DATE: February 24, 1998
---------------------------------
(1) SMITHKLINE ▇▇▇▇▇▇▇ p.l.c.
and
(2) ICN PHARMACEUTICALS, INC.
AGREEMENT FOR THE SALE AND PURCHASE
OF A PORTFOLIO OF PHARMACEUTICAL, OTC AND
CONSUMER HEALTHCARE PRODUCTS
2
TABLE OF CONTENTS
CLAUSE SUBJECT PAGE
1. DEFINITIONS...................................................... 1
2. INTERPRETATION................................................... 6
3. SALE AND PURCHASE................................................ 6
4. RESERVED RIGHTS.................................................. 8
5. CONSIDERATION.................................................... 8
6. COMPLETION....................................................... 19
7. TRADE MARKS...................................................... 23
8. STOCK............................................................ 24
9. BUSINESS CONTRACTS............................................... 25
10. PRODUCT REGISTRATIONS............................................ 25
11. MACHINERY........................................................ 28
12. REPRESENTATIONS AND WARRANTIES OF SB............................. 29
13. REPRESENTATIONS AND WARRANTIES OF ICN............................ 34
14. COVENANTS BY SB.................................................. 37
15. COVENANTS BY ICN................................................. 39
16. COVENANTS BY ICN AND SB.......................................... 40
17. CONFIDENTIALITY.................................................. 42
18. COSTS............................................................ 42
19. LIMITATIONS OF LIABILITY......................................... 42
20. THIRD PARTY CLAIMS............................................... 45
21. COUNTERPARTS..................................................... 46
22. FURTHER ASSISTANCE............................................... 46
23. GENERAL.......................................................... 46
24. ASSIGNMENT....................................................... 47
25. NOTICES.......................................................... 47
26. GOVERNING LAW AND JURISDICTION................................... 48
INDEX OF SCHEDULES
SCHEDULE ONE - PRODUCTS AND TERRITORIES.....................................
SCHEDULE TWO - PRODUCT LICENCES.............................................
SCHEDULE THREE - TRADE MARKS................................................
SCHEDULE FOUR - BUSINESS CONTRACTS..........................................
SCHEDULE FIVE - MASTER TRANSITION DISTRIBUTION AGREEMENT....................
SCHEDULE SIX - MASTER TRANSITION MANUFACTURING AGREEMENT....................
SCHEDULE SEVEN - MASTER TRADEMARK ASSIGNMENT................................
SCHEDULE EIGHT - STANDARD FORM ASSIGNMENT DOCUMENTS.........................
SCHEDULE NINE - CUSTOMER LETTERS............................................
SCHEDULE TEN - LETTER OF CROSS REFERRAL.....................................
SCHEDULE ELEVEN - CONTACT LISTS.............................................
SCHEDULE TWELVE - REGISTRATION RIGHTS AGREEMENT.............................
SCHEDULE THIRTEEN - CERTIFICATE OF DESIGNATION..............................
SCHEDULE FOURTEEN - SALES AND GROSS MARGIN STATEMENT........................
SCHEDULE FIFTEEN - APPORTIONMENT OF CONSIDERATION...........................
1
THIS AGREEMENT is made on 1998
BETWEEN:
(1) SMITHKLINE ▇▇▇▇▇▇▇ p.l.c., a company incorporated in England and Wales
whose registered office is at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ("SB"); and
(2) ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in The United States of America whose registered office
is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("ICN").
WHEREAS:
(A) SB or an Affiliate of SB holds each of the Exploited Product Licences for
the Products in the Territories.
(B) SB or an Affiliate of SB owns each of the Exploited Trade Marks to be
assigned to ICN.
(C) ICN wishes to purchase from SB the right to manufacture, sell, distribute
and market the Products in the Territories (and in addition to purchase the
Warranted CEE Trade Marks, the Warranted CEE Product Licences, the
Additional Trade Marks and the Additional Product Licences) and SB has
agreed to procure the transfer, licence and assignment to ICN of such
rights relating to the Products upon the following terms and conditions.
(D) SB and ICN intend that the sale and purchase contemplated hereby shall have
economic effect as of the Effective Date, such that the profits, losses and
other normal business risks of the Business after the Effective Date shall,
subject to the representations, warranties and indemnities contained
herein, be the responsibility of ICN, and that the Assets and Business be
held in trust by SB for the account of ICN from the Effective Date until
Completion.
IT IS AGREED as follows:
1. DEFINITIONS
In this Agreement, the following words and expressions shall have the
following meanings, unless the context otherwise requires:
"Additional Product Licences" means the Product Licences presently held
by SB, its Affiliates or distributors in respect of the Products in the
Global Disposal Area which are not Warranted CEE Product Licences and
with respect to which neither SB nor any Affiliate has marketed or sold
the subject Product in the relevant geographical area since 1 January
1997. The Additional Product Licences are listed in Part A of Schedule
Two (without a "#" symbol).
"Additional Trade Marks" means the registered trade marks and
applications for trade marks, details of which are set out in Part C of
Schedule Three, together with any unregistered trade marks used
exclusively in relation to any Product within the Global Disposal Area
but which are not Exploited Trade Marks.
"Affiliate" means, in relation to each party to this Agreement, any
organisation directly or indirectly controlled by that party, any
organisation which directly or indirectly controls that party or any
organisation directly or indirectly controlled by the same person as
that party. For the purpose of this definition, "control" shall mean in
relation to any entity the ability of another entity to ensure, whether
through ownership of shares or otherwise that the affairs of the first
entity are conducted in accordance with the wishes of that other
entity.
"Assets" means the assets agreed to be sold and purchased under this
Agreement pursuant to Clause 3 below.
"Authority" means the Ministry of Health or equivalent regulatory body
in any country within the Global Disposal Area.
"Business" means the business of manufacturing, selling, distributing
and marketing each Product in its respective Territory.
"Business Contracts" means all supply, distribution, manufacturing,
intellectual property licences and other contracts between third
parties and SB or an Affiliate of SB (the "SB Contracting Party" in
respect of the relevant Business Contract) relating to the Business
including, but not limited to, the contracts listed in Schedule Four,
and "Business Contract" means any one of them.
"Business Day" means a day (other than a Saturday or Sunday) on which
clearing banks are open for business in London.
"Certificate of Designation" means a certificate of designation of
rights and preferences of Series D Convertible Preferred Stock of ICN
substantially in the form set out in Schedule Thirteen.
"Common Stock" means the shares of common stock, par value US$0.01 of
ICN.
"Completion" means the completion of the sale and purchase of the
Assets in accordance with this Agreement.
"Completion Date" means 24 February 1998 or such later date as the
parties may agree.
"Contact List" means, for each of ICN and SB, the list contained in
Schedule Eleven comprising named contacts within ICN and SB
respectively who shall be primarily responsible for implementing the
sale of Products contemplated by this Agreement, as such list may be
amended from time to time.
"Customer Lists" means the documents or lists containing (i) the names
and addresses of SB's current customers for the Products in the
Territories and (ii) such details of the sales to customers of the
Products in the Territories for the calendar years 1996 and 1997 as are
in the possession of SB.
"Disclosure Schedule" means the disclosure schedule delivered on or
prior to the Completion Date to ICN by SB in connection with this
Agreement. The sections of the Disclosure Schedule correspond to the
Clauses of this Agreement, but information disclosed in any section of
the Disclosure Schedule shall be deemed to be disclosed as to all
relevant Clauses hereof.
"Effective Date" means 23 February 1998.
"Existing Product Licence Information" means the information dossiers,
data, results of clinical and other trials and investigations and the
like submitted as part of any application for any approval, consent or
licence prepared or used in respect of the Exploited Product Licences.
"Exploited Product Licences " means the Product Licences concerning
the marketing, distribution and sale of each Product in its respective
Territory. The Exploited Product Licences are listed in Part A of
Schedule Two, marked with a "#" symbol.
"Exploited Trade Marks" means the registered trade marks and
applications for trade marks, details of which are set out in Part A of
Schedule Three, together with any unregistered trade marks used
exclusively in relation to each Product within its respective
Territory.
"Global Disposal Area" means the countries listed in Part B of Schedule
One.
"Goodwill" means the goodwill of the Business excluding Trade ▇▇▇▇
▇▇▇▇▇▇▇▇.
"ICN Claim" means any claim or cause of action (including but not
limited to any claim in contract, in tort and/or under statute) made by
ICN under or in relation to this Agreement, the sale of the Assets, any
aspect of the Assets or the Business or the negotiation and
communications in relation thereto.
"Know How" means all the information (including packaging and
production information, formulations (including without prejudice to
the generality of the foregoing Product Formulae), processes,
specifications, techniques and methods of quality control) owned by SB,
which is used by SB in connection with the Business.
"Master Transition Distribution Agreement" means a master agreement for
the transitional distribution of the Products in the Territories in
substantially the same form as the draft set out in Schedule Five. The
parties or their Affiliates may in addition enter into further
distribution agreements ("Distribution Agreements") in relation to
specific geographical areas within the Territories, where required.
"Master Transition Manufacturing Agreement" means a master agreement
for the transitional manufacture by SB or its Affiliates of the
Products, in substantially the same form as the draft set out in
Schedule Six.
"Master Trademark Assignment" means a master trademark assignment in
substantially the same form as the draft set out in Schedule Seven.
"Material Adverse ICN Effect" means a material adverse effect on the
financial standing of ICN or on ICN's ability to perform its
obligations under this Agreement.
"Material Adverse SB Effect" means a material adverse effect on the
Business and Assets taken as a whole.
"Packaging Rights" means, subject to the exclusions in Clause 4
(Reserved Rights), all intellectual property rights that exist or are
capable of existing in the get up or packaging in which the Products
are currently sold including the artwork and text used exclusively on
the Products in the form sold at the Completion Date.
"Patents" means Australian patents nos. AU ▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ patent no. 212097 and South African patent no. 8513671
relating to the active ingredient in "Maxolon".
"Person" means a natural person, partnership, company, unincorporated
association, government or political subdivision, agency or
instrumentality of a government.
"Preferred Stock" means shares of Series D Convertible Preferred Stock
U.S. $0.01 par value of ICN.
"Products" means the portfolio of pharmaceutical, OTC and consumer
healthcare products, further details of which are contained in Schedule
One, and "Product" means any one of them.
"Product Formulae" means the formulation of each of the Products to the
extent such formulations are owned by SB or its Affiliates.
"Product Liability Claim" means a claim by one party to this Agreement
against the other in respect of loss (including legal fees) caused to
the first party due to a claim against that party for product liability
in respect of one or more Products.
"Product Licence" means an approval, consent or authorisation issued by
an Authority authorising the marketing and/or distribution of a
pharmaceutical, OTC or consumer healthcare product in a specified area.
"Records" means all records owned by SB or its Affiliates (whether
maintained on paper or electronic media) concerning current
formulations, raw material procurement, manufacture, distribution,
packing, promotion or sale of the Products in the Territories and/ or
concerning the registration or approval of the Products in the
Territories.
"Registration Rights Agreement" means an agreement between SB and ICN
substantially in the form set out in Schedule Twelve.
"Sales and Gross Margin Statement" means the statement of sales of the
Products in the Territories in 1996 and 1997 (including, in the latter
case, such figures restated to reflect currency exchange rates as at 9
January 1998 as detailed therein) and gross margins for such years,
forming Schedule Fourteen to this Agreement.
"SB Product Licences" means the Exploited Product Licences, the
Warranted CEE Product Licences and the Additional Product Licences.
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
"Stock" means all finished goods (within the meaning specified in UK
GAAP) in respect of Products owned by SB or its Affiliates for sale
within the Territories at the Completion Date.
"Territory" means, in respect of any Product, the group of countries
listed against the Product concerned in Part A of Schedule One.
"Trade Marks" means the Exploited Trade Marks, the Warranted CEE Trade
Marks and the Additional Trade Marks.
"Trade ▇▇▇▇ ▇▇▇▇▇▇▇▇" means the goodwill of SB or its Affiliates
attaching to and symbolised solely by the Trade Marks.
"UK GAAP" means UK generally accepted accounting principles.
"Warranted CEE Product Licences" means the Product Licences listed in
Part B of Schedule Two.
"Warranted CEE Trade Marks" means the registered trade marks and
applications for trade marks, details of which are set out in Part B of
Schedule Three.
2. INTERPRETATION
2.1 A reference to a statutory provision includes a reference to:
2.1.1 the statutory provision as modified or re-enacted
or both from time to time before the date of this
Agreement; and
2.1.2 any subordinate legislation made under the
statutory provision before the date of this
Agreement.
2.2 A reference to an agreement or other document is a reference
to that agreement or document as from time to time duly
supplemented or amended in accordance with its terms.
2.3 The headings in this Agreement shall not affect the interpre-
tation of this Agreement.
2.4 References to this Agreement shall include the Recitals
and Schedules hereto.
3. SALE AND PURCHASE
3.1 In accordance with and subject to the provisions of this
Agreement, SB agrees to sell with full title guarantee subject
to matters disclosed in or pursuant to this Agreement
including without limitation the Disclosure Schedule and,
where necessary, to procure the sale on the same basis by the
relevant Affiliate of SB, and ICN agrees to purchase with
effect from the Completion Date (subject to sub-Clauses 9.3 to
9.5), the following (the "Assets"):
3.1.1 the Goodwill
3.1.2 the Know How (other than information at present in
the public domain)
3.1.3 the Exploited Trade Marks, the Warranted CEE
Trademarks and the Trade ▇▇▇▇ ▇▇▇▇▇▇▇▇ associated
therewith.
3.1.4 the Exploited Product Licences and the Warranted
CEE Product Licences (to the extent such Product
Licences are capable of being transferred to ICN
by SB or its relevant Affiliates)
3.1.5 the Customer Lists
3.1.6 the Packaging Rights (to the extent that such
rights do not include copyright or rights in any
trade ▇▇▇▇ other than the Trade Marks or in any
packaging used for Products other than the
Products, and save that no guarantee as to title
is given in respect of copyright associated with
packaging materials)
3.1.7 the Records (including, without limitation,
Existing Product Licence Information)
3.1.8 the benefit (subject to the burden) of the
Business Contracts
3.1.9 the Stock
3.1.10 the Patents
3.2 In accordance with and subject to the provisions of this
Agreement, SB in addition agrees to sell to the extent it has
the right to sell and without any guarantee as to or warranty
in respect of title, and where necessary to procure the sale
on the same basis by the relevant Affiliate of SB and ICN
agrees to purchase with effect from the Completion Date the
following:
3.2.1 the Additional Trade Marks
3.2.2 the Additional Product Licences (to the extent
such Product Licences are capable of being
transferred to ICN by SB or its relevant
Affiliates).
3.3 Subject to Clause 17, it is agreed by the parties that any
books, records, information or other data relating in any
manner to this sale and purchase and which are retained by
either party and which are material for the purpose of any
returns for taxation or other necessary purposes shall to the
extent relevant be made available for inspection and copying
by the other parties at all reasonable times and on reasonable
notice by the relevant party.
3.4 The sale and purchase contemplated by sub-Clauses 3.1 and 3.2
shall not include the assumption by ICN of any liabilities in
respect of the Assets arising prior to the Effective Date.
4. RESERVED RIGHTS
4.1 ICN acknowledges that nothing contained in this Agreement
shall give ICN or its Affiliates the right to use the trade
marks, trade names or logos (other than the Trade Marks) owned
by SB or its Affiliates in connection with the Products or
otherwise (except to the extent that the name of SB or any
Affiliate of SB as the holder of any of the Existing Product
Licences is legally required to be marked on the packaging of
the Products).
4.2 Without limiting the generality of sub-Clause 4.1, the
following are specifically excluded from the sale hereunder:
the names "SmithKline" and "▇▇▇▇▇▇▇", the "SB" logo and any
material or trademarks (including, without limitation, capsule
colours) not used exclusively in relation to the Products,
provided that ICN shall have the right to sell existing Stock
and Products manufactured by SB pursuant to the provisions of
the Master Transition Manufacturing Agreement.
5. CONSIDERATION
5.1 PAYMENT OF CONSIDERATION. At Completion ICN shall deliver to
SB (or an Affiliate of SB designated by SB) in consideration
of the sale, conveyance, assignment, transfer and delivery of
the Assets (excluding Stock in respect of which ICN shall pay
SB such amount as is calculated under Clause 8): (i) the Cash
Portion of the Purchase Price by wire transfer of immediately
available funds to the bank account or bank accounts
previously specified by SB in a written notice delivered to
ICN; and (ii) that number of shares of Preferred Stock as
shall be convertible into such number of shares of Common
Stock (rounded up to the closest whole share) as shall have a
market value computed at the Original Price equal to the
Equity Portion of the Purchase Price. For the purposes of this
Clause 5, all references to SB shall include any Affiliate of
SB holding any of the Shares.
5.2 INITIAL PRICE GUARANTEE. ICN guarantees to SB that on the
Initial Guarantee Date, the Adjusted Current Market Price as
of the Initial Guarantee Date shall equal or exceed the
Initial Guaranteed Price. In the event that the Adjusted
Current Market Price on the Initial Guarantee Date is less
than the Initial Guaranteed Price, ICN shall pay SB the
Interim Payment. Any Interim Payment due to SB hereunder shall
be paid by ICN in such combination of cash and Additional
Shares (in the form of Preferred Stock) as ICN shall determine
in its sole discretion. For such purposes, each share of
Preferred Stock shall be valued at an amount equal to the
Current Market Price for the Initial Guarantee Date multiplied
by the number of shares of Common Stock issuable upon
conversion of a share of Preferred Stock. The Interim Payment
shall be made not later than 10 Business Days following the
Initial Guarantee Date.
