Exhibit 10.9
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT, dated as of September 28, 2001 (this
"Agreement"), between ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc., a Delaware corporation (the
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"Company"), and Armkel, LLC, a Delaware limited liability company ("Buyer")
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(each of the Company and Buyer, a "Party" and collectively, the "Parties").
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RECITALS:
WHEREAS, the Company and Buyer have executed and delivered an Asset
Purchase Agreement, dated as of May 7, 2001 (including the exhibits,
schedules and annexes thereto, the "Asset Purchase Agreement"), providing
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for, among other things, the sale, conveyance, transfer, assignment and
delivery to Buyer of all of the Company's and its affiliates' rights, title
and interest in and to the Purchased Assets (as defined in the Asset
Purchase Agreement) and the assumption by Buyer of all of the Assumed
Liabilities (as defined in the Asset Purchase Agreement), effective in each
case immediately prior to the ABC Merger (as defined herein);
WHEREAS, the Company, CPI Development Corporation, a Delaware
corporation ("ABC"), MedPointe Inc., a Delaware corporation ("Parent"), MCC
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Merger Sub Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent ("Company Merger Sub"), and MCC Acquisition Sub
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Corporation, a Delaware corporation and a wholly owned subsidiary of Parent
("ABC Merger Sub"), have executed and delivered an Agreement and Plan of
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Merger, dated as of May 7, 2001 (including the exhibits, schedules and
annexes thereto, the "Merger Agreement"), providing for, among other
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things, the merger of ABC Merger Sub with and into ABC (the "ABC Merger")
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and the merger of Company Merger Sub with and into the Company; and
WHEREAS, in connection with the transactions contemplated by the Asset
Purchase Agreement and the Merger Agreement, Buyer is willing to provide to
the Company the Buyer Services (as defined herein), and the Company is
willing to provide to Buyer the Company Services (as defined herein).
NOW, THEREFORE, the Parties, in consideration of the premises and the
mutual covenants contained herein, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 General Terms. For purposes of this Agreement, the following terms
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have the meanings hereinafter indicated:
"Affiliate" means, with respect to any Person, any other Person
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directly or indirectly controlling, controlled by or under common control
with such Person as of the time of determination.
"Bankruptcy Event" with respect to a Party means the filing of an
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involuntary petition in bankruptcy or similar proceeding against such Party
seeking its reorganization, liquidation or the appointment of a receiver,
trustee or liquidator for it or for all or substantially all of its assets,
whereupon such petition shall not be dismissed within 60 days after the
filing thereof, or if such Party shall (i) apply for or consent in writing
to the appointment of a receiver, trustee or liquidator of all or
substantially all of its assets, (ii) file a voluntary petition in
bankruptcy or similar
proceeding or admit in writing its inability to pay its debts as they
become due, (iii) make a general assignment for the benefit of
creditors, (iv) file a petition or an answer seeking reorganization or
an arrangement with its creditors or take advantage of any insolvency
law with respect to itself as debtor, or (v) file an answer admitting
the material allegations of a petition filed against it in any
bankruptcy, reorganization, insolvency proceedings or any similar
proceedings.
"Business Day" means any day other than a Saturday, a Sunday
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or a day on which banks in the City of New York are authorized or
obligated by law or executive order to close.
"Buyer Services" means those transitional services to be
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provided by Buyer to the Company set forth on Schedule A hereto, in
each case at the locations specified on Schedule A hereto.
"Closing" means the Closing under the Merger Agreement.
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"Company Services" means those transitional services to be
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provided by the Company to Buyer set forth on Schedule B hereto, in
each case at the locations specified on Schedule B hereto.
"Cranbury Lease" means that certain Cranbury Facilities
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Sharing Agreement and Lease between the Company and Buyer, dated the
date of this Agreement.
"Facility" means any of the respective facilities listed on
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Schedule A or Schedule B, as the case may be.
"Person" means any individual, firm, partnership, association,
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group (as such term is used in Rule 13d-5 under the Securities Exchange
Act of 1934, as amended, as such Rule is in effect on the date of this
Agreement), corporation or other entity.
"Provider" means, as the case may be, a Party, or an Affiliate
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of such Party, performing a Service for the other Party, or its
Affiliates, under the terms of this Agreement.
"Services" means, collectively, the Company Services and the
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Buyer Services.
"Subject Party" means, as the case may be, a Party, or an
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Affiliate of such Party, receiving a Service hereunder from a Provider
or its Affiliate on such Provider's behalf.
ARTICLE II
SERVICES
2.1 Services. (a) Buyer shall provide or cause one of its
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Affiliates to provide to the Company or the relevant Affiliate of
the Company each Buyer Service for the term set forth in the
description of such Buyer Service in Schedule A.
