EX-10.1 2 g93267exv10w1.htm STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT
Exhibit 10.1
THIS STOCK PURCHASE AGREEMENT is made and entered into as of this 15th day of February, 2005, by and among IVAX CORPORATION, a Florida corporation (“IVAX”), PSI HOLDINGS, INC., a Delaware corporation (“PSI”), PHOENIX SCIENTIFIC, INC., a Delaware corporation (“Phoenix”), Green Equity Investors III, L.P., a Delaware limited partnership (“GEI III”), Green Equity Investors Side III, L.P., a Delaware limited partnership (“GEI Side III”), the other stockholders and warrantholders of PSI set forth on the signature pages hereto and, solely to acknowledge and agree to the provisions of Article 11, Xxxxxxx Xxxxx & Partners, L.P., a Delaware limited partnership (“LGP”).
WHEREAS each of the other stockholders of PSI set forth on Schedule I attached hereto that has not executed this Agreement on the date hereof shall execute and deliver an instrument of joinder prior to the Closing Date whereby each shall become a party to this Agreement; and
In addition to terms defined in the Preamble and the Recitals and terms defined elsewhere in this Agreement, the following terms when utilized in this Agreement shall have the meanings indicated, which meanings shall be equally applicable to both the singular and plural forms of such terms:
“Affiliate” of a specified Person means a Person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person, and any executive officer or director of such Person. For purposes of the foregoing sentence, the term “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Affiliate Loan” shall mean any obligation for money borrowed by or for the benefit of any Seller from Phoenix or PSI (other than advances of business expenses and other advances made in the Ordinary Course of Business).
“Agency” shall mean any federal, state, municipal, county, parish, local, foreign or other judicial, governmental or regulatory authority, agency or instrumentality.
“Aggregate Common Equivalent Cash Consideration” shall mean an amount equal to (i) the Cash Consideration, minus (ii) the Aggregate Series A Consideration, minus (iii) the Aggregate Series B Consideration, minus (iv) the Management Shares Cash Consideration.
“Aggregate Series A Consideration” shall mean an amount equal to the Series A Preferred Share Purchase Price multiplied by the number of shares of Series A Preferred Stock issued and outstanding immediately prior to the Closing.
“Aggregate Series B Consideration” shall mean an amount equal to the Series B Preferred Share Purchase Price multiplied by the number of shares of Series B Preferred Stock issued and outstanding immediately prior to the Closing.
“Agreement” shall mean this stock purchase agreement together with all exhibits and schedules contemplated hereby.
“Balance Sheet Date” shall mean December 31, 2004.
“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which the banks in Miami, Florida are authorized or obligated by applicable Law to close.
“Basket Limitation” shall have the meaning set forth in Section 7.3.
“Cap Limitation” shall have the meaning set forth in Section 7.3.
“Cash Consideration” shall mean cash in immediately available funds in the amount of one hundred ninety-six million eight hundred fifty thousand dollars ($196,850,000);
“Closing” shall have the meaning set forth in Section 2.2.
“Closing Date” shall have the meaning set forth in Section 2.2.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
“Commission” shall have the meaning set forth in Section 5.4.
“Company Employees” shall have the meaning set forth in Section 6.16.
“Confidentiality Agreement” shall mean that certain letter agreement dated November 19, 2004, by and among Phoenix, LGP and IVAX.
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“Consent” shall mean any consent, approval, waiver or authorization of, or registration, qualification, designation, declaration or filing with, any Person.
“Contract” shall mean any contract, undertaking, commitment, arrangement, plan or other legally binding agreement or understanding.
“Court” shall mean any federal, state, municipal, county, parish, local, foreign or other court or judicial entity.
“Damages” shall have the meaning set forth in Section 7.3.
“Delaware GCL” shall mean the Delaware General Corporation Law.
“Director/Officer Indemnitees” shall have the meaning set forth in Section 6.17.
“Domain Names” shall have the meaning set forth in the definition of Intellectual Property in this Article 1.
“Environmental Law” shall mean any federal, state, municipal, county, parish, local or foreign Law or Order relating to pollution, investigation, remediation, restoration or protection of the environment or natural resources (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, any Law relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or industrial, toxic or Hazardous Substances or wastes into the environment, or otherwise relating to the generation, management, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of chemicals, pollutants, contaminants, or industrial, toxic or Hazardous Substances or wastes.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“Escrow Agent” shall have the meaning set forth in Section 2.3.
“Escrow Agreement” shall have the meaning set forth in Section 2.3.
“Escrow Fund” shall have the meaning set forth in Section 7.5.1.
“Exchange Act” shall have the meaning set forth in Section 5.5.
“Exchange Act Reports” shall have the meaning set forth in Section 5.5.
“Final Expiration Date” shall mean September 15, 2008.
“First Expiration Date” shall mean the date that is the later of (i) fifteen months after the Closing Date and (ii) September 15, 2006.
“Fully Diluted Common Shares Number” shall mean the sum of the number of shares of PSI Common Stock issued and outstanding immediately prior to the Closing plus the number of
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shares of PSI Common Stock issuable upon exercise of each PSI Warrant outstanding immediately prior to the Closing.
“GAAP” shall mean accounting principles generally accepted in the United States.
“GEI III” shall have the meaning set forth in the Preamble.
“GEI Side III” shall have the meaning set forth in the Preamble.
“Hazardous Substance” means any substance, material, or waste that is listed, classified or regulated in any concentration pursuant to any Environmental Law, including without limitation any petroleum hydrocarbon, polychlorinated biphenyls, radioactive materials or radon.
“HSR Act” shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Indemnified Amount” shall have the meaning set forth in Section 7.5.
“Initial IVAX Shares Consideration Amount” shall mean an amount equal to sixty-two million five hundred thousand dollars ($62,500,000).
“Initial Per Share IVAX Shares Consideration” shall mean (i) (A) the Initial IVAX Shares Consideration Amount, plus the Management Shares Cash Consideration, divided by (B) the Fully Diluted Common Shares Number divided by (ii) the IVAX Shares Average Closing Price.
“Initial Per Share Management IVAX Shares Consideration” shall mean a number of shares of IVAX Common Stock equal to (i) the difference between (A)(1) the Initial IVAX Shares Consideration Amount, plus the Management Shares Cash Consideration, divided by (2) the Fully Diluted Common Shares Number minus (B) $1.00 divided by (ii) the IVAX Shares Average Closing Price.
“Intellectual Property” shall mean any or all of the following and any and all rights in or arising out of: (a) all discoveries, processes, designs, techniques, developments, technology and inventions and all improvements of any of the foregoing (in each case, whether patentable or unpatentable and whether or not reduced to practice), and all patents, patent applications, and patent disclosures, together with all reissuances, renewals, confirmations, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all trademarks, servicemarks, trade dress, logos, trade names, and corporate names, and all applications, registrations, and renewals in connection therewith (“Trademarks”); (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith; (d) all trade secrets (including, without limitation, any of the following that constitute trade secrets: ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals); (e) all systems, computer programs and software (including, without limitation, data and source and object codes and related documentation) other than “off the shelf” computer software generally available to the public; and (f) domain names, uniform resource locators and other Internet or similar addresses or identifiers (“Domain Names”).
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“IRS” shall mean the United States Internal Revenue Service.
“IVAX” shall have the meaning set forth in the Preamble.
“IVAX Common Stock” shall mean the common stock, par value $0.10 per share, of IVAX.
“IVAX Indemnified Party” shall have the meaning set forth in Section 7.3.
“IVAX Material Adverse Effect” shall mean any circumstance, change in, or effect on IVAX or any of its subsidiaries that, individually or in the aggregate with any other circumstances, changes or effects, has a material adverse effect on the business, financial condition or operations of IVAX and its subsidiaries taken as a whole; provided, however, that the effects of changes that are generally applicable to (a) the industries and markets in which IVAX and its subsidiaries operate, (b) the United States economy or (c) the United States securities markets shall be excluded from the determination of IVAX Material Adverse Effect; and provided, further, however, that any adverse effect on IVAX or its subsidiaries resulting from the execution of this Agreement, any public announcement relating to this Agreement or the consummation of the transactions contemplated by this Agreement (other than the failure of IVAX to obtain any Consent required or necessary to be obtained in connection with this Agreement) shall also be excluded from the determination of IVAX Material Adverse Effect.
“IVAX Plan” shall have the meaning set forth in Section 6.16.
“IVAX Shares Average Closing Price” shall mean the average closing price of a share of IVAX Common Stock on the American Stock Exchange during the ten (10) trading days preceding the date which is two (2) business days prior to the Closing.
“Knowledge” or similar phrases shall mean, with respect to any representation or warranty or other statement in this Agreement qualified by reference to the knowledge of any party, the actual (and not constructive or imputed) knowledge of such party. Where reference is made to the knowledge of PSI or similar phrases, such reference shall be deemed to include the individuals set forth on Schedule 1, each of whom shall be deemed to have read this Agreement, including, without limitation, the representations and warranties set forth in Article 3.
“Law” shall mean any federal, state, municipal, county, parish, local, foreign or other governmental law, rule, regulation, ordinance, statute or directive.
“Xxxxxxx Xxxxx” shall mean GEI III and GEI Side III.
“LGP” shall have the meaning set forth in the Preamble.
“License” shall mean any license, franchise, approval, registration, certificate, permit, planning, permission or other authorization.
“Lien” shall mean any lien, claim, charge, mortgage, security interest or other encumbrance of any nature whatsoever.
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“Management Agreement” shall mean that certain Amended and Restated Management Services Agreement, dated February 25, 2004, between Phoenix and LGP.
“Management Common Share” shall have the meaning set forth in Section 2.3.
“Management Shares Cash Consideration” shall mean an amount equal to $1.00 multiplied by the number of Management Common Shares issued and outstanding immediately prior to the Closing.
“Most Recent Balance Sheet” shall mean the audited consolidated balance sheets of PSI as of December 31, 2004.
“Note Redemption Date” shall have the meaning set forth in Section 6.12.
“Order” shall mean any judgment, injunction, notice, suit, decree or order of any Court or Agency.
“Ordinary Course of Business” shall mean the ordinary course of business of PSI and Phoenix and consistent with past custom and practice.
“Per Common Equivalent Cash Consideration” shall mean an amount equal to (i) the sum of (A) the Aggregate Common Equivalent Cash Consideration plus (B) an amount equal to the aggregate exercise price per share of PSI Common Stock of each PSI Warrant outstanding immediately prior to the Closing, divided by (ii) the Fully Diluted Common Shares Number.
“Person” shall mean any natural person, corporation, unincorporated organization, partnership, limited liability company, association, joint-stock company, joint venture, trust, entity or government, or any Agency.
“Phoenix” shall have the meaning set forth in the Preamble.
