Product Sales Agreement

PRODUCTSALESAGREEMENTTHISPRODUCTSALESAGREEMENT(thisAgreement)madeasofthe21stdayofDecember,2001,byandbetweenAesgen,Inc.,aDelawarecorporation,havingitsprincipalplaceofbusinessat2ResearchWay,ThirdLevelEast,Princeton,NewJersey08540(Aesgen)andaaiPharma,Inc.,aDelawarecorporation,havingitsprincipalplaceofbusinessat2320ScientificParkDrive,Wilmington,NorthCarolina28405(AAI).WHEREAS,Aesgenistheownerofdevelopmentprojectsrelatingtocertainproducts,including,butnotlimitedtotheabbreviatednewdrugapplicationswhichhavebeenfiledand/orapproved,asmorespecificallysetforthbelow;andWHEREAS,AAIdesirestopurchasefromAesgenandAesgendesirestoselltoAAIsuchproductsdevelopmentprojects,togetherwithalltheirattendantrightsandobligations;andWHEREAS,AAIhasagreedtoassumefromAesgencertainliabilitiesandundertakecertainobligationsonbehalfofAesgen;NOWTHEREFORE,inconsiderationofthemutualcovenantsandbenefitscontainedinthisAgreement,thepartiesagreeasfollows:1DEFINITIONS.Inadditiontothetermsdefinedelsewhereherein,thefollowingtermsshallbedefinedasfollows:1.1ANDAshallmeananabbreviatednewdrugapplicationwhichissubmittedtotheFDAforapprovaltomanufactureand/orsellapharmaceuticalproductintheUnitedStatespursuanttotheFDCAct1.2ANDAProductsshallmean(i)AcyclovirCapsules(200mg);(ii)AcyclovirTablets(400mg,800mg,UD);(iii)EtodolacCapsules(300mg,bottleof100);(iv)EtodolacTablets(400mg,bottleof100);and(iv)KetoconazoleTablets(200mg,bottleof100,blisterpacks).1.3cGMPshallmeancurrentgoodmanufacturingpracticesassetforthintheFDCAct.1.4DevelopmentProductsshallmean(i)PentoxifyllineTablets(400mg,bottleof100,5000,UD)and(ii)SelegilineTablets/Capsules(genericdosageforms).1.5FDAshallmeantheUnitedStatesFoodandDrugAdministration.1.6FDCActshallmeantheFederalFood,DrugandCosmeticAct,21U.S.C.ss.321etseq.,asamended,andtheregulationspromulgatedthereunderfromtimetotime.1.7GovernmentalEntityshallmeananyfederal,state,localornon-U.S.governmentoranycourtofcompetentjurisdiction,legislature,governmentalagency,administrativeagencyorcommissionorothergovernmentalauthorityorinstrumentality.1.8LOIshallmeanthatcertainletterofintentexecutedbyandbetweenAesgenandAAIonoraboutApril20,2001.1.9MaterialAdverseEffectmeansamaterialadverseeffectonthebusiness,assets,operations,prospectsorcondition,financialorotherwise,relatingtotheANDAProductsandtheDevelopmentProducts,takenasawhole.2TRANSFEROFTHEASSETS.2.1SALEOFASSETS.OnthetermsandconditionssetforthinthisAgreement,Aesgenagreestosell,assign,deliver,transferandconveyandAAIagreestopurchase,acquireandacceptalloftheright,titleandinterestofAesgeninandtotheProducts(asdefinedbelow),andmoreparticularlytheassetssetforthbelowinsubsections2.1.1through2.1.5(theAssets),freeandclearofanyandallliensorencumbrances.2.1.1THEPRODUCTS.AllofAesgen'sright,titleandinterestinandtotheANDAProductsandtheDevelopmentProducts(collectivelyreferredtohereinastheProducts).2.1.2THEREGULATORYRECORDS.AllofAesgen'sright,titleandinterestinandtoanyandallregulatoryfiles(includingcorrespondencewithregulatoryauthorities),registrations,applications,approvals,licensesandpermitsrelatingtotheProducts,asoftheClosingDate,fromtheFDA,or,totheextenttheyexist,anyotherapplicableregulatoryauthorityinanycountry,ineachcasetotheextenttransferableinlightoflegal,regulatoryand,practicalconsiderations;2.1.3THEINTELLECTUALPROPERTY.Alltrademarks,trademarkrights,licenses,inventions,processes,specifications,know-how,tradesecrets,goodwillandcopyrights,whicharecurrentlyownedbyAesgenandusedexclusivelyinconnectionwiththeProductsandsetforthonSchedule2.1.3.2.1.4ACCRUEDROYALTIES.AllroyaltieswhichaccrueandbecomedueandowingfromMOVAtoAesgenfromthedateoftheexecutionoftheLOI,tobepaidinaccordancewithSection6.1.3below.2.1.5THEINTANGIBLES.AlltherightsexclusivelyrelatingtotheAssetssetforthin2.1.1,2.1.2,2.1.3above,includingallclaims,counterclaims,credits,causesofaction,rightsofrecoveryandrightsofsetoff.2.2EXCLUDEDASSETS.AAIacknowledgesandagreesthatitisnotacquiringanyright,titleorinterestinortoanyotherassetsofAesgenincluding,bywayofexample,thefollowingassets(ExcludedAssets):2.2.1CASH.AllofAesgen'scash,bankaccounts,certificatesofdepositandothercashequivalents.2.2.2ACCOUNTSRECEIVABLE.ExceptassetforthinSection2.1.4above,allofAesgen'saccountsreceivable,whichshallincludeallreceivablesarisingfromorrelatingtoanyProductsatanytimepriortothecloseofbusinessontheClosingDate.2.2.3REALESTATE.AnyrealestateownedorleasedbyAesgen.2.2.4TAXRECORDSANDREFUNDS.AllofAesgen'staxreturnsandrecordsandanytaxrefundsortaxcreditsdueAesgenattributabletotheProductsfortaxperiodspriortotheClosingDate.2.2.5OTHERASSETS.AllotherassetsofAesgenexceptfortheAssets.2.3PRIOROBLIGATIONSOFAAI.InconnectionwiththeterminationoftheProductTransfer,Manufacturing,MarketingandDistributionAgreementbetweenMOVAPharmaceuticalCorporation(MOVA)andAesgen(theMOVAAgreement)relatingtotheProducts,whichterminationshallbeeffectiveonApril22,2002(theTerminationDate),AAIherebyacknowledgesthat,inaccordancewiththetermsoftheMOVAAgreementanauditofMOVA'sbooksandrecordshasbeenrequestedbyAesgeninordertodeterminethefinalbalance