1
Exhibit 3.1
CONFIDENTIAL TREATMENT
Note: Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Commission under Rule 24b-2. The omitted
confidential material has been filed separately with the Commission. The
location of the omitted confidential information is indicated herein by
asterisks.
PURCHASE AGREEMENT
by and among
AMERICAN CYANAMID COMPANY
AMERICAN HOME PRODUCTS CORPORATION
and
BASF AKTIENGESELLSCHAFT
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...................................................................................1
ARTICLE II THE ACQUISITION..............................................................................12
2.1 PURCHASE AND SALE............................................................................12
2.2 ASSUMPTION OF LIABILITIES....................................................................12
ARTICLE III CLOSING; PURCHASE PRICE ADJUSTMENT...........................................................12
3.1 THE CLOSING..................................................................................12
3.2 DELIVERIES BY BUYER..........................................................................13
3.3 DELIVERIES BY SELLERS........................................................................13
3.4 FURTHER ASSURANCES AND OTHER JOINT VENTURE INTERESTS.........................................15
3.5 CLOSING STATEMENT............................................................................17
3.6 ADJUSTMENT OF PURCHASE PRICE.................................................................18
3.7 [***]........................................................................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS....................................................19
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC......................................................19
4.2 CAPITALIZATION OF THE COMPANIES..............................................................20
4.3 EFFECT OF AGREEMENT..........................................................................21
4.4 FINANCIAL STATEMENTS AND NET ASSET VALUE.....................................................21
4.5 ABSENCE OF CERTAIN CHANGES OR EVENTS.........................................................22
4.6 TAXES........................................................................................23
4.7 REAL PROPERTY................................................................................24
4.8 GOOD TITLE TO AND CONDITION OF ASSETS........................................................24
4.9 CONTRACTS....................................................................................25
4.10 INTELLECTUAL PROPERTY RIGHTS.................................................................26
4.11 LITIGATION AND CLAIMS........................................................................27
4.12 COMPLIANCE WITH LAW; APPLICABLE PERMITS......................................................28
4.13 ENVIRONMENTAL MATTERS........................................................................28
4.14 REGULATORY MATTERS...........................................................................29
4.15 LABOR MATTERS................................................................................29
4.16 BROKER'S FEES................................................................................30
4.17 INTERCOMPANY AGREEMENTS......................................................................30
4.18 NO OTHER REPRESENTATIONS OR WARRANTIES; DISCLOSURE...........................................30
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[***] Confidential treatment requested and the redacted material has been
separately filed with the Commission.
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER......................................................30
5.1 CORPORATE ORGANIZATION.......................................................................30
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT.........................................................31
5.3 BROKER'S FEES................................................................................31
5.4 CONSENTS AND APPROVALS; NO VIOLATIONS........................................................31
5.5 FINANCIAL CAPABILITY.........................................................................32
5.6 SECURITIES ACT...............................................................................32
5.7 NO OTHER REPRESENTATIONS OR WARRANTIES.......................................................32
ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING......................................................32
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING......................................................32
6.2 PERMITTED ACTIONS............................................................................34
6.3 CHANGE OF NAME...............................................................................35
ARTICLE VII ADDITIONAL AGREEMENTS........................................................................35
7.1 EXPENSES.....................................................................................35
7.2 ADDITIONAL AGREEMENTS........................................................................36
7.3 ACCESS TO INFORMATION........................................................................36
7.4 FILINGS AND AUTHORIZATIONS...................................................................36
7.5 TAX MATTERS..................................................................................37
7.6 USE OF CERTAIN NAMES.........................................................................41
7.7 REMOVAL OF INTERNATIONAL ASSETS..............................................................41
7.8 ACCESS TO RECORDS AFTER CLOSING..............................................................41
7.9 REPLACEMENT OF GUARANTY OBLIGATIONS..........................................................42
7.10 NON-SOLICITATION.............................................................................42
7.11 TERMINATION OF INTERCOMPANY AGREEMENTS/ARRANGEMENTS..........................................42
7.12 CERTAIN CONTRACTS............................................................................42
ARTICLE VIII CONDITIONS...................................................................................43
8.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT...............................................................................43
8.2 CONDITIONS TO THE OBLIGATION OF SELLERS......................................................43
8.3 CONDITIONS TO THE OBLIGATION OF BUYER........................................................43
ARTICLE IX AGREEMENTS WITH RESPECT TO EMPLOYEES AND EMPLOYEE BENEFITS...................................44
9.1 U.S. EMPLOYEE PLANS..........................................................................44
9.2 INTERNATIONAL PLANS..........................................................................46
9.3 BUYER'S OBLIGATIONS TO EMPLOYEES.............................................................46
9.4 TREATMENT OF SELLERS' AND BUYER'S U.S. EMPLOYEE PLANS AND U.S. BENEFIT
ARRANGEMENTS.................................................................................48
9.5 INTERNATIONAL EMPLOYEES OF THE EUROPEAN UNION ("EU"). .......................................51
9.6 TREATMENT OF SELLERS' INTERNATIONAL PLANS....................................................51
9.7 STOCK OPTIONS................................................................................54
9.8 NO THIRD PARTY BENEFICIARIES.................................................................54
ARTICLE X TERMINATION, AMENDMENT AND WAIVER............................................................54
10.1 TERMINATION..................................................................................54
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10.2 EFFECT OF TERMINATION........................................................................55
ARTICLE XI INDEMNIFICATION..............................................................................55
11.1 INDEMNIFICATION..............................................................................55
11.2 PROCEDURES...................................................................................59
11.3 LIMITATIONS..................................................................................61
11.4 INDEMNIFICATION AS SOLE REMEDY...............................................................61
ARTICLE XII GENERAL PROVISIONS...........................................................................62
12.1 PUBLIC STATEMENTS............................................................................62
12.2 NOTICES......................................................................................62
12.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................................................63
12.4 AMENDMENT....................................................................................63
12.5 WAIVER.......................................................................................63
12.6 PARTIES IN INTEREST..........................................................................64
12.7 SELLERS' KNOWLEDGE...........................................................................64
12.8 GOVERNING LAW; MISCELLANEOUS.................................................................64
12.9 DISCLOSURE SCHEDULE..........................................................................64
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT dated as of March 20, 2000 (the
"Agreement") by and among AMERICAN CYANAMID COMPANY, a Maine corporation
("Cyanamid"), AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation ("AHP";
and AHP together with Cyanamid, being, "Sellers"), and BASF Aktiengesellschaft,
a corporation organized under the laws of Germany ("Buyer").
W I T N E S S E T H:
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to
acquire from Sellers, certain assets, and to assume certain liabilities, in each
case relating to Sellers' crop protection business, which the parties agree will
be achieved pursuant to the purchase and sale of the Assets (as defined herein)
and the Shares (as defined herein), all on the terms and subject to the
conditions set forth herein;
WHEREAS, the Assets included in the purchase and sale are
owned by Sellers and the Asset Transferor Entities (as defined herein) and
Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers and
the Asset Transferor Entities, the Assets;
WHEREAS, the Shares included in the purchase and sale are
owned by the Share Transferor Entities (as defined herein) and Sellers desire to
sell to Buyer, and desire that such Share Transferor Entities sell to Buyer, and
Buyer desires to purchase from Sellers and such Share Transferor Entities, the
Shares; and
WHEREAS, in connection with such purchase and sale, Buyer is
willing to assume certain liabilities of Sellers and its Affiliates (as defined
herein) and to assume certain obligations regarding the employment of those
employees of Sellers and such Affiliates primarily engaged in the conduct of the
Business (as defined herein), all on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the terms defined below shall
have the indicated meanings:
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1.1 "Access Agreement" shall mean the access agreement to be
executed between a Seller and Buyer, substantially in the form of Exhibit D.
1.2 "Accountant" shall have the meaning set forth in Section
3.5(c).
1.3 "Affiliate" shall mean, with respect to any Person, any
Person which directly or indirectly through stock ownership or through other
arrangements either controls, or is controlled by or is under common control
with, such Person, provided, however, for purposes of this Agreement the term
"Affiliate" shall not include (i) subsidiaries or other entities in which a
Person owns a majority of the ordinary voting power to elect the majority of the
board of directors or other governing board but is restricted from electing such
majority by contract or otherwise, until such time as such restrictions are no
longer in effect and (ii) the Joint Venture Entities
1.4 "Agreement" shall mean this Agreement and any supplements,
amendments, exhibits and schedules hereto.
1.5 "Aggrieved Party" shall have the meaning set forth in
Section 11.2(a).
1.6 "Animal Health Business" shall mean the business of
Sellers and their Affiliates relating to the discovery, research, development,
manufacturing, formulation, licensing, marketing, distribution and sale of
products, including, without limitation, pharmaceuticals, nutritionals,
pesticides and biologicals (including vaccines, antibodies, interleukins,
somatotropins, large molecule therapeutics, proteins and peptides) as each of
the foregoing is used or held for use for the treatment, prevention, correction,
amelioration or diagnosis of disease, illness, injury or any other condition in
non-human animals.
1.7 "Applicable Laws" shall mean all laws, statutes,
regulations and ordinances of any Governmental Authority having jurisdiction
over the Companies or the Assets or the Business, as may be in effect on or
prior to the Closing.
1.8 "Applicable Permits" shall mean any waiver, exemption,
variance, permit, authorization, license or similar approval, required to be
obtained or maintained under Applicable Laws in connection with the Companies,
the Assets or the Business.
1.9 "Asset Transferor Entities" shall mean each Affiliate of
AHP transferring Assets pursuant to this Agreement. The Asset Transferor
Entities are listed in Exhibit A.
1.10 "Assets" shall mean, collectively, all assets of any
kind, nature and description owned by Sellers or the Asset Transferor Entities
and used primarily in the Business, but shall not include the Shares, the Other
Joint Venture Interests, the [***] Agreements and the Excluded Assets.
1.11 "Assumed Contracts" shall mean the Contracts, other than
the [***] Agreements, which are included in the Assets and are being conveyed by
the Asset Transferor Entities.
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[***] Confidential treatment has been requested and the redacted material has
been separately filed with the Commission.
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1.12 "Assumed Liabilities" shall mean any and all liabilities
of Sellers or the Asset Transferor Entities arising out of the conduct of the
Business which exist on or after the Closing Date, including without limitation,
(i) the obligations of Sellers or the Asset Transferor Entities under the
Assumed Contracts, (ii) the [***] Obligations, and (iii) any and all liabilities
to the Employees except to the extent any such liability is retained by Sellers
or their Affiliates pursuant to Article 9, in each case other than Excluded
Liabilities. For purposes of clarity, it is understood that Assumed Liabilities
shall relate only to the purchase and sale of the Assets and that, by operation
of law, the liabilities of the Companies shall remain with the Companies,
subject to (x) allocation of Taxes set forth in Section 7.5, (y) employee
matters set forth in Article 9, and (z) the indemnification provisions set forth
herein.
1.13 "Base Net Asset Value" shall have the meaning set forth
in Section 3.6.
1.14 "Books and Records" shall mean the books and records of
(i) Sellers and the Asset Transferor Entities, to the extent related primarily
to the Business, and (ii) the Companies.
1.15 "Business" shall mean the business of the Companies
together with the business conducted by the Asset Transferor Entities existing
on the date hereof related primarily to (x) the discovery, research,
development, manufacture, formulation, licensing, marketing and/or selling of
(i) pesticides (such as herbicides, insecticides, acaricides, nematicides,
fungicides and rodenticides); (ii) plant regulators; (iii) oils, crop oils and
surfactants; (iv) plant varieties, lines, hybrids and inbreds, including
mutants, derivatives and parts thereof and genetic material relating thereto;
and (v) biological materials and systems and those biologically derived or
biologically synthesized; as each of the foregoing is used in agriculture (other
than animals), aquaculture, horticulture, forestry (including for protection
during transport or storage of harvested agricultural (other than animals),
aquacultural, horticultural and/or forestry products), turf management and
vegetation control for home and garden, consumer, industrial, commercial and
public health applications, and (y) the research, development and formulation of
biotechnological processes primarily directed to crop protection and seeds, but
in each case specifically excluding (i) the Excluded Assets, and (ii) the
Excluded Liabilities. Pesticides and plant regulators as are defined in 7 U.S.C.
Section 136.
1.16 "Closing" shall have the meaning set forth in Section
3.1.
1.17 "Closing Date" shall have the meaning set forth in
Section 3.1.
1.18 "Closing Net Asset Value" shall have the meaning set
forth in Section 3.5(a).
1.19 "Closing Statement" shall have the meaning set forth in
Section 3.5(a).
1.20 "Code" shall mean the U.S. Internal Revenue Code of 1986,
as amended.
1.21 "Companies" shall mean those entities that are directly
or indirectly wholly-owned by Sellers or their Affiliates that are or will be at
Closing engaged exclusively in the conduct of the Business (or engaged
exclusively in the conduct of the Business and providing
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[***] Confidential treatment has been requested and the redacted material has
been separately filed with the Commission.
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services to other businesses of Sellers or their Affiliates as provided for in
this Agreement), each of which is listed in Exhibit A.
1.22 "Competition Laws" shall mean all Applicable Laws that
are designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
1.23 "Constituent Documents" shall mean, with respect to any
company, such company's articles of incorporation and by-laws, or other similar
documents prescribed by the Applicable Laws of such company's jurisdiction of
incorporation.
1.24 "Contracts" shall mean all leases, subleases, rental
agreements, insurance policies, sales orders, licenses, agreements, purchase
orders, instruments of indebtedness, guarantees and any and all other contracts
or binding arrangements of the Sellers, the Asset Transferor Entities and the
Companies, in each case, relating primarily to the Business, but shall not
include any contracts or other binding arrangements related primarily to the
Excluded Assets or Excluded Liabilities.
1.25 "Cyanamid Companies" shall mean Sellers, the Share
Transferor Entities and the Asset Transferor Entities.
1.26 "Costs" shall have the meanings set forth in Section
11.1(a).
1.27 "Delayed Closings" shall have the meaning set forth in
Section 3.4(e).
1.28 "Disclosure Schedule" shall mean that certain schedule
identified as such and delivered by Sellers to Buyer pursuant to the Agreement,
as Section 4.10(a) of the Disclosure Schedule may be supplemented and updated
from time to time; provided, however, that any such supplement shall not
materially change the information previously set forth therein.
1.29 "Employees" shall mean the U.S. Employees and the Ex-U.S.
Employees.
1.30 "Encumbrances" shall mean all claims, security interests,
liens, pledges, charges, escrows, options, proxies, rights of first refusal,
preemptive rights, mortgages, hypothecations, prior assignments, title retention
agreements, indentures, security agreements or any other encumbrances of any
kind.
1.31 "Environmental Laws" shall mean all Applicable Laws,
including any judicial or administrative order, consent decree or judgment to
which order, decree or judgment one or more of the Companies is a party or which
relates to any of the Assets or the Business, relating to the protection or
pollution of the environment, exposure of persons to hazardous materials or
substances, or natural resources, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended (42 U.S.C. Section 9601 et
seq.) ("CERCLA"), the Federal Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act and the Hazardous and Solid Waste
Amendments thereto, the Clean Air Act, the Clean Water Act, the Toxic Substances
Control Act, the Safe Drinking Water Act, and any similar or analogous statutes,
or regulations of any Governmental Authority, as each of the foregoing exists on
the Closing Date.
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1.32 "Environmental Reports" shall mean the reports listed in
Section 4.13 of the Disclosure Schedule, including the Phase I and Phase II
Environmental Site Assessments prepared in connection with the transactions
contemplated by this Agreement.
1.33 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.34 "ERISA Affiliate" of any entity means any other entity
which, together with such entity, would be treated as a single employer under
Section 414 of the Code.
1.35 "Ex-U.S. Employees" shall mean all (i) individuals who,
on the Closing Date, are actively employed outside of the United States and
Puerto Rico by Sellers and their Affiliates and whose employment and
responsibilities relate primarily to the Business (either directly or indirectly
by providing back office or host support to the Business); and (ii) individuals
outside of the United States and Puerto Rico who would have been included in
subsection (i) above, if they were actively employed on the Closing Date but who
are on short-term (not more than 180 days) disability leave, authorized leave of
absence or military service or lay-off with recall rights from Sellers or their
Affiliates as of the Closing Date; provided that such individuals return to work
within the 180 day period following the Closing, or within such longer period as
the individual has statutory re-employment rights.
1.36 "Excluded Assets" shall mean the assets of Sellers and
certain of their Affiliates (all of which are expressly excluded from the
purchase and sale contemplated hereby) set forth on Exhibit B.
1.37 "Excluded Liabilities" shall mean the following
liabilities of Sellers and the Asset Transferor Entities (all of which are
expressly excluded from the purchase and sale contemplated hereby):
(i) Tax Liabilities;
(ii) intercompany liabilities (other than (x) accounts payable
of the Companies arising from transactions among the Companies and (y)
liabilities and obligations of the Business arising under the Contracts
listed in Section 6.2 of the Disclosure Schedule;
(iii) liabilities retained by Sellers and their Affiliates
pursuant to the provisions of Article 9; and
(iv) liabilities relating to the Excluded Assets. For the
purposes of clarity, it is understood that Excluded Liabilities shall
relate only to the purchase and sale of the Assets and that, by
operation of law, the liabilities of the Companies shall remain with
the Companies, subject to (x) Allocation of Taxes set forth in Section
7.5, (y) employee and employee benefit matters set forth in Article 9,
and (z) the indemnity provisions set forth herein.
1.38 "Final Net Asset Value" shall have the meaning set forth
in Section 3.5(c).
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1.39 "Financial Statements" shall have the meaning set forth
in Section 4.4(a).
1.40 "GAAP" shall mean United States generally accepted
accounting principles.
1.41 "Governmental Authority" shall mean any governmental
department, commission, board, bureau, agency, court or other instrumentality of
the United States or any other country, jurisdiction, municipality or other
political subdivision thereof or any other supranational organization of
sovereign states, where any of the Companies is now operating or has operated or
where any of the Assets are located.
1.42 "HSR Act" shall have the meaning set forth in Section
7.4.
1.43 "Hazardous Substance" shall mean any hazardous substance
as that term is defined in CERCLA and any other substance, material or waste
regulated by any Environmental Law, and shall include, but not be limited to,
petroleum, including crude oil or any fraction thereof, asbestos and chlorinated
organic compounds.
1.44 "Indemnifying Party" shall have the meaning set forth in
Section 11.2(a).
1.45 "Intellectual Property" shall mean (i) Patents, (ii)
Know-how, (iii) Trademarks and (iv) copyrights, copyright registrations and
applications for registration, inventions and all other intellectual property
rights whether registered or not, in the case of subsection (iv) which are
licensed to or owned by (x) Sellers or the Asset Transferor Entities and used
primarily in the Business or (y) any of the Companies, in each case other than
the Excluded Assets.
1.46 "International Plans" shall have the meaning set forth in
Section 9.2(a).
1.47 "Joint Venture Entities" shall mean the entities listed
in Section (c) of Exhibit A in which Sellers or their Affiliates hold less than
all of the outstanding equity interest, which entities have certain assets
primarily related to the Business.
