CONFIDENTIAL TREATMENT
Exhibit 10.34.1
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION * * *
CONFIDENTIAL TREATMENT
Exhibit 10.34.1
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT is made as of the 15th
day of December, 2004, by and between Aventis Pharmaceuticals
Puerto Rico Inc., a Delaware corporation ("Seller"), and Inyx
USA, Ltd., an Isle of Man limited corporation ("Purchaser")
WITNESSETH:
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WHEREAS, Seller is engaged in the manufacture of
pharmaceutical products at its plant located in Manati, Puerto
Rico (the "Business"); and
WHEREAS, Purchaser desires to purchase the Acquired
Assets as defined herein and to assume the Assumed Liabilities as
defined herein, and Seller desires to sell, transfer and assign
to Purchaser the Acquired Assets and the Assumed Liabilities, all
upon the terms and subject to the conditions set forth in this
Agreement (the "Purchased Business");
NOW, THEREFORE, in consideration of the premises and of
the respective representations, warranties, covenants,
agreements, and conditions contained herein, and intending to be
legally bound hereby, Seller and Purchaser agree as follows:
ARTICLE I
Definitions
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Section 1.1. CERTAIN DEFINITIONS. In this Agreement
and any Exhibit or Schedule hereto, the following capitalized
terms have the following respective meanings:
"Acquired Assets" means the following assets,
properties and rights of Seller (other than Excluded Assets)
existing at the Effective Time:
(a) the Facility;
(b) the Tangible Personal Property;
(c) the Purchased Inventory
(d) subject to Section 7.6, Seller's rights under
the Transferred Contracts;
(e) the Books and Records pertaining to the
Purchased Business, including (i) architectural plans and
drawings, construction plans and drawings, surveys, construction
contracts, maintenance records, (ii) all vendor materials,
operating manuals, training documents and similar documents and
materials pertaining to the Acquired Assets, (iii) all
environmental studies, (iv) all communications, notices and
similar documents with or from any Governmental or Regulatory
Authority pertaining to the Purchased Business (including all
communications related to any Taxes which pertain to any of the
Purchased Business), (v) all documents describing the results of
any audit or other review or analysis of the Purchased Business,
including automation or computer systems related to the operation
thereof, (vi) all Facility equipment and computer system
qualification and validation documents, excluding those deemed
Seller proprietary systems and those specifically excluded under
the Transition Services Agreement, (vii) all employee and
personnel records of employees hired by Purchaser pursuant to
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COMMISSION.
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Article VIII, and (viii) copies of all insurance policies and
communications with all companies providing insurance on the Real
Property or Tangible Personal Property (including all reports and
documents related to any insurance audits, inspections or
analyses and all records related to installation, process and
operational qualifications related to the Tangible Personal
Property) (collectively, the "Manati Business Books and Records")
(it being acknowledged that Seller shall be entitled to retain
and use copies of the Manati Business Books and Records provided
that the use does not otherwise violate Seller's covenants under
this Agreement);
(f) the Transferred Intangible Property;
(g) to the extent their transfer is permitted
under applicable Laws, all Permits utilized by Seller exclusively
or primarily in the conduct of the Business, including the
Permits listed in Section 5.1(k) of the Disclosure Schedules
attached hereto; and
(h) all warranties, claims and similar rights
with respect to any of the foregoing assets.
(i) the prepaid expenses listed in Section 1.1(i)
of the Disclosure Schedule (the "Prepaid Expenses");
(j) the motor vehicles owned or leased by Seller
listed in Section 1.1(j) of the Disclosure Schedule (the
"Vehicles");
(k) the security deposits deposited by or on
behalf of Seller listed in Section 1.1(k) of the Disclosure
Schedule (the "Security Deposits"); and
(l) all designs, construction drawings, plans,
blueprints, bills of material, flowsheets, specifications, plan
sheets, parts lists, instruction manuals, all documents related
to regulatory compliance, quality and manufacturing records
(including, without limitation, standard operating procedures,
validation master plans and change controls) and device master
records relating to the Acquired Assets, but specifically
excluding any of the foregoing to the extent related solely to
products that will not be manufactured at the Facility after the
Closing (the "Instruction Materials").
"Affiliate" means, as to any Person, any other Person
or group acting in concert in respect of the Person that,
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with that
Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person or
group of Persons, means possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of the Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this Asset Purchase Agreement, the
Disclosure Schedules and the Schedules and Exhibits hereto, as
originally executed or as amended as provided herein.
"APL" means Aventis Pharma Ltd.
"Assumed Liabilities" means all Liabilities of Seller
described in Section 2.2 or otherwise specifically assumed by
Purchaser under this Agreement.
"Assumption Agreement" means the Assumption Agreement
substantially in the form attached hereto as Exhibit 1.
"Azmacort Assignment and Assumption Agreement" means
the Azmacort Assignment and Assumption Agreement substantially in
the form attached hereto as Exhibit 10.
"Azmacort Supply Agreement" has the meaning set forth
in Section 7.9(b).
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COMMISSION.
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* * *
"Benefit Plans" has the meaning set forth in
Section 5.1(g).
"Best Efforts" means the efforts that a prudent Person
who wants to achieve the result in question would take and that
are commercially reasonable under the circumstances.
"Books and Records" shall mean records, files,
equipment manuals and maintenance records, building and equipment
blueprints and specifications, drawings and designs, real estate
surveys and reports, computer software, and other data.
"Business" has the meaning set forth in the recitals.
"Claim" has the meaning set forth in Section 6.2(a).
"Closing" means the consummation of the transactions
described in Article IV of this Agreement.
"Closing Date" means March 31, 2005 or such other
earlier date as is agreed upon by the parties.
"COBRA" has the meaning set forth in Section 8.2.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commonwealth" means the Commonwealth of Puerto Rico.
"Confidentiality Agreement" has the meaning set forth
in Section 7.8.
"Contemplated Transactions" means all of the
transactions contemplated by this Agreement and the Related
Agreements, including the following actions:
(a) the sale of the Purchased Business by Seller
to Purchaser; and,
(b) the execution, delivery, and performance of
the Related Agreements.
"Contract" means any written agreement, lease, license,
purchase order, commitment for the purchase of goods, or other
contract, instrument or arrangement to which Seller is a party
and which relates to the Purchased Business.
"Core Representations and Warranties" has the meaning
set forth in Section 6.3.
"Damages" means all Liabilities, damages, losses,
penalties, fines, forfeitures, assessments, claims, suits,
proceedings, investigations, actions, demands, causes of action,
judgments, awards, taxes, and expenses including court costs,
reasonable attorneys', consultants' and experts' fees and other
costs and expenses incident to or arising out of any claim or
occurrence or investigation or the defense of any claim or
occurrence (whether or not litigation has commenced).
"Disclosure Schedules" means the disclosure schedules
of Seller as specified in this Agreement that are attached to
this Agreement or that are subsequently delivered to Purchaser
pursuant to the terms of this Agreement.
"Dispute" has the meaning set forth in Section 9.2.
"Dispute Notice" has the meaning set forth in Section
9.2(a).
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COMMISSION.
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CONFIDENTIAL TREATMENT
"Dollars" means U.S. dollars.
"Effective Time" means 12:00 midnight, Puerto Rico
time, on the Closing Date.
"Employment Costs" means all costs incurred with
respect to any employee, including wages, salaries, benefits,
employment taxes, claims by an employee and all costs incurred in
connection with such claims, and all similar costs.
"Environmental Assessments" has the meaning set forth
in Section 6.5(a)(ii).
"Environmental Claims" has the meaning set forth in the
definition of "Environmental Liabilities".
"Environmental Laws" shall include, without limitation,
the following Laws: (1) Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986; (2) Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976, as amended by the Hazardous and Solid Waste
Amendments of 1984; (3) Federal Water Pollution Control Act of
1972, as amended by the Clean Water Act of 1977, as amended; (4)
Toxic Substances Control Act of 1976, as amended; (5) Emergency
Planning and Community Right-to-Know Act of 1986; (6) Clean Air
Act of 1966, as amended by the Clean Air Act Amendments of 1990;
(7) National Environmental Policy Act of 1970, as amended; (8)
Rivers and Harbors Act of 1899, as amended; (9) Endangered
Species Act of 1973, as amended; (10) Occupational Safety and
Health Act of 1970, as amended; (11) Safe Drinking Water Act of
1974, as amended, (12) Puerto Rico Public Policy Environmental
Act; (13) Environmental Emergencies Fund Act; (14) The Regulation
for Control of Hazardous Waste; (15) the Non-Hazardous Solid
Waste Management Regulation; (16) the Regulation for the Control
of Atmospheric Pollution; (17) Water Quality Standards
Regulation; (18) Underground Injection Control Regulation;
(19) Underground Storage Tank Control Regulation; and (20) all
Laws of the United States, the Commonwealth or any political
subdivision of the United States or the Commonwealth relating to
the regulation or protection of human health, safety, the
environment, natural resources (including, without limitation,
ambient air, surface water, groundwater, wetlands, land, surface
or subsurface strata, wildlife, aquatic species or vegetation),
including, without limitation, Laws relating to emissions,
discharges, releases or threatened releases of Hazardous
Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
"Environmental Liabilities" means all Liabilities
arising from or under any Environmental Law or any Permit issued
under Environmental Law and consisting of or relating to:
(a) any environmental matters or conditions
(including on-site or off-site contamination and regulation of
chemical substances or products);
(b) fines, penalties, judgments, awards,
settlements, legal or administrative proceedings, surcharges,
damages, losses, claims, demands and response, investigative,
remedial, or inspection costs and expenses arising under
Environmental Law (including any claims involving liability in
tort, strict, absolute or otherwise), liens, notices of
noncompliance or violation, or legal fees or costs of
investigations or proceedings relating in any way to any
Environmental Law or any Permit issued under such Environmental
Law, or arising from the presence or release (or alleged presence
or release) into the environment of any Hazardous Materials
(hereinafter also referred to as "Environmental Claims")
including, without limitation, all Environmental Claims,
regardless of the merit of such Environmental Claims, by any
governmental or regulatory authority or by any third party for
enforcement, clean up, removal response, remedial, or other
actions or damages, contribution, indemnification, cost recovery,
compensation or injunctive relief pursuant to any Environmental
Law or any alleged injury or threat of injury to health, safety
or the environment;
(c) financial responsibility under Environmental
Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other
remediation or response actions required by applicable
Environmental Law and for any natural resource damages;
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(d) any other compliance, corrective,
investigative or remedial measures required under Environmental
Law; or
(e) any breach of any of the representations and
warranties of Seller set forth in Section 5.1(m).
"Environmental Liabilities Cap" has the meaning set
forth in Section 6.5(d).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"Escrow Account" has the meaning set forth in Section
8.3(b)(i).
"Excluded Assets" means all assets of Seller not
specifically included among the Acquired Assets, including the
following:
(a) the corporate charter, qualifications to do
business as a foreign corporation, arrangements with registered
agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books
and other documents relating to the organization and existence of
Seller as a corporation;
(b) all cash, rights in bank accounts,
certificates of deposit, bank deposits, cash equivalents,
investment securities and checks or other payments received by
Seller (including received in lock boxes) by the close of
business on the Closing Date;
(c) the Receivables;
(d) the Inventory, except for the Purchased
Inventory;
(e) all tax returns and tax records (with the
exception of property tax returns and property tax records
related to the Purchased Business) and any rights to tax refunds
or credits and current and deferred tax assets, specifically
including Seller's rights to net operating loss carry forward
applicable to the Business, the Facility, or otherwise,
including, specifically, tax credits in the aggregate amount of
$7,194,717 as set forth in that certain Closing Agreement dated
June 30, 2004 by and among Seller, Aventis Pharmaceuticals Inc.,
and the Secretary of the Treasury of the Commonwealth;
(f) all assets held by or on behalf of Seller's
employee benefit plans;
(g) Seller's rights under this Agreement and the
Related Agreements;
(h) the Excluded Books and Records;
(i) all insurance policies and contracts and all
rights thereunder (including but not limited to, the right to
make claims thereunder and to the proceeds thereof);
(j) those assets listed on Exhibit 2;
(k) all Intangible Property with the exception of
Transferred Intangible Property; and
(l) loans to third parties and affiliates of
Seller.
"Excluded Books and Records" means all Books and
Records relating to the Excluded Assets or Excluded Liabilities.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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"Excluded Liabilities" means, except as otherwise set
forth in this Agreement, all Liabilities of Seller other than the
Assumed Liabilities.
"Facility" means the Real Property, personal property
that is attached to the Real Property and classified as real
property by destiny, and all improvements located thereon and all
rights related thereto.
"GAAP" means generally accepted accounting principles
as in effect in the United States on the date of this Agreement.
"General Assignment" means the General Assignment
substantially in the form attached hereto as Exhibit 3.
"General Liability Cap" has the meaning set forth in
Section 6.4(b)(i).
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or the Commonwealth,
including any political subdivision of the United States or the
Commonwealth.
"Hazardous Materials" means any substance that has been
defined by applicable Environmental Law to be radioactive, toxic,
hazardous or otherwise a pollutant or contaminant, including
PCBs, asbestos, petroleum products or any fraction thereof, urea-
formaldehyde and all substances listed as a "hazardous
substance," "hazardous waste," "hazardous material" or "toxic
substance" or words of similar import, under any Environmental
Law.
"Indemnified Party" has the meaning set forth in
Section 6.2(a).
"Indemnifying Party" has the meaning set forth in
Section 6.2(a).
"Intangible Property" means all of the following to the
extent related to the operation of the Purchased Business:
(a) computer software, data and documentation
related to the operation of the Tangible Personal Property,
excluding those deemed Seller proprietary systems and those
specifically excluded under the Transition Services Agreement;
(b) know-how of all employees hired by Purchaser
pursuant to Article VIII; and,
(c) other rights relating to any of the foregoing
(including remedies against infringements thereof and rights of
protection of interest therein under the Laws of all
jurisdictions).