“Phoenix Common Stock” shall mean the common stock, par value $0.01 per share, of Phoenix.
“Phoenix Notes” shall mean the 11.5% Senior Secured Notes due 2009 issued by Phoenix.
“Products” shall have the meaning set forth in Section 3.38.
“PSI” shall have the meaning set forth in the Preamble.
“PSI Commitments” shall have the meaning set forth in Section 3.28.
“PSI Common Stock” shall mean the common stock, par value $0.01 per share, of PSI.
“PSI Financial Statements” shall mean (i) the audited consolidated balance sheets of PSI as of December 31 in each of the fiscal years 2004, 2003 and 2002, together with the audited consolidated statements of income, shareholders’ equity and cash flows for the twelve-month periods ended December 31, 2003 and 2004 and for the period from October 2, 2002 through
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December 31, 2002, and the footnotes related thereto, certified without qualification by KPMG LLP and (ii) the audited statements of income, shareholders’ equity and cash flows of Phoenix for the period from January 1, 2002 through October 1, 2002, and the footnotes related thereto, certified without qualification by KPMG LLP.
“PSI Intellectual Property” means any Intellectual Property that is owned by or is licensed to or by PSI or Phoenix, excluding Intellectual Property licensed implicitly or by operation of law (e.g., the implied license to use a patented article after a first sale thereof).
“PSI Leases” shall have the meaning set forth in Section 3.17.
“PSI Material Adverse Effect” shall mean any circumstance, change in, or effect on PSI or Phoenix that, individually or in the aggregate with any other circumstances, changes or effects, has a material adverse effect on the business, financial condition or operations of PSI or Phoenix; provided, however, that the effects of changes that are generally applicable to (a) the industries and markets in which PSI or Phoenix operate, (b) the United States economy or (c) the United States securities markets shall be excluded from the determination of PSI Material Adverse Effect; and provided, further, however, that any adverse effect on PSI or Phoenix resulting from the execution of this Agreement, any public announcement relating to this Agreement, the consummation of the transactions contemplated by this Agreement (other than the failure of PSI or Phoenix to obtain any Consent required or necessary to be obtained in connection with this Agreement) or the transactions contemplated by this Agreement shall also be excluded from the determination of PSI Material Adverse Effect.
“PSI Pension Plan” shall have the meaning set forth in Section 3.22.
“PSI Plans” shall mean each (i) “employee benefit plan” as defined in Section 3(3) of ERISA and (ii) all other material pension, retirement, stock purchase, stock bonus, stock option, profit sharing, excess benefit, savings, deferred compensation, bonus, incentive, severance, termination and fringe benefit plans, programs or arrangements maintained, contributed to or required to be contributed to, by or on behalf of PSI or Phoenix and as to which PSI or Phoenix has any liability with respect to any current or former director, officer, consultant or employee of PSI or Phoenix.
“PSI Properties” shall have the meaning set forth in Section 3.15.
“PSI Real Property” shall have the meaning set forth in Section 3.17.
“PSI Securities” shall mean shares of PSI Series A Preferred Stock, PSI Series B Preferred Stock and PSI Common Stock, and PSI Warrants.
“PSI Series A Preferred Stock” shall mean the 14% Series A Redeemable Cumulative Preferred Stock, par value $0.01 per share, of PSI.
“PSI Series B Preferred Stock” shall mean the 12% Series B Redeemable Cumulative Preferred Stock, par value $0.01 per share, of PSI.
“PSI Shares” shall mean each share of PSI Common Stock, PSI Series A Preferred Stock and PSI Series B Preferred Stock issued and outstanding on the date hereof.
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“PSI Stockholders Agreement” shall mean that certain Stockholders Agreement of PSI, dated October 2, 2002, between Xxxxxxx Xxxxx and the other stockholders of PSI.
“PSI Warrants” shall mean the warrants issued by PSI, each of which is exercisable to purchase one (1) share of PSI Common Stock.
“PSI Welfare Plan” shall have the meaning set forth in Section 3.22.
“Registered Intellectual Property” means all United States, international and foreign: (a) patents and patent applications (including, without limitation, provisional applications); (b) registered Trademarks; (c) registered copyrights and applications for copyright registration; and (d) Domain Name registrations.
“Registration Statement” shall have the meaning set forth in Section 5.8.
“Representatives” shall have the meaning set forth in Section 11.2.
“Represented Holder” shall have the meaning set forth in Section 11.1.
“Rules” shall have the meaning set forth in Section 5.8.
“Securities Act” shall have the meaning set forth in Section 5.8.
“Sellers” shall mean GEI III, GEI Side III, each of the other stockholders and warrantholders of PSI signatory hereto and each of the other stockholders and warrantholders who shall execute an instrument of joinder to become a party to this Agreement after the date hereof and prior to the Closing Date.
“Sellers’ Representative” shall have the meaning set forth in Section 11.1.
“Series A Preferred Share Purchase Price” shall have the meaning set forth in Section 2.3.
“Series B Preferred Share Purchase Price” shall have the meaning set forth in Section 2.3.
“Subsidiary” (whether or not capitalized) shall mean any corporation fifty percent (50%) or more of whose outstanding voting securities, or any partnership, limited liability company, joint venture or other entity fifty percent (50%) or more of whose equity or ownership interests, are directly or indirectly owned by a Person.
“Subsequent IVAX Shares Consideration” shall mean a number of shares of IVAX Common Stock equal to twelve million five hundred thousand dollars ($12,500,000) divided by the IVAX Shares Average Closing Price, rounded down to the nearest whole share.
“Tax” shall mean any federal, state, municipal, county, parish, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock,
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social security, unemployment, disability, payroll, license, employee or other withholding, or other tax.
“Termination Date” shall have the meaning set forth in Section 10.1.
“Third Party Claim” shall have the meaning set forth in Section 7.4.
“Trademarks” shall have the meaning set forth in the definition of Intellectual Property in this Article 1.
2.3 Allocation of Consideration; Other Proceedings at Closing.
2.3.1 Allocation of Consideration. At the Closing, IVAX shall:
(i) deliver:
(A) for each share of PSI Series A Preferred Stock issued and outstanding on the Closing Date, an amount in cash equal to the Liquidation Preference in respect thereof (as defined in the Restated
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Certificate of Incorporation of PSI) as of the Closing Date (the “Series A Preferred Share Purchase Price”); plus
(B) for each share of PSI Series B Preferred Stock issued and outstanding on the Closing Date, an amount in cash equal to the Liquidation Preference in respect thereof (as defined in the Restated Certificate of Incorporation of PSI) as of the Closing Date (the “Series B Preferred Share Purchase Price”); plus
(C) for each share of PSI Common Stock issued and outstanding on the Closing Date that is held by a member of the management team of PSI as indicated on Schedule I attached hereto (each such share, a “Management Common Share”), (1) an amount in cash equal to the sum of (x) $1.00 and (y) the Per Common Equivalent Cash Consideration plus (2) a number of shares of IVAX Common Stock equal to the Initial Per Share Management IVAX Shares Consideration, rounded down to the nearest whole share, with cash paid in lieu of any fractional shares so rounded down; plus
(D) for each share of PSI Common Stock issued and outstanding on the Closing Date that is not a Management Common Share, (1) an amount in cash equal to the Per Common Equivalent Cash Consideration plus (2) a number of shares of IVAX Common Stock equal to the Initial Per Share IVAX Shares Consideration, rounded down to the nearest whole share, with cash paid in lieu of any fractional shares so rounded down; plus
(E) for each PSI Warrant outstanding on the Closing Date, (1) an amount in cash equal to the difference between (x) the Per Common Equivalent Cash Consideration minus (y) the exercise price per share of PSI Common Stock of such PSI Warrant plus (2) a number of shares of IVAX Common Stock equal to the Initial Per Share IVAX Shares Consideration, rounded down to the nearest whole share, with cash paid in lieu of any fractional shares so rounded down;
(ii) deliver the Subsequent IVAX Shares Consideration to an escrow agent designated and compensated by IVAX and reasonably acceptable to PSI (the “Escrow Agent”), for the benefit of the record holders of shares of PSI Common Stock and PSI Warrants immediately prior to the Closing, in accordance with an escrow agreement substantially in the form attached hereto as Exhibit A (the “Escrow Agreement”).
2.3.2 The cash amounts payable pursuant to Section 2.3.1(i) shall be made by IVAX to each of the Sellers by wire of immediately available funds to such account or accounts as the Sellers’ Representative shall specify in writing at least 3 days prior to the Closing Date, and the certificates representing shares of IVAX Common Stock deliverable pursuant to Section 2.3.1(i) shall be delivered to the Sellers’ Representative for distribution to the Sellers.
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2.3.3 To the extent that a Seller has an Affiliate Loan obligation as set forth in Schedule 2.3.3, as of the date of any payment to such Seller pursuant to this Agreement, the amount of such payment shall be reduced by the amount owing from such Seller at the time of such payments. The amount of any such reduction shall represent repayment and full satisfaction to PSI or Phoenix, as the case may be, of the same amount so owing.
2.3.4 In the event this Agreement is executed (either on the date hereof or through the execution of an instrument of joinder to this Agreement) by Sellers beneficially owning fewer than 100% of the issued and outstanding PSI Shares, the consideration provided for in this Article 2 will be proportionately reduced, and such consideration will be paid to the Sellers subsequently by IVAX as merger consideration following consummation of a “short form” merger in compliance with Delaware law. In such event, the indemnification provisions of Section 7.3 will apply in respect of any assertion of dissenters’ or appraisal rights.
2.3.5 At the Closing, the Sellers shall deliver to IVAX one or more certificates representing all of the securities owned by such Sellers set forth on Schedule I attached hereto, and each such certificate shall be duly and validly endorsed in favor of IVAX or accompanied by a duly and validly executed stock power.
ARTICLE 3 Representations and Warranties of PSI
Except as set forth in the disclosure Schedules to this Agreement, which Schedules are incorporated by reference herein, or as disclosed in the PSI Financial Statements, PSI represents and warrants to IVAX that all of the statements contained in this Article 3 are true as of the date of this Agreement (or, if made as of a specified date, as of such date). For purposes of the representations and warranties of PSI contained herein, disclosure in any Schedule of any facts or circumstances shall be deemed to be adequate response and disclosure of such facts or circumstances with respect to all representations and warranties by PSI calling for disclosure of such information, whether or not such disclosure is specifically associated with or purports to respond to one or more or all of such representations or warranties, if it would be clearly apparent to a person other than a member of management of PSI or Phoenix that it is also applicable to such other Schedule. The inclusion of any information in any Schedule or other document delivered by PSI pursuant to this Agreement shall not be deemed to be an admission or evidence of the materiality of such item, nor shall it establish a standard of materiality for any purpose whatsoever.
