EXHIBIT 2.1
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SHARE PURCHASE AGREEMENT
BETWEEN
SAVIENT PHARMACEUTICALS, INC.
AND
FERRING B.V.
March 23, 2005
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TABLE OF CONTENTS
ARTICLE I SHARE PURCHASE..........................................................................1
Section 1.1 Sale and Transfer of Shares............................................................1
Section 1.2 Purchase Price.........................................................................1
Section 1.3 The Closing............................................................................2
Section 1.4 Post-Closing Adjustment................................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER............................................5
Section 2.1 Organization, Qualification and Corporate Power........................................5
Section 2.2 Capitalization.........................................................................6
Section 2.3 Authority..............................................................................7
Section 2.4 Bankruptcy.............................................................................7
Section 2.5 Governmental Consents..................................................................7
Section 2.6 Noncontravention.......................................................................8
Section 2.7 Financial Statements...................................................................9
Section 2.8 Absence of Certain Changes............................................................10
Section 2.9 Undisclosed Liabilities...............................................................10
Section 2.10 Taxes.................................................................................10
Section 2.11 Withholdings and Remittances..........................................................11
Section 2.12 Tangible Personal Property............................................................11
Section 2.13 Real Property.........................................................................11
Section 2.14 Intellectual Property.................................................................12
Section 2.15 Contracts.............................................................................13
Section 2.16 Entire Business.......................................................................14
Section 2.17 Litigation............................................................................14
Section 2.18 Employees.............................................................................15
Section 2.19 Employee Benefits.....................................................................16
Section 2.20 Environmental Matters.................................................................17
Section 2.21 Legal Compliance......................................................................18
Section 2.22 Permits...............................................................................19
Section 2.23 Drug Product Regulatory Matters.......................................................19
Section 2.24 Brokers' Fees.........................................................................20
Section 2.25 Insurance.............................................................................20
Section 2.26 Bank Debt.............................................................................20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER............................................20
Section 3.1 Organization; Qualification and Corporate Power.......................................20
Section 3.2 Authority.............................................................................21
Section 3.3 Governmental Consents.................................................................21
Section 3.4 Noncontravention......................................................................22
Section 3.5 Litigation............................................................................22
Section 3.6 Investment Intent.....................................................................22
Section 3.7 Financing.............................................................................23
Section 3.8 Financial Advisor.....................................................................23
Section 3.9 Due Diligence by the Buyer............................................................23
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ARTICLE IV PRE-CLOSING COVENANTS..................................................................24
Section 4.1 Closing Efforts.......................................................................24
Section 4.2 Operation of Business.................................................................25
Section 4.3 Access................................................................................27
Section 4.4 Schedules.............................................................................27
Section 4.5 Elimination of Certain Intercompany Obligations.......................................28
Section 4.6 Obligations Relating to Puricase......................................................28
Section 4.7 Banking Relationships; Powers of Attorney.............................................28
Section 4.8 BTG-271...............................................................................29
ARTICLE V CONDITIONS PRECEDENT TO CLOSING........................................................29
Section 5.1 Conditions to Obligations of the Buyer................................................29
Section 5.2 Conditions to Obligations of the Seller...............................................30
Section 5.3 Frustration of Closing Conditions.....................................................30
ARTICLE VI INDEMNIFICATION........................................................................31
Section 6.1 Indemnification by the Seller.........................................................31
Section 6.2 Indemnification by the Buyer..........................................................31
Section 6.3 Claims for Indemnification............................................................32
Section 6.4 Survival..............................................................................33
Section 6.5 Limitations...........................................................................34
Section 6.6 Treatment of Indemnification Payments.................................................36
ARTICLE VII TAX MATTERS............................................................................37
Section 7.1 Preparation and Filing of Tax Returns; Payment of Taxes...............................37
Section 7.2 Allocation of Certain Taxes...........................................................38
Section 7.3 Refunds and Carrybacks................................................................38
Section 7.4 Cooperation on Tax Matters; Tax Audits................................................38
Section 7.5 Termination of Tax Sharing Agreements.................................................39
Section 7.6 Section 338 Election..................................................................39
Section 7.7 Scope of Article VII..................................................................40
ARTICLE VIII TERMINATION............................................................................40
Section 8.1 Termination of Agreement..............................................................40
Section 8.2 Effect of Termination.................................................................41
ARTICLE IX OTHER POST-CLOSING COVENANTS...........................................................41
Section 9.1 Access to Information; Record Retention...............................................41
Section 9.2 Use of Name for Transition Period.....................................................42
Section 9.3 Payment of Assumed Liabilities; Receipt of Accounts Receivable........................42
Section 9.4 Further Assurances....................................................................42
Section 9.5 License Grants........................................................................43
Section 9.6 Non-Competition.......................................................................44
Section 9.7 Non-Solicitation......................................................................44
Section 9.8 No Interference with the Business.....................................................44
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ARTICLE X MISCELLANEOUS..........................................................................45
Section 10.1 Confidentiality Agreement.............................................................45
Section 10.2 Press Releases and Announcements......................................................45
Section 10.3 No Third-Party Beneficiaries..........................................................45
Section 10.4 Action to be Taken by Affiliates......................................................45
Section 10.5 Entire Agreement......................................................................45
Section 10.6 Succession and Assignment.............................................................46
Section 10.7 Notices...............................................................................46
Section 10.8 Amendments and Waivers................................................................47
Section 10.9 Severability..........................................................................47
Section 10.10 Expenses..............................................................................47
Section 10.11 Governing Law.........................................................................47
Section 10.12 Disclosure............................................................................47
Section 10.13 Construction..........................................................................48
Section 10.14 Counterparts and Facsimile Signature..................................................48
Section 10.15 Dispute Resolution....................................................................48
EXHIBITS AND SCHEDULES:
Exhibit A Share Transfer Deed
Exhibit B Form of Undertaking
Exhibit C Residual Rights Agreement
Exhibit D Guarantee
Disclosure Schedule
Schedule 4.2(a) Operation of Business
Schedule 4.8 BTG-271 Patents
Schedule 5.1(d) Required Consents
Appendix I Memorandum and Articles of Association of BTG
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TABLE OF DEFINED TERMS
Defined Term Section
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Acquired Assets 1.4(a)
Adjusted Asset Purchase Price 1.4(f)
Adjusted Share Purchase Price 1.4(f)
Affiliate 4.1(a)
Agreement Preliminary Statement
Asset Buyer Introduction
Asset Purchase Agreement Introduction
Asset Purchase Price 1.2(a)
Assumed Liabilities 1.3(b)(v)
Bank Debt 2.26
BTG Introduction
BTG Organizational Documents 2.1(c)
Business 2.1(b)
Business Benefit Plans 2.19(a)
Business Contracts 2.15(c)
Business Day 1.2(d)
Business Material Adverse Effect 2.1(b)
Buyer Preliminary Statement
Buyer Certificate 5.2(c)
Buyer Indemnified Parties 6.1
Buyer License 9.5(a)
Buyer Material Adverse Effect 3.3(h)
Closing 1.3(a)
Closing Date 1.3(a)
Closing Date Debt Obligation 1.2(d)
Closing Statement 1.4(a)
Closing Working Capital Amount 1.4(a)
Competitive Activity 9.6
Confidentiality Agreement 10.1
Damages 6.1
Deferred Item 2.16
Designated Intellectual Property 2.14(a)
Disclosure Schedule Article II
Dispute 10.15(a)
Employee Benefit Plan 2.19(a)
Environment 2.20(a)(ii)
Environmental Law 2.20(a)(iv)
Environmental Matters 2.20(a)(v)
Excluded Liabilities 2.9
FDA 2.23(a)
Financial Statements 2.7(a)
GAAP 1.4(a)
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Defined Term Section
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Governmental Application 2.5
Governmental Entity 2.5
IMH 2.23(a)
Income Taxes 7.1(a)
Indemnified Party 6.3(a)(i)
Indemnifying Party 6.3(a)(i)
Israel Lands Authority 2.5(d)
Israeli Antitrust Law 4.1(b)
Investment Center 2.5(e)
Leased Real Property 2.13(b)
Lien 2.2(c)
Manufacturing Agreement 4.5(b)
Material Contract 4.2(a)(xvi)
Materials of Environmental Concern 2.20(a)(iii)
Most Recent Financials Date 2.7(a)
Most Recent Statement of Net Assets 2.7(a)
Neutral Accountant 1.4(c)(ii)
Non-Competition Period 9.6
Notes 3.7
Notice of Objection 1.4(b)
OCS 2.5(c)
Off-Site Liabilities 2.20(a)(vi)
Payoff Agreements 2.26
P&Ls 2.7(d)
Permits 2.22
Products 2.23(b)
Puricase 4.5(b)
Real Property Leases 2.13(b)
Regulatory Authorizations 2.23(a)
Related Patent Rights 9.5(e)
Release 2.20(a)(i)
Residual Rights Agreement 4.5(a)
Retained Marks 9.2(a)
Seller Preliminary Statement
Seller Certificate 5.1(c)
Seller Indemnified Parties 6.2
Seller License 9.5(a)
Share Purchase Price 1.2(a)
Shares Introduction
Subsidiary 9.6(c)
Target Working Capital Amount 1.4(d)
Tax Audit 7.4(b)
Tax Returns 2.10(d)
Taxes 2.10(d)
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Defined Term Section
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Third-Party Claim 6.3(a)
Third Party Consent 2.6(c)
Transferred Contract 2.6(c)
Transferred Patent Rights 9.4
Transferred Products 9.5(a)
Transferred Trademark Rights 9.2(a)
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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement") is entered into as of
March 23, 2005 between Savient Pharmaceuticals, Inc., a Delaware corporation
(the "Seller") and Ferring B.V., a Dutch corporation (the "Buyer").
INTRODUCTION
Bio-Technology General (Israel) Ltd. is a company organized under the
laws of the State of Israel and a wholly owned direct subsidiary of the Seller
("BTG").
The Buyer desires to purchase from the Seller, and the Seller desires
to sell to the Buyer, all of the issued and outstanding share capital of BTG
(the "Shares"), upon the terms and subject to the conditions set forth herein.
In addition, as a condition and inducement to the parties' willingness
to enter into this Agreement, the Seller and Ferring International Centre SA, a
Swiss corporation and an Affiliate (as defined in Section 4.1(a)) of the Buyer
(the "Asset Buyer"), are entering into an Asset Purchase Agreement of even date
herewith (the "Asset Purchase Agreement"), providing for the purchase by the
Asset Buyer of certain contract rights of the Seller and certain intangible
assets licensed by the Seller to BTG, and related inventory and accounts
receivable. All capitalized terms used in this Agreement and not otherwise
defined herein shall have the respective meanings ascribed to them in the Asset
Purchase Agreement.
As a further condition and inducement to the parties' willingness to
enter into this Agreement, Ferring Holding S.A. a Swiss corporation and an
Affiliate of the Buyer (the "Ferring Holdings"), is executing and delivering to
the Seller a Guarantee of even date herewith in the form of Exhibit D,
guaranteeing the indebtedness, obligations and liabilities of (i) the Buyer
hereunder, (ii) the Asset Buyer under the Asset Purchase Agreement and (iii) the
Asset Buyer under the Notes (as defined in the Asset Purchase Agreement).
The Buyer and the Seller therefore agree as follows:
ARTICLE I
SHARE PURCHASE
Section 1.1 Sale and Transfer of Shares. On the terms and subject to
the conditions of this Agreement, at the Closing (as defined in Section 1.3(a)),
the Seller shall sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer shall purchase and acquire from the Seller, the Shares, free and clear
of Liens (as defined in Section 2.2(c)).
Section 1.2 Purchase Price.
(a) In consideration for the sale and transfer of the Shares, the Buyer
shall pay at the Closing $50,100,000.00 (the "Share Purchase Price").
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(b) At the Closing, the Buyer shall pay the Share Purchase Price by
wire transfer of immediately available funds to one or more accounts designated
by the Seller.
(c) The accounts to which the Share Purchase Price is to be paid
pursuant to Section 1.2(b) shall be designated by the Seller to the Buyer in
writing at least five Business Days (as defined in Section 1.2(d)) prior to the
Closing Date (as defined in Section 1.3(a)).
(d) As used in this Agreement, a "Business Day" shall be any day other
than (i) a Saturday or Sunday or (ii) a day on which banking institutions
located in New York, New York, United States of America or in The Netherlands
are permitted or required by law, executive order or governmental decree to
remain closed.
(e) The Share Purchase Price is stated above in its gross amount, and
is subject to any Tax withholding required to be made by the Buyer, under any
applicable law in any jurisdiction.
Section 1.3 The Closing.
(a) Time and Location. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx and Xxxx LLP, Xxxxx Castle, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxx
Xxxxxxx, commencing at 10:00 a.m., London time on the second Business Day
following the satisfaction or waiver of the conditions set forth in Article V
(other than delivery of items to be delivered at the Closing and other than
satisfaction of those conditions that by their terms are to be satisfied or
waived at the Closing, but subject to the satisfaction or waiver of such
conditions at the Closing), or on such other date and at such other time and
place as the Buyer and the Seller agree. The date on which the Closing actually
occurs is referred to in this Agreement as the "Closing Date". The Closing under
this Agreement shall occur simultaneously with the occurrence of the "Closing"
under the Asset Purchase Agreement.
(b) Deliveries by the Seller. At the Closing, the Seller shall deliver
or cause to be delivered to the Buyer:
(i) one or more certificate(s) evidencing all of the Shares
registered in the name of the Buyer, and a copy of the shareholder's register of
BTG certified by BTG's Managing Director;
(ii) a share transfer deed in the form attached hereto as Exhibit
A, duly executed for transfer to the Buyer;
(iii) a notice to the Israeli Registrar of Companies with respect
to the transfer of the Shares to the Buyer, duly executed;
(iv) the Seller Certificate (as defined in Section 5.1(c));
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(v) a notice of immediate resignation of all of the directors of
BTG in their capacities as directors (and not in any other capacities), each of
which notices will confirm that the respective director does not have any claims
or demands against BTG for remuneration in respect of having served as a
director of BTG, or any claims against the Seller that would be Assumed
Liabilities (as defined in Section 1.2(a) of the Asset Purchase Agreement); and
(vi) a notice to the Israeli Registrar of Companies confirming the
resignations of all directors of BTG as described in Section 1.3(b)(v).
(c) Deliveries by the Buyer. At the Closing, the Buyer shall pay the
Share Purchase Price in accordance with Section 1.2, and shall deliver or cause
to be delivered to the Seller the Buyer Certificate (as defined in Section
5.2(c)).
Section 1.4 Post-Closing Adjustment. The Share Purchase Price set forth
in Section 1.2 and the Asset Purchase Price set forth in Section 1.3(a) of the
Asset Purchase Agreement shall be subject to adjustment after the Closing Date
as follows:
(a) Within 45 days after the Closing Date, the Buyer shall prepare and
deliver to the Seller a statement calculating the Closing Working Capital Amount
(the "Closing Statement"). For purposes of the Closing Statement, current assets
and current liabilities shall be determined in accordance with United States
generally accepted accounting principles as in effect as of the Most Recent
Financials Date (as defined in Section 2.7(a)) ("GAAP") and on a basis
consistent with the accounting principles, practices, procedures, policies and
methods that were employed in the preparation of the Most Recent Statement of
Net Assets. The Closing Statement shall set forth a calculation of the Closing
Working Capital Amount (as defined in this Section 1.4(a)), including as a line
item any number used in calculating the Closing Working Capital Amount that
would ordinarily be included on a balance sheet prepared in accordance with GAAP
and illustrating how such calculation of the Closing Working Capital Amount is
derived from the information included in the Closing Statement. As used in this
Agreement, "Closing Working Capital Amount" means, (i) the Acquired Assets (as
defined in Section 1.1(a) of the Asset Purchase Agreement) and the assets of BTG
(other than Tax (as defined in Section 2.10(d)) assets), in each case that
constitute current assets as of the Closing Date, less (ii) the Assumed
Liabilities and the liabilities of BTG (other than Tax liabilities), in each
case that constitute current liabilities as of the Closing Date.
