SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 19, 1996
DYNAGEN, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-11352 04-3029787
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(State or other jurisdiction of (Commission file (I.R.S. Employer
incorporation or organization) number) Identification No.)
99 Erie Street, Cambridge, MA 02139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 491-2527
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No change since last report
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(Former name or address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On August 9, 1996, DynaGen, Inc. ("DynaGen"), and Able Acquisition
Corp., a subsidiary of DynaGen (together with DynaGen, the "Buyers"), entered
into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Alpharma
USPD Inc. ("Alpharma") and Able Laboratories, Inc. (the "Seller"), a subsidiary
of Alpharma. On August 19, 1996, the Buyers acquired, pursuant to the Asset
Purchase Agreement, substantially all of the assets of the Seller (the
"Assets"), including all machinery and equipment and all raw materials,
work-in-process, finished and other inventories of the Seller's tablet business,
including finished goods presently located at Alpharma's central distribution
center in Baltimore, Maryland; related supplies and all equipment for the
manufacture of suppository products; and all proprietary rights. The purchase
price and terms for the transaction were determined in arms-length negotiations
between the parties. On August 19, 1996, the Buyers paid the Seller $550,000 in
cash in exchange for the Assets, which purchase price was paid out of DynaGen's
cash reserves. The Buyers also assumed the Seller's obligations, including the
payment of rent in the amount of $21,965 per month plus certain expenses, under
a lease for real property located in South Plainfield, New Jersey, until such
lease expires on March 31, 2000. As additional consideration for the purchase
and sale of the Assets, the Buyers agreed pursuant to the Asset Purchase
Agreement not to directly or indirectly manufacture or sell, or assist any third
party in the manufacture or sale of, certain suppository products for periods of
between two and five years. The Seller and Alpharma agreed pursuant to the Asset
Purchase Agreement not to directly or indirectly manufacture or sell any tablet
product for a period of five years. A copy of the Asset Purchase Agreement is
attached as Exhibit 2.1 to this Current Report on Form 8-K.
DynaGen is primarily engaged in the development and marketing of
therapeutic and diagnostic products for the human health care market. The Seller
is a pharmaceutical manufacturing firm specializing in all phases of drug
manufacturing and over-the-counter/generic drug compounding for generic
wholesalers, retail drug chains and ethical drug procedures. DynaGen intends to
continue to use the assets purchased from the Seller for the purpose of
manufacturing suppository and solid dosage tablet products.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
It is impracticable to provide the financial statements
required pursuant to Regulation S-X at the time this report is
filed. Such required financial information will be filed under
cover of Form 8-K as soon as practicable but not later than
October 18, 1996.
(b) Unaudited Pro Forma Combined Financial Information.
It is impracticable to provide the pro forma financial
information required pursuant to Article 11 of Regulation S-X
at the time this report is filed. Such
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required pro forma financial information will be filed under
cover of Form 8-K as soon as practicable but not later than
October 18, 1996.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated August 9, 1996, among
DynaGen, Inc., Able Acquisition Corp., Able
Laboratories, Inc. and Alpharma USPD Inc.
2.2 Product Supply Agreement, dated August 9, 1996, among
DynaGen, Inc., Able Acquisition Corp. and Able
Laboratories, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DYNAGEN, INC.
By: /s/Dhanajay G. Wadekar
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Name: Dhanajay G. Wadekar
Title:Executive Vice President
Dated: August 19, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
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<S> <C> <C>
2.1 Asset Purchase Agreement, dated August 9, 1996, among DynaGen, Inc., Able
Acquisition Corp., Able Laboratories, Inc. and Alpharma USPD Inc.
2.2 Product Supply Agreement, dated August 9, 1996, among DynaGen, Inc., Able
Acquisition Corp. and Able Laboratories, Inc.
</TABLE>
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ASSET PURCHASE AGREEMENT
AMONG
ABLE ACQUISITION CORP.
AND
DYNAGEN, INC.,
AS BUYER,
ABLE LABORATORIES, INC.,
AS SELLER
AND
SOLELY FOR PURPOSES OF SECTION 6.4(B)
ALPHARMA USPD INC.
AUGUST 9, 1996
================================================================================
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I
PURCHASE AND SALE OF ASSETS..............................................................................1
1.1 Purchase and Sale of Assets.....................................................................1
1.2 Retained Assets.................................................................................3
1.3 Assumed Liabilities.............................................................................3
1.4 Excluded Liabilities............................................................................3
1.5 Purchase Price; Allocation......................................................................5
1.6 Closing Transactions............................................................................5
1.7 Assignment of Contracts and Rights..............................................................5
1.8 Further Transfers...............................................................................6
ARTICLE II
CONDITIONS TO CLOSING....................................................................................6
2.1 Conditions to Buyer's Obligations...............................................................6
2.2 Conditions to Seller's Obligations..............................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER.............................................................8
3.1 Organization and Corporate Power................................................................8
3.2 Authorization of Transactions...................................................................8
3.3 Absence of Conflicts............................................................................9
3.4 Purchased Assets................................................................................9
3.5 LIMITATION OF WARRANTIES........................................................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER..............................................................9
4.1 Corporate Organization and Power................................................................9
4.2 Authorization..................................................................................10
4.3 Absence of Conflicts...........................................................................10
4.4 Seller Notification............................................................................10
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ARTICLE V
RETAINED ASSETS.........................................................................................10
5.1 Retention of Retained Assets...................................................................10
5.2 Buyer's Possession of Suppository Assets.......................................................11
5.3 Transfer of Possession of Suppository Assets...................................................11
ARTICLE VI
COVENANTS...............................................................................................11
6.1 Business.......................................................................................11
6.2 Access.........................................................................................12
6.3 Payment of Assumed Liabilities.................................................................12
6.4 Non-Competition................................................................................12
6.5 Transitional Services..........................................................................13
6.6 Conduct of the Business Prior to Closing Date..................................................14
6.7 Facility Lease.................................................................................14
6.8 Releases.......................................................................................14
ARTICLE VII
EMPLOYEES AND PLANS.....................................................................................14
7.1 Employment.....................................................................................14
ARTICLE VIII
ADDITIONAL AGREEMENTS...................................................................................15
8.1 Bulk Sales Law.................................................................................15
8.2 Press Releases and Announcements...............................................................15
8.3 Further Transfers..............................................................................15
8.4 Expenses.......................................................................................16
ARTICLE IX
DEFINITIONS.............................................................................................16
ARTICLE X
MISCELLANEOUS...........................................................................................18
10.1 Amendment and Waiver...........................................................................18
10.2 Notices........................................................................................18
10.3 Binding Agreement; Assignment..................................................................19
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10.4 Severability...................................................................................20
10.5 No Strict Construction.........................................................................20
10.6 Headings.......................................................................................20
10.7 Entire Agreement...............................................................................20
10.8 Exclusive Remedy...............................................................................20
10.9 Counterparts...................................................................................20
10.10 Governing Law; Consent to Jurisdiction.........................................................20
</TABLE>
EXHIBITS
Exhibit A - Form of Product Supply Agreement
Exhibit B - Form of Assignment Agreement
Exhibit C - Form of Seller's Officer's Certificate
Exhibit D - Form of Buyer's Officer's Certificate
LIST OF SCHEDULES
Schedule 1 - Retained Assets
Schedule 1.1(a)(i) - Sold Inventory
Schedule 1.1(a)(iii) - Purchased Equipment and Machinery
Schedule 1.1(b) - Material Contracts
Schedule 1.1(h) - Products and ANDA Numbers
Schedule 3.4 - Encumbrances
Schedule 6.4(a) - Buyer Non-Compete Products
Schedule 6.4(c) - Seller Non-Compete Products
Schedule 7.1(b) - Certain Employees
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ASSET PURCHASE AGREEMENT
AGREEMENT made as of August 9, 1996 among Dynagen, Inc., a
Delaware corporation ("Dynagen"), Able Acquisition Corp., a Delaware corporation
(together with Dynagen the "Buyer"), Able Laboratories, Inc, a New Jersey
corporation (the "Seller"), and solely for purposes of Section 6.4(b), Alpharma
USPD Inc., a Maryland corporation. Except as otherwise indicated herein,
capitalized terms used herein are defined in Article IX hereof.
