Exhibit 99.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (together with the Annexes, Schedules and
Exhibits attached hereto, this "Agreement"), dated as of February 6, 2002 by and
between VETOQUINOL U.S.A., Inc., a Delaware corporation (the "Buyer"), and IGI,
INC., a Delaware corporation (the "Seller"). Capitalized terms used in this
Agreement are defined or otherwise referenced in Section 10.03.
W I T N E S S E T H:
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WHEREAS, the Seller is in the business of the production and marketing
of companion pet products (the "Products") such as pharmaceuticals, nutritional
supplements and grooming aids and formulations under the names EVSCO
Pharmaceuticals, Tomlyn and Luv `Em (collectively, the "Pet Business"); and
WHEREAS, the Seller desires to sell to the Buyer, and the Buyer
desires to purchase from the Seller, the Purchased Assets, and the Buyer has
agreed to assume the Assumed Liabilities, in each case in connection with the
Pet Business and upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual representations and
warranties and covenants made herein, the Buyer and the Seller, each intending
to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
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Section 1.01. Purchase and Sale of Assets.
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(a) At the Closing provided for in Section 2.01, on the terms and
subject to the conditions set forth in this Agreement, the Seller shall, or
shall cause its Subsidiaries to, sell, convey, transfer, assign and deliver to
the Buyer, free and clear of any and all Liens and Encumbrances, and the Buyer
shall purchase and acquire from the Seller or its Subsidiaries, as applicable,
all of the right, title and interest of the Seller or its Subsidiaries, as
applicable, in and to all of the assets used solely in the Pet Business existing
on the Closing Date other than the Excluded Assets (collectively, the "Purchased
Assets"). The Purchased Assets include the following:
(i) all inventories solely of the Pet Business including, without
limitation, raw materials, work in progress, consigned goods, finished
goods, packaging and labels (including, without limitation, any of the
foregoing owned by the Seller and held for the benefit of the Seller or its
Subsidiaries and in the possession of third party manufacturers, suppliers,
dealers or others in transit) (the "Inventory"),
(ii) except as provided in Section 1.01(b)(ii), all items of
personal property used solely in connection with the Pet Business
including, without limitation, the personal property set forth on Schedule
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1.01(a)(ii);
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(iii) except for the Novasome Technology and as provided in
Section 1.01(b)(i), all past and current product formulations,
specifications, processes, trade secrets, inventions for which no patents
are pending, industrial rights and technological know-how owned by the
Seller or any of its Subsidiaries relating solely to the Products, any of
the Purchased Assets, or the Pet Business (excepting the Novasome
Technology and as provided in Section 1.01(b)(i), the "Technology")
including, but not limited to, those set forth on Schedule 1.01(a)(iii);
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(iv) to the extent maintained by the Seller or any of its
Subsidiaries, all books, records, files and other data of the Seller or any
of its Subsidiaries (including those stored electronically) other than
Accessible Financial Records, in each case relating solely to any of the
Products, the Purchased Assets or the Pet Business, including, but not
limited to, customer lists, customer purchasing histories, price lists,
distribution lists, supplier lists, inventory reports of raw materials,
packaging, goods in process and finished goods, production data,
manufacturing and quality control records and procedures, customer
complaint and inquiry files, research and development files, records, data
and laboratory books, medical reports, files relating to the safety and
effectiveness of each of the Products, adverse reaction reports, Product
Registrations and regulatory files (including, but not limited to, all
correspondence with any Governmental Entity), sales materials and records,
strategic plans, internal financial statements, marketing and promotional
surveys, material and research, trademark and Intellectual Property files
and import and export records; provided that the Seller may maintain and
retain copies of all such materials;
(v) the agreements, personal property leases, contracts,
licenses, leases, commitments, understandings, instruments, binding
obligations and arrangements (oral or written) (A) set forth (or, in the
case of oral contracts a description of the material terms of which are set
forth) in Schedule 1.01(a)(v) or (B) that are entered into in the ordinary
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course of the Pet Business between the date hereof and the Closing Date
(the "Assumed Contracts");
(vi) to the extent their transfer is permitted by Applicable Law,
all approvals, consents, permits, licenses, registrations, authorizations
and clearances of any Governmental Entity including, without limitation,
all Product Registrations, FDA approvals, product clearances and any other
product registrations issued or granted to the Seller or any of its
Subsidiaries relating, in each case, solely to any of the Products, the
Purchased Assets or the Pet Business (the "Permits") including, but not
limited to, the Permits set forth on Schedule 1.01(a)(vi);
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(vii) all current and historical sales and promotional literature
and other material of the Seller or any of its Subsidiaries relating solely
to the Products, the Purchased Assets or the Pet Business, including, but
not limited to, promotional
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pamphlets and brochures, samples, historical and current television, radio
and other media advertising, historical and current print advertising and
all artwork relating to sales and promotional literature; provided that the
Seller may maintain and retain copies of all such materials;
(viii) all labels, logo's, graphics and associated artwork, all
current and historical packaging, and all litho screens, master silk
screens, printing plates and associated tooling and material, in each case
owned by the Seller or any of its Subsidiaries and relating solely to the
Products, the Purchased Assets or the Pet Business including, but not
limited to, those set forth on Schedule 1.01(a)(viii); provided that the
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Seller may maintain and retain copies of all such materials;
(ix) except as set forth in Section 1.01(b)(i), all rights of the
Seller in all Intellectual Property relating solely to any of the Products,
the Purchased Assets or the Pet Business, including the goodwill associated
therewith, and the Seller's or its Subsidiaries' right to xxx for, and
remedies against, past, present or future infringements thereof, and rights
of priority and protection of interest therein;
(x) all accounts receivable of the Seller or any of its
Subsidiaries as of the Closing Date relating solely to the Pet Business
(whether or not invoices have been issued), and any and all insurance
policies and letters of credit relating to the payment thereof or to
customer credit;
(xi) all "other receivables" of the Seller or any of its
Subsidiaries as of the Closing Date relating solely to the Pet Business,
which shall include refunds, credits, allowances, rebates and other debt
items owing by suppliers, vendors and others furnishing goods or providing
services to the Pet Business;
(xii) all prepaid expenses, advances or deposits with or paid to
third parties of the Seller or any of its Subsidiaries relating solely to
the Pet Business;
(xiii) all goodwill of the Seller and its Affiliates relating solely
to the Pet Business;
(xiv) the domain names "Xxxxxx.xxx" and "XxxxxXxxxx.xxx", and the
content at the domain names and Internet web sites set forth on Schedule
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3.11(a) of the Disclosure Schedule to the extent such content relates
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solely to any of the Products, the Purchased Assets or the Pet Business;
(xv) except as provided in Section 1.01(b)(vi), all claims, causes
of action, judgments, indemnity or other rights that were or could have
been instituted by the Seller or any of its Subsidiaries against any third
party (collectively, "Claims"), arising solely out of or relating solely to
(A) any of the Purchased Assets arising before, on or after the Closing or
(B) the conduct of the Pet Business as conducted before, on and after the
Closing; and
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(xvi) except for the Novasome Technology, all Products of the Pet
Business manufactured, packaged, marketed, sold or otherwise distributed on
or prior to the Closing Date and owned by the Pet Business on the Closing
Date, including any Discontinued Products so owned on the Closing Date,
including those listed in Schedule 1.01(a)(xvi).
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(b) Notwithstanding anything in this Agreement to the contrary,
specifically excluded from the Purchased Assets are the right, title and
interest of the Seller, or any of its Subsidiaries, in or to any of following
(collectively, the "Excluded Assets"):
(i) except to the extent incorporated in the Inventory as of the
Closing Date and as provided in the Technology Rights Agreement, all right,
title and interest of the Seller or any of its Subsidiaries in or to the
Novasome Technology and any and all books, records, files and other data of
the Seller or any of its Subsidiaries (including those stored
electronically), relating to the Novasome Technology;
(ii) all manufacturing equipment (the "Manufacturing Equipment")
and racking and any Hazardous Substance stored in conjunction with the Pet
Business located at Seller's facility (the "Plant") at 000-000 Xxxxxxx
Xxxx, Xxxxx, Xxx Xxxxxx including the items set forth in Schedule
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1.01(b)(ii), except for such Manufacturing Equipment as is covered by the
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Assumed Contracts;
(iii) all right, title and interest of the Seller or any of its
Subsidiaries in or to any real property, including but not limited to the
Plant, other than to the extent set forth in the Transition Services
Agreement, if any;
(iv) all cash, short term investments and cash equivalents held
by the Seller or any of its Subsidiaries;
(v) all agreements, contracts, leases, licenses, commitments,
understandings, instruments or any other binding obligation or arrangement
(oral or written) to which the Seller or any of its Subsidiaries is a party
or by which any of the Purchased Assets is bound or subject or which
relates in any manner to the Pet Business and, which in each case, is not
an Assumed Contract (except those relating to the Permits that the Buyer
specifically assumes);
(vi) all insurance policies of the Seller or any of its
Subsidiaries and any rights thereunder;
(vii) all books, records, files and data (including those stored
electronically) of the Seller or any of its Subsidiaries (A) not relating
solely to any of the Products, the Purchased Assets or the Pet Business, or
(B) prepared in connection with this Agreement or the other Transaction
Agreements or the transactions contemplated hereby and thereby (including
all minute books and corporate records of the Seller and its Subsidiaries);
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(viii) all claims, causes of action, judgments, indemnity or
other rights arising out of or relating to any of the Excluded Assets or
Retained Liabilities;
(ix) all refunds, credits or overpayments with respect to
Taxes;
(x) all rights of the Seller and any of its Subsidiaries
arising under this Agreement or the other Transaction Agreements or the
transactions contemplated hereby and thereby;
(xi) any domain name other than "Xxxxxx.xxx" and
"XxxxxXxxxx.xxx", and any Internet web site other than those set forth
on Schedule 3.11(a);
(xii) the corporate name of the Seller, any derivations
thereof and any trademarks, service marks, logo's, artwork or other marks
related thereto;
(xiii) those assets set forth on Schedule 1.01(b)(xiii);
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(xiv) the Accessible Financial Records; and
(xv) any asset, property, right, contract or other
agreement that is not included within the Purchased Assets.
Section 1.02. Purchase Price.
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(a) In consideration of the sale, conveyance, transfer,
assignment and delivery of the Purchased Assets by the Seller or its
Subsidiaries, as applicable, pursuant to Section 1.01(a), the Buyer agrees to
(i) pay to the Seller in accordance with Section 1.03, US $16,700,000 (Sixteen
Million Seven Hundred Thousand Dollars) in the aggregate (subject to the
adjustments, if any, contemplated by Section 1.06, the "Purchase Price") in cash
at Closing, and (ii) undertake, assume and agree to perform, and otherwise pay,
satisfy and discharge the following liabilities, obligations, claims, demands,
expenses, damages or responsibilities, if any, of any of the Seller or its
Subsidiaries whether known or unknown, absolute, accrued, contingent or
otherwise and whether due or to become due (the "Assumed Liabilities") and no
others:
(i) All Current Liabilities reflected on the Final
Statement of Working Capital;
(ii) all liabilities and obligations of the Seller or any
of its Subsidiaries under the Assumed Contracts to the extent included in
the Purchased Assets and which are either Current Liabilities reflected
on the Final Statement of Working Capital or which arise and relate to
any period on or after the Closing; and
(iii) all obligations for the repair, replacement or return
of Products manufactured or sold in the ordinary course of the Pet
Business prior to the Closing Date;
(iv) those liabilities and obligations set forth on
Schedule 1.02(a)(iv);
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(v) (A) during each twelve-month period beginning on each
of the Closing Date and the first anniversary date thereof (each a
"Products Liability Period"), those liabilities and obligations relating
to products liability claims made during such Products Liability Period
and relating to Products sold in the ordinary course of the Pet Business
prior to the Closing Date (the "Products Liability Claims"), to the
extent the aggregate amount of such liabilities and obligations in such
Products Liability Period exceeds Two Million Dollars (net of any
liability or obligation assumed under subsection (B) hereof in such
Products Liability Period), but only to the extent of such excess; (B)
during any Products Liability Period, those liabilities and obligations
relating to Products Liability Claims made during such Products Liability
Period for which the Seller is not entitled to any insurance recovery
because of a deductible in any policy providing insurance coverage for
Products Liability Claims, provided that the maximum liability of the
Buyer under this sub-section (B) with respect to any Products Liability
Claim shall not exceed $25,000; (C) with respect to any period after the
second Products Liability Period, all liabilities and obligations
relating to any Products Liability Claims made during such period; and
(D) any and all liabilities and obligations for products liability claims
made at any time relating to Products manufactured but not sold in the
ordinary course of the Pet Business prior to the Closing Date.
(vi) all liabilities and obligations relating solely to the
Products, the Purchased Assets or the Pet Business, in each case to the
extent arising out of and relating to any period on and after the Closing
Date and not otherwise included in the Retained Liabilities other than
those with respect to which the Buyer is entitled to indemnification
pursuant to Section 9.01(a)(iii), (iv) or (v); and
(vii) liabilities, debts, obligations and claims (other than
those relating to Taxes, Indebtedness, violations of Applicable Laws,
including Environmental Laws, the Excluded Assets, the Retained
Liabilities or the Assumed Liabilities set forth in the preceding clauses
(i)-(vi)) which do not exceed $100,000 in the aggregate.
(b) On the terms and subject to the conditions set forth in this
Agreement, the Xxxx of Sale and the Instrument of Assignment and Assumption, at
the Closing, the Seller or its Subsidiaries shall assign to the Buyer all of
their rights under the Assumed Contracts and the Permits and all of their
obligations under the Assumed Contracts and the Permits, in each case to the
extent such obligations arise on or after the Closing, and the Buyer shall
accept the assignment of all of the Seller's or its Subsidiaries' rights
thereunder and shall assume all of the Seller's or its Subsidiaries' obligations
thereunder, to the extent such obligations arise on or after the Closing;
provided, however, that the Seller or its Subsidiaries shall assign such rights
and obligations only to the extent that such rights and obligations are
assignable under such Assumed Contracts and Permits and Applicable Law, and no
action hereunder shall constitute an assignment thereof, except to such extent
and provided, further, that to the extent the consent of any Person to the
assignment, or notice to a third party of the assignment, is required pursuant
to the terms of such Assumed Contract, Permit or Applicable Law, no assignment
or attempted assignment will be deemed to have been effected by the provisions
of this Agreement without such consent or notice or waiver thereof. To the
extent that such an Assumed Contract or Permit and Applicable Law permit such an
assignment and the notice to or consent of any Person is required, the Seller or
its Subsidiaries shall use commercially reasonable efforts to deliver to, and
obtain from, the applicable Person the required consent or notice in accordance
with the terms and conditions of the applicable Assumed Contract or Permit and
of Applicable Law, and shall
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use commercially reasonable efforts to obtain any such required consents, upon
terms substantially similar to those enjoyed by the Seller or its Subsidiaries
under such Assumed Contract or Permit, prior to the Closing Date. To the extent
that Applicable Law does not permit the Seller or its Subsidiaries to assign any
Assumed Contract that would otherwise constitute a Purchased Asset, the Seller
or its Subsidiary that is a party to such Contract shall (i) provide to the
Buyer, at the request of the Buyer, the benefits of any such Contract, and (ii)
enforce and perform, at the request and reasonable expense of the Buyer and to
the extent commercially reasonable, for the account of the Buyer, any rights or
obligations of the Seller or its Subsidiaries arising from any such Contract
against or in respect of any third party, including the right to elect to
terminate any Contract in accordance with the terms thereof upon the advice of
the Buyer, or otherwise enter into with the Buyer such other reasonable
arrangements sufficient to provide equivalent benefits and burdens to the Buyer;
provided that the Buyer shall reimburse the Seller or its Subsidiaries for
reasonable out-of-pocket expenses incurred by the Seller or its Subsidiaries in
connection with entering into any such other arrangement. The Buyer shall, to
the extent permitted by Applicable Law, perform and fulfill on a subcontractor
basis or otherwise the obligations of the Seller and its Subsidiaries pursuant
to the preceding sentence.
(c) Notwithstanding anything in this Agreement to the contrary, the
Buyer shall not assume, and the Seller shall be responsible for the payment,
satisfaction, performance and discharge of all liabilities, obligations, claims,
demands, expenses, damages or responsibilities of the Seller or any of its
Subsidiaries other than the Assumed Liabilities, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become due
(collectively, the "Retained Liabilities").
Section 1.03. Payment of Purchase Price. At the Closing, the Buyer
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shall deliver to the Seller US $16,700,000 (Sixteen Million Seven Hundred
Thousand Dollars) (the "Closing Payment") in immediately available funds by wire
transfer to an account or accounts designated by the Seller.
Section 1.04. Allocation of Purchase Price. Promptly following the
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Closing, the amount of the Purchase Price plus all Assumed Liabilities shall be
allocated by the parties in accordance with Section 1060 of the Code. Neither
the Seller nor the Buyer shall take any position on any return, declaration,
report or information return or statement relating to Taxes inconsistent with
such allocation, unless so required by Applicable Law or as a result of the
application of Section 1.06(g). Notwithstanding any other provision of this
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Agreement, the agreement reached by the Seller and the Buyer pursuant to this
Section 1.04 shall survive indefinitely.
Section 1.05. Further Assurances.