5.3 FINAL SETTLEMENT. No later than November 1, 1999, the Calcul-
ation Agent shall deliver to ICN
5.3.1 A written statement setting forth: (i) the Estimated
Amount, if any, and (ii) the number of shares of
Common Stock as shall have a market value calculated
at the Closing Price on October 28, 1999, equal to
such Estimated Amount. Unless ICN pays the Estimated
Amount to SB in cash in full by November 3, 1999,
ICN shall deliver to SB, on or before November 3,
1999, 110% of the number of shares of Common Stock
referred to in (ii) above less the number of shares
of Common Stock equal in value (based on the October
28, 1999 Closing Price) to any amount delivered in
cash to SB by ICN in partial satisfaction of ICN's
obligation under this Clause 5.3 to deliver the
Estimated Amount to SB.
5.3.2 All the shares of Common Stock delivered by ICN to
SB pursuant to this Clause 5.3 shall be: (i) covered
by a registration statement prepared by ICN and
filed with the SEC in compliance with the Securities
Act which registration statement shall have been
declared effective by the SEC so that such shares
may be publicly offered and sold by SB, (ii) in full
compliance with all state securities and Blue Sky
laws, and (iii) authorized for listing or quotation,
as applicable, on the Principal Market. If any of
the shares of Common Stock due to be delivered to SB
pursuant to Clause 5.3.1 do not comply with the
requirements of (i) to (iii) of the preceding
sentence, ICN shall pay SB in cash, in lieu of
delivering such shares, an amount equal to the
aggregate value of all such shares as calculated
pursuant to Clause 5.3.1(ii).
5.3.3 Not later than November 3, 1999, SB shall convert
all the shares of Preferred Stock then held by SB
into Common Stock and subject to Clause 5.6(ii) may
in its sole discretion during the Settlement Period
sell any or all of such shares of Common Stock and
any shares of Common Stock received by SB from ICN
pursuant to Clause 5.3 in one or more transactions;
provided that SB will only sell Additional Shares as
SB in its reasonable discretion believes would be
required to be sold to realize the full amount due
to SB hereunder.
5.3.4 For the purposes of this Clause 5.3.4, sales of
Common Stock by SB during any Trading Day during the
Settlement Period shall be deemed to be sales of
Remaining Shares until one-twentieth of the
Remaining Shares held by SB at the close of trading
on the Principal Market on the last Trading Day
before the first day of the Settlement Period have
been sold and thereafter to be sales of Additional
Shares. Not later than three Trading Days following
the last day of the Settlement Period, the
Calculation Agent shall deliver to ICN a written
statement setting forth:
(i) the number of -
(A) Remaining Shares held by SB; and
(B) Additional Shares held by SB
in each case, as of the close of trading
on the Principal Market (x) on the last
Trading Day preceding the first day of
the Settlement Period and (y) on the
Final Guarantee Date.
(ii) for each sale of Remaining Shares made by SB
during the Settlement Period -
(A) the number of Remaining Shares
sold;
(B) the net sales proceeds received
from such sale plus the
aggregate gross dividends paid
on such Remaining Shares from
the Completion Date through the
date of such sale;
(C) the product of the number of
Remaining Shares sold and the
Final Guaranteed Price; and
(D) the Proceeds Surplus or
Proceeds Shortfall in respect
of such Remaining Shares, if
any;
(iii) for each sale of Additional Shares made by
SB during the Settlement Period -
(A) the number of Additional Shares
sold; and
(B) the net sales proceeds received
from such sale plus the
aggregate gross dividends paid
on such Additional Shares from
the Completion Date through the
date of such sale.
(iv) the aggregate amount of cash, if any,
paid by ICN to SB pursuant to Clauses
5.2, 5.3 and 5.4.
(v) for any Remaining Shares held by SB at
the close of trading on the Principal
Market on the Final Guarantee Date:
(A) (1) the Current
Market Price for the
Final Guarantee Date
plus the gross
dividends paid per
share on such
Remaining Shares from
the Completion Date
through such date
minus (2) the Final
Guaranteed Price;
(B) the amount determined in (A)
multiplied by the number of
such Remaining Shares.
If the amount determined in Clause (B) is
positive, such amount will be deemed to
be a Proceeds Surplus; if the amount in
Clause (B) is negative, the absolute
value of such amount shall be deemed to
be a Proceeds Shortfall.
(vi) the aggregate of the Proceeds Shortfalls,
if any, minus the aggregate of the
Proceeds Surpluses.
5.3.5 Not later than the second Business Day after
receipt from the Calculation Agent of the
statement provided for in Clause 5.3.4:
(i) if the amount described in (vi) of such
statement is negative, SB shall pay to ICN
the absolute value of such amount in such
combination of cash and delivery of shares of
Original Common Stock as SB shall determine
in its sole discretion. In addition, SB shall
return to ICN all Additional Shares then
owned by SB and any cash proceeds from the
sale of Additional Shares plus the aggregate
gross dividends paid from the Completion Date
through the Final Guarantee Date on such then
owned Additional Shares, and any cash
delivered to SB pursuant to Clauses 5.2, 5.3
and 5.4.
(ii) if the amount described in (vi) of such
statement is positive, the Calculation Agent
shall subtract from such amount the amount
described in Clause 5.3.4(iv) and the
aggregate amounts described in Clause
5.3.4(iii)(B) for all sales of Additional
Shares during the Settlement Period. If such
amount is still positive, ICN shall pay to SB
the difference in cash less the aggregate
gross dividends paid from the Completion Date
through the Final Guarantee Date on
Additional Shares not sold by the end of the
Settlement Period. If such amount is
negative, SB shall return to ICN the absolute
value of such amount in cash. In addition, SB
shall return to ICN all Additional Shares
then owned by SB plus the aggregate gross
dividends paid from the Completion Date
through the Final Guarantee Date on such then
owned Additional Shares.
For purposes of this Clause 5.3.5, any shares of
Original Common Stock delivered by SB to ICN shall
be valued at the Current Market Price for the Final
Guarantee Date.
5.4 LIMITS ON DELIVERY OF ADDITIONAL SHARES. ICN shall not deliver
Additional Shares to SB pursuant to this Agreement to the
extent that such delivery would increase the percentage of
outstanding shares of Common Stock that would be owned by SB
(excluding shares of Common Stock acquired and held by SB
independent of this Agreement) at the time of delivery to more
than 4.9%, assuming for purposes of such calculation,
conversion into Common Stock of all of the Preferred Stock
then held by SB. If ICN would, but for the preceding sentence,
have the option to deliver Additional Shares to SB, ICN shall,
in lieu of such delivery, pay to SB on the date on which
delivery of such Additional Shares is otherwise due, a cash
amount equal to the difference between the payment then due
and the value of the Additional Shares (calculated as provided
in Clause 5.2 and Clause 5.3) that ICN is permitted to deliver
and delivers to SB on such date. Notwithstanding the
prohibition on delivery of Additional Shares contained in the
first sentence of this Clause 5.4, if ICN notifies SB in good
faith that it is financially unable to pay SB all or part of
such cash amount, SB may, in its sole discretion, accept
delivery of all or any of such amount in the form of
Additional Shares.
5.5 SALES PRIOR TO SETTLEMENT PERIOD. In the event that SB shall,
at any time prior to the close of trading on the Principal
Market on the last Trading Day before the Settlement Period,
as permitted by Clause 5.6, sell to any third party, excluding
any Affiliate of SB, ICN or any Affiliate of ICN any Original
Common Stock then:
(i) The Calculation Agent shall determine whether the
aggregate net sales proceeds received from such
sales when added to the aggregate gross dividends
paid on such Shares from the Completion Date
through the date of such sale exceeds the per
share price that is the linear interpolation
(straight line) between the Original Price and the
Final Guaranteed Price for such date of sale
multiplied by the number of Shares sold.
(ii) If an excess exists, on the tenth Business Day
following such sale SB shall pay to ICN such
excess, at the option of SB, either in cash or in
the form of the return of shares of Original
Common Stock, valued at the net price per share of
Common Stock realized by SB in such sale.
5.6 TRANSFER RESTRICTIONS. Except as provided in this Clause 5.6,
prior to November 1, 1999, SB shall not: (i) without ICN's
prior written consent, sell, convey, assign or transfer any of
the Shares unless the net price to be received by SB would
exceed U.S.$75 per share of Common Stock or (ii) effect any
sales of Common Stock on any Trading Day pursuant to this
Clause 5 unless such Sales would have met the condition set
forth in Section (b)(4)(i) of Rule 10b-18 promulgated under
the 1934 Act if such Rule would have been applicable to SB;
provided, that the covenant of SB in (ii) above shall not
apply to sales of Common Stock not in excess of (A) 30,000
shares on any Trading Day, or (B) 50,000 shares on any Trading
Day if the price of the Common Stock on the Principal Market
on the previous Trading Day was less than 50% of the Original
Price.
5.7 ADJUSTMENTS.
5.7.1 In the event that ICN issues additional shares of
Common Stock pursuant to a stock dividend, stock
distribution or subdivision, the Initial Guaranteed
Price and the Final Guaranteed Price shall,
concurrently with the effectiveness of such stock
dividend, stock distribution or subdivision, be
proportionately reduced, as if the Preferred Stock
was converted into Common Stock and in the event the
outstanding shares of Common Stock of ICN shall be
combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common
Stock, the Initial Guaranteed Price and the Final
Guaranteed Price shall, concurrently with the
effectiveness of such combination or consolidation,
be proportionately increased. If any of the events
described in the preceding sentence occurs, all
references in this Clause 5 to number, percentage,
value or amount of any Shares or any calculation
relating thereto shall be adjusted as appropriate as
of the day of such event.
5.7.2 All references contained herein to share prices,
trading volumes and the like are to such numbers
prior to the ex-date for the stock split for holders
of record of the Common Stock on February 17, 1998.
5.7.3 In the event of the occurrence of any other event
which would give rise to an adjustment of the
Conversion Ratio of the Series D Convertible
Preferred Stock pursuant to the terms of the
Certificate of Designation, the Initial Guaranteed
Price and the Final Guaranteed Price shall be
increased or decreased, as applicable, to take
effect of any adjustments made pursuant to the
adjustment provisions set forth in Section 2(c) of
the Certificate of Designation so that the
Guaranteed Value shall remain unchanged as a result
of such adjustments. For the avoidance of doubt, the
Initial Guaranteed Price and the Final Guaranteed
Price shall remain unchanged if any of the
adjustments under this Section 5.7.3 were already
accounted for under Section 5.7.1.
5.8 LIMITS ON INCREASE OF SB'S HOLDING PERCENTAGE. ICN shall not
directly or indirectly redeem, repurchase or otherwise acquire
any shares of Common Stock or any other class of capital stock
of ICN or take any other action affecting such shares (other
than such action taken at the request of SB or unless SB shall
have waived in writing its rights under this Clause 5.8), if
such action would increase the percentage of outstanding
shares of Common Stock owned by SB (excluding shares of Common
Stock acquired and held by SB independent of this Agreement),
assuming conversion of the Preferred Stock held by SB, to
greater than 4.9%.
For the purposes of this Clause 5.8, in the event SB shall
have transferred any shares of Common Stock to any of its
Affiliates, "SB" shall mean SB and the Affiliates of SB to
which any shares of Common Stock shall have been transferred.
5.9 CHANGE OF CONTROL. The day on which a Change of Control of ICN
becomes effective shall be deemed to be the first day of the
Settlement Period and the provisions of Clause 5.3 shall apply
except that: (i) the Estimated Amount shall be payable to SB
in cash only, and (ii) all relevant dates shall be accelerated
as appropriate.
5.10 ACCELERATION OF SETTLEMENT PERIOD. If: (i) ICN fails to: (a)
perform, in any material respects, any of its obligations
under this Clause 5, including, without limitation to deliver
any of the Additional Shares or pay any cash to SB when such
delivery or payment becomes due; (b) make any payment of
interest, principal or other amount in respect of any of its
Indebtedness or Indebtedness guaranteed by it as and when that
Indebtedness becomes payable; (c) perform or observe any
covenant or agreement to be performed or observed by it
contained in any other agreement or in any instrument
evidencing any of its Indebtedness or Indebtedness guaranteed
by it and, as a result of its failure under (b) or (c) above,
any other party to that agreement or instrument has
accelerated the maturity of such Indebtedness; or (d) maintain
its shares of Common Stock listed and traded on a nationally
recognized securities exchange or a nationally recognized
securities market; or (ii) a Liquidation Event occurs, then
the date of such failure shall be deemed to be the first day
of the Settlement Period and the provisions of Clause 5.3
shall apply except that: (a) the Estimated Amount shall be
payable to SB in cash only, (b) ICN shall indemnify SB in full
for any loss suffered by SB as a result of such acceleration
of the Settlement Period and (c) all relevant dates shall be
accelerated as appropriate. Notwithstanding the foregoing, if
ICN notifies SB in good faith that it is financially unable to
pay SB all or part of the Estimated Amount in cash, SB may, in
its sole discretion, accept delivery of all or any such cash
amount in the form of Additional Shares.
5.11 CALCULATION AGENT. All determinations, calculations and
adjustments hereunder shall be made by the Calculation Agent
in its reasonable judgment and, absent manifest error, shall
be binding on the parties hereto. The Calculation Agent shall
provide reasonable detail of any determination, calculation or
adjustment upon request.
5.12 VOTING RIGHTS. Except for voting on the matters which may have
adverse effect, directly or indirectly, on the Preferred
Stock, or the rights attached thereto, individually or as a
class, on any matter submitted to the vote of shareholders of
ICN holders of shares of Preferred Stock shall vote such
shares in the same proportion and in the same manner as all
other shares of ICN having voting rights which are actually
voted on such matter. The foregoing provision shall not apply
if any of the events specified in Clause 5.10 shall have
occurred and be continuing.
5.13 The consideration payable pursuant to this Clause 5 will be
apportioned between the individual Assets in accordance with
Schedule Fifteen.
5.14 DEFINITIONS.Capitalised terms used in this Clause 5 and not
defined in Clause 1 of this Agreement, shall have the meanings
set out below.
"ACTUAL VALUE" means the sum of (i) the product of (a) the
Current Market Price for a Guarantee Date and (b) the
Remaining Shares plus the Additional Shares (assuming
conversion of Preferred Stock into Common Stock), and (ii) the
aggregate gross dividends paid from Completion Date to such
Guarantee Date on such Remaining Shares and such Additional
Shares.
"ADDITIONAL SHARES" means shares of Preferred Stock other than
Original Preferred Stock and any shares of Common Stock other
than Original Common Stock issued by ICN to SB after the
Completion Date.
"ADJUSTED CURRENT MARKET PRICE" means the Current Market Price
as of a Guarantee Date (assuming conversion of any Preferred
Stock) plus the aggregate gross dividends per Remaining Share
paid since the Completion Date.
"CALCULATION AGENT" means SB.
"CASH PORTION OF THE PURCHASE PRICE" means U.S.$22,500,000.
"CHANGE OF CONTROL" means such time as either: (i) any Person
or group (within the meaning of Section 13(d) or 14(d) of the
▇▇▇▇ ▇▇▇) has acquired, directly or indirectly, for cash, the
beneficial ownership, by way of merger, consolidation or
otherwise of the majority of the voting power of ICN on a
fully-diluted basis; (ii) the sale, lease or transfer for cash
of all or substantially all of the assets of ICN to any Person
or group; or (iii) the consolidation or merger of ICN with or
into another Person or any Person consolidates with, or merges
with or into ICN, in any such event pursuant to a transaction
in which the majority of holders of Common Stock receive cash
for their shares.
"CLOSING PRICE" means the price of one share of the Common
Stock on the Principal Market at the close of trading on the
Principal Market.
"CURRENT MARKET PRICE" means for a Guarantee Date the average
of the Closing Prices for the five consecutive Valuation Dates
immediately prior to such Guarantee Date.
"EQUITY PORTION OF THE PURCHASE PRICE" means U.S$23,000,000.
"ESTIMATED AMOUNT" means an amount equal to the amount, if
any, by which the Guaranteed Value on the Final Guarantee Date
would exceed the Actual Value as of the Final Guarantee Date
assuming that the Current Market Price on the Final Guarantee
Date is equal to the Closing Price on October 28, 1999.
"FINAL GUARANTEE DATE" means the last Valuation Date of the
Settlement Period.
"FINAL GUARANTEED PRICE" means U.S.$69.00 per share.
"GUARANTEE DATE" means the Initial Guarantee Date or the Final
Guarantee Date.
"GUARANTEED VALUE" means (i) for the Initial Guarantee Date
the product of (x) the Initial Guaranteed Price and (y) the
Remaining Shares held by SB on the Initial Guarantee Date and
(ii) for the Final Guarantee Date the product of (x) the Final
Guaranteed Price and (y) the Remaining Shares held by SB at
the close of trading on the Principal Market on the Trading
Date immediately preceding the first day of the Settlement
Period.