WHEREAS, the Buyer desires to purchase from the Seller
substantially all of the assets of the Seller, including all Suppository
Equipment and machinery and equipment (including equipment relating to Seller's
suppository products), non-suppository intangible assets and all inventories of
the tablet business (including finished goods of the tablet business presently
located at ALPHARMA's (as defined below) central distribution center in
Baltimore, Maryland) (the "Tablet Business") and the ANDAs (as defined below)
for the products set forth on Schedule 1.1(h);
WHEREAS, the Seller and the Buyer desire that the Seller will
retain those assets of the Company listed on Schedule 1 attached hereto (the
"Retained Assets");
WHEREAS, the Buyer and Seller will execute the Product Supply
Agreement (the "Product Supply Agreement") at Closing, the form of which is
attached hereto as Exhibit A;
NOW, THEREFORE, subject to the terms and conditions set forth
in this Agreement, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS. At the Closing (as defined
below), subject to the terms and conditions set forth in Section 2.1 and 2.2, as
applicable, the Buyer shall purchase from the Seller and the Seller shall sell,
convey, assign, transfer, and deliver to the Buyer, all properties, assets, and
rights of the Seller, whether tangible or intangible, real or personal, other
than the properties, assets and rights related to the Retained Assets (the
"Purchased Assets"). The Purchased Assets include, without limitation, all
right, title and interest of the Seller in and to the following, except to the
extent that any of the following are included in the Retained Assets:
(a) all machinery and equipment and all raw materials,
work-in-process, finished and other inventories of
the Tablet Business (other than the inventory set
forth on Schedule 1.1(a)(i) to the extent that such
inventory has been removed from
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the Facility on or prior to August 31, 1996 (the
"Sold Inventory")) and related supplies and all
equipment for the manufacture of suppository
products, including, without limitation, those assets
set forth on Schedule 1.1(a) (ii) to the extent they
are still in existence and in Seller's possession
immediately prior to Closing;
(b) all proprietary rights (including the name "Able
Laboratories"), along with all income, royalties,
damages and payments due or payable as of the Closing
Date (as defined below) or thereafter (including
damages and payments for past, present or future
infringements or misappropriations thereof), the
right to sue and recover for past infringements and
misappropriations thereof, and any and all
corresponding rights that, now or hereafter, may be
secured, in each case together with all books,
records, drawings, recipes, application or other
indicia thereof, and in each case together with
goodwill associated therewith;
(c) all real property, leaseholds (including, without
limitation, the leasehold under the Facility Lease)
and sublease holds, and all plants, buildings,
improvements and fixtures and fittings located on
such owned or leased property, and all easements,
licenses, rights of way, permits and all
appurtenances to such owned or leased property;
(d) all rights existing under contracts (other than the
Excluded Contract), leases, licenses, permits, supply
and distribution arrangements, sales and purchase
agreements and orders, consignment arrangements,
warranties, consents, orders, registrations,
privileges, memberships, certificates, approvals or
other similar rights and all other agreements,
arrangements and understandings, other than
employment and consulting agreements (including,
without limitation, the agreements set forth on
Schedule 1.1(d)) (collectively, "Contracts");
(e) copies of all lists and records (including copies of
financial and accounting records relating to the
Tablet Business) pertaining to customers, suppliers,
distributors, personnel and agents and copies of all
other files, documents, correspondence, plats,
architectural plans, drawings and other printed and
written materials;
(f) to the extent transferable, all franchises,
approvals, permits, licenses, orders, registrations,
certificates, variances and similar rights obtained
from all government entities (including the United
States Food and Drug Administration) and other
permitting, licensing, accrediting and certifying
agencies, and the rights to all data and records held
by such government entities or other permitting,
licensing and certifying agencies;
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(g) except as otherwise specifically provided herein, all
other assets, properties, claims, credits, rights,
choses in action, rights of set-off and interests of
Seller relating to the Purchased Assets of the Tablet
Business of every kind and nature and description
whether or not disclosed herein or in the financial
statements, and whether tangible or intangible, real,
personal or mixed; and
(h) the ANDAs for the products set forth on Schedule
1.1(h).
1.2 RETAINED ASSETS. Notwithstanding Section 1.1, the Retained
Assets are expressly excluded from the purchase and sale contemplated hereby
and, as such, are not included in the Purchased Assets.
1.3 ASSUMED LIABILITIES. At Closing, subject to the terms and
conditions set forth in Sections 2.1 and 2.2, as applicable, as additional
consideration for the Purchased Assets, the Buyer hereby agrees to assume and
become responsible for and pay all Liabilities of the Seller other than the
Excluded Liabilities (the "Assumed Liabilities") including, without limitation:
(a) all Liabilities of the Seller under the Contracts
other than the Excluded Contract, whether existing or
arising hereafter;
(b) all Liabilities associated with purchase commitments
made in the ordinary course of business by Seller
prior to Closing for which goods or services are to
be received by the Buyer after Closing; and
(c) all Liabilities of Seller with respect to any real
property included in the Purchased Assets (whether
owned or leased) including all leasehold obligations,
obligations with respect to environmental liabilities
and regulatory compliance (other than those
obligations retained by Seller pursuant to Section
1.4(b)) and obligations with respect to utility
services supplied thereto.
1.4 EXCLUDED LIABILITIES. The Buyer will not assume or in any
way become liable for, and the Seller will retain and remain responsible for and
pay in accordance with their respective terms, all Liabilities of the Seller set
forth below (the "Excluded Liabilities"):
(a) all Liabilities of Seller resulting from product
liability claims for damage or injury, actual or
alleged, to persons or property resulting from the
ownership, possession or use of (i) any product
manufactured by Seller prior to Closing to the extent
such claim arises out of a manufacturing defect or
(ii) any product manufactured and sold to customers
by Seller prior to Closing; provided, however, that
such Liabilities shall not include Liabilities where
3
such damage or injury is related to the improper
storage, warehousing, delivery, distribution or other
handling of such product after Closing;
(b) all Liabilities arising from any Governmental Agency
or third party claim arising under any Environmental
Law with respect to any release of a hazardous
substance into the environment at or from the
properties or facilities of the Business to the
extent, and in the proportion, Buyer demonstrates by
competent evidence that such release took place prior
to Closing;
(c) all Liabilities of Seller with respect to taxes
arising prior to Closing;
(d) all Liabilities of Seller related to the Retained
Assets and arising on or prior to the Closing Date or
at any time when any particular Retained Asset is in
the possession of and under the control of the
Seller;
(e) all Liabilities of Seller with respect to unpaid
wages, severance (including any severance as a result
of the transactions contemplated by this Agreement),
workers compensation claims arising out of injuries
prior to Closing, commissions and accrued vacations
incurred in the ordinary course, employee benefit
plans and compensation or retirement plans, or under
the Consolidated Budget Reconciliation Act of 1985,
in each case arising prior to Closing;
(f) all Liabilities of Seller under or pursuant to this
Agreement, the other agreements contemplated hereby
or any other agreement between either of the Seller,
on the one hand, and the Buyer, on the other hand,
entered into on or after the date of this Agreement;
(g) all Liabilities of the Seller with respect to the
Excluded Contract; and
(h) all Liabilities of Seller arising out of actions of
Seller prior to Closing other than Liabilities which:
(i) relate to compliance with laws or regulations,
taxes or product liability claims, (ii) arise from
any Governmental Agency or third party claim arising
under any Environmental Law, (iii) relate to unpaid
wages, severance, workers compensation claims or any
other employee benefit matters or (iv) Buyer has
assumed and become responsible for pursuant to
Sections 1.3(a), 1.3(b) or 1.3(c); provided, however,
the Seller will retain and remain responsible for the
Liabilities set forth in Sections 1.4(a) through
1.4(g).
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1.5 PURCHASE PRICE; ALLOCATION.
(a) The Buyer agrees to pay to the Seller at the Closing
$550,000 (the "Purchase Price") by wire transfer or delivery of other
immediately available funds.
(b) Buyer and Seller agree for tax purposes that this
Agreement is for the purchase and sale of assets and that the Purchase Price,
the Assumed Liabilities and all other capitalizable costs shall be allocated
among the Purchased Assets and the covenants of Seller in accordance with a
mutually agreed upon Allocation Statement. The Allocation Statement will be
initially prepared by Buyer and shall be agreed upon prior to Closing. Buyer and
Seller agree to report this transaction for tax purposes in accordance with such
Allocation Statement and to file Form 8594 with the Internal Revenue Service as
required under Section 1060 of the Internal Revenue Code of 1986, as amended.
1.6 CLOSING TRANSACTIONS.
(a) Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") will take place at the offices of Kirkland &
Ellis, Citicorp Center, 153 East 53rd Street, New York, New York at 10:00 a.m.
on August 15, 1996 or such other date as may be mutually agreed to by the Seller
and the Buyer. The parties hereto agree that time is of the essence. The date
and time of the Closing are herein referred to as the "Closing Date."
(b) Deliveries at the Closing. Subject to the conditions set
forth in this Agreement, the parties agree to consummate the following
transactions on the Closing Date:
(i) The Seller will convey all of the Purchased
Assets to the Buyer and will deliver to the Buyer a bill of sale,
assignments of leases and all other instruments of conveyance which are
required for or which the Buyer reasonably requests to effect the sale
and transfer to the Buyer of the Purchased Assets;
(ii) The Buyer will assume the Assumed Liabilities
and will deliver all instruments which the Seller reasonably requests
to effect the assumption of the Assumed Liabilities by the Buyer;
(iii) The Buyer and the Seller, as applicable, shall
cause the certificates and other documents and instruments to be
delivered pursuant to Article II hereof; and
(iv) The Buyer will deliver to the Seller the
Purchase Price in immediately available funds.
1.7 ASSIGNMENT OF CONTRACTS AND RIGHTS. To the extent that any
Contracts shall require the consent of the other party thereto, this Agreement
shall not constitute an agreement to assign the same if an attempted assignment
would constitute a breach thereof. The Seller will use
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reasonable efforts to obtain such consent of the other parties to such Contracts
for the assignment thereof to the Buyer.
