided herein, all rights of
the Seller under this Agreement and any other agreements, instruments and
certificates delivered in connection with this Agreement, the Ancillary
Agreements or the Transactions;
(g) Names and
Logos. Except as provided in Section 7.14, the name and mark
"Enzon" and "Enzon Pharmaceuticals" and any names (including Internet domain
names) or marks containing or comprising the name and mark "Enzon" or "Enzon
Pharmaceuticals" or related thereto, including any names or marks (including
Internet domain names) similar thereto or dilutive or derivative thereof, and
the logo depicted on Schedule 2.2(g) and any logos containing or comprising such
logo or related thereto, including any logos similar thereto or derivative or
dilutive thereof (collectively, the "Enzon Mark and
Logo"), and the goodwill associated therewith;
(h) Capital
Stock. All of the capital stock or equity interests of the
Seller or any of its Affiliates;
(i) Process Development
Equipment. All of the process development equipment located at
the Seller's Piscataway, New Jersey facility;
(j) Other Real
Property. Any and all interests of the Seller or its
Affiliates in or to any real property other than the Owned Real Property;
and
(k) Other
Assets. The other assets, properties or rights of the Seller
listed on Schedule 2.2(k).
After
the Closing Date, the Purchasing Parties shall take all action (or shall cause
their Affiliates to take all actions) reasonably requested by the Seller to
effect the provisions of this Section 2.2, including the prompt return of any
Excluded Assets that are owned by the Seller and are transferred to the
Purchasing Parties inadvertently at Closing.
Section
2.3 Assumed
Liabilities.
(a) Klee Assumed
Liabilities. At the Closing, on the terms and subject to the
conditions set forth in this Agreement, Klee shall assume and shall pay, perform
and discharge when due the following Liabilities existing on or arising after
the Closing Date and relating exclusively to the Manufacturing Assets, except to
the extent the same are Excluded Liabilities, and no others:
(i) Liabilities. All
Accounts Payable and other accrued expenses and current liabilities of the
Business incurred in the ordinary course of business consistent with past
practice;
(ii) Return
Claims. (A) All Liabilities for the return of any
pharmaceutical product (other than the Products) manufactured or processed at
the Facility, up to the amount reserved against on the Balance Sheet, and (B)
with respect to pharmaceutical products manufactured or processed at the
Facility and sold after the Closing, all Liabilities for such
returns;
(iii) Contracts. All
Liabilities arising or to be performed after the Closing under the Assumed
Contracts and Permits assumed by Klee, excluding any Liability (A) relating to
defaults thereunder occurring on or prior to the Closing Date, (B) arising out
of any breach by the Seller of any representation
or
warranty contained herein or in any such Assumed Contract or (C) that the Seller
was obligated to perform or discharge on or prior to the Closing
Date;
(iv) Product
Claims. All Liabilities in respect of a claim by any Person
based on use, handling or ingestion of, exposure to or contact with any chemical
or substance at any time used or handled at, or distributed from, the Facility
(including all Liabilities for personal injury or property damage relating to or
arising out of products manufactured or processed at, or other services rendered
by the Business at or from, the Facility), on or after the Closing Date but in
any case excluding any such Liabilities relating to the Products;
(v) Environmental
Claims. To the extent such Liabilities relating to
Environmental Claims are not Excluded Liabilities, any Liabilities relating to
Environmental Claims arising out of the ownership, occupation or operation of
the Business, the Facility or the Assets, or conditions created at the Facility,
on or after the Closing Date or associated with the release of any Hazardous
Materials on or after the Closing Date at, on, under or from the Owned Real
Property;
(vi) Taxes. All
Liabilities for Taxes arising out of the ownership of the Manufacturing Assets
that are allocable to Klee pursuant to Section 11.5(b); and
(vii) Accrued Employee
Compensation, Benefits and Other Liabilities. The amount of
Accrued Employee Compensation, Benefits and Other Liabilities.
(b) Defiante Assumed
Liabilities. At the Closing, on the terms and subject to the
conditions set forth in this Agreement, Defiante shall assume and shall pay,
perform and discharge when due the following Liabilities existing on or arising
after the Closing Date, except to the extent the same are Excluded Liabilities,
and no others (collectively with the Liabilities set forth in Section 2.3(a),
the "Assumed
Liabilities"):
(i) Liabilities. To
the extent not otherwise assumed by Klee, all Accounts Payable and other accrued
expenses and current liabilities of the Business incurred in the ordinary course
of business consistent with past practice;
(ii) Return
Claims. (A) All Liabilities for the return of or payment with
respect to any Product manufactured or processed by the Business (including
chargebacks and rebates), up to the amount reserved against on the Balance
Sheet, and (B) with respect to the Products manufactured or processed by the
Business and sold after the Closing, all Liabilities for such returns or
payments;
(iii) Product
Claims. All Liabilities in respect of a claim by any Person
based on use, handling or ingestion of, exposure to or contact with any of the
Products (including all Liabilities for personal injury or property
damage
relating to or arising out of the sale of the Products) on or after the Closing
Date;
(iv) Contracts. All
Liabilities arising or to be performed after the Closing under the Assumed
Contracts, Permits and Transferred Intellectual Property assumed by Defiante,
excluding any Liability (A) relating to defaults thereunder occurring on or
prior to the Closing Date, (B) arising out of any breach by the Seller of any
representation or warranty contained herein or in any such Assumed Contract or
(C) that the Seller was obligated to perform or discharge on or prior to the
Closing Date; and
(v) Taxes. All
Liabilities for Taxes arising out of the ownership of the Non-Manufacturing
Assets that are allocable to Defiante pursuant to Section 11.5(b).
To
the extent that any Liability appearing on the Closing Working Capital Schedule
is not otherwise an Assumed Liability pursuant to this Section 2.3, the
Purchasing Parties shall assume and shall pay, perform and discharge when due
such Assumed Liability.
Section
2.4 Excluded
Liabilities. It is expressly agreed that the Seller shall
retain, and the Purchasing Parties shall not assume or have any obligation to
pay, perform or discharge, any Liability of the Seller or its Affiliates other
than the Assumed Liabilities (the "Excluded
Liabilities"), including the following Liabilities:
(a) Excluded
Assets. Liabilities arising out of the Excluded
Assets;
(b) Contracts. All
Liabilities with respect to Contracts not assumed by the Purchasing Parties
hereunder, and all Liabilities arising out of breaches by or defaults of the
Seller or any of its Affiliates under any Assumed Contract;
(c) Service
Liability. Any Liability of the Business or the Seller (or any
of its Affiliates) arising out of or resulting from any services performed by
the Seller, its employees, independent contractors or Affiliates (including
Liabilities arising out of or resulting from the consummation of the
Transactions), including claims made or to be made for injury to a Person,
damage to property or other damage (whether made in product or service
liability, tort or otherwise), except as may be provided in the Transition
Services Agreement;
(d) Borrowed
Money. All Liabilities for indebtedness (including interest
and penalties thereon) for borrowed money;
(e) Intercompany
Liabilities. All intercompany payables and other Liabilities
or obligations of the Business or the Seller due or owing to any Affiliate of
the Seller;
(f) Certain
Taxes. All Liabilities for Taxes arising from the operation of
the Business or the Assets that are allocated to the Seller pursuant to Section
11.5(b);
(g) Employees. Except
as provided in Article VIII or as set forth on the Closing Working Capital
Schedule, all Liabilities relating to or arising out of (i) the
employment
relationship
between the Seller or its Affiliates and all current or former employees of the
Seller or its Affiliates; (ii) workers' compensation claims against the Seller
or any of its Affiliates that relate to the period on or prior to the Closing
Date, irrespective of whether such claims are made prior to or after the
Closing, and (iii) any Enzon Benefit Plan;
(h) Environmental
Claims. All Liabilities relating to Environmental Claims to
the extent arising out of the ownership, occupation or operation of the
Business, the Facility or the Assets, or conditions existing at, on, under or
within the Facility, in each case prior to the Closing Date, including
Liabilities and Environmental Claims associated with the release of any
Hazardous Materials at, on, under or from the Owned Real Property (including
those items set forth on Schedule 5.13(c)) and releases at locations other than
the Owned Real Property to the extent relating to the off-site disposal of
Hazardous Materials by the Seller prior to the Closing Date;
(i) Return
Claims. All Liabilities for the return of or payment with
respect to products (including the Products) manufactured, processed or sold by
the Business prior to the Closing Date, including chargebacks and rebates, but
only to the extent exceeding the reserve set forth on the Balance
Sheet;
(j) Product
Claims. All Liabilities in respect of a claim by any Person
based on use, handling or ingestion of, exposure to or contact with any chemical
or substance at any time used, handled or distributed by the Business (including
all Liabilities for personal injury or property damage relating to or arising
out of products manufactured, processed or sold, or services rendered by, the
Business), and all other Liabilities in respect of any and all products
(including the Products) manufactured, processed or sold and/or services
performed by Seller or its Affiliates, in each case to the extent arising out of
the ownership, occupation or operation of the Business, the Facility or the
Assets prior to the Closing Date;
(k) Transaction
Expenses. Any broker's, finder's or similar fee incurred by
the Seller or any of its Affiliates, and, except as otherwise provided in this
Agreement, any cost, fee or expense incurred by the Seller or its Affiliates in
connection with the negotiation and preparation of this Agreement and the
performance by Seller of the terms and conditions contained herein and the
consummation by the Seller of the Transactions, including any cost, fee or
expense relating to obtaining the Requisite Stockholder Approval;
(l) Legal
Proceedings. All Liabilities in respect of any Legal
Proceeding (i) pending against the Seller (or any Affiliate of the Seller), the
Business or the Assets on the Closing Date; (ii) instituted after the Closing
Date but arising out of actions of the Seller (or its Affiliates) or the
operation of the Business on or prior to the Closing Date (including the items
identified on Schedule 5.13(c)) or (iii) relating to any Excluded
Asset;
(m) Bulk Sales
Laws. Any liability arising out of or resulting from
noncompliance by the Seller with any bulk sales or fraudulent transfer laws in
connection with any of the Transactions; and
(n) Other
Liabilities. All Liabilities that the Seller has expressly
retained under any provision of this Agreement, any Ancillary Agreement or any
other agreement, instrument or certificate delivered by the Seller in connection
with the Transactions.
ARTICLE
III
PURCHASE PRICE; ADJUSTMENTS;
MILESTONES; ROYALTIES
Section
3.1 Purchase Price;
Payment. In consideration of the sale, transfer, assignment,
conveyance and delivery by the Seller of the Assets, and subject to the terms
and conditions of this Agreement, the Purchasing Parties shall (a) pay to the
Seller an aggregate of $300,000,000, as adjusted pursuant to Section 3.2(a) (the
"Cash Purchase
Price"), plus the milestone and royalty payments contemplated by Section
3.3, and (b) assume the Assumed Liabilities. For purposes of this
Agreement, the "Purchase Price" shall
mean the aggregate amount paid by the Purchasing Parties in consideration of the
purchase and assumption by them of the Assets and Assumed Liabilities, including
the Cash Purchase Price and all milestone and royalty payments made pursuant to
Section 3.3 and following all adjustments made pursuant to Section 3.4 and
indemnification payments made pursuant to Article XI.
Section
3.2 Payment at the
Closing.
(a) Not
later than two Business Days prior to the Closing Date, the Seller and the
Purchasing Parties shall mutually agree on a schedule, based upon the Balance
Sheet and substantially in the form attached hereto as Schedule 3.2(a) (the
"Preliminary Working
Capital Schedule"), setting forth the Parties' good faith estimate as of
the Closing Date of the current Accounts Receivable, net of allowances for
doubtful accounts, Inventory, net of allowance for obsolete Products, and other
current assets (including Prepaid Expenses and Other Current Assets) of the
Business that are included in the Assets ("Current Assets")
minus the
Accounts Payable, Accrued Employee Compensation, Benefits and Other Liabilities
and other current liabilities of the Business (other than Taxes payable) that
are included in the Assumed Liabilities (the "Current Liabilities")
(the results of such calculation, the "Preliminary Working
Capital"). The Preliminary Working Capital Schedule shall be
prepared using accounting principles, practices and methods consistent with
those used in preparing the Balance Sheet with adjustments for changes occurring
in the period between the date of the Balance Sheet and the Closing
Date. If the amount of the Preliminary Working Capital exceeds the
Target Amount, then the Cash Purchase Price shall be increased by the
excess. If the amount of Preliminary Working Capital is less than the
Target Amount, the Cash Purchase Price shall be decreased by the
shortfall. In order to determine the Preliminary Working Capital, the
Seller shall provide the Purchasing Parties and their Representatives with all
data and financial statements, reasonable access to the Books and Records and
any other information reasonably required by the Purchasing Parties and
customarily prepared by the Seller prior to the date of this Agreement for the
determination of the Preliminary Working Capital.
(b) At
the Closing, (i) Klee shall pay to the Seller, by wire transfer of immediately
available funds to an account designated by the Seller not later than two
Business Days prior to the Closing Date, the Manufacturing Assets Purchase
Price; and (ii) Defiante shall pay to the Seller, by wire transfer of
immediately available funds to an account designated by the
Seller
not later than two Business Days prior to the Closing Date, an amount equal to
the Cash Purchase Price, as adjusted pursuant to Section 3.2(a), minus the
Manufacturing Assets Purchase Price.
Section
3.3 Milestone and Royalty
Payments.
(a) In
addition to the amount payable by Defiante pursuant to Section 3.2(b), Defiante
shall make the following milestone payments to the Seller by wire transfer of
immediately available funds to the account or accounts of the Seller designated
by the Seller:
(i) $5,000,000
within ten Business Days after Defiante (or any successor thereto pursuant to
the terms of this Agreement) receives FDA Approval (including for this purpose
any such approval deemed granted 30 days following the submission of any
"Supplement—Change Being Effected in 30 Days" applications or similar approvals)
for SS Oncaspar®;
(ii) $7,000,000
within ten Business Days after Defiante (or any successor thereto pursuant to
the terms of this Agreement) receives FDA Approval for SC Oncaspar®;
and
(iii) either
(A) $15,000,000, if Defiante (or any successor thereto pursuant to the terms of
this Agreement) receives EMEA Approval for SC Oncaspar® on an accelerated,
conditional or expedited basis (including any EMEA Approval granted prior to the
completion of any additional clinical trial other than the clinical trial for SC
Oncaspar® that is ongoing in the United States as of the date of this
Agreement), or (B) $10,000,000, if Defiante (or any successor thereto pursuant
to the terms of this Agreement) receives EMEA Approval for SC Oncaspar® on a
non-accelerated basis, in either case within ten Business Days after the EMEA
Approval is received.
(b) In
addition to the amount payable by Defiante pursuant to Section 3.2(b) and the
milestone payments set forth in Section 3.3(a), Defiante shall make the
following royalty payments to the Seller, on a quarterly basis not later than 30
days after the end of each calendar quarter (with payments made in respect of
each of the first three calendar quarters of each applicable year constituting
Defiante's good faith estimate of the royalty owed for such quarter, and with
the payment made in respect of the fourth calendar quarter of such year
including a "true up" for the first three calendar quarters' payments, based on
actual amounts owed by Defiante in respect of such three calendar quarters
relative to amounts paid by Defiante), by wire transfer of immediately available
funds to the account or accounts of the Seller designated by the
Seller:
(i) With
respect to sales of the Products in the United States for each of calendar years
2010, 2011, 2012, 2013 and 2014, Defiante shall pay to the Seller 5% of the
amount, if any, by which Net Receipts in the United States for each such
calendar year exceed the Baseline Amount applicable to the United
States.
(ii) With
respect to sales of the Products outside the United States: (A) for each of
calendar years 2010 and 2011, Defiante shall pay to the Seller 10% of the
amount, if any, by which aggregate Net Receipts for all territories outside the
United States for each such calendar year exceed the Baseline Amount applicable
to such territories, and (B) for each of calendar years 2012, 2013 and 2014,
Defiante shall pay to the Seller 5% of the amount, if any, by which aggregate
Net Receipts for all territories outside the United States for each such
calendar year exceed the Baseline Amount applicable to such
territories.
(iii) In
connection with any payments made pursuant to this Section 3.3(b), Defiante
shall simultaneously deliver to the Seller a schedule setting forth in
reasonable detail the calculation of Net Receipts pursuant to each of the
foregoing clauses (i) and (ii).
(iv) Defiante
agrees that, during calendar years 2010, 2011, 2012, 2013 and 2014, it shall
not, and shall cause its Affiliates, agents, licensees, sub-licensees and
distributors not to, distribute, bundle or otherwise sell any Product in any
manner that would reduce the Gross Sales of such Product in favor of other
revenue not subject to the royalties set forth in the foregoing clauses (i) and
(ii).
(v) In
the event that, during calendar years 2010, 2011, 2012, 2013 and 2014, either of
the Purchasing Parties or any of their Affiliates, directly or indirectly,
licenses its rights in any Product such that the full amount of the invoiced
sales of such Product are no longer counted as Gross Sales of such Product, (A)
such license shall only be made upon arms-length terms and (B) the consideration
received in respect of such license shall, for purposes of calculating the
royalties owed to the Seller pursuant to the foregoing clauses (i) and (ii), be
treated as Net Receipts as of the time of such license.
(vi) Defiante
will maintain for a period of three years following the close of each of
calendar years 2010, 2011, 2012, 2013 and 2014 true and complete books
containing an accurate record of all data necessary for the proper computation
of royalties under this Agreement. The Seller will have the right,
upon written request to Defiante and through the Independent Accounting Firm, to
inspect the relevant records of Defiante at any time within such three year
period (but not more than once in any calendar year) for the purpose of
verifying the accuracy of all payments or charges used to calculate royalties
payable under this Agreement; provided that such
inspection shall only occur during regular business hours, without unreasonable
disruption to the business or operations of Defiante, at such place or places
where such books and records are customarily kept. The Parties agree
that information furnished as a result of any such inspection will be limited to
a written statement by the Independent Accounting Firm to the effect that it has
reviewed the books and records of Defiante and either (A) the Gross Sales and
Net Receipts claimed by Defiante are in conformity with such books and records
and the applicable provisions of this Agreement or (B) setting forth any
required adjustments. The
fees
and expenses of the Independent Accounting Firm in connection with this Section
3.3(b)(vi) will be borne by the Seller, except as provided below. If
any such examination shows any underpayment or overpayment, or overcharge or
undercharge, a correcting payment or refund will be made within 30 days after
receipt of the written statement described above. Notwithstanding the
foregoing, if any such inspection indicates that, with respect to any calendar
year, the amount of royalties that should have been paid in such year by
Defiante exceeds the amount actually paid in such year by Defiante by greater
than 5%, then Defiante shall bear all reasonable and documented costs associated
with such examination (including the costs of the accountants performing the
verification and the reasonable out-of-pocket costs of the
Seller). The Seller agrees to, and shall use reasonable best efforts
to cause the Independent Accounting Firm to, hold in confidence all information
learned in the course of any audit or inspection, except to the extent necessary
to reveal such information in order to enforce its rights under this Agreement
or pursuant to applicable Law. Defiante will not have any obligation
to maintain records pertaining to amounts charged by them or payments due from
them under this Agreement beyond such three year periods. The results
of each inspection, if any, will be binding on the Parties, absent fraud, bad
faith or manifest error by the Independent Accounting Firm.
(c) Notwithstanding
anything to the contrary in this Agreement, until the last payment contemplated
by this Section 3.3 has been made to the Seller, the Purchasing Parties and
their Affiliates shall not sell, assign, transfer, dispose of or convey any of
the Products or the Business to a third party unless such third party has
agreed, in manner reasonably satisfactory to the Seller, to be bound by the
terms and conditions of this Section 3.3 and to assume all of the obligations of
the Purchasing Parties contemplated by this Agreement (including pursuant to
this Section 3.3 and Section 7.24); provided, however, that
Defiante shall guarantee the payment by such third party of amounts payable to
the Seller pursuant to this Section 3.3, if and when, and limited to the extent
that, such third party defaults under its payment obligations. The
Seller shall provide to Defiante (i) notice of the extent to which such third
party has defaulted under such payment obligations and (ii) a demand for payment
by Defiante of the amount of such obligations, less the amount in respect
thereof that such third party has already paid to the Seller through and
including the date of such demand. Defiante shall, within 30 days of
receipt of demand for payment from the Seller, pay the unpaid amount by wire
transfer of immediately available funds to an account or accounts designated by
the Seller. Defiante reserves the right to assert defenses that such
third party may have to any payment guaranteed hereunder.
(d) If
Defiante (or any successor thereto pursuant to the terms of this Agreement)
fails to pay in full on or before the date due any royalty or milestone payment
that is required to be paid under this Agreement, Defiante (or any successor
thereto pursuant to the terms of this Agreement) will also pay to the Seller, on
demand, interest on any such amount beginning on such due date at an annual rate
(calculated on the basis of a 360-day year) equal to the "base rate" of
Citibank, N.A., or any successor thereto, in New York, New York in effect on
such due date, to be assessed from the date payment of the amount in question
first became due.
Section
3.4 Adjustment to Purchase
Price.
(a) Within
45 days following the Closing, the Seller shall prepare and deliver to the
Purchasing Parties a schedule (the "Closing Working Capital
Schedule"), in the form attached hereto as Schedule 3.4(a), setting forth
a calculation of the Current Assets and Current Liabilities as of the Closing
(the "Closing Working
Capital"), which shall be prepared on the same basis and using accounting
principles, practices and methods consistent with those used to prepare the
Preliminary Working Capital Schedule and the Balance Sheet. During
such period, the Purchasing Parties shall provide the Seller and its
Representatives with all data and financial statements reasonably requested by
the Seller, and full access to the Books and Records, any other information, and
to any employees to the extent necessary for the Seller to prepare the Closing
Working Capital Schedule.