"INDEBTEDNESS" means an amount in excess of U.S.$10,000,000
(or its foreign currency equivalent based on the foreign
exchange rate on the first date of such Indebtedness) payable
or guaranteed by ICN as debtor, borrower, issuer or guarantor
pursuant to any (i) judgments, decrees or orders for payment
of money; or (ii) agreement or instrument involving or
evidencing money borrowed or received, an extension or credit,
a conditional sale or a transfer with recourse or with an
obligation to repurchase.
"INITIAL GUARANTEE DATE" means December 31, 1998.
"INITIAL GUARANTEED PRICE" means U.S.$62.16 per share.
"INTERIM PAYMENT" means the amount, if any, by which the
Guaranteed Value exceeds the Actual Value on the Initial
Guarantee Date.
"LIQUIDATION EVENT" means, in respect of ICN, any of the
following events: (i) any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization
or other similar proceedings in connection therewith,
commenced by ICN or by its creditors, as such, or relating to
its assets or (y) the dissolution or other winding up of ICN
whether total or partial, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy proceedings,
or (z) any assignment for the benefit of creditors or any
marshaling of the material assets or material liabilities of
ICN.
"ORIGINAL COMMON STOCK" means the number of shares of Common
Stock into which the Original Preferred Stock may be
converted.
"ORIGINAL PREFERRED STOCK" means the shares of Preferred Stock
delivered by ICN to SB at Completion.
"ORIGINAL PRICE" means U.S.$56.05 per share.
"PRINCIPAL MARKET" means the principal exchange on which the
Common Stock is traded or the principal market on which the
Common Stock is quoted.
"PROCEEDS SHORTFALL" means (i) with respect to any sale of
Remaining Shares, the amount by which (A) the product of the
number of Remaining Shares sold and the Final Guaranteed Price
exceeds (B) the aggregate net sales proceeds received from
such sale plus the aggregate gross dividends paid on such
Remaining Shares from the Completion Date through the date of
such sale and (ii) with respect to any Remaining Shares held
by SB at the close of trading on the Principal Market on the
Final Guarantee Date, the amount computed as provided in
Clause 5.3.4.(v).
"PROCEEDS SURPLUS" means (i) with respect to any sale of
Remaining Shares, the amount, if any, by which (A) the net
sales proceeds received from such sale plus the aggregate
gross dividends paid on such Remaining Shares from the
Completion Date through the date of such sale exceeds (B) the
Final Guaranteed Price and (ii) with respect to any Remaining
Shares held by SB at the close of trading on the Principal
Market on the Final Guarantee Date, the amount computed as
provided in Clause 5.3.4(v).
"PURCHASE PRICE" means U.S.$45,500,000.
"REMAINING SHARES" means, as of any date of determination, the
number of shares of Common Stock into which shares of Original
Preferred Stock owned by SB on a Guarantee Date are then
convertible and shares of Original Common Stock then held by
SB.
"SETTLEMENT PERIOD" means the period of twenty Valuation Dates
from and including November 4, 1999.
"SHARES" means the Preferred Stock and the Common Stock.
"STOCK MARKET DISRUPTION EVENT" means the occurrence or
existence on any Trading Day of any of the following events:
The suspension or material limitation of trading in (i) the
Common Stock on the Principal Market, (ii) securities
generally on the Principal Market, or (iii) options contracts
related to the Common Stock traded on the relevant option
exchange.
For the purposes of this definition (a) a limitation on the
hours and number of days of trading will not constitute a
Stock Market Disruption Event if it results from an announced
change in the regular business hours of the relevant exchange
and (b) a material limitation on trading imposed during the
course of a day by reason of movements in price exceeding
levels permitted by the relevant exchange will constitute a
Stock Market Disruption Event.
The Calculation Agent shall as soon as practicable notify SB
and ICN of the existence or occurrence of a Stock Market
Disruption Event on any day that but for the occurrence or
existence of a Stock Market Disruption Event would have been a
Valuation Date.
"TRADING DAY" means a day that is a trading day on the
Principal Market and Chicago Board Options Exchange (in each
case other than a day on which trading on such exchange is
scheduled to close prior to its regular closing time).
"VALUATION DATE" means a Trading Day on which no Stock Market
Disruption Event has occurred or exists.
6. COMPLETION
6.1 COMPLETION VENUE: Completion of this Agreement will take place
at the offices of Coudert Brothers in New York, New York, USA
on the Completion Date.
6.2 ICN CONDITIONS PRECEDENT: The obligation of ICN to complete
the transaction contemplated hereby is subject to the
satisfaction on or prior to the Completion Date of the
following conditions (all or any of which may be waived in
whole or in part by ICN):
6.2.1 REPRESENTATIONS AND WARRANTIES: The
representations and warranties made by SB in this
Agreement shall have been true and correct in all
respects as of the Completion Date with the same
force and effect as though said representations
and warranties had been made on the Completion
Date (except for representations and warranties
made as of a specified date, which will be true
and correct in all respects as of the specified
date).
6.2.2 PERFORMANCE: SB shall have performed and complied
in all material respects with all agreements,
obligations and conditions required by this
Agreement to be so performed or complied with by
it prior to or at Completion.
6.2.3 GOVERNMENT APPROVALS: All approvals of competent
authorities required for the consummation of the
transactions contemplated by this Agreement, if
any, have been obtained and all waiting periods
under applicable laws, if any, shall have expired
or been terminated.
6.2.4 CERTIFICATE OF DESIGNATION: The Certificate of
Designation shall have been accepted for filing by
the Secretary of State of the State of Delaware.
6.2.5 LISTING OF UNDERLYING STOCK: The shares of Common
Stock into which the Preferred Stock is
convertible shall have been authorised for listing
upon official notice of issuance on the New York
Stock Exchange.
6.2.6 LITIGATION: No investigation, suit, action, or
other proceeding shall be threatened or pending
before any court or governmental agency that seeks
the restraint, prohibition, damages, or other
relief in connection with this Agreement or the
consummation of the transactions contemplated by
this Agreement unless such action would not have a
Material Adverse SB Effect.
6.2.7 NO ADVERSE CHANGE: During the period from 1
October 1997 to the Completion Date there shall
not have occurred or been discovered, and there
shall not exist on the Completion Date except for
that which has been otherwise disclosed elsewhere
in this Agreement or in the Disclosure Schedule,
any condition or fact that would have a Material
Adverse SB Effect.
6.3 SB CONDITIONS PRECEDENT: The obligation of SB to complete the
transaction contemplated hereby is subject to the satisfaction
on or prior to the Completion Date of the following conditions
(all or any of which may be waived in whole or in part by SB):
6.3.1 REPRESENTATIONS AND WARRANTIES: The
representations and warranties made by ICN in this
Agreement shall have been true and correct in all
respects as of the Completion Date with the same
force and effect as though said representations
and warranties had been made on the Completion
Date (except for representations and warranties
made as of a specified date, which will be true
and correct in all respects as of the specified
date).
6.3.2 PERFORMANCE: ICN shall have performed and complied
in all material respects with all agreements,
obligations and conditions required by this
Agreement to be so performed or complied with by
it prior to or at Completion.
6.3.3 GOVERNMENT APPROVALS: All approvals of competent
authorities required for the consummation of the
transactions contemplated by this Agreement, if
any, have been obtained and all waiting periods
under applicable laws, if any, shall have expired
or been terminated.
6.3.4 LITIGATION: No investigation, suit, action, or
other proceeding shall be threatened or pending
before any court or governmental agency that seeks
the restraint, prohibition, damages, or other
relief in connection with this Agreement or the
consummation of the transactions contemplated by
this Agreement unless such action would not have a
Material Adverse ICN Effect.
6.3.5 NO ADVERSE CHANGE: During the period from 1
January 1997 to the Completion Date there shall
not have occurred or been discovered, and there
shall not exist on the Completion Date except for
that which has been otherwise disclosed elsewhere
in this Agreement, any condition or fact that
would have a Material Adverse ICN Effect.
6.3.6 CERTIFICATE OF DESIGNATION. The Certificate of
Designation shall have been accepted for filing by
the Secretary of State of the State of Delaware.
6.3.7 LISTING OF UNDERLYING STOCK: The shares of Common
Stock into which the Preferred Stock is
convertible shall have been authorised for listing
upon official notice of issuance on the New York
Stock Exchange.
6.3.8 LETTER OF CREDIT. ICN shall have procured at its
own expense an irrevocable standby letter of
credit (the "Standby Letter of Credit") from
Banque Nationale de Paris in favour of, and in a
form acceptable to, SB for an amount of
$28,300,000 expiring not earlier than December 25,
1999.
6.4 SB DELIVERIES: At Completion, SB shall:
6.4.1 Execute and deliver to ICN the Master Trade ▇▇▇▇
Assignment.
6.4.2 Execute and deliver to ICN assignments of Goodwill
and Packaging Rights, such documents being in the
form set out in Schedule 8.
6.4.3 Execute and deliver to ICN the Master Transition
Distribution Agreement.
6.4.4 Execute and deliver to ICN the Master Transition
Manufacturing Agreement.
6.4.5 Execute and deliver to ICN an assignment of the
Patents in the form set out in Schedule 8.
6.4.6 Execute and deliver to ICN the Registration Rights
Agreement.
6.5 ICN DELIVERIES:
At Completion, ICN shall:
6.5.1 Deliver to SB a duly executed stock certificate in
respect of the shares of Preferred Stock in form
and denomination acceptable to SB.
6.5.2 Deliver to SB a copy of the Certificate of
Designation as filed with the Secretary of State
of the State of Delaware and proof of acceptance
of such filing by the Secretary of State of
Delaware.
6.5.3 Execute and deliver to SB the documents listed
in sub-Clauses 6.4.1 to 6.4.6.
6.5.4 Deliver to SB the Standby Letter of Credit
6.6 TERMINATION:
This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Completion Date:
6.6.1 By the mutual written consent of SB and ICN;
6.6.2 By either SB or ICN if Completion shall not have
occurred on or before June 30, 1998;
6.6.3 By either SB or ICN if consummation of the
transactions contemplated hereby shall violate any
non-appealable final order, decree or judgement of
any court or governmental body having competent
jurisdiction; or
6.6.4 By either SB or ICN if there has been a material
violation or breach by the other party of any of
the agreements, representations or warranties
contained in this Agreement that has not been
waived in writing, or if there has been a material
failure of satisfaction of a condition to the
obligations of the other party that has not been
waived in writing, and such violation, breach, or
failure has not been cured within sixty (60) days
of written notice to the other party.
6.7 EFFECT OF TERMINATION: If this Agreement is terminated
pursuant to sub-Clause 6.6, all further obligations of SB and
ICN under this Agreement shall terminate without further
liability of SB or ICN except (a) for the obligations of ICN
and SB under Clauses 16.2 (Press Releases), 17
(Confidentiality), 18 (Costs) and 26 (Governing Law &
Jurisdiction) and (b) that such termination shall not
constitute a waiver by any party of any claim it may have for
damages caused by reason of a breach by the other party of a
representation, warranty, covenant or agreement.
7. TRADE MARKS
7.1 SB shall assign the Trade Marks to ICN and, where SB is not
the registered proprietor, SB shall procure the assignment of
the Trade Marks by the registered proprietor of such Trade
Marks.
7.2 SB hereby agrees on its own behalf and on behalf of its
relevant Affiliates, in addition to executing the Master Trade
▇▇▇▇ Assignment, to execute such additional trade ▇▇▇▇
assignments as ICN may reasonably request to give effect to
Clause 7.1. The form of the additional assignments to be
executed pursuant to this Clause 7.2 is set out in Schedule
Eight. It is acknowledged by the parties that this form may
need to be amended to the extent necessary to comply with the
requirements of local law.
7.3 In the event that it is not possible or, in the reasonable
opinion of SB, not practicable, to assign any of the Trade
Marks then at the option and cost of ICN, SB shall, or shall
procure that the registered proprietor shall, either:
7.3.1 cancel such of the Trade Marks as cannot be
assigned, or
7.3.2 grant to ICN an irrevocable, exclusive, royalty
free licence in respect of such Trade Marks in
such form as the parties to this Agreement shall
be reasonably advised to be effective by local
trade ▇▇▇▇ agents of repute.
7.4 ICN shall prepare at its own expense all Trade ▇▇▇▇
assignments or licences to be executed pursuant to this Clause
7.
7.5 All records of assignments and licences of the Trade Marks
shall be undertaken by ICN at its expense.
7.6 Subject to the representations set forth in Clause 12.16,
title to and risk in the Trade Marks shall pass to ICN with
effect from Completion. Neither SB nor its Affiliates shall
have any responsibility for maintaining registrations of or
defending the Trade Marks after Completion but shall use
reasonable efforts to provide at ICN's expense such assistance
with maintaining registrations or defending the Trade Marks as
ICN may reasonably request.
8. STOCK
8.1 As soon as reasonably practicable after Completion, SB shall
calculate the price to be paid for the Stock by ICN. In
accordance with the principles of UK GAAP, the price for the
Stock will be stated at the lower of cost (excluding
intercompany profit) and net realisable value.
8.2 The quantities and descriptions of the Stock and the cost and
net realisable value of the Stock shall be determined by
reference to a stock-taking to be taken within one month after
the Completion Date in each Territory by a representative
appointed by SB, working jointly with a representative
appointed by ICN if ICN so requests in respect of particular
countries.
8.3 SB and ICN shall give to the other such assistance as may be
reasonably required to enable the price of the Stock to be
calculated and SB shall procure that proper access to the
books of account and accounting records of the Business is
given to ICN at reasonable times and on reasonable notice for
this purpose.
8.4 8.4.1 For Stock levels of less than one hundred and
eighty (180) days ICN shall pay SB for all such
Stock within thirty (30) days of receipt of invoice
from SB.
8.4.2 Should the levels of Stock exceed one hundred and
eighty (180) days ("Excess Stock"):
(i) ICN shall pay SB the value of the first
one hundred and eighty (180) days' Stock
within thirty (30) days of receipt of
invoice from SB.
(ii) ICN shall pay SB the value of the Excess
Stock within two hundred and ten (210)
days after the Completion Date or within
thirty (30) days of receipt of the
relevant invoice from SB, if later.
8.5 Payments pursuant to sub-Clause 8.4 shall be made in cash in
accordance with sub-Clause 23.9, and shall be in addition to
ICN's payment obligations pursuant to Clause 5 hereof.
8.6 Any dispute concerning the price of the Stock shall be
referred to an independent chartered accountant to be
appointed by the parties or (in default of agreement) by the
President of the Institute of Chartered Accountants in England
and Wales. The decision of such chartered accountant (who
shall be deemed to act as an expert and not as an arbitrator)
shall be final and binding on the parties and the cost of such
reference shall be paid by the parties in equal shares.
9. BUSINESS CONTRACTS
9.1 Subject to sub-Clause 9.2, ICN shall from the Completion Date:
9.1.1 assume the obligations of and become entitled to
the benefits of the SB Contracting Party under
each Business Contract; and
9.1.2 carry out and perform all the obligations under
the Business Contracts in accordance with the
terms contained therein.
9.2 Insofar as the benefit or burden of any Business Contract
cannot be effectively assigned to or assumed by ICN except
with the agreement or consent of any other party to it, SB and
ICN shall comply with the terms of Clauses 14.2 and 15.1
respectively in relation to obtaining such consents.
9.3 Subject to sub-Clause 9.5 and the other provisions of this
Agreement, all profits, receipts, losses, liabilities and
outgoings arising from the conduct of the Business prior to
the Effective Date shall belong to and be paid, borne and
discharged by SB. All profits, receipts, losses, liabilities
and outgoings arising from the conduct of the Business on or
after the Effective Date shall belong to and be paid, borne
and discharged by ICN.
9.4 Subject to sub-Clause 9.5, SB shall indemnify ICN against any
and all losses and liabilities incurred by ICN arising from
the conduct of the Business prior to the Effective Date. ICN
shall indemnify SB against any and all losses and liabilities
incurred by SB arising from the conduct of the Business on or
after the Effective Date.
9.5 Sub-Clauses 9.3 and 9.4 shall not come into effect unless and
until Completion takes place.
10. PRODUCT REGISTRATIONS
10.1 ICN shall, as soon as reasonably practicable following the
Completion Date, apply to the appropriate Authorities in the
Territories for the grant to ICN of new Product Licences in
respect of the Products corresponding with the SB Product
Licences in the respective Territory ("Marketing Authorisation
Transfer"). Further subject to the provisions of the Master
Transition Distribution Agreement and the Master Transition
Manufacturing Agreement, SB shall, or shall procure that the
relevant Affiliates shall, request of the relevant Authorities
that the SB Product Licences be varied to include ICN as the
company responsible for warehousing, marketing, distributing
and selling the Products.
10.2 In such countries as may be appropriate, the application for
the grant of such new Product Licences under Clause 10.1 shall
be by way of an abridged application ("Cross Referral") and SB
shall, or shall procure that its Affiliates shall, provide to
ICN letters in the form set out in Schedule Ten and all such
other assistance as may be reasonably necessary for the grant
of such Product Licences.
10.3 Subject to sub-clause 10.4, the costs and expenses incurred in
connection with obtaining new Product Licences and amending
the existing SB Product Licences in accordance with
sub-clauses 10.1 and 10.2 (including any official fees to be
paid to any Authority) shall be borne equally by SB and ICN,
up to an aggregate of US$500,000 in fees and expenses. To the
extent such fees and expenses in aggregate exceed US$500,000,
ICN alone shall bear such excess.