3.1 Organization, Standing and Power. Each of PSI and Phoenix is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use and to engage in and consummate the transactions contemplated hereby. Each of PSI and Phoenix is duly qualified to do business as a foreign corporation, and is in good standing, under the laws of each jurisdiction in which either the ownership or use of the properties or assets owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified or in good standing would not individually or in the aggregate, have a PSI Material Adverse Effect. Each of PSI and Phoenix has full corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereby.
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GAAP applied on a consistent basis during the periods presented (except as may be stated in the notes thereto), and present fairly the financial condition, results of operations and cash flows of PSI and Phoenix as of the times and for the periods referred to therein in all material respects.
3.8 Subsidiaries. PSI does not have, and has never had, any Subsidiaries other than Phoenix and PSI Acquisition Sub, Inc., a Delaware corporation. Except as set forth on Schedule 3.8, Phoenix has no Subsidiaries. The authorized capital stock of Phoenix consists solely of one thousand (1,000) shares of Phoenix Common Stock, of which one thousand (1,000) shares are issued and outstanding, one hundred percent (100%) of which are owned by PSI. Except as set forth on Schedule 3.8 and for the Phoenix Common Stock owned by PSI, neither PSI nor Phoenix owns any capital stock or other equity or ownership interest in any entity (including, without limitation, any corporation, unincorporated organization, partnership, limited liability company, association, joint-stock company, joint venture or trust). All such capital stock and other equity or ownership interests, including, without limitation the capital stock and other equity or ownership interests set forth on Schedule 3.8 and the Phoenix Common Stock, are solely owned of record and beneficially owned by either PSI or Phoenix, as the case may be, free and clear of any and all Liens.
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its incorporation to the date hereof were issued in violation of the preemptive or similar rights of any Person. All Taxes (including, without limitation, documentary stamp Taxes) required to be paid in connection with the issuance and any transfers of any shares of the PSI Shares prior to the date hereof have been paid.
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or was not during the past five (5) years, in compliance with any Law or Order and (y) all reports of inspections of any business, property or facility of PSI or Phoenix under any applicable Law or Order or conducted by any Agency or Court that are in the possession of PSI or Phoenix.
3.13 Intentionally omitted.
3.16 PSI Stockholders. All of the stockholders and warrantholders of PSI are listed on Schedule I. With respect to each of the PSI Common Stock, the PSI Series A Preferred Stock and the PSI Series B Preferred Stock, Schedule 3.16 sets forth all of the stockholders of such class or series of capital stock, the number of shares owned by each such stockholder and the percentage of such class or series of capital stock owned by such stockholder (on both a non-diluted basis and a fully diluted basis (including, without limitation, the shares of PSI Common Stock into which any PSI Warrant is exercisable)). With respect to each PSI Warrant, Schedule 3.16 sets forth all of the holders of such securities, the number of shares of PSI Common Stock into which each such security is exercisable, the percentage of such type of security owned by such holder and the percentage of PSI Common Stock owned by such holder upon exercise of such security on a fully diluted basis (including, without limitation, the shares of PSI Common Stock into which such PSI Warrant is exercisable).
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3.17.1 Schedule 3.17.1 sets forth a list and description of all real estate owned by PSI or Phoenix (the “PSI Real Property”) and all real estate previously owned by PSI or Phoenix. PSI has made available to IVAX or its representatives a correct and complete copy of the deed and acquisition agreement for each tract of the PSI Real Property. All such PSI Real Property is owned by PSI or Phoenix in fee simple, free and clear of all Liens, except: (i) as described on Schedule 13.17.1, (ii) for Taxes and general and special assessments not yet delinquent and (iii) for other Liens that do not materially interfere with PSI’s or Phoenix’s use and operation of such PSI Real Property or materially detract from or diminish the value thereof. Except as set forth on Schedule 3.17.1: (a) PSI has no Knowledge of, and has not received any written notice of (i) material violations of building codes and/or zoning ordinances or other governmental or regulatory laws affecting the PSI Real Property, (ii) existing, pending or threatened condemnation proceedings affecting the PSI Real Property or (iii) existing, pending or threatened zoning, building or other moratoria proceedings, restrictive allocations or similar matters which could reasonably be expected to materially and adversely affect the use of the PSI Real Property for its current use, (b) to PSI’s Knowledge the improvements on the PSI Real Property are in all material respects in good operating condition and in a state of good and working maintenance and repair, ordinary wear and tear excepted, (c) each PSI Real Property is served by water, electric, sewer, sanitary sewer and storm drain facilities and PSI believes each PSI Real Property has adequate rights of access to dedicated public ways and (d) to PSI’s Knowledge, the PSI Real Property is free of any right of possession or claim of right of possession of any party other than PSI or Phoenix.
3.17.2 Schedule 3.17.2 sets forth a list and description of all leases pursuant to which PSI or Phoenix is lessee or lessor of any real property (the “PSI Leases”). Except as indicated on Schedule 3.17.2, each PSI Lease is valid and binding on PSI or Phoenix, as the case may be, and, to the Knowledge of PSI, the other party thereto, and is in full force and effect subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity, and was entered into on an arm’s length basis with Persons not Affiliated with PSI or Phoenix. Except in each case as would not result in a PSI Material Adverse Effect, each of PSI and Phoenix has performed all obligations required to be performed by it under, is not in breach, violation or default or, to the Knowledge of PSI, alleged to be in breach, violation or default in respect of, any PSI Lease, and no event has occurred which, with due notice or lapse of time or both, would constitute such a breach, violation or default. Except as indicated on Schedule 3.17.2, to the Knowledge of PSI, no other party to any PSI Lease is in breach, violation or default in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a breach, violation or default, and none of such parties has notified PSI or Phoenix that it intends to terminate or alter such PSI Lease. PSI has delivered to IVAX true and complete copies of all PSI Leases. Except set forth on Schedule 3.17.2, all PSI Leases are terminable by PSI or Phoenix, without penalty to PSI or Phoenix, upon not more than thirty (30) days’ notice. PSI has no Knowledge of, and has not received any written notice of (i) material violations of building codes and/or zoning ordinances or other Laws affecting improvements located on property subject to a PSI Lease, (ii) existing, pending or threatened condemnation proceedings affecting property subject to a PSI Lease or (iii) existing, pending or threatened zoning, building or other moratoria proceedings, restrictive allocations or similar matters which could reasonably be expected to materially and adversely affect use of the property subject to a PSI Lease for its current use.
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3.22.1 Schedule 3.22.1 sets forth a list of all PSI Plans. Schedule 3.22.1 also identifies each PSI Plan that constitutes an “employee pension benefit plan” (a “PSI Pension Plan”) or an “employee welfare benefit plan” (a “PSI Welfare Plan”), as such terms are defined in ERISA. PSI has made available to IVAX or its representatives correct and complete copies of each PSI Plan. In addition, PSI has made available to IVAX or its representatives current, correct and complete copies of the most recent (i) IRS determination letter and any outstanding request for a determination letter; (ii) Form 5500 and attached Schedule B, if any, (including any related actuarial valuation report) with respect to the last two plan years for each plan; (iii) certified financial statements, if any; (iv) collective bargaining agreements or other such contracts, if any; and (v) Form 5310 and any related filings with the Pension Benefit Guaranty Corporation with respect to the last six plan years for each plan subject to Title IV of ERISA, if any.
3.22.2 Except as set forth on Schedule 3.22.2, (i) none of the PSI Plans is a “multiemployer plan,” as such term is defined in ERISA, (ii) none of PSI, Phoenix or any other Person maintains a voluntary employees’ beneficiary association to implement a PSI Plan, (iii) none of the PSI Pension Plans is subject to the minimum funding requirements of Code Section 412 or Title IV of ERISA and (iv) neither PSI nor Phoenix maintains or has entered into any document, plan or agreement that contains, directly or indirectly, any change in control provision that could cause an increase or acceleration of benefits or benefit entitlements to any current or former director, officer, consultant or employee of PSI or Phoenix or other event that could cause an increase in liability for benefits or benefit entitlements to PSI or Phoenix as a result of the transactions contemplated by this Agreement.
3.22.3 With respect to each PSI Plan: (i) each PSI Pension Plan that is intended to qualify under Sections 401(a) and 501(a) of the Code is based upon a standardized prototype plan that has received a favorable opinion letter as to its qualification under the Code; and (ii) except as set forth on Schedule 3.22.3, each PSI Plan that is intended to meet the requirements of Code Section 79, 125, 401(a) or 401(k) complies in all material respects with, and has complied in all material respects with, such requirements since the Plan’s inception; (iii) there are no actions, suits or claims pending, or to the Knowledge of PSI, threatened, that could reasonably be expected to result in any material liability to PSI or Phoenix, and PSI has no Knowledge of any fact that could give rise to any such action, suit or claim, except for benefit claims payable in the ordinary course of business consistent with past practices; (iv) neither PSI, Phoenix nor any employee or director of PSI or Phoenix nor any fiduciary of any PSI Plan has, with respect to any PSI Plan engaged in a prohibited transaction, as such term is defined in Code Section 4975 or ERISA Section 406 that is not exempt under Code Section 4975(d) or ERISA Section 408, that would subject PSI, Phoenix or any other Person to any Taxes, penalties or other liabilities resulting from prohibited transactions under Code Section 4975 or under ERISA Sections 409 or 502(i); (v) no event has occurred and no condition exists that would subject PSI, Phoenix or any other Person to any material Tax under Code Section 4971, 4972, 4977 or 4979 or to a penalty under ERISA Section 502(c) or 502(l); (vi) the plan administrator of each PSI Plan has complied with the reporting and disclosure requirements of ERISA in all material respects; (vii) all insurance premiums required to have been paid as of the Closing Date have been paid; (viii) there are no leased employees (as such term is defined in Code Section 414(n)) that must be taken into account with respect to the requirements set forth under Code Section 414(n)(3) and (ix) PSI and Phoenix have paid all amounts required under applicable Law and any PSI Plan to be paid as a contribution to each PSI Plan through the date hereof.
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3.22.4 With respect to any PSI Welfare Plan:
(i) each such PSI Welfare Plan that is intended to meet the requirements for Tax-favored treatment under Subchapter B of Chapter 1 of the Code meets such requirements;
(ii) there is no “disqualified benefit” (as such term is defined in Code Section 4976(b)) that would subject PSI or Phoenix to a material Tax under Code Section 4976(a); and
(iii) each such PSI Welfare Plan that is a “group health plan” (as such term is defined in Code Section 5000(b)(1)) has complied in all material respects with the applicable requirements of Code Sections 4980B and 9801 and Parts 6 and 7 of Title I of ERISA; and each PSI Welfare Plan (including any such plan covering former or retired employees of PSI or Phoenix) may be amended or terminated by PSI on or at any time after the Closing Date without subjecting PSI or Phoenix to any liability therefor, other than for benefits accrued as of the date of such amendment or termination or administrative charges as a result of such termination.