(b) The
Purchasing Parties shall have 60 days after the delivery by the Seller to review
the Closing Working Capital Schedule. The Seller shall, from and
after the Closing Date, provide the Purchasing Parties and their Representatives
with all data and financial statements reasonably requested by the Purchasing
Parties, and full access to any information, and to any employees to the extent
necessary for the Purchasing Parties to review the Closing Working Capital
Schedule. In the event that the Purchasing Parties object to any of
the items in the Closing Working Capital Schedule, the Purchasing Parties shall,
on or before the last day of such 60 day period, inform the Seller in writing
(the "Purchasers'
Objection"), setting forth a specific description of the basis of the
Purchasers' Objection and the adjustments to the Closing Working Capital that
the Purchasing Parties believe should be made. Failure to notify the
Seller within such 60 day period shall constitute acceptance and approval by the
Purchasing Parties of the Closing Working Capital Schedule. If the
Purchasing Parties deliver a Purchasers' Objection to the Seller on or before
the last day of such 60 day period, the Parties shall then have 15 days to
negotiate in good faith to resolve the disputes set forth in the Purchasers'
Objection as expeditiously as possible and, if the Parties so resolve such
disputes, the Closing Working Capital and the Closing Working Capital Schedule,
as amended to the extent necessary to reflect the resolution of such disputes,
shall be conclusive and binding upon the Parties. It is acknowledged
and agreed that any items in the Closing Working Capital Schedule not set forth
in the Purchasers' Objection shall be deemed to be conclusively accepted and
approved by the Purchasing Parties.
(c) If
the Purchasing Parties and the Seller are unable to resolve all of their
disagreements with respect to the determination of Closing Working Capital by
the expiration of such 15-day period, they shall promptly refer any remaining
disagreements to a mutually agreeable nationally recognized firm of independent
public accountants (the "Independent Accounting
Firm"), which shall determine, solely on the basis of the standard set
forth in Section 3.4(a) and only with respect to the remaining disagreements and
objections so submitted, whether and to what extent, if any, the Closing Working
Capital requires adjustment. Each of the Purchasing Parties and the
Seller shall make complete submissions to the Independent Accounting Firm within
ten days following the engagement of the Independent Accounting
Firm. Any materials submitted by a Party to the Independent
Accounting Firm after such ten-day period shall be ignored by the Independent
Accounting Firm. The Parties shall instruct the Independent
Accounting Firm to deliver its written determination to the Seller and the
Purchasing Parties within 30 days after the expiration of such ten-day
period. The
Independent
Accounting Firm shall resolve the dispute and determine the Closing Working
Capital, not on the basis of an independent review, but only within the disputed
range and based on the standard set forth in Section 3.4(a). Such
resolution shall be set forth in a written statement delivered to the Purchasing
Parties and the Seller. The Independent Accounting Firm's
determination shall be conclusive and binding upon the Seller and the Purchasing
Parties, absent fraud, bad faith or manifest error by the Independent Accounting
Firm. The fees and disbursements of the Independent Accounting Firm
shall be shared equally by the Purchasing Parties, on one hand, and the Seller,
on the other hand.
(d) Within
ten Business Days following determination of the Closing Working Capital (as may
be adjusted by agreement of the Parties or the determination of the Independent
Accounting Firm, as the case may be), the Seller or the Purchasing Parties, as
the case may be, shall make an adjustment payment in an amount equal to the
difference between the Preliminary Working Capital and the Closing Working
Capital. The adjustment payment will be made by the Seller to the
Purchasing Parties to the extent that the Closing Working Capital is less than
the Preliminary Working Capital and by the Purchasing Parties to the Seller to
the extent that Closing Working Capital is greater than the Preliminary Working
Capital. The adjustment payment shall bear interest (calculated on
the basis of a 360-day year) from the Closing Date to and including the day
immediately prior to payment at the "base rate" of Citibank, N.A., or any
successor thereto, in New York, New York in effect on the Closing
Date. The adjustment payment shall be treated for all tax purposes as
an adjustment to the Purchase Price and shall be paid by wire transfer, in
immediately available funds, to a bank account or accounts designated by the
Seller or the Purchasing Parties, as the case may be.
Section
3.5 Allocation of Purchase
Price. The Seller and the Purchasing Parties agree that the
portion of the Cash Purchase Price allocable to the Manufacturing Assets is
$30,000,000 (the "Manufacturing Assets
Purchase Price"). Notwithstanding the foregoing, if the Seller
and the Purchasing Parties determine, after the date hereof, that the
Manufacturing Assets Purchase Price is not accurate in all material respects,
then they shall consult with each other on such price and may mutually agree to
amend the amount of the Manufacturing Assets Purchase Price prior to the
Closing. The Seller and the Purchasing Parties further agree that the
remainder of the Cash Purchase Price and the relevant Assumed Liabilities shall
be allocated among the Non-Manufacturing Assets, and the Manufacturing Assets
Purchase Price shall be allocated among the Manufacturing Assets, in each case
in accordance with Section 1060 of the Code. The Cash Purchase Price
(which for these purposes shall include the amount of the relevant Assumed
Liabilities) shall be allocated among the respective Assets in accordance with
schedules that each of Klee and Defiante shall provide to the Seller within 90
days after the Closing. Thereafter, the Seller shall have 25 days
either to (a) agree with and accept such schedules or (b) in good faith suggest
changes to either such schedule and attempt to agree with the respective
Purchasing Party as to the contents of the applicable schedule (with the
resulting agreed-upon schedule in both instances called the "Allocation Schedule"
with respect to the relevant Assets). The Seller, on the one hand,
and each of the Purchasing Parties, on the other hand, shall provide each other
promptly with any other information required to complete the respective
Allocation Schedule. If the Seller and the respective Purchasing
Party agree on the applicable Allocation Schedule within 135 days following the
Closing, the Seller and such Purchasing Party shall file Internal Revenue
Service Form 8594 and any required attachments thereto ("Form 8594"), together
with all federal, state and local tax returns, in a manner
consistent
with and in accordance with such Allocation Schedule. In addition,
the Seller and each Purchasing Party hereby undertake and agree to timely file
any information that may be required to be filed pursuant to the U.S. Department
of Treasury regulations promulgated under Section 1060(b) of the
Code. If the Seller and the respective Purchasing Party are unable to
reach such agreement within 135 days following the Closing, the allocation of
the applicable portion of the Cash Purchase Price (and the amount of the
relevant Assumed Liabilities) shall be determined by the Independent Accounting
Firm within 30 days after it is retained for such purpose, provided that such
allocation is reasonable and in accordance with Section 1060 of the Code and the
U.S. Department of Treasury regulations promulgated
thereunder. Within 10 days after filing Form 8594 with the Internal
Revenue Service pursuant to this Section 3.5, each Party shall provide the other
with a copy of such form as filed.
ARTICLE
IV
THE
CLOSING
Section
4.1 The
Closing. The closing of the Transactions (the "Closing") shall
take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four
Times Square, New York, New York 10036 at 10:00 a.m., New York City time, two
Business Days following the satisfaction or waiver of all conditions to closing
set forth in Article IX (other than those conditions that can be satisfied only
at the Closing, but subject to the satisfaction or waiver of such conditions),
or such other date, time and place as shall be agreed upon by the Seller and the
Purchasing Parties, but in no event earlier than January 1, 2010 (the actual
date and time being herein called the "Closing
Date"). The Closing shall be deemed effective as of 5:00 p.m.
on the Closing Date.
Section
4.2 Deliveries by the
Seller. At the Closing, the Seller shall deliver or cause to
be delivered to the Purchasing Parties:
(a) an
Instrument of Assignment and Bill of Sale substantially in the form attached as
Exhibit A, duly executed by the Seller (the "Instrument of Assignment and
Bill of Sale");
(b) a
special warranty deed ("Deed") in recordable
form relating to the Owned Real Property substantially in the form attached as
Exhibit B;
(c) a
Trademark Assignment substantially in the form attached as Exhibit C (the "Trademark
Assignment") and a Patent Assignment substantially in the form attached
as Exhibit D (the "Patent Assignment"),
each duly executed by the Seller;
(d) an
Assumption Agreement substantially in the form attached as Exhibit E (the "Assumption
Agreement"), duly executed by the Seller;
(e) a
Transition Services Agreement substantially in the form attached as Exhibit F
(the "Transition
Services Agreement"), duly executed by the Seller;
(f) a
License Agreement substantially in the form attached as Exhibit G (the "License Agreement"),
duly executed by the Seller;
(g) a
certificate, dated the Closing Date and signed by a senior officer of the
Seller, certifying the satisfaction of the conditions set forth in Section
9.2(a), Section 9.2(b) and Section 9.2(c);
(h) a
certificate of good standing of the Seller from the Secretary of State of the
State of Delaware;
(i) a
certificate of the Secretary of the Seller certifying as accurate and complete
as of the Closing certain resolutions adopted by the Board of Directors of the
Seller approving the execution and delivery of this Agreement and each Ancillary
Agreement and the consummation of the Transactions;
(j) UCC
termination statements, if any, and any other necessary documents that, when
filed on the Closing Date, will be sufficient to release all Liens (other than
Permitted Liens) on the Assets;
(k) a
certificate of non-foreign status as provided in U.S. Department of Treasury
Regulation Section 1.1445-2(b); and
(l) all
other previously undelivered documents required to be delivered by the Seller to
the Purchasing Parties at or prior to the Closing pursuant to this
Agreement.
Section
4.3 Deliveries by the Purchasing
Parties. At the Closing, the Purchasing Parties shall deliver
or cause to be delivered to the Seller:
(a) the
Cash Purchase Price, as adjusted pursuant to Section 3.2(a), by wire transfer of
immediately available funds, to the account or accounts of the Seller designated
by the Seller prior to Closing;
(b) the
Transition Services Agreement, duly executed by the relevant Purchasing
Party(ies);
(c) the
Trademark Assignment and Patent Assignment, each duly executed by
Defiante;
(d) the
License Agreement, duly executed by Klee;
(e) the
Assumption Agreement, duly executed by the Purchasing Parties;
(f) a
certificate, dated the Closing Date and signed by a senior officer of the
Purchasing Parties, certifying the satisfaction of the conditions set forth in
Section 9.3(a) and Section 9.3(b); and
(g) all
other previously undelivered documents required to be delivered by the
Purchasing Parties to the Seller at or prior to Closing pursuant to this
Agreement.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES OF THE SELLER
The
Seller represents and warrants to the Purchasing Parties as
follows:
Section
5.1 Existence. The
Seller is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and the Seller has the requisite power
and authority to own, lease and operate the Assets and to carry on the Business
as the same is now being conducted. The Seller is duly authorized,
qualified or licensed to do business as a foreign corporation and in good
standing in every jurisdiction wherein, by reason of the nature of the Business
or the character of the Assets, it is necessary for the Seller to be so
authorized, qualified or licensed and in good standing, except where the failure
to be so authorized, qualified or licensed and in good standing would not
reasonably be likely to result in a Material Adverse Effect.
Section
5.2 Authorization. The
Seller has all necessary corporate power and authority to execute and deliver
this Agreement and the Ancillary Agreements, to perform its obligations
hereunder and thereunder and, subject to receipt of the Requisite Stockholder
Approval, to consummate the Transactions. The execution and delivery
of this Agreement and the Ancillary Agreements by the Seller and the
consummation by the Seller of the Transactions have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of the Seller are necessary to authorize the execution and delivery
of this Agreement or the Ancillary Agreements or to consummate the Transactions,
other than the receipt of the Requisite Stockholder Approval.
Section
5.3 Binding
Agreement. This Agreement has been (and, when executed and
delivered, the Ancillary Agreements will have been) duly executed and delivered
by the Seller and, assuming due and valid authorization, execution and delivery
hereof and thereof by the Purchasing Parties, this Agreement is (and, when
executed and delivered, each of the Ancillary Agreements will be) a valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar Laws of
general application affecting enforcement of creditors' rights generally and (b)
the availability of the remedy of specific performance or injunctive or other
forms of equitable relief may be subject to equitable defenses and would be
subject to the discretion of the court before which any proceeding may be
brought.
Section
5.4 No
Conflicts. The execution and delivery by the Seller of this
Agreement and the consummation by the Seller of the Transactions do not and will
not (a) violate or conflict with any provision of the certificate of
incorporation or bylaws of the Seller; (b) except as set forth on Schedule 5.4,
conflict with, result in a material violation or breach of, constitute, with or
without the giving of notice or the lapse of time or both, a default or give
rise to any right of termination, material modification, cancellation or
acceleration under, or result in the loss of any material benefit or incurrence
of any material obligation under, the terms of any Assumed Contract, Permit,
note, bond, indenture, mortgage or other material agreement to which the Seller
is a party or by which the Seller, the Business or any of the Assets is bound;
(c) result
in
the imposition of any Lien (other than a Permitted Lien) on any of the Assets;
(d) violate or conflict with any Order applicable to the Seller, the Business or
any of the Assets; or (e) violate or conflict with any applicable
Law.
Section
5.5 Governmental Approvals;
Consent. No license, certificate, approval, consent,
ratification, permit, authorization, waiver, order, amendment, modification or
qualification of, or filing or registration with, or notification to
(collectively, "Consents") any
Governmental Entity or any other Person is required to be obtained or made
following the date of this Agreement by the Seller in connection with (a) the
execution and delivery of this Agreement, (b) the consummation of the
Transactions, including the assignment and transfer to each Purchasing Party of
the respective Assets to be transferred to it pursuant to the terms of this
Agreement, or (c) the continuing validity as of and following the Closing of any
Assumed Contract or Permit, in either case that is material to the Business,
except for (i) (x) the expiration of the waiting period under the HSR Act and
(y) any applicable foreign antitrust or competition Law filings, (ii) applicable
requirements of the Exchange Act, (iii) any filings and approvals of applicable
Regulatory Authorities, (iv) the Consents set forth on Schedule 5.5 and (v) any
such Consents that have already been obtained or made.
Section
5.6 Financial
Statements. True and complete copies of the (a) unaudited
balance sheet of the Business as at September 30, 2009 and unaudited balance
sheet of the Business as at December 31, 2008, and (b) unaudited income
statements and statements of cash flows of the Business for the nine months
ended September 30, 2009 and unaudited income statements and statements of cash
flows of the Business for the year ending December 31, 2008, together with the
related footnotes thereto (collectively, the "Financial
Statements"), have heretofore been delivered to the Purchasing
Parties. The Financial Statements (i) have been prepared from and are
in accordance with, in all material respects, the Books and Records of the
Seller, (ii) have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be stated in the notes thereto)
and (ii) fairly present in all material respects the consolidated financial
position and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Business as of the dates and for the
periods referred to therein (subject to any audit adjustments which are not in
the aggregate material and to the absence of footnotes), it being understood
that (A) the Business has been consolidated into the financial statements
of the Seller and has had transactions and relationships with the Seller and its
Affiliates, including financing necessary to support the continued operations of
the Business; (B) it is possible that the terms of these transactions and
relationships are not the same as those that would have existed had the Business
been owned by a separate company; (C) the Business has relied on the Seller and
its Affiliates for a portion of its administrative support for which the costs
have been allocated on a basis that the Seller reasonably believes appropriate
under the circumstances; (D) the amounts recorded for these allocations are not
necessarily representative of the amounts that would have been reflected on the
Financial Statements had the Business been an entity operated independently of
the Seller, although such amounts are the Seller's reasonable estimates of such
allocations; and (E) all of such administrative and financial support, together
with any associated assets or personnel, are not necessarily being transferred
pursuant to this Agreement.
Section
5.7 Absence of Certain
Changes. Except as contemplated by this Agreement and except
for changes carried out in connection with the separation of the
Business
from
the Seller's other activities, since September 30, 2009, (a) the Business has
been conducted in all material respects in the ordinary course consistent with
past practice and (b) there has not occurred any (i) Material Adverse Effect,
(ii) material damage, destruction or loss, whether or not covered by insurance,
with respect to the Assets, (iii) change in the Seller's methods of accounting
with respect to the Business, other than as required by Law or GAAP, (iv)
imposition of any Lien (other than Permitted Liens) on any of the Assets, (v)
sale of any material assets of the Business other than sales in the ordinary
course of business, or (vi) any agreement or commitment to do any of the
foregoing in clauses (iii) through (v).
Section
5.8 Personal and Real
Property.
(a) Schedule
5.8(a) sets forth a true and complete list of all Machinery with a fair market
value as of the date of this Agreement equal to or exceeding
$100,000. The Seller has (i) good title to the Machinery, free and
clear of all Liens (other than Permitted Liens), and all Machinery is in working
condition and good repair, normal wear and tear excepted, and (ii) a valid and
enforceable leasehold interest under each Personal Property
Lease. The Seller will transfer to Klee at the Closing good and valid
title to the Machinery and the Personal Property Leases, free and clear of all
Liens (other than Permitted Liens). The Seller has delivered or
otherwise made available to Klee true and complete copies of the Personal
Property Leases listed on Schedule 2.1(a)(ii), together with all amendments,
modifications or supplements thereto.
(b) The
Seller has good fee title to the Owned Real Property included in the Assets,
free and clear of all Liens (other than Permitted Liens and Permitted
Exceptions). Other than in the ordinary course of business, there are
no parties other than the Seller in possession of any part of the Owned Real
Property and, other than in the ordinary course of business, there are no
leases, subleases, licenses, concessions or other agreements, written or oral,
granting to any party or parties the right of use or occupancy of the Owned Real
Property or any portion thereof. The Seller has not granted, nor, to
the Knowledge of the Seller, are there any rights or options to acquire the
Owned Real Property or any portion thereof or any interest therein by any
Person. All material Improvements are in good operating condition and
repair, reasonable wear and tear excepted.
(c) Schedule
5.8(c) sets forth a complete list and the location of all Owned Real
Property. To the Knowledge of the Seller, there are no material
proceedings, claims, disputes or conditions affecting any Owned Real Property
that may interfere with the use of such property as currently
used. To the Knowledge of the Seller, none of the Owned Real Property
nor any other Asset is subject to any Order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or without payment
of compensation therefor, nor, to the Knowledge of the Seller, has any such
condemnation, expropriation or taking been proposed.
(d) Except
as would not be reasonably likely to result in a Material Adverse Effect, the
Seller has not received any notice of, or other writing referring to, any
requirements or recommendations by any insurance company that has issued a
policy covering any part of the Owned Real Property or by any board of fire
underwriters or other body
exercising
similar functions, requiring or recommending any repairs or work to be done on
any part of the Owned Real Property, which repair or work has not been
completed.
(e) The
Seller has obtained all materially appropriate licenses, easements and rights of
way, including proofs of dedication, required to use and operate the Owned Real
Property in the manner in which the Owned Real Property is currently being used
and operated. The Seller has all material Permits (including any and
all environmental permits) necessary to own or operate the Owned Real Property
as currently owned and operated.
(f) To
the Knowledge of the Seller, neither the construction, operation nor maintenance
of the Owned Real Property or the Improvements (i) contravenes any applicable
zoning or building law or (ii) violates any
restrictive covenant or applicable Law, the effect of which would materially
interfere with or prevent the continued use of the Owned Real Property for the
purposes for which it is now being used.
(g) To
the Knowledge of the Seller, there is no threatened stoppage or interruption of
utility services serving the Owned Real Property.
(h) To
the Knowledge of the Seller, there is no Encumbrance affecting the Owned Real
Property or any portion thereof, other than Permitted Liens or Permitted
Exceptions.
Section
5.9 Contracts.
(a) Schedule
5.9(a) sets forth a list, as of the date of this Agreement, of each Contract to
which the Seller is a party or by which any of the Assets are bound that is
(collectively, the "Material
Agreements"):
(i) a
Contract for the purchase of goods or services by the Business involving future
annual payments by the Business in excess of $100,000;
(ii) a
Contract for the sale of goods or services by the Business involving future
annual revenues in excess of $100,000;
(iii) a
collective bargaining Contract affecting any of the Transferred
Employees;
(iv) a
Contract with any customer of the Business involving guaranteed or fixed
pricing, order cancellation price reductions, discounts or rights to return or
reject any Product;
(v) a
Contract that, by its terms, materially restricts the freedom of the Seller, or
would, following the Closing, materially restrict the freedom of either
Purchasing Party, to enter into or engage in any line of business or compete
with any Person with respect to the Business as currently conducted by the
Seller or as proposed to be conducted as of the Closing Date, or
that
requires
the Seller to transact business relating to the Business exclusively with any
Person;
(vi)
a Contract relating to employment, compensation, severance or indemnification
between the Seller and any of the Transferred Employees (other than the Enzon
Benefit Plans), but excluding confidentiality agreements entered into in the
ordinary course of business and excluding any such agreements not assigned to or
assumed by either Purchasing Party or indemnification agreements relating to
Excluded Liabilities;
(vii) a
Contract involving a guarantee by the Business of the debts of any Person for
borrowed money or the performance of a material obligation of another
Person;
(viii) a
Contract pursuant to which the Seller grants or obtains a license to use
material Intellectual Property, other than Contracts (x) in which grants of
Intellectual Property are incidental and not material to such Contracts, or (y)
concerning generally commercially available software, including software
available through retail stores, distribution networks, that is subject to
"shrink-wrap" or "click-through" license agreements, or that is pre-installed as
a standard part of hardware purchased by the Seller;
(ix) a
lease or license to occupy or use real property in connection with the
Business;
(x) a
Personal Property Lease involving future annual payments by the Business in
excess of $25,000;
(xi) a
Contract to perform services or deliver goods outside of the United States, in
either case relating to the Business;
(xii) a
Contract with an Affiliate of the Seller relating to the Business (other than
Contracts that are not Assumed Contracts);
(xiii) any
joint venture, partnership or other Contract relating to the Business and
involving a sharing of profits, losses, costs, or liabilities between the Seller
and any other Person;
(xiv) a
Contract between the Seller and any third party manufacturer of the Products
(but not any ingredients (other than active pharmaceutical ingredients) or any
components of the Products); and
(xv) a
Contract for the sale of goods on consignment or where the Seller otherwise acts
as consignee or consignor, in either case relating to the Business.
(b) The
Seller has delivered to the Purchasing Parties a true and correct copy of each
Material Agreement. Each Material Agreement is in full force and
effect according
to
its terms and is a legal, valid and binding obligation of the Seller and, to the
Knowledge of the Seller, the other parties thereto, in each case in accordance
with such Material Agreement's terms. The Seller is not, and, to the
Knowledge of the Seller, the other parties to each Material Agreement are not,
in material default or breach thereof nor would be in material default or breach
thereof with notice or lapse of time, or both. The Seller has not
given or received any written or, to the Knowledge of the Seller, other notice
of termination, cancellation, amendment, breach or default under any Material
Agreement that has not been withdrawn or cured.
Section
5.10 Litigation. Except
as set forth on Schedule 5.10, there are no Legal Proceedings pending or, to the
Knowledge of the Seller, threatened, at law or in equity, or before any
Governmental Entity (but excluding any Regulatory Authority), against the
Seller, the Assets or the Business. The Seller is not a party to any
settlement agreements or similar written agreements with any Governmental Entity
(but excluding any Regulatory Authority) and is not subject to or in default
under any material Order relating to any Asset or the Business.