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(a) At the Closing and from time to time after the Closing, at the
reasonable request of the Buyer and without further consideration, the Seller
shall promptly execute and deliver, or cause its Subsidiaries to promptly
execute and deliver, to the Buyer such agreements, certificates and other
instruments of sale, conveyance, assignment and transfer, and take such other
action, as may be reasonably requested by the Buyer (i) more effectively to
sell, convey, assign and transfer to and vest in the Buyer (or to put the Buyer
in possession of) any of the
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Purchased Assets or (ii) to assist the Buyer in registering the Buyer's rights
in the Intellectual Property with the appropriate Governmental Entities in any
jurisdiction as may be requested by the Buyer. In addition, at the Closing and
from time to time after the Closing, at the reasonable request of the Buyer and
without further consideration, the Seller shall take, or cause to be taken, all
actions, and do, or cause to be done, and assist and cooperate with the Buyer in
doing, all things necessary, proper or advisable in connection with the
preparation and filing with the appropriate Governmental Entities of all
documents required to be prepared and filed in connection with the transfer of
the Permits and the Product Registrations to the Buyer pursuant to this
Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
but subject to the final sentence of Section 1.05(a), neither the Seller nor any
of its Affiliates shall be responsible for or obligated to undertake the
provision of any notice or other correspondence, the submission of any
application, form, listing registration or any amendment, modification or
supplement thereto or the taking of any action by the Buyer, the Parent or any
of their respective Affiliates necessary, proper or advisable for the Buyer to
make use or enjoy the benefits, privileges and rights associated with, or to
own, the Purchased Assets, including without limitation, the Products and the
Permits, nor shall any of the Seller or its Affiliates be liable for any failure
by the Buyer, the Parent or any of their respective Affiliates to so provide,
submit or otherwise act or for any consequences associated with any failure to
so provide, submit or otherwise act.
Section 1.06. Post Closing Adjustment.
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(a) Preliminary Statement of Working Capital. On or prior to the
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date which is ninety (90) days after the Closing Date, the Seller shall cause
its independent accountants, KPMG LLP, to prepare a statement (which shall have
been prepared pursuant to audit-like procedures) of the items comprising the Net
Working Capital of the Pet Business (the "Preliminary Statement of Working
Capital") setting forth (i) the Current Assets and Current Liabilities of the
Pet Business and (ii) the Net Working Capital of the Pet Business, in each case
as of 11:59 p.m. (Eastern Time) on the date immediately preceding the Closing
Date. For purposes of this Agreement, (A) "Current Assets" shall mean the
current assets of the Pet Business that are included in the Purchased Assets, as
determined in accordance with United States Generally Accepted Accounting
Principles ("U.S. GAAP") (consistently applied with the preparation of the
Unaudited Financial Statements, except as set forth on Schedule 1.06(a))
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including the aggregate of Inventory (net of reserves) and accounts receivable
(net of reserves) and (B) "Current Liabilities" shall mean the current
liabilities of the Pet Business other than Retained Liabilities, as determined
in accordance with U.S. GAAP (consistently applied with the preparation of the
Unaudited Financial Statements, except as set forth on Schedule 1.06(a))
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including accounts payable and accrued payroll and other accrued expenses, and
(C) "Net Working Capital" shall mean Current Assets minus Current Liabilities.
The Preliminary Statement of Working Capital shall be prepared in accordance
with U.S. GAAP applied on a basis consistent with those applied by the Seller in
connection with the Pet Business prior to the Closing Date (except as set forth
on Schedule 1.06(a)) and shall reflect the results of the physical inventory
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count to be performed by or on behalf of the Buyer within seven (7) Business
Days after the Closing Date. The parties acknowledge and agree that for purposes
of determining Net Working Capital, (i) the cost of inbound freight and outbound
freight shall be included in
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Inventory, (ii) overhead costs are calculated based upon the number of units
sold, rather than the number of units produced, consistent with the Seller's
past practice since January 1, 2002 and (iii) the percentage of the amount of
reserves for Inventory (such percentage to be computed by comparing the dollar
amount of Inventory reserves to the dollar amount of Inventory) shall be at
least 95% of the amount of the percentage of the amount of such Inventory
reserves on the Reference Balance Sheet (such percentage to be computed by
comparing the dollar amount of the Inventory reserves to the dollar amount of
Inventory on the Reference Balance Sheet), but determined without regard to
reserves for items fully reserved for on the Reference Balance Sheet that are
not included in Current Assets on the Preliminary Statement of Working Capital.
(b) Review of Preliminary Statement of Working Capital. On or prior to
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the date on which the Preliminary Statement of Working Capital is due (as
contemplated by Section 1.06(a)), the Seller shall deliver to the Buyer the
Preliminary Statement of Working Capital. The Buyer and its independent
accountants, Xxxxx Xxxxxxxx LLP ("Buyer's Accountants"), may review the
Preliminary Statement of Working Capital and in such review may make inquiry of
the Seller and with prior notice to the Seller, its representatives, including
KPMG LLP. The Seller will make available to the Buyer and to the Buyer's
Accountants and their respective representatives, all books and records owned by
the Seller relating to the Preliminary Statement of Working Capital reasonably
necessary in connection with their review thereof (excluding the work papers of
KPMG LLP to the extent not permitted by KPMG LLP). All such books and records
and the contents thereof shall be deemed to be Confidential Material for
purposes of the Confidentiality Agreement. The Preliminary Statement of Working
Capital shall be binding and conclusive upon, and deemed accepted by, the Buyer
unless the Buyer shall have notified the Seller in writing of any objections
thereto consistent with the provisions of this Section 1.06 within forty-five
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(45) days after the Buyer's receipt thereof, which notice shall specify in
reasonable detail each item on the Preliminary Statement of Working Capital that
the Seller disputes and the basis for such dispute (such written notice, an
"Objection Notice"). All items in the Preliminary Statement of Working Capital
not disputed in the Objection Notice in the manner described in the preceding
sentence shall be deemed binding and conclusive and accepted by the Buyer.
(c) Disputes. Disputes between the Buyer and the Seller relating to
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the Preliminary Statement of Working Capital that cannot be resolved by the
Buyer and the Seller within sixty (60) days after receipt by the Seller of the
Objection Notice may be referred thereafter for a written decision at the
request of either the Buyer or the Seller to a single partner of Deloitte &
Touche LLP or at such other accounting firm as may be agreed to by both the
Buyer and the Seller (the "Arbiter"). Promptly, but no later than ninety (90)
days after its acceptance of its appointment as Arbiter, such Arbiter shall
determine, based on presentations by the Buyer and the Seller, and, to the
extent the Arbiter deems necessary, by independent review, those items in
dispute on the Preliminary Statement of Working Capital and shall render a
written report as to the resolution of each dispute and the resulting
calculation of the Final Statement of Working Capital. The Arbiter shall have
exclusive jurisdiction over, and resort to the Arbiter as provided in this
Section 1.06(c) shall be the sole recourse and remedy of the parties against one
another or any other Person with respect to, any disputes arising out of or
relating to the Preliminary Statement of Working Capital; and the Arbiter's
determination shall be conclusive and binding on all of the parties hereto and
shall be enforceable in a court of law.
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The Arbiter shall have the authority to determine only that an item in dispute
on the Preliminary Statement of Working Capital shall be different from that set
forth in the Preliminary Statement of Working Capital to the extent (i) that,
except to the extent provided in Schedule 1.06(a), (A) the item was not prepared
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or included in accordance with U.S. GAAP, or (B) if the item was prepared or
included in accordance with U.S. GAAP, that U.S. GAAP was not applied on a basis
consistent with that applied by the Seller in connection with the preparation of
the Reference Balance Sheet, or (ii) that the item shall not comply with the
final sentence of Section 1.06(a) (in the case of which, the Arbiter shall make
a determination with respect to such item solely as provided in such final
sentence). The fees of the Arbiter shall be borne fifty percent (50%) by the
Seller and fifty percent (50%) by the Buyer.
(d) Final Statement of Working Capital. The Preliminary Statement of
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Working Capital shall become final and binding upon the parties hereto upon the
earliest of (i) the failure by the Buyer to object thereto within the period
permitted under, and otherwise in accordance with the requirements of, Section
1.06(b), (ii) the written agreement between the Buyer and the Seller with
respect thereto and (iii) the decision by the Arbiter with respect to disputes
under Section 1.06(c). The Preliminary Statement of Working Capital, as adjusted
pursuant to the written agreement of the parties hereto or the decision of the
Arbiter, when final and binding, is referred to herein as the "Final Statement
of Working Capital".
(e) Adjustments to Purchase Price. As soon as practicable (but not
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more than five (5) Business Days) after the determination of the Final Statement
of Working Capital in accordance with this Section 1.06:
(i) subject to Section 1.06(f), there shall be an immediate
downward adjustment in the Purchase Price equal to the excess, if any, of
(A) $3,174,000 over (B) the Net Working Capital of the Pet Business as set
forth on the Final Statement of Working Capital, in which case the Seller
shall immediately pay to the Buyer in United States Dollars an amount equal
to such adjustment in immediately available funds by wire transfer to an
account or accounts designated by the Buyer;
(ii) subject to Section 1.06(f), there shall be an immediate
upward adjustment to the Purchase Price equal to the excess, if any, of (A)
the Net Working Capital of the Pet Business as set forth on the Final
Statement of Working Capital over (B) $3,174,000 in which case the Buyer
shall immediately pay to the Seller in United States Dollars an amount
equal to such adjustment in immediately available funds by wire transfer to
an account or accounts designated by the Seller.
(f) Minimum Adjustment. Any adjustment to Purchase Price provided for
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in this section is hereinafter referred to as the "Purchase Price Adjustment".
Notwithstanding the foregoing in Section 1.06(e), no Purchase Price Adjustment
shall be made by either party unless the amount of such Purchase Price
Adjustment is equal to or greater than $75,000 and then only to the extent of
such excess.
(g) Allocation of Adjustment to Purchase Price. The Buyer and the
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Seller shall agree as to the adjustment to the allocation determined in
accordance with Section 1.04
10
occasioned by any adjustment to the Purchase Price pursuant to this Section
1.06. Subject to the foregoing, for purposes of such adjustment to the
allocation (i) any adjustment to the value of any Purchased Asset pursuant to
this Section 1.06 shall give rise to a corresponding adjustment to the
allocation to such asset and (ii) any adjustment to the amount of any Assumed
Liability shall give rise to a corresponding adjustment to the allocation to the
goodwill of the Pet Business.
ARTICLE II
CLOSING
-------
Section 2.01. Closing, Date. The closing of the transaction
-------------
contemplated hereby (the "Closing") shall take place at the offices of Xxxxxxx
Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as soon as practicable, but
in no event later than five (5) Business Days after satisfaction (or waiver) of
the conditions set forth in Article VII (except for the conditions which by
their terms are to be satisfied at or immediately prior to the Closing) or such
other time or date as the Buyer and the Seller agree in writing. The time and
date upon which the Closing occurs is herein referred to as the "Closing Date".
The Closing shall be deemed effective as of the opening of business on the
Closing Date.
Section 2.02. Instruments of Conveyance, Transfer, Assumption, Etc.
-----------------------------------------------------
(a) The Seller shall execute and deliver, or cause its Subsidiaries,
mortgagees or lessees, as appropriate, to execute and deliver, to the Buyer at
the Closing:
(i) the Xxxx of Sale, the Assignment of Trademarks and such
other instruments of conveyance as the Buyer may reasonably request in
order to effect the sale of the Purchased Assets contemplated hereby;
(ii) a receipt for the Purchase Price;
(iii) the Technology Rights Agreement;
(iv) the Supply Agreement;
(v) an affidavit, sworn to under penalty of perjury, setting
forth Seller's name, address and federal tax identification number and
stating that the Seller is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended, and the
decisions, regulations and rulings pertaining thereto (the "Code");
(vi) such other documents and certificates as may be required to
evidence the Seller's or its Subsidiaries' authority, and the authority of
the person or persons executing documents on behalf of the Seller or its
Subsidiaries, to consummate the transactions contemplated by this
Agreement;
11
(vii) a certificate of the Secretary of the Seller and each of
its Subsidiaries certifying that the resolutions adopted by the Seller's or
its Subsidiaries' Board of Directors attached thereto were duly and validly
adopted and are in full force and effect;
(viii) a certificate of the Secretary of each of the Seller and
its Subsidiaries as to the incumbency of certain of such Seller's or
Subsidiaries' officers and certifying that the copies the Seller's or its
Subsidiaries' Charter and bylaws attached thereto are true and correct;
(ix) each of the certificates and other documents contemplated
by Section 7.02 hereof; and
(x) such other agreements, certificates and other instruments
required to be delivered by the Seller or its Subsidiaries under this
Agreement or any of the other Transaction Agreements or as the Buyer or its
counsel may reasonably request to consummate the transactions contemplated
by this Agreement or the other Transaction Agreements.
(b) The Buyer shall execute and deliver to the Seller at the Closing:
(i) by wire transfer in immediately available funds to the
account or accounts designated by the Seller, the Closing Payment;
(ii) the Instrument of Assignment and Assumption and such other
instruments as the Seller may reasonably request in order to effect the
assumption by the Buyer of the Assumed Liabilities;
(iii) a receipt for the Xxxx of Sale and the other instruments
of conveyance described in Section 2.02(i);
(iv) the Technology Rights Agreement;
(v) the Supply Agreement;
(vi) a certificate of the Secretary of each of the Buyer and
the Parent certifying that the resolutions adopted by the Buyer's and the
Parent's Boards of Directors attached thereto were duly and validly adopted
and are in full force and effect;
(vii) a certificate of the Secretary of each of the Buyer and
the Parent as to the incumbency of certain officers of the Buyer and the
Parent certifying that the copies of the Buyer's and the Parent's Charter
and bylaws, as the case may be, attached thereto are true and correct;
(viii) each of the certificates and other documents contemplated
by Section 7.03 hereof, and
12
(ix) such other agreements, certificates and other instruments
required to be delivered by the Buyer under this Agreement or any of the
other Transaction Agreements, or as the Seller or its counsel may
reasonably request to carry out the purpose of this Agreement or the other
Transaction Agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
The Seller represents and warrants to the Buyer that the statements
contained in this Article III are true and correct, except as set forth in the
disclosure schedule provided by the Seller to the Buyer on the date hereof (the
"Disclosure Schedules"). The disclosures in any section, subsection, schedule or
subschedule of the Disclosure Schedule shall (notwithstanding any specific
schedule references in this Article III) qualify and apply to any and all other
sections, subsections, schedules and subschedules of the Disclosure Schedule,
unless a reasonable person would determine that the disclosure contained in such
section, subsection, schedule or subschedule could not qualify or apply to any
such other sections, subsections, schedules and subschedules of the Disclosure
Schedule. For purposes of this Agreement, the phrase "to the knowledge of the
Seller", "a matter of the Seller's knowledge" or any phrase of similar import
shall refer to the actual knowledge of Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx
Xxxxxxx or Xxxxxxx Xxxxx, after review of this Article III and the Disclosure
Schedules and, as to each such person, such records relating to the Pet Business
as he maintains or reviews in the normal course of his duties as an employee of
the Seller or any of its Subsidiaries.
Section 3.01. Organization, Standing and Power. The Seller and each of
--------------------------------
its Subsidiaries conducting operations in the Pet Business is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized (which jurisdiction is listed opposite the Seller's or its
Subsidiaries' name on Schedule 3.01 of the Disclosure Schedules) and has full
-------------
corporate power and authority to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently conducted.
Schedule 3.01 contains a complete list of all Subsidiaries conducting operations
in the Pet Business and the address of all principal executive offices
maintained by the Seller and its Subsidiaries during the last five (5) years.
Section 3.02. Authority, Execution and Delivery; Enforceability.
-------------------------------------------------
Except for the approval by the Required Stockholder Vote of the Seller's
stockholders of the sale of assets contemplated by this Agreement, (a) the
Seller and each of its Subsidiaries has all requisite corporate power and
authority to execute this Agreement and each of the other Transaction Agreements
to which the Seller and/or its Subsidiaries is (or will be) a party, and to
consummate the transactions contemplated hereby and thereby, (b) the execution
and delivery by the Seller of this Agreement and the execution by the Seller
and/or its Subsidiaries of each of the other Transaction Agreements to which the
Seller and/or its Subsidiaries are (or will be) a party, and the consummation by
the Seller and each such Subsidiary of the transactions contemplated hereby and
thereby, has been duly authorized by all necessary corporate action on the part
of the Seller and each such Subsidiary, (c) the Seller has duly executed and
delivered this Agreement,
13
and (d) this Agreement and the other Transaction Agreements constitute or will
constitute, as the case may be, valid and binding obligations of the Seller
and/or its Subsidiaries, enforceable against the Seller and/or its Subsidiaries
in accordance with their respective terms.
Section 3.03. No Conflicts; Consents. Except as set forth in Schedule
---------------------- --------
3.03 of the Disclosure Schedules, the execution and delivery by the Seller of
----
this Agreement, and by the Seller and each of its Subsidiaries of each of the
other Transaction Agreements to which the Seller or each such Subsidiary is (or
will be) a party, does not, and the consummation of any transaction and
compliance with the terms hereof and thereof will not, conflict with, or result
in any violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any Person
under, or result in the creation of any Lien or Encumbrance upon any of the
Purchased Assets under, any provision of (i) the Seller's or any of its
Subsidiaries' Charter or bylaws, (ii) any material Assumed Contract or material
contract, lease, license, indenture, mortgage, note, bond, agreement, permit,
concession, franchise or other instrument to which any of the Purchased Assets
is bound or (iii) except to the extent it would not individually or in the
aggregate have a Material Adverse Effect on the Pet Business as conducted by the
Seller on the date hereof, (A) any judgment, order, injunction, award, decree or
writ ("Judgment"), (B) any federal, state, local or foreign statute, law
(including, common law), code, ordinance, rule or regulation enacted, adopted,
issued or promulgated by any Governmental Entity ("Applicable Law") applicable
to the Seller or any of its Subsidiaries, the Pet Business or any of the
Purchased Assets or (C) any written request of any Governmental Entity. Except
to the extent it would not individually or in the aggregate have a Material
Adverse Effect on the Pet Business as conducted by the Seller on the date
hereof, no consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, or notice to
("Filing"), any federal, state, local or foreign government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, including,
without limitation, the FDA (a "Governmental Entity") or any Person party to any
Assumed Contract or other issuer of any Permit, is required to be obtained or
made by or with respect to the Seller or any of its Subsidiaries in connection
with the execution, delivery and performance of any transaction contemplated by
this Agreement or any other Transaction Agreements.