(b) The Company shall provide or cause one of its Affiliates
to provide to Buyer or the relevant Affiliates of Buyer, each Company Service
for the term set forth in the description of such Company Service in Schedule B.
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(c) Notwithstanding Sections 2.1(a) and (b), a Party may elect to
permanently cancel any Service as to which it or one of its Affiliates is the
Subject Party, if such Service can be reasonably separated and terminated
distinctly from any other Services which such Party has not elected to cancel,
upon the delivery of 30 days' written notice, unless provided otherwise on
Schedule A or Schedule B, to the Provider of such Service.
(d) Each Party shall create and maintain full and accurate books
in connection with the provision of the Services, and all other records relevant
to this Agreement, and upon reasonable notice from the other Party shall make
available for inspection and copy by such other Party's agents such records
during reasonable business hours.
2.2 Parameters of Services; Standard of Service. (a) The Services
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shall be in scope and nature substantially the same as such Services were
provided within the Company for the four quarters prior to the date of the Asset
Purchase Agreement and, subject to Section 10.7, such Services will be provided
by and to the Persons and operations (or their equivalents) within each of Buyer
and the Company, as the case may be, as was generally the case prior to the date
of the Asset Purchase Agreement.
(b) In performing the Services, Buyer and the Company or any of
their respective Affiliates providing the Services on their behalf shall provide
substantially the same level of service and use substantially the same degree of
care as their respective personnel provided and used in providing such Services
with respect to the Company or similar services by Buyer with respect to Buyer
prior to the date of this Agreement (it being understood that Buyer may over
time reduce its own occupancy and usage of the Cranbury Facility (as defined in
Section 3.1) and Buyer's ability to retain and/or attract employees may be
affected as a result; accordingly, to the extent Buyer is so affected, Buyer
shall not be in breach of its obligations hereunder so long as it uses its
reasonable best efforts to hire or make available replacement personnel to
perform Services required hereunder).
2.3 Authorized Statements of Provider in Respect of Products. A
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Provider performing any Services hereunder which involve the manufacturing,
testing, marketing, sale, distribution or handling of products of a Subject
Party shall not make any representations or warranties to any third parties,
including but not limited to, any governmental inspection authority in respect
of such products.
2.4 No Registration. It is the Parties' intention that nothing in
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this Agreement shall be construed to require Buyer to apply for, obtain or
maintain registration with the Drug Enforcement Agency ("DEA") pursuant to the
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Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended ("CSA").
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2.5 Independent Contractor. It is the specific understanding of
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the Parties that this Agreement shall not constitute or give rise to a
partnership between the Parties. All Services provided by either Buyer or the
Company under the terms of this Agreement shall be carried on by either Buyer or
the Company as an independent contractor and not as an agent for or employee of
either the Company or Buyer, respectively, and this Agreement shall not
constitute or give rise to an agency relationship between the Parties, except as
otherwise expressly contemplated hereby.
ARTICLE III
CRANBURY FACILITY
3.1 Collective Bargaining Employees. (a) Upon the Closing, and to
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the extent consistent with its obligations under the Collectively Bargained
Agreements (as defined herein), Buyer
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shall make available to the Company a sufficient number of (i) certain
production employees ("Production Employees") who are covered under the
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collective bargaining agreement (the "Production CBA") between Buyer and the
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Paper, Allied-Industrial, Chemical and Energy Workers International Union,
AFL-CIO, CLC and its Local 2-5570 (the "Union") to operate its pharmaceutical
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production and (ii) certain quality control employees ("QC Employees", and
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together with Production Employees, the "Collective Bargaining Employees") who
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are covered under the collective bargaining agreement ("QC CBA," and
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collectively, with the Production CBA, the "Collectively Bargained Agreements")
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between the Union and Buyer to perform, at the direction of the Company's
employees, the Company's quality control functions consistent with past practice
at Buyer's facility in Cranbury, New Jersey ("Cranbury Facility") and is fully
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consistent in the future with CGMPs and applicable DEA regulations. As of the
date of this Agreement, the Company estimates that it will require 25 Production
Employees and 12 QC Employees. The Company will update such estimates monthly
during the term of this Agreement.
(b) Subject to the Collectively Bargained Agreements, the
Company shall have priority rights to choose which skilled or partially
qualified Collective Bargaining Employees (including, but not limited to,
chemical operators with pharmaceutical qualification, technician class 2 with
pharmaceutical qualification and line mechanics with pharmaceutical
qualification) are made available to it by Buyer.
(c) The Company will provide Buyer with 30 days' prior written
notice, if it shall require that Buyer reduce or increase the number of
Collective Bargaining Employees it is providing to the Company, but Buyer shall
be required to provide additional Collective Bargaining Employees to the
Company, only if Buyer has such Collective Bargaining Employees available to it
and to the extent consistent with its obligations under the Collectively
Bargained Agreements.
