SHARE PURCHASE AGREEMENT
by and among
APPLIED MICROBIOLOGY, INC.,
a New York corporation,
XXXXX & XXXXXXX LIMITED,
a company incorporated under
the laws of England and Wales,
and
XXXXX XXXXX (UK) plc,
a company incorporated under
the laws of England and Wales
December 12, 1996
TABLE OF CONTENTS
Description Page
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1. Certain Definitions; Sale and Purchase of Shares;
Closing................................................................. 1
1.1 Certain Definitions.............................................. 1
1.2 Sale and Purchase of Shares...................................... 7
1.3 Purchase Price................................................... 8
1.4 Payment on the Closing Date...................................... 8
1.5 Final Payment.................................................... 8
1.6 Adjustments to Final Payment..................................... 8
1.7 Closing Date Settlement.......................................... 9
1.8 Termination of Existing Agreement................................ 10
1.9 Redemption of New Preferred Stock................................ 10
1.10 Buyer Entitled to Rights Accruing to Shares...................... 10
1.11 Additional Consideration......................................... 10
2. Representations and Warranties of the Seller............................ 11
2.1 Corporate Status................................................. 11
2.2 Ownership of Shares.............................................. 12
2.3 Subsidiaries..................................................... 12
2.4 Title to Shares.................................................. 12
2.5 Authorization.................................................... 12
2.6 Financial Statements and Records................................. 13
2.7 Title to Personal Properties and Assets.......................... 13
2.8 Properties....................................................... 13
2.9 Real Property Matters............................................ 14
2.10 Accounts Receivable and Trade Discounts.......................... 14
2.11 Patents, Trademarks and Certain Intangibles...................... 15
2.12 Contracts........................................................ 16
2.13 Bank Accounts.................................................... 17
2.14 Insurance........................................................ 17
2.15 Taxation......................................................... 17
2.16 Litigation; Compliance with Laws................................. 19
2.17 Filings.......................................................... 20
2.18 Agreement Will Not Cause Breach.................................. 20
2.19 Conduct of Business.............................................. 21
2.20 Brokers.......................................................... 21
2.21 Environmental Laws............................................... 21
2.22 Liabilities...................................................... 22
2.23 Employees........................................................ 22
2.24 Disclosure....................................................... 23
2.25 Prohibited Payments.............................................. 24
2.26 Absence of Certain Changes or Events............................. 24
2.27 Business Relations............................................... 26
2.28 Compliance by Corporation with Other
Instruments and Laws. ........................................... 26
2.29 Permits.......................................................... 26
2.30 Covenants Performed.............................................. 26
2.31 Tortious Conduct................................................. 26
2.32 Regulatory Matters............................................... 27
2.33 Products......................................................... 27
2.34 Inventory........................................................ 27
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2.35 Computer Hardware and Software etc............................... 28
2.36 Data Protection Act.............................................. 29
3. Representations and Warranties of the Buyer............................. 29
3.1 Corporate Status................................................. 29
3.2 Authorization.................................................... 29
3.3 Litigation....................................................... 30
3.4 Noncontravention; Consents....................................... 30
3.5 Brokers.......................................................... 30
3.6 Material Misstatements or Omissions.............................. 30
3.7 Covenants Performed.............................................. 30
3.8 Title to Purchase Price Shares................................... 30
3.9 Filings.......................................................... 31
4. Covenants of the Buyer and the Seller................................... 31
4.1 Access and Confidential Information.............................. 31
4.2 Interim Operations............................................... 31
4.3 Legal Requirements and Filings................................... 33
4.4 Confidentiality Agreements Regarding
Intellectual Property Rights..................................... 33
4.5 Maintenance of Insurance......................................... 34
4.6 Additional Transactions.......................................... 34
4.7 Adverse Changes.................................................. 34
4.8 Indebtedness..................................................... 34
4.9 Intercompany Payables............................................ 35
4.10 GECC Lease....................................................... 35
4.11 Excluded Assets.................................................. 35
4.12 Intellectual Property............................................ 35
4.13 Mayacamas Agreement.............................................. 36
4.14 Regulatory Documentation......................................... 36
4.15 Withholding Tax.................................................. 37
5. Conditions to Obligations of the Buyer.................................. 37
5.1 Representations and Warranties................................... 37
5.2 Complete Performance by the Seller and the
Corporation...................................................... 37
5.3 Corporate Action................................................. 37
5.4 Related Documents................................................ 38
5.5 Opinion of Counsel............................................... 38
5.6 Absence of Changes............................................... 38
5.7 Litigation....................................................... 38
5.8 Delivery of Other Closing Documents.............................. 38
5.9 Board Meeting of the Corporation................................. 39
5.10 Board Approval................................................... 39
5.11 GECC Lease....................................................... 39
5.12 Gist-Brocades Distribution Agreement............................. 39
5.13 Board Approval of Seller......................................... 39
5.14 Management Services Agreement.................................... 40
5.15 Declaration of Trust............................................. 40
6. Conditions to Obligations of the Seller................................. 40
6.1 Representations and Warranties................................... 40
6.2 Complete Performance by the Buyer................................ 40
6.3 Corporate Action................................................. 40
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6.4 Opinion of Counsel............................................... 40
6.5 Litigation....................................................... 40
6.6 Related Documents................................................ 41
6.7 Delivery of Other Closing Documents.............................. 41
6.8 Fairness Opinion................................................. 41
7. Indemnification......................................................... 41
7.1 Indemnification by the Seller.................................... 41
7.2 Indemnification by the Buyer..................................... 42
7.3 Notice and Right To Defend Third-Party Claims.................... 42
7.4 Survival of Indemnification...................................... 43
8. Termination............................................................. 44
8.1 Termination...................................................... 44
(a) Mutual Consent..................................... 44
(b) Default............................................ 44
(c) Upset Date......................................... 44
(d) Legal Restraint.................................... 44
8.2 Effect of Termination............................................ 44
8.3 Remedies for Breach by Seller.................................... 44
9. Miscellaneous........................................................... 45
9.1 Parties and Assignment........................................... 45
9.2 Confidentiality; Press Releases.................................. 45
9.3 Expenses......................................................... 45
9.4 Notices.......................................................... 46
9.5 Counterparts..................................................... 46
9.6 Headings......................................................... 46
9.7 Entire Agreement................................................. 46
9.8 Severability..................................................... 47
9.9 Governing Law.................................................... 47
9.10 Consent to Jurisdiction.......................................... 47
9.11 Resolution of Disputes........................................... 47
(a) Negotiation Between Executives..................... 47
(b) Arbitration........................................ 48
9.12 Waivers and Amendments........................................... 48
9.13 Further Acts..................................................... 48
9.14 Disclosure in Schedules.......................................... 48
9.15 Interpretation................................................... 48
9.16 Warranties Remain Notwithstanding Completion..................... 49
9.17 Information Supplied by Corporation Not Deemed
Warranty......................................................... 49
9.18 Representations and Warranties to the Seller's
Knowledge........................................................ 49
9.19 Restrictive Trade Practices...................................... 49
9.20 Right of Setoff.................................................. 49
9.21 Currency of Payments Due Under Agreement;
Currency Exchange................................................ 50
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SCHEDULES
Schedule 1........................... Short Details of Xxxxx & Xxxxxxx, Limited
Schedule 1.1......................... Excluded Liabilities
Schedule 2.7......................... Title Exceptions
Schedule 2.8......................... Properties
Schedule 2.11........................ Intellectual Property
Schedule 2.12........................ Contracts
Schedule 2.13........................ Bank Accounts
Schedule 2.14........................ Insurance
Schedule 2.15........................ Tax Matters
Schedule 2.16........................ Litigation
Schedule 2.21........................ Environmental Disclosure
Schedule 2.23........................ Employee Matters
Schedule 2.26........................ Absence of Certain Changes or Events
Schedule 2.34........................ Inventory
Schedule 2.35........................ Computer Hardware and Software
Schedule 4.10........................ Corporation Equipment
Schedule 4.11........................ Excluded Assets
Schedule 4.12(a)..................... Intellectual Property of Corporation
Schedule 4.12(b)..................... Intellectual Property of Seller
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EXHIBITS
Exhibit A............................ Form of Deed of Tax Covenant
Exhibit B............................ June Pro Forma Financial Statements
Exhibit C-1.......................... Form of License Agreement between Seller
as Licensor and the Corporation as
Licensee
Exhibit C-2.......................... Form of License Agreement between the
Corporation as Licensor and Seller as
Licensee
Exhibit D............................ Form of Loan and Security Agreement
Exhibit E............................ Form of Deed of Termination
Exhibit F............................ Form of Investors' Rights Agreement
Exhibit G............................ Form of Supply Agreement
Exhibit H............................ Form of Opinion of Counsel to the Seller
and the Corporation
Exhibit I............................ Form of Opinion of Counsel to the Buyer
Exhibit J............................ Determination of Closing Net Book Value
Exhibit K............................ Termination Acknowledgement
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made this 12th day of
December, 1996, by and among APPLIED MICROBIOLOGY, INC., a New York corporation
(the "Seller"), XXXXX & XXXXXXX LIMITED, a company incorporated under the laws
of England and Wales particulars of which are set out in Schedule 1 (the
"Corporation"), and XXXXX XXXXX (UK) PLC, a company incorporated under the laws
of England and Wales (the "Buyer").
WHEREAS, the Seller owns 2,128,514 of the issued ordinary shares of
(pound)1 each of the Corporation, which together with one ordinary share of
(pound)1 held in the name of Xxxxx Xxxxx International Investments Limited
constitute all of its issued share capital (the "Shares"); and
WHEREAS, Seller desires to sell the Shares to Buyer and Buyer desires to
purchase the Shares from Seller on the terms and subject to the conditions set
forth in this Agreement; and
WHEREAS, Seller and Buyer's affiliate, Xxxxx Xxxxx Microbiology Pty
Limited, are parties to an Agreement for the Purchase and Sale of Stock, dated
June 30, 1992 (the "Existing Agreement"), which agreement shall be terminated as
of the consummation of the share purchase hereunder:
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements contained 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:
1. Certain Definitions; Sale and Purchase of Shares; Closing.
1.1 Certain Definitions. The following definitions apply throughout this
Agreement:
"Affiliated Entity" means any individual, corporation, partnership,
association, trust or other entity or organization ("Person") directly or
indirectly controlling, controlled by or under common control with the
Corporation. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, in no event shall the Seller be deemed to be an
Affiliated Entity of the Corporation.
"Aged" shall have the meaning set forth in Section 2.34 hereof.
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"Agreement" shall mean this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Applicable Claim Termination Date" shall have the meaning set forth in
Section 7.4 hereof.
"Auditors" means KPMG of 0 Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxx,
Wilts XX0 XXX, Xxxxxxx.
"Xxxxx Xxxxx Inc." means Xxxxx Xxxxx Inc., a Delaware corporation
"Xxxxx Xxxxx Overseas" means Xxxxx Xxxxx Food Overseas Holdings Limited,
an Australian corporation.
"Buyer" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Cash Equivalents" means deposit accounts (including uncleared funds) with
banks or similar financial institutions, including, without limitation,
certificates of deposit.
"Citibank Prime Rate" means the rate of interest publicly announced from
time to time by Citibank, N.A. in New York City, New York, as its "prime rate."
Any change in the prime rate announced by Citibank N.A. shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Closing" means the consummation of the sale and purchase of the Shares
which shall take place at 2:00 p.m. New York time on the first business day
after satisfaction of the conditions set forth in Sections 5 and 6 hereof at the
offices of Pillsbury Madison & Sutro LLP or at such other place, time and date
as may be mutually agreed upon in writing by the Buyer and the Seller.
"Closing Date" means the date on which the Closing occurs.
"Closing Date Balance Sheet" shall have the meaning set forth in Section
1.6 hereof.
"Closing Net Book Value" means the difference between the assets of the
Corporation (other than the Excluded Assets) and the liabilities of the
Corporation (other than the Excluded Liabilities), as shown on the Closing Date
Balance Sheet, determined in accordance with Exhibit J.
"Companies Act" means the United Kingdom Companies Act 1985 (as amended or
re-enacted by the Companies Act 1989).
"Confidentiality Agreement" means the Undertaking, dated as of March 27,
1996, between the Seller and the Buyer.
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"Corporation" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Corporation Equipment" shall have the meaning given such term in Section
4.10 hereof.
"Customers" shall have the meaning given such term in Section 2.27 hereof.
"Deed of Tax Covenant" means that certain Deed of Tax Covenant
substantially in the form of Exhibit A hereto, dated as of the Closing Date,
between Buyer and Seller, as the same may be amended, supplemented or otherwise
modified from time to time.
"Deed of Termination" means that certain Deed of Termination substantially
in the form of Exhibit E hereto, dated as of the Closing Date, between Xxxxx
Xxxxx International Investments Limited and Seller, as the same may be amended,
supplemented or otherwise modified from time to time.
"Dollars" or "$" means the lawful currency of the United States of
America.
"Effective Date" means the date of this Agreement.
"Environment" means all or any of the following media, namely land
(including without limitation surface water and sub surface strata), air and
water (including without limitation surface water and ground water).
"Environmental Laws" means all or any civil, administrative or criminal
European Community or United Kingdom statutes or other laws (including without
limitation common laws) or subordinate legislation (including without limitation
all or any directives, rules, decisions, orders, regulations or directions of
any competent authority) which relate to the pollution or contamination of the
Environment or the health and safety of any human or other living organism.
"Environmental Permits" means all or any permits, authorizations,
licenses, consents, approvals, certificates, registrations and other
authorizations required under any Environmental Law.
"Excess" shall have the meaning set forth in Section 2.34 hereof.
"Excluded Assets" shall have the meaning set forth in Section 4.11 hereof.
"Excluded Liabilities" means the liabilities listed in Schedule 1.1
hereof.