"Inventory" means all inventory owned by Seller as of
the Effective Time including all inventories of raw materials,
work-in-process, finished goods, supplies, parts and packaging
materials and in-transit inventory, but inventory does not
include replacement parts, supplies or any assets related to the
operation or maintenance of the Facility or the Acquired Assets
which shall be deemed Tangible Personal Property.
"IOCAM" means the Seller's Industrial Operations Cost
Accounting Manual.
"KOS/Aeropharm Consent" has the meaning set forth in
Section 7.9(b).
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law.
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"Liability" or "Liabilities" means any or all
obligations (whether to make payments, to give notices or to
perform or not perform any action), commitments, contingencies
and other liabilities of a Person (whether known or unknown,
asserted or not asserted, whether absolute, accrued, contingent,
fixed or otherwise, determined or determinable, liquidated or
unliquidated, and whether due or to become due).
"Lien" means any mortgage, pledge, security interest,
hypothecation, assignment, encumbrance, lease, lien, option,
right of use and other rights of other Persons, any conditional
sale contract, title retention contract, or other encumbrance of
any kind.
"Manati Business Books and Records" has the meaning set
forth in the definition of Acquired Assets.
"Material Adverse Change" means any material adverse
change to the condition of the Acquired Assets or the Facility
from a financial or operational perspective, as the case may be;
provided that changes within the ordinary course of business
cannot individually or collectively constitute a material adverse
change.
"Material Contracts" has the meaning set forth in
Section 5.1(j).
"Notice" has the meaning set forth in Section 9.3.
"Order" means and includes any writ, judgment, decree,
injunction, award or other order of any Governmental or
Regulatory Authority.
"Permits" means all licenses, permits, authorizations,
approvals, registrations, franchises and similar consents granted
or issued by any Governmental or Regulatory Authority.
"Permitted Lien" means (i) any statutory Lien arising
in the ordinary course of business by operation of Law that is
not yet due or delinquent, including real and personal property
taxes not delinquent.
"Person" means any natural person, corporation, general
partnership, limited partnership, limited liability partnership,
limited liability company, proprietorship, other business
organization, trust, government, governmental authority,
regulatory authority, court or arbitrator, or any other entity
whatsoever.
"Post Closing Agreement" has the meaning set forth in
Section 7.14.
"Product Supply Agreement" has the meaning set forth in
Section 7.15.
"Product Supply Technical Agreement" has the meaning
set forth in Section 7.15.
"PR Code" means the Puerto Rico Internal Revenue Code
of 1994, as amended.
"Prepaid Expenses" has the meaning set forth in the
definition of Acquired Assets.
"Purchase Price" has the meaning set forth in Section
3.1.
"Purchased Business" has the meaning set forth in the
preamble.
"Purchased Inventory" means the Inventory specifically
purchased by Purchaser with respect to which the Purchase Price
shall be adjusted, as described in Section 3.5.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser Environmental Liabilities" has the meaning
set forth in Section 6.5(f).
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"Purchaser Indemnified Parties" has the meaning set
forth in Section 6.1(a).
"Purchaser's Closing Certificate" has the meaning set
forth in Section 4.3(a).
"Purchaser's Parent Company" has the meaning set forth
in Section 7.17.
"Purchaser's Parent Guaranty" has the meaning set forth
in Section 7.17.
"Real Property" means the parcel of real estate,
buildings, and structures described on Exhibit 4, all
improvements located thereon and all rights related thereto.
"Receivables" means the accounts receivable trade,
notes receivable and other receivables of Seller, and any claim,
remedy or other right related to the foregoing.
"Related Agreements" means all agreements,
certificates, instruments or other documents required to be
executed and/or delivered pursuant to or in connection with this
Agreement by any party, including, without limitation, the
General Assignment, the Assumption Agreement, the Transition
Services Agreement, the Post-Closing Agreement, the Product
Supply Agreement, the Product Supply Technical Agreement,
Purchaser's Parent Guaranty, Seller's Parent Guaranty, the
Tooling Access Letter, the Azmacort Assignment and Assumption
Agreement, and the KOS/Aeropharm Consent.
"Restricted Product" means any product or substance
having the active pharmaceutical ingredient Triamcinolone
Acetonide that is indicated for intranasal administration.
"Respective Restricted Territories" means for the
''Restricted Products'' all countries of the world.
"Seller" has the meaning set forth in the preamble.
"Seller Indemnified Parties" has the meaning set forth
in Section 6.1(b).
"Seller's Closing Certificate" has the meaning set
forth in Section 4.2(a).
"Seller's Parent Company" has the meaning set forth in
Section 7.18.
"Seller's Parent Guaranty" has the meaning set forth in
Section 7.18.
"Seller's Savings Plan" has the meaning set forth in
Section 8.1(c).
"Separation Benefits" has the meaning set forth in
Section 8.3(a).
"Separation Plan" means the Aventis Pharmaceuticals
Associate Separation Plan effective March 15, 2004, attached
hereto as Exhibit 5.
"Services and Access Rights Agreement" means the
Services and Access Rights Agreement dated December 2, 2004, by
and between Purchaser and Seller regarding Purchaser's access to
the Facility and services provided to Purchaser by Seller prior
to the Effective Time.
"Sharing Period" has the meaning set forth in Section
6.5(c).
"Tangible Personal Property" means the equipment,
furniture, fixtures and other personal property listed on Exhibit
6, including replacement parts, supplies and any other assets
that are used by Seller solely in connection with the operation
or maintenance of the Purchased Business, including personal
property subsequently acquired by Seller and used solely in
connection with the Purchased Business.
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"Taxes" means all United States federal, state,
Commonwealth, municipal, foreign, and other net income, gross
income, gross receipts, social security, sales, use, ad valorem,
franchise, withholding, payroll, employment, excise, property,
and other taxes, and Transfer Taxes together with any interest
and any penalties, additions to tax, or additional amounts with
respect thereto, and the term "Tax" means any one of the
foregoing Taxes.
"Tax Grant" means Seller's industrial tax exemption
grant under the Puerto Rico Tax Incentives Act of 1998, as
amended.
"Tax Returns" means all returns, declarations, reports,
statements, schedules, notices, forms or other documents or
information required to be filed in respect of the determination,
assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of any
legal requirement relating to any Tax, and the term "Tax Return"
means any one of the foregoing Tax Returns.
"Time of Closing" has the meaning set forth in Section
4.1.
"Tooling Access Letter" has the meaning set forth in
Section 7.9(c).
"Transferred Contracts" has the meaning set forth in
Section 5.1(j)(i)(E).
"Transferred Intangible Property" has the meaning set
forth in Section 5.1(r).
"Transition Services Agreement" means the Transition
Services Agreement of even date herewith entered into between
Purchaser and Seller described in Section 7.10 hereof and
substantially in the form attached hereto as Exhibit 7.
"Valois" means Valois S.A.S.
"WARN" has the meaning set forth in Section 8.4.
ARTICLE II
Purchase and Sale and Assumption
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Section 2.1. PURCHASE AND SALE OF PURCHASED BUSINESS.
Subject to the terms and conditions set forth in this Agreement,
at the Time of Closing, Seller shall sell, transfer, convey,
assign, deliver and set over to Purchaser, and Purchaser shall
purchase and accept, all of the right, title, benefit and
interest of Seller in, to and under the Purchased Business, free
and clear of all Liens other than Permitted Liens. In no event
shall Purchaser acquire any right, title, benefit or interest in,
to or under any of the Excluded Assets.
Section 2.2. ASSUMED LIABILITIES. Subject to the
terms and conditions set forth in this Agreement, at the Time of
Closing, Purchaser shall assume and agrees to pay, perform and
discharge when due the Assumed Liabilities set forth in Section
2.2 of the Disclosure Schedules. Purchaser shall not assume, and
Seller shall retain, the Excluded Liabilities.
ARTICLE III
Purchase Price
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Section 3.1. PURCHASE PRICE. The purchase price for
the Purchased Business (the "Purchase Price") shall be Fifteen
Million Dollars ($15,000,000), subject to adjustment on the
Closing Date as provided herein and in particular in Sections 3.5
and 8.3, and allocated as set forth in Section 3.1 of the
Disclosure Schedules.
Section 3.2. PAYMENT OF THE PURCHASE PRICE. At the
Time of Closing, Purchaser shall pay the Purchase Price to Seller
by wire transfer of immediately available funds to an account
specified in writing by Seller,
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provided that a portion of the Purchase Price shall be paid into
the Escrow Account established pursuant to Section 8.3.
Section 3.3. TAXES AND ASSESSMENTS. Purchaser shall
pay all non-delinquent property Taxes, special assessments, and
any other taxes or fees related to the Facility which are payable
subsequent to the Closing and on a going-forward basis. Seller
shall pay all real estate taxes and special assessments due and
payable with respect to the Facility which are due prior to the
Closing Date or which are attributable to all periods prior to
the Closing Date. Real Estate taxes and assessment will be
prorated between Seller and Purchaser as of the Closing Date.
Section 3.4. INTERNAL REVENUE STAMPS AND RECORDING
FEES. Seller will bear the cost of all documentary stamps
required by law to be cancelled on the original deed of purchase
and sale transferring the Real Property to Purchaser. Purchaser
shall bear the cost of all documentary stamps required to be
cancelled on the Deed or Purchase and Sale conveying the Real
Property to Purchaser and transfer and recording fees. Purchaser
shall select the Notary and bear the notarial tariff.
Section 3.5. PURCHASED INVENTORY. Section 3.5
of the Disclosure Schedules sets forth the Purchased Inventory.
The parties shall value the Purchased Inventory based on a
physical count of such inventory as of the day prior to the
Closing Date, and computed in accordance with IOCAM. The value
of all Purchased Inventory found obsolete, damaged or non-
merchantable will be deducted from such count. At the Time of
Closing, the Purchase Price shall be increased by the amount by
which the aggregate value of the Purchased Inventory exceeds One
Million Five Hundred Thousand Dollars ($1,500,000), or decreased
by the amount by which One Million Five Hundred Thousand Dollars
($1,500,000) exceeds the aggregate value of the Purchased
Inventory.
Section 3.6 TAX GRANT. Seller shall cooperate fully
with Purchaser and support Purchaser's application for approval
of the transfer of Seller's Tax Grant to Purchaser, including
joining in such application if required by law. Purchaser shall
be responsible for all filing fees and other costs in connection
with such application.
ARTICLE IV
Closing Matters
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Section 4.1. CLOSING. The Closing of the
transactions described in this Agreement will take place at 10:00
a.m. (local time) (the "Time of Closing") on the Closing Date at
the offices of XxXxxxxxx Xxxxxx in San Xxxx, Puerto Rico, or at
such other time, date, and place as the parties may agree. All
documents delivered and all transactions consummated at the
Closing will be deemed for all purposes to have been delivered
and consummated effective as of the Effective Time.
Section 4.2. PURCHASER'S CONDITIONS TO CLOSING. The
obligation of Purchaser to effect the Closing shall be subject to
the satisfaction of the following conditions at or prior to the
Time of Closing, any or all of which conditions may be waived by
Purchaser in its sole and absolute discretion:
(a) Accuracy of Representations, Warranties and
Agreements. As of the Time of Closing, there shall have been no
material adverse change to the representations and warranties
made by Seller herein that would affect Seller's ability to
consummate the transaction contemplated herein. Seller shall
have performed and complied with all agreements, covenants and
conditions required by this Agreement to be performed and
complied with by it at or prior to the Closing Date, and Seller
shall have delivered to Purchaser a certificate certifying that
the conditions set forth in this Section 4.2(a) are satisfied in
all respects (the "Seller's Closing Certificate").
(b) Consents and Approvals. As of the Time of
Closing, Seller shall have obtained all consents and approvals
from third parties required for it to consummate the sale of the
Purchased Business to Purchaser.
(c) Litigation. No temporary restraining order,
preliminary or permanent injunction, or cease and desist order,
issued by any Governmental or Regulatory Authority preventing the
transfers contemplated hereby
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or the consummation of the Closing, shall be in effect at the
Time of Closing, and no proceeding by any Governmental or
Regulatory Authority seeking to restrict or prohibit the transfer
and exchange contemplated hereby or the consummation of the
Closing shall be pending or threatened at the Time of Closing.
(d) Consents to Assignment. To the extent
necessary, Seller shall have obtained written consents to the
assignment to Purchaser of all Transferred Contracts.
(e) Closing Documents. Seller shall have
executed and tendered each of the documents to be executed and
delivered by it pursuant to Section 4.4.
(f) Transition Services Agreement. Seller and
Purchaser shall have executed the Transition Services Agreement.
(g) Azmacort Assignment and Assumption Agreement
and KOS/Aeropharm Consent. Purchaser and Seller shall have
executed the Azmacort Assignment and Assumption Agreement, and
Seller shall have delivered to Purchaser the KOS/Aeropharm
Consent.
(h) Labor Unrest Caused by Seller. There shall
not be in effect any labor unrest as a direct result of Seller's
actions that constitutes a Material Adverse Change.
(i) Environmental Remediation. Purchaser shall
be reasonably satisfied with any remediation action plan
initiated by Seller in connection with Section 6.5.
Section 4.3. SELLER'S CONDITIONS TO CLOSING. The
obligations of Seller to effect the Closing shall be subject to
the satisfaction of the following conditions at or prior to the
Time of Closing, any or all of which conditions may be waived by
Seller in its sole and absolute discretion:
(a) Accuracy of Representations, Warranties and
Agreements. As of the Time of Closing, there shall have been no
material adverse change to the representations and warranties
made by Purchaser herein that would affect Purchaser's ability to
consummate the transaction contemplated herein. The
representations and warranties of Purchaser contained herein
shall be true and correct on the Time of Closing as if made again
at the Time of Closing. Purchaser shall have performed and
complied with all agreements, covenants and conditions required
by this Agreement to be performed and complied with by it at or
prior to the Closing Date, and Purchaser shall have delivered to
Seller a certificate certifying that the conditions set forth in
this Section 4.3(a) are satisfied in all respects (the
"Purchaser's Closing Certificate").