10.4 ICN and SB shall within 45 days after Completion prepare a
plan of work to be carried out by the directors, officers or
employees of SB or its Affiliates after Completion to enable
SB or its Affiliates to comply with sub-clauses 10.1 and 10.2
or otherwise to assist ICN with Marketing Authorisation
Transfer. All such work carried out shall be notionally valued
at US$100 per man-hour, and any liability of SB to pay fees
and expenses pursuant to sub-clause 10.3 shall be reduced by
the total notional value of all such work carried out.
10.5 SB shall not be required to generate new or additional data or
information or carry out any tests or trials except that the
provisional results from any ongoing stability trials as at
the Completion Date relating to the Products will be provided
to ICN. In addition SB shall use its reasonable efforts to
complete any stability trials which it is carrying out at the
date hereof in respect of the Products in the Territories and
shall pass on to ICN the results of such trials when
completed.
10.6 For each SB Product Licence, prior to Marketing Authorisation
Transfer, SB shall hold that SB Product Licence as nominee and
trustee for and on behalf of ICN and shall, at ICN's expense
and subject to ICN approving such expenditure, maintain the
same in full force and effect and will use its reasonable
endeavours to procure any modification of or addition to such
SB Product Licence as ICN may require.
10.7 Prior to Marketing Authorisation Transfer (and in respect of
any Products subject to a Distribution Agreement, during the
term of such agreement) SB and/or its Affiliates shall
continue to discharge their obligations under the law and
regulations applicable to each SB Product Licence. ICN shall
conduct the marketing of the Products during such period so as
to be consistent with SB and/or its Affiliates meeting their
obligations and shall satisfy the terms of the SB Product
Licences. Further, ICN shall fully co-operate with SB and its
Affiliates in the discharge of its relevant obligations
including (without limitation):
10.7.1 the expeditious recording and reporting of any
adverse events in accordance with laws and
regulations applicable to the SB Product Licences
provided that serious adverse events shall be
reported to SB by ICN by telephone, facsimile or
other instantaneous form of communication in each
case confirmed in writing by first class post
immediately upon ICN becoming aware of the same;
10.7.2 obtaining the prior written approval of SB for all
promotional materials relating to the Products,
such approval not to be unreasonably delayed by
SB; and
10.7.3 complying in all respects with any applicable
local codes of practice or regulations.
For the purposes of this clause a serious adverse event means
a serious adverse clinical experience which is fatal, life
threatening, disabling/incapacitating or which results in
hospitalisation.
10.8 Full Economic Results
10.8.1 Notwithstanding any matter disclosed to ICN by SB in
or pursuant to the Disclosure Schedule, provided ICN
has filed the relevant application for a Product
Licence within one year after the Completion Date,
if an Authority refuses, through no fault of ICN, to
grant a Product Licence (whether by assigning an SB
Product Licence or otherwise) within three (3) years
following the Completion Date, such that ICN is
unable to market a Product in a certain country
within the relevant Territory, SB shall pay ICN in
cash within thirty (30) days from the later of (a)
the date falling three years after the Completion
Date and (b) receipt of notice from ICN of the
relevant refusal by the regulatory authority an
amount equal to 1.5 times the 1997 sales of that
Product in that country based on 9 January 1998
exchange rates as shown in Column A of the Sales and
Gross Margin Statement. If SB identifies an
appropriate pharmaceutical, OTC or consumer
healthcare product or products and ICN in its sole
discretion agrees to the transfer, SB shall instead
of such payment transfer to ICN all its rights in
and to such other product(s) as the parties agree is
or are of equivalent value to such sum.
10.8.2 Notwithstanding any matter disclosed to ICN by SB in
or pursuant to the Disclosure Schedule, in the event
that a Product Licence is held by a third party or
is subject to third party rights and SB is unable,
through no fault of ICN either (i) to procure the
assignment of the Business Contract in respect of
such third party to ICN or (ii) effect a novation or
other similar transfer mechanism to enable ICN to
realise the economic results of the Product in the
country on equivalent terms enjoyed by SB at
Completion, in each case prior to 31 December 1999,
SB shall pay within 30 days of demand to ICN in cash
an amount equal to 1.5 times the 1997 sales of that
Product in that country based on 9 January 1998
exchange rates as shown in Column A of the Sales and
Gross Margin Statement. If SB identifies an
appropriate pharmaceutical, OTC or consumer
healthcare product or products and ICN in its sole
discretion agrees to the transfer, SB shall instead
of such payment transfer to ICN all its rights in
and to such other product(s) as the parties agree is
or are of equivalent value to such sum.
10.8.3 Pending the payment or transfer (if any) referred to
in sub-Clauses 10.8.1 and 10.8.2, the full economic
results of the relevant Product in respect of the
relevant country shall vest in ICN with effect from
the Effective Date.
10.8.4 In the event of payment by SB to ICN pursuant to
sub-Clauses 10.8.1 or 10.8.2 with respect to any
Product in any country, all rights with respect to
such Product in such country shall revert to SB as
of the date of such payment.
11. MACHINERY
Where as a result of the sale of the Products pursuant to this
Agreement, an item or items of machinery ("Machinery") owned by SB or
its Affiliates becomes redundant, SB shall give ICN or procure that ICN
is given a right of first refusal to purchase the Machinery on terms
mutually acceptable to the parties.
12. REPRESENTATIONS AND WARRANTIES OF SB
12.1 ORGANISATION: SB is a corporation duly organised, validly
existing and in good standing under the laws of England, with
full corporate power and authority to consummate the
transactions contemplated hereby.
12.2 AUTHORITY: The execution and delivery of this Agreement by SB
and the consummation and performance of the transactions
contemplated hereby, have been duly and validly authorised by
all necessary corporate and other proceedings, and this
Agreement has been duly authorised, executed, and delivered by
SB and, assuming enforceability against ICN, constitutes the
legal, valid and binding obligation of SB, enforceable in
accordance with its terms.
12.3 TITLE TO ASSETS: Except as set forth in Schedule 12.3 of the
Disclosure Schedule, SB or an Affiliate of SB has good and
marketable title to all the Assets and will convey good and
marketable title at Completion, free and clear of any and all
liens, encumbrances, charges, claims, restrictions, pledges,
security interest, or impositions of any kind (including those
of secured parties). SB or an Affiliate of SB is the
beneficial owner of all the Assets. None of the Assets is
leased, rented, licensed, or otherwise not owned by SB or an
Affiliate of SB.
12.4 NO VIOLATION OR CONFLICT: The execution and delivery of this
Agreement by SB and the performance of this Agreement (and the
transactions contemplated herein) by SB (a) do not and will
not conflict with, violate or constitute or result in a
default under any law, judgement, order, decree, the
Memorandum and Articles of Association of SB or any contract
or agreement to which SB is a party or by which SB is bound
and (b) will not result in the creation or imposition of any
lien, charge, mortgage, claim, pledge, security interest,
restriction or encumbrance of any kind on, or liability with
respect to, the Assets except as otherwise provided herein or
otherwise disclosed on the Disclosure Schedule.
12.5 PATENTS: Except for the Patents and except as set forth in
Schedule 12.5 of the Disclosure Schedule, SB does not own any
patents with respect to the active ingredients for the
Products or the Products themselves or the manufacturing of
the Products in the Territories.
12.6 REGISTRATIONS: To the best knowledge of SB, the SB Product
Licences constitute all Product Licences held by SB or its
Affiliates in the Global Disposal Area. In the event
additional Product Licences are discovered at any time, they
will be transferred forthwith to ICN in accordance with Clause
10. Such transfer shall constitute ICN's only and final remedy
for a breach of the above warranty. Except as set forth on
Schedule 12.6 of the Disclosure Schedule, the Exploited
Product Licences:
12.6.1 are in the name of SB or an Affiliate of SB or,
where local regulations dictate, in the name of a
local distributor being a party to a Business
Contract;
12.6.2 constitute all licences, permits, approvals,
qualifications, and governmental specifications,
authorisations or requirements which SB or its
Affiliates have in connection with the marketing
and sale of the Products in the Territories, and
12.6.3 to the best knowledge of SB after due inquiry
made, constitute all such licences, permits,
approvals, qualifications, and governmental
specifications, authorisations, and requirements
necessary for the marketing and sale of the
Products in the Territories as currently conducted
by SB and its Affiliates and distributors.
All Exploited Product Licences and Warranted CEE Product
Licences are in full force and effect. SB has complied with
all of its obligations under the Exploited Product Licences
and all applicable laws and regulations relating to the
marketing, distribution and sale of the Products in their
respective Territories. To SB's knowledge, except as set forth
in Schedule 12.6 of the Disclosure Schedule, no Exploited
Product Licence is likely to be suspended, cancelled or
revoked or is likely not to qualify for assignment to ICN
provided ICN makes best efforts to obtain the authorities'
consent to such an assignment. SB does not warrant the
possibility of continuation of any Product Licence in the name
of ICN in the event ICN decides to have Products manufactured
by an entity other than the company which is actually
manufacturing that Product as of the Completion Date, and SB
does not warrant any continuation of price approval or price
reimbursement for the Products by social security institutions
following the transfer of the Product Licences to ICN.
12.7 STOCK: As of Completion, each Product comprising the Stock
shall meet the specifications therefor as set forth in the
manufacturing documentation and Product Licences for such
Product with the competent authority in the country concerned
of the relevant Territory. The Stock will be in good
condition, properly stored and in compliance with applicable
laws, usable and saleable in the ordinary course of business.
The Stock of each Product with individual country sales of
more than ,40,000 in 1997 as set forth in Column A of the
Sales and Gross Margin Statement shall be sufficient to
maintain a running business for 90 days based on annual sales
in 1997. For Products with individual country sales not
exceeding ,40,000 in 1997, SB represents and warrants that
since 1 October 1997 it has maintained Stock levels in a
manner consistent with previous practice. SB represents and
warrants that since 1 October 1997 it has not made or
instituted any unusual or novel method of sale in the conduct
of the Business inconsistent with past practices.
12.8 TAXES: As of the date hereof, there are no liens for taxes
upon the Assets except for liens for current taxes not yet due
and payable.
12.9 ABSENCE OF CERTAIN CHANGES: As of the date hereof and as of
the Completion Date and except as otherwise disclosed on the
Disclosure Schedule, there has not since 1 October 1997 been
any event causing a Material Adverse SB Effect and SB is not
aware of any facts, circumstances, or proposed or contemplated
events that would have a Material Adverse SB Effect after
Completion.
12.10 VIOLATIONS OF LAW: Except as set forth in Schedule 12.10 of
the Disclosure Schedule, to the best of SB's knowledge after
due inquiry made, the operation of the Business by SB (i) does
not violate or conflict with any law, governmental
specification, authorisation, or requirement, or any decree,
judgement, order, or similar restriction in any material
respect, and (ii) has not been the subject of an investigation
or inquiry by any governmental agency or authority regarding
violations or alleged violations, or found by any such agency
or authority to be in violation, of any law, other than
investigations, inquiries or findings that have not had, or
are reasonably likely not to have, a Material Adverse SB
Effect.
12.11 SB SALES STATEMENTS. The sales and gross margin figures given
in the Sales and Gross Margin Statement are accurate and
complete in all material respects, reflect only actual bona
fide transactions net of intercompany profit, and were
prepared in accordance with UK GAAP consistently applied. SB
makes no warranty or representation as to the future financial
performance of the Business or the Assets.
12.12 NO GOVERNMENT RESTRICTIONS: Except as set forth on Schedule
12.12 of the Disclosure Schedule or for consents the failure
of which to obtain would not have a Material Adverse SB
Effect, no consent, approval, order or authorisation of, or
registration, declaration or filing with, any governmental
agency is required to be obtained or made by or with respect
to SB in connection with the execution and delivery of this
Agreement by SB or the consummation by it of the transactions
contemplated hereby to be consummated by it.
12.13 LITIGATION: Except as set forth on Schedule 12.13 of the
Disclosure Schedule or for adverse drug reports annexed to the
Disclosure Schedule, the Assets are not the subject of (i) any
outstanding judgement, order, writ, injunction or decree of
any arbitrator or administrative or governmental authority or
agency, limiting, restricting or affecting the Assets in a way
that would have a Material Adverse SB Effect and (ii) any
pending or, to the best of SB's knowledge, after due inquiry
made, threatened claim, suit, proceeding, charge, inquiry,
investigation or action of any kind that would have a Material
Adverse SB Effect. To the best knowledge of SB, there are no
claims, actions, suits, proceedings or investigations pending
or threatened by or against SB with respect to the
transactions contemplated hereby, at law or in equity or
before or by any supranational, federal, state, municipal or
other governmental department, commission, board, agency,
instrumentality or authority.
12.14 BUSINESS CONTRACTS: To the best of SB's knowledge, the
Business Contracts listed in Schedule Four to this Agreement
constitute all the supply, distribution, manufacturing,
intellectual property licences and other contracts between SB
or its Affiliates and third parties material to the Business
save for short-term purchase, advertising and other
commitments entered into by SB in the ordinary course of its
business not reduced to formal written contracts. Except as
disclosed to ICN, SB and its Affiliates and, to the best
knowledge of SB, each other party to each Business Contract
has performed in all material respects each term, covenant and
condition of each Business Contract which is to be performed
by them at or before the date hereof. Each of the Business
Contracts is in full force and effect and constitutes the
legal and binding obligation of SB or its Affiliate and, to
the best knowledge of SB, the other parties thereto.
12.15 MANUFACTURING TECHNOLOGY AND KNOW HOW: The Know How and the
Product Formulae will be sufficient to enable ICN to
manufacture the Products to the same standard as currently
enjoyed. However, SB does not warrant that ICN has or at any
time will have the ability to manufacture such Products to
such standard. The Product Formulae fully conform with the
pertaining Registrations approved by the competent government
authorities in the Territories.
12.16 TRADE MARKS: Except as set forth in Schedule 12.16 of the
Disclosure Schedule, SB or an Affiliate of SB owns the
Exploited Trade Marks and the Warranted CEE Trade Marks set
forth in Parts A and B of Schedule Three which are formally
registered or applied for. All Trade ▇▇▇▇ registrations set
forth in Parts A and B of Schedule Three have been duly
granted and have not been cancelled, abandoned or otherwise
terminated to the best knowledge of SB. All Trade ▇▇▇▇
applications set forth in Parts A and B of Schedule Three have
been duly filed and maintained to the best knowledge of SB.
12.17 NO INFRINGEMENT OF THIRD PARTY RIGHTS: Except as set forth
herein or in the Disclosure Schedule, the use of the Assets by
SB in the Territory does not to the best knowledge of SB
infringe any third party rights in a way which results in a
Material Adverse SB Effect.
12.18 INVESTMENT REPRESENTATIONS:
12.18.1 SB understands that neither the shares of Original
Preferred Stock (as defined in sub-Clause 5.13
hereof) nor the shares of Common Stock into which
such shares may be converted (the "Conversion
Shares" and collectively with the Original
Preferred Stock the "Securities") are being
registered under the Securities Act of 1933, as
amended, (the "Securities Act") and are being sold
to SB in a transaction that is exempt from the
registration requirements of the Securities Act.
12.18.2 SB has such knowledge and experience in financial
and business matters as to be capable of
evaluating the merits and risks of an investment
in the Original Preferred Stock, and is able to
bear the economic risk of investment in the
Original Preferred Stock.
12.18.3 SB is acquiring the Original Preferred Stock for
its own account and not with a view to any
distribution of the Original Preferred Stock,
subject, nevertheless, to the understanding that
the disposition of its property will at all times
be and remain within its control.
12.18.4 SB understands that: (a) the Original Preferred
Stock will be in unregistered form only and that
any certificates delivered to it in respect of the
Original Preferred Stock will bear a legend
substantially the following form:
"This Security has not been registered under the Securities
Act of 1933, as amended, (the "Securities Act") or any state
securities law and, accordingly, may not be offered, sold or
otherwise transferred other than in a transaction exempt from,
or not subject to, the registration requirements of the
Securities Act. The transfer of this security is subject to a
sale and purchase agreement dated February 24, 1998, between
SmithKline ▇▇▇▇▇▇▇ p.l.c. and ICN Pharmaceuticals, Inc.",
and (b) ICN has agreed to reissue such certificates without
the foregoing legend in the event of a disposition of the
Securities in accordance with the provisions of clause 12.18.5
below (provided, in the case of a disposition of the
Securities in accordance with clause 12.18.5(f) below, that
the legal opinion referred to in such paragraph so permits),
or at its request at such time as it would be permitted to
dispose of them in accordance with clause 12.18.5(a) below.
12.18.5 SB agrees that in the event that at some future
time it wishes to dispose of any of the
Securities, it will not do so unless such
disposition is made in accordance with any
applicable securities laws of any state of the
United States and:
(a) such Securities are sold in compliance
with Rule 144(k) under the Securities
Act; or
(b) such Securities are sold in compliance
with Rule 144A under the Securities
Act; or
(c) such Securities are sold in compliance
with Rule 904 of Regulation S under
the Securities Act; or
(d) such Securities are sold pursuant to an
effective registration statement
under the Securities Act; or
(e) such Securities are sold to ICN; or
(f) such Securities are disposed of in any
other transaction that does not require
registration under the Securities Act,
and SB theretofore has furnished to ICN
or its designee an opinion of counsel
experienced in securities law matters to
such effect or such other documentation
as ICN or its designee may reasonably
request.
