1
Exhibit 10.25
ASSET PURCHASE AGREEMENT
dated as of February 27, 1998
among
PARKEDALE PHARMACEUTICALS, INC.,
PARKE, DAVIS & COMPANY
and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY
with respect to the assets of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY'S
PARKEDALE STERILE MANUFACTURING OPERATIONS
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS...................................................... 1
1.01 Definitions............................................................ 1
Accounts Receivable......................................................... 1
Actions or Proceedings...................................................... 2
Active Employees............................................................ 2
Affiliate................................................................... 2
Agreement................................................................... 2
Assets ................................................................... 2
Assets and Properties....................................................... 2
Assignment Instruments...................................................... 2
Assumed Liabilities......................................................... 2
Assumption Instruments...................................................... 2
Benefit Plan................................................................ 2
Books and Records........................................................... 2
Business.................................................................... 2
Business Books and Records.................................................. 2
Business Combination........................................................ 3
Business Contracts.......................................................... 3
Business Day................................................................ 3
Business Licenses........................................................... 3
CERCLA ..................................................................... 3
Claim Notices............................................................... 3
Closing..................................................................... 3
Closing Date................................................................ 3
COBRA....................................................................... 3
Code ................................................................... 3
Collective Bargaining Agreement............................................. 3
Condition of the Seller's Business.......................................... 3
Consent Decree.............................................................. 3
Contract.................................................................... 3
Cut-off Date................................................................ 3
DEA ................................................................... 4
Disclosure Schedule......................................................... 4
Discontinued or Withdrawn Products.......................................... 4
Dispute Period.............................................................. 4
Employee.................................................................... 4
Environmental Laws.......................................................... 4
ERISA ................................................................... 4
Establishedment License..................................................... 4
Excluded Assets............................................................. 4
FDA ................................................................... 4
FDA Audit................................................................... 4
General Assignment and Assumption........................................... 4
Governmental or Regulatory Authority........................................ 4
Hazardous Substances........................................................ 4
Hazardous Wastes............................................................ 5
HSR Act..................................................................... 5
Improvements................................................................ 5
Inactive Employees.......................................................... 5
Indebtedness................................................................ 5
Indemnified Party........................................................... 5
Indemnifying Party.......................................................... 5
Indemnity Notice............................................................ 5
Intangible Personal Property................................................ 5
Intellectual Property....................................................... 5
Inventory................................................................... 6
IRS ................................................................... 6
Laws ................................................................... 6
Liabilities................................................................. 6
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Licenses.................................................................... 6
Liens ................................................................... 6
Loss ................................................................... 6
Modifications............................................................... 6
New Hire Date............................................................... 6
OCAW Agreement.............................................................. 6
Operative Agreements........................................................ 6
Order ................................................................... 6
Permits..................................................................... 6
Permitted Lien.............................................................. 7
Person ................................................................... 7
Personal Property Leases.................................................... 7
Petroleum Products.......................................................... 7
Plan ................................................................... 7
Post-Closing Tax Period..................................................... 7
Pre-Closing Tax Period...................................................... 7
Prepaid Expenses............................................................ 7
Purchase Price.............................................................. 7
Purchaser................................................................... 7
RCRA........................................................................ 7
Real Property............................................................... 7
Real Property Leases........................................................ 7
Release..................................................................... 7
Representatives............................................................. 7
Resolution Period........................................................... 8
Retained Liabilities........................................................ 8
Retirement Plan............................................................. 8
Savings Plan................................................................ 8
Security Agreements......................................................... 8
SOPS ................................................................... 8
Tangible Personal Property.................................................. 8
Tax ................................................................... 8
Third Party Claim........................................................... 8
Third Party Consent......................................................... 8
Third Party Product Lot..................................................... 8
Transferred Employees....................................................... 8
Union ................................................................... 8
Vehicles.................................................................... 8
▇▇ ▇▇▇▇▇▇▇▇▇ Plan........................................................... 8
Year 2000 Issue............................................................. 8
Construction of Certain Terms and Phrases................................... 9
ARTICLE II - SALE OF ASSETS AND CLOSING........................................ 9
2.01 Assets............................................................. 9
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2.02 Liabilities........................................................ 12
2.03 Purchase Price; Allocation......................................... 13
2.04 Closing............................................................ 13
2.05 Further Assurances; Post-Closing Cooperation....................... 14
2.06 Third Party Consents............................................... 15
2.07 Insurance Proceeds................................................. 15
2.08 Year 2000.......................................................... 16
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLERS........................ 16
3.01 Corporate Existence................................................ 16
3.02 Authority.......................................................... 16
3.03 No Conflicts....................................................... 16
3.04 Governmental Approvals and Filings................................. 17
3.05 Profit and Loss Statements......................................... 17
3.06 Taxes.............................................................. 17
3.07 Legal Proceedings.................................................. 17
3.08 Compliance With Laws and Orders.................................... 18
3.09 Employee Benefit Plans............................................. 18
3.10 Employees.......................................................... 19
3.11 Labor Relations.................................................... 19
3.12 Real Property...................................................... 20
3.13 Tangible Personal Property......................................... 21
3.14 Intellectual Property Rights....................................... 21
3.15 Contracts.......................................................... 22
3.16 Licenses........................................................... 23
3.17 Inventory.......................................................... 23
3.18 Insurance.......................................................... 23
3.19 Affiliate Transactions............................................. 24
3.20 Environmental Matters.............................................. 24
3.21 Vehicles........................................................... 25
3.22 Brokers............................................................ 25
3.23 Suppliers.......................................................... 25
3.24 Conduct of Business................................................ 26
3.25 Compliance with Consent Decree..................................... 26
3.26 Debarment.......................................................... 26
3.27 DEA................................................................ 26
3.28 Disclosure......................................................... 26
ARTICLE IV - REPRSENTATIONS AND WARRANTIES OF PURCHASER........................ 27
4.01 Corporate Existence................................................ 27
4.02 Authority.......................................................... 27
4.03 No Conflicts....................................................... 27
4.04 Governmental Approvals and Filings................................. 28
4.05 Legal Proceedings.................................................. 28
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4.06 Brokers............................................................ 28
4.07 Financing.......................................................... 28
ARTICLE V - COVENANTS OF SELLERS............................................... 28
5.01 Regulatory and Other Approvals..................................... 28
5.02 HSR Filings........................................................ 29
5.03 Investigation by Purchaser........................................ 29
5.04 Conduct of Business................................................ 29
5.05 Use of Trademarks and Trade Names.................................. 29
5.06 Certain Restrictions............................................... 30
5.07 Delivery of Books and Records, etc.; Removal of Property.......... 30
5.08 Fulfillment of Conditions.......................................... 31
5.09 Permits............................................................ 31
5.10 Remedial Actions................................................... 31
5.11 Guaranty........................................................... 31
ARTICLE VI - CONVENANTS OF PURCHASER........................................... 32
6.01 Regulatory and Other Approvals..................................... 32
6.02 HSR Filings........................................................ 32
6.03 Union Negotiations................................................. 32
6.04 FDA Audit.......................................................... 32
6.05 FDA Modifications and Powerhouse Repairs........................... 33
6.06 Third Party Manufacturing Business Responsibility.................. 33
6.07 Fulfillment of Conditions.......................................... 34
6.08 Additional Obligations............................................. 34
6.09 Consent Decree..................................................... 34
6.10 Parkedale Name..................................................... 35
6.11 Establishment License.............................................. 35
ARTICLE VII - CONDITIONS TO OBLIGATIONS OF PURCHASER........................... 36
7.01 Representations and Warranties..................................... 36
7.02 Performance........................................................ 36
7.03 Officers' Certificates............................................. 36
7.04 Orders and Laws.................................................... 37
7.05 Regulatory Consents and Approvals.................................. 37
7.06 Third Party Consents............................................... 37
7.07 Opinion of Counsel................................................. 37
7.08 Deliveries......................................................... 37
ARTICLE VIII - CONDITIONS TO OBLIGATIONS OF SELLERS............................ 37
8.01 Representations and Warranties.................................... 38
8.02 Performance....................................................... 38
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8.03 Officers' Certificates............................................ 38
8.04 Orders and Laws................................................... 38
8.05 Regulatory Consents and Approvals................................. 38
8.06 Third Party Consents.............................................. 38
8.07 Opinion of Counsel................................................ 38
8.08 Deliveries........................................................ 38
ARTICLE IX - TAX MATTERS....................................................... 39
9.01 Transfer Tax...................................................... 39
9.02 Allocation of Taxes............................................... 39
9.03 Other Taxes....................................................... 39
ARTICLE X - EMPLOYEE MATTERS................................................... 40
10.01 Definitions....................................................... 40
10.02 Employment of Employees of the Business........................... 40
10.03 Obligation to the Employees....................................... 40
10.04 Severance......................................................... 41
10.05 Medical Coverage.................................................. 41
10.06 Retirement and Savings Plan....................................... 41
10.07 Vacation Pay...................................................... 42
10.08 Records........................................................... 42
10.09 Workers Compensation.............................................. 42
10.10 Union............................................................. 42
ARTICLE XI - SURVIVAL; NO OTHER REPRESENTATIONS................................ 42
11.01 Survival of Representations, Warranties, Covenants and Agreements. 42
11.02 No Other Representations.......................................... 43
ARTICLE XII - INDEMNIFICATION.................................................. 43
12.01 Indemnification................................................... 43
12.02 Method of Asserting Claims........................................ 46
12.03 Exclusivity....................................................... 48
ARTICLE XIII - TERMINATION..................................................... 49
13.01 Termination....................................................... 49
13.02 Effect of Termination............................................. 49
ARTICLE XIV - MISCELLANEOUS.................................................... 49
14.01 Notices........................................................... 49
14.02 Bulk Sales Act.................................................... 50
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14.03 Entire Agreement.................................................. 51
14.04 Expenses.......................................................... 51
14.05 Public Announcements.............................................. 51
14.06 Confidentiality................................................... 51
14.07 Waiver............................................................ 52
14.08 Amendment......................................................... 52
14.09 No Third Party Beneficiary........................................ 52
14.10 No Assignment; Binding Effect..................................... 52
14.11 Headings.......................................................... 52
14.12 Invalid Provisions................................................ 53
14.13 Governing Law..................................................... 53
14.14 Counterparts...................................................... 53
Disclosure Schedule
Exhibits
A General Assignment and Assumption
B Seller's Officers' Certificate
C Seller's Secretary's Certificate
D Seller's Opinion of Counsel
E Product Asset Purchase Agreement
F Manufacturing Agreement (Parkedale Pharmaceuticals, Inc. as Owner)
G Transition Services Agreement
H Manufacturing Agreement (▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company as Owner)
I Clinical and Toxicology Manufacturing Supply Agreement
J License Agreements
K Guaranty Agreement
L Purchaser's Officers' Certificate
M Purchaser's Secretary's Certificate
N Purchaser's Opinion of Counsel
Schedules
Exhibits
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of February 27, 1998, is made and
entered into by and among Parkedale Pharmaceuticals, Inc., a Michigan
corporation ("Purchaser"), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company, a Delaware corporation
("WL"), and Parke, Davis & Company, a Michigan corporation, which is a
wholly-owned subsidiary of WL ("PD")(PD and WL are identified together as
"Sellers"). Capitalized terms not otherwise defined herein have the meanings set
forth in Section 1.01.
WHEREAS, utilizing certain real and personal property of PD, WL is engaged
in the business of manufacturing, packaging, testing and distributing, certain
pharmaceutical products for third party customers, at or in relation to its
Parkedale sterile manufacturing facility located in Rochester, Michigan (the
"'Facility"). Such business is hereinafter referred to as the "Business";
WHEREAS, PD owns the land, buildings and certain depreciable assets at the
Facility;
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WHEREAS, WL and PD each desire to sell, transfer and assign to Purchaser,
and Purchaser desires to purchase and acquire from Sellers, certain of the
assets relating to the operation of the Business (excluding, any assets related
solely to the manufacture, packaging, development, testing, distribution,
marketing and sale of WL products currently being manufactured at the Facility),
and in connection therewith, Purchaser has agreed to assume certain of the
liabilities of Sellers relating to the Business and the Facility, all on the
terms set forth herein; and
WHEREAS, in connection with the transactions contemplated by this
Agreement, WL and Purchaser will enter into that certain Product Asset Purchase
Agreement pursuant to which WL will sell certain assets related to the Products
(as that term is defined in the Product Asset Purchase Agreement) and Purchaser
will assume certain liabilities related to such Products (the "Product Asset
Purchase Agreement"). This Agreement does not address the terms and conditions
of the sale of the Products and the related assets which are being sold pursuant
to the terms of the Product Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. (a) Defined Terms. As used in this Agreement, the
following defined terms have the meanings indicated below:
"Accounts Receivable" has the meaning ascribed to it in Section
2.01(b)(ix).
"Actions or Proceedings" means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation.
"Active Employees" has the meaning ascribed to it in Section 10.01.
"Affiliate" means any Person that directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means ownership of 50% or more of the voting or income interest in such Person.
"Agreement" means this Asset Purchase Agreement and the Exhibits, the
Disclosure Schedule and the Schedules hereto and the certificates delivered in
accordance with Articles VII and VIII, as the same shall be amended from time to
time in accordance with the terms hereof.
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"Assets" has the meaning ascribed to it in Section 2.01 (a).
"Assets and Properties" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible and wherever situated), including the goodwill
related thereto, operated, owned or d by such Person.
"Assignment Instruments" has the meaning ascribed to it in Section 2.04.
"Assumed Liabilities" has the meaning ascribed to it in Section 2.02(a).
"Assumption Instruments" has the meaning ascribed to it in Section 2.04.
"Benefit Plan" means any Plan established by either Seller, or any
predecessor or Affiliate of such Seller, existing at the Closing Date or at any
time within the five (5) year period prior thereto, to which such Seller
contributes or has contributed on behalf of any Employee or former Employee, or
under which any Employee or former Employee of such Seller, or any beneficiary
thereof, is covered, is eligible for coverage or has benefit rights.
"Books and Records" of any Person means, without any limitation, all files,
documents, instruments, papers, books and records (financial or other) relating
to the business, results of operations and Assets and Properties of such Person,
including, without limitation, budgets, pricing guidelines, ledgers, journals,
deeds, title policies, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data, plans and environmental studies
together with all internal and external correspondence, historical records and
copies of the foregoing.
"Business" has the meaning ascribed to it in the forepart of this
Agreement.
"Business Books and Records" has the meaning ascribed to it in Section
2.01(a)(x).
"Business Combination" means with respect to any Person, any merger,
consolidation or combination to which such Person is a party or any sale,
dividend or other disposition of all or substantially all of the Assets and
Properties of such Person.
"Business Contracts" has the meaning ascribed to it in Section 2.01(a)(vi).
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in the State of Michigan are authorized or obligated to close.
"Business Licenses" has the meaning ascribed to it in Section
2.01(a)(viii).
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"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"Claim Notice" means written notification pursuant to Section 12.02(a) of a
Third Party Claim as to which indemnity under Section 12.01 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under Section 12.01, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim.
"Closing" means the closing of the transactions contemplated by Section
2.04.
"Closing Date" means (a) March 15, 1998 or (b) such other date as Purchaser
and Sellers mutually agree upon in writing.
"COBRA" means the Consolidated Budget Reconciliation Act of 1985, as
amended.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Collective Bargaining Agreement" has the meaning ascribed to it in Section
3.11.
"Condition of the Seller's Business" means, with respect to WL, the
business, financial condition, results of operations and Assets of the Business
and, with respect to PD, the Assets of PD being assigned, sold or transferred by
PD to Purchaser pursuant to this Agreement.
"Consent Decree" has the meaning ascribed to it in Section 3.25.
"Contract" means any agreement, lease, license, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract.
"Cut-off Date" means, with respect to any representation, warranty,
covenant or agreement contained in this Agreement, the date on which such
representation, warranty, covenant or agreement ceases to survive as provided in
clause (b), (c) or (d) of Section 11.01, as applicable.
"DEA" has the meaning ascribed to it in Section 3.27.
"Disclosure Schedule" means the record delivered to Purchaser by Sellers
herewith and dated as of the date hereof, containing all lists, descriptions,
exceptions and
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other information and materials as are required to be included therein by
Sellers pursuant to this Agreement.
"Discontinued or Withdrawn Products" means Ophthochlor(R) (chloramphenicol
ophthalmic solution), Ophthocort(R) (chloramphenicol, polymyxin B sulfate and
hydrocortisone acetate ophthalmic ointment), Chloromycetin(R) Hydrocortisone
Ophthalmic Chloromycetin(R) (chloramphenicol capsules), Surital(R), Theelin(R),
Pitocin(R), Procan(R) SR (procainamide hydrochloride extended-release tablets,
500 mg, 750 mg and 1000 mg tablets), Procan(R) capsules, Aplitest(R)
(Tuberculin), Poison Ivy Extract, Fluogen(R), ACTH for injection and Vira-A(R)
for infusion.
