STOCK AND ASSET PURCHASE AGREEMENT
BETWEEN
PFIZER INC.
AND
ENERGIZER HOLDINGS, INC.
DATED AS OF JANUARY 20, 2003
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions 1
Section 1.2 Other Definitional Provisions 13
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Shares of the Conveyed Subsidiaries 14
Section 2.2 Purchase and Sale of Assets of the Asset
Selling Corporations 14
Section 2.3 Consents 16
Section 2.4 Excluded Assets of the Business 18
Section 2.5 Assumption of Certain Obligations of the Business 19
Section 2.6 Retained Liabilities of the Business 20
Section 2.7 Purchase Price 21
Section 2.8 Purchase Price Adjustment 21
Section 2.9 Allocation of the Aggregate Purchase Price 23
ARTICLE III
CLOSING
Section 3.1 Closing 24
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions to the Obligations of Purchaser and Pfizer 24
Section 4.2 Conditions to the Obligations of Purchaser 25
Section 4.3 Conditions to the Obligations of Pfizer 25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PFIZER
Section 5.1 Organization 26
Section 5.2 Authority; Binding Effect 26
Section 5.3 Conveyed Subsidiaries; Capital Structure 27
Section 5.4 Non-Contravention 28
Section 5.5 Governmental Authorization 28
Section 5.6 Financial Information; Books and Records 28
Section 5.7 Absence of Material Changes 29
Section 5.8 No Litigation 29
Section 5.9 Compliance with Laws 29
Section 5.10 Product Registrations; Regulatory Compliance 30
Section 5.11 Environmental Matters 30
Section 5.12 Material Contracts 31
Section 5.13 Intellectual Property 33
Section 5.14 Real Property 34
Section 5.15 Assets 35
Section 5.16 Taxes 36
Section 5.17 Employee Benefits 37
Section 5.18 Brokers 39
Section 5.19 Related Party Transactions 39
Section 5.20 Labor and Employment Matters; Collective Bargaining. 40
Section 5.21 Employees (non-US). 40
Section 5.22 Workers' Compensation 40
Section 5.23 New Products 41
Section 5.24 No Undisclosed Liabilities 41
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 6.1 Organization and Qualification 41
Section 6.2 Corporate Authorization 41
Section 6.3 Binding Effect 41
Section 6.4 Non-Contravention 41
Section 6.5 Governmental Authorization 42
Section 6.6 Third Party Approvals 42
Section 6.7 Financial Capability 42
Section 6.8 Securities Act 42
Section 6.9 Condition of the Business 42
Section 6.10 Litigation 43
Section 6.11 Brokers 43
ARTICLE VII
COVENANTS
Section 7.1 Information and Documents 43
Section 7.2 Conduct of Business 43
Section 7.3 Best Efforts; Certain Governmental Matters 45
Section 7.4 Tax Matters. 47
Section 7.5 Employees and Employee Benefits 53
Section 7.6 Certain Dividends, Etc 59
Section 7.7 Resignations; Delivery of Surveys and Title Policies 59
Section 7.8 Bulk Transfer Laws 59
Section 7.9 Noncompetition 59
Section 7.10 Transitional Services 61
Section 7.11 Transitional Intellectual Property License Agreement 61
Section 7.12 Compliance with WARN, Etc 61
Section 7.13 Foreign Implementing Agreements 61
Section 7.14 Litigation Support 61
Section 7.15 Insurance 62
Section 7.16 Trade Notification; Notification of Certain Matters;
Revised Schedules 62
Section 7.17 Products Received by Asset Selling Corporations 62
Section 7.18 Audited Financial Statements 63
Section 7.19 New Products 63
Section 7.20 Intercompany Debt 64
Section 7.21 Cash and Bank Accounts 64
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification by Pfizer 65
Section 8.2 Indemnification by Purchaser 65
Section 8.3 Notice of Claims 66
Section 8.4 Third Party Claims 66
Section 8.5 Expiration 67
Section 8.6 Certain Limitations 68
Section 8.7 Losses Net of Insurance, Etc 68
Section 8.8 No Consequential Damages 69
Section 8.9 Sole Remedy/Waiver 69
Section 8.10 Procedures for Remedial Actions 69
Section 8.11 Limitation on Remedial Action Obligations 71
Section 8.12 Limitation on Indemnification for Non-Compliance
with Environmental Laws 72
ARTICLE IX
TERMINATION
Section 9.1 Termination 72
Section 9.2 Effect of Termination 73
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices 73
Section 10.2 Amendment; Waiver 74
Section 10.3 Assignment 75
Section 10.4 Entire Agreement 75
Section 10.5 Fulfillment of Obligations; Cooperation 75
Section 10.6 Parties in Interest 76
Section 10.7 Public Disclosure; Confidentiality 76
Section 10.8 Return of Information 76
Section 10.9 Expenses 76
Section 10.10 Schedules 77
Section 10.11 Governing Law; Jurisdiction 77
Section 10.12 Counterparts 77
Section 10.13 Headings 77
Section 10.14 Severability 77
SCHEDULES
1.1(A) Asset Selling Corporations
1.1(B) Conveyed Subsidiaries
1.1(C) Excepted Employees
1.1(D) Facilities
1.1(E) Knowledge of Pfizer
1.1(F) Stock Selling Corporations
2.2(a) Leased Real Property of Asset Selling Corporations
2.2(n) Domain Names
2.2(q) Other Assets
2.4(a)(ix) Excluded Assets
2.9 Allocation of the Aggregate Purchase Price
4.2(b) Written Consents
5.2(d) Ownership Chart
5.3(b) Capital Structure
5.3(c) Subsidiaries of Conveyed Subsidiaries
5.4 Non-Contravention
5.5 Consents and Approvals of Governmental Authorities
5.6(a) Financial Statements: Exceptions
5.6(b) Financial Statements: Deferred Taxes
5.6(c) Interim Financial Statements; Receivables and Inventory
5.7 Absence of Material Changes
5.8 Litigation
5.9 Compliance with Laws
5.10 Product Registrations; Regulatory Compliance
5.11 Environmental Matters
5.12 Material Contracts
5.13(a) Intellectual Property
5.13(c) Trademark, Patent and Know-how
Licenses and Agreements
5.13(d) Unauthorized Use Of Intellectual Property
5.13(f) Intellectual Property Opposition Proceedings
5.14(a) Owned and Leased Real Property of Asset Selling Corporations and
Conveyed Companies
5.14(d) Claims and Encroachments on Real Property
5.14(e) Exceptions to Real Estate Operating Conditions
5.15(a) Assets: Exceptions to Title
5.15(b) Affiliates of Pfizer Engaged in the Business
5.15(c) Leases of Personal Property
5.16 Taxes
5.17 Employee Benefit Plans and Foreign Plans
5.17(i) Post-Retirement and Post-Termination Benefits
5.17(j) Employee Payments and Compensation
5.17(k) Claims Against Plans and Foreign Plans
5.19 Related Party Transactions
5.20 Labor and Employment Matters; Collective Bargaining
5.21 Employees (non-US): Location and Employer
5.22 Workers' Compensation
5.23 New Products
6.5 Purchaser Consents and Approvals
6.6 Purchaser Third-Party Approvals
7.2 Conduct of Business
7.5(a) Employee Benefits (US)
7.5(a)(i) Employee Severance Program (US)
7.5(a)(ii) Employees (US)
7.5(a)(iii) Purchaser Employee Benefit Plans
7.5(b)(ii) Purchaser Qualified Plans
7.5(f) Employees (non-US)
7.5(i) Individuals Covered Under the ESP
7.19(a) Capital Expenditures Amounts
7.19(b) Media Slot Purchases
7.19(d) Inventory for "Intuition"
EXHIBITS
EXHIBIT A List of instruments and documents provided by Seller Corporations
to Purchaser
EXHIBIT B List of instruments and documents provided by Purchaser to Seller
Corporations
EXHIBIT C Form of Transitional Services Agreement
EXHIBIT D Form of Transitional Intellectual Property License Agreement
EXHIBIT E Pfizer Employee Separation Plan
EXHIBIT F Release Agreement (Individual Termination)
EXHIBIT G Release Agreement (Group Termination)
EXHIBIT H Letter Agreement (Net Economic Benefit or Loss)
STOCK AND ASSET PURCHASE AGREEMENT
This Stock and Asset Purchase Agreement is made and entered into as of the
20th day of January, 2003 between Pfizer Inc., a Delaware corporation
("Pfizer"), and Energizer Holdings, Inc., a Missouri corporation ("Purchaser").
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W I T N E S S E T H:
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WHEREAS, Pfizer through certain of its Subsidiaries is engaged in the
Business (as defined below);
WHEREAS, Pfizer is the direct or indirect owner of controlling stock interests
in the Stock Selling Corporations (as defined below) and of controlling stock
interests in the Asset Selling Corporations (as defined below);
WHEREAS, the Stock Selling Corporations are the record and beneficial owners of
all of the issued and outstanding shares of capital stock of the Conveyed
Subsidiaries (as defined below);
WHEREAS, the Asset Selling Corporations own the Purchased Assets (as defined
below); and
WHEREAS, the parties hereto desire that, at the Closing, Pfizer shall cause the
Stock Selling Corporations to sell and transfer to Purchaser (or its designee),
and Purchaser (or its designee) shall purchase from the Stock Selling
Corporations, all of the issued and outstanding shares of capital stock of the
Conveyed Subsidiaries (the "Shares"), and Pfizer shall cause the Asset Selling
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Corporations to sell and transfer to Purchaser (or its designee), and Purchaser
(or its designee) shall purchase from the Asset Selling Corporations, all of the
Purchased Assets and assume all of the Assumed Liabilities (as defined below),
upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions. As used in this Agreement, the following terms
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shall have the meanings set forth or as referenced below:
"ABO" shall mean the Accumulated Benefit Obligation (as defined in the
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Statement of Financial Accounting Standard Number 87) calculated using the
assumptions (including the discount rate assumption) reflected by Pfizer in the
development of this figure for purposes of its most recent financial disclosure
concerning the applicable Plan or Foreign Plan.
"Affected Employee" shall mean an Employee (i) who shall accept an offer of
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employment or offer of continuation of employment by Purchaser on or prior to
the Closing Date and work for Purchaser or any of its Affiliates for at least
one day; (ii) whose employment, as a matter of Law, automatically continues with
Purchaser or an Affiliate of Purchaser; or (iii) whose initial offer of
employment by Purchaser requires a relocation which is rejected, resulting in
termination of employment, whether or not such Employee worked for Purchaser or
any of its Affiliates for at least one day. For purposes of this definition,
the term "Employee" includes an Employee whose compensation is subject to
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individual approval by the Pfizer Leadership Team, acting in its capacity as the
Employee Compensation and Management Development Committee.
"Affiliate" shall mean, with respect to any Person, any other person
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directly or indirectly controlling, controlled by, or under common control with,
such Person at any time during the period for which the determination of
affiliation is being made.
"Aggregate Purchase Price" shall have the meaning set forth in Section
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2.7(b).
"Agreement" shall mean this Agreement, as the same may be amended or
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supplemented from time to time in accordance with the terms hereof.
"Allocation" shall have the meaning set forth in Section 2.9.
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"Applicable Remedial Action Standard" shall have the meaning set forth in
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Section 8.11.
"Asset Purchase Price" shall have the meaning set forth in Section 2.7(b).
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"Asset Selling Corporations" shall mean those entities listed on Schedule
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1.1(A).
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"Assumed Contracts" shall have the meaning set forth in Section 2.2(d).
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"Assumed Liabilities" shall have the meaning set forth in Section 2.5.
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"Business" shall mean the worldwide business of researching, developing,
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manufacturing, marketing, distributing and selling hair removal, manicure,
toiletry and sword products, as conducted on the date hereof by Pfizer.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
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on which banks in New York City are authorized or obligated by law or executive
order to close.
"Business Intellectual Property" shall mean all Intellectual Property owned
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by the Asset Selling Corporations which relates primarily to the Business.
"Business Intercompany Balances" shall mean trade related Intercompany
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Liabilities and Intercompany Receivables where both the debtor and creditor are
Conveyed Companies or Asset Selling Corporations and the relevant Intercompany
Liability or Intercompany Receivable relates to the Business.
"Business Unit" shall have the meaning set forth in Section 2.3(b).
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"Cash Equivalents" shall mean cash, checks, money orders, marketable
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securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts, and any evidence of indebtedness issued or
guaranteed by any Governmental Authority, including checks deposited in or
through lockboxes, as well as compensating balances used to secure indebtedness.
"Closing" shall mean the closing of the transactions contemplated by this
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Agreement pursuant to the terms of this Agreement, including Section 7.3(e).
"Closing Date" shall have the meaning set forth in Section 3.1(a).
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"Code" shall mean the Internal Revenue Code of 1986, as amended, from time
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to time.
"Collateral Source" shall have the meaning set forth in Section 8.7.
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"Company Intellectual Property" shall mean all Intellectual Property owned
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by any of the Conveyed Companies.
"Competition Laws" shall mean statutes, rules, regulations, orders,
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decrees, administrative and judicial doctrines, and other Laws that are designed
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or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization, lessening of competition or restraint of trade.
"Competitive Activity" shall have the meaning set forth in Section 7.9(a).
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"Confidentiality Agreement" shall mean the Confidentiality Agreement
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between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (on behalf of Pfizer) and Purchaser or
an Affiliate of Purchaser relating to the Business.
"Consolidated Tax Returns" shall mean any Tax Returns with respect to
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Consolidated Taxes.
"Consolidated Taxes" shall mean all federal, state, provincial or local
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Income Taxes, domestic or foreign, that are paid on a consolidated, unitary,
combined or similar basis with respect to Tax Returns that include one or more
Conveyed Companies, on the one hand, and Pfizer or any of its Affiliates (other
than the Conveyed Companies) on the other.
"Conveyed Companies" shall mean the Conveyed Subsidiaries and their
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Subsidiaries.
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"Conveyed Subsidiaries" shall mean those entities listed on Schedule
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1.1(B).
"Delayed Transfer Deadline" shall mean, with respect to a Right or a
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Business Unit, the date fifteen (15) months after the Closing Date; provided
that the Purchaser may, at its sole discretion, extend the Delayed Transfer
Deadline for up to five successive three-month periods by giving notice no later
that 5 days prior to any such Delayed Transfer Deadline.
"Disputed Item" shall have the meaning set forth in Section 2.8(b).
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"Employee" shall mean an Employee (non-US) or an Employee (US).
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"Employee (non-US)" shall mean any individual who, as of the Closing, (i)
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shall be (or in the case of clause (ii)(C) below, is scheduled to become) an
employee outside the United States of America of a Conveyed Company, an Asset
Selling Corporation or another Affiliate of Pfizer who primarily performs (or
will, on commencing work, primarily perform) services on behalf of the Business
other than an employee who primarily performs services on behalf of the Business
but who is on the payroll of a division of Pfizer other than the Business; and
(ii) either (A) shall have been employed and at work on the Closing Date; (B)
shall have been absent on the Closing Date because of illness or on short-term
disability (including maternity disability), workers' compensation, vacation,
parental leave of absence, or other absence or leave of absence consistent with
the Seller Corporations' policies, practices and procedures in effect at the
time such absence or leave commenced; or (C) shall have received an offer of
employment with the Business with a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer, in the ordinary course of business
on or prior to the Closing Date, but shall have not yet commenced work as of the
Closing Date. Notwithstanding the foregoing, each of the individuals listed on
Schedule 1.1(C) shall not be an Employee (non-US).
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"Employee (US)" shall mean any individual who as of the Closing, (i) shall
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be (or in the case of clause (ii)(C) below, is scheduled to become) an employee
in the United States of America of a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer who primarily performs (or will, on
commencing work, primarily perform) services on behalf of the Business other
than an employee who primarily performs services on behalf of the Business but
who is on the payroll of a division of Pfizer other than the Business; and (ii)
either (A) shall have been employed and at work on the Closing Date; (B) shall
have been absent on the Closing Date because of illness or on short- term
disability (including maternity disability), workers' compensation, vacation,
parental leave of absence, or other absence or leave of absence consistent with
the Seller Corporations' policies, practices and procedures in effect at the
time such absence or leave commenced; or (C) shall have received an offer of
employment with the Business with a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer, in the ordinary course of business
on or prior to the Closing Date, but shall have not yet commenced work as of the
Closing Date. Notwithstanding the foregoing, each of the individuals listed on
Schedule 1.1(C) shall not be an Employee (US).
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"Environmental Law" shall mean, except as otherwise provided in this
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Agreement, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, and any other applicable federal, state, local or foreign Law as in
effect between June 19, 2000 and the Closing relating to or imposing liability
or standards of conduct concerning air emissions, water discharges, noise or the
Release of any Hazardous Substance into the environment, the generation,
handling, treatment, storage, transport or disposal of any Hazardous Substance,
or otherwise concerning pollution or protection of the indoor or outdoor
environment, occupational health and safety or human health to the extent
relating to exposure to Hazardous Substances.
"Environmental Liability" means all Liabilities and Losses resulting from
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(i) failure to comply with any requirement of Environmental Law; (ii) failure to
obtain or comply with any required Environmental Permit; (iii) a Remedial
Action; (iv) harm or injury to any real property (other than a Facility), to any
person, to public health, or to natural resource (other than Remedial Action) as
a result of exposure to, or Release of, Hazardous Substances.
"Environmental Permit" shall mean a permit, license, certificate, consent,
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approval or authorization issued by a Governmental Authority pursuant to an
Environmental Law.
"Equipment" shall have the meaning set forth in Section 2.2(c).
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"Equipment Leases" shall have the meaning set forth in Section 2.2(c).
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
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incorporated, that together with the Seller Corporations would be deemed a
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"single employer" within the meaning of Section 4001(b) of ERISA.
"Excluded Assets" shall have the meaning set forth in Section 2.4(a).
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"Excluded Environmental Liabilities" shall mean the items set forth in (i)
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through (vii) below, limited, if at all, to the dollar amounts and time periods
set forth in Section 8.5 or Section 8.6:
(i) Environmental Liabilities resulting from Third Party Claims associated
with or arising from all facilities other than (A) those owned or leased by the
Conveyed Companies as of the Closing Date, or (B) those constituting part of the
Purchased Assets as of the Closing Date;
(ii) Environmental Liabilities resulting from Third Party Claims for
Remedial Action, or from Remedial Action required by Environmental Law, arising
from Releases of Hazardous Substances at or from any Facility, to the extent the
Release resulting in such Environmental Liability existed or had occurred prior
to the Closing, (x) with respect to all Facilities, except for the Solingen,
Germany Facility, to the extent arising out of the operation of the Business,
and (y) with respect to the Solingen, Germany Facility, to the extent arising at
or from the Facility at any time prior to Closing;
(iii) Environmental Liabilities as defined in clauses (i) and (ii) of the
definition of Environmental Liability that result directly from the failure
prior to Closing to comply with any requirement of Environmental Law or the
failure prior to Closing to obtain or comply with any required Environmental
Permit;
(iv) Environmental Liabilities resulting from the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Substances generated by
and transported off-site by or on behalf of the Business prior to the Closing;
(v) Known Milford Issues;
(vi) Except as provided in subparagraph (vii) of this definition of Excluded
Environmental Liabilities, Environmental Liabilities as defined in clause (iv)
of the definition of Environmental Liability resulting from Third Party Claims
arising from exposure to, or Releases of, Hazardous Substances occurring at or
from a Facility prior to Closing to the extent arising out of the operation of
the Business; and
(vii) Environmental Liabilities resulting from Third Party Claims for harm
or injury to natural resources (other than Remedial Action) arising from
Releases of Hazardous Substances at or from the Milford Facility prior to the
Closing.
Notwithstanding anything to the contrary set forth in this Agreement,
capital and other costs or expenditures of environmental related compliance with
Environmental Laws in the ordinary course of operating the Business (including
closure and post closure expenditures) incurred after the Closing Date shall not
be deemed to be Excluded Environmental Liabilities.
"Facilities" shall mean the manufacturing facilities listed on Schedule
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1.1(D).
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"Final Working Capital" shall have the meaning set forth in Section 2.8(c).
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"Financial Statements" shall mean the financial data set forth on Schedules
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5.6(a) and (b).
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"Foreign Implementing Agreements" shall mean the various agreements to be
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executed by the Seller Corporations located outside of the United States of
America after the date of this Agreement for the purpose of implementing the
transfer and conveyance on the Closing Date, or as soon thereafter as can be
effected, of Purchased Assets, Assumed Liabilities and the Shares to Purchaser
or the designated Affiliate of Purchaser, as the case may be, by such Seller
Corporations.
"Foreign Plan" shall mean each material pension, profit sharing, savings,
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retirement, health, life, disability, deferred compensation, incentive,
severance and fringe benefit plan, program, or arrangement maintained or
contributed to by any Seller Corporation for the benefit of any Employees
(non-US), other than plans, programs, or arrangements required to be maintained
or contributed to by the Laws of the relevant jurisdiction and Plans maintained
for the benefit of Employees (US).
"GAAP" shall mean accounting principles and practices generally accepted in
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the United States of America consistently applied by Pfizer.
"Governmental Antitrust Entity" shall have the meaning set forth in Section
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7.3(c).
"Governmental Authority" shall mean any supranational, national, federal,
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state or local judicial, legislative, executive, administrative or regulatory
authority.
"Governmental Authorizations" shall mean all licenses, permits,
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certificates and other authorizations and approvals required to carry on the
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Business as conducted as of the date of this Agreement under the applicable Laws
of any Governmental Authority.
"Governmental Order" shall mean any order, writ, judgment, directive,
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injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Substances" shall mean any hazardous substances within the
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meaning of Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., or any substance,
pollutant or contaminant that is regulated under any Environmental Law in effect
at the time of Closing including any asbestos, any petroleum, oil (including
crude oil or any fraction thereof), any radioactive material, any
polychlorinated biphenyls, and any other substance that may give rise to
liability under any Environmental Law.
"Hong Kong Intercompany Debt" shall mean the US$10,000,000 intercompany
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loan (including the related Intercompany Liability and Intercompany Receivable)
that is intended to be due and owing as of the Closing by ▇▇▇▇▇▇ Guangzhou
Company Limited to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Trading Co. Ltd.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
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1976, as amended.
"Income Tax" or "Income Taxes" shall mean all Taxes based upon, measured
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by, or calculated with respect to (i) gross or net income or gross or net
receipts or profits (including any capital gains, minimum Taxes and any Taxes on
items of tax preference, but not including sales, use, real or personal property
transfer or other similar Taxes); (ii) multiple bases (including corporate
franchise, doing business or occupation Taxes) if one or more of the bases upon
which such Tax may be based upon, measured by, or calculated with respect to, is
described in clause (i) above; and (iii) withholding Taxes measured by, or
calculated with respect to, any payments or distributions (other than wages).
"Indebtedness" of any Person means (1) indebtedness for borrowed money of
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such person (including any long-term or short-term portions thereof) and (2) any
indebtedness secured by the assets of, or guaranteed by, such Person or
evidenced by a note, bond, letter of credit, indenture or similar instrument;
provided, however, that Indebtedness shall not be deemed to include accounts
payable incurred in the ordinary course of business or intercompany
transactions.
"Indemnified Party" shall have the meaning set forth in Section 8.3(a).
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"Indemnifying Party" shall have the meaning set forth in Section 8.3(a).
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"Independent Accountant" shall have the meaning set forth in Section
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2.8(c).
"Information Technology" shall mean computer hardware, software, networks
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and/or other information technology used in the Business.
"Intellectual Property" shall mean (i) Patent Rights, (ii) Technology
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Rights, (iii) Trademark Rights, (iv) copyrights (registered and unregistered)
and registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof, (v) rights in names,
likenesses, images and other attributes of individuals, (vi) confidential,
proprietary and/or trade secret business and technical information, including
customer and vendor lists, (viii) software, including source, object and machine
code), software programs documentation and manuals used in connection therewith,
and all related databases, and (viii) agreements pursuant to which any Conveyed
Company, Seller Corporation, or other Affiliate of Pfizer has obtained or
granted the right to use any of the foregoing.
"Intellectual Property Licenses" shall have the meaning set forth in
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Section 2.2(f).
"Intercompany Liabilities" shall mean any Liability payable or owed by an
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Asset Selling Corporation or a Conveyed Company to Pfizer or any Affiliate of
Pfizer as at Closing.
"Intercompany Receivables" shall mean any Liability payable or owed to an
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Asset Selling Corporation or a Conveyed Company by Pfizer or any Affiliate of
Pfizer as at Closing.
"Interim Period Adjustments" shall mean the adjustments to reflect (i)
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consolidation of various entities comprising the Business, (ii) actual
in-transit inventory amounts and (iii) audit adjustments.
"Inventories" shall mean all inventory, including raw materials, packaging
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supplies, work-in-process or finished goods owned by each of the Conveyed
Companies or Asset Selling Corporations in respect of the Business.
"IRS" shall mean the Internal Revenue Service of the United States of
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America.
"Key European Countries" shall mean France, Germany, and the United
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Kingdom.
"Knowledge of Pfizer" shall mean the actual knowledge of any of the
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individuals listed on Schedule 1.1(E) and the knowledge that such person would
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reasonably be expected to have in the normal exercise of such person's duties in
the ordinary course of the Business.
"Known Milford Issues" shall mean (i) Remedial Action required under the
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federal Resource Conservation and Recovery Act, 42 U.S.C. 6921-6939e due to
Releases occurring prior to the Closing; (ii) Remedial Action required under the
ongoing actions being conducted under the Connecticut Transfer Act, Conn. Gen.
Stat. 22a-134 et seq. due to Releases of Hazardous Substances occurring prior
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to the Closing; and (iii) Remedial Action required under the Connecticut
Transfer Act due to the transactions contemplated by this Agreement due to
Releases of Hazardous Substances occurring prior to the Closing. Further, in
conducting Remedial Action pursuant to clauses (i) through (iii) above,
Environmental Laws shall mean those Laws applicable to and governing the
Remedial Action at the time the Remedial Action is being conducted and as
necessary to achieve completion of the Remedial Action pursuant to the terms of
Section 8.10(d) of this Agreement.
"Laws" shall include any federal, state, foreign or local law, common law,
----
statute, ordinance, rule, regulation, code or Governmental Order.
"Leased Real Property" shall have the meaning set forth in Section 2.2(a).
---------------------
"Liabilities" shall mean any and all debts, liabilities and obligations,
-----------
whether accrued or fixed, known or unknown, absolute or contingent, matured or
unmatured or determined or determinable.
"Liens" shall mean any lien, security interest, mortgage, charge or similar
-----
encumbrance.
"Loss" or "Losses" shall have the meaning set forth in Section 8.1(a).
---- ------
"Management Agreement" shall have the meaning set forth in Section 2.3(b).
---------------------
"Material Adverse Change" shall mean a change that is materially adverse to
-----------------------
the business results, operations or financial condition of the Business taken as
a whole, but shall exclude any changes, effects, events, circumstances,
occurrences or states of facts (a) that are generally applicable in the
economies of the United States of America, the European Union, Japan or any
other country in which there are transferred assets or sales of products of the
Business in the international financial markets or in the securities, syndicated
loan, credit or financial markets of the United States of America, the European
Union, Japan or any other country in which there are transferred assets or sales
of products of the Business; (b) that arise out of or are attributable to the
acts or omissions of, or circumstances affecting, Purchaser and/or its
Affiliates; (c) that generally affect the industries in which the Business
operates; (d) that arise out of or are attributable to acts of terrorism or war
(whether or not threatened, pending or declared) other than acts of terrorism or
war that specifically and directly affect the assets necessary for the conduct
of the Business; (e) that relate to any failure by the Business to meet internal
projections or forecasts for any period (but not the underlying causes of such
failure); or (f) that arise out of or are attributable to the public
announcement of this Agreement or the transactions contemplated hereby.
"Material Adverse Effect" shall mean an effect that is materially adverse
-------------------------
to the business results, operations or financial condition of the Business taken
as a whole.
"Material Contracts" shall have the meaning set forth in Section 5.12(a).