Section 3.04. Financial Statements; Undisclosed Liabilities.
---------------------------------------------
(a) Footnotes 17, 17 and 19 of the Financial Statements for the fiscal
years ended December 31, 1998, 1999 and 2000, respectively, fairly present in
accordance with U.S. GAAP consistently applied throughout the periods indicated
(and when reviewed as a part of, and with reference to, the Financial
Statements), the revenues, operating profit (loss), depreciation and
amortization, identifiable assets and capital expenditures of the Pet Business
for the periods then ended.
(b) Set forth on Schedule 3.04 of the Disclosure Schedules are the
following additional financial statements of the Seller (the "Unaudited
Financial Statements"): (i) unaudited statement of profit and loss of the Pet
Business for the fiscal years ended
14
December 31, 1998, 1999 and 2000, (ii) unaudited statement of profit and loss of
the Pet Business for the 11 months ended November 30, 2001, (iii) unaudited
balance sheet of the Pet Business at December 31, 2000 and (iv) unaudited
balance sheet (the "Reference Balance Sheet") of the Pet Business at November
30, 2001. The Unaudited Financial Statements were prepared from the accounting
books and records of Seller and Seller's Subsidiaries used as a basis for the
preparation of Seller's consolidated financial statements and present fairly in
all material respects the net revenues, cost of goods sold, total cost of sales,
gross profit, selling and marketing expenses, operating profit (loss), and
income (loss) from continuous operations and, in the case of the Reference
Balance Sheet, the Current Assets and Current Liabilities, of the Pet Business
at the respective dates set forth therein, in each case in accordance with U.S.
GAAP consistently applied, except as set forth in Schedule 3.04, as disclosed
therein and as may be customary in the presentation of interim financial
statements and segment reporting (including, without limitation, the absence of
footnotes and being subject to year end adjustment). The reserve for accounts
receivable set forth in the Reference Balance Sheet includes a reserve for
product returns at November 30, 2001 and such reserve for product returns was
prepared in accordance with U.S. GAAP consistently applied.
(c) There are no liabilities, debts, obligations or claims relating to
the Pet Business absolute or contingent, except (i) as and to the extent
reflected or reserved against of any nature, on the Reference Balance Sheet;
(ii) as to and to the extent set forth in the Disclosure Schedule and which a
reasonable person would determine could apply to this paragraph; (iii) incurred
since the date of the Reference Balance Sheet in the ordinary course of business
consistent with prior practice; (iv) open purchase or sales orders or agreements
for delivery of goods and services in the ordinary course of business consistent
with prior practice, provided that, as of the Closing Date, neither the Seller
nor any Subsidiary shall be in default thereunder; (v) liabilities, debts,
obligations and claims (other than those relating to Taxes, Indebtedness,
violations of Applicable Laws, including Environmental Laws, the Excluded Assets
or the Retained Liabilities) which do not exceed $100,000 in the aggregate; and
(vi) under the Assumed Contracts.
Section 3.05. Absence of Certain Changes or Events. Since November 30,
------------------------------------
2001 there has not been any:
(a) Material Adverse Effect;
(b) except as set forth in Schedule 3.05(b) of the Disclosure
----------------
Schedules, change in accounting methods, principles or practices by the Seller
or any of its Subsidiaries (other than pursuant to a change in U.S. GAAP or a
statement of any appropriate accounting authority) materially affecting the
Purchased Assets, liabilities or results of operations of the Pet Business;
(c) waiver by the Seller or any of its Subsidiaries of any material
right under any Assumed Contract or any Permit;
(d) sale, lease, license or other disposition of, or subjecting to
any Lien or Encumbrance of any material Intellectual Property or, except in the
ordinary course of business
15
consistent with past practice, any material sale, lease, license or other
disposition of, or subjecting to any Lien or Encumbrance any other Purchased
Assets;
(e) acquisition or agreement to acquire any assets for use in
connection with the Pet Business that are material, individually or in the
aggregate, to the Pet Business, except purchases of Inventory or other assets in
the ordinary course of business consistent with past practice;
(f) (i) waiver by the Seller or any of its Subsidiaries of any
material claims or rights related to the Pet Business and included in the
Purchased Assets or (ii) waiver of any material benefits of, or agreement to
modify in any material manner, any confidentiality, standstill or similar
agreement to which the Seller or any its Subsidiaries is a party and relating to
any of the Products, the Purchased Assets or the Pet Business;
(g) termination (other than by lapse of time) or failure to renew any
material Assumed Contract, or termination or failure to renew, or receipt of any
written threat (that was not subsequently withdrawn) to terminate or fail to
renew, any material Permit; or
(h) any damage, destruction or loss, whether or not covered by
insurance, adversely affecting, either in any case or in the aggregate, any
Purchased Asset or the Pet Business which had, individually or in the aggregate,
a Material Adverse Effect.
Section 3.06. Taxes. Except as set forth in Schedule 3.06 of the
----- -------------
Disclosure Schedules,
(a) For purposes of this Agreement, (i) "Tax" or "Taxes" shall mean
all federal, state, local, provincial and foreign taxes and similar assessments,
including all interest, penalties and additions imposed with respect to such
amounts; (ii) "Pre-Closing Tax Period" shall mean all taxable periods ending on
or before the Closing Date and the portion of any taxable period prior to the
Closing Date of any taxable period that includes (but does not end on) the
Closing Date and (iii) "Returns" shall mean returns, reports or forms, including
information returns filed or required to be filed with a taxing authority.
(b) The Seller or its Subsidiaries has timely paid or accrued or has
caused to be timely paid or accrued all Taxes relating to the Pet Business and
each of the Purchased Assets shown to be due on any Tax Return. No Tax Liens
have been filed and remain outstanding with respect to the Pet Business or any
of the Purchased Assets, and no claims are being asserted in a writing received
by the Seller or any its Subsidiaries with respect to any such Taxes.
(c) Neither the Seller nor any of its Subsidiaries is bound by any
agreement with respect to Taxes relating to the Pet Business or any of the
Purchased Assets.
(d) During the immediately preceding three (3) full years, with
respect to the Pet Business and the Purchased Assets, there have not been (i)
any Tax audits of the Seller by any Tax authority and, to the knowledge of the
Seller, the Seller has not received any notice that any such audit will be
commenced or (ii) any rulings by any Tax authority requested by or issued to the
Seller.
16
Section 3.07. Workers' Injuries. Except as set forth in Schedule 3.07
----------------- -------------
of the Disclosure Schedules, there has not been during the past three (3) years,
any actual or, to the knowledge of the Seller, threatened claims in writing of
Transferred Employees for compensation for any material injury, disability or
illness arising out of or relating to their employment by the Seller or any its
Subsidiaries in connection with the Pet Business.
Section 3.08. Litigation. There is (i) no material outstanding
----------
Judgment of any Governmental Entity against the Seller or any of its
Subsidiaries relating to the Pet Business or any of the Purchased Assets, (ii)
no suit, action, claim, dispute or legal, governmental, administrative,
arbitration or regulatory proceeding ("Proceeding") pending or, to the knowledge
of the Seller, threatened in writing against the Seller or any of its
Subsidiaries relating to the Pet Business or any of the Purchased Assets, and
(iii) no investigation by any Governmental Entity pending or, to the knowledge
of the Seller, threatened in writing against the Seller or any of its
Subsidiaries relating to the Pet Business or any of the Purchased Assets. None
of the items set forth in Schedule 3.08 of the Disclosure Schedules, if
-------------
adversely determined against the Seller or any or its Subsidiaries, would be
material to the Pet Business or any of the Purchased Assets or adversely affect
the ability of the Seller or any its Subsidiaries to consummate the transactions
contemplated by this Agreement or any of the other Transaction Agreements.
Section 3.09. Compliance with Applicable Laws. Except as set forth in
-------------------------------
Schedule 3.09 of the Disclosure Schedules, to the Seller's knowledge, the Pet
-------------
Business is (and during the past three (3) years has been) conducted in material
compliance with all Applicable Laws. Neither the Seller nor any of its
Subsidiaries has received any written communication during the past three (3)
years from a Governmental Entity that alleges that the Pet Business is not
conducted in material compliance with any Applicable Law. This Section 3.09 does
not relate to matters with respect to Taxes or Environmental Laws.
Section 3.10. Environmental Matters.
---------------------
(a) Except as set forth on Schedule 3.10:
---
(i) to the best of Seller's knowledge, neither the Seller nor any
of its Subsidiaries is in violation or alleged violation of any judgment,
decree, order, license, rule or regulation issued, entered, promulgated
and/or authorized by any Governmental Entity under, pursuant to and/or
otherwise by operation of any applicable Environmental Laws with respect
exclusively to the Plant and/or to its operations of the Pet Business at
any time prior to the date of this Agreement;
(ii) to the best of Seller's knowledge, neither the Seller nor any
of its Subsidiaries have received actual written notice from any third
party providing, (A) that the Seller or any of its Subsidiaries has been
identified and/or named by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party ("PRP") under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part
000 Xxxxxxxx X (1986) as amended, or (B) that any Hazardous Substances
generated, transported and/or disposed of by the Seller or any of its
Subsidiaries on or at the Plant or
17
otherwise exclusively in connection with its operations of the Pet Business
at any time prior to the date of this Agreement have been specifically
identified, located and/or found to exist at any site which is and/or has
been the subject of any remedial investigation, removal or other response
action pursuant to the requirements and/or mandates of any Environmental
Laws;
(iii) to the best of Seller's knowledge, neither the Seller nor any
of its Subsidiaries have actually been or overtly been threatened in
writing to be named as a party to any legal and/or administrative claim,
lawsuit, action, cause of action, complaint and/or proceeding instituted,
commenced and/or otherwise asserted by any third party seeking to recover
from the Seller or any of its Subsidiaries costs, expenses, losses or
damages of any kind whatsoever allegedly incurred and/or sustained by such
third party as a proximate result of Seller's or any of its Subsidiaries'
release of Hazardous Substances generated, handled, stored, treated,
transported and/or disposed of on or at the Plant and/or otherwise
exclusively in connection with its operations of the Pet Business at any
time prior to the date of this Agreement;
(iv) to the best of Seller's knowledge, neither Seller nor any of
its Subsidiaries has used any portion of the Plant for the handling,
manufacturing, processing, storage or disposal of Hazardous Substances,
except in accordance with and as permitted by applicable Environmental
Laws;
(v) to the best of Seller's knowledge, there are no underground
storage tanks or other underground storage receptacles formerly or
presently used for the storage of any Hazardous Substances located on or at
the Plant;
(vi) to the best of Seller's knowledge, no actionable contamination
levels of any Hazardous Substances regulated under applicable Environmental
Laws are present on or at the Plant, including without limitation, the
groundwater, surface water, soil and subsurface thereof, except in each
case to the extent that the presence of any such Hazardous Substances
thereon does not violate any applicable Environmental Laws;
(vii) to the best of Seller's knowledge, there have been no actual
releases (i.e., spills, leaks, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) in actionable level
amounts of any Hazardous Substances on, upon, into, at or from the Plant,
except in accordance with and/or as otherwise permitted by applicable
Environmental Laws;
(viii) to the best of Seller's knowledge, any Hazardous Substances
that have been used, handled, generated and/or stored by the Seller or any
of its Subsidiaries on or at the Plant or otherwise exclusively in
conjunction with its operations of the Pet Business at any time prior to
the date of this Agreement have to the extent required by applicable
Environmental Laws been transported offsite by independent, third-party
haulers and/or carriers retained by Seller or its Subsidiaries, each of
which such hauler and/or carrier having represented to Seller or its
Subsidiaries that it was fully authorized and licensed by any and all
necessary Governmental Entities in compliance with all
18
applicable Environmental Laws to transport any and all such Hazardous
Substances, to facilities for treatment and/or disposal, each of which such
treatment and/or disposal facility having been represented to Seller or its
Subsidiaries to be fully authorized and licensed by any and all necessary
Governmental Entities in compliance with all applicable Environmental Laws
to treat and/or dispose of any and all such Hazardous Substances;
(ix) to the best of Seller's knowledge, except as set forth in
Section 6.21 of this Agreement, the transactions set forth and to be made
in accordance with the terms of this Agreement do not subject the Plant to,
trigger and/or otherwise require compliance with any Environmental Laws
regulating the performance of remedial actions and imposing other
responsibilities in conjunction with the transfer of real property and/or
sale, transfer or closure of an industrial establishment or other
commercial enterprise.
(b) The Seller and its Subsidiaries have furnished to or made
available for inspection by the Buyer or its attorneys, accountants, consultants
or other representatives, complete and accurate copies of all known documents in
the Seller's or its Subsidiaries' custody, control or possession which contain
any material information with respect to environmental liabilities associated
with the environmental condition of and/or compliance with Environmental Laws
applicable to the Plant and/or its operations of the Pet Business at any time
prior to the date of this Agreement.
Section 3.11. Intellectual Property.
---------------------
(a) Schedule 3.11(a) of the Disclosure Schedules sets forth a true and
----------------
complete list of all material registered Intellectual Property. Notwithstanding
anything to the contrary in this Agreement, the term "Intellectual Property"
shall not include the Novasome Technology. For purposes of this Agreement, the
term "Intellectual Property" means all patents, design patents, trademarks,
trade names, domain names, Internet web sites, service marks, common law marks,
trade dress and copyrights and applications therefor, royalty rights and other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, owned, used, filed by or licensed to the
Seller and any of its Subsidiaries that relate solely to the Products or any
other Purchased Asset or the Pet Business. With respect to such material
registered Intellectual Property, Schedule 3.11(a) sets forth a true and correct
----------------
list of all jurisdictions in which such are registered or applied for,
classifications for all trademarks, service marks and trade names, registration
and application numbers, registration dates, expiration dates and the registered
owners thereof. The Seller or its Subsidiaries own, and have the right to use,
execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, free and clear of any pledges, liens,
charges, encumbrances, usufructs, defects in title, security interests and
options, without payment of any kind to any other Person, all Technology and all
Intellectual Property and the consummation of any transaction contemplated
hereby or by any of the other Transaction Agreements will not conflict with,
alter or impair any such rights, except to the extent such rights are
transferred to the Buyer as provided in the Transactions Agreements. All items
of Intellectual Property set forth on Schedule 3.11 are valid (a) and in full
-------------
force and effect, have not been abandoned or terminated, all renewals due
through the
19
Closing Date have been filed and are not subject to any pending cancellation or
reexamination Proceeding or any other Proceeding challenging their extent or
validity. The Seller or its Subsidiaries have all rights to the Intellectual
Property as are necessary in connection with the conduct of the Pet Business as
presently conducted.
(b) Neither the Seller nor its Subsidiaries own or have rights in any
trademark, trade name, domain name, Internet web site or service xxxx that is
not part of the Purchased Assets that is confusingly similar to those set forth
on Schedule 3.11(a) of the Disclosure Schedules.
----------------
(c) Neither the Seller nor its Subsidiaries is bound by or a party to
any agreement, contract, lease, option, license, commitment, instrument or any
other binding obligation or arrangement (oral or written) relating to the
Intellectual Property or the Technology (the "Intellectual Property Contracts").
The Seller and its Subsidiaries (i) own all Intellectual Property and Technology
free and clear of any claims of others and of all Liens (other than the
Intellectual Property and Technology that is used pursuant to any Intellectual
Property Contract set forth in Schedule 3.11(c) of the Disclosure Schedules) and
----------------
(ii) have the legal right to use all of the Intellectual Property and Technology
that is used pursuant to an Intellectual Property Contract set forth in Schedule
--------
3.11(c) of the Disclosure Schedules. The Seller and its Subsidiaries have paid
-------
all material required filing and registration fees in connection with the
Intellectual Property and the Technology. To the Seller's knowledge, none of the
Intellectual Property or Technology violates, conflicts with or infringes any
patents, design patents, trademarks, trade names, service marks, common law
marks, domain names, trade dress, industrial property and copyrights and any
other Intellectual Property rights and applications therefor of any other
Person. Except as set forth in Schedule 3.11(c) of the Disclosure Schedules, (i)
----------------
no claims are pending or, to the knowledge of the Seller or any of its
Subsidiaries, threatened, against the Seller by any Person with respect to the
ownership, validity, enforceability, effectiveness or use of any Intellectual
Property or Technology and (ii) during the past three (3) years, neither the
Seller nor any of its Subsidiaries has received any written communications
alleging that the Seller or any of its Subsidiaries has violated any rights
relating to any patents, design patents, trademarks, trade names, service marks,
common law marks, domain names, trade dress, industrial property and copyrights
and any other Intellectual Property rights and applications therefor of any
Person or asserting any infringement, dilution, unfair competition or conflict
with the asserted rights of any other Person in connection with the use by any
of the Seller or any of its Subsidiaries of any of the Intellectual Property or
Technology.