Section
5.11 Title; Liens; Sufficiency of
Assets. The Seller has good title, free and clear of all Liens
(other than Permitted Liens or Permitted Exceptions, as applicable), to all of
the tangible Assets. Except for (a) the Excluded Assets described in
Section 2.2(a), Section 2.2(c), Section 2.2(e), Section 2.2(f) and Section
2.2(g) and (b) any general and administrative, field salesforce or global
business management (sales and marketing) functions not acquired or obtained by
the Purchasing Parties pursuant to this Agreement or any of the Ancillary
Agreements, the Assets to be conveyed or otherwise provided to the Purchasing
Parties pursuant to this Agreement or the Ancillary Agreements, including the
services provided in the Transition Services Agreement and the rights licensed
to the Purchasing Parties under the License Agreement, constitute all of the
assets necessary for the conduct of the Business as currently conducted and to
permit the Purchasing Parties to conduct the Business immediately after the
Closing in all material respects in the same manner as the Business has been
conducted by the Seller during the period covered by the Financial Statements
and as conducted immediately prior to the Closing Date, subject to the
understandings set forth at the end of Section 5.6.
Section
5.12 Employee Benefit
Plans.
(a) Schedule
5.12(a) sets forth a list, as of the date of this Agreement, of each "employee
pension benefit plan" (as defined in Section 3(2) of ERISA), "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA), and each other plan,
arrangement or policy (written or oral) relating to annual or long-term cash
incentives, restricted stock, stock options, stock purchases, deferred
compensation, severance, fringe benefits or other material employee benefit
plan, program, policy or arrangement, that is maintained or contributed to, or
required to be maintained or contributed to, by the Seller or any ERISA
Affiliate of the Seller, or any individual employment, severance or consulting
agreement entered into by the Seller or any ERISA Affiliate of the Seller, in
any case, for the benefit of any of the Business Employees. All such
plans, agreements, arrangements and policies shall be referred to herein
collectively as the "Enzon Benefit
Plans." Neither the Seller nor any ERISA Affiliate of the
Seller has contributed to, or been obligated to contribute to, or has any
obligation to, a "Multiemployer Plan," as such term is defined in Section 3(37)
of ERISA, at any time since December 31, 2003.
(b) The
Seller has made available to the Purchasing Parties true, complete and correct
copies of (i) the documents or instruments pursuant to which each Enzon Benefit
Plan is maintained (or, in the case of any unwritten Enzon Benefit Plans,
descriptions thereof), (ii) the most recent summary plan description (or similar
document) for each Enzon Benefit Plan for which such a summary plan description
was provided to plan participants or beneficiaries and (iii) the most recent
determination letter received from the Internal Revenue Service with respect to
each Enzon Benefit Plan intended to qualify under Section 401 of the
Code.
(c) The
Enzon Benefit Plans have been administered in all material respects in
accordance with their terms and are in compliance in all material respects with
the applicable provisions of ERISA, the Code, and all other applicable
Laws. The Enzon 401(k) Plan has been the subject of a determination
letter from the Internal Revenue Service to the effect that it is qualified and
its related trust is exempt from federal income taxes under Sections 401(a) and
501(a), respectively, of the Code; such determination letter has not been
revoked, and no event has occurred and no circumstances exist that could
reasonably be expected to adversely affect the tax-qualification of the Enzon
401(k) Plan.
(d) Except
for the Enzon Pharmaceuticals, Inc. Executive Deferred Compensation Plan, no
Enzon Benefit Plan will or may provide for the deferral of compensation subject
to Section 409A of the Code, whether pursuant to the execution and delivery of
this Agreement or the consummation of the Transactions (either alone or upon the
occurrence of any additional or subsequent events) or otherwise. Each
Enzon Benefit Plan that is a nonqualified deferred compensation plan subject to
Section 409A of the Code, including the Enzon Pharmaceuticals, Inc. Executive
Deferred Compensation Plan, has been operated and administered in good faith
compliance with Section 409A of the Code from the period beginning January 1,
2005 through the date of this Agreement. Except as set forth on
Schedule 5.12(d), neither the execution and delivery of this Agreement nor the
consummation of the Transactions will result in any payment, acceleration or
creation of any rights of any Transferred Employee to benefits under any Enzon
Benefit Plan. Except as set forth in Schedule 5.12(d), no amount that
could be received under any Enzon Benefit Plan (whether in cash, property, the
vesting of property or otherwise) by any Business Employee who is a
"disqualified individual" (within the meaning of Section 280G(b)(1) of the Code)
as a result of or in connection with the consummation of the Transactions could
reasonably be expected to be characterized as an "excess parachute payment" (as
defined in Section 280G(b)(1) of the Code).
Section
5.13 Environmental
Matters.
(a) The
Business is currently in material compliance with all applicable Environmental
Laws, which compliance includes the possession by the Business of all Permits
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof, and, to the Knowledge of the Seller, there are no
circumstances that may prevent or interfere with such compliance in the
future.
(b) The
Business has received no material Environmental Claim, whether from a
Governmental Entity, citizens group, employee or otherwise, that remains
unresolved.
(c) Except
as set forth on Schedule 5.13(c), to the Knowledge of the Seller, there has been
no release of any Hazardous Material at the Owned Real Property or at any other
property operated or previously operated by the Business.
(d) To
the Knowledge of the Seller, there is no remedial action required at the Owned
Real Property pursuant to applicable Environmental Law.
(e) All
Permits currently held by the Seller with respect to the Business or the Assets
pursuant to the Environmental Laws are identified in Schedule
5.13(e).
Section
5.14 Proprietary
Rights.
(a) Schedule
2.1(b)(i)(1)(A) sets forth a complete and accurate list of all material U.S. and
foreign: (A) patents and patent applications, (B) trademark registrations and
applications (other than for the Enzon Mark and Logo), not including Internet
domain names, and (C) copyright registrations and applications, in each case to
the extent relating to the Business, whether owned by or licensed to the
Seller. To the Knowledge of the Seller, the foregoing registrations
are in effect and subsisting.
(b) Except
with respect to Transferred Intellectual Property that is not used in the
Business, (i) the Seller owns all rights, title and interest to, or has a valid
right to use, and has a valid right to assign and transfer to Defiante, the
Transferred Intellectual Property; (ii) the Seller has a valid right to license
or sub-license, as applicable, to Defiante all rights contemplated to be
licensed to Defiante pursuant to the License Agreement; (iii) to the Knowledge
of the Seller, the conduct of the Business as currently conducted by the Seller
does not infringe or otherwise violate any Person's Intellectual Property or
Know-How, and there is no such claim pending or, to the Knowledge of the Seller,
threatened against the Seller; and (iv) to the Knowledge of the Seller, no
Person is infringing, misappropriating or otherwise violating any Transferred
Intellectual Property or Commercial Know-How owned by the Seller or that the
Seller has a right to use, and no such claims are pending or threatened against
any Person by the Seller.
(c) There
are no material claims against the Seller that are pending or, to the Knowledge
of the Seller, threatened, asserting the invalidity, misuse, misappropriation or
unenforceability of any of (i) the Transferred Intellectual Property or (ii) the
Intellectual Property licensed to the Purchasing Parties pursuant to the License
Agreement.
Section
5.15 Labor
Matters.
(a) There
is no labor strike, dispute, corporate campaign, slowdown, stoppage or lockout
actually pending, or to the Knowledge of the Seller, threatened against or
affecting the Business and the Seller is not a party to any collective
bargaining agreements with any of its employees or any labor organization
representing the employees of the Business and, to the Knowledge of the Seller,
there is no labor union organizing or election activity pending or threatened
with respect to the Seller.
(b) There
is no material unfair labor practice charge or complaint against the Seller
(with respect to the Business) pending or, to the Knowledge of the
Seller,
threatened
before the National Labor Relations Board or any similar state or foreign
agency. The Seller has not received notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws to conduct an investigation with respect to or relating to
the Business, and no such investigation is in progress.
(c) There
is no presently pending material grievance arising out of any collective
bargaining agreement or other grievance procedure.
(d) The
Seller is and has at all times been in material compliance with all applicable
Laws respecting employment and employment practices, terms and conditions of
employment, wages, hours of work, immigration, civil rights, and occupational
safety and health, including the Worker Adjustment and Retaining Notifications
Act, as amended, COBRA, the Family and Medical Leave Act of 1993, as amended,
and the Equal Pay Act, and is not engaged in any unfair labor practices, as
defined in the National Labor Relations Act or other applicable
Laws.
(e) No
material charge with respect to or relating to the Business is pending before
any Governmental Entity responsible for the prevention of unlawful employment
practices, for occupational health and safety or for the payment of wages or
other benefits. No material complaint or action against the Seller by
any current or former employee who work or worked primarily for the Business,
including a complaint or action alleging breach of an employment contract,
discrimination, wrongful discharge, or breach of a duty of good faith and fair
dealing in the employment relationship, is pending or, to the Knowledge of the
Seller, threatened before any Governmental Entity, and there are no pending or,
to the Knowledge of the Seller, threatened material claims against the Seller
for workers' compensation, unemployment insurance, or disability benefits under
any applicable Law.
(f) To
the Knowledge of the Seller, no Business Employee is obligated under any
contract, or subject to any judgment, decree or order of any Governmental Entity
that would interfere with the use of his or her efforts to promote the interests
of the Business. Except as set forth on Schedule 5.15(f), each
Business Employee has executed a non-disclosure of confidential and/or
proprietary information agreement (or other similar agreement) with respect to
the confidential and/or proprietary information made available to each such
Business Employee during the term of and within the scope of such Business
Employee's employment with or services for the Business. Except as
set forth on Schedule 5.15(f), each Business Employee who is involved in the
development of Intellectual Property or Know-How used in the Business has
executed a valid and binding written agreement with the Seller sufficient to
vest title in the Purchasing Parties of all such Business Employee's right,
title and interest in and to any Intellectual Property and Know-How created by
such Business Employee, and, to the Knowledge of the Seller, each such agreement
is enforceable against the respective employee. To the Knowledge of
the Seller, no Business Employee is in violation of any term or covenant of any
contract relating to employment, invention disclosure, invention assignment,
nondisclosure or noncompetition or any other contract with any other party by
virtue of such Business Employee being employed by the Business or using trade
secrets or proprietary information of others without permission.
(g) The
Seller is not liable in any material respect for any payment to any trust or
other fund or to any Governmental Entity with respect to unemployment
compensation benefits, social security benefits or other benefits for such
employees.
Section
5.16 Tax
Matters. Except as set forth on Schedule 5.16:
(a) all
Tax Returns required to be filed by the Seller and its Affiliates with respect
to Taxes relating to the Business or the Assets have been timely filed with the
appropriate taxing authorities on or prior to the Closing Date;
(b) all
Taxes and Tax liabilities due by or with respect to the Business or the Assets
for all taxable years or other taxable periods that end on or before the Closing
Date and, with respect to any taxable year or other taxable period beginning on
or before and ending after the Closing Date, the portion of such taxable year or
period ending on and including the Closing Date (each a "Pre-Closing Period")
have been timely paid or will be timely paid in full on or prior to the Closing
Date or accrued and adequately disclosed and reflected as Current Liabilities in
the Closing Working Capital;
(c) there
are no written claims for Taxes that have been asserted by a Governmental Entity
against the Seller or its Affiliates with respect to the Business or the
Assets;
(d) the
Seller has delivered to Klee any notice of reassessment received by the Seller
in connection with the Business since the last property tax bill
issued;
(e) (i)
neither the Seller nor any of its Affiliates has been the subject of an audit or
other examination of Taxes relating to the Business or the Assets by the tax
authorities of any nation, state or locality; (ii) to the Knowledge of the
Seller, no such audit is contemplated or pending; and (iii) neither the Seller
nor any of its Affiliates has received any written notices from any taxing
authority relating to any issue which could affect any Tax liability relating
the Business or the Assets;
(f) neither
the Seller nor any of its Affiliates, as of the Closing Date, (i) has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of Taxes relating to the Business or the Assets that has not expired,
(ii) is presently contesting any Tax liability relating to the Business or the
Assets before any court, tribunal or agency, (iii) has granted a
power-of-attorney relating to Tax matters relating to the Business or the Assets
to any person or (iv) has applied for and/or received a ruling or determination
from a taxing authority regarding a past or prospective transaction relating to
the Business or the Assets;
(g) all
Taxes relating to the Business or the Assets that the Seller and each of its
Affiliates is (or was) required by law to withhold or collect in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party for which either Purchasing Party could be
liable have been duly withheld or collected and have been timely paid over to
the proper authorities to the extent due and payable, and the Seller is not
liable in any material respect for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing;
(h) there
are no tax sharing, allocation, indemnification or similar agreements in effect
as between the Seller or any of its Affiliates or any predecessor or affiliate
thereof and any other party (including Seller and any predecessors or affiliates
thereof) under which either Purchasing Party could be liable for any Taxes or
other claims of any party;
(i) there
are no liens or security interests on the Business or the Assets that arose in
connection with any failure (or alleged failure) to pay any Taxes;
(j) the
Seller is not a "foreign person" within the meaning of Section 1445 of the Code;
and
(k) to
the Knowledge of the Seller, there are no special assessments to be levied
against the Owned Real Property that are in addition to those set forth on
Schedule 5.16 or disclosed in the title commitment issued by the Title Company
having File No. 09-7406-21567 for the Owned Real Property (the "Title Commitment") or
any documents referenced therein.
Section
5.17 Compliance with
Laws. The Business has complied in all material respects and
is in compliance in all material respects with all Laws and Orders of all
Governmental Entities (excluding any Regulatory Authority) with jurisdiction
over the Assets, the Business or operation thereof, and no notice, charge,
claim, action or assertion has been received by the Seller or has been filed,
commenced or, to the Knowledge of the Seller, threatened against the Business
alleging any violation of any of the foregoing. No material
investigation or review by any Governmental Entity with respect to the Business
or any of the Assets is pending or, to the Knowledge of the Seller, threatened
by any Governmental Entity (excluding any Regulatory Authority). The
subject matter of Section 5.12, Section 5.13, Section 5.14, Section 5.16,
Section 5.18 and Section 5.19 is excluded from the provisions of this Section
5.17 and the representations and warranties of the Seller with respect to those
subject matters are exclusively set forth in those referenced
sections.
Section
5.18 Permits. The
Permits are valid, subsisting and in full force and effect and collectively
constitute all of the material Permits necessary to permit the Seller to own and
use the Assets in the manner in which it currently owns and uses the Assets and
to conduct the Business in the manner and in the jurisdictions in which the
Seller currently conducts the Business and in the manner in which the Business
is proposed to be conducted at Closing. The Seller has filed with all
proper authorities all material statements and reports required by any law,
regulation, licensing requirement or orders to which the Seller (in respect of
the Business) is subject. The Seller is not in default under, and no
condition exists that with notice or lapse of time, or both, would constitute a
default under, any Permit.
Section
5.19 Regulatory
Matters.
(a) Except
as set forth on Schedule 5.19, the Seller and the Business, including all
manufacturing, warehousing, distributing and testing operations relating to the
Products, are (and for the past three years have been) in compliance in all
material respects with all applicable Laws of the United States and each foreign
jurisdiction, including of the rules and regulations of the FDA and any
Governmental Entity of any other country having jurisdiction
over
the Facility or the manufacture, sale, labeling, storing, testing and
distribution of the Products, as applicable (each, a "Regulatory
Authority"), with respect to the manufacture, sale, labeling, storing,
testing and distribution of the Products, including all applicable requirements
of Current Good Manufacturing Practice Regulations.
(b) Except
as set forth on Schedule 5.19, since January 1, 2007, the Seller has not
received any written communication regarding, and has not been and is not now
subject to, any adverse inspection, compelled or voluntary recall,
investigation, regulatory enforcement action (including seizure, injunction,
civil penalty or criminal action), penalty for corrective or remedial action,
corrective action plan or outstanding commitments or committed obligations by or
of any Regulatory Authority, in each case that is material to the Business and
that relates to (i) the Products, (ii) the Facility, (iii) any alleged or actual
violation by the Seller or by any of the Products of any Permit, Law or other
requirement of any Governmental Entity relating to the conduct of the Business,
or (iv) any alleged or actual failure to have or maintain in effect all Permits
required in connection with the conduct of the Business.
(c) Since
January 1, 2007, the Seller has not received from any Regulatory Authority any
written notice alleging any violation by the Seller of any (i) Regulatory
Approval, (ii) labeling requirement or (iii) Law, in any case relating to any of
the Products and in each case other than the written notices and other
correspondence made available to the Purchasing Parties prior to the date of
this Agreement.
(d) Except
as set forth on Schedule 5.19, since January 1, 2007, none of the Products has
been withdrawn, recalled, suspended or discontinued by the Seller as a result of
any action by any Regulatory Authority, either within or, to Knowledge of the
Seller, outside the United States (whether voluntarily or
otherwise). No proceeding within or, to Knowledge of the Seller,
outside the United States seeking the recall, withdrawal, suspension or seizure
of any of the Products is pending against the Seller nor was any such proceeding
pending at any time since January 1, 2007.
(e) Except
as set forth on Schedule 5.19, all of the material Regulatory Documentation and
all of the material Regulatory Approvals are complete, accurate and up to date,
and each of the Products can be effectively, efficiently and legally
manufactured and utilized in compliance with the applicable Regulatory
Approval. Each of the Products is being manufactured and tested in
compliance with the current version of its respective Regulatory Approval and
all applicable Regulatory Documentation.
(f) No
product manufactured and/or distributed by the Seller in connection with the
Business and, to the Knowledge of the Seller, none of the Products manufactured
by a third party has been (i) adulterated within the meaning of 21 U.S.C.
Section 351 (or any similar Law); (ii) misbranded within the meaning of 21
U.S.C. Section 352 (or any similar Law); or (iii) produced in violation of
21 U.S.C. Section 355 (or any similar Law).
(g) To
the Knowledge of the Seller, no Representative of the Seller has made any untrue
statement of a material fact or a fraudulent statement to any Regulatory
Authority, failed to disclose any material fact required to be disclosed to any
Regulatory Authority, or committed an act, made a statement or failed to make a
statement that, at the time
such
act, statement or omission was made, could reasonably be expected to provide a
basis for any Regulatory Authority to invoke the FDA's policy respecting "Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal Gratuities" set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy, nor,
to the Knowledge of the Seller, has any director, officer or employee of the
Seller been convicted of any crime or engaged in any conduct for which debarment
is mandated by 21 U.S.C. Section 335a(a) (or any similar Law) or authorized by
21 U.S.C. Section 335a(b) (or any similar Law).
(h) Except
as set forth on Schedule 5.19, at no time since January 1, 2007 has the Seller
received any written notice that any Regulatory Authority has commenced, or
threatened to commence, any action to withdraw its approval, registration or
licensure of any of the Products or has commenced or, to the Knowledge of the
Seller, threatened to commence, any action to seize or enjoin production of any
of the Products.
(i) Except
as set forth on Schedule 5.19, the Seller (or a third Person on Seller's behalf)
is duly authorized to sell the Products in each of the states and countries in
which the Seller (or such third Person on the Seller's behalf) is currently
selling the Products. To the extent that any of the Products that are
unapproved are intended for export from the United States, the Seller is in
compliance, in all material respects, with the applicable requirements of
21 U.S.C. Sections 381(e) or 382, as applicable, and of the
Controlled Substances Act of 1970, as amended.
(j) The
Seller has made available to the Purchasing Parties all material documents in
its possession or control (i) concerning communications to or from the FDA
and any similar Governmental Entity with respect to any Product since January 1,
2007; or (ii) prepared by the FDA or any similar Governmental Entity with
respect to a Product since January 1, 2007, in each case that bears, in any
material respect, on compliance with the requirements of the FDA or of any
similar Governmental Entity regarding any Product, including any regulatory
inspection observation, deficiency letter, warning letter, non-approvable
letter/order, withdrawal letter/order, objection to Product promotion or similar
document.
(k) Except
as set forth on Schedule 5.19, since January 1, 2007, (i) the Seller has been in
compliance with current good manufacturing practices as regulated or required by
applicable Regulatory Authorities and (ii) the Seller has not received written
notice that any of its third party manufacturers has been in non-compliance with
current good manufacturing practices as regulated or required by applicable
Regulatory Authorities.
(l) As
of the date of this Agreement, there are no pending actions, suits, proceedings,
hearings, investigations, charges, claims, demands, notices or complaints by any
Regulatory Authority relating to the Facility or the Products.
(m) The
subject matter of Section 5.14 is excluded from the provisions of this Section
5.19 and the representations and warranties of the Seller with respect to that
subject matter are exclusively set forth in Section 5.14.
Section
5.20 Vote
Required. The affirmative vote of the holders of a majority of
the outstanding shares of Seller Common Stock (the "Requisite Stockholder
Approval") is the only vote of holders of securities of the Seller that
is necessary to approve the Transactions.
Section
5.21 Brokers or
Finders. No broker, finder or investment bank is entitled to
any brokerage, finder's fee, or similar fee or commission from the Seller or its
Affiliates in connection with any of the Transactions, except as set forth on
Schedule 5.21.
Section
5.22 Certain Business
Matters. Except as set forth on Schedule 5.22, in each case in
respect of the Business, (a) the Seller does not have any sole-source
supplier of significant goods or services (other than utilities) with respect to
which practical alternative sources are not available on equivalent terms and
conditions; (b) the Seller neither gives nor is bound by any express warranties
relating to the Products and, to the Knowledge of the Seller, since January 1,
2005, there has been no assertion of any breaches of warranty or product
liability relating to any of the Products that is still pending; and (c) to
the Knowledge of the Seller, there have been no material workmanship or service
problems or, since January 1, 2005, any material claims made against the Seller
with respect to any Product sold or services provided by the
Seller. The Seller is not now developing any pharmaceutical product
that, if it were to continue to develop, or subsequently market or sell, such
product after the Closing, would place the Seller in violation of Section
7.5(a).
Section
5.23 Related Party
Transactions. No Affiliate of the Seller and no stockholder,
director, officer or employee of the Seller, and no immediate family member
(which shall be deemed to include spouses, cousins and adopted children) or
Affiliate of any of the foregoing persons: (a) has borrowed money from or loaned
money to the Seller in respect of the Business, which obligation has not been
repaid by the owing party; (b) has any contractual, tort or other claim, express
or implied, against the Seller in respect of the Business; (c) has or has had,
since January 1, 2005, any right or interest in or to any tangible Asset or any
other properties or assets used by the Seller in the Business; (d) owns any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of or consultant to, or lender to or borrower from,
or has the right to participate in the profits of, any Person that is (i) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of the
Business or (ii) engaged in a business related to the Business; or (e) is party
to any contract, transaction or other arrangement with the Seller or its
Affiliates in respect of the Business, other than (x) an employment agreement or
(y) a contract that involves consideration of less than $25,000.