"Dispute Period" means the period ending thirty (30) days following receipt
by an Indemnifying Party of either a Claim Notice or an Indemnity Notice.
"Employee" means each employee or officer of a Seller engaged exclusively
in the conduct of the Business and who is located at the Facility.
"Environmental Laws" means any federal, state or local law, regulation,
ordinance or Order, including but not limited to CERCLA, RCRA and the Hazardous
Materials Transportation Act in existence as of the Closing Date which govern:
(i) the existence or remediation of contamination on the Real Property; (ii) the
emission or discharge of Hazardous Substances into the environment; (iii) the
control of Hazardous Wastes; or (iv) the use, generation, transport, treatment,
storage, disposal or removal of Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Establishment License" means Establishment License Number 1 issued by FDA
to Sellers.
"Excluded Assets" has the meaning ascribed to it in Section 2.01(b).
"FDA" means the United States Food and Drug Administration.
"FDA Audit" has the meaning ascribed to it in Section 5.10.
"General Assignment and Assumption" has the meaning ascribed to it in
Section 2.04.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
any country, or any domestic state, county, city or other political subdivision.
"Hazardous Substances" means (A) any Petroleum Products, flammable
substance, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes
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or substances or any other wastes, materials or pollutants which cause the Real
Property or the property subject to the Real Property Leases to be in violation
of any Environmental Law; (B) asbestos which is friable, urea formaldehyde foam
insulation, transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls in excess of regulatory
requirements, or radon gas; and (C) any chemical, material or substance defined
as, or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted hazardous waste"
or "toxic substances" or words of similar import under any applicable
Environmental Law.
"Hazardous Wastes" means hazardous wastes as defined by RCRA and the
regulations thereunder.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Improvements" has the meaning ascribed to it in Section 2.01(a)(i).
"Inactive Employees" has the meaning ascribed to it in Section 10.01.
"Indebtedness" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases or (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" means any Person claiming indemnification under any
provision of Article XII, including without limitation, a Person asserting a
claim pursuant to Section 12.02(c).
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XII, including
without limitation a Person against whom a claim is asserted pursuant to Section
12.02(c).
"Indemnity Notice" means written notification pursuant to Section 12.02(b)
of a claim for indemnity under Article XII by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in good faith, of
such claim.
"Intangible Personal Property" has the meaning ascribed to it in Section
2.01(a)(vii).
"Intellectual Property" means all of the following without limitation and
whether registered, issued, pending or in a draft form: patents, application for
patents,
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trademarks and trademark rights, service marks and service ▇▇▇▇ rights, service
names and service name rights, brand names, inventions, copyrights and copyright
rights, processes, formulae, product names, logos, slogans, trade secrets, trade
dress, processes, designs, methodologies, technical information, technical
drawings and know-how, relating exclusively to the Business, except that WL
shall retain the right to any know-how or trade dress utilized in connection
with any of its other businesses.
"Inventory" has the meaning ascribed to it in Section 2.01(a)(iii).
"IRS" means the United States Internal Revenue Service.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any domestic
state, county, city or other political subdivision or of any Governmental or
Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority, including all
applications, renewals or extensions therefor.
"Liens" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
"Loss" means any and all damages, fines, penalties, deficiencies, losses
and expenses (including without limitation interest, court costs, amounts paid
in settlement, reasonable fees of attorneys, accountants and other experts or
other reasonable expenses of litigation or other proceedings or of any claim,
default or assessment).
"Modifications" has the meaning ascribed to it in Section 5.10.
"New Hire Date" has the meaning ascribed to it in Section 10.01.
"OCAW Agreement" has the meaning ascribed to it in Section 6.03.
"Operative Agreements" means, collectively, the General Assignment and
Assumption and the other Assignment Instruments, and the other Assumption
Instruments, the Product Asset Purchase Agreement, those certain Manufacturing
Agreements between WL and Purchaser (the "Manufacturing Agreements"), that
certain
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Transition Services Agreement between WL and Purchaser dated the date hereof
(the "Transition Services Agreement"), those certain License Agreements (the
"License Agreements") between WL and Purchaser, that certain Clinical and
Toxicology Product Manufacturing Supply Agreement between WL and Purchaser, that
certain Guaranty Agreement by King Pharmaceuticals, Inc., a Tennessee
corporation, in favor of Sellers and any support or other agreements to be
entered into in connection with the transaction.
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"Permits" has the meaning ascribed to it in Section 3.08.
"Permitted Lien" means (i) any Lien for any Tax not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate
reserves have been established, (ii) any statutory Lien arising in the ordinary
course of business by operation of Law with respect to a Liability that is not
yet due or delinquent and (iii) any minor imperfection of title or similar Lien
unknown by Seller or disclosed to Purchaser by Seller in the Disclosure Schedule
or in any title report or title search obtained by Purchaser prior to the date
hereof.
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Personal Property Leases" has the meaning ascribed to it in Section
2.01(a)(v).
"Petroleum Products" means petroleum, gasoline, oil, fuel oil, diesel fuel
and petroleum solvents.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation day, or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Post-Closing Tax Period" means any Tax period (or portion thereof) ending
on or after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
before the Closing Date.
"Prepaid Expenses" has the meaning ascribed to it in Section 2.01(b)(x).
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"Purchase Price" has the meaning ascribed to it in Section 2.03(a) .
"Purchaser" has the meaning ascribed to it in the forepart of this
Agreement.
"RCRA" means the Resources Conservation and Recovery Act and rules and
regulations promulgated thereunder.
"Real Property" has the meaning ascribed to it in Section 2.01(a)(i).
"Real Property Leases" has the meaning ascribed to it in Section
2.01(a)(ii).
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment.
"Representatives" has the meaning ascribed to it in Section 5.03.
"Resolution Period" means the period ending one hundred twenty (120) days
following receipt by an Indemnified Party of a written notice from an
Indemnifying Party stating that it disputes all or any portion of a claim set
forth in a Claim Notice or an Indemnity Notice.
"Retained Liabilities" has the meaning ascribed to it in Section 2.02(b).
"Retirement Plan" has the meaning ascribed to it in Section 10.06(a).
"Savings Plan" has the meaning ascribed to it in Section 10.06(b).
"Security Agreements" means any security arrangements and collateral
securing the repayment or other satisfaction of the Accounts Receivable.
"SOPs" has the meaning ascribed to it in Section 6.08.
"Tangible Personal Property" has the meaning ascribed to it in Section
2.01(a)(iv).
"Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, value added, franchise, capital, paid-up
capital, profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or any penalty, addition to
tax or additional amount imposed by any
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governmental authority (domestic or foreign) responsible for the imposition of
any such tax.
"Third Party Claim" has the meaning ascribed to it in Section 12.02(a).
"Third Party Consent" has the meaning ascribed to it in Section 2.06.
"Third Party Product Lot" has the meaning ascribed to it in Section
6.06(a).
"Transferred Employees" has the meaning ascribed to it in Section 10.01.
"Union" shall mean the Oil, Chemical and Atomic Workers International
Union, local 7-176.
"Vehicles" has the meaning ascribed to it in Section 2.01(a)(ix).
"▇▇ ▇▇▇▇▇▇▇▇▇ Plan" has the meaning ascribed to it in Section 10.04.
"Year 2000 Issue" means any error, omission, gap or malfunction in computer
programming, data processing or operations arising from or relating to the
inability or failure of electronic data processing equipment, microprocessors,
computer hardware, computer software, microcontrollers, media, data, microchips
embedded in computer or non-computer equipment or any other computerized or
electronic equipment or components to recognize, interpret, process or
differentiate between years in different centuries; or any other data processing
problems associated with the inability at any time to accurately process data
involving dates on or after January 1, 2000.
(b) Construction of Certain Terms and Phrases. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender;
(ii) words using the singular or plural number also include the plural or
singular number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; and (v) the phrase "ordinary course of business" refers to the
business of Sellers in connection with the Business. Whenever this Agreement
refers to a number of days, such number shall refer to calendar days unless
Business Days are specified. Any representation or warranty contained herein as
to the enforceability of a Contract shall be subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally and to general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
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ARTICLE II
SALE OF ASSETS AND CLOSING
2.01 Assets. (a) Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, WL and PD shall each sell, transfer,
convey, assign and deliver to Purchaser, and Purchaser will purchase and pay
for, at the Closing, free and clear of all Liens other than Permitted Liens, all
right, title and interest in, to and under the following Assets and Properties
owned by WL and/or PD, as the case may be, but only to the extent used solely in
connection with the Business, except as otherwise provided in Section 2.01(b),
as the same shall exist on the Closing Date (collectively with any proceeds and
awards referred to in Section 2.07, the "Assets"):
(i) Real Property. The real property described in Section 2.01(a)(i) of the
Disclosure Schedule, and all of the rights arising out of the ownership thereof
or appurtenant thereto (the "Real Property"), together with all buildings,
structures, facilities, fixtures and other improvements thereto (the
"Improvements");
(ii) Real Property Leases. (A) The leases and subleases of real property
described in Section 2.01(a)(ii)(A) of the Disclosure Schedule, copies of which
shall be delivered to Purchaser at or prior to the Closing, as to which a Seller
is the lessor or sublessor and (B) the leases and subleases of real property
described in Section 2.01(a)(ii)(B) of the Disclosure Schedule, copies of which
shall be delivered to Purchaser at or prior to the Closing, as to which a Seller
is the lessee or sublessee, together with any options to purchase the underlying
property and leasehold improvements thereon as described in Section
2.01(a)(ii)(B) of the Disclosure Schedule, copies of which shall be delivered to
Purchaser at or prior to the Closing, and in each case all other rights,
subleases, licenses, permits, deposits and profits appurtenant to or related to
such leases and subleases (the leases and subleases described in subclauses (A)
and (B), the "Real Property Leases");
(iii) Inventory. All inventories of demonstration equipment, office and
other supplies, parts, packaging materials and other accessories related thereto
which are held at, or are in transit from or to, the locations at which the
Business is conducted which are used by a Seller solely in the conduct of the
Business, together with all rights of such Seller against suppliers of such
inventories (the "Inventory");
(iv) Tangible Personal Property. All furniture, fixtures, tools, dies,
molds, industrial models, equipment, machinery, all computer software and
hardware and other accessories related thereto, including any computer equipment
which operates the heating, ventilating, air conditioning and security systems
at the Facility, and other tangible personal property (other than Vehicles) used
solely in the conduct of the Business at the Facility or at any location subject
to a Real Property Lease (including, but not limited to, the items listed in
Section 2.01(a)(iv) of the Disclosure Schedule), (the "Tangible Personal
Property");
(v) Personal Property Leases. (A) The leases or subleases of Tangible
Personal Property described in Section 2.01(a)(v)(A) of the Disclosure Schedule,
copies of which shall be delivered to Purchaser at or prior to the Closing, as
to which a Seller is
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the lessor or sublessor and (B) the leases of Tangible Personal Property
described in Section 2.01(a)(v)(B) of the Disclosure Schedule, copies of which
shall be delivered to Purchaser at or prior to the Closing, as to which a Seller
is the lessee or sublessee, together with any options to purchase the underlying
property (the leases and subleases described in subclauses (A) and (B) are
referred to herein as the "Personal Property Leases");
(vi) Business Contracts. To the extent their transfer is permitted under
the terms thereof, all Contracts (other than the Real Property Leases, the
Personal Property Leases and the Collective Bargaining Agreement) to which a
Seller is a party and evidencing transactions relating solely to the conduct of
the Business, including, without limitation, Contracts relating to suppliers'
purchase orders and manufacturing arrangements for amounts individually in
excess of $25,000.00 as described in Section 2.01(a)(vi) of the Disclosure
Schedule. Copies of the Contracts described in Section 2.01(a)(vi) of the
Disclosure Schedule shall be delivered to Purchaser at or prior to Closing (the
"Business Contracts");
(vii) Intangible Personal Property. All Intellectual Property used solely
in the conduct of the Business (including WL's and/or PD's, as the case may be,
goodwill therein, as the case may be) and all other rights, privileges, claims,
causes of action and options relating or pertaining solely to the Business or
the Assets (the "Intangible Personal Property");
(viii) Licenses. To the extent their transfer is permitted under the terms
thereof or under applicable Laws, all Licenses utilized solely in the conduct of
the Business, including, but not limited to, the Licenses listed in Section
2.01(a)(viii) of the Disclosure Schedule (the "Business Licenses"). Copies of
such listed Licenses shall be delivered to Purchaser on or prior to the Closing
Date;
(ix) Vehicles. All motor vehicles owned by a Seller and used solely in the
conduct of the Business, as listed in Section 2.01(a)(ix) of the Disclosure
Schedule, copies of which shall be delivered to Purchaser at or prior to the
Closing, (the "Vehicles");
(x) Books and Records. Except as set forth in Section 5.07(a), all Books
and Records used solely in the conduct of the Business or otherwise relating
solely to the Assets, other than the minute books, stock transfer books and
corporate seal of a Seller, which relate to the conduct of such Business or
Assets for the period beginning January 1, 1993 and with respect to those books
and records which are material to the operation of the Business or the Assets,
and to the extent necessary to the conduct of the Business, any additional Books
and Records requested by Purchaser (the "Business Books and Records"). To the
extent any of the Business Books and Records are items susceptible to
duplication and are either (x) used in connection with any of WL's or PD's
businesses other than the Business or (y) are required by Law to be retained by
WL or
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PD, as the case may be, WL and/or PD, as the case may be, may deliver
photostatic copies or other reproductions from which, in the case of Business
Books and Records referred to in clause (x), information solely concerning WL's
or PD's, as the case may be, businesses other than the Business, has been
deleted;
(xi) Litigation Claims. Any rights (including indemnification rights),
claims and recoveries under litigation against third parties arising out of or
relating to events occurring after the Closing Date; and
(xii) Goodwill. All goodwill associated with the Business other than
goodwill associated with any trademark, trade name, service ▇▇▇▇, service name,
slogan or logo which was (A) used by Sellers prior to the date hereof and (B)
not transferred to Purchaser pursuant to this Agreement or the Operative
Agreements.
(b) Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the following Assets and Properties of WL and/or PD, as the case may
be (the "Excluded Assets") shall be excluded from and shall not constitute
Assets:
(i) Cash. Cash, commercial paper, certificates of deposit and other bank
deposits, treasury bills and other cash equivalents, except for the Landlord
Security Deposits pursuant to Section 5.07 of this Agreement;
(ii) Insurance. Life insurance policies of officers and other employees of
WL and PD and all other insurance policies relating to the operation of the
Business;
(iii) Employee Benefit Plans. All assets owned or held by any Benefit
Plans;
(iv) Tax Refunds. All refunds or credits, if any, of Taxes due to or from
WL or PD, as the case may be, which cannot be assigned by Law;
(v) Real and Personal Property.Any real or personal property that is not
described in Sections 2.01(a)(i), (iv), (vii) or (ix);
(vi) Corporate Records. The minute books, stock transfer books and
corporate seal of WL and/or PD;
(vii) Litigation Claims. Any rights (including indemnification), claims and
recoveries under litigation of WL and/or PD, as the case may be, against third
parties arising out of or relating to events occurring prior to the Closing
Date;
(viii) Excluded Obligations. The obligations of WL and/or PD, as the case
may be, in, to and under all Contracts of any nature, which are not assumed by
Purchaser pursuant to Section 2.02(b);
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(ix) Accounts Receivable. All trade accounts receivable and all notes,
bonds and other evidences of Indebtedness of and rights to receive payments
arising out of sales occurring in the conduct of the Business prior to the
Closing Date and the Security Agreements related thereto, including any rights
of a Seller with respect to any third party collection procedures or any other
Actions or Proceedings which have been commenced in connection therewith (the
"Accounts Receivable");
(x) Prepaid Expenses. All prepaid expenses relating to the Business,
including, but not limited to, the items listed in Section 2.01(b)(x) of the
Disclosure Schedule (the "Prepaid Expenses"); and
(xi) WL's and PD's rights under this Agreement.
2.02 Liabilities. (a) Assumed Liabilities. In connection with the sale,
transfer, conveyance, assignment and delivery of the Assets pursuant to this
Agreement, on the terms and subject to the conditions set forth in this
Agreement, at the Closing, Purchaser will assume and agree to pay, perform and
discharge when due only the following obligations of WL or PD, as the case may
be, arising solely in connection with the operation of the Business, as the same
shall exist on the Closing Date together with all rights, claims and defenses of
Seller (and the right to assert such rights, claims and defenses) in, to and
against such obligations (the "Assumed Liabilities"), and no others:
(i) Real Property Lease Obligations. All obligations of WL or PD, as the
case may be, under the Real Property Leases arising or to be performed on or
after the Closing Date, and excluding any such obligations arising or to be
performed prior to the Closing Date;
(ii) Personal Property Lease Obligations. All obligations of WL or PD, as
the case may be, under the Personal Property Leases arising or to be performed
on or after the Closing Date, and excluding any such obligations arising or to
be performed prior to the Closing Date;
(iii) Obligations under Contracts and Licenses. All obligations of WL or
PD, as the case may be, under the Business Contracts and Business Licenses
arising or to be performed on or after the Closing Date, and excluding any such
obligations arising and to be performed prior to the Closing Date;
(iv) Permitted Liens. All Permitted Liens attaching to or otherwise
covering the Assets.