(d) Except with respect to the Novasome Technology, the Seller or any
of its Subsidiaries are the applicant of record in all pending patent
applications and applications for trademark, trade name, service xxxx or
copyright registration related to the Pet Business and no written action of
opposition or interference or final refusal has been received by the Seller or
any of its Subsidiaries in connection with any such application. Neither Seller
nor any of its Subsidiaries is a party to or bound by any Contract or Judgment
which limits the use by the Seller of any of the Intellectual Property or
Technology (other than the Intellectual Property and Technology used pursuant to
any Intellectual Property Contract set forth in Schedule 3.11(d)).
----------------
20
(e) The Intellectual Property and the Technology has been maintained
in confidence in accordance with protection procedures customarily used in the
industries of the Seller and each of its Subsidiaries to protect rights of like
importance. To the Seller's knowledge, no former or current officer or other
employee of the Seller or any of its Subsidiaries has any claim against the
Seller or any of its Subsidiaries in connection with such Person's involvement
in the conception and development of any Intellectual Property or Technology and
no such claim has been asserted or is threatened. None of the current officers
and employees of the Seller or any of its Subsidiaries have any patents issued
or applications pending for any device, process, design or invention of any kind
now used by the Pet Business, which patents or applications have not been
assigned to the Seller or its Subsidiaries.
Section 3.12. Contracts.
---------
(a) Complete and correct copies of each of the Assumed Contracts other
than purchase orders from suppliers and customers have been made available to
the Buyer. None of the Assumed Contracts constitutes an agreement, contract,
lease, option, license, commitment, instrument or any other binding obligation
or arrangement (oral or written) by or to which the Pet Business, any of the
Purchased Assets or the Products are bound or subject and which are material to
the conduct of the Pet Business (collectively, the "Contracts") which is a
contract with any Affiliate of the Seller or any of its Subsidiaries or any
director, officer, stockholder or employee of the Seller or any of its
Subsidiaries.
(b) Each of the Assumed Contracts is a valid and binding obligation of
the Seller or its Subsidiaries which is a party to such Assumed Contract and, to
the knowledge of the Seller, of the other party thereto, and is in full force
and effect and is enforceable by the Seller or any of its Subsidiaries which is
a party to such Assumed Contract in accordance with its terms. None of the
Assumed Contracts shall as a result of the transactions contemplated by this
Agreement be restricted in any manner having a Material Adverse Effect. The
Seller and each of its Subsidiaries are not in material breach or default
thereunder and, to the knowledge of the Seller, no other party to any of the
Assumed Contracts is in breach or default thereunder. There have been no
amendments of any material Assumed Contract. From June 30, 2001 through (and
including) the date hereof, no Person which is a party to any Contract has
informed the Seller in writing, nor to the Seller's knowledge, has any such
Person informed the Seller, that it intends to change its current relationship
with the Pet Business in any manner which would have a Material Adverse Effect.
Section 3.13. Bonds. The Seller has no material outstanding bonds and
-----
other surety arrangements issued or entered into by the Seller or any of its
Subsidiaries in connection with the Pet Business and operations of the Pet
Business or any of the Purchased Assets.
Section 3.14. Accounts Receivable, Accounts Payable.
-------------------------------------
(a) All accounts receivable of the Pet Business as of the Closing
Date, whether reflected on the Unaudited Financial Statements or subsequently
created, have arisen from bona fide transactions in the ordinary course of
business. Schedule 3.14(a) of the Disclosure
----------------
21
Schedules sets forth a true and correct aged list of all accounts receivable of
the Pet Business as of November 30, 2001.
(b) Except as set forth in Schedule 3.14(b), all accounts payable of
----------------
the Pet Business, whether reflected on the Unaudited Financial Statements or
subsequently created, have arisen from bona fide transactions in the ordinary
course of business. Schedule 3.14(b) of the Disclosure Schedules sets forth a
----------------
true and correct aged list of all accounts payable of the Pet Business and
includable in the Assumed Liabilities as of November 30, 2001.
Section 3.15. Licenses; Permits. Schedule 3.15 of the Disclosure
----------------- -------------
Schedule sets forth a true and complete list of all issued and pending product
registrations (other than those set forth on Schedule 3.11 of the Disclosure
-------------
Schedules), and any and all applications therefor, relating to the Products (the
"Product Registrations") and all Permits, in each case issued or granted to the
Seller or any of its Subsidiaries by any Governmental Entity and used by the
Seller or any of its Subsidiaries at any time during the past twelve (12) months
solely in connection with the conduct of the Pet Business, identifies the Seller
or its Subsidiary to which such Product Registration or Permit has been issued
or granted and sets forth the period of validity of each such Product
Registration and Permit. Each of such Product Registrations and each of such
Permits has been validly issued or granted and is in full force and effect, and
may be transferred to the Buyer to the extent such party meets the requirements
of Applicable Law. No other product registrations relating to the Product or
Permits are necessary in connection with the conduct of the Pet Business as
presently conducted other than as set forth in Schedule 1.01(a)(vi) and other
--------------------
than product registrations and permits the absence of which would not have a
Material Adverse Effect. Neither the Seller nor any of its Subsidiaries has
received any unresolved written notice that it lacks any Product Registration it
is required to have or any Product Registrations are under review by any
Governmental Entity or subject to termination, suspension, modification,
revocation or non-renewal for any reason, or that they will be subject to
termination, suspension, modification, revocation or non-renewal as a result of
the execution, delivery and performance of this Agreement or any of the other
Transaction Agreements or for any other reason.
Section 3.16. Suppliers. Schedule 3.16 of the Disclosure Schedules is
--------- -------------
a true and complete list of all material suppliers of raw materials, packaging
materials, or any other component of inventory of the Pet Business as of
December 31, 2001 and the dollar amount of such raw materials or other supplies
purchased by the Seller or its Subsidiaries from such supplier during the most
recent full fiscal year. From June 30, 2001 through (and including) the date
hereof, no such supplier has informed the Seller or any of its Subsidiaries in
writing, nor, to the Seller's knowledge, has any such supplier informed the
Seller or any of its Subsidiaries that it intends to change its current
relationship with the Pet Business in any manner which would have a Material
Adverse Effect.
Section 3.17. Customers. Schedule 3.17 of the Disclosure Schedules
--------- -------------
contains a true and complete list of all material customers (including
distributors) of the Pet Business as of November 30, 2001 which purchase any of
the Products directly from the Seller or its Subsidiaries. Since November 30,
2001 neither the Seller nor any of its Subsidiaries has received any written
complaint from any customer (not limited to those listed in Schedule 3.17 of
-------------
22
the Disclosure Schedules) regarding Products with a value in excess of $25,000,
nor has it had any Products returned by a customer or subsequent purchaser
thereof with a value in excess of $25,000. From June 30, 2001 through (and
including) the date hereof, no customer (including a distributor) has informed
the Seller or any of its Subsidiaries in writing, nor, to the Seller's
knowledge, has any such customer informed the Seller or any of its Subsidiaries
that it intends to change its current relationship with the Pet Business in any
manner which would have a Material Adverse Effect.
Section 3.18. Real Property.
-------------
(a) Neither Seller nor any of its Subsidiaries own, lease or sublease
any real property or interests therein in connection with, or necessary for, the
operation of the Pet Business as presently conducted, other than as set forth on
Schedule 3.18 of the Disclosure Schedules.
-------------
With respect to the Plant:
(i) Neither the Seller nor any of its Subsidiaries have granted
to any third party a right to use or occupy any portion of the Plant.
(ii) No condemnation of the Plant, or any portion thereof, has
occurred or to the knowledge of Seller is threatened.
(iii) The occupancy and use of the Plant, or any portion thereof,
in a manner consistent with the occupancy and use thereof by the Seller as
contemplated by Section 6.13 will not violate or conflict with any
covenants, conditions, restrictions or contractual obligations applicable
thereto.
(iv) Except as disclosed on Schedule 3.18, there are no
-------------
restrictions of any nature on the Seller's ability, and Seller has
sufficient title or other leasehold interest in the Plant, to permit the
Seller to occupy and use the Plant as contemplated under Section 6.13.
(v) All utilities necessary to operate the Plant in a manner
consistent with the use thereof by the Seller (including without
limitation, water, sewer, electricity and telephone facilities) are
available to the Plant and there exists, to the knowledge of Seller, no
proposed limitation in or reduction of the quality or quantity of the
utility services to be furnished to the Plant.
The Seller has all material Permits with respect to the ownership, use
and occupancy of the Plant for the Pet Business. The current use and occupancy
of the Plant for the Pet Business does not materially violate any such Permit,
and no proceeding is pending or, to the knowledge of Seller or its Subsidiaries,
is threatened, to revoke, suspend, modify or limit any Permit in a manner that
would have a Material Adverse Effect. No Permit will be subject to revocation,
suspension, modification or limitation as a result of this Agreement or the
consummation of the transactions contemplated hereby.
23
Section 3.19. Transactions with Affiliates.
----------------------------
(a) There are no agreements, contracts, leases, options, licenses,
commitments, instruments or any other binding obligations (oral or written) (the
"Affiliate Contracts") between the Seller, on the one hand, and any of its
Subsidiaries or Affiliates, on the other hand, relating to the Products, the
Purchased Assets or the Pet Business. Except as set forth in Schedule 3.19,
-------------
after the Closing neither the Seller nor any of the Seller's Subsidiaries or
Affiliates will own or have any interest in any assets, property (personal,
tangible or intangible, but excluding real property) or contract or agreement
necessary for the conduct of the Pet Business (other than the Excluded Assets).
(b) After the Closing Date, no ingredient used to formulate the
Products other than the Novasome Technology will need to be procured from the
Seller or the Seller's Affiliates in order for the Buyer to be able to
manufacture and sell the Products in a manner consistent with the manner such
Products were manufactured and sold by the Seller.
Section 3.20. Products. There are no published statements, citations
--------
or decisions by any Governmental Entity (including, without limitation, the
United States Food and Drug Administration ("FDA")) stating that any of the
Products is defective or unsafe for its intended uses or fails to meet any
standards promulgated by any such Governmental Entity. During the 3-year period
immediately preceding the Closing Date, there have been no recalls ordered by
any Governmental Entity with respect to any of the Products. Since January 1,
1998 neither the Seller nor any of its Subsidiaries has received any written
complaints of any injury or harm to any person or animal arising from use of a
Product and to the Seller's knowledge there is no (i) fact relating to any of
the Products that would impose upon the Seller or any of its Subsidiaries a duty
to recall any of the Products or a duty to warn customers of a defect in any of
the Products, (ii) latent or overt design, manufacturing or other defect in any
of the Products or (iii) material liability for warranty claims or returns known
to the Seller with respect to any of the Products not fully reflected on the
Unaudited Financial Statements with respect to the periods covered by the
Unaudited Financial Statements. Schedule 3.20 sets forth a description of all
-------------
material Product warranty claims in excess of $5,000 for each of calendar years
2000 and 2001. The Product formulations being sold to the Buyer pursuant to
Section 1.01(a)(iii), and each of the ingredients therein, conform in all
material respects with all Applicable Laws and all written requests of all
Governmental Entities, and such formulations and ingredients are in all material
respects safe and, to the knowledge of the Seller, do not pose any risk of
material injury or harm to any end-user when used in accordance with applicable
instructions.
Section 3.21. Employees and Benefit Plans.
---------------------------
(a) Schedule 3.21(a) of the Disclosure Schedules sets forth the name,
----------------
title, current annual salary or wages, current bonus or commissions, and
vacation entitlements of, and the Benefit Plans offered by the Seller or any of
its Subsidiaries to, each employee of the Seller or any of its Subsidiaries who
is employed solely in the Pet Business (each a "Pet Business Employee"). Each
Pet Business Employee is an employee-at-will. The Company has not agreed to pay
any severance to any Pet Business Employee nor does it have a policy or standard
practice of paying severance to its employees.
24
(b) With respect to the Pet Business Employees, (i) there is no labor
strike, dispute, slowdown or stoppage actually pending or, to the Seller's
knowledge, threatened in writing against the Pet Business; (ii) the Pet Business
has not experienced any organized work stoppage in the last three (3) years;
(iii) to the Seller's knowledge, none of the Pet Business Employees is a member
of or represented by any labor union and there are no attempts of whatever kind
and nature being made to, organize any of such Employees; (iv) no agreement
(including any collective bargaining agreement), arbitration or court decision,
decree or order or governmental order which is binding on the Pet Business
(other than Applicable Law) in any material way limits or restricts the Seller
or any of its Subsidiaries from relocating or closing any of its operations; and
(v) there are no material charges, administrative proceedings or formal
complaint of discrimination (including but not limited to discrimination based
upon sex, age, marital status, race, national origin, sexual preference,
handicap or veteran status) pending or, to the Seller's knowledge, threatened in
writing against the Seller or any of its Subsidiaries.
Section 3.22. Inventory. Except as set forth in Schedule 3.22 of the
--------- -------------
Disclosure Schedules, (i) all of the Inventory is in commercially acceptable
condition, conforms in all material respects with the applicable warranties of
the Pet Business and with all Permits, Applicable Laws and requests of all
Governmental Entities, and (ii) the value at which the Inventory is carried is
in accordance with U.S. GAAP consistently applied. The amount and mix of the
items included in the Inventory is, and at the Closing Date will be, consistent
with the past business practices of the Seller and its Subsidiaries relating to
the conduct of the Pet Business.
Section 3.23. Title. Except as set forth in Schedule 3.23 of the
----- -------------
Disclosure Schedules, Seller and the Subsidiaries have and will convey to the
Buyer good title to the Purchased Assets free and clear of all Liens and
Encumbrances other than Permitted Liens.
Section 3.24. Sufficiency of Assets. Except for the provision of
---------------------
various transition services by the Seller to the Buyer and the use and occupancy
of the Plant by the Buyer, in each case as contemplated by Section 6.13, the
Purchased Assets, the Plant, the Technology Rights Agreement and the Supply
Agreement, in the aggregate, when utilized by a labor force substantially
similar to that employed by the Seller with respect to the Pet Business on the
date hereof, are sufficient for the conduct of the operations of the Pet
Business as presently conducted by the Seller in all material respects,
exclusive of executive, finance, accounting and other general and administrative
functions.
Section 3.25. Micro-Pak License Agreement. The Seller delivered to the
---------------------------
Buyer a complete and correct copy of the License Agreement, dated as of December
13, 1995, between Igen, Inc. ("Igen") and Micro-Pak, Inc. ("Micro-Pak") and all
amendments thereto (the "Micro-Pak License Agreement"). The Micro-Pak License
Agreement is a valid and binding obligation of Igen and, to the Seller's
knowledge, Micro-Pak and is in full force and effect and, to the Seller's
knowledge, is enforceable by Igen in accordance with its terms. The Micro-Pak
License Agreement shall not, as a result of the transactions contemplated by
this Agreement be restricted in any manner having a Material Adverse Effect.
Igen is not in material breach or default thereunder nor, to the knowledge of
the Seller, is Micro-Pak in breach or default thereunder. There have been no
oral or written modifications, amendments or waivers with respect to any of the
terms of the Micro-Pak License Agreement.
25
Section 3.26. Capitalization. As of the date hereof, the authorized
--------------
capital stock of the Seller consists of 51,000,000 shares of capital stock of
which 50,000,000 shares are shares of Common Stock, par value $0.01 per share
(the "Seller Common Stock"), and 1,000,000 are shares of Preferred Stock, par
value $0.01 per share (the "Seller Preferred Stock"). As of the close of
business on the Business Day ending two Business Days prior to the date hereof,
(i) 11,269,320 shares of Seller Common Stock and no shares of Seller Preferred
Stock were issued and outstanding and (ii) securities convertible into or
exchangeable for 4,391,984 shares of the Seller Common Stock prior to July 1,
2002 were issued and outstanding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
The Buyer represents and warrants to the Seller as follows:
Section 4.01. Organization, Standing and Power. Each of the Buyer and
--------------------------------
the Parent is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has full corporate power and
authority to conduct its businesses as presently conducted.
Section 4.02. Authority; Execution and Delivery; Enforceability. Each
-------------------------------------------------
of the Buyer and the Parent has all requisite corporate power and authority to
execute this Agreement and each of the Transaction Agreements to which it is (or
will be) a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Buyer and the Parent of this
Agreement, and of each of the other Transaction Agreements to which it is (or
will be ) a party, and the consummation by them of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of the Buyer or the Parent, as the case may be. Each of the Buyer
and the Parent has duly executed and delivered this Agreement, and this
Agreement and the other Transaction Agreements to which it is or will be a party
constitute or will constitute, as the case may be, valid and binding obligations
of the Buyer or the Parent, as the case may be, enforceable against it in
accordance with their respective terms.
Section 4.03. No Conflicts; Consents. Except to the extent it would
----------------------
not have a material adverse effect on the Buyer's or the Parent's ability to
consummate the transactions contemplated by this Agreement or the Transaction
Agreements to which it is a party, the execution and delivery by the Buyer and
the Parent of this Agreement and the Transaction Agreements to which it is a
party, does not, and the consummation of any transaction and compliance with the
terms hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any Person under, or result in the creation
of any Lien upon any of its properties or assets under, any provision of (i) its
organizational documents, (ii) any material contract, lease, license, indenture,
mortgage, note, bond, agreement, permit, concession, franchise or other
instrument to which it is a party or
26
by which any of its properties or assets is bound or (iii) any Judgment or
Applicable Law applicable to Buyer or the Parent or its properties or assets.
Except to the extent it would not have a material adverse effect on the ability
of the Buyer or the Parent, as the case may be, to consummate the transactions
contemplated hereby, no Consent of, or Filing with any Governmental Entity is
required to be obtained or made by or with respect to the Buyer or the Parent in
connection with the execution, delivery and performance the Agreement or any
other Transaction Agreement.