(b) If the Seller does not, within 30 days after the Buyer's delivery
of the Closing Statement, deliver a notice to the Buyer disagreeing with the
Buyer's calculation of the Closing Working Capital Amount (a "Notice of
Objection"), then the Closing Statement delivered by the Buyer shall be final
and binding. Any Notice of Objection shall specify those items or amounts as to
which the Seller disagrees and shall include the Seller's proposed Closing
Working Capital Amount, and the Seller shall be deemed to have agreed with all
other items and amounts contained in the Closing Statement. Resolution of any
dispute identified in any Notice of Objection shall be resolved in accordance
with Section 1.4(c).
(c) If the Seller timely delivers a Notice of Objection to the Buyer,
then:
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(i) The Buyer and the Seller shall, during the 15-day period
following the delivery of such Notice of Objection, attempt in good faith to
reach agreement on the disputed items or amounts. If the Buyer and the Seller
are able to reach agreement with respect to the disputed items or amounts, then
they shall prepare an agreed Closing Statement, which statement shall be final
and binding.
(ii) If during such 15-day period the Buyer and the Seller are
unable to reach such agreement, they shall promptly thereafter submit the
matters remaining in dispute to Huron Consulting Group (or, if Huron Consulting
Group declines to act, to another accounting firm mutually agreed upon by the
Buyer and the Seller and, if the Buyer and the Seller are unable so to agree
within 10 days after the end of such 15-day period, then a nationally recognized
accounting firm with expertise in resolving purchase price adjustment disputes
shall be selected in accordance with the rules of the American Arbitration
Association) (Huron Consulting Group or such agreed or selected firm, the
"Neutral Accountant"). The Buyer and the Seller shall instruct the Neutral
Accountant (x) to review this Agreement, the Asset Purchase Agreement and the
disputed items or amounts and (y) to deliver to the Buyer and the Seller, as
promptly as practicable, a Closing Statement prepared in accordance with Section
1.4(a), which Closing Statement shall be final and binding. The Closing Working
Capital Amount set forth in the Closing Statement prepared by the Neutral
Accountant shall be equal to one of, or between, the values proposed by the
Buyer in the Closing Statement and by the Seller in its Notice of Objection.
(iii) The Neutral Accountant's authority shall be limited to
determining the items or amounts disputed by the Seller in its Notice of
Objection and not resolved by the parties during the 15-day period following the
delivery of the Notice of Objection. The Buyer and the Seller agree that the
procedure set forth in this Section 1.4(c) for resolving disputes with respect
to the Closing Statement shall be the sole and exclusive method for resolving
any such disputes, provided that this provision shall not prohibit the Buyer or
the Seller from instituting litigation to enforce the ruling of the Neutral
Accountant. The fees and expenses of the Neutral Accountant shall be borne
equally by the Buyer and the Seller. After final determination of the Closing
Statement, neither party shall have any further right to make any claims against
the other party in respect of any element of the Closing Statement that such
party raised, or could have raised, in accordance with the procedures set forth
in this Section 1.4(c).
(d) If the Closing Working Capital Amount as shown on the final Closing
Statement is less than the Target Working Capital Amount (as defined in this
Section 1.4(d)), the Share Purchase Price and/or the Asset Purchase Price, as
applicable in accordance with applicable law, shall be reduced by such
deficiency and the Seller shall pay to the Buyer (in the case of an adjustment
to the Share Purchase Price) or the Asset Buyer (in the case of an adjustment to
the Asset Purchase Price), by wire transfer of immediately available funds,
within three Business Days after the date on which the final Closing Statement
is finally determined pursuant to this Section 1.4, an amount equal to the
lesser of (i) $17,000,000 or (ii) such deficiency (plus, in the case of clause
(i) or clause (ii), interest thereon at an annual rate equal to the rate of
interest from time to time announced publicly by Citibank, N.A. as its annual
prime rate, compounded monthly, from the Closing Date to the date of payment).
If the Closing Working Capital Amount as shown on the final Closing Statement
exceeds the Target Working Capital Amount, the Share Purchase Price and/or the
Asset Purchase Price, as applicable in accordance with applicable law, shall be
increased by such excess amount and the Buyer (in the case of an adjustment to
the Share Purchase Price) or the Asset Buyer (in the case of an adjustment to
the Asset Purchase Price) shall pay to the Seller, by wire transfer of
immediately available funds, within three Business Days after the date on which
the final Closing Statement is finally determined pursuant to this Section 1.4,
an amount equal to the lesser of (x) $17,000,000 or (y) such excess (plus, in
the case of clause(i) or clause (ii), interest thereon at an annual rate equal
to the rate of interest from time to time announced publicly by Citibank, N.A.
as its annual prime rate, compounded monthly, from the Closing Date to the date
of payment). As used in this Agreement, the term "Target Working Capital Amount"
means $8,000,000.
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(e) For the purpose of enabling the Seller to exercise its rights and
perform its obligations under this Section 1.4, at the Seller's request, the
Buyer shall, and shall cause its Affiliates (as defined in Section 4.1(a)) to,
provide to the Seller any information reasonably requested and access at all
reasonable times to the personnel, properties, books and records of BTG. For the
purpose of enabling the Buyer to exercise its rights and perform its obligations
under this Section 1.4, at the Buyer's request, the Seller shall provide to the
Buyer any information reasonably requested and access at all reasonable times to
the personnel, properties, books and records of the Seller to the extent
relating exclusively to the Business.
(f) The Share Purchase Price, as adjusted pursuant to this Section 1.4,
is referred to in this Agreement as the "Adjusted Share Purchase Price." The
Asset Purchase Price, as adjusted pursuant to this Section 1.4, is referred to
in this Agreement as the "Adjusted Asset Purchase Price."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer that, except as set
forth in the Disclosure Schedule provided by the Seller to the Buyer (the
"Disclosure Schedule"):
Section 2.1 Organization, Qualification and Corporate Power.
(a) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Seller has all
necessary corporate power and authority to own, be licensed or otherwise hold
the Shares and the Acquired Assets owned, licensed to or otherwise held by it,
and to carry on its business as now being conducted.
(b) BTG is a company duly organized and validly existing under the laws
of the State of Israel and is duly qualified to conduct business under the laws
of each jurisdiction where the character of the properties owned, leased or held
by it or the nature of its activities makes such qualification necessary, except
for any such failure to be qualified that would not reasonably be expected to
have a Business Material Adverse Effect (as defined in this Section 2.1(b)). BTG
has all necessary corporate power and authority to carry on the Business as
currently conducted by it, and to own and use the properties now owned and used
by it. As used in this Agreement, the "Business" means, collectively, (i) the
business, assets and operations of BTG, (ii) the Acquired Assets and (iii) the
business activities of the Seller relating exclusively to the Acquired Assets.
As used in this Agreement, "Business Material Adverse Effect" means an event,
occurrence, fact, condition, effect, development or change, or any combination
of the foregoing, that is, either individually or in the aggregate, materially
adverse to (x) the business, operations, results of operations, financial
condition, assets or liabilities of the Business as a whole, or (y) the ability
of the Seller to consummate the transactions contemplated by this Agreement and
the Asset Purchase Agreement; provided, however, that a "Business Material
Adverse Effect" shall expressly exclude any event, occurrence, fact, condition,
effect, development or change, or any combination of the foregoing, resulting
from or arising in connection with (A) the announcement of the execution of this
Agreement and the Asset Purchase Agreement or the consummation of the
transactions contemplated hereby and thereby, (B) changes in the Business's
industry or in markets generally and not specifically relating to the Business,
(C) changes in national or international general economic, political, legal or
regulatory conditions or (D) national or international political conditions or
instability, including the engagement by the United States or Israel in
hostilities, whether or not pursuant to a declaration of emergency or war, or
the occurrence of any military or terrorist attack upon the United States,
Israel or any other nation.
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(c) The Seller has made available to the Buyer correct and complete
copies of the memorandum and articles of association of BTG as currently in
effect (the "BTG Organizational Documents"), copies of which are attached to
this Agreement as Appendix I. The directors and officers of BTG are as set forth
in Section 2.1(c) of the Disclosure Schedule. The Seller has made available to
the Buyer correct and complete minutes of all meetings of the shareholders and
the board of directors of BTG held since January 1, 2002. Neither the
shareholders nor the board of directors of BTG has taken any action prior to
January 1, 2002 that, to the knowledge of the Seller, would reasonably be
expected to have a Business Material Adverse Effect. BTG is not in default under
or in violation of any of the provisions of the BTG Organizational Documents,
other than any defaults or violations that would not reasonably be expected to
have a Business Material Adverse Effect.
Section 2.2 Capitalization.
(a) The registered share capital of BTG consists of NIS 4,000,000
divided into 4,000,000 ordinary shares of a nominal value of NIS 1.00 each, of
which only 3,100,101 ordinary shares, constituting the Shares, are issued and
outstanding. All of the Shares are duly authorized, validly issued, fully paid
and nonassessable. All of the Shares are owned of record and beneficially by the
Seller and the Seller has good title to the Shares, free and clear of Liens
(assuming compliance with the matters referred to in Section 2.5) and
contractual restrictions other than (i) applicable securities law restrictions
and (ii) as set forth in the BTG Organizational Documents. None of the Shares
has been issued in violation of, or is subject to, any purchase option, call,
right of first refusal, preemptive, subscription or similar right under any
provision of applicable law, the BTG Organizational Documents, or any contract,
agreement or arrangement to which BTG and/or the Seller is a party.
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(b) There are no outstanding or authorized options, warrants, rights,
"phantom" share rights, share appreciation rights, agreements, contracts or
convertible securities to which BTG and/or the Seller is a party providing for
the issuance, disposition or acquisition of any shares of BTG or any rights to
any shares of BTG (whether already issued or newly issued). There are no
contracts, agreements, voting trusts or proxies with respect to the voting or
registration under the Securities Act of 1933 (or any similar law) of any shares
of BTG.
(c) As used in this Agreement, "Lien" means any mortgage, pledge,
security interest, encumbrance, claim, charge or other lien or similar
restriction (whether arising by contract, agreement or by operation of law or
order of a court), other than any such mortgage, pledge, security interest,
encumbrance, prior assignment, right to possession, claim, charge or other lien
or similar restriction (i) registered with the Israeli Registrar of Companies
securing the Bank Debt (as defined in Section 2.26), (ii) registered with the
Israeli Registrar of Companies securing the debenture dated August 19, 1982
registered in favor of Bank Leumi Industrial Development Ltd. and Bank Leumi
Le'Israel B.M., (iii) in the nature of mechanic's, materialmen's, carrier's,
repairer's, landlord's or other similar liens, (iv) arising under worker's
compensation, unemployment insurance, social security, retirement or similar
legislation, (v) arising in the ordinary course of business on goods in transit,
(vi) for Taxes not yet due and payable, (vii) for Taxes which are being
contested in good faith and by appropriate proceedings or (viii) arising solely
by action of the Buyer or the Asset Buyer. None of the matters referenced in
clauses (i) through (viii) of this Section 2.2(c) and existing as of the date
hereof would reasonably be expected to have a Business Material Adverse Effect.
Section 2.3 Authority. The Seller has all requisite corporate power and
authority to execute and deliver this Agreement and the Asset Purchase Agreement
and to perform its obligations hereunder and thereunder. The execution and
delivery by the Seller of this Agreement and the Asset Purchase Agreement, the
performance of its obligations hereunder and thereunder and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the Seller and BTG. Each of this
Agreement and the Asset Purchase Agreement has been validly executed and
delivered by the Seller and, assuming due execution and delivery by the Buyer
and the Asset Buyer, respectively, constitutes a valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms.
Section 2.4 Bankruptcy. The Seller is not an insolvent person under
applicable law, and will not become an insolvent person as a result of the
Closing. BTG has not made an assignment in favor of its creditors or a proposal
in bankruptcy to its creditors or any class thereof nor had any petition for a
receiving order presented in respect of it. BTG has not taken any act or
initiated any proceeding with respect to a compromise or arrangement with its
creditors or for its winding-up, liquidation, bankruptcy, reorganization or
dissolution. No receiver, receiver-manager or similar Person has been appointed
in respect of BTG or any of its assets and no execution or distress has been
levied upon any of BTG's assets.
Section 2.5 Governmental Consents. No consent, approval or
authorization of, or registration, declaration or filing with, the government of
the United States of America, Israel or any state, local or foreign government,
court of competent jurisdiction, administrative agency, commission,
instrumentality, any securities authority or other governmental body (a
"Governmental Entity") is required to be obtained or made by the Seller or BTG
in connection with the execution, delivery and performance of this Agreement and
the Asset Purchase Agreement by the Seller or the consummation by the Seller of
the transactions contemplated hereby and thereby (any such consent, approval,
authorization, registration, declaration or filing, a "Governmental
Application"), other than:
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(a) the filing of a merger notice with the Israeli Antitrust Authority
and the receipt of approval from the General Director of the Israeli Antitrust
Authority or the expiration of the waiting period considered to be an approval;
(b) the filings and receipt, termination or expiration, as applicable,
of such other approvals or waiting periods required under any other applicable
competition, antitrust or similar law required in any jurisdiction;
(c) the filings and consents required by the Office of the Chief
Scientist of the Israeli Ministry of Trade & Industry (the "OCS");
(d) the filings and consent required by the Israel Lands Authority (the
"Israel Lands Authority");
(e) the filings and consent required by the Investment Center of the
Israeli Ministry of Trade & Industry (the "Investment Center");
(f) Governmental Applications that may be required solely by reason of
either the Buyer's or the Asset Buyer's (as opposed to any other third party's)
participation in the transactions contemplated hereby;
(g) the filings and consents required by the municipal authorities of
Nes Ziona, Israel and Beer Tuvia, Israel; and
(h) Governmental Applications the failure of which to obtain or make
prior to the Closing would not reasonably be expected to have a Business
Material Adverse Effect.
Section 2.6 Noncontravention. The execution, delivery and performance
by the Seller of this Agreement and the Asset Purchase Agreement and the
consummation of the transactions contemplated hereby and thereby do not and will
not:
(a) conflict with or violate any provision of the BTG Organizational
Documents or the certificate of incorporation or bylaws of the Seller;
(b) assuming compliance with the matters referred to in Section 2.5,
violate any applicable law, rule, regulation, judgment, injunction, order or
decree, or obligation of BTG to any Governmental Entity, except for any such
violations which would not reasonably be expected to have a Business Material
Adverse Effect;
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(c) assuming compliance with the matters referred to in Section 2.5 and
except as would not reasonably be expected to have a Business Material Adverse
Effect, result in a breach of or constitute a default under (with or without due
notice or lapse of time or both), or require any notice or consent under, or
result in any penalty or acceleration or termination under, any Transferred
Contract (as defined in Section 1.1(a)(v) of the Asset Purchase Agreement) or
any contract or agreement to which BTG or the Seller is a party (a "Third Party
Consent") or any Permit (as defined in Section 2.22); or
(d) assuming compliance with the matters referred to in Section 2.5,
result in the creation or imposition of any Lien on the Shares, any of the
Acquired Assets or any of the assets or properties of BTG.
Section 2.7 Financial Statements.
(a) The Disclosure Schedule includes (i) unaudited statements of net
assets for the Business as of December 31, 2001, December 31, 2002, December 31,
2003 and December 31, 2004 (the "Most Recent Financials Date") and (ii) the
unaudited profit and loss statements for the Business for the fiscal years ended
December 31, 2002 and December 31, 2003 and for the year ended December 31,
2004. Such statement of net assets as of December 31, 2004 is referred to in
this Agreement as the "Most Recent Statement of Net Assets". The statements of
net assets and profit and loss statements described in this Section 2.7(a) are
collectively referred to in this Agreement as the "Financial Statements".
(b) The Financial Statements have been derived from (i) the
consolidated accounts of the Seller, which are kept by the Seller in the
ordinary course of business, and (ii) the Seller's consolidated financial
statements included in its periodic reports filed with the United States
Securities and Exchange Commission, which financial statements have been
prepared in accordance with GAAP. The consolidated accounts of the Seller have
been prepared in accordance with GAAP and the Seller's usual accounting
practices and procedures and are accurate and complete in all material respects.