(b) Consents and Approvals. Purchaser shall have
obtained all consents and approvals from third parties required
for it to consummate the sale of the Purchased Business to
Purchaser. .
(c) Litigation. No temporary restraining order,
preliminary or permanent injunction, or cease and desist order,
issued by any Governmental or Regulatory Authority preventing the
transfers contemplated hereby or the consummation of the Closing,
shall be in effect at the Time of Closing, and no proceeding by
any Governmental or Regulatory Authority seeking to restrict or
prohibit the transfer and exchange contemplated hereby or the
consummation of the Closing shall be pending or threatened at the
Time of Closing.
(d) Closing Documents. Purchaser shall have
executed and tendered each of the documents to be executed by
Purchaser pursuant to Sections 4.5 and 4.6.
(e) Offers of Employment. Purchaser shall have
made offers of employment to Seller's employees as required by
Article VIII.
(f) Post-Closing Agreement. Seller and Purchaser
shall have executed the Post-Closing Agreement.
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(g) Product Supply Agreement. Seller and
Purchaser shall have executed the Product Supply Agreement and
related Product Supply Technical Agreement.
Section 4.4. DELIVERIES BY SELLER. At the Time of
Closing:
(a) Seller shall sell, assign, convey, transfer
and deliver to Purchaser the Acquired Assets in accordance with
this Agreement by (i) delivery of the General Assignment
appropriately completed and duly executed by Seller, (ii) a Deed
of Purchase and Sale in the form attached hereto as Exhibit 8, as
modified to conform to the Survey, duly executed by Seller before
a Notary Public selected by Purchaser, (iii) a certificate of
title (or similar documents) duly endorsed with respect to any
vehicles or other equipment included in the Acquired Assets for
which a certificate of title or origin is required to transfer
title and (iv) a xxxx of sale for the transfer of the Tangible
Personal Property.
(b) Seller shall execute and deliver such other
documents as Purchaser may reasonably request to evidence and
effectuate conveyance of the Acquired Assets and Seller's
obligations under this Agreement.
(c) Seller shall deliver to Purchaser the
Seller's Closing Certificate.
(d) Seller shall deliver to Purchaser an opinion of
Seller's counsel in form and substance reasonably satisfactory to
Purchaser.
(f)Seller shall deliver to Purchaser the Tooling
Access Letter.
(g) Seller shall deliver to Purchaser the Azmacort
Assignment and Assumption Agreement and the KOS/Aeropharm
Consent.
Section 4.5. DELIVERIES BY PURCHASER. At the Time of
Closing:
(a) Purchaser shall pay to Seller the Purchase
Price as provided in Section 3.2.
(b) Purchaser shall deliver to Seller the
Purchaser's Closing Certificate.
(c) Purchaser shall deliver to Seller an opinion
of Purchaser's counsel in form and substance reasonably
satisfactory to Seller.
(d) Purchaser shall deliver to Seller the Post-
Closing Agreement.
(e) Purchaser shall deliver to Seller the Product
Supply Agreement and related Product Supply Technical Agreement.
Section 4.6. FURTHER ASSURANCES AND COOPERATION.
Subject to the terms and conditions of this Agreement, at any
time and from time to time after the Closing, at a party's
reasonable request, the other party shall execute and deliver
such other instruments of sale, transfer, conveyance, assignment
and confirmation, and assumption, and provide such materials and
information and take such other actions as the requesting party
may reasonably deem necessary or desirable in order to more
effectively transfer, convey and assign to Purchaser all of the
Acquired Assets and/or in order to more effectively effect the
assumption by Purchaser of the Assumed Liabilities. As and when
requested by Purchaser prior to or after the Closing Date, Seller
shall provide information regarding the Facility and the Tangible
Personal Property that is reasonably necessary or helpful to
Purchaser in obtaining all Permits, consents and approvals
necessary for Purchaser to acquire, occupy and operate the
Purchased Business for the purpose of pharmaceutical
manufacturing. Purchaser and Seller further agree to reasonably
cooperate with the other in the conduct of any audit or other
proceeding related to Taxes involving the Business. This
reasonable cooperation does not include payment of attorneys,
accountants or other professional advisors in connection with
such cooperation.
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Section 4.7. POST-CLOSING ACCESS. In connection
with any matter relating to any period before, or any period
ending on, the Closing Date, Purchaser will, upon reasonable
notice of the Seller, permit the Seller and its representatives
full access at all reasonable times to the Books and Records of
the Facility (including for example, equipment records) that
shall have been transferred to the Purchaser provided that
Purchaser's business shall not be unreasonably interfered with.
Purchaser acknowledges that, due to the regulatory requirements
requiring responses to inquiries from regulatory authorities to
be received within 72 hours, Seller may require access to such
Books and Records urgently. Accordingly, if so requested by
Seller, Purchaser shall permit Seller to have access to such
Books and Records within 24 hours of Purchaser's receipt of
Seller's request, which may be made orally or by facsimile
transmission. Purchaser shall not dispose of such Books and
Records during the 7 year period beginning with the Closing Date
without the Seller's consent. Following expiration of such 7
year period, the Purchaser may dispose of such Books and Records
at any time, unless the Seller has previously notified the
Purchaser of its intention to take possession of such Books and
Records.
Section 4.8. AGREEMENTS REGARDING PERMITs. If by
April 1, 2005, Purchaser has applied for but not received any
Permit the lack of which would prevent Purchaser from being able
to operate the Purchased Business to manufacture pharmaceutical
products, the parties acknowledge and agree that the Services and
Access Rights Agreement shall remain in full force and effect,
subject to certain modifications set forth herein, and the
parties will abide by the terms and conditions of such amended
agreement. Purchaser and Seller hereby agree that, effective
April 1, 2005, the Services and Access Rights Agreement and
applicable exhibits attached thereto shall be amended as follows:
(a) the Leased Premises and Dedicated Facility shall both be
deemed to include the entire Facility; and (b) in lieu of the
Rent otherwise due under the Lease, Purchaser shall be
responsible for and shall pay Seller for all operating,
personnel, facilities, equipment, overhead and any other costs or
expenses whatsoever associated with the Facility and the
Business; provided that such costs and expenses shall be charged
to Purchaser without any xxxx-up. Such payments shall be billed
monthly in arrears. The terms "Leased Premises", Dedicated
Facility", "Rent", and "Lease" shall have the meanings set forth
in the Services and Access Rights Agreement.
In addition, effective at the close of business on March 31,
2005, Seller shall terminate the employment of all employees to
whom Purchaser has not offered employment. Employees of Seller
to whom Purchaser has offered employment shall, as of April 1,
2005, be deemed to be Employees under the Services and Access
Rights Agreement, as amended. With respect to all employees
terminated by Seller pursuant to the foregoing, as required
herein, Purchaser shall establish the Escrow Account (defined in
Section 8.3(c)(i)) and deposit therein on March 31, 2005, an
amount equal to the portion of the Purchase Price that Purchaser
would have deposited in the Escrow Account pursuant to Section
8.3 if the Closing had occurred on March 31, 2005. The funds in
the Escrow Account shall be available to Seller to pay the
Separation Plan expenses described in Section 8.3 to the
terminated employees as if the Closing had occurred on March 31,
2005.
ARTICLE V
Representations and Warranties
------------------------------
Section 5.1. REPRESENTATIONS AND WARRANTIES OF
SELLER. Seller hereby represents and warrants to Purchaser as of
the date of this Agreement and as of the Time of Closing that:
(a) Organization and Existence. Seller is a
Delaware corporation duly organized, validly existing, and in
good standing under the laws of Delaware, and qualified to do
business in the Commonwealth, with full power and authority to
own, lease, and operate the Business and the Acquired Assets and
to carry on the Business as and where such assets are now owned
or leased and the Business is now conducted.
(b) Authority and Approval. Seller has the
requisite corporate power and authority to execute, deliver and
perform this Agreement and each of the Related Agreements. At
the Time of Closing, the execution, delivery and performance of
this Agreement, and each of the Related Agreements, will have
been duly authorized by all necessary corporate action on the
part of Seller. This Agreement has been, and at the Time of
Closing all Related Agreements will have been, duly executed and
delivered by authorized officers of Seller and
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constitutes or will constitute the legal, valid and binding
obligations of Seller enforceable against Seller in accordance
with their respective terms.
(c) No Conflict. The execution, delivery and
performance by Seller of this Agreement and each of the Related
Agreements does not and will not as of the Time of Closing
(i) conflict with or result in the breach of any term, condition
or provision of, or require the consent of any Person under,
Seller's articles of incorporation or bylaws, as such documents
are amended or restated as of the date of this Agreement;
(ii) conflict with or result in the breach of, constitute a
default under, or accelerate the performance required by, or
require any consent, authorization, or approval under, any
Transferred Contract or under any other material Contract if such
default under such other material Contract would affect the
validity or enforceability of the Agreement; (iii) contravene,
conflict with, or result in a violation of, or give any
Governmental or Regulatory Authority or other Person the right to
challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any legal requirement or any
Order to which the Seller, or any of the Acquired Assets owned or
used by the Seller, may be subject; (iv) contravene, conflict
with, or result in a violation of any of the terms or
requirements of, or give any Governmental or Regulatory Authority
the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Permit that is held by the Seller relating to the
Purchased Business; (v) cause Purchaser to become subject to, or
to become liable for the payment of, any Tax attributable to the
payments made to Seller as part of the Contemplated Transactions;
or (vi) result in the imposition or creation of any Lien upon or
with respect to any of the Acquired Assets.
(d) Governmental Approvals and Filing. Except as
disclosed in Section 5.1(d) of the Disclosure Schedules, no
consent, authorization, approval or action of, filing with,
notice to, or exemption from any Governmental or Regulatory
Authority on the part of Seller is required in connection with
the execution, delivery and performance of this Agreement or any
Related Agreements to which Seller is a party or the consummation
of the transactions contemplated hereby or thereby.
(e) Legal Proceedings. Except as disclosed in
Section 5.1(e) of the Disclosure Schedules:
(i) There are no lawsuits or arbitrations
pending or, to the knowledge of the Seller, threatened
against Seller that relate to the Purchased Business, which
could have a material adverse effect on Purchaser's use of
the Purchased Business for manufacturing pharmaceutical
products or which could have a material adverse effect on
Seller's ability to consummate the transactions contemplated
by this Agreement.
(ii) There are no Orders outstanding against
Seller that relate to the Facility, which could have a
material adverse effect on Purchaser's use of the Facility
for manufacturing active pharmaceutical ingredients or which
could have a material adverse effect on Seller's ability to
consummate the transactions contemplated by this Agreement.
(f) Compliance with Laws and Orders. Except as
disclosed in Section 5.1(f) of the Disclosure Schedules, to its
knowledge, Seller is not in violation of or in default under any
Law or Order applicable to the Purchased Business, the Acquired
Assets or the Assumed Liabilities.
(g) Employee Benefit Plans. Section 5.1(g) of
the Disclosure Schedules lists with respect to Seller: (i) each
defined benefit plan and defined contribution plan, stock option
or ownership plan, executive compensation, bonus, incentive
compensation or deferred compensation or profit-sharing plan,
(ii) each medical, dental, vision, disability or death benefit
plan, and (iii) any other employee benefit plan, including each
"employee benefit plan" within the meaning of Section 3(3) of
ERISA, and any fringe benefit, or group life insurance plan in
each case which is or was maintained or contributed to or
sponsored by Seller for the benefit of any employee or former
employee of the Business and which covers employees or former
employees of the Business (such plans, contracts, agreements,
arrangements, programs and policies described in clauses (i)
through (iii) of this Section 5.1(g), whether formal or informal
and whether or not set forth in writing are referred to herein as
the
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"Benefit Plans"). True and complete copies of the agreements
specified in this Section 5.1(g) have been made available to
Purchaser.
(h) Title.
(i) Real Property -- Section 5.1(h)(i) of
the Disclosure Schedule contains a complete and accurate
list of all property and interests comprising the Real
Property. Seller has delivered or made available to
Purchaser copies of the deeds and other instruments by which
the Seller acquired the Real Property, and copies of all
title insurance policies, title reports, abstracts,
surveys, leases, mortgages, certificates of occupancy and
similar documents, and all amendments thereof, with respect
to the Real Property. The Seller owns with good and
marketable title, subject only to Permitted Liens, all the
Real Property. The Real Property is free and clear of all
Liens, except for Permitted Liens, and is not subject to any
rights of way, exceptions, variances, reservations, or
limitations of any nature except as may appear of record in
the Registry of Property of Puerto Rico. All improvements
to the Real Property that are required by law to have been
approved and registered with the proper governmental
authorities have been so approved and registered. Seller
has not been served or threatened with any condemnation or
appropriation proceedings by any Governmental or Regulatory
Authority against any of the Real Property.
(ii) Personal Property -- Section 5.1(h)(ii)
of the Disclosure Schedule contains a complete and accurate
list of all personal property included in the Acquired
Assets. The Seller owns good and marketable title to all
such personal property, free and clear of all Liens.
(iii) At the Closing, but subject to the
filing or recording of appropriate conveyance instruments,
Purchaser will receive good and marketable title to all of
the Acquired Assets transferred to it free and clear of and
from all Liens other than the Permitted Liens.