(v) Consent Decree. Obligations under the Consent Decree to the extent set
forth in Section 6.09.
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(vi) Establishment License. Obligations with respect to the Establishment
License to the extent set forth in Section 6.11.
(b) Retained Liabilities. Except for the Assumed Liabilities, Purchaser
shall not assume by virtue of this Agreement or the transactions contemplated
hereby, and shall have no liability for, any Liabilities of WL or PD, as the
case may be, of any kind, character or description whatsoever (the "Retained
Liabilities"). WL or PD, as the case may be, shall discharge in a timely manner
or shall make adequate provision for all of the Retained Liabilities, provided
that WL or PD, as the case may be, shall have the ability to contest, in good
faith, any such claim of liability asserted in respect thereof by any Person
other than Purchaser and its Affiliates. Without limiting the foregoing, the
Purchaser shall not at the Closing, assume or agree to perform, pay or
discharge, and the Sellers shall remain unconditionally liable for, all
obligations, liabilities and commitments, fixed or contingent, of the Sellers
other than the Assumed Liabilities, including but not limited to: (i) any Union
contract (including, without limitation, the Collective Bargaining Agreement);
(ii) post-retirement benefits owing under any severance policy, union contract
(including, without limitation, the Collective Bargaining Agreement) or
employment agreement to any employees (union or non-union), sales agents,
distributors or independent contractors employed by the Sellers prior to the
Closing, liabilities for any Benefit Plan including but not limited to any
obligations under ERISA or under COBRA; (iii) liabilities for any federal,
state, local or foreign income taxes (including interest, penalties and
additions to such taxes), any deferred income taxes or any single business taxes
owed by or asserted against the Sellers; (iv) liabilities incurred in connection
with violations of occupational safety, wage, health, welfare, employee benefit
laws or regulations or Environmental Laws, which violations occurred prior to
the Closing; (v) any other Liens or liabilities of Sellers of any kind or nature
that are not expressly assumed by the Purchaser under Section 2.02 hereof; and
(vi) deferred expenses.
2.03 Purchase Price; Allocation. (a) Purchase Price. The aggregate purchase
price for the Assets is Seventy-Seven Million Dollars ($77,000,000.00) (the
"Purchase Price").
(b) Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets in accordance with Section 2.03(b) of the Disclosure Schedule.
Each party hereto agrees (i) that any such allocation shall be consistent with
the requirements of Section 1060 of the Code and the regulations thereunder,
(ii) if required, to complete and to file Form 8594 with its federal income tax
return consistent with such allocation for the tax year in which the Closing
Date occurs and (iii) that it will not and will cause its Affiliates not to take
a position on any income, transfer or gains Tax return, before any Governmental
or Regulatory Authority charged with the collection of any such Tax or in any
judicial proceeding, that is in any manner inconsistent with the terms of any
such allocation, without the consent of the other party.
22
2.04 Closing. The Closing will take place at the Facility or at such other
place as the parties mutually agree, at 10:00 A.M. local time, on the Closing
Date. At the Closing, Purchaser will pay the Purchase Price by wire transfer of
immediately available funds to such accounts as WL may reasonably direct by
written notice delivered to Purchaser by WL at least two (2) Business Days
before the Closing Date. Simultaneously, (a) each Seller will assign and
transfer to Purchaser good and valid title in and to such Seller's Assets (free
and clear of all Liens, other than Permitted Liens) by delivery of, if
applicable, (i) a General Assignment, Assumption and Irrevocable ▇▇▇▇ of Sale
substantially in the form of Exhibit A hereto (the "General Assignment and
Assumption"), duly executed by such Seller, (ii) general warranty deeds in
proper statutory form for recording and otherwise in form and substance
reasonably satisfactory to Purchaser conveying title to the Real Property and
(iii) such other good and sufficient instruments of conveyance, assignment and
transfer, in form and substance reasonably acceptable to Purchaser's counsel, as
shall be effective to vest in Purchaser good and valid title to the Assets (the
General Assignment and Assumption and the other instruments referred to in
clauses (ii) and (iii) being collectively referred to herein as the "Assignment
Instruments"), and (b) Purchaser will assume from each Seller the due payment,
performance and discharge of the Assumed Liabilities assumed from such Seller,
by delivery of (i) the General Assignment and Assumption duly executed by
Purchaser, and (ii) such other good and sufficient instruments of assumption, in
form and substance reasonably acceptable to such Seller's counsel, as shall be
effective to cause Purchaser to assume the Assumed Liabilities as and to the
extent provided in Section 2.02(a) (the General Assignment and Assumption and
such other instruments collectively referred to herein as the "Assumption
Instruments"). At the Closing, there shall also be delivered to each Seller and
Purchaser the opinions, certificates and other Contracts, documents and
instruments required to be delivered under Articles VII and VIII.
2.05 Further Assurances; Post-Closing Cooperation. (a) Subject to the terms
and conditions of this Agreement, at any time or from time to time after the
Closing, at Purchaser's request, WL and PD, as the case may be, shall execute
and deliver to Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as shall be necessary in order more effectively to transfer,
convey and assign to Purchaser, and to confirm Purchaser's title to, all of the
Assets being sold by such party hereunder, and, to the full extent permitted by
Law, to put Purchaser in actual possession and operating control of the Business
and the Assets and to assist Purchaser in exercising all rights with respect
thereto, and otherwise to cause WL or PD, as the case may be, to fulfill its
respective obligations under this Agreement and the Operative Agreements.
(b) Following the Closing, each party will afford each other party, its
counsel and its accountants, during normal business hours, reasonable access to
the books, records and other data relating to the Business in its possession and
the right to make copies and extracts therefrom, to the extent that such access
may be reasonably required by the requesting party in connection with (i) the
preparation of Tax returns, (ii)
23
the determination or enforcement of rights and obligations under this Agreement
or the Operative Agreements, (iii) compliance with the requirements of any
Governmental or Regulatory Authority, (iv) the determination or enforcement of
the rights and obligations of any Indemnified Party or any Indemnifying Party,
(v) in connection with any actual or threatened Action or Proceeding or (vi) the
operation by Purchaser of the Business, but only with respect to Books and
Records in Sellers' possession, which were necessary for Sellers to operate the
Business prior to the Closing Date, were so used by Sellers and after the
Closing Date remain necessary for Purchaser to operate the Business. Further,
each party agrees for a period extending six (6) years after the Closing Date
not to destroy or otherwise dispose of any such books, records and other data
unless such party shall first offer in writing to surrender such books, records
and other data to the other party and such other party shall not agree in
writing to take possession thereof during the ten (10) day period after such
offer is made.
(c) If, in order properly to prepare its Tax returns, other documents or
reports required to be filed with Governmental or Regulatory Authorities or its
financial statements or to fulfill its obligations hereunder, it is necessary
that a party be furnished with additional information, documents or records
relating to the Business not referred to in paragraph (b) above, and such
information, documents or records are in the possession or control of any other
party, such other party shall use its best efforts to furnish or make available
such information, documents or records (or copies thereof) at the recipient's
request, cost and expense. Any information obtained by such party in accordance
with this paragraph shall be held confidential by such party in accordance with
Section 14.06.
(d) Notwithstanding anything to the contrary contained in this Section, if
the parties are in an adversarial relationship in litigation or arbitration, the
furnishing of information, documents or records in accordance with paragraphs
(b) and (c) of this Section shall be subject to applicable rules relating to
discovery if such information, documents or records relate, directly or
indirectly, to the subject matter of such litigation or arbitration, or could in
any manner assist or be beneficial to the requesting party in such litigation or
arbitration.
2.06 Third Party Consents. To the extent that any Real Property Lease,
Personal Property Lease, Business Contract or Business License is not assignable
without the consent of another party (a "Third Party Consent"), this Agreement
shall not constitute an assignment or an attempted assignment thereof if such
assignment or attempted assignment would constitute a breach thereof. WL or PD,
as the case may be, and Purchaser shall use commercially reasonable efforts to
obtain the consent of such other party to the assignment of any such Real
Property Lease, Personal Property Lease, Business Contract or Business License
to Purchaser in all cases in which such consent is or may be required for such
assignment. If any such Third Party Consent shall not be obtained, WL or PD, as
the case may be, shall cooperate with Purchaser in any reasonable arrangement
designed to provide for Purchaser the benefits intended to be assigned to
Purchaser under the relevant Real Property Lease, Personal Property Lease,
Business Contract or Business License, including, but not limited to,
enforcement at the cost of Sellers and for the account of Purchaser of any and
all rights of WL or PD, as the
24
case may be, against the other party thereto arising out of the breach or
cancellation thereof by such other party or otherwise. If and to the extent that
such arrangement cannot be made, Purchaser shall have no obligation pursuant to
Section 2.02 or otherwise with respect to any such Real Property Lease, Personal
Property Lease, Business Contract or Business License. If the commercially
reasonable efforts of a Seller, required by this Section 2.06, have failed to
secure any Third Party Consent, and if, in the opinion of Purchaser, the absence
of a Third Party Consent has deprived Purchaser of a material benefit of its
bargain hereunder or under the Operative Agreements, and if Seller and Purchaser
have been unable to agree upon an arrangement designed to provide for Purchaser
the benefits intended to be assigned to it, then the parties agree to negotiate
in good faith an offset to the Purchase Price paid by Purchaser hereunder for
that part of the benefit the parties mutually agree Purchaser has lost. Nothing
in this Section 2.06 shall be deemed to waive the rights of the Purchaser not to
consummate the transactions contemplated by this Agreement or the Operative
Agreements if the condition to its obligations hereunder contained in Section
7.06 have not been fulfilled.
2.07 Insurance Proceeds. If any of the Assets are destroyed or damaged or
taken in condemnation between the date hereof and the Closing Date, the
insurance proceeds or condemnation award with respect thereto shall be an Asset.
At the Closing, WL or PD, as the case may be, shall pay or credit to Purchaser
any such insurance proceeds or condemnation awards received by it on or prior to
the Closing and shall assign to or assert for the benefit of Purchaser, all of
its rights against any insurance companies, Governmental or Regulatory
Authorities and others with respect to such damage, destruction or condemnation.
Nothing in this Section 2.07 shall be deemed to waive the right of the Purchaser
not to consummate the transactions contemplated by this Agreement or the
Operative Agreements if the condition to its obligations hereunder contained in
Section 7.01 have not been fulfilled.
2.08 Year 2000. Purchaser acknowledges and accepts that neither Seller will
have any liability with respect to periods prior to the Closing Date or after
the Closing Date related to any Year 2000 Issue which may affect the Assets, as
a result of the action or inaction of either Seller or any Person. Purchaser
will be responsible for addressing the Year 2000 Issue with respect to the
Business, the Assets and the Facility.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise specifically set forth in this Article III, each Seller
hereby represents and warrants to Purchaser as follows:
3.01 Corporate Existence. Such Seller is a corporation duly incorporated,
validly existing and in good standing under the Laws of its respective
jurisdiction of incorporation, and has full corporate power and authority to
conduct its business at the Facility as and to the extent now conducted and to
own, use and lease those Assets currently owned, used and leased by it. The
Sellers are duly qualified to do
25
business and are in good standing in all jurisdictions in which the failure to
be so qualified could reasonably be expected to have a material adverse effect
upon the Condition of the Seller's Business.
3.02 Authority. Such Seller has full corporate power and authority to
execute and deliver this Agreement and the Operative Agreements to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including, without limitation, to
sell and transfer (pursuant to this Agreement) Assets currently owned, used or
leased by it. The execution and delivery by such Seller of this Agreement and
the Operative Agreements to which it is a party have been duly and validly
authorized by the Board of Directors of such Seller and no other corporate
action on the part of such Seller or its stockholders shall be necessary for
such performance. This Agreement has been duly and validly executed and
delivered by such Seller, and constitutes, and upon the execution and delivery
by such Seller of the Operative Agreements to which it is a party, such
Operative Agreements will constitute, legal, valid and binding obligations of
such Seller, enforceable against such Seller, in accordance with their terms.
3.03 No Conflicts. The execution and delivery by such Seller of this
Agreement does not, and the execution and delivery by such Seller of the
Operative Agreements to which it is a party, the performance by it of its
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the articles of incorporation or by-laws of such
Seller;
(b) to the knowledge of Sellers, subject to obtaining the consents,
approvals and actions, making the filings and giving the notices disclosed in
Section 3.03 of the Disclosure Schedule or as required by the Consent Decree,
with respect to such Seller, conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to such Seller or any of
the Assets; or
(c) to the knowledge of Sellers, except as disclosed in Section 3.03 of the
Disclosure Schedule with respect to such Seller, (i) conflict with or result in
a violation or breach or default of, (ii) require such Seller to obtain any
consent, approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of, or (iii) result in the creation or
imposition of any Lien other than Permitted Liens upon such Seller or any of the
Assets under, any Contract or License to which such Seller is a party or by
which any of the Assets is bound.
3.04 Governmental Approvals and Filings. Except as disclosed in Section
3.04 of the Disclosure Schedule, or as required by the Consent Decree, to the
knowledge of Sellers, no consent, approval or action of, filing with or notice
to any Governmental or Regulatory Authority is required in connection with the
execution, delivery and performance of this Agreement or any of the Operative
Agreements or the
26
consummation of the transactions contemplated hereby or thereby, except those as
would be required solely as a result of the identity or the legal or regulatory
status of Purchaser or any of its Affiliates or which would be required to be
obtained by Purchaser in order to operate the Business or Facility.
3.05 Profit and Loss Statements. (a) Sellers have provided the Purchaser
with true and complete copies of the unaudited profit and loss statements for
the Business for the fiscal years ending December 31, 1993, 1994, 1995, 1996 and
1997; and (b) since December 31, 1997 there has not been any material adverse
change in the Condition of the Seller's Business except as disclosed in this
Agreement or the Disclosure Schedule. Such profit and loss statements were
prepared in accordance with generally accepted accounting principles
consistently maintained and applied on a basis consistent with prior practice
and are accurate and complete and fairly present, as of their respective dates,
the results of operations of the Business for the periods indicated.
3.06 Taxes. Sellers have timely paid all Taxes and all interest and
penalties due thereon and payable by them for the Pre-Closing Tax Period which
will have been required to be paid on or prior to the Closing Date, the
non-payment of which would result in a Lien on any Asset or would otherwise
adversely affect the Business or would result in Purchaser becoming liable or
responsible therefor.
3.07 Legal Proceedings. Except as disclosed in Section 3.07 of the
Disclosure Schedule with respect to such Seller (with paragraph references
corresponding to those set forth below) and except for the Consent Decree:
(a) there are no Actions or Proceedings pending or, to the knowledge of
such Seller threatened against, relating to or affecting such Seller with
respect to the Business or any of the Assets;
(b) except as disclosed in Section 3.07(b) of the Disclosure Schedule with
respect to such Seller, there are no Orders outstanding against such Seller,
relating to or affecting such Seller with respect to the Business or any of the
Assets; and
(c) to the knowledge of Sellers, there are no facts or circumstances which
could reasonably be anticipated to result in any such claims, demands,
litigation, action, suit, inquiry, investigation, arbitration or other
proceeding related to any of the Assets or the Properties which could
financially impair Purchaser or its Affiliates in their maintenance, use or
enjoyment of any of their rights, title, or interests in and to the Assets as
contemplated under this Agreement or any of the Operative Agreements.
3.08 Compliance With Laws and Orders. The Sellers have all requisite,
Licenses, registrations, permits and certificates from federal, state and local
authorities necessary to conduct the Business and to own and operate the Assets
(collectively, the "Permits"). Section 3.08 of the Disclosure Schedule lists all
such Permits (including any pending new Permits or Permits for which the Sellers
are seeking renewal) copies of which shall be delivered to Purchaser at or prior
to the Closing. To the knowledge of
27
Sellers, they have not engaged in any activity which would cause or permit
revocation or suspension of any such Permit and no action or proceeding seeking
or contemplating the revocation or suspension of any such Permit is pending or,
to the knowledge of the Sellers, threatened. To the knowledge of Sellers, there
are no existing defaults or events or states of fact which with notice or lapse
of time or both would constitute a default by the Sellers under any Permit. The
Sellers have no knowledge of any default or alleged default or state of facts
which with notice or lapse of time or both would constitute a default in the
performance of any obligation to be performed by them under any Permit. Except
as set forth on Section 3.08 of the Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement or the Operative Agreements will in
no way affect the continuation, validity or effectiveness of the Permits or
require the consent of any third party under any such Permit. The Sellers are
not in violation of any Law (including, without limitation, any Environmental
Law), Order, rule, regulation or ordinance relating to the Real Property. The
Business does not violate in any material respect any federal, state or local
laws, regulations or orders. Except as set forth in Section 3.08 of the
Disclosure Schedule, the Sellers have not received any notice or communication
from any federal, state or local governmental or regulatory authority or
otherwise, of any such violation or noncompliance that has not been cured.