12.18.6 SB is acquiring the Securities solely for the
purpose of investment and not for any other
purpose and has no intent to affect or otherwise
influence the management of ICN or the composition
of its Board of Directors.
13. REPRESENTATIONS AND WARRANTIES OF ICN
13.1 ORGANISATION: ICN is a corporation duly organised, validly
existing and in good standing under the laws of the state of
Delaware, with full corporate power and authority to
consummate the transactions contemplated hereby.
13.2 AUTHORITY: The execution and delivery of this Agreement and
all other Agreements to be executed in connection with this
Agreement by ICN, and the consummation and performance of the
transactions contemplated hereby and thereby, including,
without limitation, the issuance of the shares of Preferred
Stock, have been duly and validly authorised by all necessary
corporate and other proceedings, and this Agreement and all
other Agreements to be executed in connection with this
Agreement have been duly authorised, executed, and delivered
by ICN and, assuming the enforceability against SB,
constitutes the legal, valid and binding obligation of ICN
respectively, enforceable in accordance with its terms.
13.3 NO VIOLATION OR CONFLICT: The execution and delivery of this
Agreement and all other Agreements to be executed in
connection with this Agreement by ICN and the performance of
this Agreement and all other Agreements to be executed in
connection with this Agreement (and the transactions
contemplated herein and thereby) and the issuance of the
Preferred Stock by ICN do not and will not conflict with,
violate or constitute or result in a default under any law,
judgement, order, decree, the certificate of incorporation or
bylaws of ICN, or any contract or agreement to which ICN is a
party or by which ICN is bound.
13.4 NO GOVERNMENT RESTRICTIONS: Except as set forth on Schedule
13.4 of the Disclosure Schedule and for consents the failure
of which to obtain would not have a Material Adverse SB
Effect, no consent, approval, order or authorisation of, or
registration, declaration or filing with, any governmental
agency is required to be obtained or made by or with respect
to ICN in connection with the execution and delivery of this
Agreement and all other Agreements to be executed in
connection with this Agreement or the issuance of the
Preferred Stock.
13.5 LITIGATION: There are no claims, actions, suits, proceedings
or investigations pending or, to the best of ICN's knowledge,
threatened by or against ICN with respect to the transactions
contemplated hereby, at law or in equity or before or by any
supranational, federal, state, municipal or other governmental
department, commission, board, agency, instrumentality or
authority.
13.6 CAPITALISATION. The authorised capital stock of ICN consists
of 100,000,000 authorised shares of Common Stock, $.01 par
value, and 10,000,000 authorised shares of preferred stock,
$.01 par value. As of January 31, 1998, there were outstanding
47,488,487 shares of Common Stock, as of February 3, 1998,
2,249 shares of Series B Convertible Preferred Stock, and as
of December 31, 1997, employee stock options to purchase an
aggregate of 5,946,818 shares of ICN Common Stock (of which
options to purchase an aggregate of 3,761,714 shares of ICN
Common Stock were exercisable). As of February 3, 1998, a
total of 50,861 shares of Common Stock were issuable upon
conversion of ICN's Series B Convertible Preferred Stock, and
a total of 551,595 shares of Common Stock were issuable upon
the conversion of Biocapital Holding Swiss Franc Exchangeable
Certificates convertible debt securities of ICN. All
outstanding shares of capital stock of ICN have been duly
authorised and validly issued and are fully paid and
non-assessable. Except as set forth in this Clause and this
Agreement and except for changes since December 31, 1997
resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (a) no shares
of capital stock or other voting securities of ICN, (b) no
securities of ICN convertible into or exchangeable for shares
of capital stock or voting securities of ICN, and no options
or other rights to acquire from ICN and (c) no obligation of
ICN to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock
or voting securities of ICN (the items in clauses (a), (b) and
(c) being referred to collectively as "Company Securities").
There are no outstanding obligations of ICN or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
Company Securities.
13.7 PREFERRED STOCK. All shares of Preferred Stock of ICN to be
issued to SB upon the consummation of the transactions
contemplated hereby or at any time thereafter, will have been
validly issued, fully paid and non-assessable and will be free
and clear of any lien, charge or other encumbrance or claim
and the issuance thereof will not be subject to any preemptive
or similar rights. Upon the consummation of the transactions
contemplated hereby and at any time thereafter, the shares of
Common Stock issuable upon conversion of the shares of
Preferred Stock to be issued to SB will have been duly
authorised and reserved for issuance upon the conversion of
the Preferred Stock, or when otherwise issued to SB and when
issued upon such conversion or otherwise, will be validly
issued, fully paid and non-assessable, and will be free and
clear of any lien, charge or other encumbrance or claim and
the issuance of such shares is not and will not be subject to
any preemptive or similar rights.
13.8 SEC FILINGS. ICN has made available to SB the annual reports
on Form 10-K for its fiscal years ended December 31, 1996 and
1995, its quarterly reports on Form 10-Q for its fiscal
quarter-ended March 31, 1997, June 30, 1997 and September 30,
1997, its proxy or information statements relating to meetings
of, or actions taken without a meeting by, the stockholders of
ICN held since December 31, 1995, and all of its other
reports, statements, schedules and registration statements
filed with the SEC since December 31, 1996. ICN will make a
timely filing of its Form 10-K for its fiscal year ended
December 31, 1997 and will make such Form 10-K available to SB
at that time.
13.9 FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial
statements of ICN included in its annual reports on Form 10-K
and the quarterly reports on Form 10-Q referred to in Clause
13.8 fairly present, in conformity with generally accepted
accounting principles applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated
financial position of ICN and its consolidated subsidiaries as
of the dates thereof and their consolidated results of
operations and changes in financial position for the periods
then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements). For purposes
of this Agreement, "Balance Sheet" means the consolidated
balance sheet of ICN as of December 31, 1996 set forth in ICN
10-K and "Balance Sheet Date" means December 31, 1996.
13.10 ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date, ICN
and its Affiliates have conducted their business in the
ordinary course consistent with past practice and there has
not been any event, occurrence or development of a state of
circumstances or facts which has had or reasonably could be
expected to have a Material Adverse ICN Effect on ICN.
13.11 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities
of ICN or any of its subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be
expected to result in such a liability, other than: (i)
liabilities disclosed or provided for in the Balance Sheet;
(ii) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date,
which in the aggregate are not material to ICN and its
subsidiaries, taken as a whole; and (iii) liabilities under
this Agreement.
13.12 STOCK OPTIONS. ICN represents that there are no existing
employee stock options or any other stock options which were
granted at less than the fair market value of such stock at
the time of such grant and ICN covenants that it shall not
grant prior to December 31, 1999 any employee stock options or
any other stock options at less than the fair market value at
the time of such grant.
13.13 NO KNOWLEDGE: ICN has no actual knowledge of any matter as of
the Completion Date which has not been disclosed by SB in or
pursuant to the Disclosure Schedule which would constitute a
breach by SB of any representations or warranties given by SB
in this Agreement.
14. COVENANTS BY SB
14.1 MAINTENANCE OF ASSETS: SB agrees from the date hereof until
the Completion Date that, except as specifically disclosed in
Schedule 14.1 or unless otherwise consented to by ICN in
writing, SB shall:
14.1.1 except as disclosed on the Disclosure Schedule,
maintain the Assets in good status and condition
and not sell or dispose of any of the Assets
except in the ordinary course of business;
14.1.2 continue the Business in the ordinary course of
business and not make or institute any unusual or
novel methods of purchase, sale, management,
operation, or other business practice in the
conduct of the Business inconsistent with past
practices;
14.1.3 not enter into any material contract or
commitment, engage in any transaction, extend
credit or incur any obligation with respect to the
Assets or the Business, in each case not in the
usual and ordinary course of business and
consistent with normal business practices; and
14.1.4 promptly inform ICN of any change in the Assets
that could have a Material Adverse SB Effect.
14.2 CONSENTS: SB shall use all reasonable efforts to obtain the
consents of the third parties to the assignment to ICN of the
Business Contracts, to the extent they relate to the Products,
at the same terms as currently contained in the Business
Contracts, provided, however, SB shall not be required to make
any payment of any kind whatsoever to ICN or any third party,
or waive any rights or assume any obligations other than those
obligations set forth in the Business Contracts, in connection
with obtaining any such required consents. If SB is unable to
obtain a required consent within a reasonable period of time,
SB may, but is not obliged to, terminate the pertaining
Business Contract (for the Products or as a whole) provided
that SB shall first obtain ICN's consent to such termination
which shall not be unreasonably withheld. For as long as SB
has neither assigned a Business Contract nor terminated it
with respect to the Products, SB or its relevant Affiliate,
shall, to the extent permitted by that Business Contract, hold
that Business Contract or trust for ICN and shall continue to
honour the terms of the relevant Business Contract, for the
Products as sub-contractor for the account and benefit of ICN,
and ICN shall indemnify SB and its Affiliates for all
liability relating to the Products (and only the Products)
under such Business Contract other than any liability arising
from SB's negligence or failure to perform. ICN shall give SB
or its Affiliates all licences and marketing authorisations
necessary or required to continue to fulfil its obligations
under these Business Contracts until such Business Contracts
expire, terminate or are assigned to ICN with respect to the
Products.
14.3 DISCLOSURE SUPPLEMENTS: From time to time prior to the
Completion Date, SB will promptly inform ICN, in writing, with
respect to any matter that may arise hereafter and that, if
existing or occurring prior to the Completion Date, would have
been required to be set forth or described herein or in the
Disclosure Schedule.
14.4 NON-COMPETE:
14.4.1 Save as provided in sub-Clause 14.4.2, SB covenants
and agrees in respect of each Product that for a
period of five years following the Completion Date,
neither SB nor any of its Affiliates will directly
or indirectly engage in the relevant Territory in
the manufacture, marketing or distribution of any
product which both has the same chemical substance
and is provided for the same indication as that
Product (hereinafter a "Competing Product").
14.4.2 The covenant contained in sub-Clause 14.4.1 shall
not apply to any Competing Product acquired by SB or
its Affiliates as a result of the acquisition of a
company or a business during the aforesaid five-year
period provided that aggregate sales of such
Competing Product across the relevant Territory in
the calendar year preceding such acquisition are at
least L10,000,000. If aggregate sales of such
Competing Product are less than L10,000,000, ICN
shall have the right of first refusal to acquire
such Competing Product from SB or its Affiliate on
conditions to be negotiated in good faith. Should
ICN not exercise its right of first refusal or
should negotiations subsequently held between SB and
ICN fail, SB shall make good faith efforts to divest
such Competing Product to a third party. Prior to
such disposal of the Competing Product (whether to
ICN or a third party), Sub-Clause 14.4.1 shall not
apply in respect of that Competing Product.
14.5 HEDGING ACTIVITIES: SB agrees that from the date
hereof until the Final Guarantee Date it shall not
and it shall procure that each of its Affiliates
shall neither (a) except as provided in Clause 5,
sell any Common Stock or Preferred Stock, nor (b)
engage in any hedge transactions relative to the
Common Stock or Preferred Stock, including without
limitation any short sales or purchases or sales of
any derivative securities based on the Common Stock
or Preferred Stock. As used in this sub-Clause 14.5
the term "Final Guarantee Date" shall have the
meaning set forth in sub-clause 5.13.
15. COVENANTS BY ICN
15.1 CONSENTS: ICN shall use all reasonable efforts to cooperate
with SB in obtaining the consents of the third parties to the
assignment to ICN of the Business Contracts, to the extent
they relate to the Products, at the same terms as currently
contained in the Business Contracts; provided, however, ICN
shall not be required to make any payment of any kind
whatsoever to SB or any third party, or waive any rights or
assume any obligations other than those obligations set forth
in the Business Contracts, in connection with obtaining any
such required consents.
15.2 LABELLING: Notwithstanding Clause 4 of this Agreement,
following Completion, ICN shall at its own expense and as
expeditiously as possible use all reasonable efforts to obtain
such approvals of competent government authorities in the
Territory as may be necessary to change ICN's labelling for
each Product used in its relevant Territory in such a way that
any reference to SB or its Affiliates is removed as well as
implement such change of labelling. ICN may use the current
labelling on the Stock existing at Completion approved by SB
prior to such use until such inventory is exhausted, subject
to applicable laws and regulations in the Territory. ICN may,
however, use the SB labelling only in connection with clearly
identifying ICN as the responsible person for commercialising
the Products in a way that is customary in the industry and is
to be approved in advance by SB.
15.3 RESERVATION OF SHARES OF COMMON STOCK: ICN agrees that from
the date hereof until ICN has fulfilled all of its obligations
under Clause 5 of this Agreement ICN shall reserve and keep
free from any pre-emptive rights sufficient shares of Common
Stock to effect the full conversion of all shares of Preferred
Stock as may be outstanding from time to time or otherwise
required to be delivered by ICN to SB pursuant to Clause 5 of
this Agreement.
16. COVENANTS BY ICN AND SB
16.1 TECHNOLOGY TRANSFER: ICN and SB shall work together to
commence transfer of the Know How to ICN promptly after
Completion. SB shall use all reasonable efforts to assist ICN
in assuming manufacture of the Products, provided, however,
that SB cannot ensure ICN's ability to successfully
manufacture the Products. SB shall have no obligation to
provide manufacturing support for any Product and SB shall not
be responsible for any delay or other consequences, if ICN
elects to use a process that is materially different from an
SB process. If ICN elects to transfer an SB process, SB shall
provide reasonable access to SB's manufacturing facilities and
during a period of up to two years from the Completion Date up
to a total of [160 (one hundred and sixty)] man-days of 8
hours each of technical support free-of-charge. Thereafter,
ICN shall reimburse SB for providing such technical assistance
at a rate of US$100.00 (one hundred United States Dollars) per
hour, plus all reasonable out-of-pocket expenses incurred by
SB in rendering such assistance. SB's obligation to provide
hands-on manufacturing support for a transferred Product shall
cease following successful manufacture of the registration
batch for such Product.
16.2 PRESS RELEASES: Subject to the requirements of applicable law
or the regulations of any recognised stock exchange, neither
SB nor ICN, nor any Affiliate thereof, will issue or cause
publication of any press release or other announcement or
public communication with respect to this Agreement or the
transactions contemplated hereby without the prior written
consent of the other party, which consent will not be
unreasonably withheld or delayed. Without prejudice to the
foregoing, the parties acknowledge that ICN will issue a press
release on or shortly after the Completion Date announcing the
transaction. ICN shall provide SB with a draft of such press
release prior to issuance and the parties shall mutually agree
upon the final text thereof.
16.3 CUSTOMER LISTS: As soon as reasonably practicable following
Completion, SB or its Affiliates shall make available to ICN
the Customer Lists.
16.4 LETTER TO CUSTOMERS: SB or its relevant Affiliate shall send
to each customer for the Products as at Completion a letter
substantially in the form set out in Schedule Nine. Such
letter shall for each customer be enclosed with either the
first or second invoice sent to such customer by SB following
Completion.
16.5 MUTUAL CO-OPERATION: The parties hereto shall use reasonable
endeavours to do all such other things as may be necessary or
desirable to ensure a rapid and orderly handover of the
Products within the relevant Territories. The employees of SB
and ICN listed in the respective Contact Lists will be the
first point of contact for the other party in relation to the
areas of responsibility listed in the Contact List. SB and ICN
shall ensure that such employees are given all authority and
resources necessary to ensure that they are able to fulfil
such role effectively. SB and ICN shall each notify the other
party without delay of any amendments to their Contact List.
16.6 NEW APPLICATIONS: If ICN wishes to apply for a new Product
Licence in respect of a Product in a country within the Global
Disposal Area where there is at the date hereof no SB Product
Licence, SB shall, to the extent it is in possession of the
relevant information, allow ICN access to such marketing
authorisations for other countries held in the name of SB or
its Affiliates as may reasonably be required by ICN to support
such new application. If ICN intends to start to exploit an
Additional Trade ▇▇▇▇ or a Warranted CEE Trade ▇▇▇▇ it shall
give SB 30 days' notice prior to commencing such exploitation.
If during such 30 day period SB notifies ICN that such
Additional Trade ▇▇▇▇ or Warranted CEE Trade ▇▇▇▇ cannot be
exploited due to the existence of third party rights or
otherwise, the parties will work together in good faith to
resolve the issue and ICN shall not exploit such Trade ▇▇▇▇
until the issue has been resolved.
17. CONFIDENTIALITY
17.1 ICN undertakes to SB and SB undertakes to ICN that they shall
(and shall procure that their employees shall) keep
confidential and not disclose or use for any purpose, other
than the purpose for which the same may have been provided to
it, any information which it may have acquired from the other
party or in relation to the activities of the other.
17.2 The obligations under this Clause 17 shall not apply:
17.2.1 to the extent that the relevant information enters
the public domain other than by virtue of a breach
of this Clause 17;
17.2.2 to the extent that disclosure is required to
comply with any applicable legal or
regulatory requirements;
17.2.3 to the extent that the relevant information is
disclosed by a third party entitled to do so.