(c) The statements of net assets included in the Financial Statements
include all of the Acquired Assets and the assets of BTG, and all of the
liabilities of BTG and the Assumed Liabilities, in each case as of the
respective dates of such statements of net assets and to the extent required by
GAAP to be reflected on a balance sheet (or in the notes thereto). All
intercompany account balances have been eliminated for the presentation of such
statements of net assets.
(d) The product sales and other revenues of the Business reflected in
the profit and loss statements included in the Financial Statements (the "P&Ls")
were recognized in accordance with GAAP. The cost of goods sold and
non-recurring expenses included in the P&Ls include (i) all expenses
attributable to the product sales and other revenues included in such P&Ls and
(ii) all other costs incurred by the Seller and BTG in conducting the Business;
provided, however, that the P&Ls do not include any allocation for overhead or
any other indirect support provided to the Business by the Seller.
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(e) The Financial Statements are subject to normal year-end
adjustments, and do not include footnotes. The Financial Statements may not
necessarily reflect the financial position and profit and loss of the Business
had it operated as a stand-alone entity.
(f) The Seller does not have any electronic means of accessing the
accounting system or accounting records maintained by BTG.
(g) As of the Closing Date, BTG's liability for deferred vacation does
not exceed $900,000.
(h) As of the Closing, BTG does not have any indebtedness for borrowed
money other than current liabilities included in the Closing Working Capital
Amount.
Section 2.8 Absence of Certain Changes. Except as contemplated by this
Agreement, since the Most Recent Financials Date, the Business has been
conducted in the ordinary course of business and there has not been any event or
development which has had a Business Material Adverse Effect, and neither the
Seller nor BTG has taken any action that would have required the consent of the
Buyer under Section 4.2(a) had such action been taken after the date of this
Agreement and prior to the Closing.
Section 2.9 Undisclosed Liabilities. To the knowledge of the Seller,
neither BTG nor the Business has any liability or obligation, nor is either
bound by any guarantee, indemnification, assumption or endorsement or any like
commitment, in each case which is material to the Business and which would be
required by GAAP to be reflected on a balance sheet, except for (a) liabilities
shown on the Most Recent Statement of Net Assets, (b) liabilities which have
arisen since the Most Recent Financials Date in the ordinary course of business
and (c) Excluded Liabilities (as defined in Section 1.2(b) of the Asset Purchase
Agreement). To the knowledge of the Seller, the Assumed Liabilities do not
include any liabilities or obligations which are material to the Business and
which would be required by GAAP to be reflected on a balance sheet (or in the
notes thereto), except liabilities which have arisen since the Most Recent
Financials Date in the ordinary course of business.
Section 2.10 Taxes.
(a) BTG has filed or had filed on its behalf all Tax Returns that it
was required to file in Israel, and all material Tax Returns that it was
required to file outside of Israel, and all such Tax Returns (whether or not
required to be filed in Israel) were correct and complete. BTG has paid (or had
paid on its behalf) all Taxes shown to be due and payable on any such Tax
Returns.
(b) No examination or audit of any Tax Return of BTG or similar
proceeding is currently in progress.
(c) BTG has paid (or had paid on its behalf) in full all Taxes,
including property Taxes, required to be paid by it on or prior to the date
hereof.
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(d) As used in this Agreement, "Taxes" means all taxes, including
income, foreign income, gross receipts, ad valorem, value-added, customs,
duties, stamp duties, purchase tax, property tax, excise, real property,
personal property, sales, use, transfer, withholding, employment, social
security charges, betterment taxes, municipal taxes and franchise taxes imposed
by any Governmental Entity, and any interest, penalties, assessments or
additions to tax resulting from, attributable to or incurred in connection with
any tax or any contest or dispute thereof. As used in this Agreement, "Tax
Returns" means all reports, returns, declarations, statements, forms, claims for
refunds or statements relating to Taxes or other information required to be
supplied to a Governmental Entity in connection with Taxes under any applicable
United States, Israeli, state, local, municipal or foreign law.
(e) Since January 1, 2001, the percentage of the foreign stockholders
of the Seller has been sufficient to comply with the status and treatment of BTG
as a "Foreign Investment Company" as provided in BTG's Tax Returns and BTG's
applications to the Investment Center, in each case in accordance with the
Israeli Law for the Encouragement of Capital Investment - 1959.
Section 2.11 Withholdings and Remittances. BTG has withheld from each
payment made to its employees or former employees, officers and directors, the
Seller and any Affiliates thereof and to all persons or third parties all
amounts required by applicable law to be withheld, and furthermore, has remitted
such withheld amounts within the prescribed periods to the appropriate
Governmental Entity. BTG has charged, collected and remitted on a timely basis
all material Taxes as required under applicable law on any sale, supply or
delivery made by BTG.
Section 2.12 Tangible Personal Property. BTG or the Seller has good
title to, or a valid leasehold interest in or a valid license or right to use,
all of the material tangible personal property reflected on the Most Recent
Statement of Net Assets (other than property sold, consumed or otherwise
disposed of in the ordinary course of business since the Most Recent Financials
Date), free and clear of any Liens.
Section 2.13 Real Property.
(a) BTG does not own any real property.
(b) The Disclosure Schedule lists all real property leased or subleased
to BTG (the "Leased Real Property"). The Seller has made available to the Buyer
complete and accurate copies of the leases and subleases (as amended to date)
listed therein (the "Real Property Leases"). Each such Real Property Lease is in
full force and effect and is a valid and binding obligation of BTG and, to the
Seller's knowledge, the other party or parties thereto, enforceable against BTG
and, to the Seller's knowledge, the other party thereto, in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally and by equitable principles,
including those limiting the availability of specific performance, injunctive
relief and other equitable remedies and those providing for equitable defenses.
With respect to each Real Property Lease, BTG is not, and to the knowledge of
the Seller no other party to such Real Property Lease is, in breach thereof or
default thereunder (with or without due notice or lapse of time or both), except
for any such breach or default that would not reasonably be expected to have a
Business Material Adverse Effect.
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(c) To the knowledge of the Seller, there are no material defects in
the material physical structures on the Leased Real Property located in Beer
Tuvia, Israel. To the knowledge of the Seller, there are no material defects in
the material physical structures on the Leased Real Property located in Rehovot,
Israel that would reasonably be expected to have a Business Material Adverse
Effect.
Section 2.14 Intellectual Property.
(a) The Disclosure Schedule lists all patents, patent applications,
registered trademarks, trademark applications, domain names, copyright
registrations and design right registrations, in each case that are material to
the Business (the "Designated Intellectual Property"), setting forth in each
case the owner thereof. BTG or the Seller owns, or is licensed or otherwise
possesses valid rights to use, the Designated Intellectual Property, free and
clear of any Liens.
(b) Neither BTG nor, with respect to the Business, the Seller, has been
named in any pending suit, action or proceeding which involves a claim of
infringement of any third party's patents, trademarks, trade names, service
marks or copyrights, or misappropriation of any third party's trade secrets, nor
to the knowledge of the Seller is any such suit, action or proceeding which is
material to the Business threatened against BTG or, with respect to the
Business, the Seller. To the knowledge of the Seller, the Business as presently
conducted does not infringe any third party's valid patents, trademarks, trade
names, service marks or copyrights, or misappropriate any third party's trade
secrets, and no third party is infringing any Designated Intellectual Property
or misappropriating any trade secrets of the Business, except in each case for
any such infringement or misappropriation that would not reasonably be expected
to have a Business Material Adverse Effect.
(c) Except as would not reasonably be expected to have a Business
Material Adverse Effect, BTG and, with respect to the Business, the Seller, have
taken reasonable measures to protect and preserve the confidentiality of the
trade secrets and other confidential information of the Business.
(d) The Disclosure Schedule lists (i) each license pursuant to which
BTG or the Seller has granted to any third party any license or right to the
commercial use of any of the Designated Intellectual Property and (ii) each item
of Designated Intellectual Property that is owned by a person or entity other
than BTG or the Seller (other than mass marketed or off-the-shelf software
programs), and the license or agreement pursuant to which the Seller or BTG uses
it.
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(e) To the knowledge of the Seller, none of the duties of any employee
of BTG on behalf of the Business is in material violation of any non-disclosure,
non-compete or inventions agreement entered into by such employee with the
Seller, BTG or any third party.
(f) Except as would not reasonably be expected to have a Business
Material Adverse Effect, BTG or the Seller has an agreement with each contractor
and consultant to the Business providing for an assignment to BTG or the Seller
of, or a license to BTG or the Seller of, or a valid right of BTG or the Seller
to use, any Designated Intellectual Property, trade secrets or other intangible
intellectual property created by or with such consultant or contractor pursuant
to such consultant or contractor's providing services for the Business.
Section 2.15 Contracts.
(a) The Disclosure Schedule lists all of the following contracts and
agreements, in each case excluding Real Property Leases (x) to which BTG is a
party as of March 10, 2005 or (y) in effect as of March 10, 2005 and by which
BTG will (unless terminated in accordance with their terms) be bound immediately
following the Closing:
(i) any contract or agreement for the lease of personal property
providing for annual rentals of NIS 350,000 or more, other than any such
contracts and agreements that can be terminated by BTG on 60 or fewer days'
notice without payment by BTG of any penalty;
(ii) any contract or agreement for the purchase by BTG of
materials, supplies, equipment or services under which the undelivered balance
of such materials, supplies, equipment or services is in excess of NIS 350,000,
other than any such contracts and agreements that can be terminated by BTG on 60
or fewer days' notice without payment by BTG of any penalty;
(iii) any research, development, license, manufacturing, sales,
sales agency, distribution or similar contract or agreement (x) related
primarily to the Business or (y) the termination of which would reasonably be
expected to have a Business Material Adverse Effect;
(iv) any contract or agreement for the acquisition or disposition
by BTG of any operating business (whether by merger, share purchase, asset
purchase or otherwise);
(v) any contract or agreement establishing a partnership or joint
venture;
(vi) any contract or agreement under which BTG has created,
incurred, assumed or guaranteed indebtedness for borrowed money;
(vii) any contract or agreement pursuant to which BTG is committed
not to compete in any line of business or with any person or entity in any area;
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(viii) any contract or agreement between BTG and the Seller or any
of its Affiliates other than BTG, other than any such contracts and agreements
that will be terminated prior to, or pursuant to which BTG will not have any
continuing obligations following, the Closing; and
(ix) any contract or agreement between BTG and any of its employees
or officers.
(b) Other than the Transferred Contracts, the Seller is not as of March
10, 2005 a party to any contract or agreement (i) that relates primarily to the
Business or (y) the termination of which would reasonably be expected to have a
Business Material Adverse Effect.
(c) The Seller has made available to the Buyer a complete and accurate
copy of each Transferred Contract and each contract and agreement listed in
Section 2.15 of the Disclosure Schedule (collectively, the "Business
Contracts").
(d) Other than the Business Contracts, there are no contracts or
agreements to which the Seller or BTG is a party as of March 10, 2005 that are
material to the Business.
(e) Each Business Contract is in full force and effect and is a valid
and binding obligation of BTG or the Seller, as the case may be, and, to the
Seller's knowledge, the other party or parties thereto, enforceable against BTG
or the Seller, as the case may be, and, to the Seller's knowledge, the other
party or parties thereto, in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally and by equitable principles, including those limiting the
availability of specific performance, injunctive relief and other equitable
remedies and those providing for equitable defenses.
(f) With respect to each Business Contract, neither the Seller or BTG,
as applicable, nor to the knowledge of the Seller any other party to such
Business Contract, is in breach thereof or default thereunder (with or without
due notice or lapse of time or both), except for any breaches or defaults that
would not reasonably be expected to have a Business Material Adverse Effect.
Section 2.16 Entire Business. Except for any Deferred Items (as defined
in Section 1.5 of the Asset Purchase Agreement), and assuming the Buyer (or one
or more of its Affiliates) has the ability to provide to the Business all
corporate-level services currently provided to the Business by the Seller, the
Acquired Assets and the assets of BTG collectively are sufficient to permit the
Buyer and the Asset Buyer collectively to conduct the Business immediately
following the Closing as it is currently conducted, except as would not
reasonably be expected to have a Business Material Adverse Effect. The Acquired
Assets are the only assets owned or held by the Seller that are used exclusively
in the Business).
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Section 2.17 Litigation.
(a) There is no action, suit or proceeding material to the Business
before any Governmental Entity pending to which BTG is a party or, to the
knowledge of the Seller, threatened against BTG. There is no action, suit or
proceeding material to the Business before any Governmental Entity pending to
which the Seller is a party or, to the knowledge of the Seller, threatened
against the Seller, which relates to the Business.
(b) BTG is not a party or subject to or in default under any settlement
agreement or any unsatisfied judgment, order, award or decree material to the
Business. The Seller is not a party or subject to or in default under any
settlement agreement or any unsatisfied judgment, order, award or decree
material to the Business.
Section 2.18 Employees.
(a) The Disclosure Schedule contains a list, as of March 10, 2005, of
each employee of BTG, along with the position and the annual base compensation
of each such person. Each employee of BTG as of the date hereof has entered into
a confidentiality and assignment of inventions agreement with BTG, a copy or
form of which has previously been made available to the Buyer.
(b) BTG is not, and the Seller is not with respect to the Business, a
party to or bound by any collective bargaining agreement, labor contract,
voluntary recognition agreement or other binding commitment to any labor union,
trade union or employee organization or group which qualifies as a trade union
in respect of any employees or independent contractors of BTG. BTG does not make
any deduction from its employees' salaries for membership or subscription in any
labor union, trade union or employee organization or group which qualifies as a
trade union. Neither BTG nor the Seller is currently engaged in any collective
bargaining negotiation relating to any employees of BTG. Neither BTG nor the
Seller has experienced, since January 1, 2002, any strikes, grievances, claims
of unfair labor practices or other collective bargaining disputes material to
the Business.
(c) BTG, and the Seller with respect to the Business, have since
January 1, 2002 been and are being operated in compliance in all material
respects with all material applicable laws relating to employees, directors and
officers and former employees of BTG, including material employment standards,
occupational health and safety, human rights, labor relationships, workers'
compensation, pay equity and employment equity laws.
(d) BTG is not a party to and is not bound by any (i) written contract
with any employee, director, officer or former employee, of BTG or (ii) any
agreement, commitment or understanding, whether written or oral, pursuant to
which any employee, director or officer of BTG will receive any increased
payment, compensation, remuneration or other benefit as a result of or triggered
by the consummation of the transactions contemplated by this Agreement and the
Asset Purchase Agreement.
(e) There are no employees of the Seller whose duties consist primarily
of performing services for the Business.
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(f) Neither the Seller nor BTG has made any commitment to any employee
of BTG with respect to the participation by any employee of BTG in any of the
Buyer's equity based option plans. The Seller recognizes that the Buyer is under
no obligation to the Seller or to BTG to grant any equity based compensation to
any employee of BTG.
Section 2.19 Employee Benefits.
(a) The Disclosure Schedule contains a complete and accurate list of
all Employee Benefit Plans (as defined in this Section 2.19(a)) maintained or
contributed to by BTG for the benefit of the employees of BTG (and their
beneficiaries) as of the date hereof (the "Business Benefit Plans"). As used in
this Agreement, "Employee Benefit Plan" means any written or oral plan or
agreement involving compensation applicable to more than one employee, including
insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, share options, share purchase, phantom shares, share
appreciation or other forms of incentive compensation or post-retirement
compensation or fringe benefits. Complete and accurate copies of all Business
Benefit Plans and all material related trust agreements, insurance contracts and
summary plan descriptions have been made available to the Buyer.
(b) The Seller does not currently maintain or contribute to any
Employee Benefit Plan for the employees of BTG, other than the Seller's stock
option and employee stock purchase plans.
(c) There are no material unfunded obligations under any Business
Benefit Plan providing benefits after termination of employment to any employee
of BTG (or to any beneficiary of any such employee).
(d) Each Business Benefit Plan maintained or contributed to by BTG has
been administered in accordance with its terms in all material respects and BTG
has met its material obligations with respect to each such Business Benefit
Plan.
(e) There are no material termination proceedings or other claims
(except claims for benefits payable in the normal operation of the Business
Benefit Plans and proceedings with respect to qualified domestic relations
orders), suits or proceedings against or involving any Business Benefit Plan or
asserting any material rights or claims to benefits under any Business Benefit
Plan, or, to the knowledge of the Seller, investigations by any Governmental
Entity involving any Business Benefit Plan.
