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ASSETS PURCHASE AGREEMENT
DATED AS OF OCTOBER 17, 1996,
AMONG
CEPHALON PROPERTY MANAGEMENT, INC.
AND
CEPHALON, INC.
AND
NORTH AMERICAN VACCINE, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE 1 - PURCHASE AND SALE..........................................................................1
1.1 Agreement to Sell......................................................................1
1.2 Agreement to Purchase..................................................................3
1.3 The Purchase Price.....................................................................3
(a) Purchase Price................................................................3
(b) Payment of Purchase Price. ..................................................3
(c) Adjustments to Purchase Price.................................................3
(d) Adjustment for Pre-Closing Inspection.........................................4
(e) Injunctive Relief; Specific Performance.......................................4
1.4 Assumption of Liabilities..............................................................4
ARTICLE 2 - CLOSING, ITEMS TO BE DELIVERED, THIRD PARTY CONSENTS,
CHANGE IN NAME AND FURTHER ASSURANCES...........................................................5
2.1 Closing................................................................................5
2.2 Items to be Delivered at Closing.......................................................5
2.3 Third Party Consents...................................................................7
2.4 Further Assurances.....................................................................7
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES.............................................................8
3.1 Representations and Warranties of the Seller...........................................8
(a) Corporate Existence...........................................................8
(b) Corporate Power; Authorization; Enforceable Obligations.......................8
(c) Validity of Contemplated Transactions, etc....................................8
(d) All Tangible Purchased Assets.................................................9
(e) Title to Purchased Assets.....................................................9
(f) Compliance with Law; Authorizations...........................................9
(g) Litigation....................................................................9
(h) Contracts and Commitments.....................................................9
(i) Intellectual Property, Violations, etc.......................................11
(j) Purchased Assets.............................................................11
(k) Tax Returns..................................................................11
(l) Insurance....................................................................11
(m) Condition of Assets..........................................................11
(n) FDA Matters..................................................................11
(o) WARN ACT.....................................................................12
(p) Environmental Matters........................................................12
(q) No Other Warranties..........................................................13
(r) Facilities Leases and Equipment Leases.......................................14
(s) "Knowledge of the Seller and Cephalon".......................................14
3.2 Representations and Warranties of the Purchaser.......................................14
(a) Corporate Existence..........................................................14
(b) Corporate Power and Authorization............................................14
(c) Validity of Contemplated Transactions, etc...................................14
(d) Investigation and Evaluation.................................................15
3.3 Survival of Representations and Warranties................................................15
ARTICLE 4 - AGREEMENTS PENDING CLOSING..................................................................15
4.1 Agreements of the Seller Pending the Closing..........................................15
4.2 Agreements of the Purchaser Pending the Closing.......................................17
4.3 Access................................................................................17
4.4 Press Releases........................................................................17
ARTICLE 5 - CONDITIONS PRECEDENT TO THE CLOSING.......................................................18
5.1 Conditions Precedent to the Purchaser's Obligations...................................18
(a) Representations, Warranties and Covenants of the Seller......................18
(b) Injunctions, etc.............................................................18
(c) Consents and Approvals.......................................................18
(d) Destruction of the Purchased Assets..........................................18
5.2 Conditions Precedent to the Seller's and Cephalon's Obligations......................19
(a) Representations, Warranties and Covenants of the Purchaser...................19