1.48 "Joint Venture Interests" shall mean (a) the equity
interests of the Sellers or their Affiliates in the Joint Venture Entities as
defined and listed in Section (d) of Exhibit A that are not owned by one of the
Companies (the "Transferable Joint Venture Interests") and (b) the equity
interests of the Sellers or their Affiliates in the Joint Venture Entities as
defined and listed in Section (e) of Exhibit A (the "Other Joint Venture
Interests").
1.49 "Know-how" shall mean all product specifications,
processes, product designs, plans, ideas, concepts, manufacturing, engineering
and other manuals and drawings, technical information, trade secrets, data,
research records, all promotional literature, customer and supplier lists and
similar data and information, and all other confidential or proprietary
technical and business information licensed to or owned by (x) Sellers or the
Asset Transferor Entities and used primarily in the Business or (y) any of the
Companies, in each case other than the Excluded Assets.
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1.50 "Leased Real Property" shall mean all real property,
including any buildings, structures, fixtures and improvements thereon or
appurtenances thereto leased by (x) Sellers or the Asset Transferor Entities and
used primarily in the Business or (y) any of the Companies, in each case other
than Excluded Assets.
1.51 [INTENTIONALLY DELETED.]
1.52 "Material Adverse Effect" shall mean any event, change,
circumstance or effect that is materially adverse to the business, assets,
operations, results of operations or financial condition of the Business, taken
as a whole, other than any event, change, circumstance or effect relating (x) to
the economy in general, (y) in general to the industries in which the Business
operates and not specifically relating to the Business; provided that the
Business, taken as a whole, is not materially disproportionately affected as
compared to other Persons engaged in such industry by such event, change,
circumstance or effect or (z) changes, circumstances and effects relating to the
announcement of the transactions contemplated by this Agreement.
1.53 "Minimum Loss" shall have the meaning set forth in
Section 11.3.
1.54 "Multiemployer Plan" means each U.S. Employee Plan that
is a multiemployer plan, as defined in Section 3(37) of ERISA.
1.55 "Net Assets" shall mean the (i) sum of (a) the book value
of the Assets and (b) the book value of the Sellers' interest in the total
assets of the Companies (excluding the Excluded Assets) and the Joint Venture
Entities, to the extent related to the Business, (ii) minus the sum of the book
value of the Assumed Liabilities and the book value of the Sellers' interest in
the total liabilities of the Companies (excluding the Excluded Liabilities) and
the Joint Venture Entities, to the extent related to the Business, all
calculated in accordance with GAAP applied in a manner consistent with the
preparation of the Financial Statements.
1.56 "Notice of Disagreement" shall have the meaning set forth
in Section 3.5(b).
1.57 "Operating Profit" shall mean the amount calculated from
the line items set forth on the Statements of Operating Profit of the Business
included in the Financial Statements as follows: Net Sales less the sum of the
following: Cost of Goods Sold (including royalty payments); Marketing; Selling;
Storage, Packaging & Shipping; Administrative; Research & Development; and
General Expense.
1.58 "Owned Real Property" shall mean all real property,
including any buildings, structures and improvements thereon or appurtenances
thereto owned by (x) Sellers or the Asset Transferor Entities and used primarily
in the Business, or (y) any of the Companies, in each case other than the
Excluded Assets.
1.59 "Patents" shall mean all patents, and patent
applications,(including, without limitation, all reissues, divisions,
continuations, continuations-in-part, renewals and extensions of the foregoing)
licensed to or owned by (x) Sellers or the Asset Transferor Entities
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and used primarily in the Business or (y) any of the Companies, in each case
other than the Excluded Assets.
1.60 "Patent and Data Rights Agreement" shall mean the
Agreement to be executed between Sellers or their Affiliates and Buyer,
substantially in the form of Exhibit C, pursuant to which Sellers or their
Affiliates convey rights to the Buyer with respect to the Business related to
the [***] Agreements and pursuant to which the Buyer assumes the [***]
Obligations.
1.61 "Pension Plan" or "Pension Plans" means an employee
pension benefit plan (as such term is defined in Section 3(2) of ERISA) that is
intended to qualify under Section 401(a) of the Code, is subject to the funding
requirements of Section 412 of the Code and is maintained by Sellers or an ERISA
Affiliate.
1.62 "Permitted Encumbrances" shall mean each of the following
as to which no enforcement, collection, execution or foreclosure proceeding
shall have been commenced: (i) any Encumbrances specifically disclosed in the
Financial Statements; (ii) liens for Taxes, assessments and other governmental
charges not yet due and payable; (iii) immaterial mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other like liens arising or incurred
in the ordinary course of business or other Encumbrances that are a matter of
public record; (iv) with respect to Real Property, (A) easements,
quasi-easements, licenses, covenants, rights-of-way, and other similar
restrictions, including without limitation any other agreements, conditions or
restrictions, in each case, which are a matter of public record and which would
not, individually or in the aggregate, materially adversely affect the use of
such property in the manner currently being utilized by the Business, (B) any
conditions that would be shown by a current survey or physical inspection and
(C) zoning, building and other similar restrictions pursuant to Applicable Laws;
and (v) other Encumbrances which, individually or in the aggregate with such
other Encumbrances, are not material and would not be required to be disclosed
or reflected on a combined balance sheet of the Business prepared in accordance
with GAAP and which would not, individually or in the aggregate, materially
adversely affect the use of such property in the manner currently being utilized
by the Business.
1.63 "Person" shall mean an individual, a corporation, limited
liability company, a partnership, an association, a trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
1.64 "Purchase Price" shall have the meaning set forth in
Section 2.1.
1.65 "Real Property" shall mean the Owned Real Property and
the Leased Real Property.
1.66 "Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal or leaching
of Hazardous Substances into the environment.
1.67 [***] Agreement" shall mean that certain Amended and
Restated [***] Agreement, dated [***], between [***] and [***].
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separately filed with the Commission.
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1.68 "Section 3.5(a) Documents" shall have the meaning set
forth in Section 3.5(a).
1.69 "Securities Act" shall mean the Securities Act of 1933,
as amended.
1.70 "Shares" shall mean the outstanding equity interests in
the Companies and the Transferable Joint Venture Interests, in each case
outstanding as of the Closing Date.
1.71 "Share Transferor Entities" shall mean each Affiliate of
AHP transferring Shares pursuant to this Agreement as listed in Exhibit A.
1.72 "[***] Agreements" shall mean the [***] Agreement, dated
[***], between [***] and [***].
1.73 "[***] Obligations" shall mean the obligations of [***]
and its Affiliates related to the Business, the Assets and/or the Companies
under the [***], as such obligations exist under such agreements, taking into
account all provisions thereof including, without limitation, governing law and
dispute resolution.
1.74 "Straddle Period" shall mean any taxable year or period
beginning before and ending after the Closing Date.
1.75 "Subsidiary" shall mean, as to any Person, any
corporation, partnership, limited liability company or joint venture, of which
(or in which) such Person, together with one or more of its subsidiaries, owns
100% of the interest in the capital or profits of such corporation, limited
liability company, partnership or joint venture.
1.76 "Tax Affiliate" of a Person shall mean any Affiliate
(determined without regard to the proviso of Section 1.3 hereof) of said Person
which was included, or includable, in a Tax Return in which such Person was
included as a member.
1.77 "Tax Assets" shall mean all assets comprising receivables
or refunds or prepayments for Taxes relating to the Assets or the Business for
taxable periods or portions thereof ending on or before the Closing Date;
provided, however, that for purposes of determining Net Assets hereunder, Tax
Assets shall include deferred Tax Assets and shall exclude value added taxes and
payroll and employment taxes (including all contributions or premiums pursuant
to industry or governmental social security laws or pursuant to other tax laws
or regulations).
1.78 "Tax Liabilities" shall mean all liabilities for Taxes
imposed on Sellers and their Affiliates or relating to the Assets or the
Business for taxable periods or portions thereof ending on or before the Closing
Date; provided, however, that for purposes of determining Net Assets hereunder,
Tax Liabilities shall exclude value added taxes and payroll and employment taxes
(including all contributions or premiums pursuant to industry or governmental
social security laws or pursuant to other tax laws or regulations).
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1.79 "Tax Returns" shall mean all reports, returns, schedules
and any other documents required to be filed with respect to Taxes and all
claims for refunds of Taxes.
1.80 "Tax Sharing Arrangement" shall mean any written or
unwritten agreement or arrangement for the allocation or payment of Tax
Liabilities or payment for Tax benefits with respect to a consolidated, combined
or unitary Tax Return which Tax Return includes any of the Companies.
1.81 "Taxes" (and with correlative meanings, "Tax" and
"Taxable") shall mean all taxes of any kind imposed by a federal, state, local
or foreign Governmental Authority, and any payments made to another party
pursuant to a Tax Sharing Arrangement, indemnity or other similar arrangement,
including but not limited to those on, or measured by or referred to as income,
gross receipts, financial operation, sales, use, ad valorem, value added,
franchise, profits, license, withholding, payroll (including all contributions
or premiums pursuant to industry or governmental social security laws or
pursuant to other tax laws and regulations), employment, excise, severance,
stamp, occupation, premium, property, transfer or windfall profits taxes,
customs, duties or similar fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by such Governmental Authority with respect to such amounts.
1.82 "Trademarks" shall mean (i) trademarks, service marks,
trade names, trade dress, domain names, labels, logos and all other names and
slogans associated with any products or services of the Business, or embodying
associated goodwill of the Business related to such products or services,
whether or not registered, and any applications or registrations therefor; and
(ii) any associated goodwill incident thereto; in each case owned by or licensed
to (x) Sellers and the Asset Transferor Entities and used primarily in the
Business or (y) the Companies; and further in each case other than (A) the
Excluded Assets and (B) the trademarks, service marks, trade names, domain names
and associated trade dress, packaging, logos, and labels containing "American
Home", "AHP", "Wyeth", "Fort Dodge" and "Lederle" or any derivative or anything
imitative thereof or which resembles or is confusingly similar thereto.
1.83 "Transition Services Agreements" shall mean the
transition services agreements to be entered into between Sellers or their
Affiliates and Buyer, its Affiliates or the Companies in a form to be agreed to
in good faith by Buyer and a Seller and which shall include without limitation
the services described on Section 7.10 (B) of the Disclosure Schedule.
1.84 "U.S. Benefit Arrangements" shall have the meaning set
forth in Section 9.1(d).
1.85 "U.S. Employee Plans" shall have the meaning set forth in
Section 9.1(a).
1.86 "U.S. Employees" shall mean (i) all individuals who, on
the Closing Date, are actively employed in the United States, including Puerto
Rico, by Sellers or their Affiliates and whose employment and responsibilities
relate primarily to the Business (except for any employee listed on Section 7.10
(A) of the Disclosure Schedule who does not accept an offer of employment from
Buyer); and (ii) all individuals who would have been included in subsection (i)
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above, if they were actively employed on the Closing Date, but who are on
short-term (not more than 180 days) disability leave, authorized leave of
absence or military service or lay-off with recall rights from Sellers or their
Affiliates as of the Closing Date; provided that such individuals return to work
within the 180 day period following the Closing, or within such longer period as
the individual has statutory re-employment rights.
Additional definitions are set forth in Article 9.
ARTICLE II
THE ACQUISITION
2.1 PURCHASE AND SALE.
Upon the terms and subject to the conditions of this
Agreement, (x) Sellers shall (and shall cause the Share Transferor Entities and
the Asset Transferor Entities to) sell, assign, transfer and deliver to Buyer or
one or more of its wholly-owned subsidiaries designated in writing by Buyer
(unless such designation would lead to further required approvals of third
parties or Governmental Authorities) the Shares and the Assets, and (y) Buyer or
one or more of its wholly-owned subsidiaries designated in writing by Buyer
(unless such designation would lead to further required approvals of third
parties or Governmental Authorities), shall purchase and accept the Shares and
the Assets from Sellers and such Share Transferor Entities and Asset Transferor
Entities, subject to the Assumed Liabilities, for an aggregate purchase price of
$3,800,000,000 (Three Billion Eight Hundred Million Dollars), payable at
Closing, subject to adjustment as provided in Section 3.6 (the price as so
adjusted is herein called the "Purchase Price").
2.2 ASSUMPTION OF LIABILITIES.
With respect to the purchase and sale of the Assets, in
addition to payment of the Purchase Price and pursuant to assumption agreements
to be executed and delivered in accordance with Section 3.2(e), Buyer will
assume at the Closing and subsequently, in due course, pay, honor and discharge
all of the Assumed Liabilities.
ARTICLE III
CLOSING; PURCHASE PRICE ADJUSTMENT
3.1 THE CLOSING.
Unless this Agreement shall have been terminated, on the terms
and subject to the conditions of this Agreement, the closing of the sale and
purchase of the Shares and the Assets and the consummation of the other
transactions contemplated hereby (the "Closing") shall take place at the offices
of American Home Products Corporation, Five ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ on the fifth business day after the date on which the last to be fulfilled
or waived of the conditions set forth in Article 8 shall be fulfilled or waived
in accordance with this Agreement or at such other time, date or place as the
parties may mutually agree upon in writing (the "Closing Date"). At the Closing,
the parties to this Agreement will exchange funds,
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certificates and other documents specified in this Agreement. For purposes of
this Agreement, the Closing will be treated as if it occurred at the open of
business at each location of the Business on the Closing Date.
3.2 DELIVERIES BY BUYER.
At the Closing, Buyer shall deliver, or cause to be delivered,
to Sellers the following:
(a) the amount of the Purchase Price specified in Section 2.1
to be paid at Closing, payable by wire transfer in immediately available funds
on the Closing Date to an account specified in writing by Sellers, with such
notice to be delivered no less than two business days prior to the Closing Date;
(b) the certificate by an officer of Buyer required to be
delivered pursuant to Section 8.2(c);
(c) a certificate, signed by an authorized officer of Buyer,
certifying (i) the due organization and good standing of Buyer, (ii) the
corporate resolutions of Buyer authorizing the transactions contemplated by this
Agreement, and (iii) the incumbency of officers of Buyer executing this
Agreement and the other agreements, instruments or certificates delivered upon
the Closing;
(d) the Transition Services Agreements, duly executed by Buyer
or its Affiliates;
(e) the Patent and Data Rights Agreement, duly executed by
Buyer;
(f) such instruments of assumption and other certificates,
instruments or documents, in form and substance reasonably acceptable to
Sellers, as may be necessary to effect Buyer's assumption under Applicable Laws
of the Assumed Liabilities;
(g) the Access Agreement, duly executed by Buyer; and
(h) such other instruments and documents, in form and
substance reasonably acceptable to Sellers and Buyer, as may be reasonably
necessary to effect the Closing.
3.3 DELIVERIES BY SELLERS.
At the Closing, Sellers shall deliver, or cause to be
delivered by their Affiliates, to Buyer the following:
(a) certificates representing the Shares duly endorsed for
transfer to Buyer or accompanied by stock powers duly executed in blank, or, in
the case of Shares of non-U.S. companies, evidence of the transfer of such
Shares in accordance with the Applicable Laws of the jurisdictions in which such
non-U.S. companies are organized;
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(b) the certificate by officers of Sellers required to be
delivered pursuant to Section 8.3(c);
(c) a certificate, signed by an authorized officer of each of
Sellers, certifying (i) the due organization and good standing of Sellers, (ii)
the corporate resolutions of Sellers authorizing the transactions contemplated
by this Agreement, and (iii) the incumbency of officers of the Sellers executing
this Agreement and the other agreements, instruments or certificates delivered
upon the Closing;
(d) the stock books, stock ledgers, minute books and corporate
seals of each of the Companies;
(e) the Transition Services Agreements, duly executed by AHP
or one of its Affiliates;
(f) bills of sale, deeds and any other appropriate instruments
of sale and conveyance, in form and substance reasonably acceptable to Buyer,
transferring under Applicable Laws all real property or tangible personal
property included in the Assets to Buyer or its Affiliates;
(g) the Patent and Data Rights Agreement, duly executed by
AHP;
(h) bills of sale, assignments and any other appropriate
instruments of sale and conveyance, in form and substance reasonably acceptable
to Buyer, transferring under Applicable Laws all Intellectual Property to Buyer
or its Affiliates (it being understood and agreed that Buyer, at its own expense
shall prepare any and all individual assignment documents required in the
respective countries and record them in Buyer's discretion, to the extent not
required by Applicable Law, in the national patent and trademark and other
government offices, as applicable);
(i) assignments or, where necessary, subleases, in form and
substance reasonably acceptable to Buyer, assigning or subleasing to Buyer or
its Affiliates under Applicable Laws all Assumed Contracts;
(j) except with respect to any loans extended to [***],
such instruments of cancellation and other appropriate documents, in form and
substance reasonably acceptable to Buyer, cancelling all loans or other
obligations for borrowed money owed by any of the Companies to Sellers or any of
their Affiliates (other than the Companies), duly executed by Sellers or such
Affiliates, as the case may be;
(k) such other instruments and documents, in form and
substance reasonably acceptable to Buyer and Sellers, as may be reasonably
necessary to effect the Closing; and
(l) letters of resignation executed by the directors of each
of the Companies and such letters executed by officers of the Companies as shall
be requested by Buyer;
(m) a receipt for the Purchase Price; and
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(n) the Access Agreement, duly executed by Seller.
3.4 FURTHER ASSURANCES AND OTHER JOINT VENTURE INTERESTS.
(a) From time to time, at Buyer's or Sellers' request, and in
accordance with Section 7.2, whether at or after the Closing Date, Buyer or
Sellers, as the case may be, shall, and shall cause their respective Affiliates
to, execute and deliver such further instruments of conveyance, transfer and
assignment, cooperate and assist in providing information for making and
completing regulatory filings, and take such other actions as Buyer or Sellers,
as the case may be, may reasonably require of the other to more effectively
assign, convey and transfer to such party the Shares, the Assets and, subject to
subparagraph (e) below, the interests of Sellers and their Affiliates in the
Business relating to the Other Joint Venture Entities (to the extent related to
the Business), and to assume the Assumed Liabilities, as contemplated by this
Agreement.
(b) To the extent that the assignment of any Assumed Contract
to Buyer hereunder shall require the consent of the other party thereto, this
Agreement shall not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof. Sellers will use their diligent
efforts to obtain the consent of the other parties to such Assumed Contracts for
the assignment thereof to Buyer, provided, however, that Sellers shall not be
obligated to make any payment or take any other commercially unreasonable action
to obtain any such consent. If any such consent is not obtained, Sellers shall,
and shall cause their Affiliates to, cooperate with Buyer in any arrangement
reasonably requested by Buyer to provide for Buyer the benefits under any such
Contract, including the enforcement at the cost of and for the benefit of Buyer
of any and all rights thereunder of Sellers or their respective Affiliates
against the other party thereto.
(c) (i) To the extent that any of the Assets or the assets of
the Companies transferred to Buyer as contemplated herein include rights or
assets that (x) are necessary for the operation of any business (other than the
Business) of Sellers or their Affiliates and (y) were used by Sellers or any of
their Affiliates prior to Closing, Buyer agrees, to the extent possible, to
transfer, convey, assign, license, sublicense or enter into another arrangement
with respect to such rights or assets so that Sellers and their Affiliates have
substantially similar benefits (subject to the burdens) of such rights and
assets for such other business as they had prior to the Closing; provided that
the foregoing shall not require Buyer (A) to permit Sellers or their Affiliates
to use such rights or assets in the Business or (B) to transfer, convey, assign,
license, sublicense or enter into such other arrangement if such action
precludes Buyer from using such rights or assets in the Business.