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"Existing Agreement" shall have the meaning set forth in the third recital
hereof.
"FDA" shall have the meaning set forth in Section 2.32 hereof.
"Final Payment" shall have the meaning set forth in Section 1.5 hereof.
"Final Payment Date" shall mean the day that is six (6) months after the
Closing Date or, if such day is not a business day, the next succeeding business
day.
"Financial Statements" means the audited balance sheet, profit and loss
account and statements of cash flow and recognized gains and losses for the
Corporation for the financial year ended June 30, 1996 and the Management
Accounts, together in each case with all notes, reports and statements annexed
to them.
"GAAP" means United Kingdom generally accepted accounting principles.
"GECC" means General Electric Capital Corporation, a New York corporation.
"GECC Lease" means that certain Master Lease Agreement, dated as of June
28, 1995, between GECC and Seller, together with Addendum to Master Lease
Agreement dated as of June 28, 1995, Equipment Schedule No. 001, dated as of
June 28, 1995, Equipment Schedule No. 002, dated as of June 28, 1995, Equipment
Schedule No. 003, dated as of June 28, 1995, Equipment Schedule No. 004, dated
as of June 30, 1995, Equipment Schedule No. 005, dated as of June 30, 1995,
Equipment Schedule No. 006, dated as of December 28, 1995, Equipment Schedule
No. 007, dated as of December 28, 1995, Equipment Schedule No. 008, dated as of
December 28, 1995, and Equipment Schedule No. 009, dated as of December 28,
1995, as the same may be further amended, supplemented or otherwise modified
from time to time.
"Hazardous Substances" means any materials or substances of any form
whether natural or artificial, solid or liquid, gas or vapor or any mixture
thereof which are present in such quantities or concentrations as may be harmful
or prejudicial to the Environment or the health of any human or other living
organism.
"Initial Payment" shall have the meaning set forth in Section 1.4 hereof.
"Intellectual Property Rights" means any patent, patent application,
know-how, trade secret, trademark, trademark application, service xxxx, service
xxxx application, trade name, business name, registered design, copyright,
proprietary method
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or process, or other similar industrial, intellectual or commercial rights.
"Investors' Rights Agreement" means that certain Investors' Rights
Agreement substantially in the form of Exhibit F hereto, dated as of the Closing
Date, between Seller and the affiliate of Buyer party thereto, as the same may
be amended, supplemented or otherwise modified from time to time.
"June Pro Forma Financial Statements" means the pro forma financial
statements prepared by Seller for the fiscal year ended June 30, 1996, a copy of
which is attached hereto as Exhibit B.
"License Agreements" means (i) that certain License Agreement
substantially in the form of Exhibit C-1 hereto, dated as of the Closing Date,
between Seller as licensor and the Corporation as licensee, as the same may be
amended, supplemented or otherwise modified from time to time, and (ii) that
certain License Agreement substantially in the form of Exhibit C-2 hereto, dated
as of the Closing Date, between the Corporation as licensor and the Seller as
licensee, as the same may be amended, supplemented or otherwise modified from
time to time.
"Lien" means any lien, encumbrance, security interest, pledge, equity,
charge, mortgage, claim or other contractual or preferential restrictions of any
kind or nature in respect of any property, including, without limitation, those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessee under a capital lease or any
consignment or bailment for security purposes. The term "Lien" shall also
include, without limitation, reservations, exceptions, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
property.
"Loan Agreement" means that certain Loan and Security Agreement
substantially in the form of Exhibit D hereto, dated as of the Closing Date,
between Xxxxx Xxxxx Inc. and Seller, as the same may be amended, supplemented or
otherwise modified from time to time.
"Management Accounts" means the unaudited balance sheet and profit and
loss account for the Corporation for the three-month period ended September 30,
1996.
"Material Adverse Effect" means a material adverse effect on the business
or condition (financial or otherwise), assets, liabilities, prospects or results
of operations of the applicable party.
"Material Contracts" shall have the meaning set forth in Section 2.12
hereof.
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"Material Permits" shall have the meaning set forth in Section 2.29
hereof.
"Mayacamas Agreement" shall have the meaning set forth in Section 4.13
hereof.
"New Preferred Stock" means the New Preferred stock of Seller issued to
Xxxxx Xxxxx Microbiology Pty pursuant to the Existing Agreement and currently
owned, beneficially and of record by Xxxxx Xxxxx Inc.
"Nisaplin Sales Amount" means the cumulative amount of sales by the
Corporation or an Affiliated Entity, in Dollars, directly or indirectly, to
purchasers which are either located in the United States or which sell to
subsequent purchasers in the United States under arrangements known or
reasonably expected to be known to the Corporation or such Affiliated Entity at
the time of sale, of nisin sold for food preservative uses, during the period
beginning on the Closing Date and continuing through June 30, 1999, but
excluding any sales pursuant to the Mayacamas Agreement. The cumulative amount
of such sales for purposes of determining the Nisaplin Sales Amount shall be
calculated by determining the aggregate amount of all such sales during such
period in accordance with past practices and GAAP and subtracting all returns
made during or in relation to sales made in such period.
"Properties" means the leasehold and freehold properties described in
Schedule 2.8.
"Purchase Price" shall mean the consideration payable for the Shares as
set forth in Sections 1.3 and 1.11.
"Purchase Price Shares" shall have the meaning set forth in Section 1.3
hereof.
"Rate of Exchange" means the spot rate on the relevant date on which
Dollars can be exchanged for British pounds sterling as published in the Wall
Street Journal, or if no such rate is published in the Wall Street Journal or if
the Wall Street Journal ceases publication, then in such other comparable
publication as shall be reasonably agreed by Seller and Buyer.
"Related Documents" means the Loan Agreement, the Deed of Tax Covenant,
the Supply Agreement, the Investors' Rights Agreement, the License Agreements
and any other documents or agreements executed and delivered in connection with
this Agreement and the transactions contemplated hereby.
"Relevant Accounting Standards" means any applicable statement of standard
accounting practice, financial reporting standard, consensus or statement of
recommended practice issued by the Accounting Standards Board in England and
Wales or any
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committee of it or body recognized by it in force on June 30, 1996.
"Seller" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Shares" has the meaning set forth in the first recital hereof.
"Sterling" or "(pound)" or "pounds" means the lawful currency of the
United Kingdom.
"Supply Agreement" means that certain Supply Agreement substantially in
the form of Exhibit G hereto, dated as of the Closing Date, between Seller and
the Corporation, as the same may be amended, supplemented or otherwise modified
from time to time.
"TA" means the United Kingdom Income and Corporation Taxes Act of 1988.
"Target Net Book Value" means the difference between the assets of the
Corporation (other than the Excluded Assets) and the liabilities of the
Corporation (other than the Excluded Liabilities), as shown on the June Pro
Forma Financial Statements.
"Tax Return" means any return, report, information return or other
document (including any related or supporting information) with respect to Taxes
that is either filed or required to be filed with a taxing authority or required
by applicable tax law to be provided to any other person.
"Taxes" means all taxes, duties, charges, fees, contributions,
impositions, levies or other assessments imposed by any Taxing Authority,
including, but not limited to, income, gross receipts, excise, property, sales,
use, transfer, payroll, license, ad valorem, value added, withholding, social
security, national insurance (or other similar contributions or payments),
franchise, estimated, severance and stamp taxes (including any interest, fines,
penalties or additions to, or imposed on or with respect to, any such taxes,
duties, charges, fees, contributions, impositions, levies or other assessments).
"Taxing Authority" shall have the meaning given to that term in the Deed
of Tax Covenant.
"Termination Acknowledgment" shall have the meaning set forth in Section
1.8 hereof.
1.2 Sale and Purchase of Shares. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date the Seller agrees to sell with full
title guarantee to the Buyer, and the Buyer agrees to purchase from the Seller,
the Shares.
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1.3 Purchase Price. Subject to Sections 1.6 and 1.11 below, the
consideration to be paid for the Shares shall be (a) thirteen million five
hundred thousand Dollars ($13,500,000) and (b) the transfer back to Seller at
the request of and by the direction of Buyer of two million four hundred twenty
thousand (2,420,000) shares of common stock of Seller held by Xxxxx Xxxxx
Overseas (the "Purchase Price Shares").
1.4 Payment on the Closing Date.
(a) On the Closing Date, the Buyer shall (i) pay a portion of the Purchase
Price equal to eight million Dollars ($8,000,000) (the "Initial Payment")
(reduced by any amounts allocated to the satisfaction of unpaid intercompany
balances pursuant to Section 1.7) by wire transfer of same day Dollar funds to
an account designated by the Seller, and (ii) cause Xxxxx Xxxxx Overseas to
deliver to Seller the certificates representing the Purchase Price Shares.
(b) The Initial Payment will be allocated as follows:
(i) The Initial Payment, reduced by any amounts allocated to the
satisfaction of unpaid intercompany balances pursuant to Section
1.4(b)(ii), will represent a portion of the Purchase Price.
(ii) The Seller shall allocate a portion of the Initial Payment to
any unpaid intercompany balances between Seller and Corporation in
satisfaction of Section 4.9(b). The Seller shall treat such amounts as a
repayment and satisfaction of the intercompany debt owed by the
Corporation.
1.5 Final Payment. On the Final Payment Date the Buyer will pay to the
Seller, by wire transfer of same day Dollar funds to an account designated by
Seller, a portion of the Purchase Price equal to five million five hundred
thousand Dollars ($5,500,000), subject to adjustment pursuant to Section 1.6
below (the "Final Payment"), plus interest on the amount of the Final Payment as
so adjusted from and including the Closing Date to but excluding the Final
Payment Date at a rate of interest per annum equal to the Citibank Prime Rate.
1.6 Adjustments to Final Payment.
(a) The Final Payment shall be adjusted (the "Purchase Price Adjustment")
upward or downward, on a dollar-for-dollar basis, by the amount by which the
Closing Net Book Value exceeds or is less than the Target Net Book Value,
respectively. As soon as practicable after the Closing Date but in no event
later than ninety (90) days prior to the Final Payment Date, Buyer shall deliver
to Seller a balance sheet for the Corporation as of the Closing Date (the
"Closing Date Balance Sheet") prepared by Buyer and audited by the Auditors,
together with a
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determination of the Closing Net Book Value based on the Closing Date Balance
Sheet determined in accordance with Exhibit J. Seller shall review the Closing
Date Balance Sheet and shall notify Buyer within fifteen (15) days after receipt
thereof if Seller has any objections to the amount of the Purchase Price
Adjustment as determined by Buyer. If the Buyer and the Seller are unable to
resolve any dispute as to the Purchase Price Adjustment within fifteen (15) days
after receipt by Buyer of Seller's objections, the dispute shall be referred to
Price Waterhouse (UK Bristol office) for a final and conclusive determination of
the Purchase Price Adjustment. Such determination shall be made within thirty
(30) days after the referral. Seller and Buyer shall bear equally the expenses
arising in connection with such determination. If the Purchase Price Adjustment
has not been finally determined as of the Final Payment Date, (i) the Final
Payment shall be calculated using the Purchase Price Adjustment determined by
Buyer for purposes of making the Final Payment on the Final Payment Date, (ii)
if the final Purchase Price Adjustment is less than the Purchase Price
Adjustment used to calculate the Final Payment, Buyer shall pay Seller the
difference between such amounts within three (3) days after receipt of the final
determination of the Purchase Price Adjustment, plus interest on such amount at
a rate of interest per annum equal to the Citibank Prime Rate from and including
the Closing Date to but excluding the date such payment is made, and (iii) if
the final Purchase Price Adjustment is more than the Purchase Price Adjustment
used to calculate the Final Payment, Seller shall pay Buyer the difference
between such amounts within three (3) days after receipt of the final
determination of the Purchase Price Adjustment, plus interest on such amount at
a rate of interest per annum equal to the Citibank Prime Rate from and including
the Closing Date to but excluding the date such payment is made. Any payments
made pursuant to this Section 1.6 shall be made by wire transfer of same day
Dollar funds to an account designated by Seller or Buyer, as applicable.
(b) The parties shall cause all records, working papers and other
information as may be reasonably required by the Buyer, the Seller, Price
Waterhouse (UK Bristol office) and/or the Auditors for the purposes of this
Section 1.6 and Exhibit J to be made available upon a request for them and shall
generally render all assistance reasonably necessary in relation thereto.
1.7 Closing Date Settlement. On the Closing Date, in addition to payment
of the Initial Payment and delivery of the Purchase Price Shares pursuant to
Section 1.4 above, Buyer shall pay to Seller as further consideration for the
Shares an amount equal to the sum of (i) all cash, plus (ii) the fair market
value of all Cash Equivalents, in each case as shown on the books of the
Corporation as of the Closing Date to the extent that such cash and Cash
Equivalents have not previously been transferred to the Seller pursuant to
Section 4.11 hereof (less
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the amount of any transaction costs associated with such payment which shall be
for the account of Seller).
1.8 Termination of Existing Agreement. On the Closing Date, the Existing
Agreement shall be terminated and superseded in full by this Agreement and the
Related Documents and Buyer shall cause Xxxxx Xxxxx Microbiology Pty to deliver
to Seller an acknowledgement of such termination substantially in the form of
Exhibit K hereto (the "Termination Acknowledgement").
1.9 Redemption of New Preferred Stock. On the Final Payment Date, Seller
shall redeem the New Preferred Stock at the redemption value specified in
Seller's Certificate of Incorporation and shall pay to Xxxxx Xxxxx, Inc. any
accrued and unpaid dividends thereon, in each case by wire transfer of same day
U.S. Dollar funds to an account designated by Xxxxx Xxxxx, Inc.
