CONFIDENTIAL TREATMENT
EXECUTION VERSION
EXHIBIT 10.34.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
AVENTIS PHARMACEUTICALS PUERTO RICO INC.
and
INYX USA, LTD.
DECEMBER 15, 2004
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 15th day of
December, 2004, by and between Aventis Pharmaceuticals Puerto Rico Inc., a
Delaware corporation ("Seller"), and Inyx USA, Ltd., an Isle of Man limited
corporation ("Purchaser")
WITNESSETH:
WHEREAS, Seller is engaged in the manufacture of pharmaceutical
products at its plant located in Manati, Puerto Rico (the "Business"); and
WHEREAS, Purchaser desires to purchase the Acquired Assets as
defined herein and to assume the Assumed Liabilities as defined herein, and
Seller desires to sell, transfer and assign to Purchaser the Acquired Assets
and the Assumed Liabilities, all upon the terms and subject to the conditions
set forth in this Agreement (the "Purchased Business");
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements, and conditions
contained herein, and intending to be legally bound hereby, Seller and
Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Certain Definitions. In this Agreement and any Exhibit or
Schedule hereto, the following capitalized terms have the following
respective meanings:
"Acquired Assets" means the following assets, properties and
rights of Seller (other than Excluded Assets) existing at the Effective Time:
(a) the Facility;
(b) the Tangible Personal Property;
(c) the Purchased Inventory
(d) subject to Section 7.6, Seller's rights under the Transferred Contracts;
(e) the Books and Records pertaining to the Purchased Business, including
(i) architectural plans and drawings, construction plans and drawings,
surveys, construction contracts, maintenance records, (ii) all vendor
materials, operating manuals, training documents and similar documents and
materials pertaining to the Acquired Assets, (iii) all environmental studies,
(iv) all communications, notices and similar documents with or from any
Governmental or Regulatory Authority pertaining to the Purchased Business
(including all communications related to any Taxes which pertain to any of
the Purchased Business), (v) all documents describing the results of any
audit or other review or analysis of the Purchased Business, including
automation or computer systems related to the operation thereof, (vi) all
Facility equipment and computer system qualification and validation
documents, excluding those deemed Seller proprietary systems and those
specifically excluded under the Transition Services Agreement, (vii) all
employee and personnel records of employees hired by Purchaser pursuant to
Article VIII, and (viii) copies of all insurance policies and communications
with all companies providing insurance on the Real Property or Tangible
Personal Property (including all reports and documents related to any
insurance audits, inspections or analyses and all records related to
installation, process and operational qualifications related to the Tangible
Personal Property) (collectively, the "Manati Business Books and Records")
(it being acknowledged that Seller shall be entitled to retain and use copies
of the Manati Business Books and Records provided that the use does not
otherwise violate Seller's covenants under this Agreement);
(f) the Transferred Intangible Property;
(g) to the extent their transfer is permitted under applicable Laws, all
Permits utilized by Seller exclusively or primarily in the conduct of the
Business, including the Permits listed in Section 5.1(k) of the Disclosure
Schedules attached hereto; and
(h) all warranties, claims and similar rights with respect to any of the
foregoing assets.
(i) the prepaid expenses listed in Section 1.1(i) of the
Disclosure Schedule (the "Prepaid Expenses");
(j) the motor vehicles owned or leased by Seller listed in
Section 1.1(j) of the Disclosure Schedule (the "Vehicles");
(k) the security deposits deposited by or on behalf of Seller
listed in Section 1.1(k) of the Disclosure Schedule (the "Security
Deposits"); and
(l) all designs, construction drawings, plans, blueprints,
bills of material, flowsheets, specifications, plan sheets, parts lists,
instruction manuals, all documents related to regulatory compliance, quality
and manufacturing records (including, without limitation, standard operating
procedures, validation master plans and change controls) and device master
records relating to the Acquired Assets, but specifically excluding any of
the foregoing to the extent related solely to products that will not be
manufactured at the Facility after the Closing (the "Instruction Materials").
"Affiliate" means, as to any Person, any other Person or group
acting in concert in respect of the Person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person or group of
Persons, means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of the Person, whether
through the ownership of voting securities, by contract, or otherwise.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
"Agreement" means this Asset Purchase Agreement, the Disclosure
Schedules and the Schedules and Exhibits hereto, as originally executed or as
amended as provided herein.
"APL" means Aventis Pharma Ltd.
"Assumed Liabilities" means all Liabilities of Seller described
in Section 2.2 or otherwise specifically assumed by Purchaser under this
Agreement.
"Assumption Agreement" means the Assumption Agreement
substantially in the form attached hereto as Exhibit 1.
"Azmacort Assignment and Assumption Agreement" means the Azmacort
Assignment and Assumption Agreement substantially in the form attached hereto
as Exhibit 10.
"Azmacort Supply Agreement" has the meaning set forth in Section
7.9(b).
"Azmacort Royalty" has the meaning set forth in Section 7.9(b).
"Benefit Plans" has the meaning set forth in Section 5.1(g).
"Best Efforts" means the efforts that a prudent Person who wants
to achieve the result in question would take and that are commercially
reasonable under the circumstances.
"Books and Records" shall mean records, files, equipment manuals
and maintenance records, building and equipment blueprints and
specifications, drawings and designs, real estate surveys and reports,
computer software, and other data.
"Business" has the meaning set forth in the recitals.
"Claim" has the meaning set forth in Section 6.2(a).
"Closing" means the consummation of the transactions described in
Article IV of this Agreement.
"Closing Date" means March 31, 2005 or such other earlier date as
is agreed upon by the parties.
"COBRA" has the meaning set forth in Section 8.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commonwealth" means the Commonwealth of Puerto Rico.
"Confidentiality Agreement" has the meaning set forth in Section
7.8.
"Contemplated Transactions" means all of the transactions
contemplated by this Agreement and the Related Agreements, including the
following actions:
(a) the sale of the Purchased Business by Seller to
Purchaser; and,
(b) the execution, delivery, and performance of the Related
Agreements.
"Contract" means any written agreement, lease, license, purchase
order, commitment for the purchase of goods, or other contract, instrument or
arrangement to which Seller is a party and which relates to the Purchased
Business.
"Core Representations and Warranties" has the meaning set forth
in Section 6.3.
"Damages" means all Liabilities, damages, losses, penalties,
fines, forfeitures, assessments, claims, suits, proceedings, investigations,
actions, demands, causes of action, judgments, awards, taxes, and expenses
including court costs, reasonable attorneys', consultants' and experts' fees
and other costs and expenses incident to or arising out of any claim or
occurrence or investigation or the defense of any claim or occurrence
(whether or not litigation has commenced).
"Disclosure Schedules" means the disclosure schedules of Seller
as specified in this Agreement that are attached to this Agreement or that
are subsequently delivered to Purchaser pursuant to the terms of this
Agreement.
"Dispute" has the meaning set forth in Section 9.2.
"Dispute Notice" has the meaning set forth in Section 9.2(a).
"Dollars" means U.S. dollars.
"Effective Time" means 12:00 midnight, Puerto Rico time, on the
Closing Date.
"Employment Costs" means all costs incurred with respect to any
employee, including wages, salaries, benefits, employment taxes, claims by an
employee and all costs incurred in connection with such claims, and all
similar costs.
"Environmental Assessments" has the meaning set forth in Section
6.5(a)(ii).
"Environmental Claims" has the meaning set forth in the
definition of "Environmental Liabilities".
"Environmental Laws" shall include, without limitation, the following Laws:
(1) Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986;
(2) Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments
of 1984; (3) Federal Water Pollution Control Act of 1972, as amended by the
Clean Water Act of 1977, as amended; (4) Toxic Substances Control Act of
1976, as amended; (5) Emergency Planning and Community Right-to-Know Act of
1986; (6) Clean Air Act of 1966, as amended by the Clean Air Act Amendments
of 1990;
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(7) National Environmental Policy Act of 1970, as amended; (8)
Rivers and Harbors Act of 1899, as amended; (9) Endangered Species Act of
1973, as amended; (10) Occupational Safety and Health Act of 1970, as
amended; (11) Safe Drinking Water Act of 1974, as amended, (12) Puerto Rico
Public Policy Environmental Act; (13) Environmental Emergencies Fund Act;
(14) The Regulation for Control of Hazardous Waste; (15) the Non-Hazardous
Solid Waste Management Regulation; (16) the Regulation for the Control of
Atmospheric Pollution; (17) Water Quality Standards Regulation;
(18) Underground Injection Control Regulation; (19) Underground Storage Tank
Control Regulation; and (20) all Laws of the United States, the Commonwealth
or any political subdivision of the United States or the Commonwealth
relating to the regulation or protection of human health, safety, the
environment, natural resources (including, without limitation, ambient air,
surface water, groundwater, wetlands, land, surface or subsurface strata,
wildlife, aquatic species or vegetation), including, without limitation, Laws
relating to emissions, discharges, releases or threatened releases of
Hazardous Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
"Environmental Liabilities" means all Liabilities arising from or
under any Environmental Law or any Permit issued under Environmental Law and
consisting of or relating to:
(a) any environmental matters or conditions (including on-site or off-site
contamination and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, surcharges, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses arising
under Environmental Law (including any claims involving liability in tort,
strict, absolute or otherwise), liens, notices of noncompliance or violation,
or legal fees or costs of investigations or proceedings relating in any way
to any Environmental Law or any Permit issued under such Environmental Law,
or arising from the presence or release (or alleged presence or release) into
the environment of any Hazardous Materials (hereinafter also referred to as
"Environmental Claims") including, without limitation, all Environmental
Claims, regardless of the merit of such Environmental Claims, by any
governmental or regulatory authority or by any third party for enforcement,
clean up, removal response, remedial, or other actions or damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief pursuant to any Environmental Law or any alleged injury or threat of
injury to health, safety or the environment;
(c) financial responsibility under Environmental Law for cleanup costs or
corrective action, including any investigation, cleanup, removal,
containment, or other remediation or response actions required by applicable
Environmental Law and for any natural resource damages;
(d) any other compliance, corrective, investigative or remedial measures
required under Environmental Law; or
(e) any breach of any of the representations and warranties of Seller set
forth in Section 5.1(m).
"Environmental Liabilities Cap" has the meaning set forth in
Section 6.5(d).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Escrow Account" has the meaning set forth in Section 8.3(b)(i).
"Excluded Assets" means all assets of Seller not specifically
included among the Acquired Assets, including the following:
(a) the corporate charter, qualifications to do business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute
books, stock transfer books and other documents relating to the organization
and existence of Seller as a corporation;
(b) all cash, rights in bank accounts, certificates of deposit, bank
deposits, cash equivalents, investment securities and checks or other
payments received by Seller (including received in lock boxes) by the close
of business on the Closing Date;
(c) the Receivables;
(d) the Inventory, except for the Purchased Inventory;
(e) all tax returns and tax records (with the exception of property tax
returns and property tax records related to the Purchased Business) and any
rights to tax refunds or credits and current and deferred tax assets,
specifically including Seller's rights to net operating loss carry forward
applicable to the Business, the Facility, or otherwise, including,
specifically, tax credits in the aggregate amount of $7,194,717 as set forth
in that certain Closing Agreement dated June 30, 2004 by and among Seller,
Aventis Pharmaceuticals Inc., and the Secretary of the Treasury of the
Commonwealth;
(f) all assets held by or on behalf of Seller's employee benefit plans;
(g) Seller's rights under this Agreement and the Related Agreements;
(h) the Excluded Books and Records;
(i) all insurance policies and contracts and all rights thereunder
(including but not limited to, the right to make claims thereunder and to the
proceeds thereof);
(j) those assets listed on Exhibit 2;
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(k) all Intangible Property with the exception of Transferred Intangible
Property; and
(l) loans to third parties and affiliates of Seller.
"Excluded Books and Records" means all Books and Records relating
to the Excluded Assets or Excluded Liabilities.
"Excluded Liabilities" means, except as otherwise set forth in
this Agreement, all Liabilities of Seller other than the Assumed
Liabilities.
"Facility" means the Real Property, personal property that is
attached to the Real Property and classified as real property by destiny, and
all improvements located thereon and all rights related thereto.
"GAAP" means generally accepted accounting principles as in
effect in the United States on the date of this Agreement.
"General Assignment" means the General Assignment substantially
in the form attached hereto as Exhibit 3.
"General Liability Cap" has the meaning set forth in Section
6.4(b)(i).
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States or the Commonwealth, including any political subdivision
of the United States or the Commonwealth.
"Hazardous Materials" means any substance that has been defined
by applicable Environmental Law to be radioactive, toxic, hazardous or
otherwise a pollutant or contaminant, including PCBs, asbestos, petroleum
products or any fraction thereof, urea-formaldehyde and all substances listed
as a "hazardous substance," "hazardous waste," "hazardous material" or "toxic
substance" or words of similar import, under any Environmental Law.
"Indemnified Party" has the meaning set forth in Section 6.2(a).
"Indemnifying Party" has the meaning set forth in Section 6.2(a).
"Intangible Property" means all of the following to the extent
related to the operation of the Purchased Business:
(a) computer software, data and documentation related to the operation of
the Tangible Personal Property, excluding those deemed Seller proprietary
systems and those specifically excluded under the Transition Services
Agreement;
(b) know-how of all employees hired by Purchaser pursuant to Article VIII;
and,
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(c) other rights relating to any of the foregoing (including remedies
against infringements thereof and rights of protection of interest therein
under the Laws of all jurisdictions).
"Inventory" means all inventory owned by Seller as of the
Effective Time including all inventories of raw materials, work-in-process,
finished goods, supplies, parts and packaging materials and in-transit
inventory, but inventory does not include replacement parts, supplies or any
assets related to the operation or maintenance of the Facility or the
Acquired Assets which shall be deemed Tangible Personal Property.