(i) Disclaimer of Warranties. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN THE DEED TO BE FILED
OF RECORD IN THE REGISTRY OF PROPERTY OF PUERTO RICO, THE SELLER
HEREBY DISCLAIMS ALL CONDITIONS, OTHER WARRANTIES AND STATEMENTS
IN RESPECT OF THE ACQUIRED ASSETS, WHETHER EXPRESS OR IMPLIED, BY
STATUTE, CUSTOM OF THE TRADE OR OTHERWISE (INCLUDING, WITHOUT
LIMITATION, ANY SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO
THE DESCRIPTION OR QUALITY OF THE ACQUIRED ASSETS, THEIR
MERCHANTABILITY OR THEIR FITNESS FOR A PARTICULAR PURPOSE OR USE
UNDER ANY CONDITIONS) AND ANY SUCH CONDITION, WARRANTY OR
STATEMENT IS HEREBY DISCLAIMED BY THE SELLER AND EXCLUDED. IN NO
EVENT SHALL THE SELLER OR THE PURCHASER BE LIABLE UNDER OR WITH
RESPECT TO THIS AGREEMENT, OR ANY OTHER AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY (INCLUDING ALL RELATED
AGREEMENTS), FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
OR PUNITIVE DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO
LOSS OF PROFITS, INCLUDING BUT NOT LIMITED TO, DUE TO BREACH OF
WARRANTY, TORT, OR BREACH OR REPUDIATION OF ANY TERM OR CONDITION
OF THIS AGREEMENT, OR ANY OTHER AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY (INCLUDING ALL RELATED
AGREEMENTS); PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT
LIMIT EITHER PARTY'S LIABILITY IN CONNECTION WITH ITS INDEMNITY
OBLIGATIONS FOR THIRD PARTY CLAIMS.
(j) Material Contracts.
(i) Section 5.1(j) of the Disclosure
Schedules contains a list of all of the following Contracts
to which Seller is a party as of the date of this Agreement,
which shall be updated as of a date within five (5) days
prior to the Closing Date ("Material Contracts"):
(A) any Contracts pertaining to the
ownership or operation of the Purchased Business providing
for payments in excess of Twenty-Five Thousand Dollars
($25,000) per calendar year
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or which in the aggregate exceed Fifty Thousand Dollars
($50,000);
(B) any employment, severance or termination
agreements as to current employees of the Business or any
agreements which would provide any current or former
employees with rights or benefits as a result of the
consummation of the transactions contemplated by this
Agreement;
(C) any Contracts limiting Seller's right to
occupy or use the Purchased Business and any lease or
sublease of any portion of the Facility;
(D) any licenses related to the ownership or
operation of the Purchased Business other than "shrink wrap"
licenses that are generally available to the public and
other licenses that are listed on Section 5.1(r) of the
Disclosure Schedules and that are generally available to the
public and that are not specifically related to the
operation of the Tangible Personal Property;
(E) any other Contracts that have been
furnished to Purchaser and that Purchaser has agreed in
writing to assume, provided that such Contracts are listed
on Section 5.1(j) of the Disclosure Schedules under the
heading "Transferred Contracts" (the "Transferred
Contracts").
(ii) Copies of the Material Contracts have
been made available and/or delivered to Purchaser. Each
Material Contract is in full force and effect and
constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party
thereto; and except as disclosed in Section 5.1(j) of the
Disclosure Schedule neither Seller nor, to the knowledge of
Seller, any other party to any Material Contract is, or has
received notice that it is, in violation or breach of or
default under any Material Contract (or that with notice or
lapse of time or both, it would be in violation or breach of
or default under any Material Contract) in any material
respect.
(iii) Except as disclosed in Section 5.1 (j)
of the Disclosure Schedules, the execution, delivery and
performance by Seller of this Agreement, and the
consummation of the Contemplated Transactions, will not (A)
result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with
respect to, (B) result in or give to any Person any
additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (C) result in
the creation or imposition of any Lien, other than a
Permitted Lien, upon Seller or any of its Acquired Assets
under, any Material Contract.
(iv) No event has occurred and no
circumstance exists that (with or without notice or lapse of
time) will give the Seller or other Person the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Material Contract.
(v) There are no renegotiations of, attempts
to re-negotiate, or outstanding rights to renegotiate any
material amounts paid or payable to the Seller under any
Material Contract and Seller has not received any written
demand for such renegotiation.
(k) Permits. Except as disclosed in
Section 5.1(k) of the Disclosure Schedules, Seller owns or
possesses all Permits necessary or material to the ownership or
operation of the Purchased Business and all Permits necessary for
the construction of each of the improvements which are part of
the Real Estate. Except as disclosed in Section 5.1(k) of the
Disclosure Schedules, all such Permits possessed by Seller were
validly issued in compliance with all applicable Laws and are in
full force and effect; Seller has not received notice of
violation or proposed revocation or termination of any of such
Permits from any Governmental or Regulatory Authority. Seller
has obtained all approvals and Permits necessary for the Facility
to comply with all Laws relating to land use (including
development, zoning, planning, construction and use
restrictions).
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(l) Insurance. Section 5.1(l) of the Disclosure
Schedules sets forth a list of all insurance policies maintained
by Seller covering the Acquired Assets. All such insurance is in
full force and effect, all premiums due thereunder up to the
Effective Time have or will be paid and no written notice of
cancellation or termination has been received with respect to any
such insurance.
(m) Environmental Matters.
(i) To the knowledge of Seller, (A) Seller
is in compliance with all applicable Environmental Laws
(which compliance includes, but is not limited to, the
possession by the Seller of all Environmental Permits, and
compliance with the terms and conditions thereof), except
where failure to be in compliance would not reasonably be
expected to have a material adverse effect on Purchaser's
ability to operate the Purchased Business; (B) there is as
of the date of this Agreement and, except as set forth in
Disclosure Schedule 5.1(m), there will be as of the Closing
Date, no Environmental Liabilities pending or, to the
knowledge of Seller, threatened against or affecting the
Seller which would reasonably be expected to have a material
adverse effect on Purchaser's ability to operate the
Purchased Business; (C) there have been no releases of
Hazardous Materials on, at, in or underneath any of the
Acquired Assets or, to the knowledge of Seller, on, at, in
or underneath the Facility that would reasonably be expected
to have a material adverse effect on Purchaser's ability to
operate the Purchased Business; (D) as of the date of this
Agreement, except for actions, if any, in response to the
Environmental Assessments and any update thereto referred to
in Section 6.5(a)(ii) and (iii), there is no cleanup or
remediation of Hazardous Materials being conducted or
planned by the Seller at the Facility; and (E) the Seller
has delivered or otherwise made available for inspection to
Purchaser true, complete and correct copies and results of
any Phase I or Phase II Environmental Assessments previously
prepared, and any other material reports, studies, analyses,
tests or monitoring possessed or initiated by the Seller
pertaining to Hazardous Materials in, on, beneath or
adjacent to any of the Acquired Assets, or regarding the
Seller's compliance with applicable Environmental Laws in
connection with the Acquired Assets. Notwithstanding
anything to the contrary herein, the parties hereby agree
that there is excluded from all other representations and
warranties in this Article V all matters with respect to
compliance with, or Environmental Liabilities arising under,
Environmental Laws. The representations and warranties
contained in this Section 5.1(m) shall be the exclusive
representations and warranties with respect to such matters.
(ii) (A) Seller is not subject to any
outstanding judgment, order or decree under any
Environmental Law relating to the Acquired Assets; (B) to
the knowledge of Seller, there is no claim, action, suit,
notices, surcharges, proceeding or investigation pending, or
to the knowledge of Seller, threatened by or before any
third party, including any Governmental or Regulatory
Authority, against Seller, or, to the knowledge of Seller,
any current or previous owner or tenant of the Facility
relating to any Environmental Law; and (C) to the knowledge
of Seller, there are no enforcement, clean-up, removal,
mitigation or other governmental or regulatory actions
instituted, or, to the knowledge of Seller, threatened
against the Seller pursuant to any Environmental Laws
concerning or dealing with any of the Acquired Assets.
(iii) Except as disclosed in Section
5.1(m)(iii) of the Disclosure Schedules, Seller does not
own, operate or lease a treatment, storage or disposal
facility on any of the Real Property requiring a permit
under the Resource Conservation and Recovery Act, as
amended, or under any other comparable state or local Law;
and, without limiting the foregoing, (i) to the knowledge of
Seller, no polychlorinated biphenyl is or has been present,
(ii) no asbestos or asbestos-containing material is or has
been present, (iii) there are no underground storage tanks
or surface impoundments for Hazardous Materials, active or
abandoned, and (iv) no Hazardous Material has been released
in a quantity reportable under, or in violation of, any
Environmental Law or otherwise released, in the cases of
clauses (i) through (iv), at, on or under any such site or
facility during any period that Seller owned, operated or
leased such property.
(iv) No oral or written notification of a
release of a Hazardous Material in connection with the
operation of the Business has been filed by or on behalf of
Seller, and no site or facility
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now or previously owned, operated or leased by Seller on any
of the Real Property is listed or proposed for listing on
the NPL, CERCLIS or any similar state or local list of sites
requiring investigation or clean-up.
(v) No Liens have arisen under or pursuant
to any Environmental Law on any site or facility owned,
operated or leased by Seller on any of the Real Property,
and no federal, state or local Governmental or Regulatory
Authority action has been taken or, to the knowledge of
Seller, is in process that could subject any such site or
facility to such Liens, and Seller would not be required to
place any notice or restriction relating to the presence of
Hazardous Materials at any such site or facility in any deed
to the Real Property on which such site or facility is
located.
(vi) There have been no environmental
investigations, studies, audits, tests, reviews or other
analyses conducted by, or that are in the possession of,
Seller in relation to any site or facility now or previously
owned, operated or leased by Seller on any of the Real
Property which have not been delivered to Purchaser prior to
the execution of this Agreement.
(n) Brokers. No broker, finder or investment
banker is entitled to any brokerage commission, finder's fee or
similar payment in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Seller.
(o) Absence of Certain Changes or Events. Since
August 30, 2004, except as described in Section 5.1(o) of the
Disclosure Schedules, there has not occurred any Material Adverse
Change. Since August 30, 2004:
(i) Seller has not made any material change
in employment terms for any employees of the Purchased
Business with the exception of changes in benefits which are
applicable to all of Seller's employees; and
(ii) Seller has not sold, assigned,
transferred or otherwise disposed or agreed to dispose of
any of the assets used in the Purchased Business except in
the ordinary course of business.
(iii) There has not occurred any physical
damage, destruction or other casualty loss (whether or not
covered by insurance) affecting any of the plant, real or
personal property or equipment of Seller or held for use in
the conduct of the Purchased Business in an aggregate amount
exceeding $10,000;
(iv) There has not occurred (A) any
disposition of any Acquired Assets used or held for use in
the conduct of the Purchased Business, other than Inventory
in the ordinary course of business consistent with past
practice and other dispositions not exceeding in either case
$10,000 in the aggregate; or (B) any creation or incurrence
of a Lien, other than a Permitted Lien, on any Acquired
Assets used or held for use in the conduct of the Purchased
Business;
(v) Except as set forth in Section 5.1(j)
of the Disclosure Schedule, Seller has not entered into,
amended, modified, terminated (partial or complete) or
granted any waiver under or given any consent with respect
to (A) any Material Contract or (B) any Permit;
(vi) Seller has not entered into any
Material Contract to do or engage in any of the foregoing
after the date hereof; or
(vii) There has not occurred any other
transaction involving, or any development affecting, the
Acquired Assets outside the ordinary course of business
consistent with past practice.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
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(p) Facility and Tangible Personal Property.
(i) To the knowledge of Seller, the
operations and maintenance of the Facility as now operated
and maintained, do not violate or contravene any Laws or
Orders, and the Facility is in adequate and suitable
condition for operation as a pharmaceutical manufacturing
facility in light of its age and remaining useful life,
ordinary wear and tear excepted.
(ii) There exists no pending or, to the
knowledge of Seller, threatened condemnation or similar
proceeding with respect to the Facility.
(iii) Seller has not made any other agreement
for sale, lease or other disposition of, or given any person
an option to purchase, lease or otherwise acquire, all or
any part of the Facility.
(iv) At the Time of Closing, the Facility
will be in the possession of Seller, and no other person
shall have any right to possession or claims to possession
of all or any part of the Facility.
(v) No portion of the Facility is located in
an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards.
No portion of the Facility has been designated as "Flood
Zone 1" or "Flood Zone 2" by the Puerto Rico Planning Board.
(q) Employee Matters.
(i) Section 5.1(q)(i) of the Disclosure Schedules
lists all current employees of the Business as of the date
of this Agreement, and Seller has provided Purchaser with
their hourly rates of compensation or base salaries (as
applicable) and any bonus arrangements or bonus plans.
(ii) Seller is a party to a collective bargaining
agreement (the "Collective Bargaining Agreement"), by which
Purchaser will not be bound, which covers or applies to
certain employees of the Business. Schedule 5.1(q)(ii)
lists with respect to Seller: (1) the Collective Bargaining
Agreement; (2) each employment agreement; and (3) the
Separation Plan. Purchaser will not be bound by virtue of
the Contemplated Transactions by, and except as set forth on
Schedule 5.1(q)(ii), the Seller does not have, is not a
party to, nor is it bound, by:
(A) any collective bargaining agreements;
(B) any agreements or arrangements that
contain any severance pay or post-employment liabilities or
obligations;
(C) any employment or consulting agreement,
contract or commitment with an employee, former employee or
individual consultant or any consulting agreement, contract
or commitment under which any firm or other organization
provides services to the Seller;
(iii) Except as set forth on Schedule
5.1(q)(iii), to Seller's knowledge, Seller is in compliance
with all applicable foreign, federal, Commonwealth, and
local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and
wages and hours, in each case, with respect to its employees
and former employees; has withheld all amounts required by
law or by agreement to be withheld from the wages, salaries
and other payments to its employees and former employees; is
not liable for any arrears of wages or any Taxes or any
penalty for failure to comply with any of the foregoing; and
is not liable for any payment to any trust or other fund or
to any Governmental or Regulatory Authority with respect to
unemployment, short term disability, social security for
chauffeurs, workers compensation, social security or other
benefits or obligations for its employees or former
employees.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
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(iv) Seller has not been notified, and has no
reason to believe, that any work stoppage or labor strike
against the Seller is pending or threatened. Except as set
forth in Schedule 5.1(q)(iv), Seller is not involved in or
threatened with, any labor dispute, grievance, or litigation
relating to labor, safety or discrimination matters
involving any employee or former employee of Seller,
including, without limitation, charges or complaints of
unfair labor practices, wrongful discharge, discrimination,
retaliation, harassment, wage and hour, or under any
Employee Benefit Plans.