1.10 Buyer Entitled to Rights Accruing to Shares. The Buyer shall be
entitled to exercise all rights attached or accruing to the Shares including,
without limitation, the right to receive all dividends, distributions or any
return of capital declared, paid or made by the Corporation on or after the
Closing Date, notwithstanding that the Purchase Price may not have been paid in
full on the Closing Date.
1.11 Additional Consideration.
(a) On June 30, 1999 (the "Earnout Payment Date"), Buyer shall pay to
Seller, by wire transfer of same day Dollar funds to an account designated by
Seller, as additional consideration for the Shares, an amount equal to the
amount specified below opposite the applicable Nisaplin Sales Amount (the
"Earnout Amount"):
Nisaplin Sales Amount in Earnout Amount in Millions
Millions of Dollars of Dollars
------------------------ --------------------------
< 7 0.0
7 to 8 0.5
8 to 11 1.0
11 to 14 1.5
14 to 17 2.0
> 17 2.5
(b) Buyer shall deliver to Seller on the Earnout Payment Date, a
statement, certified by the Buyer's Chief Financial Officer, setting forth in
reasonable detail the aggregate Nisaplin Sales Amount, together with the name of
the Corporation's Nisaplin customers to which sales included in the Nisaplin
Sales Amount were made, the aggregate amount of Nisaplin purchased by each such
customer and the aggregate amount of Nisaplin Sales Amount attributable to each
such customer. Seller shall review the Buyer's statement and shall notify Buyer
within fifteen (15) days after receipt thereof if
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Seller has any objections to the amount of the Earnout Amount as determined by
Buyer. If Buyer and Seller are unable to resolve any dispute as to the Earnout
Amount within fifteen (15) days after receipt by Buyer of Seller's objections,
the dispute shall be referred to Price Waterhouse (UK Bristol office) for a
final and conclusive determination of the Earnout Amount. Such determination
shall be made within thirty (30) days after the referral. Seller and Buyer shall
bear equally the expenses arising in connection with such determination. If the
Earnout Amount as determined by Buyer is less than the Earnout Amount determined
by Price Waterhouse (UK Bristol office) as provided herein, Buyer shall pay
Seller the difference between such amounts within three (3) days after receipt
of the final determination of the Earnout Amount by Price Waterhouse (UK Bristol
office), plus interest on such amount at a rate of interest per annum equal to
the Citibank Prime Rate from and including the Earnout Payment Date to but
excluding the date such payment is made. If the Earnout Amount as determined by
Buyer is more than the Earnout Amount determined by Price Waterhouse (UK Bristol
office) as provided herein, Seller shall pay Buyer the difference between such
amounts within three (3) days after receipt of the final determination of the
Earnout Amount by Price Waterhouse (UK Bristol office), plus interest on such
amount at a rate of interest per annum equal to the Citibank Prime Rate from and
including the Earnout Payment Date to but excluding the date such payment is
made.
2. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Buyer as of the Effective
Date and as of the Closing Date as follows:
2.1 Corporate Status. The Corporation is a company duly incorporated under
the laws of England and Wales and has all necessary corporate powers to own or
lease its properties and assets and to carry on its business as now conducted,
and is authorized to transact business and is in good standing in each
jurisdiction in which its ownership of assets or conduct of business requires
such qualification except to the extent that failure to so qualify would not
have a Material Adverse Effect on the Corporation. True and complete copies of
the charter documents, minutes and share register of the Corporation, as written
up to date, have been made available to the Buyer for inspection. The Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the State of New York and has all necessary corporate powers to own or
lease its properties and assets and to carry on its business as now conducted,
and is authorized to transact business and is in good standing in each
jurisdiction in which its ownership of assets or conduct of business requires
such qualification, except to the extent that failure to so qualify would not
have a Material Adverse Effect on the Seller. The Corporation has in its
possession its register of members and other statutory books all of which have
been properly kept and contain a true and accurate
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and complete record of all matters with which they should deal. All returns,
resolutions and other documents necessary to be filed with the Registrar of
Companies in the United Kingdom have been duly filed and were correct when
filed. The copies of the Memorandum and Articles of Association of the
Corporation which have been supplied to the Buyer are complete and accurate in
all respects, have attached to them copies of all resolutions and other
documents required by law to be so attached, and fully set out the rights and
restrictions attaching to each class of share capital to which they relate.
2.2 Ownership of Shares. The Corporation has an authorized share capital
consisting of (pound)5,000,000 divided into 5,000,000 ordinary shares of
(pound)1 each, of which 2,128,515 of such ordinary shares are issued. The Shares
constitute all of such issued share capital of the Corporation and are all owned
beneficially by Seller. The Shares are duly authorized, validly issued and fully
paid and, with the exception of one ordinary share held in the name of Xxxxx
Xxxxx International Investments Limited, are all registered in the Seller's
name. There are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments obligating the
Corporation, or the Seller or any other entity to acquire, sell, issue or allot
any additional shares in the capital of the Corporation.
2.3 Subsidiaries. The Corporation does not, directly or indirectly, own
any share capital, bonds or other securities of, or have any proprietary
interest in, any corporation, firm, partnership, joint venture, trust or other
entity.
2.4 Title to Shares. The Seller is the beneficial owner of and has good
and marketable title to the Shares, free and clear of all Liens and the transfer
and delivery of the Shares by Seller to Buyer as contemplated by this Agreement
will transfer good and marketable title to the Shares to Buyer free and clear of
all Liens.
2.5 Authorization. Each of the Seller and the Corporation has full power
and authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement by Seller and
the Corporation and the performance of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Seller and the Board of
Directors of the Corporation and no other corporate proceedings on the part of
either Seller or the Corporation are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller and the Corporation and assuming due authorization,
execution and delivery by Buyer, constitutes the valid and binding agreement of
Seller and the Corporation, enforceable in accordance with the terms hereof
except as the same may be limited by bankruptcy, insolvency, reorganization or
other laws affecting the enforceability of creditors' rights
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generally and except that the remedy of specific performance or similar
equitable relief may be subject to equitable defenses.
2.6 Financial Statements and Records.
(a) The Seller has delivered to the Buyer the Financial Statements which
comply with the requirements of the Companies Act, all other relevant statutes
and all Relevant Accounting Standards, and in all other respects have been
prepared in accordance with and on the same basis as the corresponding accounts
for the preceding three financial years, are accurate in all material respects
and give a true, accurate and fair view of the state of affairs generally of the
Corporation as at June 30, 1996, and September 30, 1996, as applicable, and of
the trading record, cash flow and profit or loss of the Corporation in respect
of the financial period for which they were prepared. The Financial Statements
for the financial year ended June 30, 1996 have been audited by the Auditors.
(b) The Corporation has kept proper records of its business and
financial affairs which are now complete, up to date and accurate and give a
true and fair view of its financial and trading position. None of these records
nor any other systems, data, controls or information of the Corporation is
stored, recorded, maintained operated or otherwise wholly or partly dependent
upon or held by any means (including all means of access thereto and therefrom)
which are not under the exclusive ownership and direct control of the
Corporation.
2.7 Title to Personal Properties and Assets. The Corporation has good and
marketable title to, or a valid leasehold interest in, all of the personal
properties and assets reflected in the Financial Statements and all other
personal properties and assets owned or used by the Corporation in the conduct
of its business, free and clear of any Liens, except as otherwise disclosed in
the Financial Statements or Schedule 2.7 and except for (a) those properties and
assets disposed of after June 30, 1996 in the ordinary course of business, (b)
minor imperfections of title and encumbrances that do not detract from the value
or use of the property or asset subject thereto, (c) the lien of current taxes
not yet due and payable and (d) mechanics', carriers', sellers' and other
similar liens arising in the ordinary course of business.
2.8 Properties. Attached hereto as Schedule 2.8 is a complete and correct
list of (i) all real property owned by or leased to the Corporation, together
with a brief description of each such property and the buildings and other major
improvements located thereon, and (ii) a complete and correct list of all
material items of equipment and other tangible personal property owned by, in
the possession of or used by the Corporation, all of which are reflected in the
books and records of the Corporation in accordance with customary practice and
GAAP. All equipment and other tangible personal property of the
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Corporation included in the list on Schedule 2.8 are in good condition, are
operable in the ordinary course of business, and have been regularly maintained,
repaired and replaced in accordance with Corporation's ordinary business
practice.
2.9 Real Property Matters.
(a) The Corporation has good and marketable title to the Properties which
comprise all the estate or interest of the Corporation in any land or premises.
Full and accurate particulars of the titles of the Corporation to the Properties
are set out in Schedule 2.8. The Corporation has in its possession or under its
control all duly stamped deeds and documents which are necessary to prove title
to the Properties.
(b) Except as disclosed in Schedule 2.8, the Corporation has exclusive and
unfettered possession of the Properties.
(c) Except as disclosed in Schedule 2.8, there is no option or agreement
for sale, mortgage (whether specific or floating), charge, lien, lease,
agreement for lease or overriding interest or other such rights in favor of
third parties in respect of the Properties.
(d) The Properties are not subject to the payment of any outgoings (except
those payable pursuant to any leases under which the Properties are held and
general and water rates).
(e) The Corporation has not since 30 June 1992 received any notice of any
breach of any covenants, conditions, agreements or statutory requirements,
planning consents, bye-laws, orders and regulations affecting the Properties.
(f) The current use of each of the Properties is the permitted use for the
purposes of the United Kingdom Town & Country Planning Acts 1971-1990 and the
Planning and Compensation Xxx 0000.
(g) The Corporation has not since 30 June 1992 received any compulsory
purchase notices, orders or resolutions affecting the Properties.
(h) The Corporation has not since 30 June 1992 owned any interest in any
freehold or leasehold property other than the Properties.
2.10 Accounts Receivable and Trade Discounts. All accounts receivable of
the Corporation shown on the Financial Statements arose from bona fide sales in
the ordinary course of business. The Financial Statements reflect adequate
reserves for bad and doubtful accounts in accordance with GAAP. Adequate accrual
and allowances have been provided for in accordance with GAAP consistently
applied.
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2.11 Patents, Trademarks and Certain Intangibles.
(a) The Corporation owns or possesses, free and clear of all Liens, all
Intellectual Property Rights which are necessary to conduct its business as it
is presently operated, including, without limitation, the Intellectual Property
Rights listed on Schedule 2.11. The Corporation is not infringing upon any
Intellectual Property Rights owned by any other person or persons, and there is
no claim or action by any such person pending, or to the knowledge of the Seller
or the Corporation threatened, with respect thereto. The Seller is not aware of
any infringement by any third party of any of the Intellectual Property Rights
owned by the Corporation. None of the Intellectual Property Rights currently or
previously used by the Corporation give rise or may give rise to any liability
pursuant to Sections 40 and 41 of the United Kingdom Patents Xxx 0000 (as
amended) and the Corporation has received no notice of any claim by any other
person or under such legislation.
(b) Schedule 2.11 contains a complete and correct list including country,
registration number or application number, explanation of status, and expiration
date (whenever such data or explanation is applicable) of all Intellectual
Property Rights which are owned or acquired by or registered in the name of, or
applied for by, the Corporation or any of its employees for the Corporations's
benefit for the Corporation's business, or have been licensed by or to the
Corporation for the Corporation's business. Each of the Seller and the
Corporation has used its best efforts to keep all of the Intellectual Property
Rights listed on Schedule 2.11 confidential and has not disclosed any of such
Intellectual Property Rights to any other person or entity except under written
valid, binding and enforceable confidentiality agreements which require each
such person or entity to keep the Intellectual Property Rights confidential
subject to only customary exceptions. The Corporation has not taken or omitted
to take any action which would have the effect of waiving any of the rights of
the Corporation to use any of the Intellectual Property Rights listed on
Schedule 2.11. Except as set forth in Schedule 2.11 the Corporation is not a
party to any licenses or other agreements or arrangements regarding the use by
the Corporation of such Intellectual Property Rights and is not under obligation
to pay any license fee or royalty to any other party with respect to the
manufacture, sale or use of any of the Corporation's products. Except as set
forth in Schedule 2.11 the Corporation has not granted to any other person any
license or other right in relation to the Intellectual Property Rights now or
formerly used by the Corporation. Each license, contract and commitment
identified on Schedule 2.11 is a valid, legally binding obligation of the
Corporation and the other parties thereto, without any material default (or any
event which, with notice or lapse of time or both, or the happening or
occurrence of any other event, would constitute a material default) by the
Corporation or, to the Corporation's and the Seller's knowledge,
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of any other parties thereto. Except as disclosed on Schedule 2.11, the Seller
knows of no material facts which would bar or impede the issuance of any patent
related to the Corporation's business.
2.12 Contracts.
(a) Attached hereto as Schedule 2.12 is a complete and correct list of all
contracts (including, without limitation, all employment and collective
bargaining agreements and all pension, bonus, profit-sharing, stock option and
other agreements providing for employee remuneration or benefits), real and
personal property leases, agreements, licenses, instruments and other
commitments to which the Corporation is a party or by which it or any of its
properties is bound that call for a payment by the Corporation in excess of
60,000 pounds or that require performance over a period in excess of one year or
that are otherwise material to the business of the Corporation (collectively,
the "Material Contracts"). Each of the Material Contracts was entered into on an
arm's length basis in the ordinary course of business. Complete and correct
copies of all such contracts have been provided or made available for inspection
to Buyer. Each of the Material Contracts so listed on Schedule 2.12, or required
to be so listed, is a valid and binding obligation of the Corporation in
accordance with its terms, and there have been no uncured or unwaived defaults
by the Corporation or by the other party or parties, or claims of default, and
to the Seller's best knowledge, there are no facts or conditions that have
occurred or that are reasonably anticipated to occur which, through the passage
of time or the giving of notice, or both, would constitute a default by the
Corporation or by the other party or parties, thereunder or would cause the
acceleration of any obligation of any party thereto or the creation of a Lien
upon any asset of the Corporation. Except as set forth in Schedule 2.12, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will require the consent of any party to any of
the Material Contracts and the Corporation has not received any notice or other
communication from any party indicating any intent by such party to terminate or
amend any Material Contracts by reason of the transactions contemplated hereby
or otherwise.