(f) All of the Business Benefit Plans are and have been established,
registered, qualified, invested and administered in all material respects in
accordance with (i) all material laws, regulations, orders or other material
legislative, administrative or judicial promulgations applicable to such
Business Benefit Plans, and (ii) all material undertakings between BTG and/or
the Seller and BTG's employees.
(g) No person participates in the Business Benefit Plans other than
current and former employees of BTG.
-16-
(h) BTG has withheld from each payment made to its employees and
officers since January 1, 2002 all material amounts required to be withheld
under any insurance or pension plan, and has remitted such amounts, as well as
all material additional related payments which should have been paid by it since
January 1, 2002 to the relevant insurance companies or pension or savings funds.
(i) BTG's liability to its employees for vacation and holiday pay
as of the Most Recent Financials Date is fully accrued on the Most Recent
Statement of Net Assets.
Section 2.20 Environmental Matters.
(a) For purposes of this Agreement, the following terms have the
meanings provided below.
(i) As used in this Agreement, "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing into the Environment (including the abandonment
or discarding of barrels, containers, and other closed receptacles containing
any Materials of Environmental Concern).
(ii) As used in this Agreement, "Environment" means any surface
water, ground water, drinking water supply, land surface or subsurface strata,
or ambient air.
(iii) As used in this Agreement, "Materials of Environmental
Concern" means (A) any substance that is regulated or which falls within the
definition of a "hazardous substance," "hazardous waste" or "hazardous material"
pursuant to any Environmental Law (as defined in Section 2.20(a)(iv)) or (B) any
petroleum product or by-product, asbestos-containing material, polychlorinated
biphenyls, radioactive materials or radon.
(iv) As used in this Agreement, "Environmental Law" means any
United States, Israeli, state, local or foreign law, regulation or order of a
competent Governmental Entity relating to the protection of the Environment or
occupational health and safety, including any law pertaining to (A) the
presence, manufacture, processing, use, treatment, storage, disposal,
transportation, handling or generation of Materials of Environmental Concern;
(B) air, water and noise pollution; (C) groundwater and soil contamination; or
(D) the Release or threatened Release of Materials of Environmental Concern to
the Environment.
(v) As used in this Agreement, "Environmental Matters" means any
legal obligation or liability arising under Environmental Law.
(vi) As used in this Agreement, "Off-Site Liabilities" means
Environmental Matters resulting from any transportation, treatment, storage,
disposal or Release, or the arrangement therefor, in connection with the
Business of any Materials of Environmental Concern, to or at any property,
location, site or facility other than a Leased Real Property.
(b) Except as would not reasonably be expected to have a Business
Material Adverse Effect:
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(i) neither BTG, nor the Seller with respect to the Business, has
received any written notice alleging any non-compliance with applicable
Environmental Laws;
(ii) neither BTG, nor the Seller with respect to the Business, has
received any written notice alleging that it is subject to liability for any
disposal of or contamination by any Materials of Environmental Concern in
violation of any applicable Environmental Law on the property of any third
party;
(iii) to the Seller's knowledge, the Leased Real Properties are not
contaminated with any Materials of Environmental Concern in an amount or
concentration that would give rise to any clean-up or other material obligation
under any applicable Environmental Law or that would reasonably be expected to
give rise to any criminal or material civil proceedings or liability;
(iv) BTG holds all Permits that are required to operate the
Business under any applicable Environmental Law, which Permits are listed on
Section 2.20 of the Disclosure Schedule. Such Permits presently held are valid
and in full force and effect, and BTG is not in material violation thereof or
material default thereunder. Neither BTG nor the Seller has received any written
threat of suspension or cancellation of any such Permit;
(v) no Materials of Environmental Concern have been Released by BTG
at any Leased Real Property in violation of applicable law;
(vi) neither BTG, nor the Seller with respect to the Business, has
failed to comply with any applicable Environmental Law; and
(vii) neither BTG, nor the Seller with respect to the Business, is
subject to or in default under any unsatisfied judgment, order or decree
addressing any material liability under any applicable Environmental Law.
(c) The Buyer and the Seller agree that the only representations and
warranties of the Seller herein and in the Asset Purchase Agreement as to any
Environmental Matters, Matters of Environmental Concern, Releases, Environmental
Laws and Off-Site Liabilities are those contained in this Section 2.20. Without
limiting the generality of the foregoing, the Buyer specifically acknowledges
that Environmental Matters shall not be within the scope of the representations
and warranties contained in Sections 2.21, 2.22 and 2.23.
Section 2.21 Legal Compliance. BTG and, with respect to the Business,
the Seller, have operated the Business in compliance with all applicable laws,
and the terms of all Business Contracts are in compliance with all applicable
laws, except in each case where the failure to comply therewith would not
reasonably be expected to have a Business Material Adverse Effect. Neither BTG
nor the Seller has received written notice from any Governmental Entity alleging
any failure by BTG or, with respect to the Business, the Seller, to comply with
any applicable law, except as would not reasonably be expected to have a
Business Material Adverse Effect.
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Section 2.22 Permits. The Disclosure Schedule lists all permits,
licenses, franchises, approvals or authorizations from any Governmental Entity
held by BTG or the Seller that are material to the Business (collectively, the
"Permits"). Each such Permit is in full force and effect and BTG or the Seller,
as applicable, is not in material violation thereof or material default
thereunder. Neither BTG nor the Seller has received any written threat of
suspension or cancellation of any such Permit. BTG has not, since January 1,
2000, been in material violation or material default under any Permit issued by
the OCS (other than any violation or default of any payment obligation which has
since been fully satisfied). As of the Closing Date, BTG has paid to the OCS all
amounts required to be paid by it to the OCS on or prior to the Closing Date.
Section 2.23 Drug Product Regulatory Matters.
(a) Section 2.23 of the Disclosure Schedule lists all Regulatory
Authorizations (as defined in this Section 2.23(a)) that are material to the
conduct of the Business as currently conducted and that have been filed by BTG
or Savient with respect to any of the Products. To the knowledge of the Seller,
(i) each such Regulatory Authorization is in full force and effect and BTG is
not in material violation thereof or material default thereunder and (ii) no
suspension, termination or revocation of any such Regulatory Authorization has
been threatened in writing. As used in this Agreement, "Regulatory
Authorizations" means any registration, license, exemption, permit or other
regulatory authorization filed with the United States Food and Drug
Administration (the "FDA"), the Israeli Ministry of Health (the "IMH") or any
similar foreign regulatory authorities.
(b) Each of the drug products, medical devices, drug product candidates
and medical device candidates listed in Section 2.23(b) of the Disclosure
Schedule (the "Products") that is manufactured, labeled, stored, tested,
marketed or distributed by Savient or BTG is being so manufactured, labeled,
stored, tested, marketed or distributed by Savient or BTG, as the case may be,
in compliance in all material respects with the required specifications of such
product, and in all material respects with applicable laws and regulations
(including applicable current "good manufacturing practice" regulations) of the
United States, Israel and similar foreign regulatory authorities, relating to
the manufacture, labeling, storage, testing, marketing and distribution of drug
products.
(c) The Seller has made available to the Buyer all material written
warning letters, notices of adverse findings, audit reports and similar written
correspondence relating to any Product received by the Seller or BTG from the
FDA, the IMH and similar foreign regulatory authorities.
(d) Since January 1, 2002, each of BTG and the Seller has filed all
material adverse drug reaction reports that it was required to file with the
FDA, IMH or any similar foreign regulatory authorities with respect to any
Product.
(e) Neither BTG nor the Seller, nor any of their officers, has violated
any applicable law in connection with obtaining any Regulatory Authorization,
other than as would not reasonably be expected to have a Business Material
Adverse Effect.
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(f) The Buyer and the Seller agree that the only representations and
warranties of the Seller herein and in the Asset Purchase Agreement as to any
Regulatory Authorizations, compliance with laws and regulations of the
manufacture, labeling, storage, testing, marketing and distribution of the
Products and the receipt of warning letters, notices of adverse findings, audit
reports and similar correspondence are those contained in this Section 2.23.
Without limiting the generality of the foregoing, the Buyer specifically
acknowledges that the matters described in the foregoing sentence shall not be
within the scope of the representations and warranties contained in Sections
2.21 and 2.22.
Section 2.24 Brokers' Fees. There is no investment banker, broker,
finder, financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of the Seller or BTG and who is entitled to any fee
or commission from BTG, the Asset Buyer or the Buyer in connection with the
transactions contemplated by this Agreement and the Asset Purchase Agreement, or
whose fee or commission would be an Assumed Liability, other than UBS Securities
LLC, whose fees and expenses shall be paid by the Seller.
Section 2.25 Insurance. Section 2.25 of the Disclosure Schedule lists
all material insurance policies maintained by BTG. All such policies (or
substitute policies with substantially similar terms and underwritten by
insurance carriers with substantially similar or higher ratings) are in full
force and effect and BTG is not in material default, whether as to the payment
of premiums or otherwise, under the terms of such policies. Since January 1,
2002, neither the Seller nor BTG has failed to give notice to any insurer under
any insurance policy maintained by the Seller or BTG of any material claim or
material potential claim relating to the Business, where such failure to give
notice has resulted or would result in a loss of insurance coverage with respect
to such claim or potential claim. Since January 1, 2002, no insurer has refused
to provide coverage for any claim made by BTG under any insurance policy
maintained by BTG.
Section 2.26 Bank Debt. As of the Closing, BTG will have fully repaid
its indebtedness for borrowed money under the Bank Debt (as defined in this
Section 2.26). As used in this Agreement, the "Bank Debt" means BTG's
indebtedness for borrowed money pursuant to (a) the debenture dated June 7, 2000
registered in favor of Bank Hapaolim B.M. As of the Closing, the pledges imposed
on BTG's assets as security for the Bank Debt will have been removed from the
Israeli Registrar of Companies. As of the Closing, BTG will not have any further
liability to Bank Hapaolim B.M. arising out of the Bank Debt.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that:
Section 3.1 Organization; Qualification and Corporate Power. The Buyer
is a corporation duly organized and validly existing under the laws of The
Netherlands. The Buyer has all necessary corporate power and authority to carry
on its business as currently conducted by it.
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Section 3.2 Authority.
(a) The Buyer has all requisite corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by the Buyer of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Buyer. This Agreement has been validly executed and delivered by the
Buyer and, assuming due execution and delivery by the Seller, constitutes a
valid and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally and by
equitable principles, including those limiting the availability of specific
performance, injunctive relief and other equitable remedies and those providing
for equitable defenses.
(b) The Asset Buyer has all requisite corporate power and authority to
execute and deliver the Asset Purchase Agreement and to perform its obligations
thereunder. The execution and delivery by the Asset Buyer of the Asset Purchase
Agreement, the performance of its obligations thereunder and the consummation of
the transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Asset Buyer. The Asset Purchase Agreement
has been validly executed and delivered by the Asset Buyer and, assuming due
execution and delivery by the Seller, constitutes a valid and binding obligation
of the Asset Buyer, enforceable against the Asset Buyer in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally and by equitable principles,
including those limiting the availability of specific performance, injunctive
relief and other equitable remedies and those providing for equitable defenses.
Section 3.3 Governmental Consents. No consent, approval or
authorization of, or registration, declaration or filing with any Governmental
Entity is required to be obtained or made by the Buyer in connection with the
execution, delivery and performance of this Agreement and the Asset Purchase
Agreement by the Buyer and the Asset Buyer, respectively, or the consummation by
the Buyer and the Asset Buyer of the transactions contemplated hereby or
thereby, other than:
(a) the filing of a merger notice with the Israeli Antitrust Authority
and the receipt of approval from the General Director of the Israeli Antitrust
Authority or the expiration of the waiting period considered to be an approval;
(b) the filings and receipt, termination or expiration, as applicable,
of such other approvals or waiting periods required under any other applicable
competition, antitrust or similar law required in any jurisdiction;
(c) the filings and consents required by the OCS;
(d) the filings and consent required by the Israel Lands Authority;
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(e) the filings and consent required by the Investment Center;
(f) those that may be required solely by reason of the Seller's (as
opposed to any other third party's) participation in the transactions
contemplated hereby;
(g) the filings and consents required by the municipal authorities of
Nes Ziona, Israel and Beer Tuvia, Israel; and
(h) those the failure of which to obtain or make prior to the Closing
would not reasonably be expected to have a material adverse effect on either (i)
the ability of the Buyer to consummate the transactions to be consummated at the
Closing pursuant to this Agreement or (ii) the ability of the Asset Buyer to
consummate the transactions to be consummated at the Closing pursuant to the
Asset Purchase Agreement (any such effect, a "Buyer Material Adverse Effect").
Section 3.4 Noncontravention. The execution, delivery and performance
by the Buyer of this Agreement, and the execution, delivery and performance by
the Asset Buyer of the Asset Purchase Agreement, and the consummation of the
transactions contemplated hereby and thereby, do not and will not:
(a) conflict with or violate any provision of the certificate of
incorporation or bylaws of either the Buyer or the Asset Buyer;
(b) assuming compliance with the matters referred to in Section 2.5,
violate any applicable law, rule, regulation, judgment, injunction, order or
decree, or obligation of either the Buyer or the Asset Buyer to any Governmental
Entity, except for any such violations which would not reasonably be expected to
have a Buyer Material Adverse Effect; or
(c) except as would not reasonably be expected to have a Buyer Material
Adverse Effect, result in a breach of or constitute a default under (with or
without due notice or lapse of time or both), or require any notice or consent
under, any (i) contract or agreement to which either the Buyer or the Asset
Buyer is a party or (ii) any permit, license, franchise or authorization held by
either the Buyer or the Asset Buyer.
Section 3.5 Litigation. There is no action, suit or proceeding before
any Governmental Entity pending and to which either the Buyer or the Asset Buyer
is a party or, to the knowledge of the Buyer or the Asset Buyer, threatened,
which would adversely affect the Buyer's performance of its obligations under
this Agreement or the Asset Buyer's performance of its obligations under the
Asset Purchase Agreement, or the consummation of the transactions contemplated
hereby or thereby.
Section 3.6 Investment Intent. The Buyer is acquiring the Shares for
investment for its own account and not with a view to the distribution of any
part thereof. The Buyer acknowledges that the Shares have not been registered
under U.S. federal or any applicable state, local or foreign securities laws and
may be subject to resale restrictions thereunder. The Buyer further acknowledges
that (a) it has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Shares, (b) it can bear the economic risk of an investment in the Shares for an
indefinite period of time and (c) it has had the opportunity to conduct an
independent due diligence review of the Business.
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Section 3.7 Financing. The Buyer currently has, and at the Closing will
have, sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to pay the Share Purchase Price and any other
amounts required to be paid by it hereunder, to consummate the transactions
contemplated hereby and to fulfill its obligations hereunder. The Asset Buyer
currently has, and at the Closing and upon maturity of the Notes (as defined in
Section 1.4(c)(ii) of the Asset Purchase Agreement) will have, sufficient cash,
available lines of credit or other sources of immediately available funds to
enable it to pay the Asset Purchase Price, the amounts due under the Notes, and
any other amounts required to be paid by it under the Asset Purchase Agreement,
to consummate the transactions contemplated hereby and thereby and to fulfill
its obligations thereunder.
Section 3.8 Financial Advisor. There is no investment banker, broker,
finder, financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of the Buyer or the Asset Buyer in connection with
the transactions contemplated by this Agreement and the Asset Purchase
Agreement.
