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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
by and among
ELAN CORPORATION, PLC
ELAN PHARMA INTERNATIONAL LIMITED
ELAN PHARMACEUTICALS, INC.
and
KING PHARMACEUTICALS, INC.
JONES PHARMA INCORPORATED
MONARCH PHARMACEUTICALS, INC.
dated as of May 19, 2003
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Construction of Certain Terms and Phrases ....................18
ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.01. Purchase and Sale of Assets at the Closing ...................19
SECTION 2.02. Excluded Assets...............................................20
SECTION 2.03. Retention of Assets...........................................21
SECTION 2.04. Assignability and Consents....................................21
ARTICLE III
ASSUMPTION OF LIABILITIES
SECTION 3.01. Assumption of Liabilities.....................................22
ARTICLE IV
PURCHASE PRICE AND PAYMENT
SECTION 4.01. Purchase Price................................................25
SECTION 4.02. Allocation of Purchase Price..................................26
SECTION 4.03. Sales, Use and Other Taxes....................................26
SECTION 4.04. Tax Withholding...............................................27
SECTION 4.05. Closing Date Inventory Value Adjustments......................27
SECTION 4.06. Skelaxin Purchase Price Adjustment............................28
ARTICLE V
CLOSING
SECTION 5.01. Time and Place................................................28
SECTION 5.02. Deliveries at Closing.........................................29
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE ELAN COMPANIES
SECTION 6.01. Organization, Etc.............................................30
SECTION 6.02. Authority of the Elan Companies...............................31
SECTION 6.03. Consents and Approvals........................................32
SECTION 6.04. Non-Contravention.............................................32
SECTION 6.05. Contracts.....................................................32
SECTION 6.06. Intellectual Property Rights..................................33
SECTION 6.07. Employee Matters..............................................35
SECTION 6.08. Litigation....................................................36
SECTION 6.09. Compliance with Law...........................................36
SECTION 6.10. Inventory.....................................................38
SECTION 6.11. Brokers.......................................................38
SECTION 6.12. Sufficiency of Purchased Assets...............................38
SECTION 6.13. Customers and Suppliers.......................................38
SECTION 6.14. Operation of the Business; Description of the Business .......39
SECTION 6.15. Financial Information.........................................39
SECTION 6.16. Title.........................................................39
SECTION 6.17. Voting Requirements...........................................39
SECTION 6.18. Insurance.....................................................40
SECTION 6.19. Pharma Marketing Settlement Agreement.........................40
SECTION 6.20. Certain Covenants Under the Original Agreement ...............40
SECTION 6.21. No Other Representations and Warranties.......................40
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
PARENT AND THE ACQUIRORS
SECTION 7.01. Corporate Organization........................................41
SECTION 7.02. Authority of the Acquiror Parent and the Acquirors ...........41
SECTION 7.03. Consents and Approvals........................................41
SECTION 7.04. Non-Contravention.............................................42
SECTION 7.05. Litigation....................................................42
SECTION 7.06. Brokers.......................................................42
SECTION 7.07. Financial Capability..........................................42
SECTION 7.08. No Other Representations or Warranties........................43
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ARTICLE VIII
COVENANTS OF THE PARTIES
SECTION 8.01. Operation of the Businesses...................................43
SECTION 8.02. Commercially Reasonable Efforts...............................44
SECTION 8.03. Cooperation...................................................45
SECTION 8.04. Access........................................................46
SECTION 8.05. Public Announcements; Confidentiality.........................48
SECTION 8.06. Corporate Names...............................................50
SECTION 8.07. Regulatory Matters............................................51
SECTION 8.08. Returns, Rebates and Chargebacks..............................51
SECTION 8.09. Indigent Patient Program......................................56
SECTION 8.10. Employee Matters..............................................56
SECTION 8.11. Bulk Transfer Laws............................................59
SECTION 8.12. Covenant Not to Compete.......................................59
SECTION 8.13. Further Assurances............................................60
SECTION 8.14. HSR Act and Irish Competition Act Filings ....................60
SECTION 8.15. Elan Companies' Right of Reference............................61
SECTION 8.16. Litigation Substitution.......................................62
SECTION 8.17. Cooperation Regarding Financial Statements ...................64
SECTION 8.18. No Solicitation...............................................64
SECTION 8.19. Medical Inquiries and Complaints..............................65
SECTION 8.20. Wyeth/Elan Supply Agreement; Wyeth/Elan Master Agreement .....65
SECTION 8.21. Pharma Marketing Settlement Agreement.........................65
SECTION 8.22. Distribution and Co-Promotion Agreement.......................66
SECTION 8.23. Skelaxin License..............................................66
SECTION 8.24. NanoCrystal Technology........................................67
SECTION 8.25. Additional Skelaxin Formulations..............................67
SECTION 8.26. Annual Adjustment Amount......................................68
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF
THE ELAN COMPANIES FOR THE CLOSING
SECTION 9.01. Representations, Warranties and Covenants ....................69
SECTION 9.02. No Actions or Proceedings.....................................69
SECTION 9.03. Consents......................................................69
SECTION 9.04. Elan Shareholder Approval.....................................69
SECTION 9.05. Wyeth/King Agreements.........................................69
SECTION 9.06. Absence of Acquiror Material Adverse Effect ..................70
SECTION 9.07. Wyeth/Elan Supply Agreement...................................70
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ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR
PARENT AND THE ACQUIRORS FOR THE CLOSING
SECTION 10.01. Representations, Warranties and Covenants ....................70
SECTION 10.02. No Actions or Proceedings.....................................70
SECTION 10.03. Consents......................................................71
SECTION 10.04. Elan Shareholder Approval.....................................71
SECTION 10.05. Wyeth/King Agreements.........................................71
SECTION 10.06. Absence of Material Adverse Effect............................71
ARTICLE XI
INDEMNIFICATION
SECTION 11.01. Survival of Representations, Warranties, Covenants, Etc.......71
SECTION 11.02. Indemnification...............................................71
SECTION 11.03. Limitations...................................................75
ARTICLE XII
TERMINATION AND ABANDONMENT
SECTION 12.01. Methods of Termination........................................75
SECTION 12.02. Procedure upon Termination....................................77
SECTION 12.03. Effect of Certain Terminations................................77
SECTION 12.04. Specific Performance..........................................78
SECTION 12.05. Settled Claims................................................78
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Notices.......................................................79
SECTION 13.02. Entire Agreement..............................................80
SECTION 13.03. Waiver........................................................80
SECTION 13.04. Amendment.....................................................81
SECTION 13.05. Third Party Beneficiaries.....................................81
SECTION 13.06. Assignment; Binding Effect....................................81
SECTION 13.07. Headings......................................................81
SECTION 13.08. Severability..................................................81
SECTION 13.09. Governing Law; Jurisdiction; and Venue........................82
SECTION 13.10. Expenses......................................................82
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Page
SECTION 13.11. Counterparts..................................................82
Exhibit A - Form of Assignment of Domain Names
Exhibit B - Form of Bill of Sale
Exhibit C - Form of Development Agreement
Exhibit D - Form of Irish Assignment Agreement
Exhibit E - Form of Patent Assignment Agreement
Exhibit F - Form of Skelaxin Payment Agreement
Exhibit G - Form of Trademark Assignment Agreement
Exhibit H - Form of Detailing Agreement
Exhibit I - Form of Asset Transfer Agreement
Exhibit J - Form of Joint Litigation and Prosecution Agreement
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this "Agreement")
is made and entered into as of May 19, 2003, by and among King Pharmaceuticals,
Inc., a Tennessee corporation (the "Acquiror Parent"), Jones Pharma
Incorporated, a Delaware corporation ("JPI"), and Monarch Pharmaceuticals, Inc.,
a Tennessee corporation ("MPI") (JPI and MPI each an "Acquiror" and collectively
the "Acquirors"; the Acquirors, together with the Acquiror Parent, the "King
Companies"), and Elan Corporation, plc, a public limited company organized under
the laws of Ireland (the "Elan Parent"), Elan Pharma International Limited, a
private limited company organized under the laws of Ireland ("EPIL"), and Elan
Pharmaceuticals, Inc., a Delaware corporation ("EPI" and, together with the Elan
Parent and EPIL, the "Elan Companies").
RECITALS
The King Companies and the Elan Companies are parties to that certain
Asset Purchase Agreement (the "Original Agreement") dated as of January 30, 2003
(the "Original Agreement Date") and desire to amend and restate the Original
Agreement in its entirety.
Acquiror Parent and Elan Parent have entered into an Escrow Agreement
(the "Escrow Agreement") dated the date hereof pursuant to which Acquiror Parent
has deposited $400,000,000 (the "Escrow Amount"), which Escrow Amount and the
earnings thereon are subject to the release provisions set forth in the Escrow
Agreement.
This Agreement sets forth the terms and conditions upon which the
Acquirors are purchasing the Purchased Assets (as defined below) and assuming
the Assumed Liabilities (as defined below) from the Elan Companies, and the Elan
Companies are selling the Purchased Assets and transferring the Assumed
Liabilities to the Acquirors.
AGREEMENT
In consideration of the premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
defined terms shall have the meanings specified below:
"Accountants" means an accounting firm of national reputation
(excluding each of the King Companies' and the Elan Companies' respective
regular outside accounting
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firms) as may be mutually acceptable to the Acquiror and the Elan Companies;
provided, however, that in the event that the Acquirors and the Elan Companies
are unable to agree on such an accounting firm within ten (10) days, then the
accounting firm shall be selected by lot.
"Accounts Receivable" means all trade accounts and notes receivable and
other miscellaneous receivables, including those that are not evidenced by
instruments or invoices, existing as of the Closing Date.
"Acquiror" and "Acquirors" have the meaning set forth in the preamble
to this Agreement.
"Acquiror Disclosure Schedule" has the meaning set forth in the
preamble to Article VII.
"Acquiror Governmental Consents" has the meaning set forth in Section
7.03.
"Acquiror Material Adverse Effect" means an effect or condition that
individually or when taken together with all other effects or conditions of like
nature would individually or in the aggregate have, or would be reasonably
expected to have, individually or in the aggregate a material adverse effect (i)
on the business, assets, results of operations or financial condition of the
King Companies and their Subsidiaries, taken as a whole, or (ii) on the ability
of the King Companies to perform their obligations under this Agreement, the
Related Agreements and the Wyeth/King Agreements or on the ability of the
Acquirors to consummate the transactions contemplated hereby and thereby.
"Acquiror Parent" has the meaning set forth in the preamble to this
Agreement.
"Acquiror's Defined Contribution Plan" has the meaning set forth in
Section 8.10(c).
"Acquisition Proposal" has the meaning set forth in Section 8.18(a).
"Action or Proceeding" means any action, suit, proceeding, arbitration,
Order, inquiry, hearing, assessment with respect to fines or penalties or
litigation (whether civil, criminal, administrative or investigative) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental or Regulatory Authority.
"Adverse Recommendation Change" has the meaning set forth in Section
8.18(b).
"Affiliate" means, with respect to any Person, any other Person which
Controls, is Controlled by or is under common Control with such Person.
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"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Applicable Period" has the meaning set forth in Section 8.12(a).
"Assignment of Domain Names" means the Assignment of Domain Names
conveying certain domain names from the Elan Companies to the Acquirors,
substantially in the form attached hereto as Exhibit A.
"Assumed Contracts" means the Assumed Skelaxin Contracts and the
Assumed Sonata Contracts.
"Assumed Liabilities" has the meaning set forth in Section 3.01(a).
"Assumed Skelaxin Contracts" has the meaning set forth in Section
2.01(a)(i).
"Assumed Sonata Contracts" has the meaning set forth in Section
2.01(b)(i).
"Bill of Sale" means one or more Bills of Sale conveying the Purchased
Assets from the Elan Companies to the Acquirors, substantially in the form
attached hereto as Exhibit B.
"Books and Records" means all books, records, files, documents, data,
information and correspondence (including customer lists, credit and collection
records, correspondence and miscellaneous records with respect to customers and
supply sources, all other general correspondence and, to the extent not
originals, true and complete copies of all files relating to the filing,
prosecution, issuance, maintenance, enforcement and/or defense of any patents,
patent applications, trademarks, copyrights or other intellectual property
rights, whether on paper or in electronic format; provided, however, that no
documents constituting attorney work product shall be included in this
definition) owned by any of the Elan Companies or any of their respective
Subsidiaries as of the Closing Date.
"Business Day" means a day other than Saturday, Sunday or any day on
which commercial banks located in New York are authorized or obligated by Law to
close.
"Businesses" means, collectively, the Skelaxin Business and the Sonata
Business.
"Charter Documents" has the meaning set forth in Section 6.01.
"Closing" has the meaning set forth in Section 5.01.
"Closing Date" has the meaning set forth in Section 5.01.