(b) Except for any guarantee or warranty implied by law or contained in
the standard terms of business of the Corporation, the Corporation has given or
made no guarantee, warranty or representation in respect of any goods or
services supplied or contracted to be supplied by it or accepted any liability
or obligation that would apply after the supply of any such goods or services.
There is not now outstanding any other guarantees or agreements for indemnity or
for suretyship either given by the Corporation.
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2.13 Bank Accounts. Attached hereto as Schedule 2.13 is a complete and
correct list of all banks and other financial institutions in which the
Corporation has an account, deposit or safe deposit box, together with a list of
all authorized signatories relating to each account.
2.14 Insurance. Attached hereto as Schedule 2.14 is a complete and correct
list of all insurance policies presently maintained by the Corporation. In
respect of all such insurances (other than insurance maintained through Buyer or
an Affiliated Entity of Buyer):
(a) all premiums have been duly paid to date;
(b) all the policies are in force and are not voidable on account of any
act, omission or nondisclosure on the part of the insured party.
2.15 Taxation.
(a) The Corporation has filed all returns and provided all other
information required by law to be supplied to the Inland Revenue, H. M.
Commissioners of Custom and Excise and/or any other competent fiscal authority,
and such returns are complete and accurate in all material respects and are not
disputed. The Corporation has duly paid all taxation within the time limits set
out by law for which it is liable and with respect to which payment was then
due. The provisions or reserves for taxation appearing in the Financial
Statements are sufficient fully to cover all taxation for which the Corporation
was as of June 30, 1996 accountable with respect to all events occurring on or
before June 30, 1996. The provisions or reserves for taxation appearing in the
Management Accounts are sufficient fully to cover all taxation for which the
Corporation was as of September 30, 1996 accountable with respect to all events
occurring during the period covered thereby.
(b) The Corporation has properly and punctually deducted and accounted for
Taxes which it has been required to deduct or for which it has been required to
account in respect of any payments made or deemed to have been made by it. In
particular, the Corporation has properly operated the United Kingdom "Pay As You
Earn" system and has duly made all deductions and payments required to be made
in respect of United Kingdom National Insurance contributions (including
employer's contributions).
(c) There is no material dispute or disagreement outstanding nor is any
contemplated at the date of this Agreement with any Taxing Authority regarding:
(i) the computation of any gains profits or losses of the
Corporation for the purposes of any Taxes.
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(ii) any liability or potential liability to or for any Taxes
(including penalties or interest) recoverable from the Corporation; or
(iii) the availability to the Corporation of any relief from or to
any Taxes.
(d) The Corporation is not and will not become liable to pay, reimburse or
indemnify any person in respect of any Taxes in consequence of failure by that
or any other person to discharge any such Taxes (whether within any specified
period or otherwise) where such taxation relates to a profit, income, gain,
transaction, event, omission or circumstance arising, occurring or deemed to
arise or occur (whether wholly or partly) on or before the date of this
Agreement.
(e) Schedule 2.15 lists all concessions, agreements and other formal or
informal arrangements with any Tax Authority (other than such as are published
by a Tax Authority in the UK) from which the Corporation has or will benefit, or
by which it is bound, and (in either case) which are extant on the date of this
Agreement.
(f) The Corporation has not since 30 June 1992 been a party to any scheme
or arrangement:
(i) in respect of which the main purpose or one of the main purposes
was or might be held to have been the avoidance, reduction or deferral of
a liability to or for Taxes; or
(ii) in respect of which any tax clearance has been or could have
been obtained; or
(iii) which was or included a reorganization or reduction of the
share capital of the Corporation.
(g) The Corporation has not since 30 June 1996 disposed of any asset
otherwise than in the ordinary course of its trade.
(h) All documents which are in the possession of the Corporation or by
virtue of which the Corporation has any right or interest and which either
attracts stamp duty or stamp duty reserve tax or requires to be stamped with a
particular stamp denoting that no duty is chargeable or that the document has
been produced to the appropriate authority have been properly stamped and there
is no liability to any fine or penalty in respect of such duty or stamp nor are
there any circumstances which may result in the Corporation becoming liable to
any such fine or penalty.
(i) Within the two years ending on the date of this Agreement the
Corporation has not made any claim for exemption
-18-
from stamp duty under Section 42 of the United Kingdom Finance Xxx 0000.
(j) The Corporation has duly registered for Value Added Tax purposes and
has complied with all relevant provisions of the United Kingdom Value Added Tax
Xxx 0000 ("VATA") and regulations made or notices issued under any legislation
relating to Value Added Tax.
(k) Schedule 2.15 lists those jurisdictions where the Corporation has
filed or, to the best knowledge of Seller or the Corporation, is required to
file a Tax Return. No claim which remains outstanding has ever been made to the
Seller or the Corporation by a taxing authority in a jurisdiction where the
Corporation does not file a Tax Return that the Corporation is or may be subject
to taxation by that jurisdiction due to its activities or business.
2.16 Litigation; Compliance with Laws. Except as set forth in Schedule
2.16, (a) there is no legal, administrative or regulatory action, suit, claim,
grievance, investigation or proceeding pending or, to the best knowledge of
Seller, threatened, against or affecting the Corporation which if adversely
determined could reasonably be expected to have a Material Adverse Effect on the
Corporation or restrict the ability of the Seller or the Corporation to
consummate the transactions contemplated herein, and (b) there is no outstanding
or unsatisfied judgment, order or decree to which the Corporation is a party or
which is binding on the Corporation or its assets or which could affect the
transactions contemplated hereby. The Corporation is in compliance with all
laws, statutes, orders, rules, ordinances, regulations, charters and by-laws and
regulations (including any applicable building, zoning or environmental
protection law, ordinance or regulation) applicable to it or to the ownership of
its assets or the operation of its business, except to the extent that such
noncompliance would not have a Material Adverse Effect on the Corporation. The
Corporation is not subject to any judicial injunction or mandate or any
quasi-judicial order or quasi-judicial restriction directed to or against it,
nor has any governmental agency at any time challenged the Corporation in
writing or commenced or given notice to the Corporation of intention to commence
any investigation or administrative proceeding, relating to the legal right to
operate its business as presently or heretofore operated, except to the extent
that any of the foregoing would not have a Material Adverse Effect on the
Corporation. To the best knowledge of the Seller, except as otherwise disclosed
pursuant to Schedule 2.16, there are no (a) consumer, customer or distributor
complaints or regulatory complaints or investigations relating to the
Corporation's business, nor is there the basis for any such complaint or (b)
claims which the Corporation has put in the hands of its insurance carriers
seeking damages for personal or other injuries or loss resulting from the
manufacture, sale or use of
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any of the products manufactured or sold by the Corporation. Except as disclosed
in Schedule 2.16, the Seller knows of no strikes, work stoppages undertaken or
threatened or demands for recognition or petitions for representation since June
30, 1996 by any of the employees of the Corporation or grievances or other
claims by any union representing any employees of the Corporation.
2.17 Filings. No notice to or filing with, and no authorization, consent
or approval of, any domestic or foreign court or any public or governmental body
or authority is necessary for the consummation by the Seller or the Corporation
of the transactions contemplated by this Agreement, except for notices or
filings the failure to give or make, and authorizations, consents and approvals
the failure to obtain, would not materially and adversely affect the ability of
the parties hereto to consummate the transactions contemplated hereby or future
conduct of the Corporation's business.
2.18 Agreement Will Not Cause Breach. Neither the execution and delivery
of, nor the consummation of the transactions contemplated by, this Agreement
will result in any of the following:
(a) a default or an event that, with notice or lapse of time, or
both, would constitute a default, breach or violation of (i) the charter,
bylaws or other governing instruments of the Corporation or of the Seller,
(ii) any Material Contract or Material Permit, or (iii) any material
contract, agreement, license or instrument to which the Seller is a party
or by which the Seller, or the property of the Seller is bound which
default, breach or violation could reasonably be expected to have a
Material Adverse Effect on the Corporation or a material adverse effect on
the ability of the parties to consummate the transactions contemplated
hereby;
(b) an event that would permit any person or entity (i) to terminate
any Material Contract or Material Permit or (ii) to accelerate the
maturity of any indebtedness or other obligation of the Corporation, which
acceleration could reasonably be expected to have a Material Adverse
Effect on the Corporation or a material adverse effect on the ability of
the parties to consummate the transactions contemplated hereby;
(c) an event that would permit any person or entity to terminate any
material contract, agreement, license or instrument to which the Seller is
a party or by which the Seller or the property of the Seller is bound, or
to accelerate the maturity of any indebtedness or other obligation of the
Seller which
-20-
termination or acceleration could reasonably be expected to have a
Material Adverse Effect on the Corporation or a material adverse effect on
the ability of the parties to consummate the transactions contemplated
hereby;
(d) the creation or imposition of any Lien upon any asset of the
Corporation or the Seller;
(e) a violation or breach of any statute, ordinance, rule or
regulation applicable to the Corporation or the Seller, or any writ,
injunction or decree of any court or governmental instrumentality to which
the Corporation or the Seller is a party or by which the Corporation, or
the Seller, or the property of the Corporation or the Seller is bound,
which violation or breach could reasonably be expected to have a Material
Adverse Effect on the Corporation or a material adverse effect on the
ability of the parties to consummate the transactions contemplated hereby;
or
(f) a loss or adverse modification under the terms thereof, of any
Material Contract or Material Permit.
2.19 Conduct of Business. Since June 30, 1996, there has occurred no event
which would have a Material Adverse Effect on the Corporation.
2.20 Brokers. Neither the Seller nor the Corporation, nor any shareholder,
officer, director or agent of either of them has incurred on behalf of the
Seller or the Corporation any liability to any broker, finder or agent for any
brokerage fees, finders' fees or commissions with respect to the transactions
contemplated hereby.
2.21 Environmental Laws.
(a) Except as disclosed in Schedule 2.21 hereto, (i) all real property
which is owned or leased by the Corporation complies in all respects with all
applicable Environmental Laws and Environmental Permits; (ii) all Environmental
Permits are valid and subsisting and none has been suspended, revoked or
restricted or is likely to be so or the subject of any notice from any competent
authority nor is any material expenditure required to maintain or renew any
Environmental Permit; (iii) none of the Corporation's operations thereon is
subject to any judicial or administrative proceeding alleging the violation of
any Environmental Law; (iv) none of such real property is the subject of any
regulatory investigation concerning any use or release of any Hazardous
Substance, except for any such investigation conducted entirely without notice
to the Seller or the Corporation without entry to any facility of the Corpora-
tion's and of which the Seller has no knowledge; (v) neither the
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Corporation nor, to the best of the Seller's knowledge, any predecessor-in-title
to such real property has received, nor has the Seller or the Corporation any
reason to expect that the Corporation may receive, any notice under any
Environmental Law or Environmental Permit relating to past or present treatment,
storage or disposal of a hazardous waste or a spill or release of a Hazardous
Substance into the Environment; (vi) the Corporation has no contingent liability
in connection with any release of any Hazardous Substance into the Environment
and no release which could require remediation has occurred; (vii) none of the
Corporation's or any other person's operations on such real property involve the
generation, transportation, treatment, storage or disposal of Hazardous
Substances; (viii) except in accordance with all applicable laws, the
Corporation has not disposed of any Hazardous Substance in, on or about such
real property and neither has any lessee, prior owner or other person.
(b) Except for storage tanks described in Schedule 2.21 hereto, no surface
impoundments or underground storage tanks are located in, on or about any real
property.
2.22 Liabilities. Except as reflected on the Financial Statements, the
Corporation has no liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise, that would be of a type and nature required to
be reported on a financial statement (including the notes thereto) prepared in
accordance with GAAP consistently applied, other than liabilities or obligations
arising in the ordinary course of business since June 30, 1996.
2.23 Employees.
(a) Schedule 2.23 details the names and full particulars of all employees
of the Corporation and their respective ages, length of service with the
Corporation and their terms of employment, including their notice periods and
remuneration (including, without limitation, bonuses, profit sharing
arrangements and benefits in kind and usual dates and terms of review of salary)
and also details any arrangements relating to any redundancy or other payment or
compensation rights or any retirement rights which those employees have or would
have in the event of the termination or cessation of their employment.
(b) Except as set forth in Schedule 2.23, no present employee of the
Corporation has given or received notice terminating his employment or is
entitled (without giving proper notice) to terminate his employment with the
Corporation.
(c) The Corporation is not party to any agreement or arrangement imposing
an obligation on it to increase the rates of remuneration of or to make any
bonus or incentive payments or any benefits in kind or any payments under a
profit sharing scheme to or on behalf of any of its former, present or future
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employees, whether now or at any future date and nor is it in discussions with
any of the employees of the Corporation or their representatives in relation to
any such agreement or arrangement.
(d) Except as set forth in Schedule 2.23, there is not in existence any
share incentive scheme, share option scheme or profit sharing scheme for all or
any of the Corporation's employees and no proposals for any such scheme or
arrangement are under consideration by the Corporation.
(e) Schedule 2.23 contains details of all consultancy agreements with the
Corporation.
(f) There are no agreements or arrangements (whether or not legally
binding) between the Corporation and any trade union or other body representing
its employees or any of them and the Corporation does not recognize any trade
union or other body representing its employees or any of them for negotiating
purposes.
(g) Except as disclosed in Schedule 2.23 the Corporation has no legal
liability or obligation to pay or provide for the payment of any form of
pension, superannuation or death benefit or allowance or sickness or accident
benefit to or in respect of any person or to contribute to any retirement
benefit accident life assurance medical insurance or salary indemnity scheme in
respect of any person.