(ii) To the extent that the Assets and the assets of the
Companies transferred to Buyer as contemplated herein do not include any right
or asset, other than Excluded Assets, that (x) was owned by or licensed to
Sellers or their Affiliates at Closing, (y) is necessary for the operation of
the Business and (z) was used by Sellers or their Affiliates in the Business
prior to Closing, Sellers agree, to the extent possible, to transfer, convey,
assign, license, sublicense or enter into another arrangement with respect to
such right or asset so that Buyer has substantially
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similar benefits (subject to the burdens) of such right or asset for the
Business as did Sellers or their Affiliates in conducting the Business prior to
Closing; provided that the foregoing shall not require Sellers or their
Affiliates (A) to permit Buyer to use such right or asset in any business other
than the Business or (B) to transfer, convey, assign, license, sublicense or
enter into such other arrangement if such action precludes Sellers or their
Affiliates from using such right or asset in their businesses (other than the
Business).
(d) It is the intention of the parties hereto for Sellers to
convey to Buyer at or, subject to subsection (e) below, as soon as practicable
after the Closing, the Other Joint Venture Interests or other interests
equivalent thereto as more fully described in Section 3.4(d) of the Disclosure
Schedule.
(e) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the sale, assignment, transfer or delivery or
attempted sale, assignment, transfer or delivery to Buyer or its designated
Affiliates of any Asset, Shares or Other Joint Venture Interests is prohibited
by any Applicable Law or would require any governmental or third-party
authorizations, approvals, consents or waivers and such authorizations,
approvals, consents or waivers shall not have been obtained prior to the
Closing, this Agreement shall not constitute a sale, assignment, transfer or
delivery, or any attempted sale, assignment, transfer or delivery thereof.
Following the Closing, the parties shall use all reasonable efforts, and
cooperate with each other, to obtain promptly such authorizations, approvals,
consents or waivers; provided, however, that neither Sellers nor Buyer nor any
Affiliates thereof shall be required to pay any consideration therefor, other
than filing, recordation or similar fees payable to any Governmental Entity,
which fees shall be shared equally by Buyer, on the one hand, and Sellers, on
the other (unless specifically treated otherwise herein). Pending such
authorization, approval, consent or waiver, the parties shall cooperate with
each other in any reasonable and lawful arrangements designed to provide to
Buyer the profits and other benefits and liabilities of use or ownership of such
Asset (and related Assumed Liabilities), Shares or Other Joint Venture Interests
(as the case may be) (including liabilities for Taxes relating to such use or
ownership or the profits to Buyer therefrom). Once such authorization, approval,
consent or waiver for the sale, assignment, transfer or delivery of any such
Asset, Shares or Other Joint Venture Interests is obtained, Sellers shall cause
the applicable Share Transferor Entities or Asset Transferor Entities to
promptly sell, assign, transfer and deliver such Asset (and related Assumed
Liabilities), Shares or Joint Venture Interests to Buyer or its designated
Affiliates for no additional consideration at a closing to be held on the
seventh business day after receipt of all such authorizations, approvals,
consents or waivers, or such other time as the Buyer, Sellers may mutually agree
(a "Delayed Closing"). To the extent that Buyer is unable to obtain the benefits
and liabilities of the use or ownership of any Assets, Shares or Joint Venture
Interests, as contemplated by this Section 3.4(e) prior to a Delayed Closing,
Sellers and their Affiliates shall be responsible for all Taxes relating to such
Assets, Shares or Joint Venture Interests for Taxable periods or portion thereof
ending on or prior to the date of the Delayed Closing.
(f) Buyer shall pay the full Purchase Price at the Closing
notwithstanding any requirement for a Delayed Closing pursuant to Section
3.4(e); provided, however, that if any Delayed Closing pursuant to Section
3.4(e) shall not occur within thirty-six (36) months after the Closing either
Sellers or Buyer may by notice in writing to the other party elect to terminate
the parties' obligation to buy and sell the assets of the Business subject to
such Delayed Closing in
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which case Sellers shall pay to Buyer, no later than five business days after
the date of such notice, in immediately available funds, the portion of the
Purchase Price allocable with respect to the assets of the Business not
transferred at a Delayed Closing and, from and after the effective date of such
payment the arrangement of the parties with respect to the benefits and
liabilities of such assets shall also terminate.
3.5 CLOSING STATEMENT.
(a) As promptly as practicable, but no later than 90 days
after the Closing Date, Sellers will cause to be prepared in accordance with
GAAP and delivered to Buyer a draft combined adjusted statement, together with
notes thereto, of the Net Assets (which shall include any cash, cash equivalents
and marketable securities remaining in any of the Companies at the Closing which
are not otherwise transferred pursuant to Section 6.2(a)) as of the close of
business on the Closing Date (the "Closing Statement") including a schedule
based on such Closing Statement setting forth Sellers' calculation of the value
of the Net Assets as of the Closing Date (the "Closing Net Asset Value"). The
Closing Statement shall include line items and notes substantially consistent
with those of the statement of Net Assets as of December 31, 1999 included in
the Financial Statements. Buyer, at its own expense, shall cause the Companies
and Buyer's Affiliates and their respective employees to assist Sellers in the
preparation of the Closing Statement and shall provide Sellers and their
independent auditors, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇"), access at all reasonable
times to the personnel, properties and Books and Records relating to the
Business for such purpose. The Closing Statement shall be accompanied by a draft
audit report from ▇▇▇▇▇▇▇▇ stating that in its opinion the Closing Statement
presents fairly, in all material respects, the Net Assets as of the Closing Date
in conformity with GAAP, consistently applied, and pursuant to the terms of this
Agreement. The Closing Statement and the accompanying audit report are
collectively referred to as the "Section 3.5(a) Documents".
(b) If Buyer disagrees with Sellers' calculation of Closing
Net Asset Value contained in the Section 3.5(a) Documents, Buyer may, within 45
days after delivery of the Section 3.5(a) Documents, deliver a notice to Sellers
disagreeing with such calculation and setting forth Buyer's calculation of such
amount ("Notice of Disagreement"). Any such Notice of Disagreement shall specify
those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to
have agreed with all other items and amounts contained in the Section 3.5(a)
Documents. If Buyer does not disagree with Sellers' calculation of Closing Net
Asset Value contained in the Section 3.5(a) Documents within said 45 days, then
Sellers shall cause ▇▇▇▇▇▇▇▇ to issue the draft audit report referred to in
Section 3.5(a) in final form. In connection with its review of the Closing
Statement, Sellers will provide Buyer with reasonable access to the work papers
of Sellers' auditors, subject to execution of customary releases among the
Sellers and Buyer.
(c) If a Notice of Disagreement shall be duly and timely
delivered pursuant to Section 3.5(b), the parties shall, during the 15 days
following such delivery, use their diligent efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required, the amount
of Closing Net Asset Value, which amount shall not be more than the amount
thereof shown in the Section 3.5(a) Documents nor less than the amount thereof
shown in the Notice of Disagreement. If, during such period, the parties are
unable to reach agreement, they shall promptly thereafter cause a mutually
acceptable firm of nationally recognized
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independent public accountants (the "Accountant") promptly to review this
Agreement, the appropriate Books and Records and the disputed items or amounts
for the purpose of calculating Closing Net Asset Value. In making such
determination, the Accountant shall consider only those items or amounts in the
Closing Statement or Sellers' calculation of Closing Net Asset Value as to which
Buyer has disagreed. The Accountant shall deliver to Sellers and Buyer, as
promptly as practicable, a report setting forth such determination. Such report
shall be final and binding upon the parties hereto. The cost of such review and
report shall be borne (i) by the party whose calculation or calculations, taken
together, were furthest from that of the Accountant, or (ii) otherwise equally
by Sellers and Buyer. "Final Net Asset Value" means (A) Closing Net Asset Value
as shown in the Sellers' calculation delivered pursuant to Section 3.5(a) if no
Notice of Disagreement with respect thereto is duly and timely delivered, (B)
the amount agreed upon by the parties pursuant to this Section 3.5(c) or (C) in
the absence of such agreement, the amount as shown in the Accountant's
calculation delivered pursuant to this Section 3.5(c); provided that Final Net
Asset Value shall not in any event be more than Sellers' calculation delivered
pursuant to Section 3.5(a) or less than Buyer's calculation pursuant to Section
3.5(b).
3.6 ADJUSTMENT OF PURCHASE PRICE.
(a) If the amount of [***] ("Base Net Asset Value") exceeds
the Final Net Asset Value, Sellers shall pay to Buyer, as an adjustment to the
Purchase Price, in the manner and with interest as provided in Section 3.6(b),
the amount of such excess. If the Final Net Asset Value exceeds Base Net Asset
Value, Buyer shall pay to Sellers, as an adjustment to the Purchase Price, in
the manner and with interest as provided in Section 3.6(b), the amount of such
excess. Any such payment pursuant to this Section 3.6(a) shall be made (i)
within 45 days after Sellers' delivery of the Section 3.5(a) Documents if no
Notice of Disagreement with respect to Closing Net Asset Value is duly and
timely delivered pursuant to Section 3.5(b) or (ii) if a Notice of Disagreement
with respect to Closing Net Asset Value is duly and timely delivered pursuant to
Section 3.5(b), then within 10 days after the earlier of (A) agreement between
the parties pursuant to Section 3.5(c) with respect to Closing Net Asset Value
or (B) delivery of the Accountant's calculation of Final Net Asset Value
pursuant to Section 3.5(c).
(b) Any payment made pursuant to this Section 3.6 shall be
made by wire transfer or by delivery to the payee of the required amount in
immediately available funds. Payee shall have designated its preferred method of
payment (and wire instructions, if appropriate) for such purpose at least two
(2) days prior to the date of the required payment (or, if not so designated, by
certified or official bank check payable in immediately available funds to the
order of the payee in such amount). The amount to be paid under this Section
shall bear interest from and including the Closing Date to the date one day
prior to payment at a rate per annum equal to the rate publicly announced by The
Chase Manhattan Bank in New York, New York as its 30-day LIBOR rate in effect on
the Closing Date plus 25 basis points. Interest shall
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be calculated daily on the basis of a year of 365 days and the actual number of
days for which interest is due.
3.7 [***] ADJUSTMENT.
(a) In the event Cyanamid is required to sell its interest in
[***] to [***] pursuant to the terms of the [***], Sellers shall promptly
deliver to Buyer the consideration received in respect of its Joint Venture
Interest in lieu of conveying such interest to Buyer.
(b) In the event Cyanamid is required to purchase [***]
interest in [***], such interest shall be conveyed to Buyer, and Buyer shall be
required to promptly deliver to either Sellers or [***], as applicable, the
consideration for the purchase of such interest.
(c) Any adjustments required pursuant to this Section 3.7
shall be considered an adjustment to Purchase Price. Any payments required shall
be wired to the appropriate entity within seven business days of receipt of wire
transfer instructions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to
Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC
(a) Each of the Companies is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated. Each of the Companies has the requisite corporate power and
authority to own, operate or lease the properties that it purports to own,
operate or lease and to carry on its business as it is now being conducted and
is duly licensed or qualified as a foreign corporation in each domestic or
foreign jurisdiction in which the nature of the business conducted by it or the
character or location of the properties owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so licensed
or qualified would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Copies of the Constituent Documents of each
of the Companies heretofore delivered, furnished or made available to Buyer or
its representatives by Sellers, are, as of the date hereof, true and complete in
all material respects and in full force and effect, and none of the Companies is
in violation or breach of any of the provisions of its respective Constituent
Documents in any material respect.
(b) Each of the Cyanamid Companies is a corporation duly
organized and validly existing under the laws of the jurisdiction in which it is
incorporated. Each Seller has the requisite corporate power and authority to
execute and deliver this Agreement and the other
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agreements contemplated hereby, and, except as set forth in Section 4.1(b) of
the Disclosure Schedule, Sellers, the Asset Transferor Entities and the Share
Transferor Entities have all requisite corporate power and authority to
consummate the transactions contemplated hereby and thereby. Except as set forth
in Section 4.1(b) of the Disclosure Schedule, the execution and delivery of this
Agreement by Sellers and the execution and delivery by the Cyanamid Companies of
the other agreements contemplated hereby, and the consummation by Sellers, the
Asset Transferor Entities and the Share Transferor Entities of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of such entities and no other or further corporate
proceedings will be necessary for the execution and delivery of such agreements
by Sellers, the Asset Transferor Entities and the Share Transferor Entities, the
performance by Sellers, the Asset Transferor Entities and the Share Transferor
Entities of their obligations hereunder and thereunder and the consummation by
such entities of the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by each of the Sellers and
constitutes a legal, valid and binding obligation of each of the Sellers
enforceable against Sellers in accordance with its terms, except as the same may
be limited by bankruptcy, insolvency, moratorium, reorganization or other laws
of general applicability relating to or affecting the enforcement of creditors'
rights and general principles of equity.
4.2 CAPITALIZATION OF THE COMPANIES.
(a) As of the date of this Agreement, the authorized and
issued capital stock of each of the Companies is as set forth in Section 4.2(a)
of the Disclosure Schedule and all shares of such capital stock are validly
issued, outstanding, fully paid and non-assessable. None of the Shares have been
issued in violation of any preemptive rights. Except as set forth in Section
4.2(a) of the Disclosure Schedule, none of the Companies owns any interest in
any corporation, partnership, joint venture or similar entity, including
Affiliates of Sellers. Except as set forth in Section 4.2(a) of the Disclosure
Schedule, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character obligating any of the Companies or
the Cyanamid Companies to issue or sell any shares of capital stock of or other
equity interests in any of the Companies, or any securities or obligations
convertible into or exchangeable for any shares of capital stock of any of the
Companies or other equity interests in any of the Companies obligating any of
the Companies or the Cyanamid Companies to grant, extend, or enter into any such
right, agreement, arrangement or commitment.
(b) Except as set forth in Section 4.2(b) of the Disclosure
Schedule, there are no outstanding contractual obligations of any of the
Companies to repurchase, redeem or otherwise acquire any outstanding shares of
capital stock of, or other ownership interests in, any of the Companies, or to
make any investment (in the form of a loan, capital contribution or otherwise)
in any other entity.
(c) Except as set forth in Section 4.2(c) of the Disclosure
Schedule, Sellers or their Affiliates are the holders of record of and have
good, valid and marketable title to all of the Shares, free and clear of any
Encumbrances and any preemptive or subscription rights of any Person. Except as
set forth in Section 4.2(c) of the Disclosure Schedule, there are no material
restrictions with respect to the transferability of the Shares except under
Applicable Law.
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4.3 EFFECT OF AGREEMENT.
The execution, delivery and performance by Sellers of this
Agreement and the other agreements contemplated hereby and the consummation by
Sellers and their Affiliates of the transactions contemplated hereby and thereby
will not require any notice to, filing with, or the consent, approval or
authorization of, any Person or Governmental Authority, except as contemplated
in Section 7.4 hereof or as set forth in Section 4.3 of the Disclosure Schedule,
other than where the failure to obtain such consent, approval or authorization,
or to give or make any such notice or filing, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except as
contemplated in Section 7.4 hereof or as set forth in Section 4.3 of the
Disclosure Schedule, neither the execution and delivery of this Agreement or of
the other agreements contemplated hereby nor the consummation of the
transactions contemplated hereby or thereby will (i) violate or result in a
breach or result in the acceleration or termination of, or require any consent
under, or the creation in any third party of the right to accelerate, terminate,
modify or cancel, any indenture, contract, lease, sublease, loan agreement, note
or other obligation or liability to which any of the Companies or the Business
is a party or is bound or to which any of the assets of the Companies or the
Assets are subject, except for such violation, breach, acceleration or
termination which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (ii) conflict with, violate or
result in a breach of any provision of the Constituent Documents of the Sellers
or any of the Companies in any material respect, or (iii) conflict with or
violate any Applicable Laws or court orders in any material respect.
4.4 FINANCIAL STATEMENTS AND NET ASSET VALUE.
(a) Sellers have delivered to Buyer or its representatives the
following (the "Financial Statements"): an audited combined adjusted statement
of Net Revenues and Expenses for the year ended December 31, 1999 and a combined
statement of adjusted Net Assets as of December 31, 1999 (including notes
thereto) which combined adjusted financial statements contain a report from
▇▇▇▇▇▇▇▇ reporting thereon.
(b) The audited combined adjusted statement of adjusted Net
Assets included in the Financial Statements fairly presents, in all material
respects, the Net Assets as of its date and the audited combined adjusted
statement of adjusted Net Revenues and Expenses included in the Financial
Statements fairly presents, in all material respects, the Operating Profit for
the period set forth therein, in each case in accordance with GAAP, except in
each case as set forth in the Notes therein.
(c) To Sellers' knowledge, there exist no liabilities or
obligations of the Companies, the Business or the Cyanamid Companies (with
respect to the Business) whether accrued, absolute, contingent or threatened,
which are required to be reflected, reserved for or disclosed under GAAP in
financial statements of the Business as of and for the period ended on the date
of this representation and warranty, other than (i) liabilities or obligations
which are adequately reflected, reserved for or disclosed in the Financial
Statements or (ii) liabilities or obligations incurred since December 31, 1999
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
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4.5 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except (x) to the extent arising out of or relating to the
transactions contemplated by this Agreement or as otherwise permitted by the
terms of this Agreement (including with respect to the Excluded Assets), (y) for
Contracts entered into since December 31, 1999, that are included in the
Contracts listed on Section 4.9(i) of the Disclosure Schedule, and (z) for
matters listed on Section 4.5 of the Disclosure Schedule, since December 31,
1999, (i) the Business has been operated in the ordinary course in a manner
substantially consistent with past practice and (ii) there has not been, and
there is not reasonably expected to be, any Material Adverse Effect. As
amplification and not limitation of the foregoing, with respect to the Business
and except as disclosed on Section 4.5 of the Disclosure Schedule, since
December 31, 1999, none of the Cyanamid Companies has:
(i) sold, transferred, leased, subleased, licensed or
otherwise disposed of, to a third party, any property or asset, real,
personal or mixed (including, without limitation, leasehold interests
and intangible property), which in each case is, individually or in the
aggregate, material to the Business, other than the sale of inventories
and obsolete equipment and licensing, in each case in the ordinary
course of the Business consistent with past practice;
(ii) merged with, entered into a consolidation with or
acquired an interest of 5% or more in any Person or acquired a
substantial portion of the assets or business of any Person or any
division or line of business thereof, which in any case is,
individually or in the aggregate, material to the Business, other than
in the ordinary course of the Business consistent with past practice;
(iii) made any capital expenditure or commitment for any
capital expenditure in excess of U.S.$5,000,000 in the aggregate, other
than as set forth on the capital expenditure budget for the Business
attached hereto as Exhibit 4.5(iii);
(iv) incurred any interest bearing indebtedness or assumed any
capital lease obligation in excess of U.S.$ 30,000,000 in the
aggregate;
(v) except in the ordinary course of the Business consistent
with past practice (A) granted any increase, or announced any increase,
in the wages, salaries, compensation, bonuses, incentives, pension or
other benefits payable to any of its employees with annual cash
compensation in excess of $75,000, including, without limitation, any
increase or change pursuant to any benefit plan, or (B) established or
increased or promised to increase any benefits under any benefit plan,
in either case except as required by Applicable Law, any benefit plan
identified in Section 9.1(a) or 9.2(a) of the Disclosure Schedules or
any collective bargaining agreement;
(vi) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 4.5 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights with respect to any of the actions specified in this
Section 4.5, except as expressly contemplated by this Agreement.