"Closing Date Inventory Value" means the value of all Inventory as of
the Closing Date valued as described on Schedule 1.01(a) of the Elan Disclosure
Schedule;
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provided, however, that Closing Date Inventory Value shall not include the value
of any Inventory with, as of the Closing Date, a shelf life of less than 12
months.
"Closing Date Inventory Value Adjustment" means the Closing Date
Inventory Value minus the Estimated Closing Date Inventory Value.
"Closing Date Inventory Value Statement" has the meaning set forth in
Section 4.05(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Commonly Controlled Entity" means each person or entity that, together
with EPI, is treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code or any other similar Law.
"Compliance Information" means documentation that is reasonably
sufficient to demonstrate that the representations and warranties set forth in
Section 7.07 would have been true and correct as of the date of delivery of such
documentation assuming the Closing had occurred on such date of delivery and an
officer's certificate from the Acquiror Parent certifying such compliance.
"Competing Product" has the meaning set forth in Section 8.12(a).
"Confidential Information" has the meaning set forth in Section
8.05(b).
"Confidentiality Agreement" has the meaning set forth in Section
8.05(f).
"Contracts" means any and all binding commitments, contracts, purchase
orders, leases, licenses, easements, commitments, arrangements, undertakings or
other agreements, whether written or oral.
"Control" means:
(a) ownership (directly or indirectly) of at least fifty percent (50%)
of the shares or stock entitled to vote for the election of directors in
the case of a company or corporation;
(b) the ability otherwise to direct and control the actions of a
Person, other than a company or a corporation; or
(c) with respect to the Skelaxin Intellectual Property and the Sonata
Copyrights, the possession (whether by ownership or license or sublicense
and other than pursuant to this Agreement) of the ability to grant
intellectual property rights.
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"Corporate Names" means the trademark and service mark "ELAN", the Elan
corporate logo, and trade names of the Elan Companies, including the word "ELAN"
together with any variations and derivatives thereof and any other logos,
symbols or trademarks, trade names or service marks of the Elan Companies or
their respective Affiliates, but excluding the Skelaxin Trademarks.
"Credit Agreement" means the Credit Agreement, dated as of April 23,
2002, by and among the Acquiror Parent, certain lenders from time to time party
thereto, Credit Suisse First Boston, as administrative agent and collateral
agent, and certain other banks from time to time party thereto.
"Current" means the existing, prepared, made or being made, tested or
being tested, or physically reduced to practice or contained in an invention
disclosure form prior to or as of the Closing Date.
"Damages" has the meaning set forth in Section 11.02(a).
"Default" means (a) a breach, default or violation, (b) the occurrence
of an event that with or without the passage of time or the giving of notice, or
both, would constitute a breach, default or violation or cause an Encumbrance to
arise, or (c) with respect to any Contract, the occurrence of an event that with
or without the passage of time or the giving of Notice, or both, would give rise
to a right of termination, renegotiation or acceleration or a right to receive
Damages or a payment of penalties.
"Development Agreement" means the Sonata Reformulation Option Agreement
to be dated as of the Closing Date by and among the Elan Parent, EPIL and the
applicable Acquiror, substantially in the form attached hereto as Exhibit C.
"Distribution and Co-Promotion Agreement" means the Distribution and
Co-Promotion Agreement dated as of December 19, 2001 by and between EPIL and
Wyeth as amended by Amendment No. 1 to Distribution and Co-Promotion Agreement
dated as of January 13, 2003.
"DMFs" has the meaning set forth in Section 8.15.
"Elan Companies" has the meaning set forth in the preamble to this
Agreement.
"Elan Companies Proceeding" means any Action or Proceeding commenced by
or against any of the Elan Companies or any of their respective Affiliates or
officers or directors prior to the Closing or commenced after the Closing but
based on events occurring prior to Closing.
"Elan Disclosure Schedule" has the meaning set forth in the preamble to
Article VI.
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"Elan Governmental Consents" has the meaning set forth in Section
6.03(a).
"Elan Parent" has the meaning set forth in the preamble to this
Agreement.
"Elan Severance Plan" has the meaning set forth in Section 8.10(f).
"Elan Shareholder Approval" has the meaning set forth in Section
8.02(a).
"Elan Shareholders Meeting" has the meaning set forth in Section
8.02(a).
"Elan Shares" means (i) the ordinary shares of the Elan Parent, nominal
value Euro 0.05 each, (ii) the American Depositary Shares of the Elan Parent and
(iii) the "B" Executive Shares of the Elan Parent, nominal value Euro 0.05 each.
"Elan Third Party Consents" has the meaning set forth in Section
6.03(b).
"Elan's 401(k) Plan" has the meaning set forth in Section 8.10(c).
"Employee Benefit Plans" means the Pension Plans, Welfare Plans, and
each other employment, bonus, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock appreciation, restricted stock, stock
option, "phantom" stock, performance, stock bonus, paid time off, perquisite,
fringe benefit, vacation, severance or other plan, program, policy or
arrangement (i) maintained, contributed to or required to be maintained or
contributed to by EPI or any Commonly Controlled Entity or (ii) with respect to
which the Elan Companies or any of their Affiliates has or could have any
Liability, in each case providing benefits to any Employee.
"Employees" has the meaning set forth in Section 8.10(a).
"Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, levy, license, restriction on
transferability, defect in title, charge or other encumbrance of any kind, or
any conditional sale or title retention agreement or other agreement to give any
of the foregoing in the future.
"EPI" has the meaning set forth in the preamble to this Agreement.
"EPI Consideration" has the meaning set forth in Section 4.01(a).
"EPIL" has the meaning set forth in the preamble to this Agreement.
"EPIL Consideration" has the meaning set forth in Section 4.01(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Escrow Agreement" has the meaning set forth in the preamble to this
Agreement.
"Escrow Amount" has the meaning set forth in the preamble to this
Agreement.
"Estimated Closing Date Inventory Value" means the Elan Parent's good
faith estimate of the Closing Date Inventory Value set forth in reasonable
detail in writing and delivered to the Acquirors at least three Business Days
prior to the Closing Date.
"Excluded Assets" has the meaning set forth in Section 2.02.
"Excluded Books and Records" means all Books and Records solely to the
extent related to or constituting (i) human resources and any other employee
related files and records, (ii) original financial and accounting records, (iii)
any items set forth on Schedule 1.01(b) of the Elan Disclosure Schedule to the
extent that any applicable Law prohibits their transfer, (iv) any tax files,
documents, instruments, papers, books and records, (v) the Elan Companies'
rights and obligations under the Formulation Development Agreement dated as of
December 19, 2001 by and among the Elan Parent, EPIL and Wyeth, as amended by
Amendment No. 1 to Formulation Development Agreement dated January 13, 2003, and
the Development Agreement (as such agreements may be amended or amended and
restated from time to time) and (vi) original Sonata Books and Records except to
the extent that delivery of originals thereof is legally required to effectuate
the transfer of any Sonata Asset.
"Excluded Liabilities" has the meaning set forth in Section 3.01(b).
"Excluded Tax Liability" has the meaning set forth in Section
3.01(b)(ii).
"Expiration Date" has the meaning set forth in Section 11.01.
"FDA" means the United States Food and Drug Administration or any
successor thereto.
"FDA Act" means the U.S. Food, Drug and Cosmetic Act of 1938, as it may
be superseded or amended from time to time.
"Financial Information" has the meaning set forth in Section 6.15.
"FSS" has the meaning set forth in Section 8.08(d)(ii).
"Generic Skelaxin" means any pharmaceutical product containing
metaxalone that obtains regulatory approval by reliance on data previously
submitted to the FDA (NDA No. 13-217, including NDA Nos. 13-217/S36 and
13-217/S44) in support of a Skelaxin Product Registration.
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"Generic Sonata" means any pharmaceutical product containing zaleplon
that obtains regulatory approval by reliance on data previously submitted to the
FDA (NDA No. 020-859, including NDA Nos. 020-859/001 and 020-859/02 and NDA No.
20-859/S-001) in support of a product registration relating to Sonata in the
Sonata Territory.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, department, ministry, official or
other instrumentality of the United States, Ireland or other country, or any
supra-national organization, or any foreign or domestic, state, county, city or
other political subdivision.
"Government Rebates" has the meaning set forth in Section 8.08(b)(i).
"Hired Employee" has the meaning set forth in Section 8.10(a).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, together with any rules or regulations promulgated thereunder.
"IND" means (a) an Investigational New Drug Application, as defined in
the FDA Act, as amended, and the regulations promulgated thereunder, which is
required to be filed with the FDA before beginning clinical testing of a product
in human subjects, or any successor application or procedure, and (b) all
supplements and amendments that may be filed with respect to the foregoing.
"Indemnification Claim Notice" has the meaning set forth in Section
11.02(c).
"Indemnified Party" has the meaning set forth in Section 11.02(c).
"Indemnitee" and "Indemnitees" has the meaning set forth in Section
11.02(c).
"Indigent Patient Program" means the Indigent Patient Program governed
by the Patient Assistance Program Agreement between Mckesson Health Solutions
Arizona Inc. and EPI dated December 31, 2001.
"Interim Chargeback Period" has the meaning set forth in Section
8.08(d)(i).
"Interim Rebate Period" has the meaning set forth in Section 8.08(c).
"Inventory" means the Skelaxin Inventory and the Sonata Inventory owned
as of the Closing Date by any of the Elan Companies or any of their respective
Subsidiaries.
"Irish Assignment Agreement" means one or more Assignment Agreements
relating to the Irish Purchased Assets to be dated as of the Closing Date by and
among the applicable Acquirors, EPIL and EPI, substantially in the form attached
hereto as Exhibit D.
"Irish Competition Act" means the Competition Act, 2002 of Ireland.
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"Irish Purchased Assets" means any Purchased Assets which are situated
in Ireland as a matter of Irish Law.
"Joint Litigation and Prosecution Agreement" means the Joint Litigation
and Prosecution Agreement to be dated as of the Closing Date by and among the
Elan Companies and the King Companies, substantially in the form which is
attached hereto as Exhibit J.
"JPI" has the meaning set forth in the preamble to this Agreement.
"King Companies" has the meaning set forth in the preamble to this
Agreement.
"Know-How" means any proprietary or nonproprietary information directly
related to the manufacture, preparation, development (both research and
clinical), or commercialization of a product, including product specifications,
processes, product designs, plans, trade secrets, ideas, concepts, inventions,
formulae, chemical, pharmacological, toxicological, pharmaceutical, physical,
analytical, stability, safety, quality assurance, quality control and clinical
data or information, technical information, research records or information, and
all other confidential or proprietary technical and business information,
whether or not embodied in any documentation or other tangible materials, but in
no event shall the definition of "Know-How" include information properly in the
public domain as of the Closing Date.
"Knowledge" with respect to (i) the Elan Companies, means the knowledge
following reasonable investigation of the officers, directors or senior managers
of the Elan Companies and their respective Subsidiaries with responsibility for,
or supervision of, the relevant matters and (ii) the King Companies, means the
knowledge following reasonable investigation of the officers, directors or
senior managers of the King Companies and their Subsidiaries with responsibility
for supervision of the relevant matters.
"Labeling" shall be as defined in Section 201(m) of the FDA Act, 21
U.S.C. (Section) 321(m), including the applicable Product's label, packaging and
package inserts accompanying such Product, and any other written, printed, or
graphic materials accompanying such Product, including, but not limited to,
patient instructions or patient indication guides.
"Law" means any federal, state, local or foreign law, statute or
ordinance, or any rule or regulation promulgated by any Governmental or
Regulatory Authority or any Order.
"Liability" means any, direct or indirect, liability, obligation,
claim, deficiency, guarantee or commitment of any kind or nature (whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, or due or to become due), including any
liability for Taxes.
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"Material Adverse Effect" means an effect or condition that
individually or when taken together with all other effects or conditions of like
nature would individually or in the aggregate have, or would be reasonably
expected to have, individually or in the aggregate a material adverse effect (i)
on the business, assets, results of operations or financial condition of the
Businesses, taken as a whole, or (ii) on the ability of the Elan Companies to
perform their obligations under this Agreement, the Related Agreements and the
Wyeth/Elan Agreements or on the ability of the Elan Companies to consummate the
transactions contemplated hereby and thereby.
"Modified Release Skelaxin" has the meaning set forth in Section
8.25(a).
"MPI" has the meaning set forth in the preamble to this Agreement.
"NDA" means a New Drug Application for any product, as appropriate,
requesting permission to place a drug on the market in accordance with the FDA
Act, and all supplements or amendments filed pursuant to the requirements of the
FDA, including all documents, data and other information concerning a product
which are reasonably necessary for FDA approval to market a product in the
United States.
"NDC" has the meaning set forth in Section 8.08(a)(iii).
"Net Sales" means, with respect to any Product, gross amounts actually
received from sales by the Elan Companies of such Product, less any applicable
discounts, allowances, credit, chargebacks, rebates, taxes, duties, freight and
insurance charges and provisions for product returns related to such sales.