(b) Injunctions, etc.............................................................19
(c) Consents and Approvals.......................................................19
ARTICLE 6 - POST-CLOSING MATTERS......................................................................19
6.1 Employee Arrangements.................................................................19
6.2 Discharge of Certain Liabilities......................................................19
6.3 Maintenance of Books and Records......................................................20
6.4 Restriction on Use of Name............................................................20
6.5 Sublicense............................................................................20
ARTICLE 7 - INDEMNIFICATION...........................................................................20
7.1 Indemnification Obligations...........................................................20
7.2 Method of Asserting Claims, Etc.......................................................21
7.3 Payment...............................................................................22
ARTICLE 8 - MISCELLANEOUS.............................................................................23
8.1 Termination...........................................................................23
8.2 Compliance with Bulk Sales Laws.......................................................23
8.3 Brokerage; Expenses; Etc..............................................................24
8.4 Contents of Agreement; Amendment; Parties in Interest, Assignment, Etc................24
8.5 Confidentiality.......................................................................24
8.6 Notices...............................................................................25
8.7 Maryland Law to Govern................................................................26
8.8 No Benefit to Others..................................................................26
8.9 Headings, Gender and "Person..........................................................26
8.10 Schedules and Exhibits................................................................26
8.11 Severability..........................................................................26
8.12 Counterparts..........................................................................26
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INDEX OF DEFINED TERMS
Assets................................................. 1
Assumed Liabilities......................................4
Authorization............................................9
Beltsville Assets........................................1
Cephalon.................................................1
CGMP....................................................11
Claim Notice............................................22
Closing..................................................5
Closing Date.............................................5
Code.....................................................6
Environmental Laws......................................13
Equipment Leases.........................................2
Excluded Assets..........................................2
Facilities Leases........................................1
FDA.....................................................11
Hazardous Substances....................................13
HSR......................................................9
Leased Assets............................................2
Notice Period...........................................22
Purchased Assets.........................................1
Purchase Price...........................................3
Purchaser's Documents...................................14
Seller...................................................1
Seller's Documents.......................................8
Tax.....................................................11
Taxes...................................................11
WARN Act................................................12
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ASSETS PURCHASE AGREEMENT
This ASSETS PURCHASE AGREEMENT is made and entered into as of October
17, 1996, by and among CEPHALON PROPERTY MANAGEMENT, INC., a Delaware
corporation (the "SELLER"), CEPHALON, INC., a Delaware corporation ("CEPHALON")
and NORTH AMERICAN VACCINE, INC., a Canadian corporation (the "PURCHASER"), with
reference to the following Preamble:
The Seller leases certain facilities at 0000 Xxxxxxxx Xxxxx Xxxx,
Xxxxxx 000, 270, 280 and 290, Xxxxxxxxxx, Xxxxxxxx 00000 (the
"FACILITIES") and the Seller and Cephalon have acquired certain
equipment, materials and other assets for the production of biological
pharmaceutical compounds at the Facilities (the "BELTSVILLE ASSETS").
The Purchaser desires to purchase and the Seller and Cephalon desire to
sell the Purchased Assets (hereinafter defined) in exchange for the
payment by the Purchaser of the Purchase Price (hereinafter defined)
and the assumption by the Purchaser of the Assumed Liabilities
(hereinafter defined), all on the terms and conditions described in
this Agreement.
NOW, THEREFORE, in consideration of the Preamble and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1 - PURCHASE AND SALE