3.25 Intentionally omitted.
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3.26 Absence of Changes. Except as set forth on Schedule 3.26, since the Balance Sheet Date, each of PSI and Phoenix has conducted its business only in the Ordinary Course of Business, and (a) there has not been any PSI Material Adverse Effect and, to the Knowledge of PSI, no event, development or other circumstance has occurred that could reasonably be expected to result in a PSI Material Adverse Effect, (b) there has not been any damage, destruction, loss or casualty to property or assets of PSI or Phoenix with a value in excess of five hundred thousand dollars ($500,000), whether or not covered by insurance, (c) neither PSI nor Phoenix has issued, sold or authorized for issuance or sale, shares of any class or series of its securities (including, without limitation, by way of stock split or dividend) or any subscriptions, options, warrants, rights or convertible securities or entered into any agreements or commitments of any character obligating it to issue or sell any such securities, (d) neither PSI nor Phoenix has redeemed, purchased or otherwise acquired, directly or indirectly, any shares of its capital stock or any option, warrant or other right to purchase or acquire any such shares, (e) neither PSI nor Phoenix has declared or paid any dividend or other distribution (whether in cash, stock or other property) with respect to its capital stock, and (f) neither PSI nor Phoenix has taken any action that, if taken after the date hereof, would constitute a violation of any of clauses (a), (d), (e), (f), (g), (k) or (q) of Section 6.1.2.
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pursuant to Section 1445(a) of the Code upon the consummation of the transactions contemplated by this Agreement; (g) neither PSI nor Phoenix has permanent establishment in any foreign country, as defined in the relevant Tax treaty between the United States and such foreign country; and (h) no claim has ever been made by a taxing authority in a jurisdiction where PSI or Phoenix does not file Tax returns that it is or may be subject to Taxes assessed by such jurisdiction.
3.28 PSI Commitments.
3.28.1 Schedule 3.28.1 sets forth all (a) Contracts to which PSI or Phoenix is a party not made in the Ordinary Course of Business; (b) material development, supply, distribution, investigator, manufacturing, packaging, research, secrecy, confidentiality, specialty, licensing or purchase Contracts; (c) Contracts with respect to the license of material Intellectual Property rights, including, without limitation, computer software programs or applications, except for any of the foregoing related to the use of “off the shelf” computer software generally available to the public; (d) documents granting any power of attorney with respect to the affairs of PSI or Phoenix; (e) material working capital maintenance or guaranty agreements, suretyships and bonds; (f) Contracts materially limiting or restraining PSI or Phoenix from engaging or competing in any line of business or area or with any Person; (g) partnership and joint venture Contracts; (h) Contracts relating to the issuance or repurchase by PSI or Phoenix of any of its capital stock or other securities; (i) indenture, mortgage, promissory note, loan agreement, guarantee or other Contracts for the borrowing or lending of money; (j) Contracts which involve a payment of more than one hundred thousand dollars ($100,000) (other than open purchase orders entered into in the Ordinary Course of Business) and have an unexpired term or require future performance over a period of more than one (1) year and may not be canceled by PSI or Phoenix upon 60 days’ or less notice without any liability, penalty or premium; (k) any other Contract not covered by clauses (a) through (j), the loss of which, individually or together with other similar Contracts, would result in a PSI Material Adverse Effect if terminated or breached. The Contracts and items identified on Schedule 3.28.1 are hereinafter referred to, collectively, as the “PSI Commitments.”
3.28.2 Except as set forth on Schedule 3.28.2, as of the date hereof, each PSI Commitment is valid and binding on PSI or Phoenix, as the case may be, and, to the Knowledge of PSI, the other parties thereto in accordance with its terms. Except as set forth on Schedule 3.28.2 and except in each case as would not result in a PSI Material Adverse Effect, each of PSI and Phoenix has performed all obligations required to be performed as of the date hereof by it under, is not in breach, violation or default or, to the Knowledge of PSI, alleged to be in breach, violation or default in respect of, any PSI Commitment, and no event has occurred which, with due notice or lapse of time or both, would constitute such a breach, violation or default. To the Knowledge of PSI, no other party to any PSI Commitment is in breach, violation or default, in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a breach, violation or default, and none of such parties has notified PSI or Phoenix that it intends to terminate or alter such PSI Commitment or reduce the volume of business done with PSI or Phoenix. PSI has made available to IVAX or its representatives true and complete copies of all PSI Commitments.
3.29 Intentionally omitted.
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3.31 Intellectual Property.
3.31.1 Schedule 3.31.1 lists (i) all Registered Intellectual Property owned by PSI or Phoenix and, to the Knowledge of PSI, lists any proceedings or actions before any Court, the United States Patent and Trademark Office or foreign equivalent, or any Internet Domain Name registrar substantially related to any of the Registered Intellectual Property owned by PSI or Phoenix.
3.31.2 Schedule 3.31.2 lists all material Trademarks (other than Trademarks that constitute Registered Intellectual Property) owned by PSI or Phoenix.
3.31.3 Each item of PSI Intellectual Property owned by PSI or Phoenix, including, without limitation, all Registered Intellectual Property owned by PSI or Phoenix, is free and clear of any and all Liens, other than Liens that do not materially interfere with PSI’s or Phoenix’s use of such PSI Intellectual Property. Except as set forth on Schedule 3.31.3 or in any of the documents specified on Schedule 3.31.4, PSI or Phoenix owns all material Trademarks and material Domain Names used in connection with the operation or conduct of its respective business or operations, including, without limitation, the sale of any material product or material technology or the provision of any material service by PSI or Phoenix.
3.31.4 Except with respect to the PSI Intellectual Property listed on Schedule 3.31.4 or licensed under any agreement listed in such Schedule, PSI or Phoenix owns all material patents included in the PSI Intellectual Property. To the extent that PSI or Phoenix has acquired ownership of any material patents or material registered Trademarks included in the PSI Intellectual Property from a third party, such acquisition has been effectively recorded with or reflected in the records of the United States Patent and Trademark Office or appropriate foreign equivalent.
3.31.5 Except as set forth in Schedule 3.31.5, neither PSI nor Phoenix has granted any license with respect to any material PSI Intellectual Property to any other Person (other than licenses relating to PSI’s or Phoenix’s products or services granted in the Ordinary Course of Business).
3.31.6 Except as set forth on Schedule 3.31.6 or in any of the agreements listed in Schedule 3.31.4, PSI or Phoenix owns improvements rightfully made by PSI or Phoenix to Intellectual Property which has been licensed to PSI or Phoenix, except where the failure to own such improvements would not, individually or in the aggregate, give rise to a PSI Material Adverse Effect.
3.31.7 Schedule 3.31.7 lists all material contracts, agreements, arrangements, understandings and licenses between PSI or Phoenix and any other Person wherein or whereby
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PSI or Phoenix has agreed to indemnify and hold harmless such other Person with respect to infringement or misappropriation by PSI or Phoenix or such other Person of the Intellectual Property of any Person other than PSI or Phoenix, other than sales contracts and other contracts entered into in the Ordinary Course of Business. For the avoidance of doubt, contracts, agreements, arrangements, understandings and licenses referenced in this Section 3.31.7 include only contracts expressly providing for defense of third party claims alleging infringement and do not include, for example, contracts that include express or implied representations or warranties of non-infringement without related indemnity provisions.
3.31.8 To the Knowledge of PSI, the businesses and operations of PSI and Phoenix as currently conducted do not, and during the past three (3) years did not, infringe or misappropriate the Intellectual Property of any Person. Neither PSI nor Phoenix has received written notice during the past three (3) years that the businesses and operations of PSI or Phoenix as currently conducted infringe or misappropriate the Intellectual Property of any Person. Except as set forth on Schedule 3.31.8, to the Knowledge of PSI, no Person is infringing or misappropriating, or during the past two (2) years has infringed or misappropriated, any PSI Intellectual Property. Notwithstanding any other provision hereof, no representation or warranty or other provision hereof (including, without limitation, any representation or warranty regarding the ownership or sufficiency of PSI’s or Phoenix’s assets or the lack of Liens with respect thereto), other than this Section 3.31.8 to the extent provided herein, shall be deemed to be violated or breached by reason of any infringement or misappropriation of any Intellectual Property by PSI or Phoenix.
3.31.9 There are neither Contracts nor licenses between PSI or Phoenix and any other Person with respect to material PSI Intellectual Property under which there is any dispute of which PSI or Phoenix currently has Knowledge regarding the scope of or performance under such Contract or license, including, without limitation, with respect to any payment to be made or received by PSI or Phoenix thereunder.
3.31.10 Each of PSI and Phoenix has taken reasonable steps in accordance with normal industry practice to protect its respective rights in its respective confidential information and trade secrets or confidential information or trade secrets provided by any other Person to PSI or Phoenix, except where the failure to take such steps shall not, individually or in the aggregate, give rise to a PSI Material Adverse Effect.
3.31.11 Except as set forth on Schedule 3.31.11, to the Knowledge of PSI, no material PSI Intellectual Property is subject to any action, suit or proceeding or Order that restricts in any manner the use, transfer or licensing thereof by PSI or Phoenix or may affect the validity, use or enforceability of such PSI Intellectual Property.
3.31.12 Except as provided in Schedule 3.31.12 or in any of the agreements listed in Schedule 3.31.4, neither this Agreement nor the transactions contemplated by this Agreement will result in the granting to any third party of any right to or with respect to any material PSI Intellectual Property or will result in PSI or Phoenix being bound by, or subject to any non-compete or other material restriction on the operations, area or scope of their respective businesses.
As used herein, all references to material Intellectual Property (including, without limitation, material PSI Intellectual Property, Registered Intellectual Property, or other subset of
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Intellectual Property) or material license or other agreements or arrangements shall mean Intellectual Property, agreements or understandings, the loss of which (or the loss of the rights under which) would give rise to a PSI Material Adverse Effect. Further, for purposes hereof, ownership of a copy of software or documentation shall not be deemed to constitute ownership of any Intellectual Property, because ownership of such software or documentation shall be deemed to include only ownership of rights under copyright, patent, trademark, trade secret or any similar law.