"New Sonata Formulation" shall mean, to the extent owned by any of the
Elan Companies or any of their respective Subsidiaries, any composition of
matter, other than Sonata or a Sonata Line Extension, which is suitable for
administration to a human or an animal and which contains zaleplon as an active
ingredient.
"Non-Assignable Asset" has the meaning set forth in Section 2.04(a).
"Notice" with respect to a party means notice actually received by an
officer, director or senior manager of the Elan Parent, EPIL or EPI, in the case
of the Elan Companies, or of the applicable Acquiror, in the case of the King
Companies, in each case with responsibility in the relevant area, or delivered
in accordance with the terms of the document, Law or Order pursuant to which
such notice was given.
"Notice of Objection" has the meaning set forth in Section 4.05(b).
"Order" means any writ, judgment, decree, injunction or similar order,
including consent orders, of any Governmental or Regulatory Authority (in each
such case whether preliminary or final).
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"Ordinary Course of Business" means an action that is consistent in
nature, scope and magnitude with the past practices of the Elan Companies and
their respective Subsidiaries with respect to the Skelaxin Business or the
Sonata Business, as the case may be.
"Original Agreement" has the meaning set forth in the recitals to this
Agreement.
"Original Agreement Date" has the meaning set forth in the recitals to
this Agreement.
"Patent Assignment Agreement" means the Patent Assignment Agreement to
be dated as of the Closing Date by and between the applicable Acquiror and EPI,
substantially in the form attached hereto as Exhibit E.
"Patent Litigations" has the meaning set forth in Section 8.16(a).
"Patent Rights" means rights conferred or represented by a granted or
issued patent in force, or such like rights related to a patent application and
any divisionals, continuations, continuations-in-part, provisionals,
substitutions, patents of addition, reissues, extensions, reexaminations or
renewal applications related to, or claiming priority to, the foregoing
(including any supplemental patent certificates) or any confirmation patent or
registration patent and all patents issuing and all foreign counterparts of any
of the foregoing.
"Pension Plans" means "employee pension benefit plans" as defined in
Section 3(2) of ERISA.
"Performance Period" has the meaning set forth on Section 8.10(h).
"Permitted Encumbrance" means, collectively, (a) Encumbrances for Taxes
or assessments which are not delinquent or are being contested in good faith by
appropriate proceedings, (b) statutory, warehousemen's and carriers' liens and
other similar Encumbrances arising in the Ordinary Course of Business for
obligations which are not delinquent and (c) the rights, if any, of third
parties appearing in product advertisements for the Products that are set forth
on Schedule 1.01(c) of the Elan Disclosure Schedule.
"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, joint venture,
other business organization, trust, entity, union, association or Governmental
or Regulatory Authority.
"Personal Property Leases" has the meaning set forth in Section
2.01(d).
"Pharma Marketing Settlement Agreement" has the meaning set forth in
Section 6.19.
"PHS Entity" has the meaning set forth in Section 8.08(b)(iv).
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"Post-Closing Tax Period" means all taxable periods other than any
Pre-Closing Tax Period.
"Pre-Closing Tax Period" means all taxable periods ending on or before
the Closing Date and the portion ending on the Closing Date of any taxable
period that includes (but does not end on) the Closing Date. For purposes of
this definition, all real estate Taxes, personal property Taxes and similar ad
valorem Taxes (but excluding, for the avoidance of doubt, any Transfer Taxes)
arising out of, directly or indirectly, the Purchased Assets or the ownership or
Control, lease or license of any of the Purchased Assets for a taxable period
that includes (but does not end on) the Closing Date shall be (i) apportioned
between the Elan Companies and the applicable Acquiror based on the number of
days of such period included in the Pre-Closing Tax Period and the number of
days of such period after the Closing Date and (ii) determined in a manner
consistent with the past practice of the Elan Companies.
"Product Improvements" means Skelaxin Product Improvements and Sonata
Line Extensions.
"Products" means Skelaxin and Sonata.
"Purchase Price" has the meaning set forth in Section 4.01(a)(i).
"Purchased Assets" has the meaning set forth in Section 2.01.
"Purchased Sonata Books and Records" shall mean (a) true and complete
copies of all Sonata Books and Records and (b) any original Sonata Books and
Records, the delivery of which to the Acquirors is legally required to
effectuate the transfer of any Sonata Asset (it being understood that the Elan
Companies shall retain copies at their expense of all such original items
included in the Purchased Sonata Books and Records).
"Related Agreements" means the Development Agreement, the Trademark
Assignment Agreement, the Patent Assignment Agreement, the Bill of Sale, the
Irish Assignment Agreement, the Assignment of Domain Names, the Pharma Marketing
Settlement Agreement, the Skelaxin Payment Agreement, the Escrow Agreement and
the Joint Litigation and Prosecution Agreement.
"Scheduled Shareholder Vote Date" has the meaning set forth in Section
8.02(a).
"Settlement Agreement" means the Settlement Agreement to be dated as of
the date hereof by and among the Elan Companies and the King Companies.
"Skelaxin" means that pharmaceutical product containing metaxalone
currently approved by the FDA pursuant to NDA Nos. 13-217, including NDA Nos.
13-217/S36 and 13-217/S44, and marketed in the United States under the trademark
SKELAXIN.(R)
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"Skelaxin Adverse Determination Event" means the determination, which
need not be final or nonappealable, by a court of competent jurisdiction or
applicable Governmental or Regulatory Authority in the United States (including
the U.S. Patent and Trademark Office or the FDA) that all claims contained in
U.S. Patent No. 6,407,128 are invalid or such patent is not enforceable or is or
was improperly issued or listed in the FDA's Approved Drug Products with
Therapeutic Equivalence Evaluations, including any such determination by the
court in the matter of Case No. EDNY 03 CV 0006, Elan Pharmaceuticals, Inc. v.
Eon Labs, Inc. and Elan Pharmaceuticals, Inc. v. Core Pharma, LLC.
"Skelaxin Assets" has the meaning set forth in Section 2.01(a).
"Skelaxin Books and Records" shall mean all of the Books and Records
necessary for, or solely to the extent related to, the research, development and
manufacture of Skelaxin or a Current Skelaxin Product Improvement or the
distribution, marketing, sale, promotion, importation or use of Skelaxin or, to
the extent applicable, Current Skelaxin Product Improvements in the Skelaxin
Territory, but excluding the Excluded Books and Records.
"Skelaxin Business" means the research, development, manufacture,
distribution, marketing, sale, promotion, importation or use of Skelaxin and, to
the extent applicable, Current Skelaxin Product Improvements in the Skelaxin
Territory.
"Skelaxin Copyrights" means, in the Skelaxin Territory, copyrights,
whether registered or unregistered, and applications, if any, set forth on
Schedule 1.01(d) of the Elan Disclosure Schedule.
"Skelaxin Formulation Agreement" has the meaning set forth in Section
8.25(a).
"Skelaxin Governmental Permits" means all governmental permits,
licenses, registrations, certificates of occupancy, approvals and other
governmental authorizations necessary for the operation of the Skelaxin Business
that are held in the name of any of the Elan Companies or any of their
respective Subsidiaries.
"Skelaxin Intellectual Property" means the Skelaxin Copyrights, the
Skelaxin Patent Rights, the Skelaxin Know-How and the Skelaxin Trademarks, and
all rights to sue and recover Damages or obtain injunctive relief for past or
future infringement, misappropriation, violation, dilution or breach of any of
the foregoing.
"Skelaxin Inventory" means all inventory of finished pharmaceutical
product that is formulated, labeled or otherwise intended for use, sale or offer
for sale under the Skelaxin Trademark, owned by any of the Elan Companies or any
of their respective Subsidiaries as of the Closing Date together with all
work-in-progress and all bulk active pharmaceutical ingredient owned by any of
the Elan Companies or any of their respective Subsidiaries as of the Closing
Date. For the purposes of this Agreement, "Skelaxin Inventory" shall be deemed
to include samples of finished pharmaceutical product labeled
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under the Skelaxin Trademarks and designated for use in promoting pharmaceutical
product and that are not intended to be sold, consistent with FDA requirements.
"Skelaxin Know-How" shall mean any and all Skelaxin Manufacturing
Know-How, product specifications, processes, product designs, plans, trade
secrets, ideas, concepts, inventions, manufacturing, engineering and other
manuals and drawings, standard operating procedures, formulae, flow diagrams,
chemical, pharmacological, toxicological, pharmaceutical, physical, analytical,
stability, safety, quality assurance, quality control and clinical data or
information, technical information, research records or information, and all
other confidential or proprietary technical and business information, that is
currently owned, leased or licensed by any of the Elan Companies or any of their
respective Subsidiaries and which is exclusively related to, or is necessary and
primarily related to, the Skelaxin Business as of the Closing Date. For the sake
of clarity, none of the foregoing information shall be included in Skelaxin
Know-How to the extent that such information is covered by any claim of any
Skelaxin Patent Rights.
"Skelaxin Manufacturing Know-How" shall mean the percentages and
specifications of ingredients, the manufacturing processes, specifications,
technology, inventions, assays, quality control and testing procedures, know-how
and trade secrets exclusively related to, or necessary and primarily related to,
the manufacture, formulation, testing and packaging of Skelaxin or any Current
Skelaxin Product Improvement for sale, marketing and distribution in the
Skelaxin Territory as of the Closing Date. For the sake of clarity, none of the
foregoing information shall be included in Skelaxin Manufacturing Know-How to
the extent that such information is covered by any claim of any Skelaxin Patent
Rights.
"Skelaxin Marketing Materials" means those items of advertising and
promotional materials and literature owned by any of the Elan Companies or any
of their respective Subsidiaries as of the Closing Date solely to the extent
used in the advertising and promotion of Skelaxin or any Current Skelaxin
Product Improvement, if any, in the Skelaxin Territory.
"Skelaxin Maximum Returns Credit Amount" has the meaning set forth in
Section 8.08(a)(iii).
"Skelaxin Patent Rights" shall mean, to the extent owned, Controlled or
licensed by any of the Elan Companies or any of their respective Subsidiaries,
those Patent Rights listed on Schedule 1.01(e) of the Elan Disclosure Schedule
and any other Patents Rights that are owned, Controlled or licensed by any of
the Elan Companies or any of their respective Subsidiaries, the practice of
which during the making, having made, use, having used, marketing, sale, having
sold, offering to sell and importation of Skelaxin or any Current Skelaxin
Product Improvement in the Skelaxin Territory would result in the infringement
thereof.
"Skelaxin Payment Agreement" means the Skelaxin Payment Agreement
relating to sales of Skelaxin by the King Companies to be dated as of the
Closing Date by and
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among the applicable Acquirors and EPI, substantially in the form attached
hereto as Exhibit F.
"Skelaxin Product Improvement" shall mean, to the extent owned or
Controlled or licensed by any of the Elan Companies or any of their respective
Subsidiaries, any: (a) line extension of Skelaxin; (b) new indication of
Skelaxin; (c) composition of matter or article of manufacture consisting
essentially of a chemical derivative of metaxalone; or (d) method of making,
having made, using, selling, offering for sale or importing of such compositions
of matter or articles of manufacture constituting any of the foregoing. For the
avoidance of doubt, the term "Skelaxin Product Improvement" shall not include
any (a) pharmaceutical combination containing metaxalone and another active
ingredient, (b) new formulation comprising metaxalone or (c) method of making,
having made, using, selling, offering for sale or importing of such compositions
of matter or articles of manufacture constituting any of the foregoing.
"Skelaxin Product Registrations" means (i) the approvals or
registrations which have been received by any of the Elan Companies or any of
their respective Subsidiaries as of the Original Agreement Date, or which are
received by any of the Elan Companies or any of their respective Subsidiaries
after the Original Agreement Date but before the Closing Date, for the
investigation, sale, distribution and/or marketing of Skelaxin or a Current
Skelaxin Product Improvement in the Skelaxin Territory (including any NDAs or
INDs), and (ii) all dossiers, reports, data and other written materials filed as
part of such approvals or registrations, or maintained by any of the Elan
Companies or any of their respective Subsidiaries and relating to such approvals
or registrations.
"Skelaxin Returns Termination Date" has the meaning set forth in
Section 8.08(a)(iii).
"Skelaxin Territory" means the United States, its territories and
possessions, the District of Columbia and the Commonwealth of Puerto Rico.
"Skelaxin Trademarks" means the trademarks, trade names, domain names,
designs and logos, whether or not registered set forth on Schedule 1.01(f) of
the Elan Disclosure Schedule.
"Sonata" means those forms of zaleplon currently sold in the United
States of America under the authority of NDA No. 020-859, including NDA Nos.
020-859/001 and 020-859/02 and sNDA No. 20-859/S-001. Notwithstanding anything
to the contrary in this Agreement, the term Sonata shall not include New Sonata
Formulations or Sonata Line Extensions.
"Sonata Assets" has the meaning set forth in Section 2.01(b).