-------------------
"Patent Rights" means all rights to and in the patents and patent
--------------
applications identified in Schedule 5.13, together with any extensions,
--- --------------
reexaminations and reissues of such patents, patents of addition, divisions,
--
continuations, continuations-in-part, and any subsequent filings in any country
claiming priority therefrom.
"Permitted Encumbrances" shall mean (i) all Liens approved in writing by
-----------------------
Purchaser; (ii) statutory Liens arising out of operation of Law (including
mechanics', materialmens', carriers', workmens', warehousemens', repairmens',
landlords' or other like Liens and security obligations) with respect to a
Liability incurred in the ordinary course of business which are not delinquent
and which are not reasonably likely to create a Material Adverse Effect; (iii)
such Liens and other imperfections of title as do not materially detract from
the value or impair the use of the property subject thereto or make such
property unmarketable; (iv) Liens for Taxes not yet subject to penalties for
nonpayment or which are being actively contested in good faith by appropriate
proceedings.
"Person" shall mean an individual, a limited liability company, joint
------
venture, a corporation, a partnership, an association, a trust, a division or
operating group of any of the foregoing or other entity or organization.
"Pfizer" shall have the meaning set forth in the heading of this Agreement.
------
"Pfizer Corporate Insurance Program" shall mean the worldwide insurance
-------------------------------------
coverages provided by or through Pfizer to its Affiliates in respect of property
coverage and business interruption, marine cargo, general and product liability,
directors and officers liability and crime.
"Pfizer Qualified Plans" shall have the meaning set forth in Section
------------------------
7.5(b)(i).
"Plan" shall mean any material employee benefit plan as defined in Section
----
3(3) of ERISA and any other material written plan, program, agreement or
arrangement, whether qualified under applicable Law or not, maintained (or
contributed to or required to be contributed to) by any Seller Corporation or
any ERISA Affiliate, for the benefit of any Employee (US).
"Pre-Closing Tax Period" shall have the meaning set forth in Section
------------------------
7.4(g)(iii)(A).
"Proceeding" shall have the meaning set forth in Section 10.11(b).
----------
"Product Claim" shall mean a written claim from a third party addressed to,
-------------
and received by, the Conveyed Companies or the Asset Selling Corporations prior
to the Closing for money or other compensation (beyond the cost of a particular
product) in respect of injury allegedly due and owing as a result of the use,
application, malfunction or defect of a product of the Business irrespective of
the legal theory of liability and in respect of which no lawsuit has been
commenced prior to the Closing.
"Product Registrations" shall have the meaning set forth in Section
----------------------
5.10(a).
-
"Purchased Assets" shall have the meaning set forth in Section 2.2, it
-----------------
being understood that the Purchased Assets do not include the Excluded Assets or
the Shares.
"Purchaser" shall have the meaning set forth in the heading of this
---------
Agreement.
-
"Purchaser Qualified Plans" shall have the meaning set forth in Section
---------------------------
7.5(b)(ii).
"Purchaser Tax Act" shall have the meaning set forth in Section 7.4(g)(i).
------------------
"Real Property" shall have the meaning set forth in Section 5.14(a).
--------------
"Real Property Leases" shall have the meaning set forth in Section 2.2(a).
---------------------
"Release" means any spilling, leaking, pumping, pouring, emitting,
-------
emptying, injecting, depositing, disposing, discharging, dispersal, escaping,
--
dumping or leaching into the environment, including surface water, soil or
groundwater (including the abandonment or discarding of barrels, containers, and
other receptacles containing Hazardous Substances) or as otherwise defined under
Environmental Laws.
"Remedial Action" shall mean action required under Environmental Law to
----------------
clean up soil, surface water, groundwater or air in both the indoor or outdoor
environment in response to a Release of Hazardous Substances including
associated action taken to investigate, monitor, assess and evaluate the extent
and severity of any such Release; negotiations with Governmental Authorities and
other third parties related to the above action taken to remediate any such
Release; post-remediation monitoring of any such Release; negotiations with
Governmental Authorities and other third parties relating to the above, and
preparation of all reports, studies, analyses or other documents relating to the
above. "Remedial Action" also shall refer to any judicial, administrative or
other proceeding relating to any of the above, including the negotiation and
execution of judicial or administrative consent decrees; responding to
information requests and notices of violation by any Governmental Authority; or
defending claims brought by any Governmental Authority or any other Person,
whether such claims are equitable or legal in nature, relating to the cleanup of
the indoor or outdoor environment, including air, soil, surface water,
groundwater, and sediments in response to a Release of Hazardous Substances and
associated actions. "Remedial Action" shall not include (a) the capital,
operation and maintenance costs incurred by Purchaser to continue to operate the
facilities, fixtures and Equipment which as of the Closing Date are being
operated by any Asset Selling Corporation or Conveyed Company in compliance with
Environmental Laws; or (b) the closure and post-closure expenditures related to
such facilities, fixtures and Equipment.
"Required Governmental Report" shall mean any written notice, report or
------------------------------
other filing by Purchaser that is necessary to comply with Environmental Law as
a result of actions taken in the ordinary course of operating the Business;
provided, however, that actions taken in the ordinary course of operating the
Business shall not include any investigation undertaken voluntarily by Purchaser
or at the request of a third party that is not required by Environmental Law.
"Resolution Period" shall have the meaning set forth in Section 2.8(c).
------------------
"Retained Liabilities" shall have the meaning set forth in Section 2.6.
---------------------
"Retirement Plan" shall have the meaning set forth in Section 7.5(b)(i).
----------------
"Rights" shall have the meaning set forth in Section 2.3(a).
------
"Savings Plan" shall have the meaning set forth in Section 7.5(b)(i).
-------------
"Section 2.9(i) Allocation" shall have the meaning set forth in Section
-------------- ----------
2.9.
"Section 2.9(ii) Allocation" shall have the meaning set forth in Section
--------------- ----------
2.9.
"Securities Act" shall mean the Securities Act of 1933, as amended.
---------------
"Seller Corporations" shall mean Pfizer, the Stock Selling Corporations and
-------------------
the Asset Selling Corporations.
"Seller's Business" shall mean any activities or business carried on at any
-----------------
time by any of the Conveyed Companies or the Seller Corporations or any
Affiliate of Pfizer other than the Business.
"Shares" shall have the meaning set forth in the recitals hereto.
------
"Share Purchase Price" shall have the meaning set forth in Section 2.7(a).
---------------------
"Stock Selling Corporations" shall mean those entities listed on Schedule
---------------------------- --------
1.1(F).
-----
"Straddle Period" shall have the meaning set forth in Section 7.4(a)(i).
----------------
"Subsidiary" shall mean an entity as to which Pfizer or Purchaser or any
----------
other relevant entity, as the case may be, owns directly or indirectly 50% or
more of the voting power or other similar interests. Any Person which comes
within this definition as of the date of this Agreement but thereafter fails to
meet such definition shall from and after such time not be deemed to be a
Subsidiary of Pfizer or Purchaser or any other relevant entity, as the case may
be. Similarly, any Person which does not come within such definition as of the
date of this Agreement but which thereafter meets such definition shall from and
after such time be deemed to be a Subsidiary of Pfizer or Purchaser or any other
relevant entity, as the case may be.
"Tax" or "Taxes" shall mean all taxes, charges, duties, fees, levies,
--- -----
imposts or other assessments, including income, excise, property, sales, value
added, profits, license, withholding (with respect to compensation or
otherwise), payroll, employment, net worth, capital gains, transfer, stamp,
social security, national insurance, environmental, occupation and franchise
taxes, imposed by any Governmental Authority, and including any interest,
penalties and additions attributable thereto.
"Tax Claim" shall have the meaning set forth in Section 7.4(i).
----------
"Tax Return" or "Tax Returns" shall mean any return, report, declaration,
----------- -----------
information return, statement or other document filed or required to be filed
with any Governmental Authority, in connection with the determination,
assessment or collection of any Tax or the administration of any Laws relating
to any Tax.
"Technology Rights" shall mean all rights in (i) inventions, whether
------------------
patentable or nonpatentable, whether or not reduced to practice, and not yet
made the subject of a pending patent application or applications, (ii) ideas and
conceptions of potentially patentable subject matter, including any invention
and/or patent disclosures, whether or not reduced to practice and not yet made
the subject of a patent application, (iii) confidential, proprietary and/or
trade secrets, technical information and/or know-how (including any ideas,
formulas, compositions, inventions and conceptions or inventions whether
patentable or nonpatentable, whether or not reduced to practice) (iv) technology
(including know-how and show-how), manufacturing and productions processes and
techniques, service and repair manuals, research and development, information,
drawings, specifications, designs, plans, proposals, technical data and
copyrightable works, whether secret or confidential or not, (v) all rights to
obtain and rights to apply for patents, and to register trademarks and
copyrights and (vi) all documents, information and records (including research
and testing notebooks, memoranda, and designs) in any accessible format or
medium (including, but not limited to, paper records, photographs, audio and
visual tape recordings, computer storage media and other information storage
media) pertaining to any of the foregoing, including patentable or potentially
patentable subject matter.
"Third Party Claim" shall have the meaning set forth in Section 8.4(a).
-------------------
"Trademark Rights" shall mean registered and unregistered trademarks,
-----------------
service marks, brand names, certification marks, trade dress, goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application.
"Transitional Intellectual Property License Agreement" shall have the
--------------------------------------------------------
meaning set forth in Section 7.11.
"Transitional Services Agreement" shall have the meaning set forth in
---------------------------------
Section 7.10.
"WARN" shall mean the Worker Adjustment and Retraining Notification Act of
----
1988, as amended.
"Working Capital of the Business" shall mean the current assets less the
----------------------------------
current liabilities of the Business, determined in accordance with GAAP on a
basis consistent with the preparation of the Financial Statements, provided that
there shall be excluded from such determination the Excluded Assets, the
Retained Liabilities, and all short-term borrowings and all severances related
to the transactions contemplated by this Agreement, and all transaction-related
expenses, and there shall be included in such determination (i) Cash Equivalents
to the extent transferred to Purchaser as provided in the parenthetical to
Section 2.4(a)(i) (notwithstanding that Cash Equivalents were excluded in the
preparation of the Financial Statements); and (ii) accruals or reserves for
deferred Taxes. Only Income Taxes and Deferred Taxes related to the Conveyed
Subsidiaries are included in the calculation of Working Capital of the Business.
"Working Capital Statement" shall have the meaning set forth in Section
---------------------------
2.8(a).
Section 1.2 Other Definitional Provisions. (a) The words "hereof",
-------------------------------
"herein", "hereto" and "hereunder" and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(a) The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(b) The terms "dollars" and "$" shall mean United States of America dollars.
(c) The term "including" shall mean "including, without limitation."
(d) When a reference is made in this Agreement to an Article, a Section, an
Exhibit or Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Shares of the Conveyed Subsidiaries. Upon
--------------------------------------------------------
the terms and subject to the conditions set forth herein, at the Closing, Pfizer
shall cause the Stock Selling Corporations to sell to Purchaser, and
Purchaser agrees to purchase from the Stock Selling Corporations, free and clear
of all Liens, the Shares.
Section 2.2 Purchase and Sale of Assets of the Asset Selling Corporations.
--------------------------------------------------------------
Upon the terms and subject to the conditions set forth herein, at the Closing,
Pfizer shall cause each Asset Selling Corporation to sell, convey, assign and
transfer to Purchaser, and Purchaser shall purchase, acquire and accept from
each Asset Selling Corporation, free and clear of all Liens, other than
Permitted Encumbrances, all of such Asset Selling Corporation's right, title and
interest in the assets, properties and rights owned or held by such Asset
Selling Corporation on the date hereof relating primarily to the Business or
acquired by such Asset Selling Corporation primarily for the Business prior to
the Closing (subject to any decreases or dispositions thereof as may occur prior
to Closing in the ordinary course of business, and not in violation of Section
7.2 hereof) (collectively, the "Purchased Assets"). The Purchased Assets shall
----------------
include all assets, properties and rights reflected on the Financial Statements
(except to the extent disposed of or decreased in the ordinary course of
business since the date thereof) and, except as expressly provided otherwise
herein, shall include those certain assets, properties and rights described in
the following clauses (a) through (q):
(a) the leasehold interests, including any prepaid rent, security deposits
and options to renew or purchase in connection therewith, of the Asset Selling
Corporations in real property (the "Leased Real Property" and the leases
----------------------
relating to such Leased Real Property, the "Real Property Leases") that are set
--------------------
forth on Schedule 2.2(a);
----------------
(b) the Real Property owned by any of the Asset Selling Corporations that
are set forth on Schedule 5.14(a);
-----------------
(c) the furniture, equipment, machinery, supplies, vehicles, spare parts,
tools, personal property and other tangible property owned, leased or licensed
by the Asset Selling Corporations and primarily used by the Business
(collectively, the "Equipment" and leases relating to such Equipment so leased
---------
by the Asset Selling Corporations, the "Equipment Leases");
-----------------
(d) the contracts, licenses (other than Intellectual Property Licenses),
agreements and commitments relating solely to the Business (excluding contracts,
licenses, agreements and commitments relating to the Excluded Assets) (the
"Assumed Contracts");
--------------
(e) the Inventories of the Asset Selling Corporations, and Cash Equivalents
to the extent not transferred to Pfizer or one of its Affiliates and are
included in the calculation of Working Capital of the Business in Section 2.8.;
(f) all rights to the Intellectual Property owned, utilized or licensed by
the Asset Selling Corporations and used, or being developed for use, primarily
in the Business (the licenses relating to Intellectual Property so licensed by
any of the Asset Selling Corporations sometimes referred to as the "Intellectual
------------
Property Licenses"); to the extent any Intellectual Property, other than the
------------------
"Pfizer" and "▇▇▇▇▇▇ ▇▇▇▇▇▇▇" names and logos, is owned, utilized or licensed by
---
Pfizer or any Affiliate and is used, or being developed for use, for the
Business and is used by one or more other businesses of Pfizer and its
Affiliates or is not transferable by Pfizer or any Affiliate, then such
Intellectual Property will be retained by Pfizer or one of its Affiliates and at
the Closing, Pfizer and/or its applicable Affiliate will, subject to Section 2.3
and except to the extent Pfizer's rights to such Intellectual Property do not
allow it to grant such license, grant to Purchaser and its Affiliates a
royalty-free license of such Intellectual Property exclusive to the field of the
Business;
(g) Product Registrations (and applications therefor) owned, utilized or
licensed by the Asset Selling Corporations relating primarily to the Business
and to the extent transferable;
(h) transferable Governmental Authorizations, including Environmental
Permits, owned, utilized or licensed (subject to the terms of such licenses) by
the Asset Selling Corporations relating primarily to and required in the
operation of the Business as it is currently conducted
(i) (i) the databases and software programs (including, source code, object
code, machine code, firmware, and the like), and user manuals, documentation,
instruction manuals, and the like, owned, used, leased by or licensed to any of
the Asset Selling Corporations, Conveyed Companies, and/or Conveyed Subsidiaries
and used, or being developed for use, primarily in the Business to the extent
transferable; and (ii) all computer hardware used solely in the Business;
(j) all customer and vendor lists to the extent relating primarily to the
Business, and all files and documents (including credit information) to the
extent relating solely to customers and vendors of the Business, and all other
business and financial records, files, books and documents (whether in hard
copy, computer format or any other storage media) to the extent relating
primarily to the Business;
(k) the accounts and notes receivable of the Business;
(l) the goodwill of the Business;
(m) all advertising, marketing, sales creative and promotional materials
relating primarily to the Business;
(n) all domain names set forth on Schedule 2.2(n) and any and all
----------------
variations, derivations, extensions, renewals or registrations therefor
pertaining to the Business;
(o) all warranties and all claims in respect of deposits, prepayments and
refunds and rights of set off against third parties that relate primarily to the
Purchased Assets;
(p) all insurance policies, if any, with third parties (other than policies
under or pursuant to the Pfizer Corporate Insurance Program or shared with other
Pfizer entities) held in the name of the Asset Selling Corporations and relating
solely to the Business to the extent assignable; and
(q) all other assets set forth on Schedule 2.2(q).
----------------
Section 2.3 Consents. (a) Subject to the provisions of Section 4.2 of
--------
this Agreement, any Real Property Lease, Equipment Lease, Intellectual Property
License, Assumed Contract, agreement, lease, license or right which is included
in the Purchased Assets (collectively, the "Rights") which is not assignable or
------
transferable without the consent of any Person other than the Asset Selling
Corporations, the Conveyed Companies or any Subsidiary of Pfizer or Purchaser,
to the extent that such consent shall not have been given prior to the Closing,
will, at Closing, be assigned or transferred to Purchaser contingent upon the
receipt of such consents. Pfizer agrees promptly to request all such consents,
as may be required, and to use commercially reasonable efforts to obtain such
consents and to otherwise obtain satisfaction of conditions to such assignments
or transfers as soon as reasonably practicable after the date of this Agreement.
Nothing in this Agreement shall be construed as an attempt to assign to
Purchaser any Rights having the following character:
(i) any lease, license, contract, engagement or commitment which, as a
matter of law or by the terms thereof, is not assignable without the consent of
the other party or parties to such lease, license, contract, engagement or
commitment, unless such consents shall have been given; or
(ii) any claim or demand thereunder as to which all of the remedies for the
enforcement thereof enjoyed by the assignor would not, as a matter of law, pass
to Purchaser as an incident of the transfers to be made under this Agreement.
Purchaser and each of the Seller Corporations shall have the continuing
obligation after the Closing to use commercially reasonable efforts to endeavor
to obtain all necessary consents to the assignment of the Rights (provided that
neither the Seller Corporations nor any of their respective Subsidiaries nor
Purchaser shall be required to commence any litigation or offer or grant any
accommodation (financial or otherwise) to any third party) and, upon obtaining
the requisite third party consents thereto, such Rights shall be transferred and
assigned to Purchaser hereunder. Neither Purchaser nor the Seller Corporations
shall be under any obligation to obtain consents to the assignment of any
insurance policies other than to request the same and the provisions of Section
2.3(b) shall not apply to insurance policies.
(b) With respect to any Rights which are not assigned to Purchaser at the
Closing, after the Closing and until any requisite consent is obtained and the
foregoing assigned to Purchaser Pfizer and each of the Seller Corporations shall
use commercially reasonable efforts to obtain for Purchaser an arrangement,
reasonably acceptable to Purchaser, designed to provide for Purchaser the
benefits thereof in some other manner, provided, that none of Seller
--------
Corporations, Purchaser nor any of the Conveyed Companies or their respective
Affiliates shall be required to expend money without reimbursement, commence any
litigation or offer or grant any unreasonable accommodation (financial or
otherwise) to any third party in order to obtain such benefits. Until such
Rights are assigned to Purchaser with such consent, or the Delayed Transfer
Deadline, whichever is earlier, the applicable Seller Corporation shall hold the
Rights in trust for Purchaser. Until the Delayed Transfer Deadline or the
effective date of such assignment, whichever is earlier, in order that the full
value of the Rights may be realized for the benefit of Purchaser, the applicable
Seller Corporation will, at the request and under the direction of the
Purchaser, in the name of the applicable Seller Corporation or otherwise as
Purchaser shall specify, take all such action and do or cause to be done all
such lawful things as shall be commercially reasonable in order that the
obligations of the applicable Seller Corporation thereunder may be performed in
such manner that the value of such Rights shall be preserved and shall inure to
the benefit of Purchaser, and that the collection of any moneys due and payable
or to become due and payable to Purchaser in and under the Rights shall be
received by Purchaser; and the applicable Seller Corporation will promptly pay
over to Purchaser all moneys collected by or paid to the applicable Seller
Corporation in respect of every such Right. In addition, if transfers of
Conveyed Companies or aggregate Purchased Assets in a particular country (each,
a "Business Unit") cannot be obtained as of Closing because of required
--------------
third-party consents (whether in respect of Rights, Competition Laws or any
-----
other basis) that have not been obtained, Pfizer and Purchaser shall enter into
-
management agreements reasonably acceptable to each party (each, a "Management
----------
Agreement") pursuant to which Pfizer shall operate such Business Units for the
--------
benefit of Purchaser and (to the extent permitted by law) at the direction of
Purchaser, consistent with the letter agreement attached as Exhibit H hereto
until the transfer of such Business Unit or the Delayed Transfer Deadline,
whichever is earlier. Upon the occurrence of the Delayed Transfer Deadline,
Purchaser and Pfizer shall negotiate in good faith to arrive at a valuation for
any and all Rights and Business Units that have not been transferred, which
valuation shall take into account the significance of the Business Unit to the
overall Business, as conducted immediately prior to Closing. If after 30 days
the parties have been unable to agree, each party shall nominate an investment
bank and the two investment banks shall, within 15 days, select a third
investment bank, which third investment bank shall, within 45 days after its
selection, make a binding determination of the value of such Rights and Business
Units, which amount Pfizer shall promptly pay to Purchaser as an adjustment to
the Purchase Price.
(c) Purchaser acknowledges that certain consents to the transactions
contemplated by this Agreement may be required from parties to the Rights and
that such consents have not been and may not be obtained. Provided that Pfizer
is in full compliance with the provisions of subsections (a) and (b) above and
has satisfied any disclosure obligations under this Agreement with respect to
such consents, Purchaser agrees that no representation or warranty of Pfizer
contained herein shall be breached or deemed breached, and, except as set forth
in Section 4.2 of this Agreement, no condition to Purchaser's obligations to
close the transactions contemplated by this Agreement shall be deemed not
satisfied as a result of the failure to obtain any such consent.
Section 2.4 Excluded Assets of the Business. (a) Notwithstanding any
-----------------------------------
provision in this Agreement, Purchaser is not purchasing any of the following
(the "Excluded Assets"):
----------------
(i) Cash Equivalents (except to the extent that Cash Equivalents are not
transferred pursuant to Section 2.4(b) or 7.21 and are reflected in the
calculation of the Working Capital of the Business pursuant to Section 2.8);
(ii) All Intercompany Receivables, other than amounts due and owing among
the Conveyed Companies and the Asset Selling Corporations in respect of the
Business;
(iii) With respect to the Asset Selling Corporations, all Tax losses and Tax
loss carry forwards and rights to receive refunds, credits and credit carry
forwards with respect to any and all Taxes, to the extent attributable to a
taxable period (or portion thereof) ending on or prior to the Closing Date,
including interest thereon, whether or not the foregoing is derived from the
Business;
(iv) the corporate books and records of the Asset Selling Corporations;
(v) all current and prior insurance policies (other than as referred to in
Sections 2.2(p) and 7.15 of this Agreement) and all rights of any nature with
respect thereto, including all insurance recoveries other than as provided in
Section 7.15;
(vi) except as expressly set forth herein, all assets of any Plan or Foreign
Plan;
(vii) the "Pfizer" and "▇▇▇▇▇▇ ▇▇▇▇▇▇▇" names and logos;
(viii) all legal and beneficial interest in the share capital, equity
interest or assets not related primarily to the Business; and
(ix) any legal or beneficial interest in the assets listed on Schedule
--------
2.4(a)(ix), notwithstanding the fact that such assets are related primarily to
-----
the Business.
(b) Pfizer may take (or cause one or more of its Affiliates to take) such
action as is necessary or advisable to transfer effective as of the Closing Date
the Excluded Assets from the Conveyed Companies and each of the Asset
Selling Corporations to Pfizer or one or more of its Affiliates for such
consideration or for no consideration, as may be determined by the Seller
Corporations in their sole discretion. After the Closing Date, Purchaser shall
take all actions (or shall cause its Affiliates to take all actions) reasonably
requested by the Seller Corporations to effect the provisions of this Section
2.4, including the return of any Excluded Assets. Any action taken pursuant to
this Section 2.4(b) after the Closing Date shall be deemed for the purposes of
Section 2.8 to have occurred on the Closing Date and shall be reflected in the
calculation of the Working Capital of the Business pursuant to Section 2.8 where
the relevant Excluded Asset falls within the Working Capital of the Business.
Section 2.5 Assumption of Certain Obligations of the Business. Upon the
----------------------------------------------------
terms and subject to the conditions of this Agreement, Purchaser agrees,
effective at the Closing, to assume and to satisfy and discharge all Liabilities
of the Seller Corporations to the extent relating to the Purchased Assets
or the Business and to cause the Conveyed Companies to satisfy and discharge
their respective Liabilities, whether arising prior to or after the Closing, and
whether accrued or fixed, known or unknown, absolute or contingent, matured or
unmatured or determined or determinable as of the Closing Date, other than the
Retained Liabilities (all of the foregoing liabilities and obligations being
herein collectively called the "Assumed Liabilities"). Assumed Liabilities
--------------------
shall include, but not be limited to, the following:
(a) all lawsuits commenced and claims made after the Closing to the extent
resulting from the conduct of the Business or the ownership of the Shares or the
Purchased Assets prior to or after the Closing, including lawsuits and
claims relating to alleged Intellectual Property infringement;
(b) all Liabilities for Taxes to the extent accrued or reserved against in
the Working Capital Statement;
(c) all Liabilities, including all lawsuits commenced and all claims made
prior to or after the Closing, arising from the design, manufacture, testing,
marketing, distribution or sale of any products of the Business prior to or
after the Closing, including warranty obligations and irrespective of the legal
theory asserted;
(d) all Liabilities to suppliers for materials and services relating to the
Business ordered in the ordinary course of business prior to the Closing, but
scheduled to be delivered or provided thereafter, and all Liabilities to
customers under purchase orders for products of the Business which have not yet
been shipped at Closing;
(e) all Liabilities arising prior to or after the Closing under any
contracts, agreements, leases, licenses or commitments that are assigned to
Purchaser pursuant to Section 2.1, 2.2 or 2.3 at or subsequent to the Closing;
(f) all Liabilities with respect to products of the Business returned prior
to or after the Closing as set forth in Section 7.17;
(g) all Environmental Liabilities, whether arising prior to or after the
Closing, other than the Excluded Environmental Liabilities;
(h) all Liabilities to Employees with respect to periods after the Closing,
except as otherwise provided in this Agreement; and
(i) all other Liabilities arising prior to or after the Closing relating to
the ownership or operation of the Purchased Assets or the Conveyed Companies.
Section 2.6 Retained Liabilities of the Business. Notwithstanding any
----------------------------------------
provision in this Agreement, the Seller Corporations shall retain and be
responsible only for the following liabilities relating to the Business (the
"Retained Liabilities"):
-------------------
(a) the Excluded Environmental Liabilities;
(b) Liabilities resulting from all lawsuits pending as of the Closing to the
extent resulting from the conduct of the Business by any Seller Corporation or
Conveyed Company prior to the Closing, or otherwise relating to the operation of
the Business or the Seller's Business prior to Closing, including the pending
lawsuits listed on Schedule 5.8;
-------------
(c) Liabilities for which any Seller Corporation expressly has
responsibility pursuant to the terms of this Agreement;
(d) Liabilities exclusively associated with the Excluded Assets;
(e) Intercompany Liabilities, other than amounts due and owing among the
Conveyed Companies and the Asset Selling Corporations in respect of the
Business;
(f) Liabilities or obligations to former employees of the Seller
Corporations and liabilities or obligations to Employees which accrued prior to
the Closing, except (i) as otherwise provided in this Agreement, (ii) as accrued
and provided for on the Working Capital Statement, (iii) amounts at the Closing
applicable to the ▇▇▇▇▇▇▇▇▇ Sword GmbH Pension Plan that were reflected in the
Financial Statements for the year ended December 31, 2001, (iv) other employee
and former employee accrued liabilities at the Closing that will not exceed
$2,000,000 that was reflected in the Financial Statements for the year ended
December 31, 2001, or (v) liabilities or obligations with respect to former
employees or Employees with respect to which assets are or will be transferred
pursuant to this Agreement;
(g) Liabilities from Product Claims reported and pending as of the Closing,
including the pending Product Claims listed on Schedule 5.8;
-------------
(h) any and all Liabilities for Taxes related to the Business or the
Purchased Assets for taxable periods prior to the Closing, except for (i) Taxes
attributable to actions of Purchaser occurring after the Closing or (ii) to the
extent reflected or reserved against in the Working Capital Statement;
(i) any and all Liabilities, excluding Products Liabilities claims, of the
Conveyed Companies arising prior to or after the Closing to the extent such
Liabilities arise from acts prior to the Closing and are not related to, or
arise out of, the operation of the Business or the ownership or use of the
Purchased Assets;
(j) post-retirement medical insurance, post-retirement life insurance and
any other post-retirement benefits for former employees of the Business and for
Employees who would otherwise be eligible for such benefits as of the Closing
(except as may otherwise be required by Law); and
(k) any and all Indebtedness of the Business existing as of Closing,
including any Indebtedness of any Conveyed Company or Asset Selling Corporation
other than Indebtedness of a Conveyed Company to another Conveyed Company and
the Hong Kong Debt.