(h) There are no disputes with or in relation to or claims by any of the
present or former employees of the Corporation, nor has the Corporation received
notice that any such disputes or claims are pending or threatened.
(i) Except as set forth in Schedule 2.23, since June 30, 1992 the
Corporation has not made or agreed to make any payment or provided or agreed to
provide any benefit to any present or former director or employee or any of
their dependents in connection with the actual or proposed termination or
suspension of their office or employment or variation of any contract of
employment of such present or former director or employee.
2.24 Disclosure.
(a) The Seller and the Corporation have made, and have caused their
officers, directors, employees, agents and other representatives to make
available to Buyer and its representatives and agents all written materials,
documents, agreements files, books and records of the Corporation and financial
statements and other information in their possession that relate to the
Corporation, and the Seller and the Corporation have made available all of their
officers, directors and employees that are responsible or familiar with the
business, financial, legal or other affairs of the Corporation, and have
directed all of
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the officers, directors and employees of the Seller and the Corporation to be
available to Buyer and its representatives and agents to answer all questions
regarding the Corporation.
(b) In connection therewith, neither the Seller nor the Corporation has
withheld from Buyer any information pertaining to the Corporation which in the
good faith judgment of the Corporation or the Seller would be reasonably
necessary for Buyer to properly evaluate, prior to the Closing, the business,
assets, financial condition and prospects of the Corporation.
(c) All such written information delivered or made available to Buyer and
its representatives and agents by the Seller and the Corporation (including
without limitation the information set out in the schedules to this Agreement)
is in all material respects true, accurate and complete.
(d) No representation or warranty by the Seller or the Corporation in this
Agreement or any schedule, exhibit, certificate, or other document furnished or
to be furnished by the Corporation or the Seller to Buyer pursuant to this
Agreement or the Buyer's due diligence review, contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(e) It is agreed and acknowledged by the Seller that notwithstanding any
other provisions in this Agreement or the Deed of Tax Covenant no disclosure
shall be made or shall be effective against or in relation to any of the
provisions of the Deed of Tax Covenant.
2.25 Prohibited Payments. Seller has not, with respect to the
Corporation's business and the Corporation has not, (i) entered into any
understanding, agreement or arrangement, written or oral, under or pursuant to
which bribes, kickbacks, illegal rebates, payoffs or other forms of illegal
payments have been or will be made, provided for or suffered, (ii) made any
contributions to any candidate for political office, or failed to disclose fully
any such contribution in violation of law or (iii) made any payment to any
foreign governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments or contributions required or
allowed by applicable law.
2.26 Absence of Certain Changes or Events. Except as set forth in Schedule
2.26, since June 30, 1996, there has not been
(a) any direct or indirect redemption, purchase or other acquisition by
Seller or the Corporation of any shares of the Corporation or any declaration,
setting aside or payment of any dividend with respect to such share capital or
made any payment or disposal which is or is treated as a distribution for the
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purposes of the TA (except as permitted pursuant to Section 4.11 hereof);
(b) any change in the number of issued shares of the Corporation, or any
issuance of options or warrants with respect thereto;
(c) any increase in the compensation payable or to become payable by the
Corporation to any of its officers or employees;
(d) any adoption of, or increases in compensation payable under, or
contributions to, or other amendments to, any of the Corporation's pension,
retirement, profit sharing, bonus or similar benefit plans other than in the
ordinary course of businesses and consistent with past practice;
(e) any new employment or consulting agreements or amendments to any
existing agreements with any of its officers or employees;
(f) any sale or other disposition of any assets of the Corporation other
than sales or dispositions made in the ordinary course of business and
consistent with past practice;
(g) any creation of a material Lien upon any asset of the Corporation,
except in the ordinary course of business and consistent with past practice;
(h) any write-offs or write-downs of inventories or accounts receivable of
the Corporation, other than in the ordinary course of business and consistent
with past practice;
(i) any discharge or payment of any material obligation or liability of
the Corporation, other than in the ordinary course of business and consistent
with past practice;
(j) any borrowings by the Corporation, other than in the ordinary course
of business and consistent with past practice;
(k) any amendment to the Memorandum or Articles of Association or other
governing instruments of the Corporation;
(l) any amendment or termination of any Material Contract or Material
Permit;
(m) any agreement by the Corporation to enter into any commitment,
contractual obligation, capital expenditure or other transactions other than
immaterial commitments in the ordinary course of business; or
(n) any agreement by the Seller or the Corporation, as applicable, to take
any action described in this Section.
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2.27 Business Relations. Neither the Seller nor the Corporation has
received any notice or other communication (written or oral) from any
substantial customer, supplier or any other third party with which the
Corporation has a business relationship involving more than 30,000 pounds in any
of the two most recently ended fiscal years (collectively, the "Customers"),
indicating any intent by such Customer to terminate, reduce or materially change
any business relationship or agreement with the Corporation by reason of the
transactions contemplated herein or otherwise.
2.28 Compliance by Corporation with Other Instruments and Laws. The
Corporation has, and is in compliance with, all necessary consents, permits,
licenses, orders, ratings, authorizations and approvals of, or registration or
declaration with, all governmental authorities, agencies, bureaus, commissions
or regulatory bodies for it to operate the properties and facilities comprising
the business presently being operated, except for those which would not have a
Material Adverse Effect on the Corporation. All labels and packaging materials
and all specifications and procedures used in the manufacture and packaging of
the Corporation's products are in material compliance with all applicable laws
in any jurisdiction in which its products are packaged, shipped or sold by the
Corporation, except where any such noncompliance would not have a Material
Adverse Effect on the Corporation.
2.29 Permits. The Corporation has all permits, licenses, approvals, orders
or authorizations of, or registrations, declarations, qualifications,
designations or filings with, any governmental authority, agency, bureau or
commission, or any third party (including without limitation, Kosher
validation), which are required to be obtained or made by the Corporation in
connection with the operation of its business as presently being conducted,
except for those which would not have a Material Adverse Effect on the
Corporation (collectively, the "Material Permits").
2.30 Covenants Performed. As of the Closing Date, Seller and Corporation
have performed their respective obligations and covenants contained herein which
by their terms are to be performed on or before the Closing Date, except to the
extent any such obligations or covenants are waived in writing by the Buyer.
2.31 Tortious Conduct. Except as otherwise disclosed in the schedules
hereto, covered by insurance or reflected on the June Pro Forma Financial
Statements, on and as of the Closing Date, the Corporation is not liable to any
third party or entity for any damages resulting in whole or in part from the
negligent, reckless or willful acts or omissions of the Corporation, whether
such liability may arise in tort, strict liability or for breach of contract,
nor has the Corporation acted or failed to act so as to result in such
liability, except
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to the extent that any such liability would not have a Material Adverse Effect
on the Corporation.
2.32 Regulatory Matters.
(a) The Corporation has filed or otherwise provided all reports, data,
other information and applications with respect to its business or products
which are required to be filed with or otherwise provided to the U.S. Food and
Drug Administration ("FDA") and any other federal, state, local or foreign
governmental authorities with jurisdiction over the manufacture, use and sale of
such products, and, all regulatory approvals in respect thereof are in full
force and effect on the date hereof, except to the extent that the failure of
any of the foregoing would not have a Material Adverse Effect on the
Corporation. The manufacture, use, sale and distribution by the Corporation of
the products comply in all material respects with all applicable laws and
published governmental rules, regulations and interpretations thereof, as in
effect on the date hereof or on the Closing Date, except to the extent that any
such non-compliance or liability would not have a Material Adverse Effect on the
Corporation and the methods of quality control employed by the Corporation are
reasonably sufficient to ensure such compliance.
(b) No contract, arrangement, agreement or obligation to which the
Corporation is a party contravenes or is registrable under any of the Trade
Descriptions Act, the Fair Trading Xxx 0000, the Restrictive Trade Practices Xxx
0000, the Competition Xxx 0000, the Treaty of Rome or any other applicable
antitrust, antimonopoly, or anticartel legislation or regulations or otherwise
restricts in any way the freedom of the Corporation to carry on any business in
any part of the world.
2.33 Products. All products manufactured, distributed or sold by the
Corporation on or before the Closing Date meet published or quoted
specifications, were not defective, were not contaminated or spoiled, did not
contain any foreign objects and are in compliance with and were manufactured in
accordance with any warranties or representations given or implied in respect
thereof and in compliance with all applicable laws and regulations (including
without limitation the regulations promulgated by the FDA). The products are
packaged in appropriate containers which comply in all material respects with
all FDA regulations, including labeling regulations.
2.34 Inventory. Except as otherwise described herein, the inventories of
the Corporation consist of items of a quality and quantity usable and suitable
in the ordinary course of business, and are in all material respects salable in
the market for which such products were manufactured or produced to be sold and
include no items which require governmental approvals to be sold. To the extent
the values of items were below standard quality or quantity or were obsolete or
otherwise unsalable,
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such items were accounted for in the Financial Statements at the lower of cost
and net realizable value in accordance with GAAP. As of the Closing Date, there
will be a supply of raw materials and goods in process in the inventory at their
customary location (together with supplies) adequate to manufacture, in the
ordinary course of business as generally conducted by the Corporation prior to
the Closing, finished products in amounts which, together with the finished
products in the inventory as of the Closing, will be sufficient to meet the
Corporation's requirements in the ordinary course of business as generally
conducted by the Corporation prior to the Closing, except to the extent of
variations caused by events beyond the Corporation's or Seller's control. Except
for items undergoing routine rework, items not salable in the normal course of
business (including but not limited to discontinued items, damaged goods or
items not meeting quality assurance guidelines), shall be accounted for in the
Closing Date Balance Sheet at the lower of cost or their net realizable value in
accordance with GAAP. Items shall be deemed "Aged" if, as of the end of the
fiscal month immediately preceding the Closing Date (or as of the Closing Date
if the Closing Date coincides with the last day of a fiscal month), they have a
remaining shelf life of less than six (6) months according to Schedule 2.34.
Such items deemed "Aged" shall be accounted for at no value. Items shall be
deemed "Excess" if, as of the end of the fiscal month immediately preceding the
Closing Date (or as of the Closing Date if the Closing Date coincides with the
last day of a fiscal month), there is more than twenty-four (24) months supply
on hand (based on turnover during the last twenty-four (24) month period) in the
Corporation's inventory unless reasonably economical minimum orders are for
greater than twenty-four (24) months supply. The amount deemed "Excess" shall be
accounted for at salvage value. Packaging materials will be valued at cost
except that no value shall be attributable to packaging not usable in the normal
course of business (e.g., damaged, obsolete, discontinued, faded or shaded) or
packaging not meeting applicable legal requirements. All raw materials and
goods-in-process shall be suitable and processable for the production of
products in accordance with the Corporation's standard quality and yield
specifications as now in effect.
2.35 Computer Hardware and Software etc.
(a) The Corporation has not suffered any material failures or breakdowns
of the computer hardware which it used in the year preceding the date of this
Agreement, and has not suffered any material failures or bugs in or breakdowns
of its software (except arising from operator error not based on inadequate
manuals) in the year preceding the date of this Agreement.
(b) The Corporation has operated and used all items of computer hardware
used by it substantially in accordance with the manufacturers' recommendations
including (without limita-
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tion) any recommendations as to environmental conditions and power supply.
(c) Schedule 2.35 contains a list of all computer software (including
programs held on silicon chips, disks and any other media, manuals and operator
guides) used by the Corporation. All such computer software is either owned by
the Corporation or held by it on license as noted in Schedule 2.35.
(d) The Corporation has not altered, adapted or modified any software held
by it on license or used by it whether with or without the consent of the owner
or manufacturers thereof.
2.36 Data Protection Act.
(a) The Corporation has complied in all material respects with all
requirements of the Data Protection Act 1984 and in particular:
(i) has registered as a data user under that Act for all purposes
for which registration is required by the business as carried on by the
Corporation;
(ii) has complied with the data protection principles.
(b) The Corporation has not received any notice letter or complaint
alleging a breach by it of the provisions of the Data Protection Act 1984 and
has no reason to believe that circumstances exist which may give rise to such a
notice letter or complaint.
3. Representations and Warranties of the Buyer.
The Buyer hereby represents and warrants to the Seller as of the Effective
Date and as of the Closing Date the following:
3.1 Corporate Status. The Buyer is a company duly incorporated under the
laws of England and Wales.
3.2 Authorization. The Buyer has full power and authority as of the
Effective Date and the Closing Date to enter into this Agreement and to
consummate the transactions contemplated herein. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action. The execution and
delivery of this Agreement by Buyer and the performance of the transactions
contemplated hereby have been duly authorized by the Board of Directors of Buyer
and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Buyer and, assuming due
authorization, execution and delivery by Seller and the Corporation, constitutes
the valid and binding agreement of
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Buyer, enforceable in accordance with the terms hereof except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws affecting the
enforceability of creditors' rights generally and except that the remedy of
specific performance or similar equitable relief may be subject to equitable
defenses.
3.3 Litigation. No legal, administrative or regulatory action, suit or
proceeding is pending or, to the best knowledge of the Buyer, is threatened,
against the Buyer which if adversely determined could reasonably be expected to
restrict the Buyer's ability to consummate the transactions contemplated herein.
3.4 Noncontravention; Consents. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (a)
violate any provisions of the Buyer's Articles of Association; or (b) violate
any agreement to which the Buyer is a party or is bound or result in the
creation of any Lien on any of the Buyer's assets or properties, the effect of
all of which violations, creations and impositions would be to materially
adversely affect the Buyer's ability to consummate the transactions contemplated
herein.
3.5 Brokers. Neither the Buyer nor any stockholder, officer, director or
agent of the Buyer has incurred on behalf of the Buyer any liability to any
broker, finder or agent for any brokerage fees, finders' fees or commissions
with respect to the transactions contemplated hereby.