(d) The Company shall be responsible for directing and
supervising the Collective Bargaining Employees and any employees of Buyer
performing Services for the Company at Buyer's facility in Dayton, New Jersey
(the "Dayton Facility") so as to achieve and maintain compliance with applicable
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law and regulations, including, but not limited to, the U.S. Federal, Food,
Drug, and Cosmetic Act, as amended ("FFDCA"), the CSA, federal laws governing
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hazardous or toxic substances or wastes, and parallel state laws and regulations
as to each.
(e) The Company shall ensure that each of the Collective
Bargaining Employees and any employees of Buyer performing Services for the
Company at the Dayton Facility are qualified to perform assigned tasks, are
authorized to perform assigned tasks, and possess no disqualification from
performing assigned tasks, including but not limited to, appropriate training,
education, and background to perform assigned tasks within the jurisdiction of
the FDA and the DEA under the FFDCA and the CSA. The Parties specifically
acknowledge the need, subject to the terms of the Collectively Bargained
Agreements, to provide each other with criminal background information regarding
employees with potential access to controlled substances and agree to maintain
such information as confidential in accordance with Article VI. The Parties
specifically agree to use their commercially reasonable efforts to develop and
maintain such information regarding designees' training, education, and
background as will be necessary in order to fulfill the Parties' respective
legal and regulatory obligations. The Company shall have the ability to take
appropriate steps with personnel to assure compliance with the FDA's current
Good Manufacturing Practices, DEA regulations, and conditions of approved New
Drug Applications.
(f) No Collective Bargaining Employee and any employees of
Buyer performing Services for the Company at the Dayton Facility shall be deemed
to be an employee of the Company; provided, however, that no Collective
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Bargaining Employee and any employees of Buyer performing Services for the
Company at the Dayton Facility shall be permitted by the Company to perform any
task
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for which that Collective Bargaining Employee or employees of Buyer performing
Services for the Company at the Dayton Facility does not possess necessary
training, education, and background, and for which that Collective Bargaining
Employee or employee of Buyer performing Services for the Company at the Dayton
Facility is otherwise not disqualified by applicable law or regulation.
3.2 Employee Costs. With respect to each Collective Bargaining
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Employee, the Company shall pay to Buyer and be liable for (i) salary, wages,
cash compensation and related payroll taxes, employee benefits during the period
from the Closing Date to the date such Collective Bargaining Employee's
employment is terminated (excluding severance, except as provided in (ii)), (ii)
incremental liability, if any, for any post-employment benefit entitlement and
severance incurred by reason of a Collective Bargaining Employee remaining
employed by the Company after the first anniversary of the Closing Date and
(iii) any employment-related liabilities to the extent related to acts or
omissions by the Company that occur during the period from the Closing Date to
the date such Collective Bargaining Employee's employment is terminated
(including, without limitation, for employment discrimination or other torts or
violations of law).
3.3 Incremental Costs. If Buyer is required to hire or re-assign
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any additional personnel in order to allow the Company to have sufficient
employees or incur incremental costs to comply with the rules and regulations
promulgated under the FFDCA and CSA, then the Company shall reimburse Buyer for
all such employee costs (including, but not limited to, salaries and employee
benefits) and other costs; provided, however, that the Company consented (such
consent not unreasonably withheld) prior to the hiring of such personnel or
incurrence of such incremental cost.
3.4 Collective Bargaining Agreement. The Company will explore in
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good faith with Buyer the feasibility of and the terms under which it will be
able to transfer to the Company the Collective Bargaining Employees who are
still being provided to the Company on the date which Buyer otherwise
permanently ceases production on its own behalf at the Cranbury Facility.
3.5 Employee Qualifications. In accordance with the requirements
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of the FFDCA, Buyer certifies that it does not and will not be using the
services of any person debarred under 21 U.S.C. section 335a in any capacity in
connection with the performance of the Services. Buyer also certifies that it
does not and will not be using the services of any person or Affiliate, Person
or firm for whom convictions subject to debarment have occurred in the past five
(5) years in any capacity in connection with the performance of the Services. If
at any time after execution of this Agreement, Buyer becomes aware that it or
any Person employed by it or any Affiliate, Person or firm has been or is in the
process of being debarred or is convicted of any offense subjecting it or any
Person to debarment, Buyer hereby agrees that it will promptly notify the
Company.
ARTICLE IV
LAWS, LICENSES AND PERMITS
In respect of its obligations hereunder, each Party covenants and
warrants to the other Party that all such obligations shall be performed in
compliance with all material applicable federal, state, provincial and local
laws, rules and regulations. Each Party shall obtain and maintain all material
permits, approvals and licenses necessary or appropriate to perform its
obligations hereunder and shall at all times comply with the terms and
conditions of such permits, approvals and licenses.