17.3 The obligations contained in this Clause 17 shall survive
Completion or termination of this Agreement.
18. COSTS
Except as otherwise expressly provided in this Agreement, each party
shall pay its own costs of and incidental to the negotiation,
preparation, execution and implementation by it of this Agreement and
of all of the documents referred to in it.
19. LIMITATIONS OF LIABILITY
19.1 Notwithstanding anything to the contrary contained in this
agreement, SB will not be liable for any ICN Claims:
19.1.1 to the extent to which the ICN Claim is a result
of or in consequence of any voluntary act,
omission, transaction or arrangement of or on
behalf of ICN after Completion or is the result of
any matter or thing done or omitted to be done in
accordance with this Agreement or otherwise at the
request of or with the approval of ICN;
19.1.2 where an ICN Claim is a result of or in respect
of, or where the ICN Claim arises from, any act,
matter, omission, transaction or circumstance
which would not have occurred but for any
legislation not in force on the Completion Date or
any change after the Completion Date of any law or
administrative practice of any Governmental
Agency, including any such legislation or change
which takes effect retrospectively;
19.1.3 to the extent that the circumstances giving rise
to the ICN Claim are fairly disclosed in or
pursuant to this Agreement or any of the Schedules
hereto or the Disclosure Schedule.
19.1.4 unless:
(a) ICN has given timely notice to SB of any act
or circumstances of which it has become aware
and which gives or may give rise to an ICN
Claim and has afforded SB a four (4) week
period from the giving of that notice to
investigate the same (at SB's expense), even
though it may not at the date of notice give
rise to any liability on the part of SB,
provided that the failure by ICN to comply
with the provisions of this sub-Clause
19.1.4(a) shall only exonerate SB to the
extent such failure causes actual prejudice
to SB;
(b) ICN has in any event given written notice to
SB setting out specific details of the ICN
Claim within the following time limits:
(i) in respect of Product Liability
Claims, within 5 years after
the Completion Date;
(ii) in respect of ICN Claims for
indemnity in relation to
taxation liabilities arising
out of the conduct of the
Business prior to the
Completion Date, within 3
months following the expiry of
the statutory time limit for
the bringing of a claim against
ICN in respect of the same
matter by the relevant taxing
authority in the absence of any
extension to such time limit
agreed between the taxing
authority and ICN;
(iii) in respect of any other ICN
Claim, within 18 months after
the Completion Date.
(c) within 12 months after the giving of
written notice under sub-clause
19.1.3(b), the ICN Claim has been
admitted or satisfied by SB, settled
between SB and ICN, or ICN has instituted
and served legal proceedings in relation
to the ICN Claim;
19.1.5 except as provided in sub-Clause 19.3, unless the
amount finally awarded or agreed as being payable
in respect of the ICN Claim is not less than
L20,000 (twenty thousand pounds);
19.2 The maximum aggregate amount recoverable by ICN from SB in
respect of all ICN Claims except Product Liability Claims is
US$23,000,000 (twenty three million dollars). The amount
recoverable in respect of Product Liability Claims shall be
unlimited.
19.3 In respect of any ICN Claim in respect of any Warranted CEE
Trade ▇▇▇▇ or Warranted CEE Product Licence:
19.3.1 sub-Clause 19.1.5 (minimum claim threshold) shall
not apply to the ICN claim; but
19.3.2 the maximum aggregate amount recoverable by ICN in
relation to any individual Warranted CEE Trade
▇▇▇▇ or Warranted CEE Product Licence shall be
2,000 (two thousand pounds).
19.4 Notwithstanding anything to the contrary contained in this
agreement, to the extent that ICN Claims are for or in respect
of any loss of sales, loss of profit, loss of market or loss
of market share, SB shall not be liable for any such loss in
respect of a particular Product in a particular country in
excess of twice the 1997 sales of that Product in that
country, as such sales are stated in Column A of the Sales and
Gross Margin Statement.
19.5 ICN must reimburse SB for amounts paid by SB to ICN in respect
of any ICN Claim to the extent to which the amount is
recovered by ICN from any third party, including but not
limited to suppliers, manufacturers or insurers.
19.6 (i) Prior to the close of trading on the Principal Market
on the last Trading Day before the Settlement Period, SB
may, at its option, satisfy all or part of its liability to
ICN for any ICN Claim by transferring to ICN shares of
Preferred Stock or Remaining Shares, which shall have a
value equal to the product of (A) the number of such
Remaining Shares delivered to ICN or the number of shares
of Common Stock into which such shares of Preferred Stock
are convertible, as the case may be, and (B) the price per
share of Common Stock that is the linear interpolation
(straight line) between the Original Price and the Final
Guaranteed Price for the date of such delivery.
(ii) On or after the Final Guarantee Date, SB may, at its
option, satisfy all or part of its liability to ICN for any
ICN Claim by transferring to ICN shares of Preferred Stock
or Remaining Shares, which shall have a value equal to the
product of (A) the number of such Remaining Shares
delivered to ICN or the number of shares of Common Stock
into which such shares of Preferred Stock delivered to ICN
are convertible, as the case may be, and (B) the Final
Guaranteed Price.
20. THIRD PARTY CLAIMS
20.1 If any claim, demand, action or proceeding is made or
instituted against one of the parties hereto ("Claimant") in
respect of which the Claimant may seek to make any claim under
this Agreement against the other party (the "Indemnifying
Party") ("Third Party Claim"), the following procedure
applies:
20.1.1 The Claimant must give prompt written notice of
the Third Party Claim to the Indemnifying Party
and must ensure that it consults with the
Indemnifying Party concerning the Third Party
Claim;
20.1.2 the Claimant must not admit, compromise, settle or
pay any Third Party Claim or take any other steps
which may in any way prejudice the defence or
challenge thereof without the prior written
consent of the Indemnifying Party except as may be
reasonably required in order to prevent any
judgement against the Claimant;
20.1.3 the Claimant must permit the Indemnifying Party at
the Indemnifying Party's expense to take such
action in the name of the Claimant to defend or
otherwise settle the Third Party Claim as the
Indemnifying Party may reasonably require;
20.1.4 the Claimant must ensure that the Indemnifying
Party and its representatives are given access to
such of the documents and records of the Claimant
as may be reasonably required by the Indemnifying
Party in relation to any action taken or proposed
to be taken by the Indemnifying Party under Clause
20.1.3; and
20.1.5 the Claimant must ensure it does not do or cause
to be done anything in relation to the Third Party
Claim which compromises or prejudices the
Indemnifying Party's rights under this Clause 20.1
to the extent such failure to comply causes actual
prejudice to the Indemnifying Party.
20.2 the Indemnifying Party is not liable to the Claimant for any
Claim arising from a Third Party Claim in respect of which the
Claimant does not comply with Clause 20.1 to the extent such
failure to comply causes actual prejudice to the Indemnifying
Party.
21. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument.
22. FURTHER ASSISTANCE
At any time after Completion each party shall at its own expense (save
as otherwise provided in this Agreement) do and execute, or procure to
be done and executed, all necessary acts, deeds, documents and things
reasonably within its power, to give effect to this Agreement.
23. GENERAL
23.1 No variation of this Agreement or any of the documents in the
agreed form shall be valid unless it is in writing and signed
by or on behalf of each of the parties.
23.2 The failure to exercise or delay in exercising a right or
remedy under this Agreement shall not constitute a waiver of
the right or remedy or a waiver of any other rights or
remedies and no single or partial exercise of any right or
remedy under this Agreement shall prevent any further exercise
of the right or remedy or the exercise of any other right or
remedy.
23.3 The invalidity, illegality or unenforceability of any
provision of this Agreement shall not affect or impair the
continuation in force of the remainder of this Agreement.
23.4 Except to the extent that they have been performed and except
as expressly provided in this Agreement the warranties,
indemnities, undertakings and obligations contained in this
Agreement shall remain in full force and effect
notwithstanding Completion.
23.5 This Agreement contains the whole agreement between the
parties relating to the subject matter of this Agreement at
the date hereof to the exclusion of any terms implied by law
which may be excluded by contract. ICN acknowledges that it
has not been induced to enter into this Agreement and, so far
as is permitted by law and except in the case of fraud, hereby
waives any remedy in respect of any warranties,
representations and undertakings not expressly incorporated
into this Agreement.
23.6 So far as permitted by law and except in the case of fraud,
the parties agree and acknowledge that the only right and
remedy which shall be available to ICN in connection with or
arising out of or related to any of the statements contained
in Clause 12 (Representations and Warranties of SB) shall be
damages in contract for breach of this Agreement and not
rescission of this Agreement, or damages in tort or under
statute (whether under the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or
otherwise), or any other remedy.
23.7 Each party to this Agreement confirms it has received
independent legal advice relating to all the matters provided
for in this Agreement, including the provisions of sub-Clauses
23.5 and 23.6, and agrees, having considered the terms of
sub-Clauses 23.5 and 23.6 and the Agreement as a whole, that
the provisions of sub-Clauses 23.5 and 23.6 are fair and
reasonable.
23.8 The parties agree to execute and keep the original and
executed counterparts of this Agreement, the Master Trademark
Assignment, the Master Transition Distribution Agreement, the
Master Transition Manufacturing Agreement, and the Patent
Assignment outside the United Kingdom at all times.
23.9 Any cash payments required to be made to SB or an Affiliate of
SB pursuant to this Agreement shall be made by wire transfer
or such other method as SB may direct into a bank account
situated outside the United Kingdom as specified by SB.
24. ASSIGNMENT
24.1 This Agreement shall not be assigned or transferred by either
party (except to one or more of its Affiliates) without the
prior written consent of the other party.
24.2 No attempted assignment shall relieve the assigning party of
any of its obligations hereunder without the prior written
consent of the other party.
25. NOTICES
Any notice or other communication to be given or to be delivered to
either party shall be in writing and delivered personally or sent by
first class pre-paid postage, or if sent overseas, by airmail or if
sent by facsimile transmission to the facsimile number below for the
party to whom it is to be sent, provided that it is confirmed by notice
sent by the same manner of post as is required of this Clause 25:
25.1 in the case of SB to: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇; Fax No: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇; attention of
General Counsel.
25.2 in the case of ICN to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇; Fax No.: ▇-▇▇▇-▇▇▇-▇▇▇▇; attention of
General Counsel.
Or such other address or facsimile number as shall be notified by such
party in writing to the other. Any notice so given shall be deemed
received if delivered personally or if sent by first class post at the
time of delivery and if sent by facsimile as soon as the transmission
is confirmed to the sender and provided such facsimile is followed by
first class pre-paid postage.
26. GOVERNING LAW AND JURISDICTION
This Agreement is governed by and shall be construed in accordance with
English Law and the parties hereto irrevocably submit to the exclusive
jurisdiction of the Courts of the State of New York.
IN WITNESS WHEREOF this Agreement has been executed by the parties on the date
first written above.
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/ )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF OF )
SMITHKLINE ▇▇▇▇▇▇▇ p.l.c. )
ICN PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
SCHEDULE ONE: PRODUCTS AND TERRITORIES
SCHEDULE TWO: PRODUCT LICENCES
SCHEDULE THREE: TRADE MARKS
SCHEDULE FOUR: BUSINESS CONTRACTS
SCHEDULE FIVE: MASTER TRANSITION DISTRIBUTION AGREEMENT
SCHEDULE SIX: MASTER TRANSITION MANUFACTURING AGREEMENT
SCHEDULE SEVEN: MASTER TRADE ▇▇▇▇ ASSIGNMENT
MASTER TRADE ▇▇▇▇ ASSIGNMENT
THIS ASSIGNMENT is made the day of 1998
BETWEEN:
1. SMITHKLINE ▇▇▇▇▇▇▇ p.l.c., a company incorporated in England and Wales
whose registered office is at One New Horizons Court, Brentford,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("SB"); and
2 ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in the United States of America whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("ICN").
WHEREAS:-
(A) SB or an Affiliate of SB is the proprietor of the trade marks (the
"Trade Marks") registered in the various jurisdictions set out in the
Schedule hereto short particulars of which are set out in that
Schedule.
(B) Pursuant to an Agreement dated 24 February 1998 for the sale and
purchase of a portfolio of pharmaceutical, OTC and consumer healthcare
products (the "Agreement"), SB has agreed to assign or procure the
assignment of the Trade Marks to ICN.
IT IS AGREED as follows:
1. In pursuance of the Agreement and in consideration of the aggregate sum
of $21,480,000 (forming part of, and being satisfied in full by the
payment of, the consideration under Clause 5 of the Agreement, and the
receipt of which sum is hereby acknowledged by SB) SB hereby assigns
and undertakes to procure that the registered proprietor of each Trade
▇▇▇▇ assigns unto ICN ALL THAT:-
i) right title and interest of the registered proprietor in and
to each Trade ▇▇▇▇ together with the goodwill of the
business represented and symbolised by each Trade ▇▇▇▇ in
the product in respect of which such Trade ▇▇▇▇ is
registered; and
ii) all of the rights powers liberties and immunities conferred
on SB by registration of any given Trade ▇▇▇▇ including the
right to ▇▇▇ for damages and other remedies in respect of
any infringement of the Trade Marks which may have occurred
prior to the date hereof.
TO HOLD UNTO ICN for its own use and benefit absolutely.
2. SB agrees (at ICN's expense) to execute or to procure the execution of
all such documents forms and authorisations and to depose to or swear
(or procure the deposition to or swearing of) any declaration or oath
as may be required by the relevant local Trade ▇▇▇▇ Registries or by
any other competent authority for vesting the full right title and
interest in the Trade Marks in ICN, provided that the preparation of
all relevant documents shall be carried out by ICN at its expense.
3. Within 6 months of the date hereof, SB shall make available to ICN for
collection all SB's files relating to the Trade ▇▇▇▇ applications and
registrations, or where impracticable, permit ICN reasonable access at
reasonable times to such files upon giving reasonable notice.
4. This Assignment is governed by and shall be construed in accordance
with English Law and the parties hereto submit to the exclusive
jurisdiction of the courts of the State of New York.
SCHEDULE
The Trade Marks
[Schedule Three to the Agreement to be inserted here]
IN WITNESS whereof this Assignment has been executed by the parties on the date
first above written.
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/ )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF OF )
SMITHKLINE ▇▇▇▇▇▇▇ p.l.c. )
ICN PHARMACEUTICALS, INC.
By:
Name:
Title:
SCHEDULE EIGHT: STANDARD FORM ASSIGNMENT DOCUMENTS
1. Assignment of Goodwill
2. Assignment of Packaging Rights
3. Assignment of Trade Marks (including Goodwill)
4. Assignment of Patent
ASSIGNMENT OF GOODWILL
THIS ASSIGNMENT is made on the day of 1998
BETWEEN:
(1) SMITHKLINE ▇▇▇▇▇▇▇ p.l.c., a company incorporated in England and Wales
whose registered office is at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("SB"); and
(2) ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in the United States of America whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("ICN").
WHEREAS:-
(A) The parties have entered into an agreement for the sale and purchase of
a portfolio of pharmaceutical, OTC and consumer healthcare products
dated [ ] (the "Agreement").
(B) SB wishes to assign the Goodwill (as defined in the Agreement)
to ICN pursuant to the Agreement.
IT IS AGREED as follows:-
1. ASSIGNMENT
In consideration of the aggregate sum of $20,000,000 (forming part of,
and being satisfied in full by the payment of, the consideration under
Clause 5 of the Agreement, and in respect of which sum SB acknowledges
receipt) SB with full title guarantee subject to matters disclosed in
or pursuant to the Agreement in accordance with its terms hereby
assigns unto ICN all that Goodwill to hold the same unto ICN for its
own use and benefit absolutely.
2. FURTHER ASSURANCE
SB undertakes at the request and expense of ICN to do and execute or
procure to be done and executed all necessary acts, deeds, documents
and things to give effect to this Assignment and to secure the vesting
in ICN of the Goodwill free from all liens, charges, options or
encumbrances or adverse interests of any kind save to the extent any
existing liens, charges, options, encumbrances or adverse interests
have been disclosed to ICN in the Disclosure Schedule to the Agreement
in accordance with its terms.
3. GOVERNING LAW
This Assignment is to be governed by and shall be construed in
accordance with English Law and the parties hereto submit to the
exclusive jurisdiction of the courts of the State of New York.
IN WITNESS whereof this Assignment has been executed by the parties on the date
first above written.
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/ )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF OF )
SMITHKLINE ▇▇▇▇▇▇▇ p.l.c. )
ICN PHARMACEUTICALS, INC.
By:
Name:
Title:
ASSIGNMENT OF PACKAGING RIGHTS
THIS ASSIGNMENT is made on the day of 1998
BETWEEN:
(1) SMITHKLINE ▇▇▇▇▇▇▇ p.l.c., a company incorporated in England and Wales
whose registered office is at One New Horizons Court, Brentford,
Middlesex TW8 9EP, United Kingdom, ("SB"); and
(2) ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in the United States of America whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("ICN").
WHEREAS:-
(A) The parties have entered into an Agreement for the sale and purchase of
a portfolio of pharmaceutical, OTC and consumer healthcare products
dated [ ] (the "Agreement").
(B) SB wishes to assign the Packaging Rights (as defined in the Agreement
and subject to the restrictions and reservations contained therein) to
ICN pursuant to the Agreement.