3.6 Material Misstatements or Omissions. No representation or warranty by
the Buyer in this Agreement or any schedule, exhibit, certificate, or other
document furnished or to be furnished by the Buyer to Seller pursuant to this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
3.7 Covenants Performed. As of the Closing Date, Buyer has performed its
obligations and covenants herein which by their terms are to be performed on or
before the Closing Date, except to the extent any such obligations or covenants
are waived in writing by the Seller.
3.8 Title to Purchase Price Shares. Xxxxx Xxxxx Overseas is the beneficial
owner of and has good and marketable title to the Purchase Price Shares, free
and clear of all Liens and the transfer and delivery of the Purchase Price
Shares by Xxxxx Xxxxx Overseas to Seller as contemplated by this Agreement will
transfer good and marketable title to the Purchase Price Shares to Seller free
and clear of all Liens.
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3.9 Filings. No notice to or filing with, and no authorization, consent or
approval of, any domestic or foreign court or any public or governmental body or
authority is necessary for the consummation by the Buyer of the transactions
contemplated by this Agreement, except for notices or filings the failure to
give or make, and authorizations, consents and approvals the failure to obtain,
would not materially and adversely affect the ability of the parties hereto to
consummate the transactions contemplated hereby.
4. Covenants of the Buyer and the Seller.
4.1 Access and Confidential Information.
(a) Seller shall make, and shall cause the Corporation and its officers,
directors, employees and agents, including accountants, counsel and other
representatives to make, available to the officers, employees and agents of
Buyer reasonable access during normal business hours throughout the period prior
to the Closing Date all of the Corporation's officers, employees, agents,
properties, books, contracts, commitments and records, and during such period,
shall furnish promptly to Buyer all other reasonably requested information
concerning its business, properties and personnel. Neither the Seller nor the
Corporation shall withhold from Buyer and its representatives and agents for
review or questioning any known or available information pertaining to the
Corporation which in the reasonable judgment of Buyer or the Seller would be
necessary for Buyer to evaluate, prior to the Closing Date, the business,
assets, financial condition and prospects of the Corporation.
(b) No investigation pursuant to this Section shall affect, add to or
subtract from any representations or warranties or the conditions to the
obligations of the parties hereto to consummate the transaction contemplated
hereby.
(c) All information disclosed to Buyer pursuant to this Section 4.1 shall
be subject to the Confidentiality Agreement.
4.2 Interim Operations. After the date hereof and prior to the Closing or
earlier termination of this Agreement, unless Buyer shall otherwise agree in
writing or as otherwise contemplated by this Agreement, each of Seller and the
Corporation shall ensure that:
(a) the business of the Corporation shall be conducted only in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted;
(b) there is no material change (including any change by the incorporation
or acquisition or disposal of a subsidiary of all or part of a business) in the
nature and extent of its business;
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(c) the Corporation shall not create any new subsidiaries;
(d) the Corporation shall not take any of the actions set forth in Section
2.26 hereof or enter into any contract, agreement, commitment or arrangement
with respect to any of such actions;
(e) the Corporation shall not resolve to be or convene any general meeting
as to which a resolution is proposed that the Corporation shall be voluntarily
wound-up;
(f) the Seller shall confer with one or more representatives of Buyer to
report operational matters of a material nature and the general status of
ongoing operations;
(g) neither the Seller nor the Corporation shall:
(i) knowingly cause any of the representations and the warranties by
the Corporation or the Seller contained in this Agreement to be untrue or
incorrect in any material respect as of the Closing Date;
(ii) waive, grant, release or transfer any rights or property of
material value or modify or change in any material respect any Material
Contract or Material Permit other than in the ordinary course of business;
(iii) commit a breach of, or default under, any Material Contract or
Material Permit, or any contract, agreement, license or instrument to
which any of the Corporation's shares may be subject, or violate any
applicable law; regulation, ordinance, order, injunction or decree or any
other requirement of any governmental body or court, relating to the
Corporation's shares or assets or business;
(iv) fail to (A) file all reports and returns required to be filed
with the Registrar of Companies, and local and foreign authorities; (B)
fail to promptly pay all Taxes lawfully levied or assessed upon it or any
of its properties (except for taxes being contested for which adequate
reserves have been created); or (C) withhold or collect and pay to proper
governmental authorities or hold in separate bank accounts for such
payment all Taxes and other assessments that are required by law to be so
withheld or collected; or
(v) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
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(h) The Seller and the Corporation shall use reasonable efforts to
preserve intact the business organization of the Corporation, to keep available
the services of its present officers and key employees, and to preserve the good
will of the Customers;
(i) The Seller and the Corporation shall not, and shall cause their
officers, employees, representatives or agents not to, directly or indirectly:
(i) encourage, solicit, initiate or participate in discussions or
negotiations with, or provide any non-public information to, any person,
other than Buyer or its affiliates concerning any transaction involving
acquisition of all or substantially all of the Shares or the assets of the
Corporation, or
(ii) otherwise solicit, respond, participate in or negotiate with
respect to any proposal contemplating any such transaction.
(j) The Corporation and the Seller shall not take any action or agree, in
writing or otherwise, to take any of the foregoing actions or any action that
could be reasonably foreseen at the time of the taking of such action to cause
any representation or warranty by Seller or the Corporation in this Agreement
untrue or incorrect as of the date hereof or at the Closing Date; and
(k) The Corporation shall not pay, loan or advance any amount to, or sell,
transfer or lease any of its properties or assets to, or enter into any
agreement or arrangement with, any of its officers or directors, except for its
customary directors' fees and compensation to officers.
4.3 Legal Requirements and Filings. Subject to the terms and conditions of
this Agreement, each party will use its reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated under this Agreement.
4.4 Confidentiality Agreements Regarding Intellectual Property Rights.
Seller hereby agrees that the Corporation shall have the right to enforce the
provisions of any confidentiality agreement relating to the Intellectual
Property Rights to which the Seller is a party and that the terms and provisions
of such confidentiality agreements shall inure to the benefit of the
Corporation. Seller agrees, upon request of the Corporation, to promptly execute
any document reasonably requested by the Corporation, including without
limitation any assignment or similar agreement, to enable the Corporation to
enforce the provisions of any such confidentiality agreement.
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4.5 Maintenance of Insurance. From the Effective Date hereof until the
Closing Date, the Corporation shall continue to carry and maintain in full force
and effect the existing property, casualty (including, without limitation, stop
loss coverage for employee medical claims) and liability insurance as set forth
in Schedule 2.14; provided, however, that it shall not be a default hereunder if
the Corporation shall fail to maintain any such insurance which is maintained
through Buyer or an affiliate of Buyer to the extent that such failure is caused
solely by Buyer or such affiliate.
4.6 Additional Transactions. From the Effective Date hereof until the
Closing Date, the Corporation shall not do or agree to do any of the following:
(a) Enter into any lease, contract, agreement, commitment or transaction,
other than in the usual and ordinary course of business.
(b) Sell, lease, assign, hypothecate or otherwise transfer or dispose of
any of its assets, other than in the usual and ordinary course of business;
provided that the foregoing shall not apply to the replacement of existing
assets which are expended, rendered obsolete or retired if replaced with assets
of comparable or better quality.
(c) Modify, amend, cancel, terminate, forfeit, fail to renew, assign or
encumber in any material manner, other than in the ordinary course of business,
any existing governmental license, permit, consent or franchise or any lease,
contract, agreement or commitment of the Corporation or affecting its business
or assets, unless such action would not have a Material Adverse Effect on the
Corporation.
4.7 Adverse Changes. From the Effective Date hereof until the Closing
Date, the Seller and the Corporation shall promptly notify the Buyer in writing
of (a) any adverse developments which became or become known to the Corporation
or the Seller and which could reasonably be expected to have a Material Adverse
Effect on the Corporation; (b) any damage, destruction or loss (whether or not
covered by insurance) affecting any of the assets which could reasonably be
expected to have a Material Adverse Effect on the Corporation; (c) any notice of
material violation, forfeiture or complaint under any permanent license,
consent, authority, operating right, franchise, lease, contract, agreement,
commitment or arrangement; or (d) anything which if not corrected prior to the
Closing Date could reasonably be expected to prevent Seller or the Corporation
from fulfilling any condition precedent to the Closing described in this
Agreement.
4.8 Indebtedness. Seller shall pay or cause the Corporation to pay, on or
prior to the Closing Date, all interest-bearing debt of the Corporation other
than trade
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payables incurred in the ordinary course of business, so that on the Closing
Date, the Corporation has no interest-bearing debt outstanding other than such
trade payables.
4.9 Intercompany Payables.
(a) Seller and Buyer agree that all accounts payable and receivable
outstanding between Seller or the Corporation on the one hand and Buyer or any
of Buyer's affiliates on the other as a result of normal trading transactions
incurred in the ordinary course of business shall be settled in accordance with
their customary terms.
(b) All intercompany payables between the Seller and the Corporation
(other than payables relating to the purchase of goods in the ordinary course of
business and on standard business terms) shall be paid on or prior to the
Closing Date. For purposes of determining the value of the intercompany payables
on the Closing Date, the Rate of Exchange prevailing on the Closing Date shall
be used.
4.10 GECC Lease. On or prior to the Closing Date, Seller shall terminate
the GECC Lease and cause GECC to convey the equipment described on Schedule 4.10
(the "Corporation Equipment") to the Corporation and the remaining equipment
covered by the GECC Lease to the Seller and to obtain from GECC a full release
of the Corporation from any liability under the GECC Lease, and (b) to cause
GECC to unconditionally release Buyer and its affiliates from the guaranty of
the GECC Lease. The Corporation shall pay the portion of the purchase price of
the Corporation Equipment payable to GECC in connection with such termination
that represents repayment of principal and Seller shall pay all other costs
associated with the termination of the GECC Lease, including, without
limitation, any prepayment penalties or premiums included in such purchase
price, all sales tax associated therewith, and the purchase price of and all
costs associated with the equipment covered by the GECC Lease other than the
Corporation Equipment.
4.11 Excluded Assets. Notwithstanding anything else contained herein to
the contrary, Seller and Buyer agree that Seller shall have the right to cause
the Corporation to transfer to Seller as a dividend, prior to the Closing Date,
all cash and Cash Equivalents of the Corporation and the equipment listed on
Schedule 4.11 hereto (collectively, the "Excluded Assets"); provided, however,
that such transfer shall only be permitted to the extent that a dividend of the
Excluded Assets is permissible under applicable law and that it is effected at
the market value of the relevant Excluded Assets as determined by an independent
third party appraiser. Seller shall be responsible for all costs and Taxes
incurred in connection with such transfer.
4.12 Intellectual Property. The parties agree and acknowledge that (i) the
Intellectual Property Rights described
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on Schedule 4.12(a) hereto are owned or possessed by the Corporation and the
Seller does not own or have any right to use any of such Intellectual Property
Rights except to the extent specifically set forth in the License Agreements,
(ii) the Intellectual Property Rights described on Schedule 4.12(b) hereto are
owned or possessed by the Seller and the Corporation does not own or have any
right to use any of such Intellectual Property Rights except to the extent
specifically set forth in the License Agreements, and (iii) none of the
transactions contemplated by this Agreement shall have any effect on the
foregoing. The parties further agree and acknowledge that the value received by
each licensee under the License Agreements is equal to the value received by the
other licensee under the License Agreements.
4.13 Mayacamas Agreement.
(a) With regard to the Letter Agreement dated June 19, 1996 (the
"Mayacamas Agreement"), by and between the Corporation and Mayacamas Fine Foods,
Inc. ("Mayacamas"), the Seller agrees to promptly reimburse the Buyer for profit
reduction incurred by the Corporation as a result of (i) the return of
"returnable Product" (as defined in the Mayacamas Agreement), (ii) the sale of
Product (as defined in the Mayacamas Agreement) for less than $300 per kilogram
by Mayacamas, and (iii) commissions paid to Mayacamas, upon receipt of written
notice thereof from the Buyer setting forth in reasonable detail the calculation
of the profit reduction. Profit reduction means the reduction in Target Net Book
Value as presented on the June 1996 Pro Forma Financial Statements, by reason of
(i) the return of Product, (ii) the sale of Product for less than $300 per
kilogram by Mayacamas, and (iii) commissions paid to Mayacamas, pursuant to the
Mayacamas Agreement. In addition to the cost for shipping returnable Product to
the Corporation, Seller's obligation to reimburse the Buyer hereunder shall not
exceed $400,000 in the aggregate.
(b) Buyer and the Corporation agree (i) to cause the first 2,000 kilograms
of sale of the Product for use in the US on orders placed prior to June 28, 1997
to be made by Mayacamas and (ii) to use commercially reasonable efforts to
mitigate the likelihood of any such return and profit reduction.
4.14 Regulatory Documentation. From time to time after the Closing, the
Corporation shall supply to Seller, as soon as reasonably possible (taking into
consideration Seller's needs for such documentation) after request by Seller, a
complete copy of the quality assurance and quality control regulatory
documentation, analytical records, certification records and other documentation
(e.g., process development records) in the possession of the Corporation
relating to the toxicology, manufacture and supply of nisin for pharmaceutical
purposes and other purposes for which Seller is permitted to use nisin under the
License Agreement ("Seller's Permitted Uses") furnished by
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the Corporation to Seller, including, but not limited to, Nisin GN, to the
extent that any of the foregoing are in Seller's reasonable opinion necessary
for any regulatory uses involving the use of nisin for Seller's Permitted Uses;
provided, however, that all out-of-pocket costs and expenses incurred by the
Corporation in connection with providing copies of any such documentation shall
be for the account of Seller; and provided, further, that Seller shall (a) keep
all such documentation strictly confidential and only disclose such
documentation under standard confidentiality arrangements except to the extent
required to be disclosed by law or other governmental requirement, (b) use
commercially reasonable efforts to cause any governmental entities to which such
documentation must be disclosed to keep such documentation confidential, and (c)
not use any such documentation for any purpose other than regulatory uses. Buyer
shall cause the Corporation to retain records of such documentation as is
reasonably required by Seller.