3.09 Employee Benefit Plans.
(a) Section 3.09 of the Disclosure Schedules lists (i) all employee benefit
plans (as defined in Section 3(3) of ERISA) and all bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree medical or
life insurance, supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, termination, severance or other
Contracts or agreements applicable to the Employees to which either Seller is a
party or with respect to which either Seller has any obligation in connection
with the Employees; (ii) each employee benefit plan applicable to the Employees
for which either Seller could incur liability under Title IV of ERISA in the
event such plan has been or were to be terminated and (iii) any "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA applicable to the
Employees in respect of which either Seller could incur liability.
(b) Each of the Plans described in Section 3.09(a) is in compliance with
ERISA and the Code except for such failures to comply which, individually or in
the aggregate, could not reasonably be expected to be materially adverse to the
Condition of the Seller's Business.
(c) All contributions and other payments required to be made by Sellers to
any Plan described in Section 3.09(a) with respect to any period ending before
the Closing Date have been timely made or reserves adequate for such
contributions or other payments have been or will be set aside therefor.
(d) To the knowledge of Sellers, no transaction contemplated by this
Agreement or any of the Operative Agreements will result in liability under
Title IV of
28
ERISA, or otherwise, with respect to Purchaser or any corporation or
organization controlled by or under common control with Purchaser within the
meaning of Section 4001 of ERISA, except which, individually or in the
aggregate, could not be financially adverse to the condition of the Seller's
Business.
(e) Sellers have delivered to Purchaser prior to the date hereof true and
complete copies of each of the Plans described in Section 3.09(a).
(f) Except as disclosed in Section 3.09(f) of the Disclosure Schedule, none
of the Plans described in Section 3.09(a) is a "multiemployer plan" within the
meaning of Section 4001(a) (3) of ERISA.
(g) Except as disclosed in Section 3.09(g) of the Disclosure Schedule or as
may result from effects bargaining with the Union, the consummation of the
transactions contemplated in this Agreement or the Operative Agreements will not
result in an increase in the amount of compensation or benefits or accelerate
the vesting or timing of payment of any benefits or compensation payable in
respect of any Employee. Sellers shall be responsible for any obligations to the
Union or any Union Employees, embodied in any agreement arising between Sellers
and the Union resulting from such effects bargaining.
(h) Each Plan to which the group health plan continuation coverage
requirements set forth in Part 6 of Subtitle I of ERISA and Section 4980B(f) of
the Code are applicable has been operated in material compliance with such
requirements except for such failures to comply which, individually or in the
aggregate, could not reasonably be expected to be materially adverse to the
Condition of the Seller's Business.
(i) None of the Employees has informed WL's human resources department of
his or her intention to terminate his or her employment upon the consummation of
the transactions contemplated by this Agreement, except for retirements in the
normal course of business.
3.10 Employees. Section 3.10 of the Disclosure Schedule sets forth the
following information for each of the Employees: employee name and job title;
annual rate of compensation as of the date of such Schedule (identifying bonuses
separately); and vacation days provided each year and service credited for
purposes of vesting and eligibility to participate in the Plans.
3.11 Labor Relations. (a) Section 3.11 of the Disclosure Schedule sets
forth each collective bargaining agreement which covers Employees of the
Business (a "Collective Bargaining Agreement"). Except as set forth in Section
3.11 of the Disclosure Schedule or as may arise as a result of effects
bargaining between Sellers and the Union, to the knowledge of Sellers, (i) there
is no union organization activity currently underway at the Facility, (ii)
Sellers are not engaged in, or have not received any written notice during the
current or preceding year of any unfair labor practice, and no such complaint is
pending before the National Labor Relations Board or any other
29
agency having jurisdiction thereof, (iii) during the immediately preceding
twelve (12) calendar months there has not been any, and, there is no threatened,
labor strike, work stoppage or slowdown by the Union pending against Sellers (to
the extent relating to the Business), and there is no pending lockout by Sellers
(to the extent relating to the Business), (iv) there is no material labor
grievance or arbitration proceedings arising out of or under the Collective
Bargaining Agreement pending or threatened against or affecting the Sellers as
to the Business and (v) there is no pending litigation or other proceeding
against the Sellers as to the Business (with the exception of potential Union
claims as may arise as a result of effects bargaining between Sellers and the
Union) by any employee or group of employees which is based on claims arising
out of any employee's or group of employees' employment relationship with the
Sellers, including, but not limited to, claims for contract, tort,
discrimination, employee benefits, wrongful termination or other claims based on
common law or statutory rights. Sellers have satisfied and performed in all
material respects theirobligations under each Collective Bargaining Agreement
under all applicable federal laws, and under any order, conciliation Contract or
settlement Contract by which either Seller (to the extent relating to the
Business) is bound or to which either Seller (to the extent relating to the
Business) is subject concerning employment related matters (with the exception
of potential Union claims which may arise as a result of effects bargaining
between Sellers and the Union).
(b) The Sellers have deducted and remitted to the relevant Governmental or
Regulatory Authority on a timely basis and in compliance with all applicable
laws and regulations, all income taxes, unemployment insurance contributions,
workers' compensation premiums and contributions and all taxes or other amounts
which they are required by statute to deduct and remit to any Governmental or
Regulatory Authority in connection with any of the Sellers' Employees at the
Business.
3.12 Real Property.
(a) Section 2.01(a)(i) of the Disclosure Schedule contains a true and
correct list of each parcel of the Real Property and Section 2.01(a)(ii)(A) and
(B) of the Disclosure Schedule contains a true and correct list of each parcel
of real property leased by either Seller (as lessor or lessee) and used in
connection with the Business.
(b) Except as disclosed in Section 3.12(b) of the Disclosure Schedule, WL
and/or PD has good and marketable fee simple title to the Real Property, free
and clear of all Liens other than Permitted Liens. Except for the Real Property
subject to Real Property Leases described in Section 2.01(a)(ii)(A) of the
Disclosure Schedule, PD and/or WL is in possession of the Real Property.
(c) PD and/or WL has a valid and subsisting leasehold estate in and the
right to quiet enjoyment of the real properties subject to the Real Property
Leases described in Section 2.01(a)(ii)(B) of the Disclosure Schedule for the
full term thereof. To the knowledge of Sellers each Real Property Lease is a
legal, valid and binding agreement of PD or WL, enforceable in accordance with
its terms and, except as set forth
30
in Section 3.12(c) of the Disclosure Schedule, to the knowledge of PD and WL,
there is no default (or any condition or event which, after notice or lapse of
time or both, would constitute a default) thereunder.
(d) Sellers have delivered or caused to be delivered to Purchaser prior to
the execution of this Agreement or shall deliver to Purchaser on or prior to the
Closing Date true and complete copies of the following documents in its
possession, all deeds, leases, current mortgages, deeds of trust, current
certificates of occupancy, and similar documents, and all amendments thereof,
with respect to the Real Property, unless required to be attached to or included
in one or more sections of the Disclosure Schedule.
(e) Except as disclosed in Section 3.12(e) of the Disclosure Schedule, the
Improvements and every element thereof and system comprising the Improvements,
including, but not limited to, electrical, plumbing, roofing, support, flooring,
foundation, sewer/septic, mechanical, heating/cooling, ventilating, water
systems, communications wiring, elevators and the like are in all material
respects in good operating condition and in a state of good maintenance and
repair, ordinary wear and tear excepted, to enable the Purchaser to conduct the
Business in the same manner as presently conducted by the Sellers and there are
no condemnation or appropriation proceedings pending or, to the knowledge of
Sellers, threatened against any of the Real Property or the Improvements. With
respect to item 3 of Section 3.12(e) of the Disclosure Schedule, WL will perform
prior to the Closing Date or will reimburse Purchaser for reasonable, necessary
out-of-pocket costs incurred by Purchaser to perform after the Closing Date the
repairs to the foundation of the powerhouse and related utilities as more
specifically described in Section 3.12 of the Disclosure Schedule.
(f) Except as described in Section 3.12(f) of the Disclosure Schedule, to
the knowledge of the Sellers, no work has been performed on or materials
supplied to the Real Property which could give rise to mechanics or
materialmen's liens, all bills and claims for labor performed and materials
furnished to or for the benefit of the Real Property for all periods prior to
the Closing shall be paid in full, and the Sellers have no knowledge of any
mechanic's or materialmen's liens, whether or not perfected, on or affecting any
portion of the Real Property.
(g) The Real Property and to Sellers' knowledge, the real property subject
to the Real Property Lease, is in compliance with applicable building and zoning
Laws.
3.13 Tangible Personal Property. Sellers are in possession of and have good
title to, or have valid leasehold interests in or valid rights under Contract to
use, all the Tangible Personal Property. Except as disclosed in Section 3.13 of
the Disclosure Schedule, all the Tangible Personal Property owned by or leased
to either Seller is free and clear of all Liens, other than Permitted Liens and
is in all material respects in good
31
working order and condition, ordinary wear and tear excepted, to enable the
Purchaser to conduct the Business in the same manner as presently conducted by
the Sellers.
3.14 Intellectual Property Rights. (a) The Sellers have all right, title
and interest in, or a valid and binding right under Contract to use, the
Intellectual Property used solely in the conduct of the Business. Except as
disclosed in Section 3.14 of the Disclosure Schedule, (i) all registrations with
and applications to Governmental or Regulatory Authorities in respect of
Intellectual Property are valid and in full force and effect and (ii) to the
knowledge of the Sellers, they are not, nor have they received any notice that,
either Seller is in default in any material respect under any Contract to use
such Intellectual Property. Neither Seller has received notice that it is
infringing any Intellectual Property of any other Person in connection with the
conduct of the Business, to the knowledge of either Seller, no claim is pending
or has been made to such effect that has not been resolved and, to the knowledge
of either Seller, it is not infringing any Intellectual Property of any other
Person. Sellers have not granted to any Person any licenses, sublicenses or
other rights under any Intellectual Property;
(b) Sellers have not prepared or caused to be prepared any intent to use
applications with respect to any trademark, trademark right, service ▇▇▇▇,
service ▇▇▇▇ right, service name or service name right included within the
Intellectual Property described in Section 2.01(a)(vii).
3.15 Contracts. (a) With respect to the Business Contracts described in
Section 2.01(a)(vi), Section 3.15(a) of the Disclosure Schedule contains a true
and complete list of each of the following Business Contracts (true and complete
copies or, if none exist, reasonably complete and accurate written descriptions
of which, together with all amendments and supplements thereto, will be
delivered to Purchaser at or prior to Closing) to which either Seller is a party
or by which any of the Assets is bound which in any case involve the payment,
pursuant to the terms of any such Business Contract, by or to such Seller of
more than $25,000.00 annually:
(i) all Business Contracts (excluding Benefit Plans) providing for a
commitment of employment or consultation services for a specified or unspecified
term to, or otherwise relating to employment or the termination of employment
of, any Employee, the name, position and rate of compensation of each Employee
party to such a Business Contract and the expiration date of each such Business
Contract;
(ii) all Business Contracts with any Person containing any provision
or covenant prohibiting or materially limiting the ability of either Seller to
engage in any business activity or compete with any Person in connection with
the Business or prohibiting or materially limiting the ability of any Person to
compete with either Seller in connection with the Business;
(iii) all material partnership, joint venture, shareholders' or other
similar Business Contracts with any Person in connection with the Business;
32
(iv) all Business Contracts with distributors, dealers, manufacturers'
representatives, sales representatives, sales agencies, suppliers, wholesalers,
customers or any other Person or franchises with whom either Seller deals in
connection with the Business;
(v) all Business Contracts relating to the future disposition or
acquisition of any Assets, other than dispositions or acquisitions of Inventory
in the ordinary course of business;
(vi) all collective bargaining Contracts covering any Employee; and
(vii) all other Business Contracts (other than Benefit Plans, the Real
Property Leases and insurance policies listed in Section 3.18 of the Disclosure
Schedule) with respect to the Business that involve the payment or potential
payment, pursuant to the terms of any such Contract, by or to Sellers of more
than $25,000.00;
(b) With respect to each Business Contract required to be disclosed in
Section 3.15(a) of the Disclosure Schedule, and except as disclosed in Section
3.15(b) of the Disclosure Schedule:
(i) To the knowledge of Sellers, each Business Contract is a valid and
binding agreement, enforceable in accordance with its terms except as such
enforceability may be limited by (a) order of a court of competent jurisdiction
and, to Sellers' knowledge, no such order has been entered into, (b) bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, and (c) principles of equity (whether considered in a proceeding at
law or in equity) and Sellers' have no knowledge that any Contract is not a
valid and binding agreement of the other parties thereto;
(ii) All material obligations required pursuant to the Business
Contracts to have been performed by Sellers prior to the date hereof have been
fulfilled, and Sellers have no reason to believe that they will not be able to
fulfill, when due, all of their obligations under the Business Contracts which
remain to be performed after the date hereof to the Closing Date;
(iii) To the knowledge of Sellers, neither Seller is in breach of or
default under any Business Contract, and no event has occurred which with the
passage of time or giving of notice or both would constitute such a default,
result in a loss of rights or result in the creation of any lien, charge or
encumbrance, thereunder or pursuant thereto;
(iv) To the knowledge of Sellers, there is no existing breach or
default by any other party to any Business Contract and, to Sellers' knowledge,
no event has occurred which with the passage of time or giving notice of or both
would constitute
33
a default by such other party, result in a loss of rights or result in the
creation of any lien, charge or encumbrance, thereunder or pursuant thereto; and
(v) Except as set forth in Section 3.15(b) of the Disclosure Schedule,
all such Business Contracts are assignable to the Purchaser without a consent.
3.16 Licenses. (a) To Sellers' knowledge, Section 2.01(a)(viii) of the
Disclosure Schedule contains a true and complete list of all Business Licenses,
copies of which shall be delivered to Purchaser at or prior to the Closing,
setting forth the grantor, the grantee, the function and the expiration and
renewal date of each. Except as disclosed in Section 3.16(a) of the Disclosure
Schedule, to Sellers' knowledge, neither Seller is in default (or with the
giving of notice or lapse of time or both, would be in default) under any
Business License in any material respect.
3.17 Inventory. On the Closing Date, all the Inventory conveyed pursuant to
Section 2.01(a)(iii) of this Agreement will be in good and usable condition.
Sellers represent and warrant that they have used reasonable commercial efforts
to keep such Inventory at levels which do not exceed those normally experienced
by the Sellers during the twelve (12) month period prior to the date of this
Agreement.
3.18 Insurance. Section 3.18 of the Disclosure Schedule contains a true and
complete list of all insurance policies currently in effect that insure the
Business, the Employees or the Assets. Each such insurance policy is valid and
binding and in full force and effect, no premiums due thereunder have not been
paid and neither Seller has received any notice of cancellation or termination
in respect of any such policy or is in default thereunder in any material
respect.
3.19 Affiliate Transactions. Except as disclosed in Section 3.19 of the
Disclosure Schedule with respect to such Seller, (i) no officer, director or
Affiliate of such Seller, provides or causes to be provided any assets, services
or facilities used in connection with the Business, and (ii) the Business does
not provide or cause to be provided any assets, services or facilities to any
such officer, director or Affiliate. Except as disclosed in Section 3.19 of the
Disclosure Schedule with respect to such Seller, each of the transactions listed
in Section 3.19 of the Disclosure Schedule with respect to such Seller is
engaged in on an arm's-length basis.
3.20 Environmental Matters.
(a) Except as set forth in Section 3.20(a) of the Disclosure Schedule, to
the knowledge of Sellers, there have not been any activities on or at the
Facility (including with respect to the actual leased space being leased
pursuant to any Real Property Lease, any activities in such leased space)
involving, directly or indirectly, the use, generation, treatment, storage or
disposal of any Hazardous Substances (i) under, or in the land at the Facility
whether contained in soil, tanks, sumps, ponds, lagoons, drainage areas, barrels
or other containments, structures or equipment, (ii) incorporated in the
buildings, structures or improvements located at the Facility, including any
building
34
material containing asbestos, or (iii) used in connection with any operation on,
in or at the Facility, except where items (i), (ii), or (iii) were conducted in
accordance with applicable Environmental Laws;
(b) Except as set forth in Section 3.20(b) of the Disclosure Schedule, to
the knowledge of Sellers, there have been no releases of any Hazardous
Substances from the Facility (including with respect to the actual leased space
being leased pursuant to any Real Property Lease, any activities in such leased
space) and the Facility has not been used at any time by any Person as a
landfill or waste disposal site;
(c) Except as set forth in Section 3.20(c) of the Disclosure Schedule, to
the knowledge of Sellers, or except in accordance with applicable Environmental
Laws, there has been no treatment, storage or disposal, as those terms are
defined in RCRA, of any Hazardous Substances at the Facility or, to the
knowledge of Sellers, with respect to the actual leased space being leased
pursuant to any Real Property Lease, in any such leased space;
(d) There are no pesticides, fungicides, insecticides or rodenticides
located in or on the Facility or, with respect to the actual leased space being
leased pursuant to any Real Property Lease, in such leased space, in violation
of any applicable Laws.