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4.6 TAXES.
(a) Except as disclosed on Section 4.6 of the Disclosure
Schedule, (i) except where failure to file would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, the
Companies have filed or been included in on or before the date hereof (or will
timely file) or be included in) all Tax Returns required to be filed for tax
years or periods ending on or before the Closing Date; (ii) except where the
failure to pay would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, all such Tax Returns are (or will
be) complete and accurate and disclose (or will disclose) all Taxes required to
be paid by or with respect to the Companies for the periods covered thereby and
all Taxes shown to be due on such Tax Returns have been (or will be) timely
paid; (iii) except where the failure to pay would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, all Taxes
(whether or not shown on any Tax Return) owed by the Companies or in respect of
the Assets or the Business and required to be paid with respect to tax years or
periods ending on or before the Closing Date have been (or will be) timely paid
or are being presently contested in good faith; (iv) none of the Companies or
any of their Tax Affiliates have waived or to Sellers' knowledge been requested
to waive any statute of limitations in respect of Taxes; (v) there is no action,
suit, investigation, audit, claim or assessment pending or proposed or to
Sellers' knowledge threatened with respect to Taxes of the Companies or in
respect of the Assets or the Business; (vi) all deficiencies asserted or
assessments made as a result of any examination of the Tax Returns referred to
in clause (i) have been paid in full; (vii) all Tax Sharing Arrangements and Tax
indemnity arrangements will terminate on or prior to the Closing Date and the
Companies will have no liability thereunder on or after the Closing Date; (viii)
there are no liens for Taxes upon any of the assets of the Companies or the
Assets except liens relating to current Taxes not yet due or for which adequate
reserves are not reflected in the books and records of the business; (ix) no
intercompany obligation of the Companies or any Tax Affiliate will remain
outstanding following the Closing; (x) the Companies have no corporate
acquisition indebtedness, as described in Section 279(b) of the Code; (xi) no
consent under section 341(f) of the Code has been filed with respect to any of
the Companies and (xii) none of the Companies has any material amount of income
reportable for a taxable period ending after the Closing Date but attributable
to a transaction occurring in, or a change in accounting method for, a taxable
period ending on or prior to the Closing Date.
(b) As a result of the transactions contemplated by this
Agreement, none of the Companies nor the Buyer will be obligated to make a
payment to an individual that would be an "excess parachute payment" to a
"disqualified individual" as those terms are defined in Section 280G of the
Code.
4.7 REAL PROPERTY.
(a) Section 4.7 of the Disclosure Schedule sets forth a list
of all Owned Real Property. Except as set forth on Section 4.7(a) of the
Disclosure Schedule and, except for Permitted Encumbrances, (i) one of the
Companies, Sellers or the Asset Transferor Entities, as the case may be, has
good, valid and marketable fee simple title to each parcel of Owned Real
Property and (ii) none of the Owned Real Property is subject to any lease.
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(b) Section 4.7(b) of the Disclosure Schedule sets forth a
list of all Leased Real Property that is material to the Business. One of the
Companies, Sellers or the Asset Transferor Entities, as the case may be, has a
valid leasehold interest in each parcel of Leased Real Property and each of such
leases is in full force and effect in accordance with its terms and there exists
no material breach or default thereunder on the part of any of the Companies,
Sellers or the Asset Transferor Entities or, to the knowledge of Sellers, any
other party thereto other than those breaches or defaults which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.8 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) The Companies have good title to, or a valid and binding
leasehold interest in, the assets of the Companies, and Sellers and the Asset
Transferor Entities have good title to, or a valid and binding leasehold
interest in, the Assets (other than Real Property and Intellectual Property
which are addressed in Sections 4.7 and 4.10, respectively), in each case free
and clear of all Encumbrances, except (i) as set forth in Section 4.8(a) of the
Disclosure Schedule, or (ii) Permitted Encumbrances. Except (i) as set forth in
Section 4.8 of the Disclosure Schedule and (ii) for the Excluded Assets, the
assets of the Companies and the Assets, together with the rights granted to
Buyer pursuant to this Agreement, the other agreements to be entered into
pursuant hereto and the agreements set forth in Section 6.2 of the Disclosure
Schedule, constitute, and on the Closing Date will constitute, substantially all
of the assets, properties and rights used in or necessary to the conduct of the
Business as currently conducted.
(b) Except as reflected in the Financial Statements or as set
forth in Section 4.8(b) of the Disclosure Schedule, the physical assets of the
Companies and the Assets, taken as a whole, are in good and serviceable
condition (subject to normal wear and tear and immaterial impairments of value
and damage) and are generally suitable for the uses for which they are intended.
4.9 CONTRACTS.
(a) Section 4.9(i) of the Disclosure Schedule sets forth a
list, as of the date hereof, of the following Contracts primarily relating to
the Business (other than (a) purchase orders in the usual and ordinary course of
business, and (b) any Contract terminable by any of the Companies, Sellers or
the Asset Transferor Entities without material penalty upon not more than 90
days' notice):
(i) each Contract for the purchase of inventory, other
materials or personal property with any supplier or for the furnishing
of services to the Business under the terms of which a Company, Seller
or Asset Transferor Entity is obligated to pay or otherwise give
consideration of more than U.S. $500,000 in the aggregate during the
calendar year ended December 31, 2000;
(ii) each Contract for the sale of inventory or other personal
property or for the furnishing of services by the Business which is
likely to involve consideration of more than U.S.$500,000 in the
aggregate during the calendar year ended December 31, 2000;
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(iii) all material (as relates to the amount of sales)
distributor, dealer, agency, sales promotion Contracts to which a
Company, Seller or Asset Transferor Entity is a party;
(iv) all material Contracts relating to any interest bearing
indebtedness of the Business;
(v) all material Contracts with any Governmental Authority to
which a Company or Seller or Asset Transferor Entity is a party;
(vi) all Contracts (it being understood that this is not
intended to include those Contracts relating to Intellectual Property
which contain only customary limitations on rights to use Intellectual
Property) that limit or purport to limit the ability of the Companies
or the Business in any material respect to compete in any line of
business or with any Person or in any geographic area or during any
period of time;
(vii) all Contracts between or among Sellers or any of their
Affiliates (other than the Companies), on the one hand, and a Company
or the Business, on the other hand; and
(viii) all other Contracts, whether or not made in the
ordinary course of the Business, which are material to the conduct of
the Business, or the absence of which would have a Material Adverse
Effect.
(b) Except as set forth in Section 4.9(ii) of the Disclosure
Schedule, each Contract listed in Section 4.9(i) of the Disclosure Schedule or
Section 4.10(a) of the Disclosure Schedule is a valid and binding agreement and
is in full force and effect. Except as otherwise provided in Section 4.9(iii) of
the Disclosure Schedule, Sellers have no knowledge of any default under any
Contract listed in Section 4.9(i) of the Disclosure Schedule which default has
not been cured or waived, except for such defaults as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Except as described in Section 4.9(iv) of the Disclosure Schedule, to Sellers'
knowledge, there is no event or circumstance which, with the passage of time or
the giving of notice or both, would constitute a material default or breach by
any of the Companies, the Asset Transferor Entities or Sellers that is a party
thereto under any of the Contracts listed in Section 4.9(i) of the Disclosure
Schedule or would give rise to any right of termination or acceleration
thereunder except for such default, breach, termination or acceleration as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. To Sellers' knowledge, there is no assertion by any third party
of any claim of material default or breach under any of the Contracts, except
for such claim as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.10 INTELLECTUAL PROPERTY RIGHTS.
(a) Section 4.10(a) of the Disclosure Schedule sets forth a
listing of (i) all Patents, registered Trademarks and applications therefor,
registered copyrights and applications for copyright registration, industrial
and utility model registrations and applications therefor, and design
registrations and applications therefor, included in the Intellectual Property,
(ii) all
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Contracts under which any of the Companies, the Asset Transferor Entities or
Sellers is licensed or otherwise uses or is permitted to use Intellectual
Property which has been previously used by Sellers or the Asset Transferor
Entities in the ordinary course of the Business or which is material to the
Business and (iii) all Contracts under which the Companies, the Asset Transferor
Entities or Sellers license or otherwise permit any party to use Intellectual
Property; provided, however, that except as set forth in Section 7.6, the right
to use the trademarks, trade names, domain names and associated trade dress,
packaging, logos and labels containing "American Home", "AHP", "Wyeth", "Fort
Dodge", or "Lederle" or any derivative or anything imitative thereof or which
resembles or is confusingly similar thereto by Buyer is prohibited and such
rights are expressly excluded from the purchase and sale hereunder.
(b) To the knowledge of Sellers, since January 1, 1997, except
as set forth in Section 4.10(b) of the Disclosure Schedule, no Person has
asserted or claimed that the conduct of the Business as currently conducted, or
asserted or claimed that the use of the Intellectual Property in connection
therewith, infringes on or otherwise violates the intellectual property rights
of any other Person and (ii) except as set forth on Section 4.10(b) of the
Disclosure Schedule, no Person is challenging the validity or enforceability of
the Intellectual Property, and (iii) except as set forth on Section 4.10(b) of
the Disclosure Schedule, to the knowledge of Sellers, no Person is infringing or
otherwise violating the Intellectual Property, except, in each case, for
challenges, infringements or violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Except as disclosed on Section 4.10(c) of the Disclosure
Schedule, one or more of the Companies, Sellers or the Asset Transferor Entities
either (i) owns the entire right, title and interest in and to the Intellectual
Property free and clear of any Encumbrances; or (ii) has or have the right to
use the same as currently used in the conduct of the Business.
(d) Except as disclosed on Section 4.10(d) of the Disclosure
Schedule, none of the Companies, the Asset Transferor Entities or Sellers are in
breach of or default under any material provision of any material agreement,
commitment, contractual understanding, license, sublicense, assignment or
indemnification which relates to any of the Intellectual Property and they have
not taken any action which would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on their rights in any of the
Intellectual Property.
4.11 LITIGATION AND CLAIMS.
(a) Except as set forth in Section 4.11(a) of the Disclosure
Schedule, and except for matters under Environmental Laws or relating to the
environmental condition of the Real Property (as to which no representation or
warranty is being made except as set forth in Section 4.13) and except for
regulatory matters (as to which no representation and warranty is being made
except as set forth in Section 4.14), there is no civil, criminal or
administrative action, suit, hearing, proceeding or investigation pending or, to
the knowledge of Sellers, threatened against the Companies, the Asset Transferor
Entities or Sellers (to the extent related to the conduct of the Business),
other than those that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
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(b) Except as set forth in Section 4.11(b) of the Disclosure
Schedule, and except for matters under Environmental Laws or relating to the
environmental condition of the Real Property (as to which no representation or
warranty is being made except as set forth in Section 4.13) and except for
regulatory matters (as to which no representation and warranty is being made
except as set forth in Section 4.14), none of the Sellers, the Companies nor
Asset Transferor Entities is subject to any order, writ, judgment, award,
injunction, or decree of any court or Governmental Authority or any arbitrator
or arbitrators related to the conduct of the Business other than those that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.12 COMPLIANCE WITH LAW; APPLICABLE PERMITS.
Except as set forth in Section 4.11 of the Disclosure Schedule
or Section 4.12 of the Disclosure Schedule, and except for matters relating to
Taxes which are addressed in Section 4.6, and except for matters under
Environmental Laws or relating to the environmental condition of the Real
Property (as to which no representation or warranty is made except as set forth
in Section 4.13), and except for regulatory matters (as to which no
representation and warranty is being made except as set forth in Section 4.14),
the Business has been since December 31, 1998, and is being, conducted in
compliance with all Applicable Laws, except where the failure to have complied,
or to comply, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Companies, the Asset Transferor
Entities and Sellers have all Applicable Permits necessary to conduct the
Business as currently conducted, other than those the absence of which would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There are no proceedings pending or, to the knowledge of
Sellers, threatened which may result in the revocation, cancellation or
suspension of any such Applicable Permits, except those the absence of which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.13 ENVIRONMENTAL MATTERS.
Except as disclosed in Section 4.13 of the Disclosure
Schedule:
(a) the Companies, the Asset Transferor Entities and/or
Sellers have obtained those material environmental permits, licenses or
approvals required by law and necessary for the conduct of the Business and are
in compliance with such permits, licenses and approvals and other requirements
of applicable Environmental Laws, except where the failure to comply with any of
the foregoing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(b) none of the Companies, or, to the extent related to the
Business, the Asset Transferor Entities, nor Sellers has received any written
notice from any Governmental Authority or other third party of violation of or
any liability under any Environmental Laws which has not been complied with or
satisfied without remaining obligation, cost or liability, except where the
failure to so comply or satisfy would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
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(c) the Real Property does not contain and, to the knowledge
of the Sellers, has never contained, any underground storage tanks, surface
impoundments, pits, sumps, septic tanks or lagoons containing any Hazardous
Substance, the presence of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(d) none of the Companies, or, to the extent related to the
Business, the Asset Transferor Entities or Sellers has received any written
notice, claim, or request for information relating to any third-party location
or waste disposal site alleging that any of them is or may be liable to any
Person or Governmental Authority in connection with such location or site;
(e) to the knowledge of Sellers, except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, no Hazardous Substance has been released at any of the Real
Property or, during the period of any of their ownership or operation thereof,
at any property formerly owned or operated by the Companies or, to the extent
related to the Business, the Asset Transferor Entities or Sellers;
(f) To the knowledge of Sellers, no Governmental Authority has
proposed any modification of any permit, license or approval issued pursuant to
any Environmental Law, related to the Business that would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and
(g) Neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require any
investigation, remediation or other action related to Hazardous Substance, or
any notice to or consent of Governmental Authorities or third parties, pursuant
to any applicable Environmental Law or permit, license or approval related
thereto, other than the New Jersey Industrial Site Recovery Act.
4.14 REGULATORY MATTERS.
Except as set forth on Section 4.14 of the Disclosure
Schedule, there are no products included in the assets of the Companies or the
Assets being manufactured or sold by the Companies or Sellers or any Subsidiary
of Sellers which at the date hereof would require any approval of the U.S.
Environmental Protection Agency or any other Governmental Authority for the
purpose for which they are being manufactured or sold (i) for which such
approval has not been obtained, or (ii) for which such approval has been
withdrawn or is no longer in full force and effect, except where the failure to
have such approval would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as set forth in Section 4.14
of the Disclosure Schedule, the registrations relating to the products
manufactured or sold primarily relating to the Business are valid and in full
force and effect and no proceeding is pending or to the knowledge of Sellers
threatened looking towards the revocation or limitation of any such Registration
and, to the knowledge of Sellers, there is no basis or ground for any such
revocation or limitation in each such case except for such failures, revocations
or limitations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
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4.15 LABOR MATTERS.
Except as disclosed in Section 4.15 of the Disclosure
Schedule, none of the Companies or, to the extent related to the Business, the
Asset Transferor Entities or Sellers is a party to any collective bargaining
agreement and there are no unfair labor practice proceedings pending between any
of the Companies or, to the extent related to the Business, the Asset Transferor
Entities or Sellers and any of their Employees or any labor or other collective
bargaining unit representing any Employee that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.16 BROKER'S FEES.
Except for the retention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
the fees and expenses of which will be paid by Sellers in accordance with
Section 7.1, Sellers and their Affiliates have not employed any broker, finder
or investment banker or incurred any liability for any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement.
4.17 INTERCOMPANY AGREEMENTS.
For a period of three years from Closing, each of the
agreements set forth on Section 4.17 of the Disclosure Schedule are on economic
terms generally consistent with the revenue and cost assumptions for the items
covered thereby contained in the forecast relating to the Business previously
delivered to Buyer.
4.18 NO OTHER REPRESENTATIONS OR WARRANTIES; DISCLOSURE.
Except for the representations and warranties of Sellers
expressly set forth in this Agreement, neither Sellers nor any other Person
makes any other express or implied representation or warranty on behalf of
Sellers or otherwise in respect of the Business. Disclosure in a particular
Section of the Disclosure Schedule shall be deemed to be a disclosure in all
other Sections thereof to the extent that the disclosure in such particular
Section on its face would be reasonably relevant in light of the disclosure
made.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
5.1 CORPORATE ORGANIZATION.
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of Germany. Buyer has the requisite corporate power
and authority to own, operate or lease the properties that it purports to own,
operate or lease and to carry on its business as it is now being conducted and
is duly licensed or qualified as a foreign corporation in each domestic or
foreign jurisdiction in which the nature of the business conducted by it or the
character or location of the properties owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so licensed
or qualified would not reasonably be expected to have a material adverse effect
on the business, operations or financial condition of Buyer and its
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subsidiaries, taken as a whole or on the ability of Buyer to consummate the
transactions contemplated herein.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
Buyer has the requisite corporate power and authority to
execute and deliver this Agreement and the other agreements contemplated hereby
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Buyer of this Agreement and the other agreements
contemplated hereby and the consummation by Buyer of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Buyer and no other corporate proceeding is
necessary for the execution and delivery of this Agreement or such other
agreements by Buyer, the performance by Buyer of its obligations hereunder or
thereunder and the consummation by Buyer of the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws of general
applicability relating to or affecting the enforcement of creditors' rights and
general principles of equity.
5.3 BROKER'S FEES.
Except for the retention of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., the
fees and expenses of which will be paid by Buyer pursuant to Section 7.1, none
of Buyer or any of its Affiliates has employed any broker, finder or investment
banker or incurred any liability for any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement.
5.4 CONSENTS AND APPROVALS; NO VIOLATIONS.
Except as contemplated by Section 7.4 hereof, no material
filing with, and no material permit, authorization, consent or approval of, any
public body or authority is necessary for the consummation by Buyer of the
transactions contemplated by this Agreement or the other agreements which Buyer
will execute pursuant to the terms of this Agreement. The execution and delivery
of this Agreement and such other agreements and the consummation of the
transactions contemplated hereby and thereby will not (x) conflict with or
result in a breach of any of the provisions of the Certificate of Incorporation
or by-laws or other Constituent Documents of Buyer, or (y) be subject to the
making of the filings and the obtaining of the governmental and other consents
referred to herein, contravene in any material respect any law, rule or
regulation of any state, the United States or any foreign country or any order,
writ, judgment, injunction, decree, determination or award currently in effect
that is binding upon Buyer or any of its subsidiaries or any of their respective
properties.
5.5 FINANCIAL CAPABILITY.
Buyer has sufficient funds to purchase the Assets and the
Shares and to perform its obligations under the Assumed Contracts and Assumed
Liabilities on the terms and subject to the conditions contemplated by this
Agreement.
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5.6 SECURITIES ACT.