3.37 Major Customers and Suppliers. Set forth on Schedule 3.37 is a list of the ten (10) largest customers (measured by dollar volume) of each of PSI and Phoenix and the ten (10) largest suppliers (measured by dollar volume) of each of PSI and Phoenix during each of the fiscal years ended December 31, 2003 and 2004, and with respect to each, the name and address, dollar volume involved and nature of the relationship (including, without limitation, with respect to the list of suppliers, the principal categories of products purchased and, with respect to the list of customers, the principal categories of products sold). Except as indicated on Schedule 3.37, all supplies and services necessary for the conduct of PSI’s and Phoenix’s respective businesses as presently conducted and as proposed to be conducted as to which PSI and Phoenix spent in excess of one million dollars ($1,000,000) during the year ended December 31, 2004 for the procurement thereof may be readily obtained from alternate sources on comparable terms and
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conditions as those presently available to them. No customer or supplier of PSI or Phoenix set forth on Schedule 3.37 has, during the twelve (12) months preceding the date hereof, cancelled, suspended, terminated or materially altered its relationship with PSI or Phoenix or advised PSI or Phoenix of its intention to cancel, suspend, terminate or materially alter its relationship in a manner detrimental to PSI or Phoenix or to decrease its purchases from or sales to PSI or Phoenix or to change the terms upon which it purchases from or sells to PSI or Phoenix in a manner detrimental to PSI or Phoenix, and to the Knowledge of PSI, no such customer or supplier intends to terminate, decrease or materially alter in a manner detrimental to PSI or Phoenix its business with it by reason of the transactions contemplated hereby or otherwise.
3.38.1 Schedule 3.38.1 lists each product distributed or sold by PSI or Phoenix during the five-year period ending on January 31, 2005 (collectively, the “Products”). Each Product manufactured by PSI or Phoenix has been manufactured substantially in accordance with (a) the product certificate or other product registration applicable to such Product, (b) the specifications under which the Product is normally and has normally been manufactured and (c) the provisions of all applicable Laws, including, without limitation, the requirements of the Food, Drug and Cosmetic Act of 1938, as amended, and the Food and Drug Administration and any other Agency with jurisdiction over PSI, Phoenix or any of the Products (including, without limitation, with regard to investigational use, premarket clearance, good manufacturing practices, labeling, advertising, record keeping, requisite filings and security). The formulation, development, manufacturing, licensing, packaging, distribution, storage, labeling, promotion, advertising and sale of the Products are in substantial compliance with all applicable Laws, including, without limitation, the requirements of the Food, Drug and Cosmetic Act of 1938, as amended, and the Food and Drug Administration and any other Agency with jurisdiction over PSI, Phoenix or any of the Products (including, without limitation, with regard to investigational use, premarket clearance, good manufacturing practices, labeling, advertising, record keeping, requisite filings and security).
3.38.2 Schedule 3.38.2 lists all product certificates and other product registrations which are pending or maintained by PSI or Phoenix, and with respect to pending product certificates and product registrations, the phase of clinical development of the Products which are the subject thereof. A true and complete copy of each such product certificate and other product registration has been previously made available to IVAX or its representatives.
3.38.3 Schedule 3.38.3 lists all (a) Products which at any time have been recalled, withdrawn or suspended by PSI or Phoenix, whether voluntarily or otherwise, (b) completed or pending proceedings seeking the recall, withdrawal, suspension or seizure of any Product and (c) warning letters, and letters of adverse findings received by PSI or Phoenix or any of their respective agents relating to PSI or Phoenix or any of the Products, copies of which have previously been made available to IVAX or its representatives.
3.38.4 Except as set forth on Schedule 3.38.4, to the Knowledge of PSI, there exist no set of facts: (a) which could reasonably furnish a basis for the recall, withdrawal or suspension of any product approval, product license, manufacturing license, wholesale dealers license, export license or other License in any jurisdiction in which PSI or Phoenix maintains or has pending any product certificate or other product registration or develops, manufactures, licenses, packages, distributes, markets or sells any Product; (b) which could reasonably furnish
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a basis for the recall, withdrawal or suspension of any Product from the market, the termination or suspension of any clinical testing of any Product, or the change in marketing classification of any Product; or (c) which could reasonably be expected to have an adverse effect on the continued operation of any facility of PSI or Phoenix. To the Knowledge of PSI, neither PSI nor Phoenix is on the “alert list” of, or subject to the “fraud policy” of, the Food and Drug Administration, nor is on any similar list or subject to any similar policy of any Agency.
3.38.5 PSI has previously made available to IVAX or its representatives true and complete copies of all correspondence received or sent by or on behalf of PSI or Phoenix to or from the Food and Drug Administration or any other Agency during the five-year period ending on the date hereof (a) with which PSI or Phoenix maintains or has pending any product certificate or other product registration or (b) which has jurisdiction over PSI or Phoenix or the respective development, manufacturing, licensing, packaging, distribution, marketing or sale of any Product.
ARTICLE 4 Representations and Warranties of the Sellers
Except as set forth in the disclosure Schedules to this Agreement as further described in the Preamble to Article 3, each Seller severally and not jointly represents and warrants to IVAX that all of the statements contained in this Article 4 are true as of the date of this Agreement (or, if made as of a specified date, as of such date).
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(b) If such Seller is an individual, such Seller has the capacity to execute and deliver this Agreement in his or her individual capacity and consummate the transactions contemplated hereby.
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ARTICLE 5 Representations and Warranties of IVAX
Except as set forth in the disclosure Schedules to this Agreement, which Schedules are incorporated by reference herein, IVAX represents and warrants to PSI and the Sellers that all of the statements contained in this Article 5 are true as of the date of this Agreement (or, if made as of a specified date, as of such date). For purposes of the representations and warranties of IVAX contained herein, disclosure in any Schedule of any facts or circumstances shall be deemed to be adequate response and disclosure of such facts or circumstances with respect to all representations and warranties by IVAX calling for disclosure of such information, whether or not such disclosure is specifically associated with or purports to respond to one or more or all of such representations or warranties, if it would be clearly apparent to a person other than management of IVAX on the face of such disclosure that it is also applicable to such other Schedule. The inclusion of any information in any Schedule or other document delivered by IVAX pursuant to this Agreement shall not be deemed to be an admission or evidence of the materiality of such item, nor shall it establish a standard of materiality for any purpose whatsoever.
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clear of any and all Liens (other than Liens pursuant to the Escrow Agreement and any Liens arising through any Seller or Affiliate thereof).
5.8.1 IVAX has prepared and filed in conformity in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the published rules and regulations thereunder (the “Rules”) adopted by the Commission a registration statement on Form S-4 (No. 333-51364), including a related prospectus (the “Base Prospectus”) relating to IVAX Common Stock that may be issued from time to time by IVAX in accordance with Rule 415 of the Securities Act, and such amendments thereof as may have been required to the date of this Agreement. The term “Registration Statement” as used in this Agreement means the registration statement, including all financial statements, exhibits and documents filed therewith or incorporated by reference therein, as amended or supplemented from time to time. IVAX meets the requirements for use of Form S-4 under the Securities Act and has filed with the Commission the Registration Statement on such Form, including a Base Prospectus, for registration under the Securities Act of the offering and sale of the shares of IVAX Common Stock to be issued pursuant to Section 2.3. Such Registration Statement, as so amended and supplemented, is effective. When the Registration Statement or any amendment thereof or supplement thereto was or is declared effective, it (i) complied or will comply, in all material respects, with the requirements of the Securities Act and the rules and regulations of the Commission thereunder and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
5.8.2 No stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Base Prospectus has been issued by the Commission and no proceedings for that purpose are pending or , to the Knowledge of IVAX, threatened under the Securities Act. IVAX will make any filings with the Commission required pursuant to the Securities Act as a result of the issuance of the IVAX Common Stock pursuant to Section 2.3 under the Registration Statement within the time so required. Other than pursuant to the provisions of applicable Law, the Affiliate Letters and Standstill Agreements, or as a result of any Seller being an Affiliate of IVAX at any time, there are no restrictions upon the resale of the IVAX Common Stock to be issued pursuant to Section 2.3. To the Knowledge of IVAX, no Seller is as of the date of this Agreement nor will become upon Closing an Affiliate of IVAX.
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During the period from the date of this Agreement to the Closing Date, PSI shall, and PSI shall cause Phoenix to, perform the covenants applicable to PSI and Phoenix set forth below and IVAX shall perform the covenants applicable to IVAX set forth below. From and after the Closing Date, the parties hereto shall perform the covenants set forth in Sections 6.16, 6.17 and 6.18, as applicable to each such party.
6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and effect, and not cause a default of any of its obligations under, any PSI Commitments; (c) keep in full force and effect the insurance coverage in effect on the date hereof to the extent that such insurance continues to be reasonably available; (d) maintain, renew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the continuance of its general customer and supplier relationships; and (e) duly comply with all Laws applicable to it and to the conduct of its business, except where the failure to so comply would not, individually or in the aggregate, have a PSI Material Adverse Effect.
6.1.2 Except with the prior written consent of IVAX or as otherwise required or permitted by this Agreement or as contemplated by Schedule 6.1, PSI shall not, and PSI shall
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cause Phoenix to not, directly or indirectly, do any of the following: (a) voluntarily or involuntarily sell, transfer, surrender, abandon or dispose of any of its properties, assets or rights (tangible or intangible) other than in the Ordinary Course of Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (e) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its Certificate of Incorporation or Bylaws; (i) expend or commit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any inventory or any accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in accordance with GAAP; (m) enter into any indemnification, severance, employment or consulting Contract with any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the Ordinary Course of Business, or enter into any indemnification, severance, employment or consulting Contract with any current officer, employee or consultant of PSI or Phoenix; (n) enter into any transaction with an Affiliate (other than transactions with customers and suppliers who are Affiliates entered into in the Ordinary Course of Business for goods or services on terms and at prices customary for arm’s-length transactions with third parties for such goods and services); (o) issue, sell or authorize for issuance or sale, shares of any class or series of its securities (including, without limitation, by way of stock split or dividend) or any subscriptions, options, warrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (p) redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any option, warrant or other right to purchase or acquire any such shares; (q) declare or pay any dividend or other distribution (whether in cash, stock or other property) with respect to its capital stock (other than the quarterly dividend on the PSI Xx xxxx A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid in cash); (r) other than in the Ordinary Course of Business, enter into a new Contract, which if in existence on the date of this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or amend, terminate or elect not to renew any PSI Commitment; (s) except as permitted by this Section 6.1.2, take or omit to take any action which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the Closing impossible; (t)
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take any action which results or could reasonably be expected to result in a PSI Material Adverse Effect; or (u) agree, whether in writing or otherwise, to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the transactions contemplated by this Agreement in excess of an aggregate of $575,000.
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may disclose the substance of this Agreement to its lenders, employees, customers and parties to PSI Commitments as to which Consent is required, in each case, only after and in the manner as to which IVAX has reasonably agreed in advance of such disclosure.
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6.11 Information from PSI and Phoenix. PSI will, and will cause Phoenix to, cooperate with IVAX to a reasonable extent in connection with (a) the preparation of any documentation required or necessary in connection with IVAX’s attempt to obtain financing for the transactions contemplated by this Agreement and (b) the preparation or filing of any report or other document by IVAX with the Commission. PSI shall, and shall cause Phoenix to, (x) furnish all information as may be reasonably requested in connection therewith.