(e) To the knowledge of Sellers, they are in full compliance with all
Environmental Laws. The Sellers have all approvals, consents, Licenses, Permits,
registrations and orders necessary to carry out the Business as currently
conducted. There is no pending environmental litigation, enforcement actions,
administrative orders, environmental liens or notices of violation brought under
any Environmental Laws concerning the Facility and, to the knowledge of Sellers,
there are no threats of such litigation, enforcement actions, administrative
orders or notices of violation.
(f) Sellers have delivered or otherwise made available for inspection to
Purchaser true, complete and correct copies and results of all non-privileged
reports, studies, assessments, analyses, evaluations or tests possessed by
Sellers pertaining to compliance with or liability under applicable
Environmental Laws with respect to any of the Assets owned or leased by the
Sellers, all of which shall be included within the definition of Business Books
and Records.
3.21 Vehicles. Section 2.01(a)(ix) of the Disclosure Schedule contains a
true and complete list of all motor vehicles owned by such Seller and used in
the conduct of the Business. Except as disclosed in Section 3.21 of the
Disclosure Schedule, Sellers have good and valid title to each such Vehicle
indicated as being owned by it, free and clear of all Liens other than Permitted
Liens. The parties acknowledge and agree that Purchaser is not acquiring any
interest in any vehicles leased by Sellers and used in the conduct of the
Business.
35
3.22 Brokers. All negotiations relative to this Agreement and the Operative
Agreements and the transactions contemplated hereby and thereby have been
carried out by Sellers directly with Purchaser without the intervention of any
Person on behalf of Sellers in such manner as to give rise to any valid claim by
any such Person against Purchaser for a finder's fee, brokerage commission or
similar payment.
3.23 Suppliers. (a) Section 3.23(a)(i) of the Disclosure Schedule sets
forth a true, correct and complete list of the names and addresses of the
suppliers of the Sellers as to the Business which accounted for five (5) percent
of the dollar volume of purchases by the Sellers for the fiscal year ended
December 31, 1997. The Sellers are not a party to any requirements contract
relating to the purchase of Inventory or other property used in the conduct of
the Business. None of such suppliers which accounted for five (5) percent of the
dollar volume of purchases by the Sellers for the fiscal year ended December 31,
1997 has discontinued its relationship with the Sellers or notified the Sellers
that it intends to discontinue its relationship with the Sellers nor, except as
disclosed in Section 3.23(a)(ii) of the Disclosure Schedule, to the knowledge of
the Sellers, does there exist any actual or threatened termination, cancellation
or limitation of, or any modification or change in, the business relationship of
the Sellers with any such supplier nor except as disclosed in Section
3.23(a)(iii) of the Disclosure Schedule does there exist a present condition or
state of facts or circumstances known to the Sellers involving any supplier,
whether or not listed in Section 3.23 of the Disclosure Schedule, which could
reasonably be expected to have a material adverse effect on the Condition of
Sellers' Business or prevent the Purchaser from conducting the Business after
the Closing in the same manner as presently conducted by the Sellers.
Section 3.23(b) of the Disclosure Schedule sets forth a list of
suppliers (including Sellers, if applicable) who are the only qualified source
of materials or property used in the conduct of the Business and a description
of the materials or property provided by such supplier.
(c) Section 3.23(c) of the Disclosure Schedule describes all materials and
property supplied by either Seller in the conduct of the Business.
3.24 Conduct of Business. Sellers have used their reasonable commercial
efforts since January 1, 1997, to conduct each and every element and aspect of
the Business in the ordinary course of business. Since January 1, 1997, Sellers
have not suffered any material adverse changes in the Business or the Assets
which materially and adversely affect the value of the Assets, the well-being of
the Business, or the ability of the Purchaser to perform any of its obligations
under this Agreement or the Operative Agreements except to the extent caused by
the voluntary recall and/or suspension of sales of Fluogen(R) and Pitocin(R).
Purchaser hereby acknowledges that Seller is not currently marketing the
Discontinued or Withdrawn Products and makes no representations or warranties in
any manner with respect to the Discontinued or Withdrawn Products.
3.25 Compliance with Consent Decree. Without admission and except as
disclosed in public records or in Sections 3.07(a) or (e) of the Disclosure
Schedule or by
36
Sellers to Purchaser in writing, Sellers have substantially complied with all
the terms, provisions, and restrictions of the Consent Decree relative to the
Assets, the Business as conducted at the Facility, and/or the Facility itself as
of the date hereof. Sellers have not received any direct written communication
from any court with jurisdiction over the Consent Decree, or from the FDA,
stating that the Consent Decree will be extended beyond August, 1998. For
purposes of this Section 3.25 and elsewhere in this Agreement, "Consent Decree"
shall mean that certain Consent Decree of Permanent Injunction entered into the
United States District Court for the District of New Jersey in Civil Action No.
93-3525 styled as United States of America ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company, a
corporation, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇, individuals.
3.26 Debarment. Except as set forth on Section 3.26 of the Disclosure
Schedule, no Employee of the Facility, nor to Sellers' knowledge any consultant
retained by Sellers for the purpose of performing services related to the
Facility, during the period beginning on January 1, 1997 and ending on the date
hereof, has been debarred under ss.306(a) or ss.306(1) of the Federal Food, Drug
and Cosmetic Act or has, during that period, been convicted of or formally
charged with a criminal offense relating to the development or approval process
of any drug product, or a felony of any kind which could lead to debarment.
3.27 DEA. During the period commencing on January 1, 1997 and ending on the
date hereof, with respect to Sellers or their Affiliates, to Seller's knowledge
there have been no inspections, inspection reports or other correspondence from
the Drug Enforcement Administration ("DEA") in which the DEA or any other
Governmental or Regulatory Authority has asserted or alleged that the operations
of Sellers with respect to the Facility is or was not or may not be in
compliance with the federal Controlled Substances Act, as amended, or any
similar law of any country or other jurisdiction.
3.28 Disclosure. To the knowledge of the Sellers, no representation or
warranty by the Sellers in this Agreement or the Operative Agreements or in any
Schedule or Exhibit hereto or thereto, or in any list, statement, document or
information set forth in or attached to any Schedule or Exhibit delivered or to
be delivered pursuant to this Agreement or the Operative Agreements, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary in order to make the statements contained
herein or therein not misleading. To the knowledge of the Sellers, they have
disclosed to the Purchaser all material facts pertaining to the Business, the
Assets and the transactions contemplated by this Agreement and the Operative
Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
37
4.01 Corporate Existence. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Michigan.
Purchaser has full corporate power and authority to enter into this Agreement
and the Operative Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
4.02 Authority. The execution and delivery by Purchaser of this Agreement
and the Operative Agreements to which it is a party, and the performance by
Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors of Purchaser, no other corporate
action on the part of Purchaser or its stockholders being necessary. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes, and upon the execution and delivery by Purchaser of the Operative
Agreements to which it is a party, such Operative Agreements will constitute,
legal, valid and binding obligations of Purchaser enforceable against Purchaser
in accordance with their terms.
4.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement does not, and the execution and delivery by Purchaser of the Operative
Agreements to which it is a party, the performance by Purchaser of its
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the charter of incorporation or by-laws of
Purchaser;
(b) to the knowledge of Purchaser, subject to obtaining the consents,
approvals and actions, making the filings and giving the notices disclosed in
Section 4.03(b) of the Disclosure Schedule hereto, conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
Purchaser or any of its Assets and Properties (other than such conflicts,
violations or breaches which could not in the aggregate reasonably be expected
to adversely affect the validity or enforceability of this Agreement or any of
such Operative Agreements); or
(c) to the knowledge of Purchaser, except as disclosed in Schedule 4.03(c)
of the Disclosure Schedule hereto, or as could not, individually or in the
aggregate, reasonably be expected to adversely affect the ability of Purchaser
to consummate the transactions contemplated hereby or by any such Operative
Agreements or to perform its obligations hereunder or thereunder, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under or (iii) require Purchaser to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result of, the terms of any Contract or License to
which Purchaser is a party or by which any of its Assets and Properties is
bound.
4.04 Governmental Approvals and Filings. Except as disclosed in Section
4.04 of the Disclosure Schedule hereto, and to the knowledge of Purchaser, no
38
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Purchaser is required in connection with the
execution, delivery and performance of this Agreement or the Operative
Agreements to which it is a party or the consummation of the transactions
contemplated hereby or thereby, except where the failure to obtain any such
consent, approval or action, to make any such filing or to give any such notice
could not reasonably be expected to adversely affect the ability of Sellers to
consummate the transactions contemplated by this Agreement or any of such
Operative Agreements or to perform their obligations hereunder or thereunder.
4.05 Legal Proceedings. There are no Actions or Proceedings pending or, to
the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be expected
to result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Agreements.
4.06 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Purchaser directly
with Sellers without the intervention of any Person on behalf of Purchaser in
such manner as to give rise to any valid claim by any such Person against
Sellers for a finder's fee, brokerage commission or similar payment.
4.07 Financing. Purchaser has sufficient cash and/or available credit
facilities (and has provided Sellers with evidence thereof) to pay the Purchase
Price and to make all other necessary payments of fees and expenses in
connection with the transactions contemplated by this Agreement and the
Operative Agreements.
ARTICLE V
COVENANTS OF SELLERS
Each Seller, as the case may be, covenants and agrees with Purchaser that,
at all times from and after the date hereof until the Closing, such Seller, will
comply, to the extent applicable to it, with all covenants and provisions of
this Article V, except to the extent Purchaser may otherwise consent in writing.
5.01 Regulatory and Other Approvals. Such Seller will (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all filings
with and to give all notices to Governmental or Regulatory Authorities or any
other Person required of either WL or PD, as the case may be, to consummate the
transactions contemplated hereby and by the Operative Agreements, including
without limitation those described in Sections 3.03 and 3.04 of the Disclosure
Schedule, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as such Governmental or
Regulatory Authorities or other Persons may reasonably request in connection
39
therewith and (c) provide reasonable cooperation to Purchaser in obtaining all
consents, approvals or actions of, making all filings with and giving all
notices to Governmental or Regulatory Authorities or other Persons required of
Purchaser to consummate the transactions contemplated hereby and by the
Operative Agreements. Such Seller will provide prompt notification to Purchaser
when any such consent, approval, action, filing or notice referred to in clause
(a) above is obtained, taken, made or given, as applicable.
5.02 HSR Filings. In addition to and not in limitation of such Seller's
covenants contained in Section 5.01, such Seller will (a) take promptly all
actions necessary to make the filings required of such Seller or its Affiliates
under the HSR Act, (b) comply at the earliest practicable date with any request
for additional information received by such Seller or its Affiliates from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act and (c) cooperate with Purchaser in connection with
Purchaser's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by either the Federal Trade Commission or the Antitrust
Division of the Department of Justice or state attorneys general.
5.03 Investigation by Purchaser. Prior to the execution of this Agreement
and from the date of this Agreement to the Closing, such Seller has or will (a)
provide Purchaser and its officers, employees, counsel, accountants, financial
advisors, consultants and other representatives (collectively,
"Representatives") with full access, upon reasonable prior notice and during
normal business hours, to (i) the officers of such Seller who have primary
responsibility for the conduct of the Business or (ii) the Assets being
transferred by such Seller hereunder, but only to the extent that such access
does not unreasonably interfere with such Seller's business and (b) furnish
Purchaser and such other Representatives with all such information and data,
including copies thereof, concerning the Assets and the Assumed Liabilities
being transferred by such Seller hereunder (including the Plans described in
Section 3.09(a)) as Purchaser or any such other Representative reasonably may
request in connection with such investigation, except to the extent that
furnishing any such information or data would violate any Law, Order, Contract
or License applicable to such Seller, or by which any of its Assets and
Properties is bound.
5.04 Conduct of Business. From the date of this Agreement until the
Closing, Sellers will operate the Business only in the ordinary course. Without
limiting the generality of the foregoing, Sellers will use commercially
reasonable efforts, to the extent the officers of Sellers believe such action to
be in the best interest of the Business, to (a) preserve intact the present
business organization and reputation of the Business in all material respects,
(b) keep available (subject to dismissals and retirements in the ordinary course
of business) the services of key Employees, (c) maintain the Assets in good
working order and condition, ordinary wear and tear excepted, and (d) maintain
the good will of key customers, suppliers, lenders and other Persons with whom
Sellers otherwise have significant business relationships in connection with the
Business.
40
5.05 Use of Trademarks and Trade Names. After the Closing, Purchaser will
be granted by Sellers a limited right to utilize Sellers' trademarks and trade
names as follows: (i) Purchaser may use, in the same manner used by Sellers
prior to the Closing, all printed matter and materials included in the Assets
and bearing those of Sellers' trademarks and trade names not being assigned,
sold or transferred to Purchaser pursuant to this Agreement or the Operative
Agreements, in the ordinary course of operating the Business until the earlier
of (x) the depletions of such items or (y) six months after the Closing Date,
provided that Purchaser shall destroy all unused supplies of the same within one
month following the expiration of such six month period. Notwithstanding the
foregoing, Purchaser may utilize Sellers' trademarks and tradenames in
conjunction with finished products released by Sellers' quality assurance group
prior to the Closing Date, but only for a period expiring twelve months after
the Closing Date.
5.06 Certain Restrictions. From the date hereof until the Closing, each
Seller will refrain from any of the following, except in the ordinary course of
business:
(a) acquiring or disposing of, or incurring any Lien (other than a
Permitted Lien) on, any Assets being transferred hereunder by such Seller;
(b) entering into, amending, modifying, terminating (partially or
completely), granting any waiver under or giving any consent with respect to any
Business Contract (other than the Collective Bargaining Agreement) or any
Business License;
(c) incurring, purchasing, canceling, prepaying or otherwise providing for
a complete or partial discharge in advance of a scheduled payment date with
respect to, or waiving any right under, any Liability of or owing to such
Seller, in connection with the Business in an aggregate principal amount
exceeding $10,000;
(d) engaging with any Person in any Business Combination, unless such
Person agrees in a written instrument to adopt and comply with each and every
term and condition of this Agreement and the Operative Agreements as though such
Person was an original signatory hereto or thereto;
(e) engaging in any transaction individually or in the aggregate with other
such transactions material to the Condition of the Seller's Business with any
officer, director or Affiliate of such Seller outside the ordinary course of
business other than on an arm's-length basis;
(f) selling, assigning, or transferring any of the Business or the Assets;
(g) unless otherwise required by or contemplated in this Agreement or the
Operative Agreements, making capital expenditures or commitments for additions
to property, plant or equipment constituting capital assets on behalf of the
Business in an aggregate amount exceeding $50,000; or
41
(h) entering into any Contract to do or engage in any of the foregoing.
5.07 Delivery of Books and Records, etc.; Removal of Property. (a) On the
Closing Date, each of WL and PD, as the case may be, will take all commercially
reasonable steps to deliver or make available to Purchaser at the Facility all
of the Business Books and Records and such other Assets (including Inventory) as
are in such Seller's possession at other locations, and if at any time after the
Closing WL discovers in its possession or under its control any other Business
Books and Records or other Assets it will forthwith deliver such Business Books
and Records or other Assets to Purchaser (provided that Sellers shall have the
right to retain one copy of such Business Books and Records for its archives).
(b) Sellers covenant that they will not, and have not, removed any of the
Assets from the Facility without the prior written consent of Purchaser.
5.08 Fulfillment of Conditions. Each of WL and PD, as the case may be, will
execute and deliver at the Closing each Operative Agreement that either WL or
PD, as the case may be, is required hereby to execute and deliver as a condition
to the Closing, will take all commercially reasonable steps necessary or
desirable and proceed diligently and in good faith to satisfy each other
condition to the obligations of Purchaser contained in this Agreement and
applicable to such Seller and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
5.09 Permits. At the request of Purchaser, Sellers shall deliver to
Purchaser at the Closing, the originals, if in the Seller's possession, of all
building permits, certificates of occupancy and other governmental licenses,
registrations, permits and approvals, and all plans, blueprints, diagrams, CAD's
and specifications relating to the Real Property or the property subject to the
Real Property Leases not previously delivered to the Purchaser.
5.10 Remedial Actions. (a) If, as a result of the next scheduled FDA audit
of the Facility pursuant to the Consent Decree to occur after January 31, 1998
(the "FDA Audit"), the FDA determines that changes, alterations, improvements,
additions or modifications (including the purchase of new equipment or systems)
to the Facility, the Business or any of the Assets are required to assure
compliance with applicable Laws ("Modifications"), then Sellers shall be
responsible for the out-of-pocket costs incurred by Purchaser in connection with
any such Modifications requested by the FDA, excluding (i) Modifications
relating to conditions that come into existence after the Closing Date, (ii)
Modifications which were identified in FDA 483 observation reports,
Establishment Investigation Reports, similar reports of corresponding
governmental agencies outside the United States, and all responses thereto,
which could be found in public records prior to the FDA Audit or (iii)
Modifications which have been disclosed to
42
Purchaser in writing. Purchaser shall consult with Sellers and accept reasonable
suggestions of Sellers regarding the planning, coordination and implementation
of any such Modifications, as well as any communications with the FDA relating
to the FDA Audit or the Modifications.