Section 3.9 Due Diligence by the Buyer. The Buyer is an informed and
sophisticated purchaser, and has engaged expert advisors experienced in the
evaluation and purchase of property and assets such as the Shares and the
Business as contemplated hereunder and under the Asset Purchase Agreement. The
Buyer has conducted to its satisfaction an independent investigation of the
financial condition, results of operations, assets, liabilities and properties
of the Business, and has been provided with and has evaluated such documents and
information as it has deemed necessary. In making its determination to proceed
with the transactions contemplated by this Agreement, the Buyer has relied
solely on the results of its own independent investigation and the
representations and warranties of the Seller set forth in Article II of this
Agreement. It is understood that, subject to the terms of this Agreement and the
Asset Purchase Agreement, the Buyer takes the Shares and, together with the
Asset Buyer, the Business, in each case on an "as is" basis, and that the Buyer
agrees to accept the Shares and, together with the Asset Buyer, the Business, in
each case in the condition they are in on the Closing Date without reliance upon
any express or implied representation or warranties, except as expressly set
forth in Article II of this Agreement and Article II of the Asset Purchase
Agreement. Such representations and warranties by the Seller in Article II of
this Agreement and Article II of the Asset Purchase Agreement constitute the
sole and exclusive representations and warranties of the Seller to the Buyer and
the Asset Buyer in connection with the transactions contemplated hereby, and the
Buyer acknowledges and agrees that the Seller is not making, and the Buyer is
not relying upon, any representation or warranty whatsoever, express or implied,
including any implied warranty as to condition, merchantability, or suitability
as to the Shares, any of Acquired Assets or any other assets of BTG or the
Business, beyond those expressly given in Article II of this Agreement and
Article II of the Asset Purchase Agreement. The Buyer further acknowledges and
agrees that any cost estimates, budgets, projections or other predictions that
may have been provided to the Buyer or any of its employees, agents or
representatives are not representations or warranties of the Seller. The Buyer
has no knowledge that any representation or warranty of the Seller in Article II
of this Agreement or in Article II of the Asset Purchase Agreement is not true
and correct, and the Buyer has no knowledge of any errors in, or omissions from,
the Disclosure Schedule or the other Schedules to this Agreement or the Asset
Purchase Agreement (it being understood that the parties agree that the Buyer
does not have any knowledge that the terms of any Business Contract are not in
compliance with any applicable laws).
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ARTICLE IV
PRE-CLOSING COVENANTS
Section 4.1 Closing Efforts.
(a) On the terms and subject to the conditions of this Agreement and
the Asset Purchase Agreement, each of the Buyer and the Seller shall use
commercially reasonable efforts to cause the Closing to occur hereunder and
under the Asset Purchase Agreement, including by using commercially reasonable
efforts to take or cause to be taken all actions and using such efforts to do or
cause to be done all things reasonably necessary or advisable to perform its
obligations hereunder and under the Asset Purchase Agreement, satisfy the
conditions to Closing set forth herein, consummate the transactions contemplated
hereby and thereby and comply with all legal requirements that may be imposed on
it or any of its Affiliates in connection with the consummation of the
transactions contemplated hereby and thereby. Each of the Buyer and the Seller
shall promptly notify the other of any fact, condition or event known to it that
would reasonably be expected to prohibit, make unlawful or delay the
consummation of the transactions contemplated by this Agreement and the Asset
Purchase Agreement. An "Affiliate" of a person or entity is any other person or
entity controlling, controlled by or under common control with such first person
or entity; provided that BTG will be deemed an "Affiliate" of the Seller prior
to the Closing, and an "Affiliate" of the Buyer following the Closing.
(b) Each of the Buyer and the Seller shall, as promptly as practicable
but in no event later than fifteen Business Days following the date hereof, (i)
file a merger notice with the Israeli Antitrust Authority with respect to the
transactions contemplated by this Agreement and the Asset Purchase Agreement,
(ii) make such other filings as are necessary in other jurisdictions in order to
comply with all applicable competition, antitrust or similar laws in connection
with the transactions contemplated by this Agreement and the Asset Purchase
Agreement and (iii) promptly provide any supplemental information requested by
applicable Governmental Entities relating thereto. Any such filing, notification
and report form and supplemental information shall be in material compliance
with the requirements of the Restrictive Trade Practices Law 1988 (the "Israeli
Antitrust Law") or such other applicable law. Each of the Buyer and the Seller
shall furnish to the other such necessary information and reasonable assistance
as the other may request in connection with the preparation of any filing or
submission that is necessary under the Israeli Antitrust Law or such other
applicable law. Each of the Buyer and the Seller shall keep the other apprised
of the status of any communications with, and any inquiries or requests for
additional information from, the Israeli Antitrust Authority and any other
applicable Governmental Entity and shall comply promptly with any such inquiry
or request and shall promptly provide any supplemental information requested in
connection with the filings made pursuant to the Israeli Antitrust Law or such
other applicable law. Each of the Buyer and the Seller shall use commercially
reasonable efforts to obtain approval from the General Director of the Israeli
Antitrust Authority and any clearance required under such other applicable law
for the consummation of the transactions contemplated by this Agreement and the
Asset Purchase Agreement.
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(c) Each of the Buyer and the Seller shall, as promptly as practicable
after the date of this Agreement, (i) make such filings with the OCS, the
Investment Center, the Israel Lands Authority and the municipal authorities of
Nes Ziona, Israel and Beer Tuvia, Israel as are required to obtain the consent
of such authorities to the transactions contemplated by this Agreement and the
Asset Purchase Agreement, (ii) make such filings with, and seek such consents
from, any other Governmental Entity required by applicable law, (iii) provide to
each such authority or other Governmental Entity any information reasonably
requested by such authority or other Governmental Entity in connection with such
filing or consent and (iii) execute such undertakings customarily requested by
any such authority or other Governmental Entity and reasonably necessary or
advisable in connection with obtaining such consent. Without limiting the
generality of clause (iii), the Buyer shall deliver to the OCS an undertaking in
substantially the form attached hereto as Exhibit B and any other undertakings
requested by the Investment Center with respect to BTG's continuing after the
Closing to operate in a manner consistent with its previous undertakings to the
Investment Center.
Section 4.2 Operation of Business.
(a) Except for matters set forth on Schedule 4.2(a) or as otherwise
contemplated by this Agreement, the Asset Purchase Agreement or the Residual
Rights Agreement, from the date of this Agreement until the Closing Date, unless
the Buyer consents in writing in advance otherwise (which consent shall not be
unreasonably withheld, conditioned or delayed), the Seller shall, and shall
cause BTG to, conduct the Business in the ordinary course, and use commercially
reasonable efforts to preserve the material business relationships of the
Business with customers, suppliers, distributors and others with whom the
Business deals in the ordinary course of business. In addition, except for
matters set forth on Schedule 4.2(a) or as otherwise contemplated by this
Agreement, the Asset Purchase Agreement or the Residual Rights Agreement, prior
to the Closing, the Seller shall not, and shall not permit BTG to, do any of the
following without the prior written consent of the Buyer (which consent shall
not be unreasonably withheld, conditioned or delayed):
(i) authorize, issue, sell or transfer any shares of BTG, including
any securities convertible or exercisable into or exchangeable for any shares
of, or any warrants, options or other rights to acquire any shares of, BTG;
(ii) amend or authorize any amendment to the BTG Organizational
Documents;
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(iii) sell, license, lease, assign, transfer or otherwise dispose
of any Acquired Asset or any asset of BTG, in each case that is material to the
Business, other than (x) in the ordinary course of business or (y) sales or
other dispositions of obsolete or excess equipment or other assets not used in
the Business;
(iv) subject the Shares or any of the Acquired Assets or any of the
assets of BTG to any Lien;
(v) grant any severance, retention or similar rights to any
director, officer or employee of BTG, other than any such rights that are
granted pursuant to applicable law or Business Benefit Plans listed on the
Disclosure Schedule;
(vi) enter into any employment, compensation or deferred
compensation agreement (or any amendment to any such existing agreement) with
any employee of BTG providing for (x) payment of annual base salary at a rate in
excess of NIS 600,000 or (y) a notice period for termination of employment of
more than 30 days;
(vii) grant any bonus or any loan, or increase the cash
compensation payable or potentially payable, to any director, officer or
employee of BTG, other than (x) increases that are substantially consistent with
the past practice of the Business or (y) increases required by (x) applicable
law or (y) agreements in effect as of the date hereof and listed on the
Disclosure Schedule;
(viii) adopt any new Business Benefit Plan, or materially amend the
terms of any existing Business Benefit Plan, except as required by law;
(ix) directly or indirectly acquire any operating business, whether
by merger, share purchase or asset purchase (other than acquisitions by the
Seller which will not become integrated into the Business and which will not
prevent the Seller from satisfying its financial obligations prior to the
Closing), or otherwise merge or consolidate BTG with any other person or entity;
(x) enter into any lease of real property for which BTG would have
any liability after the Closing, other than renewals of existing leases in the
ordinary course of business;
(xi) materially change BTG's accounting principles, methods,
practices or costing systems, except in each case only so as to conform to
changes in GAAP or as required by applicable law or any Governmental Entity;
(xii) declare, or agree to declare, any dividend in respect of the
Shares that is to be paid after the Closing;
(xiii) waive any claims or rights of BTG or of the Seller where
such waiver materially adversely affects the Business;
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(xiv) incur or assume any liabilities for borrowed money for which
BTG would have any liability after the Closing, other than current liabilities
incurred in the ordinary course of business;
(xv) enter, or agree to enter, into any contract (or group of
substantially related contracts) to which BTG is a party involving annual
payments in excess of NIS 200,000 or activities by BTG in a new line of
business, in each case other than in the ordinary course of business;
(xvi) intentionally default in any material respect in the
performance of its obligations under any Business Contract that is material to
the Business (a "Material Contract") or any Permit;
(xvii) terminate, cancel or modify in any material respect any
Material Contract; or
(xviii) enter into a legally binding commitment, agree in writing
or otherwise to take any of the foregoing actions or any other action that would
reasonably be expected to have a Business Material Adverse Effect.
(b) Notwithstanding the limitations set forth in paragraph (a) above,
BTG shall be permitted to use any and all cash, cash equivalents and other short
term liquid investments to make dividends or distributions, repay loans or make
other payments to the Seller or any of the Seller's Affiliates.
Section 4.3 Access. Seller shall, and shall cause BTG to, permit the
Buyer and its representatives to have reasonable access (at reasonable times, on
reasonable prior written notice and in a manner so as not to interfere with the
normal business operations of the Business or the Seller) to the personnel,
properties, books, contracts and other records and documents of the Seller and
BTG to the extent relating exclusively to the Business. Notwithstanding the
foregoing, the Seller shall not be obligated to provide any information,
documents or access (i) to any person or entity other than the Buyer unless such
person or entity enters into a confidentiality agreement with the Seller on
terms that are substantially the same as those set forth in the Confidentiality
Agreement (as defined in Section 10.1), (ii) that would violate the provisions
of any applicable laws or any contract or agreement to which it is a party or
(iii) that would cause the loss of the attorney-client privilege with respect
thereto. Prior to the Closing, the Buyer and its Affiliates and representatives
shall not contact or communicate with the employees, customers and suppliers of
the Seller or BTG in connection with the transactions contemplated by this
Agreement and the Asset Purchase Agreement, except with the prior written
consent of the Seller, which consent shall not be unreasonably withheld.
Section 4.4 Schedules. The Seller shall be entitled to submit to the
Buyer, from time to time between the date hereof and the Closing Date, written
updates to the Disclosure Schedule disclosing any events or developments that
occur or any information learned between the date of this Agreement and the
Closing Date. The Seller's representations and warranties contained in this
Agreement and in the Asset Purchase Agreement shall be construed for all
purposes of this Agreement (including Section 5.1(a) and Article VI) and the
Asset Purchase Agreement in accordance with the Disclosure Schedule, as so
updated; provided that the Buyer shall have the right to terminate this
Agreement as a result of any such update to the Disclosure Schedule to the
extent provided in Section 8.1(a)(iv).
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Section 4.5 Elimination of Certain Intercompany Obligations.
(a) At or prior to the Closing, the Seller and BTG shall enter into the
Residual Rights Agreement in the form attached hereto as Exhibit C (the
"Residual Rights Agreement").
(b) Effective as of the Closing, all agreements and other obligations
between BTG or the Business, on the one hand, and the Seller or any of its
Affiliates other than BTG, on the other hand, shall be terminated, other than
(i) the obligations of BTG and the Seller pursuant to the Residual Rights
Agreement, (ii) any manufacturing agreement that may be entered into between the
Seller and BTG with respect to the Seller's PEGylated recombinant porcine
uricase (urate oxidase) product candidate ("Puricase") consistent with the term
sheet attached as Annex C to the Residual Rights Agreement (the "Manufacturing
Agreement") and (iii) to the extent expressly provided for otherwise herein.
Section 4.6 Obligations Relating to Puricase.
(a) Without limiting the generality of Section 4.5(b), for the
avoidance of doubt, effective as of the Closing, all agreements and other
obligations between BTG or the Business, on the one hand, and the Seller or any
of its Affiliates other than BTG, on the other hand, relating to Puricase, shall
be terminated, other than (i) the obligations of BTG and the Seller pursuant to
the Residual Rights Agreement, (ii) the Manufacturing Agreement (if any) and
(iii) to the extent expressly provided for otherwise herein.
(b) On the terms and subject to the conditions of this Agreement, at
the Closing, the Seller shall assume and agree to pay, perform and discharge
when due all liabilities and obligations of BTG existing as of the Closing, of
every kind, nature, character and description, whether known or unknown, primary
or secondary, direct or indirect, absolute or contingent, due or to become due,
in each case arising out of BTG's services performed for the Seller on or prior
to the Closing Date with respect to Puricase, including any contracts or other
undertakings and including any liability to the OCS.
Section 4.7 Banking Relationships; Powers of Attorney. At or prior to
the Closing, the Seller shall provide to the Buyer a schedule listing:
(a) the name of each bank, trust company and other financial
institution in which BTG currently holds any accounts or safety deposit boxes,
in each case holding money or property material to the Business, and the names
of every Person authorized to draw on such accounts or to have access thereto;
and
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(b) to the knowledge of the Seller, the name of each Person holding a
currently effective general or specific power of attorney from BTG and, to the
extent available, a copy thereof.
Section 4.8 BTG-271. Prior to the Closing, the Seller shall either (a)
transfer the patents listed on Schedule 4.8 (the "BTG-271 Patents") to a third
party and arrange with the OCS for a full release of BTG's obligation to pay
royalties to the OCS with respect to subsequent sales in relation thereto or (b)
transfer the BTG-271 Patents to BTG or the Buyer.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.1 Conditions to Obligations of the Buyer. The obligation of
the Buyer to consummate the transactions to be consummated at the Closing
pursuant to this Agreement and the Asset Purchase Agreement is subject to the
satisfaction (or waiver by the Buyer), at or before the Closing, of the
following conditions:
(a) that the representations and warranties of the Seller set forth in
Article II of this Agreement and in Article II of the Asset Purchase Agreement
are true and correct as of the Closing Date as if made as of the Closing Date,
except (i) for changes contemplated or permitted by this Agreement or the Asset
Purchase Agreement or consented to, in writing, by the Buyer or the Asset Buyer,
(ii) for those representations and warranties that address matters only as of a
particular date (which shall be true and correct as of such date, subject to
clause (iii) below), and (iii) for failures to be true and correct as to matters
that would not reasonably be expected to have a Business Material Adverse
Effect;
(b) that the Seller has performed or complied with in all material
respects the agreements and covenants required to be performed or complied with
by it under this Agreement and the Asset Purchase Agreement at or prior to the
Closing;
(c) that the Seller has delivered to the Buyer a certificate (the
"Seller Certificate") to the effect that the conditions specified in clauses (a)
and (b) of this Section 5.1 are satisfied;
(d) that the Seller has obtained the consent to the assignment to the
Asset Buyer at the Closing of the Transferred Contracts listed on Schedule
5.1(d);
(e) that any required consent of the General Director of the Israeli
Antitrust Authority (or the expiration of the waiting period considered to be an
approval), the OCS, the Israeli Land Authority, the Investment Center and the
municipal authorities of Nes Ziona, Israel and Beer Tuvia, Israel to the
transactions contemplated by this Agreement and the Asset Purchase Agreement has
been obtained, and that evidence to this effect has been provided to the Buyer;
and
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(f) that no provision of applicable law and no judgment, injunction,
order or decree in effect and issued by any Governmental Entity of competent
jurisdiction prohibits the consummation of the Closing.