1.1 AGREEMENT TO SELL.
(a) At the Closing hereunder (as defined in SECTION 2.1
hereof) and except as otherwise provided in this SECTION 1.1, the Seller and
Cephalon, as applicable, shall grant, sell, convey, assign, transfer and deliver
to the Purchaser, upon and subject to the terms and conditions of this
Agreement, all right, title and interest of the Seller and Cephalon, as
applicable, in and to all assets, properties and rights of the Seller and
Cephalon, as applicable, described below (which assets, properties and rights
are herein sometimes called the "PURCHASED ASSETS"):
(i) all of the Seller's rights under the leases for the
Facilities dated March 20, 1992, November 12, 1991 and December 28,
1990, as each such Lease was assumed by the Seller on December 14, 1992
and amended on such date, copies of which are as attached hereto as
EXHIBIT A (collectively, the "FACILITIES LEASES") including security
deposits and all credits or refunds payable thereunder;
(ii) all equipment, machinery, furniture, office
furnishings, leasehold improvements, fixtures, computer hardware and
systems (exclusive of data and software) and other tangible personal
property located at the Facilities, including without limitation those
items specified in SCHEDULE 1.1(A)(II) hereto, except for those items
leased pursuant to the Equipment Leases (defined below) by Cephalon;
(iii) all of Cephalon's right, title and interest in and
to the Master Lease Agreement dated as of February 1, 1994, as amended
by and between Cephalon and General Electric Credit Corporation, copies
of which are attached hereto as EXHIBIT B (the "EQUIPMENT LEASES") to
the extent such Equipment Leases relate to the assets listed on
SCHEDULE 1.1(A)(III) (the "Leased Assets");
(iv) all rights of the Seller and Cephalon under the
contracts, agreements, leases, or arrangements specified in SCHEDULE
1.1(A)(IV);
(v) all prepaid expenses, refunds, causes of action,
rights of setoff and recoupment arising from or relating to the other
Purchased Assets or the Leased Assets;
(vi) all of the Seller's and Cephalon's right, title and
interest in and to all facility and construction drawings, engineering
reports and drawings, facility licenses and permits, guaranties and
warranties relating to the other Purchased Assets or the Leased Assets
and all other documentation and records associated with the operation
of the other Purchased Assets or the Leased Assets; and
(viii)all office and other supplies and a copy of all
validation protocols, validation records and other operating
information in the possession of the Seller or Cephalon and related to
the use and maintenance of the Purchased Assets or the Leased Assets.
(b) Notwithstanding the foregoing, the Purchased Assets shall
not include any of the following (the "EXCLUDED ASSETS"):
(i) all lease agreements for real and personal property
(other than the Facilities Leases and the Equipment Leases) and all
service agreements or executory contracts related to the Facilities or
the Beltsville Assets, other than those agreements specified in
SCHEDULE 1.1(A)(IV);
(ii) all cash on hand or in bank accounts;
(iii) the corporate seals, certificates of incorporation,
minute books, stock books, tax returns, books of account or other
records having to do with corporate organization of the Seller;
(iv) the rights which accrue or will accrue to the Seller
under this Agreement;
(v) the rights to the Seller's claims for any federal,
state, local, or foreign tax refunds or any tax attributes of the
Seller, including without limitation any net operating loss forwards;
(vi) all raw materials, work-in-progress, supplies and
other inventories located at the Facilities;
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(vii) all right, title and interest in and to the name
"Cephalon"; and
(viii)any batch records or other regulatory files or
notebooks specifically related to the products manufactured by the
Seller.
(c) The assets shall be sold, transferred, assigned, conveyed
and delivered to the Purchaser free and clear of all liens, claims, charges,
options, pledges and encumbrances of any kind.
1.2 AGREEMENT TO PURCHASE. At the Closing hereunder, the
Purchaser shall purchase the Purchased Assets from the Seller and Cephalon, upon
and subject to the terms and conditions of this Agreement and in reliance on the
representations, warranties and covenants of the Seller and Cephalon contained
herein, in exchange for the Purchase Price (defined in SECTION 1.3 hereof). In
addition, the Purchaser shall assume at the Closing and agree to pay, discharge
or perform, as appropriate, certain liabilities and obligations of the Seller
and Cephalon to the extent and as provided in SECTION 1.4 of this Agreement.
Except as specifically provided in this Agreement, the Purchaser shall not
assume or be responsible for any liabilities or obligations of the Seller or
Cephalon.
1.3 THE PURCHASE PRICE.
(a) PURCHASE PRICE. The "PURCHASE PRICE" shall be payable in
United States dollars and shall be an amount equal to $24,863,973 less the
agreed value of the liabilities assumed by the Purchaser under the Equipment
Leases as set forth on Schedule 1.3(a) hereto.
(b) PAYMENT OF PURCHASE PRICE. On the Closing Date, the
Purchaser shall pay to the Seller the Purchase Price, as adjusted pursuant to
SECTIONS 1.3(C) and 1.3(D) hereof, payable by wire transfer of immediately
available funds to such account as the Seller shall designate.
(c) ADJUSTMENTS TO PURCHASE PRICE. [*]
[*] Confidential information has been omitted and filed separately with the
Commission.