Section
5.24 Insurance. Schedule
5.24 sets forth a list of all insurance policies, binders and fidelity bonds
that are currently in effect insuring the Business. The Seller has
made available to the Purchasing Parties true and complete copies of all
policies, binders and bonds listed on Schedule 5.24. Except as set
forth on Schedule 5.24, there is no claim by the Seller pending under any of
such policies, binders and bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies, binders and
bonds.
Section
5.25 Accounts
Receivable. All Accounts Receivable that are reflected on the
Financial Statements, and all Accounts Receivable arising after June 30, 2009,
represent (and, to the extent outstanding at the Closing, will represent) valid
obligations arising from bona fide sales actually made or services actually
performed by the Seller in the ordinary course of
business. Any
reserves for Accounts Receivable in the Financial Statements are calculated in
accordance with GAAP and are consistent with past practice. To the
Knowledge of the Seller, there is no material contest, claim, defense or right
of setoff under any Contract with any account debtor of an Account Receivable
relating to the amount or validity of such Account Receivable. All
Accounts Payable that are reflected on the Financial Statements, and all
Accounts Payable arising after June 30, 2009, represent (and, to the extent
outstanding at Closing, will represent) valid obligations arising from bona fide
purchases actually made or services actually performed for the Seller in the
ordinary course of business. Schedule 5.25 contains a true and
complete list of all Accounts Receivable and Accounts Payable as of the most
recent accountable date prior to the date of this Agreement, which list also
sets forth the aging of each Account Receivable.
Section
5.26 Inventory. Schedule
5.26 sets forth all Inventory of the Business, including the number of units,
cost to Seller per unit, and total cost of goods per type of Inventory, as of
the most recent available date prior to the date of this
Agreement. All items of Inventory are determined and valued in
accordance with GAAP at the lower of cost or market using the "first in first
out" method of accounting. Except in connection with any pending
"Supplement—Changes Being Effected in 30 Days" applications, all of the
Inventory is good and merchantable and is of a quality and quantity presently
usable or salable in the ordinary course of business.
Section
5.27 Indenture. The
consummation of the Transactions does not implicate Section 6.8 of that certain
indenture, dated as of May 23, 2006, as amended, between the Seller and
Wilmington Trust Company, and the Purchasing Parties shall have no obligation in
connection with such indenture following the consummation of the Transactions or
otherwise.
Section
5.28 Solvency. At
the Closing, after giving effect to the consummation of the Transactions, the
Seller and its Affiliates will be Solvent and will have adequate capital to
carry on their respective businesses and otherwise meet all of their obligations
contained herein, including in Article XI.
Section
5.29 No Other Representations or
Warranties. Except for the representations and warranties
contained in this Article V or in any other document or instrument delivered by
the Seller pursuant to this Agreement, neither the Seller nor any other Person
makes any other express or implied representation or warranty on behalf of the
Seller, including any representation or warranty as to the probable success or
profitability of the ownership, use or operation of the Business or the Assets
by the Purchasing Parties after the Closing.
ARTICLE
VI
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASING
PARTIES
Each
of the Purchasing Parties hereby jointly and severally represents and warrants,
and, solely with respect to Section 6.4, Sigma-Tau represents and warrants, to
the Seller as follows:
Section
6.1 Organization. Each
Purchasing Party is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization
and
has all requisite corporate power to own, lease and operate its properties and
to carry on its business as now being conducted, except where the failure to be
so organized, existing and in good standing or to have such power and authority
would not have a Purchaser Material Adverse Effect.
Section
6.2 Authorization; Validity of
Agreement; Necessary Action. Each Purchasing Party has all
necessary corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements, to perform its obligations hereunder and
thereunder and to consummate the Transactions. The execution and
delivery of this Agreement and the Ancillary Agreements by each Purchasing Party
and the consummation by the Purchasing Parties of the Transactions has been duly
and validly authorized by all necessary corporate action of the Purchasing
Parties, and no other corporate proceeding on the part of the Purchasing Parties
is necessary to authorize the execution and delivery of this Agreement or the
Ancillary Agreements or to consummate the Transactions. No vote of,
or consent by, the holders of any class or series of stock or Voting Debt issued
by either Purchasing Party is necessary to authorize the execution and delivery
by either Purchasing Party of this Agreement or the consummation by either of
them of the Transactions. This Agreement has been (and, when executed
and delivered, the Ancillary Agreements will have been) duly executed and
delivered by the Purchasing Parties and, assuming due and valid authorization,
execution and delivery hereof and thereof by the Seller, this Agreement is (and,
when executed and delivered, each of the Ancillary Agreements will be) a valid
and binding obligation of the Purchasing Parties, enforceable against the
Purchasing Parties in accordance with its terms except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws of general application affecting enforcement
of creditors' rights generally and (b) the availability of the remedy of
specific performance or injunctive or other forms of equitable relief may be
subject to equitable defenses and would be subject to the discretion of the
court before which any proceeding therefor may be brought.
Section
6.3 Governmental Approvals;
Consent; No Violations. Except (x) the expiration of the
waiting period under the HSR Act and (y) any applicable foreign antitrust or
competition Law filings, no Consent of any Governmental Entity is required to be
obtained or made following the date of this Agreement by the Purchasing Parties
in connection with the execution and delivery of this Agreement or the
consummation of the Transactions, except for such Consents that have already
been obtained or made. Neither the execution and delivery of this
Agreement nor the consummation by the Purchasing Parties of the Transactions
will (a) violate or conflict with any provision of the organizational documents
of the Purchasing Parties or (b) conflict with, result in a violation or breach
of, or constitute, with or without the giving of notice or the lapse of time or
both, a default or give rise to any right of termination, cancellation or
acceleration under, the terms of any note, bond, indenture, mortgage or
agreement to which either Purchasing Party is a party or by which either
Purchasing Party or any of its Affiliates is bound, except for any such
conflict, violation, breach or default which would not reasonably be likely to
result in a Purchaser Material Adverse Effect.
Section
6.4 Financial
Capacity. An accurate and complete copy of the commitment
letter, pursuant to which, and subject to the terms and conditions of which, the
lending party thereto (the "Lender") has
committed to lend the amount set forth therein to Sigma-Tau for the purpose of
funding the Transactions (the "Financing"), is
attached hereto as Exhibit
H
(the "Commitment
Letter"). The Commitment Letter is in full force and effect
and has not been withdrawn or terminated or otherwise modified in any respect,
and, to the knowledge of Sigma-Tau is a legal, valid and binding obligation of
the Lender. To the knowledge of Sigma-Tau, the Commitment Letter
contains all of the conditions precedent to the obligations of the Lender to
make the Financing available to Sigma-Tau on the terms therein. As of
the date of this Agreement, (a) there are no other agreements, side letters or
arrangements relating to the Commitment Letter or the Financing that could
affect the availability or amount of the Financing (other than this Agreement)
and (b) no event has occurred that, with or without notice, lapse of time or
both, would constitute a default or breach on the part of Sigma-Tau under any
term or condition of the Commitment Letter. Together with available
internal funds, the aggregate proceeds from the Financing will be sufficient to
consummate the Transactions, including the payment of the Cash Purchase Price
and the payment of all associated costs and expenses.
Section
6.5 Brokers or
Finders. Except in connection with the Commitment Letter, no
broker, finder or investment bank is entitled to any brokerage, finder's fee, or
similar fee or commission from the Purchasing Parties or their Affiliates in
connection with any of the Transactions.
Section
6.6 Litigation. There
are no Legal Proceedings pending against either Purchasing Party or, to the
Knowledge of the Purchasing Parties, threatened, at law or in equity, or before
any Governmental Entity against either Purchasing Party that, if determined or
resolved adversely against such Purchasing Party, would prevent the ability of
such Purchasing Party to consummate the Transactions. Neither
Purchasing Party is in default under any material Order.
Section
6.7 Solvency. Assuming
the accuracy as of the Closing Date of the Seller's representations and
warranties and the performance by the Seller of its covenants set forth in this
Agreement, at the Closing and after giving effect to the Transactions and the
payment of all amounts required to be paid in connection therewith, including
the Financing, each Purchasing Party will be Solvent and will have adequate
capital to carry on its business and otherwise meet all of its obligations
contained herein, including in Article XI.
Section
6.8 Existing
Indebtedness. With respect to all obligations of either of the
Purchasing Parties for borrowed money or evidenced by bonds, debentures, notes
or similar instruments, or upon which interest payments are customarily made,
the Purchasing Parties are not in default, and no waiver of any such default is
in effect, and no event or condition exists (including the consummation of the
Transactions) with respect to any such obligations that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to
cause any such obligation to become due and payable before its regularly
scheduled date of payment.
Section
6.9 No Vote
Required. No vote of the holder of any class or series of
stock or Voting Debt issued by either Purchasing Party is necessary to approve
the Transactions.
Section
6.10 No Knowledge of
Breaches. As of the date of this Agreement, neither Purchasing
Party nor any of its respective Affiliates is aware that any representation or
warranty of the Seller set forth in Article V is untrue or
incorrect.
Section
6.11 Matters Related to
Defiante.
(a) True
and complete copies of the (i) unaudited balance sheet of Defiante as at
September 30, 2009 and December 31, 2008, and (ii) unaudited income statement
for the nine-month period ending September 30, 2009 and for the years ending
December 31, 2008 and December 31, 2007 (collectively, the "Defiante Financial
Statements"), have heretofore been delivered to the
Seller. The Defiante Financial Statements (A) have been prepared from
and are in accordance with, in all material respects, the books and records of
Defiante, and (B) fairly present in all material respects the financial position
and results of operations (and changes in financial position, if any) of
Defiante as of the dates and for the periods referred to therein (subject to any
audit adjustments which are not in the aggregate material and to the absence of
footnotes).
(b) At
the Closing and following receipt of the Financing, Defiante will have adequate
capital to carry on its business and otherwise meet all of its obligations
pursuant to this Agreement.
Section
6.12 No Other Representations or
Warranties. Except for the representations and warranties
contained in this Article VI or in any other document or instrument delivered by
the Purchasing Parties pursuant to this Agreement, neither the Purchasing
Parties nor any other Person makes any other express or implied representation
or warranty on behalf of the Purchasing Parties.
ARTICLE
VII
COVENANTS
Section
7.1 Interim Operations of the
Business. Except (i) as otherwise contemplated by this
Agreement, (ii) as may be reasonably required in connection with the separation
of the Business from the Seller's other activities (and in respect of which the
Seller has provided to the Purchasing Parties written notice), (iii) as
disclosed on Schedule 7.1 (which, to the extent known as of the date of this
Agreement, includes items covered by (ii) above), or (iv) with the prior written
approval of the Purchasing Parties (which shall not be unreasonably withheld,
conditioned or delayed), the Seller covenants that until the Closing it will
continue to operate the Business in all material respects in the ordinary course
consistent with past practices of the Business, and use commercially reasonable
efforts to maintain and preserve intact the Business and its relationships with
suppliers, customers, employees and others having business relationships with
the Business. Until the Closing, the Seller shall not, and shall
cause its Affiliates not to, without the prior written approval of the
Purchasing Parties (which approval shall not be unreasonably withheld,
conditioned or delayed), and except as contemplated by this Agreement or as
described on Schedule 7.1, take any of the following actions:
(a) sell,
transfer, modify or otherwise dispose of any material Asset, other than the sale
of inventory or other assets in the ordinary course of business consistent with
past practices, or fail to maintain in customary repair and condition any
tangible material Asset, including the Owned Real Property, it being
acknowledged and agreed to by the Seller that in the event of any casualty, loss
or damage to any tangible material Asset prior to Closing, the
Seller
shall
either repair or replace such Asset with an asset of comparable quality or
transfer to the Klee at the Closing the proceeds of any insurance recovery (or
the right to such proceeds) with respect thereto;
(b) modify,
amend (other than such amendments that are immaterial or ministerial) or
terminate any Material Agreement or fail to pay, perform and discharge all
material obligations under the Material Agreements;
(c) enter
into any Contract relating to the Business involving the annual payment of
amounts greater than $200,000 (excluding customer sales and commitments related
to customer sales and purchases of inventory, in each case in the ordinary
course of business consistent with past practice);
(d) grant
any material increase in or commit to increase the compensation or bonus of any
officer or employee who would constitute a Business Employee on the date of this
Agreement (except for increases in the ordinary course of business consistent
with past practice or pursuant to existing employment
arrangements);
(e) encumber
by mortgage, pledge, Lien or otherwise (not including licenses of or grants of
rights to use Intellectual Property in the ordinary course of business
consistent with past practice), or grant any security interest in or to, any
Asset, except for Permitted Liens or Permitted Exceptions, as
applicable;
(f) enter
into any union contract or collective bargaining agreement with any Business
Employee;
(g) use
the Business or the Assets in respect of a guarantee, surety or endorsement of
the Liability of any other Person;
(h) cancel
or compromise any debt or claim of the Business or the Assets or waive or
release any material right of the Seller with respect to the Business or the
Assets, in each case other than in the ordinary course of business consistent
with past practice;
(i) change
its methods, practices or timing of (i) collecting Accounts Receivable or other
amounts owed to Seller in respect of the Business or (ii) paying any amounts
payable or other debts or obligations of the Seller in respect of the Business,
including, in either case, any changes intended to, or having the effect of,
accelerating the collection of any Accounts Receivable, delaying the payment of
any Accounts Payable or changing from current to long-term or from long-term to
current any liabilities of the Seller in respect of the Business;
(j) lease
or dispose of any material interest in, or take any actions that would be
materially detrimental to the current use, operation or value of the Owned Real
Property;
(k) except
as required by Law or GAAP, change in any material respect the accounting
methods used by the Seller; or
(l) enter
into any agreement, contract, commitment or arrangement to do any of the
foregoing, or authorize, recommend, propose or announce an intention to do, any
of the foregoing.
Notwithstanding
any of the foregoing, the Seller shall be allowed to retain and remove cash or
cash equivalents from the Business at any time or from time to time at or prior
to the Closing.
Section
7.2 Investigation of
Business. The Seller shall permit the Purchasing Parties and
their authorized agents or Representatives, including their independent
accountants, to have access during normal business hours and upon reasonable
advance notice to the Facility and Books and Records to review information and
documentation relative to the properties, books, contracts, commitments and
other records of the Business; provided, however, that any
such investigation does not unreasonably interfere with the normal operations of
the Seller, any of its Affiliates or the Business and provided, further, that prior
to the Closing the Purchasing Parties shall not have access to (a) any (i)
privileged information or (ii) information that the Seller is prohibited by law
or by a confidentiality agreement with a third party from disclosing to the
Purchasing Parties (provided that any
relevant information that could be disclosed pursuant to the Confidentiality
Agreement shall not be subject to this provision), (b) any information with
respect to the Excluded Assets or (c) disclosures and information with respect
to the process engaged in by the Seller for the sale of the
Business. Notwithstanding such access, the Seller shall timely
furnish to the Purchasing Parties such financial and operating data and other
information regarding the Business customarily prepared by the Seller that the
Purchasing Parties may from time to time reasonably
request. Notwithstanding anything to the contrary in this Agreement,
the Purchasing Parties shall not conduct any environmental sampling or Phase II
environmental inspection of, at or on the Owned Real Property prior to the
Closing. Until the Closing Date, the Seller shall deliver to the
Purchasing Parties prompt written notice and shall otherwise keep the Purchasing
Parties reasonably informed of any material change in any customer or supplier
relationship or the price that any customer will pay or supplier will charge for
products or services of the Seller.
Section
7.3 Confidentiality. Until
the Closing, the Purchasing Parties and their Representatives will hold in
confidence all confidential information (including the information contained in
the Data Room and the Schedules or otherwise delivered to the Purchasing Parties
or their Representatives pursuant to this Agreement) obtained from or through
the Seller or its Affiliates or their respective Representatives in accordance
with the provisions of the letter dated August 19, 2008 between Sigma-Tau
Pharmaceuticals, Inc. and the Seller (the "Confidentiality
Agreement").
Section
7.4 Efforts and Actions to Cause
Closing to Occur.
(a) From
and after the date of this Agreement, upon the terms and subject to the terms
and conditions of this Agreement, the Purchasing Parties and the Seller shall
use their respective commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done and cooperate with each other
in order to do, all things necessary, proper or advisable (subject to any
applicable Laws) to effect the Closing and consummate the Transactions as
promptly as practicable following the date of this Agreement, which
efforts
include
the preparation and filing of all forms, registrations and notices required to
be filed to consummate the Closing and the Transactions and the taking of such
actions as are necessary to obtain any requisite Consents by any third party or
Governmental Entity. In addition, neither Party shall take any action
or cause or permit any of its Affiliates to take any action after the date of
this Agreement that could reasonably be expected to materially delay the
obtaining of, or result in not obtaining, any permission, approval or consent
from any Governmental Entity or other Person required to be obtained prior to
Closing.
(b) Each
Party shall promptly (and in any event within 48 hours after receipt) inform the
other of, and furnish to the other Party copies of, any communication,
correspondence or filing received by such Party from any Governmental Entity
regarding any of the Transactions. If any Party or its Affiliate
receives a request for additional information or documentary material from any
such Governmental Entity with respect to the Transactions, then such Party
shall, or shall cause its Affiliate to, as soon as reasonably practicable, but
after providing the other Party with a reasonable opportunity to review and
comment, deliver an appropriate response to the applicable Governmental Entity
in compliance with such request. Neither Party shall participate, or
cause or permit its Affiliates to participate, in any substantive meeting or
discussion with any Governmental Entity in respect of any filings,
investigations or inquiries concerning this Agreement unless it consults with
the other Party in advance and, to the extent permitted by such Governmental
Entity, gives the other Party the opportunity to attend and participate in such
meeting.
(c) The
Seller, on the one hand, and the Purchasing Parties, on the other hand, shall,
and shall cause their respective Affiliates to, promptly file or cause to be
filed all filings with Governmental Entities required in order to consummate the
transactions contemplated hereby, including (i) filing within 15 Business Days
of the date of this Agreement all required filings under the HSR Act, (iii) any
applicable foreign antitrust or competition Law filings and (iii) submissions of
additional information requested by the FTC, DOJ, state attorney general or any
other Governmental Entity. Each of the Purchasing Parties and the
Seller further agrees that it shall, and shall cause its Affiliates to, comply
with any applicable post-Closing notification or other requirements of any
antitrust, trade competition, investment or control reporting or similar Law or
regulation of any Governmental Entity with competent
jurisdiction. Each of the Purchasing Parties and the Seller agrees to
cooperate with and promptly to consult with, to provide any reasonably available
information with respect to, and to provide, subject to appropriate
confidentiality provisions, copies of all presentations and filings to any
Governmental Entity to the other party or its counsel. Each Party
agrees not to extend any waiting period under the HSR Act or enter into any
agreement with any Governmental Entity not to consummate the Transactions except
with the prior written consent of the other Party.
(d) In
addition to the agreements set forth in Section 7.4(c), the Purchasing Parties
and the Seller shall ensure that the Consents from Governmental Entities,
including any antitrust clearance by FTC, DOJ, or any state attorney general
under the HSR Act, or by the FDA or similar Governmental Entity, are obtained as
promptly as practicable, and that any reasonable conditions set forth in or
established by any such Consents are wholly satisfied.
Section
7.5 Non-Compete;
Non-Solicitation and Confidentiality. Recognizing the
historically close relationship and interaction between the Business and the
Seller's retained
businesses,
which have involved the sharing of technical, marketing, strategic and other
proprietary information (including Intellectual Property and Commercial
Know-How) over many years, and desiring to preserve the value of the respective
businesses to the Purchasing Parties and the Seller, the Parties agree
that:
(a) From the Closing Date until the date that is the fourth
anniversary of the Closing Date, the Seller agrees that it shall not, and it
shall not cause or permit its Affiliates to, directly or
indirectly:
(i) develop,
market or sell:
(1) the active pharmaceutical ingredient of any of the
Products;
(2) any active
pharmaceutical ingredient that has the same mechanism of action as any active
pharmaceutical ingredient of any of the Products;
(3) any finished
pharmaceutical product that (A) has the same mechanism of action as any of the
Products or (B) contains an active pharmaceutical ingredient referred to in the
foregoing clauses (1) or (2); or
(4) any finished
pharmaceutical product for the same labeled therapeutic indication(s) as of the
Closing Date as Abelcet® or Adagen® (the foregoing clauses (1) through (4),
collectively, a "Competing Business");
or
(ii) own,
manage, operate, join or control, participate or invest in, contribute, assign,
transfer or license significant assets (including cash) to, or acquire more than
5% of the capital stock or equity, or a significant portion of the assets, of a
Person that engages in a Competing Business; provided, however, that if,
following the Closing, the Seller or any of its Affiliates intends to enter or
enters into an agreement with any Person pursuant to which such Person acquires
control of all or substantially all of the Seller's or such Affiliate's business
or assets (whether such acquisition is by means of stock or asset acquisition,
merger, consolidation, similar business combination or otherwise), the
restrictions contained in this Section 7.5(a) shall not prohibit such sale and
shall not apply to any such Person or its Affiliates; provided, however, that the
Seller shall ensure that such Person and its Affiliates do not utilize the
business or assets acquired by such Person from the Seller or such Affiliate to
engage in a Competing Business or in a manner that otherwise contravenes this
Section 7.5 prior to the fourth anniversary of the Closing Date.
(b) Except
as set forth in Article VIII, for a period of two years from the Closing Date,
neither the Seller nor either Purchasing Party shall, or shall cause or permit
its Affiliates to, without the prior written consent or request of the other
Party, directly or indirectly solicit for employment or hire or attempt to hire
any director, officer or employee of the other Party or such other Party's
Affiliates, or attempt to induce any such director, officer or
employee
to
leave the employ of the other Party; provided, however, that the
foregoing shall not prohibit the Seller or either Purchasing Party, or any of
their respective Affiliates, from hiring any person whose employment has been
terminated prior to the date of this Agreement by either the Seller or either
Purchasing Party, or any of their respective Affiliates, as the case may
be. The provisions of this Section 7.5(b) will apply whether such
officers, directors or employees are employed by the applicable Party on the
date of this Agreement or hereafter.