1.8 FURTHER TRANSFERS. After Closing, if an asset which is a
Retained Asset is discovered to have been transferred to Buyer in error or if an
asset which is a Purchased Asset is discovered to have been retained by Seller
in error, the Buyer and the Seller agree to execute and deliver such bills of
sale, assignments or other instruments of conveyance which are required for or
which the Seller reasonably requests to effect the transfer back to the Seller
of the Retained Asset or the Buyer reasonably requests to effect the transfer to
the Buyer of the Purchased Asset.
ARTICLE II
CONDITIONS TO CLOSING
2.1 CONDITIONS TO BUYER'S OBLIGATIONS. The obligation of Buyer
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction or waiver of the following conditions on or before the Closing
Date:
(a) the representations and warranties set forth in Article
III hereof will be true and correct on the date hereof and at and as of the
Closing Date as though then made;
(b) the Seller will have performed and complied with all of
the covenants and agreements required to be performed by it under this Agreement
prior to the Closing;
(c) subject to the provisions of Section 1.7, Seller shall
have used its best efforts to have obtained at Buyer's cost and expense all
consents and waivers by third parties that are required for the transfer of the
Purchased Assets to Buyer or that are required for the consummation of the
transactions contemplated hereby including, without limitation, any consents
required pursuant to any leases or subleases or that are required in order that
the transactions contemplated hereby do not constitute a breach of or a default
under or a termination or modification of any agreement to which the Seller is a
party or to which any portion of the Purchased Assets is subject;
(d) all governmental filings, authorizations and approvals
that are required for the consummation of the transactions contemplated hereby,
if any, will have been duly made and obtained on terms reasonably satisfactory
to Buyer;
(e) the Seller shall have made all filings of environmental
nature required for the transactions contemplated hereby with all federal, state
and local regulatory authorities, including all filings required under the New
Jersey Industrial Site Recovery Act ("ISRA"), N.J.S.A. 13:1K-6 et seq. Further,
with respect to ISRA, on or before the Closing, the Seller shall have obtained
from the New Jersey Department of Environmental Protection and Energy ("NJDEPE")
and delivered to the
6
Buyer either: (i) a Letter of Non-Applicability from NJDEPE or (ii) approval by
NJDEPE of a Negative Declaration submitted by the Seller (collectively, the
"ISRA Clearance");
(f) the Buyer and the Seller shall have entered into the
Product Supply Agreement in the form of Exhibit A hereto;
(g) the Seller shall have delivered to the Buyer (i) a
certificate from the Seller in the form of Exhibit C attached hereto, dated the
Closing Date, stating that the conditions specified in Sections 2.1(a)-(e) have
been satisfied, (ii) copies of all consents, waivers and governmental filings,
authorizations and approvals required in connection with the consummation of the
transactions contemplated hereunder, and (iii) such other documents or
instruments as Buyer may reasonably request to effect the transactions
contemplated hereby;
(h) the Seller shall have caused the filing of a UCC-3
Termination Statement relating to the release of all liens of A.L. Laboratories,
Inc. on the Purchased Assets; and
(i) the Buyer and Seller shall have agreed upon the Allocation
Statement.
2.2 CONDITIONS TO SELLER'S OBLIGATIONS. The obligation of the
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction or waiver of the following conditions on or before the
Closing Date:
(a) the representations and warranties set forth in Article IV
hereof will be true and correct on the date hereof and at and as of the Closing
Date as though then made;
(b) the Buyer shall have performed and complied in all
material respects with all of the covenants and agreements required to be
performed by it under this Agreement prior to the Closing;
(c) all governmental filings, authorizations and approvals
that are required for the consummation of the transactions contemplated hereby,
if any, shall have been duly made and obtained;
(d) the Buyer shall have retained and borne the expense of
environmental consultants and attorneys satisfactory to the Buyer in its
reasonable judgment to conduct an environmental assessment of the real property
at 6 Hollywood Court, South Plainfield, New Jersey 07080 (the "Environmental
Assessment"), which shall have included physical inspections, review of all
relevant governmental agency and other records and contact with governmental
agency personnel, sampling and any other investigatory activities of a scope
satisfactory to the Buyer in its reasonable judgment;
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(e) the Buyer shall have filed at Buyer's expense in the
relevant jurisdictions UCC-1 financing statements as required by Section 6.7,
reflecting Seller's interest in the Suppository Equipment, such UCC-1 financing
statements to be in form and substance satisfactory to the Seller;
(f) the Buyer and the Seller shall have entered into the
Product Supply Agreement which shall be in the form of Exhibit A hereto;
(g) the Seller shall have received certificates of insurance
evidencing the insurance coverage required by Section 5.5 of the Product Supply
Agreement and evidencing Seller's status as an additional insured under such
insurance policies;
(h) the leasehold under the Facility Lease shall have been
assigned to the Buyer pursuant to the form of Assignment Agreement attached
hereto as Exhibit B;
(i) the Buyer shall have delivered to the Seller (i) a
certificate from the Buyer in the form set forth in Exhibit D attached hereto,
dated the Closing Date, stating that the conditions specified in Sections
2.2(a)-(e) have been satisfied, (ii) copies of the Environmental Assessment and
all consents, waivers and governmental filings, authorizations and approvals
required in connection with the consummation of the transactions contemplated
hereby, (iii) certified copies of the resolutions of Buyer's board of directors
approving the transactions contemplated by this Agreement, and (iv) such other
documents or instruments as Seller may request to effect the transactions
contemplated hereby; and
(j) the Buyer and Seller shall have agreed upon the Allocation
Statement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As a material inducement to Buyer to enter into this
Agreement, Seller hereby represents and warrants to Buyer that:
3.1 ORGANIZATION AND CORPORATE POWER. The Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey with full corporate power and authority to execute
and deliver this Agreement and the other agreements and documents contemplated
hereby and perform its obligations hereunder and thereunder.
3.2 AUTHORIZATION OF TRANSACTIONS. The execution, delivery and
performance by the Seller of this Agreement and the other agreements and
documents contemplated hereby have been duly and validly authorized by all
requisite corporate action on the part of the Seller and no other corporate
proceedings on its part are necessary to approve and authorize the execution and
delivery of this Agreement and the other agreements and documents contemplated
hereby and the
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consummation of the transactions contemplated hereby and thereby. This Agreement
and the other agreements and documents contemplated hereby have been duly
executed and delivered by the Seller and constitute valid and binding agreements
of the Seller, enforceable against the Seller in accordance with their terms.
3.3 ABSENCE OF CONFLICTS. The execution, delivery and
performance of this Agreement and the other agreements and documents
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby do not and will not (a) conflict with or result in a breach of any
of the provisions of, (b) constitute a default under, (c) result in a violation
of, (d) give any third party the right to terminate or to accelerate any
obligation under, (e) result in the creation of any lien, security interest,
charge or encumbrance upon the Purchased Assets, or (f) require any
authorization, consent, approval, exemption or other action by or notice to any
court or other governmental body, under the provisions of the certificate of
incorporation or bylaws of the Seller or any indenture, mortgage, lease,
license, loan agreement or other agreement or instrument to which the Seller is
bound or affected, or, any law, statute, rule or regulation or any judgment,
order or decree to which the Seller is subject, except where such conflict,
default, violation or failure to obtain such consent or authorization would not
have a Material Adverse Effect.
3.4 PURCHASED ASSETS. Other than as set forth on Schedule 3.4,
the Seller has good and marketable title to, or a valid leasehold interest in,
all of the Purchased Assets free and clear of all Liens.
3.5 LIMITATION OF WARRANTIES. OTHER THAN THOSE REPRESENTATIONS
AND WARRANTIES EXPRESSLY MADE BY THE SELLER IN THIS ARTICLE III, THE SELLER
MAKES NO REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, REPRESENTATIONS OR WARRANTIES OF CONDITION OF ASSETS,
MERCHANTABILITY OR FITNESS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As a material inducement to the Seller to enter into this
Agreement, Buyer hereby represents and warrants to Seller that:
4.1 CORPORATE ORGANIZATION AND POWER. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to do business in every jurisdiction
in which the nature of its business or its ownership of property requires it to
be so qualified and where the failure to be so qualified would have a Material
Adverse Effect. The Buyer has full corporate power and authority to execute and
deliver this
9
Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder.
4.2 AUTHORIZATION. The execution, delivery and performance by
the Buyer of this Agreement and the other agreements and documents contemplated
hereby and thereby have been duly and validly authorized by all requisite
corporate action on the part of the Buyer and no other corporate proceedings on
the part of the Buyer are necessary to approve and authorize the execution and
delivery of this Agreement and the other agreements and documents contemplated
hereby and the consummation of the transactions contemplated hereby and thereby.
This Agreement and the other agreements and documents contemplated hereby have
been duly executed and delivered by the Buyer and constitute valid and binding
agreements of the Buyer, enforceable against the Buyer in accordance with their
terms.
4.3 ABSENCE OF CONFLICTS. The execution, delivery and
performance of this Agreement and the other agreements and documents
contemplated hereby and thereby and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) conflict with or result
in a breach of any of the provisions of, (b) constitute a default under, (c)
result in a violation of, (d) give any third party the right to terminate or to
accelerate any obligation under, (e) result in the creation of any lien,
security interest, charge or encumbrance upon the capital stock or assets of the
Buyer, or (f) require any authorization, consent, approval, exemption or other
action by or notice to any court or other governmental body, under the
provisions of the certificate of incorporation or bylaws of the Buyer or any
indenture, mortgage, lease, license, loan agreement or other agreement or
instrument to which the Buyer is bound or affected, or, any law, statute, rule
or regulation or any judgment, order or decree to which the Buyer is subject,
except where such conflict, default, violation or failure to obtain consent or
authorization would not have a Material Adverse Effect.