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(d) ADJUSTMENT OF PURCHASE PRICE. If, prior to the Closing,
the Purchaser and the Seller determine that the representations set forth in
SECTION 3.1(D) or SECTION 3.1(E) hereof are not true and correct, the Purchase
Price shall be reduced by an amount equal to the Seller's historical cost, as
set forth in SCHEDULES 1.1(A)(II) and 1.1(A)(III) hereto, of the Purchased
Assets that do not satisfy either of such representations.
(e) [*]
1.4 ASSUMPTION OF LIABILITIES. At the Closing hereunder and except as
otherwise specifically provided in this SECTION 1.4, the Purchaser shall assume
and agree to pay, discharge or perform, as appropriate, the following
liabilities and obligations of the Seller and Cephalon (the "ASSUMED
LIABILITIES"):
(a) all obligations of the Seller or Cephalon, as applicable, under
the contracts, agreements, leases or arrangements specified in Schedule
1.1(a)(iv) to be performed at or after the Closing Date;
(b) all obligations of the Seller, if any, accruing at or after the
Closing Date under the Facilities Leases;
(c) all obligations of Cephalon, if any, accruing at or after the
Closing Date under the Equipment Leases to the extent the Purchaser has assumed
such Equipment Leases; and
(d) sales and use tax liability resulting from the sale or arising
after the sale of the Purchased Assets regardless of which party hereto may be
deemed by law to bear responsibility for payment of such taxes.
In no event, however, shall the Purchaser assume or incur any liability or
obligation under this SECTION 1.4 or otherwise in respect of any of the
following:
[*] Confidential information has been omitted and filed separately with the
Commission.
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(i) any federal, state or local income taxes charged,
assessed or payable by the Seller (or any member of any affiliated
group of which the Seller is a member), including without limitation
such income taxes incident to or arising as a consequence of the
negotiation or consummation by the Seller (or any member of any
affiliated group of which the Seller is a member) of this Agreement and
the transactions contemplated hereby;
(ii) any sales, use, excise, franchise, personal or real
property taxes or any similar taxes, fees or governmental charges
attributable to events or periods prior to the Closing Date;
(iii) any liability or obligation arising from or related to
the Excluded Assets or any events, acts or omissions by the Seller
prior to the Closing Date (other than the Assumed Liabilities),
including without limitation, any liability or obligation arising from
or related to the environmental condition of the Facilities prior to
the Closing Date; or
(iv) any liability or obligation related to any employees of
the Seller, or under any benefit arrangement of the Seller with respect
thereto, including without limitation, all liabilities for pay, wages,
salaries, unemployment compensation and insurance, employee benefits,
and contributions to employee benefit plans, however classified.
ARTICLE 2 - CLOSING, ITEMS TO BE DELIVERED, THIRD PARTY
CONSENTS, CHANGE IN NAME AND FURTHER ASSURANCES
2.1 CLOSING. The consummation of the transactions contemplated hereby
(the "CLOSING") shall take place at 10:00 A.M., local time, on November 1, 1996
or the second business day following the satisfaction or waiver of all of the
conditions precedent of each of the parties hereto required to be satisfied on
or prior to the Closing or on such other date as may be mutually agreed upon in
writing by the Purchaser and the Seller. The date on which the transactions
contemplated herein are consummated is sometimes herein referred to as the
"CLOSING DATE." The Closing shall take place at the offices of Xxxxxx & Xxxxxx,
Xxxxxxx Xxxxxx Building, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
2.2 ITEMS TO BE DELIVERED AT CLOSING. At the Closing and subject to
the terms and conditions herein contained:
(a) The Seller and Cephalon, as applicable, shall deliver to the
Purchaser:
(i) such bills of sale, assignments, endorsements, and other
good and sufficient instruments and documents of conveyance and
transfer as shall be necessary or appropriate to transfer and assign to
the Purchaser all of the Seller's and Cephalon's right, title and
interest in and to the Purchased Assets in form reasonably satisfactory
to the Purchaser and its counsel;
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(ii) an assignment of the Facilities Leases;
(iii) an assignment of the Equipment Leases to the extent
provided in SECTION 1.1(A)(III);
(iv) certificates of good standing of the Seller from the
Maryland Department of Assessments and Taxation and of the Seller and
Cephalon from the Delaware Secretary of State, in each case dated not
more than 30 days prior to the Closing;
(v) an affidavit of the Seller certifying, under penalties of
perjury, that the Seller is not a "foreign person" within the meaning
of section 1445 of the Internal Revenue Code of 1986, as amended (the
"CODE");
(vi) certificates of the President of each of the Seller and
Cephalon and the Chief Financial Officer of Cephalon certifying the
matters set forth in SECTION 5.1(A) hereof;
(vii) a legal opinion of the Seller's and Cephalon's counsel
regarding the matters set forth in SCHEDULE 2.2(A)(VII), in form and
substance reasonably satisfactory to the Purchaser; and
(viii) such other certificates, instruments and documents as
are required to be delivered pursuant to this Agreement or as the
Purchaser may reasonably require.