(c) The
Seller and the Purchasing Parties agree to the following confidentiality
provisions:
(i) For
a period of ten years from the Closing Date, the Seller covenants that it shall
not, and shall not cause or permit its Affiliates to, without the prior written
consent of the Purchasing Parties, make use of or otherwise disclose to any
Person information of a confidential or proprietary nature regarding the Assets,
the Assumed Liabilities or the Business (the "Purchaser Confidential
Information"), except to Representatives of the Seller or its Affiliates
who need to know such information for purposes of taxes, accounting, pending
litigation and other matters necessary in respect of (A) the Seller's ownership
of the Assets or (B) the Transactions, unless after consultation with counsel,
disclosure is required to be made under applicable Law.
(ii) For
a period of ten years from the Closing Date, the Purchasing Parties covenant
that they shall not, and shall not cause or permit their Affiliates to, without
the prior written consent of the Seller, make use of or otherwise disclose to
any Person information of a confidential or proprietary nature regarding the
Excluded Assets or the Excluded Liabilities (the "Seller Confidential
Information"), except to Representatives of the Purchasing Parties or
their Affiliates who need to know such information for purposes of taxes,
accounting, pending litigation and other matters necessary in respect of the
Transactions, unless after consultation with counsel, disclosure is required to
be made under applicable Law.
(iii)
Each Party acknowledges that neither the Purchaser Confidential Information nor
the Seller Confidential Information includes information that (A) is or becomes
generally available to the public other than as a result of a disclosure by the
Seller or either Purchasing Party in violation of this Agreement or (B) becomes
available to the Seller or either of the Purchasing Parties on a
non-confidential basis from a source other than the Purchasing Parties or the
Seller or their respective Representatives, provided that such
source is not, to the Knowledge of the Seller or the Knowledge of the Purchasing
Parties, as the case may be, a party to a confidentiality agreement with the
Seller or the Purchasing Parties or another party.
(iv) Notwithstanding
the foregoing in this Section 7.5(c) or anything else in this Agreement to the
contrary, the Parties agree that any trade secret of any of them shall remain
subject to an obligation of confidentiality and non-disclosure for so long as it
remains a trade secret.
(d) Solely
for purposes of this Section 7.5, "Affiliate" of a Party shall not include any
Person holding less than 25% of the outstanding equity interests of such Party
or any Affiliates of such Person.
(e) The
Seller and the Purchasing Parties agree that the covenants contained in this
Section 7.5 are necessary for the protection of the other Party's reasonable
interests, are reasonable in scope, content and duration and are in partial
consideration for each Party's agreement to consummate the
Transactions.
(f) If
it is ever held that the provisions of this Section 7.5 are too onerous in scope
or duration or are not necessary for the protection of the Parties, each Party
agrees that any court of competent jurisdiction may impose lesser restrictions
that such court may consider to be fair, reasonable, necessary or appropriate to
properly protect the Parties under the circumstances.
(g) If
any court determines that any of the provisions of this Section 7.5, or any part
thereof, is invalid or unenforceable, such provision or part shall be revised so
that it is no longer invalid or unenforceable, as the case may be, but the
remainder of this Section 7.5 will not otherwise be affected and shall at all
times be given full effect, without regard to the invalid portions, whether
revised or not revised.
(h) The
Seller and the Purchasing Parties recognize and agree that the restrictions set
forth this Section 7.5 are being entered into in connection with the sale of the
Business to the Purchasing Parties and the Parties would not be entering into
this Agreement absent such restrictions and the full commitment of each of the
Seller and each Purchasing Party to abide by such restrictions. The
Seller and the Purchasing Parties recognize and acknowledge that a breach by the
Seller or either Purchasing Party of this Section 7.5 may cause irreparable harm
and material loss and damage to the other Party as to which it may not have an
adequate remedy at law or in damages. Accordingly, the Seller and the
Purchasing Parties acknowledge and agree that the issuance of temporary,
preliminary and permanent injunctive relief, specific performance or other
equitable remedy shall be an appropriate remedy for any such breach in addition
to any other remedies available at law or in equity.
Section
7.6 Subsequent
Actions. In case at any time after the Closing Date any
further action is necessary, proper or advisable to carry out the purposes of
this Agreement, each Party shall take, and shall cause its proper officers and
directors to take, as soon as is reasonably practicable, all such necessary,
proper or advisable actions.
Section
7.7 Taxes.
(a) The
Seller shall be liable for, and shall timely pay, any and all Transfer Taxes and
similar Taxes, fees, and costs together with any interest thereon, penalties,
fines, costs, fees, additions to tax or additional amounts with respect thereto
incurred in connection with this Agreement and the consummation of the
Transactions, regardless of who may be liable therefore under applicable
Law. The Seller shall, at its own expense, properly complete, sign,
and timely file any and all required Tax Returns with respect to such taxes
(the
"Transfer Tax
Returns") and, if required by applicable Law, the Purchasing Parties will
join in the execution of any such Transfer Tax Returns.
(b) Each
of the Purchasing Parties and the Seller shall provide the other with such
assistance as may reasonably be requested by the other party in connection with
the preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes with respect to the Business, Assets, Assumed Liabilities and Excluded
Liabilities, and each will retain and provide the requesting party with any
records or information which may be relevant to such return, audit or
examination, proceedings or determination. Any information obtained
pursuant to this Section 7.7(b) or pursuant to any other Section hereof
providing for the sharing of information or review of any Tax Return or other
schedule relating to Taxes shall be kept confidential by the
Parties.
(c) The
Seller and its Affiliates agree, from and after the date of this Agreement and
until the Closing Date, to (i) prepare all Tax Returns relating to the Business
or the Assets in a manner that is consistent with the past practices of the
Seller and each such Affiliate, as the case may be, with respect to the
treatment of items on such Tax Returns except to the extent that any
inconsistency would not or may not materially increase either Purchasing Party's
liability for Taxes for any period; (ii) refrain from incurring any material
liability for Taxes relating to the Business or the Assets other than in the
ordinary course of business; and (iii) refrain from entering into any settlement
or closing agreement with a taxing authority that increases or may increase the
Tax liability of the Seller or such Affiliate relating to the Business or the
Assets for any period without the consent of the Purchasing Parties, which
consent shall not be unreasonably withheld, conditioned or delayed.
Section
7.8 Financing.
(a) Sigma-Tau
shall use its commercially reasonable efforts to (i) maintain in effect the
Commitment Letter; (ii) negotiate definitive agreements with respect to the
Financing on the terms and conditions contained in the Commitment Letter (or on
terms no less favorable to Sigma-Tau (including with respect to the
conditionality thereof) than the terms and conditions in the Commitment Letter);
(iii) satisfy on a timely basis all conditions applicable to it and its
Affiliates, if any, in such definitive agreements that are within its or its
Affiliates, if applicable, control; (iv) upon satisfaction of such conditions
(and all of the other conditions contained in Section 9.1 and Section 9.2 (other
than Section 9.2(d)), consummate the Financing at or prior to the Closing,
accept the funds comprising the Financing and transfer such funds (whether by
contribution or loan or otherwise) to the Purchasing Parties; and (v) comply
with its obligations set forth in the Commitment Letter. Sigma-Tau
shall keep the Seller informed on a reasonably current basis and in reasonable
detail of the status of the Financing and shall promptly provide to the Seller
appropriate notice when the definitive binding documents related to the
Financing have been executed (which notice will include reasonable detail
regarding any terms to the Financing that are inconsistent with those contained
in the Commitment Letter). Sigma-Tau shall have the right from time
to time to enter into any amendment, replacement, supplement or other
modification of, waive any of its rights under, or terminate, the Commitment
Letter (other than with respect to the conditions thereto), substitute other
debt or equity financing for all or any portion of the Financing from the same
and/or alternate funding sources (on terms no less favorable to Sigma-Tau with
respect to the conditionality thereof), or
reduce
the amount of the Financing, in any case in its reasonable discretion, but only
if such amendment, replacement, supplement or other modification of, waiver of
any provision contained in, or termination of, the Commitment Letter,
substitution of other financing or reduction of the Financing does not, and
would not reasonably be expected to, prevent or delay the Closing or add any
additional or greater conditionality to the funding of the
Financing. Sigma-Tau shall keep the Seller informed on a prompt basis
and in reasonable detail if it takes any of the actions referred to in the
preceding sentence. Sigma-Tau shall give the Seller prompt notice of
any termination of the Commitment Letter.
(b) If
any portion of the Financing becomes unavailable on the terms and conditions
contemplated by the Commitment Letter, the Purchasing Parties shall (i)
immediately notify the Seller and (ii) use, as promptly as practicable, their
commercially reasonable efforts to arrange and obtain alternative financing from
alternative sources, on terms and conditions that are customary and commercially
reasonable, in an amount sufficient to consummate the Transactions in a timely
manner.
(c) The
Seller shall provide, and shall cause its Affiliates, and shall use its
commercially reasonable efforts to cause each of its and their respective
Representatives to provide, all cooperation reasonably requested by Sigma-Tau or
the Purchasing Parties in connection with the Financing or any replacement,
amended, modified or alternative financing, including (i) providing accurate
information, including financial information, relating to the Business to the
extent reasonably requested by Sigma-Tau or the Purchasing Parties to assist in
the preparation of customary information documents to be used for the completion
of the Financing as contemplated by the Commitment Letter, (ii) using its
reasonable best efforts, as appropriate, to have its independent accountants
provide their reasonable cooperation and assistance, and (iii) cooperating
reasonably with the relevant financing parties' due diligence, to the extent
customary and reasonable and to the extent not unreasonably interfering with the
Business or the Seller's other businesses.
(d) Notwithstanding
anything to the contrary in this Agreement, Sigma-Tau and the Purchasing Parties
acknowledge and agree that the Seller and its Affiliates and their respective
Representatives shall not have any responsibility for, or incur any liability to
any Person under, the Commitment Letter, the Financing or any other financing
that the Purchasing Parties may raise in connection with the Transactions, and
that the Purchasing Parties shall jointly and severally indemnify and hold
harmless the Seller and its Affiliates and their respective Representatives from
and against any and all losses, damages, claims, costs or expenses suffered or
incurred by any of them in connection with the Financing, including pursuant to
Section 7.8(c), and any information utilized in connection therewith, except, in
any case, to the extent that any information provided by the Seller and its
controlled Affiliates (other than any projections or other "forward looking"
information) contains any untrue statement by the Seller or omits to state any
material fact necessary to make any statement therein not misleading, it being
understood that the Seller makes no representation or warranty (other than as
explicitly set forth in this Agreement) with respect to any information it
provides pursuant to this Section 7.8.
(e) In
the event that the Commitment Letter is amended, replaced, supplemented or
otherwise modified, including if Sigma-Tau or the Purchasing Parties
substitute
other
debt or equity financing for all or a portion of the Financing, each of
Sigma-Tau, the Purchasing Parties and the Seller shall comply with its
respective covenants in this Section 7.8 with respect to the Commitment Letter
as so amended, replaced, supplemented or otherwise modified and with respect to
such other debt or equity financing to the same extent that Sigma-Tau, the
Purchasing Parties and the Seller would have been obligated to comply with
respect to the Financing, and the Financing shall be deemed to refer to the
Commitment Letter as so amended, replaced, supplemented or otherwise modified
and to such other financing, as applicable.
Section
7.9 Mail and Payments Received
After Closing. Following the Closing, the Purchasing Parties
shall deliver or cause to be delivered to the Seller all mail and payments
received by them or the Business after the Closing that pursuant to this
Agreement belong to the Seller or any of its
Affiliates. Additionally, following the Closing, the Seller shall
deliver or cause to be delivered to the Purchasing Parties all mail and payments
received by the Seller or its Affiliates after the Closing that pursuant to this
Agreement belong to the Purchasing Parties.
Section
7.10 Post-Closing Access to
Records and Personnel.
(a) After
the Closing, each Party shall retain all books, records, documents, instruments,
accounts, correspondence, writings, evidences of title and other papers relating
to the Business and the Assets in their respective possession for at least seven
years or for such longer period of time set forth in their respective records
retention policies on the Closing Date or as may be required by Law or any
order.
(b) After
the Closing, the Parties shall allow each other reasonable access to and use of
the Books and Records, and to personnel having knowledge of the whereabouts or
contents of the Books and Records, for legitimate business reasons, such as the
preparation of Tax Returns or the prosecution or defense of Legal Proceedings or
access to information relating to the Excluded Assets or Excluded
Liabilities. Notwithstanding anything to contrary contained in this
Agreement, the Purchasing Parties and their Affiliates shall not be entitled to
any information regarding, or a copy of, any consolidated, combined, affiliated
or unitary Tax Return that includes that of the Seller and its
Affiliates.
Section
7.11 Third Party
Consents.
(a) The
Seller shall use commercially reasonable efforts, as soon as reasonably
practicable following the date of this Agreement, and the Purchasing Parties
shall assist the Seller in its efforts, to obtain all third party Consents
required to assign or transfer the Assets to the Purchasing Parties pursuant to
the terms and conditions of this Agreement. In connection with
seeking such Consents, the Seller shall keep the Purchasing Parties informed of
all material developments and shall, at either Purchasing Party's request,
include such Purchasing Party in any discussions or communications with any
parties whose Consent is sought hereunder. Such Consents shall be in a form
reasonably acceptable to the Purchasing Parties. For the avoidance of
doubt, the Seller shall not be obligated to pay, and the Seller shall not pay,
any fees or penalties to any Person in connection with obtaining any third party
Consent.
(b) To
the extent that (i) any Asset requires the Consent of a third Person to assign
or transfer such Asset to the applicable Purchasing Party and such Consent has
not been obtained on or prior to the Closing Date or (ii) any Asset is not, by
its terms or under applicable Law, assignable and transferable to the applicable
Purchasing Party (in either case, a "Non-Assignable
Asset"), this Agreement shall not constitute an assignment or transfer or
attempted assignment or transfer thereof, unless and until, in the case of
assignments requiring Consent, such Consent shall have been
obtained. The Seller shall hold or cause to be held each such
Non-Assignable Asset, as of and from the Closing Date, in trust for the benefit
of the applicable Purchasing Party and the covenants and obligations thereunder
shall be performed by such Purchasing Party in the name of the Seller or the
applicable Affiliate of the Seller, as the case may be, and all benefits and
obligations existing thereunder shall be for the account of such Purchasing
Party. The Seller, on behalf of itself and its Affiliates, as of and
from the Closing Date, authorizes the applicable Purchasing Party, to the extent
permitted by applicable Law and the terms of the Non-Assignable Assets, at such
Purchasing Party's expense, to perform all the obligations and receive all the
benefits of the Seller or its Affiliates under the terms of the Non-Assignable
Assets. The Seller shall use its commercially reasonable efforts to
take or cause to be taken such actions in the name of the applicable Purchasing
Party as such Purchasing Party may reasonably request to (x) provide such
Purchasing Party with the benefits of the Non-Assignable Assets and to effect
collection of money or other consideration that becomes due and payable under
the Non-Assignable Assets, and the Seller shall promptly pay or cause to be
promptly paid over to such Purchasing Party all money or other consideration
received by the Seller or such Affiliate in respect of the Non-Assignable Assets
and (y) enforce, at the request of such Purchasing Party, and at the expense and
for the account of such Purchasing Party, any rights of the Seller or the
applicable Affiliate of the Seller arising from such Non-Assignable Assets
against the other party or parties thereto (including the right to elect to
terminate any such Non-Assignable Asset in accordance with the terms
thereof). The Seller shall not take any action (unless requested in
writing by the applicable Purchasing Party or required by applicable Law) that
would limit or restrict or terminate the benefits to such Purchasing Party of
any Non-Assignable Asset. With respect to any Non-Assignable Asset as
to which the necessary Consent for the assignment or transfer to the applicable
Purchasing Party is obtained following the Closing, the Seller, as soon as
reasonably practicable following receipt of such Consent, shall transfer such
Non-Assignable Asset to such Purchasing Party by execution and delivery of an
instrument of conveyance reasonably satisfactory to such Purchasing
Party. With respect to any Permit that cannot be assigned or
transferred to the applicable Purchasing Party, the Seller agrees to file such
applications, notices, certifications, reports or other information as shall be
necessary to convey the benefits of each such Permit to such Purchasing Party on
and following the Closing Date, or as soon as reasonably practicable after the
Closing Date if such conveyance cannot by Law by accomplished before or as of
Closing.
Section
7.12 "As Is"
Condition. Except as may be specifically provided in this
Agreement, including the representations and warranties of the Seller contained
herein and any certificate or Schedule contemplated hereby and
delivered by the Seller in connection herewith, the Purchasing Parties expressly
understand and agree that they shall accept the sale and transfer by the Seller
of all of the Assets on an "As Is Where Is" basis on the Closing Date regardless
of the condition of the Assets and whether the Purchasing Parties have inspected
and examined them. EXCEPT AS MAY BE SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THE SELLER MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO
THE
VALUE,
CONDITION OR USE OF THE ASSETS, WHETHER EXPRESSED OR IMPLIED, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
OR WITH RESPECT TO ANY PROJECTIONS.
Section
7.13 Ancillary
Agreements. At the Closing, the Purchasing Parties and the
Seller shall execute and deliver the following Ancillary Agreements: (a) the
Patent Assignment, (b) the Trademark Assignment, (c) the Assumption Agreement,
(d) the Transition Services Agreement, and (e) the License
Agreement.
Section
7.14 Use of Enzon Name and
Supplies.
(a) Nothing
in this Agreement gives the Purchasing Parties any rights to the ownership or
use of the Enzon Mark and Logo, other than the rights to use the Enzon Mark and
Logo expressly set forth in this Section 7.14(a). Following the
Closing, the Purchasing Parties shall, and shall cause their Affiliates to, as
soon as practicable, but in no event later than 60 days following the Closing
Date, cease to, and obtain all Consents required to enable them to cease to (i)
make any use of the Enzon Mark and Logo, and (ii) hold themselves out as having
any affiliation with the Seller or any of its Affiliates, other than as required
by applicable Law. In furtherance thereof, as soon as practicable but
in no event later than 60 days following the
Closing Date, the Purchasing Parties shall, and shall cause their Affiliates to,
use their respective reasonable best efforts to obtain all Consents required to
enable them to remove, strike over, or otherwise obliterate the Enzon Mark and
Logo from all assets and other materials owned by the Purchasing Parties and
their Affiliates, including any vehicles, business cards, schedules, stationery,
packaging materials, displays, signs, promotional materials, manuals, forms,
websites, email, computer software and other materials and systems other than as
required by applicable Law. Any use by the Purchasing Parties or any
of their Affiliates of the Enzon Mark and Logo as permitted in this Section
7.14(a) is subject to such Person's use of the Enzon Mark and Logo in a form and
manner, and with standards of quality, substantially similar to (but in no event
less stringent than) those in effect for the Enzon Mark and Logo as of the
Closing Date. The Purchasing Parties and their Affiliates shall not
use the Enzon Mark and Logo in a manner that may reflect negatively on such name
and marks or on the Seller or its Affiliates. The Seller shall have
the right to terminate the foregoing license, effective upon 30 days written
notice to the Purchasing Parties, if the Purchasing Parties or their Affiliates
fail to comply with the foregoing terms and conditions or otherwise fail to
comply with any reasonable direction of the Seller in relation to the use of the
Enzon Mark and Logo, and do not cure such failure to the Seller's reasonable
satisfaction within 30 days after such notice is provided to the Purchasing
Parties. Notwithstanding anything to the contrary in this Agreement,
the Purchasing Parties and their Affiliates shall indemnify and hold harmless
the Seller and any of its Affiliates for any and all Losses arising from or
relating to any use by the Purchasing Parties or any of their Affiliates of the
Enzon Mark and Logo in violation of this Section 7.14(a).
(b) Notwithstanding
anything to the contrary in Section 7.14(a), the Purchasing Parties shall be
entitled to use, sell and distribute (i) any of the Products containing the
Enzon Mark and Logo that are held in the Inventory on the Closing Date, but only
for an amount of time following the Closing reasonably necessary to sell all of
such Products, and (ii) any promotional materials in the possession of the
Business on the Closing Date for up to 180 days following the Closing
Date.
Section
7.15 Publicity. Prior
to the Closing Date, neither Party shall, nor shall they permit their respective
Affiliates or Representatives to, issue any press release or otherwise make any
public statements with respect to this Agreement, the Ancillary Agreements or
the Transactions without first consulting with the other Party, unless such
release or statements are reasonably determined to be required by applicable Law
or the rules of any applicable stock exchange. Any press release or
public statement issued by one Party may be simultaneously issued by the other
Parties. Following the Closing, the Parties shall mutually agree on
any public announcements made by either Party in connection with this Agreement,
the Ancillary Agreements and the Transactions.
Section
7.16 Maintenance of Existence; No
Distributions. From the date of this Agreement until the
latest of the dates on which the Ancillary Agreements are terminated, the Seller
agrees to remain in existence and in good standing under the laws of the
State of Delaware and agrees not to take, or cause or permit to be taken, any
action that could result in the dissolution, liquidation or winding up of the
Seller. From the Closing Date until the first anniversary thereof,
the Seller shall maintain $45,000,000 in cash or cash equivalents in its bank
accounts; provided, however, that, if, as
of the date that is six months following the Closing, all bona fide unresolved
indemnification claims made by the Purchasing Parties pursuant to Article XI are
for an aggregate amount of less than $15,000,000, the Seller shall only have to
maintain $30,000,000 in cash and cash equivalents from and after such date;
provided, further that if, as of the date that is nine months following the
Closing, all bona fide
unresolved indemnification claims made by the Purchasing Parties pursuant to
Article XI are for an aggregate amount of less than $10,000,000, the Seller
shall only have to maintain $15,000,000 in cash and cash equivalents from and
after such date until the first anniversary of the Closing.
Section
7.17 Shared
Contracts.