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ARTICLE V
PAYMENT
5.1 In consideration for the provision of each of the Buyer
Services, the Company shall pay to Buyer the fees listed on Schedule A in
respect of the Buyer Services provided to the Company. Buyer will invoice the
Company on a monthly basis in arrears in U.S. dollars for the Buyer Services,
and the Company shall pay the amounts due under such invoices in U.S. dollars 10
Business Days following the receipt by the Company of such invoice.
5.2 In consideration for the provision of each of the Company
Services, Buyer shall pay to the Company the fees listed on Schedule B, in
respect of the Company Services provided to Buyer. The Company will invoice
Buyer on a monthly basis in arrears in U.S. dollars for the Company Services,
and Buyer shall pay the amounts due under such invoices in U.S. dollars within
10 Business Days of receipt by Buyer of such invoice.
ARTICLE VI
CONFIDENTIALITY
6.1 Confidential Information. The Parties hereto expressly
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acknowledge and agree that all information, whether written or oral, furnished
by either Party to the other Party or any Affiliate of such other Party pursuant
to this Agreement, including any schedules and exhibits hereto ("Confidential
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Information") shall be deemed to be confidential and shall be maintained by each
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Party and their respective Affiliates in confidence, using the same degree of
care to preserve the confidentiality of such Confidential Information that the
Party to whom such Confidential Information is disclosed would use to preserve
the confidentiality of its own information of a similar nature and in no event
less than a reasonable degree of care. Except as authorized in writing by the
other Party, neither Party shall at any time disclose or permit to be disclosed
any such Confidential Information to any person, firm, corporation or entity,
(i) except as may reasonably be required in connection with the performance of
this Agreement by Buyer, the Company or their respective Affiliates, as the case
may be, and (ii) except to the Parties' agents or representatives who are
informed by the Parties of the confidential nature of the information and are
bound to maintain its confidentiality , and (iii) in the course of due diligence
in connection with the sale of all or a portion of either Party's business,
provided the disclosure is pursuant to a written nondisclosure agreement having
terms comparable to Sections 6.1 and 6.2.
6.2 Exceptions. The obligation not to disclose information under
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Section 6.1 shall not apply to information that, as of the Closing or
thereafter, (i) is or becomes generally available to the public other than as a
result of disclosure made after the execution of the Asset Purchase Agreement by
the Party desiring to treat such information as nonconfidential or any of its
Affiliates or representatives thereof, (ii) was or becomes readily available to
the Party desiring to treat such information as nonconfidential or any of its
Affiliates or representatives thereof on a nonconfidential basis prior to its
disclosure to such Party by the other Party, or (iii) becomes available to the
Party desiring to treat such information as nonconfidential or any of its
Affiliates or representatives thereof on a nonconfidential basis from a source
other than its own files or personnel or the other Party or its Subsidiaries,
provided, that such source is not known by the Party desiring to treat such
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information as nonconfidential to be bound by confidentiality agreements with
the other party or its Affiliates or by legal, fiduciary constraints on
disclosure of such information, or (iv) is required to be disclosed pursuant to
a governmental order or decree or other legal requirement (including the
requirements of the U.S. Securities and Exchange Commission and the listing
rules of any applicable securities exchange), provided, that the Party required
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to disclosure such information shall give the other Party prompt notice thereof
prior to such disclosure
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and, at the request of the other Party, shall cooperate in all reasonable
respects in maintaining the confidentiality of such information, including
obtaining a protective order or other similar order. Nothing in this Section 6.2
shall limit in any respect either Party's ability to disclose information in
connection with the enforcement by such Party of its rights under this
Agreement.
ARTICLE VII
TERM
7.1 Duration. Subject to the terms of Article VI, this Agreement
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shall terminate upon the earlier of (x) the termination of the last to terminate
of the Company Services or the Buyer Services, as the case may be, as set forth
on Schedule A or Schedule B, as applicable, and (y) a termination under Sections
7.2 or 7.3.
7.2 Early Termination by the Company. The Company may terminate
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this Agreement by (and effective upon) its delivery of written notice to Buyer
specifying the basis for termination hereunder, under the following
circumstances:
(a) if Buyer shall breach this Agreement in any material respect;
provided, that Buyer shall have the right, exercisable twice during the term of
this Agreement, to prevent termination based upon Buyer's material breach of
this Agreement by curing such material breach within 30 days following receipt
of the Company's termination notice; or
(b) following the occurrence of a Bankruptcy Event with respect
to Buyer.
7.3 Early Termination by Buyer. Buyer may terminate this
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Agreement by (and effective upon) its delivery of written notice to the Company
specifying the basis for termination hereunder, under the following
circumstances:
(a) if the Company shall breach this Agreement in any material
respect; provided, that the Company shall have the right, exercisable twice
during the term of this Agreement, to prevent termination based upon the
Company's material breach of this Agreement by curing such material breach
within 30 days following receipt of Buyer's termination notice; or
(b) following the occurrence of a Bankruptcy Event with respect
to the Company.