"Sonata Books and Records" shall mean all of the Books and Records
necessary for, or solely to the extent related to, the development of Sonata or
a Sonata Line
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Extension or the distribution, marketing, sale, promotion or use of Sonata or a
Sonata Line Extension in the Sonata Territory, but excluding the Excluded Books
and Records.
"Sonata Business" means the distribution, marketing, sale, promotion or
use of Sonata or Sonata Line Extensions in the Sonata Territory.
"Sonata Copyrights" means, in the Sonata Territory, copyrights, whether
registered or unregistered, and applications, if any, in each case owned by the
Elan Companies or any of their respective Subsidiaries and set forth on Schedule
1.01(g) of the Elan Disclosure Schedule.
"Sonata Inventory" means all inventory of finished Sonata owned by any
of the Elan Companies or any of their respective Subsidiaries as of the Closing
Date. For the purposes of this Agreement, "Sonata Inventory" shall be deemed to
include samples of finished Sonata or Sonata Line Extensions, if any, designated
for use in promoting Sonata and that are not intended to be sold, consistent
with FDA requirements.
"Sonata Line Extension" means any new indication, new dosage strength
of a solid capsule, or Labeling or packaging change for Sonata.
"Sonata Marketing Materials" means those items of advertising and
promotional materials and literature owned by any of the Elan Companies or any
of their respective Subsidiaries as of the Closing Date solely to the extent
used in the advertising and promotion of Sonata or Sonata Line Extensions, if
any, in the Sonata Territory.
"Sonata Maximum Returns Credit Amount" has the meaning set forth in
Section 8.08(a)(iii).
"Sonata Returns Termination Date" has the meaning set forth in Section
8.08(a)(iii).
"Sonata Territory" means the United States, its territories and
possessions, the District of Columbia and the Commonwealth of Puerto Rico.
"Specified Facts" has the meaning set forth in Section 12.05.
"Stub Period Bonus" has the meaning set forth in Section 8.10(h).
"Subsidiary" of a Person means any entity Controlled by that Person.
"Superior Proposal" has the meaning set forth in Section 12.03.
"Tangible Personal Property" has the meaning set forth in Section
2.01(c).
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"Taxes" means all of the following: (i) any net income, withholding,
alternative or add-on minimum tax, gross income, gross receipts, sales, use,
value added, ad valorem, transfer, franchise, profits, license, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, capital tax, customs duty or other tax, governmental fee or other
like assessment, together with any interest, penalty or additional amount due,
imposed by any governmental, regulatory or administrative entity or agency
responsible for the imposition of any such tax (domestic or foreign); (ii) any
Liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of any affiliated, consolidated, combined,
unitary or other group for any taxable period; and (iii) any Liability for the
payment of any amounts of the type described in clause (i) or (ii) above as a
result of any express or implied obligation to indemnify any other Person.
"Tax Benefit" shall mean the Tax savings, net of any Tax increases,
actually realized by the Indemnified Party as a result of any deduction, loss,
credit or other Tax reduction allowable to the Indemnified Party as a result of
the Damages giving rise to the indemnification claim, calculated on an
incremental basis (i.e., by comparing the Indemnified Party's total Tax
liabilities with and without the benefit of such deduction, loss, credit or
other Tax reduction item). The Indemnified Party shall provide the indemnifying
party with a good faith computation of the Tax Benefit in reasonable detail;
provided, however, that nothing in this sentence shall give the indemnifying
party the right to review the Tax returns of the Indemnified Party or its
Affiliates. The parties agree to consult with each other in good faith to
resolve any dispute concerning the amount or timing of any Tax Benefit.
"Termination Date" has the meaning set forth in Section 12.01(b).
"Termination Fee" has the meaning set forth in Section 12.03.
"Third Party Claim" has the meaning set forth in Section 11.02(d).
"Trademark Assignment Agreement" means the Trademark Assignment
Agreement to be dated as of the Closing Date by and between the applicable
Acquiror and EPI, substantially in the form attached hereto as Exhibit G.
"Transfer Taxes" has the meaning set forth in Section 4.03(a).
"WAC" has the meaning set forth in Section 8.08(f).
"WARN Act" means the Workers Adjustment and Retraining Notification Act
of 1988.
"Welfare Plans" means "employee welfare benefit plans" as defined in
Section 3(1) of ERISA.
"Wyeth" means Wyeth (formerly known as American Home Products
Corporation), acting through its Wyeth Pharmaceuticals Division.
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"Wyeth Purchase Price" means the "Purchase Price" as defined in the
Wyeth/King Asset Transfer Agreement.
"Wyeth/Elan Agreements" means (i) the Wyeth/Elan Master Agreement, (ii)
the Wyeth/Elan Supply Agreement, (iii) the Wyeth/Elan Development Agreement,
(iv) the Distribution and Co-Promotion Agreement and (v) the Bulk Supply
Agreement dated as of January 13, 2003 by and between Wyeth and EPIL.
"Wyeth/Elan Development Agreement" means the Amended and Restated
Formulation Development Agreement dated as of January 13, 2003 by and among
Wyeth, the Elan Parent and EPIL, as amended by Amendment No. 1 to Amended and
Restated Formulation Development Agreement dated as of January 29, 2003.
"Wyeth/Elan Master Agreement" means the Agreement dated as of January
13, 2003 by and among Wyeth, Wyeth Pharmaceuticals Company, Inc., the Elan
Parent and EPIL, as amended by Amendment No. 1 to Master Agreement dated as of
January 29, 2003.
"Wyeth/Elan Supply Agreement" means the Amended and Restated Supply
Agreement dated as of January 13, 2003 by and between Wyeth Pharmaceutical
Company, Inc. and EPIL.
"Wyeth/King Agreements" means (i) the Wyeth/King Asset Transfer
Agreement, (ii) the Detailing Agreement to be dated as of the Closing Date by
and between Wyeth and the applicable Acquiror, substantially in the form which
is attached hereto as Exhibit H, and (iii) the Escrow Agreement to be dated as
of the Closing Date by and among Wyeth Pharmaceuticals Company, Inc., the
applicable Acquiror and JPMorgan Chase Bank, substantially in the form which is
attached as Exhibit 3.01(c) to the Wyeth/Elan Supply Agreement.
"Wyeth/King Asset Transfer Agreement" means the Asset Transfer
Agreement to be dated as of the Closing Date by and between Wyeth and the
applicable Acquiror, substantially in the form which is attached hereto as
Exhibit I.
SECTION 1.02. Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires: (a) words of any gender include
each other gender; (b) words using the singular or plural number also include
the plural or singular number, respectively; (c) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; (d) the
terms "Article" or "Section" refer to the specified Article or Section of this
Agreement; (e) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or"; and (f) the term
"including" means "including without limitation." Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless Business
Days are specified.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.01. Purchase and Sale of Assets at the Closing. Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing,
each of the Elan Companies shall sell, convey, assign, transfer and deliver to
the Acquirors, and the Acquirors shall purchase and acquire from each of the
Elan Companies, all of such Elan Company's right, title and interest in and to
the Skelaxin Assets, the Sonata Assets, the Tangible Personal Property and the
Personal Property Leases free and clear of all Encumbrances, other than
Permitted Encumbrances (collectively, the "Purchased Assets"), in the manner set
forth in Section 2.01(e).
(a) The following assets shall constitute the "Skelaxin Assets":
(i) all rights of the Elan Companies under the Contracts set forth on
Schedule 2.01(a)(i) of the Elan Disclosure Schedule (the "Assumed Skelaxin
Contracts");
(ii) all Skelaxin Marketing Materials;
(iii) all Skelaxin Books and Records;
(iv) all Skelaxin Inventory;
(v) all Skelaxin Patent Rights;
(vi) all Skelaxin Product Registrations;
(vii) all Skelaxin Copyrights;
(viii) all Skelaxin Trademarks;
(ix) all Skelaxin Governmental Permits, to the extent legally
transferable;
(x) all Skelaxin Know-How; and
(xi) any other assets set forth on Schedule 2.01(a)(xi) of the Elan
Disclosure Schedule.
(b) The following assets shall constitute the "Sonata Assets":
(i) the rights of the Elan Companies under the Contracts set forth
on Schedule 2.01(b)(i) of the Elan Disclosure Schedule (the "Assumed Sonata
Contracts");
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(ii) all Sonata Marketing Materials;
(iii) all Purchased Sonata Books and Records;
(iv) all Sonata Inventory;
(v) all Sonata Copyrights; and
(vi) any other assets set forth on Schedule 2.01(b)(vi) of the Elan
Disclosure Schedule.
(c) The following assets shall constitute the "Tangible Personal
Property": all computers, printers, facsimile machines, projectors, exhibit and
display booths, controlled substance lockers and other similar tangible personal
property owned by any of the Elan Companies and used exclusively in the sales
field as of the Closing Date by the Hired Employees, but not including software,
data or other information stored in any such computers.
(d) The following assets shall constitute the "Personal Property
Leases": the leases set forth on Schedule 2.01(d) of the Elan Disclosure
Schedule.
(e) Pursuant to this Section 2.01, (i) MPI shall purchase and acquire
from the applicable Elan Companies the following: all Skelaxin Marketing
Materials; all Skelaxin Books and Records; all Skelaxin Inventory; all Skelaxin
Governmental Permits, to the extent legally transferable; all Sonata Marketing
Materials; all Purchased Sonata Books and Records; all Sonata Inventory; any
asset set forth on Schedule 2.01(b)(vi) of the Elan Disclosure Schedule; all
Tangible Personal Property; and all Personal Property Leases, and (ii) JPI shall
purchase and acquire from the applicable Elan Companies the following: all
rights of the Elan Companies under the Assumed Skelaxin Contracts and the
Assumed Sonata Contracts; any asset set forth on Schedule 2.01(a)(xi) of the
Elan Disclosure Schedule; all Skelaxin Patent Rights; all Skelaxin Product
Registrations; all Skelaxin Copyrights; all Skelaxin Trademarks; all Skelaxin
Know-How; and all Sonata Copyrights.
(f) Notwithstanding anything to the contrary in this Agreement, EPIL
and EPI shall sell, convey, assign, transfer and deliver to the Acquirors, and
the Acquirors shall purchase and acquire from each of the Elan Companies, all of
EPIL's and EPI's right, title and interest in and to the Irish Purchased Assets
solely pursuant to the Irish Assignment Agreement.
SECTION 2.02. Excluded Assets. Notwithstanding anything to the contrary
contained in this Agreement, from and after the Closing, the Elan Companies
shall retain all of their right, title and interest in and to the following
assets (the "Excluded Assets"):
(a) all cash and cash equivalents of the Elan Companies or any of their
respective Subsidiaries;
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(b) all Accounts Receivable of the Elan Companies or any of their
respective Subsidiaries;
(c) the Corporate Names, except as expressly provided in Section 8.06;
(d) all human resources and any other employee related files and
records;
(e) any refund or credit of Taxes attributable to any Pre-Closing Tax
Period;
(f) all Books and Records (including the Excluded Books and Records)
other than the Skelaxin Books and Records and the Purchased Sonata Books
and Records;
(g) all tangible personal property owned by any of the Elan Companies
and used outside of, or not exclusively in the field as of the Closing Date
by the Hired Employees;
(h) except as otherwise expressly provided in Section 8.10, any assets
relating to any Employee Benefit Plan; and
(i) all tangible and intellectual property rights and assets relating
generically to Elan's drug delivery technology.
SECTION 2.03. Retention of Assets. Notwithstanding anything to the
contrary contained in this Agreement, the Elan Companies may retain, at their
expense, archival copies of all Assumed Contracts, Skelaxin Books and Records,
Purchased Sonata Books and Records, Skelaxin Marketing Materials, Sonata
Marketing Materials and other documents or materials conveyed hereunder;
provided, however, that the Elan Companies shall maintain such items in
accordance with the provisions of Section 8.05.
SECTION 2.04. Assignability and Consents. (a) Notwithstanding anything
to the contrary contained in this Agreement, if the sale, conveyance,
assignment, transfer or delivery or attempted sale, conveyance, assignment,
transfer or delivery to the Acquirors of any Purchased Asset is (i) prohibited
by any applicable Law or (ii) would require any authorizations, approvals,
consents or waivers from a third Person and such authorizations, approvals,
consents or waivers shall not have been obtained prior to the Closing Date
(each, a "Non-Assignable Asset"), in either case, the Closing shall proceed, but
the Closing shall not constitute the sale, conveyance, assignment, transfer or
delivery of such Non-Assignable Asset, and this Agreement shall not constitute a
sale, conveyance, assignment, transfer or delivery of such Non-Assignable Asset
unless and until such authorization, approval, consent or waiver is obtained;
provided, however, that if any one or more of the Purchased Assets set forth on
Schedule 2.04(a) of the Elan Disclosure Schedule shall constitute Non-Assignable
Assets, the Acquirors shall have the right not to consummate the Closing. After
the Closing, the Elan Companies shall continue to use commercially reasonable
efforts to obtain any Elan
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Third Party Consent, and the Acquirors shall cooperate with the Elan Companies
in any commercially reasonable arrangement and at the Elan Companies' expense to
provide that the Acquirors shall receive the interest of the Elan Companies in
the benefits, including economic benefits, under such Non-Assignable Asset until
such time as such Elan Third Party Consent shall have been obtained, and the
Elan Companies shall cooperate with the Acquirors in any such commercially
reasonable arrangement, including performance by the Elan Companies as agent if
commercially reasonable to the Elan Companies, and, in such case, the Acquirors
shall be liable to the Elan Companies in a fashion equivalent to what the
Acquirors' Liabilities would be under the Non-Assignable Asset if it were
assigned; provided, however, that the Acquirors shall only be so liable to the
Elan Companies to the extent that the Acquirors correspondingly receive such
benefits, including economic benefits, under such commercially reasonable
arrangements.