(b) Sellers shall be obligated to pay any amounts charged by the FDA
with respect to such FDA Audit.
(c) Purchaser shall be responsible for all FDA audits, other than the
FDA Audit, which may occur after the Closing Date, pursuant to the Consent
Decree or otherwise.
5.11 Guaranty. WL irrevocably and unconditionally guarantees (i) the full
and punctual performance of all of the obligations of PD contained in or arising
out of this Agreement or the Operative Agreements, including, but not limited
to, payment when due of any amounts owed, when due, to Purchaser or its
Affiliates and (ii) the representations, warranties and covenants of PD herein
or under the Operative Agreements.
ARTICLE VI
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Sellers that, at all times from and
after the date hereof until the Closing, Purchaser will comply with all
covenants and provisions of this Article VI, except to the extent each Seller
may otherwise consent in writing.
6.01 Regulatory and Other Approvals. Purchaser will (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all filings
with and to give all notices to Governmental or Regulatory Authorities or any
other Person required of Purchaser to consummate the transactions contemplated
hereby and by the Operative Agreements, including without limitation those
described in Schedules 4.03 and 4.04 of the Disclosure Schedules hereto, (b)
provide such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request in connection therewith and
(c) provide reasonable cooperation to each Seller in obtaining all consents,
approvals or actions of, making all filings with and giving all notices to
Governmental or Regulatory Authorities or other Persons required of Sellers, as
the case may be, to consummate the transactions contemplated hereby and by the
Operative Agreements. Purchaser will provide prompt notification to Sellers, as
the case may be, when any such consent, approval, action, filing or notice
referred to in clause (a) above is obtained, taken, made or given, as
applicable.
43
6.02 HSR Filings. In addition to and without limiting Purchaser's covenants
contained in Section 6.01, Purchaser will (i) take promptly all actions
necessary to make the filings required of Purchaser or its Affiliates under the
HSR Act, (ii) comply at the earliest practicable date with any request for
additional information received by Purchaser or its Affiliates from the Federal
Trade Commission or the Antitrust Division of the Department of Justice pursuant
to the HSR Act and (iii) cooperate with each of WL and/or PD, as the case may
be, in connection with each of WL's and/or PD's, as the case may be, filings
under the HSR Act and in connection with resolving any investigation or other
inquiry concerning the transactions contemplated by this Agreement commenced by
either the Federal Trade Commission or the Antitrust Division of the Department
of Justice or state attorneys general.
6.03 Union Negotiations. Purchaser shall proceed diligently and in good
faith and use all commercially reasonable efforts, as promptly as practicable to
negotiate a new contract with respect to the Employees covered by the agreement
between ▇▇▇▇▇-▇▇▇▇▇ Division of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company Rochester Plant and Local
7-176 Oil, Chemical & Atomic Workers, International Union (the "Union") which
expires April 30, 1998 (the "OCAW Agreement").
6.04 FDA Audit. Subsequent to the Closing, Purchaser shall inform Sellers
of any and all contacts and communications from the FDA related to the FDA Audit
described in Section 5.10 herein, in sufficient time for Sellers to participate
in person in any inspections, investigations or meetings by or with the FDA
related to the FDA Audit. To the extent it may do so, Purchaser will not
schedule any audits, inspections, investigations or meetings with the FDA
relating to the FDA Audit without ensuring that a representative of Sellers can
participate in person, if they so choose. Purchaser agrees that Sellers shall,
at their discretion, have the right to fully participate in any such audits,
inspections, investigations and meetings with the FDA and Purchaser which may
obligate Sellers pursuant to Section 5.10. Purchaser agrees that Sellers shall
have the right, at Sellers' discretion, to discuss the terms and conditions of
such obligations with the FDA (and Purchaser shall have the right to take part
in such discussions) and Purchaser shall cooperate in all respects with Sellers
regarding the conduct, results and responses to such audits or inspections and
all such negotiations. Purchaser shall provide Sellers with a copy of any FDA
comments or observations relating to the FDA Audit and shall provide Sellers
with a copy of any draft response to the FDA at least three days prior to
submission. Purchaser agrees to accept and incorporate all reasonable comments
of Sellers thereto.
6.05 FDA Modifications and Powerhouse Repairs. After the Closing Date,
Purchaser agrees to provide WL and its agents necessary access to the Facility
and adequate assistance to allow WL to consult with Purchaser on the planning,
coordination and implementation by Purchaser of any repairs required pursuant to
Section 3.12(e) herein and any Modifications pursuant to Section 5.10 herein.
6.06 Third Party Manufacturing Business Responsibility.
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(a) After the Closing Date, Purchaser shall hold, store, manufacture,
package and test any product lot sold or transferred to Purchaser as part of the
Business (including but not limited to its raw materials, excipients and
components) and which was delivered or sold by either Seller prior to the
Closing Date, as well as any product lot that bears a trade name or the
trademark used by either Seller prior to the Closing Date (any such product lot
is referred to herein as a "Third Party Product Lot"), in accordance with (i)
current Good Manufacturing Practices, (ii) the applicable product application or
license, (iii) applicable analytical procedures, material specifications, master
batch records, stability protocols, analytical methods and packaging
instructions and (iv) all other applicable Laws.
(b) The parties shall notify each other in writing in the event that any
party receives a complaint or a report of an adverse drug event relating to any
Third Party Product Lot. In the case of a complaint, such notice must be
provided by the complaint recipient to all other parties (i) within 24 hours if
the complaint involves allegations of suspected or actual product tampering,
mix-up or contamination and (ii) within 4 business days in the case of all other
complaints. In the case of any adverse drug events, such notice must be provided
by the report recipient to all other parties within 4 business days of receipt.
(c) After the Closing Date, Purchaser (or its contract customer) shall be
responsible for investigating and responding to all reported complaints and
adverse drug events and for all communications with any Governmental or
Regulatory Authority or any other third party relating to all Third Party
Product Lots.
(d) After the Closing Date, Purchaser (or its contract customer) shall be
responsible for all required stability testing relating to all Third Party
Product Lots. Purchaser shall notify Sellers within 3 business days of any
initial out-of-specification result relating to any such Third Party Product
Lot. Purchaser (or its contract customer) shall be responsible for investigating
all such out-of-specification results and for any communications with any
Governmental or Regulatory Authority or any other third party.
(e) After the Closing Date, Purchaser (and/or its contract customer) shall
be responsible for all contacts with any Governmental or Regulatory Authority
with respect to all matters relating to the Business, provided that (i)
Purchaser shall notify Sellers immediately and in no event later than 1 business
day after receipt of any contact or communication from any Governmental or
Regulatory Authority that in any way requests the need for recall or withdrawal
of, or otherwise calls into question the quality or safety of a Third Party
Product Lot. Purchaser shall be responsible for investigating any such request
or suggestion and for any communications with any Governmental or Regulatory
Authority or third pary relating thereto.
(f) With regard to any investigation undertaken by Purchaser pursuant to
subsections (c) through (e), the terms of this subsection (f) shall apply.
Purchaser shall provide Sellers with copies of all related investigation reports
and all related communications received from or sent to any Governmental or
Regulatory Authority or
45
third party within 2 business days of the completion of any such investigation
report or related communication. Purchaser shall consult with Sellers with
respect to any such investigations. Purchaser shall comply with all reasonable
requests and comments by the Sellers with respect to all such investigations.
Unless otherwise required by law, Purchaser shall not communicate with or
respond to any Governmental or Regulatory Authority or any third party
(excluding Purchaser's contract customer) concerning any such investigation
without the prior written consent of Sellers, which consent shall not be
unreasonably withheld. Sellers shall have the right to require Purchaser to
recommend a recall to its contract customer with respect to any Third Party
Product Lot if Sellers determine that a recall is appropriate under 21 C.F.R.
ss. 7.
6.07 Fulfillment of Conditions. Purchaser will execute and deliver at the
Closing each Operative Agreement that Purchaser is hereby required to execute
and deliver as a condition to the Closing, will take all commercially reasonable
steps necessary or desirable and proceed diligently and in good faith to satisfy
each other condition to the obligations of WL and PD, as the case may be, as
shall be contained in this Agreement and will not take or fail to take any
action that could reasonably be expected to result in the nonfulfillment of any
such condition.
6.08 Additional Obligations. Except as otherwise specifically permitted in
Section 5.05, Purchaser shall remove Sellers' name from all documentation,
including without limitation, all standard operating procedures ("SOPs"),
labels, signs, notices, postings and electronic media prior to the first
anniversary of the Closing Date. Purchaser shall not provide any SOPs to any
third party if such SOP contains either Seller's name. Sellers shall have the
right to remove from the Facility all its Assets and Properties, other than the
Assets, and Purchaser shall ship to Sellers, at Sellers' cost, any such Assets
or Properties discovered at the Facility after the Closing Date.
6.09 Consent Decree. (a) Effective as of the date of the Closing, and
subject to the terms and conditions of this Agreement and the Operative
Agreements, Purchaser shall assume sole responsibility for compliance with the
terms, conditions, and requirements of, and all liabilities under, the Consent
Decree to the extent that the Consent Decree applies to the Facility, the
Business or the Assets.
(b) Except as otherwise specifically set forth herein or in the Operative
Agreements, subject to the terms of this Agreement, Sellers shall have no
responsibility for compliance with the terms, conditions and requirements of the
Consent Decree with respect to the Facility, the Business or the Assets, and
Sellers shall not be liable for any failure by Purchaser to comply with the
Consent Decree, or for any liabilities or penalties incurred by Purchaser
thereunder. Purchaser shall indemnify, defend and hold harmless Sellers, their
officers, directors and employees, including any named individual defendants
under the Consent Decree, from and against any Losses and Liabilities arising
out of or relating to (i) actions, matters, or conditions that come into
existence after the Closing Date or actions, matters and conditions that
predated the Closing Date but which could have been mitigated by Purchaser and
(ii) failure of Purchaser to comply with all
46
the terms of the Consent Decree as it applies to the Facility, the Business or
the Assets. Sellers shall indemnify, defend and hold harmless Purchaser, their
officers, directors and employees, from and against any and all Losses and
Liabilities arising out of or relating to (i) actions, matters, or conditions
that come into existence prior to the Closing Date and (ii) failure of Sellers
to comply with all the terms of the Consent Decree as it applies to anything
other than solely to the Facility, the Business or the Assets.
(c) Subject to applicable law, as of the Closing Date, Sellers shall not,
and shall have no right to, initiate or participate in any communications,
negotiations, or petitions with any third party relating to or pursuant to the
Consent Decree to the extent that such communications, negotiations or petitions
relate solely to the Facility, the Business or the Assets.
(d) Subject to applicable law, Purchaser shall not, and shall have no right
to, initiate or participate in any communications, negotiations or petitions
with any third party relating to or pursuant to the Consent Decree to the extent
that such communications, negotiations or petitions relate solely to anything
other than the Business, the Facility or the Assets.
(e) Subsequent to the date of the Closing, neither Sellers nor Purchaser
shall comment on or discuss the other party's performance, rights,
responsibilities and/or liabilities with respect to the Consent Decree with any
third party unless required to do so by Law or if expressly authorized to do so
in a writing signed by the other party.
(f) Sellers agree that Purchaser may negotiate and/or petition for relief
under the Consent Decree solely with respect to the Business, the Facility
and/or the Assets separately from and without notice to Sellers.
(g) Purchaser agrees that Sellers may negotiate and/or petition for relief
under the Consent Decree with respect to any matter, except matters relating
solely to the Business, the Facility or the Assets, separately from and without
notice to Purchaser.
(h) In the case of any reasonable negotiation or petition for relief
described in subsections (f) or (g) of this Section 6.09, the non-negotiating or
non-petitioning party shall provide reasonable cooperation to the other party as
may be necessary to obtain the relief sought by such negotiation or petition.
6.10 Parkedale Name. Sellers shall not object to Purchaser's use of the
name "Parkedale" in the conduct of its business.
6.11 Establishment License. Sellers hereby grant to Purchaser the right to
use the Establishment License in the operation of the Facility, including in the
manufacture, use, sale, storage or shipment of products on behalf of Purchaser
or pursuant to any Business Contract (such use is hereby referred to as the
"Permitted Use"), subject to the following restrictions:
47
(i) Purchaser shall use its best efforts to obtain an establishment
license in its own name, as soon as possible, for the Permitted Use, and
Purchaser's rights under the Establishment License shall cease immediately upon
the issuance to Purchaser or any Affiliate of Purchaser of any establishment
license, or equivalent, from FDA;
(ii) All regulatory filings and all communications with all
Governmental and Regulatory Authorities with respect to the Establishment
License shall be the sole responsibility of Sellers. Purchaser shall promptly
notify Sellers of all communications from and all inspections by FDA relating to
the Establishment License and Sellers shall have sole control over the content
and timing of all responses to such communications and all filings with FDA
relating to the Establishment License; and
(iii) Sellers shall have, during the term of the Permitted Use, the
right to be present at the Facility at all times (including, without limitation,
during any FDA inspections), and shall have complete access to all areas of the
Facility and all documents wherever located, to the extent they relate to the
Establishment License or compliance with applicable Laws relating thereto.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Assets and to assume
and pay, perform and discharge the Assumed Liabilities are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Purchaser in its sole
discretion):
7.01 Representations and Warranties. The representations and warranties
made by each of WL and PD, as the case may be, in this Agreement or the
Operative Agreements shall be true and correct in all material respects on and
as of the Closing Date as though made on and as of the Closing Date or, in the
case of representations and warranties made as of a specified date earlier than
the Closing Date, on and as of such earlier date.
7.02 Performance. Each of WL and PD, as the case may be, shall have
performed and complied with, in all material respects, the agreements, covenants
and obligations required by this Agreement or the Operative Agreements to be so
performed or complied with by it at or before the Closing.
7.03 Officers' Certificates. Each Seller shall have delivered to Purchaser
a certificate, dated the Closing Date and executed by its Chairman of the Board,
President or any Vice President, authorized by such Seller to execute such
certificate, substantially in the form and to the effect of Exhibit B hereto,
and a
48
certificate, dated the Closing Date and executed by its Secretary or any
Assistant Secretary, substantially in the form and to the effect of Exhibit C
hereto.
7.04 Orders and Laws. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
any of the Operative Agreements.
7.05 Regulatory Consents and Approvals. All consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Purchaser and WL and PD, as the case may be, to perform
their obligations under this Agreement and the Operative Agreements and to
consummate the transactions contemplated hereby and thereby shall have been duly
obtained, made or given and shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement and the Operative Agreements, including under the
HSR Act, shall have occurred.
7.06 Third Party Consents. The consents (or in lieu thereof written
waivers) listed in Section 7.06 of the Disclosure Schedule which include certain
consents required under Real Property Leases, Personal Property Leases, Business
Contracts and Business Licenses shall have been obtained and shall be in full
force and effect. Copies of each such consents (or in lieu thereof written
waivers) shall be delivered to Purchaser at or prior to the Closing.
7.07 Opinion of Counsel. Purchaser shall have received the opinion of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and General Counsel of WL, dated the Closing
Date, substantially in the form and to the effect of Exhibit D hereto.
7.08 Deliveries. WL and/or PD, as the case may be, shall have executed and
delivered to Purchaser (i) the appropriate Assignment Instruments, (ii) the
Product Asset Purchase Agreement, in substantially the form attached hereto as
Exhibit E; (iii) a Manufacturing Agreement for the Products being sold to
Purchaser pursuant to the Product Asset Purchase Agreement which are currently
not manufactured at the Facility in substantially the form attached hereto as
Exhibit F; (iv) a Transition Services Agreement in substantially the form
attached hereto as Exhibit G; (v) a Manufacturing Agreement in substantially the
form attached hereto as Exhibit H for Products currently manufactured at the
Facility and not being sold to Purchaser pursuant to the Product Asset Purchase
Agreement; (vi) a Clinical and Toxicology Manufacturing Supply Agreement in
substantially the form attached hereto as Exhibit I; (vii) the License
Agreements substantially in the form attached hereto as Exhibit J; (viii) the
Guaranty Agreement substantially in the form attached hereto as Exhibit K; (ix)
all other Operative Agreements; and (x) all other documents, materials, or
information necessary to fulfill each of Sellers' respective obligations under
this Agreement and/or the Operative Agreements.
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ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder to sell the Assets are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Sellers in their sole
discretion):
8.01 Representations and Warranties. The representations and warranties
made by Purchaser in this Agreement or the Operative Agreements shall be true
and correct in all material respects on and as of the Closing Date as though
made on and as of the Closing Date.
8.02 Performance. Purchaser shall have performed and complied with, in all
material respects, the agreements, covenants and obligations required by this
Agreement or the Operative Agreements to be so performed or complied with by
Purchaser at or before the Closing.