IT IS AGREED as follows:-
1. ASSIGNMENT
In consideration of the payment by ICN to SB of the sum of $3,000
(forming part of, and being satisfied in full by the payment of, the
consideration under Clause 5 of the Agreement, and the receipt of which
sum is hereby acknowledged by SB) SB with full title guarantee subject
to matters disclosed in or pursuant to the Agreement in accordance with
its terms hereby assigns to ICN all right title and interest in and to
the Packaging Rights subject to the restrictions and reservations
contained in the Agreement together with all statutory and common law
rights powers benefits and rights of action appertaining to the same
including the right to claim damages and other remedies in respect of
past infringement and any other unlawful acts relating to the Packaging
Rights TO HOLD the same unto ICN for its own use and benefit
absolutely.
2. FURTHER ASSURANCE
SB undertakes at the request and expense of ICN to do and execute or
procure to be done and executed all necessary acts, deeds, documents
and things to give effect to this Assignment.
3. GOVERNING LAW
This Assignment is to be governed by and shall be construed in
accordance with English Law and the parties hereto submit to the
exclusive jurisdiction of the courts of the State of New York.
IN WITNESS whereof this Assignment has been executed by the parties on the date
first above written.
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/ )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF OF )
SMITHKLINE ▇▇▇▇▇▇▇ p.l.c. )
ICN PHARMACEUTICALS, INC.
By:
Name:
Title:
ASSIGNMENT OF TRADE MARKS
THIS ASSIGNMENT is made the day of 199
BETWEEN:
(1) [SB/RELEVANT AFFILIATE], a company incorporated in [ ]
whose registered office is at[ ] ("the Assignor"); and
(2) ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in the United States of America whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("ICN").
WHEREAS:-
(A) The Assignor is the proprietor of the trade marks (the "Trade Marks")
registered in the various jurisdictions set out in the Schedule hereto
short particulars of which are set out in that Schedule.
(B) Pursuant to an Agreement dated 24 February, 1998 for the sale and
purchase of a portfolio of pharmaceutical, OTC and consumer healthcare
products (the "Agreement"), the Assignor has agreed to assign the Trade
Marks to ICN.
IT IS AGREED as follows:
1. In pursuance of the said Agreement and in consideration of the
aggregate sum of [*****] (forming part of, and being satisfied in full
by the payment of, the consideration under Clause 5 of the Agreement,
receipt of which sum is hereby acknowledged by the Assignor) the
Assignor as registered proprietor of the Trade Marks hereby assigns
unto ICN ALL THAT:-
i) right title and interest of the Assignor in and to the Trade
Marks together with the goodwill of the business represented
and symbolised by the Trade Marks in the products in respect
of which the Trade Marks are registered; and
ii) all of the rights powers liberties and immunities conferred
on the Assignor by registration including the right to ▇▇▇
for damages and other remedies in respect of any
infringement of the Trade Marks which may have occurred
prior to the date hereof.
TO HOLD UNTO ICN for its own use and benefit absolutely.
2. The Assignor agrees (at ICN's expense) to execute or to procure the
execution of all such documents forms and authorisations and to depose
to or swear (or procure the deposition to or swearing of) any
declaration or oath as may be required by the relevant local Trade ▇▇▇▇
Registries or by any other competent authority for vesting the full
right title and interest in the Trade Marks in ICN, provided that the
preparation of all relevant documents shall be carried out by ICN at
its expense.
3. Within 6 months of the date hereof the Assignor shall make available to
the Assignee for collection all the Assignor's files relating to each
of the Trade ▇▇▇▇ applications and registrations, or where
impracticable, permit the Assignee reasonable access at reasonable
times to such files upon giving reasonable notice.
4. This Assignment is governed by and shall be construed in accordance
with English Law and the parties hereto submit to the exclusive
jurisdiction of the courts of the State of New York.
SCHEDULE
The Trade Marks
TRADE MARKS REGISTERED OWNER REGISTRATION NO. REGISTRATION DATE
IN WITNESS whereof this Assignment has been executed by the parties on the date
first above written.
SIGNED BY __________________________
DULY AUTHORISED
FOR AND ON BEHALF OF SB/AFFILIATE
ICN PHARMACEUTICALS, INC.
By:
Name:
Title:
ASSIGNMENT OF PATENTS
THIS PATENT ASSIGNMENT is made the day of 1998
BETWEEN
(1) SMITHKLINE ▇▇▇▇▇▇▇ plc, a company incorporated in England and Wales
whose registered office is at One New Horizons Court, Brentford,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("SB"); and
(2) ICN PHARMACEUTICALS, INC., a company incorporated under the laws of the
State of Delaware in the United States of America whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
("ICN").
WHEREAS:
SB or an Affiliate of SB is the registered proprietor of the Patents and has, by
virtue of an agreement for the sale and purchase of a portfolio of
pharmaceutical, OTC and consumer healthcare products dated 24 February, 1998 and
made between SB and ICN (the "Agreement"), agreed to assign or procure the
assignment to ICN of the Patents (as defined below).
IT IS AGREED as follows:-
1. DEFINITIONS
The following terms shall have the following meanings:
"Affiliate" shall have the meaning given to it in the Agreement;
"Patents" means the patents as described in Schedule 1 attached hereto.
2. ASSIGNMENT
Pursuant to the Agreement, SB with full title guarantee subject to
matters disclosed in or pursuant to the Agreement in accordance with
its terms and in consideration of the sum of $10,000 (forming part of,
and being satisfied in full by the payment of, the consideration under
Clause 5 of the Agreement, receipt of which sum SB hereby acknowledges)
assigns to ICN and undertakes to procure that the registered
proprietors of the Patents shall assign by entering into an assignment
on request by ICN in equivalent form as required by the laws of the
relevant jurisdiction to this Assignment in favour of ICN, at no
further cost or expense to ICN all of its respective rights and title
in and to the Patents (including the right to bring proceedings for
infringement prior to the date hereof) to hold unto ICN absolutely.
3. MISCELLANEOUS
3.1 SB shall have the right to be informed and assume
responsibility for any of the Patents which ICN intends to
abandon or otherwise cause or allow to be forfeited.
3.2 SB shall deliver to ICNSB's files relating to each of the
Patents and the Patent Applications no later than 6 months
after the date hereof.
4. FURTHER ASSURANCE
ICN will at its own expense prepare and record any further document
that may be required to enable it to become registered in the relevant
Registers of Patents as the proprietor of the Patents. SB will at the
request and expense of ICN execute any such further documents
(including without limitation forms of assignment and other documents
of transfer) and do such further things that may be reasonably required
from time to time.
5. GOVERNING LAW AND JURISDICTION
This Assignment is governed by and shall be construed in accordance
with English law and the parties hereto irrevocably submit to the
exclusive jurisdiction of the courts of the State of New York the day
and year first before written
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/ )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF OF )
SMITHKLINE ▇▇▇▇▇▇▇ P.L.C. )
ICN PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
SCHEDULE
THE PATENTS
COUNTRY PATENT NO. DESCRIPTION
Australia AU ▇▇▇▇▇▇ Metoclopramide
with sodium metabisulphate
Australia AU ▇▇▇▇▇▇ Metoclopramide
without sodium metabisulphate
New Zealand 212097 Metoclopramide
with sodium metabisulphate
South Africa 85/3671 Metoclopramide
with sodium metabisulphate
SCHEDULE NINE: FORM OF CUSTOMER LETTER
[To be typed on SB note paper]
Dear [name of customer contact]
It has recently been announced that ICN Pharmaceuticals, Inc., has purchased the
following brands from us:
[LIST RELEVANT BRANDS]
There will be a transition period with both companies, and we will be doing
everything possible to ensure a smooth transition.
I would like to thank you for the support you have given on these brands over
the years, and if you have any queries on this sale please give me a call.
Yours sincerely
SCHEDULE TEN: LETTER OF CROSS REFERRAL
[MOH Authority]
[Date]
Dear Sirs
PRODUCT: ( ) PRODUCT LICENCE NO:
By way of this letter [SB/relevant Affiliate] authorises [ICN/Affiliate] to make
cross reference to the information contained in its Product licence ( ) in
connection with the forthcoming Product licence application by [ICN/Affiliate].
However, we would draw your attention to the fact that the above information is
confidential and should not be disclosed to any third party except
[ICN/Affiliate] without our formal written consent.
Yours faithfully,
for
[SB/Affiliate]
SCHEDULE ELEVEN: CONTACT LISTS
SCHEDULE TWELVE: REGISTRATION RIGHTS AGREEMENT
SCHEDULE TWELVE
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") dated as of February
24, 1998, is entered into by and between SMITHKLINE ▇▇▇▇▇▇▇ P.L.C., a company
incorporated in England and Wales (hereinafter referred to as "SB") and ICN
PHARMACEUTICALS, INC., a Delaware corporation (hereinafter referred to as
"ICN").
W I T N E S S E T H:
WHEREAS, ICN, as purchaser, and SB, as seller, have entered into that
certain Sale and Purchase Agreement dated 24 February, 1998 (the "Purchase
Agreement"), pursuant to which ICN agreed to purchase and SB agreed to sell
certain assets of SB including certain pharmaceutical compounds owned by SB;
WHEREAS, 821 shares of Series D Convertible Preferred Stock of ICN
(the "Preferred Stock") initially convertible (subject to adjustments pursuant
to the terms of the Certificate of Designation relating thereto) into 410,500
shares of Common Stock, $.01 par value, of ICN (the "Common Stock") are,
concurrently herewith, being issued and delivered by ICN to SB upon the
Completion of the transactions contemplated by the Purchase Agreement as part of
the consideration for the transfer of assets from SB to ICN contemplated by the
Purchase Agreement;
WHEREAS, such shares of Preferred Stock delivered upon Closing and any
Additional Shares of Preferred Stock delivered by ICN to SB at any time during
the Registration Period are referred to herein as the "Shares";
WHEREAS, the execution and delivery of this Agreement is a condition
to the consummation of the transactions contemplated by the Purchase Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, SB and ICN hereby agree as follows:
1. RESTRICTIONS ON TRANSFER, REGISTRATION OF SHARES, ETC.
1.1 CERTAIN DEFINITIONS. Capitalized terms used but not defined in
this Agreement shall have the respective meanings given to such terms in the
Purchase Agreement. As used in this Agreement:
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person shall mean any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person shall mean the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
The terms "Register," "Registered" and "Registration" shall refer to a
registration effected by preparing and filing a Registration Statement in
compliance with the Act, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
"Registrable Securities" shall mean any shares of Common Stock into
which the Shares are convertible from time to time, any Additional Shares of
Common Stock delivered by ICN to SB during the Registration Period in
satisfaction of the Guaranteed Value for the Initial Guarantee date or the Final
Guarantee date, any other shares of Common Stock otherwise delivered by ICN to
SB in connection with the transactions contemplated by the Purchase Agreement
and other securities issued with respect thereto upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event.
"Registration Expenses" shall mean all expenses incurred by ICN or SB
in compliance with Sections 1.5 and 1.6 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel, financial and other advisors for ICN or SB, Blue Sky fees and expenses,
and the expense of any special audits incident to or required by any such
Registration.
"Registration Period" shall mean the period of time commencing on the
Completion Date and ending upon the fulfillment of all of ICN's obligations
under the Purchase Agreement.
"Registration Statement" shall mean the Shelf Registration Statement
and any other Registration statement filed with the Commission by ICN pursuant
to this Agreement.
"Restricted Securities" shall mean the securities of ICN required to
bear the legend set forth in Section 1.3 hereof.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel, financial and other advisors for SB.
"Securities" shall mean the Shares and the Registrable Securities.
"Shelf Registration" shall mean a Registration effected pursuant to
Section 1.5 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of ICN pursuant to the provisions of Section 1.5(a) hereof which
covers not less than 700,000 Registrable Securities on an appropriate form under
Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, and amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
1.2 RESTRICTIONS ON TRANSFERABILITY. Any transfer of the Shares or the
Registrable Securities shall be made in compliance with the provisions of the
Act.
1.3 RESTRICTIVE LEGEND. Each certificate representing (i) the Shares,
or (ii) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Act) be stamped or otherwise
imprinted with a legend in the following form (in addition to any legend
required under applicable state securities laws):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAW
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
OTHER THAN IN A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE TRANSFER OF THIS
SECURITY IS SUBJECT TO A SALE AND PURCHASE AGREEMENT DATED FEBRUARY
24, 1998, BETWEEN SMITHKLINE ▇▇▇▇▇▇▇ P.L.C. AND ICN PHARMACEUTICALS,
INC.
As soon as practicable but not later than ten business days after ICN shall have
received, at SB's option, either the opinion referred to in Section 1.4(i) or
the "no-action" letter referred to in Section 1.4(ii) to the effect that any
transfer by SB of the securities evidenced by such certificate will not violate
the Act or any applicable state securities laws, ICN shall remove the foregoing
legend from any certificate or issue to SB a new certificate for each
certificate being replaced free of any transfer legend.
1.4 NOTICE OF PROPOSED TRANSFERS. SB by acceptance of certificates
representing Restricted Securities agrees to comply in all respects with the
provisions of this Section 1.4. Prior to any proposed transfer of any Restricted
Securities (other than under circumstances described in Sections 1.5 and 1.6
hereof), SB shall give written notice to ICN of its intention to effect such
transfer. Each such notice shall describe the manner and circumstances of the
proposed transfer in sufficiently reasonable detail, and shall be accompanied
(except in transactions in compliance with Rule 144) by, at SB's option, either
(i) a written opinion of legal counsel who shall be reasonably satisfactory to
ICN, addressed to ICN and reasonably satisfactory in form and substance to ICN's
counsel, to the effect that the proposed transfer of Restricted Securities may
be effected without Registration, or (ii) a "no action" letter from the staff of
the Commission to the effect that the distribution of such securities without
Registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon SB shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by SB to ICN. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear the restrictive legend set forth in
Section 1.3 above, except that such certificate shall not bear such restrictive
legend if the opinion of counsel or "no-action" letter referred to above is to
the further effect that such legend is not required in order to establish
compliance with any provisions of the Act
1.5 REGISTRATION.
(a) SHELF REGISTRATION STATEMENT. ICN shall prepare and, not later
than 60 days following the Closing Date, shall file with the Commission a Shelf
Registration Statement pursuant to Rule 415 under the Act or any similar rule
that may be adopted by the Commission relating to the offer and sale of the
Registrable Securities and thereafter shall use its best efforts to cause such
Shelf Registration Statement to be declared effective under the Act.
(b) ICN shall use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming part
thereof to be usable by SB until the expiration of the Registration Period. ICN
shall be deemed not to have used its best efforts to keep the Shelf Registration
Statement effective during the Registration Period if it voluntarily takes or
neglects to take any action that would result in SB not being able to offer and
sell such Registrable Securities during that period, unless such action or
omission is (i) required by applicable law, or (ii) taken or omitted in good
faith by ICN and results in the occurrence of an event described in Item 11(b)
of Form S-3 under the Act, so long as ICN promptly thereafter complies with the
requirements of Section 1.8(o) hereof, if applicable.
(c) If during the Registration Period, ICN is obligated under the
Purchase Agreement to deliver any Registrable Securities to SB, which
Registrable Securities are not at that time covered by the Registration
Statement, ICN shall, as soon as practicable after becoming obligated to deliver
such Registrable Securities to SB: (i) file a post-effective amendment to the
Shelf Registration Statement requesting Registration of the number of additional
Registrable Securities as then required to meet its obligations under the
Purchase Agreement up to the amount permitted under Rule 462(b)(3) of the Act;
or (ii) if such amount is not sufficient to meet such obligations, prepare and,
not later than 60 days following the time such obligations arise, file with the
Commission and thereafter use its best efforts to cause to be declared effective
under the Act another Shelf Registration Statement relating to the offer and
sale of such Registrable Securities.
(d) Any Registration Statement filed pursuant to this Agreement may,
subject to the provisions of Section 1.5(e) below, include other securities of
ICN, including its own securities and securities which are held by persons who,
by virtue of agreements with ICN, are entitled to include their securities in
any such registration.
(e) UNDERWRITING. If SB intends to distribute any or all of the
Registrable Securities by means of an underwritten offering, it shall so advise
ICN. If holders of securities of ICN who are entitled, by contract with ICN, to
have securities of ICN included in such an underwritten offering (the "Other
Shareholders") request such inclusion, SB may offer to include all or any
portion of the securities of such Other Shareholders in the underwriting as it
may, in its sole discretion, determine and may condition such offer on the
acceptance of such Other Shareholders of the further applicable provisions of
this Section 1. ICN shall (together with SB and the Other Shareholders proposing
to distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by SB and reasonably
acceptable to ICN. Notwithstanding any other provision of this Section 1.5, if:
(i) the number of Registrable Securities to be distributed by SB in aggregation
with other securities of ICN to be distributed exceeds the number of Registrable
Securities that may be distributed; or (ii) the managing underwriter advises SB
in writing that the inclusion of the number of securities requested to be
included in such registration exceeds the largest number of securities which can
be sold without having a material and adverse effect on such offering (the
"Maximum Offering Size"), ICN will include in such registration, in the
following priority, up to the Maximum Offering Size, (1) all or a portion, as SB
may determine in its sole discretion, of the Registrable Securities to be
registered by SB or its Affiliates, (2) all securities requested to be included
by Other Shareholders in proportion, as nearly as practicable, to the respective
amounts of securities which were requested to be included by such Other
Shareholders in such Registration Statement and (3) any securities proposed to
be Registered by ICN. If SB or any Other Shareholder who has requested inclusion
in such Registration as provided above disapproves of the terms of the
underwriting, such person may elect to have such person's securities withdrawn
therefrom by written notice to ICN, the underwriter and SB. Any securities so
withdrawn by such person, shall also be withdrawn from Registration.