Buyer is acquiring the Shares solely for the purpose of
investment and not with a view to, or for sale in connection with, any
distribution thereof in violation of the Securities Act. Buyer acknowledges the
Shares are not registered under the Securities Act or any applicable state
securities law or other Applicable Laws, and that such Shares may not be
transferred or sold except pursuant to the registration provisions of such
Securities Act or pursuant to an applicable exemption therefrom and pursuant to
state securities laws and regulations as applicable.
5.7 NO OTHER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties of Buyer
expressly set forth in this Agreement, neither Buyer nor any other Person makes
any other express or implied representation or warranty on behalf of Buyer.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING.
Except as disclosed in Section 6.1 of the Disclosure Schedule,
Sellers and Buyer agree that, prior to the Closing, unless Buyer shall otherwise
consent in writing (which consent Buyer shall not unreasonably withhold) or as
otherwise contemplated by this Agreement (including with respect to the Excluded
Assets) the following provisions shall apply:
(a) The Business shall be conducted only in the ordinary
course of business and consistent with past practices. Without limiting the
generality of the foregoing, except as described in Section 6.1 of the
Disclosure Schedule, Sellers will (with respect to the Business), and will cause
the Companies, the Asset Transferor Entities and the Share Transferor Entities
(with respect to the Business) to, (i) continue its advertising and promotional
activities, and purchasing policies, in the ordinary course of business; (ii)
not shorten or lengthen the customary payment cycles for any of its payables or
receivables except in the ordinary course of business; (iii) use diligent
efforts to (A) preserve intact its business organization and the business
organization of the Business, (B) keep available to Buyer the services of the
employees of the Business, and (C) continue in full force and effect without
material modification all existing policies or binders of insurance currently
maintained in respect of the Business;
(b) Except as described in Section 6.1 of the Disclosure
Schedule, Sellers covenant and agree that, prior to the Closing, without the
prior written consent of Buyer, and to the extent not otherwise contemplated by
this Section 6.1, none of the Cyanamid Companies, nor the Companies will do any
of the things enumerated in the second sentence of Section 4.5 (including,
without limitation, clauses (i) through (vii) thereof);
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(c) The Companies, Sellers and the Asset Transferor
Entities shall not pledge, dispose of or encumber any of the Assets or assets of
the Companies (other than Excluded Assets) other than in the ordinary course of
business and consistent with past practice;
(d) Sellers shall cause (x) the Companies and (y) the
Asset Transferor Entities, only to the extent related to or affecting the
Business, not to do any of the following: (i) authorize for issuance, issue,
sell, pledge, deliver, or agree or commit to issue, sell, pledge or deliver
(whether through the issuance or grant of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any capital stock of the
Companies or securities or rights convertible into or exchangeable for, shares
of capital stock or securities convertible into or exchangeable for such shares;
(ii) amend or propose to amend their Constituent Documents; (iii) split, combine
or reclassify any shares of their capital stock; (iv) redeem, purchase or
otherwise acquire or offer to redeem, purchase or otherwise acquire any capital
stock; or (v) authorize or propose any of the foregoing or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing;
provided, however, notwithstanding anything to the contrary contained in this
Agreement, that Sellers and their Affiliates shall continue to have the right
to, at their own expense, withdraw cash from the Companies, either in the form
of a dividend or in the form of a cash advance, and, correspondingly, to provide
cash to the Companies, either in the form of a contribution to capital or an
intercompany loan, in a manner consistent with their past practice and the cash
management programs which they have in place, generally, for their Affiliates.
Buyer acknowledges that Sellers may transfer by way of a dividend or otherwise
cash, cash equivalents, marketable securities and other financial instruments as
well as any other Excluded Assets out of the Companies prior to Closing and, it
is intended that to the extent practicable, the Excluded Assets relating to the
Companies will be transferred out of the Companies by way of dividend or
otherwise prior to Closing as contemplated by Section 6.2(a);
(e) Sellers shall cause the Companies and, as it relates
to the Business, with respect to clauses (ii) and (iii) below, the Asset
Transferor Entities not to (i) acquire (by merger, consolidation or acquisition
of stock or assets) any corporation, partnership or other business organization
or division thereof or make any investment either by purchase of stock or
securities of any other individual or entity; (ii) acquire any assets for an
aggregate value in excess of $5,000,000 other than pursuant to the current
capital expenditure budget (a copy of which is attached hereto as Exhibit
4.5(iii)) of the Business and other than purchases in the ordinary course of
business; (iii) dispose of any assets, other than Excluded Assets, with an
aggregate value in excess of $5,000,000 other than sales of inventory in the
ordinary course of business; (iv) incur any indebtedness for borrowed money or
issue any debt securities or assume or guarantee the obligations of any other
Person or make any loans or advances or enter into any other transaction, except
the occurrence of intercompany loans or the making of intercompany advances in
the ordinary course of business consistent with past practice and except for
advances to Employees for expenses in the ordinary course of business and
consistent with past practice; (v) authorize, recommend or propose any change in
its capitalization; or (vi) insofar as relates to the Business, make, change or
revoke any material Tax election (unless expressly contemplated hereby or
regularly made in connection with the Business) or method of Tax accounting, or
settle or compromise any material Tax deficiency or assessment; or (viii)
authorize or propose any of the foregoing or enter into or modify any contract,
agreement, or commitment or arrangement with respect to any of the foregoing;
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(f) Except as otherwise contemplated by this Agreement,
the Companies and, to the extent related to the Business, the Asset Transferor
Entities and Sellers shall not adopt or amend any U.S. Employee Plan, U.S.
Benefit Arrangement or International Plan or increase or pay any benefit not
required by any existing U.S. Employee Plan, U.S. Benefit Arrangement or
International Plan (as defined in Article 9), or increase any salaries or wages
of Employees, other than in the ordinary course of business consistent with past
practice or as may be required by a Governmental Authority, by Applicable Law or
collective bargaining or other agreements or as previously agreed in writing by
Buyer;
(g) None of the Companies, the Asset Transferor Entities
or Sellers shall waive, release, grant or transfer any rights with respect to
any Intellectual Property, or abandon or allow to lapse any Intellectual
Property material to the Business, or modify or change in any material respect
any existing material license, distribution agreement, lease, or other document
used in the Business, in each case, other than in the ordinary course of
business in a manner consistent with past practice; and
(h) Sellers, the Companies and the Asset Transferor
Entities shall not, except as disclosed in Section 6.1(h) of the Disclosure
Schedule, grant any bonuses, commissions, prizes or similar forms of
remuneration to any Employee, any general increase in the rates of salaries or
compensation or any specific increase to any Employee or enter into any
employment agreement, except such as are (i) in accordance with regularly
scheduled periodic increases or existing bonus plans, policies or programs, (ii)
required under Applicable Law or collective bargaining or labor agreements, or
(iii) previously agreed to in writing by Buyer.
6.2 PERMITTED ACTIONS.
(a) Notwithstanding any other provisions herein to the
contrary, prior to the Closing, Sellers and their Affiliates shall (A) use
diligent efforts to (i) cause each of the Companies to transfer by way of
dividend or otherwise to Sellers or any of their Affiliates, as the case may be,
all Excluded Assets including, but not limited to, any cash, cash equivalents or
marketable securities held by such Company from time to time up to and including
the Closing Date, and (ii) except to the extent otherwise agreed between Sellers
and Buyer including the Contracts set forth in Section 6.2 of the Disclosure
Schedule, settle all intercompany receivables and intercompany payables
(including without limitation all intercompany Tax and equity accounts) and (B)
be permitted but not required to repay obligations for borrowed money, whether
pursuant to the issuance of commercial paper or otherwise. All Taxes arising
from transactions contemplated by this Section 6.2 shall be borne by the
Sellers.
(b) To the extent not completed by Closing, Buyer will
cooperate with Sellers and their Affiliates to transfer to Sellers or their
Affiliates any Excluded Assets and assets of the Companies not used primarily in
the Business remaining in any of the Companies (at Sellers' expense).
6.3 CHANGE OF NAME.
(a) Prior to Closing, (i) Cyanamid shall change its
corporate name and shall omit therefrom the word "Cyanamid" and (ii) Sellers
shall be permitted to change the corporate
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name of any of the Companies to delete any reference to "AHP", "American Home
Products", "Fort Dodge", "Wyeth", "Lederle" or any similar name.
(b) Sellers acknowledge that from and after the Closing,
the name "Cyanamid" and all confusingly similar names, marks and logos (all of
such names, marks and logos being the "Cyanamid Names") shall be owned by Buyer,
and that, subject to the (i) Trademark and License Agreement between the Crop
Protection Division of Cyanamid and the Human Health Division of Cyanamid, dated
February 1, 2000 and (ii) Trademark License Agreement between the Crop
Protection Division of Cyanamid and the Animal Health Division of Cyanamid dated
February 1, 2000, none of Sellers nor any of their Affiliates shall have any
rights in the Cyanamid Names, and that none of Sellers nor any of their
Affiliates will contest the ownership or validity of any rights of Buyer in or
to the Cyanamid Names.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 EXPENSES.
Except as otherwise provided in Section 3.5(c), all expenses,
including the fees of any attorneys, accountants, investment bankers or others
engaged by a party, incurred in connection with this Agreement and the
transactions contemplated hereby, shall be paid by the party incurring such
expenses whether or not the transactions contemplated by this Agreement are
consummated.
7.2 ADDITIONAL AGREEMENTS.
Subject to the terms and conditions herein provided, each of
the parties hereto agrees (i) to use all reasonable efforts to do, or cause to
be done, all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement and to cooperate with each other in
connection with the foregoing, (ii) to defend all lawsuits or other legal
proceedings challenging this Agreement or the consummation of the transactions
contemplated hereby, (iii) to use all reasonable efforts to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby, and (iv) to
use all reasonable efforts to effect all necessary registrations and filings and
submissions of information required or requested by Governmental Authorities
with respect to the transactions contemplated hereby.
7.3 ACCESS TO INFORMATION.
Prior to the Closing, Sellers shall, and shall cause their
Affiliates to, afford the officers, employees and agents of Buyer reasonable
access to the facilities and employees of Business and the records of the
Sellers and their Affiliates relating to the Business (but not including
confidential personnel records) during normal business hours and in a manner
that will not unreasonably disrupt the operation of the Business. In connection
therewith, the parties will comply with the terms of the Confidentiality
Agreement, dated September 22, 1999, between Buyer and AHP, which agreement
shall survive the termination of this Agreement.
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7.4 FILINGS AND AUTHORIZATIONS.
Sellers and Buyer have filed or supplied or will, as promptly
as practicable, file or supply, or cause to be filed or supplied, all
notifications and information required to be filed or supplied pursuant to any
merger control or Competition Laws including, without limitation, the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and, if necessary, any other Competition Laws, in connection with the
transactions contemplated by this Agreement. As promptly as practicable, (a)
Sellers and Buyer will make, or cause to be made, all such other filings and
submissions under laws, rules and regulations applicable to them, or to their
Subsidiaries and Affiliates, as may be reasonably required for them to
consummate the transactions contemplated hereby in accordance with the terms of
this Agreement, and (b) Buyer will use reasonable best efforts to obtain, or
cause to be obtained, as promptly as practicable all authorizations, approvals,
consents and waivers from all Governmental Authorities necessary to be obtained
by them, or their Affiliates, in order for them so to consummate such
transactions. [***] Each of the Buyer and the Sellers agrees that it will inform
the other regarding its communications with Governmental Authorities and permit
the other to participate fully in any investigation by Governmental Authorities,
including providing the other with notice of and an opportunity to attend all
meetings between Buyer or the Sellers and any Governmental Authority. [***]
7.5 TAX MATTERS.
(a) Liability for Taxes.
(i) Except as provided in Section 7.5(iv) or for Taxes
included in the Final Net Asset Value, Sellers shall be liable for, and
shall indemnify Buyer against, all (A) Taxes imposed on any of Sellers
or their Tax Affiliates (other than the Companies) for any taxable year
or period that ends on or before the Closing Date, (B) Taxes imposed on
or with respect to the Companies, the Assets or the Business or for
which the Companies, or the Business may otherwise be liable for any
taxable year or period that ends on or before the Closing Date and,
with respect to any Straddle Period, the portion of such Straddle
Period ending on and including the Closing Date (including, without
limitation, any obligation to contribute to the payment of a Tax
determined on a consolidated, combined or unitary basis with respect to
the Companies and any of Sellers' Tax Affiliates) and (C) Taxes
relating to the Companies, the Assets or the Business attributable to
any breach of warranty or misrepresentation under clauses (vii), (ix),
(x), (xi) and (xii) of paragraph (a), and paragraph (b), of Section 4.6
hereof.
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[***] Confidential treatment requested and the redacted material has been
separately filed with the Commission.
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(ii) Buyer shall be liable for, and shall indemnify
Sellers against, Taxes imposed on or with respect to the Companies, the
Assets, the Business or Buyer for any taxable year or period that
begins after the Closing Date and with respect to any Straddle Period,
the portion of such Straddle Period beginning after the Closing Date
(including, without limitation, any obligation to contribute to the
payment of a Tax determined on a consolidated, combined or unitary
basis with respect to Buyer and its Tax Affiliates).
(iii) For purposes of paragraphs (a)(i) and (a)(ii) above,
whenever it is necessary to determine the liability for Taxes relating
to the Companies, the Assets or the Business for a Straddle Period, the
determination of the Taxes relating to the Companies, the Assets or the
Business for the portion of the Straddle Period ending on, and the
portion of the Straddle Period beginning after, the Closing Date shall
be determined by assuming that the Straddle Period consisted of two
taxable years or periods, one which ended on the Closing Date and the
other which began at the beginning of the day following the Closing
Date, and items relating to the Companies, the Assets or the Business
for the Straddle Period shall be allocated between such two taxable
years or periods on a "closing of the books basis" by assuming that the
books of the Companies and the Business were closed at the close of
business on the Closing Date, provided, however, that Taxes imposed on
a periodic basis with respect to the assets of the Companies or the
Assets (or otherwise measured by the level of any item), and any
exemptions, allowances or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned
between such two taxable years or periods on a daily basis.
(iv) Any and all real property transfer or real property
transfer gains Tax, sales Tax, use Tax, stamp Tax, stock transfer Tax,
or other similar Tax imposed on the sale to Buyer of the Shares and the
Assets hereunder shall be paid 50% by Buyer and 50% by Sellers;
provided that any such liability relating to value added taxes shall be
paid by Buyer to the extent Buyer is entitled to recovery thereof.
(v) Buyer shall pay to Seller the amounts of any refund,
abatement or credit of Taxes received related to the Business which are
attributable to (A) any taxable period that ends on or before the
Closing Date, (B) in the case of any taxable period that begins before
and ends after the Closing Date, to the extent such amounts do not
exceed the amount of the refund, abatement or credit of Taxes that
would have been made had the taxable period ended on the Closing Date,
or (C) Taxes for which Seller has previously indemnified Buyer.
Notwithstanding the foregoing, Buyer shall not be obligated to pay
Seller the amount of any refund, abatement or credit of Taxes that was
reflected as an asset on the Closing Statement.
(b) For taxable years or periods ending on or before the
Closing Date, Buyer shall unless otherwise requested by Sellers prepare and file
when due all non-U.S. Tax Returns with respect to the Companies and Sellers
shall reimburse Buyer for costs of any outside services for such preparations
and filings. Buyer shall remit (or cause to be remitted) to the appropriate
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Governmental Authority any taxes due in respect of such Tax Returns. Buyer shall
file or cause to be filed when due all non-U.S. Tax Returns that are required to
be filed by or with respect to the Companies for any Straddle Period taxable
years or periods ending after the Closing Date and Buyer shall remit (or cause
to be remitted) to the appropriate Governmental Authority any Taxes due in
respect of such Tax Returns. At Sellers' request, Buyer shall submit to Sellers
the non-U.S. Tax Returns that have been prepared for filing as required above no
less than thirty (30) days prior to their respective due dates for Sellers'
review and approval (which approval shall not be unreasonably withheld). Sellers
shall prepare and file all U.S. Tax Returns for the Companies for taxable
periods ending on or before the Closing Date. Sellers or Buyer shall reimburse
the other party the Taxes for which Sellers or Buyer is liable pursuant to
paragraph (a) of this Section 7.5 but which are payable with any Tax Return to
be filed by the other party pursuant to this paragraph (b) upon written request
of the party entitled to reimbursement setting forth in detail the computation
of the amount owed by Sellers or Buyer, as the case may be. All Tax Returns
which Sellers are required to file or cause to be filed in accordance with this
paragraph (b) shall be prepared and filed in a manner consistent with past
practice in preparing and filing similar Tax Returns and shall not thereafter
amend any Tax Return to take positions inconsistent with such past practice. The
Buyer agrees that no tax election will be made by Buyer which will affect Taxes
of a year or period ending on or prior to Closing Date unless made with the
prior written consent of Seller. Seller reserves the right to elect (on an
election filed and effective prior to the Closing) the provisions of Reg.
301.7701(4) for certain eligible foreign companies (copies of any such elections
shall be furnished to Buyer).
(c) Contest Provisions. Buyer shall notify Sellers in
writing upon receipt by Buyer or any of its Tax Affiliates of notice of proposed
audit, or any assessment or claim in any Tax audit or any administrative or
judicial proceeding which may materially affect the Tax liabilities of the
Companies for which Sellers would be required to indemnify Buyer pursuant to
paragraph (a) of this Section 7.5; provided, however, that a failure to give
such notice will not affect Buyer's right to indemnification under this Section
7.5 except to the extent that Sellers have been actually prejudiced as a result
of such failure. In the case of a proposed Tax assessment or claim that relates
to taxable periods ending on or before the Closing Date, (A) both Buyer and
Sellers may participate in the conduct of the audit or administrative or
judicial proceeding involving such assessment or claim (at their own expense)
and (B) provided that Sellers have acknowledged in writing their liability to
indemnify Buyer against the full amount of any adjustment which may be made as a
result of such audit or proceeding, Sellers may elect to control (at their
expense) the conduct of such audit or proceeding (but only to the extent that
such audit or proceeding relates solely to a potential adjustment for which
Sellers have acknowledged their liability and the issue underlying the proposed
adjustment does not recur for any taxable period ending after the Closing Date).
With respect to a proposed tax assessment or claim for which either Sellers (as
evidenced by their acknowledgment hereunder) and any Buyer, the Companies or
their Affiliates could be liable, or which involves an issue that recurs for any
period ending after the Closing Date (whether or not the subject of audit at
such time), (A) both Buyer and the Sellers may participate in the audit,
administrative or judicial proceeding involving such assessment or claim (at
their own expense), and (B) the audit or proceeding shall be controlled by that
party which would bear the burden of the greater portion of the sum of the
assessment or claim and any corresponding adjustments that may reasonably be
anticipated for future taxable periods. In the case of any Tax audit or
administrative or judicial proceeding governed by this paragraph (c), the
controlling party shall have the authority to settle or
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compromise any proposed Tax claim or assessment, provided however that neither
Buyer nor Sellers shall enter into any compromise or agree to settle any claim
or assessment pursuant to any Tax audit or administrative or judicial proceeding
which would adversely affect the other party without the written consent of the
other party, which consent may not be unreasonably withheld.
(d) Cooperation.