4.15 Withholding Tax. The Seller shall be responsible for the payment of
any amounts required to be withheld on account of Taxes in connection with the
redemption of the New Preferred Stock and the payment of the redemption value
and accrued dividends thereon pursuant to Section 1.9 hereof, and the transfer
back to Seller of the Purchase Price Shares as part of the Purchase Price
pursuant to Section 1.3 hereof, in each case under any applicable law,
including, without limitation, the Internal Revenue Code of 1986, as amended.
5. Conditions to Obligations of the Buyer.
The obligations of the Buyer under this Agreement are subject to the
satisfaction of all of the following conditions, unless waived by the Buyer in
writing:
5.1 Representations and Warranties. All of the representations and
warranties by the Seller contained in this Agreement shall be true and complete
in all material respects as of the Closing Date, and the Buyer shall have
received a certificate from the Seller dated the Closing Date and signed by the
President or a Vice President, to such effect.
5.2 Complete Performance by the Seller and the Corporation. The Seller and
the Corporation shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by each
of them prior to, on, or as of the Closing Date, and the Buyer shall have
received certificates to such effect from each of the Seller and the
Corporation, each dated the Closing Date and signed by the President or a Vice
President in the case of the Seller, and by a duly authorized Attorney-in-Fact
in the case of the Corporation.
5.3 Corporate Action. The Buyer shall have received certified copies of
the resolutions of the respective boards of
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directors of the Seller and the Corporation which authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby.
5.4 Related Documents. The Seller and the Corporation, as applicable,
shall have executed and delivered the Related Documents.
5.5 Opinion of Counsel. The Seller shall have delivered to the Buyer an
opinion of counsel to the Seller and the Corporation in the form of Exhibit H.
5.6 Absence of Changes. During the period from the date of this Agreement
to and including the Closing Date, the Corporation shall not have sustained any
loss or damage to its assets or its business, whether or not insured, which
materially and adversely affects the ability of the Corporation to conduct its
business as a whole.
5.7 Litigation. As of the Closing Date, no action or proceeding shall be
completed or pending that has or may result in a judgment, decree or order that
will prevent or make unlawful the consummation of the transactions contemplated
under this Agreement or will have a Material Adverse Effect on the Corporation,
its assets, or its business. As of the Closing Date, there shall be in effect no
order restraining or prohibiting the consummation of the transactions
contemplated by this Agreement or any proceedings pending with respect thereto.
5.8 Delivery of Other Closing Documents. The Seller shall deliver to the
Buyer.
(a) duly executed share transfers in respect of the Shares in favor of the
Buyer, or as it may direct, together with the relative share certificates and
any power of attorney or other authority under which such transfers have been
executed;
(b) the Common Seal, Certificate of Incorporation and all statutory books
of the Corporation properly written up to the day prior to the Closing Date,
namely the Register of Members, Register of Mortgages, Register of Directors and
Secretaries, Register of Directors' Interests, the Books of Account and the
Minute Books of Meetings of the Corporation and of its Board of Directors;
(c) all documents of title to the Properties;
(d) irrevocable powers of attorney (in such form as the Buyer may
reasonably require) executed by the Seller in favor of the Buyer, or its
nominees, enabling the Buyer, or its nominees, pending registration of the
transfers of the Shares, to exercise all voting and other rights attaching to
the Shares and to appoint proxies for such purpose; and
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(e) any other documents required by this Agreement to be supplied by the
Seller to the Buyer at the Closing Date or reasonably requested by Buyer to give
effect to the transactions contemplated hereby.
5.9 Board Meeting of the Corporation. The Seller shall cause to be duly
held a meeting of the Board of the Corporation validly to effect or execute or
validly to resolve to effect or execute:
(a) the approval of the said transfers of the Shares to the Buyer, the
issue to the Buyer of share certificates in respect of those shares and the
registration of Buyer as holder of those shares (subject only to those transfers
being represented duly stamped);
(b) the appointment as Directors and Secretary of the Corporation of such
persons as the Buyers may nominate, subject to such persons consenting to such
appointment and not being disqualified in law or under the Articles of
Association of the Corporation;
(c) the sealing of the Share Certificates in favor of the Buyer and the
execution of the Supply Agreement and the License Agreements;
(d) any other business which may be necessary or desirable to give full
and valid effect to the sale and purchase provided for in this Agreement or as
the Buyer may reasonably require;
and the Seller shall supply a certified copy of the duly signed minutes of such
meeting to the Buyer on the Closing Date.
5.10 Board Approval. The Board of Directors of Xxxxx Xxxxx & Company
Limited shall have approved this Agreement and the transactions contemplated
hereby.
5.11 GECC Lease. GECC shall have (i) unconditionally released Buyer and
its affiliates from the guaranty of the GECC Lease, and (ii) terminated the GECC
Lease and conveyed the Corporation Equipment to the Corporation free and clear
of any claims of GECC or Seller, all under documentation and arrangements
reasonably satisfactory in form and substance to Buyer.
5.12 Gist-Brocades Distribution Agreement. The Corporation shall have
entered into a valid, binding and enforceable written distribution agreement
with Gist-Brocades Australia Pty Limited for distribution of Nisaplin on terms
and conditions satisfactory to the Buyer in its sole discretion.
5.13 Board Approval of Seller. This Agreement, the Related Documents and
the transactions contemplated hereby and thereby shall have been approved by the
disinterested members of the Board of Directors of Seller in accordance with
Seller's
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articles of incorporation and bylaws and applicable law. For the avoidance of
doubt, such disinterested directors shall not include (but without limitation),
any director that is an employee of or otherwise affiliated with Buyer or any of
its affiliates other than Seller, and Xxxxxxx Xxxxx.
5.14 Management Services Agreement. The Management Services Agreement,
dated September 9 and 11, 1996 (with an effective date of July 1, 1996) by and
between the Seller and the Corporation, shall have been terminated.
5.15 Declaration of Trust. Seller shall have terminated the declaration of
trust established for the benefit of Seller in connection with the one ordinary
share of the Corporation held in the name of Xxxxx Xxxxx International
Investments Limited and shall have delivered to the Buyer the Deed of
Termination duly executed by the Seller.
6. Conditions to Obligations of the Seller.
The obligations of the Seller under this Agreement are subject to the
satisfaction of all of the following conditions, unless waived by the Seller in
writing:
6.1 Representations and Warranties. All representations and warranties by
the Buyer contained in this Agreement shall be true and complete in all material
respects as of the Closing Date, and the Seller shall have received a
certificate from the Buyer, dated the Closing Date and signed by its duly
authorized Attorney-in-Fact, to such effect.
6.2 Complete Performance by the Buyer. The Buyer shall have performed and
complied with all agreements and conditions on its part required by this
Agreement to be performed and complied with prior to, on, or as of the Closing
Date, and the Seller shall have received a certificate from the Buyer, dated the
Closing Date and signed by its duly authorized Attorney-in-Fact, to such
effect.
6.3 Corporate Action. The Seller shall have received a certified copy of
the resolutions of the board of directors of the Buyer which authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
6.4 Opinion of Counsel. The Buyer shall have delivered to the Seller an
opinion of counsel to the Buyer in the form of Exhibit I.
6.5 Litigation. As of the Closing Date, no action or proceeding shall be
completed or pending that has or may result in a judgment, decree or order that
will prevent or make unlawful the consummation of the transactions contemplated
under this Agreement or will have a Material Adverse Effect on the
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Corporation, its assets, or its business. As of the Closing Date, there shall be
in effect no order restraining or prohibiting the consummation of the
transactions contemplated by this Agreement or any proceedings pending with
respect thereto.
6.6 Related Documents. The Buyer or its affiliates, as applicable, shall
have executed and delivered the Related Documents.
6.7 Delivery of Other Closing Documents. The Buyer shall have delivered to
the Seller all other documents required to be delivered hereunder, including,
without limitation, the Termination Acknowledgment.
6.8 Fairness Opinion. The Board of Directors of Seller shall have received
a reasonably satisfactory fairness opinion with respect to the transactions
contemplated by this Agreement, the costs of which shall be borne solely by
Seller.
7. Indemnification.
7.1 Indemnification by the Seller. The Seller shall indemnify, defend and
hold harmless the Buyer and its affiliates, shareholders, officers and employees
from and against any and all claims, demands, actions, losses, damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
expenses) which arise out of or in connection with: (i) the inaccuracy of any of
the representations and warranties of Seller contained in this Agreement, or any
certificate or agreement delivered pursuant hereto or (ii) the breach by Seller
of any of the covenants made by it in this Agreement; provided, however, that
the foregoing shall not apply to any such claims, demands, actions, losses,
damages, liabilities, costs and expenses that do not exceed $15,000 for any
individual matter or $75,000 in the aggregate; and provided, further, that the
Seller's liability in the aggregate under this Section 7.1 shall not exceed
twenty-four million six hundred ninety-two thousand five hundred Dollars
($24,692,500) in the aggregate for all such matters. Neither Buyer nor the
Corporation shall be deemed to have sustained a loss to the extent it is
compensated by insurance carried by Buyer or the Corporation. In computing the
amount to be paid by the Seller under this paragraph, there shall be deducted an
amount equal to any Tax benefits realized by the Buyer, or the Corporation (or
their successors, assigns or affiliates), as a result of the event giving rise
to Seller's obligation to make such payment, after taking into account the
income tax treatment of the Buyer's receipt of such payment. The indemnification
contemplated in the Deed of Tax Covenant and any indemnification resulting from
a breach of the representations and warranties contained in Section 2.15 hereof
or the covenants contained in Section 4.15 hereof shall not be subject to the
dollar limitations or minimums set forth above.
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7.2 Indemnification by the Buyer. The Buyer shall indemnify, defend and
hold harmless the Seller and its affiliates, shareholders, officers and
employees from and against any and all claims, demands, actions, losses,
damages, liabilities, costs and expenses (including reasonable attorneys' fees
and expenses) which arise out of or in connection with: (i) the inaccuracy of
any of the representations and warranties of Buyer contained in this Agreement,
or any document, certificate or agreement delivered pursuant hereto; or (ii) the
breach by Buyer of any of the covenants made by it in this Agreement; provided,
however, that the foregoing shall not apply to any such claims, demands,
actions, losses, damages, liabilities, costs and expenses that do not exceed
$15,000 for any individual matter or $75,000 in the aggregate; and provided,
further, that the Buyer's liability in the aggregate under this Section 7.2
shall not exceed twenty-four million six hundred ninety-two thousand five
hundred Dollars ($24,692,500) in the aggregate for all such matters. In
computing the amount to be paid by the Buyer under this paragraph, there shall
be deducted an amount equal to any Tax benefits realized by the Seller (or its
successors, assigns or affiliates) as a result of the event giving rise to
Buyer's obligation to make such payment, after taking into account the income
tax treatment of the Seller's receipt of these payments.
7.3 Notice and Right To Defend Third-Party Claims. Upon receipt of written
notice of any claim, demand or assessment or the commencement of any suit,
action or proceeding in respect of which indemnity may be sought on account of
an indemnity agreement contained in this Section 7.3, the party seeking
indemnification (the "Indemnitee") shall promptly, but in no event later than
twenty (20) days prior to the date a response or answer thereto is due (unless a
response or answer is due within fewer than twenty (20) days from the date of
Indemnitee's receipt of notice thereof), inform the party against whom
indemnification is sought (the "Indemnitor") in writing thereof. The failure,
refusal or neglect of such Indemnitee to notify the Indemnitor within the time
period specified above of any such claim or action shall relieve such Indemnitor
from any liability which it may have to such Indemnitee in connection therewith,
if the effect of such failure, refusal or neglect is to prejudice materially the
rights of the Indemnitor in defending against the claim or action. In case any
claim, demand or assessment shall be asserted or suit, action or proceeding
commenced against an Indemnitee, and such Indemnitee shall have timely and
properly notified the Indemnitor of the commencement thereof, the Indemnitor
will be entitled to participate therein, and, to the extent that it may wish, to
assume the defense, conduct or settlement thereof, with counsel selected by the
Indemnitor. After notice from the Indemnitor to the Indemnitee of its election
to assume the defense, conduct or settlement thereof, the Indemnitor will not be
liable to the Indemnitee for expenses incurred in connection with the defense,
conduct or settlement thereof, except for such expenses as may be reasonably
required to enable the Indemnitor to take over such defense, conduct or
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settlement. The Indemnitee will at its own expense cooperate with the Indemnitor
in connection with any such claim, make personnel, witnesses, books and records
relevant to the claim available to the Indemnitor at no cost, and grant such
authorizations or powers of attorney to the agents, representatives and counsel
of the Indemnitor as the Indemnitor may reasonably request in connection with
the defense or settlement of any such claim. In the event that the Indemnitor
does not wish to assume the defense, conduct or settlement of any claim, demand
or assessment, the Indemnitee shall have the exclusive right to prosecute,
defend, compromise, settle or pay the claim in its sole discretion and pursue
its rights under this Agreement; provided that, before settling any claim
hereunder, the Indemnitee shall give ten (10) days' notice to the Indemnitor to
allow the Indemnitor to reject the settlement, in which case Indemnitor shall
defend the claim. Notwithstanding the foregoing, the Indemnitee shall have the
right to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnitee unless (a) the Indemnitor has agreed in writing
to pay such fees and expenses, (b) the Indemnitor has failed to assume the
defense of such action, claim or proceeding or (c) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both the
Indemnitor and the Indemnitee and the Indemnitee reasonably determines that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Indemnitor (in which case, if the
Indemnitee informs the Indemnitor in writing that it elects to employ separate
counsel at the expense of the Indemnitor, the Indemnitor shall not have the
right to assume the defense of such action, claim or proceeding on behalf of the
Indemnitee, it being understood, however, that the Indemnitor shall not, in
connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnitee, which firm shall be designated in
writing by the Indemnitee).
7.4 Survival of Indemnification. The right to make a claim for
indemnification pursuant to Sections 7.1 and 7.2 of this Agreement shall survive
the Closing Date for a period with respect to all claims against the Corporation
relating to Taxes, equal to the applicable statutory limitation period for the
applicable claim plus six weeks, and with respect to all other matters, equal to
two years and one month. The last day of each such period shall be, with respect
to the applicable matter, referred to herein as the "Applicable Claim
Termination Date." No claim or action for indemnification under this Agreement
shall be asserted or maintained by any party hereto after the Applicable Claim
Termination Date except that if there shall be pending on the Applicable Claim
Termination Date any claim
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asserted by a party in writing to the party alleged to be responsible for such
claim under this Article 7, on or prior to the Applicable Claim Termination
Date, then the party asserting that claim shall thereafter have the right to
continue to assert that claim and to be indemnified with respect thereto, if due
under this Article 7.
8. Termination.
8.1 Termination. Notwithstanding anything in this Agreement to the
contrary:
(a) Mutual Consent. This Agreement may be terminated by the mutual
consent of the parties hereto.
(b) Default. If, notwithstanding the terms of this Agreement, a
party hereto shall intentionally fail or refuse to consummate the
transactions contemplated herein or otherwise fail to perform its
obligations hereunder, then the nondefaulting party, after affording the
defaulting party a ten (10) day period after notice in which to cure such
breach or default, shall have the right, to terminate this Agreement by
written notice given to the other party hereto.
(c) Upset Date. If the Closing shall not have occurred on or before
December 31, 1996 then, unless otherwise agreed to in writing between the
parties hereto, this Agreement may be terminated by either party at any
time upon notice to the other party; provided, however, that the conduct
or failure to act by the party electing to terminate this Agreement shall
not have prevented the Closing from occurring.
(d) Legal Restraint. Any party may, by written notice to the other
party, terminate this Agreement if at the time the written notice of
termination is given, there is in effect a permanent injunction enjoining
the transaction contemplated hereunder.
8.2 Effect of Termination. In the event of termination of this Agreement
by either Buyer or Seller, as provided above, this Agreement shall forthwith
become void and there shall be no further obligations hereunder on the part of
either Buyer or Seller or their respective officers or directors. However,
nothing contained in this Section shall relieve any party hereto from any
liability to the others for any breach of this Agreement. If this Agreement is
terminated, the Existing Agreement shall remain in effect.
8.3 Remedies for Breach by Seller. Seller and Buyer agree that it may be
impossible to measure in money the damages which will accrue by reason of a
failure by Seller to perform its
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obligations to sell the Shares to Buyer under this Agreement. In the event of
any dispute or controversy concerning any right or obligation under this
Agreement, such right or obligation shall be enforceable in a court of equity or
other competent jurisdiction by a decree of specific performance or other
appropriate equitable relief, including injunctive relief (in any event of which
the Buyer shall also have and receive the costs of such action which shall
include its reasonable attorneys' fees). Seller hereby waives its right to
assert any claim or defense that Buyer has or may have an adequate remedy at
law.
9. Miscellaneous.
9.1 Parties and Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be assigned by any party
without the consent of the other parties hereto, except that the Buyer may
designate a wholly owned subsidiary as the purchaser of the Shares, but such
designation shall not relieve the Buyer of any of its obligations hereunder.
Nothing in this Agreement shall confer upon any person or entity not a party to
this Agreement (other than the legal representatives and agents of the parties
to this Agreement) any rights, remedies of any nature or kind whatsoever, and no
such person or entity shall be construed to be a third party beneficiary or
shall be entitled to rely upon any provision of this Agreement or any agreement,
instrument, certificate or document executed pursuant to or in connection with
this Agreement. Notwithstanding the foregoing or any other provision in this
Agreement the benefit of all representations and warranties given under this
Agreement or pursuant to this Agreement by Seller may be assigned, in whole or
in part and without restriction, to any person acquiring any of the Shares from
Buyer and accordingly such person shall be entitled to enforce each of the
representations and warranties against the Seller as if they were named in this
Agreement as the Buyer.
9.2 Confidentiality; Press Releases. Except as otherwise required by law,
from and after the Effective Date and until the Closing Date each of the parties
hereto agrees that all press releases and other announcements, whether written
or oral, to be made by any of them with respect to the transactions contemplated
hereby shall be subject to the agreement and consent of all parties hereto prior
to the dissemination thereof. Until the Closing Date, each of the parties hereto
shall comply with the terms of the Confidentiality Agreement.
9.3 Expenses. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel, financial
advisors, accountants, brokers, finders, and investment bankers, and any filing
or
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other fees or charges. Any sales, use or stamp tax or duty assessed or imposed
in connection with the transfer of the Shares hereunder shall be borne by
Seller.
9.4 Notices. Any notices, requests, demands or other communications
hereunder, shall be in writing and shall be deemed to have been duly given when
personally delivered, whether by hand, air courier or by facsimile confirmed by
receiving party to the following addresses:
If to the Seller: Applied Microbiology, Inc.
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Vice President - Legal
Fax: (000) 000-0000
with a copy to: Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Buyer: Xxxxx Xxxxx & Co. Ltd.
0 Xxxxxx Xxxxxx
Xxxxxx, XXX 0000, Xxxxxxxxx
Attn: The Company Secretary
Fax: 00 0 0000 0000
with a copy to: Xxxxx Xxxxx Food, Inc.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
or to such other addresses as either party may specify in writing to the other.
9.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
9.6 Headings. The headings of the sections and paragraphs hereunder are
for convenience and reference only and shall not be deemed a part of this
Agreement.
9.7 Entire Agreement. This Agreement, which includes the Schedules and
Exhibits hereto, sets forth the parties' final and entire agreement with respect
to its subject matter and supersedes any and all understandings and agreements,
and may not be contradicted, explained or supplemented by evidence of any prior
agreement, any contemporaneous oral agreement or any consistent additional
terms; provided, however, that until the Closing Date the Existing Agreement and
the Confidentiality Agreement shall
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remain in full force and effect in accordance with their respective terms.
9.8 Severability. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining provisions of this Agreement or affecting the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
9.9 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York (without regard to principles of conflicts of
laws) applicable to contracts made and to be performed within such state.
9.10 Consent to Jurisdiction. Subject to Section 9.11 hereof, the parties
to this Agreement, acting for themselves and for their respective successors and
assigns, without regard to domicile, citizenship or residence, hereby agree to
submit themselves to the exclusive jurisdiction of the courts of the State of
New York located in New York City, and the United States District Court for the
Southern District of New York, in respect of any matter arising under this
Agreement. The parties hereby waive, to the fullest extent they may effectively
do so under applicable law, any objection which they now or hereafter have to
the laying of the venue of any such matter brought in any such court and any
claim that any such matter brought in any such court has been brought in an
inconvenient forum. Service of process, notices and demands of such courts may
be made upon any party to this Agreement by personal service at any place where
it may be found or by giving notice to such party pursuant to this Agreement.
9.11 Resolution of Disputes.
(a) Negotiation Between Executives. The parties shall attempt in good
faith to resolve any dispute arising out of or relating to this Agreement or any
other Related Document, or the breach, termination or validity hereof or
thereof, by negotiations between executives who have authority to settle the
controversy. Any party may give the other party written notice of any dispute
not resolved in the normal course of business. Within 20 days after delivery of
such notice, executives of both parties shall meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary, to
exchange relevant information and to attempt to resolve the dispute. If the
matter has not been resolved within 60 days of the disputing party's notice, or
if the parties fail to meet
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within 20 days, either party may initiate arbitration of the controversy or
claim as provided hereinafter.
If a negotiator intends to be accompanied at a meeting by an attorney, the
other negotiator shall be given at least three working days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.
(b) Arbitration. If a dispute arising out of or relating to this Agreement
or any other Related Document, or the breach, termination or validity hereof or
thereof, has not been resolved by negotiation as provided herein, it shall be
settled by arbitration in accordance with the Center for Public Resources
Institute for Dispute Resolution Rules for Non-Administered Arbitration of
Business Disputes. The arbitration shall take place in New York City, New York,
shall be governed by the United States Arbitration Act, 9 U.S.C. xx.xx. 1-16,
and judgment upon the award rendered by the arbitrator may be entered by any
court having jurisdiction thereof.
9.12 Waivers and Amendments. Each of Seller and Buyer may by written
notice to the other (a) extend the time for the performance of any of the
obligations or other actions of the other; (b) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement; (c)
waive performance of any of the covenants or obligations of the other created
under this Agreement; or (d) waive fulfillment of any of the conditions to its
own obligations under this Agreement. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach, whether or not similar, and shall not constitute a
waiver by either party of any rights or remedies under this Agreement or
otherwise in law or equity. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties hereto.
9.13 Further Acts. If, at any time after the Closing Date, any further
action by the Seller is necessary or appropriate to more effectively convey,
transfer and assign to Buyer the legal and beneficial title to Shares or for
aiding and assisting and collecting and reducing to possession and exercising
rights with respect thereto or otherwise giving effect to the transactions
contemplated hereby and by the Related Documents, Seller shall promptly upon
request of Buyer and at Seller's own expense cause such action to be taken.
9.14 Disclosure in Schedules. Each schedule attached to this Agreement
shall be deemed to incorporate all information contained in all other schedules
to the extent applicable.
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9.15 Interpretation. In this Agreement any reference to a statute or
statutory provision includes any consolidation or reenactment, modification or
replacement of the same, any statute or statutory provision of which it is a
consolidation, reenactment, modification or replacement and any subordinate
legislation in force under any of the same from time to time.
9.16 Warranties Remain Notwithstanding Completion. The parties acknowledge
that the parties have entered into this Agreement upon the basis of the
representations and warranties set out in this Agreement and accordingly the
said representations and warranties together with any other provisions of this
Agreement, the Deed of Tax Covenant and all other Related Documents which shall
not have been fully performed at Completion shall remain in force, subject to
the provisions of Section 7.4 hereof, notwithstanding that the Closing shall
have taken place.
9.17 Information Supplied by Corporation Not Deemed Warranty. The Seller
agrees with the Buyer and the Corporation and their respective officers and
employees or agents that any information supplied by the Corporation or their
respective officers and employees or agents prior to the Closing Date to the
Seller or its agents, representatives or advisers in connection with the
representations and warranties, or otherwise in relation to the business and
affairs of the Corporation shall not be deemed a representation, warranty or
guarantee of its accuracy by the Corporation to the Seller and shall not
constitute a defense to any claim by the Buyer under this Agreement and the
Seller waives any claim against the Corporation and its officers, employees and
agents in respect of any misrepresentations in or omissions from any such
information so supplied.
9.18 Representations and Warranties to the Seller's Knowledge. With
respect to each representation and warranty made by the Seller herein that is
expressed to be given "so far as the Seller is aware" or "to the best of the
knowledge of the Seller," or words to that effect, the Seller shall be deemed to
have knowledge of all facts, matters and circumstances which are actually known
to each of the officers and directors of Seller after due inquiry or
investigation, including, without limitation, due inquiry of all relevant
officers, directors and employees of the Corporation.
9.19 Restrictive Trade Practices. In the United Kingdom, no provision of
this Agreement or of any agreement or arrangement of which this Agreement forms
part and which is subject to registration under the Restrictive Trade Practices
Act 1976 shall take effect until the day after particulars of this Agreement or
of the agreement or arrangement of which it forms part (as the case may be) have
been furnished to the Director General of Fair Trading pursuant to the
provisions of Section 24 of that Act.
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9.20 Right of Setoff. Notwithstanding anything else contained herein or in
any Related Document to the contrary Buyer shall have the right to set off (a)
any payment of the Earnout Amount or the Final Payment due hereunder against any
amounts due and owing by AMBI under Section 7 of the Deed of Tax Covenant at the
time any such payment is made, and (b) any payment of the Earnout Amount against
any amounts due and owing by AMBI under the Loan Agreement at the time such
payment is made.
9.21 Currency of Payments Due Under Agreement; Currency Exchange.
(a) Payments made under this Agreement shall be made in the currencies
specified herein. All payments made on account of the indemnities set forth in
Section 7 hereof or in the Deed of Tax Covenant or otherwise on account of costs
and expenses to be borne by a party hereunder shall be made in the currency of
the underlying claim, cost or expense that gives rise to a right of indemnity or
reimbursement for costs and expenses.
(b) For purposes of determining the amount of the Purchase Price
Adjustment pursuant to Section 1.6 hereof, the difference between the Closing
Net Book Value and the Target Net Book Value shall be converted to Dollars at
the Rate of Exchange four business days prior to the Final Payment Date.
(c) For purposes of determining whether the Dollar limitations or minimums
set forth in Section 7.1 or 7.2 have been exceeded, amounts payable under such
Sections that are not payable in Dollars shall be converted to Dollars at the
Rate of
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Exchange prevailing on the date on which such amounts were payable thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
APPLIED MICROBIOLOGY, INC.
By______________________________________
Xxxxxxxx Xxxxx
Vice President
EXECUTED AS A DEED BY XXXXX &
XXXXXXX LIMITED BY XXXXXXXX XXXXX
ITS DULY AUTHORIZED ATTORNEY:
By______________________________________
Xxxxxxxx Xxxxx
Its Lawful Attorney
XXXXX XXXXX (UK) PLC
By______________________________________
Xxxxxxxx X. Xxxx
Its Lawful Attorney
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