6.16.1 IVAX acknowledges that, from and after the Closing Date, the employment, indemnification, severance and consulting Contracts set forth on Schedule 3.20 shall continue to be the legal, valid and binding obligation of PSI and Phoenix.
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6.16.2 To the extent permitted by applicable Law and the terms of such plans or arrangements, IVAX shall give employees of PSI or Phoenix immediately prior to the Closing (collectively, the “Company Employees”) full credit for purposes of eligibility, vesting, benefit accrual and determination of the level of benefits under any employee benefit plans or arrangements maintained by IVAX or any subsidiary of IVAX or any subsidiary of IVAX for such Company Employees’ service with Phoenix or PSI to the same extent recognized by PSI or Phoenix immediately prior to the Closing; provided, however, that such crediting of service shall not operate to duplicate any benefit. To the extent requested by IVAX reasonably in advance of the Closing, PSI and Phoenix shall each take all corporate action and shall use their commercially reasonable efforts to take any other action required to terminate, effective as of the Closing Date, each PSI Plan that contains a cash or deferred arrangement subject to Section 401(k) of the Code.
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to the Closing Date no later than thirty (30) days prior to earlier of the due date (including any extensions thereof) or filing date thereof, to the extent claims for indemnification may be made with respect to such Tax returns hereunder. All such Tax returns shall be prepared in a manner consistent with similar Tax returns heretofore filed by PSI and Phoenix, except as required by law. The Sellers’ Representative shall have the right to review and provide comments on such Tax returns during the fifteen (15)-day period following the receipt of such Tax returns, provided that such fifteen (15)-day period shall be extended by one (1) day for each day after the second business day following the request from the Sellers’ Representative that IVAX does not provide information reasonably requested by the Sellers’ Representative in connection with the Sellers’ Representative’s review of such Tax returns. The Sellers’ Representative and IVAX shall consult with each other and attempt in good faith to resolve any issues arising as a result of such Tax returns and, if they are unable to do so, the disputed items shall be resolved (within a reasonable time, taking into account the deadline for filing such Tax return) by an internationally recognized independent accounting firm chosen by both IVAX and the Sellers’ Representative. Upon resolution of all such items, the relevant Tax Return shall be timely filed on that basis.
ARTICLE 7 Survival; Investigation; Indemnification
7.3.1 Subsequent to the Closing and subject to the limitations contained in this Article 7, PSI and each Seller, to the extent set forth in the Escrow Agreement, agrees to indemnify and hold harmless IVAX and its Affiliates, officers, directors, stockholders,
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employees and agents (each such indemnified party, an “IVAX Indemnified Party”) from, against and in respect of Damages incurred by any of them arising from (a) a breach of any representation or warranty of PSI or any Seller in this Agreement (when made, except in the case of each of the representations and warranties that by their terms are made solely as of a specified date, in which case breaches shall be measured only as of such specified date) or (b) a breach or violation of any covenant of PSI or the Sellers in this Agreement. As used herein, the term “Damages” shall mean any and all liabilities, damages, claims, deficiencies, fines, assessments, losses, penalties, interest, costs and expenses (including, without limitation, reasonable attorneys’ fees and costs), but shall not include any incidental, consequential or punitive damages or any claim for loss of value.
7.3.2 PSI and the Sellers shall have no obligation for Damages under Section 7.3.1 unless and until the aggregate of all Damages (aggregating all claims for Damages under Section 7.3.1) exceeds five hundred thousand dollars ($500,000) (the “Basket Limitation”) (at which point PSI and the Sellers shall become liable only for amounts in excess of one hundred seventy-five thousand dollars ($175,000)). In no event will PSI and the Sellers’ liability (for indemnification or otherwise) with respect to the matters in Section 7.3.1 exceed in the aggregate the lesser of (a) twelve million five hundred thousand dollars ($12,500,000) and (b) the then-current market value of the Subsequent IVAX Shares Consideration (the “Cap Limitation”). The Basket Limitation shall not apply to any claim for indemnification in respect of any dispute with any Seller or any assertion by any Seller of appraisal rights in respect of the transactions contemplated by this Agreement or any short-form merger undertaken as contemplated by Section 2.3. Neither the Basket Limitation nor the Cap Limitation shall apply to any claim for indemnification against any Seller in respect of any dispute arising from such Seller’s breach or violation of any of the representations and warranties of such Seller set forth in Section 4.4.
7.3.3 Except as set forth in the last sentence of Section 7.3.2 above, any indemnification required to be made by PSI or the Sellers pursuant to Section 7.3.1 shall be satisfied solely and exclusively pursuant to the terms of the Escrow Agreement by claim against the Subsequent IVAX Shares Consideration.
7.3.4 The amount of any Damages for which indemnification is provided under this Article 7 shall be net of any specific reserve attributable to the subject matter of the related claim, as reflected on the portion of the work papers to the Most Recent Balance Sheet set forth on Schedule 7.3.4. In addition, to the extent any Damages arise in respect of a breach of the representation and warranty as to real estate, Damages shall be reduced, dollar for dollar, by the amount of coverage paid to any IVAX Indemnified Person under any title insurance policy in respect of such Damages; provided, however, that IVAX shall use all commercially reasonable efforts to avail itself of such coverage to the maximum extent allowable.
7.3.5 If the indemnitor makes any payment under this Article 7 in respect of any Damages, the Shareholders’ Representative shall be subrogated, to the extent of such payment to the rights of the indemnified Person against any third party with respect to such Damages.
7.3.6 For purposes of paying indemnification under this Section 7.3, the value of a share of IVAX Common Stock as of any date of payment of such indemnification shall be deemed to be the average closing price of a share of IVAX Common Stock on the American Stock Exchange during the ten (10) trading days preceding the date which is two (2) business days prior to such date of payment of such indemnification.
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7.3.7 IVAX agrees that the indemnification provisions of this Article 7 are intended to provide the exclusive remedy as to all Damages any IVAX Indemnified Party may incur arising from any breach of the representations, warranties or covenants of PSI or the Sellers herein or otherwise from the transactions contemplated by this Agreement and IVAX hereby waives any other rights or remedies that may arise under any applicable statute, rule or regulation.
7.3.8 Indemnification for breaches of the representations in Section 3.27 shall be limited to Taxes of PSI and Phoenix for taxable periods ending on or prior to the Closing Date and the pre-Closing portion of any taxable period that begins before but does not end on the Closing Date. For purposes of determining the Taxes that arise in a period that begins before but does not end on the Closing Date, in the case of any Taxes that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Closing Date, the portion of such Tax that relates to the portion of such Tax period ending on the Closing Date shall (i) in the case of any Taxes other than those described in clause (ii), be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on the Closing Date and the denominator of which is the number of days in the entire Tax period, and (ii) in the case of any Tax based upon or related to income, receipts, payroll, sales or other items of revenue or expense, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Closing Date.
7.4.1 An IVAX Indemnified Party shall promptly notify the Sellers’ Representative of any event or occurrence with respect to which the IVAX Indemnified Party intends to seek indemnification pursuant to this Article 7; provided that if such event or occurrence is a suit, action, claim or legal, administrative, arbitration or other alternative dispute resolution, proceeding, audit or investigation by a third party (a “Third Party Claim”), an IVAX Indemnified Party shall give reasonably prompt notice thereof in writing. Each such notice shall describe in reasonable detail the basis of the claim for indemnity hereunder. The failure to give notice as required by this Section 7.4.1 in a reasonably prompt fashion shall not result in a waiver of any right to indemnification hereunder except to the extent that such failure actually increases the liability of the indemnifying party for Damages hereunder.
7.4.2 The Sellers’ Representative shall not be entitled to assume the defense or settlement of any Third Party Claim for which an IVAX Indemnified Party has indicated it intends to seek indemnity hereunder unless IVAX and the Seller’s Representative agree that Seller’s Representative shall so assume the defense or settlement, or unless IVAX fails to actually assume the defense of the Third Party Claim. In all other instances, the IVAX Indemnified Party may engage counsel to defend, settle or otherwise dispose of such Third Party Claim, which counsel shall be reasonably satisfactory to the Sellers’ Representative; provided that that the IVAX Indemnified Party shall not settle or compromise any such Third Party Claim without the consent or agreement of the Sellers’ Representative (which consent will not be unreasonably withheld or delayed). The expense of such counsel shall be considered Damages hereunder.
7.4.3 In cases where the IVAX Indemnified Party has assumed the defense or settlement of a Third Party Claim, the Seller’s Representative will reasonably cooperate with
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IVAX Indemnified Party, and the Sellers’ Representative shall be entitled to participate at its own cost in any such Third Party Claim or in any negotiations or proceedings to settle or otherwise eliminate such Third Party Claim.
7.4.4 In the event indemnification is requested, the Sellers’ Representative and its representatives and agents shall have access to the premises, books and records of IVAX, PSI and Phoenix, or parties seeking such indemnification, and their Affiliates to the extent reasonably necessary to assist it in defending or settling any action, proceeding or claim; provided that such access shall be conducted in such manner as not to interfere unreasonably with the operation of the business of any such Person. Except as reasonably necessary to assist it in defending or settling such action, proceeding or claim, the IVAX Indemnified Party shall not be required (i) to disclose any information with respect to itself or any of its Affiliates (or former Affiliates) or (ii) to participate in the defense of any claim to be indemnified hereunder.
7.4.5 In the event that IVAX or its Affiliates (including PSI and Phoenix after the Closing Date) receive notice of any pending or threatened Tax audits or assessments or other disputes concerning Taxes with respect to which the Sellers may incur liability under Article 7 of this Agreement, the party in receipt of such notice shall promptly notify the Sellers’ Representative of such matter in writing and the Sellers’ Representative shall have the sole right to represent the interests of PSI and Phoenix in any Tax audit or administrative or court proceeding relating to such Taxes; provided that the Sellers’ Representative shall provide prompt notice to IVAX of any substantive meeting or telephone conference with any Taxing Authority with respect to such Tax matters and IVAX shall have the right to participate at its expense in any such meeting or conference. Notwithstanding the foregoing, the Sellers’ Representative shall not be entitled to settle, either administratively or after the commencement of litigation, any claim for Taxes which would adversely affect the liability for Taxes of the IVAX or its affiliates (including PSI and Phoenix after the Closing Date) for periods after the Closing Date without the prior written consent of IVAX, which consent shall not be unreasonably withheld.