(a) The
Purchasing Parties and the Seller shall use commercially reasonable efforts to
cause certain Contracts that are primarily but not exclusively related to the
Business and are set forth on Schedule 7.17(a) (the "Shared Contracts") to
be split into separate contracts between the appropriate third party and the
Seller (with respect to the portion of the Shared Contracts that does not relate
to the Business) or the applicable Purchasing Party (with respect to the portion
of the Shared Contracts that relates to the Business). The Seller and
the Purchasing Parties agree to cooperate and provide reasonable assistance
prior to and for a period of six months following the Closing to effect such
separation. In the event and to the extent that the Purchasing
Parties and the Seller are unable to obtain any Consent or amendment required to
separate the Shared Contracts, (i) the Seller and the applicable Purchasing
Party shall use their commercially reasonable efforts in good faith to separate
such Shared Contracts as promptly as practicable and (ii) if such separation is
not obtained, the Parties shall use commercially reasonable efforts in good
faith to effect any lawful arrangement designed to provide for such Purchasing
Party the benefits after Closing that it would have received, and to subject
such Purchasing Party directly to the Liabilities thereunder, as if such Shared
Contracts had been separated and acquired by such Purchasing Party as an
Asset.
(b) With
respect to those Shared Contracts set forth on Schedule 7.17(b), upon the
reasonable request of the Purchasing Parties, the Seller shall use commercially
reasonable efforts to enforce or assign upon request such Shared Contracts on
behalf of the
Purchasing
Parties against the other parties thereto in accordance with their
terms. The Purchasing Parties shall reimburse the Seller for all
reasonable and documented out of pocket costs and expenses incurred by the
Seller in complying with this Section 7.17(b).
Section
7.18 Proxy
Statement.
(a) Covenants of the Seller with
Respect to the Proxy Statement. As promptly as reasonably
practicable following the date of this Agreement, the Seller shall prepare and
shall cause to be filed with the SEC a proxy statement (collectively with any
amendments thereof or supplements thereto and any other filings that are
required to be filed by the Seller with the SEC in connection with the
Transactions, the "Proxy Statement")
relating to the meeting of the Seller's stockholders to be held to consider the
approval of the Transactions and shall cause the Proxy Statement to be filed
with the SEC as promptly as is reasonably practicable after the date of this
Agreement. The Seller covenants and agrees that none of the
information with respect to the Seller or any of its Affiliates to be included
in the Proxy Statement will, at the time of the mailing of the Proxy Statement
or any amendments or supplements thereto, or at the time of the Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and that the Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.
(b) Covenants of the Purchasing
Parties with Respect to the Proxy Statement. The Purchasing
Parties covenant and agree that none of the information provided by either of
them with respect to the Purchasing Parties, any of their Affiliates or the
Financing to be included in the Proxy Statement will, at the time of the mailing
of the Proxy Statement or any amendments or supplements thereto, or at the time
of the Stockholders' Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) Cooperation with Respect to
the Proxy Statement. The Seller and the Purchasing Parties
shall cooperate and consult with each other in preparation of the Proxy
Statement and the Seller shall provide the Purchasing Parties with a reasonable
opportunity for review and comment on the Proxy Statement (including each
amendment or supplement thereto). Without limiting the generality of
the foregoing, the Purchasing Parties shall furnish to the Seller the
information relating to them required by the Exchange Act and the rules and
regulations promulgated thereunder to be set forth in the Proxy
Statement. The Seller, on the one hand, and the Purchasing Parties,
on the other hand, shall promptly (i) notify the other of the receipt of any
comments from the SEC with respect to the Proxy Statement and of any request by
the SEC for amendments of, or supplements to, the Proxy Statement, and (ii)
provide the other with copies of all filings made with the SEC and all
correspondence between the Seller and the SEC with respect to the Proxy
Statement. The Seller and the Purchasing Parties shall cooperate with
each other and use their respective reasonable best efforts to resolve all
comments from the SEC with respect to the Proxy Statement as promptly as
practicable.
(d) Mailing of Proxy Statement;
Amendments. As promptly as reasonably practicable after the
Proxy Statement has been cleared by the SEC, the Seller shall mail the Proxy
Statement to the holders of Seller Common Stock as of the record date
established for the Stockholders' Meeting. If at any time prior to
the Stockholders' Meeting any event or circumstance relating to the Seller or
the Purchasing Parties or any of their respective Affiliates, officers or
directors should be discovered by the Seller or the Purchasing Parties that,
pursuant to the Exchange Act, should be set forth in an amendment or a
supplement to the Proxy Statement, such Party shall promptly inform the
other. The Seller and each Purchasing Party each agree to correct any
information provided by it for use in the Proxy Statement that shall have become
false or misleading. All documents that the Seller and each
Purchasing Party is responsible for filing with the SEC in connection with the
Transactions will comply as to form in all material respects with, and will be
distributed to the Seller's stockholders in compliance with, the applicable
requirements of the Exchange Act.
Section
7.19 Stockholders'
Meetings. Subject to Section 7.20, the Seller shall, as
promptly as reasonably practicable following the date of this Agreement,
establish a record date for, duly call, give notice of, convene and hold a
meeting of its stockholders for the purpose of voting upon the approval of the
Transactions (the "Stockholders'
Meeting"), and the Seller shall hold the Stockholders'
Meeting. At the Stockholders' Meeting, the Seller shall recommend to
its stockholders the approval of the Transactions (the "Seller
Recommendation"); provided, however, that the
Seller shall not be obligated to recommend to its stockholders the approval of
the Transactions at the Stockholders' Meeting if the Board of Directors of the
Seller makes a Change of Recommendation pursuant to Section
7.20(c).
Section
7.20 No Solicitation of Competing
Proposal.
(a) From
and after the date of this Agreement until the earlier of the Closing Date or
the date, if any, on which this Agreement is terminated pursuant to Section
10.1, and except as otherwise provided for in this Agreement, the Seller agrees
that neither it nor any of its Affiliates shall, and that it shall use its
reasonable best efforts to cause its and their respective Representatives not
to, directly or indirectly: (i) solicit, initiate or knowingly facilitate or
encourage any Competing Proposal, (ii) participate in any negotiations
regarding, or furnish to any person any material nonpublic information with
respect to, any Competing Proposal, (iii) engage in discussions with any person
with respect to any Competing Proposal, (iv) approve or recommend any Competing
Proposal or (v) enter into any letter of intent or similar document or any
agreement or commitment providing for any Competing Proposal. The
Seller shall immediately cease and cause to be terminated any discussion or
negotiation with any Persons that commenced prior to the date of this Agreement
with respect to any Competing Proposal and shall promptly request the return or
destruction of all information provided by or on behalf of the Seller or its
Affiliates to such Person to the extent that the Seller is entitled to have such
information returned or destroyed.
(b) Notwithstanding
the limitations set forth in Section 7.20(a), if the Seller receives an
unsolicited Competing Proposal that the Board of Directors of the Seller
determines, in good faith, after consultation with the Seller's outside legal
and financial advisors, (i) constitutes a Superior Proposal or (ii) could
reasonably be expected to lead to a Superior Proposal, the Seller may take the
following actions: (x) furnish nonpublic information to the
third
party making such Competing Proposal, if, and only if, prior to so furnishing
such information, the Seller receives from the third party an executed
confidentiality agreement with terms that are, in the aggregate, no less
favorable to the Seller than those contained in the Confidentiality Agreement
and (y) engage in discussions or negotiations with the third party with respect
to the Competing Proposal; provided, however, that as
promptly as reasonably practicable following the Seller taking such actions as
described in clauses (x) and (y) above, the Seller shall (A) provide written
notice to the Purchasing Parties of such Competing Proposal and (B) provide to
the Purchasing Parties any information provided to such third party that was not
previously provided to the Purchasing Parties.
(c) Notwithstanding
the limitations set forth in Section 7.20(a), if the Board of Directors of the
Seller has concluded in good faith after consultation with the Seller's outside
legal and financial advisors that (i) a Competing Proposal constitutes a
Superior Proposal and (ii) the failure of the Board of Directors of the Seller
to change, qualify, withhold or withdraw the Seller Recommendation would be
reasonably likely to be inconsistent with the directors' exercise of their
fiduciary duties to the Seller's stockholders under applicable Law, then, in
either case, the Board of Directors of the Seller may change, qualify, withhold
or withdraw the Seller Recommendation in a manner adverse to the Purchasing
Parties (a "Change of
Recommendation"), provided that, prior
to making its Change of Recommendation, (i) the Seller shall have given the
Purchasing Parties at least four Business Days written notice of its proposed
Change of Recommendation, the reasons therefor and the terms of the Superior
Proposal at issue, and (ii) the Board of Directors of the Seller shall have
taken into account any revised proposal made by the Purchasing Parties to the
Seller following such four Business Days notice and shall have again concluded
in good faith after consultation with its outside legal and financial advisors
to make such Change of Recommendation. Following such affirmation of
such Change of Recommendation, the Board of Directors of the Seller may cause
the Seller or any of its Affiliates to enter into a binding written agreement
with respect to the applicable Superior Proposal (a "Superior Proposal
Agreement") and terminate this Agreement in accordance with Section
10.1(h).
(d) Nothing
contained in this Agreement shall prohibit the Seller or the Board of Directors
of the Seller from (i) disclosing to its stockholders a position contemplated by
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or (ii) making any
disclosure to its stockholders if the Board of Directors of the Seller has
reasonably determined in good faith, after consultation with outside legal
counsel, that the failure to do so would be inconsistent with any applicable
Law; provided,
that disclosures under this Section 7.20(d) shall not be a basis, in themselves,
for the Purchasing Parties to terminate this Agreement pursuant to Section
10.1(f), but such disclosures shall not otherwise affect the rights of the
Purchasing Parties contained in this Agreement.
(e) The
Seller shall promptly (and in no event later than 48 hours after receipt) notify
the Purchasing Parties of any Competing Proposal it or any of its
Representatives receives, including in such notice the name of the Person
submitting the Competing Proposal and the material terms and conditions of the
Competing Proposal (including, if applicable, copies of any written requests,
proposals or offers, including term sheets and proposed agreements) and
thereafter the Seller shall keep the Purchasing Parties informed, on a
reasonably prompt and current basis (which shall be considered in light of the
circumstances of such proposal or offer
and
the time by which the Purchasing Parties have the opportunity to respond), of
the status and terms of any such Competing Proposal (including any amendments
thereto). The Seller shall not enter into any Contract with any
Person that prohibits the Seller from complying with this Section
7.20(e). It is understood that if the Seller receives a Competing
Proposal, upon notification to the Purchasing Parties of such Competing Proposal
it shall also disclose to the Purchasing Parties whether or not it intends to
publicly disclose such Competing Proposal and, if the Seller does not publicly
disclose such Competing Proposal (or indicate that such Competing Proposal will
be disclosed in the Proxy Statement) within five Business Days of being
requested to do so by the Purchasing Parties, then the Purchasing Parties may
publicly disclose such Competing Proposal.
Section
7.21 Transfer of Regulatory
Approvals and Permits; Interim Responsibility.
(a) Subject
to Section 7.11(b), promptly after the Closing Date, the Parties will cooperate
in transferring the transferable Regulatory Approvals and Permits used in
connection with the operation of the Business as currently conducted to the
applicable Purchasing Party. Prior to the Closing Date, the Parties
will agree upon procedures to ensure a smooth transition from the Seller to the
Purchasing Parties of all of the activities required to be undertaken by the
holder of the Regulatory Approvals and Permits, including adverse experience
reporting, quarterly and annual reports to the FDA, handling and tracking of
complaints, sample tracking, and communication with health care professionals
and customers. The Seller shall use its commercially reasonable
efforts to obtain the cooperation of the distributors and licensees of the
Products. The Purchasing Parties shall be responsible for any expense
associated with the transactions contemplated by this Section 7.21, and the
Seller shall not have any Liability for the failure to obtain the transfer of
any such Regulatory Approval or Permit.
(b) Until
the Regulatory Approvals and Permits shall have been transferred to the
Purchasing Parties, the Seller shall use its reasonable best efforts to maintain
all such Regulatory Approvals and Permits in the ordinary course of its business
consistent with past practice. After such transfer, the applicable
Purchasing Party shall assume all responsibility for the Regulatory Approvals
and Permits. Each Party shall cooperate with the other in making and
maintaining all regulatory filings that may be necessary in connection with the
execution, delivery and performance of this Agreement.
Section
7.22 Communication With
Agencies. Until the transferable Regulatory Approvals and
Permits are transferred to the Purchasing Parties, the Seller shall have
responsibility for all communications with the FDA and other applicable
Governmental Entities relating to the Products; provided that the
Seller shall use commercially reasonable efforts to seek the input of the
Purchasing Parties prior to making such communications. The Seller
shall promptly (and in any event within 48 hours) provide to the Purchasing
Parties copies of all communications to or from the FDA and other applicable
Governmental Entities with respect to each Product and/or the manufacture
thereof. After the Regulatory Approvals and Permits transfer has been
completed, the applicable Purchasing Party shall have responsibility for all
such communication and the Seller shall promptly (and in any event within 48
hours) provide to Purchasing Parties copies of any communication or contact it
receives from the FDA and any other Governmental Entity concerning the
Products.
Section
7.23 Promotion and
Marketing. Promptly after the Closing Date, the Seller shall
file with the FDA a notice that the applicable Purchasing Party is the marketer
and distributor of the Products. To the extent that the FDA requests
additional information or meetings regarding the Purchasing Parties'
responsibilities as marketers and distributors of the Products, the Purchasing
Parties shall respond to the FDA at their own expense and through their own
personnel.
Section
7.24 Efforts Related to Milestone
Payments.
(a) Following
the Closing, Defiante shall use, and shall cause its Affiliates to use,
Applicable Efforts to (i) pursue, in a reasonably timely manner, the development
and approval of SS Oncaspar and SC Oncaspar and (ii) implement and conduct all
research, development and clinical manufacturing activities for, and regulatory
activities with respect to, SS Oncaspar and SC Oncaspar (which may include
activities conducted through third parties) that are components of or directly
related to or required for the achievement of the milestone payments
contemplated by Section 3.3.
(b) Prior
to the Closing, the Seller shall not file any "Supplement—Change Being Effected
in 30 Days" applications with the FDA with respect to the Products without (i)
delivering a complete and accurate copy of each such application to Defiante not
less than 10 Business Days prior to any such filing and (ii) obtaining
Defiante's prior written approval of the contents of such application and its
filing (such approval not to be unreasonably withheld, conditioned or
delayed).
Section
7.25 Supplemental
Information. From the date of this Agreement until the
Closing, each Party shall give prompt written notice to the other Parties of any
matter, event, fact or occurrence first arising after the date of this Agreement
that would reasonably be expected to cause any representation or warranty of
such Party contained in this Agreement to be untrue or inaccurate in any
material respect if such representation or warranty had been made at the time
such item arose. Each such item shall be set forth on Schedule 7.25
(which Schedule shall be updated by the Purchasing Parties and/or the Seller, as
the case may be, immediately prior to the Closing) and each such item shall be
deemed an Excluded Liability or Assumed Liability, as applicable, in respect of
which the Purchasing Parties or the Seller, as applicable, may assert a claim
for indemnification in accordance with the terms and conditions of Article XI,
notwithstanding the provisions of Section 11.2(b)(iv).
Section
7.26 Production of Witnesses and
Individuals. From and after the Closing Date, the Seller and
the Purchasing Parties shall use, and shall cause their respective Affiliates to
use, commercially reasonable efforts to make available to each other, upon
written request, its Representatives for fact finding, consultation and
interviews and as witnesses to the extent that any such Person may reasonably be
required in connection with any Legal Proceeding in which the requesting party
may from time to time be involved relating to the Business. The
Seller, on the one hand, and the Purchasing Parties, on the other hand, agree to
reimburse each other for reasonable out-of-pocket expenses (other than officers'
or employees' salaries) incurred by the other in connection with providing
individuals and witnesses pursuant to this Section
7.26. Notwithstanding the foregoing, the provisions of this Section
7.26 shall not apply to Legal
Proceedings
brought between the Seller and its Affiliates, on the one hand, and the
Purchasing Parties and their Affiliates, on the other hand.
Section
7.27 Real
Property.
(a) The
Seller shall:
(i) at
or prior to the Closing, pay such amounts sufficient to discharge and remove of
record all Voluntary Exceptions that may be satisfied by the payment of money,
including those that reflect fines or penalties assessed by any applicable
Governmental Entity, it being agreed by the Parties that the Seller may use a
portion of the Cash Purchase Price at the Closing to cure or correct any such
Voluntary Exceptions; and
(ii) at
or prior to the Closing, deliver the Deed, corporate authority documents and
such other documents as may be reasonably and customarily required by the Title
Company to effectuate the conveyance of the Owned Real Property, and, at Klee's
request, an owner's affidavit and a limited indemnity in favor of the Title
Company (which indemnity shall be for any matters filed with the Office of the
Recorder of Marion County, Indiana prior to the Closing Date, but not recorded
until after the Closing Date (but prior to the recording of the Deed)) in order
to cooperate with Klee's effort to receive, at its expense, a 2006 ALTA Owner's
Title Insurance Policy issued by the Title Company in form reasonably acceptable
to Klee insuring Klee's fee simple title to the Owned Real Property as of the
Closing Date in the amount of the Cash Purchase Price allocated by the Parties
to the Owned Real Property pursuant to Section 3.5. Klee shall
separately order, at its expense, a survey for the Owned Real Property (the
"Survey") certified to Klee.
(b) If
the Title Commitment reveals any material defects in title, including
Encumbrances (other than Permitted Exceptions) and Voluntary Exceptions, or if
the Survey reveals any material encroachments, material setback violations (not
otherwise permitted or grandfathered under applicable Law) or material boundary
issues, then, if Klee has provided written notification to the Seller of each
specific defect no later than ten days after the date of this Agreement, the
Seller shall diligently work to cure and correct such title or survey defects
specified; provided, however, that any
matter for which Klee fails to timely deliver such notice of defect shall be
deemed a Permitted Exception.
ARTICLE
VIII
TRANSFERRED
EMPLOYEES
Section
8.1 Hiring of
Employees.
(a) Prior
to the Closing Date, Klee may offer employment to (i) any Business Employee
employed at the Facility, (ii) any Business Employee engaging in sales and/or
marketing and (iii) the other Business Employees mutually agreed to by the
Seller (in each case including (A) those Business Employees receiving salary
continuation benefits under
the
Seller's short-term disability or salary continuation program and active
Business Employees on military leave or other approved absences, and (B)
employees absent from work pursuant to vacation, sick leave or other leave,
including leave granted or required to be granted under the terms of the Family
and Medical Leave Act, provided that in the
case of an employee described in clause (A) or (B), such employee is reasonably
expected by the Seller to return to active service) on terms and conditions that
are competitive in terms of base salary and primarily taking into account the
policies of Klee's United States Affiliates. All such Business
Employees who accept Klee's offer of employment shall become Klee's employees as
of the Closing Date (the "Transferred
Employees"). If a Business Employee retires or terminates
employment with the Seller and is subsequently hired by Klee within 180 days of
the Closing Date, he or she shall be treated as a Transferred
Employee.
(b) Prior
to the Closing, at its sole cost and expense, the Seller shall take all actions
necessary to comply with all appropriate legal requirements in connection with
the Seller's employment of its employees, including any legal requirements under
the Worker Adjustment and Retraining Notification Act.
(c) The
Seller acknowledges and agrees that neither Purchasing Party assumes or agrees
to discharge any Liability of the Seller under COBRA with respect to any current
or former employees of the Seller other than for officers or employees who would
constitute Transferred Employees.
Section
8.2 Employee Benefit
Plans.
(a) For
a period of not less than one year following the Closing Date, Klee shall, and
shall cause its Affiliates to, provide the Transferred Employees with
compensation opportunities (including incentive opportunities but excluding any
equity incentives) and employee benefits that are competitive, taking into
account the policies of Klee's U.S. Affiliates. To the extent that a
Transferred Employee commences participation in any employee benefit plan,
program or arrangement maintained by Klee or any of its Affiliates (each such
plan, program or arrangement, a "Purchaser Plan")
following the Closing Date, Klee shall, and shall cause its Affiliates and the
applicable Purchaser Plan to, (i) credit each Transferred Employee's service
with the Seller or any Affiliate or any predecessor employers thereto, to the
extent credited under the analogous Enzon Benefit Plan, as service with Klee for
all purposes under such Purchaser Plan; provided, however, that in no
event shall the Transferred Employees be entitled to any credit to the extent
that it would result in duplication of benefits with respect to the same period
of service, (ii) cause any and all pre-existing condition limitations,
eligibility waiting periods, active employment requirements and requirements to
show evidence of good health under such Purchaser Plan, to the extent that such
conditions, exclusions and waiting periods would have been waived or satisfied
under the analogous Enzon Benefit Plan in which such Transferred Employee
participated immediately prior to the Closing Date, to be waived with respect to
such Transferred Employee and such individual's spouse and eligible dependents
who become participants in such Purchaser Plan and (iii) give credit for or
otherwise take into account under such Purchaser Plan the out-of-pocket expenses
and annual expense limitation amounts paid by each Transferred Employee under
the analogous Enzon Benefit Plan for the year in which the Closing Date
occurs.
(b) Notwithstanding
the generality of Section 8.2(a), during the one year period following the
Closing, each Transferred Employee who is not party to an individual agreement
with Klee providing for severance pay shall be entitled to severance pay no less
favorable than those set forth on Schedule 8.2(b).
(c) Klee
shall designate a Purchaser Plan that is a tax-qualified defined contribution
plan of Klee or one of its Affiliates (such plan(s), the "Purchasers' Savings
Plan") that either (i) currently provides for the receipt from
Transferred Employees of "eligible rollover distributions" (as such term is
defined under Section 402 of the Code) or (ii) shall be amended as soon as
practicable following the Closing Date to provide for the receipt from the
Transferred Employees of eligible rollover distributions. As soon as
practicable following the Closing Date, (x) Klee shall provide the Seller with
such documents and other information as the Seller shall reasonably request to
assure itself that the Purchasers' Savings Plan provides for the receipt of
eligible rollover distributions and (y) the Seller shall provide Klee with such
documents and other information as Klee or its Affiliates shall reasonably
request to assure itself or themselves that the accounts of the Transferred
Employees would be eligible rollover distributions. Each Transferred
Employee who is a participant in the Enzon 401(k) Plan shall be given the
opportunity to receive a distribution of his or her account balance and shall be
given the opportunity to elect to "roll over" such account balance to the
Purchasers' Savings Plan, subject to and in accordance with the provisions of
such plan(s) and applicable Law. The Seller shall provide Klee with
copies of such personnel and other records of the Seller pertaining to the
Transferred Employees and such records of any agent or representative of the
Seller pertaining to the Transferred Employees and such records of any agent or
representative of the Seller, in each case pertaining to the Enzon 401(k) Plan
and as Klee may reasonably request in order to administer and manage the
accounts and assets rolled over to the Purchasers' Savings Plan.