(v) As of the Closing Date, Seller will have
complied with all WARN notice requirements and with any
notice requirement arising out of the Collective Bargaining
Agreement, and/or out of any of the Seller's policies and/or
practices.
(vi) Except as set forth on Schedule 5.1(q)(vi),
there are no material controversies pending or threatened
before any court or Governmental or Regulatory Authority,
between the Seller and any of its employees or former
employees.
(vii) Except as set forth on Schedule 5.1(q)(vii),
the Seller has not been notified by any Governmental or
Regulatory Authority of any labor or employee-related
investigation involving the Seller, nor does any condition
exist, which would constitute a violation of any applicable
foreign, federal, Commonwealth, or local laws, rules or
regulations.
(viii) Except as set forth on Schedule
5.1(q)(viii), the Seller is not a party to any employment
contract or arrangement with respect to any of its employees
or former employees (including, without limitation, so-
called "golden parachute" or severance agreements), nor has
the Seller in any other manner limited its right to
terminate the employment relationship with its employees or
former employees except as provided in Puerto Rico Act No.
80 of May 30, 1976.
(ix) As of the Closing Date, Seller will have paid
all salaries, including vacation, bonuses, incentives,
differentials, etc. owed to the employees.
(r) Intangible Property. Purchaser acknowledges
that the Acquired Assets do not include any Intangible Property
other than the Intangible Property described in Section 5.1(r) of
the Disclosure Schedules (the "Transferred Intangible Property").
Seller is the owner of and has the right to use the Transferred
Intangible Property free and clear of any Liens and restrictions.
To the knowledge of Seller, Seller's use of the Transferred
Intangible Property does not infringe the rights of any Person,
and no other Person has any right to use or has claimed any right
to use the Transferred Intangible Property.
(s) No Misleading Statements. Neither this
Agreement, any Related Agreement nor any certificate or other
document delivered by Seller in connection with this Agreement or
any of the Related Agreements contains, or will contain when
delivered, any untrue statement of a material fact or omits to
state, or will omit to state when delivered, a material fact
necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, not
misleading.
(t) Books and Records. The books of account and
other records of the Seller relating to the Purchased Business
have been made available to Purchaser. Such books of account, and
other records are complete and correct and have been maintained
in accordance with sound business practices including the
maintenance of an adequate system of internal controls. Seller
has delivered to Purchaser a letter from Seller's Corporate
Secretary regarding the contents of Seller's corporate minute
book, which is attached hereto as Exhibit 9.
(u) No Undisclosed Liabilities. There are no
Liabilities against, relating to or affecting any of the Acquired
Assets, other than Liabilities (i) incurred in the ordinary
course of business consistent with past practice that,
individually or in the aggregate, are not material to the
condition of the Acquired Assets or (ii) that were otherwise
disclosed in the Disclosure Schedule to this Agreement. To the
knowledge of Seller, there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against Seller with respect to any of
the Acquired Assets giving rise to any such Liabilities. Since
August 30, 2004, there
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has not been any Material Adverse Change and no event has
occurred or circumstance exists that may result in such a
Material Adverse Change.
(v) Taxes.
(i) As of the Time of Closing, none of the
Tax Returns required to be filed with respect to the
Acquired Assets will be past due the filing deadline; each
such Tax Return correctly and completely reflects, or will
reflect, the valuation, assessment or other Tax liability
and all other information required to be reported thereon;
and the tax liability shown in such Tax Returns as well as
the real property tax liability with respect to the Acquired
Assets, was or will be paid timely.
(ii) No issues will have been raised by any
taxing authority in connection with Tax Returns required to
have been filed with respect to the Acquired Assets and in
connection with the real property tax liability on the
Acquired Assets.
(w) Product Warranty. Except as set forth in
Section 5.1(w) of the Disclosure Schedules, each product
manufactured, sold, or delivered by Seller has been in conformity
with all applicable contractual commitments and all express and
implied warranties.
Section 5.2. REPRESENTATIONS AND WARRANTIES OF
PURCHASER. Purchaser hereby represents and warrants to Seller as
of the date of this Agreement and as of the Closing Date that:
(a) Organization and Existence. Purchaser is a
limited corporation duly organized and validly existing, and in
good standing under the laws of the Isle of Man, with full power
and authority to own, lease, and operate its business and
properties and to carry on its business as and where such
properties and assets are now owned or leased and such business
is now conducted.
(b) Authority and Approval. Purchaser has the
requisite corporate power and authority to execute, deliver and
perform this Agreement and each of the Related Agreements. At
the Time of Closing, the execution, delivery and performance of
this Agreement, and each of the Related Agreements, will have
been duly authorized by all necessary corporate action on the
part of Purchaser. This Agreement has been, and at the Time of
Closing all Related Agreements will have been, duly executed and
delivered by authorized officers of Purchaser and constitutes or
will constitute the legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their
respective terms.
(c) No Conflict. The execution, delivery and
performance by Purchaser of this Agreement and each of the
Related Agreements does not and will not as of the Time of
Closing (i) conflict with or result in the breach of any terms,
condition or provision of, or require any consent of, any Person
under the terms, conditions, or provisions of Purchaser's
articles of incorporation or by-laws, as such documents have been
amended or restated as of the date of this Agreement,
(ii) conflict with or result in the breach of, constitute a
default under , accelerate the performance required by, or
require any consent, authorization, or approval under, any
contract to which Purchaser is a party or by which it is bound or
to which any of its assets or property is subject, or (iv) result
in the creation of any Lien upon the assets or property of
Purchaser under any such contract, except in each case as would
not reasonably be expected to have a material adverse effect on
the validity or enforceability of this Agreement against
Purchaser or a material adverse effect on the ability of
Purchaser to consummate the transactions contemplated by this
Agreement.
(d) Governmental Approvals and Filing. No
consent, authorization, approval or action of, filing with,
notice to, or exemption from any Governmental or Regulatory
Authority on the part of Purchaser is required in connection with
the execution, delivery and performance of this Agreement or any
Related Agreements to which Purchaser is a party or the
consummation of the transactions contemplated hereby or thereby.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
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(e) Legal Proceedings.
(i) There are no lawsuits pending or, to the
knowledge of Purchaser, threatened against Purchaser which
(1) would reasonably be expected to materially adversely
affect the validity or enforceability of this Agreement or
any Related Agreement or the ability of Purchaser to
consummate the transactions contemplated by this Agreement,
or (2) would reasonably be expected to result in the
issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement.
(ii) There are no Orders outstanding against
Purchaser which would be reasonably expected to have a
material adverse effect on the ability of Purchaser to
consummate the transactions contemplated by this Agreement.
(f) Brokers. No broker, finder or investment
banker is entitled to any brokerage commission, finder's fee or
similar payment in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser,
with the exception of an arrangement between Purchaser and Xxxx
Xxxxxxxxx, for which Purchaser is solely liable.
(g) No Misleading Statements. Neither this
Agreement, any Related Agreement nor any certificate or other
document delivered by Purchaser in connection with this Agreement
or any of the Related Agreements contains, or will contain when
delivered, any untrue statement of a material fact or omits to
state, or will omit to state when delivered, a material fact
necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, not
misleading.
ARTICLE VI
Indemnification
---------------
Section 6.1. INDEMNIFICATION BY SELLER AND PURCHASER.
(a) Indemnification by Seller. Subject to the
terms and conditions of this Agreement (including, in particular,
the provisions relating specifically to indemnification for
environmental matters), Seller agrees to indemnify and hold
harmless Purchaser, its Affiliates and their respective officers,
directors, employees, and agents and their successors and
permitted assigns (collectively, the "Purchaser Indemnified
Parties") against and in respect of any Damages incurred by any
of them directly from any of the following:
(i) any misrepresentation or breach by
Seller of any representation or warranty in this Agreement
and any inaccuracy in the Seller's Closing Certificate;
(ii) any failure to perform by Seller of any
of its covenants in this Agreement or in any other
agreements or instruments furnished to Purchaser pursuant to
this Agreement;
(iii) any Excluded Liabilities;
(iv) claims of Seller's current or former
employees with respect to the period prior to the Effective
Time arising out of such Person's employment with Seller
including but not limited to claims for compensation and
violations of wage and hour statutes or other Laws, and the
claims set forth in Section 5.1(q)(iv) of the Disclosure
Schedules; or
(v) claims related to Seller's obligations
under Section 8.1(a), with respect to Benefit Plans.
(b) Indemnification by Purchaser. Subject to the
terms and conditions of this Agreement (including, in particular,
the provisions relating specifically to indemnification for
environmental matters), Purchaser agrees to indemnify and hold
harmless Seller, its Affiliates and their respective officers,
directors, managers,
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
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employees, and agents and their successors and permitted assigns
(collectively, the "Seller Indemnified Parties") against and in
respect of any Damages incurred by any of them directly from any
of the following:
(i) any misrepresentation or breach by
Purchaser of any representation or warranty in this
Agreement and any inaccuracy in the Purchaser's Closing
Certificate;
(ii) any failure to perform by Purchaser of
any of its covenants in this Agreement or in any other
agreements or instruments furnished to Seller pursuant to
this Agreement;
(iii) any claim for benefits under the
Separation Plan by any of Seller's employees at the Date of
Closing which arises out of Purchaser's decision not to
offer employment to any such employees pursuant to the terms
of this Agreement, or to terminate the employment of any
such employees, or claim arising from Purchaser's failure to
reimburse expenses incurred in connection with the
Separation Plan; provided that the costs of defending any
such claim shall be shared equally by the parties; or,
(iv) any Assumed Liabilities.
Section 6.2. INDEMNIFICATION PROCEDURES FOR THIRD-
PARTY CLAIMS.
(a) Notification of Claims. In the event any
third party makes or commences a claim, action or proceeding (a
"Claim") with respect to any matter as to which any of the
Purchaser Indemnified Parties intends to seek indemnification
under Section 6.1(a), or with respect to any matter as to which
any of the Seller Indemnified Parties intends to seek
indemnification under Section 6.1(b), the Person to be so
indemnified (the "Indemnified Party") shall promptly notify each
Person from which such indemnification is to be sought (each an
"Indemnifying Party") of the existence of such Claim. The
failure of an Indemnified Party to properly notify the
Indemnifying Party hereunder shall not relieve the Indemnifying
Party of its obligations hereunder, except to the extent that
such Indemnifying Party is materially prejudiced by the failure
to receive such notice.
(b) Defense of Claims by Indemnifying Party. The
Indemnifying Party shall have the right to undertake and direct
the defense of any such Claim by delivering to the Indemnified
Party written notice of such undertaking within thirty (30) days
of the receipt of notice from the Indemnified Party of the
existence of such third-party Claim provided that the
Indemnifying Party acknowledges, in writing, its obligation to
indemnify the Indemnified Party in accordance with the terms of
this Agreement.
(c) Settlement of Claims by Indemnified Parties.
In the event the Indemnifying Party declines to undertake the
defense of any such Claim as provided in Section 6.2(b), the
Indemnified Party shall keep the Indemnifying Party advised as to
the current status and progress thereof. The Indemnified Party
shall not make any offer of settlement with respect to any Claim
if the Indemnifying Party has undertaken the defense of such
Claim. In the event the Indemnifying Party undertakes the
defense of any such Claim, the Indemnified Party shall
nevertheless be entitled to participate in (but not direct) the
defense thereof with counsel of its own choice, and the parties
agree to cooperate fully with one another in connection with the
defense and/or settlement thereof; provided, however, that any
decision to settle any such Claim shall be at the sole discretion
of the Indemnifying Party (to the extent of the Indemnifying
Party's responsibility for the Claim). Notwithstanding the
foregoing, the Indemnifying Party shall not settle any Claim
without the Indemnified Party's consent unless such settlement
involves only the payment of money and the claimant provides to
the Indemnified Party a release from all liability in respect of
such Claim. If the settlement involves more than the payment of
money, the Indemnifying Party shall not settle the Claim without
the Indemnified Party's prior consent. From and after the date
that the Indemnifying Party assumes the defense of any Claims,
and as long the Indemnifying Party diligently defends such
Claims, the Indemnifying Party shall be relieved of the
obligation to reimburse the Indemnified Party for any other
legal, accounting, or other out-of-pocket costs and expenses
thereafter incurred by the Indemnified Party with respect to the
defense of such Claim notwithstanding any participation by the
Indemnified Party therein.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
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Section 6.3. SURVIVAL. With the exception of the
representations and warranties contained in Sections 5.1(a),
5.1(b), 5.1(c), 5.1(d), 5.1(m), 5.1(g), 5.1(q), 5.2(a), 5.2(b),
5.2(c), 5.2(d) and 5.2(f) (the "Core Representations and
Warranties"), which shall survive the Closing without limitation
as to time (but subject to any applicable statute of
limitations), all other representations and warranties contained
in this Agreement shall survive the Closing for a period of five
(5) years and shall continue in full force and effect after the
Closing only for such period, provided, however, that all rights
to indemnification with respect to claims for Damages made within
such period shall survive until the final disposition of such
claims.
Section 6.4. LIMITATIONS.
(a) The provisions of this Article VI shall apply
to any Damages for breach of any covenant, representation,
warranty or other provision of this Agreement or any agreement,
certificate or other document delivered pursuant to this
Agreement (other than a claim for specific performance or
injunctive relief) with the intent that all such Damages shall be
subject to the limitations and other provisions contained in this
Article VI.
(b) The indemnification obligations of the Seller
pursuant to Section 6.1 and the Seller's liability for all
Damages in respect thereof shall be limited as follows:
(i) Cap. In no event shall the aggregate
liability of the Seller in respect of Damages under Section
6.1(a)(i) exceed the amount of * * * (the "General
Liability Cap"). Notwithstanding the foregoing, however, if
while the Sharing Period described in Section 6.5(c) is in
effect, the aggregate amount for which Seller would be
required (but for the General Liability Cap) to indemnify
Purchaser with respect to such Damages exceeds * * * the
General Liability Cap shall be deemed increased to the then-
current Environmental Liability Cap described in Section
6.5(c), less the aggregate of all amounts paid by Seller
under Sections 6.1(a)(i) since the Closing Date.