(b) The Purchaser shall deliver to the Seller the following:
(i) the Purchase Price as adjusted in accordance with SECTION
1.3 hereof;
(ii) an undertaking whereby the Purchaser will assume and agree
to pay, discharge or perform, as appropriate, the Seller's liabilities
and obligations to the extent and as provided in SECTION 1.4 hereof in
form reasonably satisfactory to the Seller and its counsel;
(iii) an assumption of the Facilities Leases;
(iv) an assumption of the Equipment Leases to the extent
provided in SECTION 1.1(C)(III);
(v) a certificate of the President and the Chief Financial
Officer of the Purchaser certifying the matters set forth in SECTION
5.2(A) hereof; and
(vi) such other certificates, instruments and documents as are
required to be delivered pursuant to this Agreement or as the Seller
may reasonably require.
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(c) At or prior to the Closing, the parties hereto shall also
deliver to each other the agreements, certificates and other documents and
instruments referred to in ARTICLE 5 hereof.
2.3 THIRD PARTY CONSENTS. To the extent that the Seller's or Cephalon's
rights under any agreement, contract, commitment, lease, Authorization (as
defined in SECTION 3.1(F) hereof) or other Purchased Asset to be assigned to the
Purchaser hereunder may not be assigned without the consent of another person
which has not been obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof or
be unlawful. The Seller and Cephalon each shall use commercially reasonable
efforts to obtain such consents on or before the Closing Date. If any such
required consent shall not be obtained or if any attempted assignment would be
ineffective or would impair the Purchaser's rights under the Purchased Asset in
question so that the Purchaser would not in effect acquire the benefit of all
such rights, the Purchaser, at its sole and exclusive option, may require the
Seller or Cephalon, to the maximum extent permitted by law and by the terms of
such Purchased Asset, to act after the Closing as the Purchaser's agent in order
to obtain for the Purchaser the benefits thereunder and the Seller and Cephalon
shall cooperate, to the maximum extent permitted by law and the Purchased Asset,
with the Purchaser in any other reasonable arrangement designed to provide such
benefits to the Purchaser. The Purchaser will reimburse the Seller and Cephalon
for all reasonable out-of-pocket expenses incurred after the Closing Date in so
acting in the capacity of the Purchaser's agent.
2.4 FURTHER ASSURANCES. The Seller and Cephalon from time to time after
the Closing, at the Purchaser's request, will execute, acknowledge and deliver
to the Purchaser such other instruments of conveyance and transfer and will take
such other actions and execute and deliver such other documents, certifications
and further assurances as the Purchaser may reasonably require in order (i) to
vest more effectively in the Purchaser any of the Purchased Assets, or (ii) to
put the Purchaser more fully in possession of any of the Purchased Assets, or
(iii) to better enable the Purchaser to complete, perform or discharge any of
the liabilities or obligations assumed by the Purchaser at the Closing pursuant
to SECTION 1.4 hereof, subject to payment by the Purchaser of all reasonable
out-of-pocket expenses of the Seller and Cephalon in connection with this clause
(iii). Each of the parties hereto will cooperate with the other and execute and
deliver to the other parties hereto such other instruments and documents and
take such other actions as may be reasonably requested from time to time by any
other party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.