Section 4.04. Brokers. Except for Antares International Partners,
-------
Inc., no broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby or by any of
the other Transaction Agreements based upon arrangements made by or on, behalf
of the Buyer or any of its Affiliates. The Buyer shall be responsible for, and
will indemnify the Buyer and all of its Affiliates for all Losses relating to,
any and all fees payable to Antares International Partners, Inc. in connection
with the transactions contemplated by this Agreement.
Section 4.05. Financing. The Buyer's existing financial resources are
---------
sufficient to enable the Buyer to consummate the transactions contemplated by
this Agreement and the payment of all fees and expenses to be incurred by the
Buyer in connection herewith. The Notoriety Statement of Societe Generale, SA
dated November 28, 2001 provided by the Parent to the Seller is true and correct
in all material respects. Such statement shall be deemed to be Confidential
Material for purposes of the Confidentiality Agreement.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 5.01. Conduct of Business by the Seller. Except for matters
---------------------------------
permitted or contemplated by this Agreement, from the date of this Agreement to
the Closing Date, the Seller agrees to use commercially reasonable efforts to
conduct the Pet Business in the usual, regular and ordinary course in
substantially the same manner as previously conducted and, to the extent
consistent therewith, to preserve intact the current business organization of
the Pet Business, keep available the services of the current officers and
employees employed in connection with the Pet Business and keep their
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with the Pet Business to the end that its
goodwill and ongoing business shall be in all material respects unimpaired at
the Closing Date. In addition, and without limiting the generality of the
foregoing, except for matters set forth in Schedule 5.01 or otherwise permitted
-------------
or contemplated by this Agreement, from the date of this Agreement to the
Closing Date, the Seller agrees that it shall not undertake any of the following
actions without the prior written consent of the Buyer (unless such action is
required by Applicable Law, in which case the Seller shall promptly notify the
Buyer of such action).
27
(a) acquire any assets for use in connection with the Pet Business
that are material, individually or in the aggregate, to the Pet Business, except
purchases of Inventory or other assets in the ordinary course of business
consistent with past practice;
(b) make any change in accounting methods, principles or practices
(other than pursuant to a change in U.S. GAAP or a statement of any appropriate
accounting authority) materially affecting the reported combined consolidated
assets, liabilities or results of operations of the Pet Business (including the
Purchased Assets);
(c) sell, lease, license, pledge or otherwise dispose of or subject to
any material Lien or Encumbrance any Purchased Assets, except sales of Inventory
and excess or obsolete assets in the ordinary course of business consistent with
past practice, or enter into a legally binding commitment to do any of the
foregoing;
(d) make any material change, revision, amendment or other
modification to any Product labeling;
(e) except as set forth in Schedule 5.01(e), make any material change,
---------------
revision or other modification to the formulation of any of the Products other
than in the ordinary course of business consistent with past practice;
(f) make any change (or announce any prospective change) in prices,
sales discounts or allowances or any other sales incentives in connection with
the sale of any of the Products to distributors or customers of the Pet Business
other than in the ordinary course of business consistent with past practice;
(g) (i) waive any material claims or rights related to the Pet
Business and included in the Purchased Assets or (ii) waive the material
benefits of, or agree to modify in any material manner, any confidentiality,
standstill or similar agreement to which the Seller or any of its Subsidiaries
is a party and relating to the Pet Business or any of the Products or the
Purchased Assets; or
(h) authorize any of, or cause, commit or agree to take any of, the
foregoing actions.
Section 5.02. Other Actions. The parties hereto shall not, and shall
-------------
not permit any of their respective Subsidiaries to, take any action that would,
or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement
becoming untrue or inaccurate in any material respect or (ii) any condition set
forth in Article VII not being satisfied.
Section 5.03. Release of Liens. The Seller shall cause any and all
----------------
Liens and Encumbrances recorded against or applicable to the Purchased Assets to
have been released, and the Seller shall furnish the Buyer with reasonably
satisfactory evidence thereof.
Section 5.04. Advise of Changes.
-----------------
28
(a) The Seller shall promptly advise the Buyer in writing of any fact,
occurrence, change or event prior to the Closing which was required to have been
disclosed but was not disclosed or, if it occurred or existed on or prior to the
date hereof, would have been required to have been disclosed, on any of the
Schedules to be delivered by the Seller to the Buyer pursuant to Article III
including, without limitation, the Disclosure Schedules.
(b) The Buyer shall promptly advise the Seller in writing of any fact,
occurrence, change or event prior to the Closing which was required to have been
disclosed but was not disclosed or, if it occurred or existed on or prior to the
date hereof, would have been required to have been disclosed, on any of the
Schedules to be delivered by the Buyer to the Seller pursuant to Article IV.
Section 5.05. Supplements to Disclosure Schedules. From time to time
-----------------------------------
prior to the Closing, the Seller shall deliver to the Buyer information that
arises from an event that occurs on or after the date hereof, or with respect to
a representation or warranty qualified by the Seller's knowledge from an event
that occurred prior to the date hereof but which was not a matter of the
Seller's knowledge as of the date hereof, supplementing or amending the
representations, warranties and disclosures (including the Disclosure Schedules
hereto) in order to make such information therein timely, complete and accurate.
Such supplemental information furnished by the Seller shall identify the
specific event. Subject to Section 8.02, any covenant, representation or
warranty of the Seller affected by such supplemental information shall be deemed
to have been amended accordingly.
Section 5.06. Maintenance of Plant. The Seller agrees that between the
--------------------
date of this Agreement and the Closing Date, the Seller shall (i) maintain the
Plant in substantially the same condition as exists on the date hereof,
reasonable wear and tear excepted, (ii) operate the Pet Business in compliance
with all Applicable Laws in all material respects, (iii) maintain in full force
and effect all (or substantially similar) property and liability insurance
policies on the Plant in effect as of the date hereof; and (iv) afford the Buyer
and its representatives, reasonable access during normal business hours upon
reasonable notice (and in a manner so as not to interfere with the normal
business operations of the Seller and its Subsidiaries) to the Plant.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
Section 6.01. Access to Information; Confidentiality. The Seller shall
--------------------------------------
afford the Buyer and its officers, employees, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours (and in a manner so as not to interfere with the normal business
operations of the Seller and its Subsidiaries) during the period prior to the
Closing Date to all its properties, books, contracts, commitments, personnel and
records to the extent relating to the Pet Business, the Products or any of the
Purchased Assets and, during such period, the Seller shall furnish promptly to
the Buyer (i) a copy of each material report, schedule and other document to the
extent relating to any of the Products, the Pet Business or any of the Purchased
Assets filed by it during such period with any Governmental
29
Entity, (ii) a copy of any and all material correspondence to or from any
Governmental Entity to the extent relating to any of the Products, the Pet
Business or any of the Purchased Assets, (iii) detailed monthly financial data
for the Pet Business (in any event not later than twenty (20) days (or, in the
case of the month ended December 31, 2001, sixty (60) days) after the close of
such month) and (iv) all other information concerning the Pet Business, the
Products or any of the Purchased Assets as the Buyer may reasonably request. All
information reviewed by the Buyer or its officers, employees, accountants,
counsel, financial advisors or other representatives or furnished by the Seller
to the Buyer pursuant to this Section 6.01 shall be deemed to be Confidential
Material for purposes of the Confidentiality Agreement. No investigation by the
Buyer shall affect the representations and warranties of the Seller.
Section 6.02. Commercially Reasonable Efforts. Upon the terms and
-------------------------------
subject to the conditions set forth in this Agreement, the Seller and the Buyer
shall use their commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby or by the other Transaction
Agreements, including (i) the obtaining of all necessary actions or non-actions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary Filings including, without limitation, filings with Governmental
Entities, and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties (including, without limitation, in connection with
any of the Assumed Contracts), (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or any other Transaction Agreement or the consummation of the
transactions contemplated hereby or thereby, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated hereby or by
the other Transaction Agreements and to fully carry out the purposes of each of
the Transaction Agreements.
Section 6.03. Fees and Expenses. Except as otherwise provided in this
-----------------
Agreement, all fees and expenses incurred in connection with the transactions
contemplated by this Agreement and the other Transaction Agreements shall be
paid by the party incurring such fees or expenses, whether or not the
transactions contemplated hereby or thereby are consummated.
Section 6.04. Public Announcements. The parties hereto agree that,
--------------------
from the date of this Agreement through the Closing Date, except as contemplated
by this Agreement, no public release, announcement or any other disclosure
concerning any of the transactions contemplated hereby or by any of the other
Transaction Agreements shall be made or issued by any party hereto (without the
consent of the Buyer (in the case of a disclosure by the Seller) or without the
consent of the Seller (in the case of a disclosure by the Buyer)), except as the
disclosing party reasonably believes such release, announcement or disclosure
may be required by Applicable Law or stock market regulation, in which case, to
the extent practicable under Applicable Law or stock market regulation, the
party required to make the release, announcement or disclosure shall provide the
other parties hereto with a copy of such release,
30
announcement or disclosure in advance of such issuance or disclosure.
Notwithstanding the foregoing, any Party may announce or disclose any matter
which the other Party has previously publicly announced or disclosed in
accordance with the terms of this Section.
Section 6.05. Advertising and Promotional Materials. The Buyer shall
-------------------------------------
be permitted to use any and all product labels and advertising and promotional
materials included in the Purchased Assets bearing the Seller's corporate name,
logo's and product identification numbers until such materials are exhausted so
long as, and solely to the extent that, such materials are "stickered" or
otherwise identified as the Buyer's in accordance with the requirements of
Applicable Law or Governmental Entity. The Buyer agrees to maintain quality
standards equal to those maintained by the Seller at the time of Closing for so
long as the Buyer shall continue to use any product labels or any advertising or
promotional materials bearing the Seller's corporate name, logo's, or product
identification numbers. The Buyer will not order any new, or replenish any,
product labels or advertising or promotional materials bearing the Seller's
corporate name, logo's or product identification numbers.
Section 6.06. Proxy Statement, Stockholders' Meeting.
--------------------------------------
(a) The Seller shall use commercially reasonable efforts to prepare
and file with the U.S. Securities and Exchange Commission (the "SEC") as
promptly as practicable, a proxy statement relating to the solicitation of votes
of the Seller's stockholders authorizing the sale of assets contemplated by this
Agreement (the "Proxy Statement"). The Seller shall cause the Proxy Statement to
be mailed to the Seller's stockholders as soon as practicable. The Buyer shall
promptly provide the Seller with such information as it may reasonably request
for inclusion in the Proxy Statement. The information provided and to be
provided by the Seller and the Buyer, respectively, for use in the Proxy
Statement shall be, as of the date of the stockholders' meeting contemplated
therein, true and correct in all material respects and shall not omit to state
any material fact required to be stated therein or necessary in order to make
such information not misleading, and the Seller and the Buyer each agree to
correct any information provided by it for use in the Proxy Statement to the
extent such information shall have become materially false or misleading.
(b) The Seller will promptly notify the Buyer of (i) the receipt of
any comments from the SEC and (ii) any request by the SEC for any amendments to
the Proxy Statement or for additional information relating to the Proxy
Statement. The Proxy Statement and any amendment thereto, and all mailings to
the Seller's stockholders, in each case in connection with this Agreement and
the transactions contemplated hereby shall be provided to the Buyer and its
representatives prior to the filing or mailing thereof, as the case may be, in
substantially the same form as proposed to be filed or mailed, as the case may
be.
(c) The Seller shall, as promptly as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders for the purpose of authorizing the sale of assets contemplated by
this Agreement. Subject to Section 6.07 and its fiduciary duties, the Seller's
Board of Directors shall recommend to its stockholders authorization of such
matters.
31
Section 6.07. Nonsolicitation.
---------------
(a) Except as set forth in this Section 6.07 and for any public
release, announcement or any other disclosure in accordance with the provisions
of Section 6.04, from the date of this Agreement through the Closing Date, the
Seller shall not, nor shall it authorize or permit any of its Subsidiaries or
any of its directors or executive officers or any agent or representative to (i)
solicit, initiate or affirmatively encourage the submission of a Competing
Proposal or (ii) participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to, or take any other action
designed to facilitate any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, any Competing Proposal.
(b) To the extent a bona fide Competing Proposal is made to or
received by the Seller after the date of this Agreement and prior to the Final
Proposal Date, which Competing Proposal did not result from a breach of Section
6.07(a), and which the Board of Directors of the Seller determines in good faith
is likely to lead to a Superior Proposal, the Seller may (i) furnish information
with respect to the Seller to the Person making such Competing Proposal pursuant
to a customary confidentiality agreement and (ii) participate in discussions or
negotiations (including solicitation of a revised Competing Proposal) with such
Person regarding any Superior Proposal made by such Person; provided, that, the
Seller may not take any of the actions described in clauses (i) and (ii) of this
Section 6.07(b) unless and until the Seller provides to the Buyer (x)
contemporaneous written notice of the Seller's intent to furnish information or
enter into negotiations or discussions with such Person, (y) a copy of the
confidentiality agreement entered into between the Seller and such Person, and
(z) a copy of the material terms and conditions of the initial Competing
Proposal that the Seller receives from any third party.
(c) To the extent a Superior Proposal is made to or received by the
Seller after the date of this Agreement and prior to the date twenty-five (25)
days subsequent to the date hereof (the "Final Proposal Date"), which Superior
Proposal did not result from a breach of this Section 6.07 and with respect to
which Superior Proposal the Seller intends to pursue negotiations or discussions
with a third party, the Seller shall provide the Buyer with a written notice
indicating such intent and indicating the material terms of the Superior
Proposal (a "Superior Proposal Notice"). To the extent the Seller terminates
such negotiations or discussions, the Seller shall provide the Buyer with
written notice of such termination (the "Termination Notice"). The Seller shall
be required to provide to the Buyer with only one Superior Proposal Notice with
respect to any Superior Proposal (including any amendments, changes or revisions
thereto). The Seller's obligations under Section 6.06 shall be tolled during any
time which the Seller is involved in negotiations with a third party with
respect to any Superior Proposal in accordance with the provisions of this
Section 6.07. Beginning on the date twenty-five (25) days subsequent to the date
the Buyer receives a Superior Proposal Notice and ending on the date the Buyer
receives a Termination Notice, the Buyer shall be entitled to terminate this
Agreement. Upon any termination of this Agreement by the Buyer pursuant to this
Section 6.07(c), (i) the Voting Agreement shall become void, will have no effect
and terminate in its entirety and (ii) if such termination by the Buyer occurs
after the date fourteen (14) days subsequent to the date the Buyer becomes
entitled to terminate this Agreement pursuant to this Section 6.07(c), the
Seller shall promptly pay to the Buyer the amount of any and all reasonable
32
costs and expenses incurred by the Buyer in connection with this Agreement and
the transactions contemplated hereby.
(d) The Board of Directors of the Seller, in response to a Superior
Proposal that Seller receives on or before the Final Proposal Date, and which
Superior Proposal did not result from a breach of Section 6.07(a), may (i)
withdraw or modify its recommendation to the Seller's stockholders to authorize
the sale of assets contemplated by this Agreement or (ii) authorize the Seller
to terminate this Agreement; provided, that, the Board of Directors of the
Seller may not take any of the actions described in clauses (i) and (ii) of this
Section 6.07(d) unless (x) the Buyer receives from the Seller, on or prior to
the Final Proposal Date, a Superior Proposal Notice; (y) the Buyer does not
make, prior to five (5) Business Days after its receipt of the Superior Proposal
Notice, a counteroffer to the Seller that the Board of Directors of the Seller
determines in good faith is at least as favorable as the Superior Proposal
(including any amendments, changes or revisions thereto) (a "Matching Offer");
and (z) the Board of Directors of the Seller determines in good faith after
consultation with outside counsel, that with respect to the action described in
clause (i), such action is necessary for such Board of Directors to act in a
manner consistent with its fiduciary obligations and, with respect to the action
described in clause (ii), such action is in the best interests of the Seller's
stockholders; provided further, that, prior to any termination of the Agreement
pursuant to this Section 6.07(d), notwithstanding whether or not the Buyer makes
any Matching Offer, the Seller shall pay to the Buyer a termination fee in the
amount of $750,000 (Seven Hundred Fifty Thousand Dollars) in addition to any and
all costs and expenses incurred by the Buyer in connection with this Agreement
and the transactions contemplated herein. In the event that this Agreement is
terminated pursuant to this Section 6.07(d) the Voting Agreement shall become
void, will have no effect and will terminate in its entirety.
(e) Nothing in this Agreement shall be deemed to prohibit the Seller
from taking and disclosing to its stockholders a position with respect to a
tender offer contemplated by Rule 14e-2(a) promulgated under the Securities
Exchange Act of 1934, as amended, or from making any required disclosure to the
Seller's stockholders if, in the good faith judgment of the Seller's Board of
Directors, after consultation with outside counsel, failure to so disclose would
be inconsistent with its obligations under Applicable Law; provided, that,
except as set forth in Section 6.07(d), in no event shall the Seller's Board of
Directors withdraw or modify, or publicly propose to withdraw or modify, its
position with respect to the authorization of the sale of assets contemplated by
this Agreement.