(ii) Deductible. In the case of all such
Damages the Seller shall not be liable in respect of such
Damages unless and until such time as the aggregate amount
of such Damages exceed the amount of One Hundred Thousand
Dollars ($100,000), and in such event only to the extent of
such excess.
(c) Notwithstanding anything herein to the
contrary, any indemnification claims against Seller relating to
Environmental Liabilities shall be made exclusively under
Sections 6.5 and shall not be subject to and included in the cap
and deductible limitations provided in Section 6.4(b).
Section 6.5. INDEMNIFICATION AS TO ENVIRONMENTAL
MATTERS.
(a) Seller agrees to indemnify, defend and hold
harmless the Purchaser Indemnified Parties from and against all
Damages resulting from Environmental Liabilities arising out of
or related to the following:
(i) the release or threatened release of any
Hazardous Materials attributable to Seller at any offsite
location prior to the Closing Date;
(ii) any environmental matters or conditions
identified in the Phase I or Phase II Environmental
Assessments (the "Environmental Assessments") prepared
previously for Seller and made available to Purchaser; and
(iii) any environmental matters or conditions
identified in a limited update of the Environmental
Assessments that is prepared for Purchaser prior to the
Closing Date (copies of which reports shall be made
available to Seller prior to such date), provided that
Seller shall have agreed to the scope of such update in
advance, and provided further that with respect to any such
environmental matters or conditions, Seller shall have the
option to (1) indemnify, defend and hold harmless the
Purchaser Indemnified Parties as provided herein, (2) clean
up, correct, contain, remediate or take any response action
to address, at its exclusive cost and expense, any such
environmental matters or conditions, or (3) terminate
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this Agreement without further liability to any of the
Seller Indemnified Parties. Seller shall not engage any
third party to perform work under (2) above that shall not
have been approved by Purchaser, which approval shall not be
withheld unreasonably.
Seller's liability for indemnification under this Section
6.5(a) is not subject to the Environmental Liability Cap, the
General Liability Cap, or any deductible.
(b) Subject to the provisions of Section 6.5(a)
and (c), Seller and Purchaser agree to share in any Damages
arising out of or related to the following:
(i) the presence of Hazardous Materials at,
on or under the Facility prior to the Closing Date not
otherwise identified by the Phase I or Phase II
Environmental Assessments referenced in the preceding
Sections 6.5(a)(ii) and 6.5(a)(iii); and
(ii) the failure (not otherwise identified by
the Phase I or Phase II Environmental Assessments referenced
in the preceding Sections 6.5(a)(ii) and 6.5(a)(iii)) of the
Acquired Assets to be in compliance prior to the Closing
Date with any Environmental Laws or environmental Permits in
effect and enforceable as of the Closing Date.
(c) With respect to any Damages that Seller and
Purchaser agree to share under Section 6.5(b), Seller's share
shall decrease and Purchaser's share shall increase
proportionately for a period of ten (10) years after the Closing
Date pursuant to the following table (the "Sharing Period"):
Year Purchaser's
(Up to and Including) Seller's Share Share
------------------------ -------------- ---------------
Closing Date + 1 year 90% 10%
Closing Date + 2 years 80% 20%
Closing Date + 3 years 70% 30%
Closing Date + 4 years 60% 40%
Closing Date + 5 years 50% 50%
Closing Date + 6 years 40% 60%
Closing Date + 7 years 30% 70%
Closing Date + 8 years 20% 80%
Closing Date + 9 years 10% 90%
Closing Date + 10 years 0% 100%
(d) Notwithstanding the foregoing, at any time,
the aggregate liability of Seller for all Environmental
Liabilities under Section 6.5(b) shall not exceed the then-
current "Environmental Liability Cap" (defined hereinafter) less
the aggregate of all amounts paid by Seller under Section 6.1(a)
since the Closing Date. The "Environmental Liability Cap" shall
be * * * as of the Closing Date, and shall be reduced annually
thereafter on each anniversary of the Closing Date by * * * as
set forth in the following table:
Anniversary of the Environmental
Closing Date in: Liability Cap
----------------- -----------------
2006 * * *
2007 * * *
2008 * * *
2009 * * *
2010 * * *
2011 * * *
2012 * * *
2013 * * *
2014 * * *
2015 * * *
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(e) Upon conclusion of the Sharing Period,
Purchaser shall indemnify, defend and hold harmless the Seller
Indemnified Parties from and against all Damages covered by
Section 6.5(b).
(f) Purchaser further agrees to indemnify, defend
and hold harmless the Seller Indemnified Parties from and against
all Damages arising out of or related to, directly or indirectly,
all Environmental Claims attributable to Purchaser's operations
or to occurrences after the Closing Date ("Purchaser
Environmental Liabilities").
(g) Purchaser will have full authority to
control, direct, manage and implement remediation and to
determine its scope, and conduct all negotiations, meetings and
settlements with any Governmental or Regulatory Authority with
respect to Purchaser Environmental Liabilities.
(h) After the Closing Date and until the end of
the Sharing Period, either party that receives notice or
otherwise learns of any event or condition that might be subject
to this Section 6.5 shall promptly notify the other party, and
the parties shall confer and attempt to agree on an appropriate
course of action or response. If the parties cannot agree on a
course of action or response, they shall jointly engage a third
party with appropriate expertise in environmental responses to
recommend appropriate courses of action, and shall use their best
efforts to reach agreement based on those recommendations.
(i) The provisions of this Section 6.5 shall
constitute the parties' exclusive remedy with respect to each
other for all Environmental Claims under Environmental Laws
arising from the ownership or conduct of the Purchased Business.
The obligations of the parties set forth in this Section 6.5
shall be conditioned upon the Closing having occurred.
(j) Except as otherwise provided in this Section
6.5 or as would be inconsistent herewith, the provisions of
Section 6.2 shall apply to claims for indemnification under this
Section 6.5.
ARTICLE VII
Covenants of the Parties
------------------------
Section 7.1. CLOSING EFFORTS. Each of the parties
hereto shall use its Best Efforts to take all actions and to do
all things necessary, proper and advisable to consummate the
transactions contemplated by this Agreement, including using its
Best Efforts to ensure that (a) its representations and
warranties remain true and correct in all material respects
through the Closing Date and (b) the conditions to the
obligations of the other parties to consummate the transactions
contemplated by this Agreement are satisfied.
Section 7.2. APPROVALS AND CONSENTS. Each party
hereto shall use its Best Efforts to obtain in writing, prior to
the Closing Date, all consents and approvals required to
effectuate the transactions contemplated hereby and shall deliver
to the other party copies of such approvals and consents in form
and substance reasonably satisfactory to the other party. Seller
will provide information in its possession and such assistance as
is reasonably necessary to support Purchaser's applications for
any such approvals or consents. At or prior to the Closing Date,
Seller shall obtain all consents and approvals necessary to
assign all assignable Permits (including environmental Permits)
and Transferred Contracts to Purchaser; provided, however, no
modification of any Permit or Contract shall be made without
Purchaser's prior written consent.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Section 7.3. OPERATION OF THE PURCHASED BUSINESS
PRIOR TO CLOSING. Between the date hereof and the earlier of the
termination of this Agreement pursuant to Article IX hereof or
the Closing Date:
(a) Negative Covenants. Seller covenants and
agrees with Purchaser that, except as contemplated by this
Agreement or with the prior written consent of Purchaser, Seller
shall not do any of the following:
(i) sell or otherwise dispose of any of the
Acquired Assets, other than in the ordinary course of
business, cancel any debts or claims involving any Person
related to the Acquired Assets, or pledge, assign or
otherwise convey, or cause any Lien to be placed upon any
Acquired Asset;
(ii) amend its articles of organization,
operating agreement or other governing documents in any way
that would result in a Material Adverse Change.
(iii) permit any Contract or Permit to be
suspended, lapsed, revoked or modified in any way that would
result in a Material Adverse Change;
(iv) amend or terminate any commitment in a
manner that would result in a Material Adverse Change;
(v) take any action which would require any
changes in the Disclosure Schedules in order for a
representation and warranty which was true as of the date of
this Agreement to be true on the Closing Date except for
changes in the ordinary course of business which do not,
individually or in the aggregate, represent a Material
Adverse Change;
(vi) incur any material liabilities or
increase the amount of debt which is secured by a Lien on
any of the Acquired Assets;
(vii) except as set forth on Schedule
7.3(a)(vii), materially increase the annual level of
compensation of any employee, and not increase the annual
level of compensation of any employee in excess of the
increase in cost of living expense, if any, applicable in
the United States for the previous year and not granting any
extraordinary bonuses, benefits or other forms of direct or
indirect compensation to any employee, except in amounts in
keeping with past practices by formulas or otherwise;
(viii) increase, terminate, amend or otherwise
modify any plan for the benefit of employees.
(b) Affirmative Covenants of Seller. Seller
covenants and agrees with Purchaser that Seller shall:
(i) maintain the Acquired Assets, subject to
normal wear and tear, and maintain insurance upon the
Acquired Assets of the kind and in the amounts existing as
of the date of this Agreement;
(ii) comply in all respects with all
applicable Laws affecting the Purchased Business and
maintain in full force and effect all Permits; and
(iii) pay its expenses and Liabilities
related to the Purchased Business in the ordinary course of
business and consistent with past practice, except as
contested in good faith.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Section 7.4. NOTICE OF BREACHES.
(a) Between the date hereof and the earlier of
the termination of this Agreement pursuant to Article IX hereof
or the Closing Date, Seller shall promptly deliver to Purchaser
supplemental information concerning events or circumstances
occurring subsequent to the date hereof which would render any
representation, warranty or statement in this Agreement, the
Exhibits or the Disclosure Schedules inaccurate or incomplete at
any time after the date of this Agreement until the Closing. No
such supplemental information shall be deemed to avoid or cure
any misrepresentation, warranty or statement in this Agreement,
the Exhibits or the Disclosure Schedules except to the extent
such supplemental information relates to changes in the ordinary
course of business which do not, individually or in the
aggregate, represent a Material Adverse Change.
(b) Between the date hereof and the earlier of
the termination of this Agreement pursuant to Article IX hereof
or the Closing Date, Purchaser shall promptly deliver to Seller
supplemental information concerning events or circumstances
occurring subsequent to the date hereof which would render any
representation, warranty or statement in this Agreement, the
Exhibits or the Disclosure Schedules inaccurate or incomplete at
any time after the date of this Agreement until the Closing. No
such supplemental information shall be deemed to avoid or cure
any misrepresentation, warranty or statement in this Agreement,
the Exhibits or the Disclosure Schedules.
Section 7.5. ASSETS INCAPABLE OF TRANSFER.
(a) Consents to Assignment. To the extent that
any Transferred Contract or Permit is not assignable or
transferable without the consent of another Person, this
Agreement shall not constitute an assignment or transfer thereof,
an attempted assignment or transfer thereof, or an agreement to
effect such an assignment or transfer, if such assignment or
transfer, attempted assignment or transfer, or agreement would
constitute a breach thereof. Seller will use its Best Efforts to
obtain the consent of such other party to the assignment or
transfer of any such Transferred Contract and/or Permit to
Purchaser in all cases in which such consent is or may be
required for such assignment or transfer. Purchaser shall
cooperate with Seller in its efforts to obtain such consents.
(b) Alternative Arrangements. If any such
consent shall not be obtained, Seller shall cooperate with
Purchaser to provide an alternate reasonable arrangement
reasonably satisfactory to Purchaser and Seller designed to
provide to Purchaser the benefits intended to be assigned or
transferred to Purchaser under the relevant Transferred Contract
or Permit and to relieve Seller of the performance and other
obligations and Liabilities thereunder. The parties expressly
intend and agree that the beneficial interest in and to the
Transferred Contracts or Permits, to the fullest extent permitted
by the relevant Transferred Contract or Permit and applicable
Law, pass to Purchaser. If any necessary consent to assignment
of any Transferred Contract or Permit cannot be obtained, such
Contract or Permit shall cease to be a Transferred Contract, and
Seller shall remain responsible for its performance of such
Contract, and Seller shall be liable for all Liabilities under
any such Contract or Permit, including any Liabilities arising
from any termination thereof or breach or damage (or claim of
breach or damage) to or by any Person under or in respect of such
Contracts and Permits.
Section 7.6. RETURN OF EXCLUDED ASSETS. In the
event, through inadvertence, mistake or otherwise, any Excluded
Assets are transferred to Purchaser, Purchaser agrees to promptly
transfer and deliver the same to Seller.
Section 7.7. SOLICITATION AND HIRING. Prior to the
Closing Date and until twelve months after the Closing Date,
Seller shall not, directly or indirectly (including through an
Affiliate or its parent company), solicit or attempt to induce
any employee of Seller to cease working at the Facility or make
an offer of employment to any employee of Seller without prior
written consent of Purchaser, which consent shall not be
unreasonably withheld.
Section 7.8. CONFIDENTIALITY AGREEMENT. Purchaser
and Seller acknowledge and agree that the Confidential Disclosure
Agreement dated July 7, 2003 by and between Aventis
Pharmaceuticals, Inc., Seller's parent company and Purchaser (the
"Confidentiality Agreement") remains in full force and effect,
and the parties will abide by the terms and conditions of such
agreement. Notwithstanding the foregoing, Aventis' technical and
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
commercial information that relates solely to the Purchased
Business shall become Inyx's information at the Effective Time.
Section 7.9. PRODUCT MANUFACTURING; AZMACORT.
(a) Raw Materials. To the extent possible,
Seller will use its best commercial efforts to put in place, for
an agreed-upon period of time, a mechanism whereby Purchaser will
have access to prices for raw materials and components for
Azmacort CFC inhaler that are comparable to what Seller is able
to obtain. * * *
(b) Azmacort Assignment and Assumption Agreement.