8.03 Officers' Certificates. Purchaser shall have delivered to each Seller
a certificate, dated the Closing Date and executed by the Chairman of the Board,
the President or any Executive Vice President of Purchaser, authorized by
Purchaser to execute such certificate, substantially in the form and to the
effect of Exhibit L hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Purchaser, substantially
in the form and to the effect of Exhibit M hereto.
8.04 Orders and Laws. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
any of the Operative Agreements.
8.05 Regulatory Consents and Approvals. All consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit WL and/or PD, as the case may be, and Purchaser to perform
their obligations under this Agreement and the Operative Agreements and to
consummate the transactions contemplated hereby and thereby shall have been duly
obtained, made or given and shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement and the Operative Agreements, including under the
HSR Act, shall have occurred.
8.06 Third Party Consents. The consents (or in lieu thereof waivers) listed
in Section 8.06 of the Disclosure Schedule shall have been obtained and shall be
in full force and effect and copies of each such consent (or in lieu thereof
written waivers) shall be delivered to Sellers at or prior to Closing.
50
8.07 Opinion of Counsel. Each Seller shall have received the opinion of
▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇, General Counsel to Purchaser, dated the Closing Date,
substantially in the form and to the effect of Exhibit N hereto.
8.08 Deliveries. Purchaser shall have executed and delivered to (a) WL the
(i) appropriate Assumption Instruments; (ii) Product Asset Purchase Agreement in
the form of Exhibit E; (iii) the Manufacturing Agreement in the form of Exhibit
F, (iv) the Transition Services Agreement in the form of Exhibit G, (v) the
Manufacturing Agreement in the form of Exhibit H, (vi) the Clinical and
Toxicology Manufacturing Supply Agreement in the form of Exhibit I, (vii) the
License Agreements in the form of Exhibit J, and (viii) the Guaranty Agreement
in the form of Exhibit K and (b) PD the appropriate Assumption Instruments and
(c) the appropriate party all other documents, materials, or information
necessary to fulfill Purchaser's obligations under this Agreement and/or the
Operative Agreements.
ARTICLE IX
TAX MATTERS
9.01 Transfer Tax. All transfer, documentary, sales, excise, use, filing,
value added, recordation or other similar Taxes assessed upon or with respect to
the transfer of the Assets of each of WL and PD, as the case may be, to
Purchaser and any recording or filing fees with respect thereto shall be paid by
Purchaser.
9.02 Allocation of Taxes. Any liability for real property tax, personal
property tax or any similar ad valorem obligation levied with respect to any
Asset being sold by a Seller hereunder for a Post-Closing Tax Period which
includes any date prior to the Closing Date will be apportioned ratably between
such Seller and Purchaser as of the Closing Date based on the number of days of
such taxable period included in the Pre-Closing Tax Period and the number of
days of such taxable period included in the Post-Closing Tax Period. The parties
will determine the amount of reimbursement to which each is entitled under this
Section 9.02 and such total proration amount will be paid by the party owing it
to the other upon the Closing Date. In the event that subsequent to the Closing
Date either WL, PD or Purchaser makes a payment for which it is entitled to
reimbursement under this Section 9.02, the other party liable for reimbursement
under this Section 9.02 will make such reimbursement promptly but in no event
later than thirty (30) days after the presentation of a statement setting forth
the amount of reimbursement to which the presenting party is entitled along with
such supporting evidence as is reasonably necessary to calculate the amount of
reimbursement. Any payment required under this Section 9.02 and not made within
ten (10) days of delivery of the statement will bear interest at the rate per
annum determined, from time to time, under the provisions of Section 6621(a)(2)
of the Code.
9.03 Other Taxes. All income, sales and other Taxes, not otherwise
specifically provided for under Section 9.01 and 9.02 of this Agreement, or as
otherwise
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specifically provided for by this Agreement or any of the Operative
Agreements, shall be paid by the Person against whom such Taxes are levied or
assessed.
ARTICLE X
EMPLOYEE MATTERS
10.01 Definitions. As used herein, "Active Employees" shall mean all of the
Employees of the Business who are actively employed at the Closing Date and are
listed on Section 3.10 of the Disclosure Schedule. "Inactive Employees" shall
mean all of the Employees of the Business who, at the Closing Date, (i) are on
an approved leave of absence and are expected to return within 6 months
following the Closing Date and (ii) are listed on Section 3.10 of the Disclosure
Schedule; "Transferred Employees" shall mean each such Active Employee who
receives and accepts an offer of employment of Purchaser pursuant to Section
10.02(a) and each such Inactive Employee who accepts the offer of employment of
Purchaser pursuant to Section 10.02(b); "New Hire Date" shall mean (i) with
respect to any Active Employee who receives and accepts an offer of employment
of Purchaser pursuant to Section 10.02(a), the day following the Closing Date;
and (ii) with respect to any Inactive Employee who receives and accepts an offer
of Purchaser pursuant to Section 10.02(b), the date of hire of such Employee
following the expiration of his or her leave.
10.02 Employment of Employees of the Business. (a) Purchaser in its sole
discretion, may offer employment, as of the Closing Date, on an at-will basis to
the Active and Inactive Employees of the Business. Such offer of employment
extended by Purchaser shall provide for the employment of the Active Employees
accepting such offer at a base salary which is at least equal to the base salary
level being paid to each such Employee by WL.
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(b) Purchaser in its sole discretion, may offer employment on an at-will
basis to the Inactive Employees upon the expiration of their applicable leave at
a base salary which is at least equal to the base salary level being paid to
each such Employee by WL provided that such Employee is able to return to work
within six months after the Closing Date or such Employee has a legal right to
return to work.
10.03 Obligation to the Employees. Except as specifically provided herein,
Purchaser shall be responsible for compensation, benefits and other
employment-related matters of the Transferred Employees arising out of service
with the Purchaser on and after the Transferred Employees' applicable New Hire
Dates, and WL shall be responsible for compensation, benefits and other
employment-related matters of the Transferred Employees arising out of service
with WL prior to the Transferred Employees' applicable New Hire Date. WL shall
retain all liabilities and obligations for applicable medical, dental, life and
long-term disability plans, and other employee welfare and benefit plan benefits
in respect of the Transferred Employees arising out of claims incurred prior to
their applicable New Hire Dates to the extent provided under WL's applicable
benefit plan. It is understood by the parties hereto that WL shall not be
obligated for any medical or other benefit which is not covered under the
provisions of the benefit plan in which the Transferred Employee or covered
dependent is enrolled as of the Closing Date. Purchaser shall be responsible for
claims incurred on and after such Transferred Employees' applicable New Hire
Dates to the extent covered under an employee benefit plan of Purchaser. A claim
shall be deemed to have been incurred upon the incurrence of a qualified expense
for which reimbursement or treatment is sought; provided, however, a claim for a
hospitalization stay (and medical treatment during such stay) which begins prior
to a Transferred Employee's New Hire Date and which ends after such Transferred
Employee's Transfer Date shall be deemed to have been incurred prior to such New
Hire Date. WL's applicable benefit plan shall retain all liabilities and
obligations for all health and welfare benefits with respect to any Transferred
Employee who prior to and on his or her New Hire Date is hospitalized, or any
Transferred Employee's dependent who is hospitalized prior to and on the
Transferred Employee's New Hire Date, and shall continue such benefits and be
liable for claims applicable to such hospital confinement and related medical
treatment until such individual has been released from the hospital to the
extent covered under WL's applicable benefit plans.
10.04 Severance. (a) Each Employee who is not offered employment by
Purchaser pursuant to Section 10.02 shall receive severence pay from WL in
accordance with WL's Severance Plan in effect as of the date hereof, as listed
in Section 10.04 of the Disclosure Schedule ("▇▇ ▇▇▇▇▇▇▇▇▇ Plan"). Purchaser
shall reimburse WL for the amount of such severance pay. Purchaser shall not be
responsible for the payment of any severance payment or similar payments that
arise out of any arrangement other than the ▇▇ ▇▇▇▇▇▇▇▇▇ Plan.
(b) If any Transferred Employee is terminated by Purchaser within six
months following the Closing Date, such Transferred Employee shall receive
severance pay from Purchaser in an amount equal to the severance pay under WL's
Severance Plan based upon the compensation in effect at the time of termination
of employment, with
53
appropriate credit for accumulated service with both WL and one or more
predecessors, if WL would have taken such service into account under WL's
Severance Plan had the termination occurred prior to the Closing Date. Purchaser
shall not be responsible for payment of any Severance for Transferred Employees
who voluntarily terminate their employment with Purchaser.
(c) Purchaser shall require all Transferred Employees who receive severance
pay under Section 10.04(b) to execute a waiver in favor of WL that waives (i)
all Actions or Proceedings in respect of WL's Severance Plan and (ii) all
matters regarding which such Employee executes a waiver in favor of Purchaser.
(d) Any notification under the Federal Worker Adjustment and Retraining
Notification Act or any similar applicable State or local law on or after the
Closing Date shall be the responsibility of Purchaser. Any notification under
the Federal Worker Adjustment and Retraining Notification Act prior to the
Closing Date shall be the responsibility of WL.
10.05 Medical Coverage. Purchaser agrees to provide coverage under
Purchaser's group health plan to the Transferred Employees and their dependents
as of their applicable New Hire Date.
10.06 Retirement and Savings Plans. (a) With respect to those Transferred
Employees who are participating in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Retirement Plan or the
Union pension plan (collectively, the "Retirement Plan") as of the Closing Date,
WL shall cease further accruals in the Retirement Plan in respect of such
employees in accordance with the provisions of the Retirement Plan. WL shall
retain the assets and liabilities under the Retirement Plan in respect of such
benefits, and no assets of the Retirement Plan shall be transferred to Purchaser
or any plan of Purchaser except to the extent of rollovers permitted by the
Retirement Plan and any applicable plan of Purchaser. The Transferred Employees
shall receive benefits under the Retirement Plan at the time and in the manner
set forth in the Retirement Plan.
(b) With respect to those Transferred Employees who are participating in
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Savings and Stock Plan (the "Savings Plan") as of the Closing
Date, such employees shall cease further contributions to the Savings Plan and
WL shall cease further contributions in respect of such employees in accordance
with the provisions of the Savings Plan. WL shall retain the assets and
liabilities under the Savings Plan in respect of such benefits, and no assets of
the Savings Plan shall be transferred to Purchaser or any plan of Purchaser
except to the extent of rollovers permitted by the Savings Plan and any
applicable plan of Purchaser.
10.07 Vacation Pay. Purchaser shall be responsible for vacation leave
entitlement earned with respect to all Transferred Employees with WL; provided,
however, that the profit and loss statements for the Business shall reflect, as
a current liability an accrual for all vacation accrued by all Transferred
Employees prior to the Closing Date. Service with WL shall be deemed to be
service with Purchaser for
54
purposes of determining vacation time entitlements under Purchaser's vacation
policies. Purchaser makes no provisions for providing cash value of unused
vacation leave.
10.08 Records. To the extent that service with either party is relevant
with respect to any Employees or to the extent that any records related to
services with either party are relevant with respect to any Employees, Purchaser
and WL shall keep and provide each other with reasonable records and
notification of such information as may be necessary with respect to such
Employees. Purchaser and WL agree to comply with all federal and state laws
relating to the confidentiality of such information.
10.09 Workers Compensation. WL will be responsible for all workers
compensation claims filed by any Transferred Employee, no matter when it is
filed, when the occurrence giving rise to any such claim (or, in the case of a
claim relating to occupational disease, the majority of the exposure) takes
place prior to the Transferred Employee's applicable New Hire Date. Purchaser
will be responsible for all workers compensation claims filed by any Transferred
Employee when the occurrence giving rise to any such claim (or, in the case of a
claim relating to occupational disease, the majority of the exposure) takes
place on or after the Transferred Employee's applicable New Hire Date.
10.10 Union. Notwithstanding the provisions of Section 10.02, if Purchaser
and the Union agree on the material terms and conditions of a new collective
bargaining agreement then Purchaser intends to offer employment to all Employees
employed within the bargaining unit, who are Active Employees based upon such
new terms and conditions. With respect to Employees within the bargaining unit
who are Inactive Employees, Purchaser shall offer employment based upon such new
terms and conditions upon expiration of their leave of absence provided that
such person is able to return to work within a period of time agreed upon by
Purchaser and the Union.
ARTICLE XI
SURVIVAL; NO OTHER REPRESENTATIONS
11.01 Survival of Representations, Warranties, Covenants and Agreements.
The representations, warranties, covenants and agreements of Sellers and
Purchaser contained in this Agreement will survive the Closing (a) indefinitely
with respect to the representations and warranties contained in Sections 3.01,
3.02, 4.01 and 4.02 and the covenants and agreements contained in Sections 2.05
and 14.04, (b) five (5) years with respect to the covenants and agreements
contained in Section 14.06, (c) until the expiration of all applicable statutes
of limitation (including all periods of extension, whether automatic or
permissive) with respect to matters covered by Section 3.06 and Article X and
(insofar as they relate to ERISA or the Code) Section 3.09, (d) two (2) years
with respect to the representations contained in Section 3.20,and (e) one (1)
year in the case of each other representation and warranty, covenant and
agreement, except that any representation, warranty, covenant or agreement that
would otherwise terminate in accordance with clause (c) or (d) above will
continue to survive if a Claim
55
Notice or Indemnity Notice (as applicable) shall have been timely given in good
faith based on facts reasonably expected to establish a valid claim under
Article XII on or prior to such termination date, until the related claim for
indemnification has been satisfied or otherwise resolved as provided in Article
XII. This Section shall not limit in any way the survival and enforceability of
any covenant or agreement of the parties hereto which by its terms contemplates
performance after the Closing Date, which shall survive for the respective
periods set forth therein.
11.02 No Other Representations. Notwithstanding anything to the contrary
contained in this Agreement, it is the explicit intent of each party hereto that
neither WL nor PD, as the case may be, is making any representation or warranty
whatsoever, express or implied, including but not limited to any implied
representation or warranty as to condition, merchantability or suitability as to
any of the Assets or other Properties of the Business, except those
representations and warranties contained in Article III of this Agreement, the
Operative Agreements, the Schedules and Exhibits hereto and thereto and in any
certificate delivered pursuant to Section 7.03. In particular, neither Seller
makes any representation or warranty to Purchaser with respect to (i) the
information set forth in the Confidential Offering Memorandum dated April, 1997
provided to the Purchaser by WL or (ii) any financial projection or forecast
relating to the Condition of the Seller's Business or (iii) any presentation by
the Sellers of the Condition of the Seller's Business. With respect to any such
projection or forecast delivered by or on behalf of any Seller to Purchaser,
Purchaser acknowledges that (i) there are uncertainties inherent in attempting
to make such projections and forecasts, (ii) it is familiar with such
uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts
furnished to it and (iv) it shall have no claim against WL or PD, as the case
may be, with respect to such projections and forecasts prepared in good faith by
WL or PD, as the case may be.
ARTICLE XII
INDEMNIFICATION
12.01 Indemnification. (a) Subject to paragraph (c) of this Section and the
other Sections of this Article XII, each of WL and PD, as the case may be, shall
indemnify Purchaser and its officers, directors, employees, agents and
Affiliates in respect of, and hold each of them harmless from and against, any
and all Losses suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to:
(i) Any Retained Liability of the Sellers including, but not limited
to, any claim arising from any liability under or violation of any Environmental
Laws arising from any action taken or omitted to be taken on or prior to the
Closing Date;
(ii) Misrepresentation or breach of warranty or covenant or agreement
by either of the Sellers made or contained in this Agreement, the Operative
56
Agreements or in any Exhibit, Schedule, certificate or other instrument
furnished or to be furnished to the Purchaser under this Agreement or the
Operative Agreements;
(iii) Failure to comply with any bulk sales or similar laws applicable
to the transactions contemplated by this Agreement;
(iv) Litigation or other claims arising from acts, failures to act or
events relating to the Business or the Assets which occurred prior to the
Closing Date, including without limitation product liability and product
warranty claims for products sold by the Sellers prior to the Closing Date; and
(v) Any acts or omissions to act by the Sellers or their Affiliates,
or any of their employees, agents or representatives, that result in any
violation or alleged violation of any Law, or Order, that in any manner
financially adversely affects the rights and benefits of the Purchaser under
this Agreement or under any of the Operative Agreements.
(vi) The use of the Assets and Properties of the Business or operation
of the Facility or the Business prior to the Closing Date.
Furthermore, the parties agree that in no event will either PD or WL, as
the case may be, be liable to Purchaser for special, consequential, indirect,
punitive or similar damages including, without limitation, lost profits, for
either WL's or PD's, as the case may be, actions or failure to act.