(b) The Elan Companies shall pay and discharge, and shall indemnify and
hold harmless the Acquirors from and against, any and all reasonable
out-of-pocket costs of cooperation with the Elan Companies seeking to obtain or
obtaining the Elan Third Party Consents whether before or after the Closing
Date. Once authorization, approval or waiver of or consent for the sale,
conveyance, assignment, transfer or delivery of any such Non-Assignable Asset
not sold, conveyed, assigned, transferred or delivered at the Closing is
obtained, the Elan Companies shall convey, assign, transfer and deliver such
Non-Assignable Asset to the Acquirors at no additional cost to the Acquirors.
Notwithstanding anything to the contrary contained in this Agreement, the
Acquirors shall not assume any Liabilities under a Non-Assignable Asset until
they have been assigned to the Acquirors; provided, however, that the Acquirors
shall be liable to the Elan Companies for performing their obligations under the
commercially reasonable arrangements described in Section 2.04(a); and provided
further, however, that the Acquirors shall only be so liable to the Elan
Companies to the extent that the Acquirors correspondingly receive such
benefits, including economic benefits, under such commercially reasonable
arrangements.
ARTICLE III
ASSUMPTION OF LIABILITIES
SECTION 3.01. Assumption of Liabilities. (a) Upon the terms and subject
to the conditions set forth in this Agreement, as of the Closing Date, the
Acquirors jointly and severally agree to assume, satisfy, perform, pay and
discharge each of the following Liabilities (the "Assumed Liabilities"):
(i) all Liabilities of any of the Elan Companies or any of their
respective Subsidiaries arising out of any product liability, patent
infringement, breach of warranty or similar claim for injury to person or
property asserted on or after the Closing Date but only to the extent
resulting from the use or misuse of Products sold on or after the Closing
Date by or on behalf of the Acquirors (including all proceedings relating
to any such Liabilities);
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(ii) all Liabilities of any of the Elan Companies or any of their
respective Subsidiaries under the Assumed Contracts, but only to the extent
such Liabilities arise from any event, circumstance or condition occurring
in a period (or portion thereof) on or after the Closing Date;
(iii) all Liabilities of any of the Elan Companies or any of their
respective Subsidiaries arising out of government seizures, field
corrections, withdrawals or recalls of Products sold on or after the
Closing Date by or on behalf of the Acquirors, which are claimed on or
after the Closing Date;
(iv) all Liabilities for Taxes arising out of, directly or indirectly,
the Purchased Assets or the ownership, Control, lease or license of any of
the Purchased Assets for any Post-Closing Tax Period, other than the
Excluded Tax Liabilities;
(v) all Liabilities of any of the Elan Companies or any of their
respective Subsidiaries arising out of user or other similar fees payable
to the FDA or other Governmental or Regulatory Authority but only to the
extent that such fees are due and payable on account of the operation of
the Businesses on or after the Closing Date (and to the extent that any of
the Elan Companies or any of their respective Subsidiaries have paid any
such fee prior to the Closing Date, the Acquirors shall promptly reimburse
the appropriate Elan Company or Subsidiary for such payment, subject to the
provisions of Section 11.02(b)); and
(vi) all other Liabilities of any of the Elan Companies or any of their
respective Subsidiaries arising out of, directly or indirectly, the
Purchased Assets or the ownership, Control, lease or license of any of the
Purchased Assets, but only to the extent such Liabilities arise from the
Acquirors' operation of the Businesses on or after the Closing Date.
(b) Notwithstanding anything contained in this Agreement to the
contrary or any disclosure to the Acquirors, from and after the Closing Date,
the Acquirors shall not assume any, and the Elan Companies shall retain and pay,
perform and discharge when due, all of the following Liabilities ("Excluded
Liabilities"):
(i) all accounts payable and other Liabilities of the Elan Companies
and their respective Subsidiaries for materials and services with respect
to the manufacture of the Products or any Current Skelaxin Improvement or
Sonata Line Extension incurred prior to the Closing Date;
(ii) any income Tax payable by the Elan Companies or any member of any
affiliated group of which the Elan Companies are, or have been, a member,
or any Tax arising out of, directly or indirectly, the Purchased Assets or
the ownership, Control, lease or license of any of the Purchased Assets for
any Pre-Closing Tax Period, other than any transfer Tax for which the
Acquirors are responsible pursuant to Section 4.03 ("Excluded Tax
Liability");
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(iii) all Liabilities of the Elan Companies and their respective
Subsidiaries arising out of any product liability, patent infringement,
breach of warranty or similar claim for injury to person or property
whenever asserted which resulted from the use or misuse of Products sold
prior to the Closing Date (including all proceedings relating to any such
Liabilities);
(iv) all Liabilities of the Elan Companies and their respective
Subsidiaries arising out of government seizures, field corrections,
withdrawals or recalls of Products sold prior to the Closing Date, which
are claimed prior to, on or after the Closing Date;
(v) except as otherwise expressly provided in Section 8.16, all
Liabilities of the Elan Companies and their respective Subsidiaries with
respect to any litigation or other claims to the extent arising from any
event, circumstance or condition occurring or alleged to have occurred
prior to the Closing Date;
(vi) all Liabilities of the Elan Companies and their respective
Subsidiaries arising out of user or other similar fees payable to the FDA
or other Governmental or Regulatory Authority to the extent that such fees
are payable on account of the operation of the Businesses prior to the
Closing Date;
(vii) any Liability of the Elan Companies or any of their respective
Affiliates arising out of any Excluded Asset or arising out of the
operation or conduct by the Elan Companies or their Affiliates of any
business other than the Businesses;
(viii) except as otherwise expressly provided in Section 2.04, any
Liabilities arising from or pursuant to any Contracts as to which an Elan
Third Party Consent is not obtained by the Closing Date regardless of
whether the Acquirors waive delivery of such Elan Third Party Consent;
(ix) except as otherwise expressly provided in Section 8.10, any
Liability with respect to the employees or independent contractors of the
Elan Companies or their Affiliates, including any Liability with respect to
the Employee Benefit Plans and any Liability with respect to the employment
of Employees by the Elan Companies or any of their Affiliates;
(x) except as otherwise expressly provided in Section 8.10, any
Liabilities for severance or other obligations arising out of the cessation
of employment at or prior to the Closing of Employees or any other former
employees of the Elan Companies or their Affiliates by the Elan Companies
or their Affiliates;
(xi) any Liability of the Elan Companies to any of their respective
Affiliates;
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(xii) except as otherwise expressly provided in Section 8.16, all
Liabilities of the Elan Companies and their respective Subsidiaries arising
out of any Elan Companies Proceeding; and
(xiii) any other Liability of any of the Elan Companies or any of their
respective Subsidiaries that is not specifically listed as an Assumed
Liability under Section 3.01(a).
ARTICLE IV
PURCHASE PRICE AND PAYMENT
SECTION 4.01. Purchase Price. (a) As consideration for the Purchased
Assets, at the Closing, the Acquirors shall:
(i) deliver or cause to be delivered to (A) EPIL, (x) the sum of
$95,000 in respect of the Sonata Assets (other than the Irish Purchased
Assets) owned by EPIL, (y) the sum of $301,975,000 in consideration for
EPIL terminating the Distribution and Co-Promotion Agreement, whereby EPIL
will forego its exclusive right to research, develop, distribute, market,
sell and promote Sonata in the Sonata Territory and the right to use
certain of Wyeth's trademarks, patents and certain other intellectual
property relating to Sonata in connection therewith, and its option to
purchase from Wyeth the rights in and to Sonata in the Sonata Territory and
(z) the sum of $2,500 in respect of the Irish Purchased Assets owned by
EPIL (collectively, the "EPIL Consideration") and (B) EPI, (x) subject to
clause (i)(B)(z) below, the sum of $200,000,000 in respect of the Skelaxin
Assets and the Sonata Assets owned by EPI, (y) the sum of $2,500 in respect
of the Irish Purchased Assets owned by EPI and (z) if positive, the
Estimated Closing Date Inventory Value minus $40,000,000 (to the extent
that the amount in this clause (z) is negative, it will reduce the amount
to be delivered under clause (i)(B)(x) above by a corresponding amount)
(collectively, the "EPI Consideration" and, together with the EPIL
Consideration, the "Purchase Price"), in each case payable on the Closing
Date by electronic funds transfer of immediately available funds to the
accounts of such entities; and
(ii) assume the Assumed Liabilities.
(b) The aggregate Purchase Price payable on the Closing Date shall be
adjusted as follows:
(i) the Purchase Price shall be decreased by an amount equal to the
increase over $55,000,000 in the Wyeth Purchase Price to be paid by the
Acquirors pursuant to Section 1.01 of the Wyeth/King Asset Transfer
Agreement as a result of the Closing occurring on or after April 1, 2003;
and
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(ii) (x) the Purchase Price shall be increased by an amount equal to
the aggregate amount of the reduction in the aggregate Capacity Commitment
Fees (as defined in the Wyeth/Elan Supply Agreement) required to be paid
pursuant to the Wyeth/Elan Supply Agreement because the Closing has
occurred on or after April 1, 2003 pursuant to Section 3.01(a) of the
Wyeth/Elan Supply Agreement and (y) the Purchase Price shall be increased
by an amount equal to the aggregate amount of the reduction in the
aggregate Supply Incentive Fees (as defined in the Wyeth/Elan Supply
Agreement) required to be paid pursuant to Section 3.01(b) of the
Wyeth/Elan Supply Agreement.
(c) The aggregate Purchase Price payable on the Closing Date shall be
funded through (i) release of the Escrow Amount and (ii) to the extent such
aggregate Purchase Price exceeds the Escrow Amount, by wire transfer of
immediately available funds to the accounts specified in writing by the Elan
Companies and, in each case, in accordance with clause (a)(i) set forth above in
this Section 4.01.
SECTION 4.02. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in accordance with Section 1060 of the
Code, and the Acquirors and the Elan Companies agree (a) to report the sale and
purchase of the Purchased Assets for Tax purposes in accordance with such
allocations and (b) not to take any position inconsistent with such allocations
on any of their respective tax returns. The Elan Companies shall initially
determine and send written Notice to the Acquirors of the allocation of the
Purchase Price within 30 days after the Closing Date. The Acquirors will be
deemed to have accepted such allocation unless it provides written Notice of
disagreement to the Elan Companies within 10 days after the receipt of the Elan
Companies' Notice of allocation. If the Acquirors provide such Notice of
disagreement to the Elan Companies, the parties shall proceed in good faith to
determine the allocation in dispute. If, within 10 days after the Elan Companies
receive the Acquirors' Notice of disagreement, the parties have not reached
agreement, the Accountants shall be engaged to determine the final allocation in
dispute. The Elan Companies and the Acquirors shall share equally the fees of
such Accountants. Notwithstanding anything to the contrary elsewhere in this
Section 4.02, in no event shall any portion of the EPIL Consideration be
allocated to EPI (or to the assets owned by EPI) or any portion of the EPI
Consideration be allocated to EPIL (or to the assets owned by EPIL).
SECTION 4.03. Sales, Use and Other Taxes. (a) All transfer,
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes (collectively, "Transfer Taxes") incurred in
connection with the transfer and sale of the Purchased Assets as contemplated by
the terms of this Agreement, including all recording or filing fees, notarial
fees and other similar costs of Closing, that may be imposed, payable,
collectible or incurred shall be borne by the Acquirors. The Acquirors shall
execute and deliver to the Elan Companies at Closing any resale exemption
certificate or other document required to secure an exemption from any
applicable Transfer Taxes. The parties hereto agree to reasonably cooperate with
each other to claim any applicable exemption from, or reduction of, any
applicable Transfer Taxes.
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(b) The Purchase Price shall be exclusive of any value added tax which,
if charged, shall be payable by the Acquirors.
SECTION 4.04. Tax Withholding. All payments under this Agreement will
be made without any deduction or withholding for or on account of any Taxes. The
parties hereto agree to reasonably cooperate with each other, including by
completing or filing documents required under the provisions of any applicable
income tax treaty or applicable Law, to claim any applicable exemption from, or
reduction of, any such applicable Taxes.