Section 5.2 Conditions to Obligations of the Seller. The obligation of
the Seller to consummate the transactions to be consummated at the Closing
pursuant to this Agreement and the Asset Purchase Agreement is subject to the
satisfaction (or waiver by the Seller), at or before the Closing, of the
following conditions:
(a) that the representations and warranties of the Buyer set forth in
Article III of this Agreement and of the Asset Buyer set forth in Article III of
the Asset Purchase Agreement are true and correct as of the Closing Date as if
made as of the Closing Date, except (i) for changes contemplated or permitted by
this Agreement or the Asset Purchase Agreement or consented to, in writing, by
the Seller, (ii) for those representations and warranties that address matters
only as of a particular date (which shall be true and correct as of such date),
and (iii) for breaches as to matters that would not reasonably be expected to
have a Buyer Material Adverse Effect;
(b) that the Buyer and the Asset Buyer has each performed or complied
with in all material respects the agreements and covenants required to be
performed or complied with by it under this Agreement and the Asset Purchase
Agreement, respectively, at or prior to the Closing;
(c) that the Buyer has delivered to the Seller a certificate (the
"Buyer Certificate") to the effect that the conditions specified in clauses (a)
and (b) of this Section 5.2 are satisfied;
(d) that any required consent of the General Director of the Israeli
Antitrust Authority (or the expiration of the waiting period considered to be an
approval), the OCS, the Israeli Land Authority, the Investment Center and the
municipal authorities of Nes Ziona, Israel and Beer Tuvia, Israel to the
transactions contemplated by this Agreement and the Asset Purchase Agreement has
been obtained; and
(e) that no provision of applicable law and no judgment, injunction,
order or decree in effect and issued by any Governmental Entity of competent
jurisdiction prohibits the consummation of the Closing.
Section 5.3 Frustration of Closing Conditions. Neither party may rely
on the failure of any condition set forth in this Article V to be satisfied if
such failure was caused by such party's failure to act in good faith or to use
commercially reasonable efforts to cause the Closing to occur, or to otherwise
act as required by Section 4.1.
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ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification by the Seller. Subject to the terms and
conditions of this Article VI, the Seller shall indemnify the Buyer and its
Affiliates, and their respective officers, directors, employees, stockholders,
agents and representatives (the "Buyer Indemnified Parties") in respect of, and
hold each Buyer Indemnified Party harmless against, any liabilities, monetary
damages, fines, fees, penalties, costs and expenses (including reasonable
attorneys' fees and expenses) (collectively, "Damages") incurred or suffered by
such Buyer Indemnified Party, to the extent resulting from:
(a) any breach of a representation or warranty of the Seller contained
in Article II of this Agreement, Article II of the Asset Purchase Agreement or
the Seller Certificate;
(b) any failure of the Seller to perform or any breach by the Seller of
any covenant or agreement contained in this Agreement or the Asset Purchase
Agreement;
(c) the failure of the Seller to pay or otherwise discharge when due
and payable the Excluded Liabilities or any part thereof; or
(d) the litigation described in Section 2.17, Item 1 of the Disclosure
Schedule.
Section 6.2 Indemnification by the Buyer. Subject to the terms and
conditions of this Article VI and Article VII, the Buyer shall indemnify the
Seller and its Affiliates, and their respective officers, directors, employees,
stockholders, agents and representatives (the "Seller Indemnified Parties") in
respect of, and hold each Seller Indemnified Party harmless against, any Damages
incurred or suffered by such Seller Indemnified Party, to the extent resulting
from:
(a) any breach of a representation or warranty of the Buyer contained
in Article III of this Agreement or the Buyer Certificate, or any breach of a
representation or warranty of the Asset Buyer contained in Article III of the
Asset Purchase Agreement;
(b) any failure of the Buyer or the Asset Buyer to perform or any
breach by the Buyer or the Asset Buyer of any covenant or agreement contained in
this Agreement or the Asset Purchase Agreement, respectively;
(c) the Acquired Assets or the operation or conduct of the Business
(including warranty obligations and product liability) before, on or after the
Closing Date, except to the extent resulting from an event or circumstance
constituting a breach of any representation or warranty of the Seller in Article
II of this Agreement, Article II of the Asset Purchase Agreement or the Seller
Certificate;
(d) any Environmental Matters or Materials of Environmental Concern, in
each case relating to the Business or the Acquired Assets, except to the extent
resulting from an event or circumstance constituting a breach of any
representation or warranty of the Seller in Article II of this Agreement,
Article II of the Asset Purchase Agreement or the Seller Certificate;
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(e) any actions, suits, proceedings, disputes, claims or investigations
arising out of or related to the Acquired Assets or the Business, except to the
extent resulting from an event or circumstance constituting a breach of any
representation or warranty of the Seller in Article II of this Agreement,
Article II of the Asset Purchase Agreement or the Seller Certificate; or
(f) the failure of the Asset Buyer to pay or otherwise discharge when
due and payable the Assumed Liabilities or any part thereof, except to the
extent resulting from an event or circumstance constituting a breach of any
representation or warranty of the Seller in Article II of this Agreement,
Article II of the Asset Purchase Agreement or the Seller Certificate.
Section 6.3 Claims for Indemnification.
(a) Third-Party Claims. All claims for indemnification made under this
Agreement resulting from, relating to or arising out of a claim, action, suit,
proceeding or assertion of liability asserted by a third-party against an
Indemnified Party (as defined in Section 6.3(a)(i)) for which indemnification
may be sought (a "Third-Party Claim") shall be made in accordance with the
following procedures:
(i) A person or entity entitled to indemnification under this
Article VI (an "Indemnified Party") shall give prompt written notice to the
person or entity from whom indemnification is sought (the "Indemnifying Party")
of the assertion of a Third-Party Claim. Such notice shall include a description
in reasonable detail (to the extent known by the Indemnified Party) of the facts
constituting the basis for such Third-Party Claim and the amount of the Damages
claimed, along with copies of the relevant documents evidencing such Third-Party
Claim or the basis therefor.
(ii) Within 30 days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the Indemnified Party,
assume control of the defense (which it is understood shall include any related
settlement discussions and negotiations) of such Third-Party Claim with counsel
of the Indemnifying Party's choice. If the Indemnifying Party assumes control of
such defense, the Indemnifying Party shall not be liable to any Indemnified
Party for legal expenses subsequently incurred by the Indemnified Party in
connection with such Third-Party Claim following the assuming of control by the
Indemnifying Party. If the Indemnifying Party does not assume control of such
defense, the Indemnified Party shall control such defense (but the Indemnifying
Party shall nevertheless have the right to participate in such defense) and in
such case the reasonable attorneys' fees and expenses incurred by the
Indemnified Party shall be included in the "Damages" for which the Indemnified
Party may be entitled to indemnification by the Indemnifying Party. If, having
elected to assume control of the defense of a Third-Party Claim, the
Indemnifying Party thereafter fails to conduct such defense with reasonable
diligence, or thereafter decides not to continue to control such defense, then
the Indemnified Party may assume control of the defense of such Third-Party
Claim (but the Indemnifying Party shall nevertheless have the right to
participate in such defense) and in such case the reasonable attorneys' fees and
expenses incurred by the Indemnified Party shall be included in the "Damages"
for which the Indemnified Party may be entitled to indemnification by the
Indemnifying Party. Where an Indemnified Party controls the defense of a
Third-Party Claim in accordance with this Section 6.3(a)(ii), the Indemnifying
Party may not refuse to indemnify for "Damages" if such indemnification would
otherwise be required by this Article VI solely on the basis that the
Indemnified Party controlled such defense.
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(iii) The party controlling such defense shall keep the Indemnified
Party (and, if different, the other party hereto) advised of the status of such
Third-Party Claim and the defense thereof and shall consider recommendations
made by the Indemnified Party (and, if different, the other party hereto) with
respect thereto.
(iv) The Indemnified Party shall not file any papers, consent to the
entry of any judgment or agree to any settlement of such Third-Party Claim
without the prior written consent of the Indemnifying Party. The Indemnifying
Party shall not agree to any settlement of such Third-Party Claim that imposes
any liability or obligation on the Indemnified Party or that does not include a
complete release of the Indemnified Party from all liability with respect
thereto, in each case without the prior written consent of the Indemnified Party
(which consent shall not be unreasonably withheld, conditioned or delayed).
(v) The Buyer shall, and shall cause its Affiliates and employees
to, cooperate with the Seller in connection with the prosecution, defense,
settlement or performance of the Seller's obligations under this Article VI. The
Seller shall, and shall cause its Affiliates and employees to, cooperate with
the Buyer in connection with the prosecution, defense, settlement or performance
of the Buyer's obligations under this Article VI.
(b) Procedure for Other Claims. An Indemnified Party wishing to assert
a claim for indemnification under this Article VI that does not result from,
relate to or arise out of a Third-Party Claim shall deliver to the Indemnifying
Party a written notice promptly upon learning of such claim. Such notice shall
include a description in reasonable detail (to the extent known by the
Indemnified Party) of the facts constituting the basis for such claim and the
amount of the Damages incurred by the Indemnified Party, along with copies of
the relevant documents relating to such claim. The Indemnified Party will
reasonably cooperate with and assist the Indemnifying Party in determining the
validity of any claim for indemnity by the Indemnified Party and in otherwise
resolving such matters.
Section 6.4 Survival.
(a) The representations and warranties of the Seller set forth in
Article II of this Agreement, Article II of the Asset Purchase Agreement and the
Seller Certificate, and of the Buyer set forth in Article III of this Agreement
and the Buyer Certificate, and of the Asset Buyer set forth in Article III of
the Asset Purchase Agreement, shall survive the Closing and the consummation of
the transactions contemplated hereby solely for the purposes of Sections 6.1 and
6.2, and shall terminate on the date that is 18-months after the Closing Date,
provided that to the extent Damages result from fraud by the Seller, its
Affiliates or their employees, such limitation shall not apply. Notwithstanding
the foregoing, (i) the representations and warranties of the Seller contained in
Sections 2.10 and 2.11 shall survive the Closing and the consummation of the
transactions contemplated hereby until the expiration of the applicable statute
of limitations, (ii) the representations and warranties of the Seller contained
in Sections 2.1, 2.2 and 2.3 of this Agreement and Sections 2.1 and 2.2 of the
Asset Purchase Agreement, and of the Buyer contained in Sections 3.1 and 3.2 of
this Agreement, and of the Asset Buyer contained in Sections 3.1 and 3.2 of the
Asset Purchase Agreement, shall survive the Closing and the consummation of the
transactions contemplated hereby without limitation and (iii) the
representations and warranties of the Seller contained in Sections 2.14(a) and
2.14(f) shall survive the Closing and the consummation of the transactions
contemplated hereby solely for purposes of Section 6.1, and shall terminate on
the date that is three years after the Closing Date.
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(b) None of the covenants or other agreements contained in this
Agreement or the Asset Purchase Agreement shall survive the Closing Date other
than those which by their terms contemplate performance after the Closing Date,
and each such surviving covenant and agreement shall survive the Closing only
until the expiration of the term of the undertaking set forth in such agreement
and covenant.
(c) No party shall have any liability or obligation of any nature with
respect to any representation, warranty, agreement or covenant after the
termination thereof.
(d) If an indemnification claim is properly asserted in writing
pursuant to Section 6.3 prior to the expiration pursuant to Section 6.4(a) of
the representation or warranty that is the basis for such claim, then such
representation or warranty shall survive until, but only for the purpose of, the
resolution of such claim.
Section 6.5 Limitations.
(a) Notwithstanding anything to the contrary contained in this
Agreement or the Asset Purchase Agreement, the following limitations shall apply
to indemnification claims under this Agreement:
(i) no individual claim (or series of related claims) for
indemnification under Section 6.1(a) (other than any claim for indemnification
pursuant to Section 6.1(a) based on any breach of any representation or warranty
in Sections 2.1, 2.3, 2.10, 2.11 or 2.26) or Section 6.1(b) shall be valid and
assertable unless it is (or they are) for an amount in excess of $25,000;
(ii) the Seller shall be liable with respect to claims under Section
6.1(a) (other than any claim for indemnification pursuant to Section 6.1(a)
based on any breach of any representation or warranty in Sections 2.10, 2.11 or
2.26) for only that portion of the aggregate Damages related to such claims
(excluding any claims disallowed under Section 6.5(a)(i)), exceeds 1% of the sum
of the Adjusted Share Purchase Price and the Adjusted Asset Purchase Price;
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(iii) the aggregate liability of the Seller for all Damages under
Section 6.1(a) (other than any claim for indemnification pursuant to Section
6.1(a) based on any breach of any representation or warranty in Sections 2.1,
2.2, 2.3, 2.4, 2.10. 2.11 or 2.26) and Section 6.1(b) (other than any claim for
indemnification pursuant to Section 6.1(b) based on any breach of any covenant
of the Seller in Article VII) shall not exceed an amount equal to 10% of the sum
of the Adjusted Share Purchase Price and the Adjusted Asset Purchase Price;
provided, however, that the Buyer Indemnified Parties shall be entitled to be
indemnified pursuant to Section 6.1(a) based on any breach of any representation
or warranty in Sections 2.8, 2.9, 2.13(c), 2.14, 2.16, 2.17, 2.20, 2.21 or 2.25
in excess of such amount equal to 10% of the sum of the Adjusted Share Purchase
Price and the Adjusted Asset Purchase Price, but only to the extent that the
aggregate liability of the Seller for all Damages under Section 6.1(a) based on
any breach of any representation or warranty would not exceed an amount equal to
25% of the sum of the Adjusted Share Purchase Price and the Adjusted Asset
Purchase Price; provided further, however, that to the extent Damages result
from fraud by the Seller, its Affiliates or their employees, the limitations in
this Section 6.5(a)(iii) shall not apply; and
(iv) the aggregate liability of the Buyer for all Damages under
Section 6.2(a) (other than any claim for indemnification pursuant to Section
6.2(a) based on any breach of any representation or warranty in Sections 3.1,
3.2 and 3.7) shall not exceed an amount equal to 10% of the sum of the Adjusted
Share Purchase Price and the Adjusted Asset Purchase Price, provided that to the
extent Damages result from fraud by the Buyer, its Affiliates or their
employees, such limitation shall not apply; and
(v) the Buyer shall not be entitled to make any claim for
indemnification with respect to any matter to the extent the Share Purchase
Price has been adjusted to reflect such matter pursuant to Section 1.4.
(b) In no event shall any Indemnifying Party be responsible or liable
for any Damages or other amounts under this Article VI that are (i)
consequential, in the nature of lost profits, diminutions in value, special or
punitive or otherwise not actual damages (except in the event that the
Indemnified Party shall be finally adjudged and required to pay special or
consequential damages of any nature to any third party in any Third-Party Claim
with respect to which such Indemnified Party is entitled to indemnification
hereunder, in which case such special or consequential damages shall be included
in the "Damages" for which the Indemnified Party may be entitled to
indemnification by the Indemnifying Party) or (ii) contingent, unless and until
such Damages are actual and mature. Each of the Buyer, the Seller and the
Indemnified Party with respect to any indemnification claim shall (and shall
cause its Affiliates to) use commercially reasonable efforts to pursue all legal
rights and remedies available in order to minimize the Damages for which
indemnification is provided to it under this Article VI.
(c) Effective as of the Closing, the Buyer hereby waives and releases
(and shall cause BTG to waive and release), any claim (but, for the avoidance of
doubt, not any contractual obligation that survives the Closing, whether
hereunder, under the Asset Purchase Agreement or otherwise) that BTG may have
against the Seller or its Affiliates as of the Closing Date.
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(d) The amount of Damages recoverable by an Indemnified Party under
this Article VI with respect to an indemnity claim shall be reduced by (i) the
amount of any payment received by such Indemnified Party (or an Affiliate
thereof) from an insurance carrier with respect to the Damages to which such
indemnity claim relates and (ii) the amount of any Tax benefit realized or
realizable by such Indemnified Party (or an Affiliate thereof) which is
attributable to the Damages to which such indemnity claim relates. An
Indemnified Party shall use commercially reasonable efforts to pursue, and to
cause its Affiliates to pursue, all insurance claims and Tax benefits to which
it may be entitled in connection with any Damages it incurs, and each of the
Buyer, the Seller and the Indemnified Party with respect to any indemnification
claim shall cooperate with each other in pursuing insurance claims with respect
to any Damages or any indemnification obligations with respect to Damages. If an
Indemnified Party (or an Affiliate) receives any insurance payment in connection
with any claim for Damages for which it has already received an indemnification
payment from the Indemnifying Party, it shall pay to the Indemnifying Party,
within 30 days of receiving such insurance payment, an amount equal to the
excess of (i) the amount previously received by the Indemnified Party under this
Article VI with respect to such claim plus the amount of the insurance payments
received, over (ii) the amount of Damages with respect to such claim which the
Indemnified Party has become entitled to receive under this Article VI.