7.5 Payment and Releases from the Escrow Account.
7.5.1 Any claim against the Subsequent IVAX Shares Consideration (the “Escrow Fund”) shall be made by presentation to the Escrow Agent of (i) a letter signed by each of IVAX and the Sellers’ Representative instructing the Escrow Agent to pay any IVAX Indemnified Party a specified amount of Damages or (ii) a copy of a judgment or judicial order or decree to the effect that any IVAX Indemnified Party is entitled to receive indemnification pursuant to this Article 7 and the amount of Damages determined with respect to such claim (the amount of any such Damages, whether agreed or set forth in a judgment, judicial order or decree, the “Indemnified Amount”). Upon presentation of any such letter, order or decree, the Escrow Agent shall release to the IVAX Indemnified Party a number of Shares of IVAX Common Stock equal in value, determined as set forth in Section 7.3.6, to the Indemnified Amount.
7.5.2 On the First Expiration Date, the Escrow Agent shall distribute the portion of the Escrow Fund then remaining in the escrow account with a value (determined as set forth in Section 7.3.6) in excess of $2,000,000 to the former holders of shares of PSI Common Stock and PSI Warrants in accordance with the provisions of the Escrow Agreement; provided, however, that (i) in the event an audit in respect of PSI and Phoenix’s 2002 federal income tax returns for the 2002 taxable year is then in progress, the amount so released shall instead be the portion of the Escrow Fund in excess of $4,000,000, determined as set forth in Section 7.3.6 and (ii) if any
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claim for indemnification as to other matters is pending on the First Expiration Date and an amount in respect thereof has been asserted or agreed upon by IVAX and the Seller’s Representative that is less than the balance in the Escrow Fund, then such distribution shall be net of the amount so established and reserved in respect of such claim, with such retained amount to be disbursed in accordance with the terms of the Escrow Agreement. In the event an audit described in clause (i) above is commenced and completed prior to September 15, 2007 without any claim against the Escrow Fund, the portion of the Escrow Fund with a value in excess of $2,000,000 (determined as aforesaid) will be promptly released.
7.5.3 On September 15, 2007, the Escrow Agent shall distribute the portion of the Escrow Fund then remaining in the escrow account with a value (determined as set forth in Section 7.3.6) in excess of $1,000,000 (or, if an audit in respect of PSI and Phoenix’s 2002 federal income tax returns for the 2002 taxable year is then in progress, $3,000,000) to the former holders of shares of PSI Common Stock and PSI Warrants in accordance with the provisions of the Escrow Agreement; provided, however, that in the event an audit in respect of PSI and Phoenix’s federal income tax returns for the 2003 taxable year through any period ending on or before the Closing Date is then in progress, such distribution shall be made only to the extent agreed upon as described in clause (ii) of Section 7.5.2. On the Final Expiration Date, the Escrow Agent shall distribute the remaining balance of the Escrow Fund to the former holders of PSI Common Stock and PSI Warrants in accordance with the Escrow Agreement; provided that if any claim for indemnification is then pending or any audit described above is then in progress, such distribution shall only be made to the extent agreed upon as described in clause (ii) of Section 7.5.2.
ARTICLE 8 Conditions Precedent to the Obligations of PSI and the Sellers
The obligations of PSI and the Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of the following conditions (any of which may be waived in writing by the Sellers’ Representative in its sole discretion):
8.1 Representations and Warranties. Each of the representations and warranties of IVAX contained in this Agreement or in any certificate or document delivered by IVAX pursuant to the provisions hereof at Closing shall be true and correct in all material respects (except for such representations and warranties qualified by materiality or IVAX Material Adverse Effect, which shall be true and correct in all respects) as of the Closing Date with the same force and effect as though made on and as of such date, except that those representations and warranties which address matters only as of a particular date shall be true and correct in all material respects (except for such representations and warranties qualified by materiality or IVAX Material Adverse Effect, which shall be true and correct in all respects) as of such date.
8.2 Performance. IVAX shall have performed and complied with in all material respects all of the agreements, covenants and obligations required under this Agreement to be performed or complied with by them prior to or at the Closing.
8.3 Certificates. IVAX shall have delivered to the Sellers’ Representative a certificate executed by its President, dated the Closing Date, certifying that (a) the conditions specified in Sections 8.1, 8.2 and 8.4 have been fulfilled and (b) attached to such certificate is a true and
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correct copy of the resolutions of the Board of Directors of IVAX authorizing the execution, delivery and performance of this Agreement by IVAX.
8.4 No Material Adverse Change. There shall not have occurred any event or condition which has or could reasonably be expected to have an IVAX Material Adverse Effect.
8.5 Absence of Litigation. No (a) litigation, arbitration or other legal or administrative proceeding that has a credible chance of enjoining, prohibiting or materially restricting the consummation of the transactions contemplated hereby shall be pending or, to the Knowledge of the parties hereto, threatened by or before any Court or Agency (other than any of the foregoing brought by or on behalf of any Seller) and (b) Law shall have been enacted or promulgated after the date hereof and no judicial or administrative decision (whether temporary, preliminary or permanent) shall have been rendered or entered after the date hereof, in each case, which enjoins, prohibits or materially restricts, or seeks to enjoin, prohibit or materially restrict, the consummation of all or any of the transactions contemplated by this Agreement.
8.6 Governmental Consents. All Consents required by any Agency for the consummation of the transactions contemplated by this Agreement shall have been obtained, including, without limitation, the expiration or early termination of any notice and applicable waiting period under the HSR Act.
8.7 Consents. IVAX shall have obtained all Consents listed on Schedule 5.3.
8.8 Registration Statement Effective. The Registration Statement shall continue to be effective on the Closing Date.
8.9 No Suspension. There shall not have been a suspension or material limitation in trading in securities generally on the American Stock Exchange at any time during the ten (10) trading day period preceding the date which is two (2) business days prior to the Closing Date or on the Closing Date.
8.10 Listing of Shares. The shares of IVAX Common Stock to be issued pursuant to Section 2.3 shall have been approved for listing on the American Stock Exchange.
8.11 Termination Payment. The payment due to LGP from Phoenix in respect of the termination of its Management Services Agreement shall have been made, and such agreement shall have been terminated through the execution of a termination agreement substantially in the form attached hereto as Exhibit C.
ARTICLE 9 Conditions Precedent to the Obligations of IVAX
The obligations of IVAX to consummate the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of the following conditions (any of which may be waived in writing by IVAX in its sole discretion):
9.1 Representations and Warranties. Each of the representations and warranties of PSI and the Sellers contained in this Agreement or in any certificate or document delivered by PSI, Phoenix or the Sellers pursuant to the provisions hereof at Closing shall be true and correct in all material respects (except for such representations and warranties qualified by materiality or PSI
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Material Adverse Effect, which shall be true and correct in all respects) as of the Closing Date with the same force and effect as though made on and as of such date (except that those representations and warranties which address matters only as of a particular date shall be true and correct in all material respects (except for such representations and warranties qualified by materiality or PSI Material Adverse Effect, which shall be true and correct in all respects) as of such date), except to the extent that such breaches of representations and warranties, individually and in the aggregate, have not had a PSI Material Adverse Effect.
9.2 Performance. PSI and the Sellers shall have performed and complied with in all material respects all of the agreements, covenants and obligations required under this Agreement to be performed or complied with by them prior to or at the Closing.
9.3 No Material Adverse Change. There shall not have occurred any event or condition which has or could reasonably be expected to have a PSI Material Adverse Effect.
9.4 Certificates. PSI shall have delivered to IVAX a certificate executed by its President and its Chief Financial Officer, dated the Closing Date, certifying that (a) the conditions specified in Sections 9.1, 9.2, 9.3, 9.9 and 9.10 have been fulfilled and (b) attached to such certificate is a true and correct copy of the resolutions of the Board of Directors PSI authorizing the execution, delivery and performance of this Agreement by PSI.
9.5 Absence of Litigation. No (a) litigation, arbitration or other legal or administrative proceeding that has a credible chance of enjoining, prohibiting or materially restricting the consummation of the transactions contemplated hereby shall be pending or, to the Knowledge of the parties hereto, threatened by or before any Court or Agency and (b) Law shall have been enacted or promulgated after the date hereof and no judicial or administrative decision (whether temporary, preliminary or permanent) shall have been rendered or entered after the date hereof, in each case, which enjoins, prohibits or materially restricts, or seeks to enjoin, prohibit or materially restrict, the consummation of all or any of the transactions contemplated by this Agreement.
9.6 Governmental Consents. All Consents required by any Agency for the consummation of the transactions contemplated by this Agreement shall have been obtained, including, without limitation, the expiration or early termination of any notice and applicable waiting period under the HSR Act.
9.7 Consents. PSI shall have obtained all Consents listed on Schedule 3.3(iii), if any.
9.8 Related Party Agreements. All Contracts between Xxxxxxx Xxxxx and LGP, on the one hand, and PSI or Phoenix, on the other hand, including, without limitation, the Management Agreement and the PSI Stockholders Agreement, shall have been terminated or shall be terminated at the Closing by a written instrument reasonably satisfactory to IVAX (in the case of the PSI Stockholders Agreement, this Agreement is agreed to be satisfactory) and shall not have given rise to any additional liability, obligation or other compensation owing from or of PSI or Phoenix, except as expressly contemplated by this Agreement.
9.9 Stockholder Matters. Each of the stockholders and warrantholders of PSI set forth on Schedule I attached hereto shall have executed this Agreement or an instrument of joinder; provided that this condition shall be deemed satisfied so long as stockholders owning at least 98% of the PSI Shares of each class shall have done so. IVAX shall have received “affiliate
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letters” from any person or entity from whom such letters are appropriate under applicable Law. Each of GEI III, GEI Side III and any other affiliate of LGP acquiring IVAX Common Stock shall have executed and delivered “standstill agreements” in the form attached hereto as Exhibit D.
9.10 Xxxxxxx Xxxxx Releases. IVAX shall have received the general releases contemplated by Section 6.14.
9.11 Officers and Directors. To the extent requested by IVAX, IVAX shall have received the resignations of the directors and officers of PSI and Phoenix.
9.12 Redemption of the Phoenix Notes. Phoenix shall have issued the call for the redemption on the Note Redemption Date of all of the outstanding Phoenix Notes in accordance with Section 6.12 hereof.