(b) Subject to paragraph (c) of this Section and the other Sections of this
Article XII, Purchaser shall indemnify each of WL and PD, as the case may be,
and their respective officers, directors, employees, agents and Affiliates in
respect of, and hold each of them harmless from and against, any and all Losses
suffered, incurred or sustained by any of them or to which any of them becomes
subject, resulting from, arising out of or relating to:
(i) The Assumed Liabilities;
(ii) Misrepresentation or breach of warranty or covenant or agreement
by the Purchaser made or contained in this Agreement, the Operative Agreements
or in any Exhibit, Schedule, certificate or other instrument furnished or to be
furnished to the Sellers under this Agreement or the Operative Agreements;
(iii) Litigation or other claims arising from acts, failures to act or
events relating to the Business or the Assets which occurred after the Closing
Date, including without limitation product liability and product warranty claims
from products sold after the Closing Date by Purchaser and liability under or
violations of Environmental Laws but excluding Claims to the extent arising from
the existence of liabilities or violations of Environmental Laws which occurred
prior to the Closing Date which could not have been mitigated by Purchaser after
the Closing Date;
57
(iv) The use of the Assets and Properties of the Business or operation
of the Facility or the Business on and after the Closing Date;
(v) Any acts or omissions to act by the Purchaser or its Affiliates,
or any of their employees, agents or representatives, that result in any
violation or alleged violation of any Law or Order that in any manner adversely
affects the rights and benefits of the Sellers under this Agreement or under any
of the Operative Agreements; and
(vi) The use by Purchaser or any Affiliate or third party of the
Establishment License, in the operation of the Facility or in the manufacture,
use, sale, storage or shipment of any products for itself or any Affiliate or
third party, including, without limitation, any acts or failures to act of any
party other than Sellers, which result in a failure on the part of Sellers to be
in compliance with the requirements of the Establishment License or any laws,
rules or regulations applicable thereto.
(c) Notwithstanding anything to the contrary contained in this Agreement,
no amounts of indemnity shall be payable as a result of any claim in respect of
a Loss arising under paragraph (a) or (b) of Section 12.01:
(i) unless, with respect to any claim, such claim involves Losses in
excess of $50,000;
(ii) unless, until and then only to the extent that the Indemnified
Parties thereunder have suffered, incurred, sustained or become subject to
Losses referred to in such paragraphs in excess of $500,000 in the aggregate;
(iii) with respect to any claim for indemnification thereunder, unless
the Indemnified Party has given the Indemnifying Party a Claim Notice or
Indemnity Notice, as applicable, with respect to such claim, setting forth in
reasonable detail the specific facts and circumstances pertaining thereto, (A)
as soon as practical following the time at which the Indemnified Party
discovered or reasonably should have discovered such claim (except to the extent
the Indemnifying Party is not prejudiced by any delay in the delivery of such
notice) and (B) in any event prior to the applicable Cut-off Date. A Claim for
which notice was timely given pursuant to this Article shall include all costs
associated with the subject matter of the Claim, whether or not evident when the
notice was given;
(iv) with respect to any Loss resulting from a misrepresentation,
breach of warranty or nonfulfillment or failure to perform a covenant or
agreement that is either (A) disclosed in a written notice, setting forth in
reasonable detail the specific facts and circumstances pertaining thereto,
delivered by the Indemnifying Party to the Indemnified Party after the date of
this Agreement and at or prior to the Closing or (B) otherwise actually known to
the Indemnified Party prior to the Closing, if the Indemnified Party
nevertheless elects to close (regardless of whether the Indemnified
58
Party waives such misrepresentation, breach, nonfulfillment or failure in
writing or otherwise);
(v) with respect to any Loss, to the extent that the Indemnified Party
had a reasonable opportunity, but failed, in good faith to mitigate the Loss,
including but not limited to the failure to use commercially reasonable efforts
to recover under a policy of insurance or under a contractual right of set-off
or indemnity;
(vi) with respect to any Loss suffered, incurred or sustained by any
party or its Affiliates or to which any of them becomes subject to the extent it
arises from or was caused by actions taken or failed to be taken by such party
or any of its Affiliates after the Closing; or
(vii) with respect to any Loss, to the extent that such Loss is caused
by (a) any inaccuracy of a representation or breach of a warranty made by the
Indemnified Party in the Agreement or (b) the negligence or willful misconduct
of such Indemnified Party or any of its officers, directors, employees, agents
or affiliates.
(d) The limitations contained in clauses (i), (ii) and (iii) of Section
12.01(c) shall not apply to Losses arising from breach of (x) the agreements of
WL and/or PD, as the case may be, contained in Sections 3.12(e), 5.10, 5.11,
14.04 and 14.06 and of Purchaser contained in Sections 14.04 and 14.06 and (y)
Purchaser's and WL's and/or PD's, as the case may be, respective obligations
hereunder with respect to Assumed Liabilities and Retained Liabilities
(including, without limitation, any administrative or judicial proceeding
initiated by the United States Environmental Protection Agency under CERCLA or
by any state authority under similar state laws, which are currently pending
against Sellers).
12.02 Method of Asserting Claims. All claims for indemnification by any
Indemnified Party under Section 12.01 will be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under Section 12.01 is asserted against or sought to
be collected from such Indemnified Party by a Person other than either Seller,
Purchaser or any Affiliate of either Seller or Purchaser (a "Third Party
Claim"), the Indemnified Party shall deliver a Claim Notice with reasonable
promptness to the Indemnifying Party. The Indemnifying Party will notify the
Indemnified Party as soon as practicable within the Dispute Period whether the
Indemnifying Party disputes its liability to the Indemnified Party under Section
12.01 and whether the Indemnifying Party desires, at its sole cost and expense,
to defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the Indemnified
59
Party with respect to the Third Party Claim pursuant to this Section 12.02(a),
then the Indemnifying Party will have the right to defend, at the sole cost and
expense of the Indemnifying Party, such Third Party Claim by all appropriate
proceedings, which proceedings will be vigorously and diligently prosecuted by
the Indemnifying Party to a final conclusion or will be settled at the
discretion of the Indemnifying Party (with the consent of the Indemnified Party,
which consent will not be unreasonably withheld). The Indemnifying Party will
have full control of such defense and proceedings, including (except as provided
in the immediately preceding sentence) any settlement thereof; provided,
however, that the Indemnified Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the Indemnifying Party's delivery of the
notice referred to in the first sentence of this Section 12.02(a)(i), file any
motion, answer or other pleadings or take any other action that the Indemnified
Party reasonably believes to be necessary or appropriate to protect its
interests and not prejudicial to the Indemnifying Party (it being understood and
agreed that, except as provided in clause (ii) below, if an Indemnified Party
takes any such action that is prejudicial and causes a final adjudication that
is adverse to the Indemnifying Party, the Indemnifying Party will be relieved of
its obligations hereunder with respect to the portion of such Third Party Claim
prejudiced by the Indemnified Party's action); and provided further, that if
requested by the Indemnifying Party, the Indemnified Party will, at the sole
cost and expense of the Indemnifying Party, cooperate with the Indemnifying
Party and its counsel in contesting any Third Party Claim that the Indemnifying
Party elects to contest, or, if appropriate and related to the Third Party Claim
in question, in making any counterclaim against the Person asserting the Third
Party Claim, or any cross-complaint against any Person (other than the
Indemnified Party or any of its Affiliates). Notwithstanding the foregoing, the
Indemnified Party may take over the control of the defense or settlement of a
Third Party Claim at any time if it irrevocably waives its right to indemnity
under Section 12.01 with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend the
Third Party Claim pursuant to Section 12.02(a), or if the Indemnifying Party
gives such notice but fails to prosecute vigorously and diligently or settle the
Third Party Claim, or if the Indemnifying Party fails to give any notice
whatsoever within the Dispute Period, then the Indemnified Party will have the
right to defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnified Party to a final
conclusion or will be settled at the discretion of the Indemnified Party (with
the consent of the Indemnifying Party, which consent will not be unreasonably
withheld). The Indemnified Party will have full control of such defense and
proceedings, including (except as provided in the immediately preceding
sentence) any settlement thereof; provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at the sole cost and expense of
the Indemnifying Party, cooperate with the Indemnified Party and its counsel in
contesting any Third Party Claim which the Indemnified Party is contesting, or,
if appropriate and related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim, or any
cross-complaint against any Person (other than the Indemnified Party or any of
its
60
Affiliates). Notwithstanding the foregoing provisions of this Section
12.02(a)(ii), if the Indemnifying Party has notified the Indemnified Party
within the Dispute Period that the Indemnifying Party disputes its liability
hereunder to the Indemnified Party with respect to such Third Party Claim and if
such dispute is resolved in favor of the Indemnifying Party in the manner
provided in clause (iii) below, the Indemnifying Party will not be required to
bear the costs and expenses of the Indemnified Party's defense or settlement
pursuant to this Section 12.02(a)(ii) or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the Indemnified
Party will reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying Party in connection with such litigation.
(iii) If the Indemnifying Party notifies the Indemnified Party that it
does not dispute its liability to the Indemnified Party with respect to the
Third Party Claim under Section 12.01 or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes its liability
to the Indemnified Party with respect to such Third Party Claim, the Loss in the
amount specified in the Claim Notice will be conclusively deemed a liability of
the Indemnifying Party under Section 12.01 and the Indemnifying Party shall pay
the amount of such Loss to the Indemnified Party on demand. If the Indemnifying
Party has timely disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party will proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by litigation in a
court of competent jurisdiction.
(b) In the event any Indemnified Party should have a claim under Section
12.01 against any Indemnifying Party that does not involve a Third Party Claim,
the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Indemnity
Notice, the Loss in the amount specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under Section 12.02
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability
with respect to such claim, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a resolution of such dispute, and if not
resolved through negotiations within the Resolution Period, such dispute shall
be resolved by litigation in a court of competent jurisdiction.
(c) In the event of any Loss resulting from a misrepresentation, breach of
warranty or nonfulfillment or failure to be performed of any covenant or
agreement contained in this Agreement as to which an Indemnified Party would be
entitled to claim indemnity under Section 12.01 but for the provisions of
Section 12.01(c)(ii), such Indemnified Party may nevertheless deliver a written
notice to the Indemnifying Party containing the information that would be
required in a Claim Notice or an Indemnity Notice, as applicable, with respect
to such Loss. In the case of a Claim Notice, the
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provisions of Section 12.02(a)(i) will be applicable. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described
therein or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Claim Notice
or Indemnity Notice, as the case may be, the Loss specified in the notice will
be conclusively deemed to have been incurred by the Indemnified Party for
purposes of making the determination set forth in Section 12.01(c)(ii). If the
Indemnifying Party has timely disputed the claim described in such Claim Notice
or Indemnity Notice, as the case may be, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the Resolution Period,
such dispute shall be resolved by litigation in a court of competent
jurisdiction.
(d) In the event of any claim for indemnity under Section 12.01(a),
Purchaser agrees to give Sellers and their respective Representatives reasonable
access to the Business Books and Records and Employees in connection with the
matters for which indemnification is sought to the extent WL reasonably deems
necessary in connection with its rights and obligations under this Article XII.
12.03 Exclusivity. After the Closing, to the extent permitted by Law, the
indemnities set forth in this Article XII shall be the exclusive remedies of
Purchaser, WL and PD, as the case may be, and their respective officers,
directors, employees, agents and Affiliates for any misrepresentation, breach of
warranty or nonfulfillment or failure to perform any covenant or agreement
contained in this Agreement, and the parties shall not be entitled to a
rescission of this Agreement or to any further indemnification rights or claims
of any nature whatsoever in respect thereof, all of which the parties hereto
hereby waive.
ARTICLE XIII
TERMINATION
13.01 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of WL and
Purchaser;
(b) at any time before the Closing, by either Seller or Purchaser, in the
event that any Order or Law becomes effective restraining, enjoining, or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements
upon notification of the non-terminating party by the terminating party; or
(c) at any time after March 15, 1998 by either Seller or Purchaser upon
notification of the non-terminating party by the terminating party if the
Closing shall not have occurred on or before such date and such failure to
consummate is not
62
caused by a delay in the procurement of any approval of any Governmental or
Regulatory Authority set forth in Schedule 4.04 and Schedule 5.01.
13.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 13.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of either WL or PD, as
the case may be, or Purchaser (or any of their respective officers, directors,
employees, agents or other representatives or Affiliates), except that the
provisions with respect to expenses in Section 14.04 and confidentiality in
Section 14.06 will continue to apply following any such termination.
ARTICLE XIV
MISCELLANEOUS
14.01 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission (with the original promptly sent by any
of the other methods herein) or mailed ( certified or registered, return receipt
requested) or by nationally recognized overnight courier service to the parties
at the following addresses or facsimile numbers:
If to Purchaser, to:
King Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
with a copy to:
▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇, Esq.
Executive Vice President and General Counsel
King Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to WL or PD, to:
63
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: President, Pharmaceutical Sector
with a copy to:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Vice President and General Counsel
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
14.02 Bulk Sales Act. The parties hereby waive compliance with
the bulk sales act or comparable statutory provisions of each applicable
jurisdiction. WL shall indemnify Purchaser and its officers, directors,
employees, agents and Affiliates in respect of, and hold each of them harmless
from and against, any and all Losses suffered, incurred or sustained by any of
them or to which any of them becomes subject, resulting from, arising out of or
relating to the failure of WL or PD, as the case may be, to comply with the
terms of any such provisions applicable to the transactions contemplated by this
Agreement.
14.03 Entire Agreement. This Agreement and the Operative
Agreements supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof, including without
limitation that certain nondisclosure agreement between WL and the Purchaser
dated August 21, 1997, and, together with the Exhibits and Schedules attached to
this Agreement or the Operative Agreements, which are hereby deemed to have been
fully incorporated herein or therein by reference hereto or thereto, contain the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof and thereof.
14.04 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 13.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs
64
and expenses incurred in connection with the negotiation, execution and closing
of this Agreement and the Operative Agreements and the transactions contemplated
hereby and thereby.
14.05 Public Announcements. At all times at or before the Closing, WL, PD
and Purchaser will not issue or make any reports, statements or releases to the
public or generally to the employees, customers, suppliers or other Persons to
whom WL or PD, as the case may be, sells goods or provides services in
connection with the Business or with whom WL or PD, as the case may be,
otherwise has significant business relationships in connection with the Business
with respect to this Agreement or the transactions contemplated hereby without
the consent of the other, which consent shall not be unreasonably withheld. If
either party is unable to obtain the approval of its public report, statement or
release from the other party and such report, statement or release is, in the
opinion of legal counsel to such party, required by Law in order to discharge
such party's disclosure obligations, then such party may make or issue the
legally required report, statement or release and promptly furnish the other
party with a copy thereof. WL, PD and Purchaser will also obtain each party's
prior approval of any press release to be issued immediately following the
Closing announcing the consummation of the transactions contemplated by this
Agreement. Attached hereto as Section 14.05 of the Disclosure Schedule is a
mutually agreed upon press release the publication of which the parties consent
to on the Closing Date upon consummation of the transactions contemplated herein
and in the Operative Agreements. The terms of this Section will not apply in
connection with consents, notices, approvals and filings referred to in Schedule
4.03, 4.04 and 5.04.
14.06 Confidentiality. For a period of five (5) years from the Closing
Date, each party hereto will hold, and will use its best efforts to cause its
Affiliates, and in the case of Purchaser, any Person who has provided, or who is
considering providing, financing to Purchaser to finance all or any portion of
the Purchase Price, and their respective Representatives to hold in strict
confidence from any Person (other than any such Affiliate, Person who has
provided, or who is considering providing, financing or Representative) all
documents and information concerning the other party or any of its Affiliates
furnished to it by the other party or such other party's Representatives in
connection with this Agreement or the transactions contemplated hereby, except
to the extent that such documents or information can be shown to have been (a)
previously known by the party receiving such documents or information, (b) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (c) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential. The foregoing restrictions
shall not apply to documents and information (i) compelled to be disclosed by
judicial or administrative process (including without limitation in connection
with obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law or (ii) disclosed in an Action or Proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, or (iii) required
65
in any document relating to the sale or proposed sale of Purchaser's stock to
the public. In the event the transactions contemplated hereby are not
consummated, upon the request of the other party, each party hereto will, and
will cause its Affiliates, any Person who has provided, or who is providing,
financing to such party and their respective Representatives to, promptly (and
in no event later than five (5) Business Days after such request) redeliver or
cause to be redelivered all copies of confidential documents and information
furnished by the other party in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon prepared by the party furnished such documents and information
or its Representatives.
14.07 Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
14.08 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
14.09 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XII. This Agreement may be
amended, supplemented, modified or terminated by the parties without notice or
other obligation to any Person not a party hereto and entitled to such
indemnity.
14.10 No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other party hereto and any attempt to do so will be
void, except (a) for assignments and transfers by operation of Law and (b) that
Purchaser may assign any or all of its rights, interests and obligations
hereunder to a wholly-owned subsidiary or an Affiliate, provided that any such
assignee agrees in writing to be bound by all of the terms, conditions and
provisions contained herein, but no such assignment referred to in clause (b)
shall relieve Purchaser of its obligations hereunder. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
Purchaser may also grant security interests in the Assets at or at or after the
Closing.
66
14.11 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
14.12 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
14.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Michigan applicable to a Contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
14.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party as of the date first above written.
PARKEDALE PHARMACEUTICALS, INC.
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY
By:
----------------------------------
Name:
Title:
67
PARKE, DAVIS & COMPANY
By:
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Name:
Title:
