EXECUTION COPY
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
dated as of
October 17, 2003
between
XXXXXXXXXX ACQUISITION CORP
and
CAMBREX CORPORATION
AND
THE SELLERS LISTED HEREIN
RELATING TO THE
XXXXXXXXXX CHEMICALS BUSINESS
OF
CAMBREX CORPORATION
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..................................................................... 2
SECTION 1.01. Definitions........................................................ 2
ARTICLE II PURCHASE AND SALE.............................................................. 14
SECTION 2.01. Purchase and Sale.................................................. 14
SECTION 2.02. Excluded Assets.................................................... 14
SECTION 2.03. Assumed Liabilities................................................ 14
SECTION 2.04. Excluded Liabilities............................................... 14
SECTION 2.05. Assignment of Contracts and Rights................................. 14
SECTION 2.06. Purchase Price..................................................... 14
SECTION 2.07. Closing............................................................ 15
SECTION 2.08. Working Capital Adjustment......................................... 15
SECTION 2.09. Cash/Debt Adjustment............................................... 17
SECTION 2.10. Prorations......................................................... 18
SECTION 2.11. Additional Payments................................................ 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF CAMBREX..................................... 21
SECTION 3.01. Corporate Existence and Power...................................... 21
SECTION 3.02. Corporate Authorization............................................ 21
SECTION 3.03. Governmental Authorization......................................... 22
SECTION 3.04. Noncontravention................................................... 22
SECTION 3.05. Required Consents.................................................. 22
SECTION 3.06. Acquired Subsidiary................................................ 22
SECTION 3.07. Litigation......................................................... 23
SECTION 3.08. Compliance with Laws and Court Orders.............................. 23
SECTION 3.09. Financial Statements; Undisclosed Liabilities...................... 24
SECTION 3.10. Product Liability.................................................. 24
SECTION 3.11. Business Contracts................................................. 24
SECTION 3.12. Real Property...................................................... 26
SECTION 3.14. Insurance Coverage................................................. 29
SECTION 3.15. Employees.......................................................... 29
SECTION 3.16. Employee Benefit Plans............................................. 31
SECTION 3.17. Labor Matters...................................................... 34
SECTION 3.18. Environmental Matters.............................................. 35
SECTION 3.19. Sufficiency of Assets; Personal Property........................... 37
SECTION 3.20. Guarantees......................................................... 37
SECTION 3.21. Notes and Accounts Receivable...................................... 37
SECTION 3.22. Inventory.......................................................... 38
SECTION 3.23. Affiliate Transactions............................................. 38
SECTION 3.24. Customers and Suppliers............................................ 38
SECTION 3.25. Absence of Certain Changes......................................... 39
SECTION 3.26. Product Warranties, Defects and Liabilities........................ 40
SECTION 3.27. Names and Locations................................................ 40
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SECTION 3.28. Bank Accounts...................................................... 40
SECTION 3.29. Finders' Fees...................................................... 41
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER........................................ 41
SECTION 4.01. Corporate Existence and Power...................................... 41
SECTION 4.02. Corporate Authorization............................................ 41
SECTION 4.03. Governmental Authorization......................................... 41
SECTION 4.04. Noncontravention................................................... 41
SECTION 4.05. Required Consents.................................................. 42
SECTION 4.06. Litigation......................................................... 42
SECTION 4.07. Financing.......................................................... 42
SECTION 4.08. Finders' Fees...................................................... 42
ARTICLE V COVENANTS OF CAMBREX AND SELLERS................................................ 42
SECTION 5.01. Conduct of the Xxxxxxxxxx Chemicals Business....................... 42
SECTION 5.02. Access to Information.............................................. 44
SECTION 5.03. Notices of Certain Events.......................................... 44
SECTION 5.04. Resignations....................................................... 44
SECTION 5.05. Affiliate Transactions............................................. 44
SECTION 5.06. Third Party Consents............................................... 44
SECTION 5.07 Non-Compete and Confidentiality Agreements......................... 45
SECTION 5.08. Exclusivity........................................................ 46
SECTION 5.09. Title Insurance and Surveys........................................ 47
SECTION 5.10. CasChem Collective Bargaining Agreement............................ 47
SECTION 5.11. Fulfillment of Obligations......................................... 47
SECTION 5.12. Payroll............................................................ 48
SECTION 5.13. Renaissance ERP Software........................................... 48
SECTION 5.14. Confidentiality Agreements......................................... 48
ARTICLE VI COVENANTS OF BUYER............................................................. 48
SECTION 6.01. Use of Names and Trademarks........................................ 48
SECTION 6.02. Transfer of Environmental Licenses................................. 49
SECTION 6.03. Post-Closing Environmental Operating Costs......................... 49
SECTION 6.04. Other Post-Closing Environmental Matters........................... 49
SECTION 6.05. Fulfillment of Obligations......................................... 50
SECTION 6.06. Financing.......................................................... 50
ARTICLE VII COVENANTS OF BUYER AND SELLERS................................................ 50
SECTION 7.01. Further Assurances; Post-Closing Access............................ 50
SECTION 7.02. HSR Filing and Certain Other Filings............................... 51
SECTION 7.03. Public Announcements............................................... 52
SECTION 7.04. WARN Act........................................................... 52
SECTION 7.05. Transition Services................................................ 52
SECTION 7.06. Supply Agreements.................................................. 52
SECTION 7.07. Sellers' Retained Remediation Activities........................... 52
SECTION 7.08. Other Remediation Activities....................................... 56
SECTION 7.09. Bulk Sales Laws.................................................... 58
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SECTION 7.10. MACT Test.......................................................... 58
SECTION 7.11. Apportionment of Remediation Costs................................. 59
SECTION 7.12. Third Party Recoveries............................................. 59
ARTICLE VIII TAX MATTERS.................................................................. 60
SECTION 8.01. Definitions........................................................ 60
SECTION 8.02. Tax Representations................................................ 61
SECTION 8.03. Purchase Price Allocation; Tax Covenants........................... 62
SECTION 8.04. Tax Sharing........................................................ 64
SECTION 8.05. Cooperation on Tax Matters......................................... 64
SECTION 8.06. Indemnification by Sellers......................................... 65
SECTION 8.07. Survival........................................................... 66
SECTION 8.08. Exclusivity........................................................ 66
ARTICLE IX EMPLOYEE BENEFITS.............................................................. 66
SECTION 9.01. Employees and Offers of Employment................................. 66
SECTION 9.02. Sellers Plans...................................................... 68
SECTION 9.03. Bonuses............................................................ 69
SECTION 9.04. Third Party Beneficiaries.......................................... 69
SECTION 9.05. Medical Continuation Benefits...................................... 69
ARTICLE X CONDITIONS TO CLOSING........................................................... 70
SECTION 10.01. Conditions to Obligations of Buyer and Sellers.................... 70
SECTION 10.02. Conditions to Obligation of Buyer................................. 70
SECTION 10.03. Conditions to Obligation of Sellers............................... 72
ARTICLE XI SURVIVAL; NO OTHER REPRESENTATIONS............................................. 72
SECTION 11.01. Survival.......................................................... 72
SECTION 11.02. No Other Representations.......................................... 73
SECTION 11.03. Seller Disclosure Schedule........................................ 73
ARTICLE XII INDEMNIFICATION............................................................... 74
SECTION 12.01. Indemnification................................................... 74
SECTION 12.03. Calculation of Damages............................................ 76
SECTION 12.04. Exclusive Remedy.................................................. 77
ARTICLE XIII TERMINATION.................................................................. 77
SECTION 13.01. Grounds for Termination........................................... 77
SECTION 13.02. Effect of Termination............................................. 77
ARTICLE XIV MISCELLANEOUS................................................................. 78
SECTION 14.01. Notices........................................................... 78
SECTION 14.02. Amendments and Waivers............................................ 79
SECTION 14.03. Expenses.......................................................... 79
SECTION 14.04. Successors and Assigns............................................ 79
SECTION 14.05. Governing Law..................................................... 80
SECTION 14.06. Jurisdiction...................................................... 80
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SECTION 14.07. WAIVER OF JURY TRIAL.............................................. 80
SECTION 14.08. Counterparts; Third Party Beneficiaries........................... 80
SECTION 14.09. Entire Agreement.................................................. 80
SECTION 14.10. Captions.......................................................... 80
Annexes
Annex A Assumed Liabilities
Annex B Excluded Assets
Annex C Excluded Liabilities
Annex D Sellers' Knowledge
Annex E Xxxxxxxxxx Products Catalog
Annex F Purchased Assets
Annex G Form of Supply Agreements
Annex H Form of Transition Services Agreement
Annex I Designated Areas and Designated Environmental Concerns
- Heico Map 1
- Heico Map 2
- Nepera Map
- Zeeland Map 1
- Zeeland Map 2
- Seal Sands Map
Annex J Stamp Duty Agreement
Annex K Subordinated Note
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EXECUTION COPY
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
The parties hereto previously entered into an Asset Purchase Agreement,
dated as of August 7, 2003 (the "Existing Agreement"). Pursuant to Section 14.02
of the Existing Agreement, the undersigned wish to amend and restate the
Existing Agreement in its entirety as set forth below. The parties to this
Agreement agree that the Existing Agreement is hereby amended and restated in
its entirety as follows:
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT dated as of October 17,
2003 (this "Agreement") among Xxxxxxxxxx Acquisition Corp., a Delaware
corporation ("Buyer"), Cambrex Corporation, a Delaware corporation ("Cambrex"),
Cambrex Limited, a company organized under the Laws of the United Kingdom
("Cambrex Limited"), CasChem, Inc., a Delaware corporation ("CasChem"), Nepera,
Inc., a New York corporation ("Nepera"), Nepcam, Inc., a New York corporation
("Nepcam"), and Zeeland Chemicals, Inc., a Michigan corporation ("Zeeland" and,
together with Cambrex Limited, CasChem, Nepera and Nepcam, the "Sellers", and
each individually, a "Seller").
W I T N E S S E T H :
WHEREAS, Xxxxxxxxxx Chemicals, Inc., a Delaware corporation
("Xxxxxxxxxx"), is a wholly-owned Subsidiary of Cambrex;
WHEREAS, CasChem, a wholly-owned Subsidiary of Xxxxxxxxxx,
owns and operates a manufacturing facility in Bayonne, New Jersey which
manufactures refined castor oil, castor oil derivatives and related products
(together with the real property owned by CasChem on which such facility is
located, the "Bayonne Facility");
WHEREAS, CasChem, through its Heico Chemicals, Inc. division, owns and
operates a manufacturing facility in Delaware Water Gap, Pennsylvania which
manufactures a variety of ASAs and high purity organic and inorganic salts (the
"Heico Facility");
WHEREAS, Nepera, a wholly-owned Subsidiary of Xxxxxxxxxx, owns
and operates a manufacturing facility in Harriman, New York which manufactures
pyridine and derivatives and Vitamin B3 (together with the real property owned
by Nepera on which such facility is located, the "Harriman Facility");
WHEREAS, Nepcam, a wholly-owned Subsidiary of Nepera which
operates from the Harriman Facility, markets chromium picolinate, zinc
picolinate and manganese picolinate, that is produced by Zeeland;
WHEREAS, Zeeland, a wholly-owned Subsidiary of Xxxxxxxxxx,
owns and operates a manufacturing facility in Zeeland, Michigan which
manufactures a range of advanced intermediates for the pharmaceutical, personal
care and imaging industries (the "Zeeland Facility");
WHEREAS, Cambrex Limited, a Subsidiary of Cambrex, owns 100%
of the capital stock of Seal Sands Chemicals Limited (company registration
number 2864354), a
company organized under the Laws of the United Kingdom (the "Acquired
Subsidiary"), which owns and operates a manufacturing facility in Middlesbrough,
United Kingdom which manufactures monomers and performance enhancers for the
plastics and polymer markets (together with the real property owned by the
Acquired Subsidiary on which such facility is located, the "Seal Sands
Facility");
WHEREAS, the shares held by Cambrex Limited in the Acquired
Subsidiary constitute a substantial shareholding in a trading company for the
purposes of Schedule 7AC Taxation of Chargeable Gains Xxx 0000 and have been
held by the Seller Group (as defined below) for the requisite 12 month period
thereunder; and
WHEREAS, Buyer desires to acquire substantially all the assets
(including the stock of the Acquired Subsidiary) and assume certain liabilities
of the Xxxxxxxxxx Chemicals Business (as defined below) from Sellers, and
Sellers desire to sell such assets and transfer such liabilities to Buyer, upon
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
(a) The following terms, as used herein, have the following
meanings:
"Acquired Subsidiary Shares" means all of the issued and outstanding
shares of capital stock of the Acquired Subsidiary.
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"Applicable Period" means the period commencing on the Closing Date and
ending on the tenth (10th) anniversary of the Closing Date.
"Assumed Liabilities" means only the liabilities and obligations of the
Designated Sellers set forth on Annex A to this Agreement.
"Baseline Operating Conditions" means (i) the average rate of energy
consumption (based on BTU/1,000 gallon waste water feed rate) achieved at the
Harriman Facility during the Measurement Period and (ii) the frequency and
extent of the maintenance activities in respect of the Harriman Incinerator
during the Measurement Period.
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"Baseline Plant Capacity" means the ability to simultaneously operate
the three major operations at the Harriman Facility at their existing
capacities, which are: (i) the pyridine plant at 5,000 pounds per hour of
acetaldehyde feed rate; (ii) the cyanopyridine plant at 1,400 pounds per hour of
picoline feed rate in the case of 2-cyanopyridine and 1,900 pounds per hour of
picoline feed rate in the case of 3-cyanopyridine; and (iii) the amide plant at
production rate of 9.0 metric tons per day of amide.
"Cash" means the aggregate amount of cash, marketable securities and
other cash equivalents (less the amount of any uncashed checks issued by and
plus the amount of any uncashed checks payable to the Acquired Subsidiary,
provided that in no event shall such uncashed checks be treated as a reduction
of accounts payable) on hand or in bank accounts or securities brokerage
accounts or safety deposit or lockboxes of the Acquired Subsidiary.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"Change of Control" shall mean (i) any merger or other form of
reorganization, recapitalization or consolidation involving Buyer with or into
another corporation resulting in Affiliates of Arsenal Capital Management LP
failing to own, directly or indirectly, 50% or more of the voting power of the
resulting entity; or (ii) a sale of all or substantially all of the assets of
Buyer (other than to a wholly-owned subsidiary of Buyer) in any transaction or
series of related transactions; or (iii) the acquisition by any Person or
"group" (as such term is defined in Rule 13d-4 under the Securities Exchange Act
of 1934) of 50% or more of the voting power of Buyer (exclusive of any voting
power held by affiliates of Arsenal Capital Management LP). Buyer agrees to
deliver written notice to Cambrex not more than ten (10) days after the
occurrence of any Change of Control.
"Closing" means the closing of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities under this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of 1986, as
amended, including the rules and regulations thereunder.
"Contract" means any agreement, business arrangement, commitment,
lease, license, mortgage, indenture, security agreement or other contract
(written or oral).
"Designated Areas" means the following locations set forth and clearly
identified in Annex I to this Agreement (as such locations may be more precisely
delineated by survey if mutually agreed by Sellers and Buyer, absent which
agreement, Buyer reserves right to conduct such a survey at its own expense):
1. Heico Facility, Delaware Water Gap, Pennsylvania (see Annex I, Heico
Maps 1 and 2):
(a) Sandfilter/Transfer Line/Leachfield formerly used at the site until the late
1980s in
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connection with the pretreatment of process water and runoff collected in storm
drain sumps, which has been addressed by the Consent Order and Agreement between
Heico Chemicals, Inc. and the Pennsylvania Department of Environmental
Protection (formerly Pennsylvania Department of Environmental Resources), dated
January 10, 1986; and
(b) Underground Fuel Line Area in and around the on-site underground fuel line
(which previously leaked and has been remediated).
2. Harriman Facility, Harriman, New York (See Annex I, Nepera Map):
(a) Area D (excluding any part of the SPDES lagoon primarily located in Area C),
which includes, but is not limited to the Blind Lagoon, which was used to
temporarily hold sprinkler water run-off from above ground storage tanks (to the
extent not subject to Remediation by Sellers pursuant to Section 7.07); and
(b) Area B - located at the northeastern portion of the facility where calcium
sulfate material was used as fill material, but only to the extent of the
existing Parking Lot (to the extent not subject to Remediation by Sellers
pursuant to Section 7.07).
3. Zeeland Facility, Zeeland, Michigan (See Annex I, Zeeland Map 1):
(a) The seven closed and inactive lagoons, which includes the Burn Pit, and the
closed Ketone Sludge Pond formerly used to store a variety of chemicals between
the 1950s and 1970s.
"Designated Environmental Concerns" means instances of contamination
known as of the Closing Date at the locations set forth below and clearly
identified in Annex I to this Agreement (as such locations may be more precisely
delineated by survey if mutually agreed by Sellers and Buyer, absent which
agreement, Buyer reserves right to conduct such a survey at its own expense):
1. Harriman Facility, Harriman, New York (see Annex I, Nepera Map):
(a) Area A, including the ammonia and organic compounds identified beneath and
near Building 13, known as the Building 13 seep and subject to the Building 13
seep Administrative Consent Order with the NYSDEC dated March 20, 2002 at the
Harriman Facility to the extent not covered under the Nepera Consent Order;
(b) Area B, other than Designated Area (see Item 2(b), above), to the extent not
subject to Remediation by Sellers pursuant to Section 7.07;
(c) Area E, to the extent not subject to Remediation by Sellers pursuant to
Section 7.07;
(d) Area H, to the extent not subject to Remediation by Sellers pursuant to
Section 7.07;
(e) Area I, to the extent not subject to Remediation by Sellers pursuant to
Section 7.07; and
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(f) Area Z, to the extent not subject to Remediation by Sellers pursuant to
Section 7.07.
2. Seal Sands Facility, Middlesbrough, England (see Annex I, Seal Sands
Map):
(a) Area L;
(b) Area M; and
(c) Two plumes of groundwater contaminated primarily with toluene on the
northeast portion of the Seal Sands property and the neighboring Xxxxxxxx
Petroleum property as reported in the Land Condition Report for Seal Sands
Chemicals Ltd, dated October 2002, included in the Seal Sand's Application for a
Permit under Integrated Pollution Prevention and Control (IPPC) and as set forth
in the ConocoPhillips Conceptual Site Model Re-Visited (November 2002).
3. Zeeland Facility, Zeeland, Michigan (See Annex I, Zeeland Map 2):
(a) Area X;
(b) Area Y; and
(c) Area Z.
"Deviation from Past Practices" means Buyer's operation and maintenance
of the Xxxxxxxxxx Chemicals Business following the Closing in a manner
materially outside of the ordinary course of business (including, without
limitation, (i) failure to materially comply with Environmental Laws and
Licenses, (ii) gross negligence or willful misconduct in the operation or
maintenance of the Purchased Assets or (iii) material construction of new
buildings, storage areas, structures and tanks, material digging or excavation
(other than to the extent required for reasonable maintenance or repair),
material renovation or expansion of existing structures, buildings, storage
areas and tanks, and material demolition and removal of structures, foundations,
footings, buildings and tanks; provided that any activity described in this
clause (iii) shall not be deemed a Deviation from Past Practices to the extent
the applicable activity occurs above ground); provided further that with respect
to any of the Designated Areas, Deviation from Past Practices means the conduct
of any activity materially different from the activities of the applicable
Seller in connection with such Designated Area as of the date of this Agreement
(other than to the extent required for reasonable maintenance or repair);
provided, however, that Deviation from Past Practices shall not include any
actions of Buyer taken in good faith to the extent such actions are required (x)
pursuant to any applicable Law, or (y) in an emergency situation or to mitigate
damages from the release of Hazardous Materials.
"Dispute Period" means the period ending sixty (60) days following
receipt by the Indemnifying Party of a notice for indemnification pursuant to
Section 12.02.
"Employee Plan" means each employment, severance, retention, consulting
or similar Contract, plan, arrangement or policy and each other plan or
arrangement providing for compensation, bonuses, profit-sharing, stock purchase,
stock option or other equity-related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage, health, medical or
dental benefits, employee assistance program, disability benefits, death
benefits, workers' compensation, supplemental unemployment benefits, severance
benefits and post-employment or retirement benefits, including, without
limitation, any "employee benefit plan" as defined in Section 3(3) of ERISA, (i)
which is maintained, administered or contributed
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to by any of Sellers or their respective ERISA Affiliates and covers any current
or former Business Employee or (ii) under which any of Sellers or their
respective ERISA Affiliates has any liability with respect to any current or
former Business Employee, but shall not include any U.K. Plan.
"Environmental Law" means any Law or Order (including, without
limitation, CERCLA) relating to pollution, worker or public health or safety or
the regulation or protection of the environment, including without limitation,
those relating to the disposal, discharge, release or threatened release of
toxic or hazardous substances, materials or wastes or otherwise relating to the
manufacture, generation, treatment, storage, disposal, transport or handling of
toxic or hazardous substances, materials or wastes.
"Environmental Liabilities" means any and all costs, losses, damages,
demands, claims, fines, penalties, assessments, expenses, obligations and
liabilities arising in connection with or in any way relating to any of the
Sellers, or their predecessors or Affiliates, the Xxxxxxxxxx Chemicals Business,
the Purchased Assets or any activities or operations occurring or conducted at
or in connection with the ownership or operation of the Xxxxxxxxxx Chemicals
Business or the Purchased Assets or any other real property or facility now or
previously owned, leased or operated by any of the Sellers or their predecessors
or Affiliates, in each case, which arise under, are necessary to achieve or
maintain compliance with, or relate to a violation of or liability or obligation
under any Environmental Law, whether (x) occurring prior to, on or after the
Closing Date and (y) whether accrued, contingent, absolute, determined,
determinable, disclosed or undisclosed or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any Person means any other Person which, together
with such Person, would be treated as a single employer under Section 414 of the
Code.
"Excluded Assets" means the assets set forth on Annex B to this
Agreement.
"Excluded Liabilities" means all obligations and liabilities of Sellers
and their Affiliates (other than the Assumed Liabilities), including without
limitation, those set forth on Annex C to this Agreement.
"GAAP" means generally accepted accounting principles as in effect from
time to time.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official, agency or other
instrumentality exercising governmental or regulatory authority of the United
States, any foreign country or any domestic or foreign state, province, county,
city, municipality or other political subdivision or any quasi-governmental or
regulatory body exercising authority thereunder.
"HAPHWC Rule" means the NESHAP: Final Standards for Hazardous Air
Pollutants for Hazardous Waste Combustors, promulgated by U.S. Environmental
Protection Agency at 64 Fed. Reg. 52828 (September 30, 1999), as withdrawn,
amended, stayed, superceded, corrected or revised, including without limitation
by the following: the Interim Standards Rule, dated February 13, 2002, the
Summary of Final Amendments Rule, dated February 14, 2002, and the
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Technical Corrections, dated December 19, 2002, all as of the date of the MACT
Test.
"Hazardous Material" means (A) any petroleum or petroleum products,
explosives, radioactive materials, asbestos in any form or condition, urea
formaldehyde foam insulation and transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated biphenyls
(PCBs); and (B) any chemicals, wastes or other materials which are included in
the definition of or regulated as "hazardous substances," "hazardous wastes,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indebtedness" means, without duplication, (i) any indebtedness for
borrowed money or issued in substitution for or exchange of indebtedness for
borrowed money, (ii) any indebtedness evidenced by any note, bond, debenture or
other debt security, (iii) any indebtedness for the deferred purchase price of
property or services with respect to which a Person is liable, contingently or
otherwise, as obligor or otherwise (other than accounts payable, advance
xxxxxxxx and accrued expenses incurred in the ordinary course of business), (iv)
any commitment by which a Person assures a creditor against loss (including
contingent reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including guarantees in the
form of an agreement to repurchase or reimburse, but excluding the endorsement
of checks or other negotiable instruments for deposit or collection), (vi) any
obligations under capitalized leases with respect to which a Person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or with respect
to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets, (viii) any outstanding
letter of credit, sight draft, performance bond or similar surety obligation;
provided that for purposes of the calculation set forth in Section 2.09, any
such obligation shall only be considered Indebtedness to the extent such
obligation has actually been drawn (or circumstances exist which entitle the
beneficiary to draw on) at or prior to the Closing Date and (ix) any interest,
principal, prepayment penalty, fees or expenses to the extent paid, due or owing
in respect of those items listed in clauses (i) through (vii) of this defined
term.
"Information Memorandum" means the confidential information memorandum,
dated February 2003, relating to the sale of the Xxxxxxxxxx Chemicals Business
that was delivered by Cambrex to Buyer prior to negotiation of this Agreement.
"Intellectual Property Rights" means all United States and foreign
patents and patent applications (including any divisions, continuations,
continuations in part, reissues, reexaminations and exclusions thereof),
proprietary software programs and proprietary information technology,
trademarks, data, databases, service marks, trade names, brand names, domain
names, logos, any registrations and applications for registration and any
goodwill associated with any of the foregoing, copyrights and any registrations
and applications therefor, and any other proprietary rights, including, without
limitation, know-how, inventions, whether patentable or reduced to practice,
discoveries and improvements, shop rights, processes, methods and formulae,
trade secrets, product drawings, specifications, designs, formulations, supplier
and
7
customer lists, marketing and other technical information; provided that
"Intellectual Property Rights" do not include the Third Party Software.
"Inventory" means all items of inventory, including, without
limitation, raw materials, work-in-process, finished goods and samples owned by
any Seller or the Acquired Subsidiary and held for use or sale in connection
with the Xxxxxxxxxx Chemicals Business.
"IRR" means the internal rate of return on the investment in Buyer by
Affiliates of Arsenal Capital Management, LP, as such internal rate of return is
reported in writing to the limited partners of the funds managed by Arsenal
Capital Management, LP.
"knowledge of Sellers," "Sellers' knowledge" or any other similar
knowledge qualification in this Agreement means the actual knowledge after
reasonable inquiry of the individuals set forth on Annex D to this Agreement.
"Laws" means all laws (including common law), statutes, rules,
regulations, ordinances and other pronouncements having the effect of law of the
United States, any foreign country or any domestic or foreign state, province,
county, city, municipality or other political subdivision or of any Governmental
or Regulatory Authority.
"Legal Compliance Proceeding" means any litigation proceeding or
investigation brought by a Governmental or Regulatory Authority to enforce
compliance with Laws.
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any nature in respect
of such property or asset.
"Material Adverse Effect" means a material adverse effect on the
business, assets, operations or financial condition of the Xxxxxxxxxx Chemicals
Business taken as a whole.
"Measurement Period" means the twelve (12) month period immediately
preceding the Closing.
"Microsoft Licenses" means the software licenses set forth in Section
3.13(b) of the Seller Disclosure Schedule under the caption "Microsoft
Licenses".
"Nepera Consent Order" means the Consent Decree Between State of New
York and Estate of Xxxxxxx X. Xxxxxx, Nepera, Inc., and Xxxxxx-Xxxxxxx Company,
and the Order of Dismissal, entered on May 5, 1998, in New York v. Estate of
Xxxxxxx X. Xxxxxx, et al. (98 Civ. 3165 S.D.N.Y.)
"Order" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
8
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a governmental or political subdivision or a Governmental or Regulatory
Authority.
"Plans" means the Employee Plans together with U.K. Plans.
"Platform Products" means any products included in the following
product platforms: pyridine and its derivatives, castor oil and its derivatives,
sebacic acid and its derivatives, sulfones and alkenyl succinic anhydrides, but
not including (i) any products sold in commercial quantities by Cambrex and its
present Subsidiaries on the date of this Agreement (other than Products) and
(ii) 4-substituted pyridines manufactured using pyridine N-oxide intermediates.
"Products" means the products of the Xxxxxxxxxx Chemicals Business set
forth in the Xxxxxxxxxx Chemicals product catalog attached as Annex E to this
Agreement (other than 2-Chloro-3-Hydroxypyridine and 3-Amino-4-Hydroxypyridine).
"Purchased Assets" means all assets, properties, rights and interests
of every kind and nature owned or leased by Sellers and primarily related to or
used in the Xxxxxxxxxx Chemicals Business including, without limitation, the
assets set forth on Annex F to this Agreement, but excluding the Excluded
Assets.
"Remediation" means any and all investigation, delineation, cleanup,
removal, capping, remediation, corrective action, monitoring or other treatment
to address Environmental Liabilities related to any non-compliance with
Environmental Laws (as such Laws are in effect on or prior to the Closing Date)
or the release, threatened release or presence of Hazardous Materials.
"Remediation Commencement Date" means, with respect to any Other
Remediation Activity, the date on which a Governmental or Regulatory Authority
orders Buyer to commence Remediation with respect to such Other Remediation
Activity or, in the case of any Other Remediation Activity that is commenced by
Buyer without such an order from a Governmental or Regulatory Authority, the
first date on which Buyer undertakes substantial steps towards commencing
Remediation with respect to such Other Remediation Activity. The parties
acknowledge and agree that nothing contained herein shall restrict Buyer from
commencing Remediation absent an order from a Governmental or Regulatory
Authority.
"Remediation Costs" means any and all administrative, legal,
investigative, remedial, corrective and other costs, expenses and fees arising
from or incurred in connection with any Remediation.
"Representatives" means, with respect to any specified Person, its
officers, directors, employees, accountants, consultants, legal counsel, agents
and other representatives.
"Required MACT Plans" means the following plans required by the HAPHWC
Rule: the Feedstream Analysis Plan; the Startup, Shutdown and Malfunction Plan;
the Operating and Maintenance Plan; the Automatic Waste Feed Cut-Off Plan; and
the Operator Training and Certification Plan.
9
"Xxxxxxxxxx Chemicals Business" means the business of manufacturing,
selling and distributing the Products as currently conducted by Sellers and the
Acquired Subsidiary.
"Seller Disclosure Schedule" means the record delivered to Buyer by
Cambrex herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by Cambrex pursuant to this Agreement.
"Seller Names" means "Cambrex" and any and all derivations thereof that
could reasonably be expected to be confused therewith.
"Subsidiary" means any Person in which Cambrex, directly or indirectly,
beneficially owns more than fifty percent (50%) of either the equity interests
in or voting control of such Person.
"Supply Agreements" means the agreements to be entered into by Buyer
and Cambrex or one of its Affiliates substantially in the form of Annex G to
this Agreement.
"Target Plant Capacity" means the ability to simultaneously operate the
three major operations at the Xxxxxxxx Facility at their existing capacities,
which are: (i) the pyridine plant at 5,250 pounds per hour of acetaldehyde feed
rate; (ii) the cyanopyridine plant at 1,400 pounds per hour of picoline feed
rate in the case of 2-cyanopyridine and 1,900 pounds per hour of picoline feed
rate in the case of 3-cyanopyridine; and (iii) the amide plant at production
rate of 9.6 metric tons per day of amide.
"Third Party Software" means the third party software rights or
licenses to third party software, other than the Microsoft Licenses, set forth
in Section 3.19 of the Seller Disclosure Schedule.
"Title V Permit" means the permit to be issued to the owner of the
Xxxxxxxx Facility under Title V of the Clean Air Act allowing the operation of
the Xxxxxxxx Incinerator.
"Transition Services Agreement" means the agreement to be entered into
by Cambrex or one of its Affiliates and Buyer substantially in the form of Annex
H to this Agreement.
"U.K. Pension Scheme" means the Seal Sands Chemicals Pension and Life
Assurance Plan.
"U.K. Plan" means the U.K. Pension Scheme, and each other plan or
arrangement providing for bonuses, profit-sharing, stock purchase, stock option
or other equity-related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage, health, medical or dental
benefits, employee assistance program, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits, in each case which is maintained or
contributed to, primarily for the benefit of any Business Employees engaged in
the conduct or operation of the Xxxxxxxxxx Chemicals Business in the United
Kingdom or with respect to which the Acquired Subsidiary has any liability.
10
"Working Capital Assets" means the accounts receivable, Inventory and
other current assets (which shall include, among other items, prepaid expenses
but shall not include cash, Tax refunds and similar benefits relating to Taxes)
of Sellers and the Acquired Subsidiary, calculated in accordance with United
States GAAP.
"Working Capital Liabilities" means the accounts payable, advance
xxxxxxxx and accrued expenses (which shall not include liabilities for Taxes) of
Sellers and the Acquired Subsidiary calculated in accordance with United States
GAAP.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- -------
Acquired Business 5.07(b)
Acquired Subsidiary Preamble
Acquired Subsidiary Tax Returns 8.01
Additional Payment 2.06
Agreement Preamble
Applicable Period 7.08(b)
Approval Notice 2.08(d)
Audited Financial Statements 2.11
Average Sales 5.07(b)
Bayonne Facility Preamble
BAS 3.29
Business Employees 3.15(a)
Business Intellectual Property Rights 3.13(a)
Business Threshold 5.07(b)
Buyer Preamble
Buyer Indemnified Party 12.01(a)
Cambrex Preamble
Cambrex Limited Preamble
CasChem Preamble
CasChem Collective Bargaining Agreement 5.10
Cash Amount 2.09(a)
Closing Date Working Capital Amount 2.08(c)
Closing Payment 2.06
Collective Bargaining Agreement 3.17(a)
Company EBITDA 2.11
Competing Business 5.07(b)
Competing Products 5.07(a)
Continuation Period 9.01(b)
CPT 7.10(a)
Damages 12.01(a)
Debt Amount 2.09(a)
Designated Sellers Annex A
Dispute Notice 2.08(d)
DOC 7.10(a)
11
Term Section
---- -------
EBITDA Statement 2.11
EBITDA Target 2.11
Estimated Working Capital Amount 2.08(a)
Estimated Working Capital Schedule 2.08(a)
Excluded Property Annex B
Financing Agreement 2.11
First Calculation Period 2.11
Group 5.08
Xxxxxxxx Facility Preamble
Xxxxxxxx Incinerator 7.10(a)
Heico Facility Preamble
Health Insurance Termination Date 9.05
ICTA 1988 3.16(e)
Indemnified Party 12.02(a)
Indemnifying Party 12.02(a)
Independent Accountant 2.08(d)
Independent Accountant Determination 2.08(d)
Industrial Cleanup Standards 7.07(d)
IPPC 6.03
ISRA 7.07(c)
Lasons Receivable Annex B
Latest Balance Sheet 3.09(a)
Loss 8.06(a)
MACT 7.10(a)
MACT Costs 7.10(c)
MACT Test 7.10(a)
Marked Assets 6.03(a)
Marked Instrumentalities 6.03(a)
Maximum Amount 2.11
Nepcam Preamble
Nepera Preamble
Net Cash Adjustment Period 2.09(b)
Net Cash Approval Notice 2.09(b)
Net Cash Determination 2.09(b)
Net Cash Dispute Notice 2.09(b)
Net Cash Resolution Period 2.09(a)
Net Cash Schedule 2.09(a)
NJDEP 7.07(c)(i)
NOC 7.10(a)
NYDEC 7.07(b)
Other Business Employees 3.15(a)
Other Remediation Activities 7.08(a)
Permitted Liens 3.12(b)
Pre-Closing Tax Period 8.01
12
Term Section
---- -------
Principal Management 7.08(f)
Purchase Price 2.06
Real Property 3.12
Remediation 7.07(a)
Remediation Agreement 7.07(c)(i)
Remediation Material 7.07(e)
Required Consents 3.05
Resolution Period 2.08(d)
Retained Remediation Activities 7.07(a)
Xxxxxxxxxx Preamble
Seal Sands Facility Preamble
Second Calculation Period 2.11
Seller Preamble
Seller Group 8.01
Seller Indemnified Party 12.01(b)
Sellers Preamble
Software 5.13
Software License 5.13
Surveys 10.02(e)
Target 2.08(a)
Tax 8.01
Tax Asset 8.01
Tax Return 8.01
Tax Sharing Agreement 8.01
Third Party Claim 12.02(a)
Title Commitments 10.02(d)
Title Company 10.02(d)
Title Policies 10.02(d)
Third Calculation Period 2.11
Transferred Employees 9.01
TSCA 3.18(f)
U.S. Business Employees 3.15
WARN Act 7.04
Working Capital Amount Due 2.08(c)
Working Capital Schedule 2.08(c)
Zeeland Preamble
Zeeland Facility Preamble
13
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Buyer shall purchase, accept and acquire from
Sellers, and Cambrex shall cause Sellers to, and Sellers shall, sell, convey,
transfer, assign and deliver, or cause to be sold, conveyed, transferred,
assigned and delivered, to Buyer at the Closing, free and clear of all Liens,
other than Permitted Liens, all of Sellers' right, title and interest in, to and
under the Purchased Assets.
SECTION 2.02. Excluded Assets. Buyer expressly understands and agrees
that the Excluded Assets shall be excluded from the Purchased Assets and
ownership thereof shall be retained by the respective Sellers.
SECTION 2.03. Assumed Liabilities. Upon the terms and subject to the
conditions of this Agreement, Buyer shall, effective at the time of the Closing,
assume and be fully responsible for the Assumed Liabilities. Buyer shall not
assume or in any way become liable for any of the Sellers' or any other Person's
debts, liabilities or obligations of any nature whatsoever other than the
Assumed Liabilities.
SECTION 2.04. Excluded Liabilities. Sellers expressly understand and
agree that the Excluded Liabilities shall be excluded from the Assumed
Liabilities, and Cambrex shall cause Sellers to be, and Sellers shall be, fully
responsible for the Excluded Liabilities subject to the terms of this Agreement.
SECTION 2.05. Assignment of Contracts and Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any right thereunder if an
attempted assignment, without the consent of a third party, would constitute a
breach or violation of the terms of any Contract to which any Seller is a party
or in any way adversely affect the rights of Buyer or Sellers with respect to
such Purchased Asset or right thereunder. If such consent is not obtained,
Sellers and Buyer will cooperate in a commercially reasonable arrangement to
obtain such consent; provided, however, that Buyer shall not be required to pay
or incur any cost or expense to obtain any third party consent or approval other
than de minimis administrative costs associated with obtaining such consent. If
any such third party consent or approval is not obtained before the Closing,
Sellers shall cooperate with Buyer in any reasonable arrangement designed by
Buyer to provide for Buyer after the Closing the benefits intended to be
assigned to Buyer under the applicable Contract, including enforcement at the
cost and for the account of Buyer of any and all rights of Sellers against the
other party thereto arising out of the breach or cancellation thereof by such
other party or otherwise.
SECTION 2.06. Purchase Price. The aggregate purchase price for the
Purchased Assets (including the Acquired Subsidiary Shares) is up to $65,000,000
(as adjusted and determined pursuant to Sections 2.08, 2.09, 2.10 and 2.11
below, the "Purchase Price"). The Purchase Price shall be paid as follows:
14
(i) $55,000,000 shall be paid in cash at the Closing (the
"Closing Payment"), subject to adjustment after the Closing as provided
in Sections 2.08, 2.09 and 2.10 below.
(ii) $2,000,000 shall be paid by delivery of a junior
subordinated note (the "Subordinated Note") in the form attached as
Annex K hereto.
(iii) Up to $8,000,000 shall be paid as additional payments
(collectively, "Additional Payments" and each, an "Additional
Payment"), the timing and amounts of which shall be determined as
provided in Section 2.11 below.
SECTION 2.07. Closing. The Closing shall take place at the offices of
Milbank, Tweed, Xxxxxx & XxXxxx LLP, Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as soon as possible, but in no event later than two (2) business
days, after satisfaction of the conditions to Closing set forth in Section
10.01, or at such other time or place as Buyer and Cambrex may agree. At the
Closing:
(i) Buyer shall deliver the Closing Payment, in
immediately available United States funds by wire transfer to an
account or accounts designated by Cambrex, by notice to Buyer, not
later than two (2) business days prior to the Closing Date.
(ii) Buyer shall deliver the Subordinated Note, duly
executed.
(ii) Cambrex shall cause to be delivered to Buyer duly
executed transfers in respect of the Acquired Subsidiary Shares in
favor of Buyer or such person as Buyer may nominate and share
certificates for the Acquired Subsidiary Shares with all necessary
stamps affixed thereto.
(iii) Sellers and Buyer shall enter into such assignment
and assumption agreements, including without limitation, deeds in
proper statutory form for recording and conveying title to the Real
Property and assignment documents related to applications and
registrations contained in the Business Intellectual Property, purchase
agreements, bills of sale, endorsements, consents and other good and
sufficient instruments of conveyance and assignment and shall make all
appropriate filings as the parties and their respective counsel shall
deem reasonably necessary for Buyer to acquire all right, title and
interest in, to and under the Purchased Assets and to assume all of the
Assumed Liabilities.
(iv) Cambrex and Buyer (or their respective Affiliates)
will execute and deliver the Transition Services Agreement and the
Supply Agreements.
SECTION 2.08. Working Capital Adjustment. (a) Within thirty (30) days
following the Closing Date, Buyer and its Representatives shall conduct a
physical count of the Inventory as of the close of business on the Closing Date.
Cambrex and its Representatives shall be entitled to observe such physical count
of the Inventory. The results of the physical count of the Inventory shall be
used to prepare the Working Capital Schedule (defined below).
15
(b) As soon as practicable, but in no event more than ninety (90)
days following the Closing Date, Buyer shall deliver to Cambrex a schedule (the
"Working Capital Schedule") setting forth its calculation of (i) the Working
Capital Assets and the Working Capital Liabilities as of the Closing Date and
the amount by which such Working Capital Assets exceeds such Working Capital
Liabilities (the "Closing Date Working Capital Amount") and (ii) the amount, if
any, by which the Purchase Price should be adjusted, either (x) upward by the
amount and to the extent that the Closing Date Working Capital Amount is greater
than $42,765,000 (the "Target") or (y) downward by the amount and to the extent
that the Closing Date Working Capital Amount is less than the Target; provided
that the Purchase Price shall not be adjusted, upward or downward, if the
Closing Date Working Capital Amount is equal to or greater than $42,515,000 but
less than or equal to $43,015,000 (such adjustment being the "Working Capital
Amount Due").
(c) Cambrex may notify Buyer in writing within thirty (30) days
following delivery of the Working Capital Schedule (the "Adjustment Period")
that Cambrex (i) agrees with the Working Capital Schedule (an "Approval Notice")
or (ii) disagrees with the Working Capital Schedule, identifying with
specificity the items with which Cambrex disagrees and the amount involved and
Cambrex's good faith estimate of the Closing Date Working Capital Amount (a
"Dispute Notice"). Any items not specifically identified in the Dispute Notice
shall be deemed accepted by Sellers. Upon receipt by Buyer of a Dispute Notice,
Buyer and Buyer's accountants, on the one hand, and Cambrex and Cambrex's
accountants, on the other hand, will use good faith efforts during the thirty
(30) day period following the date of receipt of a Dispute Notice (the
"Resolution Period") to resolve any differences they may have as to the
calculations of the Closing Date Working Capital Amount as identified in the
Dispute Notice. Cambrex may request, and Buyer shall provide, reasonable access
during normal business hours to the information and data used to calculate the
Closing Date Working Capital Amount. If Cambrex and Buyer cannot reach written
agreement during the Resolution Period, within ten (10) business days
thereafter, their disagreements, limited to only those issues specified in the
Dispute Notice still in dispute, may be submitted by either party to an
independent, nationally-recognized United States public accounting firm jointly
selected by Buyer's accountants and Cambrex's accountants (the "Independent
Accountant"), which firm shall conduct such additional review as is necessary to
resolve the specific disagreements referred to it. Based upon such review, the
Independent Accountant shall determine the Closing Date Working Capital Amount
(the "Independent Accountant Determination"). Such determination shall be
completed as promptly as practicable but in no event later than thirty (30) days
following the selection of the Independent Accountant and shall be confirmed by
the Independent Accountant in writing to, and shall be final and binding on,
Buyer and Cambrex for purposes of this Section 2.08.
(d) The fees and expenses of the Independent Accountant shall be
borne by Buyer and Cambrex in the inverse proportion as they may prevail on
matters resolved by the Independent Accountant, which proportionate allocations
shall also be determined by the Independent Accountant at the time the
determination of the Independent Accountant is rendered on the merits of the
matters submitted.
(e) Within five (5) business days after the earlier of (i) the
receipt by Buyer of an Approval Notice, (ii) the expiration of the Adjustment
Period if Buyer has not received an Approval Notice or a Dispute Notice within
such period, (iii) the expiration of the Resolution
16
Period if Buyer and Cambrex have resolved all differences regarding the Working
Capital Schedule within such period and (iv) the receipt of the Independent
Accountant Determination, Buyer or Cambrex, as applicable, shall pay to the
other any Working Capital Amount Due, as agreed or determined, by wire transfer
of immediately available funds without set-off or deduction of any kind. The
amount of any such payment shall bear interest from and including the Closing
Date to but excluding the date of payment at a rate per annum equal to the Prime
Rate as published in The Wall Street Journal, Eastern Edition in effect from
time to time during the period from the Closing Date to the date of payment.
Such interest shall be payable at the same time as the payment to which it
relates and shall be calculated daily on the basis of a year of 365 days and the
actual number of days elapsed.
SECTION 2.09. Cash/Debt Adjustment. (a) Prior to the Closing, Sellers
shall cause the Acquired Subsidiary to (i) to the extent reasonably practicable,
distribute all of its cash to one or more of the Sellers and (ii) repay all of
its Indebtedness. Within thirty (30) days following the Closing Date, Buyer
shall deliver to Cambrex a schedule (the "Net Cash Schedule") setting forth (i)
the amount of Cash (the "Cash Amount") and the amount of Indebtedness (the "Debt
Amount") of the Acquired Subsidiary as of the Closing Date and (ii) the amount
by which the Purchase Price should be adjusted, on a dollar-for-dollar basis,
either (x) upward if and to the extent that the Cash Amount exceeds the Debt
Amount or (y) downward if and to the extent that the Debt Amount exceeds the
Cash Amount; provided, however, that the Cash Amount shall not include any Cash
that the Acquired Subsidiary is prohibited contractually or by Law from
distributing to Cambrex or any of its Affiliates on the Closing Date either in
the form of a dividend, as a prepayment of a loan or otherwise. Cambrex and
Buyer shall cooperate fully in order to determine the Cash Amount and the Debt
Amount.
(b) Cambrex may notify Buyer in writing within ten (10) business
days following delivery of the Net Cash Schedule (the "Net Cash Adjustment
Period") that Cambrex (i) agrees with the Net Cash Schedule (a "Net Cash
Approval Notice") or (ii) disagrees with the Net Cash Schedule, identifying with
specificity the items with which Cambrex disagrees and the amount involved and
Cambrex's good faith estimate of the Cash Amount and the Debt Amount (a "Net
Cash Dispute Notice"). Any items not specifically identified in the Net Cash
Dispute Notice shall be deemed accepted by Cambrex. Upon receipt by Buyer of a
Net Cash Dispute Notice, Cambrex and Cambrex's accountants, on the one hand, and
Buyer and Buyer's accountants, on the other hand, will use good faith efforts
during the thirty (30) day period following the date of receipt of a Net Cash
Dispute Notice (the "Net Cash Resolution Period") to resolve any differences
they may have as to the calculations of the Cash Amount and the Debt Amount as
identified in the Net Cash Dispute Notice. Cambrex may request, and Buyer shall
provide, reasonable access during normal business hours to the information and
data used to calculate the Cash Amount and the Debt Amount. If Cambrex and Buyer
cannot reach written agreement during the Resolution Period, within ten (10)
business days thereafter, their disagreements, limited to only those issues
specified in the Net Cash Dispute Notice still in dispute, may be submitted by
either party to an Independent Accountant, which firm shall conduct such
additional review as is necessary to resolve the specific disagreements referred
to it. Based upon such review, the Independent Accountant shall determine the
Cash Amount and the Debt Amount (the "Net Cash Determination"). Such
determination shall be completed as promptly as practicable but in no event
later than thirty (30) days following the selection of the Independent
17
Accountant and shall be confirmed by the Independent Accountant in writing to,
and shall be final and binding on, Buyer and Cambrex for purposes of this
Section 2.09.
(c) The fees and expenses of the Independent Accountant shall be
borne by Buyer and Cambrex in the inverse proportion as they may prevail on
matters resolved by the Independent Accountant, which proportionate allocations
shall also be determined by the Independent Accountant at the time the
determination of the Independent Accountant is rendered on the merits of the
matters submitted.
(d) Within five (5) business days after the earlier of (i) the
receipt by Buyer of an Approval Notice, (ii) the expiration of the Net Cash
Adjustment Period if Buyer has not received a Net Cash Approval Notice or a Net
Cash Dispute Notice within such period, (iii) the expiration of the Net Cash
Resolution Period if Buyer and Cambrex have resolved all differences regarding
the Net Cash Schedule within such period and (iv) the receipt of the Net Cash
Determination, Buyer or Cambrex, as applicable, shall pay to the other any Cash
Amount or Debt Amount due, as agreed or determined, by wire transfer of
immediately available funds without set-off or deduction of any kind. The amount
of any such payment shall bear interest from and including the Closing Date to
but excluding the date of payment at a rate per annum equal to the Prime Rate as
published in The Wall Street Journal, Eastern Edition in effect from time to
time during the period from the Closing Date to the date of payment. Such
interest shall be payable at the same time as the payment to which it relates
and shall be calculated daily on the basis of a year of 365 days and the actual
number of days elapsed.
SECTION 2.10. Prorations. To the extent not reflected in the Working
Capital Schedule, the following prorations relating to the Purchased Assets and
the ownership and operation of the Xxxxxxxxxx Chemicals Business will be made,
with Sellers liable to the extent such items relate to any time period prior to
and including the Closing Date and Buyer liable to the extent such items relate
to periods subsequent to the Closing Date:
(a) Real estate Taxes on or with respect to the Purchased Assets.
(b) Rents, additional rents, Taxes and other items payable by or
to, if applicable, any Seller under any leases relating to the Real Property.
(c) Taxes and charges for sewer, water, telephone, electricity and
other utilities relating to the Real Property.
Except as otherwise agreed by the parties, the net amount of all such prorations
will be settled and paid upon settlement by the parties of the Working Capital
Amount Due in accordance with Section 2.08 or, if it is determined that no such
amount is due, within five (5) business days after the date of such
determination.
SECTION 2.11. Additional Payments
(a) (i) If for any of the years ending on December 31, 2004
(the "First Calculation Period"), December 31, 2005 (the "Second Calculation
Period") and December 31, 2006 (the "Third Calculation Period" and each, a
"Calculation Period"), respectively, the Company EBITDA (as defined below) is in
excess of $14,000,000 (the "EBITDA Target"), then
18
Buyer shall pay to Cambrex an Additional Payment equal to one-half of the amount
by which the Company EBITDA for the applicable Calculation Period exceeds the
EBITDA Target, provided that the Additional Payment for any Calculation Period
shall in no event exceed the maximum amount (for each period, the "Maximum
Amount") set forth immediately below:
Calculation Period: Maximum Amount:
------------------ --------------
First Calculation Period $2,000,000
Second Calculation Period $2,500,000
Third Calculation Period $3,500,000
(ii) To the extent the Additional Payment made in
connection with the First Calculation Period is less than the Maximum
Amount for such period, the Maximum Amount for the Second Calculation
Period shall be increased by an amount equal to such shortfall.
Likewise, to the extent the Additional Payment made in connection with
the Second Calculation Period is less than the Maximum Amount for such
period (as adjusted to take into account any shortfall in connection
with the First Calculation Period), the Maximum Amount for the Third
Calculation Period shall be increased by such shortfall. No Additional
Payment shall become due or owing after the Third Calculation Period,
and the maximum aggregate amount of all Additional Payments (including
any payment pursuant to Section 2.11(d) below) shall not exceed
$8,000,000.
(iii) Each Additional Payment shall be deemed to comprise
principal and interest on such principal, at the lowest rate necessary
to avoid the imposition of imputed interest on the Additional Payments
under the Code.
(iv) If during the Calculation Periods, Buyer sells assets
or a business division that, individually or in the aggregate when
taken together with all such prior sales, contributed $500,000 or more
to Buyer's earnings before interest, taxes, depreciation and
amortization during the 12 months immediately prior to such sale or
sales, the EBITDA Target shall be reduced, as reasonably determined by
the board of directors of Buyer, to reflect the contribution to
earnings before interest, taxes, depreciation and amortization of the
division or assets sold, as such amounts are determined in accordance
with GAAP consistently applied; provided that once the $500,000
aggregate threshold has been reached, the EBITDA Target will only be
further reduced upon the occurrence of individual sales of assets or a
business division that contributed at least $100,000 to such earnings
during the immediately preceding 12-month period.
(b) "Company EBITDA" for each Calculation Period shall mean the
earnings of Buyer from the continuing operations of the Xxxxxxxxxx Chemicals
Business, before any adjustments for interest, taxes, depreciation or
amortization and shall be determined as set forth in Section 2.11(c) below.
Buyer agrees that in no event will Company EBITDA take into
19
account fees payable to Arsenal Capital Management LP and its Affiliates that
are in excess of the fees permitted under the agreement executed in connection
with the senior financing for the transactions contemplated hereunder (as such
agreement may be amended from time to time, the "Financing Agreement"). As of
the date hereof, the Financing Agreement permits management fees to be paid to
Arsenal Capital Management LP in an amount not to exceed $350,000 per annum.
(c) Within 120 days following the end of each Calculation Period,
Buyer shall prepare and deliver to Cambrex (i) audited financial statements of
Buyer prepared in accordance with GAAP on a consistent basis over the
Calculation Periods, accompanied by an audit opinion (which shall be unqualified
as the scope of the audit) from KPMG LLP (or such other nationally recognized
firm of independent public accountants as shall be selected by Buyer) (the
"Audited Financial Statements"), which Audited Financial Statements shall be in
the same form and delivered at the same time as the audited financial statements
of Buyer delivered to Buyer's lenders, (ii) a statement setting forth in
reasonable detail Buyer's calculation of the Company EBITDA (the "EBITDA
Statement") for such period, prepared and based solely upon the Audited
Financial Statements for the applicable Calculation Period, together with a
certificate of such independent accountants as to the accuracy of such
calculation and (iii) a statement setting forth the amount, if any, of the
applicable Additional Payment to be made to Cambrex. Within five (5) days
following the receipt by Cambrex of the documents described in clauses (i)-(iii)
above (unless prohibited by Buyer's lenders under the Financing Agreement, in
which case such payment will be made at such later date as first may be
permitted by Buyer's lenders), Buyer shall pay to Cambrex the amount of the
applicable Additional Payment by wire transfer of immediately available funds,
to an account designated by Cambrex.
(d) Upon the occurrence of a Change of Control prior to the end of
the Third Calculation Period, Buyer agrees to make a lump sum payment in cash to
Cambrex in satisfaction of Buyer's obligations under this Section 2.11 as
follows:
(i) If after giving effect to the transactions
constituting such Change of Control, and after giving effect to all
Additional Payments made under this Section 2.11 (including, without
limitation, under this clause (d)), the equity investment in Buyer
results in an IRR of greater than thirty percent (30%) but less than
forty percent (40%) per annum, Buyer shall pay to Cambrex an amount
equal to $6,000,000 minus the amount of all Additional Payments made to
Cambrex prior to the Change of Control.
(ii) If after giving effect to the transactions
constituting such Change of Control, and after giving effect to all
Additional Payments made under this Section 2.11 (including, without
limitation, under this clause (d)), the equity investment in Buyer
results in an IRR of greater than forty percent (40%) per annum, Buyer
shall pay to Cambrex an amount equal to $8,000,000 minus the amount of
all Additional Payments made to Cambrex prior to the Change of Control.
(e) In the event Buyer's lenders prohibit the funding of any
Additional Payment or portion thereof that is otherwise determined under Section
2.11(a)-(d) to be due and owing,
20
Buyer agrees that no distributions will be made on its equity securities from
the time of such prohibition until all Additional Payments due and owing to
Cambrex have been paid in full. In the event of any such prohibition by Buyer's
lenders, Buyer shall use commercially reasonable efforts to deliver to Cambrex a
letter from such lender indicating that the payment of an Additional Payment has
been prohibited and setting forth in reasonable detail the basis for such
prohibition. Buyer represents that the Financing Agreement will not, in the
absence of certain defaults specified thereunder, prohibit the making of
Additional Payments under this Section 2.11.
(f) Access to Work Papers. Buyer shall use commercially reasonable
efforts to cause its accountants to provide Cambrex with access to the audit
work papers prepared in connection with the annual audits delivered to Cambrex
under Section 2.11(c) above, upon execution by Cambrex of satisfactory releases
in favor of such accountants.
(g) Right of Setoff. Buyer shall have the option of setting off
all or any portion of any Additional Payment owing hereunder against any amount
that Cambrex has been finally determined to owe to Buyer under this Agreement,
by notifying Cambrex that Buyer is reducing the amount of an Additional Payment
by such amount owed to Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CAMBREX
Cambrex represents and warrants to Buyer that the statements contained
in this Article III are true and correct as of the date of this Agreement,
including all information referenced in and set forth in the Seller Disclosure
Schedule. Buyer and Cambrex agree that for purposes of this Agreement, the sole
representations and warranties of Cambrex and Sellers made to Buyer with respect
to Environmental Liabilities shall be set forth in Section 3.18.
SECTION 3.01. Corporate Existence and Power. Cambrex and each of the
Sellers is a corporation duly incorporated, validly existing and in good
standing under the Laws of its jurisdiction of incorporation and has all
corporate powers and all material Licenses required to carry on its business as
now conducted. Section 3.01 of the Seller Disclosure Schedule sets forth the
jurisdiction of incorporation of each of the Sellers and the Acquired Subsidiary
and each jurisdiction in which each of the Sellers and the Acquired Subsidiary
files sales, VAT or income Tax Returns, or exemptions therefrom. Each of the
Sellers is a wholly-owned Subsidiary of Cambrex.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by Cambrex and each of the Sellers of this Agreement and the
agreements to be delivered herewith and the consummation by them of the
transactions contemplated hereby and thereby are within their respective
corporate powers and authority and have been duly authorized by all necessary
corporate action on the part of Cambrex and each of the Sellers, including by
each of their boards of directors. This Agreement constitutes a legal, valid and
binding agreement of Cambrex and each of the Sellers enforceable against Cambrex
and each of the Sellers in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization,
21
moratorium or other similar Laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
SECTION 3.03. Governmental Authorization. Except as set forth in
Section 3.03 of the Seller Disclosure Schedule, the execution, delivery and
performance by Cambrex and each of the Sellers of this Agreement and the
agreements to be delivered herewith and the consummation of the transactions
contemplated hereby and thereby by Cambrex and each of the Sellers require no
action, consent or approval by or in respect of, or filing with, any
Governmental or Regulatory Authority other than compliance with any applicable
requirements of the HSR Act.
SECTION 3.04. Noncontravention. Except as set forth in Section 3.04 of
the Seller Disclosure Schedule, the execution, delivery and performance by
Cambrex and each of the Sellers of this Agreement and the agreements to be
delivered herewith and the consummation of the transactions contemplated hereby
and thereby by Cambrex and by each of the Sellers do not and will not (i)
violate the certificate of incorporation or bylaws (or comparable charter
documents) of Cambrex or any Seller or the Acquired Subsidiary, (ii) assuming
compliance with the matters referred to in Section 3.03, violate in any material
respect any applicable Law or Order, (iii) assuming the obtaining of all
Required Consents, require any consent or other action by any Person under,
constitute a material breach or violation of or default under, or give rise to
any right of termination, cancellation or acceleration of any material right or
obligation or to a loss of any material benefit under, any material Contract or
(iv) result in the creation or imposition of any Lien on any Purchased Asset.
SECTION 3.05. Required Consents. Section 3.05 of the Seller Disclosure
Schedule sets forth each material Contract requiring a consent, notice or other
action by any Person as a result of the execution, delivery or performance of
this Agreement by Cambrex or any of the Sellers or the consummation by Cambrex
or any of the Sellers of the transactions contemplated hereby (the "Required
Consents"). No party to the Contract referred to as the last item in Section
3.05 of the Seller Disclosure Schedule will have any right to purchase any of
the Purchased Assets by virtue of the execution, delivery or performance of this
Agreement or the consummation of any of the transactions contemplated hereby.
SECTION 3.06. Acquired Subsidiary. (a) The Acquired Subsidiary is a
corporation duly incorporated and validly existing under the Laws of its
jurisdiction of incorporation and has all corporate powers and all material
Licenses required to carry on its business as now conducted. Section 3.06(a) of
the Seller Disclosure Schedule sets forth a true and complete description of the
Acquired Subsidiary Shares.
(b) Except as set forth in Section 3.06(b) of the Seller
Disclosure Schedule, the Acquired Subsidiary Shares constitute all of the issued
and outstanding shares of capital stock of the Acquired Subsidiary, all of which
is owned by Cambrex Ltd. (a wholly-owned Subsidiary of Cambrex), free and clear
of any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock). There are no outstanding (i) securities convertible into or exchangeable
for shares of capital stock of the Acquired Subsidiary or (ii) obligations of
the Acquired Subsidiary or any of its Affiliates to issue any capital stock or
securities convertible into or exchangeable for any capital stock of the
22
Acquired Subsidiary. There are no (x) outstanding obligations of the Acquired
Subsidiary or any of its Affiliates to repurchase, redeem or otherwise acquire
any outstanding capital stock of the Acquired Subsidiary or (y) outstanding
preemptive rights.
(c) Except as set forth in Section 3.06(c) of the Seller
Disclosure Schedule, the Acquired Subsidiary does not own, directly or
indirectly, any interest or investment in any corporation, company, partnership,
joint venture, trust or other entity.
(d) The copies of the memorandum and articles of association of
the Acquired Subsidiary delivered to Buyer prior to the execution of this
Agreement are complete and accurate, have attached to them copies of all
resolutions and other documents required by Law to be so attached and set forth
the rights and restrictions attaching to each class of share capital of the
Acquired Subsidiary.
(e) Except as set forth in Section 3.06(e) of the Seller
Disclosure Schedule, the Acquired Subsidiary does not have outstanding any
Indebtedness.
(f) The current directors of the Acquired Subsidiary are listed in
Section 3.06(f) of the Seller Disclosure Schedule. Other than Xxxxx Xxxxxx and
Xxxxxxxxx Xxxxxxxx, all such directors are Business Employees.
SECTION 3.07. Litigation. (a) Except as set forth in Section 3.07(a) of
the Seller Disclosure Schedule, there is no Action or Proceeding pending
against, or to the knowledge of Sellers threatened against or affecting,
Cambrex, any Seller, the Acquired Subsidiary, the U.K. Pension Scheme, the
Purchased Assets or that relate to the Xxxxxxxxxx Chemicals Business by any
Person or before any Governmental or Regulatory Authority. As of the date of
this Agreement, there is no such Action or Proceeding pending or, to the
knowledge of Sellers, threatened which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.
(b) Except as set forth in Section 3.07(b) of the Seller
Disclosure Schedule, there are no Orders outstanding against any of the Sellers,
the Acquired Subsidiary, the Purchased Assets or the Xxxxxxxxxx Chemicals
Business.
SECTION 3.08. Compliance with Laws and Court Orders. (a) Neither
Cambrex, any Seller nor the Acquired Subsidiary is in violation of, or in
default under, any Law or Order applicable to such Person or the Purchased
Assets or the conduct of the Xxxxxxxxxx Chemicals Business in any material
respect.
(b) Except as set forth in Section 3.08(b) of the Seller
Disclosure Schedule, Sellers and the Acquired Subsidiary own or validly hold all
material Licenses necessary to own or lease the Purchased Assets and to conduct
the Xxxxxxxxxx Chemicals Business as conducted on the date hereof.
(c) Except as set forth in Section 3.08(c) of the Seller
Disclosure Schedule, neither any of the Sellers nor the Xxxxxxxxxx Chemicals
Business is taking or in the last two (2) years has taken any action with
respect to any Law that has been proposed to be enacted which, if enacted, could
reasonably be expected to have a Material Adverse Effect.
23
SECTION 3.09. Financial Statements; Undisclosed Liabilities. (a) The
unaudited financial statements of the Xxxxxxxxxx Chemicals Business as of
December 31, 2001, December 31, 2002, June 30, 2003 and those dated as of
September 30, 2003 (the "Latest Balance Sheet"), and the related unaudited
statements of income for the years, six (6) month period and three (3) month
period then ended, respectively, are attached hereto in Section 3.09(a) of the
Seller Disclosure Schedule and are derived from the books and records of Cambrex
(which have been maintained in all material respects in accordance with good
business practices), are true and correct in all material respects, except as
set forth in Section 3.09(a) of the Seller Disclosure Schedule, have been
prepared in accordance with United States GAAP, consistently applied, and fairly
present in all material respects the financial condition and results of
operations, assets and liabilities of the Xxxxxxxxxx Chemicals Business as of
the dates thereof and for the periods covered thereby.
(b) Neither any Seller nor the Acquired Subsidiary has any
liabilities, whether accrued, absolute, contingent or otherwise, which
individually or in the aggregate are material to the Xxxxxxxxxx Chemicals
Business, except (i) liabilities or obligations that are specifically set forth
on Annex A to this Agreement as Assumed Liabilities, (ii) liabilities or
obligations set forth in Section 3.09(b) of the Seller Disclosure Schedule or
reflected on the face of the Latest Balance Sheet (rather than in any notes
thereto) and (iii) Excluded Liabilities.
(c) Since the date of the Latest Balance Sheet, except as
disclosed in Section 3.09(c) of the Seller Disclosure Schedule, there has not
been any event or development which, individually or in the aggregate with other
such events, has had or could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10. Product Liability. Except as set forth in Section 3.10 of
the Seller Disclosure Schedule, there is no Action or Proceeding by any Person
or before any Governmental or Regulatory Authority pending or, to Sellers'
knowledge, threatened against or involving the Xxxxxxxxxx Chemicals Business or
the Acquired Subsidiary arising out of any personal injury or death or damage to
property (or alleged personal injury or damage to property) arising in
connection with or relating to any product designed, manufactured, sold,
distributed, marketed or provided by or on behalf of the Xxxxxxxxxx Chemicals
Business.
SECTION 3.11. Business Contracts. (a) Section 3.11 of the Seller
Disclosure Schedule contains a true and complete list of each of the following
Contracts to which any Seller or the Acquired Subsidiary is a party used in or
related to the operation or conduct of the Xxxxxxxxxx Chemicals Business:
(i) any lease (whether of real or personal property) that
cannot be terminated within sixty (60) days after giving notice of
termination without payment by such Seller or Acquired Subsidiary of a
penalty;
(ii) any Contract for the purchase of materials, supplies,
goods, services, equipment or other assets that involves payment by any
Seller or any of its Affiliates of more than $50,000 or that cannot be
terminated on less than thirty (30) days notice without payment of a
penalty;
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(iii) any sales, distribution or other similar Contract
that involves payment to any Seller or the Acquired Subsidiary of more
than $50,000 for the sale of materials, supplies, goods, services,
equipment or other assets;
(iv) any partnership, joint venture or other similar
Contract;
(v) any Contract relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of
assets or otherwise);
(vi) any Contract relating to Indebtedness;
(vii) any Contract that limits the freedom of any Seller or
the Acquired Subsidiary to compete in any line of business or with any
Person or in any area or is having or could reasonably be expected to
have the effect of prohibiting or impairing any current business
practice of a Seller or the Acquired Subsidiary in connection with the
conduct of the Xxxxxxxxxx Chemicals Business or the conduct of the
Xxxxxxxxxx Chemicals Business by a Seller or the Acquired Subsidiary as
currently conducted, including any non-disclosure or confidentiality
agreements;
(viii) any Contract pursuant to which any Seller or any
Affiliate of any Seller provides any services to any entity
constituting the Xxxxxxxxxx Chemicals Business;
(ix) any collective bargaining agreement (or similar labor
Contract) or litigation settlement agreement (or similar Contract)
covering any Business Employee;
(x) any Contract with a Governmental or Regulatory
Authority;
(xi) any license, royalty, indemnification (or other
similar Contract) relating to the Business Intellectual Property
Rights; or
(xii) any other Contract (other than Plans and insurance
policies) that involve the payment or potential payment, pursuant to
the terms of any such Contract, by or to Seller or the Acquired
Subsidiary of more than $50,000 annually.
(b) Each Contract required to be disclosed pursuant to Section
3.11(a) is a legal, valid, binding and enforceable agreement of a Seller or the
Acquired Subsidiary and will continue to be a legal, valid, binding and
enforceable agreement of the applicable Seller or the Acquired Subsidiary,
without any payment or penalty, upon the consummation of the transactions
contemplated by this Agreement. A true and correct copy of each such Contract
(together with all amendments and attachments thereto) has been provided to
Buyer. Neither any Seller nor the Acquired Subsidiary is in breach of or in
default under the terms of any such Contract in any material respect, and no
event has occurred which with the passage of time or the giving of notice would
constitute any such breach or default. To the knowledge of Sellers, no other
party thereto (other than a Seller or the Acquired Subsidiary) is in breach of
or in default under the terms of any such Contract in any material respect, and
no event has occurred which with the passage of time or the giving of notice
would constitute any such breach or default.
25
SECTION 3.12. Real Property. (a) Section 3.12(a) of the Seller
Disclosure Schedule describes all real property, other than the Excluded
Property, used or held for use primarily in the Xxxxxxxxxx Chemicals Business
which any of the Sellers or the Acquired Subsidiary own or operate (the "Real
Property"). Neither any Seller nor the Acquired Subsidiary leases any real
property for use in the Xxxxxxxxxx Chemicals Business.
(b) Either a Seller or the Acquired Subsidiary has good title to
all the Real Property, subject only to such exceptions as would not,
individually or in the aggregate, materially impair the value or materially
interfere with or prevent the present use of the applicable Real Property.
Except as set forth in Section 3.12(b) of the Seller Disclosure Schedule, there
are no events or circumstances, including Legal Compliance Proceedings,
affecting any of the Real Property pending or, to the knowledge of Sellers
threatened, which could reasonably be expected to materially impair the value or
materially interfere with the present use of the applicable Real Property. No
Real Property is subject to any Lien, except:
(i) Liens disclosed in Section 3.12(b) of the Seller
Disclosure Schedule;
(ii) Liens for Taxes, assessments and similar charges that
are not yet due;
(iii) mechanic's, materialman's, carrier's, repairer's and
other similar inchoate Liens, arising and incurred in the ordinary
course of business, that are not yet due and payable; or
(iv) easements, covenants, conditions, restrictions and
other similar matters of record which could not, individually or in the
aggregate, reasonably be expected to materially interfere with or
prevent the present use of the Real Property to which such Lien relates
or materially detract from its value (the types of Liens referred to in
clauses (i) through (iv) of this Section 3.12(b) are referred to
herein, collectively, as the "Permitted Liens").
(c) Except as set forth in Section 3.12(c) of the Seller
Disclosure Schedule, (i) there are no leases, subleases, licenses, concessions
or other agreements, written or oral, granting to any Person the right of use or
occupancy of any portion of the Real Property; (ii) there are no outstanding
options or rights of first refusal to purchase the Real Property (other than the
right of Buyer pursuant to this Agreement), or any portion thereof or interest
therein; and (iii) neither any Seller nor the Acquired Subsidiary is a party to
any agreement or option to purchase any real property or interest therein.
(d) All utilities currently servicing the Real Property are
installed, connected and operating and are sufficient for the operation of the
Business as currently conducted thereon.
(e) All permanent certificates of occupancy and all other material
licenses, permits, authorizations, consents, certificates and approvals required
by all Governmental or Regulatory Authorities having jurisdiction and the
requisite certificates of the local board of fire underwriters (or other body
exercising similar functions) have been issued for the Real Property
26
(and all individual items constituting the Real Property), have been paid for,
are in full force and effect and are assignable without the need for third party
consent by the applicable Seller.
(f) No Seller has received any written notice of any pending or
threatened condemnation proceedings in the nature of eminent domain in
connection with any parcel of the Real Property.
(g) No Seller has received any written notice from the holder of
any mortgage presently encumbering the Real Property, any insurance company
which has issued a policy presently insuring the Real Property or from any board
of fire underwriters (or other body exercising similar functions) claiming any
defects or deficiencies in the Real Property, or requiring the performance of
any repairs, alterations or other work to the Real Property, which has not been
appropriately addressed.
(h) Except as set forth in Section 3.12(h) of the Seller
Disclosure Schedule, to Sellers' knowledge, there are no defects in the
buildings, improvements and structures and fixtures located on or at the Real
Property which is currently materially impairing the conduct of the Xxxxxxxxxx
Chemicals Business. The mechanical, electrical, plumbing, HVAC and other systems
servicing the Real Property are in good working order and repair, ordinary wear
and tear excepted, and there are no defects in such systems which could
reasonably be expected to materially impair the conduct of the Xxxxxxxxxx
Chemical Business by Buyer immediately following the Closing.
(i) To Sellers' knowledge, the Seal Sands Facility has not been
affected by flooding or subsidence.
(j) The Seal Sands Facility is not subject to any outgoings other
than uniform business rates, water rates, Taxes or other usual and customary
payments.
(k) Except as set forth in Section 3.12(k) of the Seller
Disclosure Schedule, to the knowledge of Sellers, there are no agreements,
orders, licenses, permits, conditions or other directives, issued by a
Governmental or Regulatory Authority, which relate to the future use or require
any change in the present use or operations of the Real Property.
(l) The operation and use of the buildings and other improvements
constituting the Real Property do not violate any material zoning, subdivision,
building or similar Law, or any Order, ordinance, or recorded plat or
certificate of occupancy issued with respect to the Real Property which
individually or in the aggregate is material to the operation of the Real
Property.
SECTION 3.13. Intellectual Property. (a) Except as set forth in Section
3.13(a) of the Seller Disclosure Schedule, a Seller or an Affiliate of a Seller
owns (or in the case of Business Intellectual Property Rights that are licensed,
has the right to use), free and clear of any Lien (except in the case of
licenses, any Lien arising from the terms of the license itself), all of the
Business Intellectual Property Rights. "Business Intellectual Property Rights"
means all Intellectual Property Rights used primarily in the conduct of the
Xxxxxxxxxx Chemicals Business, and all goodwill associated therewith; provided
that "Business Intellectual Property Rights" do not include Third Party
Software. The Business Intellectual Property Rights (together with the Third
Party Software, which are Excluded Assets and are not being transferred pursuant
to this
27
Agreement) constitute all Intellectual Property Rights necessary for the
operation of the Xxxxxxxxxx Chemicals Business as currently conducted.
(b) Section 3.13(b) of the Seller Disclosure Schedule sets forth a
complete and correct list of all licenses of Business Intellectual Property
Rights, patents and patent applications, registered and material unregistered
trademarks and service marks, trade and brand names and logos, domain names,
trademark and service xxxx applications and registered copyrights and copyright
applications included in the Business Intellectual Property Rights. Except as
set forth in Section 3.13(b) of the Seller Disclosure Schedule, all filings and
recordations necessary to protect and maintain the interest of Sellers and/or
their Affiliates in, as well as all maintenance and renewal fees and other
payments in respect of, all such patents, patent applications, trademark and
service xxxx registrations, trademark and service xxxx applications and
copyright registrations and copyright applications, as well as all material
licenses of Business Intellectual Property Rights, have been made. Sellers and
their Affiliates are taking, and will continue to take prior to the Closing, all
commercially reasonable actions necessary and desirable to maintain and protect
all of the Business Intellectual Property, and will continue to maintain and
protect all of the Business Intellectual Property prior to the Closing.
(c) Except as set forth in Section 3.13(c) of the Seller
Disclosure Schedule, (i) there is no pending claim of any Person pertaining to,
or any Action or Proceeding pending or, to the knowledge of Sellers, threatened,
which challenges the rights of Sellers or any of their Affiliates in respect of,
or the validity or enforceability of, the Business Intellectual Property Rights,
or which relates to the Intellectual Property Rights of a third party and arises
out of any manufacture, use, reproduction, sale or distribution in connection
with the Xxxxxxxxxx Chemicals Business of such third-party Intellectual Property
Rights by Sellers or any of their Affiliates; (ii) none of the Business
Intellectual Property Rights is subject to any outstanding Order; and (iii) none
of the products manufactured, distributed, licensed and/or sold by Sellers and
its Affiliates in connection with the Xxxxxxxxxx Chemicals Business infringes
on, misappropriates or otherwise conflicts with any Intellectual Property Rights
held, owned or used by any third party and, to the knowledge of Sellers, none of
the Business Intellectual Property Rights is being infringed upon by any third
party.
(d) Except as set forth in Section 3.13(d) of the Seller
Disclosure Schedule, (i) each patent, patent application, trademark or service
xxxx registration, trademark or service xxxx application, copyright registration
and copyright application of Sellers and/or their Affiliates included in the
Business Intellectual Property Rights is valid, subsisting and enforceable, and
(ii) each material license of Business Intellectual Property Rights is valid,
subsisting and enforceable. Immediately following the Closing, the Business
Intellectual Property Rights will be owned or available for use by Buyer in the
conduct of the Xxxxxxxxxx Chemicals Business on identical terms and conditions
as owned or available for use by Sellers or the Acquired Subsidiary immediately
prior to the Closing.
(e) Except as set forth in Section 3.13(e) of the Seller
Disclosure Schedule, there are no agreements relating to any material Business
Intellectual Property Right which require consents of any Person in connection
with the consummation of the transactions contemplated by this Agreement. Except
as set forth in Section 3.13(e) of the Seller Disclosure Schedule, neither the
execution, delivery and performance of this Agreement by any Seller nor the
consummation
28
of the transactions contemplated hereby by any Seller or any of its Affiliates
will (i) require any Seller or any of its Affiliates to obtain any consent or
approval of or by any other contracting party with respect to any Business
Intellectual Property Right; or (ii) result in a breach or violation of, or a
material default (or give rise to any right of termination or a claim for
injunctive relief) under, any of the terms, conditions or provisions of or any
Contract relating to any Business Intellectual Property Rights.
(f) Except as set forth in Section 3.13(f) of the Seller
Disclosure Schedule, the computer systems, including the software, hardware,
networks and interfaces used in the conduct of the Xxxxxxxxxx Chemicals Business
(collectively, "Systems") are sufficient for the immediate needs of the Sellers
and the Acquired Subsidiary, and, with the exception of the Third Party
Software, are part of the Purchased Assets. Except as set forth in Section
3.13.(f) of the Disclosure Schedule, all systems, other than Third Party
Software, used in the Xxxxxxxxxx Chemicals Business are owned and operated by
and are under the control of the Sellers or Acquired Subsidiary and are not
wholly or partly dependent on any facilities that are not under the ownership,
operation or control of the Sellers or Acquired Subsidiary.
SECTION 3.14. Insurance Coverage. Sellers have made available to Buyer
a list of all insurance policies and fidelity bonds relating to the Xxxxxxxxxx
Chemicals Business and the Purchased Assets. Except as set forth in Section 3.14
of the Seller Disclosure Schedule, there are no material claims by any Seller or
any of its Affiliates pending under any of such policies or bonds as to which
coverage is currently being questioned, denied or disputed by the underwriters
of such policies or bonds or in respect of which such underwriters are reserving
their rights. Such insurance policies are placed with financially sound and
reputable insurers and, in light of the nature of the Xxxxxxxxxx Chemicals
Business and the Purchased Assets, are in amounts and have coverages that are
reasonable and customary for Persons engaged in a such business. To the
knowledge of Sellers, no Seller or any of its Affiliates has suffered the
involuntary cancellation of any existing insurance policy relating to the
Xxxxxxxxxx Chemicals Business and the Purchased Assets in the past five (5)
years.
SECTION 3.15. Employees. (a) Section 3.15(a) of the Seller Disclosure
Schedule sets forth as of three (3) business days prior to execution of this
Agreement a true and complete list of (a) the names, titles, service dates,
annual salaries and other compensation and locations of all Business Employees
whose annual base salary exceeds $100,000 (or, in the case of an Other Business
Employee, an amount equivalent to $100,000 in such person's local currency), (b)
a list of the total number of Business Employees by location, including status
as a temporary or regular, salaried, hourly direct or indirect, and (c) a list
of agreements between Cambrex and any of its Affiliates, on the one hand, and
any Business Employee, on the other. "Business Employees" means persons employed
by any Seller or the Acquired Subsidiary (including such persons on a leave of
absence, but (except in the case of the Acquired Subsidiary) expressly excluding
those persons who have been absent for more than 26 weeks for any reason)
primarily in connection with the operation or conduct of the Xxxxxxxxxx
Chemicals Business; "U.S. Business Employees" means the Business Employees so
employed in the United States, excluding employees of the Acquired Subsidiary,
and "Other Business Employees" means, for purposes of this Section 3.15(a), the
Business Employees so employed outside of the United States or employed by the
Acquired Subsidiary, but otherwise in this Section 3.15, means only a person who
is a "worker" as defined in the United Kingdom Working Time Regulations 1998
29
providing services to the Acquired Subsidiary or a person whose services are
provided to the Acquired Subsidiary by an agency.
(b) The Acquired Subsidiary has in relation to its plant and
machinery and other fixed assets, its employees and any person who might be
affected by the conduct of the Acquired Subsidiary's business, complied with all
material legal requirements relating to health and safety including, but not
limited to, those imposed by the Health and Safety at Work etc Xxx 0000 and all
regulations made thereunder, and as of three (3) business days prior to
execution of this Agreement no action has been taken by any enforcing authority
in relation to any actual or alleged breach of such requirements and neither is
the Acquired Subsidiary in receipt of any claim by any person in relation to any
such breach nor to Sellers' knowledge are there any circumstances which may lead
to such action or claim.
(c) Records held at the English and Welsh companies registry show
the full names of and offices held by each person who is a director of the
Acquired Subsidiary and no other person is a director or shadow director of the
Acquired Subsidiary.
(d) Except as set forth in Section 3.15(d) of the Seller
Disclosure Schedule, all contracts of service or engagement of any of the Other
Business Employees are terminable on not more than three months' notice without
compensation (other than compensation payable in accordance with applicable
Law).
(e) Except as set forth in Section 3.15(e) of the Seller
Disclosure Schedule, there are no written subsisting contracts for the provision
by any person of any consultancy services to the Acquired Subsidiary involving
the provision of remuneration and benefits having a value of 30,000 pounds
sterling or more per annum.
(f) Except as set forth in Section 3.15(f) of the Seller
Disclosure Schedule, as at the date three (3) business days prior to the
execution of this Agreement, none of the Other Business Employees has given
notice terminating his employment nor has the Acquired Subsidiary received
written notice that any Other Business Employee has been or is to be withdrawn
by the agency supplying him.
(g) Except as set forth in Section 3.15(g) of the Seller
Disclosure Schedule, none of the Other Business Employees is under notice of
dismissal nor is there any liability outstanding to any Other Business Employee
or any individual formerly engaged on the same basis as an Other Business
Employee or the agency supplying or which supplied him except for remuneration
or other benefits accruing due and no such remuneration or other benefit which
has fallen due for payment has not been paid.
(h) Except as set forth in Section 3.15(h) of the Seller
Disclosure Schedule, there is no plan, scheme, commitment, policy, custom or
practice (whether legally binding or not) relating to redundancy affecting any
of the Other Business Employees more generous than the statutory redundancy
requirements.
(i) Except as set forth in Section 3.15(i) of the Seller
Disclosure Schedule, all plans, schemes, commitments, policies, customs or
practices for the provision of benefits to the Other Business Employees comply
in all respects with all relevant statutes, regulations and other laws
30
and all necessary consents in relation to the same have been obtained and all
governmental filings in relation to the same have been made.
(j) Except as set forth in Section 3.15(j) of the Seller
Disclosure Schedule, there are no loans owed by any of the Other Business
Employees.
(k) Except as set forth in Section 3.15(k) of the Seller
Disclosure Schedule, none of the Other Business Employees or any agency
supplying Other Business Employees will become entitled by virtue of their
contract of service or supply to any payment or enhancement in or improvement to
their remuneration, benefits or terms and conditions of service or supply only
by reason of the execution of this Agreement or of completion of the sale and
purchase under or pursuant to this Agreement.
(l) As of the Closing Date, there shall be no working arrangement,
practice, policy or procedure operated by the Acquired Subsidiary which
contravenes the Working Time Regulations 1998 and the Acquired Subsidiary shall
have kept all records required by those Regulations.
(m) As of the Closing Date, there shall be no hourly paid Other
Business Employee employed or engaged by the Acquired Subsidiary who is paid
less than the statutory minimum applicable under the National Minimum Wage Xxx
0000.
SECTION 3.16. Employee Benefit Plans. (a) Section 3.16(a) of the Seller
Disclosure Schedule identifies each material Employee Plan. Sellers have
delivered or made available to Buyer true and complete copies of the Employee
Plans together with, to the extent relevant and required, the three (3) most
recent annual reports (Form 5500 including, if applicable, all schedules
thereto), the most recent actuarial valuation report prepared in connection with
any Employee Plan, the most recent Internal Revenue Service determination
letters for such Employee Plans, the most recent summary plan descriptions for
such Employee Plans, and, if applicable, the most recent trust, custody,
administrative services or insurance or investment management agreement
(including policies) with respect to each Employee Plan.
(b) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of Sellers, there has been no event
since the date of such determination which could reasonably be expected to
adversely affect such qualification; each trust created under any such Employee
Plan has been determined by the Internal Revenue Service to be exempt from Tax
under Section 501(a) of the Code and, to the knowledge of Sellers, there has
been no event since the date of such determination which could reasonably be
expected to adversely affect such exemption. Sellers have provided to Buyer
copies of the most recent Internal Revenue Service determination letters
relating to each such Employee Plan.
(c) Except as set forth in Section 3.16(c) of the Seller
Disclosure Schedule, (i) each Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable Laws and Orders, including but not limited to ERISA and the Code;
(ii) no Employee Plan has any provision (other than an Assumed Liability) which
could result in liability to Buyer as a result of the transactions contemplated
by this
31
Agreement; (iii) there are no pending or, to the knowledge of Sellers,
threatened actions, suits, claims, investigations or audits against any of the
Employee Plans (other than routine claims for benefits or other immaterial
claims); and (iv) no Employee Plan provides post-employment welfare benefits
(other than as required by Code Section 4980B.
(d) Each Employee Plan that is an "employee pension benefit plan"
as defined in Section 3(2) of ERISA is not, except as set forth in Section
3.16(d) of the Seller Disclosure Schedule, subject to Title IV of ERISA or to
the minimum funding requirements of Section 412 of the Code or Part 3 of Title I
of ERISA, nor is it a "multiemployer" plan within the meaning of Section
4001(a)(3) of ERISA. Sellers and their ERISA Affiliates have not incurred any
material liability to the Pension Benefit Guaranty Corporation (other than
premium payments) or otherwise under Title IV of ERISA (including any withdrawal
liability) with respect to any employee pension benefit plan that Sellers or any
ERISA Affiliate maintains or has maintained during the last six (6) years or to
which any of them contributes or has contributed during the last six (6) years
and (in either such case) in which any current or former Business Employee
participates or participated. Neither Sellers nor any ERISA Affiliate of any
Seller has incurred or suffered to exist any "accumulated funding deficiency"
(as defined in Section 302 of ERISA) whether or not waived by the Internal
Revenue Service. No Purchased Asset is subject to any Lien under ERISA or
Section 412 of the Code.
(e) U.K. Plans. (i) Section 3.16(e) of the Seller Disclosure
Schedule identifies each material U.K. Plan. Sellers have delivered or made
available to Buyer copies of the U.K. Plans, together with, if applicable,
trust, custody, administrative services or investment management agreements,
relevant insurance policies, the most recent actuarial valuation report prepared
in connection with any U.K. Plan, the most recent summary description and all
written employee communications currently being provided to new employees for
the U.K. Plans and, in the case of the U.K. Pension Scheme, copies of all deeds
or announcements currently governing the U.K. Pension Scheme, copies of
explanatory literature issued to members, and a copy of the most recent
actuarial valuation report relating to the U.K. Pension Scheme.
(ii) Except pursuant to the U.K. Pension Scheme and other
U.K. Plans or as provided in Section 3.16 of the Seller Disclosure
Schedule, neither any Seller nor the Acquired Subsidiary is under any
legally binding obligation or commitment or is a party to any custom or
practice to pay, provide or contribute towards the provision of any
relevant benefits within the meaning of Section 612 of the Income and
Corporation Taxes Act of 1988 (the "ICTA 1988"), or any other death,
retirement, sickness or disability benefits, to or in respect of any
Relevant Employee or for the widow, widower, child or dependant of any
Relevant Employee, nor has it in the last five (5) years participated
in or contributed towards any scheme or arrangement which has as its
purpose or one of its purposes the provision of any such benefits
(other than schemes which have been fully wound up), nor to Sellers'
knowledge has the Acquired Subsidiary given any written undertaking or
assurance (whether legally enforceable or not) as to the continuance,
introduction, improvement or increase of such "relevant benefit".
"Relevant Employees" means any past or present employee of the Acquired
Subsidiary or of any predecessor to all or part of its business.
32
(iii) The U.K. Pension Scheme is an exempt-approved scheme
within the meaning of Chapter 1 of Part XIV of the ICTA 1988, and there
is in force in respect of the U.K. Pension Scheme an appropriate
contracting-out certificate (within the meaning of Section 7 of the
Pension Schemes Act 1993) naming the Acquired Subsidiary and to
Sellers' knowledge nothing has been done or omitted to be done which
will or would reasonably be expected to result in the U.K. Pension
Scheme ceasing to be exempt approved or the contracting-out certificate
for the U.K. Pension Scheme being cancelled, surrendered or varied.
(iv) All amounts due from the Acquired Subsidiary to the
trustees of the U.K. Pension Scheme and to any insurance company in
connection with the U.K. Pension Scheme have been paid.
(v) All lump sum benefits (other than a refund of
contributions with interest where appropriate) payable under the U.K.
Pension Scheme on the death of a member or beneficiary while in an
employment to which the U.K. Pension Scheme relates are fully insured
under a policy effected in the name of the trustees of the U.K. Pension
Scheme.
(vi) No discretion or power has been exercised under the
U.K. Pension Scheme since the date of the last actuarial valuation: (x)
to augment benefits; (y) to make a transfer of assets in respect of any
individual to another scheme which was greater than the cash equivalent
to which the individual concerned was entitled under the Xxxxxxx
Xxxxxxx Xxx 0000; (z) to admit to membership or award benefits to a
member on terms which envision the payment of a transfer value in a
case in which the payment has not been made or not been made in full.
(vii) Since the date of the last actuarial valuation of the
U.K. Pension Scheme, contributions have been made to the scheme at a
rate or rates not lower than that or those recommended in the report
comprised in such actuarial valuation.
(viii) Every person who has at any time had the right to
join, or apply to join, the U.K. Pension Scheme has been advised of
that right. No Relevant Employee has been excluded from membership of
the U.K. Pension Scheme or from any of the benefits thereunder in
contravention of Article 141 of the Treaty of Rome, the Xxxxxxxx Xxx
0000 or other applicable laws or requirements or the provisions of the
U.K. Pension Scheme or otherwise except in respect of guaranteed
minimum pension.
(ix) As at the date three (3) business days prior to the
execution of this Agreement, none of the employees of the Acquired
Subsidiary is to Sellers' knowledge (A) applying for or about to apply
for an incapacity pension under the U.K. Pension Scheme; or (B)
terminally ill.
(x) No transfer value has been paid (directly or
indirectly) to the U.K. Pension Scheme from another arrangement for any
member of the U.K. Pension
33
Scheme under which any benefits referable to that member contravened
Article 141 of the Treaty of Rome, s.62 Pensions Xxx 0000 or any other
applicable law or requirement except in respect of guaranteed minimum
pension.
(xi) The Acquired Subsidiary has observed and performed
those provisions of the U.K. Pension Scheme which apply to it.
(xii) The Acquired Subsidiary is, and has been since
February 1994, the only employer participating in the U.K. Pension
Scheme. No employer which has previously participated in the U.K.
Pension Scheme has any claim under the U.K. Pension Scheme and in
respect of any such employer the period of participation has been
terminated and benefits have been provided in accordance with the
provisions of the U.K. Pension Scheme.
(xiii) All documentation and records in respect of the U.K.
Pension Scheme are up to date and to Seller's knowledge complete and
accurate in all material respects.
(xiv) None of the assets of the U.K. Pension Scheme: (x) is
invested in any description of employer-related investments (within the
meaning of s.40 Pensions Act 1995); or (y) save for deposits with
banks, building societies and other financial institutions and save for
any instrument creating or acknowledging an indebtedness listed on any
recognized stock exchange of repute, is loaned to any person; or (z) is
subject to any encumbrance or agreement or commitment to give or create
any encumbrance.
(xv) The U.K. Pension Scheme has at all times and in all
material respects complied with and been administered in accordance
with all applicable Laws, regulations and requirements (including those
of the Board of Inland Revenue and of trust law).
(xvi) In relation to the U.K. Pension Scheme or funds which
are or have been held for the purposes thereof neither the Acquired
Subsidiary nor the trustees or administrator of the U.K. Pension Scheme
has given an indemnity or guarantee to any person (other than in the
case of the Acquired Subsidiary any general indemnity in favor of the
trustees or administrator under the documentation governing the U.K.
Pension Scheme).
(xvii) The Acquired Subsidiary has complied with any
obligation under the Welfare Reform and Pensions Xxx 0000 to designate
a Stakeholder pension scheme.
SECTION 3.17. Labor Matters. (a) Except as set forth in Section 3.17(a)
of the Seller Disclosure Schedule: (i) there is no collective bargaining
agreement or relationship with any union, works council or other labor
organization ("Collective Bargaining Agreement") on the part of any of the
Sellers or the Acquired Subsidiary in connection with the Xxxxxxxxxx Chemicals
Business; (ii) to the knowledge of Sellers, no labor organization or group of
employees has filed any representation petition or made any written or oral
demand for
34
recognition with respect to any of the Business Employees; (iii) to the
knowledge of Sellers, no union organizing or decertification efforts are
underway or threatened and no other question concerning representation is
pending before any Governmental or Regulatory Authority or other mediator or
arbitrator of contractual grievances or claims with respect to any of the
Business Employees; (iv) no labor strike, work stoppage or slowdown or other
material labor dispute has occurred in the last three (3) years, and none is
underway or, to Sellers' knowledge, threatened with respect to any of the
Business Employees; (v) there is no material workers compensation claim or
similar liability, experience or matter relating to any Business Employee
pending or, to Sellers' knowledge, threatened; (vi) to the knowledge of Sellers,
there is no employment-related charge, complaint, grievance, investigation or
inquiry of any kind, pending or threatened, before any Governmental of
Regulatory Authority with respect to any Business Employee relating to an
alleged violation or breach by the Sellers (or any of their officers or
directors) of any Law or Contract; and (vii) to Sellers' knowledge, no employee
or agent of Sellers has committed any act or omission that could reasonably be
expected to give rise to material liability for any violation or breach
identified in clause (vi) above.
(b) Except as set forth in Section 3.17(b) of the Seller Disclosure
Schedule, there are no employment Contracts or severance agreements with any
employees associated with the Xxxxxxxxxx Chemicals Business, the Purchased
Assets or the Acquired Subsidiary.
(c) Any notice required on the part of any Seller or its Affiliates
under any Law, collective bargaining or similar agreement has been, or prior to
the Closing will be, given.
(d) Within the past three years, Sellers have not implemented any plant
closing or layoff of employees associated with the Purchased Assets or Acquired
Subsidiary that required notices to be given under the Worker Adjustment and
Retraining Notification Act of 1988, as amended, or any similar foreign, state
or local law, regulation or ordinance (jointly, the "WARN Act"), and no such
action will be implemented prior to the Closing without advance notification to
Buyer.
SECTION 3.18. Environmental Matters. (a) Except as set forth in Section
3.18(a) of the Seller Disclosure Schedule:
(i) all Licenses necessary for the operation of the
Xxxxxxxxxx Chemicals Business and the Purchased Assets as currently
operated in the ordinary course of business and the occupancy by
Sellers and their Affiliates of the facilities located on the Real
Property, in either case in order to comply in all material respects
with all applicable Environmental Laws (a list of which Licenses is set
forth in Section 3.18(a) of the Seller Disclosure Schedule), have been
obtained or applied for; and the Xxxxxxxxxx Chemicals Business and the
Purchased Assets are currently being operated in compliance, and since
January 1, 1995 have been operated in compliance (except for such past
non-compliance that has been corrected and resolved (including the
payment of all fines and penalties with respect thereto) to the extent
required by applicable Law or the applicable License), with the terms
of such Licenses and all applicable Environmental Laws in all material
respects;
35
(ii) none of the Real Property is listed or proposed for
listing on the National Priorities List promulgated under CERCLA or on
any comparable state list established pursuant to Environmental Laws;
(iii) no Liens, other than Permitted Liens, have been filed
pursuant to any Environmental Law with respect to any of the Real
Property or the Purchased Assets;
(iv) there are no pending written claims, and to Sellers'
knowledge there are no pending oral claims, threatened written claims
or threatened oral claims, asserted or alleged against any of the
Sellers, the Acquired Subsidiary or the Purchased Assets in connection
with the operation of the Xxxxxxxxxx Chemicals Business that has
resulted in or could reasonably be expected to result in an
Environmental Liability;
(v) no asbestos-containing products have been
manufactured, marketed, distributed or sold in connection with the
Xxxxxxxxxx Chemicals Business; and
(vi) there are no material environmental studies or
reports (including without limitation studies and work plans regarding
asbestos-containing materials in any form or condition) that are in the
possession, custody or control of any Seller or any of its Affiliates
in relation to the Xxxxxxxxxx Chemicals Business or the Purchased
Assets that have not been provided to Buyer prior to the execution of
this Agreement.
(b) Except as disclosed in Section 3.18(b) of the Seller
Disclosure Schedule, there is no condition involving the use, storage,
discharge, release, threatened release (as such term is defined in
CERCLA) or disposal of any Hazardous Materials in, on or under any of
the Real Property or with respect to the Purchased Assets that has
resulted in or could result in a material Environmental Liability.
(c) Except as disclosed in Section 3.18(c) of the Seller
Disclosure Schedule, none of the Sellers has treated, stored, disposed
of, arranged for or permitted the disposal of, transported, handled or
released any Hazardous Materials at or to any offsite location so as to
give rise to any Environmental Liabilities.
(d) Except as disclosed in Section 3.18(d) of the Seller
Disclosure Schedule, none of the following exists at any Real Property
or any of the facilities located thereon: (i) underground storage
tanks, (ii) asbestos-containing material in friable form or condition,
(iii) materials or equipment containing polychlorinated biphenyls or
(iv) landfills, surface impoundments or disposal areas.
(e) Except as disclosed in Section 3.18(e) of the Seller
Disclosure Schedule, no material capital expenditures are planned for
the Xxxxxxxxxx Chemicals Business or the Purchased Assets during the
years 2003 through 2005 in order to comply with any Environmental Law.
(f) Without limiting any of the foregoing, except as
disclosed in Section 3.18(f) of the Seller Disclosure Schedule, (i) the
products manufactured by
36
Sellers and the Acquired Subsidiary in connection with the Xxxxxxxxxx Chemicals
Business comply and have complied with the Toxic Substances Control Act ("TSCA")
and any similar non-U.S. requirements, including without limitation the
inclusion of any such products or substances on inventory lists, the
registration of such products and substances, the filing of any premanufacturing
notices and the obtaining of exemptions for such products and substances;
provided that to the extent this clause (i) relates to chemical substances
contained in any of such products, this representation is based solely on
Sellers' knowledge; (ii) none of the Sellers or the Acquired Subsidiary has
filed, or to the knowledge of Sellers, has had a duty to file, any reports
required by Section 8(e) of TSCA with respect to substantial risks involving
such products and substances; (iii) no such products or substances are or have
been subject to an order under Section 5(e) of TSCA, a testing rule under
Section 4 of TSCA or regulation under Section 6(a) of TSCA; and (iv) to the
knowledge of Sellers no ban or phase-out of any such products or substances is
pending or has been proposed.
SECTION 3.19. Sufficiency of Assets; Personal Property. Except as
expressly provided in Section 3.19 of the Seller Disclosure Schedule, at the
Closing Date, the Purchased Assets, together with the transition services
contemplated by the Transition Services Agreement and the supply arrangements
contemplated by the Supply Agreements will be adequate and sufficient to enable
Buyer (assuming the accuracy of the representations and warranties contained in
Article IV) to conduct the Xxxxxxxxxx Chemicals Business as currently conducted,
except for managerial services (including without limitation general managerial,
legal, accounting and treasury services) which will be cancelled as of Closing
in accordance with Section 5.05. Except as set forth in Section 3.19 of the
Seller Disclosure Schedule, (a) either a Seller or the Acquired Subsidiary, as
the case may be, has good and valid title (free and clear of all Liens other
than Permitted Liens) to, or legal and valid rights under subsisting leases or
licenses to use, all of the assets and personal property, including computer
hardware, used in the Xxxxxxxxxx Chemicals Business and (b) the assets and
personal property included in the Purchased Assets or owned or leased by the
Acquired Subsidiary are maintained in all material respects in good operating
condition, reasonable wear and tear excepted, are free of material defects and
are adequate for the purposes for which they are currently being used. To
Sellers' knowledge, there is no factor or condition affecting the Purchased
Assets that is interfering or could reasonably be expected to interfere in any
material respect with the use and operation of the Xxxxxxxxxx Chemicals Business
as currently conducted.
SECTION 3.20. Guarantees. Except as set forth in Section 3.20 of the
Seller Disclosure Schedule, neither any of the Sellers nor the Acquired
Subsidiary is a guarantor for any liability or obligation (including
indebtedness) of any Person.
SECTION 3.21. Notes and Accounts Receivable. Except for the Lasons
Receivable and as set forth in Section 3.21 of the Seller Disclosure Schedule,
all notes and accounts receivable of the Xxxxxxxxxx Chemicals Business are bona
fide, arose in the ordinary course of business, are legal, valid and binding
obligations of the respective debtors enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a
37
proceeding in equity or at law) and, to Sellers' knowledge, are subject to no
setoffs or counterclaims.
SECTION 3.22. Inventory. All Inventory reflected in the Latest Balance
Sheet consisted, and all such Inventory acquired since the date of the Latest
Balance Sheet consists, of a quality and quantity usable and salable in the
ordinary course of business consistent with past practice, subject to normal and
customary allowances in the industry for spoilage, damage and outdated items;
provided that no representation is hereby made that the Inventory will all be
sold by any particular date. Such balance sheet reflects any reserves or
write-downs with respect to such inventory as of its date in accordance with
United States GAAP. Except as set forth in Section 3.22 of the Seller Disclosure
Schedule, all such inventory is valued at the lower of cost or market, in
accordance with United States GAAP. Except as disclosed in Section 3.22 of the
Seller Disclosure Schedule, the Inventory is the property of a Seller or the
Acquired Subsidiary, free and clear of any Lien other than Permitted Liens, has
not been pledged as collateral, is not held on consignment from others and
conforms in all material respects to all standards applicable to such Inventory
or its use or sale imposed by Governmental or Regulatory Authorities or any
warranty provided by Sellers or their Affiliates.
SECTION 3.23. Affiliate Transactions. Except as disclosed in Section
3.23 of the Seller Disclosure Schedule, (a) neither Cambrex nor any of its
Affiliates (other than the Acquired Subsidiary) provides or causes to be
provided any raw materials or other products used in the manufacture of the
Products to the Xxxxxxxxxx Chemicals Business, (b) the Xxxxxxxxxx Chemicals
Business does not sell any Products to Cambrex or any of its Affiliates and (c)
no officer, director or employee of Cambrex, any of the Sellers or the Acquired
Subsidiary or, to Sellers' knowledge, any individual related to any such
individual or any entity in which any such individual owns any beneficial
interest, is a party to any arrangement (other than ordinary course employment
arrangements) or Contract or has any ownership interest in or with respect to
the Xxxxxxxxxx Chemicals Business or the Purchased Assets.
SECTION 3.24. Customers and Suppliers. Section 3.24 of the Seller
Disclosure Schedule sets forth the names and addresses of the twenty (20)
largest customers and twenty (20) largest suppliers (in dollar volume) of the
Xxxxxxxxxx Chemicals Business for the most recently-completed fiscal year and
the total sales to, or purchases from, such customers or suppliers made by the
Xxxxxxxxxx Chemicals Business during such period. Except as set forth in Section
3.24 of the Seller Disclosure Schedule, since December 31, 2002 no such customer
or supplier has ceased, materially reduced or materially changed its method of
doing business with the Sellers or the Acquired Subsidiary nor has any Seller or
the Acquired Subsidiary received any written notice that any such customer or
supplier intends to cease, materially reduce or materially change its method of
doing business with such Seller or the Acquired Subsidiary. Section 3.24 of the
Seller Disclosure Schedule sets forth the policies, rules and procedures and
other material information of all rebate programs and other refund or savings
programs offered by the Sellers and the Acquired Subsidiary in the last three
years in connection with the Xxxxxxxxxx Chemicals Business.
38
SECTION 3.25. Absence of Certain Changes. Except as set forth in
Section 3.25 of the Seller Disclosure Schedule, since December 31, 2002, the
Xxxxxxxxxx Chemicals Business has been conducted in the ordinary course
consistent with past practices and there has not been:
(a) any event, occurrence or development which has had a Material
Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock of
the Acquired Subsidiary, any repurchase, redemption or other acquisition by the
Acquired Subsidiary of any outstanding shares of capital stock or other
securities of the Acquired Subsidiary or any undistributed earnings of the
Acquired Subsidiary;
(c) any amendment of any term of any outstanding security of the
Acquired Subsidiary;
(d) any incurrence, assumption or guarantee by Sellers or the
Acquired Subsidiary of any Indebtedness other than in the ordinary course of
business consistent with past practices;
(e) any making of any loan, advance or capital contributions to or
investment in any Person by Sellers or the Acquired Subsidiary;
(f) any transaction or commitment made, or any contract or
agreement entered into, by Sellers or the Acquired Subsidiary relating to the
Purchased Assets or the Xxxxxxxxxx Chemicals Business, in either case, material
to the Xxxxxxxxxx Chemicals Business, other than transactions and commitments in
the ordinary course of business consistent with past practices and those
contemplated by this Agreement;
(g) any change in any method of accounting or accounting practice
by Sellers or the Acquired Subsidiary except for any such change required by
reason of a concurrent change in United States GAAP;
(h) any material (i) employment, bonus or wage or salary increase,
deferred compensation, severance, retirement or other similar agreement entered
into by Sellers or the Acquired Subsidiary with any Business Employee (or any
amendment to any such existing agreement), (ii) grant of any severance or
termination pay by Sellers or the Acquired Subsidiary to any Business Employee,
or (iii) change in compensation or other benefits payable by Sellers or the
Acquired Subsidiary to any Business Employee pursuant to any severance or
retirement plans or policies thereof or otherwise;
(i) any sale, assignment, transfer, lease, license or other
encumbrance of any Business Intellectual Property Rights, any disclosure of any
proprietary confidential information to any Person (other than to Buyer and its
Affiliates and other than in the ordinary course of business consistent with
past practice in circumstances in which it has imposed reasonable
confidentiality restrictions), or any abandonment of or lapse of any Business
Intellectual Property Rights;
(j) any mortgage or pledge of any of the Purchased Assets or any
properties or assets of the Acquired Subsidiary or allowing them to become
subject to any Lien;
39
(k) any extraordinary losses or waiver of any rights of the
Xxxxxxxxxx Chemicals Business of material value (whether or not in the ordinary
course of business or consistent with past practice) in excess of $50,000 in the
aggregate;
(l) any capital expenditures or commitments therefor in respect of
the Xxxxxxxxxx Chemicals Business that amount in the aggregate to more than
$50,000;
(m) any delay or postponement of the payment of any accounts
payable or commissions or any other liability or obligation relating to the
Xxxxxxxxxx Chemicals Business, any agreement or negotiation with any party to
extend the payment date of any such accounts payable or commissions or other
liability or obligation or any acceleration of the collection of (or discount
of) any accounts or notes receivable relating to the Xxxxxxxxxx Chemicals
Business;
(n) any implementation of any material pricing increases or
decreases; or
(o) with respect to the Acquired Subsidiary, any Tax election
made, any accounting method for Tax purposes adopted or changed, any amended Tax
Return filed, any closing agreement or similar agreement with any Taxing
authority consented to or entered into, any Tax claim consented to or settled or
compromised or any position inconsistent with any past practice on any Tax
Return taken;
or any Contract to do any of the foregoing.
SECTION 3.26. Product Warranties, Defects and Liabilities. Except as
set forth in Section 3.26 of the Seller Disclosure Schedule, each product sold
or delivered by Sellers and the Acquired Subsidiary relating to the Xxxxxxxxxx
Chemicals Business has been in conformity, in all material respects, with all
applicable Federal, state, local or foreign Laws and regulations, contractual
commitments and express warranties, and Sellers and the Acquired Subsidiary do
not have any liability for replacement or repair thereof or other damages in
connection therewith, except in each case for liabilities reflected on the
Latest Balance Sheet. No product sold or delivered by Sellers and the Acquired
Subsidiary relating to the Xxxxxxxxxx Chemicals Business is subject to any
guaranty, warranty or other indemnity beyond their standard terms and conditions
of sale for such products, all of which standard terms and conditions are
disclosed in Section 3.26 of Seller Disclosure Schedule.
SECTION 3.27. Names and Locations. Except as set forth on Section 3.27
of the Seller Disclosure Schedule, (i) during the five-year period prior to the
execution and delivery of this Agreement, none of the Sellers or the Acquired
Subsidiary has used any name or names in connection with the Xxxxxxxxxx
Chemicals Business under which it has invoiced account debtors, maintained
records concerning its assets or otherwise conducted business other than the
exact name under which it has executed this Agreement and (ii) all of the
Purchased Assets are located at the real property facilities listed in Section
3.12 of the Seller Disclosure Schedule.
SECTION 3.28. Bank Accounts. Section 3.28 of the Seller Disclosure
Schedule lists all of the bank accounts, safe deposit boxes and lock boxes used
in connection with the Xxxxxxxxxx Chemicals Business (designating each
authorized signatory). None of the Sellers has granted a
40
power of attorney to any Person in respect of the Xxxxxxxxxx Chemicals Business
which has not been terminated.
SECTION 3.29. Finders' Fees. Except for Banc of America Securities LLC
("BAS"), whose fees will be paid by and will be the sole responsibility of
Cambrex, there is no investment banker, broker, finder or other intermediary who
has been retained by or on behalf of Cambrex or any Seller or any of their
respective Affiliates and is entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Cambrex and Sellers that the
statements contained in this Article IV are true and correct as of the date of
this Agreement:
SECTION 4.01. Corporate Existence and Power. Buyer is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware and has all corporate powers and all material Licenses
required to carry on its business as now conducted.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the agreements to be delivered
herewith and the consummation by Buyer of the transactions contemplated hereby
and thereby are within the corporate powers and authority of Buyer and have been
duly authorized by all necessary corporate action on the part of Buyer,
including by its board of directors. This Agreement constitutes a legal, valid
and binding agreement of Buyer enforceable against Buyer in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at Law).
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby by Buyer require no action, consent or approval by or in
respect of, or filing with, any Governmental or Regulatory Authority other than
compliance with any applicable requirements of the HSR Act.
SECTION 4.04. Noncontravention. The execution, delivery and performance
by Buyer of this Agreement and the consummation of the transactions contemplated
hereby by Buyer do not and will not (i) violate the terms, conditions or
provisions of its articles of incorporation, (ii) assuming compliance with the
matters referred to in Section 4.03, violate in any material respect any
applicable Law or Order, (iii) require any consent or other action by any Person
under, constitute a material breach or violation of or default under, or give
rise to any right of termination, cancellation or acceleration of any material
right or obligation or to a loss of any
41
material benefit under, any Contract binding upon Buyer or to which Buyer is a
party or (iv) result in the creation or imposition of any Lien on any material
asset of Buyer.
SECTION 4.05. Required Consents. No consent or other action by any
Person is required to be obtained by Buyer as a result of the execution,
delivery and performance of this Agreement by Buyer or the consummation by Buyer
of the transactions contemplated hereby.
SECTION 4.06. Litigation. There is no Action or Proceeding pending or,
to the knowledge of Buyer, threatened before any court or arbitrator or any
Governmental or Regulatory Authority which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.
SECTION 4.07. Financing. Buyer has furnished to Cambrex fully executed
copies of the equity and debt commitment letters relating to the financing of
the transactions contemplated hereby. Subject to the terms and conditions set
forth in the commitment letters, the aggregate proceeds to be provided under
such commitment letters will be in an amount sufficient to pay the Closing
Payment in cash at Closing and all expenses of Buyer related to the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby. As of the date hereof and after communicating with the
institutions providing the equity and debt financing, Buyer knows of no facts or
circumstances (other than any that arise as a result of a breach by Cambrex or
any Seller of this Agreement) that are reasonably likely to result in any of the
conditions set forth in such commitment letters not being satisfied.
SECTION 4.08. Finders' Fees. Except for BAS (who is not entitled to
receive a fee from Buyer or its Affiliates in connection with the transactions
contemplated by this Agreement), there is and has been no investment banker,
broker, finder or other intermediary who has been retained by or on behalf of
Buyer and is entitled to any fee or commission in connection with the
consummation of the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF CAMBREX AND SELLERS
SECTION 5.01. Conduct of the Xxxxxxxxxx Chemicals Business. Except as
set forth in Section 5.01 of the Seller Disclosure Schedule, from the date
hereof until the Closing Date, Sellers and the Acquired Subsidiary shall conduct
the Xxxxxxxxxx Chemicals Business in the ordinary course consistent with past
practice, including with respect to payment of payables, collection of accounts
receivable and purchase and sale of Inventory, and shall use commercially
reasonable efforts to preserve the Xxxxxxxxxx Chemicals Business as currently
organized, maintain the Purchased Assets consistent with past practice, maintain
the relationships with third parties with whom the Xxxxxxxxxx Chemicals Business
does business, retain the services of current key Business Employees and
maintain substantially the same levels of coverage as under current insurance
policies relating to the Xxxxxxxxxx Chemicals Business. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date,
Sellers and the Acquired
42
Subsidiary will not, and will not permit any of their Affiliates to, without
the prior consent of Buyer, which consent will not be unreasonably withheld or
delayed:
(a) except as expressly permitted by any other paragraph of this
Section 5.01, voluntarily incur or permit to be incurred any obligation or other
liability constituting Assumed Liabilities or any liability of the Acquired
Subsidiary outside the ordinary course of business or voluntarily cancel,
prepay, settle, waive, compromise or otherwise provide for a complete or partial
discharge in advance of any scheduled payment date with respect to, or waive any
right under, any liability, litigation or obligation owing to Sellers or the
Acquired Subsidiary in connection with the Xxxxxxxxxx Chemicals Business;
(b) sell, lease, license, abandon, fail to maintain, or otherwise
dispose of any asset which on the Closing Date would otherwise constitute a
Purchased Asset, except (i) pursuant to existing Contracts or commitments or
(ii) in the ordinary course of business consistent with past practice;
(c) enter into any Contract relating to the Xxxxxxxxxx Chemicals
Business outside the ordinary course of business consistent with past practice,
amend, modify, terminate (partially or completely), grant any waiver under, give
any consent with respect to or incur any default under any Contract set forth in
Section 3.11 of the Seller Disclosure Schedule;
(d) increase the compensation payable or to become payable to any
of the Business Employees, except for increases in the ordinary course of
business consistent with past practice, or enter into or alter any employment,
retention, severance, change in control, consulting or service or other similar
agreement, except in the ordinary course of business, or enter into any
retention agreements or agreements for enhanced or extraordinary severance or
change in control benefits, with any Business Employee;
(e) commence, enter into or alter any Plan or any other profit
sharing, deferred compensation, bonus, stock option, stock purchase, pension,
retirement or incentive plan or any fringe benefit plan for Business Employees,
except in the ordinary course of business consistent with past practice;
(f) voluntarily permit to be incurred any Lien on any asset
outside the ordinary course of business which on the Closing Date would
constitute a Purchased Asset;
(g) make or commit to any capital expenditures outside the
ordinary course of business with respect to the Xxxxxxxxxx Chemicals Business;
(h) change the organizational documents of the Acquired
Subsidiary;
(i) issue, pledge, dispose or encumber, or authorize the issuance,
sale, pledge, disposition or encumbrance of, any shares of capital stock of any
class, or any options, warrants, convertible securities or other rights of any
kind to acquire any shares of capital stock of, or any other ownership interest
in, the Acquired Subsidiary; or
43
(j) enter into any Contract to do any of the foregoing.
SECTION 5.02. Access to Information. (a) From the date hereof until the
Closing Date, Sellers will (i) give Buyer and its Representatives full access to
the offices, properties, assets, Contracts, personnel, books and records of
Sellers and the Acquired Subsidiary relating to the Xxxxxxxxxx Chemicals
Business, and (ii) furnish to Buyer and its Representatives such financial and
operating data and other documents and information relating to the Xxxxxxxxxx
Chemicals Business as such Persons may reasonably request. Any investigation
pursuant to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the Xxxxxxxxxx Chemicals Business.
Notwithstanding the foregoing, prior to the Closing, Buyer shall not have access
to medical histories or other information relating to Business Employees which
in Cambrex's good faith opinion is sensitive or the disclosure of which could
subject any of the Sellers or their Affiliates to risk of liability.
SECTION 5.03. Notices of Certain Events. From the date hereof until the
Closing Date, Sellers shall promptly notify Buyer of:
(a) any notice or other communication received from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental or
Regulatory Authority in connection with the transactions contemplated by this
Agreement; and
(c) the commencement of any Action or Proceeding that, if pending
on the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.07(a).
SECTION 5.04. Resignations. On the Closing Date, Sellers will deliver
to Buyer the resignations of any director of the Acquired Subsidiary who is not
a Business Employee and of Xxx Xxxxxxx as trustee of the pension plan of the
Acquired Subsidiary.
SECTION 5.05. Affiliate Transactions. As of the Closing Date, all
intercompany indebtedness and other amounts owing under Contracts between any
Seller or any Affiliate of Seller, on the one hand, and the Acquired Subsidiary,
on the other, will be paid in full, and each Seller will, and will cause any of
its Affiliates to, terminate each Contract and any other service, transaction or
arrangement that any Seller or any Affiliate of Seller provides for or in
connection with the operation of the Xxxxxxxxxx Chemicals Business, other than
the services, transactions and arrangements contemplated by the Transition
Services Agreement and the Supply Agreements.
SECTION 5.06. Third Party Consents. Cambrex and Sellers will, as
promptly as practicable, take all commercially reasonable steps necessary or
desirable to obtain all consents (including the Required Consents), approvals or
actions of, and give all notices to, any Person required by any Seller to assign
material Contracts and Licenses to Buyer and to consummate the transactions
contemplated hereby, including without limitation all Contracts described in
Section 3.05 of the Seller Disclosure Schedule.
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SECTION 5.07 Non-Compete and Confidentiality Agreements. (a) For a
period of three (3) years following the Closing Date, neither Cambrex nor any of
its Affiliates will, directly or indirectly, own, manage, join, operate,
perform, participate in or otherwise be engaged in the business of developing,
manufacturing, selling or distributing any of the Products or Platform Products
(collectively, "Competing Products"); provided that nothing contained herein
shall prevent Cambrex and its Affiliates from (x) developing, manufacturing,
selling or distributing any Platform Products (other than Products) for or into
the pharmaceutical and life sciences markets and (y) continuing to manufacture
any Competing Products currently being manufactured by Cambrex and its present
Subsidiaries so long as those Competing Products are only used by Cambrex and
its present Subsidiaries in the manufacture of other products (not including
Competing Products) that have been commercially sold by Cambrex and its present
Subsidiaries at any time on or prior to the date of this Agreement. For purposes
of this Section, (i) "participate" includes any direct or indirect interest in
any enterprise, whether as a stockholder, partner, joint venturer or otherwise
or rendering any direct or indirect service or assistance (including as a
creditor for money borrowed) to any Person, and (ii) ownership of voting
securities of an entity whose securities are publicly traded on a recognized
securities exchange or quotation system not, in the aggregate, in excess of five
percent (5%) of such voting securities shall not be considered to be in
competition with the Business. Each of Cambrex and the Sellers agree that this
covenant is reasonably designed to protect Buyer's substantial investment in the
Xxxxxxxxxx Chemicals Business and is reasonable with respect to its duration,
geographical area and scope.
(b) Nothing contained in the preceding paragraph shall prevent
Cambrex or any of its Affiliates from purchasing or otherwise acquiring a
diversified company that is engaged, among other businesses, in the business of
developing, manufacturing, selling or distributing Competing Products (an
"Acquired Business"); provided that if the annual average sales (the "Average
Sales") for the three (3) fiscal years prior to the acquisition of such Acquired
Business that are derived from sales of Competing Products (such part of the
Acquired Business, the "Competing Business") exceed fifteen (15) percent of the
annual average of all sales of such Acquired Business for such period (the
"Business Threshold"), Cambrex shall contact Buyer within thirty (30) days after
the acquisition of such Acquired Business and offer Buyer the opportunity of
negotiating in good faith the purchase of the Competing Business. In the event
that Buyer and Cambrex, acting in good faith, fail to agree on the terms of a
sale transaction and are unable to enter into a definitive agreement for the
sale of the Competing Business after a period of ninety (90) days following
Cambrex's notification to Buyer, Cambrex and its Affiliates shall be entitled to
retain the Competing Business; provided that if fewer than thirty (30) months
have elapsed since the date hereof, Cambrex and its Affiliates shall either
divest the Competing Business or discontinue or reduce the manufacture,
distribution or sale of Competing Products by the Acquired Business such that,
within 180 days following the acquisition of the Acquired Business, Cambrex and
its Affiliates (including the Acquired Business) are no longer selling the
Competing Products produced by the Acquired Business.
(c) For a period of three (3) years following the Closing Date,
neither Cambrex nor any of its Affiliates will intentionally induce or attempt
to induce any customer, supplier or other business relation of the Xxxxxxxxxx
Chemicals Business to cease doing business with the Xxxxxxxxxx Chemicals
Business or materially reduce the amount of such business; provided that Cambrex
and its Affiliates will not be precluded from attempting to sell any Competing
Products
45
which they are permitted to sell pursuant to paragraph (a) of this Section 5.07
to customers of the Xxxxxxxxxx Chemicals Business in the pharmaceutical and life
sciences markets.
(d) For a period of three (3) years following the Closing Date,
neither Cambrex nor any of its Affiliates will directly or indirect solicit the
employment of any Business Employee hired by Buyer or any Affiliate of Buyer on
the Closing Date, provided that the foregoing shall not prohibit any general
solicitation or advertising activities not targeted to any such Business
Employee nor apply to any individual whose employment is terminated by Buyer or
any Affiliate of Buyer.
(e) For a period of three (3) years following the Closing Date,
Cambrex will hold, and will cause its Affiliates and Representatives to hold, in
strict confidence from any Person (other than any such Affiliate or
Representative), unless compelled to disclose by judicial or administrative
process or by other requirements of any Law or Order, all confidential or
competitively sensitive information relating to the Xxxxxxxxxx Chemicals
Business, except to the extent that such information can be shown to have been
(i) in the public domain (either prior to or after the furnishing of such
information) through no fault of Cambrex or its Affiliates or its
Representatives or (ii) later acquired by Cambrex, its Affiliates or its
Representatives from another source if none of Cambrex, its Affiliates or its
Representatives is aware that such source is under an obligation to Buyer to
keep such information confidential.
(f) Each of Cambrex and the Sellers acknowledges that the
restrictions on its activities and those of its Affiliates under this Section
constitute a material inducement to Buyer's entering into and performing this
Agreement, further acknowledges, stipulates and agrees that a breach of any of
the obligations and agreements set forth in this Section will result in
irreparable harm and continuing damage to Buyer for which there will be no
adequate remedy at law and further agrees that in the event of any breach of
said obligations and agreements, Buyer and its successors and assigns will be
entitled to injunctive relief and to such other relief as is proper under the
circumstances.
(g) Whenever possible, each provision and term of this Section
shall be interpreted in a manner to be effective and valid but if any provision
or term of this Section is held to be prohibited or invalid, then such provision
or term will be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Section. If any of the covenants set forth in this Section are held to be
unreasonable, arbitrary or against public policy, such covenants will be
considered divisible with respect to scope, time and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Sellers.
SECTION 5.08. Exclusivity. Until the date of termination of this
Agreement pursuant to Article XIII hereof, none of Cambrex, Sellers, the
Acquired Subsidiary or any of their respective officers, employees,
Representatives or Affiliates (together, the "Group") shall (i) initiate,
solicit, entertain, negotiate, accept or discuss, directly or indirectly, any
proposal or offer from any Person to acquire all or any significant part of the
business and properties, assets, capital stock or capital stock equivalents of
Sellers or the Acquired Subsidiary related to the Xxxxxxxxxx Chemicals Business,
whether by merger, purchase of stock, purchase of assets or otherwise, or
46
provide any non-public information to any third party in connection therewith or
enter into any agreement, arrangement or understanding requiring Cambrex,
Sellers or the Acquired Subsidiary to abandon, terminate or fail to consummate
the sale of the Purchased Assets to Buyer. Cambrex, Sellers and the Acquired
Subsidiary each agree to (i) promptly notify Buyer if any member of the Group
receives any indication of interest, request for information or offer with
respect to any proposed acquisition of all or any portion of Sellers or the
Acquired Subsidiary, (ii) communicate to Buyer in reasonable detail the terms of
any such indication, request or proposal, and (iii) provide Buyer with copies of
all written communications relating to any such indication, request or proposal.
Cambrex, Sellers and the Acquired Subsidiary each represent and warrant to Buyer
that no member of the Group is party to or bound by any agreement with respect
to a proposed acquisition of all or any portion of the Xxxxxxxxxx Chemicals
Business, other than this Agreement. Nothing contained in this Section shall
restrict Cambrex's ability to discuss with any Person any business combination
transaction not relating exclusively to the Xxxxxxxxxx Chemicals Business or the
Purchased Assets so long as such transaction will not impair or interfere with
the ability of Cambrex and Sellers to consummate the transactions contemplated
by this Agreement.
SECTION 5.09. Title Insurance and Surveys. Cambrex shall use its
commercially reasonable efforts to assist Buyer in obtaining the Title
Commitments, Title Policies and Surveys in form and substance as set forth in
paragraphs (d) and (e) of Section 10.02. Cambrex shall provide, or shall cause
the applicable Seller to provide, the Title Company with any affidavit,
indemnity or other assurances reasonably requested by the Title Company to issue
the Title Policies.
SECTION 5.10. CasChem Collective Bargaining Agreement. Following the
execution and delivery of this Agreement, Cambrex shall use, or shall cause the
applicable Seller to use, commercially reasonable efforts to negotiate with the
applicable labor union to extend the current term of the Collective Bargaining
Agreement relating to certain CasChem employees (the "CasChem Collective
Bargaining Agreement"), shall consult with Buyer periodically and report on the
progress of the negotiations, and shall consider in good faith Buyer's
reasonable suggestions with respect to such negotiations. Prior to August 17,
2003, neither Cambrex nor such Seller shall agree to such an extension without
the prior consent of Buyer, which consent shall not be unreasonably withheld or
delayed, and at the Closing Buyer shall reimburse Cambrex for any amounts paid
by the applicable Seller to Business Employees covered by the CasChem Collective
Bargaining Agreement in order to obtain such extension. On or after August 17,
2003, Cambrex or such Seller may agree with the labor union to extend the term
of the CasChem Collective Bargaining Agreement without the consent of Buyer to
the extent Cambrex or such Seller believes in good faith such extension is in
the best interest of the Xxxxxxxxxx Chemical Business as currently operated.
SECTION 5.11. Fulfillment of Obligations. Cambrex shall cause the
Sellers and its and their respective Subsidiaries and Affiliates to perform all
of their covenants and agreements contained in this Agreement. Cambrex shall
cause Sellers to, and Sellers shall, take all commercially reasonable steps
necessary or desirable and proceed diligently and in good faith to satisfy each
of the conditions to the obligations of Buyer contained in this Agreement, and
Cambrex shall cause Sellers and its and their respective Affiliates to refrain
from, and Sellers
47
shall refrain from, taking or failing to take any action that could reasonably
be expected to result in the nonfulfillment of any such condition.
SECTION 5.12. Payroll. Buyer shall assume responsibility for providing
payroll services for the Xxxxxxxxxx Chemicals Business commencing with the first
payroll to be processed after the Closing Date. In order to ensure an effective
and timely transition from Sellers to Buyer of such payroll responsibility,
Sellers shall, prior to the first Xxxxxxxxxx Chemicals Business payroll to be
processed after the Closing Date, implement the ADP PCPW system using the
Xxxxxxxxxx Chemicals Business payroll data in exchange for a one-time fee to be
paid by Buyer to Sellers at the Closing in the amount of $5,000. Sellers shall
also implement HR Profile if requested by Buyer as provided in the Transition
Services Agreement. Buyer shall, as soon as reasonably practicable after the
date of this Agreement, secure all necessary Employer Identification Numbers,
banking information, licenses from ADP, payroll tax information and other items
as required for Sellers to commence the PCPW implementation. Sellers shall
provide such post-Closing transition services with respect to payroll as are
provided for in the Transition Services Agreement.
SECTION 5.13. Renaissance ERP Software. To the extent that Buyer
obtains written authorization from Xxxx Systems, Inc. (which Cambrex shall use
commercially reasonable efforts to assist Buyer in obtaining) for Cambrex to
provide Buyer with (a) a copy of the version of the Renaissance ERP Software
currently used by the Xxxxxxxxxx Chemicals Business, as modified by or on behalf
of Cambrex on or prior to the Closing (as so modified, the "Software"), together
with copies of any documentation in Cambrex's possession related thereto, and
(b) a worldwide, royalty-free, perpetual, irrevocable license to use the
Software and such related documentation (the "Software License"), Cambrex will,
at the Closing, (x) provide Buyer with a true, correct and complete copy of the
source code and object code of the Software and such related documentation and
(y) grant the Software License to Buyer .
SECTION 5.14. Confidentiality Agreements. At the Closing, Cambrex will
assign to Buyer, and deliver to Buyer copies of, any confidentiality or similar
agreements entered into by or on behalf of Cambrex or any of its Affiliates with
any third party in connection with the proposed sale of the Xxxxxxxxxx Chemicals
Business (other than the Confidentiality Agreement dated February 21, 2003
between Arsenal Capital Partners and BAS on behalf of Cambrex) that remain in
effect on the Closing Date. Upon such assignment and delivery, such agreements
shall be deemed to be Purchased Assets for all purposes of this Agreement.
ARTICLE VI
COVENANTS OF BUYER
SECTION 6.01. Use of Names and Trademarks. Following the Closing,
neither Buyer nor any of its Affiliates shall, directly or indirectly, use or
otherwise exploit the Seller Names, or any other tradename, domain name,
trademark or service xxxx confusingly similar thereto. Notwithstanding the
foregoing, for a period of six (6) months following the Closing Date, Buyer and
its Affiliates may, and Sellers hereby grant to Buyer a non-exclusive, free,
irrevocable license to, use, solely in connection with the operation of the
Xxxxxxxxxx Chemicals Business,
48
printed purchase orders, sales invoices, marketing materials, packaging
materials, stationary, printed forms, other documents and office and shipping
supplies on hand on the Closing Date containing the Seller Name thereon. It is
expressly agreed that a violation of Section 6.01 by Buyer or any of its
Affiliates will cause irreparable harm to the other party that cannot be
adequately addressed by a remedy at law. Therefore, in the event of any
threatened or actual violation of this Section 6.01, Sellers will be entitled to
seek an injunction or other equitable remedies in addition to indemnification
for breach of covenant pursuant to the terms of this Agreement.
SECTION 6.02. Transfer of Environmental Licenses. Without limiting any
provisions of this Agreement, following the Closing, Buyer shall use its
commercially reasonable efforts to (i) take all such reasonable actions,
including without limitation the posting of bonds and financial guarantees, as
are required under applicable Environmental Laws (other than establishing any
"remediation funding source" for the CasChem site to the extent that Sellers are
responsible to provide such funding source under Section 7.07) to secure the
transfer to Buyer from any relevant Seller of any License required for the
ownership and operation of the Xxxxxxxxxx Chemicals Business that may be
lawfully transferred solely by the actions of Buyer and such Seller, and (ii)
with respect to all other such Licenses that cannot be so transferred, submit
such notices, applications and requests as are required for such Licenses to be
obtained in the name of Buyer or its Affiliates. To the extent that any such
License has not been transferred to Buyer or an Affiliate of Buyer or amended or
reissued to reflect Buyer or an Affiliate as the License holder, as applicable,
Buyer and its Affiliates shall use their commercially reasonable efforts to
comply in all material respects with the terms and conditions of all such
Licenses held in the name of the relevant Seller, as well as all other terms and
conditions of Environmental Laws applicable to the activities governed by or
subject to such Licenses. Cambrex and Sellers shall cooperate with Buyer to
facilitate the transfer of Licenses in accordance with this Section 6.02 and, in
the event that any such Licenses cannot be transferred, Cambrex and Sellers
shall use commercially reasonable efforts to assist Buyer with completing the
applications for such Licenses and shall execute such documents reasonably
necessary to permit Buyer to operate the Xxxxxxxxxx Chemicals Business pending
the issuance of such Licenses in Buyer's name.
SECTION 6.03. Post-Closing Environmental Operating Costs. Without
limiting the representations and warranties of Sellers contained in Section 3.18
or other obligations of Sellers under this Agreement, including without
limitation Section 7.10, Buyer will be responsible for all post-Closing ordinary
course environmental operating and capital costs arising from the post-Closing
operation of the Xxxxxxxxxx Chemicals Business by Buyer, such as costs
associated with administrative and regulatory compliance, communications with
Governmental or Regulatory Authorities, testing and licensing, and Remediation
Costs associated with post-Closing compliance with Environmental Laws (except to
the extent any such post-Closing non-compliance represents a continuation of any
matter that first occurred prior to the Closing Date); provided, however,
nothing in this Section 6.03 shall limit the responsibility of Sellers for
Remediation Costs under Section 7.07 and Section 7.08.
SECTION 6.04. Other Post-Closing Environmental Matters. For so long as
Cambrex and its Affiliates have any potential responsibility for Remediation
Costs under the terms of this Agreement, (a) Buyer and its Affiliates will not
conduct any Phase II environmental assessments at or on any of the Real Property
unless specifically requested by a Governmental or Regulatory
49
Authority (and Buyer shall give Cambrex reasonably prompt notice of any such
request) or required under any Environmental Law, including in connection with a
sale or recapitalization of all or any portion of the Xxxxxxxxxx Chemical
Business or any Real Property, and then only after Buyer shall have used its
commercially reasonable efforts to cause such Governmental or Regulatory
Authority to withdraw or modify such request or waive or modify the requirement,
as the case may be, including by proposing reasonable, lower cost alternatives
designed to mitigate Remediation Costs to Sellers; and (b) Buyer will consult
with Cambrex or its Representatives on a quarterly basis at the request of
Cambrex and its Representatives with respect to environmental matters
(including, without limitation, any plans or proposals Buyer may have that would
materially increase any Remediation Costs for which Sellers bear any
responsibility under this Agreement); provided, however, that no such
consultation shall prejudice the parties' rights under this Agreement. Buyer's
breach of this Section 6.04 shall not excuse performance by Sellers of any of
their obligations under this Agreement.
SECTION 6.05. Fulfillment of Obligations. Buyer shall take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each of the conditions to the obligations of Sellers
contained in this Agreement, and Buyer will refrain from taking or failing to
take any action that could reasonably be expected to result in the
nonfulfillment of any such condition.
SECTION 6.06. Financing. Buyer will use commercially reasonable efforts
to enter into definitive agreements providing for the financing of Buyer's
acquisition of the Xxxxxxxxxx Chemicals Business hereunder and related expenses
containing terms substantially similar to those set forth in the commitment
letters referred to in Section 4.07 or such other terms as are reasonably
satisfactory to Buyer, and to obtain on the Closing Date the financing
contemplated by such definitive financing agreements.
ARTICLE VII
COVENANTS OF BUYER AND SELLERS
SECTION 7.01. Further Assurances; Post-Closing Access. (a) Each of the
Sellers and Buyer agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be reasonably necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement and to vest in
Buyer good title to or a valid leasehold interest in, as the case may be, the
Purchased Assets.
(b) Following the Closing, each party will afford the other party
and its Representatives, during normal business hours and without unreasonable
interference with the operation of such party's business, reasonable access to
its officers and employees, the locations at which the Xxxxxxxxxx Chemicals
Business is operated and any books and records relating to the Xxxxxxxxxx
Chemicals Business in its possession, and the right to make copies and extracts
therefrom (at the requesting party's cost), all solely to the extent that such
access may be reasonably required by the requesting party in connection with (i)
the preparation of financial
50
statements or Tax Returns including, without limitation, in connection with the
performance by Buyer and its Representatives of an audit of the Xxxxxxxxxx
Chemicals Business following the Closing, (ii) compliance with the requirements
of any Law or Order, (iii) the determination or enforcement of the rights or
obligations of any Indemnified Party or (iv) the payment, performance or
discharge of any Assumed Liability or Excluded Liability. Each party agrees for
a period extending six (6) years after the Closing Date not to destroy or
otherwise dispose of any books, records and other data relating to the
Xxxxxxxxxx Chemicals Business, the Purchased Assets or any Business Employees
unless such party shall first offer in writing to surrender such books, records
and other data to the other party and such other party shall not agree in
writing to take possession thereof during the ten (10) day period after such
offer is made.
(c) Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relationship in litigation or
otherwise, the furnishing of information, documents or records in accordance
with Section 7.01(b) shall be subject solely to applicable rules relating to
discovery with respect to the scope and subject matter of such litigation, if
any.
(d) Notwithstanding anything herein to the contrary, Cambrex,
Buyer, and each other party hereto (and each Affiliate and Person acting on
behalf of any such party) agree that each party (and each employee,
Representative and other agent of such party) may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
this transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to such party or such Person relating to such tax
treatment and tax structure, except to the extent necessary to comply with any
applicable Federal or state securities law; provided, however, that such
disclosure may not be made until the earlier of the date of the public
announcement of discussions relating to the transaction, the date of the public
announcement of the transaction, or the date of the execution of an agreement to
enter into the transaction. This authorization is not intended to permit
disclosure of any other information including (i) any portion of any materials
to the extent not related to the tax treatment or tax structure of this
transaction, (ii) the identities of participants, (iii) any pricing or financial
information (except to the extent such pricing or financial information is
related to the tax treatment or tax structure of this transaction), or (iv) any
other term or detail not relevant to the tax treatment or the tax structure of
this transaction.
SECTION 7.02. HSR Filing and Certain Other Filings. (a) Each of the
Sellers and the Acquired Subsidiary and Buyer shall cooperate with one another
(i) in determining whether any action by or in respect of, or filing with, any
Governmental or Regulatory Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
Contract, in connection with the consummation of the transactions contemplated
by this Agreement and (ii) in taking such actions or making any such filings,
furnishing information required in connection therewith and timely seeking to
obtain any such actions, consents, approvals or waivers set forth in Section
7.02(a) of the Seller Disclosure Schedule.
(b) In addition to and not in limitation of the covenants
contained in paragraph (a), Sellers and Buyer will (i) promptly take all actions
necessary to make the filings required by Sellers and Buyer under the HSR Act,
(ii) comply at the earliest practical date with any request for additional
information received by either party from any Governmental or Regulatory
Authority pursuant to the HSR Act and (iii) cooperate with the other party in
connection with
51
such party's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by any Governmental or Regulatory Authority pursuant to the
HSR Act.
SECTION 7.03. Public Announcements. The parties agree to consult with
each other before issuing any press release or making any statement to the
public with respect to the execution and delivery of this Agreement or the
occurrence of the Closing and, except as may be required by applicable Law or
any listing agreement with any national securities exchange, will not issue any
such press release or make any such statement to the public prior to such
consultation; provided that except as required by applicable Law, no party
hereto will disclose the identity of another party hereto or its Affiliates or
owners without their prior written consent; and provided further, however, that
Buyer understands and agrees that Cambrex's initial press release announcing the
execution and delivery of this Agreement will refer to "Arsenal Capital
Partners" as the owner of Buyer.
SECTION 7.04. WARN Act. Buyer shall assume all obligations and
liabilities for the provision of notice or payment in lieu of notice or any
applicable damages and/or penalties under the Worker Adjustment and Retraining
Notification Act (the "WARN Act") or any similar state or local Law arising as a
result of any termination following the Closing of Business Employees covered by
the WARN Act or any similar state or local Law. Sellers shall take all actions
necessary to comply with the WARN Act and each similar state or local law for
all periods prior to the Closing.
SECTION 7.05. Transition Services. Cambrex and Buyer shall enter into,
simultaneously with but subject to the occurrence of the Closing, the Transition
Services Agreement.
SECTION 7.06. Supply Agreements. Cambrex and Buyer shall enter into,
simultaneously with but subject to the occurrence of the Closing, the Supply
Agreements.
SECTION 7.07. Sellers' Retained Remediation Activities. (a) Without
limiting any provision of this Agreement, Sellers shall conduct or cause to be
conducted, or shall cause the applicable Seller to conduct or cause to be
conducted, all Remediation required to resolve Environmental Liabilities
existing as of the Closing Date and related to the presence of Hazardous
Materials in, on, beneath, from or adjacent to the Bayonne Facility and the
Xxxxxxxx Facility, as provided in this Section 7.07 ("Retained Remediation
Activities"). All Environmental Liabilities arising from or relating to these
activities shall be Excluded Liabilities under this Agreement.
(b) At the Xxxxxxxx Facility, the applicable Seller shall conduct
and complete the Remediation of Hazardous Materials identified as of the Closing
Date in or subject to the Nepera Consent Order, as required to be implemented by
the New York Department of Environmental Conservation ("NYDEC") pursuant to the
Record of Decision for Site No. 33606, dated March 1997. The applicable Seller
shall prepare all reports, correspondence, studies and documentation necessary
for such Remediation at its own expense and shall conduct and complete such
Remediation in compliance with the Orders of NYDEC and otherwise in compliance
with applicable Environmental Laws.
52
(c) At the Bayonne Facility, the applicable Seller shall conduct
and complete all Remediation required under the New Jersey Industrial Site
Recovery Act, as amended, and the regulations thereunder ("ISRA") as follows:
(i) Prior to the Closing, the applicable Seller shall
take all actions necessary to obtain from the New Jersey Department of
Environmental Protection ("NJDEP") one or more of the following to the
extent required by ISRA (or the equivalent under ISRA) in order to
permit the transfer of the Bayonne Facility and related Real Property
to Buyer as contemplated by this Agreement: (A) an authorization to
transfer ownership or operations pursuant to N.J.S.A. Section
13:1K-11.5; (B) an approved negative declaration; (C) an approved
remedial action workplan; (D) a no further action letter or
authorization letter under NJ Administrative Code, Section 7:26B-1.8;
and/or (E) an approved remediation agreement ("Remediation Agreement").
The applicable Seller shall secure or post any "remediation funding
source" in the amount and form required by ISRA and any Remediation
Agreement to be entered into between Sellers, Buyer and NJDEP.
(ii) Following the Closing, the applicable Seller shall
conduct and complete the Remediation required under ISRA as a result of
the consummation of the transactions contemplated by this Agreement and
any Remediation Agreement, including, without limitation, conducting
all necessary investigations, submitting all necessary applications and
reports, executing all necessary agreements and taking all other
actions required by NJDEP to comply with ISRA.
(d) The applicable Seller's Remediation obligations under Section
7.07(b) shall be satisfied with respect to the Xxxxxxxx Facility and the
applicable Seller's Remediation obligations under Section 7.07(c) shall be
satisfied with respect to the Bayonne Facility upon (in each case) (i) (x)
completion of Remediation sufficient to achieve reductions of contaminant
concentrations or risk levels of the Hazardous Materials for which the
applicable Seller is responsible under this Section 7.07 required for continuing
use of the Xxxxxxxx Facility and the Bayonne Facility, as applicable, for its
present purposes ("Industrial Cleanup Standards"), and (y) issuance of a written
assurance of concurrence by the jurisdictional Governmental or Regulatory
Authorities (such as a "no further action" letter or its equivalent or
acceptance by such Governmental or Regulatory Authority of the applicable
Seller's final notice of completion) that such Remediation has been completed as
required by applicable Law, and (ii) in either case, if monitoring or
maintenance of the site conditions is required after completion of Remediation,
such monitoring and/or maintenance having been conducted for a period of at
least two years without the imposition of additional Remediation requirements
(unless a longer period is required by a Governmental or Regulatory Authority),
with respect to the Hazardous Materials for which the applicable Seller is
responsible under this Section 7.07, by the jurisdictional Governmental or
Regulatory Authorities; provided, however, that Sellers shall remain responsible
for all biennial reporting and certification requirements associated with any
institutional controls used as part of the Remediation at the Bayonne Facility,
including but not limited to the reporting and certification requirements of a
Deed Notice (N.J.A.C. 7:26E-8.1 - 8.7 and Appendix E) or a ground water
Classification Exception Area (N.J.A.C. 7:26E-8.1 - 8.7), and any sampling
required during or at the conclusion of a Classification Exception Area.
53
(e) Prior to the breaking of ground or performance of any
Remediation by the Sellers under this Section 7.07, the Sellers shall make
reasonable effort to locate, identify and xxxx all subsurface utilities,
including at the Bayonne Facility in compliance with the Underground Facility
Protection Act, N.J.S.A. 48:2-73 et seq. and N.J.A.C. 14:2-5.1 et seq. and at
the Xxxxxxxx Facility in compliance with the Protection of Underground
Facilities, NY Pub. Serv. Law Section 119-b (XxXxxxxx 2003). All ground water,
development water, drill cuttings, used personal protective equipment or other
material generated as a result of Remediation by Sellers ("Remediation
Material") under this Section 7.07 shall be the sole property of the Sellers,
and the Sellers shall be the sole generator of such material and shall be
responsible for the proper handling, storage and disposal of such materials in
accordance with Environmental Laws except to the extent such Remediation
Material is commingled with contaminated material generated by Buyer. Sellers
shall use their commercially reasonable efforts to remove Remediation Materials
from the applicable Real Property as soon as reasonably practicable following
generation thereof. Following the completion of the Remediation, the Sellers
shall at their sole cost and expense restore the ground at the Real Property to
substantially the same condition it was in prior to the performance of the
Remediation.
(f) With respect to the Remediation obligations under this Section
7.07, Buyer shall not:
(i) Without the express written consent of Cambrex,
communicate with NJDEP, NYDEC or any other Governmental or Regulatory
Authority or any third Person regarding Hazardous Materials being
addressed by Remediation conducted by the applicable Seller or any
other Seller pursuant to this Section 7.07 with respect to the Xxxxxxxx
Facility or the Bayonne Facility, unless and to the extent required to
do so (x) pursuant to applicable Law, and then only after providing
Cambrex with reasonable notice and the opportunity to defend such
request and/or respond to it on Buyer's behalf, or (y) in an emergency
situation or to mitigate damages from the release of Hazardous
Materials, in either of which cases Buyer shall promptly send copies of
all such communications to Cambrex;
(ii) Engage in any Deviation from Past Practices that
materially increases the obligations of or cost or scope of Remediation
required to be conducted by any Seller pursuant to this Section 7.07;
or
(iii) Without limiting any of the provisions of this
Section 7.07, unreasonably or negligently interfere with any Seller's
performance of its Remediation obligations under this Section,
including any destruction of documents or equipment, denial of access
or refusal to respond to or sign documentation reasonably requested by
Sellers to comply with such Remediation obligations; provided that
nothing in this Section 7.07(f) shall unreasonably interfere with the
operations of the Xxxxxxxxxx Chemicals Business or cause Buyer to incur
any material additional expense.
(g) With respect to the Remediation obligations under this Section
7.07, Buyer shall:
54
(i) Provide to Sellers and their Representatives and
contractors such reasonable access to the Xxxxxxxx Facility and the
Bayonne Facility as is reasonably required, during the normal working
hours of the Xxxxxxxx Facility and the Bayonne Facility, for the
performance of any required Remediation, including without limitation,
such access as is reasonably necessary to finance, install and operate
groundwater monitoring or recovery xxxxx, groundwater collection and
treatment systems, and to conduct removal of Hazardous Materials,
provided that none of the activities of Sellers or their
Representatives shall unreasonably interfere with Buyer's operation of
the Xxxxxxxxxx Chemicals Business and the Purchased Assets at such
facilities;
(ii) Without limiting any of the provisions of this
Section 7.07, provide to Sellers and their Representatives and
contractors such non-privileged information as is within the reasonable
possession or knowledge of Buyer and/or, to the extent reasonably
available, current Business Employees of the Bayonne Facility or the
Xxxxxxxx Facility, in each case, relating to the performance of the
Remediation, including without limitation non-privileged information
regarding the location of Hazardous Materials for which any Seller is
responsible hereunder, historical uses of the Xxxxxxxx Facility or
Bayonne Facility, and the location of subsurface structures, equipment
and utilities;
(iii) Sign any certifications or other documentation,
including without limitation, any deed restrictions, use restrictions,
applications, certifications or other reasonable agreements required by
the applicable Seller or NJDEP, with respect to the Bayonne Facility,
or the applicable Seller or NYDEC, with respect to the Xxxxxxxx
Facility, in order to complete the Remediation and obtain concurrence
of such completion from the jurisdictional Governmental or Regulatory
Authorities; provided, however, that Buyer shall have no obligation to
sign any such certifications or other documents to the extent such
certifications and documents impose engineering barriers, institutional
controls or other limitations that could result in material cost to
Buyer or unreasonably interfere with Buyer's ability to conduct a
chemicals manufacturing, warehousing or distribution business on the
Real Property; and
(iv) In connection with any Remediation by Sellers under
this Section 7.07, Buyer and its Affiliates shall be entitled to
reasonable participation in the activities of each Seller relating
thereto and each Seller shall facilitate such participation, such
reasonable participation to include, without limitation, the right to
(x) receive and comment on copies of material reports, work plans,
agreements with any Governmental or Regulatory Authority and other
documents prior to submission (and each Seller shall consider in good
faith any reasonable comments of Buyer with respect thereto); (y)
receive prior notice of and attend (as an observer) any meetings with
Governmental or Regulatory Authorities (if acceptable to such
authorities); and (z) review and comment on material decisions of each
Seller; provided that without limiting any other provision of this
Section 7.07(g)(iv), the parties recognize that ultimate
decision-making authority is retained by Sellers.
55
(h) Buyer's breach of any of its obligations under Section 7.07(f)
or Section 7.07(g) shall not excuse performance by Sellers of any of their
obligations under this Agreement, and Buyer shall not be liable to Sellers for
any consequential, punitive, special, indirect or incidental damages as a result
of any such breach.
(i) Without limiting any other provision of this Agreement,
Sellers and Buyer shall diligently and expeditiously as reasonably practicable,
perform their respective obligations under this Section 7.07.
(j) To the extent that, as a result of the ISRA compliance
procedures undertaken pursuant to paragraph (c) of this Section 7.07, the
jurisdictional Governmental or Regulatory Authority agrees that one or more
specifically designated areas of the Bayonne Facility or the related Real
Property constitutes an "inaccessible solid waste management unit," an
"inaccessible area of concern," or similar designation and, in any such case, is
not required to be Remediated, Buyer shall reasonably consider, and negotiate in
good faith, a request by Sellers to amend the definition of "Designated
Environmental Concerns" contained in this Agreement to include one or more of
such areas; provided that Buyer may, following such negotiations, decide in its
sole and reasonable discretion not to agree to include one or more of such areas
in such definition.
SECTION 7.08. Other Remediation Activities. (a) Except for the Retained
Remediation Activities, which are governed by Section 7.07, Remediation Costs
arising from or relating to other Environmental Liabilities arising from or
related to the presence or release of Hazardous Materials in, on, beneath, from
or adjacent to any of the Real Property on or prior to the Closing Date or
non-compliance with any Environmental Law (as such Laws are in effect on or
prior to the Closing Date) on or prior to the Closing Date ("Other Remediation
Activities") shall be allocated between Buyer and Cambrex as provided in this
Section 7.08.
(b) Except as provided in paragraph (c) or (d) of this Section
7.08, Cambrex will be responsible for all Remediation Costs relating to or
arising out of Other Remediation Activities with a Remediation Commencement Date
occurring during the Applicable Period; provided that Buyer shall be responsible
for the first $75,000 of all such Remediation Costs incurred during each twelve
(12) month period during the Applicable Period.
(c) Notwithstanding the provisions of paragraph (b) of this
Section 7.08, Remediation Costs relating to or arising out of Other Remediation
Activities with a Remediation Commencement Date occurring during the Applicable
Period to the extent they arise or result from a Deviation from Past Practices
with respect to a Designated Environmental Concern shall be allocated between
Buyer and Cambrex as follows, except that Buyer will be responsible for the
first $100,000 of such Remediation Costs incurred during each twelve (12) month
period during the Applicable Period:
56
TWELVE- MONTH PERIOD
BEGINNING WITH THE CAMBREX SHARE OF BUYER SHARE OF
CLOSING DATE REMEDIATION COSTS REMEDIATION COSTS
-----------------------------------------------------------------------------------
Period 1 80% 20%
-----------------------------------------------------------------------------------
Period 2 80% 20%
-----------------------------------------------------------------------------------
Period 3 80% 20%
-----------------------------------------------------------------------------------
Period 4 70% 30%
-----------------------------------------------------------------------------------
Period 5 60% 40%
-----------------------------------------------------------------------------------
Period 6 50% 50%
-----------------------------------------------------------------------------------
Period 7 40% 60%
-----------------------------------------------------------------------------------
Period 8 30% 70%
-----------------------------------------------------------------------------------
Period 9 20% 80%
-----------------------------------------------------------------------------------
Period 10 20% 80%
-----------------------------------------------------------------------------------
Any Remediation Costs required to be borne by Buyer during any twelve (12) month
period during the Applicable Period pursuant to the last clause of the previous
sentence shall be credited against the Remediation Costs allocated to Buyer
pursuant to the chart above for such twelve (12) month period. The applicable
allocation of Remediation Costs between Cambrex and Buyer with respect to any
Other Remediation Activity shall be determined based on the twelve (12) month
period during the Applicable Period in which the Remediation Commencement Date
for such Other Remediation Activity occurs.
(d) Notwithstanding the provisions of paragraph (b) of this
Section 7.08, Buyer shall be responsible for all Remediation Costs relating to
or arising out of Other Remediation Activities with a Remediation Commencement
Date occurring during the Applicable Period which arise or result from a
Deviation from Past Practices with respect to a Designated Area.
(e) Buyer shall be responsible for all Remediation Costs relating
to or arising out of Other Remediation Activities with a Remediation
Commencement Date occurring following the Applicable Period.
(f) Buyer shall conduct or cause to be conducted the Other
Remediation Activities and shall assume Principal Management of such Other
Remediation Activities under this Section 7.08. "Principal Management" means the
authority to principally direct the handling of the Other Remediation
Activities, including, without limitation, selection of consultants,
contractors, experts or advisors; evaluation, selection and implementation of
remedial measures; and negotiations with or challenges to any Governmental or
Regulatory Authority and third parties. In connection with any Other Remediation
Activities with respect to which Cambrex is required by this Section 7.08 to
bear all or any portion of the Remediation Costs, (i) Sellers and
57
their Affiliates shall be entitled to reasonable participation in the activities
of Buyer relating thereto and Buyer shall facilitate such participation, such
reasonable participation to include, without limitation, the right to (x)
receive and comment on copies of material reports, work plans, agreements with
Governmental or Regulatory Authorities and other documents prior to submission
(and Buyer shall consider in good faith any reasonable comments of Sellers with
respect thereto); (y) receive prior notice of and attend any meetings with
Governmental or Regulatory Authorities (if acceptable to such authorities); and
(z) review and comment on decisions of Buyer; provided that Buyer will use
commercially reasonable efforts to cooperate with Cambrex and to minimize such
Remediation Costs, including in connection with the timing and nature of its
provision of notice to and negotiations with Governmental or Regulatory
Authorities.
(g) Without limiting any other provision of this Agreement,
Sellers and Buyer shall diligently and expeditiously as reasonably practicable,
perform their respective obligations under this Section 7.08.
SECTION 7.09. Bulk Sales Laws. Buyer and Sellers each hereby waive
compliance by Sellers with the provisions of the "bulk sales", "bulk transfer"
or similar Laws of any state or other jurisdiction.
SECTION 7.10. MACT Test. (a) Sellers shall undertake diligent efforts
to perform and receive the results, prior to the Closing Date, of the maximum
achievable control technology ("MACT") performance test of the hazardous waste
incinerator at the Xxxxxxxx Facility (the "Xxxxxxxx Incinerator") as required by
the HAPHWC Rule and pursuant to the Comprehensive Performance Test ("CPT") Plan
submitted to the NYDEC on July 30,2003, subject to such modifications as
(consistent with the next sentence) may be agreed to with or imposed by the
NYDEC (the "MACT Test"). Seller agrees to undertake commercially reasonable
efforts to ensure that the final CPT Plan approved by NYDEC will allow the MACT
Test to be performed at a range of operating parameters designed to allow Buyer
to operate the Xxxxxxxx Incinerator at the Target Plant Capacity and under the
Baseline Operating Conditions; provided that Sellers shall not be required to
take any action that could unreasonably delay the performance of the MACT Test.
The parties recognize and agree that the performance of the MACT Test and the
receipt of the results of the MACT Test are not conditions to Closing. If
Sellers are unable to complete the MACT Test prior to the Closing Date, they
shall, through retention of a competent third party testing firm, complete the
MACT Test as soon as reasonably practicable after the Closing Date; provided
that Sellers shall nevertheless prepare the Documentation of Compliance ("DOC")
or Notice of Compliance ("NOC"), as appropriate, and the Required MACT Plans for
the Xxxxxxxx Incinerator by no later than September 30, 2003. Sellers shall pay
for all costs and expenses associated with the MACT Test. Sellers' obligations
under this Section shall be deemed to be satisfied upon receipt of a final Title
V Permit allowing Buyer to operate the Xxxxxxxx Incinerator at the Baseline
Plant Capacity and under the Baseline Operating Conditions.
(b) In the event the MACT Test is unable to be completed prior to
Closing, Buyer will, after Closing and until the MACT Test is completed,
continue to operate the Xxxxxxxx Incinerator in accordance with current
operating conditions, and Buyer will, reasonably prior to and during the MACT
Test, refrain from conducting any unusual operation or maintenance
58
activities that may adversely impact the conduct of the MACT Test; provided that
(i) Buyer shall reasonably consult with Sellers concerning its operation and
maintenance of the Xxxxxxxx Facility (to the extent related to the MACT Test)
reasonably prior to and during the MACT Test and consider Sellers' reasonable
suggestions in good faith and (ii) nothing herein shall (x) require Buyer to
operate the Xxxxxxxx Incinerator in any manner that unduly restricts the
operations of the Xxxxxxxx Facility or (y) prevent Buyer from responding to
emergency situations or complying with all requirements of Law or Governmental
or Regulatory Authorities.
(c) Sellers shall indemnify, defend and hold harmless Buyer from
any and all fines, penalties, costs, expenses and losses, including without
limitation business interruption losses ("MACT Costs"), arising from or relating
to (x) failure of Sellers to prepare the DOC or the NOC, as appropriate, and the
Required MACT Plans by September 30, 2003; (y) failure of the Xxxxxxxx
Incinerator, based on the MACT Test, to comply with all applicable requirements
of the HAPHWC Rule; and (z) Remediation to the extent required by the relevant
Governmental or Regulatory Authorities as a result of the MACT Test in order to
obtain a Title V Permit allowing Buyer to lawfully operate the Xxxxxxxx
Incinerator in a manner that does not represent (i) a material reduction in
Baseline Plant Capacity or (ii) a material increase in Baseline Operating
Conditions. Notwithstanding the foregoing, incremental costs necessitated by
changes in the HAPHWC Rule that are adopted subsequent to the date of the MACT
Test do not constitute MACT Costs for which Sellers are responsible under this
Section. Buyer shall cooperate with Sellers in good faith to enable Sellers to
perform their obligations under this Section and shall conduct all activities
under this Section in a cost effective and commercially reasonable manner so as
to minimize any MACT Costs associated with clauses (x) and (y) above.
(d) In the event that Sellers are required to indemnify Buyer for
any MACT Costs pursuant to this Section, each Seller shall be entitled to
reasonable participation in the activities of Buyer and its Affiliates relating
thereto and Buyer shall facilitate such participation, such reasonable
participation to include, without limitation, the right to (i) receive and
comment on copies of material reports, work plans, and agreements with
Governmental or Regulatory Authorities (and Buyer shall consider in good faith
any reasonable comments of each Seller with respect thereto); (ii) receive prior
notice of and attend any meetings with Governmental or Regulatory Authorities
(if acceptable to such authorities); and (iii) review and comment on decisions
of Buyer.
SECTION 7.11. Apportionment of Remediation Costs. To the extent that
any Remediation with respect to an Other Remediation Activity relates to the
release of Hazardous Materials first occurring after the Closing or
non-compliance with any Environmental Law first occurring after the Closing that
does not, in either case, represent the continuation of a pre-Closing release or
non-compliance, the parties shall agree in good faith on an equitable
apportionment of the Remediation Costs associated therewith to Buyer.
SECTION 7.12. Third Party Recoveries. All rights to claims and related
recoveries against contributing third parties with respect to any Remediation
Costs governed by Section 7.07 or Section 7.08, including under Contracts or
resulting from Actions or Proceedings or otherwise, shall be allocated between
Sellers, on the one hand, and Buyer, on the other hand, in proportion to the
allocation of responsibility for such Remediation Costs under Section 7.07 or
Section 7.08; provided that any deductible payment by Buyer under paragraph (b)
or (c) of
59
Section 7.08 shall have priority to such recoveries over any payments that are
shared by Buyer and Sellers under those paragraphs.
ARTICLE VIII
TAX MATTERS
SECTION 8.01. Definitions. The following terms, as used herein, have
the following meanings:
"Acquired Subsidiary Tax Returns" means all material Tax
Returns required to be filed by or on behalf of the Acquired
Subsidiary.
"Pre-Closing Tax Period" means any Tax period ending on or
before the Closing Date; and, with respect to a Tax period that begins
on or before the Closing Date and ends thereafter, the portion of such
Tax period before and including the Closing Date.
"Seller Group" means, with respect to Federal income taxes,
the affiliated group of corporations (as defined in Section 1504(a) of
the Code) of which any Seller is a member and, with respect to any
income or franchise Taxes, the consolidated, combined or unitary group
of which such Seller or any of its Affiliates is a member other than,
in each case, the Acquired Subsidiary.
"Tax" means any form of taxation, duties, levies and imposts
of any jurisdiction, including without limitation (i) any United States
Federal, state or local or any non-United States net or gross income,
gross receipts, net proceeds, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum,
estimated or other taxes, assessments, duties, fees, levies or other
governmental charges of any kind whatsoever, whether disputed or not,
including any interest, penalty or addition thereto; (ii) any United
Kingdom corporation tax, including installment payments in respect of
corporation tax, advance corporation tax, charge under s.419, s.601(2)
or s.747 Income and Corporation Taxes Xxx 0000, income tax, capital
gains tax, value added tax, duties of excise, customs and other import
duties, inheritance tax, stamp duty reserve tax, capital duties and
national insurance contributions; (iii) any liability for or in respect
of the payment of any amount of a type described in clause (i) or (ii)
of this definition as a result of being a member of an affiliated,
combined, consolidated, unitary or other group for Tax purposes; or
(iv) any liability for or in respect of the payment of any amount
described in clause (i), (ii) or (iii) of this definition as a
transferee or successor, by contract or otherwise.
"Tax Asset" means any net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction, right
to repayment of Tax or any other credit, tax relief or attribute that
could be used or carried forward or back to reduce Taxes
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(including, without limitation, deductions and credits related to
alternative minimum Taxes).
"Tax Return" means any return, statement, report or form
required to be filed with any Governmental or Regulating Authority
relating to Taxes.
"Tax Sharing Agreement" means any existing Contract (whether
or not written) binding the Acquired Subsidiary that provides for the
allocation, apportionment, sharing or assignment of any Tax liability
or benefit, or the transfer or assignment of income, revenues, receipts
or gains for the principal purpose of determining any Person's Tax
liability.
SECTION 8.02. Tax Representations. Cambrex represents and warrants to
Buyer as of the date hereof and at the Closing that, except as set forth in
Section 8.02 of the Seller Disclosure Schedule, (i) all Acquired Subsidiary Tax
Returns required to have been filed or prior to the Closing Date have been filed
on or will be timely filed on or before the Closing Date; (ii) the Acquired
Subsidiary, and with respect to the Purchased Assets the Sellers, have timely
paid all Taxes due and owing and or will timely pay all Taxes due and owing and
have reserved on their respective books and records in accordance with United
States GAAP (with respect to the Purchased Assets other than the Acquired
Subsidiary Shares) and United Kingdom GAAP (with respect to the Acquired
Subsidiary) for all Taxes for which assessments have been received, for all
periods (or portions thereof) ending on or before the Closing Date; (iii) the
Acquired Subsidiary Tax Returns that have been or will be filed on or before the
Closing Date are true, correct and complete in all respects; (iv) there is no
Action or Proceeding now pending or, to Seller's knowledge, proposed against or
with respect to the Acquired Subsidiary in respect of any Tax which could give
rise to a material liability for Taxes; (v) the Acquired Subsidiary is not a
party to any Contract or practice for the sharing of Taxes or obligated to
indemnify any other party for Taxes of such party; (vi) there are no outstanding
rulings of, or requests for rulings with, any Governmental or Regulatory
Authority that are, or if issued would be, binding on the Acquired Subsidiary;
(vii) there are no Liens for Taxes on any asset of the Acquired Subsidiary,
other than for Taxes not yet due and payable or being contested in good faith;
(viii) the Acquired Subsidiary will not be required to include any adjustment in
taxable income for any period ending after the Closing under Section 481 of the
Code (or under any similar provision of the Tax Laws of any jurisdiction) as a
result of a change in the method of accounting for a period ending on or before
the Closing or pursuant to an agreement with a Tax authority with regard to the
Tax liability of the Acquired Subsidiary for any period ending on or before the
Closing; (ix) there are no outstanding powers of attorney enabling any party to
represent the Acquired Subsidiary with respect to Taxes; (x) each Seller and the
Acquired Subsidiary has withheld and paid all Taxes required to have been
withheld and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party, and all
Forms W-2 and 1099 (and non-U.S. forms) required with respect thereto have been
properly completed and timely filed; (xi) the Acquired Subsidiary currently is
not the beneficiary of any extension of time within which to file any Tax
Return; (xii) no claim has ever been made in writing by an authority in a
jurisdiction where the Acquired Subsidiary does not file Tax Returns that it is
subject to taxation by that jurisdiction; (xiii) the unpaid Taxes of the
Acquired Subsidiary, being current Taxes not yet due and payable, (a) as of
December 31, 2002, did not exceed the amount of the reserve for Tax liability
(rather than any reserve for deferred Taxes
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established to reflect timing differences between book and Tax income) set out
on the face of the Acquired Subsidiary's audited balance sheet prepared in
accordance with United Kingdom GAAP for the year ended December 31, 2002 (rather
than in any notes thereto) and (b) as of the Closing Date, will not exceed the
amount of that reserve, as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Acquired Subsidiary
in filing its Tax Returns; (xiv) any Tax Assets included in the Acquired
Subsidiary's audited accounts prepared in accordance with United Kingdom GAAP
for the year ended December 31, 2002 are available as at Closing; (xv) the
Acquired Subsidiary has kept and preserved all such records and information as
are likely to be needed in respect of Tax Returns relating to periods ended
before or current at Closing; (xvi) the Acquired Subsidiary has not without the
prior consent of the United Kingdom Treasury been a party to any transaction for
which consent under s.765 Income and Corporation Taxes Act 1988 was required or
would have been required but for s.765A Income and Corporation Taxes Xxx 0000;
(xvii) the Acquired Subsidiary has not entered into or been party to a
transaction or series of transactions to which (or which contain steps to which)
s.703, s.770A or Schedule 28AA Income and Corporation Taxes Xxx 0000, s.168A
Finance Xxx 0000, schedule 9 paragraph 13 Finance Xxx 0000, paragraph 21
schedule 20 Finance Xxx 0000, paragraph 16 schedule 12 Finance Xxx 0000,
schedule 29 paragraph 111 Finance Xxx 0000, schedule 26 paragraph 23 Finance Xxx
0000 or paragraph 5 schedule 0 XX Xxxxxxxx xx Xxxxxxxxxx Xxxxx Xxx 0000 could
apply in each case without having received clearance in respect thereof from the
United Kingdom Inland Revenue; (xviii) Section 8.02 of the Seller Disclosure
Schedule contains details of any claims made by the Acquired Subsidiary under
Section 152 to 156 or s179B Taxation of Chargeable Gains Xxx 0000 and no such
claim or other claim has been made by any other Person (in particular pursuant
to s.175 TCGA 1992) which affects or could affect the amount or value of the
consideration for the acquisition of any asset by the Acquired Subsidiary taken
into account in calculating liability to corporation tax on chargeable gains on
a subsequent disposal; (xix) the Acquired Subsidiary has properly operated the
United Kingdom Pay As You Earn system, and has made such deductions and payments
in respect of United Kingdom income tax and national insurance contributions in
respect of payments or benefits made or treated as made to current or former
employees and officers; (xx) the Acquired Subsidiary has not provided, or agreed
to provide, to any current or former employee or officer any rights or benefits
in or connected to shares or securities; (xxi) all documents in the enforcement
of which the Acquired Subsidiary has an interest which are subject to United
Kingdom stamp duty have been duly stamped; (xxii) the Acquired Subsidiary has
charged and accounted for value added tax as required by the Value Added Tax Xxx
0000 and regulations thereunder, and all supplies made by the Acquired
Subsidiary are taxable supplies for value added tax purposes; (xxiii) the
Acquired Subsidiary is disregarded as a separate entity from its owner for
United States Federal tax purposes and (xxiv) the UK Pension Scheme (x) has
properly and punctually accounted to the UK Board of Inland Revenue for all and
any Tax for which the UK Pension Scheme is liable or accountable, and (y) is not
liable to taxation on any income from or capital gains on any of the funds which
are or have been held for the purposes of the UK Pension Scheme.
SECTION 8.03. Purchase Price Allocation; Tax Covenants. (a) Buyer and
Cambrex shall in good faith allocate the Purchase Price (together with Assumed
Liabilities properly included) and any adjustment thereto among the Sellers, and
with respect to each Seller, among the Acquired Subsidiary and the Purchased
Assets (including the non-compete provisions of Section 5.07) sold by such
Seller, all in a manner consistent with the fair market values
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determined in good faith and on a reasonable basis by Buyer and Sellers prior to
the Closing Date. Such allocation shall be consistent with Section 1060 of the
Code and the Treasury Regulations thereunder. In addition, Buyer and Cambrex
will use reasonable efforts to prepare IRS Form 8594 and related exhibits and
will act in accordance with the allocation agreed to by the parties on such Form
8594 and in the preparation, filing and audit of any and all Tax Returns.
(b) Unless otherwise required by Law, with respect to Tax Returns
of the Acquired Subsidiary for periods (or portions thereof) ending on or prior
to the Closing Date, Buyer will not without the consent of the relevant Seller
(such consent not to be unreasonably withheld) cause or permit the Acquired
Subsidiary or any Affiliate of Buyer (i) to take any action on or following the
Closing Date, other than in the ordinary course of business, which is likely to
increase any Tax liability or reduce any Tax Asset of any member of the Seller
Group or (ii) to make or change any Tax election for a Tax Return already filed
(except as provided in this Section 8.03(b)), or amend any Acquired Subsidiary
Tax Return, in each case in respect of the Acquired Subsidiary, which is likely
to increase any Tax liability or reduce any Tax Asset of any member of the
Seller Group. Buyer agrees that no member of the Seller Group is to have any
liability for any Tax resulting from any action not allowed in the preceding
sentence and agrees to indemnify and hold harmless Sellers and their respective
Affiliates against any such Tax (together with any interest, penalty, addition
to Tax or additional amount) and any liabilities, costs or expenses (including,
without limitation, reasonable expenses of investigation and attorneys' fees and
expenses) arising out of or incident to the imposition, assessment or assertion
of any such Tax.
(c) Cambrex shall prepare and file or cause to be prepared and
filed (i) all Tax Returns in respect of the Purchased Assets and (ii) all
Acquired Subsidiary Tax Returns, in each case for any taxable period (including
short taxable periods) ending on or prior to the Closing Date. Buyer shall
cooperate, and cause the Acquired Subsidiary to cooperate, with the preparation
and filing of such Tax Returns, including by making employees and
Representatives of Buyer and the Acquired Subsidiary available to Cambrex and
its Representatives upon their reasonable request.
(d) All Acquired Subsidiary Tax Returns not specified in Section
8.03(c) to be filed by the Acquired Subsidiary after the Closing Date which
includes any Pre-Closing Tax Period will be filed by Buyer when due (taking into
account any extension of a required filing date). Unless otherwise required by
applicable Law, any such Acquired Subsidiary Tax Return shall be prepared in a
manner consistent with past practice and without a change of any election or any
accounting method and shall be submitted by Buyer to Cambrex at least sixty (60)
days prior to the due date (including extensions) of such Acquired Subsidiary
Tax Return and shall be subject to Cambrex's review and approval, which shall
not be unreasonably withheld or delayed. Buyer shall not include Cambrex or any
Cambrex Affiliates in any Tax Returns (including any VAT Tax Returns) of or with
respect to the Acquired Subsidiary filed by Buyer pursuant to this Section
8.03(d). Sellers shall cooperate with the preparation and filing of such Tax
Returns, including by making employees and Representatives of Sellers available
to the Acquired Subsidiary or Buyer and its Representatives upon their
reasonable request.
(e) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred in
connection with transactions contemplated
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by this Agreement (including any real property transfer Tax and any similar Tax)
shall be paid 50 percent by Buyer and 50 percent by Cambrex. Buyer will, at its
own expense, file all necessary Tax Returns and other documentation with respect
to all such Taxes and fees, will submit such Tax Returns to Cambrex at least
sixty (60) days prior to the due date (including extensions) of such Tax Returns
and will not file such Tax Returns without Cambrex's approval, which shall not
be unreasonably withheld or delayed. If required by applicable Law, Cambrex
will, and will cause its respective Affiliates to, join in the execution of any
such Tax Returns and other documentation. Upon receipt of written notice from
Buyer as to the amount of such Taxes payable in connection with the transactions
contemplated by this Agreement, Cambrex shall pay to Buyer (or the applicable
taxing authority if directed by Buyer) 50 percent of the amount of such Taxes,
but in no event will Cambrex be required to make such payment before the date
that is five (5) days before such Taxes are due. Cambrex, Sellers and Buyer
shall enter into, simultaneously with but subject to the occurrence of the
Closing, the Stamp Duty Agreement substantially in the form of Annex J to this
Agreement.
(f) For purposes of determining the research credit allowable
under Code Section 41 for periods beginning after the sale of the Purchased
Assets, gross receipts and qualified research expenses paid or incurred with
respect to the Xxxxxxxxxx Chemicals Business during periods before the sale of
the Purchased Assets shall be reflected in Buyer's applicable U.S. Tax Returns.
Specifically, and without limitation, Sellers and their Affiliates shall remove
the gross receipts and qualified research expenditures attributable to the
Xxxxxxxxxx Chemicals Business from their base-period percentage. Buyer shall
include the gross receipts and qualified research expenditures attributable to
the Xxxxxxxxxx Chemicals Business in its base-period percentage. Sellers shall
furnish Buyer with such information as Buyer determines to be reasonably
necessary for purposes of carrying out the provisions of this paragraph.
SECTION 8.04. Tax Sharing. Any and all existing Tax Sharing Agreements
shall be terminated as of the day before the Closing Date. After such date the
Acquired Subsidiary shall have no further rights or liabilities thereunder.
Except as approved in writing by Buyer prior to Closing, all powers of attorney
authorizing any party to represent the Acquired Subsidiary shall be terminated
on or before the Closing Date.
SECTION 8.05. Cooperation on Tax Matters. Buyer and Cambrex agree to
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information (including access to books and records) and
assistance relating to the Xxxxxxxxxx Chemicals Business (including the Acquired
Subsidiary) as is reasonably necessary for the filing of any Tax Return or the
preparation for any audit, and for the prosecution or defense of any Action or
Proceeding relating to any proposed Tax adjustment. Buyer and Cambrex agree to
retain or cause to be retained all books and records pertinent to the Xxxxxxxxxx
Chemicals Business (including the Acquired Subsidiary) until ninety (90) days
after the applicable period for assessment under applicable Law (giving effect
to any and all extensions or waivers) has expired, and to abide by or cause the
abidance with all record retention agreements entered into with any Governmental
or Regulatory Authority. Buyer shall give, and cause the Acquired Subsidiary to
give, Cambrex reasonable notice prior to transferring, discarding or destroying
any such books and records relating to Tax matters and, if Cambrex so requests,
Buyer shall allow or cause the Acquired Subsidiary to allow Cambrex to take
possession of such books and records. Buyer and Cambrex shall cooperate with
each other in the conduct of any audit or other
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proceedings involving the Acquired Subsidiary or the Xxxxxxxxxx Chemicals
Business for any Tax purposes and each shall execute and deliver such powers of
attorney and other documents as are reasonably necessary to carry out the intent
of this Section 8.05.
SECTION 8.06. Indemnification by Sellers. (a) Cambrex hereby
indemnifies Buyer against and agrees to hold it harmless from any Damages
attributable to, without duplication, (i) any Tax of the Acquired Subsidiary or
with respect to the Purchased Assets, in each case relating to a Pre-Closing Tax
Period or (ii) any misrepresentation or breach of warranty made by Cambrex in
Section 8.02 with respect to the Acquired Subsidiary (Damages and Taxes, without
duplication, indemnified against hereunder being referred to as a "Loss").
Except in the case of Excluded Liabilities, this Section 8.06 shall provide the
sole source of indemnification from Cambrex in respect of any Tax. Sellers shall
reimburse Buyer for any Loss within fifteen (15) business days after payment of
such Damages by Buyer or its Affiliates.
(b) For purposes of this Section 8.06, in the case of any Taxes
that are imposed on a periodic basis and are payable for a taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax related
to the portion of such taxable period ending on the Closing Date shall (x) in
the case of any Taxes based upon or related to franchise Taxes based on
capitalization, debt or shares of stock authorized, issued or outstanding,
property Taxes and ad valorem Taxes, be deemed to be the amount of such Tax for
the entire taxable period multiplied by a fraction the numerator of which is the
number of days in the portion of the taxable period ending on the Closing Date
and the denominator of which is the number of days in the entire taxable period,
and (y) in the case of any Tax not described in clause (x), be deemed to be
equal to the amount which would be payable if the relevant taxable period ended
on the Closing Date. Any credits relating to a taxable period that begins before
and ends after the Closing Date shall be taken into account as though the
relevant taxable period ended on the Closing Date. All determinations necessary
to give effect to the foregoing allocations shall be made, subject to Cambrex's
approval not to be unreasonably withheld or delayed, in a manner consistent with
prior practice of the Acquired Subsidiary.
(c) If any claim or demand for Taxes in respect of which indemnity
may be sought pursuant to this Section 8.06 is asserted in writing against Buyer
or any of its Affiliates, Buyer shall notify Cambrex of such claim or demand
promptly upon the receipt thereof and shall give Cambrex such information with
respect thereto as Cambrex may reasonably request. The failure of Buyer to
notify Cambrex promptly shall not relieve Cambrex of its obligations under this
Agreement except to the extent such failure materially prejudices Cambrex's
ability to defend the claim or otherwise increases Cambrex's liability in
respect of the Taxes which are the subject of the claim. Cambrex may discharge,
at any time, its indemnification obligation under this Section 8.06 by paying to
Buyer the amount payable pursuant to this Section 8.06, calculated on the date
of such payment. Cambrex may, at its own expense and subject to Section 8.06(e),
participate in and, upon notice to Buyer, assume and control the defense of any
such Action or Proceeding (including any Tax audit), but in such case only so
long as Cambrex conducts the defense of such Action or Proceeding in good faith
and diligently. So long as Cambrex assumes and controls such defense, (i) Buyer
shall have the right (but not the duty) to observe the defense thereof and to
employ counsel separate from the counsel employed by Cambrex; (ii) provided
Cambrex complies with Section 8.06(e), Cambrex shall not be liable for any
expenses incurred thereafter by Buyer in connection with the defense of any such
Action or Proceeding; and (iii) subject to
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Section 8.06(e), Buyer shall execute or cause the Acquired Subsidiary to execute
any power of attorney or other document necessary to permit Cambrex to control
or to settle or to otherwise resolve any such Action or Proceeding.
(d) Cambrex shall not be liable under this Section 8.06 for (i)
any Tax the payment of which was made without its prior written consent that was
reasonably withheld and (ii) any settlements effected without the written
consent of Cambrex and resulting from any Action or Proceeding in which Cambrex
was not permitted an opportunity to assume and control the defense in accordance
with the terms of this Section 8.06; provided, however, that this Section
8.06(d) shall not apply if Cambrex previously notified Buyer of its intention to
control the defense of such Action or Proceeding and such payment or settlement
occurs following Cambrex's failure to (x) diligently and in good faith control
the defense of such Action or Proceeding or (y) comply with Section 8.06(e).
(e) Cambrex shall not be entitled pursuant to this Section 8.06 to
take any action on behalf of the Acquired Subsidiary or to require Buyer to take
any action which would (i) materially increase the liability to Tax of Buyer,
the Acquired Subsidiary or any of their Affiliates; (ii) involve the disclosure
of information confidential to Buyer, the Acquired Subsidiary or their
Affiliates; or (iii) otherwise have a materially adverse affect on the business
of Buyer or the Acquired Subsidiary.
SECTION 8.07. Survival. The indemnity obligations of Cambrex in this
Article VIII shall survive until sixty (60) days after the expiration of the
applicable statute of limitations (giving effect to any waiver or extension
thereof). Furthermore, any claims notified to Cambrex on or before such date
shall survive until they have been finally resolved and any payment to be made
in respect of such claim has been paid. None of the representations and
warranties set forth in Section 8.02 shall survive the Closing, except that the
representations and warranties (including portions thereof) in Section 8.02
relating to the Acquired Subsidiary shall survive until six (6) months after the
expiration of the applicable statute of limitations (after giving effect to any
extensions or tolling thereof).
SECTION 8.08. Exclusivity. The indemnification provided in this Article
VIII will be the sole and exclusive remedy of Buyer with respect to matters
described in this Article VIII, and Buyer hereby waives any rights and claims
which it or any of its Affiliates may otherwise have against the other parties
hereto and their respective Affiliates, whether in Law or in equity, relating to
or arising out of the matters described in this Article VIII.
ARTICLE IX
EMPLOYEE BENEFITS
SECTION 9.01. Employees and Offers of Employment. (a) On the Closing
Date, Buyer shall offer employment in a comparable position to all Business
Employees (other than Business Employees of the Acquired Subsidiary, who shall
remain employed by the Acquired Subsidiary) and in good faith encourage such
Business Employees to accept such offers of employees,
66
provided that Buyer or the Acquired Subsidiary may (in accordance with its
regular procedures) terminate the employment of or (subject to paragraph (b)
below) otherwise modify the terms of such employment at any time after the
Closing Date for any Transferred Employee (as defined below) who accepts such
offer; provided, however, that Buyer shall not take or omit to take, and shall
not cause the Acquired Subsidiary to take or omit to take, any action that could
result in any liability to any of the Sellers or their Affiliates under the WARN
Act. Sellers shall use their commercially reasonable efforts to cooperate in
facilitating the performance of Buyer's obligation to make such offers. Any such
offers shall be at such base salary and bonus opportunity which, in the
aggregate, are no less favorable than that provided to the respective Business
Employees immediately prior to the Closing Date and at a work location that is
within thirty-five (35) miles of the Business Employee's then current work
location. The Business Employees offered employment by Buyer and who accept and
commence such employment in accordance with this Section 9.01, together with all
Business Employees of the Acquired Subsidiary, are hereinafter collectively
referred to as the "Transferred Employees". Unless otherwise provided herein,
Sellers shall retain all liability for Transferred Employees for all time
periods prior to the date each Transferred Employee commences employment as an
active employee with Buyer. All Transferred Employees will be deemed for
purposes of this Section 9.01 to have commenced employment with Buyer as of the
Closing Date.
(b) Buyer shall honor and assume or cause the Acquired Subsidiary
to maintain all vacation, personal and sick days accrued by Transferred
Employees under any plans, policies, programs and arrangements of Cambrex or any
of its Affiliates in effect immediately prior to the Closing (to the extent
taken into account in determining the Closing Date Working Capital Amount) and,
except as to those employees covered under any Collective Bargaining Agreements,
Buyer shall provide, and shall cause its Affiliates and the Acquired Subsidiary
to provide, Transferred Employees from the Closing Date through the first
anniversary of the Closing Date (the "Continuation Period") with (A) annual base
salary and bonus opportunity that is not less than the annual base salary and
bonus opportunity which they were receiving immediately prior to the Closing
Date, and (B) benefits which in the aggregate (excluding retiree medical
benefits and any benefit provided under a defined benefit plan but including
medical and dental payments plans, 401(k) plans and severance arrangements) are
competitive in the industry for companies of comparable size and in similar
locations. Notwithstanding the foregoing, nothing contained herein shall be
deemed to entitle any Transferred Employee to any severance or other form of
separation pay by reason of his or her ceasing to be an employee of Sellers and
becoming an employee of Buyer or any of its Affiliates pursuant to this
Agreement.
(c) For purposes of determining eligibility to participate and
vesting with respect to any plan, program or arrangement of Buyer or its
Affiliates in which a Transferred Employee may participate (including any
defined benefit and defined contribution plans), and for purposes of determining
entitlement to severance benefits, vacation and service awards, service with any
Sellers and their Affiliates shall be treated as service with Buyer and its
Affiliates; provided, however, that such service shall not be recognized to the
extent that such recognition would result in a duplication of benefits. Such
service shall also apply for purposes of satisfying any waiting periods,
evidence of insurability requirements and the application of any preexisting
condition limitations. Transferred Employees shall be given credit for amounts
paid under a corresponding Plan during the calendar year in which the Closing
occurs for purposes of applying deductibles, co-payments and out-of-pocket
maximums as though such payments had
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been paid in accordance with the terms and conditions of the plans, programs or
arrangements of Buyer and its Affiliates. To the extent that as of the Closing
Date, Transferred Employees (and their covered dependents) meet all eligibility
requirements for retiree welfare benefits under the Plans (disregarding any
requirement that such employee had to have terminated employment from Sellers
and their Affiliates in order to be eligible for such benefits), such
Transferred Employees (and covered dependents) shall remain eligible to elect
such retiree medical coverage under the Plans on and after the date that such
Transferred Employees terminate active employment from Buyer and its Affiliates;
provided, however, (i) such termination of active employment occurs within ten
(10) years following the Closing Date, (ii) such Transferred Employees are not
hired by Buyer or any of its Affiliates thereafter, and (iii) such Transferred
Employees have notified Cambrex of their desire to make such election within
thirty (30) days following the termination of their employment with Buyer.
(d) Following the Closing, Buyer shall assume and honor all
obligations under any Collective Bargaining Agreement as such may exist on the
Closing Date, including, without limitation, the CasChem Collective Bargaining
Agreement, as such Collective Bargaining Agreement may be extended as provided
in Section 5.10.
(e) Buyer and Sellers agree that the payroll Taxes of the
Transferred Employees shall be treated in accordance with the Alternate
Procedure of Section 5 of Revenue Procedure 96-60.