4.4 SELLER NOTIFICATION. The Buyer acknowledges that ALPHARMA
has notified the Seller's employees and tablet customers of its intention to
exit the Production Facility and tablet business and understands that such
announcement may increase the possibility of lost employees and deterioration of
the tablet customer base.
ARTICLE V
RETAINED ASSETS
5.1 RETENTION OF RETAINED ASSETS. The Seller shall retain all
of its right, title and interest in and to the Retained Assets (including the
Suppository Assets). The Seller shall be the lawful owner of record and hold
title to the Retained Assets. Following Closing, the Buyer shall take all action
reasonably requested by the Seller to confirm in Seller legal title to the
Retained Assets.
10
5.2 BUYER'S POSSESSION OF SUPPOSITORY ASSETS. The Seller and
the Buyer hereby agree that for so long as the Product Supply Agreement shall be
in effect the Buyer shall maintain possession of the Suppository Assets and use
such assets exclusively for the production of the products to be delivered to
the Seller pursuant to the terms of the Product Supply Agreement.
5.3 TRANSFER OF POSSESSION OF SUPPOSITORY ASSETS. The Buyer
shall transfer to the Seller or its designee all of the Suppository Assets upon
termination of the Product Supply Agreement in accordance with Seller's
instructions. The date upon which the Suppository Assets are transferred to the
Seller pursuant hereto is referred to herein as the "Suppository Assets Transfer
Date". The Buyer shall permit Seller's representatives reasonable access to
Buyer's facility in order to remove and retake possession of the Suppository
Assets on behalf of Seller. If the Suppository Assets have not been removed
within ten (10) business days of the Suppository Assets Transfer Date the Buyer
may remove such assets and return them to the Seller, at Seller's expense, to
Seller's North Carolina facility.
ARTICLE VI
COVENANTS
6.1 BUSINESS. From and after the date hereof to and including
the Suppository Assets Transfer Date, the Buyer shall:
(a) keep the Suppository Assets physically separate from the
other assets of the Buyer and keep the Suppository Assets labeled to identify
the Seller as the owner thereof;
(b) make such filings and take such other actions as are
necessary to protect the Seller's title to and interest in the Suppository
Assets;
(c) not sell, lease, mortgage, pledge, create any lien on or
otherwise dispose of any of the Suppository Assets;
(d) maintain the Buyer's files and records regarding the
Suppository Products to be made under the Product Supply Agreement in the
ordinary manner, consistent with the past practice of the Tablet Business;
(e) not remove any of the Suppository Assets from the premises
of the Buyer; and
(f) not agree or enter into any agreement to take any of the
actions prohibited by, engage in any act or conduct that would violate or
knowingly permit to be done anything which would be contrary to or in breach of
this Section 6.1.
11
6.2 ACCESS.
(a) Prior to Closing, the Seller will permit the Buyer to have
access to its personnel and Production Facility and the Buyer and its accounting
representatives to have access to the Seller's personnel in Baltimore, Maryland,
in each case, at all reasonable times and in a manner so as not to interfere
with the normal business operations of the Seller. Except as and to the extent
required by applicable law, the Buyer will treat and hold such information as
confidential and will not use any such information except in connection with
this Agreement. If this Agreement is terminated for any reason whatsoever, the
Buyer will return to the Seller all tangible embodiments and any reproductions
thereof of such information.
(b) The Seller acknowledges that the Buyer or its accounting
representatives will prepare audited financial statements of the Tablet Business
required to be included in a Form 8-K for the Buyer pursuant to Section 13 or
15(a) of the Securities Exchange Act of 1934 ("Form 8-K"). The Seller agrees to
provide at reasonable times in a manner so as not to interfere with the normal
business operations of the Seller reasonable assistance, information and access
to the Buyer and its accounting representatives in order to aid the Buyer in the
preparation of the Form 8-K.
6.3 PAYMENT OF ASSUMED LIABILITIES. The Buyer shall promptly
pay the Assumed Liabilities when the same become due, except to the extent that
any such liability is being disputed in good faith and has been appropriately
reserved for on the books and records of the Buyer.
6.4 NON-COMPETITION.
(a) For the period set forth next to the suppository product
on Schedule 6.4(a), neither the Buyer nor any of its affiliates will (i)
directly or indirectly, manufacture or sell any suppository product listed on
Schedule 6.4(a), (ii) own, operate, lease, manage, control or invest in any
person or entity that manufacturers or sells any suppository product listed on
Schedule 6.4(a) or provides any services that may be used as substitutes for or
are otherwise in competition with any suppository product listed on Schedule
6.4(a) anywhere in the United States of America (a "Competitor"), or (iii) in
any manner or capacity relating to the manufacture or sale of any suppository
product listed on Schedule 6.4(a), engage in, permit their names to be used by,
act as consultants or advisors to or, render services for or otherwise assist in
any such manner or capacity any Competitor.
(b) Notwithstanding Section 6.4(a), Buyer may independently
develop, manufacture and sell a product similar to Anusol HC to anyone other
than Warner-Lambert Company during the two (2) year period set forth in Section
6.4(a), provided, however, that (i) Buyer may not use any of the recipes,
methods, formulas, specifications, knowledge or know how acquired by or provided
to Dynagen in the manufacture or sale of any suppository product listed on
Schedule 6.4(a) and (ii) Buyer will, upon the request of Able, demonstrate to
Able with competent evidence, Dynagen's independent development of Anusol HC or
other substantially similar product.
12
(c) For a period of five (5) years following the Closing Date,
neither Seller nor Alpharma USPD Inc. will directly or indirectly manufacture or
sell any product listed on Schedule 6.4(c) (a "Tablet Product") anywhere in the
United States of America; provided, however, that (i) Seller or Alpharma USPD
Inc. may manufacture Tablet Products for their affiliates whose operations are
principally outside the United States of America, (ii) if Seller or Alpharma
USPD Inc. or its parent or affiliated companies within the Alpharma Group
acquires another business which at the time of acquisition is developing or
manufacturers or sells any or all of the Tablet Products, the foregoing
restrictions shall not apply to the acquired business and (iii) if Seller or
Alpharma USPD Inc. or its parent or affiliated companies within the Alpharma
Group merges with or is acquired by another entity which is developing,
manufacturing or selling any or all of the Tablet Products, the foregoing
restrictions shall not apply.
(d) The Buyer and Seller acknowledge and agree that (i) the
covenants set forth in this Section 6.4 are reasonable in geographical and
temporal scope and in all other respects, (ii) the Seller and Buyer would not
have entered into this Agreement but for the covenants of the Seller and Buyer
contained herein, and (iii) the covenants contained herein have been made in
order to induce the Seller and Buyer to enter into this Agreement.
(e) If, at the time of enforcement of this Section 6.4, a
court shall hold that the duration, scope, or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope, or area reasonable under such circumstances shall be
substituted for the stated duration, scope, or area.
(f) The Seller and Buyer recognize and affirm that in the
event of their breach of any provision of this Section 6.4, money damages would
be inadequate and the damaged party would have no adequate remedy at law.
Accordingly, the parties agree that each of the Buyer and Seller shall have the
right, in addition to any other rights and remedies existing in its favor, to
enforce its rights and the obligations the Seller and Buyer under this Section
6.4, respectively not only by an action or actions for damages, but also by an
action or actions for specific performance, injunction and/or other equitable
relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions of this Section 6.4. The provisions of
this Section 6.4 shall be tolled during the continuance of any actual breach or
violation.
6.5 TRANSITIONAL SERVICES. (a) During the ninety (90) day
period following the Closing Date (the "Transition Period"), the Seller will
help facilitate the transfer to the Buyer of the Purchased Assets and the Tablet
Business related thereto by (i) permitting the Buyer to have access to
ALPHARMA's mainframe computer in Baltimore, Maryland at all reasonable times to
the extent consistent with the Seller's past practice and necessary for the
operation of the Tablet Business and in a manner so as not to interfere with the
normal business operations of ALPHARMA and its subsidiaries, (ii) and (iii)
introducing the Buyer's representatives to the Seller's Tablet Business
customers and continuing to accept orders for tablet products on behalf of the
Buyer in ALPHARMA's facility in Baltimore, Maryland. The Buyer will be
responsible for shipments and billings to customers following the Closing Date.
The Seller shall not be liable for any loss, damage,
13
liability or expense resulting from the assistance or access furnished to the
Buyer pursuant to this Section 6.5.
(b) On the Closing Date, Buyer shall pay to Seller for access
to ALPHARMA'S mainframe computer an amount equal to $2,000 per month multiplied
by a fraction the numerator of which is the number of days during the period
beginning on the Closing Date and ending on the last day of the month in which
the Closing Date falls and the denominator of which is the number of days in
such month. After the Closing Date, the Buyer shall pay to Seller for such
access an amount equal to $2,000 on the first day of each month during the
Transition Period. In addition, Seller will charge Buyer for expenses directly
incurred by ALPHARMA for providing support services in excess of forty (40)
hours during the ninety (90) day period. Seller shall invoice Buyer for such
charges and Buyer shall pay Seller for such charges on the first day of the next
month during the Transition Period or, if the Transition Period has expired
within five (5) business days of receipt of invoice.
6.6 CONDUCT OF THE BUSINESS PRIOR TO CLOSING DATE. Between the
date hereof and the earlier of the Closing Date and August 23, 1996, the Seller
shall (i) continue to operate its Tablet Business and shall not take any action
to terminate any of Seller's employees and (ii) cause its finished goods
inventory of the tablet business to be transferred to the Seller from the
Seller's affiliate.
6.7 FACILITY LEASE. In the event the Facility Lease may not be
assigned to the Buyer such that the Seller is fully and unconditionally released
from all Liability thereunder, the Buyer shall within seven (7) days of the
Seller's request (i) deposit with the Seller in escrow three months of lease
payments in immediately available funds and (ii) grant the Seller a first
priority security interest in the Suppository Equipment and perfect such
security interest, in each case as security for the Seller's Liability under the
Facility Lease. Upon the full and unconditional release of the Seller's
Liability under the Facility Lease, the Seller shall release the money deposited
with the Seller pursuant to clause (i) and release and discharge the security
interest granted to the Seller pursuant to clause (ii).
6.8 RELEASES. Seller shall not knowingly release, waive or
discharge any obligation of any person under any employment or consulting
agreement, including obligations relating to non-disclosure of confidential
information, non-competition, or similar restrictive covenants.
ARTICLE VII
EMPLOYEES AND PLANS
7.1 EMPLOYMENT.
(a) The Buyer may offer employment, effective as of the
Closing Date, to all employees of Seller employed on the Closing Date. The Buyer
hereby agrees to indemnify the Seller
14
and its affiliates for any costs or losses incurred by the Seller due to the
Buyer's failure to comply with the Worker Adjustment, Retraining and
Notification Act of 1988.
(b) Within three (3) business days following the Closing Date,
Buyer shall deliver to Seller (i) a list of each employee set forth on Schedule
7.1(b) who has been offered and has accepted employment with Buyer (an "Accepted
Employee") and (ii) available funds in an amount equal to (y) the business day
cost of each Accepted Employee set forth opposite such employee's name on
Schedule 7.1(b) under the column Business Day Cost ("Business Day Cost")
multiplied by (z) the number of business days elapsed during the period
beginning on August 12, 1996 and ending on the Closing Date (the "Interim
Period"). Within five (5) business days of receipt of the list of Accepted
Employees and immediately available funds, Seller shall issue a payroll check
for the Interim Period to each Accepted Employee.
(c) If the Closing does not occur on or prior to August 23,
1996, the Buyer shall deliver by August 30, 1996 immediately available funds in
an amount equal to the Business Day Cost of each employee set forth on Schedule
7.1(b) multiplied by ten (10).
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 BULK SALES LAW. The Buyer will bear any loss, liability,
obligation or cost suffered by the Seller or the Buyer as a result of the
Seller's noncompliance with any provision of any bulk sales law which is
applicable to any liability of the Seller or the transfer of the Purchased
Assets pursuant to this Agreement, insofar as such noncompliance relates to any
Assumed Liability. The Sellers will bear any loss, liability, obligation or cost
suffered by the Seller or the Buyer as a result of the Seller's noncompliance
with any provision of any bulk sales law which is applicable to any liability of
the Seller or the transfer of the Purchased Assets pursuant to this Agreement,
insofar as such noncompliance relates to any Excluded Liability.
8.2 PRESS RELEASES AND ANNOUNCEMENTS. Prior to the Closing,
except as and to the extent required by law, the New York Stock Exchange or the
National Association of Securities Dealers, without the prior written consent of
the other party, neither Buyer nor Seller shall, directly or indirectly, make
any public comments, statements or communications nor make any disclosure to any
party not affiliated with Buyer or Seller with respect to the proposed
transaction set forth in this Agreement, except as necessary to obtain consents
or approvals to this transaction or as necessary to comply with policies and
guidelines of the Securities and Exchange Commission. After the Closing, the
parties shall jointly prepare a press release relating to this transaction, and
the Buyer, in its sole direction, may file a Form 8-K with the Securities and
Exchange Commission disclosing this transaction.
8.3 FURTHER TRANSFERS. The Seller will execute and deliver
such further instruments of conveyance and transfer and take such additional
action as the Buyer may reasonably
15
request to effect, consummate, confirm or evidence the transfer to the Buyer of
the Purchased Assets and any other transactions contemplated hereby; provided,
that the Seller shall have no obligation to take any action which amends or
alters the substance of this transaction. The Seller will execute such documents
as may be necessary to assist the Buyer in preserving or perfecting its rights
in the Purchased Assets and will also do such acts as are necessary to perform
its representations, warranties and agreements herein.
8.4 EXPENSES. Except as otherwise provided herein, the Buyer
will pay all of the Buyer's own expenses (including, without limitation, fees
and expenses of legal counsel) and the Seller will pay all of the Seller's
expenses (including, without limitation, fees and expenses of Sintar Company and
legal counsel) incurred in connection with the negotiation of this Agreement,
the performance of their respective obligations hereunder, and the consummation
of the transactions contemplated hereby (whether consummated or not).
ARTICLE IX
DEFINITIONS
"ALPHARMA" means ALPHARMA INC., a Delaware corporation and
parent of the Seller.
"ANDA" means Abbreviated New Drug Application.
"Assumed Liabilities" has the meaning set forth in Section
1.3.
"Business" means the business which the Seller conducted prior
to Closing.
"Buyer" has the meaning set forth in the recitals hereto.
"Closing" has the meaning set forth in Section 1.6(a).
"Closing Date" has the meaning set forth in Section 1.6(a).
"Contracts" has the meaning set forth in Section 1.1(d).
"Environmental Assessment" has the meaning set forth in
Section 2.2(d).
"Environmental Laws"means any and all federal, state, local
and foreign statutes, laws (including common or case law), regulations, or
governmental restrictions, as in effect and interpreted on the Closing Date,
relating to the environment or to emissions, discharges or releases of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic, radioactive or hazardous substances or wastes ("Pollutants")
into the environment including, without limitation,
16
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Pollutants, or the clean-up or other remediation
thereof.
"Excluded Liabilities" has the meaning set forth in Section
1.4.
"Excluded Contract" means the Heads of Agreement between
Proctor & Gamble Company and Able dated as of April 26, 1990.
"Facility Lease" means the Lease between Hollywood Court
Associates and the Seller, dated as of November 29, 1984, as extended by
agreement dated April, 1988, subject to assignment of lease dated April, 1989,
as extended by agreement dated, June 1993.
"ISRA" has the meaning set forth in Section 2.1(e).
"ISRA Clearance" has the meaning set forth in Section 2.1(e).
"Liability" means any liability or obligation, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated and whether due or to become due.
"Liens" means, with respect to any asset, any mortgage, lien,
pledge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law.
"Material Adverse Effect" with respect to any Person means (i)
a material adverse change in the assets, earnings, financial condition, business
prospects, operating results, customer, supplier, employee or sales
representative relations, business condition or financing arrangements of such
Person, (ii) material casualty loss, destruction or damage to the assets or
properties of such Person whether or not covered by insurance, or (iii) any
action or proceeding before any court or government body wherein an unfavorable
judgment, decree, injunction or order would prevent the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful the
transactions contemplated by this Agreement or cause such transactions to be
rescinded.
"NJDEPE" has the meaning set forth in Section 2.1(e).
"Person" means an individual, a partnership (including a
limited partnership), a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Product Supply Agreement" has the meaning set forth in the
recitals hereto.
17
"Production Facility" shall mean the facility at 6 Hollywood
Court, South Plainfield, New Jersey.
"Purchase Price" has the meaning set forth in Section 1.5.
"Purchased Assets" has the meaning set forth in Section 1.1.
"Retained Assets" has the meaning set forth in the recitals
hereto.
"Suppository Assets"shall mean all Retained Assets which will
remain on the Buyer's premises, in its possession or be used by Buyer after the
Closing pursuant to the Product Supply Agreement.
"Suppository Assets Transfer Date" has the meaning set forth
in Section 5.3.
"Suppository Equipment" means all machinery and equipment
necessary to the manufacture of suppository products, including, but not limited
to, (i) one sarong machine type SAAS/15, (ii) one cam cartoner, (iii) one
automatic wrapper, (iv) one elbow sealer, (v) three batch tanks: #3 small, #1
medium, #2 large, (v) two bar code scanners, (vi) three transfer pumps, (vii)
four lighting mixers, (viii) one chiller, (ix) one dust collector, and (x) spare
parts, piping, tools and dies and other related equipment or supplies.
"Tablet Business" has the meaning set forth in the recitals
hereto.
"Transition Period" has the meaning set forth in Section 6.5.
ARTICLE X
MISCELLANEOUS
10.1 AMENDMENT AND WAIVER. This Agreement may be amended and
any provision of this Agreement may be waived, provided that, any such amendment
or waiver will be binding upon a party only if such amendment or waiver is set
forth in a writing executed by such party. No course of dealing between or among
any persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any party under or by reason of this Agreement.