Pursuant to an assignment and assumption agreement, substantially
in the form attached hereto as Exhibit 10 (the "Azmacort
Assignment and Assumption Agreement"), Seller shall transfer and
assign all of Seller's Parent Company right, title, and interest
in and to that certain agreement dated March 5, 2004, by and
between Aventis Pharmaceuticals Inc. and Aeropharm Technology,
Inc. relating to the manufacture and supply of Azmacort CFC
products by Seller (the "Azmacort Supply Agreement"), and
Purchaser shall assume all of Seller's liabilities and
obligations thereunder. Seller shall obtain a consent letter
from KOS Pharmaceuticals, Inc., and Aeropharm Technology, Inc.
accepting such assignment and assumption and agreeing to be bound
thereby (the "KOS/Aeropharm Consent") substantially in the form
attached hereto as Exhibit 11. In return for such assignment,
Purchaser shall pay Seller a royalty for each unit of Azmacort
CFC products Purchaser manufactures and sells pursuant to the
Azmacort Supply Agreement (the "Azmacort Royalty"). * * *.
(c) * * * Tooling * * * . At the Closing, Seller
shall deliver to Purchaser a letter signed by Aventis Pharma Ltd.
("APL") * * * governing Purchaser's access to tooling and
equipment owned by APL and located at * * * . The Tooling Access
Letter shall contain terms including, but not be limited to, (i)
Purchaser's obligations to share pro rata the cost of all
maintenance, repair and replacement of such tooling and
equipment, upon such terms as the parties shall agree, (ii)
Purchaser's use of and access to such tooling and equipment upon
the same terms as Seller, subject to such additional terms and
conditions as the parties shall agree, and (iii) an
acknowledgement and agreement by * * * to accept and process
tooling orders directly from Purchaser, provided that Purchaser
complies fully with all of the terms and conditions set forth in
the Tooling Access Letter.
Section 7.10. INFORMATION SYSTEMS. Other than the
Transferred Intangible Property to be transferred to Purchaser as
part of the Purchased Business, the only obligations of the
Seller with respect to providing access, rights or services with
respect to the Transferred Intangible Property and/or any other
software used in connection with the operation of the Purchased
Business shall be set forth in a Transition Services Agreement
substantially in the form attached hereto as Exhibit 7 (the
"Transition Services Agreement"). The parties agree that the
costs of separating the information systems at the Facility from
Seller's system's, excluding the costs of separating Aventis'
document management systems, shall be shared equally between
Purchaser and Seller; provided, that the amount payable by Seller
shall not exceed * * *
Section 7.11. NON-COMPETITION. Except for products
to be manufactured by Purchaser for Seller or any of its
Affiliates after the date of this Agreement, for a period of five
(5) years after the Closing Date, neither Purchaser nor any of
its Affiliates will develop, manufacture for development,
manufacture for commercial purposes, market, sell, distribute or
promote any Restricted Product in any of the Restricted
Territories, or enter into any agreement that would permit or
assist a third party to do so. If for any reason the Closing
does not occur, the provisions of the Confidentiality Agreement
shall continue to apply to information related to the Restricted
Products for a period of 18 months beyond the expiration of the
Confidentiality Agreement.
Section 7.12 TAX CREDITS. Seller shall cooperate
fully with Purchaser in connection with Purchaser's requests to
be filed with Governmental Authorities for tax credits with
respect to the purchase of the Purchased Business under the Tax
Incentive Act of 1998, as amended.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Section 7.13 POST-CLOSING AGREEMENT. At the Time of
Closing, the parties shall enter into an agreement governing
services to be provided by Purchaser to Seller subsequent to the
Closing Date (the "Post-Closing Agreement"). All services shall
be provided by Purchaser at cost without any xxxx-up and include,
(i) conducting on-going stability studies and testing for
Nasacort AQ and other product reasonably requested by Seller;
(ii) manufacturing product(s) produced at the facility prior to
the Closing Date for such time reasonably required by Seller
prior to removal of such product(s) by Seller to an alternate
manufacturing site; (iii) serving as a backup manufacturer for
product(s) produced at the Facility prior to the Closing Date;
(iv) compiling and providing information in support of financial
filings, audits, or other similar matters as requested by Seller;
(v) providing access to data or other information reasonably
requested by Seller; and (vi) providing any other services
reasonably deemed necessary by Seller following the sale of the
Purchased Business. Notwithstanding the foregoing, there shall
be no charge for any services Purchaser is otherwise obligated to
provide pursuant to this Agreement, specifically including
Sections 4.6 and 4.7 hereof.
Section 7.14 PRODUCT SUPPLY AGREEMENT. At the Time
of Closing, the parties shall enter into an agreement pursuant to
which Purchaser agrees to manufacture, package, label and supply
certain finished products to Seller's Affiliate, Aventis
Pharmaceuticals Inc., including products for its Dermik
Laboratories division (the "Product Supply Agreement").
Throughout the entire term of the agreement, pricing for services
and materials shall be provided at Seller's * * * The parties
shall enter into a technical agreement in connection with the
Product Supply Agreement (the "Product Supply Technical
Agreement").
Section 7.15. KLARON AGREEMENT. At the Time of
Closing, the parties shall enter into an agreement relating to
the manufacturing of Klaron by Purchaser for Seller at a price of
* * * for Klaron trade products * * * .
Section 7.16 NET WORTH COVENANT. * * * Purchaser
agrees that (i) during the Sharing Period in the case of
transfers to Purchaser's Affiliates; and (ii) during the first
five years of the Sharing Period in the case of transfers to any
Person that is not an Affiliate, Purchaser will not, other than
in the ordinary course of business, transfer to, or permit the
encumbrance of the Acquired Assets by, any Person that will not
agree to assume and be bound by all of Purchaser's obligations
under this Section 7.16 and Section 6.5.
Section 7.17 PURCHASER'S PARENT GUARANTY.
Simultaneously with the execution and delivery of this Agreement,
Purchaser shall deliver to Seller a Purchaser's Parent Guaranty
in the form of Exhibit 12, executed by Inyx, Inc. ("Purchaser's
Parent Company"), in which Purchaser's Parent Company absolutely,
unconditionally and irrevocably guarantees to Seller, jointly and
severally with Purchaser, the due and punctual performance of the
obligations of Purchaser under this Agreement and the Related
Agreements in the event that Purchaser fails to perform or comply
with its obligations hereunder or thereunder, without any
counterclaim, set-off, deduction, abatement or defense based upon
any claim that Purchaser's Parent Company may have against
Seller; provided, however, that Purchaser's Parent Guaranty shall
not apply to Purchaser's obligations under Section 6.5 and
Section 7.16.
Section 7.18 SELLER'S PARENT GUARANTY. Simultaneously
with the execution and delivery of this Agreement, Seller shall
deliver to Purchaser a Seller's Parent Guaranty in the form of
Exhibit 13 executed by Aventis Pharmaceuticals Inc. ("Seller's
Parent Company"), in which Seller's Parent Company absolutely,
unconditionally and irrevocably guarantees to Purchaser, jointly
and severally with Seller, the due and punctual performance of
the obligations of Seller under this Agreement and the Related
Agreements in the event that Seller is dissolved, liquidated or
becomes insolvent, or fails to perform or comply with its
obligations hereunder or thereunder, without any counterclaim,
set-off, deduction, abatement or defense based upon any claim
Seller's Parent Company may have against the Purchaser.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
ARTICLE VIII
Employee Matters
----------------
Section 8.1. BENEFIT PLANS.
(a) Except as specifically set forth in this
Agreement, (i) Purchaser will not assume any of the Benefit
Plans, or any rights, duties, obligations or liabilities
therewith, nor shall it become a successor employer or be
responsible in any way for Seller's participation in or
obligations or responsibilities with respect to any Benefit Plan,
(ii) Seller will retain all such Benefit Plans, including all
obligations and liabilities deriving directly or indirectly from
sponsoring or participating in such Benefit Plans; and (iii)
Purchaser will not be responsible for obligations to employees
relating to periods prior to the Effective Time, including, for
example, unpaid medical claims and unused employee deferral
accounts.
(b) All employees of Seller on the Closing
Date who accept employment by Purchaser immediately following the
Closing Date shall be given full credit for all time worked for
Seller for purposes of determining their participation and
vesting under any of the benefit plans that are established by
Purchaser (at its sole discretion) that are applicable to such
employees, except for the purpose of benefit accrual.
(c) To the extent legally possible, Seller
and Purchaser shall cooperate and use their reasonable Best
Efforts to provide for participants in the Aventis
Pharmaceuticals Puerto Rico Savings Plan (the "Seller's Savings
Plan") who are employed by Purchaser immediately following the
Closing Date to continue to repay their loans under the Seller's
Savings Plan in accordance with their original repayment
schedule.
Section 8.2. COBRA. To the extent required by
applicable law and regulations, up to and including the Closing
Date, Seller shall be responsible for providing the continuation
of health coverage required by Section 4908B of the U.S. Internal
Revenue Code and Section 601 et seq. of ERISA ("COBRA") to Merger
& Acquisition Qualified Beneficiaries (as such term is defined in
applicable Internal Revenue Service Regulations) and their
"qualified beneficiaries" regarding all qualifying events
occurring prior to, or in connection with, the sale of the
Purchased Business. Seller will maintain a group health plan in
Puerto Rico for this purpose as long as any Merger & Acquisition
Qualified Beneficiary, or any qualified beneficiary of such
person, who has elected COBRA coverage is eligible to receive
COBRA benefits. Seller will notify Merger & Acquisition
Qualified Beneficiaries on or before the Closing Date that the
period during which they will be eligible for COBRA benefits will
run concurrently with the period during which such persons are
eligible to receive employer-paid health benefits pursuant to the
Separation Plan. After such period of employer-paid health
benefits has elapsed, the cost of any such person's participation
in Seller's health plan during the remaining COBRA continuation
period, if any, will be paid by such Merger & Acquisition
Qualified Beneficiary in accordance with the provisions of COBRA
and applicable regulations. After the Closing Date, to the
extent required by applicable law and regulations, Purchaser
shall be responsible for providing COBRA continuation coverage to
all employees who begin employment with Purchaser and their
respective "qualified beneficiaries", whenever it is so required
in accordance with the provisions of COBRA and applicable
regulations. Purchaser shall indemnify, defend and hold Seller
harmless (and its directors, officers, employees and affiliates)
against any and all Damages asserted or imposed against Seller
based upon Purchaser's failure to comply with its duties under
COBRA, as legally required.
Section 8.3. SEPARATION BENEFITS.
(a) Reimbursement for Separation Benefits.
Although Purchaser will not adopt Seller's Separation Plan,
Purchaser shall reimburse Seller for Seller's cost of all
separation benefits payable with respect to Seller's employees in
accordance with the terms of the Separation Plan ("Separation
Benefits"). Seller shall require each employee who is eligible
to receive Separation Benefits to execute, as a condition of
receiving such benefits, an agreement including a release and
waiver of liability in favor of Seller and Purchaser. * * * such
former employee shall receive full credit for the employee's
seniority with Seller. Notwithstanding the foregoing, Purchaser
shall pay employees pursuant to statutory severance benefit
guidelines, with full credit for seniority with Seller, if the
statutory benefits are greater than benefits that would have been
provided under the Separation Plan. Purchaser shall indemnify,
defend, and hold harmless Seller, its affiliates, and their
respective present or former directors, officers, shareholders,
agents, representatives and employees from and against any
Damages arising out of or resulting from the termination or lay-
off by Purchaser of, or other action by Purchaser with respect
to, any former employee of Seller giving rise to a benefit
obligation under the Separation Plan.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
(b) Mechanism for Reimbursement of Separation
Benefits. Purchaser will reimburse Seller for Separation
Benefits as follows:
(i) Escrow Account - Purchaser will establish an
escrow account with an escrow agent reasonably acceptable to
Seller (the "Escrow Agent") where, no later than March 31,
2005, Purchaser shall deposit in an interest-bearing trust
account an amount equal to the Income Protection Pay (as
defined in the Separation Plan) payable to each eligible
employee of Seller whose employment is terminated by Seller
effective March 31, 2005, and who has not been offered, or
who has declined a non-Comparable Position (as defined in
the Separation Plan) with Purchaser (the "Separated
Employees"). Purchaser shall be entitled to any interest
earned on funds deposited in the Escrow Account.
(ii) Weekly Submission of Waivers and Benefits
Calculation - On a weekly basis following March 31, 2005,
Seller shall submit to the Escrow Agent copies of the signed
waiver and release agreements of Separated Employees with
respect to whom Seller has not previously submitted copies
of such waiver agreements to the Escrow Agent. Promptly
upon, but no later than two business days following, its
receipt of such agreements and a written computation of the
Income Protection Pay payable to each Separated Employee for
whom an agreement is submitted, the Escrow Agent shall
disburse to Seller from the Escrow Account the funds
required to pay the Income Protection Pay to such Separated
Employees.
(iii) Liquidation of Escrow Account. Any funds
remaining in the Escrow Account after June 30, 2005, may be
returned to Purchaser and the Escrow Account may be closed,
provided, however, that such action shall not affect
Purchaser's obligation to reimburse Seller for Separation
Benefits.
(iv) Reimbursement for costs of Health Care and
Dental Coverage. Purchaser shall reimburse Seller for
Seller's cost of providing health care and dental coverage
(as opposed to the actual health and dental costs incurred)
to Separated Employees who elect to continue such coverage
with Seller pursuant to the Separation Plan. Seller shall
invoice Purchaser for reimbursement of such costs monthly.
(c) Waiver Requirement - Purchaser shall require
all of Seller's employees at the Closing Date who accept offers
of employment with Purchaser beginning immediately following the
Closing Date to waive, as a condition of such offer,
participation in and all benefits under the Separation Plan, and
to release Purchaser from any liability to such employees under
any of Seller's Benefit Plans. Employees will not be asked to
waive any right under Act 80, and their service time with Seller
will be credited for purposes of any Act 80 severance
calculation. Purchaser shall indemnify, defend, and hold
harmless Seller, its affiliates, and their respective present or
former directors, officers, shareholders, agents, representatives
and employees from and against any Damages arising out of or
resulting from claims by former eligible employees of Seller at
the Closing Date who accept employment by Purchaser immediately
following the Closing Date. Each party will be responsible for
their respective legal fees and expenses.