1.6 ICN REGISTRATION.
(a) If at any time during the Registration Period, ICN is obligated
under the Purchase Agreement to deliver any Registrable Securities to SB, which
Registrable Securities are not at that time covered by a Shelf Registration
Statement, and ICN shall consider Registration of any of its securities, whether
such securities are owned by ICN or by Other Holders, other than a registration
relating solely to a Commission Rule 145 transaction, or a Registration on any
registration form which does not permit secondary sales or does not include
substantially as much information as would be required to be included in a
Registration Statement covering the sale of Registrable Securities, ICN will:
(i) promptly give to SB written notice thereof at least 20 days before the
filing of any Registration Statement (which shall include a list of the
jurisdictions in which ICN intends to attempt to qualify such securities under
the applicable Blue Sky or other state securities laws); and (ii) include in
such Registration (and any related qualification under Blue Sky laws or other
compliance), such Registrable Securities which are not at that time covered by
an effective Registration Statement and, if so requested by SB, include in any
underwriting such number of Registrable Securities as shall be specified in a
written request or requests, made by SB within fifteen (15) business days after
receipt of the written notice from ICN described in clause (i) above, except (A)
as set forth in Section 1.6(b) below, and (B) subject to Section 1.12. ICN shall
not be required to include Registrable Securities in any such registration if,
and to the extent, in the opinion of ICN's investment bankers, delivered to SB
in writing, the inclusion of such Registrable Securities would exceed the
Maximum Offering Size.
(b) UNDERWRITING. If the Registration of which ICN gives notice is for
a registered public offering involving an underwriting, ICN shall so advise SB
as part of the written notice given pursuant to Section 1.6(a)(i). In such event
the right of SB to Registration pursuant to this Section 1.6 shall be
conditioned upon SB's participation in such underwriting and the inclusion of
SB's Registrable Securities in the underwriting to the extent provided herein.
SB, together with ICN and the Other Shareholders distributing their securities
through such underwriting, if any, shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected by ICN or the Other
Shareholders, as the case may be, with the prior approval of SB, which approval
shall not be unreasonably withheld. Notwithstanding any other provision of this
Section 1.6, if the underwriter determines that the inclusion of all the
securities requested to be included would exceed the Maximum Offering Size, the
underwriter may (subject to the allocation priority set forth below) exclude
from such Registration and underwriting some or all of the Registrable
Securities which would otherwise be underwritten pursuant hereto. ICN shall so
advise all holders of securities requesting Registration, and the number of
securities that are entitled to be included in the Registration and underwriting
shall be allocated in the following manner: The securities of ICN held by
officers and directors of ICN shall be excluded from such Registration and if
thereafter a further limitation on the number of securities is still required in
order to reduce the number of securities to an amount less than the Maximum
Offering Size, then the number of securities that may be included in the
Registration and underwriting shall be allocated among SB and Other Shareholders
in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities and other securities which they had requested to be
included in such Registration at the time of filing the Registration Statement.
If SB or any officer, director or Other Shareholder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice to
ICN and the underwriter. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such Registration.
1.7 EXPENSES OF REGISTRATION.
All Registration Expenses incurred in connection with any
Registration, qualification or compliance pursuant to this Section 1 shall be
borne by ICN, and all Selling Expenses (except fees and disbursements of
counsel, which shall be borne by the party engaging such counsel) shall be borne
by the holders of the securities so Registered pro rata on the basis of the
number of their shares so Registered.
1.8 REGISTRATION PROCEDURES.
In the case of each Registration effected by ICN pursuant to this
Section 1, ICN shall keep SB advised in writing as to the initiation of each
Registration and as to the completion thereof. At its expense, ICN shall:
(a) Keep such Registration effective for the Registration Period and
in furtherance thereof, ICN shall prepare and file with the Commission such
amendments and supplements to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep such Registration Statement
effective for such period;
(b) Furnish to SB without charge, at any time during the Registration
Period, such number of Prospectuses (including preliminary prospectuses) and
other documents incident thereto, as the same shall be amended or supplemented
from time to time, as SB from time to time may reasonably request and ICN
consents to the use of any Prospectus or any amendment or supplement thereto by
SB in connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto;
(c) Use its best efforts to Register or qualify the Registrable
Securities covered by such Registration Statement under the securities or Blue
Sky laws of such jurisdictions as the underwriter for such offering or SB may
reasonably request; provided that ICN shall in no event be required to qualify
to do business as a foreign corporation in any jurisdiction where it is not
otherwise required to be qualified, to amend its Restated Certificate of
Incorporation, as amended, or to change the composition of its assets at the
time to conform with the securities or Blue Sky laws of such jurisdictions, to
take any action that would subject it to service of process in suits other than
those arising out of the offer and sale of the Registrable Securities covered by
the Registration Statement; or to subject itself to taxation in any jurisdiction
where it has not theretofore done so;
(d) Promptly notify SB of: (i) any stop order or the initiation of any
stop order or similar proceeding by state or federal regulatory bodies and use
its best efforts to expeditiously remove such stop order or similar proceeding;
(ii) the receipt by ICN of any notification with respect to the suspension of
the qualification of the securities included in any Registration Statement for
sale in any jurisdiction or the initiation of threatening of any proceedings for
such purpose; or (iii) the happening of any event that requires the amendment of
any Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made);
(e) Cause all Registrable Securities to be listed on each securities
exchange on which similar securities issued by ICN are then listed and, if not
so listed, to be listed on the NASDAQ automated quotation system on which
similar securities issued by ICN are listed;
(f) Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement;
(g) Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months beginning with the first day of ICN's first full calendar
quarter after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act;
(h) Prior to filing any Registration Statement, Prospectus or
amendment with the Commission, provide SB copies of all information to be
included therein concerning SB and give SB an opportunity to furnish corrections
or other modifications to such information;
(i) Upon the effectiveness of any Registration Statement hereunder,
deliver to SB the opinion of the General Counsel of ICN to the effect that the
Registration Statement has been declared effective and to the best knowledge of
such counsel no stop order suspending the effectiveness of the Registration
Statements has been issued and no proceeding for that purpose is pending or
threatened by the Commission.
(j) Ensure that: (i) any Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any amendment or supplement
thereto complies in all material respects with the Act and the rules and
regulations thereunder; (ii) any Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) any
Prospectus forming part of any Registration Statement and any amendment or
supplement to such Prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading;
(k) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement at the earliest
possible time;
(l) Cooperate with SB to facilitate the timely preparation and
delivery of certificates representing the Registrable Securities to be sold
pursuant to any Registration Statement free of any restrictive legends and in
such denominations and registered in such names as SB may request prior to sales
of Registrable Securities pursuant to such Registration Statement;
(m) If requested, promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement, such information as SB may
reasonably determine should be included therein and shall make all required
filings of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(n) Enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
Registration or the disposition of the Registrable Securities and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures no less favorable than those
set forth in Section 1.9; and
(o) Upon the occurrence of the event contemplated by the last sentence
of Section 1.5(b) above, ICN shall promptly prepare a post-effective amendment
to any Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document and take any action necessary so
that: (i) SB shall be able promptly thereafter to offer and sell Registrable
Securities as if such an event had not occurred; and (ii) as thereafter
delivered to purchasers of the securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
1.9 INDEMNIFICATION.
(a) ICN shall indemnify and hold harmless SB and each of its
directors, officers, employees and agents and any other person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, SB, within the meaning of the Act or the Exchange
Act, and any underwriter and each person who controls such underwriter within
the meaning of the Act or the Exchange Act with respect to Registration,
qualification or compliance effected pursuant to this Section 1, against all
claims, losses, damages and liabilities (or actions in respect thereof), whether
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
Prospectus, offering circular or other document, any related Registration
Statement, notification or the like as originally filed or any amendment thereof
or supplement thereto (collectively "Offering Documents") incident to any such
Registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus, in light
of the circumstances under which they were made) not misleading, or any
violation by ICN of the Act or the Exchange Act or any rule or regulation
thereunder applicable to ICN and relating to action or inaction required of ICN
in connection with any such Registration, qualification or compliance, and will
reimburse any such indemnified party and its Affiliates as incurred for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claims, loss, damage, liability or action,
provided that ICN will not be liable in any such case to indemnify any such
indemnified party to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to ICN by such indemnified party and stated to be
specifically for use therein. This indemnity will be in addition to any
liability which ICN may otherwise be subject to.
(b) SB shall, if Registrable Securities held by it are included in the
securities as to which any Registration, qualification or compliance is being
effected pursuant to this Agreement, indemnify and hold harmless ICN and each of
its directors, officers, employees and agents, and any other person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, ICN, within the meaning of the
Act or the Exchange Act, any underwriter and each person who controls such
underwriter, within the meaning of the Act or the Exchange Act with respect to
Registration, qualification, or compliance effected pursuant to this Section 1,
against all claims, losses, damages and liabilities (or actions in respect
thereof) joint or several, to which they or any of them may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based on any
untrue statement (or alleged untrue statement) of a material fact contained in
that portion of any such Offering Documents relating to information concerning
SB, which was furnished by SB to ICN in writing and stated to be specifically
for use therein or any omission (or alleged omission) to state in such portion
thereof a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus, in light of the circumstances
under which they were made) not misleading, and will reimburse any such
indemnified party and its Affiliates as incurred for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such Offering Documents in reliance
upon and in conformity with written information furnished to ICN by SB and
stated to be specifically for use therein, provided, however, that the
obligations of SB hereunder shall not exceed an amount equal to the lesser of:
(i) the net proceeds to SB of Registrable Securities sold pursuant to such
Offering Document, or (ii) the Guaranteed Value for the following Guarantee
Date.
(c) Each party entitled to indemnification under this Section 1.9 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and, provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1.9. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
(d) If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an Indemnified Party under Section 1.9(a) or
1.9(b) above in respect of any claim, then the Indemnifying Party shall
contribute to the amount paid or payable by the Indemnified Party as a result of
such claim in such proportion as is appropriate to reflect the relative benefits
received by, and the relative fault of, the Indemnifying Party on the one hand
and the Indemnified Party on the other from such offering of securities, as well
as any other relevant equitable considerations, provided, however, that the
obligations of SB hereunder shall be limited to an amount equal to the net
proceeds to SB of securities sold as contemplated herein. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable in respect of any such claim shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such claim.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The provisions of this Section
1.9(d) shall be in addition to any other rights to indemnification or
contribution which any Indemnified Party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any Indemnified Party and shall
survive the transfer of the Registrable Securities by any such party.
1.10 INFORMATION BY SB.
SB shall furnish to ICN such information regarding SB and the
distribution proposed by SB as ICN may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Section 1.
1.11 RULE 144 REPORTING.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of the Restricted
Securities to the public without registration, ICN agrees to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required to be filed by ICN under the Act
and the Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); and
(c) So long as SB owns any Restricted Securities, furnish to SB
forthwith upon request a written statement by ICN as to its compliance with the
current reporting requirements of Rule 144, and of the Act and the Exchange Act,
a copy of the most recent annual or quarterly report of ICN and such other
reports and documents so filed as SB may reasonably request in availing
themselves of any rule or regulation of the Commission allowing SB to sell any
such securities without Registration.
1.12 "MARKET STAND-OFF" AGREEMENT.
SB agrees, if reasonably requested by ICN and an underwriter of Common
Stock (or other equity securities or securities convertible into equity
securities) of ICN in connection with a firm commitment underwriting of a public
offering, not to effect any public sale or distribution of any Common Stock (or
other equity securities or securities convertible into equity securities) of ICN
held by SB during such period as the managing underwriter and ICN shall agree
(which period shall not exceed 90 days) after the effective date of a
Registration Statement of ICN filed under the Act not including Restricted
Securities, provided that all Other Shareholders and officers and directors of
ICN enter into similar agreements. Such agreement shall be in writing in a form
satisfactory to ICN and such underwriter. In the event that SB holds any
Registrable Securities on the date which is 30 days prior to the Final Guarantee
Date, the foregoing agreement shall not apply to the period of time commencing
on such day and ending on the earlier of: (i) the 90th day following the Final
Guarantee Date, or (ii) the expiration of the Registration Period. ICN agrees
that if it offers or sells any securities of ICN in a public offering during the
period mentioned in the preceding sentence, clause (ii)(B) of Section 1.6(a) and
the fourth sentence of Section 1.6(b) shall not apply, and SB shall be permitted
to include in any such public offering Registrable Securities as specified in a
request pursuant to clause (ii) of paragraph 1.6.
2. MISCELLANEOUS PROVISIONS
2.1 AMENDMENT; WAIVER.
Neither this Agreement, nor any of the terms or provisions hereof, may
be amended, modified, supplemented or waived, except by a written instrument
signed by the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, nor shall such waiver constitute a continuing waiver. No failure of
either party hereto to insist upon strict compliance by the other party with any
obligation, covenant, agreement or condition contained in this Agreement shall
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
2.2 NOTICES. (a) All notices and other communications required or
permitted under this Agreement shall be in writing and mailed, faxed or
delivered: (i) If to SB, to:
Smithkline ▇▇▇▇▇▇▇ p.l.c,
One New Horizons Court
Brentford, Middlesex TW89EP England
Attention: General Counsel
with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If ICN:
ICN Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
(b) All notices that are addressed as provided in this Section 2.2 (1)
if delivered personally against proper receipt or by confirmed fax shall be
effective upon delivery and (2) if delivered (A) by certified or registered mail
with postage prepaid or (B) by Federal Express or similar courier service with
courier fees paid by the sender shall be effective three business days following
the date when mailed or couriered, as the case may be. Either party may from
time to time change its address for the purpose of notices to that party by a
similar notice specifying a new address, but no such change shall be deemed to
have been given until it is actually received by the party sought to be charged
with its contents.
2.3 ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. The rights, interests and obligations of SB under this
Agreement, including, without limitation, its rights to cause ICN to Register
Registrable Securities granted to SB by ICN under Sections 1.5 and 1.6 may be
transferred or assigned by SB to a transferee or assignee of SB; provided that
ICN is given notice at the time of such transfer or assignment, stating the name
and address of such transferee or assignee and identifying the securities with
respect to which such Registration and other rights are being transferred or
assigned; and provided, further, that the transferee or assignee shall agree to
be bound by the terms of this Agreement; whereupon such transferee or assignee
shall be SB for purposes of this Agreement. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned or transferred by
ICN without the prior written consent of SB.
2.4 GOVERNING LAW.
This Agreement and the agreements entered into in connection with the
transaction contemplated by this Agreement are made subject to and shall be
construed under the laws of the State of New York without giving effect to the
principles of conflicts of law thereof. All actions and proceedings arising out
of or relating to this Agreement shall be heard and determined in a New York
State or federal court sitting in the City of New York, in the Borough of
Manhattan, and the parties hereto hereby irrevocably submit to the exclusive
jurisdiction of such courts in any such action or proceeding and irrevocably
waive the defense of an inconvenient forum to the maintenance of such action or
proceeding.
2.5 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 shall
constitute one and the same instrument.
2.6 HEADINGS.
The headings contained in this Agreement are for convenience of
reference only and shall not constitute a part hereof or define, limit or
otherwise affect the meaning of any of the terms or provisions hereof.
2.7 ENTIRE AGREEMENT.
This Agreement together with the Purchase Agreement embodies the
entire agreement and understanding among the parties hereto with respect to the
subject matter of this Agreement and supersedes all prior agreements,
commitments, arrangements, negotiations or understandings, whether oral or
written, between the parties with respect thereto. There are no agreements,
covenants, undertakings, representations or warranties with respect to the
subject matter of this Agreement other than those expressly set forth or
referred to herein.
2.8 SEVERABILITY.
Each term and provision of this Agreement constitutes a separate and
distinct undertaking, covenant, term or provision hereof. In the event that any
term or provision of this Agreement shall be determined to be unenforceable,
invalid or illegal in any respect, such unenforceability, invalidity or
illegality shall not affect any other term or provision of this Agreement, but
this Agreement shall be construed as if such unenforceable, invalid or illegal
term or provision had never been contained herein. Moreover, if any term or
provision of this Agreement shall for any reason be held to be excessively broad
as to time, duration, activity or subject, it shall be construed, by limiting
and reducing it, as to be enforceable to the extent permitted under applicable
law as it shall then exist.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, as
of the date first above written.
"ICN"
ICN PHARMACEUTICALS, INC.
By: ____________________________________
Name:
Title:
"SB"
SIGNED BY ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ AND )
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
ACTING UNDER A POWER OF ATTORNEY )
FOR AND ON BEHALF )
OF SMITHKLINE ▇▇▇▇▇▇▇ p.l.c.. )
SCHEDULE THIRTEEN: CERTIFICATE OF DESIGNATION
SCHEDULE FOURTEEN: SALES AND GROSS MARGIN STATEMENT
SCHEDULE FIFTEEN: APPORTIONMENT OF CONSIDERATION