(d) As
of the Closing Date, the Seller shall provide an accounting to Klee of the
account balances of each participant in the Seller's GreatWest Healthcare
Flexible Spending Accounts program (the "Flex
Plan"). As of the Closing, Klee shall assume liability for
such account balances, the aggregate amount of which shall be set forth on the
Closing Working Capital Schedule and included in the calculation of Accrued
Employee Compensation, Benefits and Other Liabilities. Klee shall
continue to provide reimbursements to such participants in accordance with the
terms of the Flex Plan through the end of 2010, based on the accounting provided
by the Seller and as if Klee (or its Affiliate, where applicable) were the
sponsor of the Flex Plan.
(e) Notwithstanding
anything to the contrary in this Agreement, Klee shall be solely responsible
for, and shall indemnify the Seller and its Affiliates or Representatives for,
all obligations and Liabilities (including legal costs of collection, attorneys'
fees and other costs of defense) that the Seller and its Affiliates or
Representatives may incur that arise from (i) the hiring, employment and
discharge of any Transferred Employee by Klee or any of its Affiliates or
related entities following the Closing; (ii) all severance entitlements and
other termination costs or entitlements due to or on behalf of any Transferred
Employee resulting from the termination of such individual's employment by Klee
following the Closing; and (iii) medical, dental, life, disability and any
other welfare benefit plans to the extent arising out of services provided
following the Closing. Without limiting the generality of the
foregoing, Klee shall be responsible, in accordance with the terms and
conditions of the Purchaser Plans,
for
(A) any medical or dental expenses incurred after the Closing Date with respect
to any Transferred Employee or dependent thereof who as of the Closing Date is
hospitalized or who has previously begun a course of treatment that continues
following the Closing Date and (B) payment of short-term or long-term disability
benefits to which Transferred Employees may become entitled under a Purchaser
Plan or as otherwise required by Law, provided that the
condition that gave rise to the salary continuation obligation occurred
following the Closing Date. The Seller shall be solely responsible
for, and shall indemnify the Purchasing Parties and their Affiliates or
Representatives for, all obligations and Liabilities (including legal costs of
collection, attorneys fees and other costs of defense) that the Purchasing
Parties and their Affiliates or Representatives may incur, which arise from (x)
the Enzon Benefit Plans, including severance obligation under any employment
agreement or severance plan, (y) any actions taken by the Seller or any of its
Affiliates or related entities with respect to the hiring, employment and
discharge of any Business Employee who is not a Transferred Employee and
(z) any actions taken by the Seller or any of its Affiliates or related
entities during all periods prior to the Closing or on the Closing Date with
respect to the hiring and employment and termination of employment by the Seller
or its Affiliates or related entities of any Transferred
Employee. The Seller acknowledges that, except as set forth in
Section 8.2(c) and Section 8.2(d), no portion of the assets of any plan, fund,
program or arrangement, written or unwritten, heretofore sponsored or maintained
by the Seller or its Affiliates (and no amount attributable to any such plan,
fund, program or arrangement) shall be transferred to Klee, and agrees that Klee
shall not be required to continue any such plan, fund, program or
arrangement. The Seller shall be responsible for any and all
compensation, benefits and severance payments to any Business Employee who is
not a Transferred Employee. This Article VIII is not intended to, and
does not, create any rights or obligations to or for the benefit of anyone other
than the Purchasing Parties and the Seller.
ARTICLE
IX
CONDITIONS
Section
9.1 Conditions to Each Party's
Obligation to Effect the Closing. The respective obligation of
each Party to effect the Closing shall be subject to the satisfaction at or
prior to the Closing Date of each of the following conditions:
(a) Statutes; Court
Orders. No statute, rule or regulation shall have been enacted
or promulgated by any Governmental Entity that prohibits the consummation of the
Closing, and there shall be no Legal Proceeding pending by any Governmental
Entity that seeks to restrain, materially alter or delay or prohibit, or any
Order in effect and issued by any Governmental Entity that has the effect of
restraining, materially altering or delaying or prohibiting, the consummation of
the Transactions.
(b) Waiting
Period. All waiting periods applicable under the HSR Act and
any corresponding Laws of other jurisdictions with respect to the Transactions
shall have expired or been terminated.
(c) Stockholder
Approval. The Requisite Stockholder Approval shall have been
obtained in accordance with applicable Law.
Section
9.2 Conditions to Obligations of
the Purchasing Parties to Effect the Closing. The obligations
of the Purchasing Parties to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following additional
conditions:
(a) Accuracy of Representations
and Warranties of the Seller. The representations and
warranties of the Seller contained in this Agreement shall be true and correct
in each case on the Closing Date as though made on the Closing Date, except
(i) to the extent such representations and warranties speak as of an
earlier date (in which case such representations and warranties shall have been
true and correct as of such earlier date), and (ii) for any failure of such
representations and warranties to be true that does not have a Material Adverse
Effect.
(b) Performance of
Covenants. The Seller shall have complied in all material
respects with all covenants contained in this Agreement to be performed by it on
or prior to the Closing.
(c) No Material Adverse
Effect. There shall not have occurred a Material Adverse
Effect since the date of this Agreement.
(d) Financing. The
Lender (or, in the event that alternate financing has been arranged, the lenders
or other financing sources that have committed to such alternate financing)
shall have made the Financing (or such alternate financing) available in full to
Sigma-Tau or the Purchasing Parties, if applicable.
Section
9.3 Conditions to Obligations of
the Seller to Effect the Closing
. The
obligations of the Seller to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following additional
conditions:
(a) Accuracy of Representations
and Warranties of the Purchasing Parties. The representations
and warranties of the Purchasing Parties contained in this Agreement shall be
true and correct in all material respects in each case on the Closing Date as
though made on the Closing Date, except to the extent such representations and
warranties speak as of an earlier date (in which case such representations and
warranties shall have been true and correct as of such earlier
date).
(b) Performance of
Covenants. Each Purchasing Party shall have complied in all
material respects with all covenants contained in this Agreement to be performed
by it on or prior to the Closing.
(c) Payment of Purchase
Price. The Seller shall have received the Cash Purchase Price
as provided herein.
ARTICLE
X
TERMINATION
Section
10.1 Termination. Notwithstanding
anything contained in this Agreement to the contrary, this Agreement may be
terminated and abandoned at any time prior
to
the Closing Date, whether before or after any approval of the Transactions by
the stockholders of the Seller, as follows:
(a) by
mutual written consent of the Purchasing Parties and the Seller;
(b) by
either the Purchasing Parties or the Seller by written notice to the other
Parties if (i) the Closing shall not have occurred on or before June 30, 2010
(the "Termination
Date") (which date shall be extended for the duration of any applicable
review period in connection with the HSR Act, for so long as no Party is in
default under this Agreement, and all other conditions precedent to the Closing
(other than those that are satisfied by action taken at the Closing) have been
satisfied, waived or are reasonably expected to be satisfied before the
expiration of such review period) and (ii) the Party seeking to terminate this
Agreement pursuant to this Section 10.1(b) shall not have breached in any
material respect its obligations under this Agreement in any manner that shall
have proximately caused the failure to consummate the Transactions on or before
such date;
(c) by
either the Purchasing Parties or the Seller by written notice to the other Party
if any Governmental Entity of competent jurisdiction shall have issued an Order
or taken any other action permanently restraining, enjoining or otherwise
prohibiting the consummation of the Transactions, and such Order or other action
shall have become final and non-appealable, provided that the
Party seeking to terminate this Agreement pursuant to this Section 10.1(c) shall
have used its reasonable best efforts (with the cooperation of the other
Party(ies)) to remove such Order or appeal diligently such other action; provided, however, that the
right to terminate this Agreement under this Section 10.1(c) shall not be
available to a Party if the issuance of such final, non-appealable Order was
primarily due to the failure of such Party to perform any of its obligations
under this Agreement;
(d) by
either the Purchasing Parties or the Seller by written notice to the other
Party, if the Requisite Stockholder Approval shall not have been obtained,
whether as a result of a Change of Recommendation or otherwise, at a duly held
Stockholders' Meeting or at any adjournment or postponement
thereof;
(e) by
the Seller, if Sigma-Tau or either Purchasing Party shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements set forth in this Agreement, which
breach or failure to perform (i) would result in a failure of a condition set
forth in Section 9.3(a) or Section 9.3(b) and (ii) cannot be cured on or before
the Termination Date (as the same may be extended), provided that the
Seller shall have given the Purchasing Parties and Sigma-Tau written notice,
delivered at least 30 days prior to such termination, stating the Seller's
intention to terminate this Agreement pursuant to this Section 10.1(e) and the
basis for such termination; provided, however, that if the
30 calendar day period referred to in Section 10.1(i) shall have expired without
Sigma-Tau or either of the Purchasing Parties obtaining the Financing (or any
alternate financing) and thereafter the Seller terminates this Agreement as a
result of a breach of Section 7.8(a), Section 7.8(b) or Section 12.17, then (x)
the 30 day notice referred to in this Section 10.1(e) need not be given and the
condition set forth in Section 9.2(d) shall be irrevocably deemed to be
incapable of being satisfied and (y) neither Sigma-Tau nor either of the
Purchasing Parties may assert the failure of such condition to be satisfied as a
defense (or similar defense, excuse or claim of non-breach) in
any
Legal Proceeding by the Seller asserted against Sigma-Tau or either of the
Purchasing Parties related to a breach of Section 7.8(a), Section 7.8(b) or
Section 12.17;
(f) by
the Purchasing Parties, if the Seller shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements set forth in this Agreement, which breach or failure to perform
(i) would result in a failure of a condition set forth in Section 9.2(a) or
Section 9.2(b) and (ii) cannot be cured on or before the Termination Date (as
the same may be extended), provided that the
Purchasing Parties shall have given the Seller written notice, delivered at
least 30 days prior to such termination, stating the Purchasing Parties'
intention to terminate this Agreement pursuant to this Section 10.1(f) and the
basis for such termination;
(g) by
the Purchasing Parties, if (i) the Board of Directors of the Seller shall have
made a Change of Recommendation, (ii) the Seller or its Board of Directors shall
have approved, recommended, or entered into a Superior Proposal Agreement, (iii)
prior to the Seller obtaining the Requisite Stockholder Vote, a tender or
exchange offer with respect to the Seller Common Stock is commenced by any third
party and, within ten Business Days of the commencement of such tender or
exchange offer, the Board of Directors of the Seller shall not have recommended
to the Seller's stockholders that they reject such tender or exchange offer;
(iv) the Seller shall have failed to make the Seller Recommendation; or (v) the
Seller or its Board of Directors publicly announces its intentions to take any
of the foregoing actions in this Section 10.1(g);
(h) by
the Seller, subject to the provisions of Section 7.20(c), if the Seller enters
into a Superior Proposal Agreement; or
(i) by
the Seller, if the condition precedent set forth in Section 9.2(d) is not
satisfied on or before the 30th calendar day after all of the other conditions
set forth in Section 9.1 and Section 9.2 shall have been satisfied or
waived.
Section
10.2 Termination
Fee. In the event that:
(a) (i)
a Competing Proposal made after the execution and delivery of this Agreement is
publicly disclosed (and prior to the termination of this Agreement) and is not
publicly withdrawn at the time of the Stockholders' Meeting, (ii) this Agreement
is terminated by the Seller pursuant to Section 10.1(b) (but only if at such
time the Purchasing Parties would not be prohibited from terminating this
Agreement by application of Section 10.1(b)(ii)) or by the Purchasing Parties or
the Seller pursuant to Section 10.1(d) and (iii) within one year after such
termination, any definitive agreement providing for a Qualifying Transaction
shall have been entered into (and thereafter consummated) with the Person or any
Affiliate thereof who made the Competing Proposal that was existing at the time
of the Stockholders' Meeting;
(b) this
Agreement is terminated by the Purchasing Parties pursuant to Section 10.1(g);
or
(c) this
Agreement is terminated by the Seller pursuant to Section 10.1(h);
then
the Seller shall pay to Defiante a fee of $15,000,000 in cash (the "Seller Termination
Fee"), such payment to be made in the case of (x) Section 10.2(a), upon
consummation of such Qualifying Transaction, or (y) Section 10.2(b) or Section
10.2(c), within two Business Days after the termination of this Agreement, it
being understood that in no event shall the Seller be required to pay the Seller
Termination Fee on more than one occasion. After such payment is
made, the Seller shall have no further liability to the Purchasing Parties with
respect to this Agreement or the Transactions. Any such payment shall
be reduced by any amount required to be deducted or withheld therefrom under
applicable Tax Law.
Section
10.3 Reverse Termination
Fee. If this Agreement is terminated by the Seller pursuant to
Section 10.1(i), then, within two Business Days after such termination, Defiante
shall pay to the Seller a fee of $15,000,000 in cash (the "Purchaser Termination
Fee"). After such payment is made, neither Purchasing Party
nor Sigma-Tau shall have any further liability to the Seller with respect to
this Agreement or the Transactions. Any such payment shall be reduced
by any amount required to be deducted or withheld therefrom under applicable Tax
Law.
Section
10.4 Sole
Remedy. The Purchasing Parties and the Seller agree that the
agreements contained in Section 10.2 and Section 10.3 are an integral part of
this Agreement and the Transactions and that, without such agreement, neither
Party would have entered into this Agreement. The Purchasing Parties
and the Seller further agree that neither the Purchaser Termination Fee nor the
Seller Termination Fee constitutes a penalty, but in each case is liquidated
damages in a reasonable amount that will compensate the non-paying Party, in the
circumstances in which such amounts are payable, for the efforts and resources
expended and the opportunities foregone while negotiating this Agreement and in
reliance on this Agreement and on the expectation of the consummation of the
Transactions, which amount would otherwise be impossible to calculate with
precision. Except in cases of fraud, receipt of payment of the
Purchaser Termination Fee (whether directly from the Purchasing Parties or
pursuant to Section 12.17) or the Seller Termination Fee, as the case may be,
shall be the sole and exclusive remedy of the Party receiving such payment and
its Affiliates and their respective directors, officers, employees, agents,
stockholders, general or limited partners, managers, members, representatives or
assignees, in each case whether former, current or future (collectively, the
"Related
Persons"), for any loss or damage suffered as a result of the failure of
the Transactions to be consummated. Upon payment of the Seller
Termination Fee or Purchaser Termination Fee, as the case may be, the Party
paying such fee shall have no further liability to any other Party or its
Affiliates or Related Persons hereunder, except in cases of fraud.
Section
10.5 Effect of
Termination. In the event of the termination of this Agreement
by any Party pursuant to the terms of this Agreement, written notice thereof
shall forthwith be given to the other Parties specifying the provision hereof
pursuant to which such termination of the Transactions is made, and there shall
be no liability or obligation thereafter on the part of the Purchasing Parties
or the Seller, except that Section 5.21 (Brokers or Finders Fee with respect to
the Seller), Section 6.5 (Brokers or Finders Fee with respect to the Purchasing
Parties), Section 7.3 (Confidentiality), Section 10.2 (Termination Fee), Section
10.3 (Reverse Termination Fee), Section 10.4 (Sole Remedy), Section 10.5 (Effect
of Termination), Article XI and Section 12.1 (Fees and Expenses) of this
Agreement shall remain in full force and effect and survive the termination of
this Agreement; provided, however, that, except
as otherwise provided
in
Section 10.2 or Section 10.3, as the case may be, and Section 10.4, nothing in
this Section 10.5 shall relieve the Purchasing Parties or the Seller of any
liability for any breach of this Agreement and, upon any termination of this
Agreement, the Seller or the Purchasing Parties, as the case may be, shall be
fully liable for any and all damages of the other Party as a result of such
breach.
ARTICLE
XI
INDEMNIFICATION
Section
11.1 Survival of Representations,
Warranties and Covenants. Subject to the limitations and other
provisions of this Agreement, including the provisions of this Article XI, the
representations and warranties of the Parties shall survive the Closing and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Seller or the Purchasing Parties, for a period of 12 months
after the Closing Date, except that the representation and warranties contained
in (i) Section 5.13 (Environmental Matters) shall survive for a period of 24
months after the Closing Date, (ii) Section 5.12 (Employee Benefit Plans) and
Section 5.16 (Tax Matters) shall survive until the expiration of the applicable
statute of limitations (taking into account any extensions thereof), and (iii)
Section 5.1 (Existence), Section 5.2 (Authorization), Section 5.3 (Binding
Agreement), Section 5.21 (Brokers or Finders), Section 6.1 (Organization),
Section 6.2 (Authorization; Validity of Agreement; Necessary Action) and Section
6.5 (Brokers or Finders) (collectively, the "Fundamental
Representations") shall survive indefinitely; provided, however, that claims
for indemnification pursuant to Section 11.2(a) or Section 11.3(a), as
applicable, first asserted in writing with specificity within such period shall
not be extinguished after such period. Notwithstanding anything to
the contrary in this Agreement, all covenants and agreements of the Parties that
by their terms contemplate actions following the Closing shall survive the
Closing and remain in full force and effect in accordance with their
terms. All other covenants and agreements of the Parties shall not
survive this Closing and shall thereupon terminate, except that claims for
indemnification in respect of any breach thereof shall survive for a period of
12 months after the Closing Date; provided, however, that claims
for indemnification pursuant to Section 11.2(a) or Section 11.3(a), as
applicable, first asserted in writing with specificity within such period shall
not be extinguished after such period.
Section
11.2 Indemnification by the
Seller.
(a) In
the event the Closing occurs, the Seller shall defend, indemnify and hold the
Purchasing Parties, any Affiliate of the Purchasing Parties or their respective
current or future Representatives, controlling persons, successors and permitted
assigns (collectively, "Purchaser
Indemnitees") harmless from and against and in respect of any and all
actual losses, liabilities, damages, claims, suits, proceedings, judgments,
settlements and expenses, including reasonable attorneys' fees, incurred by any
such Purchaser Indemnitee (hereinafter "Purchaser Losses")
(other than Purchaser Losses for Taxes for which indemnification is provided
pursuant to Section 11.5) arising out of or in connection with (i) any breach by
the Seller of any of the representations and warranties contained in Article V,
(ii) any breach by the Seller of any of its covenants or agreements in this
Agreement, (iii) the Excluded Assets, (iv) the Excluded Liabilities and (v)
the matters set forth on Schedule 11.2.
(b) The
foregoing obligation to indemnify the Purchaser Indemnitees set forth in Section
11.2(a) shall be subject to each of the following limitations:
(i) no
indemnification for Purchaser Losses asserted against the Seller under Section
11.2(a)(i) shall be required unless and until the cumulative amount of such
Purchaser Losses equals or exceeds $2,000,000 (the "Deductible"), at
which time the Purchaser Indemnitees shall be entitled to recover all Purchaser
Losses, as finally determined, in excess of $1,000,000, and in no event shall
Purchaser Losses include special, indirect, incidental, consequential, or
punitive damages, diminution in value, lost profits or lost business
opportunity, except in respect of third party claims;
(ii) the
Seller's aggregate liability to Purchaser Indemnitees under Section 11.2(a)(i)
for Purchaser Losses shall not exceed 15% of the Cash Purchase Price in the
aggregate (the "Cap");
(iii) there
shall be no indemnification for the Purchaser Losses as a result of liabilities
disclosed in the Closing Working Capital Schedule; and
(iv) no
claim for misrepresentation or breach of warranty or a failure to comply with
any covenant shall be made by the Purchasing Parties under this Section 11.2 if
such fact or event was disclosed by the Seller on a schedule or certificate
delivered to the Purchasing Parties at or prior to the date of this
Agreement.
Notwithstanding
the foregoing, the limitations set forth in Section 11.2(b)(i) and Section
11.2(b)(ii) shall not apply to breaches of any Fundamental Representation made
by the Seller or any representation or warranty contained in Section 5.12,
Section 5.13 or Section 5.16. The Purchaser Indemnitees shall be
entitled to indemnification for breaches of the Seller's representations,
warranties, covenants or agreements notwithstanding whether any Representative
of any such Purchaser Indemnitee knew or had reason to know of such breach and
regardless of any investigation by such Purchaser Indemnitee or its
Representatives.
(c) If
the Closing occurs, the indemnity provided in this Section 11.2 shall be the
sole and exclusive remedy of the Purchasing Parties and the Purchaser
Indemnitees against the Seller at law or in equity for any matter covered by
Section 11.2(a), provided the Purchasing Parties shall be entitled to specific
performance under Section 12.13 for any breach by the Seller following the
Closing of any of its covenants or agreements in this Agreement.
Section
11.3 Indemnification by the
Purchasing
Parties.
(a) In
the event the Closing occurs, the Purchasing Parties shall defend, indemnify and
hold the Seller, any Affiliate of the Seller or their respective current or
future Representatives, controlling persons, successors and permitted assigns
(collectively, the "Seller Indemnitees")
harmless from and against and in respect of any and all actual losses,
liabilities, damages, claims, suits, proceedings, judgments, settlements and
expenses, including reasonable attorneys' fees, incurred by any such Seller
Indemnitee (hereinafter the "Seller Losses"
and
together
with the Purchaser Losses, "Losses") arising out
of or in connection with (i) any breach by either Purchasing Party of any of the
representations and warranties contained in Article VI as of the Closing Date
(except to the extent they refer to an earlier date, then as of that earlier
date), (ii) any breach by either Purchasing Party of any of its covenants or
agreements in this Agreement, (iii) the ownership, operation or use of the
Business or the Assets as of and after the Closing, and (iv) the Assumed
Liabilities.
(b) The
foregoing obligation to indemnify the Seller Indemnities set forth in Section
11.3(a) shall be subject to each of the following limitations:
(i) no
indemnification for Seller Losses asserted against the Purchasing Parties under
Section 11.3(a)(i) shall be required unless and until the cumulative amount of
such Seller Losses equals or exceeds the Deductible, at which time the Seller
Indemnitees shall be entitled to recover all Seller Losses, as finally
determined, in excess of $1,000,000, and in no event shall Seller Losses include
special, indirect, incidental, consequential, or punitive damages, diminution in
value, lost profits or lost business opportunity, except in respect of third
party claims; and
(ii) the
Purchasing Parties' aggregate liability to Seller Indemnitees under Section
11.3(a)(i) for Seller Losses shall not exceed the amount of the
Cap.
Notwithstanding
the foregoing, the limitations set forth in Section 11.3(b)(i) and Section
11.3(b)(ii) shall not apply to breaches of any Fundamental Representation made
by the Purchasing Parties. The Seller Indemnitees shall be entitled
to indemnification for breaches of the Purchasing Parties' representations,
warranties, covenants or agreements notwithstanding whether any Representative
of any such Seller Indemnitee knew or had reason to know of such breach and
regardless of any investigation by such Seller Indemnitee or its
Representatives.