"IOCAM" means the Seller's Industrial Operations Cost Accounting
Manual.
"KOS/Aeropharm Consent" has the meaning set forth in Section
7.9(b).
"Laws" means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law.
"Liability" or "Liabilities" means any or all obligations
(whether to make payments, to give notices or to perform or not perform any
action), commitments, contingencies and other liabilities of a Person
(whether known or unknown, asserted or not asserted, whether absolute,
accrued, contingent, fixed or otherwise, determined or determinable,
liquidated or unliquidated, and whether due or to become due).
"Lien" means any mortgage, pledge, security interest,
hypothecation, assignment, encumbrance, lease, lien, option, right of use and
other rights of other Persons, any conditional sale contract, title retention
contract, or other encumbrance of any kind.
"Manati Business Books and Records" has the meaning set forth in
the definition of Acquired Assets.
"Material Adverse Change" means any material adverse change to
the condition of the Acquired Assets or the Facility from a financial or
operational perspective, as the case may be; provided that changes within the
ordinary course of business cannot individually or collectively constitute a
material adverse change.
"Material Contracts" has the meaning set forth in Section 5.1(j).
"Notice" has the meaning set forth in Section 9.3.
"Order" means and includes any writ, judgment, decree,
injunction, award or other order of any Governmental or Regulatory Authority.
"Permits" means all licenses, permits, authorizations, approvals,
registrations, franchises and similar consents granted or issued by any
Governmental or Regulatory Authority.
"Permitted Lien" means (i) any statutory Lien arising in the
ordinary course of business by operation of Law that is not yet due or
delinquent, including real and personal property taxes not delinquent.
"Person" means any natural person, corporation, general
partnership, limited partnership, limited liability partnership, limited
liability company, proprietorship, other business organization, trust,
government, governmental authority, regulatory authority, court or
arbitrator, or any other entity whatsoever.
"Post Closing Agreement" has the meaning set forth in Section
7.14.
"Product Supply Agreement" has the meaning set forth in Section
7.15.
"Product Supply Technical Agreement" has the meaning set forth in
Section 7.15.
"PR Code" means the Puerto Rico Internal Revenue Code of 1994, as
amended.
"Prepaid Expenses" has the meaning set forth in the definition of
Acquired Assets.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Business" has the meaning set forth in the preamble.
"Purchased Inventory" means the Inventory specifically purchased
by Purchaser with respect to which the Purchase Price shall be adjusted, as
described in Section 3.5.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser Environmental Liabilities" has the meaning set forth
in Section 6.5(f).
"Purchaser Indemnified Parties" has the meaning set forth in
Section 6.1(a).
"Purchaser's Closing Certificate" has the meaning set forth in
Section 4.3(a).
"Purchaser's Parent Company" has the meaning set forth in Section
7.17.
"Purchaser's Parent Guaranty" has the meaning set forth in
Section 7.17.
"Real Property" means the parcel of real estate, buildings, and
structures described on Exhibit 4, all improvements located thereon and all
rights related thereto.
"Receivables" means the accounts receivable trade, notes
receivable and other receivables of Seller, and any claim, remedy or other
right related to the foregoing.
"Related Agreements" means all agreements, certificates, instruments or other
documents required to be executed and/or delivered pursuant to or in
connection with this Agreement by any party, including, without limitation,
the General Assignment, the Assumption
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Agreement, the Transition Services Agreement, the Post-Closing
Agreement, the Product Supply Agreement, the Product Supply Technical
Agreement, Purchaser's Parent Guaranty, Seller's Parent Guaranty, the Tooling
Access Letter, the Azmacort Assignment and Assumption Agreement, and the
KOS/Aeropharm Consent.
"Restricted Product" means any product or substance having the
active pharmaceutical ingredient Triamcinolone Acetonide that is indicated
for intranasal administration.
"Respective Restricted Territories" means for the "Restricted
Products" all countries of the world.
"Seller" has the meaning set forth in the preamble.
"Seller Indemnified Parties" has the meaning set forth in
Section 6.1(b).
"Seller's Closing Certificate" has the meaning set forth in
Section 4.2(a).
"Seller's Parent Company" has the meaning set forth in Section
7.18.
"Seller's Parent Guaranty" has the meaning set forth in Section
7.18.
"Seller's Savings Plan" has the meaning set forth in Section
8.1(c).
"Separation Benefits" has the meaning set forth in Section 8.3(a).
"Separation Plan" means the Aventis Pharmaceuticals Associate
Separation Plan effective March 15, 2004, attached hereto as Exhibit 5.
"Services and Access Rights Agreement" means the Services and
Access Rights Agreement dated December 2, 2004, by and between Purchaser and
Seller regarding Purchaser's access to the Facility and services provided to
Purchaser by Seller prior to the Effective Time.
"Sharing Period" has the meaning set forth in Section 6.5(c).
"Tangible Personal Property" means the equipment, furniture,
fixtures and other personal property listed on Exhibit 6, including
replacement parts, supplies and any other assets that are used by Seller
solely in connection with the operation or maintenance of the Purchased
Business, including personal property subsequently acquired by Seller and
used solely in connection with the Purchased Business.
"Taxes" means all United States federal, state, Commonwealth,
municipal, foreign, and other net income, gross income, gross receipts,
social security, sales, use, ad valorem, franchise, withholding, payroll,
employment, excise, property, and other taxes, and Transfer Taxes together
with any interest and any penalties, additions to tax, or additional amounts
with respect thereto, and the term "Tax" means any one of the foregoing Taxes.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
"Tax Grant" means Seller's industrial tax exemption grant under
the Puerto Rico Tax Incentives Act of 1998, as amended.
"Tax Returns" means all returns, declarations, reports,
statements, schedules, notices, forms or other documents or information
required to be filed in respect of the determination, assessment, collection
or payment of any Tax or in connection with the administration,
implementation or enforcement of any legal requirement relating to any Tax,
and the term "Tax Return" means any one of the foregoing Tax Returns.
"Time of Closing" has the meaning set forth in Section 4.1.
"Tooling Access Letter" has the meaning set forth in Section
7.9(c).
"Transferred Contracts" has the meaning set forth in
Section 5.1(j)(i)(E).
"Transferred Intangible Property" has the meaning set forth in
Section 5.1(r).
"Transition Services Agreement" means the Transition Services
Agreement of even date herewith entered into between Purchaser and Seller
described in Section 7.10 hereof and substantially in the form attached
hereto as Exhibit 7.
"Valois" means Valois S.A.S.
"WARN" has the meaning set forth in Section 8.4.
ARTICLE II
PURCHASE AND SALE AND ASSUMPTION
Section 2.1. Purchase and Sale of Purchased Business. Subject to the
terms and conditions set forth in this Agreement, at the Time of Closing,
Seller shall sell, transfer, convey, assign, deliver and set over to
Purchaser, and Purchaser shall purchase and accept, all of the right, title,
benefit and interest of Seller in, to and under the Purchased Business, free
and clear of all Liens other than Permitted Liens. In no event shall
Purchaser acquire any right, title, benefit or interest in, to or under any
of the Excluded Assets.
Section 2.2. Assumed Liabilities. Subject to the terms and conditions
set forth in this Agreement, at the Time of Closing, Purchaser shall assume
and agrees to pay, perform and discharge when due the Assumed Liabilities set
forth in Section 2.2 of the Disclosure Schedules. Purchaser shall not
assume, and Seller shall retain, the Excluded Liabilities.
ARTICLE III
PURCHASE PRICE
Section 3.1. Purchase Price. The purchase price for the Purchased
Business (the "Purchase Price") shall be Fifteen Million Dollars
($15,000,000), subject to adjustment on the Closing Date as provided herein
and in particular in Sections 3.5 and 8.3, and allocated as set forth in
Section 3.1 of the Disclosure Schedules.
Section 3.2. Payment of the Purchase Price. At the Time of Closing,
Purchaser shall pay the Purchase Price to Seller by wire transfer of
immediately available funds to an account specified in writing by Seller,
provided that a portion of the Purchase Price shall be paid into the Escrow
Account established pursuant to Section 8.3.
Section 3.3. Taxes and Assessments. Purchaser shall pay all
non-delinquent property Taxes, special assessments, and any other taxes or
fees related to the Facility which are payable subsequent to the Closing and
on a going-forward basis. Seller shall pay all real estate taxes and special
assessments due and payable with respect to the Facility which are due prior
to the Closing Date or which are attributable to all periods prior to the
Closing Date. Real Estate taxes and assessment will be prorated between
Seller and Purchaser as of the Closing Date.
Section 3.4. Internal Revenue Stamps and Recording Fees. Seller will
bear the cost of all documentary stamps required by law to be cancelled on
the original deed of purchase and sale transferring the Real Property to
Purchaser. Purchaser shall bear the cost of all documentary stamps required
to be cancelled on the Deed or Purchase and Sale conveying the Real Property
to Purchaser and transfer and recording fees. Purchaser shall select the
Notary and bear the notarial tariff.
Section 3.5. Purchased Inventory. Section 3.5 of the Disclosure
Schedules sets forth the Purchased Inventory. The parties shall value the
Purchased Inventory based on a physical count of such inventory as of the day
prior to the Closing Date, and computed in accordance with IOCAM. The value
of all Purchased Inventory found obsolete, damaged or non-merchantable will
be deducted from such count. At the Time of Closing, the Purchase Price
shall be increased by the amount by which the aggregate value of the
Purchased Inventory exceeds One Million Five Hundred Thousand Dollars
($1,500,000), or decreased by the amount by which One Million Five Hundred
Thousand Dollars ($1,500,000) exceeds the aggregate value of the Purchased
Inventory.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Section 3.6 Tax Grant. Seller shall cooperate fully with
Purchaser and support Purchaser's application for approval of the transfer of
Seller's Tax Grant to Purchaser, including joining in such application if
required by law. Purchaser shall be responsible for all filing fees and
other costs in connection with such application.
ARTICLE IV
CLOSING MATTERS
Section 4.1. Closing. The Closing of the transactions described in this
Agreement will take place at 10:00 a.m. (local time) (the "Time of Closing")
on the Closing Date at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in San ▇▇▇▇, Puerto
Rico, or at such other time, date, and place as the parties may agree. All
documents delivered and all transactions consummated at the Closing will be
deemed for all purposes to have been delivered and consummated effective as
of the Effective Time.
Section 4.2. Purchaser's Conditions to Closing. The obligation of
Purchaser to effect the Closing shall be subject to the satisfaction of the
following conditions at or prior to the Time of Closing, any or all of which
conditions may be waived by Purchaser in its sole and absolute discretion:
(a) Accuracy of Representations, Warranties and
Agreements. As of the Time of Closing, there shall have been no material
adverse change to the representations and warranties made by Seller herein
that would affect Seller's ability to consummate the transaction contemplated
herein. Seller shall have performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed and
complied with by it at or prior to the Closing Date, and Seller shall have
delivered to Purchaser a certificate certifying that the conditions set forth
in this Section 4.2(a) are satisfied in all respects (the "Seller's Closing
Certificate").
(b) Consents and Approvals. As of the Time of Closing,
Seller shall have obtained all consents and approvals from third parties
required for it to consummate the sale of the Purchased Business to
Purchaser.
(c) Litigation. No temporary restraining order,
preliminary or permanent injunction, or cease and desist order, issued by any
Governmental or Regulatory Authority preventing the transfers contemplated
hereby or the consummation of the Closing, shall be in effect at the Time of
Closing, and no proceeding by any Governmental or Regulatory Authority
seeking to restrict or prohibit the transfer and exchange contemplated hereby
or the consummation of the Closing shall be pending or threatened at the Time
of Closing.
(d) Consents to Assignment. To the extent necessary, Seller
shall have obtained written consents to the assignment to Purchaser of all
Transferred Contracts.
(e) Closing Documents. Seller shall have executed and
tendered each of the documents to be executed and delivered by it pursuant to
Section 4.4.
(f) Transition Services Agreement. Seller and Purchaser
shall have executed the Transition Services Agreement.
(g) Azmacort Assignment and Assumption Agreement and
KOS/Aeropharm Consent. Purchaser and Seller shall have executed the Azmacort
Assignment and Assumption Agreement, and Seller shall have delivered to
Purchaser the KOS/Aeropharm Consent.
(h) Labor Unrest Caused by Seller. There shall not be in effect any labor
unrest as a direct result of Seller's actions that constitutes a Material
Adverse Change.
(i) Environmental Remediation. Purchaser shall be reasonably satisfied
with any remediation action plan initiated by Seller in connection with
Section 6.5.
Section 4.3. Seller's Conditions to Closing. The obligations of Seller
to effect the Closing shall be subject to the satisfaction of the following
conditions at or prior to the Time of Closing, any or all of which conditions
may be waived by Seller in its sole and absolute discretion:
(a) Accuracy of Representations, Warranties and Agreements. As of the Time
of Closing, there shall have been no material adverse change to the
representations and warranties made by Purchaser herein that would affect
Purchaser's ability to consummate the transaction contemplated herein. The
representations and warranties of Purchaser contained herein shall be true
and correct on the Time of Closing as if made again at the Time of Closing.
Purchaser shall have performed and complied with all agreements, covenants
and conditions required by this Agreement to be performed and complied with
by it at or prior to the Closing Date, and Purchaser shall have delivered to
Seller a certificate certifying that the conditions set forth in this
Section 4.3(a) are satisfied in all respects (the "Purchaser's Closing
Certificate").
(b) Consents and Approvals. Purchaser shall have obtained all consents and
approvals from third parties required for it to consummate the sale of the
Purchased Business to Purchaser. .
(c) Litigation. No temporary restraining order, preliminary or permanent
injunction, or cease and desist order, issued by any Governmental or
Regulatory Authority preventing the transfers contemplated hereby or the
consummation of the Closing, shall be in effect at the Time of Closing, and
no proceeding by any Governmental or Regulatory Authority seeking to restrict
or prohibit the transfer and exchange contemplated hereby or the consummation
of the Closing shall be pending or threatened at the Time of Closing.
(d) Closing Documents. Purchaser shall have executed and tendered each of
the documents to be executed by Purchaser pursuant to Sections 4.5 and 4.6.
(e) Offers of Employment. Purchaser shall have made
offers of employment to Seller's employees as required by Article VIII.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(f) Post-Closing Agreement. Seller and Purchaser shall have
executed the Post-Closing Agreement.
(g) Product Supply Agreement. Seller and Purchaser shall have
executed the Product Supply Agreement and related Product Supply Technical
Agreement.
Section 4.4. Deliveries By Seller. At the Time of Closing:
(a) Seller shall sell, assign, convey, transfer and deliver to Purchaser
the Acquired Assets in accordance with this Agreement by (i) delivery of the
General Assignment appropriately completed and duly executed by Seller, (ii)
a Deed of Purchase and Sale in the form attached hereto as Exhibit 8, as
modified to conform to the Survey, duly executed by Seller before a Notary
Public selected by Purchaser, (iii) a certificate of title (or similar
documents) duly endorsed with respect to any vehicles or other equipment
included in the Acquired Assets for which a certificate of title or origin is
required to transfer title and (iv) a ▇▇▇▇ of sale for the transfer of the
Tangible Personal Property.
(b) Seller shall execute and deliver such other documents as Purchaser may
reasonably request to evidence and effectuate conveyance of the Acquired
Assets and Seller's obligations under this Agreement.
(c) Seller shall deliver to Purchaser the Seller's Closing Certificate.
(d) Seller shall deliver to Purchaser an opinion of Seller's
counsel in form and substance reasonably satisfactory to Purchaser.
(f) Seller shall deliver to Purchaser the Tooling Access
Letter.
(g) Seller shall deliver to Purchaser the Azmacort Assignment
and Assumption Agreement and the KOS/Aeropharm Consent.
Section 4.5. Deliveries By Purchaser. At the Time of Closing:
(a) Purchaser shall pay to Seller the Purchase Price as provided in
Section 3.2.
(b) Purchaser shall deliver to Seller the Purchaser's Closing Certificate.
(c) Purchaser shall deliver to Seller an opinion of
Purchaser's counsel in form and substance reasonably satisfactory to Seller.
(d) Purchaser shall deliver to Seller the Post-Closing
Agreement.
(e) Purchaser shall deliver to Seller the Product Supply Agreement and
related Product Supply Technical Agreement.
Section 4.6. Further Assurances and Cooperation. Subject to the terms
and conditions of this Agreement, at any time and from time to time after the
Closing, at a party's reasonable request, the other party shall execute and
deliver such other instruments of sale, transfer, conveyance, assignment and
confirmation, and assumption, and provide such materials and information and
take such other actions as the requesting party may reasonably deem necessary
or desirable in order to more effectively transfer, convey and assign to
Purchaser all of the Acquired Assets and/or in order to more effectively
effect the assumption by Purchaser of the Assumed Liabilities. As and when
requested by Purchaser prior to or after the Closing Date, Seller shall
provide information regarding the Facility and the Tangible Personal Property
that is reasonably necessary or helpful to Purchaser in obtaining all
Permits, consents and approvals necessary for Purchaser to acquire, occupy
and operate the Purchased Business for the purpose of pharmaceutical
manufacturing. Purchaser and Seller further agree to reasonably cooperate
with the other in the conduct of any audit or other proceeding related to
Taxes involving the Business. This reasonable cooperation does not include
payment of attorneys, accountants or other professional advisors in
connection with such cooperation.
Section 4.7. Post-Closing Access. In connection with any matter
relating to any period before, or any period ending on, the Closing Date,
Purchaser will, upon reasonable notice of the Seller, permit the Seller and
its representatives full access at all reasonable times to the Books and
Records of the Facility (including for example, equipment records) that shall
have been transferred to the Purchaser provided that Purchaser's business
shall not be unreasonably interfered with. Purchaser acknowledges that, due
to the regulatory requirements requiring responses to inquiries from
regulatory authorities to be received within 72 hours, Seller may require
access to such Books and Records urgently. Accordingly, if so requested by
Seller, Purchaser shall permit Seller to have access to such Books and
Records within 24 hours of Purchaser's receipt of Seller's request, which may
be made orally or by facsimile transmission. Purchaser shall not dispose of
such Books and Records during the 7 year period beginning with the Closing
Date without the Seller's consent. Following expiration of such 7 year
period, the Purchaser may dispose of such Books and Records at any time,
unless the Seller has previously notified the Purchaser of its intention to
take possession of such Books and Records.
Agreements Regarding Permits. If by April 1, 2005, Purchaser has applied for
but not received any Permit the lack of which would prevent Purchaser from
being able to operate the Purchased Business to manufacture pharmaceutical
products, the parties acknowledge and agree that the Services and Access
Rights Agreement shall remain in full force and effect, subject to certain
modifications set forth herein, and the parties will abide by the terms and
conditions of such amended agreement. Purchaser and Seller hereby agree
that, effective April 1, 2005, the Services and Access Rights Agreement and
applicable exhibits attached thereto shall be amended as follows: (a) the
Leased Premises and Dedicated Facility shall both be deemed to include the
entire Facility; and (b) in lieu of the Rent otherwise due under the Lease,
Purchaser shall be responsible for and shall pay Seller for all operating,
personnel, facilities, equipment, overhead and any other costs or expenses
whatsoever associated with the Facility and the Business; provided that such
costs and expenses shall be charged to Purchaser without any ▇▇▇▇-up. Such
payments shall be billed monthly in arrears. The terms
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Section 4.8. "Leased Premises", Dedicated Facility", "Rent", and
"Lease" shall have the meanings set forth in the Services and Access Rights
Agreement.
In addition, effective at the close of business on March 31, 2005,
Seller shall terminate the employment of all employees to whom Purchaser has
not offered employment. Employees of Seller to whom Purchaser has offered
employment shall, as of April 1, 2005, be deemed to be Employees under the
Services and Access Rights Agreement, as amended. With respect to all
employees terminated by Seller pursuant to the foregoing, as required herein,
Purchaser shall establish the Escrow Account (defined in Section 8.3(c)(i))
and deposit therein on March 31, 2005, an amount equal to the portion of the
Purchase Price that Purchaser would have deposited in the Escrow Account
pursuant to Section 8.3 if the Closing had occurred on March 31, 2005. The
funds in the Escrow Account shall be available to Seller to pay the
Separation Plan expenses described in Section 8.3 to the terminated employees
as if the Closing had occurred on March 31, 2005.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of Seller. Seller hereby
represents and warrants to Purchaser as of the date of this Agreement and as
of the Time of Closing that:
(a) Organization and Existence. Seller is a Delaware corporation duly
organized, validly existing, and in good standing under the laws of Delaware,
and qualified to do business in the Commonwealth, with full power and
authority to own, lease, and operate the Business and the Acquired Assets and
to carry on the Business as and where such assets are now owned or leased and
the Business is now conducted.
(b) Authority and Approval. Seller has the requisite corporate power and
authority to execute, deliver and perform this Agreement and each of the
Related Agreements. At the Time of Closing, the execution, delivery and
performance of this Agreement, and each of the Related Agreements, will have
been duly authorized by all necessary corporate action on the part of
Seller. This Agreement has been, and at the Time of Closing all Related
Agreements will have been, duly executed and delivered by authorized officers
of Seller and constitutes or will constitute the legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms.
(c) No Conflict. The execution, delivery and performance by Seller of this
Agreement and each of the Related Agreements does not and will not as of the
Time of Closing (i) conflict with or result in the breach of any term,
condition or provision of, or require the consent of any Person under,
Seller's articles of incorporation or bylaws, as such documents are amended
or restated as of the date of this Agreement; (ii) conflict with or result in
the breach of, constitute a default under, or accelerate the performance
required by, or require any consent, authorization, or approval under, any
Transferred Contract or under any other material Contract if such default
under such other material Contract would affect the validity or
enforceability of the Agreement; (iii) contravene, conflict with, or result
in a violation of, or give any Governmental or Regulatory Authority or other
Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any legal requirement or any
Order to which the Seller, or any of the Acquired Assets owned or used by the
Seller, may be subject; (iv) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any Governmental or
Regulatory Authority the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Permit that is held by the Seller relating to the
Purchased Business; (v) cause Purchaser to become subject to, or to become
liable for the payment of, any Tax attributable to the payments made to
Seller as part of the Contemplated Transactions; or (vi) result in the
imposition or creation of any Lien upon or with respect to any of the
Acquired Assets.
(d) Governmental Approvals and Filing. Except as disclosed in
Section 5.1(d) of the Disclosure Schedules, no consent, authorization,
approval or action of, filing with, notice to, or exemption from any
Governmental or Regulatory Authority on the part of Seller is required in
connection with the execution, delivery and performance of this Agreement or
any Related Agreements to which Seller is a party or the consummation of the
transactions contemplated hereby or thereby.
(e) Legal Proceedings. Except as disclosed in Section 5.1(e) of the
Disclosure Schedules:
(i) There are no lawsuits or arbitrations pending or, to the knowledge of
the Seller, threatened against Seller that relate to the Purchased
Business, which could have a material adverse effect on Purchaser's use
of the Purchased Business for manufacturing pharmaceutical products or
which could have a material adverse effect on Seller's ability to
consummate the transactions contemplated by this Agreement.
(ii) There are no Orders outstanding against Seller that relate to the
Facility, which could have a material adverse effect on Purchaser's use
of the Facility for manufacturing active pharmaceutical ingredients or
which could have a material adverse effect on Seller's ability to
consummate the transactions contemplated by this Agreement.
(f) Compliance with Laws and Orders. Except as disclosed in Section 5.1(f)
of the Disclosure Schedules, to its knowledge, Seller is not in violation of
or in default under any Law or Order applicable to the Purchased Business,
the Acquired Assets or the Assumed Liabilities.
Employee Benefit Plans. Section 5.1(g) of the Disclosure Schedules lists
with respect to Seller: (i) each defined benefit plan and defined
contribution plan, stock option or ownership plan, executive compensation,
bonus, incentive compensation or deferred compensation or profit-sharing
plan, (ii) each medical, dental, vision, disability or death benefit plan,
and (iii) any other employee benefit plan, including each "employee benefit
plan" within the meaning of Section 3(3) of ERISA, and any fringe benefit, or
group life insurance plan in each case which is or was maintained or
contributed to or sponsored by Seller for the benefit of any employee or
former employee of the Business and which covers employees or former
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(g) employees of the Business (such plans, contracts, agreements,
arrangements, programs and policies described in clauses (i) through (iii) of
this Section 5.1(g), whether formal or informal and whether or not set forth
in writing are referred to herein as the "Benefit Plans"). True and complete
copies of the agreements specified in this Section 5.1(g) have been made
available to Purchaser.
(h) Title.
(i) Real Property -- Section 5.1(h)(i) of the Disclosure Schedule contains
a complete and accurate list of all property and interests comprising
the Real Property. Seller has delivered or made available to
Purchaser copies of the deeds and other instruments by which the Seller
acquired the Real Property, and copies of all title insurance policies,
title reports, abstracts, surveys, leases, mortgages, certificates of
occupancy and similar documents, and all amendments thereof, with
respect to the Real Property. The Seller owns with good and marketable
title, subject only to Permitted Liens, all the Real Property. The Real
Property is free and clear of all Liens, except for Permitted Liens,
and is not subject to any rights of way, exceptions, variances,
reservations, or limitations of any nature except as may appear of
record in the Registry of Property of Puerto Rico. All improvements to
the Real Property that are required by law to have been approved and
registered with the proper governmental authorities have been so
approved and registered. Seller has not been served or threatened with
any condemnation or appropriation proceedings by any Governmental or
Regulatory Authority against any of the Real Property.
(ii) Personal Property -- Section 5.1(h)(ii) of the Disclosure Schedule
contains a complete and accurate list of all personal property included
in the Acquired Assets. The Seller owns good and marketable title to
all such personal property, free and clear of all Liens.
(iii) At the Closing, but subject to the filing or recording of appropriate
conveyance instruments, Purchaser will receive good and marketable
title to all of the Acquired Assets transferred to it free and clear of
and from all Liens other than the Permitted Liens.
(i) Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT OR IN THE DEED TO BE FILED OF RECORD IN THE REGISTRY OF PROPERTY OF
PUERTO RICO, THE SELLER HEREBY DISCLAIMS ALL CONDITIONS, OTHER WARRANTIES AND
STATEMENTS IN RESPECT OF THE ACQUIRED ASSETS, WHETHER EXPRESS OR IMPLIED, BY
STATUTE, CUSTOM OF THE TRADE OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, ANY
SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO THE DESCRIPTION OR QUALITY
OF THE ACQUIRED ASSETS, THEIR MERCHANTABILITY OR THEIR FITNESS FOR A
PARTICULAR PURPOSE OR USE UNDER ANY CONDITIONS) AND ANY SUCH CONDITION,
WARRANTY OR STATEMENT IS HEREBY DISCLAIMED BY THE SELLER AND EXCLUDED. IN NO
EVENT SHALL THE SELLER OR THE PURCHASER BE LIABLE UNDER OR WITH RESPECT TO
THIS AGREEMENT, OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY (INCLUDING ALL RELATED AGREEMENTS), FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND, INCLUDING BUT NOT
LIMITED TO LOSS OF PROFITS, INCLUDING BUT NOT LIMITED TO, DUE TO BREACH OF
WARRANTY, TORT, OR BREACH OR REPUDIATION OF ANY TERM OR CONDITION OF THIS
AGREEMENT, OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY (INCLUDING ALL RELATED AGREEMENTS); PROVIDED, HOWEVER, THAT THE
FOREGOING SHALL NOT LIMIT EITHER PARTY'S LIABILITY IN CONNECTION WITH ITS
INDEMNITY OBLIGATIONS FOR THIRD PARTY CLAIMS.
(j) Material Contracts.
(i) Section 5.1(j) of the Disclosure Schedules contains a list of all of
the following Contracts to which Seller is a party as of the date of
this Agreement, which shall be updated as of a date within five (5)
days prior to the Closing Date ("Material Contracts"):
(A) any Contracts pertaining to the ownership or operation of the Purchased
Business providing for payments in excess of Twenty-Five Thousand
Dollars ($25,000) per calendar year or which in the aggregate exceed
Fifty Thousand Dollars ($50,000);
(B) any employment, severance or termination agreements as to current
employees of the Business or any agreements which would provide any
current or former employees with rights or benefits as a result of the
consummation of the transactions contemplated by this Agreement;
(C) any Contracts limiting Seller's right to occupy or use the Purchased
Business and any lease or sublease of any portion of the Facility;
(D) any licenses related to the ownership or operation of the Purchased
Business other than "shrink wrap" licenses that are generally available
to the public and other licenses that are listed on Section 5.1(r) of
the Disclosure Schedules and that are generally available to the public
and that are not specifically related to the operation of the Tangible
Personal Property;
(E) any other Contracts that have been furnished to Purchaser and that
Purchaser has agreed in writing to assume, provided that such Contracts
are listed on Section 5.1(j) of the Disclosure Schedules under the
heading "Transferred Contracts" (the "Transferred Contracts").
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(ii) Copies of the Material Contracts have been made available and/or
delivered to Purchaser. Each Material Contract is in full force and
effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party thereto; and
except as disclosed in Section 5.1(j) of the Disclosure Schedule
neither Seller nor, to the knowledge of Seller, any other party to any
Material Contract is, or has received notice that it is, in violation
or breach of or default under any Material Contract (or that with
notice or lapse of time or both, it would be in violation or breach of
or default under any Material Contract) in any material respect.
(iii) Except as disclosed in Section 5.1 (j) of the Disclosure Schedules, the
execution, delivery and performance by Seller of this Agreement, and
the consummation of the Contemplated Transactions, will not (A) result
in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (B) result in or
give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (C) result in
the creation or imposition of any Lien, other than a Permitted Lien,
upon Seller or any of its Acquired Assets under, any Material Contract.
(iv) No event has occurred and no circumstance exists that (with or without
notice or lapse of time) will give the Seller or other Person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
Material Contract.
(v) There are no renegotiations of, attempts to re-negotiate, or
outstanding rights to renegotiate any material amounts paid or payable
to the Seller under any Material Contract and Seller has not received
any written demand for such renegotiation.
(k) Permits. Except as disclosed in Section 5.1(k) of the Disclosure
Schedules, Seller owns or possesses all Permits necessary or material to the
ownership or operation of the Purchased Business and all Permits necessary
for the construction of each of the improvements which are part of the Real
Estate. Except as disclosed in Section 5.1(k) of the Disclosure Schedules,
all such Permits possessed by Seller were validly issued in compliance with
all applicable Laws and are in full force and effect; Seller has not received
notice of violation or proposed revocation or termination of any of such
Permits from any Governmental or Regulatory Authority. Seller has obtained
all approvals and Permits necessary for the Facility to comply with all Laws
relating to land use (including development, zoning, planning, construction
and use restrictions).
(l) Insurance. Section 5.1(l) of the Disclosure Schedules sets forth a
list of all insurance policies maintained by Seller covering the Acquired
Assets. All such insurance is in full force and effect, all premiums due
thereunder up to the Effective Time have or will be paid and no written
notice of cancellation or termination has been received with respect to any
such insurance.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(m) Environmental Matters.
(i) To the knowledge of Seller, (A) Seller is in compliance with all
applicable Environmental Laws (which compliance includes, but is not
limited to, the possession by the Seller of all Environmental Permits,
and compliance with the terms and conditions thereof), except where
failure to be in compliance would not reasonably be expected to have a
material adverse effect on Purchaser's ability to operate the Purchased
Business; (B) there is as of the date of this Agreement and, except as
set forth in Disclosure Schedule 5.1(m), there will be as of the
Closing Date, no Environmental Liabilities pending or, to the knowledge
of Seller, threatened against or affecting the Seller which would
reasonably be expected to have a material adverse effect on Purchaser's
ability to operate the Purchased Business; (C) there have been no
releases of Hazardous Materials on, at, in or underneath any of the
Acquired Assets or, to the knowledge of Seller, on, at, in or
underneath the Facility that would reasonably be expected to have a
material adverse effect on Purchaser's ability to operate the Purchased
Business; (D) as of the date of this Agreement, except for actions, if
any, in response to the Environmental Assessments and any update
thereto referred to in Section 6.5(a)(ii) and (iii), there is no
cleanup or remediation of Hazardous Materials being conducted or
planned by the Seller at the Facility; and (E) the Seller has delivered
or otherwise made available for inspection to Purchaser true, complete
and correct copies and results of any Phase I or Phase II Environmental
Assessments previously prepared, and any other material reports,
studies, analyses, tests or monitoring possessed or initiated by the
Seller pertaining to Hazardous Materials in, on, beneath or adjacent to
any of the Acquired Assets, or regarding the Seller's compliance with
applicable Environmental Laws in connection with the Acquired Assets.
Notwithstanding anything to the contrary herein, the parties hereby
agree that there is excluded from all other representations and
warranties in this Article V all matters with respect to compliance
with, or Environmental Liabilities arising under, Environmental Laws.
The representations and warranties contained in this Section 5.1(m)
shall be the exclusive representations and warranties with respect to
such matters.
(ii) (A) Seller is not subject to any outstanding judgment, order or decree
under any Environmental Law relating to the Acquired Assets; (B) to the
knowledge of Seller, there is no claim, action, suit, notices,
surcharges, proceeding or investigation pending, or to the knowledge of
Seller, threatened by or before any third party, including any
Governmental or Regulatory Authority, against Seller, or, to the
knowledge of Seller, any current or previous owner or tenant of the
Facility relating to any Environmental Law; and (C) to the knowledge of
Seller, there are no enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, or, to the
knowledge of Seller, threatened against the Seller pursuant to any
Environmental Laws concerning or dealing with any of the Acquired
Assets.
(iii) Except as disclosed in Section 5.1(m)(iii) of the Disclosure Schedules,
Seller does not own, operate or lease a treatment, storage or disposal
facility on any of the Real Property requiring a permit under the
Resource Conservation and Recovery Act, as amended, or under any other
comparable state or local Law; and, without limiting the foregoing, (i)
to the knowledge of Seller, no polychlorinated biphenyl is or has been
present, (ii) no asbestos or asbestos-containing material is or has
been present, (iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, and (iv) no
Hazardous Material has been released in a quantity reportable under, or
in violation of, any Environmental Law or otherwise released, in the
cases of clauses (i) through (iv), at, on or under any such site or
facility during any period that Seller owned, operated or leased such
property.
(iv) No oral or written notification of a release of a Hazardous Material in
connection with the operation of the Business has been filed by or on
behalf of Seller, and no site or facility now or previously owned,
operated or leased by Seller on any of the Real Property is listed or
proposed for listing on the NPL, CERCLIS or any similar state or local
list of sites requiring investigation or clean-up.
(v) No Liens have arisen under or pursuant to any Environmental Law on any
site or facility owned, operated or leased by Seller on any of the Real
Property, and no federal, state or local Governmental or Regulatory
Authority action has been taken or, to the knowledge of Seller, is in
process that could subject any such site or facility to such Liens, and
Seller would not be required to place any notice or restriction
relating to the presence of Hazardous Materials at any such site or
facility in any deed to the Real Property on which such site or
facility is located.
(vi) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by, or that are in the
possession of, Seller in relation to any site or facility now or
previously owned, operated or leased by Seller on any of the Real
Property which have not been delivered to Purchaser prior to the
execution of this Agreement.
(n) Brokers. No broker, finder or investment banker is entitled to any
brokerage commission, finder's fee or similar payment in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of Seller.
(o) Absence of Certain Changes or Events. Since August 30, 2004, except as
described in Section 5.1(o) of the Disclosure Schedules, there has not
occurred any Material Adverse Change. Since August 30, 2004:
(i) Seller has not made any material change in employment terms for any
employees of the Purchased Business with the exception of changes in
benefits which are applicable to all of Seller's employees; and
(ii) Seller has not sold, assigned, transferred or otherwise disposed or
agreed to dispose of any of the assets used in the Purchased Business
except in the ordinary course of business.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(iii) There has not occurred any physical damage, destruction or other
casualty loss (whether or not covered by insurance) affecting any of
the plant, real or personal property or equipment of Seller or held for
use in the conduct of the Purchased Business in an aggregate amount
exceeding $10,000;
(iv) There has not occurred (A) any disposition of any Acquired Assets used
or held for use in the conduct of the Purchased Business, other than
Inventory in the ordinary course of business consistent with past
practice and other dispositions not exceeding in either case $10,000 in
the aggregate; or (B) any creation or incurrence of a Lien, other than
a Permitted Lien, on any Acquired Assets used or held for use in the
conduct of the Purchased Business;
(v) Except as set forth in Section 5.1(j) of the Disclosure Schedule,
Seller has not entered into, amended, modified, terminated (partial or
complete) or granted any waiver under or given any consent with respect
to (A) any Material Contract or (B) any Permit;
(vi) Seller has not entered into any Material Contract to do or engage in
any of the foregoing after the date hereof; or
(vii) There has not occurred any other transaction involving, or any
development affecting, the Acquired Assets outside the ordinary course
of business consistent with past practice.
(p) Facility and Tangible Personal Property.
(i) To the knowledge of Seller, the operations and maintenance of the
Facility as now operated and maintained, do not violate or contravene
any Laws or Orders, and the Facility is in adequate and suitable
condition for operation as a pharmaceutical manufacturing facility in
light of its age and remaining useful life, ordinary wear and tear
excepted.
(ii) There exists no pending or, to the knowledge of Seller, threatened
condemnation or similar proceeding with respect to the Facility.
(iii) Seller has not made any other agreement for sale, lease or other
disposition of, or given any person an option to purchase, lease or
otherwise acquire, all or any part of the Facility.
(iv) At the Time of Closing, the Facility will be in the possession of
Seller, and no other person shall have any right to possession or
claims to possession of all or any part of the Facility.
(v) No portion of the Facility is located in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards. No portion of the Facility has been designated
as "Flood Zone 1" or "Flood Zone 2" by the Puerto Rico Planning Board.
(q) Employee Matters.
(i) Section 5.1(q)(i) of the Disclosure Schedules lists all current
employees of the Business as of the date of this Agreement, and Seller
has provided Purchaser with their hourly rates of compensation or base
salaries (as applicable) and any bonus arrangements or bonus plans.
(ii) Seller is a party to a collective bargaining agreement (the "Collective
Bargaining Agreement"), by which Purchaser will not be bound, which
covers or applies to certain employees of the Business. Schedule
5.1(q)(ii) lists with respect to Seller: (1) the Collective Bargaining
Agreement; (2) each employment agreement; and (3) the Separation Plan.
Purchaser will not be bound by virtue of the Contemplated Transactions
by, and except as set forth on Schedule 5.1(q)(ii), the Seller does not
have, is not a party to, nor is it bound, by:
(A) any collective bargaining agreements;
(B) any agreements or arrangements that contain any
severance pay or post-employment liabilities or obligations;
(C) any employment or consulting agreement,
contract or commitment with an employee, former employee or individual
consultant or any consulting agreement, contract or commitment under
which any firm or other organization provides services to the Seller;
(iii) Except as set forth on Schedule 5.1(q)(iii), to Seller's knowledge,
Seller is in compliance with all applicable foreign, federal,
Commonwealth, and local laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment
and wages and hours, in each case, with respect to its employees and
former employees; has withheld all amounts required by law or by
agreement to be withheld from the wages, salaries and other payments to
its employees and former employees; is not liable for any arrears of
wages or any Taxes or any penalty for failure to comply with any of the
foregoing; and is not liable for any payment to any trust or other fund
or to any Governmental or Regulatory Authority with respect to
unemployment, short term disability, social security for chauffeurs,
workers compensation, social security or other benefits or obligations
for its employees or former employees.
Seller has not been notified, and has no reason to believe, that any work
stoppage or labor strike against the Seller is pending or threatened. Except
as set forth in Schedule 5.1(q)(iv), Seller is not involved in or threatened
with, any labor dispute, grievance, or litigation relating to labor, safety
or discrimination matters involving any employee or former employee of
Seller, including, without limitation, charges or
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(iv) complaints of unfair labor practices, wrongful discharge,
discrimination, retaliation, harassment, wage and hour, or under any
Employee Benefit Plans.
(v) As of the Closing Date, Seller will have complied with all WARN notice
requirements and with any notice requirement arising out of the
Collective Bargaining Agreement, and/or out of any of the Seller's
policies and/or practices.
(vi) Except as set forth on Schedule 5.1(q)(vi), there are no material
controversies pending or threatened before any court or Governmental or
Regulatory Authority, between the Seller and any of its employees or
former employees.
(vii) Except as set forth on Schedule 5.1(q)(vii), the Seller has not been
notified by any Governmental or Regulatory Authority of any labor or
employee-related investigation involving the Seller, nor does any
condition exist, which would constitute a violation of any applicable
foreign, federal, Commonwealth, or local laws, rules or regulations.
(viii) Except as set forth on Schedule 5.1(q)(viii), the Seller is not a
party to any employment contract or arrangement with respect to any of
its employees or former employees (including, without limitation,
so-called "golden parachute" or severance agreements), nor has the
Seller in any other manner limited its right to terminate the
employment relationship with its employees or former employees except
as provided in Puerto Rico Act No. 80 of May 30, 1976.
(ix) As of the Closing Date, Seller will have paid all salaries, including
vacation, bonuses, incentives, differentials, etc. owed to the
employees.
(r) Intangible Property. Purchaser acknowledges that the Acquired Assets
do not include any Intangible Property other than the Intangible Property
described in Section 5.1(r) of the Disclosure Schedules (the "Transferred
Intangible Property"). Seller is the owner of and has the right to use the
Transferred Intangible Property free and clear of any Liens and
restrictions. To the knowledge of Seller, Seller's use of the Transferred
Intangible Property does not infringe the rights of any Person, and no other
Person has any right to use or has claimed any right to use the Transferred
Intangible Property.
(s) No Misleading Statements. Neither this Agreement, any Related
Agreement nor any certificate or other document delivered by Seller in
connection with this Agreement or any of the Related Agreements contains, or
will contain when delivered, any untrue statement of a material fact or omits
to state, or will omit to state when delivered, a material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading.
(t) Books and Records. The books of account and other records of the Seller
relating to the Purchased Business have been made available to Purchaser.
Such books of account, and other records are complete and correct and have
been maintained in accordance with sound business practices including the
maintenance of an adequate system of internal controls. Seller has delivered
to Purchaser a letter from Seller's Corporate Secretary regarding the
contents of Seller's corporate minute book, which is attached hereto as
Exhibit 9.
(u) No Undisclosed Liabilities. There are no Liabilities against, relating
to or affecting any of the Acquired Assets, other than Liabilities (i)
incurred in the ordinary course of business consistent with past practice
that, individually or in the aggregate, are not material to the condition of
the Acquired Assets or (ii) that were otherwise disclosed in the Disclosure
Schedule to this Agreement. To the knowledge of Seller, there is no basis for
any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against Seller with respect to any of the
Acquired Assets giving rise to any such Liabilities. Since August 30, 2004,
there has not been any Material Adverse Change and no event has occurred or
circumstance exists that may result in such a Material Adverse Change.
(v) Taxes.
(i) As of the Time of Closing, none of the Tax Returns required to be
filed with respect to the Acquired Assets will be past due the filing
deadline; each such Tax Return correctly and completely reflects, or
will reflect, the valuation, assessment or other Tax liability and all
other information required to be reported thereon; and the tax
liability shown in such Tax Returns as well as the real property tax
liability with respect to the Acquired Assets, was or will be paid
timely.
(ii) No issues will have been raised by any taxing authority in connection
with Tax Returns required to have been filed with respect to the
Acquired Assets and in connection with the real property tax liability
on the Acquired Assets.
(w) Product Warranty. Except as set forth in Section 5.1(w) of
the Disclosure Schedules, each product manufactured, sold, or delivered by
Seller has been in conformity with all applicable contractual commitments and
all express and implied warranties.
Section 5.2. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to Seller as of the date of this Agreement and
as of the Closing Date that:
(a) Organization and Existence. Purchaser is a limited corporation duly
organized and validly existing, and in good standing under the laws of the
Isle of Man, with full power and authority to own, lease, and operate its
business and properties and to carry on its business as and where such
properties and assets are now owned or leased and such business is now
conducted.
Authority and Approval. Purchaser has the requisite corporate power and
authority to execute, deliver and perform this Agreement and each of the
Related Agreements. At the Time of Closing, the execution, delivery and
performance of this Agreement, and each of the Related Agreements, will have
been duly authorized by all necessary corporate action on the part of
Purchaser. This Agreement has been, and at the Time of Closing all Related
Agreements will have been, duly executed and delivered by authorized officers
of Purchaser and constitutes
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(b) or will constitute the legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their respective
terms.
(c) No Conflict. The execution, delivery and performance by Purchaser of
this Agreement and each of the Related Agreements does not and will not as of
the Time of Closing (i) conflict with or result in the breach of any terms,
condition or provision of, or require any consent of, any Person under the
terms, conditions, or provisions of Purchaser's articles of incorporation or
by-laws, as such documents have been amended or restated as of the date of
this Agreement, (ii) conflict with or result in the breach of, constitute a
default under , accelerate the performance required by, or require any
consent, authorization, or approval under, any contract to which Purchaser is
a party or by which it is bound or to which any of its assets or property is
subject, or (iv) result in the creation of any Lien upon the assets or
property of Purchaser under any such contract, except in each case as would
not reasonably be expected to have a material adverse effect on the validity
or enforceability of this Agreement against Purchaser or a material adverse
effect on the ability of Purchaser to consummate the transactions
contemplated by this Agreement.
(d) Governmental Approvals and Filing. No consent, authorization, approval
or action of, filing with, notice to, or exemption from any Governmental or
Regulatory Authority on the part of Purchaser is required in connection with
the execution, delivery and performance of this Agreement or any Related
Agreements to which Purchaser is a party or the consummation of the
transactions contemplated hereby or thereby.
(e) Legal Proceedings.
(i) There are no lawsuits pending or, to the knowledge of Purchaser,
threatened against Purchaser which (1) would reasonably be expected to
materially adversely affect the validity or enforceability of this
Agreement or any Related Agreement or the ability of Purchaser to
consummate the transactions contemplated by this Agreement, or
(2) would reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of the transactions contemplated by this Agreement.
(ii) There are no Orders outstanding against Purchaser which would be
reasonably expected to have a material adverse effect on the ability of
Purchaser to consummate the transactions contemplated by this Agreement.
(f) Brokers. No broker, finder or investment banker is entitled to any
brokerage commission, finder's fee or similar payment in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of Purchaser, with the exception of an arrangement between Purchaser and ▇▇▇▇
▇▇▇▇▇▇▇▇▇, for which Purchaser is solely liable.
(g) No Misleading Statements. Neither this Agreement, any Related
Agreement nor any certificate or other document delivered by Purchaser in
connection with this Agreement or any of the Related Agreements contains, or
will contain when delivered, any untrue statement of a material fact or omits
to state, or will omit to state when delivered, a material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification by Seller and Purchaser.
(a) Indemnification by Seller. Subject to the terms and conditions of this
Agreement (including, in particular, the provisions relating specifically to
indemnification for environmental matters), Seller agrees to indemnify and
hold harmless Purchaser, its Affiliates and their respective officers,
directors, employees, and agents and their successors and permitted assigns
(collectively, the "Purchaser Indemnified Parties") against and in respect of
any Damages incurred by any of them directly from any of the following:
(i) any misrepresentation or breach by Seller of any representation or
warranty in this Agreement and any inaccuracy in the Seller's Closing
Certificate;
(ii) any failure to perform by Seller of any of its covenants in this
Agreement or in any other agreements or instruments furnished to
Purchaser pursuant to this Agreement;
(iii) any Excluded Liabilities;
(iv) claims of Seller's current or former employees with respect to the
period prior to the Effective Time arising out of such Person's
employment with Seller including but not limited to claims for
compensation and violations of wage and hour statutes or other Laws,
and the claims set forth in Section 5.1(q)(iv) of the Disclosure
Schedules; or
(v) claims related to Seller's obligations under Section 8.1(a), with
respect to Benefit Plans.
(b) Indemnification by Purchaser. Subject to the terms and conditions of
this Agreement (including, in particular, the provisions relating
specifically to indemnification for environmental matters), Purchaser agrees
to indemnify and hold harmless Seller, its Affiliates and their respective
officers, directors, managers, employees, and agents and their successors and
permitted assigns (collectively, the "Seller Indemnified Parties") against
and in respect of any Damages incurred by any of them directly from any of
the following:
(i) any misrepresentation or breach by Purchaser of any representation or
warranty in this Agreement and any inaccuracy in the Purchaser's
Closing Certificate;
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(ii) any failure to perform by Purchaser of any of its covenants in this
Agreement or in any other agreements or instruments furnished to Seller
pursuant to this Agreement;
(iii) any claim for benefits under the Separation Plan by any of Seller's
employees at the Date of Closing which arises out of Purchaser's
decision not to offer employment to any such employees pursuant to the
terms of this Agreement, or to terminate the employment of any such
employees, or claim arising from Purchaser's failure to reimburse
expenses incurred in connection with the Separation Plan; provided that
the costs of defending any such claim shall be shared equally by the
parties; or,
(iv) any Assumed Liabilities.
Section 6.2. Indemnification Procedures for Third-Party Claims.
(a) Notification of Claims. In the event any third party makes or
commences a claim, action or proceeding (a "Claim") with respect to any
matter as to which any of the Purchaser Indemnified Parties intends to seek
indemnification under Section 6.1(a), or with respect to any matter as to
which any of the Seller Indemnified Parties intends to seek indemnification
under Section 6.1(b), the Person to be so indemnified (the "Indemnified
Party") shall promptly notify each Person from which such indemnification is
to be sought (each an "Indemnifying Party") of the existence of such Claim.
The failure of an Indemnified Party to properly notify the Indemnifying Party
hereunder shall not relieve the Indemnifying Party of its obligations
hereunder, except to the extent that such Indemnifying Party is materially
prejudiced by the failure to receive such notice.
(b) Defense of Claims by Indemnifying Party. The Indemnifying Party shall
have the right to undertake and direct the defense of any such Claim by
delivering to the Indemnified Party written notice of such undertaking within
thirty (30) days of the receipt of notice from the Indemnified Party of the
existence of such third-party Claim provided that the Indemnifying Party
acknowledges, in writing, its obligation to indemnify the Indemnified Party
in accordance with the terms of this Agreement.
(c) Settlement of Claims by Indemnified Parties. In the event the
Indemnifying Party declines to undertake the defense of any such Claim as
provided in Section 6.2(b), the Indemnified Party shall keep the Indemnifying
Party advised as to the current status and progress thereof. The Indemnified
Party shall not make any offer of settlement with respect to any Claim if the
Indemnifying Party has undertaken the defense of such Claim. In the event
the Indemnifying Party undertakes the defense of any such Claim, the
Indemnified Party shall nevertheless be entitled to participate in (but not
direct) the defense thereof with counsel of its own choice, and the parties
agree to cooperate fully with one another in connection with the defense
and/or settlement thereof; provided, however, that any decision to settle any
such Claim shall be at the sole discretion of the Indemnifying Party (to the
extent of the Indemnifying Party's responsibility for the Claim).
Notwithstanding the foregoing, the Indemnifying Party shall not settle any
Claim without the Indemnified Party's consent unless such settlement involves
only the payment of money and the claimant provides to the Indemnified Party
a release from all liability in respect of such Claim. If the settlement
involves more than the payment of money, the Indemnifying Party shall not
settle the Claim without the Indemnified Party's prior consent. From and
after the date that the Indemnifying Party assumes the defense of any Claims,
and as long the Indemnifying Party diligently defends such Claims, the
Indemnifying Party shall be relieved of the obligation to reimburse the
Indemnified Party for any other legal, accounting, or other out-of-pocket
costs and expenses thereafter incurred by the Indemnified Party with respect
to the defense of such Claim notwithstanding any participation by the
Indemnified Party therein.
Section 6.3. Survival. With the exception of the representations and
warranties contained in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(d), 5.1(m),
5.1(g), 5.1(q), 5.2(a), 5.2(b), 5.2(c), 5.2(d) and 5.2(f) (the "Core
Representations and Warranties"), which shall survive the Closing without
limitation as to time (but subject to any applicable statute of limitations),
all other representations and warranties contained in this Agreement shall
survive the Closing for a period of five (5) years and shall continue in full
force and effect after the Closing only for such period, provided, however,
that all rights to indemnification with respect to claims for Damages made
within such period shall survive until the final disposition of such claims.
Section 6.4. Limitations.
(a) The provisions of this Article VI shall apply to any Damages for breach
of any covenant, representation, warranty or other provision of this
Agreement or any agreement, certificate or other document delivered pursuant
to this Agreement (other than a claim for specific performance or injunctive
relief) with the intent that all such Damages shall be subject to the
limitations and other provisions contained in this Article VI.
(b) The indemnification obligations of the Seller pursuant to Section 6.1
and the Seller's liability for all Damages in respect thereof shall be
limited as follows:
(i) Cap. In no event shall the aggregate liability of the Seller in
respect of Damages under Section 6.1(a)(i) exceed the amount of * * *
(the "General Liability Cap"). Notwithstanding the foregoing, however,
if while the Sharing Period described in Section 6.5(c) is in effect,
the aggregate amount for which Seller would be required (but for the
General Liability Cap) to indemnify Purchaser with respect to such
Damages exceeds * * * , the General Liability Cap shall be deemed
increased to the then-current Environmental Liability Cap described in
Section 6.5(c), less the aggregate of all amounts paid by Seller under
Sections 6.1(a)(i) since the Closing Date.
(ii) Deductible. In the case of all such Damages the Seller shall not be
liable in respect of such Damages unless and until such time as the
aggregate amount of such Damages exceed the amount of One Hundred
Thousand Dollars ($100,000), and in such event only to the extent of
such excess.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(c) Notwithstanding anything herein to the contrary, any indemnification
claims against Seller relating to Environmental Liabilities shall be made
exclusively under Sections 6.5 and shall not be subject to and included in
the cap and deductible limitations provided in Section 6.4(b).
Section 6.5. Indemnification as to Environmental Matters.
(a) Seller agrees to indemnify, defend and hold harmless the Purchaser
Indemnified Parties from and against all Damages resulting from Environmental
Liabilities arising out of or related to the following:
(i) the release or threatened release of any Hazardous Materials
attributable to Seller at any offsite location prior to the Closing
Date;
(ii) any environmental matters or conditions identified in the Phase I or
Phase II Environmental Assessments (the "Environmental Assessments")
prepared previously for Seller and made available to Purchaser; and
(iii) any environmental matters or conditions identified in a limited update
of the Environmental Assessments that is prepared for Purchaser prior
to the Closing Date (copies of which reports shall be made available to
Seller prior to such date), provided that Seller shall have agreed to
the scope of such update in advance, and provided further that with
respect to any such environmental matters or conditions, Seller shall
have the option to (1) indemnify, defend and hold harmless the
Purchaser Indemnified Parties as provided herein, (2) clean up,
correct, contain, remediate or take any response action to address, at
its exclusive cost and expense, any such environmental matters or
conditions, or (3) terminate this Agreement without further liability
to any of the Seller Indemnified Parties. Seller shall not engage any
third party to perform work under (2) above that shall not have been
approved by Purchaser, which approval shall not be withheld
unreasonably.
Seller's liability for indemnification under this Section 6.5(a) is not
subject to the Environmental Liability Cap, the General Liability Cap, or any
deductible.
(b) Subject to the provisions of Section 6.5(a) and (c), Seller and
Purchaser agree to share in any Damages arising out of or related to the
following:
(i) the presence of Hazardous Materials at, on or under the Facility prior
to the Closing Date not otherwise identified by the Phase I or Phase II
Environmental Assessments referenced in the preceding Sections
6.5(a)(ii) and 6.5(a)(iii); and
(ii) the failure (not otherwise identified by the Phase I or Phase II
Environmental Assessments referenced in the preceding Sections
6.5(a)(ii) and 6.5(a)(iii)) of the Acquired Assets to be in compliance
prior to the Closing Date with any Environmental Laws or environmental
Permits in effect and enforceable as of the Closing Date.
(c) With respect to any Damages that Seller and Purchaser agree to share
under Section 6.5(b), Seller's share shall decrease and Purchaser's share
shall increase proportionately for a period of ten (10) years after the
Closing Date pursuant to the following table (the "Sharing Period"):
-----------------------------------------------------------------------
YEAR SELLER'S SHARE PURCHASER'S SHARE
(UP TO AND INCLUDING)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 1 year 90% 10%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 2 years 80% 20%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 3 years 70% 30%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 4 years 60% 40%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 5 years 50% 50%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 6 years 40% 60%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 7 years 30% 70%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 8 years 20% 80%
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date + 9 years 10% 90%
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Closing Date + 10 years 0% 100%
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(d) Notwithstanding the foregoing, at any time, the aggregate liability of
Seller for all Environmental Liabilities under Section 6.5(b) shall not
exceed the then-current "Environmental Liability Cap" (defined hereinafter)
less the aggregate of all amounts paid by Seller under Section 6.1(a) since
the Closing Date. The "Environmental Liability Cap" shall be * * * as of
the Closing Date, and shall be reduced annually thereafter on each
anniversary of the Closing Date by * * * , as set forth in the following
table:
------------------------------------------------
ANNIVERSARY OF THE ENVIRONMENTAL
CLOSING DATE IN: LIABILITY CAP
------------------------------------------------
------------------------------------------------
2006 * * *
------------------------------------------------
------------------------------------------------
2007 * * *
------------------------------------------------
------------------------------------------------
2008 * * *
------------------------------------------------
------------------------------------------------
2009 * * *
------------------------------------------------
------------------------------------------------
2010 * * *
------------------------------------------------
------------------------------------------------
2011 * * *
------------------------------------------------
------------------------------------------------
2012 * * *
------------------------------------------------
------------------------------------------------
2013 * * *
------------------------------------------------
------------------------------------------------
2014 * * *
------------------------------------------------
------------------------------------------------
2015 * * *
------------------------------------------------
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(e) Upon conclusion of the Sharing Period, Purchaser shall indemnify,
defend and hold harmless the Seller Indemnified Parties from and against all
Damages covered by Section 6.5(b).
(f) Purchaser further agrees to indemnify, defend and hold harmless the
Seller Indemnified Parties from and against all Damages arising out of or
related to, directly or indirectly, all Environmental Claims attributable to
Purchaser's operations or to occurrences after the Closing Date ("Purchaser
Environmental Liabilities").
(g) Purchaser will have full authority to control, direct, manage and
implement remediation and to determine its scope, and conduct all
negotiations, meetings and settlements with any Governmental or Regulatory
Authority with respect to Purchaser Environmental Liabilities.
(h) After the Closing Date and until the end of the Sharing
Period, either party that receives notice or otherwise learns of any event or
condition that might be subject to this Section 6.5 shall promptly notify the
other party, and the parties shall confer and attempt to agree on an
appropriate course of action or response. If the parties cannot agree on a
course of action or response, they shall jointly engage a third party with
appropriate expertise in environmental responses to recommend appropriate
courses of action, and shall use their best efforts to reach agreement based
on those recommendations.
(i) The provisions of this Section 6.5 shall constitute the
parties' exclusive remedy with respect to each other for all Environmental
Claims under Environmental Laws arising from the ownership or conduct of the
Purchased Business. The obligations of the parties set forth in this Section
6.5 shall be conditioned upon the Closing having occurred.
(j) Except as otherwise provided in this Section 6.5 or as
would be inconsistent herewith, the provisions of Section 6.2 shall apply to
claims for indemnification under this Section 6.5.
ARTICLE VII
COVENANTS OF THE PARTIES
Section 7.1. Closing Efforts. Each of the parties hereto shall use its
Best Efforts to take all actions and to do all things necessary, proper and
advisable to consummate the transactions contemplated by this Agreement,
including using its Best Efforts to ensure that (a) its representations and
warranties remain true and correct in all material respects through the
Closing Date and (b) the conditions to the obligations of the other parties
to consummate the transactions contemplated by this Agreement are satisfied.
Section 7.2. Approvals and Consents. Each party hereto shall use its
Best Efforts to obtain in writing, prior to the Closing Date, all consents
and approvals required to effectuate the transactions contemplated hereby and
shall deliver to the other party copies of such approvals and consents in
form and substance reasonably satisfactory to the other party. Seller will
provide information in its possession and such assistance as is reasonably
necessary to support Purchaser's applications for any such approvals or
consents. At or prior to the Closing Date, Seller shall obtain all consents
and approvals necessary to assign all assignable Permits (including
environmental Permits) and Transferred Contracts to Purchaser; provided,
however, no modification of any Permit or Contract shall be made without
Purchaser's prior written consent.
Section 7.3. Operation of the Purchased Business Prior to Closing.
Between the date hereof and the earlier of the termination of this Agreement
pursuant to Article IX hereof or the Closing Date:
(a) Negative Covenants. Seller covenants and agrees with Purchaser that,
except as contemplated by this Agreement or with the prior written consent of
Purchaser, Seller shall not do any of the following:
(i) sell or otherwise dispose of any of the Acquired Assets, other than in
the ordinary course of business, cancel any debts or claims involving
any Person related to the Acquired Assets, or pledge, assign or
otherwise convey, or cause any Lien to be placed upon any Acquired
Asset;
(ii) amend its articles of organization, operating agreement or other
governing documents in any way that would result in a Material Adverse
Change.
(iii) permit any Contract or Permit to be suspended, lapsed, revoked or
modified in any way that would result in a Material Adverse Change;
(iv) amend or terminate any commitment in a manner that would result in a
Material Adverse Change;
(v) take any action which would require any changes in the Disclosure
Schedules in order for a representation and warranty which was true as
of the date of this Agreement to be true on the Closing Date except for
changes in the ordinary course of business which do not, individually
or in the aggregate, represent a Material Adverse Change;
(vi) incur any material liabilities or increase the amount of debt which is
secured by a Lien on any of the Acquired Assets;
(vii) except as set forth on Schedule 7.3(a)(vii), materially increase the
annual level of compensation of any employee, and not increase the
annual level of compensation of any employee in excess of the increase
in cost of living expense, if any, applicable in the United States for
the previous year and not granting any extraordinary bonuses, benefits
or other forms of direct or indirect compensation to any employee,
except in amounts in keeping with past practices by formulas or
otherwise;
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(viii) increase, terminate, amend or otherwise modify any plan for the
benefit of employees.
(b) Affirmative Covenants of Seller. Seller covenants and agrees with
Purchaser that Seller shall:
(i) maintain the Acquired Assets, subject to normal wear and tear, and
maintain insurance upon the Acquired Assets of the kind and in the
amounts existing as of the date of this Agreement;
(ii) comply in all respects with all applicable Laws affecting the Purchased
Business and maintain in full force and effect all Permits; and
(iii) pay its expenses and Liabilities related to the Purchased Business in
the ordinary course of business and consistent with past practice,
except as contested in good faith.
Section 7.4. Notice of Breaches.
(a) Between the date hereof and the earlier of the termination of this
Agreement pursuant to Article IX hereof or the Closing Date, Seller shall
promptly deliver to Purchaser supplemental information concerning events or
circumstances occurring subsequent to the date hereof which would render any
representation, warranty or statement in this Agreement, the Exhibits or the
Disclosure Schedules inaccurate or incomplete at any time after the date of
this Agreement until the Closing. No such supplemental information shall be
deemed to avoid or cure any misrepresentation, warranty or statement in this
Agreement, the Exhibits or the Disclosure Schedules except to the extent such
supplemental information relates to changes in the ordinary course of
business which do not, individually or in the aggregate, represent a Material
Adverse Change.
(b) Between the date hereof and the earlier of the termination of this
Agreement pursuant to Article IX hereof or the Closing Date, Purchaser shall
promptly deliver to Seller supplemental information concerning events or
circumstances occurring subsequent to the date hereof which would render any
representation, warranty or statement in this Agreement, the Exhibits or the
Disclosure Schedules inaccurate or incomplete at any time after the date of
this Agreement until the Closing. No such supplemental information shall be
deemed to avoid or cure any misrepresentation, warranty or statement in this
Agreement, the Exhibits or the Disclosure Schedules.
Section 7.5. Assets Incapable of Transfer.
(a) Consents to Assignment. To the extent that any Transferred Contract or
Permit is not assignable or transferable without the consent of another
Person, this Agreement shall not constitute an assignment or transfer
thereof, an attempted assignment or transfer thereof, or an agreement to
effect such an assignment or transfer, if such assignment or transfer,
attempted assignment or transfer, or agreement would constitute a breach
thereof. Seller will use its Best Efforts to obtain the consent of such
other party to the assignment or transfer of any such Transferred Contract
and/or Permit to Purchaser in all cases in which such consent is or may be
required for such assignment or transfer. Purchaser shall cooperate with
Seller in its efforts to obtain such consents.
(b) Alternative Arrangements. If any such consent shall not be obtained,
Seller shall cooperate with Purchaser to provide an alternate reasonable
arrangement reasonably satisfactory to Purchaser and Seller designed to
provide to Purchaser the benefits intended to be assigned or transferred to
Purchaser under the relevant Transferred Contract or Permit and to relieve
Seller of the performance and other obligations and Liabilities thereunder.
The parties expressly intend and agree that the beneficial interest in and to
the Transferred Contracts or Permits, to the fullest extent permitted by the
relevant Transferred Contract or Permit and applicable Law, pass to
Purchaser. If any necessary consent to assignment of any Transferred
Contract or Permit cannot be obtained, such Contract or Permit shall cease to
be a Transferred Contract, and Seller shall remain responsible for its
performance of such Contract, and Seller shall be liable for all Liabilities
under any such Contract or Permit, including any Liabilities arising from any
termination thereof or breach or damage (or claim of breach or damage) to or
by any Person under or in respect of such Contracts and Permits.
Section 7.6. Return of Excluded Assets. In the event, through
inadvertence, mistake or otherwise, any Excluded Assets are transferred to
Purchaser, Purchaser agrees to promptly transfer and deliver the same to
Seller.
Section 7.7. Solicitation and Hiring. Prior to the Closing Date and
until twelve months after the Closing Date, Seller shall not, directly or
indirectly (including through an Affiliate or its parent company), solicit or
attempt to induce any employee of Seller to cease working at the Facility or
make an offer of employment to any employee of Seller without prior written
consent of Purchaser, which consent shall not be unreasonably withheld.
Section 7.8. Confidentiality Agreement. Purchaser and Seller
acknowledge and agree that the Confidential Disclosure Agreement dated July
7, 2003 by and between Aventis Pharmaceuticals, Inc., Seller's parent company
and Purchaser (the "Confidentiality Agreement") remains in full force and
effect, and the parties will abide by the terms and conditions of such
agreement. Notwithstanding the foregoing, Aventis' technical and commercial
information that relates solely to the Purchased Business shall become Inyx's
information at the Effective Time.
Section 7.9. Product Manufacturing; Azmacort.
Raw Materials. To the extent possible, Seller will use its best commercial
efforts to put in place, for an agreed-upon period of time, a mechanism
whereby Purchaser will have access to prices for raw materials and components
for Azmacort CFC inhaler that are comparable to what Seller is able to
obtain. Such a mechanism could be effected by any of the following, or any
other mechanism on which the parties agree: (i) Seller may enter into
contracts for the supply of such raw materials at Seller's prices and assign
them to Purchaser (preferred method); (ii) Seller may purchase such raw
materials from suppliers at Seller's prices and resell
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
(a) them to Purchaser; or, (iii) Seller may arrange for Purchaser to
purchase such raw materials through a manufacturers' purchasing consortium at
Seller's prices.
(b) Azmacort Assignment and Assumption Agreement. Pursuant to an
assignment and assumption agreement, substantially in the form attached
hereto as Exhibit 10 (the "Azmacort Assignment and Assumption Agreement"),
Seller shall transfer and assign all of Seller's Parent Company right, title,
and interest in and to that certain agreement dated March 5, 2004, by and
between Aventis Pharmaceuticals Inc. and Aeropharm Technology, Inc. relating
to the manufacture and supply of Azmacort CFC products by Seller (the
"Azmacort Supply Agreement"), and Purchaser shall assume all of Seller's
liabilities and obligations thereunder. Seller shall obtain a consent letter
from KOS Pharmaceuticals, Inc., and Aeropharm Technology, Inc. accepting such
assignment and assumption and agreeing to be bound thereby (the
"KOS/Aeropharm Consent") substantially in the form attached hereto as Exhibit
11. In return for such assignment, Purchaser shall pay Seller a royalty for
each unit of Azmacort CFC products Purchaser manufactures and sells pursuant
to the Azmacort Supply Agreement (the "Azmacort Royalty"). On the Closing
Date, Purchaser shall pay Seller as part of the Purchase Price a sum that
represents the parties' estimate of the net present value of the Azmacort
Royalty from April 1, 2005, through December 31, 2006, based on estimated
production volume for the remainder of 2005 and the full year 2006. At the
end of each calendar year during the term of the Azmacort Supply Agreement,
Purchaser's actual production volume shall be compared with the estimated
production volume for the same period. Purchaser shall pay Seller an
additional Azmacort Royalty based on the amount by which the actual
production volume exceeds the estimated volume for the period compared. If
the estimated volume exceeds the actual volume, the amount of such excess
shall be added to the following year's estimate for the purpose of computing
the following year's Azmacort Royalty. For products manufactured after
December 31, 2006, the Azmacort Royalty shall be paid quarterly, based on
actual production volume. The precise amount of the Azmacort Royalty, the
estimated production volumes, and the computation of net present value and
year-end adjustments shall be set forth in a side letter between the parties.
(c) Azmacort Tooling at Valois. At the Closing, Seller shall deliver to
Purchaser a letter signed by Aventis Pharma Ltd. ("APL") and Valois S.A.S.
("Valois") governing Purchaser's access to tooling and equipment owned by APL
and located at Valois' facility in Le Vaudreuil, France, solely for use in
connection with Purchaser's manufacture of Azmacort (the "Tooling Access
Letter"). The Tooling Access Letter shall contain terms including, but not be
limited to, (i) Purchaser's obligations to share pro rata the cost of all
maintenance, repair and replacement of such tooling and equipment, upon such
terms as the parties shall agree, (ii) Purchaser's use of and access to such
tooling and equipment upon the same terms as Seller, subject to such
additional terms and conditions as the parties shall agree, and (iii) an
acknowledgement and agreement by Valois to accept and process tooling orders
directly from Purchaser, provided that Purchaser complies fully with all of
the terms and conditions set forth in the Tooling Access Letter.
Section 7.10. Information Systems. Other than the Transferred
Intangible Property to be transferred to Purchaser as part of the Purchased
Business, the only obligations of the Seller with respect to providing
access, rights or services with respect to the Transferred Intangible
Property and/or any other software used in connection with the operation of
the Purchased Business shall be set forth in a Transition Services Agreement
substantially in the form attached hereto as Exhibit 7 (the "Transition
Services Agreement"). The parties agree that the costs of separating the
information systems at the Facility from Seller's system's, excluding the
costs of separating Aventis' document management systems, shall be shared
equally between Purchaser and Seller; provided, that the amount payable by
Seller shall not exceed Three Hundred Thousand Dollars ($300,000) in the
aggregate.
Section 7.11. Non-Competition. Except for products to be
manufactured by Purchaser for Seller or any of its Affiliates after the date
of this Agreement, for a period of five (5) years after the Closing Date,
neither Purchaser nor any of its Affiliates will develop, manufacture for
development, manufacture for commercial purposes, market, sell, distribute or
promote any Restricted Product in any of the Restricted Territories, or enter
into any agreement that would permit or assist a third party to do so. If
for any reason the Closing does not occur, the provisions of the
Confidentiality Agreement shall continue to apply to information related to
the Restricted Products for a period of 18 months beyond the expiration of
the Confidentiality Agreement.
Section 7.12 Tax Credits. Seller shall cooperate fully with
Purchaser in connection with Purchaser's requests to be filed with
Governmental Authorities for tax credits with respect to the purchase of the
Purchased Business under the Tax Incentive Act of 1998, as amended.
Section 7.13 Post-Closing Agreement. At the Time of Closing, the
parties shall enter into an agreement governing services to be provided by
Purchaser to Seller subsequent to the Closing Date (the "Post-Closing
Agreement"). All services shall be provided by Purchaser at cost without any
▇▇▇▇-up and include, (i) conducting on-going stability studies and testing
for Nasacort AQ and other product reasonably requested by Seller; (ii)
manufacturing product(s) produced at the facility prior to the Closing Date
for such time reasonably required by Seller prior to removal of such
product(s) by Seller to an alternate manufacturing site; (iii) serving as a
backup manufacturer for product(s) produced at the Facility prior to the
Closing Date; (iv) compiling and providing information in support of
financial filings, audits, or other similar matters as requested by Seller;
(v) providing access to data or other information reasonably requested by
Seller; and (vi) providing any other services reasonably deemed necessary by
Seller following the sale of the Purchased Business. Notwithstanding the
foregoing, there shall be no charge for any services Purchaser is otherwise
obligated to provide pursuant to this Agreement, specifically including
Sections 4.6 and 4.7 hereof.
Section 7.14 Product Supply Agreement. At the Time of Closing, the parties
shall enter into an agreement pursuant to which Purchaser agrees to
manufacture, package, label and supply certain finished products to Seller's
Affiliate, Aventis Pharmaceuticals Inc., including products for its Dermik
Laboratories division (the "Product Supply Agreement"). Throughout the
entire term of the agreement, pricing for services and materials shall be
provided at Seller's *
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
* * ; subject to an adjustment * * * The parties shall enter
into a technical agreement in connection with the Product Supply Agreement
(the "Product Supply Technical Agreement").
Section 7.15. Klaron Agreement. At the Time of Closing, the
parties shall enter into an agreement relating to the manufacturing of Klaron
by Purchaser for Seller at a price of * * * for Klaron trade products* * * .
Section 7.16 Net Worth Covenant. In order to provide
reasonable assurance of Purchaser's ability to fulfill its obligations under
Section 6.5, for so long as Purchaser owns the Acquired Assets during the
Sharing Period, Purchaser agrees to maintain a net worth of at least * * * By
March 31 annually during the Sharing Period, Purchaser shall provide Seller
with a certificate signed by Purchaser's President or Chief Financial Officer
certifying that Purchaser maintained a net worth of not less than * * *
(determined in accordance with GAAP, consistently applied) throughout the
preceding calendar year. Purchaser agrees that (i) during the Sharing
Period in the case of transfers to Purchaser's Affiliates; and (ii) during
the first five years of the Sharing Period in the case of transfers to any
Person that is not an Affiliate, Purchaser will not, other than in the
ordinary course of business, transfer to, or permit the encumbrance of the
Acquired Assets by, any Person that will not agree to assume and be bound by
all of Purchaser's obligations under this Section 7.16 and Section 6.5.
Section 7.17 Purchaser's Parent Guaranty. Simultaneously
with the execution and delivery of this Agreement, Purchaser shall deliver to
Seller a Purchaser's Parent Guaranty in the form of Exhibit 12, executed by
Inyx, Inc. ("Purchaser's Parent Company"), in which Purchaser's Parent
Company absolutely, unconditionally and irrevocably guarantees to Seller,
jointly and severally with Purchaser, the due and punctual performance of the
obligations of Purchaser under this Agreement and the Related Agreements in
the event that Purchaser fails to perform or comply with its obligations
hereunder or thereunder, without any counterclaim, set-off, deduction,
abatement or defense based upon any claim that Purchaser's Parent Company may
have against Seller; provided, however, that Purchaser's Parent Guaranty
shall not apply to Purchaser's obligations under Section 6.5 and Section
7.16.
Section 7.18 Seller's Parent Guaranty. Simultaneously with the
execution and delivery of this Agreement, Seller shall deliver to Purchaser a
Seller's Parent Guaranty in the form of Exhibit 13 executed by Aventis
Pharmaceuticals Inc. ("Seller's Parent Company"), in which Seller's Parent
Company absolutely, unconditionally and irrevocably guarantees to Purchaser,
jointly and severally with Seller, the due and punctual performance of the
obligations of Seller under this Agreement and the Related Agreements in the
event that Seller is dissolved, liquidated or becomes insolvent, or fails to
perform or comply with its obligations hereunder or thereunder, without any
counterclaim, set-off, deduction, abatement or defense based upon any claim
Seller's Parent Company may have against the Purchaser.
ARTICLE VIII
EMPLOYEE MATTERS
Section 8.1. Benefit Plans.
(a) Except as specifically set forth in this Agreement, (i) Purchaser will
not assume any of the Benefit Plans, or any rights, duties, obligations or
liabilities therewith, nor shall it become a successor employer or be
responsible in any way for Seller's participation in or obligations or
responsibilities with respect to any Benefit Plan, (ii) Seller will retain
all such Benefit Plans, including all obligations and liabilities deriving
directly or indirectly from sponsoring or participating in such Benefit
Plans; and (iii) Purchaser will not be responsible for obligations to
employees relating to periods prior to the Effective Time, including, for
example, unpaid medical claims and unused employee deferral accounts.
(b) All employees of Seller on the Closing Date who accept employment by
Purchaser immediately following the Closing Date shall be given full credit
for all time worked for Seller for purposes of determining their
participation and vesting under any of the benefit plans that are established
by Purchaser (at its sole discretion) that are applicable to such employees,
except for the purpose of benefit accrual.
(c) To the extent legally possible, Seller and Purchaser shall cooperate
and use their reasonable Best Efforts to provide for participants in the
Aventis Pharmaceuticals Puerto Rico Savings Plan (the "Seller's Savings
Plan") who are employed by Purchaser immediately following the Closing Date
to continue to repay their loans under the Seller's Savings Plan in
accordance with their original repayment schedule.
Section 8.2. COBRA. To the extent required by applicable law and
regulations, up to and including the Closing Date, Seller shall be
responsible for providing the continuation of health coverage required by
Section 4908B of the U.S. Internal Revenue Code and Section 601 et seq. of
ERISA ("COBRA") to Merger & Acquisition Qualified Beneficiaries (as such term
is defined in applicable Internal Revenue Service Regulations) and their
"qualified beneficiaries" regarding all qualifying events occurring prior to,
or in connection with, the sale of the Purchased Business. Seller will
maintain a group health plan in Puerto Rico for this purpose as long as any
Merger & Acquisition Qualified Beneficiary, or any qualified beneficiary of
such person, who has elected COBRA coverage is eligible to receive COBRA
benefits. Seller will notify Merger & Acquisition Qualified Beneficiaries on
or before the Closing Date that the period during which they will be eligible
for COBRA benefits will run concurrently with the period during which such
persons are eligible to receive employer-paid health benefits pursuant to the
Separation Plan. After such period of employer-paid health benefits has
elapsed, the cost of any such person's participation in Seller's health plan
during the remaining COBRA continuation period, if any, will be paid by such
Merger & Acquisition Qualified Beneficiary in accordance with the provisions
of COBRA and applicable regulations. After the Closing Date, to the extent
required by applicable law and regulations, Purchaser shall be responsible
for providing COBRA continuation coverage to all employees who begin
employment with Purchaser and their respective "qualified beneficiaries",
whenever it is so required in accordance with the provisions of COBRA and
applicable regulations. Purchaser shall indemnify, defend and hold Seller
harmless (and its directors, officers, employees and affiliates) against any
and all Damages asserted or imposed against Seller based upon Purchaser's
failure to comply with its duties under COBRA, as legally required.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Section 8.3. Separation Benefits.
(a) Reimbursement for Separation Benefits. Although Purchaser will not
adopt Seller's Separation Plan, Purchaser shall reimburse Seller for Seller's
cost of all separation benefits payable with respect to Seller's employees in
accordance with the terms of the Separation Plan ("Separation Benefits").
Seller shall require each employee who is eligible to receive Separation
Benefits to execute, as a condition of receiving such benefits, an agreement
including a release and waiver of liability in favor of Seller and Purchaser.
* * * such former employee shall receive full credit for the employee's
seniority with Seller. Notwithstanding the foregoing, Purchaser shall pay
employees pursuant to statutory severance benefit guidelines, with full
credit for seniority with Seller, if the statutory benefits are greater than
benefits that would have been provided under the Separation Plan. Purchaser
shall indemnify, defend, and hold harmless Seller, its affiliates, and their
respective present or former directors, officers, shareholders, agents,
representatives and employees from and against any Damages arising out of or
resulting from the termination or lay-off by Purchaser of, or other action by
Purchaser with respect to, any former employee of Seller giving rise to a
benefit obligation under the Separation Plan.
(b) Mechanism for Reimbursement of Separation Benefits.
Purchaser will reimburse Seller for Separation Benefits as follows:
(i) Escrow Account - Purchaser will establish an escrow
account with an escrow agent reasonably acceptable to Seller (the
"Escrow Agent") where, no later than March 31, 2005, Purchaser shall
deposit in an interest-bearing trust account an amount equal to the
Income Protection Pay (as defined in the Separation Plan) payable to
each eligible employee of Seller whose employment is terminated by
Seller effective March 31, 2005, and who has not been offered, or who
has declined a non-Comparable Position (as defined in the Separation
Plan) with Purchaser (the "Separated Employees"). Purchaser shall be
entitled to any interest earned on funds deposited in the Escrow
Account.
(ii) Weekly Submission of Waivers and Benefits Calculation
- On a weekly basis following March 31, 2005, Seller shall submit to
the Escrow Agent copies of the signed waiver and release agreements of
Separated Employees with respect to whom Seller has not previously
submitted copies of such waiver agreements to the Escrow Agent.
Promptly upon, but no later than two business days following, its
receipt of such agreements and a written computation of the Income
Protection Pay payable to each Separated Employee for whom an agreement
is submitted, the Escrow Agent shall disburse to Seller from the Escrow
Account the funds required to pay the Income Protection Pay to such
Separated Employees.
(iii) Liquidation of Escrow Account. Any funds remaining in
the Escrow Account after June 30, 2005, may be returned to Purchaser
and the Escrow Account may be closed, provided, however, that such
action shall not affect Purchaser's obligation to reimburse Seller for
Separation Benefits.
(iv) Reimbursement for costs of Health Care and Dental
Coverage. Purchaser shall reimburse Seller for Seller's cost of
providing health care and dental coverage (as opposed to the actual
health and dental costs incurred) to Separated Employees who elect to
continue such coverage with Seller pursuant to the Separation Plan.
Seller shall invoice Purchaser for reimbursement of such costs
monthly.
(c) Waiver Requirement - Purchaser shall require all of Seller's
employees at the Closing Date who accept offers of employment with Purchaser
beginning immediately following the Closing Date to waive, as a condition of
such offer, participation in and all benefits under the Separation Plan, and
to release Purchaser from any liability to such employees under any of
Seller's Benefit Plans. Employees will not be asked to waive any right under
Act 80, and their service time with Seller will be credited for purposes of
any Act 80 severance calculation. Purchaser shall indemnify, defend, and
hold harmless Seller, its affiliates, and their respective present or former
directors, officers, shareholders, agents, representatives and employees from
and against any Damages arising out of or resulting from claims by former
eligible employees of Seller at the Closing Date who accept employment by
Purchaser immediately following the Closing Date. Each party will be
responsible for their respective legal fees and expenses.
(d) Union Employees - With respect to those employees covered
by the Collective Bargaining Agreement, references in this section to "the
Separation Plan" and "Separation Benefits" shall mean such benefits as are
agreed upon by the Seller and the collective bargaining representative of
such employees, and "Income Protection Pay" shall mean any counterpart
benefit agreed upon with such representative. Purchaser shall not be
required to reimburse Seller to the extent any such separation benefits
exceed the Separation Benefits such employees would have received if they had
been eligible for Separation Benefits under the Separation Plan.
Section 8.4. WARN Act. Seller shall be responsible for all Damages, if
any, arising under the Worker Adjustment and Retraining Notification Act of
1988 ("WARN") including all Damages imposed or incurred as a result of
Seller's failure to give any requisite WARN notice prior to the Effective
Time. After the Effective Time, Purchaser shall be responsible for providing
notice to the employees hired by Purchaser for any plant closing or mass
lay-off in accordance with the WARN Act.
ARTICLE IX
MISCELLANEOUS
Applicable Law and Jurisdiction. This Agreement shall be governed by and be
construed in accordance with the Laws of the Commonwealth, without giving
effect to any choice or conflict of law provision or rule (whether of the
Commonwealth or any other jurisdiction) that would cause the application of
laws of any jurisdictions other than those of the Commonwealth. Each party
(a) submits to the jurisdiction of any federal court sitting in the State of
New Jersey or in the Commonwealth in any action or proceeding arising out of
or relating to this Agreement or any Related Agreement, (b) agrees that all
claims in
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Section 9.1. respect of such action or proceeding may be heard and
determined in any such court, (c) agrees not to bring any action or
proceeding arising out of or relating to this Agreement or any Related
Agreement in any other court and (d) waives any right it may have to a trial
by jury with respect to any action or proceeding arising out of or relating
to this Agreement or any Related Agreement. Each party hereby 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 the other party with respect thereto. Each party may make
service on the other party by sending or delivering a copy of the process to
the party to be served at the address and in the manner provided for the
giving of notices in Section 9.3.
Nothing in this Section 9.1, however, shall affect the right of a party to
serve legal process in any other manner permitted by law.
Section 9.2. Dispute Resolution. If, after the Closing, the parties
have any dispute arising out of or relating to this Agreement, the Related
Agreements or the parties' respective rights and duties hereunder (including,
but not limited to, any breach thereof, the validity or enforceability of any
provisions hereof, and any indemnification claim) (in each case a "Dispute"),
then, except as otherwise expressly provided in this Agreement, the parties
will resolve such Dispute in the following manner:
(a) Any party may at any time deliver to the other a written notice
identifying a Dispute (the "Dispute Notice"). Within thirty (30) days after
delivery of the Dispute Notice, the receiving party shall submit to the other
a written response. The Dispute Notice and the response thereto shall state
with particularity the facts and conditions giving rise to the Dispute and
shall include (i) a statement of each party's position and a summary of
arguments supporting that position and (ii) the name and title of the Persons
who will represent that party in the negotiations contemplated by
Section 9.2(b) below.
(b) Within ninety (90) days after delivery of the Dispute Notice, the
designated representatives of both parties shall attempt in good faith to
resolve the Dispute and shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to attempt to
resolve the Dispute. All negotiations pursuant to this Section 9.2(b) shall
be confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.
(c) If the representatives of the parties are unable to resolve the Dispute
through negotiations within ninety (90) days after delivery of the Dispute
Notice then the parties may pursue all available remedies.
Section 9.3. Notices. Any and all communications required as provided
for in this Agreement shall be in writing and sent by first class mail,
postage prepaid, return receipt requested or by an express courier service
(e.g., Federal Express or UPS), prepaid, with confirmation of delivery, or
via facsimile confirmed by any of the foregoing methods, and addressed as
follows or to such other address or person as either party or person entitled
to notice may specify by notice to the other) (a "Notice"):
Any Notice to be given to Seller shall be addressed to:
Aventis Pharmaceuticals Puerto Rico, Inc.
c/o Aventis Pharmaceuticals
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
270 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any Notice to be given to Purchaser shall be addressed to:
INYX USA, LTD.
▇▇▇ ▇▇▇ ▇▇▇▇ Industrial Zone Cotto Norte
Manati, Puerto Rico 00674-0345
Attention: Inyx Facility Coordinator
Facsimile: [To be provided]
With a copy to:
Fiddler ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PSC
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Q.C.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
and to:
INYX, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Dr. ▇▇▇▇ ▇▇▇▇▇▇▇ MD
Chairman & Chief Executive Officer
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified, Notices shall be deemed given (i) when
received, if delivered by facsimile, provided subsequent confirmation is
given as provided herein, (ii) on the third (3rd) day after the same is
deposited with the United States Postal Service, or (iii) on the day
following deposit with an express courier service (provided such deposit is
made in a timely fashion on or prior to the deadline for receipt of documents
for next-day delivery).
Any change in address of a party shall be promptly communicated in
writing to the other party.
Section 9.4. Amendments. This Agreement may be amended only by a
written instrument duly executed and delivered by Seller and Purchaser.
Section 9.5. Entire Agreement; Waiver, Modifications. This Agreement,
together with the other agreements referred to herein, constitutes a final
and complete statement of all of the arrangements among the parties with
respect to the transactions contemplated hereby and thereby. No
modification, discharge, or waiver, in whole or in part, of any of the
provisions hereof shall be valid unless in writing and signed by the party
against whom the same is sought to be enforced. A failure or omission of any
party to insist, in any instance, upon strict performance by another party of
any term or provision of this Agreement or to exercise any of its rights
hereunder shall not be deemed a modification of any term or provision hereof
or a waiver or relinquishment of the future performance of any such term or
provision by such party, nor shall such failure or omission constitute a
waiver of the right of such party to insist upon future performance by
another party of any such term or provision or any other term or provision of
this Agreement.
Section 9.6. Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and abandoned at any time
before the Closing under one or more of the following circumstances:
(a) by mutual consent in writing of Seller and Purchaser;
(b) by Seller or Purchaser, in writing, if the Closing has not occurred by
May 1, 2005, because any of the conditions set forth in Section 4.2 or 4.3
have not been satisfied, provided that a party may not terminate the
Agreement pursuant to this Section 9.6(b) if the Closing has not occurred by
reason of a breach by such party of any of its obligations under this
Agreement; or
(c) by Seller, pursuant to Section 6.5(a)(iii).
Section 9.7. Effect of Termination. In the event this Agreement is
validly terminated pursuant to Section 9.6, the parties shall no longer be
obligated to proceed to the Closing, but all causes of action accruing prior
to the termination of this Agreement shall survive including causes of action
for Damages arising out of the breach of any covenant or representation or
warranty.
Section 9.8. Interpretation. The headings in this Agreement are
intended solely for convenience of reference and shall be given no effect in
the construction or interpretation of this Agreement. Unless the context
otherwise requires, the singular includes the plural, and the plural includes
the singular.
Section 9.9. No Assignment; Binding Effect. This Agreement is not
assignable by any party without the prior written consent of the other
party. Notwithstanding the foregoing, Purchaser or Seller may assign this
Agreement in whole or in part to any of its Affiliates, but in no event shall
such an assignment release such assigning party from its obligations
hereunder. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
Section 9.10. Invalidity. In the event that any provision of this
Agreement is declared to be void or unenforceable, the remainder of this
Agreement shall not be affected thereby and shall remain in full force and
effect to the extent feasible in the absence of the void and unenforceable
declaration. The parties furthermore agree to execute and deliver such
amendatory contractual provisions to accomplish lawfully as nearly as
possible the goals and purposes of the provision so held to be void or
unenforceable.
Section 9.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 9.12. Incorporation by Reference. The Disclosure Schedules and
other Schedules and Exhibits constitute integral parts of this Agreement and
are hereby incorporated by reference herein.
Section 9.13. Time of the Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Section 9.14. No Third Party Beneficiaries. The terms and provisions of
this Agreement are intended solely for the benefit of the parties hereto and
their respective successors and permitted assigns, and it is not the
intention of the parties hereto to confer third party beneficiary rights upon
any other Person.
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
Section 9.15. Public Announcements. The parties shall mutually agree on,
prepare and jointly release any press releases or announcements relating to
the transactions contemplated by this Agreement; provided, however, that a
party hereto may make any public disclosure it believes in good faith is
required by applicable Law, or stock market rule (in which case the
disclosing party shall use reasonable efforts to advise the other party or
parties and provide it or them with a copy of the proposed disclosure prior
to making the disclosure.) Each of the parties agree not to disclose the
terms (including the Purchase Price) of this Agreement without the written
consent of the parties; provided, however, that a party hereto may make any
public disclosure it believes in good faith is required by applicable Law, or
stock market rule (in which case the disclosing party shall use reasonable
efforts to advise the other party or parties and provide it or them with a
copy of the proposed disclosure prior to making the disclosure.)
Section 9.16. Facsimile Signature. Any facsimile signature attached
hereto shall be deemed to be an original and shall have the same force and
effect as an original signature.
Section 9.17. Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are
consummated, each party hereto shall pay its own costs and expenses incurred
in connection with the negotiation, execution and closing of this Agreement
and the Related Agreements and the transactions contemplated hereby and
thereby. In the event of termination of this Agreement, the obligation of
each party to pay its own expenses will be subject to any rights of such
party arising from a breach of this Agreement by another party.
Section 9.18. Bulk Sales Law. Purchaser hereby waives compliance by
Seller with the laws of any jurisdiction, including without limitation the
laws of the Commonwealth, relating to bulk transfers which may be applicable
in connection with the transfer of the Purchased Business to Purchaser.
Seller agrees to indemnify and hold harmless Purchaser for any Damages
arising out of Seller's non-compliance with the corresponding bulk sales laws.
[Remainder of this page left blank intentionally.]
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
IN WITNESS WHEREOF, the parties, intending legally to be bound,
have caused this Agreement to be duly executed and delivered as of the day
and year first herein above written.
SELLER:
AVENTIS PHARMACEUTICALS
PUERTO RICO INC.
By: _/s/__Monte Phipps_____________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Its: President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.__________
Name: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Its: Secretary
PURCHASER:
INYX USA, LTD.
By: __/s/ ▇▇▇▇ Kachkar________
Name: Dr. ▇▇▇▇ ▇▇▇▇▇▇▇
Its: Chairman and Chief Executive
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
LIST OF EXHIBITS
Exhibit 1 Assumption Agreement
Exhibit 2 Excluded Assets
Exhibit 3 General Assignment
Exhibit 4 Real Property
Exhibit 5 Seller's Separation Plan
Exhibit 6 Tangible Personal Property
Exhibit 7 Transition Services Agreement
Exhibit 8 Form Deed of Purchase and Sale
Exhibit 9 Seller's Certificate Regarding Books and Records
Exhibit 10 Azmacort Assignment and Assumption Agreement
Exhibit 11 Consent to Assignment
Exhibit 12 Purchaser's Parent Guaranty
Exhibit 13 Seller's Parent Guaranty
* * * Confidential material redacted and filed separately with the Commission.
CONFIDENTIAL TREATMENT
LIST OF DISCLOSURE SCHEDULES
Section 1.1(i) Prepaid Expenses
Section 1.1(j) Vehicles
Section 1.1(k) Security Deposits
Section 2.2 Assumed Liabilities
Section 3.1 Purchase Price Allocation
Section 3.5 Purchased Inventory
Section 5.1(d) Governmental Approvals and Filings
Section 5.1(e) Legal Proceedings
Section 5.1(f) Compliance with Laws and Orders
Section 5.1(g) Employee Benefit Plans
Section 5.1(h)(i) Real Property
Section 5.1(h)(ii) Personal Property
Section 5.1(j) Material Contracts
Section 5.1(k) Permits
Section 5.1(l) Insurance
Section 5.1(m) Environmental Liabilities
Section 5.1(m)(iii) Environmental Matters - RCRA
Section 5.1(o) Absence of Certain Changes or Events
Section 5.1(q)(i) List of Current Employees
Section 5.1(q)(ii) Collective Bargaining Agreement and Employment
Agreements
Section 5.1(q)(iii) Compliance with Labor Laws
Section 5.1(q)(iv) Labor Disputes, Grievances or Litigation
Section 5.1(q)(vi) Material Labor Controversies
Section 5.1(q)(vii) Labor Notices From Government and Labor Organizations
Section 5.1(q)(viii) Agreements Related to Employment Separation
Section 5.1(r) Transferred Intangible Property
Section 5.1(w) Product Warranty
Section 7.3(a) (vii) Negative Convenants