(i) Buyer and Sellers agree to cooperate and share all
required information on a timely basis in order to timely file all Tax
Returns and for the preparation of any audit, and for the prosecution
or defense of any claim, suit or proceeding relating to any proposed
adjustment. Buyer and Sellers agree to retain or cause to be retained
all books and records pertinent to the Companies until the applicable
period for assessment under applicable law (giving effect to any and
all extensions or waivers) has expired, and to abide by or cause the
abidance with all record retention agreements entered into with any
Governmental Authority. After the Closing, Buyer will give Sellers
reasonable notice prior to transferring, discarding or destroying any
such books and records relating to Tax matters and, if Sellers so
request and at Sellers' expense, Buyer will allow Sellers to take
possession of such books and records. Buyer and Sellers shall cooperate
with each other in the conduct of any audit or other proceedings
involving the Companies for any Tax purpose and each shall execute and
deliver such powers of attorney and other documents as are necessary
and appropriate to carry out the intent of this subsection.
(ii) Sellers shall provide Buyer with such forms or
certificates as Buyer may reasonably request for purposes of complying
with any withholding tax requirements under Applicable Law, including
under Section 1445 of the Code.
(iii) Prior to Closing, Sellers and Buyer shall meet and
mutually agree to an allocation of the sum of the Purchase Price and
Assumed Liabilities to determine the agreed fair market value of each
item of the Shares and of the Assets to be sold by Sellers and acquired
by Buyer pursuant to this Agreement. A schedule of such allocation
shall be prepared ("Allocation") and Sellers and Buyer agree to file
all Tax Returns in accordance with the Allocation and not to take or
cause to be taken any action that would be inconsistent with or
prejudicial to such Allocation. Sellers and Buyer shall cooperate in
the preparation and filing of Form 8594 (and similar forms) on a
consistent basis.
(e) Straddle Period Adjustment. In the case of any
straddle period, to the extent that Buyer takes any action outside the ordinary
course of business that gives rise to losses, credits or other Tax items
generated in the portion of the Straddle Period that begins on the day after the
Closing Date, and such losses, credits or other tax items are utilized to reduce
an amount of Tax that would have otherwise been owed had the Straddle Period
ended on the Closing Date, Buyer shall pay Seller 50% of the amount of such
reduction in Tax. If the amount of such losses, credits or other Tax items is
reduced or increased as a result of subsequent events (e.g., an adjustment by a
taxing authority), the amount of such reduction in Tax shall be redetermined and
Seller shall make to Buyer or Buyer shall make to Seller, a payment to the
extent 50% of the redetermined amount is less than, or greater than, 50% of the
amount as originally determined.
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(f) Adjustment to Purchase Price. Any payment by Buyer or
Sellers under this Section 7.5 or under Section 11.1 hereof will be deemed an
adjustment to the Purchase Price to the fullest extent permitted by applicable
laws, and otherwise such payment shall be made on an after-Tax basis, except to
the extent that a Tax benefit is not available to Sellers in respect of such
payment after reasonable efforts.
(g) Survival of Obligations. Notwithstanding anything to
the contrary in this Agreement, and notwithstanding Section 12.3 of this
Agreement, the obligations of the parties set forth in this Section 7.5 [***].
7.6 USE OF CERTAIN NAMES.
Within 180 days after the Closing, Buyer shall cause the
Companies to revise product literature and labeling (including by way of
stickering), change packaging and stationery, and otherwise discontinue use of
the names or trademarks, service marks trade names, domain names, and associated
trade dress, packaging, logos, and labels "American Home Products," "AHP",
"Lederle", "Wyeth", "Fort Dodge" and or any derivative or anything imitative
thereof or which resembles or is confusingly similar thereto (collectively,
"Names"). In no event shall Buyer or the Companies use any Names after the
Closing in any manner or for any purpose different from the use of such Names by
the Companies during the 90 day period preceding the Closing. With respect to
product inventory manufactured by the Companies or their Affiliates prior to the
Closing, Buyer and the Companies may continue to sell such inventory,
notwithstanding that it bears one or more of the Names, for a reasonable period
of time after the Closing (not to exceed eighteen months).
7.7 REMOVAL OF INTERNATIONAL ASSETS.
As soon as reasonably practicable after the Closing, but in no
event later than 180 days, Buyer shall arrange to have the Assets held by the
Asset Transferor Entities set forth in Section 7.7 of the Disclosure Schedule
removed from the premises of the Asset Transferor Entities holding such Assets,
and the legal ownership transferred to Buyer at Buyer's sole cost.
7.8 ACCESS TO RECORDS AFTER CLOSING.
(a) For a period of six years after the Closing, Sellers
and their representatives shall have reasonable access to all of the books and
records of the Business with respect to periods prior to the Closing Date to the
extent that such access may reasonably be required by such Persons in connection
with matters relating to or affected by the operations of the Business prior to
the Closing Date (including integrated records of other business of Sellers or
their Affiliates). Buyer shall afford such access upon receipt of reasonable
advance notice and during normal business hours, and Sellers shall be solely
responsible for any costs or expenses incurred by them pursuant to this Section
7.8. If Buyer or its Affiliates shall desire to dispose of any of
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[***] Confidential treatment requested and the redacted material has been
separately filed with the Commission.
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such books and records prior to the expiration of such six-year period, Buyer
shall, prior to such disposition, give Sellers a reasonable opportunity, at
Sellers' expense, to segregate and remove such books and records as Sellers may
elect.
(b) For a period of six years after the Closing Date,
Buyer and its Affiliates and their respective representatives shall have
reasonable access to all of the books and records relating to the Business which
Sellers or any of their Affiliates may retain after the Closing Date. Such
access shall be afforded by Sellers and their Affiliates upon receipt of
reasonable advance notice and during normal business hours. Buyer or its
Affiliates, as the case may be, shall be solely responsible for any costs and
expenses incurred by it pursuant to this Section 7.8. If Sellers or any of their
Affiliates shall desire to dispose of any of such books and records prior to the
expiration of such six-year period, Sellers shall, prior to such disposition,
give Buyer a reasonable opportunity, at Buyer's expense, to segregate and remove
such books and records as Buyer may elect.
7.9 REPLACEMENT OF GUARANTY OBLIGATIONS.
Buyer agrees to use diligent efforts in cooperation with
Sellers to substitute the bonds, guaranties, letters of credit and comfort
letters of Buyer for Sellers' or their Affiliates' bonds, guaranties, letters of
credit and comfort letters under the agreements set forth in Section 7.9 of the
Disclosure Schedule.
7.10 NON-SOLICITATION.
Except for those Employees set forth in Section 7.10 of the
Disclosure Schedule, Sellers will not, and will not permit any of their
Affiliates to, directly or indirectly, solicit the employment of, attempt to
employ, or employ any transferred Employee during the period commencing on the
Closing Date and ending ten months thereafter; provided, however, that the
forgoing will not prohibit hiring pursuant to a general solicitation to the
public or general advertising; provided, further, that the foregoing will also
not prohibit Sellers or one of its Affiliates from employing any transferred
Employee that is terminated by Buyer or one of its Affiliates without cause
following the Closing Date.
7.11 TERMINATION OF INTERCOMPANY AGREEMENTS/ARRANGEMENTS.
Prior to the Closing Date, except for those Contracts listed
in Section 6.2 of the Disclosure Schedule, Sellers shall, upon the written
request of Buyer, cause the termination of any contracts, arrangements or
agreements between or among the Companies or a Seller (with respect to the
Business), on the one hand, and Sellers or any of their Affiliates (other than a
Company) on the other hand, including any intercompany agreements entered into
in the ordinary course of business.
7.12 CERTAIN CONTRACTS.
In the event any of the Contracts set forth in Section 7.12 of
the Disclosure Schedule terminate by operation of law as a result of the
transactions contemplated herein, Buyer
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agrees to offer the third party(ies) to such Contracts new agreements on
identical terms and conditions.
ARTICLE VIII
CONDITIONS
8.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
The obligation of each party to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:
(a) any waiting period (and any extension thereof)
applicable to the consummation of the Agreement under the HSR Act or under
Competition Laws of the European Union or member states of the European Union
shall have expired or been terminated; and
(b) no preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
Governmental Authority nor any Applicable Law shall be in effect that would
prevent the consummation of the transactions contemplated by this Agreement in
the United States of America or the European Union.
8.2 CONDITIONS TO THE OBLIGATION OF SELLERS.
The obligation of Sellers to effect the transactions
contemplated by this Agreement is subject to the fulfillment at or prior to the
Closing Date of the following conditions:
(a) Buyer shall have performed in all material respects
each obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by it hereunder at or prior to the
Closing Date;
(b) the representations and warranties of Buyer in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same force and effect as though made at such time; and
(c) Buyer shall have furnished to Sellers a certificate,
dated as of the Closing Date, signed by a duly authorized officer of Buyer to
the effect that all conditions set forth in Sections 8.2(a) and (b) have been
satisfied.
8.3 CONDITIONS TO THE OBLIGATION OF BUYER.
The obligation of Buyer to effect the transactions
contemplated by this Agreement is subject to the fulfillment at or prior to the
Closing Date of the following conditions:
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(a) Sellers and their Affiliates shall have performed in
all material respects each obligation and agreement and complied in all material
respects with each covenant to be performed and complied with by them hereunder
at or prior to the Closing Date;
(b) the representations and warranties of the Cyanamid
Companies in this Agreement shall be true and correct in all material respects
as of the Closing Date with the same force and effect as though made at such
time;
(c) Sellers shall have furnished to Buyer a certificate,
dated as of the Closing Date, signed by a duly authorized officer of each Seller
to the effect that all conditions set forth in Sections 8.3(a) and (b) have been
satisfied.
ARTICLE IX
AGREEMENTS WITH RESPECT TO EMPLOYEES AND EMPLOYEE BENEFITS
9.1 U.S. EMPLOYEE PLANS.
The Sellers hereby represent and warrant to Buyer that:
(a) Section 9.1(a) of the Disclosure Schedule lists each
employee benefit plan, as such term is defined in Section 3(3) of ERISA, which
(i) is subject to any provision of ERISA, (ii) is maintained by or contributed
to by the Companies, the Asset Transferor Entities or Sellers, and (iii) covers
U.S. Employees (hereinafter referred to collectively as the "U.S. Employee
Plans"). With respect to each U.S. Employee Plan, Sellers have made available to
Buyer a true and complete copy of the applicable plan document or summary plan
description and the most recently filed IRS Form 5500.
(b) Except as disclosed in Section 9.1(b) of the
Disclosure Schedule, neither Sellers nor any of the Companies nor any of their
ERISA Affiliates has incurred any liability under Title IV of ERISA that could
become, after the Closing Date, an obligation of Buyer or any of its Affiliates.
No Pension Plan has incurred any accumulated funding deficiency (within the
meaning of Section 412 of the Code), whether or not waived, and neither the
Companies nor any ERISA Affiliate has failed to make a required installment or
any other payment required under Section 412 of the Code before the applicable
due date. All contributions payable to each defined contribution pension plan,
as defined in Section 3(34) of ERISA, for all benefits earned and other
liabilities arising through the Closing Date, determined in accordance with the
terms and provisions of such plan, ERISA, and the Code, have been paid or
otherwise provided for, and to the extent unpaid are reflected in the books or
financial statements of Sellers.
(c) Each U.S. Employee Plan that is intended to satisfy
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service and to the knowledge of Sellers nothing has occurred since the
issuance of each such letter which could reasonably affect its qualification.
(d) Section 9.1(d) of the Disclosure Schedule includes a
list of (x) each management, employment, consulting, or other contract with any
individual providing for the retention of personal services involving the
payment of $100,000 or more, per individual, per
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annum and (y) each plan or arrangement providing for vacation benefits,
supplemental nonqualified benefits, severance benefits, bonuses, stock options,
stock appreciation or other forms of incentive compensation or post retirement
insurance (including retiree life and medical benefits), compensation or
benefits which (i) is not a U.S. Employee Plan, (ii) is entered into, maintained
or contributed to, as the case may be, by any of the Companies or Sellers, and
(iii) covers U.S. Employees, and dependents or beneficiaries thereof. Such
contracts, plans and arrangements as are described above, copies or descriptions
of all of which have been made available to Buyer, are hereinafter referred to
collectively as the "U.S. Benefit Arrangements".
(e) Except as set forth on Section 9.1(e)(i) of the
Disclosure Schedule, to the knowledge of Sellers, there is no pending or
threatened material claim in respect of any of the U.S. Employee Plans and U.S.
Benefit Arrangements other than routine claims for benefits. Each of the U.S.
Employee Plans and U.S. Benefit Arrangements (i) has been administered in
accordance with its terms in all material respects, and (ii) complies in form,
and has been administered in accordance with the requirements of ERISA and,
where applicable, the Code, in all material respects. Except as disclosed in
Section 9.1(e)(ii) of the Disclosure Schedule, no investigation, audit or
dispute relating to any U.S. Employee Plan is pending or, to the Sellers' or the
Companies' knowledge, threatened before any governmental agency.
(f) Neither Sellers nor any of the Companies nor, to the
knowledge of Sellers, any other "disqualified person" (within the meaning of
Section 4975 of the Code) or "party in interest" (within the meaning of Section
3(14) of ERISA) has taken any action with respect to any of the U.S. Employee
Plans which could subject any such plan (or its related trust) or any of the
Companies or any officer, director or employee of any of the foregoing to any
material penalty or tax under Section 502(i) of ERISA or Section 4975 of the
Code.
(g) Except as disclosed in Section 9.1(g) of the
Disclosure Schedule, none of Sellers (with respect to the U.S. Employees) nor
any of the Companies has been required, or has any obligation, to contribute to
a multiemployer plan, as defined in Section 3(37) of ERISA, or has or expects to
have any withdrawal liability assessed against it with respect to any such
multiemployer plan.
(h) Except as disclosed in Section 9.1(h) of the
Disclosure Schedule or as may be triggered by Buyer's failure to fulfill any of
its obligations to Employees under Sections 9.3 and 9.4, neither Sellers nor any
of the Companies have by reason of the transaction contemplated hereby, any
obligation to make any payment to any U.S. Employee pursuant to any plan or
existing contract or arrangement.
(i) To the knowledge of Sellers, all filings required by
ERISA and the Code as to each U.S. Employee Plan and U.S. Benefit arrangement
have been timely filed and all notices and disclosures to participants required
by either ERISA or the Code have been timely provided.
(j) Sellers have paid all amounts due to the PBGC
pursuant to ERISA section 4007.
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9.2 INTERNATIONAL PLANS.
The Sellers hereby represent and warrant to Buyer that:
(a) Section 9.2(a) of the Disclosure Schedule lists each
material employee benefit plan, program, policy or practice maintained or
contributed to by any of the Companies or Asset Transferor Entities for the
Ex-U.S. Employees (other than Governmental Authority mandated plans or funds
maintained or contributed to by Companies and Asset Transferor Entities pursuant
to Applicable Laws), including, without limitation, vacation, severance,
disability, medical, dental, hospitalization, life insurance and incentive
bonus, savings and retirement plans, employment anniversary awards and deferred
compensation plans ("International Plans"). Summary descriptions of each
International Plan have been or will be made available to Buyer by Sellers.
(b) To the knowledge of Sellers, all International Plans
are in compliance with, and have been administered in compliance with Applicable
Laws, in all material respects and contributions required to be made to each
such plan under the terms of the plan or any contract or labor or collective
bargaining agreement or Applicable Law have been made or reserved.
9.3 BUYER'S OBLIGATIONS TO EMPLOYEES.
(a) Buyer shall be obligated to continue the employment
of the Employees or offer employment to Employees on the following basis:
(i) Buyer shall cause the Companies to continue the
employment of all Employees;
(ii) With respect to Employees employed by the Asset
Transferor Entities, except as set forth in subsection (iii) below,
Buyer shall offer or cause an Affiliate of Buyer to offer to hire each
such Employee on the Closing Date, in a comparable position, at the
same or greater base salary than that enjoyed by such Employee
immediately prior to the Closing Date; and
(iii) Buyer agrees to offer employment to all union, work
council or labor represented Employees and agrees to assume the terms
and conditions of any union, work council or collective bargaining
agreements as in effect as the Closing Date with respect to (i) ex-U.S.
Employees of a Share Transferor Entity and (ii) ex-U.S. Employees of an
Asset Transferor Entity if required by Applicable Law.
(b) Buyer shall make the following payments or provide
the following notification to Employees whom it terminates after the Closing
Date:
(i) After the Closing Date, the Companies or the Buyer,
as the case may be, will have sole responsibility for any obligations
or liabilities to U.S. Employees at all locations under the Worker
Adjustment and Retraining Notification Act or similar Applicable Laws
of any jurisdiction relating to any plant closing or mass layoff or as
otherwise required by any such Applicable Law;
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(ii) Except to the extent Buyer has assumed the Contracts
relating to individual severance obligations set forth in Section
9.3(b)(ii) of the Disclosure Schedule to which such respective
agreements shall apply, Buyer shall make or cause the Companies to make
a lump sum severance payment to each U.S. Employee (other than a U.S.
Employee who is a member of a collective bargaining unit) whose
employment is terminated by the Buyer or the Companies because of a
termination without Cause (as defined herein) or reduction in the
workforce or job elimination at any time within the 24-month period
following the Closing Date pursuant to the terms of the Severance
Policy currently in effect, as described in Section 9.3(b)(ii) of the
Disclosure Schedule, and the severance payments will be in accordance
with the formula set forth therein. No such severance payments shall be
made if an Employee is terminated for "Cause" which for purposes of
this Section shall be defined as (i) fraud or embezzlement against the
Buyer or its Affiliates, falsification of records or similar acts; (ii)
gross neglect of or a gross failure to perform substantial job duties,
(iii) commission of a felony crime, or (iv) demonstrated substance
abuse. Buyer shall or shall cause the Companies to make severance
payments if a U.S. Employee resigns from employment with the Buyer, its
Affiliates or a Company within 24 months after the Closing Date because
(w) there is a reduction in his or her salary (other than for Cause);
(x) there is a substantial diminution in the nature or status of the
Employee's responsibilities excluding a change in title or reporting
relationship; (y) there is a material reduction in employee benefits
made available under Buyer's Plans from and after the Closing; or (z) a
condition of continued employment is a relocation of principal work
place of greater than 100 miles (provided, however, that any relocation
of greater than 25 miles, but less than or equal to 100 miles, will
still constitute Constructive Termination (as defined below) unless the
Employee is provided with relocation benefits that are no less
favorable in the aggregate than those that would have been available
under the AHP Corporate Relocation Policy when AHP relocated its
corporate headquarters from New York City to Madison, New Jersey)
(collectively "Constructive Termination"). Buyer shall also provide
outplacement services as follows: (a) for non-exempt employees, up to
$1,000 per person; (b) for exempt employees earning up to $75,000, up
to $5,000 per person; and (c) for exempt employees earning more than
$75,000, up to 12% of base salary to a maximum of $15,000 per person.
Notwithstanding the foregoing, field sales representatives will receive
outplacement services from Manchester Fast Track Outplacement at a cost
of $1,000 per person;
(iii) In the event the Buyer or its Affiliates terminates
or fails to offer to hire a U.S. Employee who is covered by a
collective bargaining agreement on the Closing Date and such Employee
becomes entitled to severance as a result, Buyer shall be obligated to
pay, or to reimburse Sellers for paying the amount of severance equal
to that which would be required under the terms of such agreements; and
(iv) For a period equal to six months following the
termination of employment of a U.S. Employee (other than a U.S.