(c) If
the Closing occurs, the indemnity provided in this Section 11.3 shall be the
sole and exclusive remedy of the Seller and the Seller Indemnitees against the
Purchasing Parties at law or in equity for any matter covered by Section 11.3(a)
, provided the Seller shall be entitled to specific performance under Section
12.13 for any breach by the Purchasing Parties following the Closing of any of
their respective covenants or agreements in this Agreement.
Section
11.4 Indemnification
Procedure.
(a) All
claims for indemnification by a Purchaser Indemnitee or a Seller Indemnitee (an
"Indemnified
Party") (except for claims for tax indemnification, which are addressed
in Section 11.5(e)) shall be asserted and resolved as set forth in this Section
11.4. As soon as is reasonably practicable after an Indemnified Party
or any of its respective Affiliates, Representatives, successors and permitted
assigns, as the case may be, becomes aware of any claim for which it is entitled
to recover Losses under this Article XI, such Indemnified Party shall notify the
other party (the "Indemnifying Party")
in writing (the "Claim
Notice"), which shall describe the claim in reasonable detail and shall
specify, in reasonable detail, the facts
underlying
the nature of the claim, the basis for indemnification and the estimated amount
of Losses under such claim. The failure of any Indemnified Party to
promptly give any Indemnifying Party such Claim Notice shall not preclude such
Indemnified Party from obtaining indemnification under this Article XI, except
to the extent that such Indemnified Party's failure has materially prejudiced
the Indemnifying Party's rights or materially increased its Liabilities
hereunder.
(b) In
the event that any claim or demand for which an Indemnifying Party may be liable
to any Indemnified Party hereunder is asserted against or sought to be collected
from any Indemnified Party by a third party, such Indemnified Party shall
promptly, but in no event more than 10 days following such Indemnified Party's
receipt of such claim or demand, provide the Indemnifying Party with a Claim
Notice.
(c) The
Indemnifying Party shall have 30 days from the personal delivery or receipt of
the Claim Notice (the "Notice Period") to
notify the Indemnified Party: (i) whether or not the Indemnifying Party disputes
its liability to the Indemnified Party with respect to such claim or demand; and
(ii) in the case of a third party claim, whether or not it will defend the
Indemnified Party against such claim or demand. If the Indemnifying
Party declines to defend the claim or demand, then the reasonable costs and
expenses incurred by the Indemnified Party in defending such claim or demand
shall be a liability of, and shall be paid by, the Indemnifying Party if the
Indemnifying Party does not dispute its liability or if the Indemnifying Party
does dispute its liability and the resolution of such dispute is against the
Indemnifying Party. In the event that the Indemnifying Party elects
to defend the Indemnified Party, it shall notify the Indemnified Party within
the Notice Period that it will defend and accepts its obligation to indemnify
the Indemnified Party against such claim or demand pursuant to this
Agreement. The Indemnifying Party shall defend the Indemnified Party
by appropriate proceedings and shall have the sole power to direct and control
such defense. If any Indemnified Party desires to participate in any
such defense, it may do so at its sole cost and expense, provided, however, that if, in
the view of counsel selected by the Indemnifying Party to defend the third party
claim, an ethical or financial conflict of interest exists between the
Indemnifying Party and the Indemnified Party, the reasonable costs and expenses
of one counsel to the Indemnified Party will be paid by the Indemnifying
Party. If the Indemnifying Party assumes the defense, the Indemnified
Party shall not settle a claim or demand for which it is indemnified by the
Indemnifying Party without the written consent of the Indemnifying
Party. The Indemnifying Party shall not, without the prior written
consent of the Indemnified Party, which shall not be unreasonably withheld,
conditioned or delayed, settle, compromise or offer to settle or compromise any
such claim or demand on a basis that would result in the imposition of an Order
that would restrict the future activity or conduct of the Indemnified Party, but
if such consent is unreasonably withheld, conditioned or delayed the Indemnified
Party shall be liable to the Indemnifying Party for all additional liability or
cost incurred by the Indemnifying Party as a result thereof. The
Indemnified Party will diligently and fully cooperate with the Indemnifying
Party, its counsel, experts and other relevant persons in the defense of any
claim or demand including providing access, during normal business hours, to
relevant facilities and to business records and other documents, and shall
permit them to consult with the employees and counsel and other relevant persons
of the Indemnified Party. The Indemnifying Party shall use its
reasonable efforts to defend all such claims.
Section
11.5 Tax
Matters.
(a) The
Purchasing Parties shall have the sole right to control, defend, settle,
compromise or contest any Tax Contest relating to a Tax Return of the Purchasing
Parties; provided, however, that if the
Seller would be required to indemnify the Purchasing Parties for any Taxes,
losses, claims or expenses arising from a Tax Contest, and such Tax Contest
relates to a Tax Return of the Purchasing Parties, the Purchasing Parties shall
(i) keep the Seller fully and timely informed and apprised with respect to the
commencement, status and nature of such Tax Contest, (ii) provide the Seller
with copies of, and the reasonable opportunity to comment on, any submissions to
any taxing authority relating to such Tax Contest (and, if applicable, to
attend, with the Purchasing Parties, any meetings or conferences with such
taxing authority), and (iii) not settle any Tax Contest that would result in the
Seller being required to indemnify the Purchasing Parties for any Taxes, losses,
claims or expenses without the consent of the Seller, which consent shall not be
unreasonably withheld or delayed.
(b) The
Seller shall be responsible and liable for the timely payment of, and shall
indemnify the Purchaser Indemnitees for, any and all Taxes relating to the
Business or the Assets for all Pre-Closing Periods (other than those Taxes
included as Current Liabilities in the Closing Working Capital). The
Purchasing Parties shall be responsible and liable for the timely payment of,
and shall indemnify the Seller Indemnitees for, any and all Taxes relating to
the Business or the Assets for all taxable periods (or portions thereof)
beginning after the Closing Date.
(c) All
Taxes and Tax liabilities relating to the Business or the Assets that relate to
a Straddle Period shall be apportioned between the Pre-Closing Period and
Post-Closing Period as follows: (i) in the case of Taxes other than income,
sales and use and withholding Taxes, on a per diem basis, and (ii) in the case
of income, sales and use and withholding Taxes, as determined from the books and
records of the Seller and its Affiliates relating to the Business or the Assets
as though the taxable year of the Seller or any relevant Affiliate terminated at
the close of business on the Closing Date.
(d) The
Seller shall terminate or cause to be terminated, on the Closing Date, any and
all of the tax sharing, allocation, indemnification or similar agreements,
arrangements or undertakings in effect, written or unwritten, that (i) relate to
the Business or the Assets and (ii) could give rise to any obligation or
liability for the Purchasing Parties or their Affiliates and the successors to
the foregoing (and their respective stockholders, officers, directors, employees
and agents) for any Taxes imposed by any government or taxing authority,
regardless of the period in which such Taxes are imposed, and there shall be no
continuing obligation to make any payments under any such agreements,
arrangements or undertakings.
(e) Notwithstanding
any provision to the contrary contained in this Agreement, the Seller shall
indemnify, defend and hold harmless the Purchaser Indemnities (on an after-Tax
basis) against (i) all Taxes, losses, claims and expenses resulting from,
arising out of, or incurred with respect to, any claims that may be asserted by
any party based upon, attributable to, or resulting from the breach of any
representation, warranty or covenant contained in Section 2.4(f), Section 5.16
or Section 7.7; and (ii) all Taxes relating to the Business
or
Assets, for which any Purchaser Indemnitee may otherwise be liable, for all
Pre-Closing Periods, to the extent such Taxes are not Current Liabilities in the
Closing Working Capital.
(f) All
amounts paid by the Seller to the Purchasing Parties or the Purchasing Parties
to the Seller pursuant to Section 11.5(b) and Section 11.5(e) shall, to the
extent permitted by applicable Law, be treated as adjustments to the Purchase
Price for all Tax purposes.
Section
11.6 No Limitations for Acts of
Fraud. Notwithstanding anything in this Agreement, including
Section 11.2 or Section 11.3, to the contrary, in the event either the Seller,
on the one hand, or the Purchasing Parties, on the other hand, perpetrates an
act of fraud on the other Party, the Party that suffers or incurs Losses by
reason thereof shall be entitled to seek recovery therefor against the Party who
perpetrated such act without regard to any limitation set forth in this
Agreement.
Section
11.7 No
Set-off. Neither the Seller, on the one hand, nor the
Purchasing Parties, on the other hand, shall have any right to set-off any
payments under this Article XI against any payments to be made by such Party
pursuant to this Agreement or the Ancillary Agreements; provided, however, that the
Seller or either of the Purchasing Parties, as the case may be, may, at its
option (at any time and from time to time), but only after determination by a
final non-appealable judgment that amounts are owed to the Seller or either of
the Purchasing Parties, as the case may be, under this Article XI, reduce any
amount owed by the Seller or either of the Purchasing Parties, as the case may
be, under this Article XI by all or part of any amount owed to the Seller or
either of the Purchasing Parties, as the case may be, pursuant to this Agreement
or the Ancillary Agreements; provided, further, however, that no
reduction or set-off shall be permitted with respect to the Cash Purchase Price,
including any adjustments thereto pursuant to Section 3.4.
ARTICLE
XII
MISCELLANEOUS
Section
12.1 Fees and
Expenses. Except as otherwise provided in this Agreement, the
Seller, on the one hand, and the Purchasing Parties, on the other hand, shall
each pay their respective expenses (including legal, investment banking,
finder's, broker's and accounting fees) incurred in connection with the
origination, negotiation and execution of this Agreement, except that the
Purchasing Parties shall pay, whether or not the Transactions are consummated,
all filing fees incurred in connection with any filing with antitrust
authorities pursuant to the HSR Act and the corresponding Laws of other
jurisdictions.
Section
12.2 Amendment and
Modification. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the
Parties. No waiver by either Party of any of the provisions hereof
shall be effective unless explicitly set forth in writing and executed by the
Party so waiving. The waiver by any Party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
Section
12.3 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given when mailed, delivered personally, telecopied (which is confirmed)
or sent by an overnight courier service to the Parties at the following
addresses (or at such other address for a Party as shall be specified by such
Party by like notice):
if
to Klee, to:
Klee
Pharmaceuticals, Inc.
c/o
Sigma-Tau Pharmaceuticals, Inc.
9841
Washingtonian Blvd., Suite 500
Gaithersburg,
MD 20878
Attn: Gregg
A. LaPointe
Phone: (301)
948-1041
Fax: (301)
948-1862
with
a copy (that shall not constitute notice) to:
Orrick,
Herrington & Sutcliffe LLP
666
Fifth Avenue
New
York, NY 10103
Attn: Peter
R. Sternberg
R. King
Milling, Jr.
Phone: (212)
506-5075
Fax: (212)
506-5151
if
to Defiante, to:
Defiante
Farmacêutica, S.A.
Rua
da Alfândega, nº 78, 3º
9000-059
Funchal
Portugal
Attn: Paulo
Viegas
Phone: +351-291-214-090
Fax: +351-291-214-095
with
a copy (that shall not constitute notice) to:
Orrick,
Herrington & Sutcliffe LLP
666
Fifth Avenue
New
York, NY 10103
Attn: Peter
R. Sternberg
R. King
Milling, Jr.
Phone: (212)
506-5075
Fax: (212)
506-5151
if
to Sigma-Tau, to:
Sigma-Tau
Finanziaria S.p.A.
Via
Sud Africa, 20
00144
Rome
Italy
Attn: Ugo
Di Francesco, Vice President and CEO
Phone: +39
06 542771
Fax: +39
06 54220453
with
a copy (that shall not constitute notice) to:
Orrick,
Herrington & Sutcliffe LLP
666
Fifth Avenue
New
York, NY 10103
Attn: Peter
R. Sternberg
R. King
Milling, Jr.
Phone: (212)
506-5075
Fax: (212)
506-5151
if
to the Seller, to:
Enzon
Pharmaceuticals, Inc.
685
Route 202/206
Bridgewater,
NJ 08807
Attn: Legal
Department
Phone: (908)
541-8671
Fax: (908)
541-8838
with
a copy (that shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York, NY 10036
Attn: Richard
J. Grossman and Daniel E. Stoller
Phone:
(212) 735-3000
Fax: (212)
735-2000
Section
12.4 Counterparts. This
Agreement may be executed in any number of counterparts (including by facsimile
and .pdf file), each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. The
parties to this Agreement need not execute the same counterpart.
Section
12.5 Entire Agreement; No Third
Party Beneficiaries. This Agreement, the Schedules and
Exhibits, the Confidentiality Agreement and the Ancillary Agreements set forth
the entire understanding of the Parties, and no modifications or amendments to
this Agreement shall be binding on the Parties unless in writing and signed by
the Party or Parties to be bound by such modification or
amendment. Nothing herein, expressed or implied, shall
create
or establish any third party beneficiary hereto nor confer upon any person not a
party to this Agreement any rights or remedies under or by reason of this
Agreement, except for those third party beneficiaries set forth in Section
11.2(a) and Section 11.3(a).
Section
12.6 Severability. Any
term or provision of this Agreement that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is
invalid, void or unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
Section
12.7 Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
Section
12.8 Enforcement;
Venue. Each of the Parties irrevocably submits to the
exclusive jurisdiction of the United States District Court for the District of
Delaware located in Wilmington, Delaware, or if such court does not have
jurisdiction, the Court of Chancery of the State of Delaware, County of New
Castle, for the purposes of any suit, action or other proceeding arising out of
this Agreement, the Ancillary Agreements or any transaction contemplated hereby
or thereby. Each of the Parties further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth in Section 12.3 shall be effective service of
process for any action, suit or proceeding with respect to any matters to which
it has submitted to jurisdiction as set forth above in the immediately preceding
sentence. The Parties irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, the Ancillary Agreements or the Transactions in (a) the
United States District Court for the District of Delaware or (b) the Court of
Chancery of the State of Delaware, County of New Castle, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
Section
12.9 Extension;
Waiver. At any time prior to the Closing Date, the Parties may
(a) extend the time for the performance of any of the obligations or other acts
of the other Parties, (b) waive any inaccuracies in the representations and
warranties of the other Parties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) waive compliance by the other
Parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a Party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such Party. The failure of any Party to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
Section
12.10 Schedules and
Exhibits. All Exhibits and Schedules hereto are hereby
incorporated by reference and made a part of this Agreement. Any fact
or item which is disclosed on any Schedule to this Agreement in such a way as to
make its relevance to a representation or warranty made elsewhere in this
Agreement or to information called for by another Schedule to this Agreement
reasonably apparent on its face shall be deemed to be an exception to such
representation or warranty, or to be disclosed on such other Schedule, as the
case may be, notwithstanding the omission of a reference or cross reference
thereto. Any fact or item disclosed on any Schedule hereto shall not
by reason only of such inclusion be deemed to be material and shall not be
employed as a point of reference in determining any standard of materiality
under this Agreement.
Section
12.11 Delivery. For
purposes of this Agreement, references to the term "delivered by the Seller,"
"delivered to the Purchasing Parties" or "furnished or made available to the
Purchasing Parties" or similar expressions shall mean that the Seller has: (a)
posted such materials to the Data Room and has given the Purchasing Parties and
their Representatives access to the materials so posted, (b) set forth such
materials in the Schedules; or (c) has otherwise made such materials available
in writing to the Purchasing Parties not less than 24 hours prior to the
execution and delivery of this Agreement.
Section
12.12 Assignment. This
Agreement shall inure to the benefit of and be binding on the Parties and their
respective successors and permitted assigns. This Agreement shall not
be assigned by either Party without the express prior written consent of the
other Party, and any attempted assignment, without such consents, shall be null
and void; provided, however, that,
notwithstanding the foregoing, either Purchasing Party may assign its rights and
obligations under this Agreement to an Affiliate or to a purchaser of all or
substantially all of its assets or of greater than 50% of its equity without the
prior consent of the Seller.
Section
12.13 Specific
Performance. The Parties agree that irreparable damage would
occur in the event that any provision of this Agreement were not performed in
accordance with the terms hereof and that the Parties shall be entitled to
specific performance of the terms hereof in addition to any other remedy at law
or in equity available to any Party under this Agreement, including monetary
damages. Each Party shall be entitled to an injunction or injunctions
to prevent or restrain breaches or threatened breaches of, to specifically
enforce the terms and provisions of, or to enforce compliance with, the
covenants and obligations of the other Parties contained in this
Agreement.
Section
12.14 No Strict
Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by all Parties, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any provision of this Agreement.
Section
12.15 WAIVER OF JURY
TRIAL. THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE
ACTIONS
OF THE PURCHASING PARTIES OR THE SELLER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
Section
12.16 Headings. The
heading references herein and the table of contents hereto are for convenience
purposes only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
Section
12.17 Guarantee by
Sigma-Tau.
(a) Sigma-Tau
represents and warrants to the Seller as follows:
(i) It
is an entity duly organized, validly existing and in good standing under the
Laws of its jurisdiction of organization, and has all requisite corporate power
to own, lease and operate its properties and to carry on its business as is now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not, individually or in
the aggregate, be material nor would have a material impact on the ability of
Sigma-Tau timely to perform its obligations contemplated hereby.
(ii) It
has all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations under Section 7.8(a) and this Section
12.17. The execution and delivery of this Agreement by Sigma-Tau and
the performance by it of its obligations hereunder have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Sigma-Tau are necessary to authorize the execution and delivery
of this Agreement or the performance by it of its obligations. This
Agreement has been duly executed and delivered by Sigma-Tau and, assuming due
and valid authorization, execution and delivery hereof and thereof by the
Purchasing Parties and the Seller, this Agreement is a valid and binding
obligation of Sigma-Tau, enforceable against it in accordance with its terms
except (A) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws of general application
affecting enforcement of creditors' rights generally and (B) the availability of
the remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be
brought.
(b) Sigma-Tau
unconditionally guarantees timely and complete performance by Defiante of all of
its duties and obligations contained in Section 3.3(a), Section 3.3(b)(i),
Section 3.3(b)(ii), Section 3.3(c), Section 3.3(d) and Section 10.3, and the due
and punctual payment by Defiante of any amount that may become due and payable
by it under such Sections, if and when, and limited to the extent that, Defiante
defaults under such obligations. The Seller shall provide to
Sigma-Tau (i) notice of the extent to which Defiante has defaulted under such
obligations and (ii) a demand for payment by Sigma-Tau of the amount of such
obligations, less the amount in respect thereof that Defiante has paid to the
Seller through and including the date of such demand. Sigma-Tau
shall, within 30 days of receipt of demand for
payment
from the Seller, pay such remaining amount by wire transfer of immediately
available funds to an account or accounts designated by the
Seller. Sigma-Tau reserves the right to assert defenses that Defiante
may have to payment or performance of any obligations guaranteed
hereunder. The foregoing guarantee is a continuing guarantee and
shall remain in full force and effect for so long as any such payments may
become due and payable. Sigma-Tau waives any right to require that
any resort be had by the Seller or any Seller Indemnitees to the assets or
properties of the Purchasing Parties. The liability of Sigma-Tau
shall not be limited, diminished or affected by (i) any failure by the Seller or
any Seller Indemnitees to file or enforce any claim against the Purchasing
Parties or others (in administration, bankruptcy or otherwise), or (ii) any
other circumstance which might otherwise constitute a legal or equitable
discharge of a guarantor. Sigma-Tau hereby waives diligence,
presentment, demand of performance, protest, notice and demands (other than as
provided in this Section 12.17) in connection with the performance of its
obligations for payment under this Section 12.17. The guarantee
contemplated by this Section 12.17 shall apply regardless of any amendments,
variations, alterations, waivers or extensions to this Agreement whether or not
Sigma-Tau received notice of the same, and Sigma-Tau hereby waives all need for
notice of the same. In addition, to the extent that either of the
Purchasing Parties are required to use its commercially reasonable efforts,
pursuant to Section 7.8(b), to arrange and obtain alternative financing from
lenders other than the Lender and any such other lender requires a guarantee by
Sigma-Tau of either of the Purchasing Parties' obligations in connection with
such alternative financing, Sigma-Tau shall provide such a guarantee on
customary terms and conditions.
(c) Sigma-Tau
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the District of Delaware located in Wilmington, Delaware, or if such
court does not have jurisdiction, the Court of Chancery of the State of
Delaware, County of New Castle, for the purposes of any suit, action or other
proceeding arising out of this Agreement and applicable to
Sigma-Tau. Sigma-Tau further agrees that service of any process,
summons, notice or document by U.S. registered mail to its address set forth in
Section 12.3 shall be effective service of process for any action, suit or
proceeding with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Sigma-Tau
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement in (i) the United
States District Court for the District of Delaware or (ii) the Court of Chancery
of the State of Delaware, County of New Castle, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
Section
12.18 Actions by
Klee. Notwithstanding anything to the contrary in this
Agreement and prior to or at the Closing, whenever this Agreement requires Klee
to take any action, that requirement shall be deemed to include an undertaking
on the part Defiante to cause Klee to take that action, and Defiante shall be
liable for the non-performance of any obligation by Klee.
[Execution page
follows.]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement or caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
|
KLEE
PHARMACEUTICALS, INC.
|
|
|
|
|
|
By:
|
/s/
Gregg A. Lapointe |
|
|
Name:
|
Greg
A. Lapointe |
|
|
Title:
|
Chief
Executive Officer |
|
DEFIANTE
FARMACÊUTICA, S.A.
|
|
|
|
|
|
By:
|
/s/
Paulo Vegas |
|
|
Name:
|
Paulo
Vegas |
|
|
Title:
|
CEO |
|
ENZON
PHARMACEUTICALS, INC.
|
|
|
|
|
|
By:
|
/s/
Jeffrey H. Buchalter |
|
|
Name:
|
Jeffrey
H. Buchalter |
|
|
Title:
|
President
and Chief Executive Officer |
|
Acknowledge
and agreed solely for the purposes of Section 6.4, Section 7.8(a), Section
7.8(e) and Section 12.17
|
|
|
|
SIGMA-TAU
FINANZIARIA S.P.A.
|
|
|
|
|
|
By:
|
/s/
Ugo Di Francesco |
|
|
Name:
|
Ugo
Di Francesco |
|
|
Title:
|
Vice
President and CEO |
[Signature
Page to Asset Purchase Agreement]