Section 2.7 Purchase Price. (a) In consideration of the sale and transfer
--------------
of the Shares, Purchaser agrees to purchase from Pfizer and the Stock Selling
Corporations the Shares and to assume the Assumed Liabilities for an aggregate
purchase price of $582,162,000, allocated among the Shares as described in
Schedule 2.9 (the "Share Purchase Price").
-------- ----------------------
(b) In consideration of the sale and transfer of the Purchased Assets,
Purchaser agrees to purchase from each Asset Selling Corporation the Purchased
Assets and to assume and satisfy the Assumed Liabilities owned by such Asset
Selling Corporation for an aggregate purchase price of $347,838,000, allocated
among the Asset Selling Corporations as described in Schedule 2.9 (the "Asset
------------ -----
Purchase Price" and, together with the Share Purchase Price, the "Aggregate
------------- ---------
Purchase Price").
-------------
(c) The Aggregate Purchase Price ($930,000,000) shall be paid in immediately
available funds, by wire transfer in accordance with written instructions given
by Pfizer to Purchaser not less than 2 Business Days prior to the Closing. The
Aggregate Purchase Price shall be subject to the adjustment provisions of
Section 2.8 and shall be allocated as described in Section 2.9.
Section 2.8 Purchase Price Adjustment. (a) Within 90 days after the
---------------------------
Closing Date, Pfizer shall deliver to Purchaser a statement of the Working
Capital of the Business as of the Closing Date (the "Working Capital
----------------
Statement"). The Working Capital Statement shall be unaudited and shall state
the Working Capital of the Business excluding Cash Equivalents to the extent it
is an Excluded Asset as of the Closing Date, taking into account any transfers
made pursuant to Section 2.4(b) and the settlement of any Liabilities referred
to in Section 2.6(e) after the Closing Date, which for the purposes of the
Working Capital Statement shall be deemed to have been settled on the Closing
Date at the amount settled. Purchaser shall provide Pfizer with access to the
books, records, and personnel of the Business to the extent reasonably necessary
for Pfizer to prepare the Working Capital Statement. Pfizer shall also
consult with Purchaser in connection with the preparation of the Working Capital
Statement to the extent reasonably necessary to prepare the Working Capital
Statement.
(b) During the period of 60 days following the receipt by Purchaser of the
Working Capital Statement, Purchaser and its independent accountants shall be
permitted to review the supporting workpapers used to prepare the Working
Capital Statement and shall have access to personnel of Pfizer as may be
reasonably necessary to permit it to review in detail the manner in which the
relevant statements were prepared.
(c) Purchaser may dispute the amounts reflected on the line items of the
Working Capital Statement (a "Disputed Item"), but only (i) on the basis that an
-------------
entry contained on such Working Capital Statement is based on facts or
occurrences arising solely between the date of the Financial Statements and the
date of the Working Capital Statement; (ii) on the basis that a Disputed Item
does not reflect, or has not been made in a manner consistent with, the
provisions of this Agreement; and (iii) to the extent the amount disputed with
respect to any one Disputed Item exceeds $50,000 with respect to an individual
item or series of related items and all such allowable Disputed Items exceed
$1,000,000 in the aggregate; provided, however, Purchaser shall notify Pfizer in
-------- -------
writing of each Disputed Item, and specify the amount thereof in dispute and the
basis therefor, within 60 days after receipt of the Working Capital Statement.
The failure by Purchaser to provide a notice of Disputed Items to Pfizer within
such 60 day period will constitute Purchaser's acceptance of all the items in
the Working Capital Statement.
(d) If a notice of Disputed Items shall be timely delivered pursuant to
subclause (b) above, Pfizer and Purchaser shall, during the 30 Business Days
following the date of such delivery (the "Resolution Period"), negotiate in good
-----------------
faith to resolve the Disputed Items. If, during such Resolution Period the
parties are unable to reach agreement, Pfizer and Purchaser shall refer all
unresolved Disputed Items to Deloitte & Touche LLP, or any other independent
accounting firm as Pfizer and Purchaser shall mutually agree upon (the
"Independent Accountant"). The Independent Accountant shall make a
---------------
determination with respect to each unresolved Disputed Item within 15 days after
---
its engagement by Pfizer and Purchaser to resolve such Disputed Items, which
determination shall be made in accordance with the rules set forth in this
Section 2.8. The Independent Accountant shall deliver to Pfizer and Purchaser,
within such 15 day period, a report setting forth its adjustments, if any, to
the Working Capital Statement and the calculations supporting such adjustments.
Such report shall be final, binding on the parties and conclusive. Pfizer and
Purchaser shall each pay one-half of all the costs incurred in connection with
the engagement of the Independent Accountant. As used herein, "Final Working
-------------
Capital" shall mean (i) if no notice of Disputed Items is delivered by Purchaser
-----
within the period provided in subclause (b) above, Working Capital of the
Business as shown in the Working Capital Statement as prepared by Pfizer; or
(ii) if such a notice of Disputed Items is delivered by Purchaser, either (x)
Working Capital of the Business as agreed to in writing by Pfizer and Purchaser;
or (y) Working Capital of the Business as shown in the Independent Accountant's
calculation delivered pursuant to this subclause (c). The parties acknowledge
that they have discussed their past contacts, if any, with the Independent
Accountant, and that neither party shall have the right to object to the
Independent Accountant's service in such role by reason of non-disclosure of
past contacts, conflicts of interest, or any other reason.
(e) If the Final Working Capital excluding Cash Equivalents to the extent it
is an Excluded Asset is less than $132,500,000, then Pfizer, on behalf of the
Seller Corporations, shall, within 10 days after the determination of the Final
Working Capital, pay to Purchaser, by wire transfer of immediately available
funds in accordance with written instructions given to Pfizer by Purchaser, the
amount of such shortfall, together with interest on such amount from the Closing
Date to the date of such payment at a rate equal to the 90-day London Interbank
Offered Rate prevailing at the Closing Date minus 1/8%, as determined by Pfizer.
If the Final Working Capital is greater than $132,500,000 then Purchaser shall,
within 10 days after the determination of the Final Working Capital, pay to
Pfizer, by wire transfer of immediately available funds in accordance with
written instructions given by Pfizer to Purchaser, the amount of such excess,
together with interest on such amount from the Closing Date to the date of such
payment at an annual rate equal to the 90-day London Interbank Offered Rate
prevailing at the Closing Date plus 0.2%, as determined by Pfizer.
Notwithstanding the foregoing, Pfizer agrees to make one or more installment
payments toward the payment provided for in this Section 2.8(d) at such times as
amounts reflected in the calculation of the Working Capital of the Business
become fixed and are not Disputed Items and the non-Disputed Items are such that
a payment would be due and owing to Purchaser pursuant to the first sentence of
this subsection (d). Similarly, Purchaser agrees to make one or more
installment payments toward the payment provided for in this Section 2.8(d) at
such times as amounts reflected in the calculation of the Working Capital of the
Business become fixed and are not Disputed Items and the non-Disputed Items are
such that a payment would be due and owing to Pfizer pursuant to the second
sentence of this subsection (d). The final installment payment to be made after
the determination of Final Working Capital shall take into account all
previously-made installment payments.
Section 2.9 Allocation of the Aggregate Purchase Price. Pfizer, on behalf
-------------------------------------------
of itself and the Seller Corporations, and Purchaser (i) have agreed to the
allocation of the Aggregate Purchase Price among the Conveyed Subsidiaries and
the Asset Selling Corporations as set forth in Schedule 2.9 (the "Section 2.9(i)
------------ --------------
Allocation") and (ii) shall agree as set forth below on the allocation
----------
among the Purchased Assets sold by each Asset Selling Corporation of the Asset
Purchase Price allocable to such Asset Selling Corporation as set forth in
Schedule 2.9 (the "Section 2.9(ii) Allocation" and, together with the Section
-------- --------------------------
2.9(i) Allocation, the "Allocation"). Each of the Seller Corporations on the
----------
one hand and Purchaser on the other shall (i) be bound by the Allocation for
purposes of determining any Taxes; (ii) prepare and file, and cause its
Affiliates to prepare and file, its Tax Returns on a basis consistent with the
Allocation; and (iii) take no position, and cause its Affiliates to take no
position, inconsistent with the Allocation on any applicable Tax Return or in
any proceeding before any taxing authority or otherwise. In the event that the
Allocation is disputed by any taxing authority, the party receiving notice of
the dispute shall promptly notify the other party hereto, and both Pfizer and
Purchaser agree to use their best efforts to defend such Allocation in any audit
or similar proceeding, and the matter shall be handled as a Tax Claim described
in Section 7.4(i)(B). Each of the Seller Corporations and Purchaser acknowledge
that the Section 2.9(i) Allocation was done at arm's length based upon a good
faith estimate of fair market values. Pfizer and Purchaser agree that Purchaser
shall choose an independent appraisal firm to perform an appraisal to support
the Section 2.9(ii) Allocation. The cost of such appraisal firm shall be borne
by Purchaser. Pfizer shall be provided with a copy of the appraiser's report at
least 15 working days prior to Closing and, provided that Pfizer consents to the
report (which consent shall not be unreasonably withheld), the Section 2.9(ii)
Allocation shall be made as specified in the report. If Pfizer does not consent
to the appraiser's report, Pfizer and Purchaser shall use their best efforts to
mutually agree prior to Closing (or, if they fail to reach an agreement prior to
Closing, the parties shall mutually agree after Closing) on any changes to be
made to the report and the Section 2.9(ii) Allocation shall be made as specified
in the report so changed. Working capital adjustments pursuant to Section 2.8
and other post-Closing adjustments, if any, to the Aggregate Purchase Price
shall be allocated to the Conveyed Company or to the Asset Selling Corporation
to which the adjustment relates, and shall be further allocated (if relevant for
purposes of any applicable Law) to the assets to which the adjustment relates.
The Aggregate Purchase Price allocation to such Conveyed Company or Asset
Selling Corporation shall be correspondingly increased or decreased. Pfizer and
Purchaser acknowledge that, in accordance with GAAP, the fair market value of
the Purchased Assets is not less than the net book value of the Purchased Assets
and that, in accordance therewith, if after all other adjustments to the
Allocation are made, the Allocation with respect to any Asset Selling
Corporation, when expressed in the relevant local currency at the rate of
exchange used to determine Final Working Capital, is less than the local
currency net book value, determined in accordance with GAAP, of the Purchased
Assets of such Asset Selling Corporation as of the Closing Date, then the
Allocation with respect to such Asset Selling Corporation shall be adjusted so
that it is equal to such local currency net book value converted at the rate of
exchange used to determine Final Working Capital and a corresponding adjustment
will be made to the Allocation pro rata with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trading Co. Ltd. based on their relative Aggregate Purchase
Price allocation.
ARTICLE III
CLOSING
Section 3.1 Closing. (a) The Closing shall take place at the offices of
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Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at
10:00 A.M., New York time on the 5th Business Day following the satisfaction or
waiver of the conditions precedent specified in Article IV (other than the
conditions to be satisfied on the Closing Date, but subject to the waiver or
satisfaction of such conditions), or at such other times and places as the
parties hereto may mutually agree; provided, however, that without the agreement
-------- -------
of Pfizer and Purchaser, the Closing shall not occur later than the date
specified in Section 9.1(b). The date on which the Closing occurs is called the
"Closing Date." The Closing shall be deemed to occur and be effective as of
-------------
12:01 A.M., New York City time, on the Closing Date.
--
(b) At the Closing, Pfizer shall deliver or cause to be delivered to
Purchaser the instruments and documents set forth in Exhibit A, in each case in
a form reasonably acceptable to Purchaser.
(c) At the Closing, Purchaser shall deliver to Pfizer, as agent for the
Seller Corporations, the following: (i) the Aggregate Purchase Price, by wire
transfer in immediately available funds to one or more accounts specified in
writing by Pfizer at least 2 Business Days prior to the Closing Date and (ii)
the instruments and documents set forth in Exhibit B, in each case in a form
reasonably acceptable to Pfizer.
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions to the Obligations of Purchaser and Pfizer. The
---------------------------------------------------------
respective obligations of each of the parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction of the
following conditions precedent:
(a) There shall not (i) be in effect in the United States of America, Japan,
the European Union or any Key European Country any Law or Governmental
Order that makes illegal or enjoins or prevents in any respect the consummation
of the transactions contemplated by this Agreement, or which would result in a
Material Adverse Effect, or (ii) have been commenced, and shall be continuing,
or threatened in writing any action or proceeding by any Governmental Authority
of the United States of America, Japan, the European Union or any Key European
Country that seeks to prevent or enjoin in any respect the transactions
contemplated by this Agreement, or which would result in a Material Adverse
Effect;
(b) The waiting period required under the HSR Act, including any extensions
thereof, shall have expired and any investigations relating to the sale
hereunder that may have been opened by either the Department of Justice or the
Federal Trade Commission by means of a request for additional information or
otherwise shall have terminated, and, subject to Section 7.3(e), no other
waiting period (including any extensions thereof) under Competition Laws or
investigation by a Governmental Authority of Japan or the European Union or, if
applicable, any Key European Country relating to the transactions contemplated
hereby shall be unexpired or pending which, in the reasonable opinion of
counsel, is likely to result in an action or proceeding seeking to enjoin the
entire transaction contemplated herein; and
(c) Subject to Section 7.3(e), any approvals or actions of any Governmental
Authority having jurisdiction necessary lawfully to consummate the transactions
contemplated hereby shall have been given or taken.
Section 4.2 Conditions to the Obligations of Purchaser. The obligation of
-------------------------------------------
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions precedent:
(a) Pfizer shall have performed in all material respects its agreements and
obligations contained in this Agreement required to be performed by it at or
before the Closing, and the representations and warranties of Pfizer contained
herein shall have been true and correct when made and shall be true and correct
as of the Closing, as if made as of the Closing (except for (i) changes
contemplated or permitted by this Agreement or specifically described in the
Schedules hereto; (ii) failures to perform covenants or breaches of
representations and warranties, without taking into account any qualification,
exception or limitation as to materiality or Material Adverse Effect contained
in such covenant, representation or warranty, that would not, individually or in
the aggregate, have a Material Adverse Effect; and (iii) those
representations and warranties that address matters as of a particular date,
which, subject to clause (ii) above, need be true only as of such date).
Purchaser shall have received a certificate of Pfizer, dated as of the Closing
Date and signed by an officer of Pfizer, certifying as to the fulfillment of the
foregoing. For purposes of this Agreement, the mentioning of a specific
threshold amount in any representation or warranty shall not imply that such
amount constitutes or would be reasonably likely to constitute a Material
Adverse Effect or Material Adverse Change.
(b) Pfizer shall have made or caused to be made delivery to Purchaser of (i)
the items required by Section 3.1(b) and (ii) the written consents set forth in
Schedule 4.2(b).
----------------
Section 4.3 Conditions to the Obligations of Pfizer. The obligation of
-------------------------------------------
Pfizer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions precedent:
(a) Purchaser shall have performed in all material respects its agreements
and obligations contained in this Agreement required to be performed by it at or
before the Closing, and the representations and warranties of Purchaser
contained herein shall have been true and correct in all material respects when
made and shall be true and correct in all material respects as of the Closing,
as if made as of the Closing (except for (i) changes contemplated or permitted
by this Agreement or attributable to matters disclosed by Purchaser in the
Schedules hereto, and (ii) those representations and warranties that address
matters as of a particular date, which need be true in all material respects
only as of such date). Pfizer shall have received a certificate of Purchaser,
dated as of the Closing Date and signed by an officer of Purchaser, certifying
as to the fulfillment of the foregoing.
(b) Purchaser and its Affiliates shall have made or caused to be made
delivery to Pfizer of the items required by Section 3.1(c).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PFIZER
Pfizer hereby represents and warrants to Purchaser as follows:
Section 5.1 Organization. Pfizer is a corporation duly organized, validly
------------
existing and in good standing under the Laws of the State of Delaware. Each
Stock Selling Corporation and Asset Selling Corporation is a corporation or
limited liability company, duly organized, validly existing and, where
applicable, in good standing under the Laws of the jurisdiction of its
organization.
Section 5.2 Authority; Binding Effect. (a) Pfizer has all requisite
---------------------------
corporate power and authority to carry on its business as it is now being
conducted and to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by Pfizer of this Agreement,
and the performance by Pfizer of its obligations hereunder, have been or will
have been at the Closing duly authorized by all requisite corporate action.
(b) Each of the Asset Selling Corporations and the Stock Selling
Corporations has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Each of the Asset Selling Corporations and the Stock Selling
Corporations is duly qualified or licensed to do business and, for jurisdictions
recognizing such concept, in good standing, in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
result in fines or penalties in excess of $10,000,000 or otherwise result in a
Material Adverse Effect. The performance by each of the Asset Selling
Corporations and the Stock Selling Corporations of their respective obligations
hereunder have been or will have been at the Closing duly authorized by all
requisite corporate action.
(c) This Agreement constitutes a valid and binding obligation of Pfizer,
enforceable against Pfizer in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or law).
(d) Schedule 5.2(d) sets forth a complete list of Pfizer and its Affiliates
--- ----------------
engaged in the Business, including (x) the jurisdiction of incorporation or
organization of such Affiliate and (y) the ownership of each such Affiliate.
Section 5.3 Conveyed Subsidiaries; Capital Structure. (a) Each of the
-------------------------------------------
Conveyed Subsidiaries is duly organized, validly existing and, where applicable,
in good standing under the Laws of its jurisdiction of organization, with
corporate power and authority to own and operate its properties and assets and
to carry on its business as currently conducted. Each of the Conveyed
Subsidiaries is duly qualified to do business and, where applicable, in good
standing in each jurisdiction where the nature of its business or properties
makes such qualification necessary, except in jurisdictions where the failure to
be so qualified would not, individually or in the aggregate, result in fines or
penalties in excess of $10,000,000 or otherwise result in a Material Adverse
Effect. Pfizer has made available to Purchaser, prior to the execution of this
Agreement, a complete and correct copy of the certificate of incorporation and
by-laws, or other organizational documents, as amended to date, of each of the
Conveyed Subsidiaries. Such organizational documents are in full force and
effect and no Conveyed Subsidiary is in violation of any provision of such
organizational documents.
(b) Schedule 5.3(b) sets forth the authorized capital stock of the Conveyed
--- ----------------
Subsidiaries and the number of shares of each class of capital stock in each
such Conveyed Subsidiary which are issued and outstanding. All of the issued
and outstanding shares of capital stock of each Conveyed Subsidiary are duly
authorized, validly issued, fully paid and non-assessable, and were not issued
in violation of statutory or contractual preemptive or similar rights. Except as
set forth on Schedule 5.3(b), (i) there are no bonds, debentures, notes or
---------------
other indebtedness having general voting rights or convertible into securities
having such rights of any Conveyed Subsidiary, issued and outstanding; (ii)
there are no shares of capital stock or other voting securities of any Conveyed
Subsidiary authorized, issued or outstanding; and (iii) there are no outstanding
warrants, options, agreements, subscriptions, convertible or exchangeable
securities or other commitments pursuant to which any of the Conveyed
Subsidiaries is or may become obligated to issue, sell, purchase, return or
redeem any shares of capital stock or other securities of the Conveyed
Subsidiaries and no equity securities of any of the Conveyed Subsidiaries are
reserved for issuance for any purpose.
(c) Schedule 5.3(c) sets forth the name and the jurisdiction of
--- ----------------
incorporation of all Subsidiaries of the Conveyed Subsidiaries. Each such
--- ----
Subsidiary is duly organized, validly existing and, where applicable, in good
---
standing under the Laws of its jurisdiction of organization, and has the
--
corporate power and authority to own, lease and operate its properties and
--
assets and to carry on its business as currently conducted. Each such
--
Subsidiary is duly qualified to do business and, where applicable, in good
--
standing in each jurisdiction where the nature of its business or properties
--
makes such qualification necessary, except in jurisdictions where the failure to
--
be so qualified would not, individually or in the aggregate, result in fines or
penalties in excess of $10,000,000 or otherwise result in a Material Adverse
Effect. All of the issued and outstanding shares of capital stock of each such
Subsidiary are duly authorized, validly issued, fully paid and non-assessable,
and were not issued in violation of statutory or contractual preemptive or
similar rights, and a Conveyed Subsidiary or Subsidiary of a Conveyed Subsidiary
owns such shares, free and clear of all Liens except Permitted Encumbrances,
preemptive rights and similar rights and claims by third parties. Except as set
forth on Schedule 5.3(c), (i) there are no bonds, debentures, notes or other
----------------
indebtedness having general voting rights or convertible into securities having
such rights) of any Subsidiary issued and outstanding; (ii) there are no shares
of capital stock or other voting securities of any Subsidiaries authorized,
issued or outstanding; and (iii) there are no outstanding warrants, options,
agreements, subscriptions, convertible or exchangeable securities or other
commitments pursuant to which any of the Subsidiaries is or may become obligated
to issue, sell, purchase, return or redeem any shares of capital stock or other
securities of the Subsidiaries and no equity securities of any of the
Subsidiaries are reserved for issuance for any purpose. Except as set forth on
Schedule 5.3(c), there are no voting trusts or other arrangements or
----------------
understandings with respect to the voting of the capital stock of any of the
-----------
Subsidiaries. None of the Subsidiaries is required to redeem, repurchase or
---
otherwise acquire shares of its capital stock, including as a result of the
---
consummation of the transactions contemplated by this Agreement, and none of the
---
Subsidiaries has acquired its own shares of capital stock, given financial
assistance in the acquisition of its own shares of capital stock, nor reduced
its capital.
Section 5.4 Non-Contravention. The execution, delivery and performance of
-----------------
this Agreement by Pfizer and the consummation of the transactions contemplated
hereby do not and will not (i) violate any provision of the certificate of
incorporation or bylaws of Pfizer or the comparable organizational documents of
any of the Stock Selling Corporations, the Asset Selling Corporations or the
Conveyed Companies; (ii) subject to obtaining the consents referred to in
Schedule 5.4, conflict with, or result in the breach of, constitute a default
-------
under, result in the termination, cancellation or acceleration (whether after
the giving of notice or the lapse of time or both) of any right or obligation of
the Seller Corporations or the Conveyed Companies under, or to a loss of
any benefit of the Business to which the Seller Corporations or the Conveyed
Companies is entitled under, any Material Contract, lease of real estate or
license of Intellectual Property to which any Seller Corporation or Conveyed
Company is a party or to which its assets are subject and which relates to the
Business; and (iii) assuming compliance with the matters set forth in Sections
5.5 and 6.5, violate or result in a breach of or constitute a default under any
Law or other restriction of any Governmental Authority to which any Seller
Corporation or Conveyed Company is subject; except, with respect to clauses (ii)
and (iii), for any violations, breaches, conflicts, defaults, terminations,
cancellations or accelerations as would not, individually or in the aggregate,
result in damages in excess of $10,000,000.
Section 5.5 Governmental Authorization. Other than as set forth in Schedule
-------------------------- --------
5.5, the execution and delivery of this Agreement by Pfizer do not require any
---
consent or approval of any Governmental Authority, except for consents or
approvals, the failure of which to obtain, would not result in fines or
penalties in excess of $10,000,000 or otherwise result in a Material Adverse
Effect.
Section 5.6 Financial Information; Books and Records. (a) Except as set
------------------------------------------
forth in Schedule 5.6(a), the Financial Statements have been prepared in
----------------
accordance with GAAP, and fairly present in all material respects, (i) the
financial condition, assets and liabilities of the Business (excluding Excluded
Assets and Retained Liabilities) as of the dates therein specified; and (ii) the
results of operations of the Business for the periods indicated. Schedule
--------
5.6(b) sets out the descriptions and amounts of deferred Taxes as shown in the
-
Financial Statements.
(b) The audited financial statements for the years ended December 31, 2000
and December 31, 2001 previously delivered by Pfizer to Purchaser relating to
the Business were prepared in accordance with GAAP, and fairly present in all
material respects, (i) the financial condition, assets and liabilities of the
Business as of the dates therein specified and (ii) the results of operations of
the Business for the periods indicated.
(c) The unaudited interim statement of income and loss of the Business for
the year ended December 31, 2002 and the statements of inventory and accounts
receivables as at December 31, 2002 which are attached hereto in Schedule 5.6(c)
---------------
have been prepared by Pfizer and are derived from the books and records of the
Business and, subject to the Interim Period Adjustments, fairly present in all
material respects the results of operations and inventories and receivable
accounts of the Business for the periods and dates indicated, and are consistent
with Pfizer's internal accounting policies.
(d) The amount of receivables set forth on Schedule 5.6(c) was derived from
---------------
transactions in the ordinary course of Business reflected in the books and
records of the Business and, subject to the Interim Period Adjustments, and
subject to reserves with respect to such receivables, was recorded in accordance
with GAAP.
(e) The inventory set forth on Schedule 5.6(c) was reflected in the books
---------------
and records of the Business and, subject to the Interim Period Adjustments, and
subject to reserves with respect to such inventory, was recorded in accordance
with GAAP.
Section 5.7 Absence of Material Changes. Since December 31, 2001, except as
---------------------------
set forth in Schedule 5.7, (i) the Business has been conducted only in the
------------
ordinary course of business consistent with past practice; (ii) there has not
occurred any event having, and there has not been, a Material Adverse Change and
there have not occurred any events or changes (including the incurrence of any
liabilities of any nature, whether or not accrued or contingent) in or to the
Business which would have, individually or in the aggregate, a Material Adverse
Change; (iii) there has not been any sale, lease, license, abandonment or other
disposition by any of the Conveyed Companies or the Asset Selling Corporations
of any material assets used in the Business, except (a) in the ordinary course
of the Business; (b) to another Conveyed Company or Asset Selling Corporation;
or (c) relating to the transactions contemplated hereby; and (iv) there has not
been any increase or enhancement of the compensation or benefits of Employees
other than in the ordinary course of the Business.
Section 5.8 No Litigation. Except with respect to Environmental Laws (which
-------------
are the subject of Section 5.11) and as may be set forth on Schedule 5.8,
------------
as of the date hereof, no litigation, investigation or proceeding by or before
any Governmental Authority is pending against or, to the Knowledge of Pfizer,
threatened in writing against any Seller Corporation or Conveyed Company which
would reasonably be likely to result in damages in excess of $10,000,000.
Section 5.9 Compliance with Laws. Except with respect to Environmental Laws
--------------------
(which are the subject of Section 5.11) and Product Registrations (which are the
subject of Section 5.10), and except as to matters otherwise set forth in the
Agreement or set forth in Schedule 5.9:
-------------
(a) none of the Asset Selling Corporations and Conveyed Companies is in
default or violation of any term, condition or provision of its respective
organizational documents or any Laws applicable to the ownership or operation of
the Business, except to the extent that the failure to comply therewith
would not result in fines or penalties in excess of $10,000,000 or otherwise
result in a Material Adverse Effect; and
(b) each Seller Corporation and each Conveyed Company possesses, and is in
compliance with the terms of, all Governmental Authorizations necessary for the
lawful conduct of the Business as it is currently conducted, except where the
failure to possess any such Governmental Authorization would not result in fines
or penalties in excess of $10,000,000 or otherwise result in a Material Adverse
Effect.
Section 5.10 Product Registrations; Regulatory Compliance. Except with
-----------------------------------------------
respect to Environmental Permits (which are the subject of Section 5.11):
(a) Schedule 5.10 sets forth, as of the date hereof, a list of all material
--- --------------
Governmental Authorizations granted to Pfizer or any of its Affiliates by or
pending with any Governmental Authority in any particular country to market any
product of the Business (the "Product Registrations");
----------------------
(b) except as set forth in Schedule 5.10, to the Knowledge of Pfizer, all
-------------
products sold under the Product Registrations are manufactured and marketed in
all material respects in accordance with the specifications and standards
contained in such Product Registrations; and
(c) except as set forth in Schedule 5.10, an Asset Selling Corporation or
-------------
Conveyed Company is the sole and exclusive owner of the Product Registrations
and has not granted any right of reference with respect thereto, and with
respect to Product Registrations owned by Asset Selling Corporations, all such
Product Registrations are transferable to the Purchaser as contemplated hereby,
except where the inability to transfer any such Product Registration would not
reasonably be expected to have a Material Adverse Effect.
Section 5.11 Environmental Matters. To the Knowledge of Pfizer, and except
---------------------
as set forth in Schedule 5.11 or previously disclosed in the ▇▇▇▇▇▇ document
-------------
room maintained at the offices of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, located at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, containing the documents referenced in the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Sword United States (Milford, CT), Environmental, Health and
Safety Due Diligence Index and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Sword non-United States
(Acton, UK; Caracas, Venezuela; Guangzhou, China; and Solingen, Germany)
Environmental Health and Safety Due Diligence Index:
(a) (i) each of the Conveyed Companies, Pfizer and each Pfizer Affiliate in
relation to the Business and each of the facilities are, and since June 19, 2000
have been, in compliance with all applicable Environmental Laws and/or
Environmental Permits; and (ii) in respect of the facilities no person is
undertaking, nor has Pfizer or any Pfizer Affiliate received written notice that
they are or may become subject to, Remedial Action or enforcement action under,
or are not otherwise in compliance with, any applicable Environmental Laws
and/or Environmental Permits, except for such non-compliance, Remedial Actions
or enforcement actions that would not reasonably be expected to give rise to
material Environmental Liabilities;
(b) all Environmental Permits required under all applicable Environmental
Laws in relation to the facilities have been obtained and are in full force and
effect, and Pfizer has not received any written notice that any of the
facilities' Environmental Permits will be revoked, suspended or not renewed,
except for such failures to obtain, revocations, suspensions or failures to
renew as would not reasonably be expected to give rise to material Environmental
Liabilities;
(c) no written claims, including Third Party Claims and claims from
Governmental Authorities, have been made or threatened that could reasonably be
expected to result in Environmental Liability arising from or as a result of (i)
on-site exposures to Hazardous Substances at the facilities; (ii) Releases of
Hazardous Substances at or from any facilities; or (iii) off-site treatment,
storage or disposal of Hazardous Substances transported from the facilities,
except for such claims that would not reasonably be expected to give rise to
material Environmental Liabilities;
(d) There have been no Releases of Hazardous Substances at any facility
except such Releases that would not reasonably be expected to give rise to
material Environmental Liabilities;
(e) copies of all material environmental audits and other assessments,
reviews and reports, written claims and environmental test results in the
possession or control of Pfizer or any Pfizer Affiliate relating to the Business
and/or the Seller's Business or any of the facilities have been provided to the
Purchaser and are listed in Schedule 5.11; and
--------------
(f) In selling stock or assets, the Conveyed Companies have not entered into
any indemnification agreements that would reasonably be expected to result in
material Environmental Liabilities.
Section 5.12 Material Contracts. (a) Except for agreements entered into
-------------------
after the date hereof or as set forth on Schedule 5.12 (the "Material
-------------- --------
Contracts"), none of the Conveyed Companies, nor any Asset Selling Corporation
is a party to or bound by any written:
(i) contract, agreement or other arrangement for the purchase of Inventories
or other personal property with any supplier or for the furnishing of
services to the Business providing for financial commitments in excess of (A)
$50,000 and extending beyond one year from the date hereof or (B) $100,000;
(ii) contract, agreement and other arrangement for the sale of Inventories
or other personal property with any supplier or for the furnishing of services
by the Business, in each case with firm commitments in excess of three years
from the date hereof;
(iii) broker, distributor, dealer, manufacturer's representative, franchise
or agency agreements related to the Business the terms of which provide for
financial commitments in excess of $50,000;
(iv) contract or agreement relating to indebtedness for borrowed money,
factoring arrangements, sale and leaseback transactions or the deferred purchase
price of property, in each case relating to the Business and with respect to
which a Conveyed Company or Asset Selling Corporation is an obligor in excess of
$50,000;
(v) research and development or design agreement relating to the Business
the terms of which provide for aggregate commitments to be paid by or to a
Conveyed Company or Asset Selling Corporation in excess of $50,000;
(vi) other than intercompany agreements that are not being assigned to or
assumed by Purchaser, agreement entered into since January 1, 2000 providing for
the acquisition or disposition of any capital stock of any Conveyed Company, the
Purchased Assets or assets of a Conveyed Subsidiary and having an aggregate
value in excess of $5,000,000, other than the sale of Inventories in the
ordinary course of the Business consistent with past practice or the sale or
disposal of obsolete plant or equipment;
(vii) partnership or joint venture agreements to which any of the Conveyed
Companies is a party;
(viii) contracts relating to the Business, other than sales of Inventories
in the ordinary course of business providing for rights of indemnification or
exculpation by any of the Conveyed Companies or Asset Selling Corporations in
favor of any officer, director, employee or financial advisor of any of the
Conveyed Companies or Asset Selling Corporations;
(ix) any employment agreements, or, to the Knowledge of Pfizer, oral
employment agreements, between Pfizer or any of its Affiliates (including, but
not limited to, the Conveyed Companies and the Asset Selling Corporations, on
the one hand, and an employee of the Business, on the other hand) providing for
compensation in excess of $150,000 annually;
(x) contracts relating to the Business between any Conveyed Company or Asset
Selling Corporation and Pfizer, or any of its Affiliates;
(xi) contracts limiting or restraining any of the Conveyed Companies from
engaging or competing in any lines of businesses with any Person; and
(xii) any contract relating to the Business not entered into in the ordinary
course of business which requires the annual payment or receipt of $500,000 or
more by Pfizer or any of its Affiliates, and which is not otherwise disclosed
pursuant to the foregoing clauses (i) through (xi).
(b) Except as disclosed in Schedule 5.12, (i) each Material Contract is
--------------
valid and binding on the Asset Selling Corporation or Conveyed Company that is a
party thereto, and, to the Knowledge of Pfizer, the other party thereto,
and is in full force and effect and has not been modified or amended; and (ii)
no Asset Selling Corporation or Conveyed Company is in breach of, or default
under, any such Material Contract, which breach or default is reasonably likely
to result in damages in excess of $10,000,000.
Section 5.13 Intellectual Property. (a) Schedule 5.13(a) sets forth a list
--------------------- ----------------
of all registered Business Intellectual Property and all registered Company
Intellectual Property and all such rights are owned legally or beneficially by
the company identified against the relevant right in Schedule 5.13(a). Except
----------------
as set forth in Schedule 5.13(a), (i) to the Knowledge of Pfizer, no Company
----------------
Intellectual Property or Business Intellectual Property or any other
Intellectual Property licensed or controlled by the Business that is in each
case material to the operations of the Business is invalid or unenforceable;
(ii) to the Knowledge of Pfizer, no third party is challenging in writing the
ownership, validity or enforceability of any material Intellectual Property; and
(iii) the Intellectual Property disclosed in Schedule5.13(a) is free and
---------------
clear of any Liens, other than Permitted Encumbrances.
(b) All renewal, application and other official registry fees due at the
date of this Agreement have been or will be paid.
(c) Schedule 5.13(c) sets forth a list of all material licenses and
--- -----------------
agreements in relation to trademark, patent or know-how (including, without
---
limitation, letters of consent and undertakings) entered into by any Asset
---
Selling Corporation in connection with the Business or by any of the Conveyed
---
Companies. No such licenses and agreements are terminable by reason of the
--
transactions contemplated by this Agreement and no Asset Selling Corporation,
--
Conveyed Company or third party is in breach of any license or agreement
--
required to be listed in Schedule 5.13(c), except for terminations or breaches
--
that would not be reasonably likely to result in damages in excess of
$10,000,000.
(d) Except as set forth in Schedule 5.13(d), to the Knowledge of Pfizer no
-----------------
third party is infringing or making unauthorized use of any of the Business
Intellectual Property or Company Intellectual Property or any other Intellectual
Property licensed or controlled by the Business and to the Knowledge of Pfizer,
the activities of the Business do not infringe or make unauthorized use of the
Intellectual Property of any third party and, to the Knowledge of Pfizer, no
third party has claimed or inferred that the activities of the Business infringe
or make unauthorized use of any Intellectual Property of such third party,
except to the extent that damages resulting from any such infringement would not
exceed $10,000,000.
(e) The Business Intellectual Property, the Company Intellectual Property
and the Intellectual Property licensed to a Conveyed Company or Asset Selling
Corporation pursuant to the agreements disclosed in Schedule 5.13(c) (together
----------------
with any Intellectual Property provided pursuant to the Transitional Services
Agreement or Transitional Intellectual Property License Agreement) comprises all
the Intellectual Property which is necessary to operate the Business in
substantially the same manner immediately after Closing as it is currently being
operated.
(f) Except as set forth in Schedule 5.13(f), to the Knowledge of Pfizer, (i)
----------------
none of the Business Intellectual Property or the Company Intellectual Property
is the subject of any opposition proceedings and (ii) no Asset Selling
Corporation or Conveyed Company is opposing any Intellectual Property related to
the Business owned by a third party.
(g) To the Knowledge of Pfizer, no Asset Selling Corporation or Conveyed
Company has disclosed any confidential Business Intellectual Property to any
third party other than under an obligation of confidentiality.
(h) To the Knowledge of Pfizer, none of the current or former employees,
officers or directors of any Asset Selling Corporation or Conveyed Company (i)
has violated any written non-disclosure agreement affecting any material
Technology Rights, (ii) has disclosed any material Technology Rights to any
third party except subject to an appropriate confidentiality agreement or as
required by a Governmental Authority, or (iii) has done anything to compromise
the confidential, proprietary, and/or trade secret status of any of the material
Technology Rights.
(i) Except for such Intellectual Property to be made available pursuant to
the terms of the Transitional Services Agreement and the Transitional
Intellectual Property License Agreement, there is no material Intellectual
Property utilized in the Business that is subject to an agreement or arrangement
pursuant to which such Intellectual Property is licensed to or used by Pfizer or
any of its Affiliates (other than any Asset Selling Corporation or Conveyed
Company). The consummation of the transactions contemplated by this Agreement
will not result in the loss or impairment of any rights of any Conveyed Company,
or any Affiliate of Purchaser that is acquiring Purchased Assets from an Asset
Selling Corporation, to own, use or license any material Intellectual Property.
Section 5.14 Real Property. (a) Schedule 5.14(a) sets forth a true and
-------------- -----------------
complete list of all real property (i) in which any Asset Selling Corporation or
Conveyed Company holds legal or equitable title or (ii) which is leased by
any Asset Selling Corporation or Conveyed Company and in each case is utilized
primarily in the Business (collectively, the "Real Property"). Except as set
-------------
forth in Schedule 5.14(a), each Asset Selling Corporation or Conveyed Company
-----------------
has marketable title to, or a valid leasehold interest entitling them to the
sole and unencumbered right to possession and use of, all of their respective
Real Properties utilized in the Business, free and clear of all Liens of any
kind or character, other than Permitted Encumbrances.
(b) Except as set forth on Schedule 5.14(a), there are no leases, ground
----------------
leases, licenses or other occupancy agreements affecting any of the Real
Property or to which any Asset Selling Corporation or Conveyed Company is a
party or bound with respect to the Real Property (other than any such leases,
ground leases, licenses or other occupancy agreements with respect to any sales
office or warehouse as would not require in the aggregate payments in excess of
$10,000,000). Each lease of Real Property is a valid and binding obligation of
the relevant Asset Selling Corporation or Conveyed Company and, to the knowledge
of Pfizer, the other party thereto, and no Asset Selling Corporation or
Conveyed Company has received or given written notice of a default under any
lease to which any Real Property is subject, and no event or condition exists
which constitutes a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default by any Asset Selling Corporation or
Conveyed Company, or, to the Knowledge of Pfizer, any other party thereto, under
any such lease, except for such breaches, violations and defaults which would
not be reasonably likely to result in damages in excess of $10,000,000 in the
aggregate.
(c) There are (i) to the Knowledge of Pfizer, no plans by any Governmental
Authority which are reasonably likely to result in the imposition of any general
or special assessment relating to any of the Real Property; (ii) no
non-conforming uses, variances, special exceptions, conditions, permits or
agreements (other than non-conforming uses and variances that exist as the
result of variances properly granted by the appropriate Governmental Authority)
pertaining to any of the Real Property imposed on or granted by or entered into
by any Asset Selling Corporation or Conveyed Company which are enforceable by
any Governmental Authority; and (iii) no written notices from any Governmental
Authority which have been received by any Asset Selling Corporation or Conveyed
Company alleging a violation of any applicable building, land use, zoning, fire,
health or safety laws, codes, ordinance or rules, or requiring or calling
attention to the need for any work, repair, construction, alteration, or
installation on, or in connection with, any of the Real Property, except in the
case of clauses (ii) and (iii) hereof for such nonconforming uses, variances,
special exceptions, conditions, permits and agreements and failures to perform
such work, repair, construction, alteration or installation as would not be
reasonably likely to result in damages in excess of $10,000,000. There is no
pending or, to the Knowledge of Pfizer, threatened change in the zoning
classification of any parcel of the Real Property and no condemnation or eminent
domain proceeding against any Real Property is pending or, to the Knowledge of
Pfizer, threatened.
(d) Each Asset Selling Corporation or Conveyed Company has rights of access
to entry to the Real Property. To the Knowledge of Pfizer, there are no
unrecorded easements relating to the Real Property and no Person or Governmental
Authority is encroaching upon any of the Real Property in a way that materially
impairs the use of such property. Except as set forth in Schedule 5.14(d), (i)
----------------
to the Knowledge of Pfizer, no Person or Governmental Authority has notified any
of the Asset Selling Corporations or Conveyed Companies of a claim that any
activities of the Business are encroaching upon the properties, easements or
rights of way of others (ii) no activities of the Asset Selling Corporations or
Conveyed Companies are encroaching on any Person or Governmental Authority, and
(iii) there are no parties in possession having or, to the Knowledge of Pfizer,
claiming rights to possession of any of the Real Property.
(e) To the Knowledge of Pfizer, except as set forth in Schedule 5.14(e), all
----------------
of the Purchased Assets consisting of real estate, buildings, and equipment
(whether owned or leased) currently used in the normal operations of the
Business have been maintained in reasonable operating condition in a manner
consistent with the normal maintenance procedures of the Business and are free
from material defects, except for such defects that reasonably would be expected
to result in the cost of repair or replacement of $10,000,000 or more in the
aggregate other than replacement for normal and planned obsolescence.
Section 5.15 Assets. (a) Except as set forth in Schedule 5.15(a), each
------ -----------------
Asset Selling Corporation or Conveyed Company has marketable title to, or a
valid leasehold interest entitling them to, the sole and unencumbered right to
possession and use of all of their respective personal property (tangible and
intangible) primarily used in the Business, free and clear of Liens of any kind
or character, other than Permitted Encumbrances.
(b) Except as set forth in Schedule 5.15(b) and except for Affiliates and
----------------
Subsidiaries of Pfizer that will provide transitional services pursuant to the
Transitional Services Agreement, the Asset Selling Corporations and Conveyed
Companies are the only Affiliates of Pfizer engaged in any aspect of the
Business. Except as set forth in Schedule 5.15(b) and except for Affiliates and
----------------
Subsidiaries of Pfizer that will provide transitional services pursuant to
the Transitional Services Agreement and subject to Sections 2.3 and 7.3(f), at
the Closing, Purchaser will own, receive or have the right to use or receive all
of the assets, contracts, facilities, approvals, licenses, permits and
franchises necessary to operate the Business in substantially the same manner
immediately after the Closing as it is currently being operated.
(c) Schedule 5.15(c) contains a list of each lease pursuant to which any
--- -----------------
Asset Selling Corporation or Conveyed Company leases personal property which
---
involves payment over the remaining term of such lease of more than $1,000,000
---
and which in each case is not cancelable upon six months' notice or less without
penalty of more than $100,000. All such personal property leases are valid,
binding and enforceable in accordance with their terms, and are in full force
and effect. Each Asset Selling Corporation or Conveyed Company has complied
with all material obligations thereunder and there are no existing defaults by
any Asset Selling Corporation or Conveyed Company or, to the Knowledge of
Pfizer, by any other party thereunder; no event has occurred which (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) would constitute a default of any Asset Selling Corporation or Conveyed
Company thereunder, and, to the Knowledge of Pfizer, no event has occurred which
(whether with or without notice, lapse of time or the happening or occurrence of
any other event) would constitute a default by any other party thereunder,
except, in each case, as would not be reasonably likely to result in damages in
excess of $10,000,000.
(d) To the Knowledge of Pfizer, all material tangible personal property
included within the Purchased Assets (other than assets included in the Working
Capital Statement) is in reasonable operating condition and repair, ordinary
wear and tear excepted, except for such Assets the failure to be in such
conditions is reasonably expected to result in the cost of repair or replacement
of $10,000,000 or more in the aggregate other than replacement for normal and
planned obsolescence.
Section 5.16 Taxes. To the Knowledge of Pfizer, except as set forth in
-----
Schedule 5.16,
----------
(a) (i) All Tax Returns that are required to be filed on or before the date
hereof by or on behalf of each Conveyed Company and each Asset Selling
Corporation, or with respect to the operations of the Business, have been filed,
except with respect to Tax Returns that in the aggregate are not material;
(ii) all Taxes shown to be due and payable on such Tax Returns have been paid
(including, for any Tax Return that was not timely filed, any penalties and
interest with respect thereto); (iii) each such Tax Return (insofar as it
relates to the activities or income of a Conveyed Company or the Business) is
true, correct and complete in all material respects; (iv) all required Tax books
and records have been maintained by Pfizer, the Asset Selling Corporations or
Conveyed Companies in all material respects, and such books and records contain
sufficient detail to determine the material Tax consequences that would arise on
any disposal or realization of any Purchased Asset and any assets of the
Conveyed Companies that are owned at the Closing Date; and (v) all material
Non-Returned Taxes (defined below) due by or with respect to the income, assets
or operations of the Conveyed Companies for all taxable periods ending on or
before the Closing Date have been paid or accrued and reserved against in the
Working Capital Statement. "Non-Returned Taxes" shall mean Taxes with respect
to which no Tax Return was required to be filed on or prior to the Closing Date
by or on behalf of a Conveyed Company.
(b) None of the Conveyed Companies currently is the beneficiary of any
extension of time within which to file any Tax Return.
(c) (i) There are no Liens for material Taxes upon any of the assets of the
Business, except for Liens for Taxes not yet due and payable or being contested
in good faith; (ii) no Tax Return that includes any Conveyed Company is
currently being examined by any taxing authority or is the subject of any
pending Tax, administrative or judicial proceeding, which examination or
proceeding, together with all other examinations and proceedings, could
reasonably be expected to result in a liability for a material amount of Taxes;
and (iii) there are no outstanding written agreements or waivers extending the
statute of limitations applicable to any such Tax Return or, in the case of any
Asset Selling Corporation, to the extent related to the Business, which
agreements or waivers, together with all other agreements and waivers, could
reasonably be expected to result in a liability for a material amount of Taxes.
(d) (i) No Conveyed Company has entered into any "safe harbor" or "tax
benefit" lease pursuant to which tax benefits were or will be transferred to any
other Person and (ii) all Taxes that each Conveyed Company is required by law to
withhold or collect in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party have been
withheld or collected and have been paid over to the proper authorities to the
extent due and payable, except for such Taxes that in the aggregate are not
material.
(e) None of the Conveyed Companies (i) has been a member of an affiliated
group filing Consolidated Tax Returns within the meaning of Code Section
1504(a), or a member of a combined, consolidated or unitary group for state,
local, or foreign Tax purposes, with respect to Taxes for a taxable period for
which the statute of limitations has not expired, other than a group the common
parent of which was Pfizer; or (ii) is liable for Taxes of any Person (other
than the Conveyed Companies) under Treasury Regulation Section 1.1502-6(a) or
any corresponding provision of state, local or foreign Tax laws, as a transferee
or successor by contract or otherwise.
Section 5.17 Employee Benefits. (a) Schedule 5.17 contains a true and
------------------ --------------
complete list of each Plan and Foreign Plan. Each of the Plans that is subject
to section 302 of Title IV of ERISA or section 412 of the Code is hereinafter
referred to as a "Title IV Plan". Except as disclosed in Schedule 5.17 and
-------------- -------------
except in the ordinary course of business, none of the Asset Selling
Corporations or Conveyed Companies or any ERISA Affiliate has any commitment or
formal plan, whether legally binding or not, to create any additional Plans or
Foreign Plans or modify or change any existing Plans or Foreign Plans that would
affect any employee or former employee of any Asset Selling Corporation or
Conveyed Company and no such change with respect to benefits provided under any
Plan or Foreign Plan are presently under serious consideration by any Asset
Selling Corporation or Conveyed Company. There are no other employee benefit
plans of any nature offered to employees of the Business, other than those set
forth on Schedule 5.17.
--------------
(b) With respect to each Plan, Pfizer has made or will make available to
Purchaser prior to the date of this Agreement true and complete copies of the
Plan, including any amendments thereto (or if the Plan is not a written Plan, a
description thereof), any related trust or other funding vehicle, the most
recent reports or summaries required under ERISA or the Code, and the most
recent determination letter received from the IRS with respect to each Plan
intended to qualify under section 401 of the Code. With respect to each Foreign
Plan set forth in Schedule 5.17, Pfizer has made or will make available to
-------------
Purchaser prior to the date of this Agreement true and complete copies of such
Foreign Plan and any amendments thereto (or if the Foreign Plan is not a written
Foreign Plan, a description thereof), any related trust or other funding vehicle
and the most recent reports or summaries required under local law, if any. With
the exception of the Foreign Plans in the United Kingdom, Germany, Japan,
France, Canada and Taiwan, no Seller Corporation maintains or contributes to any
pension plan, program or arrangement with respect to Employees (non-US) in any
non-US jurisdiction other than Foreign Plans that are required to be maintained
or contributed to under the Laws of the relevant jurisdiction.
(c) No condition exists that presents a material risk to any U.S. Asset
Selling Corporation or Conveyed Company or any ERISA Affiliate of incurring any
liability under Title IV or section 302 of ERISA, other than liability for
premiums due the Pension Benefit Guaranty Corporation ("PBGC") (which premiums
----
have been paid when due).
(d) The PBGC has not instituted proceedings to terminate any Title IV Plan
and to the Knowledge of Pfizer, no condition exists that presents a material
risk that such proceedings will be instituted.
(e) No Title IV Plan is a "multiemployer pension plan," as defined in
section 3(37) of ERISA, nor is any Title IV Plan a plan described in section
4063(a) of ERISA. Within the six year period prior to the date hereof, none of
the U.S. Asset Selling Corporations or Conveyed Companies or any ERISA Affiliate
has made or suffered a "complete withdrawal" or a "partial withdrawal", as such
terms are respectively defined in sections 4203 and 4205 of ERISA (or any
liability resulting therefrom has been satisfied in full).
(f) As of the date hereof, there are no pending investigations, audits or
other proceedings or inquiries by the Department of Labor, the IRS, or any other
federal or state governmental authority concerning any of the Plans.
(g) To the Knowledge of Pfizer, each Plan has been operated and administered
in all material respects in accordance with its terms and applicable law,
including but not limited to ERISA and the Code. To the Knowledge of Pfizer,
each Foreign Plan has been operated and administered in all material respects in
accordance with its terms and applicable local law.
(h) To the Knowledge of Pfizer, each Plan intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under Section 501(a) of the Code.
To the Knowledge of Pfizer, each Plan intended to satisfy the requirements of
Section 501(c)(9) of the Code has satisfied such requirements.
(i) Except as set forth in Schedule 5.17(i), no Plan or Foreign Plan
-----------------
provides medical, surgical, hospitalization, death or similar benefits (whether
or not insured) for employees or former employees of any Asset Selling
Corporation or Conveyed Company for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan", or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
(j) Except as disclosed in Schedule 5.17(j) or as otherwise expressly
-----------------
provided in this Agreement, the consummation of the transactions contemplated by
this Agreement will not (i) entitle any current employee of any U.S. Asset
Selling Corporation or Conveyed Company, and to the Knowledge of Pfizer, entitle
any current or former employee or officer of any foreign Asset Selling
Corporation or Conveyed Company, to severance pay, redundancy payments,
indemnity payments, unemployment compensation or any other payment or benefit,
except as expressly provided in this Agreement or as mandated under applicable
law, or (ii) accelerate the time of payment or vesting, or increase the amount
of compensation due any such current employee of any U.S. Asset Selling
Corporation or Conveyed Company or, to the Knowledge of Pfizer, any current or
former employee or officer of any foreign Asset Selling Corporation or Conveyed
Company.
(k) Except as disclosed in Schedule 5.17(k), there are no pending, or, to
----------------
the Knowledge of Pfizer, threatened or anticipated material claims against any
Plan, or, to the Knowledge of Pfizer, pending or threatened against any Foreign
Plan, by any employee or former employee of any Asset Selling Corporation or
Conveyed Company covered under any such Plan or Foreign Plan, or otherwise
involving any such Plan or Foreign Plan (other than routine claims for
benefits).
(l) To the Knowledge of Pfizer, all Foreign Plans that are subject to the
laws of any jurisdiction outside the United States are in material compliance
with such applicable laws, including relevant Tax laws, and the requirements of
any trust deed under which they are established. To the Knowledge of Pfizer,
all required contributions payable to such Foreign Plans have been made, and all
such Foreign Plans are in material compliance with any applicable funding
requirements.
Section 5.18 Brokers. Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, no
-------
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Pfizer. Pfizer
is solely responsible for the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated.
Section 5.19 Related Party Transactions. Except as disclosed in Schedule
---------------------------- --------
5.19, no director, officer or partner of any Conveyed Company (i) has
--
outstanding any Indebtedness or other similar obligations to any Asset Selling
--
Corporation or Conveyed Company, Pfizer or any Affiliate thereof other than for
travel expenses in the ordinary course of business in accordance with written
policies of Pfizer and consistent with past practice and other than obligations
incurred in the ordinary course of business, in the case of any single
individual, in an amount less than $5,000; (ii) to the Knowledge of Pfizer, owns
any direct or indirect interest of any kind in, or is a director, officer,
employee, party, affiliate or associate of, or consultant or lender to, or
borrower from, or has the right to participate in the management, operations or
profits of, any Person which is (x) a competitor, supplier, customer,
distributor, lessor, tenant, creditor or debtor of any Asset Selling Corporation
or Conveyed Company, (y) engaged in a business related to the business of any
Asset Selling Corporation or Conveyed Company or (z) participating in any
transaction to which any Asset Selling Corporation or Conveyed Company is a
party or (iii) is otherwise a party to any binding agreement with any Asset
Selling Corporation or Conveyed Company.
Section 5.20 Labor and Employment Matters; Collective Bargaining.
--------------------------------------------------------
(a) Except as set forth in Schedule 5.20, none of the Asset Selling
--------------
Corporations, with respect to the Business, and Conveyed Companies, is a party
to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization or other
representative of employees, body of employees or staff association or works
council. Except as set forth in Schedule 5.20, there is no labor strike,
--------------
slowdown or stoppage or other industrial action pending or, to the Knowledge of
Pfizer, threatened against or affecting any Asset Selling Corporation or
Conveyed Company, nor has there been any such activity within the past three
years. Except as set forth in Schedule 5.20, there are currently no ongoing
-------------
collective bargaining negotiations relating to the employees of any Asset
Selling Corporation or Conveyed Company.