10.1 Termination. This Agreement may be terminated:
10.1.1 by the mutual written consent of the Sellers’ Representative and IVAX;
10.1.2 by the Sellers’ Representative, at any time after May 15, 2005 (the “Termination Date”), if the Closing shall not have occurred on or before the Termination Date (provided that the failure of the Closing to occur by the Termination Date is not the result of the failure of PSI, Phoenix, LGP or any Seller to perform or fulfill any of their respective obligations hereunder required to be performed at or prior to the Closing; and provided, further, that either of IVAX or the Seller’s Representative shall be entitled to extend the Termination Date by notice to the other if, and only if, the United States Justice Department or Federal Trade Commission has initiated a “second request” in regard to the HSR filings made pursuant to this Agreement, for a period of up to 120 additional days to enable the parties to comply with such request);
10.1.3 by IVAX, at any time after the Termination Date (or any extension thereof in accordance with Section 10.1.2 above), if the Closing shall not have occurred on or before the Termination Date (provided that the failure of the Closing to occur by the Termination Date is not the result of the failure of IVAX or any of its Affiliates to perform or fulfill any of their respective obligations hereunder required to be performed at or prior to the Closing);
10.1.4 by the Sellers’ Representative, upon written notice provided to IVAX, if there has been any material misrepresentation or breach or violation of any representation or warranty of IVAX in this Agreement or if there has been a material breach or default by IVAX of any of its covenants or agreements contained in this Agreement, in each case, which is not cured within ten (10) business days after notice thereof, but in any event prior to the Termination Date;
10.1.5 by IVAX, upon written notice provided to the Sellers’ Representative, if there has been any material misrepresentation or breach or violation of any covenant, representation or warranty of PSI or any Seller in this Agreement which would cause the condition in Section 9.1 hereof not to be satisfied were it to remain in effect through the Closing
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Date and which is not cured within ten (10) business days after notice thereof, but in any event prior to the Termination Date;
10.1.6 by the Sellers’ Representative, if any event or circumstance shall occur that renders the satisfaction of any condition to the obligations of PSI and the Sellers set forth in Article 8 (other than Section 8.7) impossible and such condition has not been waived by the Sellers’ Representative (provided that such event or condition is not the result of the failure of PSI or any of its Affiliates or any Seller to perform or fulfill any of their respective obligations hereunder required to be performed at or prior to the Closing); or
10.1.7 by IVAX, if any event or circumstance shall occur that renders the satisfaction of any condition to the obligations of IVAX set forth in Article 9 (other than Section 9.7) impossible and such condition has not been waived by IVAX (provided that such event or condition is not the result of the failure of IVAX or any of its Affiliates to perform or fulfill any of their respective obligations hereunder required to be performed at or prior to the Closing).
ARTICLE 11 AGREEMENTS AMONG SELLERS
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Stockholders Agreement shall terminate in full and shall be entirely superseded by this Agreement.
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expenses set forth in Section 11.3 shall be similarly so distributed no later than the date of the final distribution pursuant to the Escrow Agreement.
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| If to IVAX, then to: IVAX Corporation 0000 Xxxxxxxx Xxxxxxxxx Xxxxx, Xxxxxxx 00000 Attention: General Counsel Facsimile: (000) 000-0000 with a copy to: Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A. Museum Tower, Suite 2200 000 Xxxx Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxx, Esq. Facsimile: (000) 000-0000 If to PSI or Phoenix, then to: Phoenix Scientific, Inc. 0000 Xxxxx 00xx Xxxxxx Xxxxxxx Xx. Xxxxxx, Xxxxxxxx 00000 Attention: Xxxxx X. Xxxxxxx Facsimile: (000) 000-0000 with copies to: Xxxxxxx Xxxxx & Partners, L.P. 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000 Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attention: Xxxx X. Xxxxxx Facsimile: (000) 000-0000 and to: Xxxxxx, Xxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxx Xxxxxx Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attention: Xxxxxxxx Xxxxxx Xxxxxxx Facsimile: (000) 000-0000 If to the Sellers’ Representative: Xxxxxxx Xxxxx & Partners, L.P. 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000 Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attention: Xxxx X. Xxxxxx Facsimile: (000) 000-0000 |
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| and to: Xxxxxx, Xxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxx Xxxxxx Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attention: Xxxxxxxx Xxxxxx Xxxxxxx Facsimile: (000) 000-0000 |
Such notices, requests, demands and other communications shall be deemed given when actually received, or (a) in the case of delivery by nationally recognized overnight courier service with guaranteed next day delivery, the next day or the day designated for delivery, (b) in the case of certified United States mail, return receipt requested, postage prepaid, five (5) days after deposit in the United States mail or (c) in the case of facsimile, upon receipt by the sender of a confirmation report for the number designated above.
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action or proceeding arising out of or relating to this Agreement, or any judgment entered by any court in respect hereof, brought in Miami-Dade County, and further irrevocably waive any claim that any suit, action or proceeding brought in Miami-Dade County was brought in an inconvenient forum.
[SIGNATURE PAGES FOLLOW]
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| IVAX CORPORATION a Florida corporation | ||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Chief Executive Officer | |||
| PSI HOLDINGS, INC., a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| PHOENIX SCIENTIFIC, INC., a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer |
| Sellers: GREEN EQUITY INVESTORS III, L.P., a Delaware limited partnership (“GEI III”) | ||||
| By: | GEI Capital III, LLC, its General Partner | |||
| By: | /s/ Illegible | |||
| Name: | ||||
| Title: | ||||
| GREEN EQUITY INVESTORS SIDE III, L.P., a Delaware limited partnership | ||||
| By: | GEI Capital III, LLC, its General Partner | |||
| By: | /s/ Illegible | |||
| Name: | ||||
| Title: | ||||
| Sellers: BancAmerica Capital Investors I, L.P. | ||||
| By: | /s/ Xxx X. Xxxxxxxx | |||
| Name: | Xxx X. Xxxxxxxx | |||
| Title: | Partner | |||
| Caisse de depot et placement due Quebec | ||||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxx Xxxxxxx | |||
| Title: | Manager | |||
| By: | /s/ Xxx Xxxxx | |||
| Name: | Xxx Xxxxx | |||
| Title: | Manager | |||
| Co-Investment Partners, L.P. | ||||
| By: | CIP Partners, LLC, its general partner | |||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: | Xxxx X. Xxxxx | |||
| Title: | Managing Member |
| C-Squared CDO Ltd. | ||||
| By: | TCW Advisors, Inc., as its Portfolio Manager | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Managing Director | |||
| GS Mezzanine Partners II Offshore, L.P. | ||||
| By: | GS Mezzanine Advisors II, L.L.C., its general partner | |||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| GS Mezzanine Partners II, L.P. | ||||
| By: | GS Mezzanine Advisors II, L.L.C., its general partner | |||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxx Xxxxxxx | |||
| Title: | Vice President |
| Xxxxxxxx Xxxx Private Equity Fund IV, L.P. | ||||
| By: | HLSP Investment Management II Limited, its managing general partner | |||
| By: | Xxxxxxxx Xxxx Advisors, L.L.C. | |||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
| Midland National Life Insurance Company | ||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Managing Director | |||
| Lextron, Inc. | ||||
| By: | /s/ X.X. Xxxxxx | |||
| Name: | X.X. Xxxxxx | |||
| Title: | Chairman | |||
| Midwest Veterinary Supply, Inc. | ||||
| By: | /s/ Xxx Xxxxxxxxxx | |||
| Name: | Xxx Xxxxxxxxxx | |||
| Title: | President | |||
| Old Hickory Fund I, LLC | ||||
| By: | PPM America, Inc., its manager | |||
| By: | /s/ Champ Rajii | |||
| Name: | Champ Rajii | |||
| Title: | Associate | |||
| PPM America Private Equity Fund L.P. | ||||
| By: | PPM America Capital Partners, LLC, its general partner | |||
| By: | /s/ Champ Rajii | |||
| Name: | Champ Rajii | |||
| Title: | Associate | |||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Partner | |||
| PSI Co-Investment LLC | ||||
| By: | Xxxxxxx Xxxxx & Partners, L.P. | |||
| By: | LGP Management, Inc., its general partner | |||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: |
| MAGMA CDO Ltd. | ||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Vice President | |||
| TCW/Crescent Mezzanine Partners III Netherlands, L.P. TCW/Crescent Mezzanine Partners III, L.P. TCW/Crescent Mezzanine Trust III | ||||
| By: | TCW/Crescent Mezzanine Management III, L.L.C., its investment manager | |||
| By: | TCW Asset Management Company, its subadvisor | |||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Managing Director | |||
| The Northwestern Mutual Life Insurance Company | ||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Authorized Representative | |||
| The Xxxxxx and Xxxxx Xxxxx Living Trust | ||||
| By: | /s/ Illegible | |||
| Name: | ||||
| Title: | ||||
| Transamerica Life Insurance Company | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Vice President | |||
| Upper Columbia Capital, LLC | ||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Manager | |||
| WFC Holdings Corporation | ||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Attorney-in-fact |
| Xxxxxx X. Xxxxx Living Trust, dated April 7, 2001 | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Trustee | |||
| Xxxxxx X. Xxxxxxx | ||||
| /s/ Xxxxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxx | ||||
| /s/ Xxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxxxxxx | ||||
| /s/ Xxxxxxx X. Xxxxxxxxx | ||||
| Xxxx X. Xxxxxxxxx, Trustee of the Xxxx X. Xxxxxxxxx Declaration of Trust dated May 22, 2003 | ||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Trustee | |||
| Xxxx X. Xxxxxx | ||||
| /s/ Xxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
| /s/ Xxxxxxx X. Xxxxx | ||||
| Xxxx Xxxxxx, Xx. and Xxxxxx X. Xxxxxx Revocable Living Trust, Dated October 11, 2002 | ||||
| By: | /s/ Xxxx Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxx Xxxxxx, Xx. & Xxxxxx X. Xxxxxx | |||
| Title: | Trustees |
| Xxxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx, Trustees of the Xxxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx Trust under Trust Agreement dated September 21, 2004, or their successor in trust | ||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx & Xxxx X. Xxxxxxxxx | |||
| Title: | Trustees | |||
| Xxxxxx X. Xxxx | ||||
| /s/ Xxxxxx X. Xxxx | ||||
| Xxxxx X. Xxxxxxx | ||||
| /s/ Xxxxx X. Xxxxxxx | ||||
| Xxx X. XxXxxxxxx | ||||
| /s/ Xxx X. XxXxxxxxx | ||||
| Xxxxxxx X. Xxxxxxx and/or Xxxxxxx X. Xxxxxxx, as Joint Tenants | ||||
| /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx | ||||
| Xxxx Xxxxxx | ||||
| /s/ Xxxx Xxxxxx | ||||
| Xxxxxxxx Xxxxxxxx | ||||
| /s/ Xxxxxxxx Xxxxxxxx | ||||
| Xxxxx X. Xxxxxxx | ||||
| /s/ Xxxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx | ||||
| /s/ Xxxx X. Xxxxxxx | ||||
| Xxxxx X. Xxxxxx | ||||
| /s/ Xxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx | ||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxxxx | ||||
| /s/ Xxxxxx X. Xxxxxxxx | ||||
| Xxxx X. Xxxxx | ||||
| /s/ Xxxx X. Xxxxx | ||||
Acknowledged and Agreed Solely With Respect to Article 11:
XXXXXXX XXXXX & PARTNERS, L.P.
By: LGP Management, Inc., its General Partner
By: /s/ Illegible
Name: Title: