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ASSET PURCHASE AGREEMENT
AMONG
PFIZER INC.,
THE
ASSET SELLING CORPORATIONS
(NAMED HEREIN)
AND
WPAMS ACQUISITION CORP.
DATED AS OF JULY 21, 1998
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND TERMS ..........................................................................2
Section 1.1. Definitions ..................................................................2
Section 1.2. Other Definitional Provisions................................................18
ARTICLE II PURCHASE AND SALE .............................................................................18
Section 2.1. Purchase and Sale of Assets of the Asset Selling
Corporations.................................................................18
Section 2.2. Consents ....................................................................22
Section 2.3. Excluded Assets of the Business..............................................24
Section 2.4. Assumption of Liabilities of the Business....................................25
Section 2.5. Retained Liabilities of Business ............................................26
Section 2.6. Purchase Price...............................................................27
Section 2.7. Purchase Price Adjustment....................................................27
Section 2.8. Allocation of the Purchase Price.............................................30
ARTICLE III CLOSING........................................................................................32
Section 3.1. Closing......................................................................32
ARTICLE IV CONDITIONS TO CLOSING..........................................................................33
Section 4.1. Conditions to the Obligations of Purchaser and Pfizer........................33
Section 4.2. Conditions to the Obligations of Purchaser...................................34
Section 4.3. Conditions to the Obligations of the Seller Corporations.....................35
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PFIZER.......................................................36
Section 5.1. Organization.................................................................36
Section 5.2. Authority; Binding Effect....................................................37
Section 5.3. Noncontravention.............................................................37
Section 5.4. Consents and Approvals of Governmental Authorities...........................38
Section 5.5. Financial Information; Books and Records.....................................38
Section 5.6. Absence of Material Changes..................................................39
Section 5.7. No Litigation................................................................40
Section 5.8. Compliance with Laws ........................................................40
Section 5.9. Product Registrations; Regulatory Compliance.................................40
Section 5.10. Environmental Matters........................................................42
Section 5.11. Material Contracts...........................................................43
Section 5.12. Intellectual Property........................................................44
Section 5.13. Real Property................................................................46
Section 5.14. Assets.......................................................................46
Section 5.15. Taxes........................................................................47
Section 5.16. Employee Benefits............................................................47
Section 5.17. Brokers......................................................................49
Section 5.18. Entire Business..............................................................49
Section 5.19. No Undisclosed Liability.....................................................49
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Section 5.20. Product Recall...............................................................49
Section 5.21. Suppliers....................................................................50
Section 5.22. Customers and Distributors...................................................50
Section 5.23. Foreign Corrupt Practices Act................................................50
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................................52
Section 6.1. Qrganization and Qualification...............................................52
Section 6.2. Corporate Authorization......................................................52
Section 6.3. Binding Effect...............................................................52
Section 6.4. Non-Contravention............................................................52
Section 6.5. Purchaser Consents and Approvals.............................................53
Section 6.6. Financial Capability.........................................................53
Section 6.7. Condition of Conveyed Assets.................................................53
Section 6.8. Brokers......................................................................54
ARTICLE VII COVENANTS......................................................................................54
Section 7.1. Information and Documents....................................................54
Section 7.2. Conduct of Business..........................................................55
Section 7.3. Reasonable Best Efforts; Certain Governmental Matters........................56
Section 7.4. Tax Matters..................................................................60
Section 7.5. Employees and Employee Benefits..............................................62
Section 7.6. Cash Management Matters......................................................75
Section 7.7. Bulk Transfer Laws...........................................................76
Section 7.8. Noncompetition...............................................................76
Section 7.9. Transitional Services........................................................79
Section 7.10. Transitional Intellectual Property License Agreement.........................79
Section 7.11. Compliance with WARN, Etc....................................................79
Section 7.12. Foreign Implementing Agreements..............................................79
Section 7.13. Joint Defense and Cooperation Agreement......................................79
Section 7.14. Insurance....................................................................80
Section 7.15. Confidentiality..............................................................80
Section 7.18. Certain Receivables..........................................................82
ARTICLE VIII INDEMNIFICATION....................................................................................83
Section 8.1. Indemnification by Pfizer....................................................83
Section 8.2. Indemnification by Purchaser.................................................84
Section 8.3. Notice of Claims.............................................................84
Section 8.4. Third Party Claims...........................................................85
Section 8.5. Expiration...................................................................86
Section 8.6. Certain Limitations..........................................................87
Section 8.7. Losses Net of Insurance, Etc.................................................88
Section 8.8. Other Limitations............................................................88
Section 8.9. Sole Remedy/Waiver...........................................................89
Section 8.10. Indemnification Procedures for Remedial Actions on
Conveyed Prqperties..........................................................89
Section 8.11. Limitation on Indemnification for Third Party Claims for
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Remedial Action..............................................................92
Section 8.12. No Consequential Damages.....................................................93
ARTICLE IX TERMINATION....................................................................................93
Section 9.1. Termination..................................................................93
Section 9.2. Effect of Termination........................................................94
ARTICLE X MISCELLANEOUS..................................................................................95
Section 10.1. Notices......................................................................95
Section 10.2. Amendment: Waiver............................................................96
Section 10.3. Assignment ..................................................................96
Section 10.4. Entire Agreement.............................................................97
Section 10.5. Fulfillment of Obligations...................................................97
Section 10.6. Parties in Interest..........................................................97
Section 10.7. Public Disclosure............................................................98
Section 10.8. Return of Information........................................................98
Section 10.9. Expenses.....................................................................98
Section 10.10. Schedules....................................................................98
Section 10.11. Governing Law................................................................99
Section 10.12. Counterparts.................................................................99
Section 10.13. Headings.....................................................................99
Section 10.14. Severability.................................................................99
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List of Schedules
1.1 Asset Selling Corporations
1.1(a) Facilities
1.1(b) Deal Balance Sheet
2.1(a) Leased Real Property
2.3(h) Specified Excluded Assets
2.8 Allocation of the Purchase Price
4.2(c) Consents and Approvals
5.3 Non-Contravention
5.4 Consents and Approvals of Governmental Authorities
5.5 Financial Statements; Books and Records
5.6 Absence of Material Changes
5.7 No Litigation
5.8 Compliance with Laws
5.9 Product Registrations; Regulatory Compliance
5.10 Environmental Matters
5.11 Material Contracts
5.11(c) Suppliers of Production Materials
5.12(a) Intellectual Property Litigation
5.12(b) Patents and Trademark Registration
5.12(c) Licenses and Sublicenses
5.12(d) Computer Software
5.13(a) Real Property
5.14 Assets: Exceptions to Title
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5.15 Taxes
5.18 Entire Business
5.20 Product Recall
5.21 Significant Suppliers
5.22 Customers and Distributors
6.5 Purchaser Consents and Approvals
7.5(a) Employee Benefits (US)
7.5(a)(i) Employee Severance Program
7.5(a)(ii) Employees (US)
7.5(a)(iii) Purchaser Benefit Plans
7.5(a)(iv) Shared Services Employees
7.5(b)(ii) Purchaser Qualified Plans
7.5(e) Employees (non-US)
7.8(a) Noncompetition
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List of Exhibits
A. List of instruments and documents provided by Asset Selling
Corporations to Purchaser
B. List of instruments and documents provided by Purchaser to Seller
Corporations
C. Form of Transitional Services Agreement
D. Form of Transitional Intellectual Property License Agreement
E. Pfizer Employee Separation Plan
F. Release Agreement (Individual Termination)
G. Release Agreement (Group Termination)
H. Joint Defense and Cooperation Agreement
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of
the 21st day of July, 1998 among Pfizer Inc., a Delaware corporation ("Pfizer"),
the Asset Selling Corporations (as defined below) (Pfizer and the Asset Selling
Corporations are sometimes referred to, collectively, as the "Seller
Corporations") and WPAMS Acquisition Corp., a Delaware corporation
("Purchaser").
W I T N E S S E T H:
WHEREAS, Pfizer is the record and beneficial owner of all of the issued
and outstanding shares of common stock of American Medical Systems Inc., a
Minnesota corporation, which conducts in the United States the business of
American Medical Systems ("AMS"); and
WHEREAS, Pfizer, through American Medical Systems, Inc. and certain of
its other Subsidiaries, is engaged in the Business (as defined below); and
WHEREAS, the Asset Selling Corporations own the Conveyed Assets (as
defined below); and
WHEREAS, the parties hereto desire that Pfizer shall cause
the Asset Selling Corporations to sell and transfer to Purchaser and Purchaser
shall purchase from the Asset Selling Corporations all of the Conveyed 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 premises and the mutual
covenants and undertakings contained herein, subject to and on the terms and
conditions herein set forth, and intending to be bound hereby, the parties agree
as follows:
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ARTICLE I
DEFINITIONS AND TERMS
Section 1.1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"Adjusted Allocation" shall have the meaning set forth in Section
2.8(c).
"Affected Employee" shall mean (i) an Employee who shall accept an
offer of employment or offer of continuation of employment by Purchaser on or
prior to the Closing Date pursuant to Section 7.5(a) or 7.5(e) and shall
actively work for Purchaser or any of its Affiliates at least one day, (ii) an
Employee whose employment automatically continues with the Purchaser as a matter
of Law, or (iii) an Employee whose initial offer of employment by the Purchaser
requires a relocation of more than 25 miles from his current work location,
which offer is rejected, resulting in termination of employment, whether or not
such employee worked for Purchaser or any of its Affiliates at least one day.
For purposes of this definition the term "Affected Employee" includes each
Employee whose compensation is subject to individual approval by the Pfizer
Employee Compensation and Management Development Committee.
"Affiliate" shall mean, with respect to any Person, any other
person 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.
"Agreement" shall mean this Agreement, as the same may be amended
or supplemented from time to time in accordance with the terms hereof.
"Allocation" shall have the meaning set forth in Section 2.8
hereof.
"Applicable Remedial Action Standard" shall have the meaning set
forth in this Section 8.11.
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"Asset Selling Corporations" shall mean those entities listed on
Schedule 1.1 hereof.
"Assumed Contracts" shall have the meaning set forth in Section
2.1(c) hereof.
"Assumed Liabilities" shall have the meaning set forth in Section
2.4 hereof
"Business" shall mean the worldwide business of AMS, consisting of
developing, manufacturing, distributing and selling medical devices and
autologous tissue engineering products for the surgical and interventional
treatment of disorders and other conditions of the male urogenital system and
female urinary tract and male and female fecal incontinence (but excluding any
business related to the distribution of Cardura), as conducted on the date
hereof by Pfizer through the Asset Selling Corporations.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in New York City are authorized or obligated by law or
executive order to close.
"Cash Equivalents" shall mean cash, checks, money orders,
marketable 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 United States Governmental Authority.
"Closing" shall mean the closing of the transactions contemplated
by this Agreement.
"Closing Date" shall have the meaning set forth in Section 3.1(a)
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Source" shall have the meaning set forth in Section 8.7
hereof.
"Competition Laws" shall mean statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other laws that are designed
or intended to prohibit,
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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
7.8(a) hereof.
"Compliance Action" shall have the meaning set forth in this
Section 1.1 under the definition of Excluded Environmental Liabilities.
"Confidentiality Agreement" shall mean the Confidentiality Agreement, dated
April 9, 1998, between Pfizer and Purchaser relating to the Business.
"Consolidated Tax Returns" shall mean any Tax Returns with respect
to Consolidated Taxes.
"Consolidated Taxes" shall mean all federal, state, provincial or
local Income Taxes, domestic or foreign, that are paid on a consolidated,
unitary, combined or similar basis with respect to Tax Returns that include the
Asset Selling Corporations, on the one hand, and Pfizer or any of its
Subsidiaries or Affiliates (other than the Asset Selling Corporations) on the
other.
"Conveyed Assets" shall have the meaning set forth in Section 2.1
hereof, it being understood that the Conveyed Assets do not include the Excluded
Assets.
"Deal Balance Sheet" shall have the meaning set forth in this
Section 1.1 under the definition of Working Capital of the Business.
"Disputed Item" shall have the meaning set forth in Section 2.7(b).
"Employee" shall mean an Employee (US) or an Employee (non-US).
"Employee (non-US)" shall mean any individual who as of the Closing
Date (i) shall be (or, in the case of clause (ii)(D) below, is scheduled to
become) an employee outside the United States of America of an Asset Selling
Corporation or another Affiliate of Pfizer who
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primarily performs (or will, on commencing work, primarily perform) services on
behalf of the Business and (ii) (A) shall have been employed and at work on the
Closing Date excluding any individual hired after the date hereof whose annual
base compensation exceeds $100,000, unless prior written consent has been
received from Purchaser, (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, (C) shall
have been receiving short-term disability benefits for no more than one hundred
eighty (180) consecutive days as of the Closing Date, or (D) shall have received
a written offer of employment with the Business with an Asset Selling
Corporation or another Affiliate of Pfizer, not to exceed annual base
compensation of $100,000, without the Purchaser's prior written consent, 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. For the avoidance of doubt, "Employee
(non-US)" shall in no event include any persons listed on Schedule 7.5(a)(iv).
"Employee (US)" shall mean any individual who as of the Closing
Date (i) shall be (or, in the case of clause (ii)(D) below, is scheduled to
become) an employee in the United States of America of 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 and (ii)
(A) shall have been employed and at work on the Closing Date excluding any
individual hired after the date hereof whose annual base compensation exceeds
$100,000, unless prior written consent has been received from Purchaser, (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
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consistent with the Seller Corporations' policies, practices and procedures in
effect at the time such absence or leave commenced, (C) shall have been
receiving short-term disability benefits for no more than one hundred eighty
(180) consecutive days as of the Closing Date, or (D) shall have received a
written offer of employment with the Business with an Asset Selling Corporation
or another Affiliate of Pfizer, not to exceed annual base compensation of
$100,000, without the Purchaser's prior written consent, 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.
"Environmental Law" shall mean any applicable federal, state, local
or foreign law, common law, statute, ordinance, rule, regulation, code, order,
judgment, decree or injunction as in effect at the Closing Date relating
directly or indirectly to the protection of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface or subsurface land), including the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, recycling, release or disposal of Hazardous Substances.
"Environmental Liability" means the Losses resulting from (A)
failure to comply with any requirement of an Environmental Law; (B) failure to
obtain or comply with any required Environmental Permit; (C) a Remedial Action;
or (D) harm or injury to any real property (other than a Remedial Action), to
any person, to public health, or natural resource as a result of exposure to
Hazardous Substances.
"Environmental Permits" shall mean a permit held by an Asset
Selling Corporation pursuant to an Environmental Law.
"Equipment" shall have the meaning set forth in Section 2.1(b)
hereof.
"Equipment Leases" shall have the meaning set forth in Section
2.1(b) hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" shall have the meaning set forth in Section 2.3
hereof
"Excluded Environmental Liabilities" shall mean:
(i) Environmental Liabilities resulting from Third-Party Claims
associated with or arising from all facilities other than those constituting
part of the Conveyed Assets as of the Closing Date;
(ii) Environmental Liabilities resulting from Third-Party Claims
for Remedial Action at any Facility to the extent the underlying environmental
condition resulting in such Environmental Liabilities existed or had occurred as
of the Closing Date;
(iii) Environmental Liabilities constituting fines and penalties
imposed by Governmental Authorities resulting from the pre-Closing failure to
comply with any requirement of Environmental Law or failure to obtain or comply
with any required Environmental Permit where such fines and penalties are
specifically imposed with respect to a time period prior to the Closing Date
("Compliance Action");
(iv) Environmental Liabilities resulting from the off-site
transportation, storage, disposal, treatment or recycling of Hazardous
Substances generated by and taken off-site by or on behalf of the Business prior
to the Closing Date;
(v) Environmental Liabilities resulting from the failure of the
Business prior to the Closing Date to comply with the provisions of the
California Safe Drinking Water and Toxic Enforcement Act of 1986 where there are
specific claims related to the sale of products by the Business prior to the
Closing Date; and
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(vi) Notwithstanding anything to the contrary set forth in this
Agreement, capital and other costs of environmental-related compliance with
Environmental Laws in the ordinary course of operating the Business (including,
without limitation, the operation or closure of regulated units) from and after
the Closing Date shall not be deemed to be Excluded Environmental Liabilities;
provided, however, that such costs may be recovered pursuant to Section
8.l(a)(ii) or (iii) to the extent necessary to remedy any breach of a
representation in Section 5.10.
"Facilities" shall mean the manufacturing and research and
development facilities listed on Schedule 1.1(a).
"Final Working Capital" shall have the meaning set forth in Section
2.7(c) hereof.
"Financial Statements" shall mean the audited consolidated
financial statements of AMS as of, and for the three-year period ended, December
31, 1997 set forth on Schedule 5.5 hereof.
"Foreign Implementing Agreements" shall mean the various agreements
to be executed by the Asset Selling Corporations and any Affiliates of the
Purchaser after the date of this Agreement for the purpose of implementing the
transfer and conveyance by the Asset Selling Corporations on the Closing Date,
or as soon thereafter as can be effected, of Conveyed Assets and Assumed
Liabilities to any Affiliate of Purchaser.
"Foreign Plans" shall mean each pension, profit sharing, savings,
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) (including any individual employment, severance or change in control
agreement) other than plans, programs, or arrangements required to be maintained
or
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contributed to by the Laws of the relevant jurisdiction and Plans maintained
for the benefit of Employees (US).
"GAAP" shall mean generally accepted accounting principles and
practices in effect in the United States of America from time to time, as
applied by Pfizer.
"Governmental Antitrust Entity" shall have the meaning set forth in
Section 7.3(c) hereof.
"Governmental Authority" shall mean any supranational, national,
federal, state or local judicial, legislative, executive or regulatory
authority.
"Governmental Authorizations" shall mean all licenses, permits,
certificates and other authorizations and approvals required to carry on the
Business as conducted as of the date of this Agreement under the applicable
laws, ordinances or regulations of any Governmental Authority.
"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with a
Governmental Authority.
"Hazardous Substances" shall mean (i) any hazardous substances
within the meaning of Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. ("CERCLA"),
(ii) any pollutant or contaminant within the meaning of Section 101(33) of
CERCLA, or (iii) petroleum, including crude oil or any fraction thereof
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Income Tax" or "Income Taxes" shall mean all Taxes based upon,
measured by, or calculated with respect to (i) gross or net income or gross or
net receipts or profits (including,
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but not limited to, any capital gains, minimum taxes and any Taxes on items of
tax preference, but not including sales, use, goods and services, real or
personal property transfer or other similar Taxes), (ii) multiple bases
(including, but not limited to, 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, or (iii) withholding taxes measured by, or calculated with respect to,
any payments or distributions (other than wages).
"Indemnified Party" shall have the meaning set forth in Section
8.3(a) hereof.
"Indemnifying Party" shall have the meaning set forth in Section
8.3(a) hereof.
"Independent Accountant" shall have the meaning set forth in
Section 2.7(c) hereof.
"Intellectual Property" shall mean Patent Rights, inventions,
discoveries, trade secrets, know-how and ideas, rights in research and
development, and commercially practiced processes and inventions, whether
patentable or not in any jurisdiction, Trademark Rights in any jurisdiction,
copyrights and registrations or applications for registration of copyrights in
any jurisdiction, and any renewals or extensions thereof.
"Intellectual Property Licenses" shall have the meaning set forth
in Section 2.1(e) hereof.
"Inventories" shall mean all inventory, including raw materials,
packaging supplies, work-in-process or finished goods owned by any of the Asset
Selling Corporations and relating to the Business.
"IRS" shall mean the Internal Revenue Service of the United States.
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"Joint Defense and Cooperation Agreement" shall have the meaning
set forth in Section 7.13 hereof.
"Knowledge of Pfizer" shall mean the actual knowledge of (i) a
senior officer of Pfizer or (ii) any of the following individuals: ▇▇▇▇▇ ▇▇▇▇▇;
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; ▇▇▇ ▇▇▇▇; ▇▇▇
▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
"Laws" shall include any federal. state, foreign or local law,
statute, ordinance, rule, regulation, order, injunction, judgment or decree.
"Leased Real Property" shall have the meaning set forth in Section
2.1(a) hereof.
"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) hereof.
"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, but shall exclude any effect resulting from general
economic conditions.
"Material Contracts" shall have the meaning set forth in Section
5.11(a) hereof.
"Patent Rights" shall mean patents together with any extensions,
reexaminations and reissues of such patents, patents of addition, patent
applications, continuations, continuations-in-part, and any subsequent filings
in any country claiming priority therefrom.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
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"PBO" shall mean the projected benefit obligation calculated using
the Retirement Plan's actuarial assumptions contained in its January 1, 1997
actuarial report prepared in accordance with Financial Accounting Standard
No. 87 and as modified by the change of assumptions effective as of the close of
business on December 31, 1997 as set forth in the pension footnote in Pfizer's
1997 Annual Report to the stockholders, except that the settlement rate shall be
at 7.5 percent.
"Permitted Encumbrances" shall mean (i) all Liens approved in
writing by the Purchaser, (ii) statutory Liens arising out of operation of Law
with respect to a Liability incurred in the ordinary course of business of the
Business and which is not delinquent, (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, (iv) Liens for Taxes not yet subject to penalties for
nonpayment or which are being actively contested in good faith by appropriate
proceedings, or (v) mechanics', materialmen's, carriers', workmen's,
warehousemen's, repairmen's, landlords' or other like Liens and security
obligations that are not delinquent.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
"Pfizer" shall have the meaning set forth in the heading of this
Agreement.
"Pfizer Non-Qualified Plans" shall have the meaning set forth in
Section 7.5(b)(iv).
"Pfizer Qualified Plans" shall have the meaning set forth in
Section 7.5(b)(i) hereof.
"Plan" shall mean any employee benefit plan as defined in Section
3(3) of ERISA and any other material plan, program, agreement or arrangement,
whether qualified under
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applicable Law or not, maintained (or contributed to or required to be
contributed to) by any Seller Corporation, for the benefit of any Employee (US)
(including any individual employment, change in control or severance agreement).
"Product Claim" shall mean a Third Party Claim for money or other
compensation (other than claims pursuant to any product replacement policy or
limited warranty policy with respect to a product) in respect of injury alleged
as a result of the use, application or malfunction of a product of the Business,
irrespective of the legal theory of liability and in respect of which no lawsuit
has been commenced on or prior to the Closing Date.
"Product Registrations" shall have the meaning set forth in Section
5.9(a) hereof.
"Purchase Price" shall have the meaning set forth in Section 2.6.
"Purchaser" shall have the meaning set forth in the recitals and
its wholly owned Subsidiaries.
"Purchaser Tax Act" shall have the meaning set forth in Section
7.4(e)(i).
"Purchaser's Non-Qualified Plans" shall have the meaning set forth
in Section 7.5(b)(iv).
"Purchaser's Non-Qualified Retirement Plan" shall have the meaning
set forth in Section 7.5(b)(iv).
"Purchaser's Non-Qualified Savings Plan" shall have the meaning set
forth in Section 7.5(b)(iv).
"Purchaser's Qualified Savings Plan" shall have the meaning set
forth in Section 7.5(b)(ii).
"Real Property" shall have the meaning set forth in Section 5.13(a)
hereof.
"Real Property Leases" shall have the meaning set forth in Section
2.1(a) hereof.
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"Release" means any spill, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into surface water, soil or
groundwater of any property.
"Relevant Period" shall have the meaning set forth in Section 5.22.
"Remedial Action" shall mean action to clean up soil, surface
water, groundwater or sediments in response to a Release of Hazardous
Substances, including, but not limited to, associated action taken to
investigate, monitor, assess and evaluate the extent and severity of any such
Release; action taken to remediate any such Release; post-remediation monitoring
of any such Release: and preparation of all reports, studies, analyses or other
documents relating to the above. "Remedial Action" shall also refer to any
judicial, administrative or other proceeding relating to any of the above,
including, but not limited to, the negotiation and execution of judicial or
administrative consent decrees; responding to governmental information requests;
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
soil, surface water, groundwater, and sediments in response to a Release of
Hazardous Substances and associated actions.
"Required Government Report" shall mean any written notice, report
or other filing that must be made by Purchaser to or with a Governmental
Authority pursuant to Environmental Law as a result of actions taken in the
ordinary course of operating the Business.
"Resolution Period" shall have the meaning set forth in Section
2.7(c) hereof.
"Retained Liabilities" shall have the meaning set forth in Section
2.5 hereof.
"Retirement Plan" shall have the meaning set forth in Section
7.5(b)(i) hereof.
"Savings Plan" shall have the meaning set forth in Section
7.5(b)(i) hereof.
"Seller Corporations" shall have the meaning set forth in the
heading of this Agreement.
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"Shared Services Agreement" shall have the meaning set forth in
Section 7.5(a).
"Shared Services Employees" shall have the meaning set forth in
Section 7.5(a)(iv).
"Specified Sections" shall have the meaning set forth in Section
8.7 hereof.
"Suballocation" shall have the meaning set forth in Section 2.8
hereof.
"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, 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, as the case may be.
"Tax" or "Taxes" shall mean any and all federal, state, local,
foreign and other taxes, levies, fees, imposts, duties and charges of whatever
kind (including any interest, penalties or additions to the tax imposed in
connection therewith or with respect thereto), whether or not imposed on a
Seller Corporation, including, without limitation, taxes imposed on, or measured
by, income, franchise, profits or gross receipts, and also ad valorem, value
added, sales, use, service, real or personal property, capital stock, license,
payroll, withholding, employment, social security, workers' compensation.
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premium, windfall profits, transfer and gain taxes.
"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
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Governmental Authority, in connection with the determination, assessment or
collection of any Tax or the administration of any Laws relating to any Tax.
"Third Party Claim" shall have the meaning set forth in Section
8.4(a) hereof.
"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.
"Transaction Documents" shall mean this Agreement, the Transitional
Services Agreement, the Transitional Intellectual Property License Agreement,
the Joint Defense and Cooperation Agreement and any other agreements signed in
connection herewith.
"Transitional Intellectual Property License Agreement" shall have
the meaning set forth in Section 7.10 hereof.
"Transitional Services Agreement" shall have the meaning set forth
in Section 7.9 hereof.
"WARN" shall mean the Worker Adjustment and Retraining Notification
Act.
"Welfare Type Plans" shall have the meaning set forth in Section
7.5(d).
"Working Capital of the Business" as of any date shall mean the
current assets less the current liabilities of the Business as of such date,
determined in accordance with GAAP applied on a basis consistent with that used
in preparation of the unaudited balance sheet of the Business as of December 31,
1997 as set forth on Schedule 1.1(b) (the "Deal Balance Sheet"); provided that
there shall be excluded therefrom (i) the Excluded Assets and the Retained
Liabilities and (ii) any items prorated under Section 7.4(b)(iii).
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"Working Capital Statement" shall have the meaning set forth in
Section 2.7(a) hereof.
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.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The term "dollars" and the symbol "$" shall mean United States
dollars.
ARTICLE II
PURCHASE AND SALE
Section 2.1. 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 the respective Asset Selling Corporation's
right, title and interest in and to the assets, properties and rights owned or
held by each such Asset Selling Corporation on the date hereof relating
primarily to the Business or acquired by any of the Asset Selling Corporations
primarily for the Business in the ordinary course of business of the Business
prior to the Closing (subject to any decreases or dispositions thereof as may
occur in the ordinary course of business of the Business prior to the Closing)
(collectively, the "Conveyed Assets"). Without limiting the foregoing, the
Conveyed Assets shall include all assets, properties and rights reflected on the
Deal Balance Sheet (except to the extent acquired or
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disposed of in the ordinary course of business of the Business since the date
thereof but only to the extent permitted by Section 7.2 hereof) and, except as
expressly provided otherwise herein, shall include, without limitation, those
certain assets, properties and rights described in the following clauses (a)
through (m):
(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") set forth on
Schedule 2.1(a) and the Real Property set forth on Schedule 5.13(a);
(b) the furniture, equipment, fixtures, 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 (the "Equipment" and leases relating to such Equipment so leased
by the Asset Selling Corporations, the "Equipment Leases");
(c) the contracts, licenses, agreements, warranties or guarantees
on products purchased by Asset Selling Corporations from third parties
(excluding warranties and guarantees made by any Seller Corporations to such
third parties) and commitments relating primarily to the Business (excluding
contracts, licenses, agreements and commitments relating to the Excluded Assets)
("Assumed Contracts");
(d) the Inventories of the Asset Selling Corporations;
(e) all rights to the Intellectual Property owned, utilized or
licensed by the Asset Selling Corporations (the licenses relating to
Intellectual Property so licensed by the Asset Selling Corporations sometimes
referred to as the "Intellectual Property Licenses") relating primarily to the
Business; to the extent any of said Intellectual Property, other than the Pfizer
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name and logo, is owned, utilized or licensed by Pfizer or any Affiliate or
former Affiliate of Pfizer and is used for the Business and is or could be 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 2.2 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 and their respective successors
and assigns a nonexclusive freely assignable and transferable license of such
Intellectual Property for the continuation of use by the Business;
(f) Product Registrations (and applications therefor) owned, utilized or
licensed by the Asset Selling Corporations relating solely to the Business;
(g) transferable Governmental Authorizations and Environmental Permits
owned, utilized or licensed (subject to the terms of such licenses) by the Asset
Selling Corporations relating primarily to the Business;
(h) (i) the databases and software programs, source codes and user manuals
owned, used, leased by or licensed to the Asset Selling Corporations and used
primarily in the operation of the Asset Selling Corporations' computer systems
and (ii) the computer hardware used primarily in the Business;
(i) 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 primarily to customers and vendors of the Business, and other
business and financial records, files, books and documents (whether in hard copy
or computer format) to the extent relating primarily to the Business;
(j) the accounts receivable of the Business;
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(k) the Seller Corporations' rights under all confidentiality agreements
(it being understood Purchaser will be provided copies thereof at the Closing)
entered into by a Seller Corporation with prospective bidders in connection with
the proposed sale of the Business to the extent such rights relate to
confidential information of the Asset Selling Corporations; provided, however,
the Seller Corporations shall not assign, or provide copies of, any such
confidentiality agreement if doing so would result in a breach thereof;
(l) all business information, management systems (to the extent
transferable), files and records, and related books and archival materials,
whether in hard copy or magnetic format, primarily related to the operation of
the Business, including, without limitation, advertising, print and
radio/television commercials, sales promotion materials, point of sale and shelf
merchandising materials, marketing and sales programs, market research,
technical research, business and strategic plans, consumer communications,
equipment maintenance records and warranty information, plant plans,
specifications and drawings, product and raw material specifications,
manufacturing procedures and processes, files relating to Affected Employees,
correspondence with federal, state and local governmental agencies relating to
the operation of the Business and related files and records of the Asset Selling
Corporations; and
(m) telephone, fax and similar numbers (including toll-free numbers) or
addresses used solely by the Business.
Section 2.2. Consents. (a) There shall be excluded from the transactions
contemplated by this Agreement any Real Property Lease, Equipment Lease,
Intellectual Property License, Assumed Contract, agreement, lease, license or
right which is not assignable or transferable without the consent of any Person
other than the Seller Corporations or any Subsidiary of Pfizer or Purchaser or
any Subsidiary of Purchaser, to the extent that such consent
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shall not have been given prior to the Closing, provided, however, that each of
the Seller Corporations and Purchaser shall have the continuing obligation after
the Closing to use its commercially reasonable efforts to endeavor to obtain all
necessary consents to the assignment thereof (provided that neither the Seller
Corporations nor any of their respective Subsidiaries shall be required to
expend money, 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 Real Property Leases, Equipment Leases,
Intellectual Property Licenses, Assumed Contracts, agreements, leases, licenses
or rights, if otherwise includable in the Conveyed Assets or the transactions
contemplated hereby, shall be sold and assigned to Purchaser hereunder.
(b) With respect to any Real Property Lease, Equipment Lease, Intellectual
Property License, Assumed Contract, agreement, lease, license or right, which is
not included in the Conveyed Assets at the Closing by reason of Section 2.2(a),
after the Closing, the parties shall cooperate with each other, upon written
request, (i) in endeavoring to obtain the requisite third-party consents(s) to
the assignment thereof to Purchaser, without either party being obligated,
however, to make any payment to any such third party which is not otherwise due
in order to obtain such consent, unless Purchaser shall make such payment or
agree to reimburse the Seller Corporations for such payment, and (ii) if any
such requisite consent cannot be obtained, in endeavoring to obtain for
Purchaser, at no cost to the Seller Corporations, an arrangement which Purchaser
reasonably shall desire designed to provide for Purchaser the benefits thereof
in some other manner.
(c) Purchaser acknowledges that certain consents to the transactions
contemplated by this Agreement may be required from parties to the Real Property
Leases,
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Equipment Leases, Intellectual Property Licenses, Assumed Contracts, agreements,
leases, licenses or rights and that such consents have not been and may not be
obtained. Purchaser agrees that the Seller Corporations, after exercising
commercially reasonable efforts, shall not have any liability whatsoever arising
out of or relating to the failure to obtain any consents that may have been or
may be required in connection with the transactions contemplated by this
Agreement or because of the default under or acceleration or termination of any
Real Property Lease, Equipment Lease, Intellectual Property License, Assumed
Contract, agreement, lease, license or right, as a result thereof. Purchaser
further agrees that no representation, warranty or covenant of the Seller
Corporations contained herein shall be breached or deemed breached, and, except
as provided in Section 4.2(c), no condition to Purchaser's obligations to close
the transactions contemplated by this Agreement shall be deemed not satisfied as
a result of (i) the failure to obtain any such consent or as a result of any
such default, acceleration or termination or (ii) any lawsuit, action, claim,
proceeding or investigation commenced or threatened by or on behalf of any
Person arising out of or relating to the failure to obtain any consent or any
such default, acceleration or termination.
(d) Each of the Seller Corporations 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 Business to itself
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 commercially reasonable actions (or
shall cause its Affiliates to take all such actions) requested by the Seller
Corporations to effect the provisions of this Section 2.2(d). Any action taken
pursuant to this Section 2.2(d) after the Closing Date shall be deemed for the
purposes of Section 2.7 to have occurred on the Closing
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Date and shall be reflected in the calculation of the Working Capital of the
Business pursuant to such Section 2.7.
Section 2.3. Excluded Assets of the Business. Notwithstanding any provision
in this Agreement, the Seller Corporations shall retain, with respect to the
Business or any Asset Selling Corporation, the following (the "Excluded
Assets"):
(a) Cash Equivalents;
(b) all intercompany receivables;
(c) all losses, loss carry forwards and rights to receive refunds, credits
and credit carry forwards with respect to any and all Taxes, that constitute
Retained Liabilities including, without limitation, interest thereon;
(d) the corporate books and records of the Asset Selling Corporations;
(e) all current and prior insurance policies and all rights of any nature
with respect thereto, including all insurance recoveries thereunder and rights
to assert claims with respect to any such insurance recoveries;
(f) except as expressly set forth herein, all assets of any Plan or Foreign
Plan;
(g) the "Pfizer" name and logo;
(h) the assets in Schedule 2.3(h); and
(i) all assets not related primarily to the Business.
Section 2.4. Assumption of Liabilities of the Business. Upon the terms
(including the representations, warranties, covenants and indemnities) and
subject to the conditions of this Agreement, Purchaser agrees, effective at the
Closing, to assume all Liabilities of the Seller Corporations to the extent
relating to the Conveyed Assets or the Business and to satisfy and discharge
their respective Liabilities, whether arising on, prior to or after the Closing
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Date, 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"). Subject to the
limitations contained in the immediately preceding sentence, Assumed Liabilities
shall include, without limitation, the following:
(a) all lawsuits and claims commencing after the Closing Date to the extent
resulting from the conduct of the Business or the ownership of the Conveyed
Assets, prior to, on or after the Closing Date;
(b) all Liabilities arising from the manufacture, distribution or sale of
any products of the Business prior to, on, or after the Closing Date, including,
without limitation, warranty and product replacement policy obligations; and
(c) all Liabilities for Taxes as provided in ss. 7.4(b)(ii).
Section 2.5. Retained Liabilities of Business. Notwithstanding any
provision in this Agreement, the Seller Corporations shall retain and be
responsible for the following (the "Retained Liabilities"):
(a) the Excluded Environmental Liabilities;
(b) (i) Liabilities (including legal fees and related costs) resulting from
all lawsuits and Product Claims pending as of the Closing Date solely to the
extent resulting from the conduct of the Business by any Seller Corporation or
their Affiliates prior to the Closing Date, including, without limitation, the
pending lawsuits and Product Claims listed on Schedule 5.7 hereto and (ii)
Liabilities arising from Product Claims asserted and lawsuits commenced after
the Closing Date in respect of products sold by the Business prior to the
Closing Date;
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(c) Liabilities for which Pfizer expressly has responsibility pursuant to
the terms of this Agreement;
(d) Liabilities associated with the Excluded Assets;
(e) intercompany Liabilities;
(f) Liabilities to Employees and Liabilities in respect of any Plan or
Foreign Plan, except, in each case, as expressly provided herein; and
(g) any and all Liabilities related to: (i) Income Taxes of Pfizer, the
Asset Selling Corporations and their Affiliates; (ii) except to the extent
provided under Section 7.4(b)(ii), Taxes attributable to the transfer of the
Conveyed Assets pursuant to this Agreement; (iii) all other Taxes related to the
Conveyed Assets or the Business and attributable to periods ending on or prior
to the Closing Date; (iv) all other Taxes not related to the Conveyed Assets or
the Business; and (v) Taxes of any other person pursuant to an agreement or
otherwise.
Section 2.6. Purchase Price. In consideration of the sale and transfer of
the Conveyed Assets, Purchaser agrees to purchase from each Asset Selling
Corporation the Conveyed Assets owned by it for an aggregate purchase price of
$130,000,000 (the "Purchase Price"), allocated among the Asset Selling
Corporations as described in Section 2.8, and shall pay to Pfizer, as agent for
the Seller Corporations (or to Pfizer's Affiliates as Pfizer may, on behalf of
the Seller Corporations, direct in the written transfer instructions hereinafter
referred to), the amount of the Purchase Price, in immediately available funds,
by wire transfer in accordance with written instructions given by Pfizer to
Purchaser not less than two (2) Business Days prior to the Closing, which
Purchase Price shall be subject to adjustment as provided for in Section 2.7
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Section 2.7. Purchase Price Adjustment.
The Purchase Price shall be adjusted as set forth in this Section 2.7, it
being understood that the adjustment shall not affect or operate as a waiver of
any other rights of Pfizer or Purchaser hereunder.
(a) Within ninety (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 as of the Closing
Date, taking into account (i) any transfers made pursuant to Section 2.2(d) and
(ii) the settlement of any Liabilities referred to in Section 2.5(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 reasonable access to the books, records, and personnel
of the Business necessary for Pfizer to prepare the Working Capital Statement.
(b) Purchaser may dispute the amounts reflected on the line items of the
Working Capital Statement (each a "Disputed Item"), but only (i) on the basis
that an entry on such Working Capital Statement is based on facts or occurrences
arising solely between December 31, 1997 and the Closing Date and (ii) to the
extent the amount disputed with respect to any one Disputed Item exceeds $25,000
and all such Disputed Items exceed $100,000 in the aggregate; provided, however,
the Purchaser shall notify Pfizer in writing of each Disputed Item, and specify
the amount thereof in dispute and the basis therefor, within forty-five (45)
days after receipt of the Working Capital Statement. The failure by Purchaser to
provide a notice of Disputed Items to Pfizer within such forty-five (45) day
period will constitute Purchaser's acceptance of all the items in the Working
Capital Statement.
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(c) If a notice of Disputed Items shall have been timely delivered pursuant
to subclause (b) above, Pfizer and the Purchaser shall, during the twenty (20)
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 an agreement, Pfizer and the
Purchaser shall refer all unresolved Disputed Items to Deloitte & Touche, LLP,
or any other "big five" 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 fifteen (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 2.7. The Independent Accountant shall
deliver to Pfizer and Purchaser, within such fifteen (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 report delivered pursuant to
this subclause (c).
(d) If the Final Working Capital is less than $17.4 million, then Pfizer,
on behalf of the Seller Corporations, shall, within ten (10) days after the
determination of the Final
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Working Capital, pay to Purchaser, in immediately available funds, by wire
transfer 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 ninety (90) day
commercial paper rate for high grade unsecured notes effective for the Closing
Date as published in The Wall Street Journal, Eastern Edition. If the Final
Working Capital is greater than $17.4 million, then Purchaser shall, within ten
(10) days after the determination of the Final Working Capital, pay to Pfizer,
in immediately available funds, by wire transfer 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 a rate equal to the ninety (90) day commercial paper rate for high grade
unsecured notes effective for the Closing Date as published in The Wall Street
Journal, Eastern Edition.
Section 2.8. Allocation of the Purchase Price. Pfizer, on behalf of itself
and the Asset Selling Corporations, and Purchaser have agreed to the allocation
of the Purchase Price among the Asset Selling Corporations as set forth in
Schedule 2.8 (the "Allocation"). Pfizer and the Purchaser shall agree to
allocate the Allocation made to American Medical Systems, Inc. among the
Conveyed Assets of such corporation (the "Suballocation"). As promptly as
practicable following the Closing Date, Purchaser will engage at its own expense
a nationally recognized third-party valuation firm for the purpose of valuing
the assets of American Medical Systems, Inc. Purchaser will prepare a proposed
allocation among the assets of American Medical Systems, Inc. on the basis of
such valuation and will furnish a copy thereof and the valuation to Pfizer for
its review within 60 days following the Closing Date. Pfizer shall have the
right to consent to such allocation, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing,
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(a) Purchase Price adjustments pursuant to Section 2.7 and other
post-Closing adjustments, if any, to the Purchase Price shall be allocated 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, and the Purchase Price allocation to such Asset
Selling Corporation shall be correspondingly increased or decreased; and
(b) 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 Conveyed 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 when converted at the rate of exchange used to determine Final
Working Capital, and a corresponding adjustment shall be made to the Allocation
with respect to American Medical Systems, Inc.
(c) The Allocation as modified (if at all) by the foregoing subparagraphs
(a) and (b) shall be known as the "Adjusted Allocation." Each of Pfizer and the
Asset Selling Corporations on the one hand and Purchaser on the other shall (i)
be bound by the Adjusted Allocation and by the Suballocation 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 Adjusted
Allocation and the Suballocation, and (iii) take no position, and cause its
Affiliates to take no position, inconsistent with the Adjusted Allocation or the
Suballocation on any applicable Tax Return or in any proceeding before any
taxing authority or otherwise. In the event that the Adjusted Allocation or the
Suballocation is disputed by any taxing authority, the party receiving notice of
the dispute shall promptly notify the other party hereto concerning
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resolution of the dispute. Pfizer, each of the Asset Selling Corporations and
Purchaser covenant that the Adjusted Allocation and the Suballocation will be
done at arm's length based upon a good faith estimate of fair market values.
ARTICLE III
CLOSING
Section 3.1. Closing.
(a) The Closing shall take place at the offices of ▇▇▇▇, Scholer, Fierman,
▇▇▇▇ & Handler, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00
A.M., New York time, on the fifth (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 time and place as the parties hereto may mutually agree; provided,
however, that the Closing shall not occur later than the date specified in
Section 9.1(c) of this Agreement. The date on which the Closing occurs is
called the "Closing Date." The Closing shall be deemed to occur and be
effective as of the close of business 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 hereto and the
annexes to such Exhibit.
(c) At the Closing, Purchaser shall deliver to Pfizer, as agent for the
Seller Corporations, the following: (i) the Purchase Price, in immediately
available funds, by wire transfer to one or more accounts in accordance with
written instruction given by Pfizer to Purchaser not less than two (2) Business
Days prior to the Closing; and (ii) the instruments and documents set forth in
Exhibit B hereto and the annexes to such Exhibit.
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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 any statute, regulation, order, decree
or judgment which makes illegal or enjoins or prevents in any respect the
consummation of the transactions contemplated by this Agreement, or (ii) have
been commenced, and shall be continuing or threatened, any action or proceeding
by any Governmental Authority which seeks to prevent or enjoin in any respect
the transactions contemplated by this Agreement;
(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 of the United States of America by means of a
request for additional information or otherwise shall have terminated, subject
to Section 7.3(e), and no other waiting period (including any extensions
thereof) under Competition Laws or investigation by a Governmental Authority
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 transactions 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.
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Section 4.2. Conditions to the Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions precedent:
(a) The Seller Corporations, taken as a whole, shall have performed in all
material respects their agreements and obligations contained in this Agreement
required to be performed by them at or before the Closing, and the
representations and warranties of Pfizer contained herein shall (i) have been
true and correct in all material respects when made and (ii) be true and correct
in all material respects as of the Closing, as if made as of the Closing (except
for (x) changes permitted by this Agreement or contemplated by the matters
disclosed by Pfizer in the Schedules hereto, (y) changes that would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, and (z) those representations and warranties that address
matters as of a particular date). Purchaser shall have received a certificate
from Pfizer, dated as of the Closing Date and signed by an officer of Pfizer,
certifying as to the fulfillment of the foregoing.
(b) Purchaser shall have received a favorable opinion, dated as of the
Closing Date, from ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP, counsel to the
Seller Corporations, in form and substance reasonably satisfactory to Purchaser.
(c) Notwithstanding anything in this Agreement, the consents, waivers,
authorizations and approvals listed on Schedule 4.2(c) shall have been duly
obtained and shall be in full force and effect on the Closing Date.
(d) All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of the Seller Corporations under the
provisions of this Agreement, and all other actions and proceedings required to
be taken by or on behalf of the
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Seller Corporations in furtherance of the transactions contemplated hereby and
thereby, shall be reasonably satisfactory in form and substance to counsel for
Purchaser.
(e) Pfizer shall have made or caused to be made delivery to Purchaser of
the items required by Section 3.1(b).
Notwithstanding the condition specified in clause (c) above, to the extent
that any consent, waiver, authorization or approval specified on Schedule 4.2(c)
relates to the Purchaser's ability to conduct the Business in Europe or Japan in
substantially the same manner as the Business was conducted by the Asset Selling
Corporations prior to the Closing, Pfizer may satisfy such condition by
obtaining an arrangement for a period of 18 months (or less at the option of
Purchaser) to provide Purchaser substantially comparable benefits to those
Purchaser would have enjoyed if such consent, waiver, authorization or approval
had been obtained.
Section 4.3. Conditions to the Obligations of the Seller Corporations. The
obligations of the Seller Corporations 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 (i) have been true and correct in all material respects
when made and (ii) be true and correct in all material respects as of the
Closing, as if made as of the Closing (except for (x) changes permitted by this
Agreement or contemplated by the matters disclosed by Purchaser in the Schedules
hereto, (y) changes that would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on Purchaser's ability to
perform its obligations under this Agreement, and (z) those representations and
warranties that address matters as of a particular date). Pfizer shall have
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received a certificate from Purchaser, dated as of the Closing Date and signed
by an officer of Purchaser, certifying as to the fulfillment of the foregoing.
(b) The Seller Corporations shall have received a favorable opinion, dated
as of the Closing Date, from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to Purchaser, in
form and substance reasonably satisfactory to the Seller Corporations.
(c) All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of the Seller Corporations under the
provisions of this Agreement, and all other actions and proceedings required to
be taken by or on behalf of the Seller Corporations in furtherance of the
transactions contemplated hereby and thereby, shall be reasonably satisfactory
in form and substance to counsel for the Seller Corporations.
(d) Purchaser 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
Asset Selling Corporation is a corporation duly organized, validly existing and,
where applicable, in good standing under the Laws of the jurisdiction of its
organization. Each Seller Corporation is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business, in each as related to
the business, makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not have a Material Adverse Effect.
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Section 5.2. Authority; Binding Effect.
(a) Each of the Seller Corporations 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, where applicable, the Transaction Documents, and
to perform its obligations hereunder and thereunder. The execution and delivery
by each of the Seller Corporations of this Agreement and, where applicable, the
Transaction Documents, and the performance by each of the Seller Corporations of
its obligations hereunder and thereunder, have been duly authorized by all
requisite corporate action and no other corporate proceedings are required in
connection with the execution, delivery and performance of this Agreement and,
where applicable, the Transaction Documents.
(b) Each Agreement and, where applicable, the Transaction Documents,
constitutes a valid and binding obligation of each of the Seller Corporations,
enforceable against it 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).
Section 5.3. Noncontravention. The execution, delivery and performance of
this Agreement and, where applicable, the Transaction Documents, by each of the
Seller Corporations and the consummation of the transactions contemplated hereby
does not and will not (i) violate any provision of the certificate of
incorporation, bylaws or other comparable organizational documents of Pfizer or
any Asset Selling Corporation, as the case may be, (ii) subject to obtaining the
consents referred to in Schedule 5.3, conflict with, or result in the breach of,
or constitute a default under, or result in the termination, cancellation or
acceleration
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(whether after the giving of notice or the lapse of time or both) of any right
or obligation of Pfizer, or any Asset Selling Corporation under, or to a loss of
any benefit of the Business to which Pfizer or any Asset Selling Corporation is
entitled under, any agreement, contract or other instrument to which any Seller
Corporation is a party or to which its assets are subject, (iii) assuming
compliance with the matters set forth in Sections 5.4 and 6.5, violate or result
in a breach of or constitute a default under any Law or other restriction of any
court or Governmental Authority to which any Seller Corporation is subject,
except, with respect to clauses (ii) and (iii), for any violations, conflicts,
defaults, terminations, cancellations or accelerations as will not, individually
or in the aggregate, have a Material Adverse Effect.
Section 5.4. Consents and Approvals of Governmental Authorities. Other than
as set forth in Schedule 5.4, the execution, delivery and performance of this
Agreement and, where applicable, the Transaction Documents, by each of the
Seller Corporations do not require any consent or approval of any Governmental
Authority.
Section 5.5. Financial Information; Books and Records.
(a) Except as set forth in Schedule 5.5, the Financial Statements and the
Deal Balance Sheet have been prepared in accordance with Pfizer's practices,
which are in accordance with GAAP, and present fairly n accordance with such
practices in all material respects, (i) the financial condition, assets and
liabilities of the Business as of the dates therein specified and (ii) in the
case of the Financial Statements the results of operations of the Business for
the periods then ended. All accounts receivable of the Business reflected in the
Financial Statements arose, and those reflected in the Working Capital Statement
will have arisen, from bona fide transactions and the reserves in respect
thereof reflected on the Financial Statements and to be reflected on the Working
Capital Statement, are and will be, respectively, in accordance with
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GAAP and, to the Knowledge of Pfizer, are and will be, respectively, adequate.
The Inventories of the Business reflected in the Financial Statements are, and
those to be reflected on the Working Capital Statement will be, valued at the
lower of cost or market value with allowance for obsolescence, in accordance
with GAAP.
Section 5.6. Absence of Material Changes. Since December 31, 1997, except
to the extent as set forth in Schedule 5.6, there has not been any:
(a) material adverse change in the Conveyed Assets, Assumed Liabilities or
results of operations of the Business;
(b) damage, destruction, condemnation, loss (whether or not covered by
insurance) or other event that would reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect;
(c) sale, lease, license, abandonment or other disposition by any of the
Seller Corporations of any assets material to the Business, except in the
ordinary course of the business of the Business consistent with prior practices;
or
(d) increase or enhancement of the compensation or benefits of the
Employees, other than in the ordinary course of the business of the Business
consistent with prior practices.
Section 5.7. No Litigation. Except as may be set forth on Schedule 5.7, as
of the date hereof, no litigation, investigation or proceeding by or before any
court or Governmental Authority or arbitrator is pending or, to the Knowledge of
Pfizer, threatened in writing against any Seller Corporation which would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
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Section 5.8. Compliance with Laws. Except with respect to Environmental
Laws (which are the subject of Section 5.10) and Product Registrations (which
are the subject of Section 5.9), and except as to matters otherwise set forth in
the Agreement or set forth in Schedule 5.8:
(a) each Seller Corporation is in compliance in all material respects with
all Laws applicable to the ownership or operation of the Conveyed Assets and the
Business, except to the extent that the failure to comply therewith would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and
(b) each Seller Corporation possesses all governmental permits, licenses
and authorizations necessary for the conduct of the Business as it is currently
conducted, except where the failure to possess such permit, license or
authorization would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Section 5.9. Product Registrations; Regulatory Compliance. Except with
respect to Environmental Permits (which are the subject of Section 5.10):
(a) Schedule 5.9 sets forth, as of the date hereof, a list of all licenses,
permits, approvals and similar 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"). All
the Product Registrations are in full force and effect, except where the failure
to have any Product Registration in effect would not result in a Material
Adverse Effect on the Business. To the Knowledge of Pfizer, no Seller
Corporation has received any written notice of revocation of any Product
Registration;
(b) except as set forth in Schedule 5.9, to the Knowledge of Pfizer, all
products sold under the Product Registrations are manufactured and marketed in
accordance with
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the specifications and standards contained in such Product Registrations, except
where the failure to comply therewith would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(c) except as set forth in Schedule 5.9, an Asset Selling Corporation is
the sole and exclusive owner of the Product Registrations and has not granted
any right of reference with respect thereto; and
(d) to the Knowledge of Pfizer (i) there are no open notices, citations, or
decisions by any Governmental Authority that any product designed, produced,
manufactured, sold, marketed or distributed by any Asset Selling Corporation is
defective or fails to meet any applicable standards promulgated by such
Governmental Authority and (ii) no such notices, citations or decisions have
been initiated since January 1, 1998. Since January 1, 1993 the Asset Selling
Corporations have complied in all material respects with the Laws relating to
design, manufacturing or sales of products of the Business except where the
failure to comply therewith would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
Section 5.10. Environmental Matters. Except as set forth in Schedule 5.10:
(a) the Facilities (i) are in compliance with all applicable Environmental
Laws and/or Environmental Permits, and (ii) none of the Facilities are
undertaking, nor has any Seller Corporation received notice that they are
subject to, Remedial Action or enforcement action under any or all applicable
Environmental Laws and/or Environmental Permits, except for such non-compliance,
Remedial Actions or enforcement actions that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect;
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(b) the Business has obtained all Environmental Permits required under all
applicable Environmental Laws in relation to the Facilities, except for such
failures as individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect;
(c) no claims have been made or threatened that would reasonably be
expected to result in Environmental Liability with a Material Adverse Effect and
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;
(iii) off-site treatment, storage or disposal of Hazardous Substances from the
Facilities; (iv) the handling of products by employees of others or by the
release of products into the environment as a result of treatment, storage or
disposal from the Facilities; or (v) non-compliance with any Environmental Law
at any of the Facilities.
Section 5.11. Material Contracts.
(a) Except for agreements entered into after the date hereof in the
ordinary course of business consistent with prior practices, or as set forth on
Schedule 5.11 (the "Material Contracts"), no Asset Selling Corporation is a
party to or bound by:
(i) any 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 other than clinical study agreements (A)
providing for financial commitments in excess of $50,000 and extending beyond
one year from the date hereof or (B) providing for financial commitments in
excess of $100,000;
(ii) any contract, agreement or other arrangement for the sale of
Inventories or other personal property or for the furnishing of services by the
Business with firm commitments in excess of three years from the date hereof;
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(iii) any 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 $100,000;
(iv) any contracts or agreements relating to indebtedness for borrowed
money, factoring arrangements, sale and leaseback transactions, deferred
purchase price of property and other similar financing transactions relating to
the Business with respect to which an Asset Selling Corporation is an obligor in
excess of $100,000;
(v) any research and development agreements relating to the Business the
terms of which provide for aggregate commitments to be paid by or to an Asset
Selling Corporation in excess of $100,000; and
(vi) any agreement entered into since March 1, 1995 providing for the
acquisition or disposition of any Conveyed Asset and having an aggregate value
in excess of $1,000,000, other than the sale of Inventories in the ordinary
course of business of the Business consistent with past practice or the sale of
obsolete equipment; and
(vii) any lease or occupancy agreement for any portion of the Real
Property.
(b) Except as disclosed in Schedule 5.11, (i) each Material Contract is
valid and binding on the Asset Selling Corporation that is a party thereto, and
to the Knowledge of Pfizer, the other party thereto, and is in full force and
effect, and (ii) no Asset Selling Corporation is in breach of, or default under,
any such Material Contract, which breach or default would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
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(c) Except for agreements entered into after the date hereof in the
ordinary course of business of the Business consistent with prior practices,
Schedule 5.11(e) identifies all suppliers of production materials related to the
Business.
Section 5.12. Intellectual Property. (a) Each Asset Selling Corporation
owns or has the valid right to use all of the Intellectual Property used by it
in connection with the Business. Except as set forth in Schedule 5.12(a) or
5.12(c), there is no claim in writing, suit, action or proceeding pending or, to
the Knowledge of Pfizer, threatened in writing against any Seller Corporations:
(i) alleging any conflict or infringement with any third party's proprietary
rights in the conduct of the Business; or (ii) challenging the Seller
Corporations' ownership, use, validity or enforceability of the Intellectual
Property used in the conduct of the Business.
(b) Schedule 5.12(b) sets forth a complete list of patents and trademark
registrations or applications therefore pertaining to the Intellectual Property
owned or licensed to any Asset Selling Corporation and used by it in connection
with the Business and the relevant jurisdictions. Except as described in
Schedule 5.12(b), all Intellectual Property listed therein is owned by a Seller
Corporation, free and clear of all liens and other encumbrances or claims of any
nature. All renewal fees and other maintenance fees on the Intellectual Property
listed on Schedule 5.12(b) that have fallen due on or prior to the date of this
Agreement have been paid. Except as listed in Schedule 5.12(b), no listed
application or registration/patent is the subject of any legal or governmental
proceeding before any governmental, regulatory or other authority in any
jurisdiction.
(c) Schedule 5.12(c) sets forth a complete list of all: (i) licenses,
sublicenses, and other agreements in which any Seller Corporation grants rights
to any person to use the Patent Rights or Trademark Rights relating to the
Business; and (ii) consents, indemnifications,
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forebearances to ▇▇▇, settlement agreements or cross-licensing arrangements
relating to Patent Rights or Trademark Rights relating to the Business of any
third party to which a Seller Corporation is a party. Except as set forth in
Schedule 5.12(c), no Seller Corporation is under any obligation to pay royalties
or similar payments in connection with any license as a result of the execution
and delivery of this Agreement or the performance of its obligations under this
Agreement or in breach of any license, sublicense or other agreement relating to
the Intellectual Property owned or licensed to any Asset Selling Corporation and
used by it in connection with the Business.
(d) Except as set forth on Schedule 5.12(d), each Seller Corporation owns
or has the right to use all computer software, software systems and databases
currently used by it in the Business.
(e) To the Knowledge of Pfizer, no former or present employee, officer or
director of any Seller Corporation holds any material right, title or interest
in or to any Intellectual Property used in connection with the Business.
Section 5.13. Real Property.
(a) Schedule 5.13(a) sets forth all of the real property owned in fee by
any of the Asset Selling Corporations and used primarily in connection with the
Business (collectively, the "Real Property") and prior to Closing will set forth
a description of any title insurance policies and surveys related thereto.
Except as set forth on Schedule 5.13(a), the Real Property is free and clear of
any and all Liens, other than Permitted Encumbrances.
(b) No Taxes or special assessments of any kind are or have been levied
with respect to the Real Property, or any portion thereof, which are outstanding
or unpaid, other than amounts not yet due and payable.
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(c) American Medical Systems, Inc. is not a "foreign person"
within the meaning of Section 1445 of the Code.
(d) Schedule 2.1(a) sets forth all of the Real Property
Leases.
Section 5.14. Assets. Except as set forth on Schedule 5.14 or as
otherwise provided in this Agreement, each Asset Selling Corporation owns,
leases or has the legal right to use all of its Conveyed Assets (other than
Intellectual Property and Real Property, which are the subject of Sections 5.12
and 5.13). Except as disclosed on Schedule 5.14, each Asset Selling Corporation
has good and marketable title to (or in the case of leased Conveyed Assets,
valid leasehold interests in) all its Conveyed Assets (other than Intellectual
Property and Real Property, which are the subject of Sections 5.12 and 5.13,
respectively).
Section 5.15. Taxes. Except as set forth in Schedule 5.15, (a)
all material Tax Returns that are required to be filed on or before the date
hereof by or on behalf of each Asset Selling Corporation have been filed and (b)
all material Taxes due and payable with respect to periods covered by such Tax
Returns have been paid. There are no material Liens for Taxes upon any of the
assets of the Business, except for Permitted Encumbrances. Except as set forth
on Schedule 5.15, no Tax Return that includes any Asset Selling Corporation is
currently being examined by any taxing authority and there are no outstanding
agreements or waivers extending the statute of limitations applicable to any
such Tax Return. Pfizer and each of the Asset Selling Corporations have withheld
and paid all material Taxes related to the Conveyed Assets and the Business that
are required to be withheld with respect to amounts paid or owing to any
employee, creditor, independent contractor or other third party. None of the
Conveyed Assets is "tax-exempt use property" within the meaning of Section
168(h) of the Code.
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Section 5.16. Employee Benefits.
(a) Set forth on Schedule 7.5(a) is a list of each Plan and
Foreign Plan in effect as of the date of this Agreement.
(b) As applicable with respect to each Plan and Foreign Plan,
Pfizer has made available to Purchaser, true, correct and complete copies of (i)
each Plan and Foreign Plan, including all amendments thereto, (ii) the current
summary plan description and each summary of material modifications thereto,
(iii) the most recent IRS determination letter and (iv) the actuarial and
financial reports for the Retirement Plan.
(c) Each Plan has been maintained, operated and administered
in compliance in all respects with its terms and the applicable provisions of
ERISA and the Code except where such noncompliance would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
(d) Each Foreign Plan has been maintained, operated and
administered in compliance in all respects with its terms and the applicable
laws of the relevant jurisdiction except where such noncompliance would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(e) Each Pfizer Qualified Plan has been determined by the IRS
to be qualified under Section 401 of the Code and exempt from Federal income
taxation under Section 501 of the Code, and nothing has occurred with respect to
the operation of any such plan that could reasonably result in the loss of such
qualification or tax exemption.
(f) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made under
the Pfizer Qualified Plans or by Law (without regard to any waivers granted
under Section 412 of the Code) to any funds or
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trusts established thereunder or in connection therewith have been made by the
due date thereof (including any valid extension), and all contributions for any
period ending on or before the Closing Date which are not yet due will have been
paid or accrued on or prior to the Closing Date.
(g) There are no material pending actions, claims or lawsuits
which have been asserted or instituted against the Pfizer Qualified Plans, the
assets of any of the trusts under such plans or the plan sponsor or the plan
administrator, or against any fiduciary of such plans with respect to the
operation of such plans (other than routine benefit claims), nor do the Seller
Corporations have knowledge of facts which could reasonably form the basis for
any such claim or lawsuit.
Section 5.17. Brokers. Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and Lazard Freres & Co. 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 the Seller Corporations. Pfizer is solely responsible
for the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Lazard Freres
& Co. LLC.
Section 5.18. Entire Business. Except as set forth in Schedule
5.18, the Conveyed Assets, together with the rights and services to be made
available in the Transitional Services Agreement and the Transitional
Intellectual Property License Agreement, will constitute as of the Closing Date
sufficient assets, properties and rights necessary to conduct the Business in
all material respects as currently conducted.
Section 5.19. No Undisclosed Liability. There are no Assumed
Liabilities required to be reflected on a balance sheet of the Business included
in the Financial Statements,
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prepared in accordance with GAAP, other than Liabilities (i) reflected or
reserved against on the balance sheet included in the Financial Statements, (ii)
disclosed in a Schedule hereto or (iii) incurred since December 31, 1997 in the
ordinary course of business of the Business consistent with past practice, which
Liabilities, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. Reserves required to be reflected on a
balance sheet of the Business as of December 31, 1997 prepared in accordance
with GAAP are reflected in accordance with GAAP on the balance sheet as of
December 31, 1997 included in the Financial Statements and have been established
on a basis consistent with the past practice of the Asset Selling Corporations.
Section 5.20. Product Recall. Except as disclosed in Schedule
5.20, there has not been initiated, since January 1, 1996, any product recall of
any product manufactured, shipped or sold by the Asset Selling Corporations.
Section 5.21. Suppliers. Schedule 5.21 lists the names and
addresses of the ten most significant suppliers by revenue from which the Seller
Corporations ordered raw materials, supplies, merchandise and other goods to
manufacture products of the Business during the period from January 1, 1997
through July 15, 1998, showing, with respect to each such supplier, the
approximate total volume in U.S. dollars for which each such supplier was
invoiced during such period. None of the Seller Corporations has received any
written notice that any such supplier will not sell raw materials, supplies,
merchandise and other goods to the Seller Corporations.
Section 5.22. Customers and Distributors. Schedule 5.22 sets
forth a complete and correct list of (a) all customers whose purchases exceeds
two percent (2%) of the aggregate net sales of the Business during the twelve
month period ending on June 30, 1998 (the "Relevant Period"), and (b) all
distributors whose purchases exceed 2% of the aggregate net sales of the
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Business during the Relevant Period. Except as set forth in Schedule 5.22, none
of such customers or distributors has given written notice to a Seller
Corporation that it intends to terminate its relationship with the Business.
Section 5.23. Foreign Corrupt Practices Act. The Seller
Corporations and their respective directors, officers, employees, agents and
representatives have fully complied with the provisions of the Foreign Corrupt
Practices Act of 1977, as amended. Without limiting the generality of the
foregoing, neither the Seller Corporation nor any of their directors, officers,
employees, agents or representatives has directly or indirectly paid, offered or
promised to pay or authorized the payment of any funds to a political party or
candidate for political office for the purpose of influencing any act or
decision of such official or government to obtain any license, business or other
benefit for the Seller Corporations.
Section 5.24. Labor Matters.
(a) None of the Employees are represented by any labor
organization or covered by any collective bargaining agreement with the Seller
Corporations. No labor organization or group of Employees has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings presently pending or, to the Knowledge of Pfizer,
threatened to be brought or filed with the National Labor Relations Board or any
other labor relations tribunal or authority.
(b) Since January 1, 1997, there have been no strikes, work
stoppages, slowdowns, lockouts, material arbitrations or material grievances or
other material labor disputes or, to the Knowledge of Pfizer, threatened against
or involving the Seller Corporations with respect to the Employees.
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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 State of Delaware.
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 the Transaction Documents have been duly authorized by all
requisite corporate action on the part of Purchaser and no other corporate
proceedings on the part of Purchaser are required in connection with the
execution, delivery and performance by Purchaser of the Transaction Documents.
Section 6.3. Binding Effect. The Transaction Documents constitute
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their 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).
Section 6.4. Non-Contravention. The execution, delivery and
performance by Purchaser of the Transaction Documents, and the consummation of
the transactions contemplated thereby, do not and will not (i) violate any
provision of the certificate of incorporation, bylaws or other organizational
documents of Purchaser, or (ii) assuming compliance with the matters set forth
in Sections 5.4 and 6.5, violate or result in a breach of or constitute a
default under any Law or other restriction of any court or Governmental
Authority to which Purchaser is subject.
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Section 6.5. Purchaser Consents and Approvals. Except as set
forth in Schedule 6.5, and in reliance on Schedule 5.4, 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. 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 6.7. Condition of Conveyed Assets. Purchaser and its
representatives and agents have had and exercised, prior to the date hereof, the
right to enter upon the Real Property and Leased Real Property and to make all
inspections and investigations of the Business and the Conveyed Assets deemed
necessary or desirable by Purchaser. Purchaser is purchasing the Conveyed Assets
on the basis of its inspections and investigations and the terms and provisions
hereof. In light of these inspections and investigations and the representations
and warranties made to Purchaser by Pfizer in Article V hereof, Purchaser is
relinquishing any right to any claim based on any representations and warranties
other than those specifically included in Article V hereof. 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.
Purchaser further represents that neither any of the Seller Corporations nor any
other Person has made any representation or warranty, express or implied, as to
the accuracy or completeness of any information regarding any of the Seller
Corporations, the Business, the Conveyed Assets or the Assumed Liabilities not
expressly set forth in this Agreement, and neither Pfizer nor any other Person
will have or be subject to any liability to Purchaser or any other Person
resulting from the distribution to Purchaser or its representatives or
Purchaser's use of, any such
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information, including, without limitation, the confidential memorandum
distributed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, relating to the Business, any
other offering memorandum or other publication provided to Purchaser or its
representatives, or any other document or information provided to Purchaser or
its representatives in connection with the sale of the Business.
Section 6.8. Brokers. No broker, finder or investment banker
other than ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. 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
will pay the fees of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
ARTICLE VII
COVENANTS
Section 7.1. Information and Documents. From and after the date
hereof and pending Closing, upon reasonable advance notice, the Seller
Corporations shall permit Purchaser and its representatives to have access,
during regular business hours, to the assets, employees, books and records of
the Seller Corporations 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, that no such access shall unreasonably
interfere with the Selling Corporations' operation of their respective
businesses, including, without limitation, the Business; provided further, that
all information received by Purchaser and given by or on behalf of the Seller
Corporations, in connection with this Agreement and the transactions
contemplated hereby will be held by Purchaser and its Affiliates, agents and
representatives as Information, as defined in, and pursuant to the terms of, the
Confidentiality Agreement.
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Section 7.2. Conduct of Business. From and after the date hereof
and to Closing, except as otherwise contemplated by this Agreement or 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 and usual course consistent
with past practice and in compliance with all applicable Laws (it being
understood that ▇▇▇▇▇▇▇▇▇ G.m.b.H. may transfer assets which may constitute
Conveyed Assets to a Subsidiary of Pfizer which will transfer such Conveyed
Assets to the Purchaser at the Closing), and use its reasonable best efforts to
preserve intact the Business and related relationships with customers, suppliers
and other third parties having a business relationship with it and keep
available the services of the present Employees. From and after the date hereof
and to Closing, except as otherwise contemplated by this Agreement, as Purchaser
shall otherwise consent in writing, which consent shall not be unreasonably
withheld, and except as may be necessary to remove the Excluded Assets, Pfizer
covenants and agrees that it shall cause the Asset Selling Corporations, in each
case with respect to the Business, to:
(a) maintain insurance coverage at levels consistent with
presently existing levels so long as such insurance is available at commercially
reasonable rates;
(b) not incur, create or assume any Lien with respect to any
material Conveyed Asset other than Permitted Encumbrances;
(c) not acquire or dispose of any Conveyed Asset outside of
the ordinary course of business consistent with past practice;
(d) not amend any term of, or waive any right under, any
Material Contract; and
(e) not agree to take any of the foregoing actions.
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Section 7.3. Reasonable Best Efforts; Certain Governmental
Matters.
(a) Upon the terms and subject to the conditions herein
provided (including, without limitation, Section 2.2 hereof), each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all action 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 and
to provide to the parties the other benefits contemplated by this Agreement,
including, without limitation, (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, without
limitation, 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 or a Seller Corporation in connection with the
acquisition of the Conveyed Assets or the taking of any action contemplated by
this Agreement, (iv) to effect all necessary registrations, filings and
notifications including, without limitation, all materials required under
Environmental Laws and Governmental Authorizations and all transfer requests
required for Environmental Permits and Governmental Authorizations, and (v) to
take any action reasonably necessary vigorously to defend, lift, mitigate or
rescind the effect of any litigation or administrative proceeding adversely
affecting the consummation of the acquisition of the Conveyed Assets or the
transactions contemplated by this Agreement, including promptly appealing any
adverse court or administrative decision.
(b) Subject to appropriate confidentiality protections, each
of the parties hereto will furnish to the other party such necessary information
and reasonable assistance as
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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.
(c) Without limiting the generality of the undertakings
pursuant to this Section 7.3, Purchaser and Pfizer agree to take or cause to be
taken the following actions: (i) provide promptly to Governmental Authorities
with regulatory jurisdiction over enforcement of any applicable Competition Laws
("Governmental Antitrust Entity") information and documents requested by any
Government Antitrust Entity or necessary, proper or advisable to permit
consummation of the acquisition of the Conveyed Assets and the transactions
contemplated by this Agreement; (ii) without in any way limiting the other
provisions of this Section 7.3, file any notification and report form and
related material required under the HSR Act as soon as practicable and in any
event not later than five (5) Business Days after the date hereof, and
thereafter use its reasonable 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) the proffer by
Purchaser of its willingness 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 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
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clause (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 Conveyed
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 Conveyed 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 the Purchaser will provide to
the other copies of all correspondence between it (or its advisor) and any
Government Antitrust Entity relating to acquisition of the Conveyed Assets or
any of the matters described in this Section 7.3. Pfizer and the Purchaser agree
that all telephone calls and meetings with a Government Antitrust Entity
regarding the acquisition of the Conveyed Assets or any of the matters described
in this Section 7.3 shall include representatives of Pfizer and the Purchaser.
(d) The parties expressly agree: (i) that any breach by
Purchaser of its obligations under Section 7.3(c) will cause irreparable harm to
the Seller Corporations; (ii) that the Seller Corporations have agreed to this
transaction with Purchaser in specific reliance on Purchaser's obligations under
Section 7.3(c), and would not have otherwise agreed to go forward with
Purchaser; and (iii) therefore, the Seller Corporations are entitled to specific
performance of Purchaser's obligations under Section 7.3(c), and Purchaser
hereby agrees in advance to the
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granting of such specific performance of such obligations without proof of
actual damages or harm.
(e) 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)) having jurisdiction that is necessary
lawfully to consummate the transactions contemplated hereby is not obtained on
or prior to the Closing Date, Pfizer and the Purchaser agree to effect Closing
(including payment of the Purchase Price), subject to the terms of this
Agreement, with respect to all Conveyed 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
Conveyed Assets and Assumed Liabilities in accordance with the Foreign
Implementing Agreements for the jurisdiction relating thereto. Each such
transfer, upon occurrence, shall be retroactive to and be deemed to have
occurred on the Closing Date.
Section 7.4. Tax Matters.
(a) Preparation and Filing of Tax Returns. Pfizer shall
prepare and timely file or shall cause to be prepared and timely filed all Tax
Returns in respect of the Asset Selling Corporations, their assets or activities
that (i) are required to be filed (taking into account extensions) on or before
the Closing Date, (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, or (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
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Asset Selling Corporation, or (iii) to the extent not described in clauses (i)
or (ii) above, otherwise relate to any Retained Liability. Purchaser shall
prepare or cause to be prepared and shall file or cause to be filed all other
Tax Returns required to be filed after the Closing Date with respect to Taxes
that constitute Assumed Liabilities.
(b) Payment of Taxes.
(i) 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)
to the extent not described in the preceding clause, all Taxes that
constitute Retained Liabilities. Purchaser shall pay or cause to be paid
all Taxes due with respect to separate 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.
(ii) All Taxes (including, without limitation, any
value added Taxes but excluding any Income Taxes) and fees relating to the
transfer of the Conveyed 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: (x) in respect of any such Taxes
relating to the transfer of Real Property or any interest therein, by
Purchaser; (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 (x) or (y)
above, equally by the Seller Corporations on the one hand and Purchaser on
the other hand, provided that if any such Tax or any other Tax from which
there is otherwise an exemption becomes payable as a result of an action by
or
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omission of the Purchaser, including, without limitation, changing the
nature of the Business or part thereof transferred or failing to register
or become liable for value added Tax or causing a significant break in the
conduct of the Business or part thereof transferred, such Tax shall be
borne by the 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.
(iii) Real and personal property Taxes and assessments
on the Conveyed Assets for any taxable period commencing prior to the
Closing Date and ending after the Closing Date shall be prorated on a per
diem basis between Purchaser and the Seller Corporations as of the Closing
Date. All such prorations shall be allocated so that items relating to time
periods ending on or prior to the Closing Date shall be allocated to the
Seller Corporations and items relating to time periods beginning after the
Closing Date shall be allocated to Purchaser. The amount of all such
prorations shall be settled and paid on the Closing Date, provided that
final payments with respect to prorations that are not able to be
calculated as of the Closing Date shall be calculated and paid as soon as
practicable thereafter. If any of the real or personal property tax rates
for the current taxable period are not established by the Closing Date, the
prorations shall be made on the basis of the rate in effect for the
preceding taxable period, and such proration shall be adjusted upon
presentation of written evidence by Purchaser that the actual taxes paid
differ from the amount assumed on the Closing Date. (c) Refunds. Pfizer
shall be entitled to retain, or receive immediate payment from Purchaser or
any of its Subsidiaries or Affiliates of, any refund or credit with respect
to Taxes (including, without limitation, refunds and credits arising by
reason of amended Tax
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Returns filed after the Closing Date or otherwise) with respect to any Tax that
constitutes a Retained Liability.
(d) Tax Cooperation. Each of Purchaser and Pfizer shall
provide the other party 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 Asset Selling
Corporations. Purchaser shall within the earlier to occur of sixty (60) days
after Pfizer's year-end, and one hundred twenty (120) days after the Closing
Date, prepare 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.
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) in the same
or a comparable position and, for the relevant periods set forth hereafter, 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 set forth in Schedule 7.5(a), and
identical to such other benefits as are set forth in the Employee Severance
Program in Schedule 7.5(a)(i). The benefits set forth in Schedule 7.5(a)(iii)
shall be deemed to satisfy the substantial comparability requirement with
respect to benefits for Employees (US). For purposes of this Section 7.5,
references to "rate of pay" for nonexempt employees shall be the rate of pay as
in effect on the Closing Date. For exempt employees on a total compensation,
nonvariable pay arrangement, "rate of pay" shall be, at the election of the
employee, either (i) the rate of pay (base and bonus) as in effect on the
Closing Date; or (ii) an incentive compensation arrangement provided by
Purchaser which provides earnings potential at least equal to or greater than
the employee's rate of pay (base and bonus)
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as in effect on the Closing Date. For exempt employees on the Pfizer Annual
Incentive Plan (variable compensation program) "rate of pay" shall be at the
election of the employee, either (i) the employee's base salary as in effect on
the Closing Date and continuation of the target bonus and bonus range as in
effect on the Closing Date; or (ii) an incentive compensation arrangement
provided by Purchaser which provides earnings potential at least equal to or
greater than the employee's rate of pay (base and bonus) as in effect on the
Closing Date. For exempt employees on a sales commission arrangement, "rate of
pay" shall be the employee's base salary and continuation of a quota arrangement
and commission program which shall provide earnings potential at least equal to
or greater than the employee's total earnings potential on the Closing Date.
Such employment shall be at a location within a twenty-five (25) mile radius of
such employee's location of employment as of the Closing Date (which, in the
case of a sales employee, shall mean such employee's sales territory on 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 (as defined above), position and date of hire. Except with
respect to Employees (non-US) as provided for in Section 7.5(e), Purchaser shall
have no obligation whatsoever with regard to (i) former employees of the
Business who are retired or are on long-term disability, or who are not or shall
have ceased to be employees as of or prior to the Closing Date, or (ii)
employees who do not accept the offer of employment given by Purchaser in
accordance with this Section 7.5(a) and do not actively 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 bonuses,
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incentive payments and commissions) accruing after the Closing Date with respect
to the Affected Employees. Purchaser may, at its discretion, change the
conditions of employment after the Closing Date except for (i) the location
requirement described in this Section 7.5(a), (ii) the pay and benefits
requirements described in this Section 7.5(a), and (iii) the employee separation
plan obligations and other benefits described in Schedule 7.5(a)(i), all of
which matters shall remain unchanged until the date immediately following the
second anniversary of the Closing Date.
Notwithstanding the foregoing sentence, Purchaser may, beginning January 1,
2000, require Employees (U.S.) employed by Purchaser to contribute to the cost
of medical and dental benefits as provided by Purchaser in the following
amounts: for "employee only" coverage, 20% of such cost; for all other coverage
categories (employee and spouse; employee and children; employee and family) 25%
of such cost. Purchaser agrees not to change its cost to retirees of medical or
dental coverage as currently charged by Pfizer.
Moreover, with respect to Purchaser's Qualified Retirement Plan and
Purchaser's Non-Qualified Retirement Plan, Purchaser shall provide such benefits
to Employees (US) for a period of no less than three (3) years following the
Closing Date.
Notwithstanding the foregoing, Purchaser or its Affiliates may terminate an
Employee (US) during the two (2) year period immediately following the Closing
Date 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
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provides severance benefits to such employee in accordance with the Pfizer
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
Employee Severance Program contained in Schedule 7.5(a)(i). Except with respect
to the Purchaser's obligation to continue its Qualified Retirement Plan and
Non-Qualified Retirement Plan as provided above, notwithstanding anything
further to the contrary herein, on the date immediately following the second
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.
Employees shall also be provided credit by the 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 (with such
benefit accrual for purposes of Purchaser's Qualified Retirement Plan,
Purchaser's Qualified Savings Plan and Purchaser's Non-Qualified Plans being
conditioned on asset transfers as provided in Section 7.5(b)) and (y) severance
plans, programs and policies for purposes of calculating the amount of each such
employee's severance benefits. Schedule 7.5(a)(iii) sets forth the employee
benefit plans, programs and policies to be provided by Purchaser to Employees
(US). The provisions of such employee benefit plans, programs and policies shall
mirror the material provisions of the corresponding Pfizer employee benefit
plans, programs and policies.
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Schedule 7.5(a)(iv) sets forth the names of those Employees (US) ("Shared
Services Employees") who provide services to a Pfizer Affiliate pursuant to a
services agreement between Pfizer and such Pfizer Affiliate. Purchaser agrees to
offer employment to Shared Services Employees during the term of the
Transitional Services Agreement and to allow them to perform services for a
Pfizer Affiliate (whether or not such entity remains a Pfizer Affiliate during
the term of the Transitional Services Agreement) pursuant to the Transitional
Services Agreement. Should any such Shared Services Employee be terminated by
Purchaser up to 30 days after termination of the particular service provided by
such Shared Services Employee pursuant to the Transitional Services Agreement in
accordance with its terms or such earlier date as the parties thereto may agree,
Pfizer shall reimburse Purchaser for the severance costs associated with such
termination. Severance costs associated with any Shared Services Employee
terminated subsequent to such thirty (30) day period shall be paid by Purchaser.
(b) Qualified Plans.
(i) Pfizer sponsors the following plans which are intended to be
qualified under Section 401(a) of the Code (collectively, the "Pfizer
Qualified Plans"): the Pfizer Savings and Investment Plan (the "Savings
Plan") and the Pfizer Retirement Annuity 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) As of 12:01 a.m. of the day immediately following the Closing
Date, Purchaser or its Affiliates shall establish a qualified defined
contribution plan with, without limitation, a 401(k) feature ("Purchaser's
Qualified Savings Plan") for the
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eligible employees of Purchaser. As of such date, all Affected Employees
employed by Purchaser who were eligible to participate in the Savings Plan
shall be eligible to participate in the Purchaser's Qualified Savings Plan
in accordance with the terms of such plan, and all service with Pfizer and
its Affiliates which is recognized under the Savings Plan shall be credited
for eligibility and vesting and other purposes for which service is taken
into account under the Savings Plan. Pfizer shall provide Purchaser with
all information in its possession required by Purchaser to effect such
recognition. As soon as practicable after the Closing Date, Pfizer shall
cause the assets of the trust under the Savings Plan in respect of the
aggregate benefits accrued by Affected Employees employed by Purchaser to
he valued and transferred to the trust under Purchaser's Qualified Savings
Plan; provided, however, no such transfer shall be made until Purchaser
shall have first provided Pfizer with an IRS determination letter or an
opinion of counsel reasonably satisfaction to Pfizer to the effect that
Purchaser's Qualified Savings Plan is qualified, in form, under Section
401(a) of the Code. Each of Purchaser, on the one hand, and Pfizer, on the
other hand, agrees to use its best efforts and to cooperate with the other
to effect as promptly as possible the transfer of assets contemplated under
this Section 7.5(b)(ii). The assets to be transferred from the trust under
the Savings Plan pursuant to this Section 7.5(b)(ii) shall be in cash and
Pfizer common stock or, to the extent mutually agreed to by Pfizer and
Purchaser, a combination of cash, securities and other property; provided,
however, any outstanding loans attributable to the accounts of any Affected
Employees and Pfizer stock shall be transferred in kind. The actual amount
transferred from the trust under the Savings Plan shall be adjusted to
reflect any normal expenses properly attributable to the accounts of
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all Affected Employees under the Savings Plan during the period following
the Closing Date. At the time the assets that are held in the trust with
respect to Affected Employees under the Savings Plan are paid to the trust
under Purchaser's Qualified Savings Plan, Purchaser's Qualified Savings
Plan shall assume all liabilities of the Savings Plan for the applicable
benefits thereunder, and such transfer shall be in full discharge of all
obligations of the Savings Plan in respect thereof; provided, however,
Purchaser and Purchaser's Qualified Savings Plan shall assume no liability
for the pre-transfer calculation or valuation of the assets that are
transferred from the Savings Plan, any matters relating to the operation or
administration of the Savings Plan or any violation of ERISA or the Code by
the fiduciaries of the Savings Plan. During the period following the
Closing Date and preceding the transfer of assets and liabilities pursuant
to this Section 7.5(b)(ii), Purchaser will cooperate with and assist Pfizer
or its designee in collecting and remitting to the trustee of the Savings
Plan payroll deductions relating to any outstanding loans from the Savings
Plan on behalf of Affected Employees. Notwithstanding the above, the amount
transferred to Purchaser's Qualified Savings Plan shall be in no event less
than the amount necessary to satisfy the requirements of Section 414(1) of
the Code.
(iii) As of 12:01 a.m. of the day immediately following the Closing
Date, Purchaser or its Affiliates shall establish a qualified defined
benefit plan ("Purchaser's Qualified Retirement Plan") for the eligible
employees of Purchaser. As of such effective date, all Affected Employees
employed by Purchaser who were eligible to participate in the Retirement
Plan shall be eligible to participate in Purchaser's Qualified Retirement
Plan in accordance with the terms of such plan, and all service with Pfizer
and
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its Affiliates which is recognized under the Retirement Plan shall be
credited for eligibility, vesting, and, subject to the transfer of assets
described below, benefit accrual and other purposes for which service is
taken into account under the Retirement Plan. Pfizer shall provide
Purchaser with all information in its possession required by Purchaser to
effect such recognition. As soon as practicable after the Closing Date, but
not before Purchaser shall first have provided Pfizer with an IRS
determination letter or an opinion of counsel reasonably satisfactory to
Pfizer to the effect that Purchaser's Qualified Retirement Plan is
qualified, in form, under Section 401(a) of the Code, Pfizer shall cause to
be transferred from the trust under the Retirement Plan to the trust under
Purchaser's Qualified Retirement Plan assets, in the form of cash,
securities or other property or a combination thereof, as determined by
Pfizer subject to approval by Purchaser (which approval will not be
unreasonably withheld), in an amount equal to the value of the PBO as of
the Closing Date in respect of the Affected Employees employed by
Purchaser; provided, however, such amount shall be (A) increased by 7.5%
interest for the period from the Closing Date to the date of such asset
transfer, and (B) decreased by payments made to Affected Employees from the
Retirement Plan during such period. Each of Purchaser, on the one hand, and
Pfizer, on the other hand, agrees to use its best efforts and to cooperate
with the other to effect as promptly as possible the transfer of assets
contemplated under this Section 7.5(b)(iii). Effective as of the date of
transfer of the assets from the trust under the Retirement Plan in respect
of the accrued benefits of the Affected Employees as described herein,
Purchaser's Qualified Retirement Plan shall assume all liability for such
accrued benefits, and Pfizer and the Retirement Plan shall have no further
liability therefor; provided, however, prior to the date of such transfer
of
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assets, Pfizer shall provide Purchaser with (x) a certification, prepared
by the Retirement Plan's enrolled actuary, that all assets and accrued
benefits to be transferred from the trust under the Retirement Plan have
been properly determined in accordance with this Section, and that such
transfer would be in compliance with the provisions of Sections 401(a)(12)
and 414(1) of the Code and rulings and regulations issued under such
sections; and (y) such additional information as Purchaser's enrolled
actuary may reasonably request to verify such calculations. In the event
that, within forty-five (45) days of receiving such information,
Purchaser's enrolled actuary disagrees with calculations of the PBO as
defined herein, Pfizer and Purchaser shall select an independent third
enrolled actuary to settle such disagreement. The determination of such
third actuary shall be binding on Pfizer and Purchaser. The fees, costs and
expenses of said third actuary shall be divided equally between Pfizer and
Purchaser.
(iv) As of 12:01 a.m. of the day immediately following the Closing
Date, Purchaser or its Affiliates shall establish a non-qualified defined
contribution plan ("Purchaser's Non-Qualified Savings Plan") and a
non-qualified defined benefit retirement plan ("Purchaser's Non-Qualified
Retirement Plan" and, together with Purchaser's Non-Qualified Savings Plan,
"Purchaser's Non-Qualified Plans") for the eligible employees of Purchaser.
As of such effective date, all Affected Employees employed by Purchaser who
were eligible to participate in the Pfizer Inc. Nonfunded Deferred
Compensation and Supplemental Savings Plan or the Pfizer Inc. Nonfunded
Supplemental Retirement Plan (collectively, "Pfizer's Non-Qualified Plans")
shall be eligible to participate in Purchaser's Non-Qualified Plans in
accordance with the terms of such plan, and all service with Pfizer and its
Affiliates which is recognized under Pfizer's
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Non-Qualified Plans shall be credited for eligibility, vesting, and,
subject to the transfer of assets described below, benefit accrual and
other purposes for which service is taken into account under Pfizer's
Non-Qualified Plans. Pfizer shall provide Purchaser with all information in
its possession required by Purchaser to effect such recognition. As soon as
practicable after the Closing Date, Pfizer shall cause to be transferred to
a grantor trust under Purchaser's Non-Qualified Plans assets, in the form
of cash, securities or other property or a combination thereof, as
determined by Pfizer subject to approval by Purchaser (which approval will
not be unreasonably withheld), in an amount equal to the value of the
accrued benefits under Pfizer's Non-Qualified Plans determined as of the
Closing Date in respect of the Affected Employees employed by Purchaser.
Purchaser shall provide to Pfizer an opinion of counsel, acceptable to
Pfizer, that the grantor trust is a valid grantor trust that accomplishes
the goals for which it was established. The assets to be transferred to the
grantor trust under Purchaser's Non-Qualified Plans in respect of the
accrued benefits of the Affected Employees under the Pfizer Inc. Nonfunded
Deferred Compensation and Supplemental Savings Plan and the Pfizer Inc.
Nonfunded Supplemental Retirement Plan shall be determined in the same
manner as described in Sections 7.5(b)(ii) and 7.5(b)(iii), respectively.
(c) Accrued Entitlements. To the extent reflected in the Working
Capital Statement Purchaser shall be responsible for all accrued but unused
vacation days, for Affected Employees as of the Closing Date consistent with
Pfizer's policy in respect thereof
(d) Medical and Welfare Plan Obligations. Commencing as of 12:01 a.m.
on the day immediately following the Closing Date, Purchaser shall include the
Affected Employees in its welfare plans and agrees to waive any waiting periods
or limitations for preexisting
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conditions, to the extent satisfied under Pfizer's plans, under its medical,
dental, and short-term and long-term disability 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. Pfizer and
Seller Corporations shall retain responsibility for all hospital, medical, life
insurance, disability and other welfare plan expenses and benefits, and for all
workers' compensation, unemployment compensation and other government mandated
benefits (collectively referred to herein as "Welfare Type Plans") in respect of
claims covered by such plans that are maintained by Pfizer and the Seller
Corporations and which are incurred by the Affected Employees and their
dependents on or prior to the Closing Date. Purchaser shall be responsible for
all claims incurred after the Closing Date by the Affected Employees and their
dependents which are covered by the Welfare Type Plans that are maintained by
Purchaser for such Affected Employees and their dependents. For purposes of this
Section 7.5(d), claims shall be deemed to have been incurred:
(i) with respect to all death or dismemberment claims, on the actual
date of death or dismemberment;
(ii) with respect to all disability claims on the date the claimant
became unable to (i) perform his or her regular duties of employment, in
the case of an employee claimant, or (ii) perform the normal day-to-day
responsibilities that would reasonably be expected of someone of similar
age and lifestyle, in the case of a dependent claimant;
(iii) with respect to all medical, drug or dental claims, on the date
the service was received or the supply was purchased by the claimant;
provided, however, a
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medical claim relating to a claimant's hospitalization shall be deemed to
be incurred on the date the claimant was first hospitalized; and
(iv) with respect to workers' compensation claims, on the date the
incident occurred.
(e) 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) 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, in
the aggregate, substantially equivalent on an economic basis to such employee's
benefits which are in effect on the Closing Date. Schedule 7.5(e) (which shall
be updated by Pfizer on the Closing Date) shall set forth the name of each
Employee (non-US), and his current rate of pay, position and date of hire. It is
the intention of the parties to this Agreement to deal with employee matters,
including, without limitation, offers of employment, compensation, benefits, and
severance payment and benefit continuation matters for Employees (non-US) in a
manner substantially similar to 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.
(f) Employees (US) and Employees (non-US) Absent on Disability or Leaves of
Absence - Offer of Employment; Continued Employment; Severance. When an Employee
who is, on the Closing Date, absent due to illness or on short-term disability
(including maternity disability but expressly excluding long-term disability) or
workers' compensation seeks to return
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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 the Employee is
medically capable of performing the essential functions of the position occupied
immediately before such absence and only if the Employee returns to work within
one year of the initial date of absence (or such later date as required by law).
In addition, immediate employment in the same or comparable positions will be
offered to those Employees returning from authorized leaves of absence such as
parental, family and medical, and military leaves or other leaves where return
to work is required by law. 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) and, in the case of
Employees (non-US), as otherwise required by applicable local Law as of the date
of such return to active work. Anything in this Section 7.5 to the contrary
notwithstanding, Purchaser shall have no liability to any Employee described in
this Section 7.5(f) who is absent from work on the Closing Date unless and until
such Employee commences active employment with Purchaser.
(g) No Third Part Beneficiaries. Nothing contained herein, expressed or
implied, is intended to confer upon any Employee of Seller Corporations any
benefits under any benefit plans, programs, policies or other arrangements,
including, but not limited to, 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.
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Section 7.6. Cash Management Matters. Pfizer and its Affiliates shall be
permitted to continue to conduct their activities regarding cash management
matters relating to the Business (including, without limitation, 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 2.2(d). Any AMS related
receipt by Pfizer or disbursement made by Pfizer pursuant to this Section 7.6
after the Closing Date shall be deemed for purposes of Section 2.7 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 2.7.
Section 7.7. 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 7.8. Noncompetition.
(a) Subject to the provisions of this Section 7.8, Pfizer agrees that for a
period of three (3) years from the Closing Date, Pfizer and its Subsidiaries
shall not compete in any material respect with the Business as now conducted
(but excluding any business related to Cardura) ("Competitive Activity");
provided, however, that it shall not be deemed to be a violation of this
subsection for Pfizer or any of its Subsidiaries (i) to engage, directly or
indirectly, in the research, manufacture or sale of Viagra(R) or any other
pharmaceutical product or any medical device for the delivery of pharmaceutical
products, (ii) to invest in or own any non-convertible debt securities or other
similar debt obligations, (iii) to invest in any third Person (including,
without limitation, 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
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investment is less than 20% 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, (iv) to invest in, own an interest in, or
acquire a majority of the stock or assets of any Person which is not engaged
primarily in a Competitive Activity, (v) to invest in securities having less
than five percent (5%) 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, (vi) 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
(vii) to own any equity interests through any employee benefit plan or pension
plan. Notwithstanding anything to the contrary, the foregoing covenant shall not
apply with respect to any Person that acquires a majority of the stock or assets
of Pfizer or any of its Subsidiaries and that prior to such acquisition already
was engaged in a Competitive Activity. For purposes of this subsection, "engaged
primarily in a Competitive Activity" shall mean (A) that greater than
thirty-five percent (35%) of the aggregate net revenue derived during the last
complete fiscal year of such Person is derived from the Competitive Activity or
(B) that such Person is, or owns more than 20% of the outstanding ownership
interest or holds more than 5% of the outstanding voting power of, any of the
entities specified on Schedule 7.8(a). Each investment or acquisition made by
Pfizer or its Subsidiaries which is subject to the provisions of this Section
7.8 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 7.8. For a
period of three (3) years after the Closing Date, Pfizer and its Subsidiaries
shall not, directly or indirectly, induce or attempt to induce any officers,
employees, representatives or agents of Purchaser or any of its Affiliates
engaged in the Business to leave the
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employ of Purchaser or any such Affiliate, 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.
(b) Notwithstanding anything to the contrary contained in subsection (a) of
this Section 7.8, Pfizer and its Subsidiaries shall not be deemed to have
violated the restrictions contained in this Section 7.8 in the event that Pfizer
or a Subsidiary acquires or invests in any Person engaged primarily in a
Competitive Activity; provided, 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 7.8(a) hereof
(c) 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 in the operation of the Business.
(d) Pfizer and Purchaser acknowledge that this Section 7.8 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 7.8 are reasonable and proper. It is the
desire and intent of the parties that the provisions of this Section 7.8 shall
be enforced to the fullest extent permissible under applicable Law. If all or
part of this Section 7.8 is held invalid, illegal or incapable of being enforced
by any Law or public policy, all
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other terms and provisions of this Agreement shall nevertheless remain in full
force and effect. If any part of this Section 7.8 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 7.9. Transitional Services. At the Closing, Purchaser and Pfizer
shall enter into, execute and deliver a transitional services agreement in
substantially the form attached hereto as Exhibit C (the "Transitional Services
Agreement").
Section 7.10. Transitional Intellectual Property License Agreement. At the
Closing, Purchaser and Pfizer shall enter into, execute and deliver a
transitional intellectual property license agreement in substantially the form
attached hereto as Exhibit D (the "Transitional Intellectual Property License
Agreement").
Section 7.11. Compliance with WARN, Etc. With respect to WARN or other
similar statutes or regulations of any jurisdiction, Purchaser will timely give
any notices required to be given thereunder.
Section 7.12. 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 7.13. Joint Defense and Cooperation Agreement. At the Closing,
Purchaser and Pfizer shall enter into, execute and deliver a joint defense and
cooperation agreement in substantially the form attached hereto as Exhibit H
(the "Joint Defense and Cooperation Agreement").
Section 7.14. Insurance. As of the Closing Date, the coverage under all
insurance policies related to the Business shall continue in force only for the
benefit of the Seller
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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 and agrees not to seek, through any means, to
benefit from any of the Seller Corporations' or their Affiliates' insurance
policies which may provide coverage for claims relating in any way to the
Business on or prior to the Closing Date.
Section 7.15. Confidentiality.
(a) Except as specified in paragraph (b) below, the Seller Corporations
agree to, and shall cause their agents, representatives, Affiliates, employees,
officers and directors to: (i) treat and hold as confidential (and not disclose
or provide access to any Person to) all information relating to trade secrets,
processes, patent or trademark applications, product development, price,
customer and supplier lists, pricing and marketing plans, policies and
strategies, operations methods, product development techniques, business
acquisition plans, new personnel acquisition plans and any other confidential
information with respect to the Business or the Conveyed Assets, (ii) in the
event that the Seller Corporations or their agents, representatives, Affiliates,
employees, officers or directors become legally compelled to disclose any such
information, provide Purchaser with prompt written notice of such requirement so
that Purchaser may seek a protective order or other remedy or waive compliance
with this Section 7.15, (iii) in the event that such protective order or other
remedy is not obtained or Purchaser waives compliance with this Section 7.15,
furnish only that portion of such confidential information which is legally
required to be provided; provided, however, that this sentence shall not apply
to any information that, at the time of disclosure, is available publicly and
was not disclosed in breach of this Agreement by the Seller Corporations or any
of their agents, representatives, Affiliates, employees, officers or directors.
The Seller Corporations agree and
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acknowledge that remedies at Law for any breach of their obligations under this
Section 7.15 are inadequate and that, in addition thereto, Purchaser shall be
entitled to seek equitable relief, including injunction and specific
performance, in the event any such breach, without necessity of demonstrating
the inadequacy of money damages.
(b) Notwithstanding anything to the contrary contained in paragraph (a)
above, the Seller Corporations may retain copies of and use the information
specified in clause (i) of paragraph (a) above to the extent, and only to the
extent, the Seller Corporations deem reasonably necessary to discharge any
Retained Liabilities, to comply with any Law, Governmental Order or any
requirement of any Governmental Authority or Governmental Authorization or to
comply with any existing agreement with any third party.
Section 7.16. Non-Solicitation. Each Seller Corporation agrees that,
between the date of this Agreement and the earlier of (1) the Closing and (2)
the termination of this Agreement, neither such Seller Corporation nor any of
its Affiliates, officers, directors, representatives or agents shall solicit,
initiate or encourage any other proposals or offers from any Person relating to
(i) any acquisition or purchase of all or any portion of the capital stock of
the Asset Selling Corporations or their assets (other than Inventory to be sold
in the ordinary course of the business of the Business consistent with past
practice), or (ii) any other transaction which would prevent the Selling
Corporations from consummating the transaction contemplated by this Agreement.
The Seller Corporations immediately shall cease and cause to be terminated all
existing negotiations with any Persons conducted heretofore with respect to any
of the foregoing. Each Seller Corporation agrees not to, without the prior
written consent of Purchaser, release any Person from, or waive any provision
of, any confidentiality or standstill agreement with respect to the Business to
which such Seller Corporation is a party.
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Section 7.17. Post-Closing Financial Assistance. Pfizer agrees to provide
Purchaser for up to one year after the Closing Date, access to personnel,
corporate books and records, and financial information related to the Business
prior to the Closing Date. Such access shall (i) be at times mutually convenient
to Pfizer and Purchaser, (ii) not unreasonably interfere with performance by
such personnel of their other duties and (iii) not subject Pfizer to any cost or
legal exposure, in Pfizer's sole reasonable judgment.
Section 7.18. Certain Receivables. Pfizer agrees that it will purchase from
Purchaser within 30 days after the first anniversary of the Closing any
receivables from Spanish customers which were overdue by their terms on the
Closing Date and not collected in full by Purchaser prior to such first
anniversary. The purchase price to be paid by Pfizer will be the unpaid amount
due on such receivables. Purchaser shall use all commercially reasonable efforts
to collect in full all such receivables. At the Closing, Pfizer shall deliver a
schedule of all such overdue receivables.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnification by Pfizer.
(a) Pfizer agrees to defend, indemnify and hold harmless Purchaser and its
Affiliates, and, if applicable, its directors, officers, agents, employees,
successors and assigns from and against any and all claims, actions, causes of
action, judgments, awards, liabilities, losses, costs (including reasonable
attorneys' fees) or damages (collectively, a "Loss" or the "Losses") claimed or
arising from (i) any Retained Liability, (ii) any breach by a Seller Corporation
of any of its covenants or agreements contained in this Agreement, (iii) any
breach
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of any warranty or representation of a Seller Corporation contained in this
Agreement, or (iv) any noncompliance with bulk transfer or similar laws.
(b) Purchaser shall take and shall cause its Affiliates to take all
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) Notwithstanding the provisions of this Article VIII, Pfizer shall not
be liable to the Purchaser or its Affiliates for any Loss under Section
8.1(a)(i) with respect to clause (ii) of Excluded Environmental Liabilities
except to the extent such Losses exceed $1,000,000, and then further subject to
the limitations set forth in Sections 8.5 and 8.6 (including, without
limitation, clauses (i) and (ii) of the proviso of Section 8.6).
Section 8.2. Indemnification by Purchaser.
(a) Purchaser agrees to defend, indemnify and hold harmless the Seller
Corporations and their Affiliates, and, if applicable, their directors,
officers, agents, employees, successors and assigns from and against any and all
Loss claimed or arising from (i) any Assumed Liability, (ii) any breach by
Purchaser of any of its covenants or agreements in this Agreement, or (iii) any
breach of any warranty or representation of Purchaser contained in this
Agreement.
(b) The Seller Corporations shall take and cause their Affiliates to take
all 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.
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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 or has received notice of
any actual or potential Third Party Claim, the Indemnified Party shall so notify
the party from whom indemnification is sought (the "Indemnifying Party")
promptly in writing describing such Loss or Third Party Claim, the amount or
estimated amount thereof, if known or reasonably capable of estimation, and the
method of computation of such Loss or Third Party Claim, 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 or Third Party Claim 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 or expense
as a Loss or Third Party Claim under this Article VIII, the Indemnified Party
shall promptly notify the Indemnifying Party of such action or suit and tender
the Indemnified Party the defense of such action or suit. A failure 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 responsible
Person under this Article VIII, except (i) to the extent such Indemnified 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
below,
(b) Except when an immediate notice, report or other filing must be filed
pursuant to Environmental Law, 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 that would be reasonably likely to result in a Loss or Third Party
Claim. In the event Purchaser is required to file an immediate Required
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Governmental Report or any other immediate report, notification or filing,
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
(and reasonably satisfactory to the other party), any third party claim, action
or suit (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 shall obtain
the consent of the Indemnified Party to such proposed compromise or settlement,
which consent shall not be unreasonably withheld. 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 shall
have the right to participate in, but not conduct or control, 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 of records
and information that are reasonably relevant to such Third Party Claim and
provision of them to the Indemnifying Party, and (ii) the making available of
employees on a mutually convenient basis for providing additional information
and explanation of any material provided hereunder and for acting as witnesses.
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Section 8.5. Expiration. 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 hereto shall survive the Closing, but all representations and
warranties made herein or in any certificate delivered pursuant hereto, and any
party's right to assert indemnification claims 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, March 31, 2000 with respect to any claims of any party, and of
any indemnified persons under this Article VIII, which shall not have been
previously asserted, with reasonable specificity, by written notice given under
Section 8.3; provided, however, the right to assert claims under Section
8.l(a)(i) with respect to clause (ii) of Excluded Environmental Liabilities,
shall terminate and expire on, and no action or proceeding seeking damages or
other relief with respect thereto shall be commenced, after the fifth
anniversary of the Closing Date unless Third-Party Claims shall have been made
against the Indemnified Party and written notice thereof previously given to
Pfizer under Section 8.3; and the right to assert claims under Section 8.1(a)(i)
with respect to clause (iii) of Excluded Environmental Liabilities, shall
terminate and expire on, and no action or proceeding seeking damages, relief or
indemnity with respect thereto shall be commenced, after the third anniversary
of the Closing Date unless Third-Party Claims shall have been made against the
Indemnified Party and written notice thereof previously given to Pfizer under
Section 8.3; and the right to assert claims under Section 8.1(a)(i) with respect
to clauses (i), (iv) and (v) of Excluded Environmental Liabilities shall have no
time limit.
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Section 8.6. Certain Limitations. Pfizer shall not have any liability under
clause 8.1(a) for Losses unless the aggregate of all such Losses (other than
Losses under Section 8.1(a) with respect to clause (ii) of Excluded
Environmental Liabilities), for which Pfizer would, but for this provision, be
liable exceeds on a cumulative basis $1,000,000, but if such amount is exceeded,
Pfizer shall be required to pay only the amount of such Loss which exceeds
$1,000,000; provided, however, that Pfizer shall not have any liability for
Losses (i) for any individual item where the Loss relating thereto is less than
$100,000, and (ii) for all Losses (including Losses under Section 8.1(a) with
respect to clause (ii) of Excluded Environmental Liabilities) in excess of
$39,000,000.
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 (the "Specified Sections")
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 the
present value of the tax benefit, if any, attributable to such Loss.
Indemnification under this Article VIII shall not be available to Purchaser or
Pfizer, as the case may be, unless the party seeking indemnification under this
Article VIII first uses all 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,
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 Section 8.1 or 8.2 is determined after payment by the
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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. Other Limitations. No claim for breach of representation or
warranty shall be made by Purchaser under Section 8.l (a)(iii) if(a) such claim
is based on a fact or an event occurring prior to Closing (whether or not also
occurring prior to the date of this Agreement) constituting a failure of a
condition to Closing under Section 4.2, and (b) such fact or event was disclosed
by Pfizer in writing prior to Closing.
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 remedies with respect to the subject matter of this Agreement. 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 Law (including,
without limitation, such Law relating to environmental matters or arising under
or based upon any securities law, common law or otherwise).
Section 8.10. Indemnification Procedures for Remedial Actions on Conveyed
Properties.
(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
Conveyed Assets that is subject
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to indemnification pursuant to this Agreement. Pfizer must notify Purchaser,
within thirty (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 thirty (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 8.10, Purchaser shall take only those
actions necessary to comply with applicable Environmental Laws or address
conditions that pose an immediate and acute health risk (unless additional
actions are approved by Pfizer).
(b) In undertaking a Remedial Action pursuant to this Section
8.10, 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 undertake such Remedial
Action in a prompt and expeditious fashion in accordance with applicable
Environmental 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 a property included in
the Conveyed Assets into conformance with Applicable Remedial Action Standards.
Pfizer shall comply with all applicable Laws, including all applicable
Environmental
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Laws, with respect to its performance pursuant to this Section 8.10. Pfizer
shall promptly provide copies to Purchaser of all written notices,
correspondence, final submissions, final work plans, results of field work, and
final reports and shall give Purchaser a reasonable opportunity given the
circumstances (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 a property included in the Conveyed Assets.
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, but not limited to, providing Pfizer with
reasonable access to employees and documents as necessary.
(c) 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 the 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,
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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 Indemnification for Third Party
Claims for Remedial Action. Notwithstanding anything to the contrary in this
Agreement, Pfizer's indemnification obligation under Section 8.1 hereof in
respect of clause (ii) of the definition of Excluded Environmental Liabilities
is subject to the provisions of this paragraph. Pfizer shall be responsible for
the cost of Remedial Action only to the extent necessary to meet the least
stringent applicable compliance or remediation standard consistent with the
industrial/commercial use of the property as of the Closing Date, which standard
is acceptable to the Governmental Authorities making the Third Party Claim
through the use of the most cost-effective alternative (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 after the Closing Date. Further, Pfizer
shall not be responsible for costs incurred in connection with a Remedial Action
unless such Remedial Action is (i) required by a Governmental Authority acting
pursuant to Environmental Law; (ii) required to respond to a judgment or an
order in a Third Party Claim or action; (iii) required to respond to a condition
discovered in connection with the normal day-to-day operation of a facility or a
facility expansion or demolition actually implemented by Purchaser where such
Remedial Action is necessary to permit such operation, expansion or
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demolition; or (iv) required to respond to a condition which presents a
substantial endangerment to human health.
Section 8.12. 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 thereof or any liability retained or assumed hereunder.
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 Pfizer or Purchaser if a material breach of a
representation, warranty, covenant, obligation or other provision of this
Agreement has been committed by the other party and such breach has not been
waived;
(c) by either Pfizer or Purchaser, by giving written notice
of such termination to the other party, if the Closing shall not have occurred
on or prior to December 31, 1998 (unless the failure to consummate the Closing
by such date 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
(d) except as set forth in and subject to Section 7.3(e), by
either Pfizer or Purchaser if any court of competent jurisdiction or other
competent Governmental Authority
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shall have issued a statute, rule, regulation, order, decree or injunction or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such statute,
rule, regulation, order, decree or injunction 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 as a
result of any party's material breach of any 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. Upon termination of this Agreement by Pfizer or Purchaser, by reason of a
breach by the other hereunder, the damages recoverable by the party so
terminating this Agreement shall include, without limiting the generality of the
immediately preceding sentence, all attorneys' fees reasonably incurred by such
parties in connection with the transactions contemplated hereby and thereby.
(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
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solicit any Employee to join the employ of Purchaser or any of its Affiliates
shall be extended to a period of three (3) years from the date of this
Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing and
served by personal delivery upon the party for whom it is intended, delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or sent by telecopier, provided that the telecopy 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: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Senior Vice President and
General Counsel
With a copy to:
▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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To Purchaser:
WPAMS Acquisition Corp.
c/o ▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Managing Director
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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 (on behalf of
the Seller Corporation), 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. Except as otherwise provided herein, no
party to this Agreement may assign any of its 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 Pfizer until the third anniversary hereof except that
Purchaser may without such consent assign its rights to purchase the Conveyed
Assets
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hereunder to one or more Purchaser Affiliates, provided that no such assignment
by Purchaser shall relieve Purchaser of any of its obligations hereunder.
Notwithstanding the foregoing, after the Closing, Purchaser may assign its
rights under this Agreement to a subsequent purchaser who undertakes, on terms
reasonably satisfactory to Pfizer, to assume all of Purchaser's obligations
hereunder; provided, however, that any such assignment shall not 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. 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.
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. Notwithstanding anything herein
to the contrary, each of the parties to this Agreement hereby agrees with the
other party hereto that,
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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 be made or caused to be made prior to
the Closing concerning the execution or performance of this Agreement unless the
parties shall have consulted in advance with respect thereto.
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 or any of their respective 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.
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 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. The agreement shall be governed by
the laws of the state of New York, its rules of conflict of laws
notwithstanding. Pfizer and Purchaser hereby agree and consent to be subject to
the jurisdiction of the United States District Court for the Southern District
of New York and in the absence of such Federal jurisdiction, the parties
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consent to be subject to the jurisdiction of the Supreme Court of the State of
New York, County of New York.
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.
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 provision of this Agreement, or the application thereof
to any person or entity or any circumstance, is invalid 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 or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
PFIZER INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and CFO
AMERICAN MEDICAL SYSTEMS, INC.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
HOWMEDICA INTERNATIONAL LIMITED
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
PFIZER HOSPITAL PRODUCTS (BELGIUM)
N.V.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
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HOWMEDICA G.m.b.H.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
HOWMEDICA IBERICA, S.A.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
PFIZER CANADA INC.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
PFIZER S.A.
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
PFICONPROD PTY. LIMITED
By: /s/ P. ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: P. ▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
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▇▇▇▇▇▇▇▇▇ (Europe) G.m.b.H. BY PFIZER,
INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and CFO
WPAMS ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
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