(b) Except as set forth in Schedule 5.20, there is no unfair labor practice
-------------
charge, and no charge, claim, inquiry, investigation or complaint or other
proceeding pending which Pfizer or any Asset Selling Corporation or Conveyed
Company has been, served with, or otherwise has knowledge of, or, to the
Knowledge of Pfizer, has any such proceeding been threatened against any Asset
Selling Corporation or Conveyed Company, before the National Labor Relations
Board, the U.S. Equal Employment Opportunity Commission, the U.S. Department of
Labor, the U.S. Department of Justice, the Occupational Safety and Health
Administration, the Immigration and Nationalization Service, or any other state
or federal Governmental Authority or regional authority in any jurisdiction
responsible for investigating and/or adjudicating claims relating to the terms
and conditions of employment, including employment discrimination or wage and
hour issues.
Section 5.21 Employees (non-US).
-------------------
(a) Schedule 5.21 sets forth a list, by country, of the number of Employees
--- --------------
(non-US), the identities of the Employees' Employer and the location of the
Employees' employment.
(b) Each Asset Selling Corporation and Conveyed Company has complied and
will until Closing comply with all of its common law, statutory and other legal
obligations owed to or in respect of every Employee (non-US) and all collective
and/or recognition agreements, regulations, policies, procedures, customs,
practices and codes of conduct affecting its employment of any such persons and
has maintained current, materially accurate and suitable records relating to the
service of all such persons.
Section 5.22 Workers' Compensation. Schedule 5.22 describes all workers'
---------------------- -------------
compensation arrangements in the United States, whether insured or self-insured,
affecting the Asset Selling Corporations and Conveyed Companies with
respect to the Business, and the aggregate amount of all claims made under such
arrangements within the last five years. Except as described on Schedule 5.22,
-------------
there are no assessments, provisional assessments, reassessments, supplementary
assessments, penalty assessments or increased assessments which are due and
unpaid on the date hereof or which will be unpaid at Closing except as may be
accrued in the statement of the Working Capital of the Business as of the
Closing Date.
Section 5.23 New Products. (a) Schedule 5.23 sets forth the current plan
------------- -------------
of Pfizer with respect to the introduction by the Business of new products in
calendar year 2003 ("New Products"). To the Knowledge of Pfizer, there have
-------------
been no events or occurrences which would materially impact the plan set forth
on Schedule 5.23.
--------------
(b) To the Knowledge of Pfizer, no manufacturing or design problems have
been encountered with respect to the production of the Intuition product line in
quantities consistent with Schedule 7.19(a) which (i) have not been
-----------------
resolved; (ii) are reasonably likely to significantly delay the introduction of
the New Products in accordance with the time lines set forth on Schedule 5.23,
-------------
or would significantly impact the Business's ability to meet anticipated
customer orders at levels anticipated by Pfizer in connection with such
introduction, or (iii) will result in capital expenditures or other expenses
which are materially greater than the budgeted expenditures for such
introductions in accordance with Schedule 7.19(a).
-----------------
Section 5.24 No Undisclosed Liabilities. Except as reflected in the
----------------------------
Financial Statements, or as may be set forth on any Schedule to this Agreement,
there are not, and since December 31, 2001, the Business has not incurred, any
liabilities or obligations (whether direct, indirect, accrued, contingent or
absolute, and whether due or to become due, nor, to the Knowledge of Pfizer,
have any facts arisen or occurred which could reasonably form a basis therefor),
which have had, or reasonably would be expected to have, a Material Adverse
Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Pfizer as follows:
Section 6.1 Organization and Qualification. Purchaser is a corporation duly
------------------------------
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has full corporate power and authority to
conduct its business as it is presently being conducted and to own and lease its
properties and assets.
Section 6.2 Corporate Authorization. Purchaser has all requisite corporate
------------------------
power and authority to execute and deliver this Agreement, and to perform its
obligations hereunder. The execution, delivery and performance by Purchaser of
this Agreement have been duly authorized by all requisite corporate action on
the part of Purchaser.
Section 6.3 Binding Effect. This Agreement constitutes a valid and binding
--------------
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by general principles of equity (regardless or whether enforcement is sought
in a proceeding in equity or law).
Section 6.4 Non-Contravention. The execution, delivery and performance by
-----------------
Purchaser of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
certificate of incorporation, bylaws or other organizational documents of
Purchaser; (ii) result in a breach of, or default under, or right to accelerate
with respect to, any term or provision of any contract, commitment or other
obligation to which Purchaser and any of its Affiliates is a party or is
subject; or (ii) assuming compliance with the matters set forth in Sections 5.5
and 6.5, violate or result in a breach of or constitute a default under any Law
or other restriction of any Governmental Authority to which Purchaser is
subject.
Section 6.5 Governmental Authorization. Except as set forth in Schedule
--------------------------- --------
6.5, the execution and delivery of this Agreement by Purchaser do not and will
not require any material consent or approval of any Governmental Authority.
Section 6.6 Third Party Approvals. Except for any third party approvals as
---------------------
are reflected in Schedule 6.6, the execution, delivery and performance by
-------------
Purchaser of this Agreement and the transactions contemplated hereby do not
require any consents, waivers, authorizations or approvals of, or filings with,
any third Persons which have not been obtained by Purchaser.
Section 6.7 Financial Capability. On the Closing Date, Purchaser will have
--------------------
sufficient funds to make the Aggregate Payment on the terms and conditions
contemplated by this Agreement.
Section 6.8 Securities Act. Purchaser is acquiring the Shares solely for
---------------
the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act. Purchaser
acknowledges that the Shares are not registered under the Securities Act, any
applicable state securities Law or any applicable foreign securities Laws, and
that such Shares may not be transferred or sold except pursuant to the
registration provisions of the Securities Act or applicable foreign securities
Laws or pursuant to an applicable exemption therefrom and pursuant to state
securities Laws as applicable. Purchaser (either alone or together with its
advisors) has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Shares and is capable of bearing the economic risks of such investment.
Section 6.9 Condition of the Business. Purchaser is purchasing the Shares
-------------------------
and the Purchased Assets based on the results of its inspections and
investigations and on the representations and warranties of Pfizer expressly set
forth in this Agreement. Purchaser, in acquiring the Shares and the Purchased
Assets, is not relying on any statement or material made or distributed by
Pfizer or its representatives other than the representations, warranties and
covenants contained in this Agreement. Purchaser acknowledges that, with
respect to all representations, warranties and covenants contained in this
Agreement, none of the representations, warranties and covenants shall apply or
be deemed to apply with respect to the business or operations of Pharmacia
Corporation or its Affiliates to the extent that Pfizer is currently a party to
a contract to purchase the business of Pharmacia Corporation (the "Transaction")
or to the extent that such Transaction is consummated prior to the Closing Date.
Any claims Purchaser may have for breach of representation or warranty shall be
based solely on the representations and warranties of Pfizer set forth in
Article V hereof. All warranties of habitability, merchantability and fitness
for any particular purpose, and all other warranties arising under the Uniform
Commercial Code (or similar foreign laws), are hereby waived by Purchaser. In
addition, Purchaser acknowledges and agrees that no Seller Corporation intends
to give any "guarantee" nor is any "guarantee" being given by any Seller
Corporation under or pursuant to this Agreement or otherwise in connection with
the transactions contemplated hereby within the meaning of Sections 443 and 444
of the German Civil Code.
Section 6.10 Litigation. There is no material action, order, writ,
----------
injunction, judgment or decree outstanding, or suit, litigation, proceeding,
labor dispute (other than routine grievance procedures or routine, uncontested
claims for benefits under any benefit plans for any officers, employees or
agents of Purchaser), arbitration, investigation or reported claim, pending or,
threatened, before any court, governmental entity or arbitrator, which seeks to
delay or prevent the consummation of the transactions contemplated by this
Agreement or would, if successful, materially and adversely affect the ability
of Purchaser to consummate the transactions contemplated by this Agreement.
Section 6.11 Brokers. Except for Banc of America Securities LLC, no broker,
-------
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Purchaser. Purchaser is solely
responsible for the fees and expenses of Banc of America Securities LLC.
ARTICLE VII
COVENANTS
Section 7.1 Information and Documents. (a) From and after the date hereof
-------------------------
and pending Closing, upon reasonable advance notice, the Seller Corporations
shall permit Purchaser and its representatives to have reasonable access, during
regular normal business hours, to the assets, employees, books and records
of the Seller Corporations and the Conveyed Companies relating to the Business,
and shall furnish, or cause to be furnished, to Purchaser, such financial, tax
and operating data and other available information with respect to the Business
as Purchaser shall from time to time reasonably request; provided, however, that
-------- -------
no such access shall unreasonably interfere with the Seller Corporations' and
the Conveyed Companies' operation of their respective businesses, including the
Business; and provided further that the Seller Corporations shall not be
-------- -------
required to take any action which could constitute a waiver of attorney-client
privilege. Purchaser and its representatives, upon their request to Pfizer,
shall be granted full access to the document room located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇, ▇▇.
(b) All information received by Purchaser and given by or on behalf of the
Seller Corporations or the Conveyed Companies in connection with this Agreement
and the transactions contemplated hereby will be held by Purchaser and its
Affiliates, agents and representatives as "Evaluation Material", as defined in,
-------------------
and pursuant to the terms of, the Confidentiality Agreement.
Section 7.2 Conduct of Business. From and after the date hereof and to the
-------------------
Closing, except (i) as set forth on Schedule 7.2 or as otherwise contemplated by
------------
this Agreement or (ii) as Purchaser shall otherwise consent in writing,
which consent shall not be unreasonably withheld, Pfizer agrees that it will
conduct the Business, and will cause the Business to be conducted, in the
ordinary course consistent with past practice, and use commercially reasonable
efforts to preserve intact the Business and related relationships with
customers, suppliers and other third parties and keep available the services of
the present Employees. From and after the date hereof and to the Closing,
except (i) as set forth on Schedule 7.2 or as otherwise contemplated by this
------------
Agreement, (ii) as Purchaser shall otherwise consent in writing, which consent
shall not be unreasonably withheld, and (iii) as may be necessary or advisable,
in the sole discretion and at the expense of Pfizer, to remove the Excluded
Assets (provided that Pfizer shall be responsible for any damages in connection
with its actions taken pursuant to this clause (iii)), Pfizer covenants and
agrees that it shall cause the Conveyed Companies and the Asset Selling
Corporations, in each case with respect to the Business, not to:
(a) (i) in respect of any Conveyed Company, declare, set aside or pay any
dividend or other distribution payable in stock or property (other than in cash)
with respect to its capital stock or (ii) redeem, purchase or otherwise
acquire directly or indirectly any of its shares of capital stock;
(b) (i) in respect of any Conveyed Company, issue, sell, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire any shares of, capital stock of any class or any other securities
(including voting debt) of any Person; (ii) in respect of any Conveyed Company,
amend the terms of any such securities or agreements outstanding on the date
hereof; or (iii) in respect of any Conveyed Company, split, combine or
reclassify any of its shares of capital stock;
(c) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any material assets other than in the ordinary course consistent with
past practice;
(d) (i) grant any increase in the compensation payable or to become payable
to any of its executive officers or vice presidents except in the ordinary
course consistent with past practice and/or in accordance with existing
agreements or written policies; (ii) (A) adopt any new, (B) except as required
by statute or regulation, amend or otherwise increase any existing, or (C)
accelerate the payment or vesting of the amounts payable or to become payable
under any bonus, incentive compensation, deferred compensation, severance,
profit sharing, stock option, stock purchase, insurance, pension, retirement,
programs, plans, arrangements or other employee benefit plan agreement or
arrangement, except in the ordinary course consistent with past practice and/or
as required by existing written agreements or policies; (iii) enter into any
agreements or severance agreement with or, except in the ordinary course
consistent with past practice and/or in accordance with its existing written
policies or applicable law, grant any severance or termination pay to any
officer, director or employee; or (iv) voluntarily recognize a collective
bargaining representative for its employees without the benefit of an election
pursuant to National Labor Relations Board regulations;
(e) modify or amend any material term or rights or terminate any of the
Material Contracts or waive, release or assign any material rights or claims, or
amend, revise or restate the respective certificate of incorporation or by-laws,
or equivalent governing documents of any Conveyed Company;
(f) acquire or agree to acquire by merging or consolidating with, or by
purchasing any material portion of the stock or assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof;
(g) change any of the accounting methods used by it, unless required by
GAAP;
(h) in respect of any Conveyed Company, adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization under local law;
(i) other than for transfers of cash, Cash Equivalents, obsolete equipment
and capital items consistent with the Business' capital expenditure plan and
inventory in the ordinary course consistent with past practice, transfer any
assets to any other Affiliate, or assume any Liabilities of any other Affiliate,
except by operation of law in the ordinary course; and
(j) enter into an agreement, contract, commitment or arrangement to do any
of the foregoing, or to authorize, recommend, propose or announce an intention
to do any of the foregoing.
Section 7.3 Best Efforts; Certain Governmental Matters. (a) Upon the terms
------------------------------------------
and subject to the conditions herein provided (including Section 2.3), each
of the parties hereto agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary for it to do under applicable Laws to consummate and make effective
the transactions contemplated by this Agreement, including (i) to comply
promptly with all legal requirements which may be imposed on it with respect to
this Agreement and the transactions contemplated hereby (which actions shall
include furnishing all information required by applicable Law in connection with
approvals of or filings with any Governmental Authority); (ii) to satisfy the
conditions precedent to the obligations of such party hereto; (iii) to obtain
any consent, authorization, order or approval of, or any exemption by, any
Governmental Authority or other public or private third party required to be
obtained or made by Purchaser, the Seller Corporations or the Conveyed Companies
in connection with the acquisition of the Shares and the Purchased Assets or the
taking of any action contemplated by this Agreement; (iv) to effect all
registrations, filings and transfers of Environmental Permits necessary for the
operation of the Business and required under Environmental Laws; and (v) to take
any action reasonably necessary to vigorously defend, lift, mitigate, or rescind
the effect of any litigation or administrative proceeding adversely affecting
the acquisition of the Shares and the Purchased Assets or this Agreement,
including promptly appealing any adverse court or administrative decision. The
parties shall work together to promptly and diligently meet the requirements set
forth in items (i) to (v) above in a manner that is reasonable to both parties,
provided, however, to the extent necessary to consummate the transactions
-------- -------
contemplated hereby prior to the date set forth in Section 9.1(b), the parties
------
shall use their best efforts to satisfy all obligations under (i) to (v) above.
(b) With respect to the Milford Facility, Pfizer, in consultation with
Purchaser, shall have responsibility for complying with requirements imposed by
the Connecticut Transfer Act, Conn. Gen. Stat. 22a-134 et seq., due to the
--------
transactions contemplated by this Agreement, including preparing and submitting
forms and reports, executing required forms as the Certifying Party (as defined
under the Connecticut Transfer Act), implementing Remedial Action, and paying
fees and costs associated therewith.
(c) Purchaser shall execute and comply with any and all land use
restrictions, institutional and engineering controls and/or Governmental Orders
at a Facility where Remedial Action is being conducted pursuant to this
Agreement that (i) are required by any Governmental Authority; (ii) do not
interfere with the commercial/industrial use of the Facility; (iii) prevent the
use of groundwater; or (iv) Pfizer's and Purchaser's environmental consultants
agree are necessary because further Remedial Action will not achieve the
Applicable Remedial Action Standard. If Pfizer's and Purchaser's environmental
consultants are unable to reach such joint agreement, the provisions of Section
8.10 (d)(iii) shall apply.
(d) Subject to appropriate confidentiality protections, and except where
prohibited by Law, each of the parties hereto will furnish to the other party
such necessary information and reasonable assistance as such other party may
reasonably request in connection with the foregoing and will provide the other
party with copies of all filings made by such party with any Governmental
Authority and, upon request, any other information supplied by such party to a
Governmental Authority in connection with this Agreement and the transactions
contemplated hereby.
(e) Without limiting the generality of the undertakings pursuant to this
Section 7.3, (i) Purchaser and Pfizer agree to provide or cause to be provided
promptly to Governmental Authorities with regulatory jurisdiction over
enforcement of any applicable Competition Laws ("Governmental Antitrust Entity")
-----------------------------
information and documents requested by any Governmental Antitrust Entity or
necessary, proper or advisable to permit consummation of the acquisition of the
Shares and the Purchased Assets and the transactions contemplated by this
Agreement; (ii) without in any way limiting the other provisions of this Section
7.3, Purchaser and Pfizer agree to file any notification and report form and
related material required under the HSR Act, the European Commission, if
applicable, and such other jurisdictions as the parties shall determine, as soon
as practicable and in any event not later than 15 Business Days after the date
hereof, and thereafter use its best efforts to certify as soon as practicable
its substantial compliance with any requests for additional information or
documentary material that may be made under the HSR Act; (iii) Purchaser shall
proffer to (A) sell or otherwise dispose of, or hold separate and agree to sell
or otherwise dispose of specific assets or categories of assets or businesses of
the Conveyed Companies and the Purchased Assets or any of Purchaser's other
assets or businesses now owned or presently or hereafter sought to be acquired
by Purchaser; (B) terminate any existing relationships and contractual rights
and obligations; and (C) amend or terminate such existing licenses or other
intellectual property agreements and to enter into such new licenses or other
intellectual property agreements (and, in each case, to enter into agreements
with the relevant Governmental Antitrust Entity giving effect thereto), in each
case with respect to the foregoing clauses (A), (B) or (C) if such action is
necessary or reasonably advisable to obtain approval or consummation of the
transactions contemplated by the Agreement by any Governmental Antitrust Entity;
and (iv) Purchaser shall take promptly, in the event that any permanent or
preliminary injunction or other order is entered or becomes reasonably
foreseeable to be entered in any proceeding that would make consummation of the
acquisition of the Shares and the Purchased Assets and the transactions
contemplated hereby in accordance with the terms of this Agreement unlawful or
that would prevent or delay consummation of the acquisition of the Shares and
the Purchased Assets or the other transactions contemplated by this Agreement,
any and all steps (including the appeal thereof, the posting of a bond or the
taking of the steps contemplated by clause (iii) of this subsection (c))
necessary to vacate, modify or suspend such injunction or order so as to permit
such consummation on a Schedule as close as possible to that contemplated by
this Agreement. Each of Pfizer and Purchaser will provide to the other copies
of all correspondence between it (or its advisor) and any Governmental Antitrust
Entity relating to the acquisition of the Shares and the Purchased Assets or any
of the matters described in this Section 7.3. Pfizer and Purchaser agree that
all telephone calls and meetings with a Governmental Antitrust Entity regarding
the acquisition of the Shares and the Purchased Assets or any of the matters
described in this Section 7.3 shall include representatives of Pfizer and
Purchaser.
(f) The parties expressly agree: (i) that any breach by either party of its
obligations under Section 7.3(e) will cause irreparable harm to the other party;
(ii) that each party has agreed to this transaction in specific reliance on the
other party's obligations under Section 7.3(e), and would not have otherwise
agreed to go forward; and (iii) therefore, each party is entitled to specific
performance of the other party's obligations under Section 7.3(e), and each
party hereby agrees in advance to the granting of such specific performance of
such obligations without proof of actual damages or harm.
(g) In the event an approval or action of a Governmental Authority (other
than a Governmental Authority of the United States of America (or any state or
subdivision thereof), Japan, the European Union, or any Key European Country)
having jurisdiction that is necessary to lawfully consummate the transactions
contemplated hereby is not obtained on or prior to the Closing Date, Pfizer and
Purchaser agree to effect Closing (including payment of the total Aggregate
Payment and Aggregate Purchase Price), subject to the terms of this Agreement,
with respect to all Shares, Purchased Assets and Assumed Liabilities outside of
the jurisdiction of any such Governmental Authority; provided, however, that the
-------- -------
obligations of the parties hereto set forth in this Section 7.3 shall continue
with respect to any such approval or action until such approval or action is
given or taken, as the case may be, and upon the occurrence of such approval or
action, the parties hereto shall effect transfer of the effected Shares,
Purchased Assets and Assumed Liabilities in accordance with the Foreign
Implementing Agreements for the jurisdiction relating thereto, subject to the
provisions of Section 2.3(c) hereof. Each such transfer, upon occurrence, shall
be retroactive to and be deemed to have occurred on the Closing Date. As of the
Closing Date, Pfizer and Purchaser shall, subject to applicable Law, enter into
mutually agreeable alternative business arrangements consistent with the terms
of this Agreement or other arrangements which provide Purchaser with the net
economic benefit or loss (as determined pursuant the Letter Agreement attached
as Exhibit H) of the affected Conveyed Subsidiaries and Purchased Assets from
and after the Closing Date and continuing until any such third-party consent is
obtained.
Section 7.4 Tax Matters.
------------
(a) (i) Preparation and Filing of Tax Returns. Pfizer shall prepare and
----------------------------------------
timely file or shall cause to be prepared and timely filed all federal, state,
local and foreign Tax Returns in respect of the Conveyed Companies and the Asset
Selling Corporations, their assets and activities that (i) are required to
be filed (taking into account extensions) on or before the Closing Date; or (ii)
are required to be filed (taking into account extensions) after the Closing Date
and (A) are Consolidated Tax Returns of Pfizer and its Affiliates; (B) are with
respect to Income Taxes and are required to be filed on a separate Tax Return
basis for any Tax period ending on or before the Closing Date; or (C) are to be
filed by an Asset Selling Corporation. Purchaser shall prepare or cause to be
prepared and shall file or cause to be filed all other Tax Returns required of
the Conveyed Companies, or in respect of their assets or activities or required
to be filed after the Closing Date with respect to the Purchased Assets or the
Business. Any such Tax Returns that include periods ending on or before the
Closing Date or that include the activities of the Conveyed Companies or an
Asset Selling Corporation (with respect to the Business) prior to the Closing
Date shall, insofar as they relate to the Conveyed Companies or an Asset Selling
Corporation (with respect to the Business) prior to the Closing Date, be on a
basis consistent with the last previous such Tax Returns filed in respect of the
Conveyed Companies or such Asset Selling Corporation (with respect to the
Business), unless Pfizer or Purchaser, as the case may be, concludes that there
is no reasonable basis for such position. With respect to any Tax Return
required to be filed by Purchaser for a taxable period that includes (but does
not end on) the Closing Date (a "Straddle Period"), Purchaser shall deliver, at
---------------
least 30 days prior to the due date for the filing of such Tax Return (taking
into account extensions), to Pfizer a statement setting forth the amount of Tax
for which Pfizer is responsible pursuant to Sections 7.4(g) and a copy of such
Tax Return. Pfizer shall have the right to review such Tax Return and statement
prior to the filing of such Tax Return. Pfizer and Purchaser agree to consult
and resolve in good faith any issue arising as a result of Pfizer's review of
such Tax Return and statement and mutually to consent to the filing of such Tax
Return as promptly as possible. Unless otherwise required by an appropriate
Governmental Authority, neither Purchaser nor any of its Affiliates shall file
any amended Tax Returns for any periods for or in respect of the Conveyed
Companies with respect to which Purchaser is not obligated to prepare or cause
to be prepared the original such Tax Returns pursuant to this Section 7.4(a)(i)
without the prior written consent of Pfizer which consent shall not be
unreasonably withheld. Neither Pfizer nor any of its Affiliates shall file any
amended Tax Returns for or in respect of the Conveyed Companies for such periods
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld. Notwithstanding any provision of this Agreement,
Purchaser may, at its option, make an election under Section 338(g) of the Code
with respect to its purchase or deemed purchase of any of the Conveyed
Companies, in which event Purchaser shall be solely responsible for preparing
the separate return for any U.S. corporation reflecting the consequences of such
election, and shall be responsible for and shall pay, any and all Taxes
resulting from such election, including any additional Taxes arising as a result
of a reduction in the amount of foreign tax credits and other Tax credits that
are available to Pfizer (computed as if Pfizer did not utilize any foreign tax
credits or any other Tax credits, net operating losses or other Tax attributes
to reduce the additional Taxes), and shall indemnify Pfizer (in the manner
provided herein) with respect to such Taxes. If Pfizer determines that any of
the Conveyed Companies is entitled to file or make a formal or informal claim
for refund or file an amended Tax Return providing for a refund with respect to
a period for which it is obligated to prepare or cause to be prepared the
original such Tax Return pursuant to this Section 7.4(a)(i), Pfizer shall be
entitled to file or make such claim or amended Tax Return on behalf of such
Conveyed Company and will be entitled to control the prosecution of such refund
claims. In the event that Pfizer fails to prepare and timely file or cause to
be prepared and timely filed any Tax Return or pay Taxes shown to be due with
respect to a Tax Return which Pfizer is obligated to prepare and file or cause
to be prepared and filed pursuant to Section 7.4(a), Purchaser shall have the
right to prepare and file such Tax Return and pay the Taxes shown to be due on
such Tax Return notwithstanding anything in this Section 7.4(g)(i) and 7.4(b) to
the contrary, provided such Tax Return shall be prepared and filed on a basis
consistent with the principles set forth in this Section 7.4(g)(i).
(ii) Internal Restructurings. Pfizer shall have the right to cause an
---- ------------------------
election pursuant to Treasury Regulations Section 301.7701-3 to be filed,
----
effective from a date on or prior to the Closing Date, for those of the Conveyed
----
Companies that are not United States entities to be treated as a branch for
U.S. federal Income Tax purposes. Prior to the Closing, Pfizer shall provide
Purchaser with a list of all Conveyed Companies for which elections pursuant to
Treasury Regulations Section 301.7701-3 have been filed, together with copies of
such elections.
(b) Payment of Taxes. Except for Taxes that are accrued or reserved against
--- ----------------
in the Working Capital Statement, Pfizer shall pay or cause to be paid (A)
all Taxes due with respect to Tax Returns which Pfizer is obligated to prepare
and file or cause to be prepared and filed pursuant to Section 7.4(a); and (B)
all Taxes due with respect to Tax Returns for Straddle Periods for which Pfizer
is responsible pursuant to Section 7.4(g)(i). Purchaser shall pay or cause to
be paid (A) all Taxes due with respect to Tax Returns which Purchaser is
obligated to prepare and file or cause to be prepared and filed pursuant to
Section 7.4(a) other than Taxes which Pfizer shall pay or cause to be paid in
accordance with the preceding sentence; and (B) all Taxes owed by the Conveyed
Companies other than Taxes which Pfizer shall pay or cause to be paid in
accordance with the preceding sentence.
(c) Tax Sharing Agreements. On the Closing Date, all Tax sharing agreements
--- ----------------------
and arrangements, including profit pooling or similar arrangements under
non-United States law, between (i) the Conveyed Companies, on the one hand; and
(ii) Pfizer or any of its Subsidiaries or Affiliates (other than the Conveyed
Companies), on the other hand, shall be terminated effective as of the close of
the Closing Date and have no further effect for any taxable year or period
(whether a past, present or future year or period), and no additional payments
shall be made thereunder with respect to any period after the Closing Date in
respect of a redetermination of Tax liabilities or otherwise.
(d) Carryforwards and Carrybacks. Purchaser shall cause the Conveyed
--- ------------------------------
Companies to elect, when permitted by law, to carry forward any net operating
---
loss, charitable contribution credit or other item arising after the Closing
--
Date that could, in the absence of such an election, be carried back to a
--
taxable period of the Conveyed Companies ending on or before the Closing Date in
--
which the Conveyed Companies were included in a Consolidated Tax Return of
Pfizer and its Affiliates. Purchaser, on its own behalf and on behalf of its
Affiliates, hereby waives any right to use or apply any net operating loss,
charitable contribution credit or other item (including any net capital loss,
foreign tax credit or research and development credit) of the Conveyed Companies
for any tax year ending on any date following the Closing Date to any period of
the Conveyed Companies ending on or before the Closing Date. If any net capital
loss, foreign tax credit or research and development credit shall be carried
back to any such period, Purchaser shall indemnify Pfizer and its Affiliates
(other than the Conveyed Companies) for all reasonable costs and expenses
incurred by Pfizer or any of such Affiliates in filing such claims or in
connection with any audit of such claims.
(e) Refunds. Pfizer shall be entitled to retain, or receive prompt payment
--- -------
from Purchaser or any of its Subsidiaries or Affiliates (including the Conveyed
Companies) of, any refund or credit with respect to Taxes (including refunds and
credits arising by reason of amended Tax Returns filed after the Closing Date or
otherwise) with respect to any Tax period or portion thereof that ends on or
before the Closing Date relating to the Conveyed Companies or any Asset Selling
Corporation; provided, however, that (i) Purchaser and the Conveyed Companies
-------- -------
shall be entitled to retain, or receive prompt payment from Pfizer of, any such
refund or credit to the extent that such refund or credit arises as a result of
the use or application (as provided in Section 7.4(d)) of any net capital loss,
foreign tax credit or research and development credit of the Conveyed Companies
for any tax year ending on any date following the Closing Date to any period of
the Conveyed Companies ending on or before the Closing Date; and (ii) to the
extent that Pfizer or any of its Affiliates (other than the Conveyed Companies)
would, but for the carryback by the Conveyed Companies of any such net capital
loss, foreign tax credit or research and development credit, be entitled to a
refund or credit in respect of any net capital loss, foreign tax credit or
research and development credit of Pfizer or any of Pfizer's Affiliates (other
than the Conveyed Companies), Pfizer shall be entitled to receive prompt payment
from Purchaser of any such amount to the extent Purchaser has previously
received a refund or credit from a carryback to Pfizer's return. Purchaser and
the Conveyed Companies shall be entitled to retain, or receive prompt payment
from Pfizer of, any refund or credit with respect to Taxes with respect to any
taxable period beginning after the Closing Date relating to any of the Conveyed
Companies. Purchaser and Pfizer shall equitably apportion any refund or credit
with respect to Taxes with respect to a Straddle Period in a manner consistent
with the principles set forth in Section 7.4(g)(iii). If a refund for which a
payment has been made to a party hereto (the recipient) by the other party
hereto (the payor) pursuant to this Section 7.4(e) is subsequently reduced or
disallowed, the recipient shall indemnify the payor for any Tax assessed against
the Payor by reason of such reduction or disallowance.
(f) Tax Cooperation. Each of Purchaser and Pfizer shall provide each other
--- ----------------
with such information and records and make such of its officers, directors,
employees and agents available as may reasonably be requested by such other
party in connection with the preparation of any Tax Return or any audit or other
proceeding that relates to the Conveyed Companies or the Asset Selling
Corporations. Purchaser shall, within 120 days after the Closing Date, prepare
or cause the Conveyed Companies to prepare, in a manner consistent with the
Conveyed Companies' past practice, the tax work paper preparation package or
packages necessary to enable Pfizer to prepare Tax Returns Pfizer is obligated
to prepare or cause to be prepared.
(g) Tax Indemnification.
--- --------------------
(i) Pfizer shall indemnify, defend and hold Purchaser and its Affiliates
harmless from and against all liability for U.S. and non-U.S. Taxes of the
Conveyed Companies for any taxable period that ends on or before the Closing
Date and the portion of any Straddle Period ending on the Closing Date,
including (A) all liability for any breach of Pfizer's representations and
warranties contained in Article V or covenants contained in this Article VII
with respect to the Conveyed Companies; (B) all liability (as a result of
Treasury Regulation Section 1.1502-6(a) or otherwise) for Taxes of Pfizer or any
other Person (other than the Conveyed Companies) which is or has ever been
affiliated with the Conveyed Companies, or with whom the Conveyed Companies
otherwise join or have ever joined (or are or have ever been required to join)
in filing any consolidated, combined or unitary Tax Return, prior to the
Closing; (C) all liability for Taxes of the Business which constitutes a
Retained Liability pursuant to Section 2.6 of this Agreement; and (D) all
liability for reasonable legal, accounting and appraisal fees and expense with
respect to any item described in clause (A) or (B) above; provided, however,
-------- -------
that Pfizer's indemnity obligation for Taxes pursuant to this Section 7.4(g)(i)
shall be reduced by refunds of Taxes (excluding carrybacks from post-Closing
Date years to the extent permitted hereunder) with respect to such periods
received after the Closing Date by Purchaser or any of its Affiliates and not
previously remitted to Pfizer. Notwithstanding the foregoing, Pfizer shall not
indemnify, defend or hold harmless Purchaser or any of its Affiliates from any
liability for Taxes (a) attributable to (i) any election under any provision of
the Code (including Section 338(g)) or any other action taken, (ii) any failure
to comply with Law or (iii) any other failure to act which constitutes gross
negligence or willful misconduct on the part of Purchaser or any of its
Affiliates that (A) would otherwise give rise to a Pfizer Tax indemnity payment,
(B) is made after the Closing by Purchaser, any of its Affiliates (including the
Conveyed Companies) or any transferee of Purchaser or any of its Affiliates and
(C) is not expressly required or otherwise expressly contemplated by this
Agreement and has not been approved in writing by Pfizer (a "Purchaser Tax
-------------
Act"); or (b) to the extent accrued or reserved against in the Working Capital
Statement. Purchaser shall pay to Pfizer the amount of Tax savings realized by
Purchaser or any of its Affiliates as a result of any loss or credit
carryforwards of the Conveyed Companies existing as of the Closing Date, as soon
as practicable after such savings may be realized. Further, Pfizer's obligation
to indemnify, defend or hold harmless Purchaser or any of its Affiliates from
any liability shall terminate effective with the expiration of the applicable
statute of limitations (including extensions) in respect of such liability.
(ii) Purchaser shall, and shall cause the Conveyed Companies to, indemnify,
defend and hold Pfizer and its Affiliates harmless from and against, (A) except
to the extent Pfizer is otherwise required to indemnify Purchaser for such Tax
pursuant to Section 7.4(g)(i), all liability for Taxes of the Conveyed
Companies; (B) all liability for Taxes attributable to a Purchaser Tax Act,
including all liability for Taxes resulting from Purchaser making an election
under Section 338(g) of the Code with respect to its purchase or deemed purchase
of any of the Conveyed Companies, and any additional Taxes arising as a result
of a reduction in the amount of foreign tax credits and other Tax credits that
are available to Pfizer (computed as if Pfizer did not utilize any foreign tax
credits or other Tax credits, net operating losses or other Tax attributes to
reduce the additional Taxes); and (C) all liability for reasonable legal,
accounting and appraisal fees and expenses with respect to any item described in
clause (A) or (B) above. Purchaser's obligation to indemnify, defend or hold
harmless Pfizer or any of its Affiliates from any liability shall terminate
effective with the expiration of the applicable statute of limitations
(including extensions) in respect of such liability.
(iii) In the case of any Straddle Period:
(A) The periodic Taxes of the Conveyed Companies that are not based on
income or receipts (e.g., property Taxes) for the portion of any Straddle Period
----
ending on the Closing Date (the "Pre-Closing Tax Period") shall be computed
----------------------
based upon the ratio of the number of days in the Pre-Closing Tax Period and the
number of days in the entire Tax Period; and
(B) Taxes of the Conveyed Companies for the Pre-Closing Tax Period (other
than Taxes described in Section 7.4(g)(iii)(A) above) shall be computed as if
such taxable period ended as of the close of business on the Closing Date and,
in the case of any Taxes of the Conveyed Companies attributable to the ownership
by the Conveyed Companies of any equity interest in any partnership or other
"flowthrough" entity, as if a taxable period of such partnership or other
"flowthrough" entity ended as of the close of business on the Closing Date.
(iv) Any indemnity payment required to be made pursuant to this Section
7.4(g) shall be made within 30 days after the indemnified party makes written
demand upon the indemnifying party, but in no case earlier than 5 Business Days
prior to the date on which the relevant Taxes are required to be paid to the
relevant taxing authority (including estimated Tax payments).
(v) Any indemnity payment made pursuant to this Section 7.4(g), other than
for Straddle Period Taxes pursuant to the first sentence of Section 7.4(b)(B)
shall be treated as an adjustment to the price paid by Purchaser for the
relevant Conveyed Company for Tax purposes, unless a final determination with
respect to the indemnified party or any of its Affiliates causes such payment to
be treated other than as an adjustment to the purchase price for federal Income
Tax purposes.
(h) Timing Adjustment. In the event that a final determination (which shall
--- -----------------
include the execution of an IRS Form 870-AD or successor form) results in a
timing difference (e.g., an acceleration of income or delay of deductions) that
----
would increase Pfizer's liability for Taxes pursuant to this Section 7.4 or
results in a timing difference (e.g., an acceleration of deductions or delay of
----
income) that would increase Purchaser's liability for Taxes pursuant to this
Section 7.4, Purchaser or Pfizer, as the case may be, shall promptly make
payments to Pfizer or Purchaser as and when Purchaser or Pfizer, as the case may
be, actually realizes any Tax benefits as a result of such timing difference (or
under such other method for determining the present value of any such
anticipated Tax benefits as agreed to by the parties). Such Tax benefit for
federal, state and local Income Tax purposes shall be computed for any year
using Purchaser's or Pfizer's, as the case may be, actual tax liability with and
without giving effect to such timing difference.
(i) Tax Contests.
--- -------------
(A) If a claim shall be made by any taxing authority (a "Tax Claim") which,
---------
if successful, might result in an indemnity payment pursuant to Section 7.4(g),
the indemnifying party shall promptly notify the indemnified party of such claim
no later than 20 Business Days after such Tax Claim is made; provided,
--------
however, the failure to provide such notification within such period shall not
---
release the indemnifying party from its indemnification obligations hereunder
except to the extent the indemnified party is prejudiced thereby.
(B) With respect to any Tax Claim relating to a taxable period ending on or
before the Closing Date or relating to or affecting a Consolidated Tax Return,
Pfizer shall control all proceedings and may make all decisions taken in
connection with such Tax Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any taxing
authority with respect thereto, and may, in its sole discretion, either pay the
Tax claimed and ▇▇▇ for a refund where applicable law permits such refund suits
or contest the Tax Claim in any permissible manner. Purchaser shall be entitled
to be informed of such Tax Claim within a reasonable time after such Tax Claim
is asserted and the developments with respect to such Tax Claim at any
administrative meeting, conference, hearing or other proceeding.
(C) Except as otherwise provided in Section 7.4(i)(B), Pfizer and Purchaser
shall jointly control and participate in all proceedings taken in connection
with any Tax Claim relating to Taxes of the Conveyed Companies for any Straddle
Period. Neither Pfizer nor Purchaser shall settle any such Tax Claim without
the prior written consent of the other, which shall not be unreasonably
withheld.
(D) Except as otherwise provided in Section 7.4(i)(B), Purchaser shall
control all proceedings with respect to Taxes for any taxable period beginning
after the Closing Date.
(E) Purchaser, the Conveyed Companies and each of their respective
Affiliates, on the one hand, and Pfizer and its respective Affiliates, on the
other, shall cooperate in contesting any Tax Claim, which cooperation shall
include the retention and (upon request) the provision to the requesting party
of records and information which are reasonably relevant to such Tax Claim,
making employees available on a mutually convenient basis to provide additional
information or explanation of any material provided hereunder or to testify at
proceedings relating to such Tax Claim. Purchaser shall execute and deliver
such powers of attorney and other documents as are necessary to carry out the
intent of this Section.
Section 7.5 Employees and Employee Benefits. (a) Employees (US) - Offer of
------------------------------- -------------------------
Employment; Continued Employment; Severance. Purchaser agrees to offer
----------------------------------------------
employment as of 12:01 a.m. on the day immediately following the Closing Date to
each Employee (US) (or to cause the Conveyed Companies to offer to continue the
employment of each of their Employees (US)) in the same or a comparable position
and at a rate of pay at least equal to such Employee's rate of pay in effect on
the Closing Date and with benefits which shall be substantially comparable in
the aggregate to the employee benefits as are set forth in Schedule 7.5(a) and,
---------------
in the event of Purchaser's termination of employment of an Employee (US),
identical to such other benefits as are set forth in the Employee Severance
Program in Schedule 7.5(a)(i). The employee benefit plans, programs, policies,
------------------
and fringe benefits of Purchaser set forth on Schedule 7.5(a)(iii), provided
--------------------
Purchaser makes an additional fully vested contribution of 3.5% of each Affected
Employee's pay (to include base salary, bonus, overtime, shift differentials and
premium pay) for the balance of the two-year benefit comparabilty period (such
period shall be reduced by the period of time during which Purchaser replicates
Pfizer's employee benefit plans), to the Pension Plus Match Account to be
established for each Affected Employee under Purchaser's Defined Benefit Pension
Plan (regardless of whether such Affected Employee is otherwise a participant in
such plan or Purchaser's Savings Plan) shall be deemed substantially comparable
in the aggregate to the employee benefit plans, programs, policies and fringe
benefits of Pfizer. Such contribution by Purchaser to Purchaser's Defined
Benefit Pension Plan shall be made on each of the first and second anniversary
of the Closing Date. Nothing herein shall require Purchaser to provide
post-retirement medical or other post-retirement welfare benefits to any
Affected Employee or their dependents. For purposes of this Section 7.5,
references to "pay" shall include base pay plus any commission, bonus, incentive
pay, overtime, premium pay, and shift differentials, but shall exclude retention
and retention/performance allowances. Such employment shall be at a location
that is no more than 30 miles farther than the distance between the employee's
home and the employee's principal place of employment as of the Closing Date.
Schedule 7.5(a)(ii) (which shall be updated by Pfizer on the Closing Date) shall
------------------
set forth the name of each Employee (US), and his or her current rate of pay,
position and date of hire. Purchaser shall have no obligation whatsoever with
regard to (i) former employees of the Business who are retired, or who are not
or shall have ceased to be Employees (US) as of the Closing Date, or (ii)
employees who do not accept the offer of employment or continuation of
employment given by Purchaser in accordance with this Section 7.5(a) and do not
work for Purchaser or its Affiliates for at least one day, unless such employee
is otherwise an Affected Employee. Purchaser shall be solely responsible for
all salaries or wages (including commissions, bonuses, incentive pay, overtime,
premium pay, shift differentials and severance pay) accruing after the Closing
Date with respect to the Affected Employees. The following conditions of
employment shall remain unchanged until the date immediately following the 2nd
anniversary of the Closing Date: (i) the location requirement described in this
Section 7.5(a) and (ii) the pay and benefits comparability requirements
described in this Section 7.5(a), and the obligations described in Schedule
--------
7.5(a)(i). Notwithstanding the foregoing sentence, Purchaser or its Affiliates
-----
may terminate an Employee (US) during such 2-year period due to
"Performance-Related Terminations" or "Curtailment or Cessation of
Operations/Reorganization/Position Elimination" (as those terms are described in
Exhibit E, the Pfizer Employee Separation Plan) as long as Purchaser or its
Affiliates (i) first offers such employee the opportunity to sign a release
agreement in substantially the form attached hereto as Exhibit F (individual
termination) or Exhibit G (group termination), as appropriate, (ii) pays or
otherwise provides severance benefits to such employee in accordance with
Pfizer's Employee Separation Plan and (iii) provides benefits continuation and
other benefits as set forth in Schedule 7.5(a)(i), provided, however, that
------------------ -------- -------
Purchaser or its Affiliates may terminate an Employee (US) without paying or
otherwise providing severance benefits to such employee in accordance with such
policy and practice if such employee is terminated, in the reasonable discretion
of Purchaser or its Affiliates, "for cause" (as such term is defined in the
Pfizer Employee Separation Plan). Notwithstanding anything to the contrary
herein, on the date immediately following the 2nd anniversary of the Closing
Date, Purchaser shall provide pay and benefits and severance plans, programs and
policies which are no less favorable than those provided to other similarly
situated employees of Purchaser, as the case may be. Except with regard to any
defined benefit pension plans maintained by Purchaser, employees shall also be
provided credit by Purchaser for all service with Pfizer and its Affiliates, to
the same extent as such service was credited for such purpose by Pfizer and its
Affiliates, under (x) all employee benefit plans, programs, policies and fringe
benefits of Purchaser described in Schedule 7.5(a)(iii) for purposes of
---------------------
eligibility, vesting and benefit accrual, and (y) severance plans, programs and
policies for purposes of calculating the amount of each such employee's
severance benefits.
(b) Qualified Plans. (i) Pfizer sponsors the following Plans covering
--- ----------------
Employees (US) which are intended to be qualified under Section 401(a) of the
---
Code (collectively, the "Pfizer Qualified Plans"): the Pfizer Savings Plan (the
-- ----------------------
"Savings Plan") and the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Retirement Plan (the "Retirement
------------- ----------
Plan"). Effective as of the Closing Date, the Seller Corporations shall cause
-
each Affected Employee who is a participant in one or both Pfizer Qualified
Plans to become one hundred percent (100%) vested in his or her accrued benefit
under each such Plan.
(ii) Effective as of 12:01 a.m. on the day immediately following the Closing
Date, each participant in a Pfizer Qualified Plan who is an Affected
Employee shall cease to be an active participant under each such Plan, and shall
become a participant in the Purchaser Qualified Plans as listed in Schedule
--------
7.5(b)(ii) (such plans being collectively referred to as the "Purchaser
------ ---------
Qualified Plans"). Purchaser shall ensure that the Purchaser Qualified Plans
------------
will recognize the accrued service of Affected Employees with Pfizer and its
Affiliates up to and including the Closing Date for all purposes, to the extent
credited under the terms of the corresponding Pfizer Qualified Plan as in effect
on the Closing Date. As soon as practicable after the Closing Date, Pfizer
shall deliver such accrued service data to Purchaser. Purchaser shall assume
all liabilities with respect to Employees (US) under Purchaser Qualified Plans
for benefits accrued after the Closing Date.
(iii) If Purchaser maintains or establishes a Purchaser Qualified Plan that
corresponds with the Savings Plan ("Purchaser Savings Plan"), Pfizer shall
-----------------------
cause, as soon as practicable after the Closing Date, the Savings Plan to
transfer the account balance of each Affected Employee to such Purchaser Savings
Plan as of the valuation date next preceding the date of transfer.
(iv) With respect to the Purchaser Qualified Plan that corresponds to the
Retirement Plan (the "Purchaser Defined Benefit Pension Plan"), Pfizer agrees to
--------------------------------------
calculate and transfer to such Purchaser Defined Benefit Pension Plan as soon as
practicable after the Closing Date the amount required under Section 414(l) of
the Code, reflecting the appropriate PBGC assumptions in effect as of the
Closing Date. In the event the amount required under Section 414(l) of the Code
is less than the aggregate ABO determined as of the Closing Date of the Affected
Employees under the Retirement Plan, Pfizer shall pay in cash (plus interest at
LIBOR minus 1/8% for the period from the Closing Date to the payment date) to
Purchaser upon, or as soon as practicable after, the Closing Date the difference
between the aggregate ABO and the amount of assets transferred to the Purchaser
Defined Benefit Pension Plan pursuant to Section 414(l) of the Code. In
calculating the aggregate ABO for Affected Employees under the Retirement Plan,
Pfizer shall utilize the same assumptions (including the discount rate
assumption) that it used in its most recent financial disclosure for the
Retirement Plan. Service with Pfizer and its Affiliates shall be counted toward
vesting and eligibility under the Purchaser Defined Benefit Pension Plan.
Purchaser shall recognize service with Pfizer and its Affiliates with respect to
the level of benefit accrual to be prospectively credited to such Employee from
the Closing Date forward under the Purchaser Defined Benefit Pension Plan (but
no benefit accrual under the provisions of the Purchaser Defined Benefit Pension
Plan shall be attributable to such service to Pfizer and its Affiliates).
Purchaser shall cause the Purchaser Defined Benefit Pension Plan to maintain as
a separate frozen accrued benefit under such plan the accrued benefit of each
Affected Employee under the Retirement Plan determined as of the Closing Date.
Purchaser shall recognize service with both Pfizer and its Affiliates and
Purchaser for determining any early retirement subsidies that may be
attributable to determining such frozen accrued benefit. In addition, the
optional form of benefit subsidies that are provided under the Retirement Plan
shall be provided on the frozen accrued benefit. As soon as practicable after
the Closing Date, Pfizer shall deliver such accrued service date to Purchaser.
(v) Purchaser, on the one hand, and Pfizer, on the other hand, each agree to
use commercially reasonable efforts and to cooperate with the other to effect as
promptly as possible the transfers of assets contemplated under Sections
7.5(b)(iii) and 7.5(b)(iv), subject to Pfizer's receipt of satisfactory evidence
that the Purchaser Qualified Plans are in compliance with all relevant Laws;
such evidence shall include a current determination letter from the IRS and
representations satisfactory to Pfizer from the administrators of the Purchaser
Qualified Plans. If a current determination letter has not been obtained,
Purchaser and its counsel shall provide a representation that the Purchaser
Qualified Plans are qualified under Section 401(a) of the Code and that a timely
application for a determination letter is pending and that Purchaser will take
all necessary steps to secure a determination letter. Pfizer and Purchaser
shall each bear their own individual costs regarding the transfer of assets as
contemplated under Sections 7.5(b)(iii) and 7.5(b)(iv).
(vi) Pfizer shall deliver to Purchaser as soon as practicable following such
request, all data and records reasonably requested by Purchaser in connection
with its administration of retirement benefits for those Affected Employees
transferred to the Purchaser Qualified Plans.
(c) Non-Qualified Plans. Certain of the Affected Employees participate in
--- --------------------
(i) the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Excess Savings Plan, (ii) the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Excess
Retirement plan, (iii) the Pfizer Supplemental Savings Plan, (iv) the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Incentive Compensation Plan and (v) the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Overseas
Retirement Plan. The pre-Closing liabilities associated with the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Excess Savings Plan, the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Overseas Retirement Plan and the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Incentive Compensation Plan shall remain as liabilities of Pfizer
after the Closing and Pfizer shall administer the benefits payable under those
arrangements. Upon the Closing, Pfizer shall transfer to Purchaser assets equal
to the aggregate accrued liability attributable to the Affected Employees as of
the Closing Date of each non-qualified plan described in this Section 7.5(c)(ii)
and (iii), and Purchaser shall assume all liabilities attributable to the
Affected Employees incurred under said non-qualified plans as of the Closing.
In measuring the liabilities attributable to the Affected Employees under the
non-qualified plans, Pfizer shall use the assumptions (including the discount
rate assumption) utilized in its most recent financial disclosures concerning
the non-qualified plans.
(d) Accrued Entitlements. Purchaser shall be responsible for all accrued
--- ---------------------
entitlements, including vacation days, for Affected Employees as of the Closing
--
Date consistent with Pfizer's policies in respect thereof.
(e) Medical and Welfare Plan Obligations. Effective on the Closing Date and
--- ------------------------------------
continuing until on or about December 31, 2003, each Employee (US) who accepts
employment with Purchaser shall continue to be eligible for and/or to
participate in health and welfare plans that are substantially similar to those
plans currently maintained by Pfizer, and Pfizer shall provide administrative
services with respect to such plans pursuant to the terms of Article 2 of the
Transition Services Agreement. Notwithstanding the foregoing, nothing herein
shall be construed as an obligation by Purchaser to provide post-retirement
medical or other post-retirement welfare benefits to any Affected Employees, and
Purchaser expressly disclaims any obligation to do so. Effective on or about
January 1, 2004, each Employee (US) shall be eligible to participate in those
medical and welfare benefit plans maintained by Purchaser for its similarly
situated Employees, and Purchaser agrees to waive any waiting periods or
limitations for preexisting conditions under its medical, dental, life
insurance, short-term and long-term disability plans, and any other similar such
plans, and shall ensure that such employees are given credit for any amounts
paid toward deductibles, out-of-pocket limits or other fees on or prior to the
Closing Date. Claims by an Affected Employee for medical and dental services
rendered as of 12:01 a.m. on the day immediately following the Closing Date
shall be the responsibility of the medical and dental plans provided by
Purchaser to such employees. Claims incurred for medical and dental services
for Affected Employees rendered prior to and including the Closing Date shall be
the responsibility of the group medical and dental plans of Pfizer or the Seller
Corporation which covered such employees prior to and including the Closing
Date.
(f) Employees (non-US) - Offer of Employment; Continued Employment;
--- ----------------------------------------------------------------------
Severance. Purchaser agrees to offer employment as of 12:01 a.m. on the day
--- -
immediately following the Closing Date to each Employee (non-US) (or to cause
---
the Conveyed Companies to offer to continue the employment of each of their
--
Employees (non-US)) in the same or a comparable position and at a rate of pay at
--
least equal to such employee's rate of pay in effect on the Closing Date and
with benefits which shall be substantially comparable to such employee's
benefits which are in effect on the Closing Date. Schedule 7.5(f) (which shall
---------------
be updated by Pfizer on the Closing Date) shall set forth the name of each
Employee (non-US). Purchaser agrees to deal with employee matters, including
offers of employment, compensation, benefits (including Foreign Plans), and
severance payment and benefit continuation matters for Employees (non-US) in the
same manner as the manner in which Employees (US) matters have been dealt with
in this Article VII, subject to such modifications as are necessary to comply
with applicable Laws of the foreign countries and their political subdivisions;
applicable labor agreements; local Pfizer policies, programs and practices; and
established local business custom in similar transactions. In the event that
Purchaser is required to assume any unfunded liabilities under any Foreign
Plans, such liabilities under such Foreign Plans shall be accrued and provided
for on the Closing balance sheet. In measuring the liabilities under such
unfunded Foreign Plans, Pfizer shall value those liabilities on the same basis
that it valued such liabilities for accounting and funding purposes within the
foreign jurisdiction in which such Plans are maintained. With regard to the
Foreign Plans maintained in Japan, France, Canada and Taiwan, Pfizer will
transfer to the analogous Purchaser Plan as soon as practicable after the
Closing Date the aggregate ABO of the Affected Employees who participate in such
Foreign Plans, or such amount as shall be required by applicable Law or
regulation of the applicable jurisdiction. In the event such legally-required
amount is less than the ABO, Pfizer shall pay in cash (plus interest at LIBOR
minus 1/8% for the period from the Closing Date to the payment date) upon, or as
soon as practicable after, the Closing Date, the difference between the
aggregate ABO and the amount of assets legally required to be transferred.
(i) The calculation of the ABO for purposes of Section 7.5(b)(iv) and this
Section 7.5(f) shall be subject to review and approval of Purchaser's actuary,
but such approval shall relate only to the calculation of the ABO on the basis
set forth in this Agreement and not as to the assumptions themselves.
(ii) Pfizer will use its best efforts to effect the transfer of sponsorship
of the Foreign Plan in the United Kingdom (the "UK ▇▇▇▇▇▇▇▇▇ Sword Pension
--------------------------
Plan") from ▇▇▇▇▇▇▇▇▇ Sword to Pfizer prior to the Closing Date.
(g) Employees (US) and Employees (non-US) Absent on Disability or Leaves of
--- ------------------------------------------------------------------------
Absence - Offer of Employment; Continued Employment; Severance. When an
---------------------------------------------------------------------
Employee (US) or Employee (non-US) who is, on the Closing Date, absent due to
-------
illness or on short-term disability (including maternity disability) or workers'
--
compensation seeks to return to active employment, Purchaser shall offer
immediate employment to such employee in the same or a comparable position to
that which the employee occupied before such absence but only at such time that
such employee is medically capable of performing the essential functions of the
position occupied immediately before such absence. In addition, immediate
employment in the same or comparable positions will be offered by Purchaser to
those Employees (US) and Employees (non-US) returning from authorized leaves of
absence such as parental, family and medical, and military leaves or other
leaves where return to work is subject to statutory requirements. Such
employees, returning from disability or leaves of absence, will be subject to
the same pay, benefits, severance and all other policies, plans, programs and
arrangements as stipulated in this Article VII for similarly situated Employees
(US) and Employees (non-US).
(h) No Third Party Beneficiaries. Except as expressly provided herein,
--- -------------------------------
nothing contained herein, expressed or implied, is intended to confer upon any
---
Employee of Seller Corporations or the Conveyed Companies any benefits under any
benefit plans, programs, policies or other arrangements, including severance
benefits or right to employment or continued employment with Purchaser or any
Affiliate of Purchaser for any period by reason of this Agreement. In addition,
the provisions of this Agreement, in particular this Article VII, are for the
sole benefit of the parties to this Agreement and are not for the benefit of any
third party.
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Enhanced Severance Plan. Pfizer will retain
--- -----------------------------------------
responsibility for all liabilities pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Enhanced
--- ----
Severance Plan ("ESP") incurred on or prior to the Closing Date including any
--- ---
payments and benefits due as a result of the transactions contemplated by this
--
Agreement or as a result of the Closing. With respect to the individuals set
forth on Schedule 7.5(i), Purchaser shall assume responsibility for such
- ----------------
liabilities and obligations pursuant to the ESP incurred as a result of
Purchaser's actions in terminating (either actually or constructively as defined
in the ESP) the employment of any individual listed on Schedule 7.5(i) after the
---------------
Closing Date and within the protection period applicable to such individual
under the ESP.