SECTION 9.02. Sellers Plans. (a) Except as expressly set forth herein,
Sellers or their respective designated Affiliates shall retain all liabilities
and obligations (including any underfunding of defined benefit plans and
obligations under Section 4980B of the Code (COBRA)) as of the Closing Date in
respect of benefits accrued under all benefit plans or arrangements maintained,
administered or contributed to by Sellers or their respective ERISA Affiliates
or with respect to which any of the Sellers or any of their ERISA Affiliates has
any liability, including the Employee Plans (including, without limitation, the
Nepera Plan). Except as expressly set forth herein, no assets of any benefit
plans or arrangements maintained, administered or contributed to by any of the
Sellers or any of their Affiliates, including any Employee Plan, shall be
transferred to Buyer or any of its Affiliates or to any plan of Buyer or any of
its Affiliates. Notwithstanding the foregoing, all health care and dependent
care flexible spending accounts (and any corresponding assets thereto)
maintained with respect to Transferred Employees under any cafeteria plan
maintained by any of the Sellers or any of their Affiliates shall be transferred
to Buyer or one of its Affiliates. Sellers shall make all required (in
accordance with historical practices, including any discretionary matching or
profit sharing contributions under any Plan) payments, premiums, contributions,
reimbursements or accruals for all periods (or partial periods) of employment
service for Transferred Employees ending prior to or as of the Closing Date
except for liabilities assumed by Buyer pursuant to this Article IX. Sellers
shall fully vest each Transferred Employee under each Employee Plan that
provides retirement benefits as of the Closing Date. Sellers shall amend any
Employee Plan that is a defined contribution plan to permit the rollover of
promissory notes evidencing outstanding participant loans of Transferred
Employees, without default of such loan, to a tax-qualified defined contribution
plan established by Buyer, and Buyer shall cause such plan to accept such
rollovers.
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(b) All claims incurred by any Transferred Employees or their
covered dependents prior to the Closing Date under any of the Plans shall be
covered pursuant to the terms and conditions of such Plans. All claims incurred
by any Transferred Employees or their covered dependents on or after the Closing
Date under employee benefit plans of Buyer or any of its Affiliates shall be the
responsibility of Buyer. For purposes of this paragraph, a claim shall be deemed
to be incurred on the date on which medical or other treatment or service is
rendered and not the date of the submission of the claim related thereto.
(c) This Section 9.02 shall not apply to the U.K. Pension Scheme.
SECTION 9.03. Bonuses. Within thirty (30) days following the Closing,
Cambrex will pay to each Transferred Employee, or will cause each of the
Transferred Employees to receive, in respect of the year in which the
transactions contemplated in this Agreement are consummated, such bonus as the
employee would have earned pursuant to the Employee Plans as of the Closing Date
if the transactions contemplated by this Agreement had not occurred, in all
events on a basis consistent with past practice, but in no event shall Cambrex
pay to such Transferred Employees an aggregate amount less than $200,000.
SECTION 9.04. Third Party Beneficiaries. No provision of this Agreement
including, without limitation, this Article IX shall (i) create any third party
beneficiary or other rights in any employee or former employee (including any
beneficiary or dependent thereof) of any of the Sellers or any of their
Affiliates in respect of continued employment (or resumed employment) with Buyer
or any of its Affiliates or any of the Sellers or any of their Affiliates or in
connection with the Xxxxxxxxxx Chemicals Business, (ii) create any such rights
in any such individuals in respect of any benefits that may be provided,
directly or indirectly, under any benefit plans or arrangements maintained,
administered or contributed to by any of the Sellers or any of their Affiliates,
including any Employee Plan or U.K. Plan, or any plan or arrangement which may
be established by Buyer or any of its Affiliates, or (iii) constitute a
limitation on rights to amend, modify or terminate after the Closing Date any
such plans or arrangements of Buyer or any of its Affiliates.
SECTION 9.05. Medical Continuation Benefits. In the event that Buyer
has not, as of the Closing Date, been able to establish its own medical, dental
and prescription drug plans, as a convenience to Buyer, Sellers shall extend the
current coverage for such plans of Sellers to the Transferred Employees for up
to eighteen (18) full months following the Closing Date, provided Buyer pays to
Cambrex, not later than January 1, 2004, an amount equal to the aggregate
premium payments for coverage for the period beginning on the Closing Date and
extending through December 31, 2003 for such benefits for the Transferred
Employees, with the cost of such coverage calculated under COBRA, and, on the
first business day of each month beginning with the second full month after the
Closing occurs, pays to Cambrex an amount equal to an additional month's
aggregate premium payments for so long as Buyer wants to continue such coverage
(not to exceed eighteen (18) full months). If Buyer intends to cease the
coverage provided in the prior sentence, then it shall provide Sellers with
written notice that it intends to cease such coverage and the Sellers' medical,
dental and prescription drug plans shall continue to provide benefits until the
last day of the month (the "Health Insurance Termination Date") following the
30th day after Sellers' receipt of such written notice. In the event Buyer
ceases coverage under Sellers' medical, dental and prescription drug plans as
provided in the prior
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sentence, then Cambrex shall refund to Buyer amounts paid for coverage in
respect of periods following the Health Insurance Termination Date less any
amounts or expenses incurred by Sellers in respect of providing such coverage
for periods following the Health Insurance Termination Date.
ARTICLE X
CONDITIONS TO CLOSING
SECTION 10.01. Conditions to Obligations of Buyer and Sellers. The
obligations of Buyer and Sellers to consummate the Closing are subject to the
satisfaction of the following conditions:
(a) Any applicable waiting period under the HSR Act relating to
the transactions contemplated hereby shall have expired or been terminated.
(b) All other applicable consents and approvals of Governmental or
Regulatory Authorities shall have been obtained, including, without limitation,
under ISRA in order to permit the transfer of title to the Bayonne Facility and
the related Real Property from the applicable Seller to Buyer as contemplated by
Section 7.07(c).
(c) No provision of any applicable Law or Order shall prohibit the
consummation of the transactions contemplated hereby.
(d) The consents under or in respect of the Contracts and Licenses
set forth in Section 10.01(d) of the Seller Disclosure Schedule shall have been
obtained.
SECTION 10.02. Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the Closing is subject to the satisfaction of the following
further conditions:
(a) (i) Sellers shall have performed in all material respects all
of their respective obligations hereunder required to be performed by them on or
prior to the Closing Date, (ii) the representations and warranties of Cambrex
contained in this Agreement and in the certificate delivered by Cambrex pursuant
to clause (iii) below shall be true and correct in all material respects on and
as of the Closing Date as if made on and as of such date, except that
representations and warranties qualified by materiality shall be true in all
respects and those made as of a specified earlier date shall have been true and
correct as of such earlier date (in all material respects, unless qualified by
materiality), and (iii) Buyer shall have received a certificate signed by an
officer of Cambrex to the foregoing effects.
(b) Buyer shall have received all documents it may reasonably
request relating to the existence of each of Cambrex, the Sellers and the
Acquired Subsidiary and the authority of each of Cambrex and the Sellers for
this Agreement, all in form and substance reasonably satisfactory to Buyer.
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(c) Each of Cambrex and the Sellers shall have provided to Buyer
copies of resolutions certified by their respective Secretary or an Assistant
Secretary authorizing the execution, delivery and performance of this Agreement
and the transactions contemplated hereby.
(d) (i) Buyer shall have obtained a commitment for an ALTA
Owner's Title Insurance Policy for each parcel of Real Property (other than Real
Property located outside the United States) issued by a title company reasonably
satisfactory to Buyer (the "Title Company"), together with a copy of all
documents referenced therein which are obtained by the Title Company (the "Title
Commitments").
(ii) The Title Company shall have issued title insurance
policies (which may be in the form of a xxxx-up of a pro forma of the Title
Commitments) in accordance with the Title Commitments, insuring Buyer's fee
simple title to each such parcel of Real Property as of the Closing Date
(including all recorded appurtenant easements insured as a separate legal
parcel) with gap coverage from the Title Company through the date of recording,
subject only to Permitted Liens, in such amount as Buyer reasonably determines
to be the value of the Real Property insured thereunder, together with an
extended coverage endorsement (insuring over the general or standard exceptions)
to the extent available in the applicable jurisdiction (the "Title Policies").
(iii) With respect to any Real Property located outside the
United States, Buyer shall have obtained an equivalent form of title assurance
in accordance with local custom reasonably satisfactory to Buyer for each such
parcel of Real Property.
(e) Buyer shall have obtained a survey for each parcel of Real
Property, dated no earlier than the date of this Agreement, prepared by a
licensed surveyor satisfactory to Buyer, and conforming to 1999 ALTA/ACSM
Minimum Detail Requirements for Urban Land Title Surveys, including Table A
Items Nos. 1, 2, 3, 4, 6, 7(a), 7(b)(1), 8, 9, 10, 11(b), 13, 14, 15 and 16 (or
the equivalent standard for Real Property located outside the United States),
and certified to Buyer, Buyer's lenders and the Title Company, in a form
reasonably satisfactory to each of such parties (the "Surveys"). The Surveys
shall not disclose any encroachment from or onto any of the Real Property or any
portion thereof or any other survey defect which has not been cured or insured
over to Buyer's reasonable satisfaction prior to the Closing or which would not
have a Material Adverse Effect.
(f) Sellers shall have delivered to Buyer the instruments of
assignment and assumption referred to in Section 2.07.
(g) During the period from the date of this Agreement to the
Closing Date, there shall not have occurred, and there shall not exist on the
Closing Date, any condition or fact which has, or reasonably may be expected to
have, a Material Adverse Effect.
(h) Buyer shall have obtained the financing contemplated by the
written commitments referred to in the first sentence of Section 4.07 or such
other financing having terms reasonably satisfactory to Buyer and in an amount
at least equal to the amount referred to in the second sentence of Section 4.07.
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(i) Each of the Sellers shall have delivered to Buyer a
non-foreign affidavit dated as of the Closing Date, sworn under penalty of
perjury and in form and substance required under Treasury regulations issued
pursuant to Code Section 1445, stating that such Seller is not a "foreign
person" as defined in Code Section 1445; provided, however, that if a Seller is
such a "foreign person," Buyer shall have been furnished with a certificate
executed by such Seller, in accordance with Treasury Regulation Section
1.1445-2(c)(3), certifying that each interest to be transferred by such Seller
pursuant to this Agreement does not constitute a U.S. real property interest as
defined in Code Section 897(c).
SECTION 10.03. Conditions to Obligation of Sellers. The obligation of
Cambrex and the Sellers to consummate the Closing is subject to the satisfaction
of the following further conditions:
(a) (i) Buyer shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Closing Date, (ii) the representations and warranties of Buyer contained in this
Agreement and in the certificate delivered by Buyer pursuant to clause (iii)
below shall be true in all material respects at and as of the Closing Date as if
made at and as of such date, and (iii) Cambrex shall have received a certificate
signed by an officer of Buyer to the foregoing effects.
(b) Cambrex shall have received the consideration set forth in
Sections 2.07(i) and 2.07(ii) and all documents it may reasonably request
relating to the existence of Buyer and the authority of Buyer for this
Agreement, all in form and substance reasonably satisfactory to Cambrex.
(c) Buyer shall have provided to Cambrex copies of resolutions of
Buyer certified by the Secretary or an Assistant Secretary of Buyer authorizing
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
ARTICLE XI
SURVIVAL; NO OTHER REPRESENTATIONS
SECTION 11.01. Survival. Except as provided in Section 8.07, (a) the
representations, warranties, covenants and agreements of the parties hereto
contained in Section 3.16 and Article IX ( insofar as they relate to ERISA)
shall survive until the expiration of the statute of limitations period
applicable thereto, (b) the representations and warranties of Cambrex contained
in Section 3.18 shall survive the Closing until three (3) years after the
Closing Date, (c) the representations and warranties of Cambrex contained in
Section 8.02 shall survive the Closing only to the extent provided in Section
8.07 and (d) all other representations, warranties, covenants and agreements of
the parties hereto contained in this Agreement shall survive the Closing until
the date which is thirty (30) days following the completion of the audit of the
financial statements relating to the Xxxxxxxxxx Chemicals Business for the year
ended December 31, 2004, but in no event later than April 30, 2005; provided,
however, that the
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representations and warranties contained in Sections 3.01, 3.02, 3.03, 3.06,
3.23, 3.29 and in Sections 4.01, 4.02, 4.03 and 4.08 and the post-Closing
covenants of the parties hereto shall survive indefinitely. Notwithstanding the
preceding sentence, any representation, warranty, covenant or agreement in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence if
notice of the breach thereof giving rise to such right of indemnity shall have
been given to the party against whom such indemnity may be sought prior to such
time.
SECTION 11.02. No Other Representations. Notwithstanding anything to
the contrary contained in this Agreement, it is the explicit intent of each
party hereto that neither Cambrex nor any Seller is making any representation or
warranty whatsoever, express or implied, including but not limited to any
implied representation or warranty as to condition, merchantability or
suitability as to any of the Purchased Assets or other properties employed in
the Xxxxxxxxxx Chemicals Business, except those representations and warranties
contained in Article III and Article VIII and in the certificate delivered
pursuant to Section 10.02(a)(iii). In particular, neither Cambrex nor any Seller
makes any representation or warranty to Buyer with respect to (i) the
information set forth in the Information Memorandum or (ii) any financial
projection or forecast relating to the condition of the Xxxxxxxxxx Chemicals
Business contained therein or otherwise delivered by or on behalf of Sellers to
Buyer
SECTION 11.03. Seller Disclosure Schedule. (a) The parties acknowledge
and agree that (i) the Seller Disclosure Schedule may include certain items and
information solely for informational purposes for the convenience of Buyer
(provided, however, that each item set forth in the Seller Disclosure Schedule
shall be reasonably apparent on its face and shall be set forth with reasonable
specificity regarding the provisions in the Agreement to which it relates) and
(ii) the disclosure by Cambrex and the Sellers of any matter in the Seller
Disclosure Schedule shall not be deemed to constitute an acknowledgment by
Cambrex or the Sellers that the matter is required to be disclosed by the terms
of this Agreement or that the matter is material to the Xxxxxxxxxx Chemicals
Business or otherwise.
(b) Cambrex and Sellers shall from time to time prior to the
second business day preceding the Closing, supplement or amend the Seller
Disclosure Schedule with respect to any matter hereinafter arising or discovered
of which they become aware that could reasonably be expected to cause any
condition to Closing not to be satisfied as of the Closing Date. Any such
supplemental or amended disclosure shall not be deemed to have cured any breach
of any representation or warranty made in this Agreement for purposes of
determining whether or not the condition set forth in Section 10.02(a)(ii) has
been satisfied or to have cured any breach of representation or warranty
required to be made in this Agreement as of any date on or prior to the date of
this Agreement for purposes of Article XII.
(c) The disclosure of any liability or obligation in the Seller
Disclosure Schedule shall not create an Assumed Liability except to the extent
that the disclosure of any such liability or obligation has been expressly
assumed by Buyer as an Assumed Liability as provided on Annex A to this
Agreement.
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ARTICLE XII
INDEMNIFICATION
SECTION 12.01. Indemnification. (a) Cambrex hereby indemnifies Buyer
and its respective successors and assigns (if any) and their respective
officers, directors, employees, stockholders, agents and Affiliates ("Buyer
Indemnified Party") against and agrees to hold each of them harmless from any
and all damage, loss, liability, claim, demand, cost, payment obligation to any
Governmental or Regulatory Authority and expense, including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any Action or Proceeding (collectively, "Damages"), incurred
or suffered by any Buyer Indemnified Party arising out of or relating to:
(i) any misrepresentation or breach of warranty made by
Cambrex pursuant to this Agreement (determined in all cases as if the
terms "material", "materiality", "material adverse effect" or other
similar qualifiers were not included therein), provided that any claim
for a misrepresentation or breach of warranty contained in Section 8.02
shall be brought under Section 8.06 rather than this Article XII;
(ii) any breach of any covenant or agreement made by
Cambrex or any Seller pursuant to this Agreement (other than any
covenant or agreement contained in Article VIII, which shall be
governed exclusively by the terms of Article VIII); and
(iii) any Excluded Liability;
provided that (A) Cambrex shall have no liability for a misrepresentation or
breach of warranty under Section 12.01(a)(i) unless the aggregate amount of
Damages arising out of the matters referred to in such Section exceeds $750,000
and then only to the extent of such excess, and (B) Cambrex's maximum liability
for Damages for misrepresentations and breaches of warranties under Section
12.01(a)(i) shall not exceed 25% of the Purchase Price (as adjusted pursuant to
the terms of this Agreement) in the aggregate, and provided further, however,
that (x) the limitation on Damages contained in the preceding clauses (A) and
(B) shall not apply to or limit Damages otherwise payable in respect of
representations and warranties contained in Sections 3.01, 3.02, 3.03, 3.06,
3.16(a), 3.16(b), 3.16(c), 3.16(d), 3.23, and 3.29, and (y) the limitation on
Damages contained in the preceding clause (A) shall not apply to or limit
Damages otherwise payable in respect of representations and warranties contained
in Section 3.16(e). Notwithstanding the foregoing, (i) Cambrex will not be
required to provide indemnity to Buyer Indemnified Parties for Damages relating
to or arising from Excluded Liabilities described in Item 11 of Annex C to this
Agreement as to which Cambrex is not given notice in accordance with Section
12.02 on or prior to the tenth (10th) anniversary of the Closing Date, (ii) no
Buyer Indemnified Party may seek indemnity for any Remediation Costs based on a
breach of any representation or warranty under Section 3.18 for which Buyer is
otherwise responsible under Section 7.08, and (iii) no Seller Indemnified Party
may seek to avoid any of its obligations to pay Remediation Costs
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under Section 7.07 or 7.08 on the basis on the limitation on Damages payable by
Seller Indemnified Parties contained in clause (A) or (B) of this Section
12.01(a).
(b) Buyer hereby indemnifies Sellers and their respective
successors and assigns (if any) and their respective officers, directors,
employees, stockholders, agents and Affiliates ("Seller Indemnified Party")
against and agrees to hold each of them harmless from any and all Damages
incurred or suffered by any Seller Indemnified Party arising out of or relating
to:
(i) any misrepresentation or breach of warranty made by
Buyer pursuant to this Agreement;
(ii) any breach of any covenant or agreement made by Buyer
pursuant to this Agreement; and
(iii) any Assumed Liability.
SECTION 12.02. Procedures. (a) The party seeking indemnification under
Section 12.01 (including by reason of an alleged breach of a covenant contained
in Section 7.07 or Section 7.08) (the "Indemnified Party") shall give prompt
notice in reasonable detail to the party against whom indemnity is sought (the
"Indemnifying Party") of the assertion of its claim for indemnity, including the
commencement of any Action or Proceeding by any third party in respect of which
indemnity may be sought under such Section ("Third Party Claim"), and will
provide the Indemnifying Party with such information with respect thereto as the
Indemnifying Party may reasonably request. The failure of the Indemnified Party
to so notify the Indemnifying Party shall not relieve the Indemnifying Party of
its obligations hereunder, except to the extent such failure shall have
adversely prejudiced the Indemnifying Party.
(b) The Indemnifying Party will notify the Indemnified Party as
soon as practicable within the Dispute Period whether the Indemnifying Party
disputes its liability to the Indemnified Party with respect to the claim
described in a notice delivered pursuant to Section 12.02 and/or whether the
Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against a Third Party Claim described therein.
(c) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend the
Indemnified Party with respect to a Third Party Claim pursuant to this Section
12.02, then the Indemnifying Party shall be entitled to assume the control of
the defense or settlement of such Third Party Claim in accordance with the
provisions of this Section 12.02, and if requested by the Indemnifying Party,
the Indemnified Party will, at the sole cost and expense of the Indemnifying
Party, cooperate with the Indemnifying Party and its counsel in defending or
settling the Third Party Claim the defense or settlement of which the
Indemnifying Party elects to control (including by furnishing or causing to be
furnished such records, information and testimony, and attending such
conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith, and, if appropriate and related to
the Third Party Claim in question, in making any counterclaim against the Person
asserting the Third Party Claim, or any cross-claim against any Person;
provided, however, that the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party (which shall not be unreasonably withheld or
delayed) before entering into any settlement
75
of such Third Party Claim if the settlement does not provide for full indemnity
of and/or release the Indemnified Party from all liabilities and obligations
with respect to such Third Party Claim or the settlement imposes injunctive or
other equitable relief against the Indemnified Party or any of its Affiliates.
The Indemnified Party may retain separate counsel of its choice to represent it
in, but not control, any defense or settlement of any Third Party Claim
controlled by the Indemnifying Party pursuant to this Section 12.02. The fees
and expenses of such separate counsel shall be paid by the Indemnified Party.
(d) If the Indemnifying Party has notified the Indemnified Party
within the Dispute Period that the Indemnifying Party disputes its liability
hereunder to the Indemnified Party with respect to such Third Party Claim and if
such dispute is resolved in favor of the Indemnifying Party, the Indemnifying
Party will not be required to bear the costs and expenses of the Indemnified
Party's defense pursuant to this Section 12.02 or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the Indemnified
Party will reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying Party in connection with such litigation
to the extent such dispute is resolved in favor of the Indemnified Party. The
Indemnifying Party may retain separate counsel to represent it in, but not
control, any defense or settlement controlled by the Indemnified Party pursuant
to this Section 12.02, and the Indemnifying Party will bear its own costs and
expenses with respect to such participation.
(e) In the event any Indemnified Party should assert a claim for
indemnity under Section 12.01 (including by reason of an alleged breach of
covenant contained in Section 7.07 or Section 7.08) against any Indemnifying
Party that does not involve a Third Party Claim, if the Indemnifying Party
notifies the Indemnified Party pursuant to paragraph (b) above that it does not
dispute the claim for indemnity described in such notice or fails to dispute
such claim within the Dispute Period, the Damages arising from the claim
specified in such notice will be conclusively deemed a liability of the
Indemnifying Party under Section 12.01 and the Indemnifying Party shall pay the
amount of such Damages to the Indemnified Party on demand following the final
determination thereof, but only to the extent it is liable therefor under
Section 12.01. If the Indemnifying Party has timely disputed its liability with
respect to such claim, the Indemnifying Party and the Indemnified Party will
proceed in good faith to negotiate a resolution of such dispute, and if not
resolved through negotiations within ninety (90) days, such dispute shall be
resolved by litigation in a court of competent jurisdiction.
SECTION 12.03. Calculation of Damages. (a) The amount of any Damages
payable under Section 8.06 and Section 12.02 by the Indemnifying Party shall be
treated as an adjustment to the Purchase Price and be net of any amounts
actually recovered or recoverable by the Indemnified Party under applicable
insurance policies or other Contracts with respect to Damages. If the
Indemnified Party receives any payment under an insurance policy or a Contract
subsequent to payment by the Indemnifying Party relating to the same Damages,
the Indemnified Party shall pay to the Indemnifying Party the full amount of
such subsequent payment less all costs and expenses relating thereto, up to the
full amount paid by the Indemnifying Party in respect of such Damages.
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(b) The Indemnifying Party shall not be liable under Section 12.01
for any (i) Damages relating to any matter to the extent that the Indemnified
Party had been compensated for such matter pursuant to the Purchase Price
adjustment under Sections 2.08 and 2.09 or (ii) consequential or punitive,
special, indirect or incidental Damages except to the extent included in Damages
paid by an Indemnified Party in respect of a Third Party Claim.
SECTION 12.04. Exclusive Remedy. After the Closing, and except as
provided in Section 5.07, Section 6.01 and Article VIII, the indemnification
provided in this Article XII will be the sole and exclusive remedy of the Buyer
Indemnified Party, on the one hand, and the Seller Indemnified Party, on the
other, with respect to any breach of a representation, warranty, covenant or
agreement contained in this Agreement, and the parties hereby waive any rights
and claims which it or any of its Affiliates may otherwise have against the
other parties hereto and their respective Affiliates, whether in Law or in
equity, relating to or arising out of any such breach, other than in cases of
fraud, willful misconduct or intentional misrepresentation or omission of
material fact.
ARTICLE XIII
TERMINATION
SECTION 13.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of Cambrex and Buyer;
(b) by either Cambrex or Buyer in the event of a material breach
hereof by the non-terminating party, but only if such non-terminating party
fails to cure such breach within thirty (30) days following written notification
thereof by the terminating party;
(c) by either Cambrex or Buyer if the Closing shall not have been
consummated on or before November 6, 2003; or
(d) by either Cambrex or Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final Order of any
Governmental or Regulatory Authority having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clause (b)
or (c) shall give notice of such termination to the other party, upon delivery
of which notice such termination shall be effective.
SECTION 13.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 13.01(b) or 13.01(c), such termination shall be without
liability of either party (or any Affiliate or Representative of such party) to
the other parties to this Agreement, provided that if such termination shall
result from the willful (i) failure of a party to fulfill a condition to the
performance of the obligations of the other party under this Agreement, (ii)
failure of a party to
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perform a covenant or agreement required to be performed by it under this
Agreement or (iii) inaccuracy in or breach by a party of any representation or
warranty contained in this Agreement, such party shall be fully liable to the
other for any and all Damages incurred or suffered by the other party as a
result of such failure or breach, together with all costs and expenses
(including reasonable attorneys' fees and expenses) actually incurred in good
faith by such other party in connection with this Agreement. Notwithstanding the
foregoing, the provisions of this Section 13.02 and Article XIV shall survive
any termination of this Agreement pursuant to Section 13.01.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Buyer, to:
Xxxxxxxxxx Acquisition Corp.
x/x Xxxxxxx Xxxxxxx Xxxxxxxx
0000 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
if to any Seller, to:
Cambrex Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel - Xxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 14.02. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 14.03. Expenses. Except as otherwise provided herein (including
without limitation, as set forth in Section 8.03(e)), all costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring
such cost or expense including, in the case of Buyer, all expenses and premiums
of the Surveys and the Title Company in connection with the issuance of Title
Policies relating to any Real Property; provided that the filing fee in
connection with the filings required under the HSR Act shall be paid one half by
Cambrex and one half by Buyer.
SECTION 14.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto. Notwithstanding the foregoing,
Buyer may transfer or assign in whole or in part its rights or obligations under
this Agreement to (a) one or more of its subsidiaries or Affiliates, (b) any
financial institution providing purchase money or other financing to Buyer or to
one or more of its Subsidiaries or Affiliates or (c) to a purchaser of all or a
substantial portion of the assets of the Xxxxxxxxxx Chemicals Business, but no
such transfer or assignment under clause (a), (b) or (c) will relieve Buyer of
any of its obligations hereunder and, in the case of a sale of all or a
substantial portion of the assets, the transferee shall assume the related
obligations of Buyer hereunder.
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SECTION 14.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the Law of the State of New York applicable to a
Contract executed and delivered in such State.
SECTION 14.06. Jurisdiction. The parties hereto agree that any Action
or Proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Southern District of New York or any New York State court sitting in New York
City, so long as one of such courts shall have subject matter jurisdiction over
such Action or Proceeding, and that any cause of action arising out of this
Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such Action or Proceeding and irrevocably waives, to the fullest extent
permitted by Law, any objection that it may now or hereafter have to the laying
of the venue of any such Action or Proceeding in any such court or that any such
Action or Proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such Action or Proceeding may be served on
any party anywhere in the world, whether within or without the jurisdiction of
any such court. Without limiting the foregoing, each party agrees that service
of process on such party as provided in Section 14.01 shall be deemed effective
service of process on such party.
SECTION 14.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 14.08. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 14.09. Entire Agreement. This Agreement and the annexes and
schedules hereto (including the Seller Disclosure Schedule), together with the
Confidentiality Agreement, dated February 21, 2003 between Buyer and BAS on
behalf of Cambrex, constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 14.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXXXXX ACQUISITION CORP.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
CAMBREX CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
CAMBREX LTD.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
CASCHEM, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
NEPCAM, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
NEPERA, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ZEELAND CHEMICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