SECTION 4.05. Closing Date Inventory Value Adjustments. (a) As promptly
as practicable, but in any event not later than 30 days after the Closing Date,
the Elan Companies shall prepare and deliver to the Acquirors a statement
calculating the Closing Date Inventory Value (the "Closing Date Inventory Value
Statement").
(b) During the 30 day period immediately following the Acquirors'
receipt of the Closing Date Inventory Value Statement, the Acquirors shall be
permitted to review the Elan Companies' Books and Records to the extent
reasonably necessary for the Acquirors to evaluate the Closing Date Inventory
Value Statement. The Closing Date Inventory Value Statement shall become final
and binding upon the Acquirors and the Elan Companies at the end of such 30 day
period, unless the Acquirors object to the Closing Date Inventory Value
Statement, in which case they shall send written notice (the "Notice of
Objection") to the Elan Companies within such period, setting forth in specific
detail the basis for their objection and their proposal for any adjustments to
the Closing Date Inventory Value Statement. If a timely Notice of Objection is
received by the Elan Companies, then the Closing Date Inventory Value Statement
shall become final and binding (except as provided below with respect to
resolution of disputes) on the Elan Companies and the Acquirors on the first to
occur of (x) the date the Elan Companies and the Acquirors resolve in writing
any differences they have with respect to the matters specified in the Notice of
Objection and (y) the date all matters in dispute are finally resolved in
writing by the Accountants, in each case as provided below. The Elan Companies
and the Acquirors shall seek in good faith to reach agreement as to any such
proposed adjustment or that no such adjustment is necessary within 10 days
following receipt of the Notice of Objection. If agreement is reached in writing
within such 10 day period as to all proposed adjustments, or that no adjustments
are necessary, the Elan Companies and the Acquirors shall revise the Closing
Date Inventory Value Statement accordingly. If the Elan Companies and the
Acquirors are unable to reach agreement within 10 days following receipt of the
Notice of Objection, then the Accountants shall be engaged at that time to
review the Closing Date Inventory Value Statement, and shall make a
determination as to the resolution of any adjustments. The determination of the
Accountants shall be delivered as soon as practicable following engagement of
the Accountants, but in no event more than 30 days thereafter, and shall be
final, conclusive and binding upon the Elan Companies and the Acquirors and the
parties shall revise the Closing Date Inventory Value Statement accordingly. The
parties agree that judgment may be entered on such determination in any court
having jurisdiction. The Elan Companies, on the one hand, and the Acquirors, on
the other hand, shall each pay one-half of the cost of the Accountants. Within
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10 days after the date on which the Closing Date Inventory Value Statement
becomes final and binding on the Elan Companies and the Acquirors, the Acquirors
shall pay the Closing Date Inventory Value Adjustment to the Elan Companies, if
positive, and the Elan Companies shall pay the Closing Date Inventory Value
Adjustment to the Acquirors, if negative.
SECTION 4.06. Skelaxin Purchase Price Adjustment. If a Skelaxin Adverse
Determination Event shall not have occurred on or prior to December 31, 2003, on
January 2, 2004, the Acquirors shall pay or cause to be paid to EPI, by
electronic funds transfer of immediately available funds to the account of EPI,
the additional sum of $25,000,000 in respect of the Skelaxin Assets. Any payment
pursuant to this Section 4.06 shall be deemed to be part of the Purchase Price.
The Acquirors shall not sell, assign, transfer or otherwise dispose of all or
substantially all of the Skelaxin Intellectual Property in any transaction or
series of related transactions to any Person unless, as a condition thereto,
such Person assumes in writing (in form and substance reasonably satisfactory to
the Elan Companies) all of the King Companies' obligations under this Section
4.06 (it being understood that nothing in this sentence shall prohibit any
security interest on the Skelaxin Intellectual Property; provided, however, that
upon the foreclosure of any such security interest, the assignee shall take such
Skelaxin Intellectual Property subject to the King Companies' obligations under
this Agreement). In addition, (x) not less than ten (10) Business Days prior to
any sale, assignment, transfer or other disposition of any portion of the
Skelaxin Intellectual Property and (y) not less than five (5) Business Days
prior to the grant of any Encumbrance on any portion of the Skelaxin
Intellectual Property, in each case, the King Companies shall notify the Elan
Companies thereof in writing and promptly provide the Elan Companies with any
information relating thereto as the Elan Companies shall reasonably request.
ARTICLE V
CLOSING
SECTION 5.01. Time and Place. Unless this Agreement is earlier
terminated pursuant to Article XII, the closing of the transactions contemplated
by this Agreement, including the purchase and sale of the Purchased Assets and
the assumption of the Assumed Liabilities (the "Closing"), shall take place on
June 19, 2003 or, if the conditions set forth in Articles IX and X have not been
satisfied or waived on such date (other than those conditions that by their
terms are to be satisfied at the Closing, but subject to the satisfaction or
waiver of those conditions), as promptly as practicable, but in no event later
than two (2) Business Days thereafter, in each case at 10:00 a.m., New York City
time, at the offices of Cahill Gordon & Reindel llp, 80 Pine Street, New York,
New York 10005, unless another time or place shall be agreed to by the parties
(the "Closing Date").
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SECTION 5.02. Deliveries at Closing.
(a) Closing Deliveries by the Elan Companies. At the Closing, the
Elan Companies shall deliver or cause to be delivered to the Acquirors:
(i) an original of each of the Related Agreements (other than the
Pharma Marketing Settlement Agreement) and the Wyeth/Elan Agreements (other
than the Distribution and Co-Promotion Agreement and the Bulk Supply
Agreement), executed by the Elan Companies party thereto, and copies of all
documents required to be delivered by the Elan Companies pursuant to the
Related Agreements and by Wyeth or its Affiliates pursuant to the
Wyeth/Elan Agreements (other than the Distribution and Co-Promotion
Agreement and the Bulk Supply Agreement);
(ii) a copy of each of the Wyeth/King Agreements, each executed by
Wyeth or its Affiliates party thereto, and copies of all documents required
to be delivered by Wyeth or such Affiliates pursuant to the Wyeth/King
Agreements;
(iii) an unredacted, fully executed copy of each of the Assumed
Contracts;
(iv) the Skelaxin Product Registrations;
(v) assignment and assumption agreements and/or subcontracts or
other instruments of transfer, as applicable, in form and substance
reasonably acceptable to the Elan Companies and JPI, assigning to JPI all
rights of the Elan Companies in and to the Assumed Contracts;
(vi) copies of all Elan Governmental Consents set forth on Schedule
6.03(a) of the Elan Disclosure Schedule (to the extent available in
writing, and to the extent not available in writing, a schedule setting
forth in reasonable detail such Elan Governmental Consents shall be
provided by the Elan Companies) and all Elan Third Party Consents set forth
on Schedule 6.03(b) of the Elan Disclosure Schedule (to the extent
received);
(vii) executed releases of any Encumbrances that are identified on
Schedule 5.02(a)(vii) of the Elan Disclosure Schedule; and
(viii) an original of the Joint Litigation and Prosecution Agreement,
executed by each of the Elan Companies, and all documents required to be
delivered by the Elan Companies in connection therewith.
(b) Closing Deliveries by the Acquirors. At the Closing, the
Acquirors will deliver or cause to be delivered to the Elan Companies:
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(i) the Purchase Price in immediately available funds by wire
transfer to an account or accounts that shall have been designated by the
Elan
Companies not less than two Business Days prior to the Closing Date;
(ii) an original of each of the Related Agreements (other than the
Pharma Marketing Settlement Agreement), executed by the applicable
Acquirors, and copies of all documents required to be delivered by the
applicable Acquirors pursuant to the Related Agreements;
(iii) an original of each of the Wyeth/King Agreements, executed by
the applicable Acquirors, and copies of all documents required to be
delivered by the applicable Acquirors pursuant to the Wyeth/King
Agreements;
(iv) such instruments of assumption and other instruments or
documents, in form and substance reasonably acceptable to the Elan
Companies and the Acquirors, as may be necessary to effect the Acquirors'
assumption of the Assumed Liabilities;
(v) copies of all Acquiror Governmental Consents set forth on
Schedule 7.03 of the Acquiror Disclosure Schedule (to the extent available
in writing, and to the extent not available in writing, a schedule setting
forth in reasonable detail such Acquiror Governmental Consents shall be
provided by the Acquirors); and
(vi) an original of the Joint Litigation and Prosecution Agreement,
executed by each of the King Companies, and all documents required to be
delivered by the King Companies in connection therewith.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE ELAN COMPANIES
Each Elan Company represents and warrants, jointly and severally, to
the Acquirors as of (i) the date hereof with respect to the representations and
warranties set forth in Sections 6.01 through 6.04, 6.11, 6.20 and 6.21 (ii) the
Original Agreement Date with respect to the representations and warranties set
forth in Sections 6.05 through 6.10 and 6.12 through 6.21 and (iii) the Closing
Date with respect to all representations and warranties contained in Article VI,
except as to certain representations and warranties which expressly speak as of
a date certain, which shall speak as of such date, subject to such exceptions as
are disclosed in the disclosure schedule supplied by the Elan Companies to the
Acquirors and dated as of the Original Agreement Date (the "Elan Disclosure
Schedule"), as follows:
SECTION 6.01. Organization, Etc. Each Elan Company is duly organized,
validly existing and, where applicable, in good standing under the laws of such
Elan Company's jurisdiction of organization and has all requisite power and
authority to own its assets and carry on the Businesses as currently conducted
by it. Each Elan Company is duly authorized to conduct its business and is in
good standing in each jurisdiction where such
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qualification is required, except for any jurisdiction where failure to so
qualify would not have a Material Adverse Effect. The certificate of
incorporation, bylaws or other similar governing instruments and organizational
documents (the "Charter Documents") of the Elan Companies that have been
delivered to the Acquirors on or prior to the date hereof are effective under
applicable Laws and are current, correct and complete.
SECTION 6.02. Authority of the Elan Companies. Each Elan Company has
all necessary corporate power and authority and has taken all actions necessary
to enter into this Agreement, the Related Agreements and the Wyeth/Elan
Agreements to which it is or will be a party and to execute and deliver this
Agreement, the Related Agreements and the Wyeth/Elan Agreements to which it is
or will be a party and, assuming the receipt of consent of the Elan Parent's
shareholders, to carry out the transactions contemplated hereby and by the
Related Agreements and the Wyeth/Elan Agreements to which it is or will be a
party. The governing body of each Elan Company has taken all action required by
Law and the Charter Documents of each Elan Company and otherwise to be taken by
them to authorize (a) the execution and delivery of this Agreement, the Related
Agreements and the Wyeth/Elan Agreements to which each Elan Company is or will
be a party and (b) the consummation of the transactions contemplated hereby and
by the Related Agreements and the Wyeth/Elan Agreements to which each Elan
Company is or will be a party. The governing body of (i) each of the Elan Parent
and EPIL consider the terms of this Agreement, the Related Agreements and the
Wyeth/Elan Agreements and the transactions contemplated hereby and thereby to be
in the best interests of each of the Elan Parent and EPIL and their respective
shareholders as a whole and that the value of the Purchased Assets justifies the
consideration receivable pursuant to this Agreement and (ii) the Elan Parent, by
resolution duly adopted, has recommended that the shareholders of the Elan
Parent vote in favor of the transactions contemplated under this Agreement, the
Related Agreements and the Wyeth/Elan Agreements. The governing body of EPI, by
resolution duly adopted, has declared the sale of the Purchased Assets to the
Acquirors to be expedient and for the best interests of EPI and deems it
advisable and in the best interests of its shareholders to consummate, and has
approved, this Agreement, the Related Agreements and the Wyeth/Elan Agreements
and the transactions contemplated hereby and thereby on the terms and conditions
set forth in this Agreement, the Related Agreements and the Wyeth/Elan
Agreements. This Agreement has been duly and validly executed and delivered by
each Elan Company and, when executed and delivered by the King Companies, will
constitute a legal, valid and binding obligation of each Elan Company
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting generally the enforcement of
creditors' rights and (ii) the availability of equitable remedies (whether in a
proceeding in equity or at law). When executed and delivered by the applicable
Elan Company and each applicable Affiliate, Wyeth (as applicable) and each
applicable Affiliate and by the applicable King Company, each Related Agreement
and each Wyeth/Elan Agreement will constitute a legal, valid and binding
obligation of the applicable Elan Company and each applicable Affiliate
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting generally the
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enforcement of creditors' rights and (ii) the availability of equitable remedies
(whether in a proceeding in equity or at law).