10.2 NOTICES. All notices, demands and other communications
given or delivered under this Agreement will be in writing and will be deemed to
have been given when personally delivered, mailed by first class mail, return
receipt requested, or delivered by express courier service or telecopied.
Notices, demands and communications to the Seller and Buyer will, unless another
address is specified in writing, be sent to the address indicated below:
18
Notices to the Seller:
----------------------
Able Laboratories, Inc.
c/o ALPHARMA INC.
One Executive Drive
P.O. Box 1399
Fort Lee, NJ 07024
Attn: Beth P. Hecht, Esq.,
Corporate Counsel and Secretary
Telecopy: (201) 592-1481
with a copy to:
---------------
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Attn: Marjorie L. Reifenberg, Esq.
Telecopy: (212) 446-4900
Notices to Buyer:
-----------------
Dynagen, Inc.
99 Erie Street
Cambridge, MA 02139
Attn: Dr. Indu A. Muni
President and Chief Executive Officer
Telecopy: (617) 354-3902
with a copy to:
---------------
Testa, Hurwitz & Thibeault
125 High Street
Boston, MA 02110
Attn: Mitchell S. Bloom, Esq.
Telecopy: (617) 248-7100
10.3 BINDING AGREEMENT; ASSIGNMENT. This Agreement and all of
the provisions hereof will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by Buyer or Seller without the prior written consent of the
other.
19
10.4 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
10.5 NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
10.6 HEADINGS. The headings used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no caption had been used in this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement and the Product Supply
Agreement contain the entire agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.
10.8 EXCLUSIVE REMEDY. Buyer understands and agrees that its
rights and remedies pursuant to this Agreement shall constitute its sole rights
and remedies against Seller with respect to any matters arising from this
Agreement or the transactions contemplated thereby, and, except for such rights
and remedies, hereby waives and releases Seller from and agrees to indemnify,
defend and hold Seller harmless from and against any and all claims, demands,
causes of action, Liabilities (except for Excluded Liabilities), costs or
expenses with respect thereto or otherwise arising from the past, present or
future conduct of the business or the ownership or operation of its facilities
or properties (including without limitation any of the foregoing arising under
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, or otherwise relating to environmental matters).
10.9 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
taken together will constitute one and the same instrument.
10.10 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE
STATE OF NEW JERSEY, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT
PROVISION OR RULE (WHETHER OF THE STATE OF NEW JERSEY OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW JERSEY
TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF
NEW JERSEY WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT,
EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE
SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. THE BUYER AND
THE SELLER HEREBY IRREVOCABLY SUBMIT
20
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW JERSEY AND THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW JERSEY SOLELY
IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND HEREBY WAIVE
ANY, AND AGREE NOT TO ASSERT AS A, DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR
THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT
SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE
OR THAT THIS AGREEMENT OR ANY OF SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SAID
COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO
SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A NEW JERSEY
STATE OR FEDERAL COURT. THE BUYER AND THE SELLER HEREBY CONSENT TO AND GRANT ANY
SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT
MATTER OF ANY SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
10.2 HEREOF, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID
AND SUFFICIENT SERVICE THEREOF.
* * * * *
21
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the date first above
written.
DYNAGEN, INC.
By: ------------------------------------------------
Its: ------------------------------------------------
ABLE ACQUISITION CORP.
By: ------------------------------------------------
Its: ------------------------------------------------
ABLE LABORATORIES, INC.
By: ------------------------------------------------
Its: ------------------------------------------------
Solely for purposes of Section 6.4(b):
ALPHARMA USPD INC.
By: ------------------------------------------------
Its: ------------------------------------------------
PRODUCT SUPPLY AGREEMENT
This PRODUCT SUPPLY AGREEMENT (the "Agreement") is made and
entered into this 13th day of August, 1996 ("Effective Date"), by and among Able
Laboratories, Inc. ("Able") Able Acquisition Corp. ("Acquisition Corp.") and
Dynagen, Inc. (together with Acquisition Corp., "Dynagen").
WHEREAS, Able currently manufactures and sells certain
suppository products listed on Schedule A hereto (the "Suppository Products");
WHEREAS, contemporaneously with the execution of this
Agreement, pursuant to an Asset Purchase Agreement dated as of the date hereof
by and between Dynagen and Able (the "Acquisition Agreement"), Dynagen will
acquire from Able (the "Acquisition") substantially all of Able's assets;
WHEREAS, Able will not convey to Dynagen the Retained Assets
(as defined in the Acquisition Agreement);
WHEREAS, for a transitional period following consummation of
the Acquisition, Able desires to have Dynagen produce the Suppository Products
at Able's former facility at 6 Hollywood Court, South Plainfield, New Jersey
(the "Facility");
WHEREAS, as a condition precedent to Able's agreeing to enter
into the Acquisition Agreement, Dynagen has agreed to continue production of the
Suppository Products and to supply such products to Able upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I --DEFINITIONS
1.1 DEFINITIONS. In this Agreement, the following terms shall have the
following meanings:
"ABLE" has the meaning set forth in the preamble to this
Agreement.
"ACQUISITION AGREEMENT" has the meaning set forth in the
recitals to this Agreement.
"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"ANDA" shall mean Abbreviated New Drug Application.
"ALPHARMA COMPANIES" shall mean ALPHARMA INC. and its present
and future subsidiaries and affiliates.
"BULK" shall mean Miconazole 100 mg suppositories not packaged
in a folding carton.
"CONFIDENTIAL INFORMATION" has the meaning set forth in
Section 2.11.
"CONFORMING PURCHASE ORDER" shall have the meaning specified
in Section 2.6.
"DAMAGES" shall have the meaning specified in Section 5.3(a).
"EFFECTIVE DATE" has the meaning set forth in the preamble to
this Agreement.
"FDA" shall mean the United States Food and Drug
Administration or any successor governmental agency or department having similar
purpose or powers.
"F.O.B." shall mean "free on board" as that term is defined in
Section 2-319 of the New Jersey Commercial Code.
"NON-CONFORMING PURCHASE ORDER" shall have the meaning
specified in Section 2.6.
"SUPPOSITORY MATERIALS" has the meaning set forth in Section
2.3.
"SUPPOSITORY PRODUCTS" has the meaning set forth in the
recitals to this Agreement.
"TERM" has the meaning set forth in Section 3.1.
"UNIT" shall mean (a) a folding carton containing seven (7)
suppositories in the case of Miconazole 100 mg or three (3) suppositories in the
case of Miconazole 200 mg or (b) two (2) continuous strips of seven (7)
suppositories each in the case of Bulk.
ARTICLE II--PURCHASE AND SALE
2.1 PURCHASE. Subject to Section 2.5, during the Term of this
Agreement, Dynagen agrees to produce the Suppository Products at the Facility
and to sell such Suppository Products to Able. The Suppository Products that
will be produced and sold pursuant to this Agreement are listed on Schedule A
hereto.
2.2 PRICE. Dynagen shall sell Suppository Products to Able for $0.70
per Unit.
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2.3 ABLE'S PURCHASE OF SUPPOSITORY MATERIALS.
(a) Able shall purchase raw materials and packaging materials
called for by the Suppository Products' bill of material (collectively, the
"Suppository Materials"). Able shall cause the Suppository Materials to be
delivered to Dynagen at the Facility. Within five (5) days of receipt of the
Suppository Materials, Dynagen shall deliver to Able a receiving order.
(b) Within fifteen (15) days following delivery of the
Suppository Materials, Dynagen shall complete release testing of such
Suppository Materials to assure that such Suppository Materials conform to the
quality requirements set forth in the applicable ANDA or as otherwise specified
by Able with respect to such materials. Within one business day following
completion of the release testing with respect to any shipment of Suppository
Materials, Dynagen shall notify Able in writing of the results of such testing.
Such writing will set forth the amounts and types of both conforming and
nonconforming materials contained in such shipment.
(c) Within five (5) business days following the end of each
calendar month, Dynagen shall deliver to Able an inventory balance statement
reflecting the Suppository Materials held in inventory by Dynagen at the end of
such month.
2.4 FORECASTS. On or before the Effective Date, Able shall provide
Dynagen with a forecast for its requirements of Suppository Products (by
batches) for the six (6) months of this Agreement. Such forecasts will not
represent binding commitments; provided, however, that Able shall be required to
pay to Dynagen the amount, if any, required by Section 3.4.
2.5 PURCHASE ORDERS. Able will submit purchase orders to Dynagen in
writing. All purchase orders shall be received by Dynagen no later than sixty
(60) days before shipment is required and shall include (a) the quantity of
Suppository Products, by Unit, to be purchased, (b) the requested delivery
date(s), (c) shipping instructions, and (d) any other information dictated by
the circumstances of the order. Purchase orders may be on Able's purchase order
form, provided that any provision of any such purchase order form which is
inconsistent with any provision of this Agreement shall be ineffective and not
binding on either party.