Employee who is a member of a collective bargaining unit) which
triggers a severance payment under subsection (ii) or (iii) above;
Buyer will also extend, or cause its Affiliate to extend coverage under
its basic life insurance, medical, dental and prescription drug plans
to such terminated U.S. Employees and will extend or cause its
Affiliates to extend coverage under its educational assistance
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plan to those terminated U.S. Employees who participated in an
educational assistance plan as of their date of termination each as set
forth in the policy described in Section 9.3(b)(ii) of the Disclosure
Schedule.
(v) Buyer shall, or shall cause the Companies or an
Affiliate of Buyer as the case may be, to make a lump-sum severance
payment to each Ex-U.S. Employee whose employment is terminated within
the 24-month period following the Closing Date, or whose employment is
terminated or deemed to be terminated by operation of law as a result
of the transactions contemplated herein, in an amount equal to the
greater of (i) the severance payment due in accordance with the
applicable International Plan as set forth in Section 9.3(b)(v) of the
Disclosure Schedule relating to severance payments and (ii) any greater
or additional severance payments due in accordance with Applicable
Laws. In addition, Buyer shall, or shall cause an Affiliate to make a
severance payment if an Ex-U.S. Employee resigns because of a
Constructive Termination event. Buyer shall promptly reimburse Sellers
for any payments in the nature of severance payments required to be
made by an Asset Transferor Entity to an Ex-U.S. Employee who becomes
an Employee of Buyer or its Affiliates as a result of the transactions
contemplated herein.
9.4 TREATMENT OF SELLERS' AND BUYER'S U.S. EMPLOYEE PLANS
AND U.S. BENEFIT ARRANGEMENTS.
(a)(i) No assets of any defined benefit Pension Plan (except
as may be otherwise provided in this Article 9 or as determined by Sellers),
U.S. Employee Plan or U.S. Benefit Arrangement shall be transferred to Buyer or
any of its Affiliates or to any plan of Buyer or any of its Affiliates and,
except as set forth in this Article 9, the Buyer and its Affiliates shall assume
no liability or obligation of Sellers or any of its Affiliates under any of the
U.S. Employee Plans, the U.S. Benefit Arrangements or the Pension Plans where
assets are not transferred.
(ii) After the Closing Date, Buyer shall provide U.S.
Employees with benefit plans, policies and programs which are the same
as those offered to similarly situated employees of Buyer.
(iii) Buyer or its Affiliates shall recognize each
applicable union as the exclusive designated bargaining representative
for those bargaining-unit represented Employees who become employed by
the Buyer or its Affiliates hereunder, but shall not assume any of the
collective bargaining agreements or the terms or provisions thereof.
Buyer and its Affiliates agree to bargain in good faith with the
relevant collective bargaining representatives of such Employees to
establish new bargaining agreements which are mutually acceptable to
Buyer and its Affiliates and to the applicable unions.
(iv) Buyer and the Companies shall assume all U.S.
Employees' compensation, bonus and vacation liabilities, regardless of
whether such liabilities relate to events which occurred on or prior to
the Closing Date or to actions taken by Sellers or one of the Sellers'
Affiliates or Buyer or one of its Affiliates, or to consequences which
are deemed to have occurred by operation of law as a result of the
transactions contemplated herein.
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(b) Sellers shall amend their Pension Plans in the United
States to provide that all service completed by the U.S. Employees for Buyer or
its Affiliates after the Closing Date shall be recognized for purposes of
vesting and satisfying any requirements for early retirement subsidies for
benefits accrued as of the Closing Date under Sellers' Pension Plans (but not
for benefit accrual purposes); provided, however, that if the cessation of
accruals for the U.S. Employees under any of the Sellers' Pension Plans results
in a partial termination of that Pension Plan, Sellers shall fully vest the
affected U.S. Employees in that Pension Plan. Buyer maintains a Pension Plan for
its employees in the United States ("Buyer's U.S. Pension Plan(s)") Buyer shall
recognize U.S. Employees' service with Sellers or their Affiliates for purposes
of determining retirement plan eligibility to participate, vesting of benefits,
service requirements for disability, subsidized early retirement and
pre-retirement death benefits under the Buyer's U.S. Pension Plan(s), but Buyer
shall not be required to take such service into account for benefit accrual
purposes under such plan or plans.
(c) Sellers shall amend the American Home Products
Corporation Savings Plan - U.S., the American Home Products Corporation Savings
Plan-Puerto Rico and the American Home Products Corporation Union Savings Plan
(the "Sellers' U.S. Savings Plans") to provide that all U.S. Employees are fully
vested in their account balances under the Sellers' U.S. Savings Plans as of the
Closing Date. Buyer maintains a qualified savings plan or plans for the benefit
of its employees (Buyer's U.S. Savings Plan(s)"). Buyer shall recognize U.S.
Employees' service with Sellers or their Affiliates for purposes of determining
eligibility to participate and vesting of benefits in Buyer's U.S. Savings
Plan(s). Sellers shall transfer the assets (in cash) and liabilities
attributable to the U.S. Employees from the AHP Savings Plan-U.S. and the AHP
Savings Plan-Puerto Rico to Buyer's U.S. Savings Plan(s) which meet the
requirements of Section 401(a) of the Code or Section 165 of the Puerto Rico Tax
Act, whichever being applicable, as soon as practicable following the Closing
Date. There shall be no such transfer of assets and liabilities from the AHP
Union Savings Plan to any Buyer plan.
(d) With respect to the U.S. Employees, Sellers shall
retain liability under any group life, accident, worker's compensation, medical,
hospitalization, prescription drug, dental, spending account or short-term or
long-term disability plan, whether or not insured, for any claims incurred on or
prior to the Closing Date, and Buyer shall assume all liability for claims
arising after the Closing Date under its group life, accident, worker's
compensation, medical, hospitalization, prescription drug, dental, spending
account or short-term or long-term disability plans (Buyer's U.S. Welfare
Plans"). For purposes of this Section 9.4(d) claims shall be deemed to have
arisen:
(i) With respect to all death or dismemberment claims, on
the actual date of death or dismemberment;
(ii) With respect to disability or salary continuance
claims, on the day the claimant became disabled or otherwise entitled
to salary continuation;
(iii) With respect to all hospital, medical, drug or dental
claims, on the date the service or supply was purchased or received by
the claimant; and
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(iv) With respect to worker's compensation claims which
are single-accident specific, on the date of the occurrence, and with
respect to all other worker's compensation claims, on the date the
award is made.
(e) As of the Closing Date, all U.S. Employees shall be
eligible to participate in Buyer's U.S. Welfare Plans in accordance with the
terms of such plans, and employment with Sellers or their Affiliates will be
taken into account for purposes of determining eligibility to participate and
benefits under Buyer's U.S. Welfare Plans; provided, however, that
(i) U.S. Employees shall participate under Buyer's U.S.
Welfare Plans as of the day after the Closing Date without any waiting
periods, without evidence of insurability, and without application of
any pre-existing physical or mental condition limitations except to the
extent applicable under similar plans maintained by Sellers; and
(ii) Buyer shall count claims arising during the calendar
year on or prior to the Closing Date for purposes of satisfying
deductibles, out-of pocket maximums, and all other similar limitations.
(f) Sellers maintain a program of medical and life
insurance benefits for certain retired employees ("AHP U.S. Retiree Welfare
Plans"). All U.S. Employees who satisfy the eligibility criteria for benefits
under the AHP U.S. Retiree Welfare Plans as of the Closing Date shall receive
such benefits from the AHP U.S. Retiree Welfare Plans following their
termination from Buyer or its Affiliates in accordance with the terms of the AHP
U.S. Retiree Welfare Plans as of such date. However, U.S. Employees who are
eligible for medical coverage under Buyer's medical plan shall receive primary
coverage under such Buyer's medical plan with the AHP U.S. Retiree Welfare Plans
being responsible for secondary coverage. U.S. Employees shall be eligible to
participate in Buyer's U.S. retiree welfare plans ("Buyer's U.S. Retiree Welfare
Plans") in accordance with the terms of such plans and Buyer shall recognize
service with Sellers or their Affiliates for purposes of determining eligibility
to participate and for benefits.
(g) Buyer shall be responsible for any legally mandated
continuation of health care coverage for all U.S. Employees and/or their covered
dependents who have a loss of health care coverage due to a qualifying event (as
defined in Section 4980B of the Code) that occurs after the Closing Date.
9.5 INTERNATIONAL EMPLOYEES OF THE EUROPEAN UNION ("EU").
(a) Notwithstanding Section 9.3(a)(ii), Sellers and Buyer
accept and agree that the transfer of employment of the Ex-U.S. Employees in the
EU countries (hereinafter referred to as "European Employees") will be effected
and governed by the Transfer Provisions (defined below) and accordingly the
contract of employment of each European Employee shall be assumed by Buyer or
its Affiliate with effect from the Closing Date which shall be the time of
transfer under the Transfer Provisions.
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(b) Buyer shall ensure that its Affiliates (where
necessary) comply with their respective obligations under the Transfer
Provisions and upon request provide Sellers or the relevant Sellers' Affiliate
with such information as will enable either Sellers or its Affiliate as the case
may be to carry out its duties under the Transfer Provisions concerning measures
to effectuate the transfer of the European Employees to Buyer.
(c) "Transfer Provisions" means any legislation
implementing the provisions of Directive 77/187/EEC commonly called the Acquired
Rights Directive or Transfer of Undertakings Directive.
9.6 TREATMENT OF SELLERS' INTERNATIONAL PLANS.
(a) Buyer shall provide, or cause its Affiliates to
provide the Ex-U.S. Employees with plans, programs and benefits which are the
same as those provided to similarly situated employees of Buyer. If Buyer does
not currently have other employees in a particular country, Buyer shall provide
benefit plans, policies or arrangements which are reasonably comparable in the
aggregate to those provided to Ex-U.S. Employees By Seller immediately prior to
the Closing Date.
(b) Except as expressly set forth in this Section 9.6(b),
and as required by Applicable Law or determined by Sellers, no assets of any
International Plan, which is a defined benefit pension plan, shall be
transferred to Buyer or any of its Affiliates or to any plan of Buyer or any of
its Affiliates. Buyer shall assume, or cause its Affiliates to assume through an
appropriate form of plan or trust, the assets and corresponding liabilities of
any defined contribution plan, individual account plan, or fully insured plan
without potential for reversion (fully insured shall mean benefits accrued to
date are purchased and insured by an insurance carrier) maintained by Sellers,
the Companies or any of their Affiliates for the benefit of the Ex-U.S.
Employees, to the extent that any liabilities so assumed are funded and
supported by a transfer of assets or insurance to the appropriate Buyer plan or
trust. The value of fully insured plans shall be determined as of the Closing
Date based on the assumption that the plans will be maintained by Buyer or its
affiliates for the benefit of Ex-U.S. Employees and will not be terminated.
(c) With respect to any defined benefit plan which is
required under Applicable Law to transfer assets and liabilities to the Buyer
and with respect to the International Plans set forth in Section 9.6(b) of the
Disclosure Schedule, the assets and liabilities to be transferred shall be based
on reasonable actuarial assumptions and generally accepted valuation methods as
determined by Sellers' actuary subject to the review of the Buyer's actuary. In
the event the actuaries are unable to agree on the valuation of the assets and
liabilities, an expert shall be appointed by the Institute of Actuaries in
London. The parties shall share the cost arising from the appointment of such
independent third party expert. The calculation of the assets and liabilities by
such appointed actuary as expert shall be final and binding on both parties in
the absence of manifest error.
(d) Sellers shall take whatever action is reasonably
required to ensure that such plans and arrangements and all related plan assets
or reserves are maintained by, and subject to the control of, the Companies on
or prior to the Closing Date.
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(e) Sellers shall, and shall cause its Affiliates, to
fully vest the Ex-U.S. Employees in any accounts maintained under any
International Plans as of the Closing Date which are defined contribution in
nature. Buyer shall recognize each Ex-U.S. Employee's service with Sellers and
Sellers' Affiliates for purposes of determining retirement and savings plan
eligibility for participation, vesting of benefits, and service requirements for
disability, subsidized early retirement and preretirement death benefits under
the appropriate Buyer's International Retirement and Savings Plans, but not
benefit accrual purposes under the appropriate Buyer's International Retirement
Plan.
(f) With respect to all Ex-U.S. Employees, Sellers shall
retain liability under any group life, accident, worker's compensation, medical,
hospitalization, prescription drug, dental or short-term or long-term disability
plan, whether or not insured, for any claims incurred on or prior to the Closing
Date and Buyer shall assume all liability for claims arising after the Closing
Date under any group life, accident, worker's compensation, medical,
hospitalization, prescription drug, dental or short-term or long-term disability
plan ("Buyer's International Welfare Plans"). For purposes of this Section
9.6(f), claims shall be deemed to have arisen:
(i) with respect to all death or dismemberment claims, on
the actual date of death or dismemberment;
(ii) with respect to disability or salary continuance
claims, on the day the claimant became disabled or otherwise entitled
to salary continuation;
(iii) with respect to all hospital, medical, drug or dental
claims, on the date the service or supply was purchased or received by
the claimant; and
(iv) with respect to worker's compensation claims which
are single accident specific, on the date of the occurrence, and with
respect to all other worker's compensation claims, on the date the
award is made.
(g) As of the Closing Date, all Ex-U.S. Employees shall
be eligible to participate in the appropriate Buyer's International Welfare
Plans in accordance with the terms of such plans, and employment with Sellers
and its Affiliates shall be taken into account for purposes of determining
eligibility for participation and benefits under Buyer's International Welfare
Plans; provided, however, that (i) Ex-U.S. Employees shall participate under
Buyer's International Welfare Plans as of the day immediately after the Closing
Date without any waiting periods, without any evidence of insurability, and
without application of any pre-existing physical or mental condition
limitations, except to the extent not permitted under Buyer's International
Plans; provided, however, that Buyer shall make reasonable efforts to adopt any
necessary amendments to such plans to permit participation as described above
and (ii) Buyer shall count claims arising on or prior to the Closing Date for
purposes of satisfying deductibles, out-of-pocket maximums, and other similar
limitations in Buyer's International Welfare Plans.
(h) Buyer and the Companies shall assume all Ex-U.S.
Employees' compensation, bonus and vacation liabilities, regardless of whether
such liabilities relate
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to events which occurred on or prior to the Closing Date, or to actions taken by
Sellers or its Affiliates, or Buyer or its Affiliates, or to consequences which
are deemed to occur by operation of law as a result of the transactions
contemplated herein.
9.7 STOCK OPTIONS.
AHP shall be responsible for and incur any and all costs of
stock option compensation for all Employees with stock options from AHP. This
includes payments, if any, that may be made to Employees in Sellers sole
discretion relating to "in-the-money" non-exercisable stock options as of the
Closing Date. AHP shall be liable for any payments, withholding obligations and
reporting obligations that arise on or after the Closing Date under any
applicable AHP Stock Option or Stock Incentive Plan.
9.8 NO THIRD PARTY BENEFICIARIES.
No provision of this Agreement shall create any third party
beneficiary or other rights in any Employee (including any beneficiary or
dependent thereof) or any persons in respect of continued employment with any of
the Companies, with Sellers, or with any of their Affiliates and no provision of
this Agreement shall create any such rights in any such persons in respect of
any benefits that may be provided, directly or indirectly, under any U.S.
Employee Plan or U.S. Benefit Arrangement, any International Plan or any plan or
arrangement which may be established by Buyer or any of its Affiliates. No
provision of this Agreement shall constitute a limitation on the right of Buyer,
any of the Companies or any Affiliates of Buyer to terminate any Employee at
will.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION.
This Agreement may be terminated at any time prior to the
Closing Date:
(a) by mutual consent of Buyer and Sellers;
(b) by Buyer or Sellers if the Closing shall not have
occurred on or prior to December 31, 2000, provided, however, that the right to
terminate under this Section 10.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date of any
liability of such party to the other party hereunder for such failure; or
(c) subject to Section 7.4, by Buyer or Sellers if a
court of competent jurisdiction or governmental, regulatory or administrative
agency or commission of the United States or political subdivision thereof or
European Union or member state thereof shall have issued an order, decree or
ruling or taken any other action, in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable.
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The date on which this Agreement is terminated pursuant to any
of the foregoing subsections of this Section 10.1 is herein referred to as the
"Termination Date."
10.2 EFFECT OF TERMINATION.
(a) Except as set forth in Sections 7.1, 7.3 and 10.2(b),
upon the termination of this Agreement pursuant to Section 10.1, all further
obligations of the parties under this Agreement shall terminate without further
liability of any party to the others, except that nothing herein shall relieve
any party from liability for breach of any provision of, or for any
misrepresentation under this Agreement, or be deemed to constitute a waiver of
any available remedy for any such breach or misrepresentation.
(b) If (i) Buyer shall not have agreed to nor effected
all divestitures, holding separate of businesses or assets or other actions
necessary to obtain, or caused to be obtained, as promptly as practicable all
authorizations, approvals, consents and waivers from Governmental Authorities
necessary to be obtained by Buyer or its Affiliates in order to consummate the
transactions contemplated hereby and (ii) this Agreement shall have been
terminated pursuant to Section 10.1(b) or (c), [***]
ARTICLE XI
INDEMNIFICATION
11.1 INDEMNIFICATION.
(a) Except with respect to any claim related to Taxes,
for which Section 7.5 of this Agreement shall provide the sole and exclusive
remedy, and any claim or liability related to Environmental Law or environmental
matters or the breach of Section 4.13 of this Agreement, for which Sections
11.1(d) through (h), inclusive, shall provide the sole and exclusive remedy of
Buyer, and subject to Section 11.3, Sellers shall indemnify, defend and hold
harmless Buyer and its Affiliates, officers, directors, employees and
controlling Persons from any liability, damage, deficiency, loss, judgments,
assessments, cost or expense, including reasonable attorneys' fees and costs of
investigating and defending against lawsuits, complaints, actions or other
pending or threatened litigation (being hereafter referred to in this Article 11
as "Costs"), arising from or attributable to:
(i) the breach of any representation or warranty made by
the Sellers in this Agreement (it being understood that, for the
purposes of this Article XI, such
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representations and warranties (other than the representations and
warranties set forth in Sections 4.4, 4.5, 4.6 and 4.13) will be
interpreted without giving effect to any qualifications or limitations
as to "Material Adverse Effect");
(ii) any failure of Sellers or their Affiliates to perform
or observe any covenant or agreement to be performed or observed by
such entities pursuant to this Agreement;
(iii) the Excluded Liabilities;
(iv) product liabilities arising out of products shipped
by the Business prior to the Closing Date;
(v) the actions in litigation against the Sellers and/or
their Affiliates listed under the caption "Antitrust Matters" in
Section 4.11(a) of the Disclosure Schedule (or actions claiming
violation of antitrust laws arising out of activities substantially
similar to those alleged in such litigation) and any other litigation
claiming violation by the Business of antitrust or competition laws
pending or, to the knowledge of Sellers, threatened as of the Closing
Date;
(vi) the actions in litigation against the Sellers and/or
their Affiliates listed under the caption "Employee Matters" in Section
4.11(a) of the Disclosure Schedule and any other litigation on behalf
of employees or former employees of the Business pending or, to the
knowledge of Sellers, threatened as of the Closing Date; provided,
however, that, notwithstanding anything to the contrary herein, the
Sellers shall be responsible for all Costs attributable to periods up
to the Closing Date and the Buyer shall be responsible for all Costs
attributable to periods thereafter;
(vii) the actions in litigation against the Sellers and/or
their Affiliates listed under the caption "Intellectual Property
Litigation" in Section 4.11(a) of the Disclosure Schedule claiming
infringement of third party intellectual property rights and Cheapfleet
and Sharp libel actions set forth in Section 4.11 of the Disclosure
Schedule and any other litigation claiming infringement by the Business
of third party intellectual property rights pending or, to the
knowledge of Sellers, threatened as of the Closing Date; provided,
however, that, notwithstanding anything to the contrary herein, the
Sellers shall be responsible for all Costs attributable to sales of
products up to the Closing Date and the Sellers and, subject to Section
11.2(d), the Buyer shall share equally all Costs attributable to sales
of products thereafter;
(viii) any claim or cause of action of any third party
(other than product liability claims and causes of action and any
claims and causes of action subject to indemnification under the
foregoing clauses (v), (vi) and (vii)) to the extent arising out of,
any action, inaction or event of the Companies, the Asset Transferor
Entities, the Sellers (with respect to the Business) or the Business
occurring prior to the Closing except to the extent arising out of any
action, inaction or event of the Buyer and its Affiliates (including
the Companies) occurring after the Closing.