7.4 Suspension Due to Force Majeure. In the event the performance
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by Buyer or the Company of their respective duties or obligations hereunder is
interrupted or interfered with by reason of any cause beyond its reasonable
control including, but not limited to, fire, storm, flood, earthquake,
explosion, war, strike or labor disruption, rebellion, insurrection, quarantine,
"act of God," boycott, embargo, shortage or unavailability of supplies or
services, riot, or governmental law, regulation or edict (collectively, a "Force
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Majeure Event"), the Party affected by such Force Majeure Event shall not be
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deemed to be in default of this Agreement by reason of its nonperformance of its
obligations hereunder to the extent due to such Force Majeure Event, but shall
give prompt written notice to the other Party of the Force Majeure Event. If, as
soon as, and to the extent that the Force Majeure Event no longer interrupts a
Party's performance of its obligations hereunder, its interrupted obligations
shall accrue from such point forward under the terms of this Agreement.
7.5 Consequences on Termination. Subject to the terms of Article
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VI, in the event this Agreement expires or is terminated in accordance with this
Article VII, then (a) each Party will promptly cease all performance of the
Services, and shall cause its Affiliates to do so, (b) each of the
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Company and Buyer shall promptly return all Confidential Information received
from the other Party or its Affiliates in connection with this Agreement
(including the return of all information received with respect to the Services
or products of the Company or Buyer, as the case may be), without retaining a
copy thereof, (c) each of the Company and Buyer shall honor all credits and make
any accrued and unpaid payment to the other Party as required pursuant to the
terms of this Agreement, and (d) each Party shall continue to be subject to and
responsible for its accrued but unperformed obligations and any liabilities in
respect of its prior breach of this Agreement.
ARTICLE VIII
LIMITATION ON LIABILITY
Neither Party or any of its Affiliates will be liable to the
other Party and its Affiliates for any claim or demand against the other Party
and its Affiliates, and their respective officers, directors, partners,
principals, employees, agents or representative, arising under or relating to
this Agreement (i) by any unaffiliated third party (except as provided in
Article VIII hereof), or (ii) for any amounts representing loss of profit, loss
of business or special, indirect, incidental, consequential, or punitive damages
of any nature whatsoever, including, without limitation, any damages arising out
of or in connection with any loss of business or anticipatory profits, even if
either has been advised of the possibility of such damages.
ARTICLE IX
INDEMNIFICATION
9.1 Subject Party Indemnification. Subject to Article VIII,
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Subject Party (for purposes of Section 9.4, an "Indemnifying Party") shall
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indemnify, defend and hold harmless Provider and its Affiliates, and their
respective officers, directors, partners, principals, employees, agents and
representatives (collectively, the "Provider Indemnified Parties", and for
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purposes of Section 9.4, each an "Indemnified Party"), from and against all
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liabilities, out-of-pocket costs and expenses, including, without limitation,
reasonable defense costs, settlement costs and attorneys' fees (collectively,
"Losses"), based upon any (i) claim, action, suit or proceeding by an
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unaffiliated third party arising out of or related to a Service provided by
Provider or its Affiliates pursuant to this Agreement; provided, however, that
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the foregoing indemnification under clause (i) shall not apply to the extent,
and only to the extent, that such Losses are directly and proximately caused by
the gross negligence or willful misconduct of Provider or its Affiliates or
failure to comply in any material respect with the express terms of this
Agreement or (ii) a Subject Party's failure to comply in any material respect
with the express terms of this Agreement. The indemnification obligation set
forth in this Section 9.1 are subject to the indemnification procedures set
forth in Section 9.4.
9.2 Provider Indemnification. Subject to Article VIII, Provider
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shall indemnify, defend and hold harmless a Subject Party and its Affiliates,
and their respective officers, directors, partners, principals, employees,
agents and representatives (collectively, the "Subject Indemnified Parties"),
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and for, purposes of Section 9.4, each an "Indemnified Party") from and against
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any Losses based upon any claim by an unaffiliated third party arising out of or
related to a Service provided by Provider or its Affiliates pursuant to this
Agreement to the extent, and only to the extent, that such Losses are directly
or proximately caused by (i) the gross negligence or willful misconduct of
Provider or its Affiliates or (ii) the Provider's failure to comply in any
material respect with the express terms of this Agreement. The indemnification
obligation set forth in this Section 9.2 are subject to the indemnification
procedures set forth in Section 9.4.