2.6 ACCEPTANCE OF ORDERS. Dynagen will accept purchase orders issued to
it by Able within ten (10) days after receipt of such purchase orders provided
that such purchase orders are consistent with Able's applicable forecast
delivered pursuant to Section 2.4 (such binding purchase orders are referred to
herein as "Conforming Purchase Orders", and purchase orders which are not
consistent with Able's applicable forecast are referred to herein as
"Non-Conforming Purchase Orders"). Dynagen shall accept or reject a
Non-Conforming Purchase Order within ten (10) days after receipt of the same,
provided that Dynagen shall use commercially reasonable, efforts to accommodate
Able and to accept Non-Conforming Purchase Orders. If Dynagen does not accept a
Non-Conforming Purchase Order, it will propose a substitute delivery date at the
time it rejects such Non-Conforming Purchase Order.
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2.7 DELIVERY.
(a) Dynagen shall deliver the Suppository Products F.O.B. from
Dynagen's place of manufacture. The costs of such shipment, including freight,
handling and insurance, shall be borne by Able.
(b) Prior to delivery provided for in Section 2.7(a), Dynagen
will deliver via facsimile to Arden Stoermer, Director Quality Assurance,
Alpharma (410) 944-3162 batch records and raw materials records as provided in
the Quality Assurance Specifications attached hereto as Schedule B. Within three
(3) business days of receipt of the batch records and raw materials records,
Alpharma will deliver to Dynagen a batch release. Upon receipt of the batch
release, Dynagen shall prepare the Suppository Products related thereto for
delivery pursuant to Section 2.7(a).
2.8 WAREHOUSING. In the event Able notifies Dynagen in writing that it
is unable to accept a shipment of Suppository Products pursuant to an accepted
purchase order, Able may request Dynagen to store such Suppository Products up
to a maximum of fourteen (14) days past the originally requested delivery date;
provided that Able shall be required to accept shipment of such order
immediately following expiry of the above-referenced storage period.
2.9 INSPECTION. Within fifteen (15) days of receipt of a shipment of
Suppository Products, Able shall inspect the Suppository Products and report to
Dynagen any nonconformance of such Suppository Products that it has identified
by such inspection. In the event that at a later date Able reasonably believes
there is a discrepancy in connection with the quality of a Suppository Product,
Able and Dynagen will in good faith try to resolve such dispute. In the event
Able and Dynagen are unable to agree within forty-five (45) days following the
date of initiation of good faith discussions, such dispute shall be resolved by
an independent testing laboratory to be mutually agreeable to the parties. The
decision of the testing laboratory with respect to quality matters shall be
final and binding on the parties and the expenses of such testing laboratory
shall be borne by the party in error. Should a Suppository Product fail to meet
testing standards for quality, Dynagen agrees to replace in Able's inventory any
such defective Suppository Product with a Suppository Product which meets the
appropriate standards, and such replacement shall be Able's exclusive remedy for
such failure; provided, however, that Dynagen shall reimburse Able for the cost
of the Suppository Materials used in, or in the production of, any
non-conforming shipment. Notwithstanding the foregoing, nothing contained in
this Section 2.9 shall limit Able's recourse to Dynagen for any non-conforming
shipment that contains a latent defect that is not identified during the course
of the inspection contemplated by this Section 2.9 nor Dynagen's responsibility
for any third-party claims.
2.10 PAYMENT. Payment for all orders made by Able shall be net thirty
(30) days from the date of invoice. Invoices shall be dated no earlier than the
date of shipment.
2.11 EXCLUSIVE PRODUCTION. Dynagen acknowledges that the information,
observations and data related to Able's suppository business that Dynagen will
obtain in the course of its performance under this Agreement (the "Confidential
Information") represents proprietary
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information of Able with respect to such business and that such Confidential
Information would not be disclosed to Dynagen but for the undertakings
contemplated by this Agreement. Therefore Dynagen agrees that it shall not use
any Confidential Information for the production or sale of Suppository Products
to any party other than Able, during the Term or any renewal term or for a
period of five years following the termination of this Agreement or any renewal
hereof, unless Able expressly consents to such production or sale in writing.
2.12 ABLE'S REQUIREMENTS. During the Term of this Agreement, Able shall
purchase all of the Suppository Products that Able purchases from any person
other than an ALPHARMA Company solely from Dynagen. The parties acknowledge that
Able intends to relocate the production of Suppository Products to another
facility and nothing contained in this Agreement shall in any way limit Able or
any other ALPHARMA Company from producing, marketing or selling any Suppository
Product whether during or subsequent to the Term.
ARTICLE III--TERM & TERMINATION
3.1 TERM. The term (the "Term") of this Agreement shall commence on the
Effective Date and shall continue for a period of six (6) months from the
Effective Date. The Term may be extended upon mutual agreement of the parties.
3.2 TERMINATION. This Agreement may be terminated at any time by Able
upon giving 45 days written notice to Dynagen and shall automatically terminate
upon expiration of the Term.
3.3 EFFECTS OF TERMINATION. Termination of this Agreement shall not
affect either party's rights or remedies with respect to any Suppository
Products ordered prior to termination in the event that such Suppository
Products are delivered subsequent to termination.
3.4 TERMINATION PAYMENT. In the event that this Agreement is terminated
by Able or the Term has expired, and in each case Able has not purchased at
least 300,000 Units of Suppository Products from Dynagen pursuant to this
Agreement, Able shall pay within thirty (30) days of such event to Dynagen an
amount equal to (x) $0.55 multiplied by (y) the excess of 300,000 over the
number of Units of Suppository Products ordered and paid for under this
Agreement.
ARTICLE IV--OTHER AGREEMENTS
4.1 CONFIDENTIALITY. Dynagen acknowledges and agrees that it shall take
all reasonable steps to keep confidential, and shall not disclose to, publish or
use for the benefit of any third parties or for itself (except in carrying out
duties in connection with this Agreement) any Confidential Information or any
information which Able identifies as being confidential whether acquired prior
to or during the term of this Agreement, without first having obtained the
written consent of Able to such disclosure or use unless the same (a) is in the
public domain (provided that information in the
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public domain has not or does not come into the public domain as the result of
disclosure by Dynagen); (b) becomes available to Dynagen on a non-confidential
basis from a source other than Able; or (c) is independently developed by
Dynagen. The parties hereby acknowledge and agree that Dynagen's prices of
Suppository Products sold to Able hereunder and any information relating to any
ANDA for a Suppository Product shall be considered Confidential Information for
purposes of this Section 4.1 without any further identification by Able that
such information is confidential. The obligations of confidentiality hereunder
shall survive any expiration or termination of this Agreement for a period of
five (5) years from the effective date of such expiration or termination.
4.2 PACKAGING. All packaging and graphic design for packaging for the
Suppository Products shall be in accordance with Able's specifications (to the
extent such specifications are in compliance with applicable laws and
regulations). Able shall supply Dynagen with all camera ready artwork required
by Dynagen related to the other packaging of Suppository Products.
4.3 LABEL COPY. Able shall be responsible for assuring that all label
copy is in compliance with FDA and any other state or federal requirements. Able
shall indemnify and hold harmless Dynagen from liability incurred by Dynagen in
connection with any label copy not in compliance with FDA and any other state or
federal requirements. Dynagen shall be responsible for and shall indemnify and
hold harmless Able from liability incurred by Able in connection with the
placement of label copy on or the improper packaging of any Suppository Product.
ARTICLE V--WARRANTIES, INDEMNITIES AND COVENANTS
5.1 DYNAGEN'S WARRANTIES. Dynagen warrants that the Suppository
Products sold hereunder shall be manufactured in accordance and in compliance
with (i) the then current good manufacturing practices as defined by the FDA and
any ANDA for a Suppository Product, if applicable and (ii) Able's Quality
Assurance Specifications set forth on Schedule B hereto for each Suppository
Product. All Suppository Products will be shipped to Able within one (1) month
from the date of its manufacture unless such delay in shipment is attributable
to a request by Able to delay shipment pursuant to Section 2.8 or otherwise.
Dynagen hereby warrants that each shipment of Suppository Product made by it to
Able will not be at the time of such shipment or delivery, adulterated,
misbranded or otherwise prohibited within the meaning of the Federal Food, Drug
and Cosmetic Act in effect at the time of said shipment or delivery (the "Act"),
or within the meaning of any applicable state or municipal law in which the
definition of adulteration or misbranding are substantially the same as those
contained in the Act; and each such Suppository Product is not, at the time of
such shipment or delivery, merchandise which may not be introduced into
interstate commerce under the provisions of Sections 404, 505 and 512 of said
Act; and each such Suppository Product is merchandise which may be legally
transported or sold under the provisions of any other applicable federal, state
or municipal law.
5.2 ABLE'S WARRANTIES. Able warrants that (a) it owns or has a valid
right to use all artwork and packaging designs supplied to Dynagen hereunder for
use with the Suppository
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Products; (b) it owns or has a valid right to use all trademarks it requests
Dynagen to affix or use with Suppository Products sold hereunder; (c) the
recipes, formulae and specifications provided to Dynagen hereunder do not
violate or infringe upon the patents, trade secrets, copyrights or contract
rights of any third party; and (d) the recipes, formula, label copy and
specifications provided to Dynagen comply with FDA requirements for the
manufacture of a Suppository Product.