(e) To the extent any representation or warranty of the Seller in
Article II of this Agreement, Article II of the Asset Purchase Agreement or the
Seller Certificate is, to the knowledge of the Buyer or the Asset Buyer on or
prior to the Closing Date, untrue or incorrect, the Buyer shall have no rights
to indemnification under this Article VI by reason of such untruth or inaccuracy
(it being understood that the parties agree that neither the Buyer nor the Asset
Buyer has any knowledge that the terms of any Business Contract are not in
compliance with any applicable laws).
(f) Except for claims for (i) equitable relief, including specific
performance, made with respect to breaches of any covenant or agreement
contained in this Agreement or in the Asset Purchase Agreement, and (ii) fraud,
the rights of the Indemnified Parties under this Article VI shall be the sole
and exclusive remedies of the Indemnified Parties and their respective
Affiliates with respect to claims relating to breaches of any representation,
warranty, covenant or agreement contained in this Agreement, the Asset Purchase
Agreement, the Buyer Certificate or the Seller Certificate, or otherwise
relating to the transactions that are the subject of this Agreement and the
Asset Purchase Agreement.
Section 6.6 Treatment of Indemnification Payments. All indemnification
payments made under this Agreement shall be treated for Tax purposes by the
Buyer, the Asset Buyer and the Seller as an adjustment to the Adjusted Share
Purchase Price or the Adjusted Asset Purchase Price, as applicable (it being
understood that, for the avoidance of doubt, any such adjustment will not have
any affect on the Adjusted Share Purchase Price or the Adjusted Asset Purchase
Price for purposes of determining the limitations in Section 6.5).
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ARTICLE VII
TAX MATTERS
Section 7.1 Preparation and Filing of Tax Returns; Payment of Taxes.
(a) The Seller shall be responsible for the preparation and filing of
all Tax Returns for the Seller for all periods (including the consolidated,
unitary, and combined Tax Returns for the Seller which include the operations of
the Business for any period ending on or before the Closing Date) and for all
Tax Returns for any Income Taxes (as defined in this Section 7.1(a)) of BTG for
all taxable periods that end on or before the Closing Date and all other Tax
Returns of BTG required to be filed (taking into account extensions) prior to
the Closing Date, and the same shall be prepared and filed in a timely manner
and in accordance with applicable law; provided, however, that the Seller shall
provide to the Buyer copies of such Tax Returns to be filed after the date
hereof in advance of filing such Tax Returns, and shall consult with the Buyer
regarding any comments that the Buyer may have to the preparation of such Tax
Returns (it being agreed that the Seller shall be required to consider such
comments but shall not be required to accept such comments, and that the
preparation of such Tax Returns shall ultimately be in the Seller's sole
discretion). As used in this Agreement, "Income Taxes" means any Taxes imposed
upon or measured by net income. The Seller shall make or cause to be made all
payments required with respect to any such Tax Returns. The Buyer shall promptly
reimburse the Seller for the amount of any such Taxes paid by the Seller to the
extent such Taxes are attributable (as determined under Section 7.2) to periods
following the Closing Date.
(b) The Buyer shall be responsible for the preparation and filing of
all other Tax Returns for BTG or the Business. The Buyer shall make all payments
required with respect to any such Tax Returns; provided, however, that the
Seller shall promptly reimburse the Buyer for the amount of any such Taxes paid
by the Buyer to the extent such Taxes are attributable (as determined under
Section 7.2(b)) to periods ending on or before the Closing Date.
(c) Any Tax Return of BTG to be prepared and filed for taxable periods
beginning before the Closing Date and ending after the Closing Date shall be
prepared and filed in a timely manner, in accordance with applicable law and on
a basis consistent with the last previous similar Tax Return, and the Buyer
shall consult with the Seller concerning each such Tax Return and report all
items with respect to the period ending on the Closing Date in accordance with
the instructions of the Seller; provided, however, that if the Buyer is advised
by counsel that the filing of any Tax Return and the reporting on such Tax
Return of any item in accordance with the instructions of the Seller raises a
significant possibility that the Buyer would be subject to non-de minimis
penalties or fines, the Buyer may file such Tax Return without regard to the
Seller's instructions relating to such item. The Buyer shall provide the Seller
with a copy of each proposed Tax Return (and such additional information
regarding such Tax Return as may reasonably be requested by the Seller) at least
20 days prior to the filing of such Tax Return.
(d) The Buyer shall be responsible for the payment of any transfer,
sales, use, stamp, conveyance, value added, recording, registration,
documentary, filing and other non-income Taxes and administrative fees
(including notary fees) arising in connection with the consummation of the
transactions contemplated by this Agreement and the Asset Purchase Agreement.
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(e) The Buyer shall be responsible for the payment of any and all Taxes
attributable to the acts or omissions of the Buyer or the Buyer's Affiliates
occurring after the Closing.
Section 7.2 Allocation of Certain Taxes.
(a) The Buyer and the Seller agree that if BTG or the Seller is
permitted but not required under applicable state, local or foreign Tax laws to
treat the Closing Date as the last day of a taxable period for BTG, the Buyer
and the Seller shall treat such day as the last day of a taxable period.
(b) Any Taxes for a taxable period beginning before the Closing Date
and ending after the Closing Date with respect to the Business shall be
apportioned for purposes of Section 7.1 between the Seller and the Buyer based
on the actual operations of the Business during the portion of such period
ending on the Closing Date and the portion of such period beginning on the day
following the Closing Date, and for purposes of the provisions of Sections 7.1
and 7.3, each portion of such period shall be deemed to be a taxable period
(whether or not it is in fact a taxable period).
Section 7.3 Refunds and Carrybacks.
(a) The Seller shall be entitled to any refunds (including any interest
paid thereon) or credits of Taxes with respect to the Business attributable to
taxable periods ending (or deemed pursuant to Section 7.2(b) to end) on or
before the Closing Date.
(b) The Buyer and/or its Affiliates, as the case may be, shall be
entitled to any refunds (including any interest paid thereon) or credits of
Taxes with respect to the Business attributable to taxable periods beginning (or
deemed pursuant to Section 7.2(b) to begin) after the Closing Date.
(c) The Buyer shall forward to or reimburse the Seller for any such
refunds (including any interest paid thereon) or credits due to the Seller after
receipt thereof, and the Seller shall promptly forward to the Buyer or reimburse
the Buyer for any such refunds (including any interest paid thereon) or credits
due the Buyer after receipt thereof.
(d) The Buyer and the Seller agree that, with respect to any Tax, BTG
shall not carry back any item of loss, deduction or credit which arises in any
taxable period ending after the Closing Date to any taxable period ending on or
before the Closing Date.
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Section 7.4 Cooperation on Tax Matters; Tax Audits.
(a) The Buyer and the Seller and their respective Affiliates shall
cooperate in the preparation of all Tax Returns for any Tax periods for which
the Buyer or the Seller could reasonably require the assistance of the other in
obtaining any necessary information. Such cooperation shall include, but not be
limited to, furnishing prior years' Tax Returns or return preparation packages
to the extent related to the Business illustrating previous reporting practices
or containing historical information relevant to the preparation of such Tax
Returns, and furnishing such other information within such other party's
possession requested by the party filing such Tax Returns as is relevant to
their preparation. Such cooperation and information also shall include provision
of powers of attorney for the purpose of signing Tax Returns and defending
audits and promptly forwarding copies of appropriate notices and forms or other
communications received from or sent to any applicable Governmental Entity which
relate to the Business, and providing copies of all relevant Tax Returns to the
extent related to the Business, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by any
Governmental Entity and records concerning the ownership and Tax basis of
property, which the requested party may possess. The Buyer and the Seller and
their respective Affiliates shall make their respective employees and facilities
available on a mutually convenient basis to explain any documents or information
provided hereunder.
(b) The Seller shall have the right, at its own expense, to control any
audit or examination by any Governmental Entity ("Tax Audit"), initiate any
claim for refund, or contest, resolve and defend against any assessment, notice
of deficiency, or other adjustment or proposed adjustment relating to any and
all Taxes for any taxable period ending on or before the Closing Date with
respect to the Business. The Buyer shall have the right, at its own expense, to
control any other Tax Audit, initiate any other claim for refund, and contest,
resolve and defend against any other assessment, notice of deficiency, or other
adjustment or proposed adjustment relating to Taxes with respect to the
Business; provided that, with respect to (i) any state, local or foreign Taxes
for any taxable period beginning before the Closing Date and ending after the
Closing Date and (ii) any item the adjustment of which may cause the Seller to
become obligated to make any payment pursuant to Section 7.1(a) hereof, the
Buyer shall consult with the Seller with respect to the resolution of any issue
that would affect the Seller, and not settle any such issue, or file any amended
Tax Return relating to such issue, without the consent of the Seller. Where
consent to a settlement is withheld by the Seller pursuant to this Section
7.4(b), the Buyer may continue or initiate any further proceedings at its own
expense, provided that any liability of the Buyer, after giving effect to this
Agreement and the Asset Purchase Agreement, shall not exceed the liability that
would have resulted had the Seller not withheld its consent.
Section 7.5 Termination of Tax Sharing Agreements. All Tax sharing
agreements or similar arrangements with respect to or involving the Business
shall be terminated prior to the Closing Date and, after the Closing Date, the
Buyer and its Affiliates shall not be bound thereby or have any liability
thereunder for amounts due in respect of periods ending on or before the Closing
Date.
Section 7.6 Section 338 Election. The Buyer shall not make any election
pursuant to Section 338(g) of the Internal Revenue Code of 1986 (or any
comparable election under any other federal, state, local or foreign Tax law)
with respect to the purchase of the Shares pursuant to this Agreement.
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Section 7.7 Scope of Article VII. Any claim by any Indemnified Party
relating to a breach by the Buyer or the Seller of its obligations under this
Article VII shall be pursued in accordance with the procedures for
indemnification claims set forth in Section 6.3, and shall otherwise be subject
to the terms and conditions of Article VI other than the limitations in Sections
6.4(b) and 6.5(a)(i) through (iii). Notwithstanding the foregoing or any other
term or condition of Article VI, (i) claims for a breach of an obligation under
this Article VII may be made by an Indemnified Party at any time prior to the
expiration of the statute of limitations applicable to the Tax matter to which
the claim relates and (ii) to the extent there is any inconsistency between the
terms of Article VI and this Article VII with respect to the allocation of
responsibility between the Seller and the Buyer for Taxes relating to the
Business, the provisions of this Article VII shall govern.
ARTICLE VIII
TERMINATION
Section 8.1 Termination of Agreement.
(a) This Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing as provided below:
(i) by mutual written consent of the Buyer and the Seller;
(ii) by the Buyer, if any of the conditions set forth in Section 5.1
shall have become incapable of fulfillment;
(iii) by the Seller, if any of the conditions set forth in Section
5.2 shall have become incapable of fulfillment;
(iv) by the Buyer, within 30 days following delivery to the Buyer in
accordance with Section 10.7 of an update to the Disclosure Schedule pursuant to
Section 4.4 which contains new disclosure of any event or development that would
reasonably be expected to have a Business Material Adverse Effect; or
(v) by either the Buyer or the Seller, if the Closing shall not have
been consummated on or before July 30, 2005; provided, however, that if any of
the conditions in Sections 5.1(d), 5.1(e) or 5.2(d) are not satisfied on July
30, 2005, then neither party shall have the right to terminate under this
Section 8.1(a)(v) until the earlier of (x) the tenth Business Day after all of
the conditions in Sections 5.1(d), 5.1(e) and 5.2(d) are satisfied or (y)
December 31, 2005;
provided, however, that the party seeking termination pursuant to clauses (ii)
through (v) is not then in material breach of any of its agreements or covenants
contained in this Agreement or in the Asset Purchase Agreement.
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(b) Any termination of this Agreement pursuant to this Section 8.1
shall be effective upon delivery of notice by the terminating party to the other
party, and thereupon this Agreement and the transactions contemplated hereby
shall be terminated, without further action by any party.
Section 8.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 8.1, all obligations of the parties hereunder shall
terminate without any liability of either party to the other party (provided
that, for the avoidance of doubt, the Confidentiality Agreement shall survive
any such termination for the term set forth therein). Notwithstanding the
foregoing, termination of this Agreement shall not relieve any party for
liability for any breach by such party, prior to the termination of this
Agreement, of any covenant or agreement (but not any representation or warranty)
contained in this Agreement or impair the right of any party to obtain such
remedies as may be available to it in law or equity with respect to such a
breach by any other party.
ARTICLE IX
OTHER POST-CLOSING COVENANTS
Section 9.1 Access to Information; Record Retention.
(a) Following the Closing, subject to Section 9.1(b) and subject to
customary confidentiality provisions, each of the Buyer and the Seller shall,
and shall cause their respective Affiliates, to grant to the other reasonable
access (at reasonable times, on reasonable prior written notice and in a manner
so as not to interfere with normal business operations) to the financial records
and other information in its possession related to their conduct of the Business
and such cooperation and assistance as shall be reasonably required to enable
each of them to complete their legal, regulatory, stock exchange and financial
reporting requirements and for any other reasonable business purpose, including
for litigation and insurance matters. Each party shall promptly reimburse the
other for such other party's reasonable out-of-pocket expenses associated with
requests made by such first party under this Section 9.1(a), but no other
charges (including the salary or cost of fringe benefits or similar expenses
pertaining to employees of the providing party) shall be payable by the
requesting party to the other party in connection with such requests.
(b) Notwithstanding anything to the contrary in Section 9.1(a), neither
party nor any of its Affiliates shall be obligated to provide any information,
documents or access that would (i) violate the provisions of any applicable laws
or any contract or agreement to which it is a party or (ii) cause the loss of
the disclosing party's attorney-client privilege with respect thereto.
(c) Except as may otherwise be required by law or agreed to in writing
by the parties, each party shall use commercially reasonable efforts to
preserve, until six years after the Closing Date plus any additional time during
which Seller advises Buyer that there is an ongoing tax audit or investigation,
all financial and tax information and related material business records in its
possession or control to the extent pertaining to the Business prior to the
Closing. Notwithstanding the foregoing, in lieu of retaining any particular
documents, any party may offer in writing to the other party to deliver such
documents to the other party, and if such offer is not accepted within 90 days,
the offered documents may be disposed of at any time.
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Section 9.2 Use of Name for Transition Period.
(a) The Buyer shall, as promptly as practicable (and in any event
within sixty Business Days) following the Closing, change, amend or terminate,
and cause the Asset Buyer to change, amend or terminate, any certificates of
assumed name or d/b/a filings, to discontinue any reference to the Retained
Marks (as defined in this Section 9.2(a)). As used in this Agreement, "Retained
Marks" means all trademarks, trade names and logos of the Seller, and any
contractions, abbreviations and simulations of the Seller, other than the
corporate name of BTG and the Transferred Trademark Rights (as defined in
Section 1.1(a)(iii) of the Asset Purchase Agreement).
(b) Following the Closing, none of BTG, the Buyer or the Asset Buyer
shall have any right to use any Retained Marks, and the Buyer shall cause BTG
and the Asset Buyer to discontinue the use of all Retained Marks as of the
Closing. Following the Closing, the Buyer shall not, and the Buyer shall not
permit BTG or the Asset Buyer to, hold itself out as having any affiliation with
the Seller or any of the Seller's Affiliates.
Section 9.3 Payment of Assumed Liabilities; Receipt of Accounts
Receivable.
(a) In the event that the Seller (or an Affiliate thereof)
inadvertently pays or discharges, after the Closing, any Assumed Liabilities,
the Asset Buyer shall reimburse the Seller or such Affiliate for the amount so
paid or discharged within 30 days of being presented with written evidence of
such payment or discharge.