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9.3 Other Indemnification. (a) Subject to Article VIII, Buyer
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(for purposes of Section 9.4, an "Indemnifying Party") shall indemnify, defend
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and hold harmless the Company and its Affiliates, and their respective officers,
directors, partners, principals, employees, agents and representatives
(collectively, the "Company Indemnified Parties", and for, purposes of Section
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9.4, each an "Indemnified Party") from and against any Losses based upon Buyer's
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or its Affiliates' failure to comply with the Production CBA or the QC CBA and
with any labor law or similar law relating to employees or employment matters,
including, but not limited to, the failure to bargain with any labor union or
organization, but excluding any Losses to the extent attributable to the
Company's acts or omissions following the date of this Agreement.
(b) Subject to Article VIII, the Company (for purposes of Section
9.4, an "Indemnifying Party") shall indemnify, defend and hold harmless Buyer
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and its Affiliates, and their respective officers, directors, partners,
principals, employees, agents and representatives (collectively, the "Buyer
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Indemnified Parties," and for, purposes of Section 9.4, each an "Indemnified
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Party") from and against any Losses based upon the Company's or its Affiliates'
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failure, following the date of this Agreement, to comply with the Production CBA
or the QC CBA and with any labor law or similar law relating to employees or
employment matters, but excluding any Losses to the extent attributable to
Buyer's acts or omissions.
9.4 Procedures for Indemnity Claims. Any claim which may form a
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basis for indemnification hereunder (an "Indemnity Claim") by any Party (an
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"Indemnified Party") shall be asserted and resolved as set forth in this Section
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9.4. The Indemnified Party shall promptly, but in no event more than 15 Business
Days following such Indemnified Party's receipt of, notice of, or actual
knowledge of such claim, give written notice to the Party that may be required
to pay an indemnity hereunder in respect of such Indemnity Claim (an
"Indemnifying Party") which notice shall state in reasonable detail the nature
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and basis of the Indemnity Claim and the amount or the estimated amount thereof
to the extent then feasible (which estimate shall not be conclusive of the final
amount of any claim) and which notice, if applicable, shall also have attached
to it copies of all relevant documents received by the Indemnified Party
substantiating such Indemnity Claim (the "Claim Notice"). Failure of the
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Indemnified Party to give a Claim Notice as contemplated hereby shall not
relieve the Indemnifying Party from liability for indemnification hereunder,
except if and to the extent that the Indemnifying Party is actually prejudiced
thereby. Thereafter, the Indemnified Party shall deliver to the Indemnifying
Party, on an ongoing basis promptly after the Indemnified Party's receipt
thereof, copies of all notices and documents received by the Indemnified Party
relating to the Indemnity Claim, as the case may be. With respect to an
indemnity claim other than an a third party claim that is resolved as provided
in this Section 9.4, the Indemnifying Party shall promptly pay such Indemnity
Claim within 20 Business days from its receipt of the Claim Notice (the "Notice
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Period"), unless, it notifies the Indemnified Party in writing that the
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Indemnifying Party disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to the Indemnity Claim. If the
Indemnity Claim involves an amount in dispute with a third party (a "Third Party
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Claim"), the Indemnifying Party may advise the Indemnified Party within 10
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Business Days from its receipt of the Claim Notice that it will defend the
Indemnified Party against such Third Party Claim. Except as hereinafter
provided, in the event that the Indemnifying Party so notifies the Indemnified
Party that it will defend the Indemnified Party against such Third Party Claim,
the Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings and shall have the sole power to direct and control such
defense. All costs and expenses incurred by the Indemnifying Party in defending
the Third Party Claim shall be paid by the Indemnifying Party. If an Indemnified
Party desires to participate in any such defense it may do so at its sole cost
and expense; provided, that the Indemnified Party and its counsel shall comply
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with all reasonable instructions from the Indemnifying Party. The Indemnifying
Party shall not consent to the entry of any judgment or enter into any
settlement in respect of a Third Party Claim without the consent of the
Indemnified Party, to the extent such judgment or settlement imposes a
non-monetary obligation on the Indemnified Party or is not
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accompanied by a complete and unconditional release of the Indemnified Party in
respect of such Third Party Claim; provided, that the consent of the Indemnified
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Party shall not be unreasonably withheld, conditioned or delayed. If the
Indemnifying Party elects not to defend the Indemnified Party against such Third
Party Claim, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the Indemnified Party may conduct the defense
and the reasonable costs and expenses pertaining to such defense shall be the
liability of the Indemnifying Party hereunder. In any case, whether or not the
Indemnifying Party elects to control the defense of a Third Party Claim, the
Indemnified Party shall not consent to the entry of any judgment or enter into
any settlement in respect of a Third Party Claim without the consent of the
Indemnifying Party, and without such consent the Indemnifying Party shall not be
obligated to indemnify the Indemnified Party hereunder in respect of the related
Indemnification Claim; provided, that the consent of the Indemnifying Party
--------
shall not be unreasonably withheld, conditioned or delayed. To the extent the
Indemnifying Party shall direct, control or participate in the defense or
settlement of any Third Party Claim, the Indemnified Party will, as reasonably
required, give the Indemnifying Party and its counsel access to, during normal
business hours, the relevant business records and other documents, and permit
them to consult with the employees and counsel of the Indemnified Party.
Regardless of which Person assumes control of the defense of any claim, each
Party shall cooperate and provide the other Party reasonable assistance in the
defense thereof.
9.5 Sole Remedy. The remedies set forth in this Agreement shall
-----------
constitute the sole and exclusive remedy and shall be in lieu of any other
remedies that may be available to any Provider Indemnified Parties, Subject
Indemnified Parties or Company Indemnified Parties under any agreement, pursuant
to any statutory or common law, in equity or otherwise with respect to the
subject matter of this Agreement. The Parties each hereby waive any provision of
any applicable law to the extent that it would limit or restrict the agreements
contained in this Section 9.5.
9.6 Insurance. Both the Provider and Subject Party shall use
---------
their commercially reasonable efforts to have the other Party listed as an
additional insured on any policy of insurance that may cover any loss or other
liability arising out of or relating to any of the Services. No Party shall be
entitled to indemnification hereunder for any amounts recovered from insurance
or for which it is entitled to recover.
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1 Modification or Amendment. Subject to the provisions of
-------------------------
applicable law, the Parties hereto may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of Buyer
and the Company.
10.2 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
10.3 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a) THIS
---------------------------------------------
AGREEMENT AND ANY DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO
THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The
Parties hereby irrevocably submit to the jurisdiction of the courts of the State
of New York and the Federal courts of the United States of America located in
the County of New York, New York solely in respect of the interpretation and
enforcement of
10
the provisions of this Agreement and of the documents referred to in this
Agreement, and in respect of the transactions contemplated hereby, and hereby
waive, and agree not to assert, as a defense in any action, suit or proceeding
for the interpretation or enforcement of this Agreement or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the Parties irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a New York State or Federal court. The Parties hereby consent to and grant any
such court jurisdiction over the person of such Parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
10.4 or in such other manner as may be permitted by law shall be valid and
sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.3.
10.4 Notices. Any notice, request, instruction or other document
-------
to be given hereunder by any party to the others shall be in writing and shall
be deemed to have been delivered (i) on the date of service, if served
personally, (ii) upon confirmation of receipt, if transmitted by facsimile,
electronic or digital transmission method, (iii) on the first business day after
sent, if sent for next day delivery by recognized overnight delivery service and
(iv) on the third day after it is sent, if sent by first class mail. In each
case, notice shall have been sent to the Parties at the following addresses:
if to Buyer
-----------
Armkel, LLC
c/o Kelso & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with copies to:
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 917-777-2770)
if to the Company
-----------------
MedPointe Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇/▇▇/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Wild
fax: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-455-2502)
or to such other persons or addresses as may be designated in writing by the
Party to receive such notice as provided above.
10.5 Entire Agreement. This Agreement, the Asset Purchase
---------------
Agreement and the other Ancillary Agreements (as defined in the Asset Purchase
Agreement), including any schedules and exhibits hereto and thereto, constitute
the entire agreement and supersedes all other prior agreements, understandings,
representations and warranties both written and oral, among the Parties with
respect to the subject matter of this Agreement.
12
10.6 Severability. It is the intention of the Parties that the
------------
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. It is the intention of
the Parties that if any provision of this Agreement, or the application thereof
to any Person or any circumstance, is invalid or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry out, so
far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
10.7 Assignment. This Agreement and any rights and obligations
----------
hereunder shall not be assignable by any Party whether by operation of law or
otherwise, without the prior written consent of the other Party, and any
assignment made in contravention of this Section shall be null and void;
provided, that a Party may assign any of its rights and obligations hereunder,
--------
in whole or in part, to an Affiliate of such Party without the consent of the
other Party, provided such Affiliate agrees, in writing, to be bound by this
Agreement, and any Affiliate of a Party may provide any Service due to be
rendered by such Party to the other Party hereunder and any Party may cause any
Service due to it by the other Party hereunder to be rendered to its Affiliate,
if in either of such cases, such substitution does not change the nature of the
Service in any way or otherwise have any material adverse impact on the other
Party; provided further, that if a Party's Affiliate is performing a Service on
-------- -------
behalf of such Party, such Party shall continue to be directly and primarily
liable hereunder for the performance thereof.
10.8 No Third-Party Beneficiary Rights. This Agreement is not
---------------------------------
intended to confer upon any Person other than the Parties any rights or remedies
hereunder or in connection herewith.