(f) For purposes of this Agreement:
(i) "Competing Proposal" means any proposal made by a third
party for a merger, consolidation, dissolution, sale of assets, tender
offer, recapitalization, share exchange or other acquisition of, or
business combination involving, the Pet Business, other than the sale of
assets to the Buyer as contemplated by this Agreement; provided, that, no
proposal made by a third party for a merger, consolidation, dissolution,
sale of assets, tender offer, recapitalization, share exchange or other
acquisition of, or business combination involving, the Pet Business shall
be deemed to be a Competing Proposal if the Board of Directors reasonably
believes that such proposal (an "Acquisition
33
Proposal") contemplates of the Seller the assumption by such third party or
an Affiliate thereof of all of the Seller's obligations under this
Agreement (in which case, notwithstanding the provisions of Section 10.08,
the Seller may assign either this Agreement or any of its rights, interests
or obligations hereunder without the prior approval (written or otherwise)
of any other party hereto upon the consummation of such Acquisition
Proposal and the written assumption thereof by such third party or
Affiliate); and
(ii) "Superior Proposal" means any bona fide written
Competing Proposal made by a third party (i) on terms which the Board of
Directors of the Seller determines in its good faith judgment to be more
favorable to the Seller's stockholders than the sale of assets contemplated
by this Agreement, taking into account all the terms and conditions of such
proposal and this Agreement and (ii) that in the good faith judgment of the
Seller's board of directors is reasonably capable of being completed on the
material terms proposed, taking into account all financial, regulatory,
legal and other aspects of such proposal.
Section 6.08. Transferred Employees, Employee Matters. The Buyer shall
---------------------------------------
offer employment, commencing on the Closing Date, to all of the Pet Business
Employees, and to certain other employees of the Seller listed on Schedule 6.08
-------------
(such Pet Business and other employees being the "Transferred Employees"). Any
such offer of employment made by the Buyer shall be at the same salary and
commission rate paid as of the date hereof to such Transferred Employee (or, if
the Transferred Employee is hired after the date hereof, at such Employee's
salary and commission rate at his date of hire) and with substantially
comparable medical, dental, life and long-term disability insurance, vacation,
sick leave and 401(k) benefits offered by the Seller or any of its Subsidiaries
to such employees, as set forth on Schedule 3.21. The Seller shall be solely
-------------
responsible at the Closing for any and all accrued benefit costs or any other
liability under Seller's Benefit Plans with respect to any Transferred
Employees, regardless of whether or not such Transferred Employees accept the
Buyer's offer of employment, except to the extent that any such accrued benefit
costs or any other liability is accrued on the Final Statement of Working
Capital (in which case, such accrued benefit costs and such other liabilities so
accrued shall be the sole responsibility of the Buyer). The Seller and its
Subsidiaries shall not for two (2) years after the Closing attempt to solicit or
induce any Transferred Employee to terminate his or her employment with the Pet
Business; provided, that this sentence shall not apply to any such individual
-------- ----
whose employment with the Buyer has been terminated or to any such individual
who did not accept the Buyer's offer of employment set forth in the first
sentence of this Section 6.08.
Section 6.09. Transfer Taxes and Fees. All transfer, stamp,
-----------------------
documentary, sales, use, registration, withholding and other similar Taxes and
related fees (including penalties, interest and additions to Tax) required to be
paid in connection with this Agreement or the transactions contemplated hereby
shall be borne fifty percent (50%) by the Seller and fifty percent (50%) by the
Buyer. The Buyer shall bear all registration, filing and similar fees and
expenses associated with the assignment, transfer or sale of the Intellectual
Property and the Permits.
34
Section 6.10. Intellectual Property Matters.
-----------------------------
(a) The parties hereto agree that the Buyer, in its sole discretion,
shall be entitled to control the filing and recording of the assignments of the
Intellectual Property contemplated by this Agreement.
(b) Seller hereby grants and shall cause each of its Subsidiaries to
grant, to the Buyer, as of the Closing Date, a royalty free, perpetual,
non-exclusive license to use in the Pet Business any patents, trade secrets,
know-how, processes and other technology other than the Novasome Technology
which is not included in the Purchased Assets but is used as of the Closing Date
both (i) in the Pet Business and (ii) in a business of Sellers and their
Subsidiaries other than the Pet Business, which license may be assigned in whole
or in part, without Seller's consent in connection with a sale or transfer of
all or any portion of the Pet Business.
Section 6.11. Accounts Receivable Collection. On the Closing Date or
------------------------------
as soon thereafter as practicable, the Buyer shall send a letter from the Buyer,
and to the extent commercially reasonable and reasonably acceptable to the
Seller, to each of the obligors on the accounts receivable and other receivables
included in the Purchased Assets (the "Purchased Receivables") informing each
such obligor of the transfer of the Pet Business contemplated hereby and
instructing them to remit all payments and other items in respect of the
Purchased Receivables and all future accounts receivable of the Pet Business as
directed in such letter. If the Buyer receives any payment with respect to any
accounts receivable not included in the Purchased Assets (or, to the extent
included in the Purchased Assets, if the Buyer receives any payment with respect
to any accounts receivable in excess of the amount of accounts receivable (net
of reserves therefor) set forth on the Final Statement of Working Capital), the
Buyer shall reasonably promptly deliver such payment to the Seller; provided,
--------
that the Buyer shall not be required to deliver any such payment to the Seller
----
more frequently than once per week. If the Seller or any of its Subsidiaries
receives any payment with respect to any of the Purchased Receivables or any
accounts receivable or other receivable for Products sold or services rendered
after the Closing Date and included in the Purchased Assets, the Seller shall
reasonably promptly deliver such payment to the Buyer; provided, that the Seller
-------- ----
shall not be required to deliver any such payment to the Buyer more frequently
than once per week. For each of the Purchased Receivables, any amounts received
by Seller from the account customer shall be applied first to reduce the
Purchased Receivables and then to the other amounts owed by such customer,
except for amounts of any receivables as to which the account customer is
disputing.
Section 6.12. Confidentiality. From and after the date of this
---------------
Agreement, the Seller shall not, and shall cause its Affiliates not to,
disclose, divulge, furnish or make accessible to any Person, any information of
a confidential nature or not generally known to the public relating to the Pet
Business (collectively, the "Confidential Information"). The obligations of the
Seller under this Section 6.12 are in addition to, and not in limitation or
preemption of, all other obligations of confidentiality which the Seller may
have to the Buyer pursuant to the Confidentiality Agreement or under any legal
or equitable principles.
Section 6.13. Transition Services Agreement.
-----------------------------
35
(a) Following the execution of this Agreement and prior to the Closing
Date, the Seller and the Buyer shall negotiate in good faith a mutually
acceptable transition services agreement (the "Transition Services Agreement")
detailing the terms and conditions of the services to be provided by the Seller
to the Buyer and the terms and conditions (including, price and term) related to
the provision of such services. The parties acknowledge that the transition
services to be the subject of the Transition Services Agreement shall include
computer and information technology support, telephone services and such other
services as the Buyer and the Seller may mutually determine (collectively, the
"Technical Services"). At the Buyer's election exercised no later than thirty
(30) days prior to the date scheduled for the meeting of the Seller's
stockholders contemplated by Section 6.06(c), the Transition Services Agreement
shall include the exclusive use and occupancy by the Buyer of the Plant;
provided, that, such use and occupancy shall be under the Terms of Occupancy.
-------- ----
(b) For purposes of this Agreement, the term "Terms of Occupancy"
shall mean the exclusive use and occupancy of all of the Plant (except for
storage and filing space consistent with the current use by the Seller and the
room in which the Seller's autoclave is presently situated), which use and
occupancy shall be consistent with the present use and occupancy thereof by the
Seller, for the three-month period immediately following the Closing (with the
option to continue such use and occupancy for up to two successive additional
6-month periods, upon the written notice of the Buyer to the Seller given no
later than sixty (60) days prior to the end of the then current occupancy
period), (i) at a price equal to $1.00 for each such occupancy period, (ii)
where the Buyer reimburses the Seller on a monthly basis (within 10 days of the
invoice therefor) for all costs incurred by the Seller with respect to the Plant
during the Buyer's use and occupancy of the Plant that would customarily be paid
by a tenant under a "triple net lease", other than those with respect to which
the Buyer is entitled to indemnification pursuant to Sections 9.01(a)(iii), (iv)
or (v), and (iii) under such other terms and conditions as are commercially
reasonable for a commercial lease of an industrial facility in Buena, New
Jersey.
(c) In the event that the Seller and the Buyer do not execute a
Transition Services Agreement, the Seller agrees (i) to provide the Buyer with
the Technical Services for a reasonable period following the Closing Date (not
to exceed sixty (60) days) at reasonable prices and (ii) at the Buyer's
election, exercised no later than thirty (30) days prior to the date scheduled
for the meeting of the Seller's stockholders contemplated by Section 6(c), to
permit the Seller to use and occupy the Plant under the Terms of Occupancy.
(d) The execution of a Transition Services Agreement shall not be a
condition to Closing hereunder.
Section 6.14. Supply Agreement. The Buyer and the Seller shall enter
----------------
into the Manufacturing and Supply Agreement, in the form attached hereto as
Exhibit 1 (the "Supply Agreement") on or prior to the Closing.
Section 6.15. Instrument of Assignment and Assumption. At the Closing,
---------------------------------------
the Buyer shall execute and deliver the Instrument of Assignment and Assumption
in the form attached hereto as Exhibit 2 (the "Instrument of Assignment and
Assumption").
36
Section 6.16. [Intentionally Omitted]
Section 6.17. Technology Rights Agreement. On or prior to the Closing,
---------------------------
the Buyer and the Seller shall enter into the Technology Rights Agreement.
Section 6.18. Accessible Financial Records. For a period of six (6)
----------------------------
years following the Closing Date, the Seller shall afford the Buyer and its
officers, employees, accountants, counsel, financial advisors and other
representatives reasonable access during normal business hours (and in a manner
so as not to interfere with the normal business operations of the Seller and its
Subsidiaries) to all books, records, files and other data of the Seller or any
of its Subsidiaries (including those stored electronically) of a financial
nature relating to any of the Products, the Purchased Assets or the Pet Business
(the "Accessible Financial Records") that have not been transferred to the Buyer
pursuant to this Agreement because they do not relate solely to the Pet
Business. Notwithstanding the foregoing, if the Seller's standard document
retention policy would require or permit the Seller to destroy or dispose of any
Accessible Financial Record prior to the 6th anniversary of the Closing Date,
the Seller shall offer to deliver such Accessible Financial Record to the Buyer
at the Buyer's sole cost and expense prior to such destruction or disposal. All
information and data contained within Accessible Financial Records reviewed by
the Buyer or its officers, employees, accountants, counsel, financial advisors
or other representative and not relating to the Products, the Purchased Assets
or the Pet Business shall be deemed to be confidential and shall be held in
confidence by the Buyer and its officers, employees, accountants, counsel,
financial advisors and other representatives.
Section 6.19. Bulk Sales Laws. The Buyer and the Seller each hereby
---------------
waives compliance with the provisions of the bulk transfer statute in each of
the jurisdictions, if any, where such compliance would be required in connection
with the transactions contemplated by this Agreement.
Section 6.20. Noncompetition.
--------------
(a) The Seller agrees that from the Closing Date through sixty (60)
months after the date thereof, neither it nor any of its Subsidiaries shall,
independently or through any other Person:
(i) engage anywhere in the United States and Canada in any
enterprise engaged in the business of manufacturing, packaging, marketing,
selling or otherwise distributing animal health products (the "Restricted
Business") (and, for the purpose of clarity, with respect to marketing,
telemarketing, on-line services and other forms of marketing, this activity
shall be deemed to be conducted in any place where the mail, telephone
communication, computer signal or other marketing medium is received); or
(ii) acquire or own any interest in any entity engaged in a
Restricted Business and which derives sales from the Restricted Business in
an amount greater than 20% of its total sales from all of its businesses
(provided that the Seller or any of its Subsidiaries may hereafter acquire
an interest in any enterprise engaged in a Restricted Business so long as
the Seller causes, to the extent it can so cause, such enterprise to use
reasonable commercial efforts to divest, as soon as reasonably practicable,
a portion of its
37
interest in such Restricted Business such that the 20% sales test set forth
above would not be exceeded after such divestiture or, if the Seller cannot
so cause, the Seller divests its interest in such entity as soon as
reasonably practicable).
(b) Anything to the contrary herein notwithstanding, in no event shall
this Section 6.20 prevent, or be deemed to prevent, the Seller or any Subsidiary
of the Seller from:
(i) engaging in any business anywhere in the world outside the
United States and Canada;
(ii) acquiring up to 10% (in the aggregate) of the outstanding
common stock of any publicly traded company engaged in a Restricted
Business;
(iii) manufacturing, packaging, marketing, selling, distributing
or otherwise using or licensing Novasome Technology and improvements
thereto or other technology developed or acquired by the Seller or any of
its Subsidiaries for use in products other than animal health products;
(iv) exercising any of its rights or performing any of its
obligations under the Supply Agreement; or
(v) supplying (including the manufacture and packaging for) or
licensing third parties with Novasome Technology (or products manufactured,
formulated or otherwise made with or incorporating or containing Novasome
Technology) for marketing, sale, distribution or other use by such third
parties in products that are not Technology Products in the Field.
(c) With respect to the restrictive covenants set forth in this
Section 6.20, the Seller acknowledges and agrees that the restrictive covenants
contained herein are reasonable as to time, scope and area and are not unduly
burdensome on the Seller or its Subsidiaries.
(d) The restrictive covenants contained herein are in addition to any
rights the Buyer may have in law or at equity.
Section 6.21. ISRA Compliance.
---------------
(a) The Seller shall at its sole cost and expense obtain and provide
to Buyer, as promptly as practicable but in no event later than the Closing
Date, as to the transactions set forth in and to be made in accordance with the
terms of this Agreement for the sale of the assets of the Pet Business, (i) a
written determination from the New Jersey Department of Environmental Protection
("NJDEP") of the nonapplicability of the provisions of the New Jersey Industrial
Site Recovery Act, N.J.S.A. 13:1K, et seq., and the regulations promulgated
thereunder (collectively "ISRA"), to the transactions set forth in this
Agreement, issued by NJDEP in response to an Applicability Determination
submitted to NJDEP by the Seller pursuant to N.J.A.C. 7:26B-2.2 (hereinafter
referred to as a "Letter of Nonapplicability" or "LNA"), (ii) a Remediation In
Progress Waiver pursuant to N.J.S.A. 13:1K-11.5 and N.J.A.C. 7:26B-5.4 issued by
the NJDEP in response to a Remediation in Progress Application submitted by the
Seller to NJDEP for the
38
transactions set forth in this Agreement, (iii) NJDEP's written approval of a
Negative Declaration Certificate submitted by the Seller to NJDEP for the
transactions set forth in this Agreement, (iv) NJDEP's written approval of a
Remedial Action Workplan (as defined by ISRA) submitted by the Seller to NJDEP,
or (v) an executed Remediation Agreement (as defined by ISRA) between the Seller
and NJDEP.
(b) Under any Remediation Agreement or Remedial Action Workplan
submitted by Seller and approved by NJDEP in compliance with its obligations
under ISRA to the extent such is applicable to the transactions set forth this
Agreement for the sale of the assets of the Pet Business, the Seller shall be
solely responsible for obtaining NJDEP approval of a Remediation Funding Source
(as defined by ISRA), to the extent such may be required. In addition, in any
such Remediation Agreement or Remedial Action Workplan, Seller shall be
identified as the sole party responsible for (and Seller shall pay for): (i)
compliance with the Remediation Agreement or Remedial Action Workplan and (ii)
obtaining from NJDEP a No Further Action Letter under ISRA with respect thereto.
Section 6.22. Products Liability Insurance. During each Products
----------------------------
Liability Period, Seller shall maintain one or more insurance policies providing
coverage for up to an aggregate amount of One Million Dollars per occurrence/Two
Million Dollars aggregate with a $25,000 deductible per claim with respect to
any Products Liability Claims that may be made against the Seller or any of its
Subsidiaries during such Products Liability Period. Notwithstanding the
foregoing, if the Seller is not able to obtain a policy on the terms specified
in the preceding sentence, the Seller may obtain one or more insurance policies
upon substantially similar terms for per occurrence/aggregate and deductible
amounts, which terms shall be commercially reasonable.
ARTICLE VII
CONDITIONS PRECEDENT
--------------------
Section 7.01. Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Closing. The respective obligation of each party to effect and complete the
-------
Closing is subject to the satisfaction or waiver (by each party) on or prior to
the Closing Date of the following conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
----------------------------
preliminary or permanent injunction or other order issued by any Governmental
Entity or other legal restraint or prohibition preventing the consummation of
the transactions contemplated by this Agreement or by the other Transaction
Agreements shall be in effect.
(b) Transaction Agreements. All the Transaction Agreements shall have
----------------------
been executed and delivered by and to the respective parties to such agreements.
(c) Stockholders' Approval. The sale of assets contemplated by this
----------------------
Agreement shall have been authorized by the affirmative vote of holders of a
majority (or such higher number as may be required by Seller's Charter or bylaws
or Applicable Law) of the outstanding shares of the Seller's capital stock
outstanding as of the record date for the meeting of stockholders of the Seller
contemplated by Section 6.06 (the "Required Stockholder Vote").
39
Section 7.02. Conditions to Obligations of the Buyer. The obligations
--------------------------------------
of the Buyer to effect and complete the Closing are further subject to the
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of the Seller set forth in this Agreement shall be true and correct (i) as of
the date of this Agreement and (ii) as of the Closing Date as though made on and
as of the Closing Date, except in the case of each of the foregoing clauses (i)
and (ii), (x) to the extent such representations and warranties are specifically
made as of a particular date, in which case such representations and warranties
shall be true and correct as of such date, (y) for changes contemplated by this
Agreement and (z) where the failure to be true and correct (without regard to
any materiality qualifications contained therein) individually or in the
aggregate, has not had, and is not reasonably likely to have, a Material Adverse
Effect. The Buyer shall have received a certificate of the Seller signed on
behalf of such Seller by a duly authorized officer of such Seller to such
effect.