Section 7.6 Certain Dividends, Etc. Notwithstanding any provision herein to
-----------------------
the contrary (including Section 7.2), each Conveyed Company will be
permitted to distribute to Pfizer or any one or more of its designated
Affiliates, effective as of the Closing Date, up to the amount of its retained
earnings accrued through the Closing Date, but not in excess of cash on hand and
in no event to be effected through any additional borrowings from Pfizer, any of
its Affiliates or any third person. In addition, Pfizer and its Affiliates
shall be permitted to continue to conduct their activities regarding cash
management matters relating to the Business (including the collection and
transfer of accounts receivable and disbursement of funds by Pfizer) in
accordance with the practice in effect as of the date of this Agreement, except
as may be affected by actions taken pursuant to Section 2.4(b) and as may be
necessary to settle intercompany payables and receivables and to effect
intercompany funding. After the Closing Date, Purchaser shall take all actions
(or shall cause its Affiliates to take all actions) reasonably requested by
Pfizer to effect the provisions of this Section 7.6. Any action taken pursuant
to this Section 7.6 after the Closing Date shall be deemed for the purposes of
Section 2.8 to have occurred on the Closing Date and shall be reflected in the
calculation of the Working Capital of the Business pursuant to such Section 2.8.
Section 7.7 Resignations; Delivery of Surveys and Title Policies. (a) At
-----------------------------------------------------
the Closing and except as otherwise requested by Purchaser in writing, Pfizer
will deliver to Purchaser the resignations (effective on or prior to Closing) of
all directors and non-employee officers of each of the Conveyed Companies from
their positions.
(b) Pfizer shall, and shall cause its Affiliates to, deliver to Purchaser
copies of all surveys and title policies relating to each Facility that is
located in the United States and the appropriate evidence of ownership of the
Facilities that are located outside of the United States promptly upon the
receipt of such surveys, title policies and evidence of ownership.
Section 7.8 Bulk Transfer Laws. Purchaser acknowledges that the Seller
--------------------
Corporations have not taken, and do not intend to take, any action required to
comply with any applicable bulk sale or bulk transfer laws or similar laws.
SECTION 7.9 Noncompetition. (a) Subject to the provisions of this Section
--------------
7.9, Pfizer agrees that for a period of 2 years from the Closing Date, Pfizer
shall not, and it shall cause its Subsidiaries not to, compete in any material
respect with the Business as conducted as of the Closing Date ("Competitive
-----------
Activity"); provided, however, that it shall not be deemed to be a violation of
---- -------- -------
this subsection for Pfizer or any of its Subsidiaries (t) to engage, directly or
indirectly, in the research, manufacture or sale of any human pharmaceutical,
human consumer healthcare or animal pharmaceutical product or any medical device
for the delivery of human or animal pharmaceutical products; (u) to invest in or
own any debt securities or other debt obligations; (v) to invest in any third
Person (including any corporation or mutual or other fund) which invests in,
manages or operates a Competitive Activity, so long as Pfizer's or any of its
Subsidiary's investment is less than 15% of the outstanding ownership interest
in such third Person and Pfizer and its Subsidiaries do not control or conduct
such third Person or Competitive Activity; (w) to invest in, own an interest in,
or acquire all or a majority of the stock or assets of any Person which is not
engaged primarily in a Competitive Activity; (x) to invest in securities having
less than 20% of the outstanding voting power of any Person, the securities of
which are publicly traded or listed on any securities exchange or automated
quotation system; (y) to invest in any Person after the Closing Date to the
extent that Pfizer or a Subsidiary had, directly or indirectly, acquired, or had
a right to acquire, such interest prior to the date of this Agreement; or (z) to
own any equity interests through any employee benefit plan or pension plan. For
purposes of this Section 7.9, "engaged primarily in a Competitive Activity"
shall mean that greater than 35% of the aggregate net revenue derived during the
last complete fiscal year of such Person (calculated on a consolidated basis) is
derived from the Competitive Activity. Each investment or acquisition made by
Pfizer or its Subsidiaries which is subject to the provisions of this Section
7.9 must be permissible hereunder at the time of such investment; provided,
--------
however, that any such investment which was permissible when made cannot
---
thereafter be the basis of a claim of violation of this Section 7.9. The
---
restrictions contained in this Section 7.9 shall not apply to any portion of the
--
Business that cannot be sold as a result of any restriction imposed by any
Governmental Authority, any part of the Business subject to the provisions of
7.3(g) or activities in connection with the Business pursuant to the
Transitional Services Agreement.
(b) For a period of 2 years after the Closing Date, Pfizer shall not, and it
shall cause its Subsidiaries not to, directly or indirectly, induce or
attempt to induce any officers, Employees, representatives or agents of
Purchaser or any of its Affiliates engaged solely in the Business to leave the
employ of Purchaser or any such Affiliate for employment with Pfizer or its
Subsidiaries, or violate the terms of their contracts, or any employment
arrangements, with Purchaser or any such Affiliate, except that nothing in this
sentence shall restrict or preclude the rights of Pfizer and its Subsidiaries to
make generalized searches for employees by the use of advertisements in the
media (including trade media) or by engaging search firms to engage in searches
that are not targeted or focused on the Employees employed by the Business.
(c) Notwithstanding anything to the contrary contained in subsection (a) of
this Section 7.9, Pfizer and its Subsidiaries shall not be deemed to have
violated the restrictions contained in Section 7.9(a) in the event that Pfizer
or a Subsidiary acquires (by purchase of stock or assets, merger or otherwise)
or invests in any Person engaged primarily in a Competitive Activity; provided,
--------
however, that Pfizer or such Subsidiary thereafter divests a portion of such
-------
Competitive Activity within 18 months from the date of purchase of such Person
---
so as to be in compliance with Section 7.9(a).
(d) Prior to Closing, except as otherwise agreed in writing, neither
Purchaser nor any of its Affiliates will offer or provide employment on a
full-time or part-time or consulting basis to any individual employed by Pfizer
or any of its Affiliates, except that nothing in this sentence shall restrict or
preclude the rights of Purchaser and its Affiliates to make generalized searches
for employees by the use of advertisements in the media (including trade media)
or by engaging search firms to engage in searches that are not targeted or
focused on the employees of Pfizer or any of its Affiliates.
(e) Pfizer and Purchaser acknowledge that this Section 7.9 constitutes an
independent covenant and shall not be affected by performance or nonperformance
of any other provision of this Agreement. Each of Pfizer and Purchaser has
independently consulted with its counsel and after such consultation agrees that
the covenants set forth in this Section 7.9 are reasonable and proper. It is
the desire and intent of the parties that the provisions of this Section 7.9
shall be enforced to the fullest extent permissible under applicable Law. If
all or part of this Section 7.9 is held invalid, illegal or incapable of being
enforced by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect. If any part of
this Section 7.9 is held to be excessively broad as to duration, scope, activity
or subject, such part will be construed by limiting and reducing it so as to be
enforceable to the maximum extent compatible with applicable Law.
Section 7.10 Transitional Services. At the Closing, Purchaser and Pfizer
----------------------
shall enter into, execute and deliver a transitional services agreement
substantially to the effect set forth in Exhibit C (the "Transitional Services
---------------------
Agreement").
--------
Section 7.11 Transitional Intellectual Property License Agreement. At the
-----------------------------------------------------
Closing, Purchaser and Pfizer shall enter into, execute and deliver a
transitional intellectual property license agreement substantially to the effect
set forth in Exhibit D (the "Transitional Intellectual Property License
---------------------------------------------
Agreement").
-
Section 7.12 Compliance with WARN, Etc. With respect to WARN or other
-----------------------------
similar Laws of any jurisdiction, Purchaser will timely give any notices and
take any other actions as may be required thereunder.
Section 7.13 Foreign Implementing Agreements. As promptly as practicable
---------------------------------
after the date hereof, Pfizer and Purchaser shall cause the Foreign Implementing
Agreements to be prepared and executed by their applicable Affiliates.
Section 7.14 Litigation Support. Purchaser and its Affiliates on the one
-------------------
hand and Pfizer and its Affiliates on the other hand will cooperate with each
other in the defense or settlement of any Liabilities (including Product Claims)
or lawsuits involving the Business for which they have responsibility under this
Agreement by providing the other party and such other party's legal counsel and
other designated Persons access to employees, records, documents, data,
equipment, facilities, products, parts, prototypes and other information
regarding the Business and its products as such other party may request, to the
extent maintained or under the possession or control of the requested party.
The requesting party shall reimburse the other party for its reasonable
out-of-pocket expenses paid to third parties in performing its obligations under
this Section 7.14. Pfizer shall keep Purchaser informed of the status of the
pendency of the relevant Liabilities and lawsuits involving the Business for
which it has responsibility under this Agreement, will advise Purchaser of
material issues involved in the litigation and will use commercially reasonable
efforts to seek a confidentiality agreement with respect to any settlements of
such lawsuits. For so long as any Liabilities or lawsuits involving the
Business for which Pfizer has responsibility under this Agreement remain
outstanding, Purchaser will advise Pfizer of material issues involved in the
lawsuits involving the Business for which it has responsibility and will use
commercially reasonable efforts to seek a confidentiality agreement with respect
to any settlements of such lawsuits.
Section 7.15 Insurance. As of the Closing Date, the coverage under all
---------
insurance policies related to the Business (other than such policies as are
included in the Purchased Assets, if any, or such policies, if any, held by the
Conveyed Companies outside of the Pfizer Corporate Insurance Program and are
solely related to the Business and are not shared with other Pfizer entities)
shall continue in force only for the benefit of the Seller Corporations and
their Affiliates and not for the benefit of Purchaser. Purchaser agrees to
arrange for its own insurance policies with respect to the Business covering all
periods, provided, however, that to the extent any insurance policy covers
-------- -------
claims that arose prior to the Closing but are asserted against Purchaser after
the Closing, any payments on such claims by such policy shall be paid over to
Purchaser to the extent such claims were not previously indemnified by Pfizer
(and Pfizer shall use all reasonable efforts to facilitate the making of and
payment on such claim).
Section 7.16 Trade Notification; Notification of Certain Matters; Revised
--------------------------------------------------------------
Schedules. (a) Pfizer and Purchaser shall agree on the method and content of
-------
the notifications to customers of the sale of the Purchased Assets to Purchaser.
Pfizer and Purchaser agree that said notifications are to provide sufficient
advance notice of the sale and the plans associated therewith, with the
objective of minimizing any disruption of the Business.
(b) Pfizer shall give prompt notice to Purchaser, and Purchaser shall give
prompt notice to Pfizer, of (i) the occurrence of any event which constitutes a
breach of a representation, warranty or covenant contained in this Agreement;
and (ii) any material failure of Pfizer or the Selling Corporations (on the one
hand) or Purchaser (on the other hand), as the case may be, to comply with or
satisfy any covenant, condition, or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 7.16(b) shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice. Pfizer shall also give
immediate notice to Purchaser of the occurrence of any other event likely to
result in a Material Adverse Effect on the Business, taken as a whole, including
developments with respect to New Products.
(c) Prior to the Closing, Pfizer will provide Purchaser with a set of
updated disclosure Schedules. The provision of such updated disclosure
Schedules shall not be deemed to cure any breach of any representation or
warranty made in this Agreement on the date hereof or have any effect for the
purpose of determining the compliance by Pfizer with any covenant set forth
herein. No update to any Schedule shall be deemed to cure any breach of any
representation or warranty made in this Agreement as of the Closing Date, or
amend or otherwise modify a condition set forth in Article IV to the extent that
such update constitutes a Material Adverse Change since the date hereof.
Section 7.17 Products Received by Asset Selling Corporations. If products
------------------------------------------------
of the Business are received by any Asset Selling Corporation after the Closing,
Pfizer shall cause such Asset Selling Corporation to ship those products to
Purchaser, or Purchaser's stated representative, at Pfizer's cost unless
otherwise provided in the Transitional Services Agreement. Within 15 days after
notification from an Asset Selling Corporation, Purchaser shall reimburse such
Asset Selling Corporation for all customer claims made against such Asset
Selling Corporation in the form of invoice deductions for amounts associated
with such returned products which are received by such Asset Selling Corporation
or Asset Selling Corporation's agent after the Closing.
Section 7.18 Audited Financial Statements. Within forty-five (45) days of
-----------------------------
Closing, Pfizer shall prepare and deliver to Purchaser at the cost and expense
of Purchaser financial statements for the year ended December 31, 2002 (the
"2002 Financial Statements"), which shall be prepared in accordance with GAAP,
------------------------
and shall fairly present in all material respects, (i) the financial condition,
assets and liabilities of the Business (excluding Excluded Assets and Retained
Liabilities) as of the dates therein specified; and (ii) the results of
operations of the Business for the periods indicated. Pfizer shall use
commercially reasonable efforts to cause KPMG to review and audit the 2002
Financial Statements, which review and audit shall be completed within
forty-five (45) days of Closing. Purchaser shall provide Pfizer with access to
the books, records, and personnel of the Business to the extent reasonably
necessary for Pfizer to prepare the 2002 Financial Statements. Purchaser agrees
to reimburse Pfizer for its actual cost of such audit.
Section 7.19 New Products. (a) Pfizer shall use commercially reasonably
-------------
efforts to cause the Conveyed Companies or Asset Selling Corporations after the
date hereof to incur and/or contract to incur in the aggregate not less than 90%
of the capital expenditure amounts set forth in Schedule 7.19(a) hereto with
----------------
respect to the launch of the Intuition project, and not less than 75% of the
capital expenditure amounts set forth in Schedule 7.19(a) hereto with respect to
----------------
the launch of the H3 project for the periods set forth in such Schedule. To the
extent the Asset Selling Corporations and Conveyed Companies do not incur the
amounts set forth in the forgoing sentence with respect to the period between
the date hereof and the Closing (measured on a pro-rata basis if the Closing
shall occur on a date other than the last day of a month) unless the requirement
to incur such capital expenditure is waived by Purchaser ("Required Capital
Expenditure"), Pfizer shall pay to Purchaser such amount as is equal to the
excess of the Required Capital Expenditure and the actual capital expenditure
for such period. During the year ended December 31, 2002, the Conveyed
Companies and the Asset Selling Corporations incurred not less than $29,000,000
of capital expenditures in the aggregate with respect to projects set forth in
Schedule 7.19(a).
----------------
(b) Pfizer shall cause the Asset Selling Corporations and/or the Conveyed
Companies to incur or commit to incur media slot purchases in connection with
the launch of the "Intuition" project in amounts not less than 100% of the
amounts set forth on Schedule 7.19(b) for the periods set forth on such
-----------------
Schedule.
(c) Pfizer shall, at Closing, transfer to Purchaser all of its rights under
confidentiality agreements entered into with other parties relating to the
Business or the New Products and, to the extent any of such confidentiality
agreements are not transferable to Purchaser, Pfizer shall take such actions, at
Purchaser's expense, as Purchaser may reasonably request to enforce the
obligations of confidentiality under such agreements.
(d) Pfizer shall cause the Asset Selling Corporations and/or the Conveyed
Companies to incur or commit to build inventory in connection with the launch of
the "Intuition" project in a commercially reasonable manner for the periods set
forth on Schedule 7.19(d).
-----------------
(e) Nothing contained in this Section or otherwise shall be deemed a
representation of the performance level that will be attained in the future by
the "Intuition" project or other new projects.
Section 7.20 Intercompany Debt. Pfizer shall cause, at or before 60 days
------------------
after the Closing Date, all Intercompany Receivables and all Intercompany
Payables as at Closing (other than (i) Business Intercompany Balances and (ii)
the Hong Kong Debt) to be paid or otherwise discharged in full, so that no such
Intercompany Liabilities or Intercompany Receivables will be reflected in the
Working Capital Statement. The net effect of the remaining Intercompany
Liabilities and Intercompany Receivables (comprising (i) the Business
Intercompany Balances and (ii) the Hong Kong Debt), as reflected in the Working
Capital Statement will be zero. Pfizer shall be responsible for any tax
liability arising from the actions taken pursuant to this Section 7.20.
Section 7.21 Cash and Bank Accounts. (a) With respect to the Business, until
----------------------
the Closing Date, Pfizer shall continue to employ cash management practices
consistent with those employed immediately prior to the date of this Agreement,
including (i) continuing to collect funds generated from the Business from bank
accounts of Pfizer, the Asset Selling Corporations and the Conveyed Companies
and through Pfizer's standard cash management transfer system; and (ii)
continuing to fund the bank accounts of Pfizer, the Asset Selling Corporations
and the Conveyed Companies in connection with cash disbursements related to the
Business.
(b) All collection and disbursement bank accounts of the Conveyed Companies
existing as of the Closing Date, including the balances therein, shall be
retained at Closing by such Conveyed Companies, which shall retain liability
with respect to all checks or other drafts or withdrawals written on all such
accounts prior to the Closing. Notwithstanding the foregoing, it is the
intention of the parties that the book cash balance of the Conveyed Companies,
in the aggregate, as of 11:59 PM on the day before the Closing Date shall be
zero unless otherwise agreed to by Purchaser. Further it is the intent of the
parties that the cash book accounts in each foreign jurisdiction where such cash
cannot be readily remitted to the United States without a tax penalty shall
be withdrawn by Pfizer prior to Closing so that excess cash beyond the short
term need of the Business in such jurisdiction is zero. To the extent that the
actual cash balance at the Closing Date, determined in the ordinary course
consistent with past practices, is negative, such negative amount shall be
treated as a current liability on the Working Capital Statement. To the extent
that the actual book cash balance is positive, such excess over zero shall be
treated as a current asset on the Working Capital Statement. The balance of
book cash, and the calculation of current assets and liabilities for purposes of
the Working Capital Statement, shall be determined consistently, and as of the
same cut-off time. All disbursement bank accounts of Pfizer which are utilized
by the Business prior to the Closing Date shall be retained at Closing by
Pfizer, which shall retain liability with respect to all checks or other drafts
or withdrawals written on all such accounts prior to 11:59 PM on the day before
the Closing Date. At Closing, no other checks or other drafts or withdrawals of
the Business shall be made against such accounts, except as may be provided in
the Transitional Services Agreement. All bona fide checks and other instruments
deposited in Pfizer accounts or accounts of the U.S. Conveyed Companies prior to
the Closing Date and related to the operations of the Business which are
returned to such accounts thereafter shall be assigned to and shall become the
responsibility of Purchaser, and Purchaser shall reimburse Pfizer as soon as
practicable for all such items returned to Pfizer accounts upon the transfer to
Purchaser of all rights relating to such checks or instruments and the receipt
by Purchaser or a Conveyed Company of payment in cash in respect of such
returned items; provided that such reimbursement shall be limited to the amount
actually received by Purchaser or a Conveyed Company and Purchaser shall use
commercially reasonable best efforts to collect such checks in full.
(c) The parties agree to cooperate with each other in managing the cash
accounts of the Business prior to Closing to meet the short term needs of the
Business prior to and after Closing and effectuate the intent of the parties set
forth in subsections (a) and (b) above.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification by Pfizer. (a) Subject to the provisions of
---------------------------
this Article VIII, Pfizer agrees to defend, indemnify and hold harmless
Purchaser and its Affiliates, and, if applicable, their respective directors,
officers, agents, employees, successors and assigns from and against any and all
claims, actions, causes of action, judgments, awards, Liabilities, losses,
costs or damages (collectively, a "Loss" or, the "Losses") claimed or arising
---- ------
directly from (i) any Excluded Asset or Retained Liability, (ii) any breach by
any Seller Corporation of any of its covenants or agreements contained in this
Agreement, (iii) any breach of any warranty or representation of Pfizer
contained in this Agreement, or (iv) any non-compliance with bulk transfer or
similar Laws to the extent the underlying obligation to the creditor is not an
Assumed Liability.
(b) Purchaser shall take and shall cause its Affiliates to take all
commercially reasonable steps to mitigate any Loss upon becoming aware of any
event which would reasonably be expected to, or does, give rise thereto,
including incurring costs only to the minimum extent necessary to remedy the
breach which gives rise to the Loss.
(c) Nothing in this Section 8.1 shall be construed to impose Liabilities
with respect to Taxes.
Section 8.2 Indemnification by Purchaser. (a) Subject to the provisions of
----------------------------
this Article VIII, Purchaser agrees to defend, indemnify and hold harmless
the Seller Corporations and their Affiliates, and, if applicable, their
respective directors, officers, agents, employees, successors and assigns from
and against any and all Loss claimed or arising directly from (i) any Assumed
Liability, (ii) any breach by Purchaser of any of its covenants or agreements in
this Agreement, (iii) any breach of any warranty or representation of Purchaser
contained in this Agreement, or (iv) events occurring on or after the Closing
Date in connection with the Business, the Purchased Assets, or the Shares
including the use, ownership, possession, operation or occupancy of any
Facility, Leased Real Property or Real Property, the Intellectual Property of
the Business, the Purchased Assets, or the Shares from and after the Closing
Date.
(b) Pfizer shall take and cause its Affiliates to take all commercially
reasonable steps to mitigate any Loss upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto, including incurring
costs only to the minimum extent necessary to remedy the breach which gives
rise to the Loss.
(c) Nothing in this Section 8.2 shall be construed to impose Liabilities
with respect to Taxes.
Section 8.3 Notice of Claims. (a) If any of the Persons to be indemnified
----------------
under this Article VIII (the "Indemnified Party") has suffered or incurred any
-----------------
Loss, the Indemnified Party shall so notify the party from whom indemnification
is sought (the "Indemnifying Party") promptly in writing describing such Loss,
------------------
the amount or estimated amount thereof, if known or reasonably capable of
estimation, and the method of computation of such Loss, all with reasonable
particularity and containing a reference to the provisions of this Agreement or
any other agreement, instrument or certificate delivered pursuant hereto in
respect of which such Loss shall have occurred. If any action at Law or suit in
equity is instituted by or against a third party with respect to which the
Indemnified Party intends to claim any Liability as a Loss under this Article
VIII, the Indemnified Party shall promptly notify the Indemnifying Party of such
action or suit and tender to the Indemnifying Party the defense of such action
or suit. A failure by the Indemnified Party to give notice and to tender the
defense of the action or suit in a timely manner pursuant to this Section 8.3
shall not limit the obligation of the Indemnifying Party under this Article
VIII, except (i) to the extent such Indemnifying Party is prejudiced thereby,
(ii) to the extent expenses are incurred during the period in which notice was
not provided, and (iii) as provided by Section 8.5.
(b) Except when a notice, report or other filing must be filed immediately
pursuant to Environmental Laws, Purchaser will provide notice and an opportunity
to comment to Pfizer before Purchaser files any Required Governmental
Report or any other report, notification or filing with any Governmental
Authority or third party in connection with an event that would be reasonably
likely to result in a Loss subject to the indemnification provisions of this
Article. In the event Purchaser is required to file a Required Governmental
Report or any other report, notification or filing immediately, Purchaser will
provide simultaneous notice to Pfizer when it files the report with the
Governmental Authority.
Section 8.4 Third Party Claims. (a) The Indemnifying Party under this
--------------------
Article VIII shall have the right, but not the obligation, to conduct and
control, through counsel of its choosing, any third party claim, action, suit or
proceeding (a "Third Party Claim"), and the Indemnifying Party may
-------------------
compromise or settle the same, provided that the Indemnifying Party shall give
the Indemnified Party advance notice of any proposed compromise of settlement,
and provided, further, that Third Party Claims (other than those related to
-------- -------
Retained Liabilities) may be compromised or settled by the Indemnifying Party
only with the consent of the Indemnified Party if any such compromise or
settlement could reasonably be expected to have an adverse impact on the ongoing
Business. No Indemnified Party may compromise or settle any Third Party Claim
for which it is seeking indemnification hereunder without the consent of the
Indemnifying Party. The Indemnifying Party shall permit the Indemnified Party
to participate in, but not control, the defense of any such action or suit
through counsel chosen by the Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnified Party. If the
Indemnifying Party elects not to control or conduct the defense or prosecution
of a Third Party Claim, the Indemnifying Party nevertheless shall have the right
to participate in the defense or prosecution of any Third Party Claim and, at
its own expense, to employ counsel of its own choosing for such purpose.
(b) The parties hereto shall cooperate in the defense or prosecution of any
Third Party Claim, with such cooperation to include (i) the retention and the
provision of the Indemnifying Party records and information that are reasonably
relevant to such Third Party Claim, and (ii) the making available of employees
on a mutually convenient basis for proving additional information and
explanation of any material provided hereunder.
Section 8.5 Expiration. (a) Notwithstanding anything in this Agreement to
----------
the contrary, if the Closing shall have occurred, all covenants, agreements,
warranties and representations made herein or in any certificate delivered
pursuant to Exhibit A or B shall survive the Closing. Notwithstanding the
foregoing, all representations and warranties made herein or in any certificate
delivered pursuant to Exhibit A or B, and all indemnification obligations under
Sections 8.1. and 8.2 with respect to any such representation or warranty, shall
terminate and expire on, and no action or proceeding seeking damages or
other relief for breach of any thereof or for any misrepresentation or
inaccuracy with respect thereto shall be commenced after the 2nd anniversary of
the Closing Date, unless prior to such anniversary date a claim for
indemnification with respect thereto shall have been made, with reasonable
specificity, by written notice given under Section 8.3, provided, however, that
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the representations and warranties set forth in Section 5.11 of this Agreement
and all indemnification obligations under Sections 8.1. with respect thereto
shall terminate and expire on, and no action or proceeding seeking damages or
other relief for breach of any thereof or for any misrepresentation or
inaccuracy with respect thereto shall be commenced after the 3rd anniversary of
the Closing Date, unless prior to such anniversary date a claim for
indemnification with respect thereto shall have been made, with reasonable
specificity, by written notice given under Section 8.3 and provided, further,
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that that the representations and warranties set forth in Section 5.16 of this
Agreement and all indemnification obligations under Sections 8.1 with respect
thereto shall terminate and expire at, and no action or proceeding seeking
damages or other relief for breach of any thereof or for any misrepresentation
or inaccuracy with respect thereto shall be commenced after, the expiration date
of any applicable statute of limitations, unless prior to such expiration date a
claim for indemnification with respect thereto shall have been made, with
reasonable specificity, by written notice given under Section 8.3.
(b) As to indemnification obligations under Section 8.1(a)(i) with respect
to subparagraph (ii) of the definition of Excluded Environmental Liabilities,
such obligations shall terminate and expire on, and no action or proceeding
seeking damages or other relief with respect thereto shall be commenced after,
the 3rd anniversary of the Closing Date, unless prior to such anniversary date
Third Party Claims shall have been made against the Indemnified Party and
written notice thereof had been given to Pfizer under Section 8.3.
(c) As to indemnification obligations under Section 8.1(a)(i) with respect
to subparagraph (iii) of the definition of Excluded Environmental Liabilities,
such obligations shall terminate and expire on, and no action or proceeding
seeking damages, relief or indemnity with respect thereto shall be commenced
after, the 2nd anniversary of the Closing Date, unless prior to such anniversary
date Third Party Claims shall have been made against the Indemnified Party and
written notice thereof had been given to Pfizer under Section 8.3.