SECTION 6.03. Consents and Approvals. (a) Schedule 6.03(a) of the Elan
Disclosure Schedule sets forth a complete and accurate list (the "Elan
Governmental Consents") of all consents, waivers, approvals, Orders, permits or
authorizations of, or registrations, declarations, payments or filings with, any
Governmental or Regulatory Authority that are required by or with respect to the
Elan Companies in connection with the execution and delivery of this Agreement,
the Related Agreements and the Wyeth/Elan Agreements by the Elan Companies or
the performance of their respective obligations hereunder and thereunder, except
for those consents, waivers, approvals, Orders, permits, authorizations,
registrations, declarations, payments or filings which a failure to obtain or
make would not have a Material Adverse Effect.
(b) Schedule 6.03(b) of the Elan Disclosure Schedule sets forth a
complete and accurate list (the "Elan Third Party Consents") of all consents,
waivers, approvals, or authorizations of, or notices to, any third party (other
than a Governmental or Regulatory Authority) that are required by or with
respect to the Elan Companies in connection with the execution and delivery of
this Agreement, the Related Agreements and the Wyeth/Elan Agreements by the Elan
Companies or the performance of their respective obligations hereunder and
thereunder, except for those consents, waivers, approvals, authorizations or
notices which a failure to obtain or make would not have a Material Adverse
Effect.
SECTION 6.04. Non-Contravention. The execution and delivery by the Elan
Companies of this Agreement, the Related Agreements and the Wyeth/Elan
Agreements to which they are or will be a party does not, and the performance by
them of their respective obligations under this Agreement, the Related
Agreements and the Wyeth/Elan Agreements to which they are or will be a party
and the consummation of the transactions contemplated hereby and thereby will
not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Charter Documents of any Elan
Company;
(b) assuming the receipt of the Elan Governmental Consents, conflict
with or result in a violation or breach of any term or provision of any Law
applicable to any Elan Company, the Businesses or the Purchased Assets; or
(c) conflict with or result in a Default under any Contract to which
any Elan Company is a party or by which Elan Company or any of their assets
is bound,
except, in the case of clauses (b) and (c), for such conflicts, breaches or
Defaults as would not have a Material Adverse Effect.
SECTION 6.05. Contracts. Schedule 6.05 of the Elan Disclosure Schedule
sets forth a complete and correct list of each Assumed Contract and each
Contract to
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which each Elan Company or any of its Subsidiaries is a party that is material
to the research, development, manufacture, marketing, sale or distribution of
Skelaxin, Sonata, a Current Skelaxin Product Improvement or a Sonata Line
Extension and provides for aggregate annual payments, or has a value in excess,
of $1,000,000. The Elan Companies have delivered to the Acquirors complete and
correct copies of all such Contracts. Except as would not have a Material
Adverse Effect, each of the Contracts is in effect and constitutes a legal,
valid and binding agreement of the Elan Company or Subsidiary party to such
Contract and is enforceable in accordance with its terms by such Elan Company or
Subsidiary party thereto against the applicable counterparties, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting generally the enforcement of
creditors' rights and (ii) the availability of equitable remedies (whether in a
proceeding in equity or at law); and each Elan Company has performed all of its
required obligations under, and is not in violation or breach of or Default
under, each such Contract. Except as would not have a Material Adverse Effect,
the other parties to such Contracts are not in violation or breach of or in
Default under any such Contract.
SECTION 6.06. Intellectual Property Rights. (a) The Skelaxin
Intellectual Property set forth in Schedule 6.06(a) of the Elan Disclosure
Schedule constitutes all of the Skelaxin Patent Rights, Skelaxin Copyrights,
Skelaxin Trademarks and schedulable Skelaxin Know-How that are necessary to the
operation of the Skelaxin Business as it has been and is now being conducted,
and the Sonata Copyrights set forth on Schedule 1.01(g) of the Elan Disclosure
Schedule constitute all of the copyrights owned by the Elan Companies or any of
their respective Subsidiaries that are necessary to the operation of the Sonata
Business as has been and is now being conducted by the Elan Companies. As of the
Closing Date, the Elan Companies or their respective Subsidiaries will own all
of the Skelaxin Intellectual Property set forth on Schedule 6.06(a) of the Elan
Disclosure Schedule, and all of the Sonata Copyrights set forth on Schedule
1.01(g) of the Elan Disclosure Schedule.
(b) To the Knowledge of the Elan Companies, neither the operation of
the Skelaxin Business, in the Skelaxin Territory, nor the operation of the
Sonata Business in the Sonata Territory, as has been and is now being conducted,
infringes Patent Rights of any Person and neither any Elan Company, nor any
Subsidiary thereof, has received any written notice from any Person, or has
Knowledge of, any actual or threatened claim or assertion to the contrary, nor
any actual or threatened claim or assertion that the practice of any Skelaxin
Intellectual Property or of the use of any of the Sonata Copyrights would
infringe any of the Patent Rights or other intellectual property rights of any
third party, nor any facts or alleged facts which are likely to serve as the
basis for any such claim or assertion.
(c) To the Knowledge of the Elan Companies, the Skelaxin Patent Rights
and Skelaxin Trademarks have been duly filed, prosecuted, obtained and
maintained by the Elan Companies in accordance with all applicable Laws. Any
necessary registration, maintenance and renewal fees due in connection with the
Skelaxin Patent Rights and Skelaxin Trademarks have been paid in a timely manner
and all necessary documents and certificates in connection with the Skelaxin
Patent Rights and Skelaxin Trademarks have, for the
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purposes of maintaining such Skelaxin Patent Rights and Skelaxin Trademarks,
been filed in a timely manner with the relevant Governmental or Regulatory
Authorities.
(d) The Skelaxin Intellectual Property set forth on Schedule 6.06(a) of
the Elan Disclosure Schedule and the Sonata Copyrights are free and clear of all
Encumbrances, except Permitted Encumbrances, and no Person other than the Elan
Companies and their respective Subsidiaries, including any current or former
employee or consultant of the Elan Companies and their respective Subsidiaries,
has any proprietary, commercial or other interest in any of the Skelaxin
Trademarks, Skelaxin Patent Rights, Skelaxin Copyrights, schedulable Skelaxin
Know-How or Sonata Copyrights. There are no existing agreements, options,
commitments, or rights with, of or to any Person to acquire or obtain any rights
to any of the Skelaxin Patent Rights, Skelaxin Copyrights, Skelaxin Trademarks,
schedulable Skelaxin Know-How set forth on Schedule 6.06(a) of the Elan
Disclosure Schedule or any of the Sonata Copyrights.
(e) The Elan Companies or their respective Subsidiaries have the
unrestricted right to assign, transfer and/or grant to the Acquirors all rights
in the Skelaxin Intellectual Property and the Sonata Copyrights that are being
assigned, transferred and/or granted to the Acquirors under this Agreement and
the Related Agreements, in each case free of any rights or claims of any Person
and without payment of any royalties, license fees or other amounts to any
Person.
(f) To the Knowledge of the Elan Companies, there is no unauthorized
use or infringement of any of the Skelaxin Intellectual Property or the Sonata
Copyrights by any Person.
(g) There are no Actions or Proceedings (including any inventorship
challenges) pending or, to the Knowledge of the Elan Companies, threatened with
respect to any of the Skelaxin Intellectual Property or the Sonata Copyrights
nor have any such Actions or Proceedings been brought during the past one (1)
year.
(h) The Elan Companies have not entered into any Contract (i) granting
any Person the right to bring infringement or misappropriation actions, or
defend declaratory judgment actions, with respect to, or otherwise to enforce
rights with respect to, any of the Skelaxin Intellectual Property or the Sonata
Copyrights, or (ii) expressly agreeing to indemnify any Person against any
charge of infringement of any of the Skelaxin Intellectual Property or the
Sonata Copyrights.
(i) The Elan Companies have not entered into any Contract granting any
Person the right to control the prosecution or registration of any of the
Skelaxin Patent Rights, the Skelaxin Trademarks, the Skelaxin Copyrights or the
Sonata Copyrights.
(j) None of the Skelaxin Trademarks is or has been the subject of any
opposition, cancellation, abandonment or similar proceeding, and neither any
Elan Company, nor any of its Subsidiaries, has received any written notice from
any Person, or has
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Knowledge, of any actual or threatened claim or assertion to the contrary, or of
any facts or alleged facts which are likely to serve as a basis for any such
claim or assertion.
(k) To the Knowledge of the Elan Companies, there are no trademarks or
trademark registrations or applications of any Person that are interfering or
potentially interfering with the Skelaxin Trademarks, nor any patents or patent
applications of any Person that are interfering or potentially interfering with
the Skelaxin Patent Rights.
(l) The Skelaxin Trademarks are currently in use and have been used
continuously for the goods claimed in the registration identified on Schedule
1.01(f) of the Elan Disclosure Schedule since June 1, 1998 and to the Knowledge
of the Elan Companies, use of the trademark Skelaxin(TM) was not discontinued
with the intent not to resume at any time prior to June 1, 1998.
(m) The employment by the Acquirors of the Hired Employees will, to the
Knowledge of the Elan Companies, not be prohibited by or cause the breach of any
Contract with a Person that restricts or limits the scope or type of work which,
as applicable, the Hired Employees were engaged in as of the Closing Date.
(n) This Section 6.06 contains the only representations and warranties
of the Elan Companies regarding Skelaxin Intellectual Property or the Sonata
Copyrights in this Agreement and the Related Agreements and no other provision
hereof or thereof shall be construed to contain any such representation or
warranty.
SECTION 6.07. Employee Matters. (a) The Elan Companies have provided to
the Acquirors a list setting forth (i) the names, addresses, titles and dates of
hire of each of the Employees, (ii) the then current annual base salary (or
hourly rate) and bonus for the four (4) immediately preceding fiscal quarters
for which bonuses have been paid and the estimated bonus for the immediately
preceding fiscal quarters, in each case for each Employee and (iii) to the
extent any Employee is on leave of absence, the type of leave, the date it
commenced and the expected duration of leave (based on information provided to
the Elan Companies by the Employees or their physicians). All Employees are
employed on an at-will basis. Except as set forth on Schedule 6.07(a) of the
Elan Disclosure Schedule, no Employee has a right to take more than four weeks
of vacation per year. Except as set forth on Schedule 6.07(a) of the Elan
Disclosure Schedule, no Employee is, or will become, other than as required by
Law, entitled to any payment, benefit or right, or any increased and/or
accelerated payment, benefit or right, as a result of such Employee's
termination of employment with the Elan Companies or any of their Affiliates, or
the execution of this Agreement or the consummation of the transactions
contemplated hereby and by the Related Agreements, the Wyeth/Elan Agreements and
the Wyeth/King Agreements.
(b) Schedule 6.07(b) of the Elan Disclosure Schedule contains a true
and complete list of all Employee Benefit Plans (other than stock option plans
and plans providing benefits of immaterial value to Employees) currently
maintained or contributed to by the Elan
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Companies and providing benefits to the Employees. The Elan Companies have
delivered or made available to the Acquirors a true and complete copy of each
Employee Benefit Plan set forth on Schedule 6.07(b) of the Elan Disclosure
Schedule. No Employee Benefit Plan (i) provides for defined benefit pension
benefits or (ii) is a "multiemployer plan" (as defined in Section 3(37) of
ERISA). Except as would not have a Material Adverse Effect, each Employee
Benefit Plan complies with and has at all times been administered in accordance
with all applicable Laws, including ERISA and the Code.
(c) No fewer than 80% of the management personnel set forth on Schedule
6.07(c) of the Elan Disclosure Schedule are actively employed (within the
meaning of Section 8.10(a)) in such capacities as set forth on Schedule 6.07(c)
of the Elan Disclosure Schedule by the Elan Companies as of the date which is
two (2) Business Days prior to the Original Agreement Date.
SECTION 6.08. Litigation. Except as would not have a Material Adverse
Effect, there are no Actions or Proceedings pending or threatened in writing or,
to the Knowledge of the Elan Companies, threatened, against or in connection
with (i) the Purchased Assets or the Businesses, (ii) this Agreement, any
Related Agreement or any Wyeth/Elan Agreement or (iii) the transactions
contemplated under this Agreement, any Related Agreement or any Wyeth/Elan
Agreement. No Elan Company is subject to any Order that would materially impair
or delay the ability of such Elan Company to perform its obligations under this
Agreement, the Related Agreements or the Wyeth/Elan Agreements or is in Default
with respect to any court order applicable to the Purchased Assets.
SECTION 6.09. Compliance with Law. (a) Except as would not have a
Material Adverse Effect, the Businesses are conducted by the Elan Companies and
their respective Subsidiaries in compliance with all applicable Law.
(b) Except as would not have a Material Adverse Effect, all
governmental licenses, permits, registrations, Skelaxin Product Registrations,
approvals, concessions, franchises and authorizations principally employed in,
or necessary to the ongoing conduct of, the Skelaxin Business that are held in
the name of the Elan Companies or any of their respective Subsidiaries are in
full force and effect.
(c) Except as would not have a Material Adverse Effect, since December
31, 2000, no Governmental or Regulatory Authority has served notice on any of
the Elan Companies or any of their respective Subsidiaries that the Businesses
(as of the Original Agreement Date) or the Purchased Assets were or are in
violation of any Law or the subject of any investigation.