(b) Performance of Obligations of the Obligations of Other Parties.
--------------------------------------------------------------
The Seller shall have performed in all material respects all of its covenants
and obligations required to be performed by it under this Agreement on or prior
to the Closing Date, specifically including all such covenants and obligations
as set forth in Articles V and VI hereof. The Buyer shall have received a
certificate of the Seller signed on behalf of the Seller by a duly authorized
officer of the Seller to such effect.
(c) Consents and Approvals. All Consents set forth in Schedule 7.02
---------------------- -------------
shall have been obtained and be in full force and effect and all Filings set
forth in Schedule 7.02 shall have been made with the appropriate Person, and the
-------------
Buyer shall have been furnished with evidence reasonably satisfactory to it of
the granting of such Consents or the submission of such Filings, as the case may
be.
(d) No Litigation. There shall not be pending any suit, action or
-------------
proceeding by any Governmental Entity or any other Person (other than a Person
asserting a claim based on a business or stockholder relationship with the
Buyer), in each case that has a reasonable likelihood of success, (i)
challenging the purchase by the Buyer of any of the Purchased Assets or seeking
to restrain or prohibit the consummation of the transaction contemplated hereby
or by any of the other Transaction Agreements or seeking to obtain from any of
the parties hereto any damages with respect to the transactions contemplated by
this Agreement, (ii) seeking to prohibit or limit the ownership or operation by
the Buyer of the Pet Business or any portion of the Purchased Assets, or to
compel the Buyer to dispose of or hold separate any portion of the Purchased
Assets, as a result of the transaction contemplated hereby, or by any of the
other Transaction Agreements, or (iii) seeking to prohibit the Buyer from
effectively controlling any of the Purchased Assets.
(e) Opinion of Counsel. The Buyer shall have received the opinion of
------------------
Xxxx and Xxxx LLP, counsel to the Seller, dated the Closing Date, addressed to
the Buyer, substantially in the form attached hereto as Exhibit 3.
40
Section 7.03. Conditions to Obligation of the Seller. The obligation
--------------------------------------
of the Seller to effect and complete the Closing is further subject to the
satisfaction waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of the Buyer set forth in this Agreement qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, in each case as of the date hereof and as of the Closing Date
as though made as of the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, as of such earlier date). The Seller shall have received a certificate
signed on behalf of the Buyer by a duly authorized officer of the Buyer to such
effect.
(b) Performance of Obligations of the Buyer. The Buyer shall have
---------------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and the Seller shall
have received a certificate signed on behalf of the Buyer by a duly authorized
officer of the Buyer to such effect.
(c) Consents and Approvals. All Consents set forth in Schedule 7.02
---------------------- -------------
shall have been obtained and be in full force and effect and all Filings set
forth in Schedule 7.02 shall have been made with the appropriate Person, and the
-------------
Seller shall have been furnished with evidence reasonably satisfactory to it of
the granting of such Consents or the submission of such Filings, as the case may
be.
(d) No Litigation. There shall not be pending any suit, action or
-------------
proceeding by any Governmental Entity or any other Person (other than a Person
asserting a claim based on a business or stockholder relationship with the
Seller), in each case that has a reasonable likelihood of success, (i)
challenging the sale by the Seller of any of the Purchased Assets, (ii) seeking
to prohibit or limit the ownership or operation by the Buyer of the Pet Business
or any portion of the Purchased Assets, or to compel the Buyer to dispose of or
hold separate any portion of the Purchased Assets, as a result of the
transaction contemplated hereby, or by any of the other Transaction Agreements
or (iii) seeking to prohibit the Buyer from effectively controlling any of the
Purchased Assets.
(e) Opinion of Counsel. The Seller shall have received the opinion of
------------------
Xxxxxxx Xxxx LLP, counsel to the Buyer, dated the Closing Date, addressed to the
Seller, substantially in the form attached hereto as Exhibit 4.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.01. Termination. This Agreement may be terminated at any
-----------
time prior to the Closing:
41
(a) by mutual written consent of the Buyer and the Seller;
(b) by either the Buyer or the Seller upon written notice to
the other
(i) if the transactions contemplated hereby or by the
other Transaction Agreements are not consummated on or before June 30,
2002 (the "Outside Date"), unless the failure to consummate the
transactions contemplated hereby is the result of a material breach of
this Agreement by the party seeking to terminate this Agreement;
provided, however, that the passage of such period shall be tolled for
any part thereof (but not exceeding sixty (60) days in the aggregate)
during which time the Seller's proxy solicitation materials described
in Section 6.06 hereof are subject to review by, and comments from, the
SEC until the date the SEC grants the Seller permission to distribute
such materials to its stockholders;
(ii) if any Governmental Entity issues an order,
decree or ruling or takes any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated
hereby or by the other Transaction Agreements and such order, decree,
ruling or other action shall have become final and nonappealable; or
(iii) if the stockholders of the Seller do not by the
Required Stockholder Vote authorize the sale of assets contemplated
hereby in which event the Seller shall promptly pay all the reasonable
costs and expenses of the Buyer incurred in connection with this
Agreement and the transactions contemplated herein, but in no event
more than $300,000;
(c) by the Seller pursuant to Section 6.07(d)(ii) upon written
notice to the Buyer;
(d) by the Buyer pursuant to Section 6.07(c) upon written notice
to the Seller and
(e) as provided in Section 8.02.
Section 8.02. Additional Termination Rights. In the event the
-----------------------------
Buyer receives notice under Section 5.05 of a supplement or amendment to any
Disclosure Schedule which discloses, or which together with any prior
supplements or amendments pursuant to such section discloses, any change or
effect which constitutes a Material Adverse Effect measured against the
Disclosure Schedules with respect to such representations and warranties as of
the date hereof, the Buyer may, prior to the 10th Business Day after its receipt
of the applicable supplement pursuant to Section 5.05, terminate this Agreement.
Section 8.03. Effect of Termination. In the event of termination
---------------------
of this Agreement by either the Buyer or the Seller as provided in Section 8.01,
this Agreement shall forthwith become void ab initio and have no effect, without
any liability or obligation on the part of any party hereto, other than the
confidentiality provisions of Section 6.01, Section 6.03, Section 6.04, the fees
and expenses provisions of Sections 6.07 and 8.01(b)(iii), this Section 8.03 and
Article X, and except to the extent that such termination results from the
willful breach by a party of any covenant set forth in this Agreement.
42
Section 8.04. Extension; Waiver. At any time prior to the Closing
-----------------
Date, the parties may agree to (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained in this
Agreement or in any document delivered pursuant to this Agreement, (c) waive
compliance with any of the agreements of the other party contained in this
Agreement or (d) waive any condition to such party's obligation to effect and
complete the Closing. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
ARTICLE IX
INDEMNIFICATION
---------------
Section 9.01. Indemnification.
---------------
(a) The Seller shall indemnify the Buyer and its Affiliates and
their respective officers, directors, employees, stockholders, agents and
representatives against and hold them harmless from any loss, liability, claim,
damage or actual out-of-pocket expense (including reasonable legal fees and
expenses) (collectively, a "Loss") suffered or incurred by any such indemnified
party to the extent arising from
(i) any breach of any representation or warranty of the
Seller which survives the Closing contained in this Agreement;
(ii) any breach of any covenant or agreement of the
Seller contained in this Agreement requiring performance after the
Closing Date;
(iii) any remediation, assessment or monitoring
obligations or death or injury to persons or property relating to the
presence of Hazardous Substances, other than those Hazardous Substances
brought to or otherwise introduced at or introduced on the Plant by the
Buyer or its agents, employees, representatives or independent
contractors at any time during the period of Buyer's occupancy and use
of the Plant, if any, (A) in, on, under or migrating from any property
currently or formerly owned, operated or leased by the Seller or its
Subsidiaries in connection with the Pet Business (including, without
limitation, the Plant), whether known or unknown at Closing, or (B) at
any other location if such Hazardous Substances were manufactured,
generated, produced, used, stored, treated, recycled, transported,
discharged, emitted or released by or on behalf of the Seller or any of
its Subsidiaries at or from such location;
(iv) any actual or alleged violation of any Environmental
Law by the Seller or any of its Subsidiaries (A) with respect to the
Plant other than a violation caused by an act or omission of Buyer or
its agents, employees, representatives or independent contractors at the
Plant during the period of Buyer's occupancy and use thereof, if any
(other than violations which are a continuation of or arise as a result
of conditions or
43
violations which existed at the Plant at Closing) or (B) with respect to
the Pet Business occurring prior to the Closing Date;
(v) any breach by Seller of its obligations pursuant to
Section 6.21 regarding ISRA compliance, and any liability or obligation
of Buyer arising in connection with any ISRA filing required to be made
by the Buyer upon the termination of the use and occupancy, if any, of
the Plant by the Buyer unless such liability or obligation of the Buyer
arises due to the handling, manufacturing, use, treatment, recycling,
transporting, discharge, emission, generation, processing, storage,
release or disposal of Hazardous Substances at or on the Plant by the
Buyer or its agents, employees, representatives or independent
contractors;
(vi) any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Seller or any of its Subsidiaries; and
(vii) the failure of the Buyer to obtain protections
afforded by compliance with the notification and other requirements of
the bulks transfer statutes in force in the jurisdictions, if any, in
which such compliance would be required in connection with the
transactions contemplated by this Agreement;
provided that, except in the case of fraud, (A) except for Losses attributable
to a breach of a representation or warranty in Section 3.19, the Seller shall
not be liable under Section 9.01(a)(i) unless and until the aggregate amount of
Losses with respect to matters referred to in Section 9.01(a)(i) exceeds U.S.
$200,000 (the "Deductible Amount") and thereafter shall be liable for any and
all Losses under Section 9.01(a)(i) only to the extent they exceed the
Deductible Amount and (B) the Seller's maximum liability under Section
9.01(a)(i) shall not exceed $8,350,000.
(b) The Buyer shall indemnify the Seller and its Affiliates and
their respective officers, directors, employees, stockholders, agents and
representatives against and hold them harmless from any Loss suffered or
incurred by any such indemnified party to the extent arising from
(i) any breach of any representation or warranty of the
Buyer which survives the Closing contained in this Agreement;
(ii) any breach of any covenant or agreement of the Buyer
contained in this Agreement requiring performance after the Closing
Date;
(iii) the Assumed Liabilities; and
(iv) the operation of the Pet Business on and after the
Closing Date;
provided that, except in the case of fraud, (A) except for Losses attributable
to a breach of a representation or warranty in Section 4.04, the Buyer shall not
be liable under Section 9.01(b)(i) unless and until the aggregate amount of
Losses with respect to matters referred to in Section
44
9.01(b)(i) exceeds the Deductible Amount and thereafter shall be liable for any
and all Losses under Section 9.01(b)(i) only to the extent they exceed the
Deductible Amount and (B) the Buyer's maximum liability under Section 9.01(b)(i)
shall not exceed $8,350,000.
Section 9.02. Termination of Indemnification. The obligations to
------------------------------
indemnify and hold harmless a party hereto (i) pursuant to Sections 9.01(a)(i)
and 9.01(b)(i) shall terminate when the applicable representation or warranty
terminates pursuant to Section 10.01 and (ii) pursuant to the other clauses of
Sections 9.01(a) and 9.01(b) shall continue indefinitely; provided, however,
that as to clause (i) above such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the Person to be
indemnified or the related party thereto shall have, before the expiration of
the applicable period, previously made a claim by delivering a notice of such
claim (stating in reasonable detail the basis of such claim) to the Indemnifying
Party.
Section 9.03. Procedures Relating to Indemnification for Third
------------------------------------------------
Party Claims. In order for an indemnified party or any of its Affiliates or any
------------
of their respective officers, directors, employees, stockholders, agents or
representatives (an "Indemnified Party") to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any Person (other than a party hereto) against such
party (a "Third Party Claim"), such party must notify the indemnifying party
(the "Indemnifying Party") in writing, and in reasonable detail, of the Third
Party Claim promptly after receipt by the Indemnified Party of written notice of
the Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification obligations set forth in this Article IX
except to the extent the Indemnifying Party shall have been prejudiced as a
result of such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnified Party
failed to give such notice). Thereafter, the Indemnified Party shall deliver to
the Indemnifying Party, reasonably promptly after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
If a Third Party Claim is made against the Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if the Indemnifying Party so chooses and acknowledges its obligation to
indemnify the Indemnified Party therefor, to assume the defense thereof with
counsel selected by the Indemnifying Party; provided that such counsel is not
reasonably objected to by the Indemnified Party within 15 days after the
Indemnified Party is advised in writing as to the selection of such counsel by
the Indemnifying Party. Should the Indemnifying Party so assume the defense of a
Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal fees, costs and/or expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel (not reasonably
objected to by the Indemnifying Party), at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense.
If the Indemnifying Party so elects to assume the defense of
any Third Party Claim, the Indemnified Party shall cooperate with the
Indemnifying Party in the defense thereof.
45
Such cooperation shall include, without limitation, the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of records
and information which are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the Indemnifying Party shall have assumed the defense of a Third Party Claim,
neither the Indemnifying Party nor the Indemnified Party shall admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the other party's prior written consent (which consent shall not
be unreasonably withheld); provided, that the consent of the other party will
-------- ----
not be required if such admission of liability, settlement, compromise or
discharge includes a complete release of such other party from further
liability.
Section 9.04. Procedures Related to Indemnification for Other Claims.
------------------------------------------------------
In the event the Indemnified Party should have a claim against any Indemnifying
Party under Section 9.01 that does not involve a Third Party Claim being
asserted against or sought to be collected from such Indemnified Party, the
Indemnified Party shall deliver notice of such claim with reasonable promptness
to the Indemnifying Party. The failure by such Indemnified Party so to notify
the Indemnifying Party shall not relieve the Indemnifying Party from any
liability which it may have to such Indemnified Party under Section 9.01, except
to the extent that the Indemnifying Party demonstrates that it has been
prejudiced by such failure.
Section 9.05. Exclusivity; Limitation; Reduction.
----------------------------------
(a) After the Closing, except in the case of fraud by the breaching
party, Section 9.01 shall provide the exclusive remedy for any
misrepresentation, breach of warranty, covenant or other agreement, or other
claims arising out of this Agreement or the transactions contemplated hereby or
the subject matter hereof.
(b) In no event shall any party hereto be responsible for any Losses
or other amounts that are damages to reputation or the like, or special,
incidental, exemplary, consequential or punitive damages, except to the extent
such Losses are components of awards or judgments in third party claims and
except that the foregoing shall not restrict or limit any claim by the Seller
for any diminution in the value of the Pet Business (including on a "multiple"
basis) resulting from any misrepresentation, breach of warranty, covenant or
other agreement by the Seller under this Agreement.
(c) The amount of any Losses for which indemnification is provided
under this Article IX shall be reduced by any related recoveries which the
Indemnified Person has received under insurance policies or other related
payments received from third parties (including defense, indemnity, contribution
and setoff rights under the Assumed Contracts or by virtue of any of the other
Purchased Assets).
ARTICLE X
GENERAL PROVISIONS
------------------
46
Section 10.01. Survival of Representations and Warranties. The
------------------------------------------
representations and warranties in this Agreement or in any other document
delivered in connection herewith shall survive the Closing and shall terminate
as of the date which is fifteen (15) months after the Closing Date except for
(i) Section 3.06 which shall survive the Closing until thirty (30) days after
the expiration of the applicable statute of limitations (giving effect to any
extension thereof); (ii) the representations and warranties set forth in
Sections 3.01, 3.02, 3.23, 4.01 and 4.02 which shall not terminate. This Section
10.01 shall not limit any covenant or agreement of the parties which by its
terms contemplates performance after the Closing Date.
Section 10.02. Notices. All notices, requests, claims, demands and
-------
other communications required or permitted to be given under this Agreement
shall be in writing and shall be delivered by hand or sent by confirmed
facsimile or email (with the original to follow by first class mail, postage
prepaid) or sent, postage prepaid, by registered or certified mail or
internationally recognized express courier service and shall be deemed given
when so delivered by hand, email or facsimile or if mailed, five (5) days after
mailing (two (2) business day in the case of overnight courier service) at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to the Buyer, to
VETOQUINOL U.S.A., Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxxxx@xxxxxxxxxx.xx
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxx.xxx
and to the Parent at the address set forth below.
47
(b) if to the Seller, to
IGI, Inc.
Xxxxx Xxxx & Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxxxxx@xxxxxx.xxx
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Carp, Esq.
Telephone: 000-000-0000
Facsimile: 617-526-5000
Email: xxxxxxx.xxxx@xxxxxxxx.xxx
(c) If to the Parent, to:
VETOQUINOL S.A.
Laboratoire Vetoquinol
00, xxx xx Xxxxx Xxxxxx-Xxxx
00000, Xxxxx-Xxxxxxx, Xxxxxx
Attention: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000-0000
Facsimile: 011-333-8462-5509
Email: xxxxxxx.xxxxxxx@xxxxxxxxxx.xxx
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxx.xxx
Section 10.03. Definitions.
-----------
(a) For purposes of this Agreement:
48
"Affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person.
"Assignment of Trademarks" means the Assignment of Trademarks
and Domain Names, to be dated as of the Closing Date, in substantially the same
form attached hereto as Exhibit 5.
"Benefit Plan" means any employment bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, workers' compensation, death benefit, hospitalization, medical or
other plan, arrangement or understanding (whether or not legally binding)
providing benefits to any of the Seller's or any of its Subsidiaries' current or
former employees, officers or directors.