5.3 INDEMNITIES.
(a) Dynagen's Indemnity. Dynagen agrees to defend, indemnify
and hold Able harmless from and against any and all damages, losses, claims,
liabilities or expenses, including reasonable attorney's fees (collectively,
"Damages"), arising out of its breach of Section 5.1 hereof, or any allegation
by the FDA or any third party that if true would constitute a breach thereof, or
of any other provision of this Agreement.
(b) Able's Indemnity. Able agrees to defend, indemnify and
hold Dynagen harmless from any and all Damages arising out of its breach of
Section 5.2 hereof or of any other provision of this Agreement.
(c) Indemnification Procedures for Third Party Claims. Upon
the assertion of any claim against a party hereto that may give rise to a right
of indemnification under this Agreement, the indemnified party shall give
immediate notice to the indemnifying party of the existence of such claim and
shall give the indemnifying party reasonable opportunity to control, defend
and/or settle such claim at its own expense and with counsel of its own
selection; provided, however, that the indemnified party shall at all times have
the right fully to participate in such defense at its own expense with separate
counsel. If the indemnifying party shall, within a reasonable time after such
notice has been given, fail to defend, compromise or settle such claim, then the
indemnified party shall, with the consent of the indemnifying party, have the
right to defend, compromise or settle such claim on behalf, for the account of
and at the cost and risk of, the indemnifying party. Notwithstanding the
foregoing, the parties agree that if any such claim would affect Dynagen's
ability to supply Suppository Products pursuant to this Agreement or Able's
ability to purchase or sell such Suppository Products, and Dynagen is the
indemnifying party with respect to such claim, notwithstanding the foregoing,
Able shall have the right to control, defend and/or settle such claim at
Dynagen's expense with counsel of Able's selection. In all cases, each of the
parties hereto shall give the other such assistance as may be reasonably
requested by the other in order to undertake the defense of any claim.
5.4 RECALL. In the event a Suppository Product sold to Able hereunder
is the subject of a voluntary or involuntary recall, Able shall be responsible
for recovering such Suppository Product distributed by it. If such recall arises
from an act of omission which is a breach or alleged breach by Dynagen of
Section 5.1 herein, then Dynagen shall reimburse Able for its reasonable out of
pocket expenses (upon presentation to Dynagen of appropriate documentation
therefor) incurred in connection with such recall and Able shall be entitled to
return at Dynagen's expense, all Suppository Products recalled and in inventory
for a refund from Dynagen equal to the price paid by Able,
-7-
including freight, if applicable, and including the cost of any Suppository
Materials related to the recalled Suppository Products. If such recall is the
result of Able's breach of Section 5.2 herein, then Able shall reimburse Dynagen
for its reasonable out of pocket expenses (upon presentation to Able of
appropriate documentation therefor) incurred in connection with such recall. The
provisions of this Section 5.4 shall not in any way limit either Dynagen's or
Able's other rights hereunder, including their respective rights under Sections
5.3(a) and 5.3(b) hereof.
5.5 INSURANCE.
(a) During the term of this Agreement, Dynagen shall, at its
own cost and expense and with reputable carriers, maintain public and product
liability insurance (including, without limitation, contractual liability
insurance covering the Asset Purchase Agreement and the Product Supply
Agreement) with respect to the Suppository Products against claims for personal
or bodily injury, death or property damage suffered by others and related to the
Suppository Products in an amount of not less than $2,000,000 for each
occurrence and in the aggregate annually. If such coverage is made on a "Claims
Made" or similar basis Dynagen will continue to provide such coverage for
products sold to Able under this Agreement and any renewals of this Agreement,
for a period of not less than two (2) years from the termination of this
Agreement. Each insurance policy obtained by Dynagen pursuant to this Section
5.5(a) shall include Able as an additional insured with respect to Suppository
Products, and shall provide that it may not be canceled or materially changed
without giving 30 days prior notice to Able of such cancellation or material
change.
(b) At the policy renewal date thereof, Dynagen shall deliver
to Able one or more certificates of insurance evidencing the effectiveness of
the insurance coverage required by Section 5.5(a) and Able's status as an
additional insured under such insurance policies.
5.6 FURTHER ACTION. Dynagen shall take such reasonable actions as are
necessary to comply with any current or future requirements of the FDA or other
applicable regulatory body regarding production of the Suppository Products or
the Facility generally to assure that it will be able to fulfill its obligations
hereunder.
5.7 CERTAIN SUPERVISORY REPRESENTATIVES. The parties agree that the
Buyer shall, at the option of the Seller, permit the Seller access to the
Facility to the extent the Seller deems necessary to enable it to supervise and
to insure the quality of the production of the Suppository Products.
5.8 ANDAS. Dynagen shall not take any action with respect to the
Facility, the Suppository Products or the production of the Suppository Products
that would require Dynagen or Able to obtain a supplemental ANDA with respect to
any Suppository Product, without the prior written consent of Able.
- 8 -
ARTICLE VI--MISCELLANEOUS
6.1 ASSIGNMENT. This Agreement may not be assigned by Dynagen without
the prior written consent of Able. Able may assign this Agreement to any
affiliate without the consent of Dynagen.
6.2 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement. Notwithstanding
the foregoing, if any provision is so invalidated, the parties hereto shall, to
the extent lawful and practicable, use their best reasonable efforts to enter
into arrangements to reinstate the intended benefits, net of the intended
burdens, of such provision.
6.3 ACKNOWLEDGMENT. The parties hereto acknowledge and agree that (a)
the closing of the transactions contemplated by the Acquisition Agreement is
conditioned upon the execution and delivery of this Agreement as of the closing
of the Acquisition, (b) Able and Dynagen would not have engaged in the
transactions contemplated by the Acquisition Agreement if this Agreement was not
executed and delivered and (c) the Acquisition Agreement and this Agreement
should not be viewed as independent contracts, but as one agreement.
6.4 HEADINGS AND INTERPRETATION. The headings used in this Agreement
are for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit, characterize or in any way affect any
provision of this Agreement, and all provisions of this Agreement will be
enforced and construed as if no caption had been used in this Agreement. The
word "including" shall not be taken to limit a more general preceding term or
phrase. Words importing the singular shall include the plural and vice versa.
6.5 ENTIRE AGREEMENT. This Agreement and the Acquisition Agreement
referred to herein contain the entire agreement between the parties and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.
6.6 NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by both parties hereto to express their
mutual intent and no rule of strict construction against either party shall
apply to any term or condition of this Agreement.
6.7 NO WAIVER. The failure of one party hereto to enforce at any time
any of the provisions of this Agreement, or any rights in respect thereto, or to
exercise any election herein provided, shall in no way be considered to be a
waiver of such provision, rights or elections, or in any way to affect the
validity of this Agreement. Any waiver must be in writing.
- 9 -
6.8 NOTICES. All notices, demands and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered, mailed by first class mail, return receipt
requested, or delivered by express courier service or telecopied. Notices,
demands and communications to Able and Dynagen will, unless another address is
specified in writing, be sent to the address indicated below:
Notices to Able:
----------------
Able Laboratories, Inc.
c/o ALPHARMA INC.
One Executive Drive
P.O. Box 1399
Fort Lee, NJ 07024
Attn: Beth P. Hecht, Esq.,
Corporate Counsel and Secretary
Telecopy: (201) 592-1481
with a copy to:
---------------
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Attn: Marjorie L. Reifenberg, Esq.
Telecopy: (212) 446-4900
Notices to Dynagen:
-------------------
Dynagen, Inc.
99 Erie Street
Cambridge, MA 02139
Dr. Indu A. Muni, President and CEO
Telecopy: (617) 354-3902
with a copy to:
---------------
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attn: Mitchell S. Bloom, Esq.
Telecopy: (617) 248-7100
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6.9 RELATIONSHIP OF PARTIES. Neither of the parties shall act or
represent or hold itself out as having authority to act as an agent or a partner
of the other party, or in any way bind or commit the other party to any
obligations. Nothing contained in this Agreement shall be construed as creating
a partnership, joint venture, agency or an association of any kind.
6.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
6.11 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF
NEW JERSEY, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR
RULE (WHETHER OF THE STATE OF NEW JERSEY OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW JERSEY TO BE
APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW
JERSEY WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN
IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE
SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. DYNAGEN AND
ABLE HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF
NEW JERSEY AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE
STATE OF NEW JERSEY SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF
THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS
AGREEMENT, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF
ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR
PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE
VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY OF SUCH
DOCUMENT MAY NOT BE ENFORCED IN OR BY SAID COURTS, AND THE PARTIES HERETO
IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING
SHALL BE HEARD AND DETERMINED IN SUCH A NEW JERSEY STATE OR FEDERAL COURT.
DYNAGEN AND ABLE HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER
THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY SUCH DISPUTE AND
AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION
OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 6.8 HEREOF, OR IN SUCH OTHER
MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE
THEREOF.
* * * * * *
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IN WITNESS WHEREOF, the parties have caused their duly
authorized representative to execute this Agreement as of the date first above
written.
ABLE LABORATORIES, INC.
By:_________________________________________
Its:________________________________________
DYNAGEN, INC.
By:_________________________________________
Its:________________________________________
ABLE ACQUISITION CORP.
By:_________________________________________
Its:________________________________________
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Schedule A
Suppository Products
Miconazole 100 mg
Miconazole 200 mg
- 13 -