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(b) Except with respect to any claim related to Taxes for
which Section 7.5 of this Agreement shall be the sole and exclusive remedy of
Sellers, Buyer shall indemnify and hold harmless Sellers, their officers,
directors, employees and Affiliates from Costs arising from or attributable to:
(i) the breach of any representation or warranty made by
Buyer in this Agreement;
(ii) any failure of Buyer duly to perform or observe any
covenant or agreement to be performed or observed by Buyer pursuant to
this Agreement;
(iii) the Assumed Liabilities;
(iv) except for the matters for which Sellers would be
obligated to indemnify Buyer under Section 11.1(a) and 7.6, all
liabilities of the Companies arising out of the conduct of the Business
after the Closing;
(v) Sellers' or their Affiliates' obligations under the
guaranties, letters of credit and comfort letters described in Section
7.10 of the Disclosure Schedule; and
(vi) any violation of Environmental Laws arising out of or
relating to any of the Real Property or any premises owned or leased by
Buyer or its Affiliates or at which the Business has been conducted by
the Buyer or its Affiliates, or any Release or threatened Release of
any Hazardous Substance at, on, beneath or from any of the Real
Property or any premises owned or leased by Buyer or its Affiliates or
at which the Business has been conducted by the Buyer or its
Affiliates, or Release or threatened Release of any Hazardous Substance
at, on or beneath any third-party waste disposal site to which any
Hazardous Substance has been sent by the Companies, or to the extent
related to the Business, the Buyer or its Affiliates (or any successor
to the Business) on or after the Closing Date, and for which, in the
case of the foregoing, only to the extent that Buyer is not entitled to
indemnification pursuant to Sections 11.1(d) through 11.1(h),
inclusive.
(vii) any failure of Buyer to assume the union, work
council or collective bargaining agreements as in effect on the Closing
Date applicable to Ex-U.S. Employees of an Asset Transferor Entity.
(c) Sellers and Buyer shall indemnify each other for all
Taxes for the periods and in the manner described in Section 7.5.
(d) Other than with respect to the Real Property located
in Paulinia, Brazil and Genay, France, which are addressed in paragraph 11.1(h),
notwithstanding any time or dollar limitations placed upon Sellers'
indemnification obligations elsewhere in this Agreement, which shall not apply
to this subparagraph (d), Sellers shall indemnify, defend and hold harmless
Buyer, the Companies and their Affiliates, officers, directors, employees and
controlling persons against any and all Costs arising from or attributable to:
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(i) any pre-Closing Date violation of Environmental Laws
by the Sellers, the Asset Transferor Entities or the Companies arising
out of or relating to any of the Real Property or any premises at which
the Business has been conducted of which Sellers have knowledge,
including without limitation, those matters disclosed in Section 4.13
of the Disclosure Schedule or (ii) any investigation and remediation,
if any, required by applicable Environmental Law, to the standard
required by applicable Environmental Law, of those matters disclosed in
the Environmental Reports contained in Section 4.13 of the Disclosure
Schedule or (iii) any Release or threatened Release at, on or beneath
any third-party waste disposal site to which any Hazardous Substance of
which Sellers have knowledge generated prior to the Closing by the
Companies or, to the extent related to the Business, Sellers or the
Asset Transferor Entities has been sent prior to Closing, including,
without limitation, those matters disclosed in Section 4.13 of the
Disclosure Schedule or (iv) any breach of Section 4.13 of this
Agreement
(e) Other than with respect to the Real Property located
in Paulinia, Brazil and Genay, France, which are addressed in paragraph 11.1(h),
Sellers shall indemnify, defend and hold harmless Buyer, the Companies and their
Affiliates, officers, directors, employees and controlling persons against any
and all Costs, arising from or attributable to: (A) any pre-Closing Date
violation of Environmental Laws by Sellers, the Asset Transferor Entities or the
Companies arising out of or relating to any of the Real Property or any premises
at which the Business has been conducted of which Sellers have no knowledge, or
(B) any pre-Closing Date Release or threatened Release of any Hazardous
Substance at, on, beneath or from any of the Real Property or any premises at
which the Business has been conducted of which Sellers have no knowledge; or (C)
any Release or threatened Release at, on or beneath any third-party waste
disposal site to which any Hazardous Substance of which Sellers have no
knowledge generated prior to the Closing Date by the Companies or, to the extent
related to the Business, the Sellers or the Asset Transferor Entities has been
sent prior to Closing.
(f) Sellers indemnification obligations contained in
Section 11.1(e) shall only apply to claims made by Buyer which are tendered to
Sellers within [***] of the Closing Date; provided, however, that any claim
pursuant to Section 11.1(e) for which notice is tendered to Sellers within such
[***] shall be indemnified by Sellers to full completion or satisfaction. In
addition, Buyer, the Companies and their Affiliates, officers, directors,
employees and controlling persons shall not be entitled to receive any Costs for
any individual claim under Section 11.1(e) until [***]. For purposes of this
section, Costs arising out of or resulting from the same event or series of
related events shall constitute an individual claim.
(g) Notwithstanding any other provisions contained in
Section 11.1, (A) Sellers shall have the power and right to direct, manage and
control, and take such actions as are reasonably necessary in connection with,
any defense, remediation, or other resolution of any claim, event or condition
subject to indemnification under Sections 11.1(d) and 11.1(e), and Buyer shall
provide Sellers with access to any Real Property reasonably necessary for
Sellers to exercise their rights under this Section 11.1(g) provided, in the
case of each of the foregoing, that Sellers shall have first notified and
consulted with Buyer with respect thereto; and provided, further, that to the
extent any claim, event or condition subject to indemnification involves or
requires work to be performed at any of the Real Property, Sellers shall (i)
comply with all applicable laws (including, without limitation, Environmental
Laws); (ii) use the Real Property
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in a manner that will not unreasonably interfere with the operations or business
thereon or compromise the safety of the Real Property; (iii) make all reasonable
efforts to restore the Real Property to its condition immediately prior to the
commencement of Sellers' work; and (iv) furnish or cause to be furnished to
Buyer certificates of insurance evidencing coverage maintained by Sellers'
agents, employees, independent contractors, subcontractors, suppliers or
environmental consultants ("Sellers' Representatives") who are performing the
work at the Real Property, which coverage shall be reasonable and customary for
the type of work being performed at the Real Property. With respect to the
Resende, Brazil facility, Sellers have elected to exercise their rights under
this Section 11.1(g)(A), and Buyer agrees to enter into an access agreement at
the Closing in the form attached hereto as Exhibit D. (B) Buyer agrees that, in
exercising its rights under Sections 11.1(d) and 11.1(e), no environmental audit
or other assessment will be undertaken for the purpose of discovering any
conditions that might result in Costs with respect to which Sellers would be
required to provide indemnification pursuant to Sections 11.1(d) or 11.1(e)
unless required to do so by a demand, complaint, order or directive of a
Governmental Authority acting within the scope of its jurisdiction or authority
or by a prospective purchaser, lessee, financial institution or other similar
party as part of a sale, lease, financing or other commercial transaction,
except that Buyer may conduct reasonable environmental inspections and
compliance audits and assessments of the Business and its assets and properties
in the ordinary course as part of a compliance program so long as any inspection
or audit is performed in a manner consistent with the manner in which Buyer
generally conducts such inspections or audits for its other facilities.
(h) With respect to the Real Property and facilities
located at [***] and [***], Sellers shall indemnify, defend and hold harmless
Buyer and its Affiliates, officers, directors, employees and controlling persons
for Costs arising out of or related to indemnification obligations of Sellers
and their Affiliates under the [***] subject to the same limitations, terms and
conditions stated in such agreements.
11.2 PROCEDURES.
(a) Promptly after the receipt by any Person that may be
entitled to indemnity hereunder of notice or otherwise becoming aware of (a) any
claim or (b) the commencement of any action or proceeding which may give rise to
a claim for indemnification hereunder, such Person (the "Aggrieved Party") will,
if a claim with respect thereto is to be made against the party or parties
obligated to provide indemnification pursuant to this Article 11 (the
"Indemnifying Party"), give such Indemnifying Party written notice of such claim
or the commencement of such action or proceeding and, shall permit the
Indemnifying Party to assume, at its own expense, the defense of any such claim,
action or proceeding, or any litigation resulting from such claim, and, upon
such assumption, shall cooperate fully with the Indemnifying Party in the
conduct of such defense. This duty on the part of the Aggrieved Party to
cooperate in such defense shall include, but not be limited to, (i) providing
assistance in compiling and verifying responses to discovery requests, (ii)
providing reasonable access to its employees for purposes of consulting,
performing laboratory testing, providing deposition and
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trial testimony and providing expert opinions at depositions and trials and
(iii) making available to the Indemnifying Party all books and records as may
have relevance to the defense. Failure by the Indemnifying Party to notify the
Aggrieved Party of its election to defend any such action within 15 days after
notice thereof shall have been given to the Indemnifying Party, shall be deemed
a waiver by the Indemnifying Party of its right to defend such action. If the
Indemnifying Party assumes the defense of any such claim or litigation resulting
therefrom, the obligations of the Indemnifying Party as to such claim or
litigation shall be limited to taking all steps reasonably deemed necessary in
the defense or settlement of such claim or litigation resulting therefrom and to
holding the Aggrieved Party harmless from and against any and all Costs caused
by or arising out of any settlement approved by the Indemnifying Party or any
judgment in connection with such claim or litigation resulting therefrom
(subject to Section 11.3). The Aggrieved Party may participate, at its expense,
in the defense of such claim or litigation, provided that the Indemnifying Party
shall direct and control the defense of such claim or litigation; provided,
further, that if there exists or is reasonably likely to exist a conflict of
interest that would make it inappropriate in the reasonable judgement of the
Aggrieved Party for the same counsel to represent both the Indemnifying Party
and the Aggrieved Party, then the Aggrieved Party shall be entitled to retain
its own counsel, in each jurisdiction for which the Aggrieved Party determines
counsel is required, at the Indemnifying Party's expense. Subject to Section
11.3, the Indemnifying Party shall not, in the defense of such claim or any
litigation resulting therefrom, consent to entry of any judgment, except with
the written consent of the Aggrieved Party, or enter into any settlement, except
with the written consent of the Aggrieved Party which, in either case, may not
be unreasonably withheld, which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Aggrieved Party of a
full and complete release from any and all liability in respect of such claim or
litigation, and which judgement or settlement shall not impose any on-going
obligations on the Aggrieved Party.
(b) If the Indemnifying Party shall not assume the
defense of any such claim or litigation resulting therefrom, the Aggrieved Party
may defend against such claim or litigation in such manner as it may deem
appropriate and the Aggrieved Party may settle such claim or litigation on such
terms as it may deem appropriate, and the Indemnifying Party shall promptly
reimburse the Aggrieved Party for the amount of all Costs incurred by the
Aggrieved Party in connection with the defense against or settlement of such
claim or litigation, subject to Section 11.3. If no settlement of such claim or
litigation is made, the Indemnifying Party shall promptly reimburse the
Aggrieved Party for the amount of any Costs incurred by the Aggrieved Party in
the defense against such claim or litigation, subject to Section 11.3.
(c) If there shall be any conflicts between the
provisions of this Section 11.2 and Section 7.6(c) (relating to Tax contests),
the provisions of Section 7.6(c) shall control with respect to Tax contests.
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(d) In the event Seller and Buyer are unable to agree on the
terms of settlement of an infringement claim subject to Section 11.1(a)(vii),
any additional Costs that Seller or Buyer incurs and/or pays to such third party
at a later date based on a Court decision or a settlement above and beyond the
proposed earlier settlement with respect to post closing infringing activities,
which earlier settlement either the Seller or Buyer had rejected, shall be for
the sole account and obligation of the rejecting party if such other party had
advised the rejecting party that it was prepared to accept such earlier
settlement terms.
11.3 LIMITATIONS.
Notwithstanding anything to the contrary contained herein, with
respect to each and every claim for indemnification under [***], the Aggrieved
Party shall not be entitled to seek indemnification unless and until [***] (in
which event, subject to the other provisions of this Section 11.3, the Aggrieved
Party shall be entitled to seek indemnification for the entire amount of such
claim) (it being understood and agreed that only the Costs arising out of a
single event or series of related events shall constitute an individual claim).
An Aggrieved Party shall not be entitled to recover any Costs under [***] until
[***] (the "Minimum Loss"), at which time the indemnification provided under
Section 11.1 shall apply to all Costs in excess of the Minimum Loss and the
maximum liability under [***] for an Indemnifying Party shall not exceed [***]
in the aggregate. Notwithstanding anything to the contrary contained herein, a
party shall not be entitled to indemnification under Article 11 with respect to
any particular matter if and to the extent a Purchase Price adjustment has been
made with respect to such specific matter pursuant to Section 3.6 or Section
7.6(f). It is understood that this Section 11.3 shall not apply to the
environmental indemnification provisions set forth in Sections 11.1(d) through
(h), inclusive.
11.4 INDEMNIFICATION AS SOLE REMEDY.
Absent fraud, the indemnification provided in this Article 11 and
Article 7, subject to the limitations set forth herein, shall be the exclusive
post-Closing remedy for damages available to any Aggrieved Party arising out of
or relating to this Agreement and the purchase and sale of the Business
hereunder.
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ARTICLE XII
GENERAL PROVISIONS
12.1 PUBLIC STATEMENTS.
Prior to the Closing, or afterward, so long as this Agreement
is in effect, none of the parties hereto shall issue or cause the publication of
any press release or other announcement with respect to this Agreement or the
transactions contemplated hereby without consulting with and obtaining the
consent of the other party, which shall not be unreasonably withheld; provided,
however, that such consent shall not be required where such release or
announcement is required by applicable law.
12.2 NOTICES.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by reputable overnight courier or certified mail (return receipt
requested) or sent by telecopier (confirmed thereafter by such certified mail)
to the parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) if to Sellers:
c/o American Home Products Corporation
Five ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
American Home Products Corporation
Five ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer:
Crop Protection Products Division
BASF Aktiengesellschaft
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telecopier Number: 011-49-621-60-27144
Attn.: President Crop Protection Division
(AP)
with a copy to:
BASF Aktiengesellschaft
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Germany
Telecopier Number: 011-49-621-60-41789
Attn.: Central Legal Department (ZRR)
Notice so given shall (in the case of notice so given by mail)
be deemed received on the third calendar day after mailing or when received if
sent by a reputable overnight courier and (in the case of notice so given by
telecopier or personal delivery) on the date of actual transmission or (as the
case may be) personal delivery.
12.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The respective representations and warranties of the parties
hereto shall survive the Closing and shall remain in full force and effect,
provided, however, that (a) the representations and warranties in Section 4.6
with respect to any Taxes shall survive until the applicable statute of
limitations has run for such Taxes,[***]. If written notice of a claim has been
given prior to the expiration of the applicable representations and warranties
by an Aggrieved Party to the Indemnifying Party, then the relevant
representations and warranties shall survive as to such claim until the claim
has been finally resolved.
12.4 AMENDMENT.
This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
12.5 WAIVER.
At any time prior to the Closing, any term, provision or
condition of this Agreement may be waived in writing (or the time for
performance of any of the obligations or other acts of the parties hereto may be
extended) by the party that is entitled to the benefits thereof. Failure by a
party hereto on one or more occasions to avail itself of a right conferred by
this Agreement shall in no event be construed as a waiver of such party's right
to enforce said right or any other right in the future.
12.6 PARTIES IN INTEREST.
This Agreement may not be assigned by a party without the
prior written consent of the other parties hereto, except that Buyer may assign
all or any portion of its rights and obligations hereunder to any Affiliate of
Buyer; provided, however, that no such assignment shall relieve Buyer of its
obligations hereunder. This Agreement shall not run to the benefit of or be
enforceable by any Person other than a party to this Agreement and, subject to
the first sentence of this Section, its successors and assigns.
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12.7 SELLERS' KNOWLEDGE.
When "to the knowledge of Sellers" or similar phrase is used
herein it shall refer to the actual knowledge of the President, Executive Vice
President, Sr. Vice President and Vice Presidents of the Global Agricultural
Products Division and the Global Agricultural Products Research Division, in
each case, after due inquiry.
12.8 GOVERNING LAW; MISCELLANEOUS.
This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement and supersedes all other
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof; is not intended to
confer upon any other Person any rights or remedies hereunder; and shall be
governed in all respects, including validity, interpretation and effect, by the
internal laws of the State of New York. The parties hereto agree that the U.S.
District Court for the Southern District of New York shall have exclusive
jurisdiction over any dispute or controversy arising out of or in relation to
this Agreement and any judgment, determination, arbitration award, finding or
conclusion reached or rendered in any other jurisdiction shall be null and void
between the parties hereto. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
party with respect thereto.
This Agreement may be executed in one or more counterparts
which together shall constitute a single agreement. If any provisions of this
Agreement shall be held to be illegal, invalid or unenforceable under any
applicable law, then such contravention or invalidity shall not invalidate the
entire Agreement. Such provision shall be deemed to be modified to the extent
necessary to render it legal, valid and enforceable, and if no such modification
shall render it legal, valid and enforceable, then this Agreement shall be
construed as if not containing the provision held to be invalid, and the rights
and obligations of the parties shall be construed and enforced accordingly.
12.9 DISCLOSURE SCHEDULE.
The disclosure of any matter in the Disclosure Schedule shall
expressly not be deemed to constitute an admission by Sellers or Buyer of its
requirement to be disclosed or to otherwise imply that any such matter is
material for the purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
AMERICAN CYANAMID COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Vice President and
Treasurer
BASF AKTIENGESELLSCHAFT
By: /s/ Dr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: Dr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Member of the Board of
Executive Directors
BASF AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President, Crop Protection
Division