(b) In the event that the Seller inadvertently receives, after the
Closing, any payment on the account of the Accounts Receivable (as defined in
Section 1.1(a)(vii) of the Asset Purchase Agreement), the Seller shall promptly
pay to the Asset Buyer all such amounts received.
Section 9.4 Further Assurances. At any time and from time to time after
the Closing Date, as and when reasonably requested by any party hereto and at
such party's expense, the other party shall promptly execute and deliver, or
cause to be executed and delivered, all such documents, instruments and
certificates and shall take, or cause to be taken, all such further or other
actions as are necessary to evidence and effectuate the transactions
contemplated by this Agreement and the Asset Purchase Agreement. Without
derogating from the generality of the foregoing, the Seller shall, as and when
reasonably requested by the Buyer and at the Buyer's expense (it being
understood that the Buyer will have no obligation to reimburse the Seller for
any costs other than out-of-pocket costs), promptly execute and deliver, or
cause to be executed and delivered, all documents, instruments and certificates
required by any patent office in any country of the world, as are necessary to
effect the assignment of any Transferred Patent Rights (as defined in Section
1.1(a)(ii) of the Asset Purchase Agreement) to the Asset Buyer pursuant to the
Asset Purchase Agreement.
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Section 9.5 License Grants.
(a) Beginning on the date hereof and ending on the date that is nine
months after the Closing Date, the Buyer and the Seller shall work together in
good faith and use commercially reasonable efforts to determine whether (i) in
order to develop, make, have made, use, offer for sale, sell and import Puricase
or any other product or service of the Seller as of the Closing Date, and any
future products containing any of the same active ingredients as any of the
foregoing, the Seller requires a license under any of the Transferred Patent
Rights or any of the patents and patent applications owned by BTG as of the
Closing, or any Related Patent Rights (as defined in Section 9.5(e)) of any of
the foregoing (any such required license, a "Seller License") and (ii) in order
to develop, make, have made, use, offer for sale, sell and import the Products
and the Transferred Products (as defined in Section 1.1(a)(i) of the Asset
Purchase Agreement), and any future products containing any of the same active
ingredients as any of the Products or Transferred Products, the Asset Buyer or
BTG requires a license under any of the patents and patent applications owned by
the Seller as of the Closing, and their respective Related Patent Rights (and
such required license, a "Buyer License").
(b) If, at any time prior to the date that is nine months after the
Closing Date, the Seller determines that a Seller License is required, the Buyer
shall cause each of the Asset Buyer or BTG (as applicable) to immediately and
automatically grant to the Seller, retroactive to the Closing, a fully paid-up,
non-royalty-bearing, perpetual, worldwide nonexclusive license, under the
relevant Transferred Patent Rights, patents and patent applications of BTG and
Related Patent Rights of any of the foregoing, to develop, make, have made, use,
offer for sale, sell and import Puricase or any other product or service of the
Seller as of the Closing Date, and any future products containing any of the
same active ingredients as any of the foregoing.
(c) If, at any time prior to the date that is nine months after the
Closing Date, the Buyer determines that a Buyer License is required, the Seller
shall immediately and automatically grant to each of the Asset Buyer or BTG (as
applicable), retroactive to the Closing, a fully paid-up, non-royalty-bearing,
perpetual, worldwide nonexclusive license, under the relevant patents and patent
applications of the Seller and respective Related Patent Rights, to develop,
make, have made, use, offer for sale, sell and import the Products and the
Transferred Products, and any future products containing any of the same active
ingredients as any of the Products or Transferred Products.
(d) The Buyer and the Seller shall not, and shall cause each of their
Affiliates not to, enter into any contract or agreement or take any other
action, including any assignment, sale, license or other transfer of patents,
patent applications or Related Patent Rights, that would impair or limit the
respective obligations of the Buyer, BTG or the Seller to grant licenses under
this Section 9.5, or the rights of the Buyer, BTG or the Seller to have licenses
granted to them under this Section 9.5.
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(e) As used in this Agreement, "Related Patent Rights" means, with
respect to a patent or patent application: (i) continuations,
continuations-in-part, divisionals and substitute patent applications of such
patent application and of any other patent application from which such patent
application or such patent claim priority; (ii) patents issued with respect to
such patent application and with respect to any patent applications set forth in
the preceding clause (i); and (iii) reissues, reexaminations, renewals and
extensions (including supplemental patent certificates) of, and confirmation
patents, registration patents and patents of addition based on, such patent and
any patents set forth in the preceding clause (ii), in each case in clauses (i),
(ii) and (iii) in any country in the world.
Section 9.6 Non-Competition.
(a) Subject to Section 9.6(b), the Seller agrees that from and after
the Closing Date and until three years following the Closing Date (the
"Non-Competition Period"), the Seller shall not, directly or indirectly
(including through any Subsidiary (as defined in this Section 9.6(c)), without
the express prior written consent of the Buyer, develop, manufacture, market or
sell any of the following products, anywhere in the world (any such restricted
activities collectively, a "Competitive Activity"):
(i) human growth hormone;
(ii) sodium hyaluronate-based medical devices or products;
(iii) hepatitis B vaccine; or
(iv) recombinant human insulin.
(b) This Section 9.6 shall not restrict (i) the Seller from owning or
purchasing as an investment, directly or indirectly, any indebtedness or less
than 5% of the outstanding equity of any Person engaged in any Competitive
Activity, (ii) the Seller from, directly or indirectly, developing,
manufacturing, marketing or selling any product competing with any Transferred
Product, or otherwise competing with any Transferred Product and (iii) the
activities of any Person who acquires the Seller after the date hereof, or of
any business acquired by the Seller after the date hereof.
(c) As used in this Agreement, a "Subsidiary" of the Seller means any
Person more than 50% of whose outstanding equity securities representing the
right to vote for the election of directors is owned by the Seller and/or any
other Subsidiary of the Seller.
Section 9.7 Non-Solicitation. The Seller agrees that during the
Non-Competition Period, the Seller shall not, whether on the Seller's own
account or for others, directly or indirectly, solicit, interfere with or
endeavor to entice away from BTG any of BTG's employees or consultants as of the
Closing Date.
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Section 9.8 No Interference with the Business. The Seller agrees that
during the Non-Competition Period, the Seller shall not, for any reason,
directly or indirectly, (a) solicit or divert any business or clients or
customers of the Business as of the Closing Date away from the Business for the
purpose of engaging in a Competitive Activity or (b) induce customers, clients,
suppliers, agents or other Persons under contract or otherwise associated with
or doing business with the Business as of the Closing Date to reduce or alter in
a manner adverse to the Business any such association or business with the
Business.
ARTICLE X
MISCELLANEOUS
Section 10.1 Confidentiality Agreement. The Buyer acknowledges that the
confidential or proprietary information or documents provided to the Buyer or
any of its Affiliates pursuant to this Agreement or the Asset Purchase Agreement
shall be "Information" subject to the confidentiality agreement dated September
29, 2004 between the Buyer and the Seller (the "Confidentiality Agreement").
Effective upon, and only upon, the Closing, the Confidentiality Agreement shall
terminate with respect to "Information" (as defined thereunder) relating solely
to the Business; provided, however, that the Buyer acknowledges that all other
"Information" provided to it by the Seller and its representatives concerning
the Seller or any of its Affiliates other than BTG shall remain subject to the
Confidentiality Agreement after the Closing.
Section 10.2 Press Releases and Announcements. Immediately after the
execution and delivery of this Agreement, the Seller will issue a press release
announcing the execution and delivery of this Agreement and the Asset Purchase
Agreement, substantially in the form previously agreed by the Buyer and the
Seller. From the date hereof through the Closing Date, neither the Buyer nor the
Seller shall issue (and each shall cause its Affiliates not to issue) any other
press release or public disclosure relating to the subject matter of this
Agreement and the Asset Purchase Agreement without the prior consent of the
other (which consent shall not be unreasonably withheld, conditioned or
delayed); provided, however, that each of the Buyer and the Seller (and their
respective Affiliates) may make any public disclosure it believes in good faith
is required by law or the rules of any securities exchange or market (in which
case the disclosing party shall advise the other party and the other party
shall, as far as practicable, have the right to review such press release or
announcement prior to its publication).
Section 10.3 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the Buyer, the Seller
and their respective successors and permitted assigns and, to the extent
expressly specified herein, their respective Affiliates.
Section 10.4 Action to be Taken by Affiliates. Each of the Buyer and
the Seller shall cause their respective Affiliates to comply with all of the
obligations specified in this Agreement to be performed by such Affiliates.
Section 10.5 Entire Agreement. This Agreement, the Asset Purchase
Agreement, the Residual Rights Agreement and the Confidentiality Agreement
constitute the entire agreement between the Buyer and its Affiliates, on the one
hand, and the Seller and its Affiliates, on the other hand, with respect to the
subject matter hereof and thereof, and supersede any prior agreements or
understandings between the Buyer and its Affiliates, on the one hand, and the
Seller and its Affiliates, on the other hand, with respect to such matters.
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Section 10.6 Succession and Assignment. Neither this Agreement nor any
of the rights, interests, or obligations hereunder may be assigned by either
party hereto without the prior written consent of the other party hereto, except
that either party may assign its rights hereunder to any entity that acquires
all or substantially all of such party's business or assets (provided that no
such assignment shall relieve the assigning party of its obligations hereunder,
and the assigning party shall remain primarily liable for such obligations).
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns.
Section 10.7 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered four Business
Days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one Business Day after it is sent by overnight delivery via
a reputable national courier service, in each case to the intended recipient as
set forth below:
If to the Buyer:
Ferring B.V.
Postbus 184
2130 AD Hoofddorp
The Netherlands
Attention: General Counsel
Telecopy: x00 (0) 00 000 00 00
If to the Seller: Copies to:
Savient Pharmaceuticals, Inc. Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
Xxx Xxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Attention: Xxxxx X. Xxxxxxx, Esq.
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Any party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other party notice in the manner herein set forth.
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Section 10.8 Amendments and Waivers. The Buyer and the Seller may
mutually amend or waive any provision of this Agreement at any time. No
amendment or waiver of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by all of the parties.
Section 10.9 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of an
arbitrator or a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties agree that the body
making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
Section 10.10 Expenses. Except as otherwise specifically provided to
the contrary in this Agreement, each of the parties shall bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the Asset Purchase Agreement and the transactions contemplated
hereby and thereby.
Section 10.11 Governing Law. This Agreement and any disputes hereunder
shall be governed by and construed in accordance with the laws of the State of
New York, United States of America, without giving effect to any choice or
conflict of law provision or rule that would cause the application of any other
laws.
Section 10.12 Disclosure. The Disclosure Schedule shall be arranged in
sections and subsections corresponding to the numbered and lettered sections and
subsections contained in Article II. The disclosures in any section or
subsection of the Disclosure Schedule shall qualify other sections and
subsections in Article II to the extent it is reasonably clear from a reading of
the disclosure that such disclosure is applicable to such other sections and
subsections. The inclusion of any information in the Disclosure Schedule shall
not be deemed to be an admission or acknowledgment, in and of itself, that such
information is required by the terms hereof to be disclosed, is material to the
Business, has resulted in or would result in a Business Material Adverse Effect,
or is outside the ordinary course of business. The phrase "to the knowledge of
the Seller", "known to the Seller" or any phrase of similar import as used in
this Agreement means and is limited to (a) the actual knowledge of Xxx Xxxxxx,
BTG's Managing Director and Xxxxx Xxxxx, BTG's Vice President, Legal and
Associate General Counsel, as well as any other actual knowledge which such
persons would possess if they made reasonable inquiries with respect to the
matter in question of appropriate "officeholders" of BTG (as defined in the
Israel Companies Act 1999) who would reasonably be expected to have material
knowledge of the matter in question, and (b) the actual knowledge (without any
duty of inquiry) of Xxxxxx X. Xxxxxxxx, the Seller's Senior Vice President of
Corporate Strategy and General Counsel and Xxxxxxxxxxx X. Xxxxxxx, the Seller's
Chief Executive Officer.
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Section 10.13 Construction. Except where expressly stated otherwise in
this Agreement, the following rules of interpretation apply to this Agreement:
(i) "either" and "or" are not exclusive and "include", "includes" and
"including" are not limiting; (ii) "hereof", "hereto", "hereby", "herein" and
"hereunder" and words of similar import when used in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement;
(iii) "date hereof" refers to the date set forth in the initial caption of this
Agreement; (iv) "extent" in the phrase "to the extent" means the degree to which
a subject or other thing extends, and such phrase does not mean simply "if"; (v)
descriptive headings and the table of contents are inserted for convenience only
and do not affect in any way the meaning or interpretation of this Agreement;
(vi) definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms; (vii) references to a contract or
agreement mean such contract or agreement as amended or otherwise modified from
time to time; (viii) references to a person or entity are also to its permitted
successors and assigns; (ix) references to an "Article", "Section", "Exhibit" or
"Schedule" refer to an Article or Section of, or an Exhibit or Schedule to, this
Agreement; (x) references to "$" or otherwise to dollar amounts refer to the
lawful currency of the United States; (xi) references to "NIS" refer to New
Israeli Shekels; (xii) references to a law include any rules, regulations and
delegated legislation issued thereunder; and (xiii) the defined term "Business"
shall have the identical meaning in this Agreement and in the Asset Purchase
Agreement, notwithstanding that different portions of the Business are sold
pursuant to this Agreement and the Asset Purchase Agreement. The language used
in this Agreement shall be deemed to be the language chosen by the Buyer and the
Seller to express their mutual intent, and no rule of strict construction shall
be applied against the Buyer or the Seller.
Section 10.14 Counterparts and Facsimile Signature. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
This Agreement may be executed by exchange of signatures by facsimile.
Section 10.15 Dispute Resolution.
(a) Any disputes, claims or controversies between the Seller and the
Buyer in connection with this Agreement, including any question regarding its
formation, existence, validity, enforceability, performance, interpretation,
breach or termination (any such dispute, claim or controversy, a "Dispute"),
shall be finally resolved by binding arbitration.
(b) Any arbitration hereunder shall be conducted under the Rules of
Arbitration of the London Court of International Arbitration. The arbitration
shall be conducted in the English language before three arbitrators chosen
according to the following procedure: within 20 days after commencement of the
arbitration, each of the Buyer and the Seller shall appoint one arbitrator, and
within 20 days after the appointment of both such arbitrators, the two
arbitrators so chosen shall choose the third arbitrator. If the two arbitrators
chosen by the Buyer and the Seller cannot agree on the choice of the third
arbitrator within a period of 20 days after their appointment, then the third
arbitrator shall be appointed by the London Court of International Arbitration.
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(c) Each of the arbitrators shall be a lawyer or former judge. The
chairman of the three arbitrators shall have experience arbitrating disputes in
the pharmaceutical industry.
(d) Any arbitration that would otherwise conducted pursuant to either
Section 6.15 of the Asset Purchase Agreement or Section 10 of the Residual
Rights Agreement that relates to the subject matter of any arbitration conducted
pursuant to this Section 10.15 shall be combined into a single arbitration
before the same panel of three arbitrators, conducted in accordance with this
Section 10.15.
(e) Each of the Buyer and the Seller hereby irrevocably waives all
rights to trial by jury in any Dispute.
(f) Each of the Buyer and the Seller hereby irrevocably waives all
rights to any damages that are consequential, in the nature of lost profits,
diminutions in value, special or punitive or otherwise not actual damages,
except as expressly provided by the parenthetical proviso in Section 6.5(b).
(g) The place of the arbitration shall be London, England.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Buyer and the Seller have executed this
Agreement as of the date first above written.
SAVIENT PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: President and Chief Executive
Officer
FERRING B.V.
By: /s/ Xxxxxxxx Xxxxxxx
----------------------------------------
Name: [illegible]
Title: [illegible]
[The following schedules and exhibits to this Share Purchase Agreement have been
omitted and will be provided to the Commission upon request to the Registrant:
Exhibit A Share Transfer Deed
Exhibit B Form of Undertaking
Exhibit C Residual Rights Agreement
Exhibit D Guarantee
Disclosure Schedule
Schedule 4.2(a) Operation of Business
Schedule 4.8 BTG-271 Patents
Schedule 5.1(d) Required Consents
Appendix I Memorandum and Articles of
Association of BTG]