(d) Union Employees - With respect to those
employees covered by the Collective Bargaining Agreement,
references in this section to "the Separation Plan" and
"Separation Benefits" shall mean such benefits as are agreed upon
by the Seller and the collective bargaining representative of
such employees, and "Income Protection Pay" shall mean any
counterpart benefit agreed upon with such representative.
Purchaser shall not be required to reimburse Seller to the extent
any such separation benefits exceed the Separation Benefits such
employees would have received if they had been eligible for
Separation Benefits under the Separation Plan.
Section 8.4. WARN ACT. Seller shall be responsible
for all Damages, if any, arising under the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN") including all
Damages imposed or incurred as a result of Seller's failure to
give any requisite WARN notice prior to the Effective Time.
After the Effective Time, Purchaser shall be responsible for
providing notice to the employees hired by Purchaser for any
plant closing or mass lay-off in accordance with the WARN Act.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
ARTICLE IX
Miscellaneous
-------------
Section 9.1. APPLICABLE LAW AND JURISDICTION. This
Agreement shall be governed by and be construed in accordance
with the Laws of the Commonwealth, without giving effect to any
choice or conflict of law provision or rule (whether of the
Commonwealth or any other jurisdiction) that would cause the
application of laws of any jurisdictions other than those of the
Commonwealth. Each party (a) submits to the jurisdiction of any
federal court sitting in the State of New Jersey or in the
Commonwealth in any action or proceeding arising out of or
relating to this Agreement or any Related Agreement, (b) agrees
that all claims in respect of such action or proceeding may be
heard and determined in any such court, (c) agrees not to bring
any action or proceeding arising out of or relating to this
Agreement or any Related Agreement in any other court and (d)
waives any right it may have to a trial by jury with respect to
any action or proceeding arising out of or relating to this
Agreement or any Related Agreement. Each party hereby waives any
defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety or other
security that might be required of the other party with respect
thereto. Each party may make service on the other party by
sending or delivering a copy of the process to the party to be
served at the address and in the manner provided for the giving
of notices in Section 9.3.
Nothing in this Section 9.1, however, shall affect the right of a
party to serve legal process in any other manner permitted by
law.
Section 9.2. DISPUTE RESOLUTION. If, after the
Closing, the parties have any dispute arising out of or relating
to this Agreement, the Related Agreements or the parties'
respective rights and duties hereunder (including, but not
limited to, any breach thereof, the validity or enforceability of
any provisions hereof, and any indemnification claim) (in each
case a "Dispute"), then, except as otherwise expressly provided
in this Agreement, the parties will resolve such Dispute in the
following manner:
(a) Any party may at any time deliver to the
other a written notice identifying a Dispute (the "Dispute
Notice"). Within thirty (30) days after delivery of the Dispute
Notice, the receiving party shall submit to the other a written
response. The Dispute Notice and the response thereto shall
state with particularity the facts and conditions giving rise to
the Dispute and shall include (i) a statement of each party's
position and a summary of arguments supporting that position and
(ii) the name and title of the Persons who will represent that
party in the negotiations contemplated by Section 9.2(b) below.
(b) Within ninety (90) days after delivery of the
Dispute Notice, the designated representatives of both parties
shall attempt in good faith to resolve the Dispute and shall meet
at a mutually acceptable time and place, and thereafter as often
as they reasonably deem necessary, to attempt to resolve the
Dispute. All negotiations pursuant to this Section 9.2(b) shall
be confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.
(c) If the representatives of the parties are
unable to resolve the Dispute through negotiations within
ninety (90) days after delivery of the Dispute Notice then the
parties may pursue all available remedies.
Section 9.3. NOTICES. Any and all communications
required as provided for in this Agreement shall be in writing
and sent by first class mail, postage prepaid, return receipt
requested or by an express courier service (e.g., Federal Express
or UPS), prepaid, with confirmation of delivery, or via facsimile
confirmed by any of the foregoing methods, and addressed as
follows or to such other address or person as either party or
person entitled to notice may specify by notice to the other) (a
"Notice"):
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Any Notice to be given to Seller shall be addressed to:
Aventis Pharmaceuticals Puerto Rico, Inc.
c/o Aventis Pharmaceuticals
000 Xxxxxxxx Xxxxxxxxx, Xxxx.
Xxxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to:
XxXxxxxxx Xxxxxx
270 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx, Xxxx Xxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx-Xxxxx
Facsimile: 000-000-0000
Any Notice to be given to Purchaser shall be addressed
to:
INYX USA, LTD.
000 Xxx Xxxx Industrial Zone Cotto Norte
Manati, Puerto Rico 00674-0345
Attention: Inyx Facility Coordinator
Facsimile: [To be provided]
With a copy to:
Fiddler Xxxxxxxx & Xxxxxxxxx, PSC
XX Xxx 000000
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
and to:
Xxxxxxx Xxxxx XXX
0000 XXXX Xxxxxx
00000 000xx Xxx
Xxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxxxxxx, Q.C.
Facsimile: 000-000-0000
and to:
INYX, INC.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Dr. Xxxx Xxxxxxx MD
Chairman & Chief Executive Officer
Facsimile (000) 000-0000
Unless otherwise specified, Notices shall be deemed given
(i) when received, if delivered by facsimile, provided subsequent
confirmation is given as provided herein, (ii) on the third (3rd)
day after the same is deposited with the United States Postal
Service, or (iii) on the day following deposit with an express
courier service (provided such deposit is made in a timely
fashion on or prior to the deadline for receipt of documents for
next-day delivery).
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Any change in address of a party shall be promptly
communicated in writing to the other party.
Section 9.4. AMENDMENTS. This Agreement may be
amended only by a written instrument duly executed and delivered
by Seller and Purchaser.
Section 9.5. ENTIRE AGREEMENT; WAIVER, MODIFICATIONS.
This Agreement, together with the other agreements referred to
herein, constitutes a final and complete statement of all of the
arrangements among the parties with respect to the transactions
contemplated hereby and thereby. No modification, discharge, or
waiver, in whole or in part, of any of the provisions hereof
shall be valid unless in writing and signed by the party against
whom the same is sought to be enforced. A failure or omission of
any party to insist, in any instance, upon strict performance by
another party of any term or provision of this Agreement or to
exercise any of its rights hereunder shall not be deemed a
modification of any term or provision hereof or a waiver or
relinquishment of the future performance of any such term or
provision by such party, nor shall such failure or omission
constitute a waiver of the right of such party to insist upon
future performance by another party of any such term or provision
or any other term or provision of this Agreement.
Section 9.6. TERMINATION. Anything herein or
elsewhere to the contrary notwithstanding, this Agreement may be
terminated and abandoned at any time before the Closing under one
or more of the following circumstances:
(a) by mutual consent in writing of Seller and
Purchaser;
(b) by Seller or Purchaser, in writing, if the
Closing has not occurred by May 1, 2005, because any of the
conditions set forth in Section 4.2 or 4.3 have not been
satisfied, provided that a party may not terminate the Agreement
pursuant to this Section 9.6(b) if the Closing has not occurred
by reason of a breach by such party of any of its obligations
under this Agreement; or
(c)by Seller, pursuant to Section 6.5(a)(iii).
Section 9.7. EFFECT OF TERMINATION. In the event
this Agreement is validly terminated pursuant to Section 9.6, the
parties shall no longer be obligated to proceed to the Closing,
but all causes of action accruing prior to the termination of
this Agreement shall survive including causes of action for
Damages arising out of the breach of any covenant or
representation or warranty.
Section 9.8. INTERPRETATION. The headings in this
Agreement are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of
this Agreement. Unless the context otherwise requires, the
singular includes the plural, and the plural includes the
singular.
Section 9.9. NO ASSIGNMENT; BINDING EFFECT. This
Agreement is not assignable by any party without the prior
written consent of the other party. Notwithstanding the
foregoing, Purchaser or Seller may assign this Agreement in whole
or in part to any of its Affiliates, but in no event shall such
an assignment release such assigning party from its obligations
hereunder. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 9.10. INVALIDITY. In the event that any
provision of this Agreement is declared to be void or
unenforceable, the remainder of this Agreement shall not be
affected thereby and shall remain in full force and effect to the
extent feasible in the absence of the void and unenforceable
declaration. The parties furthermore agree to execute and deliver
such amendatory contractual provisions to accomplish lawfully as
nearly as possible the goals and purposes of the provision so
held to be void or unenforceable.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
Section 9.11. COUNTERPARTS. This Agreement may be
executed in multiple counterparts, each of which shall be deemed
an original but all of which together shall constitute one and
the same instrument.
Section 9.12. INCORPORATION BY REFERENCE. The
Disclosure Schedules and other Schedules and Exhibits constitute
integral parts of this Agreement and are hereby incorporated by
reference herein.
Section 9.13. TIME OF THE ESSENCE. With regard to all
dates and time periods set forth or referred to in this
Agreement, time is of the essence.
Section 9.14. NO THIRD PARTY BENEFICIARIES. The terms
and provisions of this Agreement are intended solely for the
benefit of the parties hereto and their respective successors and
permitted assigns, and it is not the intention of the parties
hereto to confer third party beneficiary rights upon any other
Person.
Section 9.15. PUBLIC ANNOUNCEMENTS. The parties shall
mutually agree on, prepare and jointly release any press releases
or announcements relating to the transactions contemplated by
this Agreement; provided, however, that a party hereto may make
any public disclosure it believes in good faith is required by
applicable Law, or stock market rule (in which case the
disclosing party shall use reasonable efforts to advise the other
party or parties and provide it or them with a copy of the
proposed disclosure prior to making the disclosure.) Each of the
parties agree not to disclose the terms (including the Purchase
Price) of this Agreement without the written consent of the
parties; provided, however, that a party hereto may make any
public disclosure it believes in good faith is required by
applicable Law, or stock market rule (in which case the
disclosing party shall use reasonable efforts to advise the other
party or parties and provide it or them with a copy of the
proposed disclosure prior to making the disclosure.)
Section 9.16. FACSIMILE SIGNATURE. Any facsimile
signature attached hereto shall be deemed to be an original and
shall have the same force and effect as an original signature.
Section 9.17. EXPENSES. Except as otherwise expressly
provided in this Agreement, whether or not the transactions
contemplated hereby are consummated, each party hereto shall pay
its own costs and expenses incurred in connection with the
negotiation, execution and closing of this Agreement and the
Related Agreements and the transactions contemplated hereby and
thereby. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this
Agreement by another party.
Section 9.18. BULK SALES LAW. Purchaser hereby waives
compliance by Seller with the laws of any jurisdiction, including
without limitation the laws of the Commonwealth, relating to bulk
transfers which may be applicable in connection with the transfer
of the Purchased Business to Purchaser. Seller agrees to
indemnify and hold harmless Purchaser for any Damages arising out
of Seller's non-compliance with the corresponding bulk sales
laws.
[Remainder of this page left blank intentionally.]
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
IN WITNESS WHEREOF, the parties, intending legally to
be bound, have caused this Agreement to be duly executed and
delivered as of the day and year first herein above written.
SELLER:
AVENTIS PHARMACEUTICALS
PUERTO RICO INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Its: President
By: /s/ Xxxx X. Xxxx, Xx.
--------------------------
Name: Xxxx X. Xxxx, Xx.
Its: Secretary
PURCHASER:
INYX USA, LTD.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Dr. Xxxx Xxxxxxx
Its: Chairman and Chief
Executive Officer
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
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CONFIDENTIAL TREATMENT
LIST OF EXHIBITS
----------------
Exhibit 1 Assumption Agreement
Exhibit 2 Excluded Assets
Exhibit 3 General Assignment
Exhibit 4 Real Property
Exhibit 5 Seller's Separation Plan
Exhibit 6 Tangible Personal Property
Exhibit 7 Transition Services Agreement
Exhibit 8 Form Deed of Purchase and Sale
Exhibit 9 Seller's Certificate Regarding Books and Records
Exhibit 10 Azmacort Assignment and Assumption Agreement
Exhibit 11 Consent to Assignment
Exhibit 12 Purchaser's Parent Guaranty
Exhibit 13 Seller's Parent Guaranty
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
CONFIDENTIAL TREATMENT
LIST OF DISCLOSURE SCHEDULES
Section 1.1(i) Prepaid Expenses
Section 1.1(j) Vehicles
Section 1.1(k) Security Deposits
Section 2.2 Assumed Liabilities
Section 3.1 Purchase Price Allocation
Section 3.5 Purchased Inventory
Section 5.1(d) Governmental Approvals and Filings
Section 5.1(e) Legal Proceedings
Section 5.1(f) Compliance with Laws and Orders
Section 5.1(g) Employee Benefit Plans
Section 5.1(h)(i) Real Property
Section 5.1(h)(ii) Personal Property
Section 5.1(j) Material Contracts
Section 5.1(k) Permits
Section 5.1(l) Insurance
Section 5.1(m) Environmental Liabilities
Section 5.1(m)(iii) Environmental Matters - RCRA
Section 5.1(o) Absence of Certain Changes or Events
Section 5.1(q)(i) List of Current Employees
Section 5.1(q)(ii) Collective Bargaining Agreement and
Employment Agreements
Section 5.1(q)(iii) Compliance with Labor Laws
Section 5.1(q)(iv) Labor Disputes, Grievances or Litigation
Section 5.1(q)(vi) Material Labor Controversies
Section 5.1(q)(vii) Labor Notices From Government and Labor
Organizations
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
CONFIDENTIAL TREATMENT
Section 5.1(q)(viii) Agreements Related to Employment Separation
Section 5.1(r) Transferred Intangible Property
Section 5.1(w) Product Warranty
Section 7.3(a) (vii) Negative Convenants
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