(d) Except as would not have a Material Adverse Effect, since December
31, 2000, none of the Elan Companies or any of their respective Subsidiaries has
received written notice from any Governmental or Regulatory Authority that there
are any circumstances currently existing which would reasonably be expected to
lead to any loss of or
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refusal to renew any material governmental licenses, permits, registrations,
Skelaxin Product Registrations, approvals, concessions, franchises and
authorizations relating to Skelaxin or the Purchased Assets on terms less
advantageous to the Elan Companies and their respective Subsidiaries than the
terms of those governmental licenses, permits, registrations, Skelaxin Product
Registrations, approvals, concessions, franchises and authorizations currently
in force.
(e) (i) Except as would not have a Material Adverse Effect, the
Skelaxin Business is conducted in compliance with all applicable Laws in
connection with the preparation and submission to the FDA of each of the INDs or
NDAs that are held in the name of any of the Elan Companies or any of their
respective Subsidiaries relating to Skelaxin or a Current Skelaxin Product
Improvement (if any), and each of the INDs or NDAs that are held in the name of
any of the Elan Companies or any of their respective Subsidiaries relating to
Skelaxin or a Current Skelaxin Product Improvement (if any) has been approved
by, and none of the Elan Companies or any of their respective Subsidiaries has
received any written notice, or otherwise has Knowledge of any facts, which
have, or reasonably should have, led the Elan Companies to believe that any of
the INDs or NDAs that are held in the name of any of the Elan Companies or any
of their respective Subsidiaries relating to Skelaxin or a Current Skelaxin
Product Improvement are not currently in good standing with, the FDA. The Elan
Companies or their respective Subsidiaries have filed with the FDA all required
notices, supplemental applications and annual or other reports, including
adverse experience reports, with respect to each IND or NDA that are held in the
name of any of the Elan Companies or any of their respective Subsidiaries
relating to Skelaxin or a Current Skelaxin Product Improvement. With respect to
Skelaxin, the applicant of each IND or NDA that is held in the name of an Elan
Company or one of its Subsidiaries relating to Skelaxin or a Current Skelaxin
Product Improvement, and all Persons performing operations covered by the
application acted in compliance with 21 U.S.C. (Section) 355 or 357, 21 C.F.R.
Parts 312 or 314 et seq., respectively, and all terms and conditions of such
applications.
(ii) To the Knowledge of the Elan Companies, no Governmental or
Regulatory Authority has commenced or threatened to initiate any action to
withdraw the Skelaxin Product Registrations or request the recall of Skelaxin,
or commenced or threatened to initiate any action to enjoin production of
Skelaxin at any facility in the Skelaxin Territory, nor have the Elan Companies
or any of their Subsidiaries received any notice to such effect since December
31, 2000.
(iii) None of the Employees, have been disqualified or debarred by the
FDA for any purpose, or have been charged with or convicted under United States
federal Law for conduct relating to the development or approval, or otherwise
relating to the regulation of any drug product under the Generic Drug
Enforcement Act of 1992, the FDA Act or any other relevant Law or have made an
untrue statement of a material fact to any Governmental or Regulatory Authority
with respect to Skelaxin or a Current Skelaxin Product Improvement (whether in
any submission to such Governmental or Regulatory Authority or otherwise), or
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failed to disclose a material fact required to be disclosed to any Governmental
or Regulatory Authority with respect to Skelaxin or a Current Skelaxin Product
Improvement.
(iv) The Elan Companies and their respective Subsidiaries have
delivered to the Acquirors copies of all material (A) reports of FDA Form 483
inspection observations, (B) establishment inspection reports, (C) warning
letters and (D) other documents that assert ongoing lack of compliance in any
material respect with any applicable Laws or regulatory requirements (including
those of the FDA), in each case to the extent received since December 31, 2000
by the Elan Companies or any of the Elan Companies' Subsidiaries from the FDA or
any other Governmental or Regulatory Authority relating to Skelaxin or a Current
Skelaxin Product Improvement and/or arising out of the conduct of the
Businesses.
SECTION 6.10. Inventory. All of the Inventory (a) is good, issuable and
merchantable in the Ordinary Course of Business, (b) in the case of Skelaxin
Inventory, was produced or manufactured in accordance with the specifications
for Skelaxin as set forth in the applicable Skelaxin Product Registrations and
in compliance with applicable Law and (c) has at least a twelve (12) month shelf
life. The Elan Companies at Closing will have good and marketable title to the
Inventory free and clear of any Encumbrances, other than Permitted Encumbrances.
During the period beginning on February 1, 2003 and ending on May 8, 2003, the
Elan Companies have sold the Skelaxin Inventory and Sonata Inventory in the
Skelaxin Territory and Sonata Territory, respectively, as set forth on Schedule
6.10 of Elan Disclosure Schedule.
SECTION 6.11. Brokers. The King Companies have no, and will have no,
obligation to pay any brokers (including real estate brokers), finders,
investment bankers, financial advisors or similar fees in connection with this
Agreement, the Original Agreement, the Related Agreements, the Wyeth/Elan
Agreements or the transactions contemplated hereby and thereby by reason of any
action taken by or on behalf of the Elan Companies or any of their respective
Subsidiaries.
SECTION 6.12. Sufficiency of Purchased Assets. The Purchased Assets
(together with the rights to be transferred or granted to the Acquirors and
their Affiliates under the Related Agreements and the Wyeth/King Agreements)
constitute all of the assets, Contracts, Skelaxin Governmental Permits, rights
and services required for the continued operation of the Businesses by the
Acquirors as operated by the Elan Companies during the past twelve (12) months.
SECTION 6.13. Customers and Suppliers. The Elan Companies have used
reasonable business efforts to maintain, and currently maintain, good working
relationships with all of the customers and suppliers of the Businesses.
Schedule 6.13 of the Elan Disclosure Schedule specifies for the period beginning
January 1, 2002 to the Original Agreement Date the names of the customers that
were, in the aggregate, the ten (10) largest customers in terms of dollar value
of each of the Products, sold by the Businesses. None of such customers has
given any of the Elan Companies or any of their respective Subsidiaries
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notice terminating, canceling or threatening to terminate or cancel any Contract
or relationship with any of the Elan Companies or any of their respective
Subsidiaries relating to the Businesses. Schedule 6.13 of the Elan Disclosure
Schedule also specifies for the period beginning January 1, 2002 to the Original
Agreement Date the names of the suppliers of each of the Products. None of such
suppliers has given any of the Elan Companies or any of their respective
Subsidiaries notice terminating, canceling or threatening to terminate or cancel
any Contract or relationship with any of the Elan Companies or any of their
respective Subsidiaries relating to the Businesses.
SECTION 6.14. Operation of the Business; Description of the Business.
Since December 31, 2001 (a) the Businesses have been conducted only through EPI
and EPIL and their respective predecessors and not through any other divisions
or any direct or indirect Subsidiary or Affiliate of EPI and EPIL, and (b) no
part of the Businesses have been operated by any Person other than EPI and EPIL
or their respective predecessors. No Person other than the Elan Companies owns
or possesses any material assets or properties that have been used in the
Businesses, other than Persons who have granted to the Elan Companies or their
respective predecessors leasehold interests in or valid licenses to use other
assets or properties used in the Businesses pursuant to Contracts that are
listed on Schedule 6.14 of the Elan Disclosure Schedule. Neither the Elan Parent
nor any of its Subsidiaries engages in research, development, manufacture,
distribution, marketing, sale or promotion of Competing Products in the Skelaxin
Territory or the Sonata Territory other than in the Businesses.
SECTION 6.15. Financial Information. Schedule 6.15 of the Elan
Disclosure Schedule sets forth certain unaudited financial information regarding
Skelaxin and Sonata (the "Financial Information"). The Financial Information
accurately presents in all material respects such financial information for the
periods indicated, based upon the accounting principles, and subject to the
limitations, set forth on Schedule 6.15 of the Elan Disclosure Schedule.
SECTION 6.16. Title. (a) The Elan Companies have good and valid title
to all the Purchased Assets free and clear of all Encumbrances, except Permitted
Encumbrances.
(b) This Section 6.16 does not relate to Skelaxin Intellectual Property
or Sonata Copyrights, such items being the subject of Section 6.06, or
Inventory, such item being the subject of Section 6.10.
SECTION 6.17. Voting Requirements. The affirmative vote at the Elan
Shareholders Meeting or any adjournment or postponement thereof of a majority of
the votes represented by the Elan Shares cast on the resolutions required to be
passed to permit the Elan Parents to give effect to the transactions
contemplated by this Agreement, the Related Agreements and the Wyeth/Elan
Agreements is the only vote or consent of the holders of any class or series of
the share capital of the Elan Parent which may be necessary to approve such
transactions.
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SECTION 6.18. Insurance. All material policies of insurance and the
amounts of coverage on the Purchased Assets held by the Elan Companies or their
respective Affiliates are reasonable and customary in the pharmaceutical
industry and in relation to the nature of the Purchased Assets. There is no
Default with respect to any such policy, nor has there been any failure to give
any notice or present any claim under any such policy in a timely fashion or in
the manner or detail required by the policy. There is no Notice of non-renewal
or cancellation with respect to, or disallowance of any claim under, any such
policy that has been received by the Elan Companies or any of their respective
Affiliates.
SECTION 6.19. Pharma Marketing Settlement Agreement. The Elan Companies
have delivered true and correct copies of Settlement Agreement (excluding
exhibits), dated as of January 29, 2003, by and among Pharma Marketing Ltd.,
Pharma Operating Ltd., the Elan Parent, EPIL and Axogen Limited (the "Pharma
Marketing Settlement Agreement") to the Acquirors at or prior to the Original
Agreement Date. None of the Elan Companies nor Axogen Limited, are in breach of
any of their respective obligations under, or any provision of, the Pharma
Marketing Settlement Agreement. As of and after the Closing, there will be no
Encumbrances relating to the Products arising out of the Pharma Marketing
Settlement Agreement.
SECTION 6.20. Certain Covenants Under the Original Agreement. The Elan
Companies performed in all material respects the agreements and covenants set
forth in Sections 8.01(a), 8.01(b), 8.03, 8.09, 8.14 and 8.21 of the Original
Agreement, to be performed by them from the Original Agreement Date through the
date hereof.
SECTION 6.21. No Other Representations and Warranties. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ELAN
COMPANIES DISCLAIM ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED,
WITH REGARD TO THE PURCHASED ASSETS AND THE BUSINESSES, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF
INTELLECTUAL PROPERTY RIGHTS.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
PARENT AND THE ACQUIRORS
Each of the Acquiror Parent and the Acquirors represents and warrants
to the Elan Companies as of (i) the date hereof with respect to the
representations and warranties set forth in Sections 7.01 through 7.04 and 7.06
through 7.08, (ii) the Original Agreement Date with respect to the
representations and warranties set forth in Sections 7.05 and 7.08 and (iii) the
Closing Date with respect to all representations and warranties contained in
Article VII, except as to certain representations and warranties which expressly
speak as of a date certain, which shall speak as of such date, subject to such
exceptions as are disclosed in the disclosure
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schedule supplied by the Acquirors to the Elan Companies and dated as of the
Original Agreement Date (the "Acquiror Disclosure Schedule") as follows:
SECTION 7.01. Corporate Organization. Each of the Acquiror Parent and
the Acquirors is a corporation duly organized, validly existing and in good
standing under the laws of such corporation's jurisdiction of organization and
has all requisite corporate power and authority to own its assets and carry on
its business as currently conducted by it. Each of the Acquiror Parent and the
Acquirors is duly authorized to conduct its business and is in good standing in
each jurisdiction where such qualification is required, except for any
jurisdiction where failure to so qualify would not have an Acquiror Material
Adverse Effect.
SECTION 7.02. Authority of the Acquiror Parent and the Acquirors. Each
of the Acquiror Parent and the Acquirors has all necessary power and authority
and has taken all actions necessary to enter into this Agreement and to execute
and deliver the Related Agreements and the Wyeth/King Agreements to which it is
or will be a party and to carry out the transactions contemplated hereby and by
the Related Agreements and the Wyeth/King Agreements to which it is or will be a
party. The board of directors of each of the Acquiror Parent and the Acquirors
has taken all action required by Law and the Charter Documents of each King
Company and otherwise to be taken by them to authorize (a) the execution and
delivery of this Agreement, the Related Agreements and the Wyeth/King Agreements
to which the applicable King Company is or will be a party and (b) the
consummation of the transactions contemplated hereby and by the Related
Agreements and the Wyeth/King Agreements to which the applicable King Company is
or will be a party. This Agreement has been duly and validly executed and
delivered by each of the Acquiror Parent and the Acquirors and, when executed
and delivered by each Elan Company, will constitute a legal, valid and binding
obligation of the Acquiror Parent and the Acquirors enforceable against them in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to
or affecting generally the enforce