"Xxxx of Sale" means the xxxx of sale to be delivered by the
Seller to the Buyer on the Closing Date in substantially the same form attached
hereto as Exhibit 6.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized to
close.
"Charter" means the Certificate of Incorporation of a
corporation (for a Delaware corporation) or other similar document of any
corporation or entity (for corporations or entities organized under the laws of
other jurisdictions), as such document has been amended and restated to date.
"Encumbrances" means all Liens, claims, rights of first
refusal, assignments, preemptive rights, rights-of-way, easements,
encroachments, restrictions, covenants, title retention agreements, indentures,
security agreements or any other encumbrances of any kind, other than any
Permitted Lien and other than any mechanic's, materialmen's, and similar liens,
liens arising under worker's compensation, unemployment insurance, social
security, retirement and similar legislation and liens on goods in transit
incurred pursuant to documentary letters of credit.
"Environmental Laws" means the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Water Pollution Control Act,
the Solid Waste Disposal Act, as amended, the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, as each may be amended
from time to time, or any federal, state or local law, statute, regulation,
ordinance or order relating to (i) pollution or the protection, preservation or
restoration of the environment, or (ii) exposure to or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, emission, discharge, release or
disposal or threatened release of Hazardous Substances (as such term in defined
herein below in this Section 10.03).
49
"Field" means the manufacture, packaging, marketing, selling
or other distribution of products for use in the animal health business.
"Financial Statements" means the audited consolidated balance
sheets of the Seller for each of the fiscal years ended December 31, 1998, 1999
and 2000, respectively, and the related statements of operations, cash flow and
stockholders' equity for the years then ended, and the related notes thereto
accompanied by the report of an independent auditor included therein.
"Hazardous Substances" means any hazardous waste as defined by
42 U.S.C. (S)6903(5), any hazardous substance as defined by 42 U.S.C.
(S)9601(14), any pollutant or contaminant as defined by 42 U.S.C. (S)9601(33) or
any toxic substance, oil or other hazardous materials or chemical (including,
without limitation, asbestos in any form, urea formaldehyde or polychlorinated
biphenyls) regulated by any Environmental Laws.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid
(other than trade payables incurred in the ordinary course of business
consistent with past practice), (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person, (v) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (excluding obligations of
such Person to creditors for raw materials, Inventory, services and supplies
incurred in the ordinary course of such Person's business), (vi) all lease
obligations of such Person capitalized on the books and records of such Person,
(vii) all obligations of others secured by a Lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (viii) all obligations of such Person under interest rate or
currency hedging transactions (valued at the termination value thereof) (other
than forward or spot foreign currency exchange contracts entered into in the
ordinary course of business consistent with past practice), (ix) all letters of
credit issued for the account of such Person (excluding letters of credit issued
for the benefit of suppliers to support accounts payable to suppliers incurred
in the ordinary course of business) and (x) all guarantees and arrangements
having the economic effect of a guarantee of such Person of any Indebtedness of
any other Person.
"Lien" means, with respect to any property or asset (or any
income or profits therefrom) of any Person (in each case whether the same is
consensual or nonconsensual or arises by Contract, operation of law, legal
process or otherwise), (a) any mortgage, lien, encumbrance, pledge, attachment,
levy or other security interest of any kind thereupon or in respect thereof, or
(b) any other arrangement, express or implied, under which the same is
subordinated, transferred, sequestered or otherwise identified so as to subject
the same to, or make the same available for, the payment or performance of any
Indebtedness, liability or obligation in priority to the payment of the
ordinary, unsecured liabilities of such Person. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset. For purposes of
50
this Agreement, the term "Lien" shall not include any Permitted Liens nor any
mechanic's, materialmen's nor similar liens, liens arising under worker's
compensation, unemployment insurance, social security, retirement and similar
legislation nor liens on goods in transit incurred pursuant to documentary
letters of credit.
"Material Adverse Effect" means (i) a material adverse effect
on the Pet Business, or Purchased Assets, operations, condition (financial or
otherwise), or results of operations of the Pet Business, taken as a whole, (ii)
a material adverse effect on the operation or use of any of the material
Purchased Assets or the ability of the Seller to perform its material
obligations under any of the Transaction Agreements, (iii) a material breach or
cancellation of the Supply Agreement dated as of March 6, 2001 by and between
Corwood Laboratory, Inc. and the Seller, or (iv) in the case of the Plant, the
impairment of, or interference with, the present or continued use of the
property subject thereto or affected thereby in any material respect, taken as a
whole; provided, that in no event shall any of the following constitute a
-------- ----
Material Adverse Effect: (a) a change in the market price or the trading volume
of the Seller's Common Stock, (b) failure of any one or more employees of the
Seller or any of its Subsidiaries to accept employment with the Buyer, (c)
conditions affecting the animal health industry generally or the United States
or global economies, (d) conditions resulting from the announcement and the
pendency of the transactions contemplated by this Agreement and the Transaction
Agreements, or (e) the mere fact of the Seller's failure to meet internal
projections or forecasts, analysts' expectations or published revenue or
earnings predictions, for the Pet Business or otherwise.
"Novasome Technology" means any technology, intellectual
property, trade secrets, processes and other property licensed, provided or used
or permitted to be licensed, provided or used under the Micro-Pak License
Agreement, including any enhancements, advances, modifications and improvements
to such technology, intellectual property, trade secrets, processes or other
property made or developed by Micro-Pak or the Seller or any of its Subsidiaries
to which (and to the extent) the Seller or any of its Subsidiaries has rights.
"Parent" means Vetoquinol S.A., a societe anonyme organized
under the laws of France.
"Permitted Liens" means Liens for taxes, assessments or
governmental charges which are not yet due and payable or that, subject to
adequate security for payment, are being properly contested in good faith by the
Seller.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, association, Governmental
Entity or other entity.
"Subsidiary" (including "Subsidiaries") means any corporation,
joint venture, partnership, limited liability company or other entity of which
the Seller, directly or indirectly, owns or controls a majority of the capital
stock or other equity interests and that is engaged solely in any aspect of the
Pet Business.
"Technology Rights Agreement" means the Technology Rights
Agreement, to be dated as of the Closing Date, by and between the Buyer and the
Seller in the form attached hereto as Exhibit 7.
51
"Technology Products" means all product lines or product categories
in the field known as: (i) shampoos, if such products contain any of the active
ingredients contained in any products of the Pet Business that are shampoos that
exist on the date hereof or existed at any time prior hereto;
(ii) creme rinses, if such products contain any of the active
ingredients contained in any products of the Pet Business that are creme rinses
that exist on the date hereof or existed at any time prior hereto;
(iii) moisturizing sprays or ear cleansers, to the extent such sprays
or ear cleansers, as the case may be, are formulated with 100% Novasome
Technology; and
(iv) hand cremes.
A product which is a Technology Product shall cease to be a Technology
Product if the Novasome Technology in its formulation is reduced to a de minimis
amount compared to the amount of Novasome Technology in its formulation in
effect on the date hereof (or, if the product has been discontinued prior to the
date hereof, its formulation on the date that its use was discontinued).
"Transaction Agreements" means, collectively, this Agreement, the
Instrument of Assignment and Assumption, the Xxxx of Sale, the Assignment of
Trademarks, the Technology Rights Agreement, the Transition Services Agreement
(if entered into as contemplated by Section 6.13), the Supply Agreement and the
Confidentiality Agreement.
"Voting Agreement" means the Stockholder Voting Agreement by and
among the Buyer and certain shareholders of the Seller as listed therein, in the
form attached hereto as Exhibit 8.
(b) The following terms have the meanings set forth in the Sections
set forth below:
Term Section
---- -------
Accessible Financial Records 6.18
Affiliate 10.03(a)
Affiliate Contracts 3.19
Agreement Preamble
Applicable Law 3.03
Arbiter 1.06(c)
Assignment of Trademarks 10.03(a)
Assumed Contracts 1.01(a)(v)
Assumed Liabilities 1.02(a)
Benefit Plan 10.03(a)
Xxxx of Sale 10.03(a)
Business Day 10.03(a)
Buyer Preamble
52
Term Section
---- -------
Buyer's Accountants 1.06(b)
Charter 10.03(a)
Claims 1.01(a)(xv)
Closing 2.01
Closing Date 2.01
Closing Payment 1.03
Code 2.02(a)(v)
Competing Proposal 6.07(f)(i)
Confidential Information 6.12
Confidentiality Agreement 6.01
Consent 3.03
Contracts 3.12
Current Assets 1.06(a)
Current Liabilities 1.06(a)
Deductible Amount 9.01(a)
Disclosure Schedules Article III
Encumbrances 10.03(a)
Environmental Laws 10.03(a)
Excluded Assets 1.01(b)
FDA 3.20
Field 10.03(a)
Filing 3.03
Final Proposal Date 6.07(c)
Final Statement of Working Capital 1.06(d)
Financial Statements 10.03(a)
Governmental Entity 3.03
Hazardous Substances 10.03(a)
Indebtedness 10.03(a)
Indemnified Party and Indemnifying Party 9.03
Igen 3.25
Instrument of Assignment and Assumption 6.15
Intellectual Property 3.11(a)
Intellectual Property Contracts 3.11(c)
Inventory 1.01(a)(i)
ISRA 6.21
ISRA Clearance 6.21
Judgment 3.03
Lien 10.03(a)
Loss 9.01(a)
Manufacturing Equipment 1.01(b)(ii)
Matching Offer 6.07(d)
Material Adverse Effect 10.03(a)
Micro-Pak 3.25
Micro-Pak License Agreement 3.25
53
Term Section
---- -------
Net Working Capital 1.06(a)
NJDEP 6.21
Novasome Technology 10.03(a)
Objection Notice 1.06(b)
Outside Date 8.01(b)(i)
Parent 10.03(a)
Permits 1.01(a)(vi)
Permitted Liens 10.03(a)
Person 10.03(a)
Pet Business Preamble
Pet Business Employee 3.21(a)
Plant 1.01(b)(ii)
Pre-Closing Tax Period 3.06(a)
Preliminary Statement of Working Capital 1.06(a)
Proceeding 3.08
Product Registrations 3.15
Products Preamble
Products Liability Claims 1.02(a)(v)
Products Liability Period 1.02(a)(v)
Proxy Statement 6.06(a)
Purchase Price 1.02(a)
Purchase Price Adjustment 1.06(f)
Purchased Assets 1.01(a)
Purchased Receivables 6.11
Reference Balance Sheet 3.04(b)
Retained Liabilities 1.02(c)
Restricted Business 6.20(a)(i)
Returns 3.06(a)
Required Stockholder Vote 7.01(c)
SEC 6.06(a)
Seller Preamble
Seller Common Stock 3.26
Seller Preferred Stock 3.26
Subsidiary and Subsidiaries 10.03(a)
Superior Proposal 6.07(f)(ii)
Superior Proposal Notice 6.07(c)
Supply Agreement 6.14
Tax and Taxes 3.06(a)
Technical Services 6.13(a)
Technology 1.01(a)(iii)
Technology Products 10.03(a)
Technology Rights Agreement 10.03(a)
Termination Notice 6.07(c)
Terms of Occupancy 6.13(b)
54
Term Section
---- -------
Third Party Claim 9.03
Transaction Agreements 10.03(a)
Transferred Employees 6.08
Transition Services Agreement 6.13(a)
Unaudited Financial Statements 3.04(b)
USDA 3.20
U.S. GAAP 1.06(a)
Voting Agreement 10.03(a)
Section 10.04. Severability. If any term or other provision of
------------
this Agreement is invalid, illegal or incapable of being enforced by any
Applicable Law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, such term or other provision will be interpreted so as to
best accomplish the intent of the parties within the limits of Applicable Law.
Section 10.05. Counterparts. This Agreement and each of the
------------
Transaction Agreements may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties. This Agreement and each of the Transaction Agreements may
be executed via facsimile.
Section 10.06. Entire Agreement; No Third-Party Beneficiaries.
----------------------------------------------
(a) Each of the representations, warranties, covenants and
agreements of any party hereto contained in any Schedule or Exhibit (including,
without limitation, the Disclosure Schedules) hereto or any certificate
delivered by or on behalf of such party pursuant to Sections 7.02 or 7.03 of
this Agreement will be deemed incorporated and contained in this Agreement and
will constitute representations, warranties, covenants and agreements or
qualifications thereto of such party. This Agreement together with the
Confidentiality Agreement, supersedes any other agreement, whether written or
oral, that may have been made or entered into by any party with respect to the
subject matter hereof; provided that, in the event that any provision of the
Confidentiality Agreement conflicts with any provisions of this Agreement, the
provisions of this Agreement shall prevail. This Agreement (including the
Schedules and Exhibits hereto), together with the other Transaction Agreements,
constitutes the entire agreement by and among the parties hereto with respect to
the subject matter hereof and there are no agreements or commitments by or among
such parties or the Affiliates with respect to the subject matter hereof except
as expressly set forth herein. No investigation or receipt of information by or
on behalf of the Buyer will diminish or obviate any of the representations,
warranties, covenants or agreements of the Seller under this Agreement or the
conditions to obligations of the Buyer under this Agreement.
55
(b) Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the parties hereto and their respective
permitted successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 10.07. Amendments. No modification or amendment of this
----------
Agreement and no waiver of any of the terms or conditions hereof shall be valid
or binding unless made in writing and executed by all of the parties hereto (in
the case of modification or amendment) or by the party giving such waiver (in
the case of waiver).
Section 10.08. Assignment, Successors in Interest. This Agreement
----------------------------------
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and permitted assigns. Prior to the
Closing, no party may assign either this Agreement or any of its rights,
interests or obligation hereunder without the prior written approval of the
other party. No assignment of this Agreement by any party without the consent of
the other party shall release such party of its obligations hereunder. In no
event under this Agreement shall the Seller ever be required to secure the
consent of more than one (1) of the Buyer or the Parent.
Section 10.09. Governing Law. This Agreement shall be governed
-------------
by, and construed in accordance with, the internal laws (and not the law of
conflicts) of the State of New York.
Section 10.10. Interpretation.
--------------
(a) Unless the context otherwise requires, (i) all references
made in this Agreement to a Section, Schedule or an Exhibit are to a Section,
Schedule or an Exhibit of or to this Agreement, (ii) each term defined in this
Agreement has the meaning ascribed to it, (iii) "or" is disjunctive but not
necessarily exclusive, (iv) words in the singular include the plural and vice
versa. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
(b) In the event of an ambiguity or question of intent or
interpretation, this Agreement shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the extent to which any such party or its
counsel participated in the drafting of any provision hereof or by virtue of the
extent to which any such provision is inconsistent with any prior draft hereof.
(c) All references to "$" or dollar amounts are to lawful
currency of the United States of America.
(d) All documents and correspondence relating to this Agreement
and the other Transaction Agreements shall be in the English language.
Section 10.11 Waiver. The failure of any of the parties to
------
enforce at any time any of the provisions of this Agreement or the other
Transaction Agreements shall in no way be
56
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any other Transaction Agreement or any part hereof
or thereof or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of or noncompliance with this Agreement or
any other Transaction Agreement shall be held to be a waiver of any other
subsequent breach or noncompliance.
Section 10.12. Payments. Unless otherwise provided, all payments
--------
required to be made pursuant to this Agreement or the other Transaction
Agreements shall be made in U.S. Dollars in the form of cash or by wire transfer
or immediately available funds to an account designated by the party receiving
such payment.
Section 10.13. The Parent Guaranty. The Parent hereby
-------------------
unconditionally guarantees the due and punctual performance of all of the
Buyer's obligations under this Agreement and under all of the Transaction
Agreements. This guaranty is an irrevocable guaranty of payment (and not just of
collection) and shall continue in effect notwithstanding any extension or
modification of the terms of this Agreement or any other act or event which
might otherwise operate as a legal or equitable discharge of such guarantor
under this Section 10.13. The Parent hereby waives all special suretyship
defenses and notice requirements.
Section 10.14. Submission to Jurisdiction; Waiver of Jury Trial.
------------------------------------------------
Except as provided in Section 1.06, each party hereto (i) submits to the
non-exclusive jurisdiction of any state or federal court sitting in the State of
New York in any action or proceeding arising out of or relating to this
Agreement or the Transaction Agreements, (ii) agrees that all claims in respect
of such action or proceeding may be heard and determined in any such court,
(iii) agrees not to bring any action or proceeding arising out of or relating to
this Agreement or the Transaction Agreements in any other court and (iv) WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTION
AGREEMENTS. Each party hereto hereby waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required to any other party hereto with
respect thereto. Any party hereto may make service on another party hereto by
sending or delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in Section 10.02.
Nothing in this Section 10.14, however, shall affect the right of any party
hereto to serve legal process in any other manner permitted by law.
Section 10.15. Specific Performance. The parties hereto
--------------------
acknowledge that the Buyer may be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or agreements of
the Seller and its Subsidiaries set forth in Sections 6.01, 6.06, 6.07, 6.12,
6.13 and 6.20. Accordingly, it is agreed that, in addition to any other remedies
that may be available to the Buyer upon any such violation, the Buyer shall have
the right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to the Buyer at law or in
equity. Nothing contained in this Section 10.15 shall release the Seller or any
of its Subsidiaries from any liability arising from any breach by it of its
representations, warranties, covenants or agreements in this Agreement.
57
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, all as of the date first written above.
THE SELLER:
IGI, INC.
By /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
THE BUYER:
VETOQUINOL U.S.A., INC.
By /s/ Xxxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
THE PARENT:
By its signature below, the Parent becomes
a party to this Agreement with respect to
Article X only.
VETOQUINOL S.A.
By /s/ Xxxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title:
58