10.9 Headings/Construction. Section headings contained in this
---------------------
Agreement are for convenient reference only, and shall not in any way affect the
meaning or interpretation of this Agreement. The language used in this Agreement
will be deemed the language chosen by the Parties to express their mutual
intent, and no rule of strict construction will be applied against any Person.
13
IN WITNESS WHEREOF, the Parties hereby have caused this Agreement to be
executed by their proper officers, duly authorized to do so, as of the date
first written above.
▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc.
By: _________________________
Name:
Title:
Armkel, LLC
By: _________________________
Name:
Title:
14
SCHEDULE A - BUYER SERVICES
At Buyer's facilities in Cranbury, New Jersey:
---------------------------------------------
Term: Except as otherwise provided below, until termination of the Cranbury
----
Lease.
. Human Resources
---------------
(1) For the term of the Cranbury Lease, Buyer agrees to provide human
resources and personnel services (including, but not limited to, human
resource management, COBRA administration, benefits administration,
EEOC administration, employment and staffing, termination processing,
HRIS, health services and hourly payroll) for a fee of $90,000 per
month.
(2) The Company may upon 60 days' prior written notice to Buyer elect
to permanently cancel any of the human resources and personnel services
that Buyer provides it. The monthly fee for the remaining human
resources and personnel services shall be reduced to reflect the
reduction in services to a cost to be mutually agreed between the
Company and Buyer.
. Office Administration
---------------------
(1) For the term of the Cranbury Lease, Buyer agrees to provide office
administrative services (including, but not limited to,
switchboard/reception, mailroom, record retention and
telecommunications management) to the Company for a fee of $25,000 per
month plus actual non-employee out-of-pocket costs (other than storage
fees) related to the provision of the office administrative services.
(2) The Company may upon 60 days' prior written notice to Buyer elect
to permanently cancel any of the office administration services that
Buyer provides it. The monthly fee for the remaining office
administration services shall be reduced to reflect the reduction in
services to a cost to be mutually agreed between the Company and Buyer.
. Print Shop
----------
(1) Buyer agrees to provide all print shop functions to the Company
for 30 days from the date hereof for a fee of $75,000; provided, that
--------
the Company shall be able to terminate such service by providing 30
days prior written notice to Buyer, and such notice shall be deemed to
have been properly delivered if delivered 30 days prior to the Closing
(2) Buyer agrees to pay all costs (including, but not limited to, any
lease termination fees or maintenance agreement termination fees) that
arise as a result of the shut down of the print shop by Buyer.
. Duplicating Services
--------------------
(1) For the term of the Cranbury Lease, Buyer shall provide the
Company with duplicating services at the actual cost of the duplicating
services used plus fixed costs of copying machine leases.
(2) Buyer agrees to pay 57.5% of all costs for the duplicating
machines outside of the print shop (including, but not limited to, any
lease termination fees or maintenance agreement
15
termination fees) that arise as a result of the shut down of the
Cranbury Facility by Buyer. The Company agrees to pay the remaining
42.5% of such costs.
At Buyer's facilities in Dayton, New Jersey:
--------------------------------------------
Storage; Distribution Management; Distribution, Warehousing (including, but not
limited to, dry and refrigerated storage in accordance with the storage
conditions for all warehoused products and any applicable federal or state laws
or regulations including those enforced by the Food and Drug Administration and
the Drug Enforcement Administration); Shipping; and Record Keeping subject to
the direction of the Company, in accordance with any applicable federal or state
laws or regulations including those enforced by the Food and Drug Administration
and the Drug Enforcement Administration, provided, that the Company retains DEA
--------
distributor registration and any other state wholesale distributor licenses with
respect to the Dayton Facility which are in place at the Dayton Facility on the
date of this Agreement. The cost will be $ 80,000 per month plus shipping costs
and direct supplies. Term: Until the termination of the lease on the Dayton
----
Facility, but in no event prior to 12/31/01.
16
SCHEDULE B - COMPANY SERVICES
At Buyer's facilities in Cranbury, New Jersey:
---------------------------------------------
. Information Technology
----------------------
(1) For 12 months following the Closing, the Company agrees to provide
information technology services to Buyer at a cost of $85,000 per
month.
(2) For the term of the Cranbury Lease, the Company agrees to provide
systems support services to Buyer, including assistance with
transferring records to Buyer's own systems, at a cost of $200,000 per
month. Buyer agrees to purchase such services for a minimum term of 2
months, thereafter Buyer may terminate such services upon 45 days'
prior written notice to the Company, such notice shall be deemed to
have been properly delivered if delivered 45 days prior to the Closing.
(3) Buyer agrees to pay 65% of all computer systems costs (including,
but not limited to, any lease termination fees or maintenance agreement
termination fees) that arise as a result of the shut down of the
Cranbury facility by Buyer. The Company agrees to pay the remaining 35%
of all such costs.
17