(d) As to indemnification obligations under Section 8.1(a)(i) with respect
to subparagraph (vi) of the definition of Excluded Environmental Liabilities,
such obligations shall terminate and expire on, and no action or proceeding
seeking damages, relief or indemnity with respect thereto shall be commenced
after, the 5th anniversary of the Closing Date, unless prior to such anniversary
date Third Party Claims shall have been made against the Indemnified Party and
written notice thereof had been given to Pfizer under Section 8.3
(e) As to indemnification obligations under Section 8.1(a)(i) with respect
to subparagraph (vii) of the definition of Excluded Environmental Liabilities,
such obligations shall terminate and expire on, and no action or proceeding
seeking damages, relief or indemnity with respect thereto shall be commenced
after, the 10th anniversary of the Closing Date, unless prior to such
anniversary date Third Party Claims shall have been made against the Indemnified
Party and written notice thereof had been given to Pfizer under Section 8.3
Section 8.6 Certain Limitations. (a) Notwithstanding the other provisions
-------------------
of this Article VIII, Pfizer shall not have any indemnification obligations for
Losses under Section 8.1(a)(iii), (i) for any individual item where the Loss
relating thereto is less than $75,000 and (ii) in respect of each individual
item where the Loss relating thereto is equal to or greater than $75,000, unless
the aggregate amount of all such Losses exceeds $10,000,000, in which event
Pfizer shall be required to pay the amount of such Losses which exceeds
$10,000,000 but only up to a maximum amount of 20% of the Aggregate Purchase
Price, except with respect to Losses related to breaches of the representations
set forth in Sections 5.2 and 5.3 of this Agreement, for which there shall be no
maximum indemnification amount.
(b) Notwithstanding the provisions of this Article VIII, Pfizer shall not
have any indemnification obligations for Losses under Section 8.1(a)(i) in
respect of Excluded Environmental Liabilities, (i) for any individual item where
the Loss relating thereto is less than (x) $50,000 with respect to items
falling within subparagraph (iii) of the definition of Excluded Environmental
Liabilities, (y) $150,000 with respect to items falling within subparagraph (ii)
of the definition of Excluded Environmental Liabilities, (z) $50,000 with
respect to items falling within subparagraph (vi) of the definition of Excluded
Environmental Liabilities relating to harm or injury to any person, public
health or natural resources, and (aa) $100,000 with respect to items falling
within subparagraph (vi) of the definition of Excluded Environmental Liabilities
related to harm or injury to real property, and (ii) in respect of each
individual item where the Loss relating thereto is equal to or greater than the
minimum amounts set forth in clause (i), unless the aggregate amount of all such
Losses exceeds $2,000,000, in which event Pfizer shall be required to pay the
amount of such Losses which exceeds $2,000,000, but only up to a maximum amount
of $22,500,000.
(c) Notwithstanding the provisions of this Article VIII, Pfizer shall not
have any indemnification for Losses under 8.1(a)(i) with respect to items
falling within subparagraph (vii) of the definition of Excluded Environmental
Liabilities to the extent such losses exceed $20,000,000.
Section 8.7 Losses Net of Insurance, Etc. The amount of any Loss for which
----------------------------
indemnification is provided under Section 8.1 or 8.2 shall be net of (i) any
accruals or reserves on the Financial Statements or the Working Capital
Statement, (ii) any amounts recovered by the Indemnified Party pursuant to any
indemnification by or indemnification agreement with any third party, (iii) any
insurance proceeds or other cash receipts or sources of reimbursement received
as an offset against such Loss (each Person named in clauses (ii) and (iii), a
"Collateral Source"), and (iv) an amount equal to any tax benefit that resulted
------------------
in an actual reduction in cash payments for Taxes in the same fiscal year such
Losses were incurred by the Indemnified Party in connection therewith. The
Indemnified Party shall use commercially reasonable efforts to maximize actual
tax benefits. Indemnification under this Article VIII shall not be available
unless the Indemnified Party first uses commercially reasonable efforts to seek
recovery from all Collateral Sources. The Indemnifying Party may require an
Indemnified Party to assign the rights to seek recovery pursuant to the
preceding sentence; provided, however, that the Indemnifying Party will then be
responsible for pursuing such claim at its own expense. If the amount to be
netted hereunder from any payment required under Sections 8.1 or 8.2 is
determined after payment by the Indemnifying Party of any amount otherwise
required to be paid to an Indemnified Party to this Article VIII, the
Indemnified Party shall repay to the Indemnifying Party, promptly after such
determination, any amount that the Indemnifying Party would not have had to pay
pursuant to this Article VIII had such determination been made at the time of
such payment.
Section 8.8 No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
--------------------------
CONTRARY CONTAINED HEREIN, NO PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR
OTHERWISE RESPONSIBLE TO ANY OTHER PARTY HERETO OR ANY AFFILIATE OF ANY OTHER
PARTY HERETO FOR CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR FOR DIMINUTION
IN VALUE OR LOST PROFITS THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH HEREOF OR ANY LIABILITY RETAINED OR ASSUMED HEREUNDER.
Section 8.9 Sole Remedy/Waiver. The parties hereto acknowledge and agree
-------------------
that the remedies provided for in this Agreement shall be the parties' sole and
exclusive remedy with respect to the subject matter of this Agreement, other
than with respect to remedies for fraud or intentional breach. In furtherance
of the foregoing, the parties hereby waive, to the fullest extent permitted by
applicable Law, any and all other rights, claims and causes of action (including
rights of contributions, if any) known or unknown, foreseen or unforeseen, which
exist or may arise in the future, that it may have against the Seller
Corporations or any of their Affiliates, or Purchaser or any of its Affiliates,
as the case may be, arising under or based upon any federal, state or local Law
(including any such Law relating to environmental matters or arising under or
based upon any securities Law, common Law or otherwise); provided, however, that
-------- -------
neither of the parties waive any rights, claims and causes of action (including
rights of contributions, if any) known or unknown, foreseen or unforeseen, which
exist or may arise in the future, related to the alleged fraud or intentional
breach of this Agreement by the other party hereto.
Section 8.10 Procedures for Remedial Actions. Notwithstanding anything to
--------------------------------
the contrary in this Agreement, except as otherwise provided in Sections 8.3 and
8.4 of this Agreement, obligations for Remedial Action under this Agreement and
obligations with respect to the covenants in Sections 7.3(b) and 7.3(c) of this
Agreement are subject to the provisions of this Section 8.10.
(a) Pfizer shall have the right but not the obligation to conduct and
control the management of a Remedial Action at a property included in the
Purchased Assets that is subject to indemnification pursuant to this Agreement.
Pfizer must notify Purchaser, within 30 days of receipt of notice of
Purchaser's claim for indemnification for such matter, that (i) it intends to
undertake said responsibility or (ii) that more information is needed from
Purchaser before Pfizer can reasonably determine that Purchaser's claim is
subject to indemnification pursuant to this Agreement. Purchaser shall promptly
respond to such requests for information (to the extent such information is
reasonably available to Purchaser) and, within 30 days of receipt of such
information, Pfizer shall notify Purchaser as to whether it shall undertake the
Remedial Action. Prior to a determination by Pfizer that it will undertake a
Remedial Action pursuant to this Section, Purchaser shall take only those
actions necessary to comply with applicable Laws or address conditions that pose
an immediate and acute health risk (unless additional actions are approved by
Pfizer or unless additional actions are required to comply with Governmental
Orders).
(b) Notwithstanding anything to the contrary in this Agreement, in relation
to the Known Milford Issues, Pfizer shall be deemed to have given notice under
Section 8.10(a).
(c) In undertaking a Remedial Action pursuant to this Section, Pfizer shall
retain a qualified independent environmental consultant, which consultant shall
be subject to Purchaser's approval (such approval not to be unreasonably delayed
or withheld). Pfizer shall consult with Purchaser in all material aspects of
the Remedial Action. Pfizer shall undertake such Remedial Action in a prompt
and expeditious fashion in accordance with applicable Laws and shall not cause,
through its own inaction, any undue delay in obtaining written notice from the
appropriate Governmental Authority that no further investigation or remediation
is necessary with respect to the matter that is the subject of the
indemnification claim to meet the Applicable Remedial Action Standards or, if no
Governmental Authority is involved in such matter, a good faith determination
from its environmental consultant that no further investigation or remediation
is required to bring the Purchased Assets into conformance with Applicable
Remedial Action Standards. Pfizer shall comply with all applicable Laws,
including all applicable Environmental Laws, with respect to its performance
pursuant to this Section. Pfizer shall provide copies to Purchaser of all
written notices, final submissions, final work plans, and final reports and
shall give Purchaser a reasonable opportunity (at Purchaser's own expense) to
comment on any submissions Pfizer intends to deliver or submit to the
appropriate Governmental Authority prior to said submission. Purchaser may, at
its own expense, hire its own consultants, attorneys or other professionals to
monitor the Remedial Action, including any field work undertaken by Pfizer, and
Purchaser shall provide Pfizer with the results of all such monitoring.
Notwithstanding the above, Purchaser shall not take any actions that shall
unreasonably interfere with Pfizer's performance of the Remedial Action. Pfizer
shall undertake any such work required herein in a manner designed to minimize
any disruption, to the greatest extent possible, with the conduct of operations
at the Conveyed Companies. Purchaser shall allow Pfizer reasonable access to
conduct any of the work contemplated herein and shall fully cooperate with
Pfizer in the performance of the Remedial Action, including providing Pfizer
with reasonable access to employees and documents as necessary.
(d) Pfizer's performance of any Remedial Action pursuant to this Section
8.10 shall be deemed to be complete (i) upon receipt of notice from the relevant
Governmental Authority indicating that no further Remedial Action is required to
be conducted (a "Governmental Sign-Off"); or (ii) where allowed by applicable
Environmental Law, a certification from a licensed environmental professional or
its equivalent that no further action is necessary under applicable Laws (unless
within the time specified by applicable Law, if any, the relevant Governmental
Authority determines that further Remedial Action is required); or (iii) if no
Governmental Authority has asserted jurisdiction or if for any other reason
Governmental Sign-Off is not obtainable, when Pfizer's and Purchaser's
environmental consultants jointly agree that the Remedial Action has been
completed in accordance with the Applicable Remedial Action Standard; provided,
---------
however, that if Pfizer's and Purchaser's environmental consultants are unable
--------
to reach such joint agreement, then Pfizer's and Purchaser's environmental
consultants shall jointly select an independent third environmental consultant
(the "Independent Consultant") acceptable to each of them and that Independent
Consultant shall review all relevant information provided by Pfizer and
Purchaser and shall make a determination, which determination shall be binding
on both Pfizer and Purchaser, as to whether the Remedial Action has achieved the
Applicable Remedial Action Standard and no further action is required. In the
event the Independent Consultant finds that additional work is required, the
scope and extent of that work shall be negotiated by the parties. All fees,
costs and expenses of the Independent Consultant shall be borne equally (50%
each) by Pfizer and Purchaser.
(e) If Pfizer declines to undertake the performance of a Remedial Action as
provided in Section 8.10(a), Purchaser shall be entitled to undertake the
Remedial Action to the Applicable Remedial Action Standards. Purchaser shall
promptly provide copies to Pfizer of all notices, correspondence, draft reports,
submissions, work plans, and final reports and shall give Pfizer a reasonable
opportunity (at Pfizer's own expense) to comment on any submissions Purchaser
intends to deliver or submit to any appropriate Governmental Agency prior to
said submission. Pfizer may, at its own expense, hire its own consultants,
attorneys or other professionals to monitor the Remedial Action, including any
field work undertaken by Purchaser, and Purchaser shall provide to Pfizer the
results of all such field work. Notwithstanding the above, Pfizer shall not
take any actions that shall unreasonably interfere with Purchaser's performance
of the Remedial Action. Pfizer's decision to allow Purchaser to undertake
Remedial Action hereunder shall not limit or affect Pfizer's obligation to
indemnify Purchaser for said Remedial Action to the Applicable Remedial Action
Standards as otherwise provided in this Agreement.
Section 8.11 Limitation on Remedial Action Obligations. (a)
---------------------------------------------
Notwithstanding anything to the contrary in this Agreement, obligations for
Remedial Action under this Agreement and obligations with respect to the
covenants in Sections 7.3(b) and 7.3(c) of this Agreement are subject to the
provisions of this Section 8.11. Pfizer shall be responsible for the cost of
such Remedial Action only to the extent necessary to meet the least stringent,
most cost-effective standard required by (i) applicable Law and (ii) consistent
with the industrial/commercial use of the Facility as of the Closing Date taking
into consideration, where applicable, engineering and/or institutional
controls or a standard pursuant to applicable Environmental Laws acceptable to
the relevant Governmental Authorities making a claim for Remedial Action (the
"Applicable Remedial Action Standard"). Pfizer shall not be responsible for
-------------------------------------
those costs incurred in connection with a Remedial Action to the extent such
-
costs arise from or are exacerbated by actions of Purchaser, including the
-
initiation of Remedial Action by Purchaser or at the request of a Third Party in
-
the absence of a requirement of Environmental Law after the Closing Date. For
purposes of this Section 8.11, in determining the Applicable Remedial Action
Standard, the term Environmental Law shall mean those Laws applicable to and
governing the Remedial Action at the time the Remedial Action is being conducted
and as necessary to achieve completion of the Remedial Action pursuant to the
terms of Section 8.10(d) of this Agreement.
(b) Unless Purchaser otherwise agrees, Pfizer shall not seek to impose land
use restrictions solely to avoid obligations for Remedial Action, and Pfizer
shall not seek to impose land use restrictions and institutional and engineering
controls at a Facility where Remedial Action is being conducted other than
those that (i) are required by any Governmental Authority; (ii) do not interfere
with the commercial/industrial use of the Facility; (iii) prevent the use of
groundwater; or (iv) Pfizer's and Purchaser's environmental consultants agree
are necessary because further Remedial Action will not achieve the Applicable
Remedial Action Standard. If Pfizer's and Purchaser's environmental consultants
are unable to reach such joint agreement, the provisions of Section 8.10
(d)(iii) shall apply.
Section 8.12 Limitation on Indemnification for Non-Compliance with
----------------------------------------------------------
Environmental Laws. (a) Notwithstanding anything to the contrary in this
----------
Agreement, Purchaser shall not be entitled to claim or seek indemnity or defense
under this Agreement for Environmental Liabilities identified in subsection
(iii) of the definition of Excluded Environmental Liabilities or for breaches of
representations and warranties in Section 5.11 relating to compliance with
Environmental Laws or Environmental Permits to the extent that such
Environmental Liabilities arise out of or to the extent that they are increased
as a result of (i) changes (including increases or decreases in production) in
operations at a Facility after the Closing; (ii) upgrades to a Facility after
the Closing; (iii) Environmental Laws that are enacted or come into effect after
the Closing; or (iv) changes after the Closing to Environmental Laws,
Environmental Permits or criteria, guidance, policy or interpretations in
relation to Environmental Laws or Environmental Permits.
(a) Notwithstanding anything to the contrary in this Agreement, Purchaser
shall not be entitled to claim or seek indemnity or defense under this Agreement
for Environmental Liabilities identified in subsection (iii) of the
definition of Excluded Environmental Liabilities without documentation
identifying (i) the specific nature of the failure to comply with Environmental
Laws or Environmental Permits; (ii) the actions necessary to correct the failure
to comply with Environmental laws or Environmental Permits; and/or (iii) the
specific costs incurred to correct the failure to comply with Environmental Laws
or Environmental Permits.
ARTICLE IX
TERMINATION
Section 9.1 Termination. This Agreement may be terminated at any time prior
-----------
to the Closing:
(a) by written agreement of Purchaser and Pfizer, acting as agent for the
Seller Corporations;
(b) by either Purchaser or Pfizer, by giving written notice of such
termination to the other party, if the Closing shall not have occurred on or
prior to July 31, 2003 (unless the failure to consummate the Closing by such
date (i) shall be due to the failure of the party seeking to terminate this
Agreement to have fulfilled any of its obligations under this Agreement, or (ii)
is due to the continuance of a waiting period or lack of an approval required
under or an injunction or equivalent thereof entered based upon any Competition
Laws, in which event Purchaser may not rely upon this Section 9.1 to terminate
this Agreement until the 1st anniversary of the date of this Agreement); or
(c) by either Pfizer or Purchaser if any court of competent jurisdiction or
other competent Governmental Authority of the United States of America, the
European Union or Japan shall have issued a Governmental Order or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such Governmental Order or other
action shall have become final and nonappealable.
Section 9.2 Effect of Termination. (a) In the event of the termination of
---------------------
this Agreement in accordance with Section 9.1 hereof, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have any
liability to the other party hereto or their respective Affiliates, directors,
officers or employees, except for the obligations of the parties hereto
contained in this Section 9.2 and in Sections 7.1, 10.1, 10.7, 10.8, 10.9 and
10.11 hereof, and except that nothing herein will relieve any party from
Liability for any breach of any covenant set forth in this Agreement prior to
such termination.
(b) In the event this Agreement shall be terminated and at such time any
party is in material breach of or default under any term or provision hereof,
such termination shall be without prejudice to, and shall not affect, any and
all rights to damages that the other party may have hereunder or otherwise under
applicable Law. The damages recoverable by the non-defaulting party shall
include all attorneys' fees reasonably incurred by such party in connection with
the transactions contemplated hereby.
(c) If this Agreement is terminated in accordance with Section 9.1,
Purchaser agrees that the prohibition in the Confidentiality Agreement
restricting Purchaser's ability to solicit any Employee to join the employ of
Purchaser or any of its Affiliates shall be extended to a period of 3 years from
the date of this Agreement, except that nothing in this sentence shall restrict
or preclude the rights of Purchaser to make generalized searches for employees
by the use of advertisements in the media (including trade media) or by engaging
search firms to engage in searches that are not targeted or focused on the
Employees employed by the Business.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices or other communications hereunder shall
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be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by facsimile, provided that the facsimile is promptly
confirmed by telephone confirmation thereof, to the Person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such Person:
To any Seller Corporation:
PFIZER INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Senior Vice President and
General Counsel
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Block, Esq.
to Purchaser:
Energizer Holdings, Inc.
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▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President, Legal Matters-Operations
with a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Section 10.2 Amendment; Waiver. Any provision of this Agreement may be
------------------
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Pfizer, or in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
Section 10.3 Assignment. No party to this Agreement may assign any of its
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rights or obligations under this Agreement including by sale of stock, operation
of Law in connection with a merger or sale of substantially all the assets of
Purchaser without the prior written consent of the other party hereto, except
that Purchaser may without such consent assign its rights to purchase the Shares
and the Purchased Assets hereunder to one or more of its Affiliates, provided,
--------
however, that no such assignment by Purchaser shall relieve Purchaser of any of
------
its obligations hereunder.
Section 10.4 Entire Agreement. This Agreement (including all Schedules and
----------------
Exhibits hereto) contains the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, except for the
Confidentiality Agreement which will remain in full force and effect for the
term provided for therein and other than any written agreement of the parties
that expressly provides that it is not superseded by this Agreement.
Section 10.5 Fulfillment of Obligations; Cooperation. (a) Any obligation of
---------------------------------------
any party to any other party under this Agreement, which obligation is
performed, satisfied or fulfilled by an Affiliate of such party, shall be deemed
to have been performed, satisfied or fulfilled by such party.
(b) On or after the Closing Date, the parties shall, on request, cooperate
with one another by furnishing any additional information, executing and
delivering any additional documents and instruments, including contract
assignments, and doing any and all such other things as may be reasonably
required by the parties or their counsel to consummate or otherwise implement
the transactions contemplated by this Agreement. In connection with the
liabilities assumed by Purchaser pursuant to this Agreement, and the retention
by Pfizer of the Retained Liabilities, each of the parties hereto shall, and
shall cause their affiliates and employees to, aid, cooperate with and assist
the other party or parties in their defense of such assumed or retained
litigation or liabilities, by, among other things, providing such other party or
parties with full access to pertinent records at such times as such other
party or parties may reasonably request, and making available for depositions,
testimony or other consultation, such officers, employees, or agents as such
party or parties may reasonably request without cost to such party or parties
except for reimbursement by it or them of out-of-pocket expenditures incurred in
connection with such cooperation and assistance.
(c) Pfizer agrees to execute transfer documents for all Intellectual
Property rights, in a recordable form provided by Purchaser for each
jurisdiction where such property is registered, at, or as soon as practicable
following, Closing. Pfizer shall have the continuing obligation after Closing
to use commercially reasonable efforts to cooperate with Purchaser in the
registration of the transfers for, and/or in the enforcement of, and/or
maintenance of any Intellectual Property rights after Closing until such
transfers are completed pursuant to the requirements of each jurisdiction.
Following Closing, Purchaser shall pay the expenses of preparing and recording
such transfers, to the extent they have not been provided at Closing.
Section 10.6 Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties hereto and their respective successors
and permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any Person other than Purchaser, Seller Corporations, or
their successors or permitted assigns, any rights or remedies under or by reason
of this Agreement.
Section 10.7 Public Disclosure; Confidentiality. (a) Notwithstanding
------------------------------------
anything herein to the contrary, each of the parties to this Agreement hereby
agrees with the other parties hereto that, except as may be required to comply
with the requirements of any applicable Laws, and the rules and regulations of
each stock exchange upon which the securities of one of the parties is listed,
if any, no press release or similar public announcement or communication shall,
if prior to the Closing, be made or caused to be made concerning the execution
or performance of this Agreement unless the parties shall have consulted in
advance with respect thereto.
(b) Pfizer, on its own behalf and on behalf of its Subsidiaries, agrees that
after the Closing it will hold any non-public information with respect to
the Business, the Purchased Assets, the Conveyed Companies and this Agreement in
confidence using the same safeguards to protect such confidential information as
it has established to protect its own confidential information.
Section 10.8 Return of Information. If for any reason whatsoever the
-----------------------
transactions contemplated by this Agreement are not consummated, Purchaser shall
promptly return to Pfizer all books and records furnished by Pfizer, any
other Seller Corporation, any Conveyed Company or any of their respective
Affiliates, agents, employees, or representatives (including all copies,
summaries and abstracts, if any, thereof) in accordance with the terms of the
Confidentiality Agreement.
Section 10.9 Expenses. Except as otherwise expressly provided in this
--------
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party incurring
such expenses. Notwithstanding the foregoing and Section 7.4(b), except as set
forth in this Section 10.9, all Taxes (including any value added Taxes but
excluding any Income Taxes) and fees relating to the transfer of the Shares and
the Purchased Assets shall be paid by Purchaser. All Taxes (including, without
limitation, any value added Taxes but excluding any Income Taxes) and fees
relating to the transfer of the Shares and the Purchased Assets shall be paid by
the person liable therefor but the liability for such Taxes as between the
Seller Corporations and Purchaser shall be borne as follows: (y) in respect of
any such Taxes which are refundable or in respect of which a credit is or
becomes available, by Purchaser; and (z) in respect of any other such Taxes not
falling within subsection (y) above, equally by the Seller Corporations on the
one hand and Purchaser on the other hand, provided, however, that if any such
-------- -------
Tax or any other Tax from which there is otherwise a refund or a credit becomes
payable or non-refundable as a result of Purchaser's failing to register or
become liable for such Tax, for example value added Tax, such Tax shall be borne
by Purchaser solely. The Seller Corporations and Purchaser, as the case may be,
will on demand reimburse the other for its share of any such Taxes paid by the
other in accordance with the foregoing provisions of this Section.
Section 10.10 Schedules. The disclosure of any matter in any Schedule to
---------
this Agreement, as may be amended or supplemented prior to the Closing, shall be
deemed to be a disclosure for all purposes of this Agreement (but only to the
extent disclosure for such purposes is reasonably apparent), but shall expressly
not be deemed to constitute an admission by any Seller Corporation or Purchaser,
or to otherwise imply, that any such matter is material for the purposes of this
Agreement.
Section 10.11 Governing Law; Jurisdiction. (a) This Agreement shall be
-----------------------------
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflicts of law rules of such state.
(b) With respect to any suit, action or proceeding relating to this
Agreement (each, a "Proceeding"), each party hereto irrevocably (i) agrees and
----------
consents to be subject to the jurisdiction of the United States District Court
for the Southern District of New York or any New York State court sitting in New
York City and (ii) waives any objection which it may have at any time to
the laying of venue of any Proceeding brought in any such court, waives any
claim that such Proceeding has been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceeding, that such court
does not have any jurisdiction over such party.
Section 10.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same agreement and shall become effective when ore or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.
Section 10.13 Headings. The heading references herein and the table of
--------
contents hereto are for convenience purposes only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
Section 10.14 Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If
any term or other provision of this Agreement, or the application thereof to any
person or entity or any circumstance, is invalid, illegal or unenforceable, (a)
a suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity, illegality or
unenforceability, nor shall such invalidity, illegality or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
PFIZER INC.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
ENERGIZER HOLDINGS, INC.
By:
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
A-2
EXHIBIT A
---------
LIST OF INSTRUMENTS AND DOCUMENTS TO BE PROVIDED BY PFIZER
(a) executed copies of the Transitional Services Agreement and the
Transitional Intellectual Property License Agreement;
(b) a receipt for payment of the Aggregate Purchase Price at Closing;
(c) a certified copy of the certificate of incorporation of Pfizer,
certified by the Secretary of State of its state of incorporation, and copies of
comparable organizational documents for each of the other Seller Corporations
and the Conveyed Companies, as well as a good standing certificate for each of
the Seller Corporations and, where available in their respective jurisdictions,
the Conveyed Companies, and a certificate of the Secretary or an Assistant
Secretary of the Seller Corporations and, where available in their respective
jurisdictions, Conveyed Companies as to the resolutions adopted by the Board of
Directors of each of the Seller Corporations relating to the transactions
contemplated hereby;
(d) a certified copy of the resolutions adopted by the Board of Directors of
Pfizer authorizing the Agreement and the transactions contemplated thereby;
(e) a copy of the bylaws or comparable documents of Pfizer, the other Seller
Corporations and the Conveyed Companies, certified by their respective
secretaries or assistant secretaries or similar officers;
(f) the certificate referred to in Section 4.2(a);
(g) Foreign Implementing Agreements, if applicable;
(h) certificates representing the Shares duly endorsed and in form for
transfer to Purchaser or other appropriate instruments of transfer in respect of
the Shares;
(i) except as otherwise requested by Purchaser in writing, resignations
(effective on or prior to Closing) of each member of the board of directors and
each non-employee officer of the Conveyed Companies; and
(j) subject to Section 2.3 of the Agreement, such bills of sale,
endorsements, assignments, deeds and other good and sufficient instruments of
conveyance and transfer, in form and substance reasonably satisfactory to
Purchaser, as shall be effective to vest in Purchaser title to the Purchased
Assets, including executed general warranty deeds, assignments, patent
assignments (in recordable form), a general trademark assignment (with trademark
assignments in recordable form to be delivered after the Closing), copyright
assignments (in recordable form) and a general copyright assignment form, lease
assignments (where appropriate, in recordable or registrable form), bills of
sale or certificates of title, in each case dated the Closing Date, transferring
to Purchaser all of each Asset Selling Corporation's right, title and interest
in and to the Purchased Assets owned by it.
(k) a completed Form III (as defined in the Connecticut Transfer Act)
executed by Pfizer as the Certifying Party (as defined in the Connecticut
Transfer Act) to the extent necessary and applicable to the Facility in Milford,
Connecticut.
B-1
EXHIBIT B
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LIST OF INSTRUMENTS AND DOCUMENTS TO BE PROVIDED BY PURCHASER
(l) Executed assumption agreements and all other instruments appropriate to
evidence Purchaser's assumption of the Assumed Liabilities;
(m) executed copies of the Transitional Services Agreement and the
Transitional Intellectual Property License Agreement;
(n) good standing certificates for Purchaser and each Purchaser entity and
certificates of the Secretary or an Assistant Secretary of Purchaser and each
Purchaser entity as to the resolutions adopted by the Boards of Directors of
Purchaser or each Purchaser entity relating to the transactions contemplated
hereby;
(o) the certificate referred to in Section 4.3(a); and
(p) Foreign Implementing Agreements, if applicable.
C-1
EXHIBIT C
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TRANSITIONAL SERVICES AGREEMENT
See Exhibit C (provided separately).
D-1
EXHIBIT D
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TRANSITIONAL INTELLECTUAL PROPERTY LICENSE AGREEMENT
See Exhibit D (provided separately).
E-1
EXHIBIT E
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PFIZER EMPLOYEE SEPARATION PLAN
See Exhibit E (provided separately).
F-1
EXHIBIT F
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RELEASE AGREEMENT (INDIVIDUAL TERMINATION)
See Exhibit F (provided separately).
G-1
EXHIBIT G
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RELEASE AGREEMENT (GROUP TERMINATION)
See Exhibit G (provided separately).
H-1
EXHIBIT H
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LETTER AGREEMENT (NET ECONOMIC BENEFIT OR LOSS)
See Exhibit H (provided separately).