2.5 POSSESSION AND RISK OF LOSS. Until the Closing, the Seller and
Cephalon shall bear all risk of loss of the Purchased Assets to be conveyed
hereunder. From and after the Closing, the Purchased Assets shall be at the risk
of the Purchaser. At the Closing, the Seller and Cephalon shall put the
Purchaser in full, complete and quiet possession and enjoyment of all of the
Purchased Assets and the Leased Assets.
2.6 PRE-CLOSING INSPECTION. Not less than one week prior to the date
set for the Closing, the Purchaser shall have the opportunity to inspect the
Facilities, the Purchased Assets and the Leased Assets for the purpose of
confirming the validity of the representations contained in SECTION 3.1(D)
hereof and determining that the condition of the Purchased Assets and the Leased
Assets satisfy the representations contained in the first sentence of SECTION
3.1(M) hereof
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except for any latent defects or defects that are not reasonably detectable upon
inspection prior to the Closing Date.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. Cephalon and the
Seller, jointly and severally hereby represent and warrant to the Purchaser as
of the date hereof as follows:
(a) CORPORATE EXISTENCE. Each of the Seller and Cephalon is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Cephalon and the Seller has the corporate
power and authority to conduct its business as now being conducted and to own,
lease and operate the properties and assets now owned, leased and being operated
by it. The Seller is duly qualified or licensed to do business and is in good
standing as a foreign corporation in Maryland. No action has been taken or
authorized by the Seller or Cephalon to liquidate or dissolve or to transfer any
assets in a manner inconsistent with the Seller's or Cephalon's obligations
under this Agreement. The Seller is a wholly-owned subsidiary of Cephalon.
(b) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
of the Seller and Cephalon has the corporate power, authority and legal right to
execute, deliver and perform this Agreement and all other agreements, documents
and instruments contemplated hereunder. The execution, delivery and performance
of this Agreement by each of the Seller and Cephalon have been duly authorized
by all necessary corporate and shareholder action. This Agreement has been, and
the other agreements, documents and instruments required to be delivered by
either the Seller or Cephalon in accordance with the provisions hereof (the
"SELLER'S DOCUMENTS") will be, duly executed and delivered on behalf of the
Seller and Cephalon, as applicable and this Agreement constitutes, and the
Seller's Documents when executed and delivered will constitute, the legal, valid
and binding obligations of the Seller and Cephalon, respectively, enforceable
against such party in accordance with their respective terms, except as may be
limited by bankruptcy laws and other similar laws affecting the rights of
creditors generally and principles of equity.
(c) VALIDITY OF CONTEMPLATED TRANSACTIONS, ETC. The execution,
delivery and performance of this Agreement by the Seller and Cephalon does not
and will not violate or result in the breach of any term, condition or provision
of, or require the consent of any other person which has not been obtained
under, (i) any law, ordinance, or governmental rule or regulation to which
either the Seller or Cephalon is subject, (ii) any judgment, order, writ,
injunction, decree or award of any court, arbitrator or governmental or
regulatory official, body or authority which is applicable to either the Seller
or Cephalon, (iii) the Certificate of Incorporation or bylaws of the Seller or
Cephalon, (iv) any mortgage, indenture, agreement, lease, plan or Authorization,
to which the Seller or Cephalon is a party, by which the Seller or Cephalon may
have rights or by which any of the Purchased Assets may be bound or (v) will
result in the creation or imposition of any lien, claim, charge, restriction or
encumbrance of any kind in or with respect to the Purchased Assets, except (A)
as described on SCHEDULE 3.1(C) hereto, (B) the filing of premerger notification
and the expiration or early termination of the waiting period required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 ("HSR"), and (C) the
delivery and recording
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of title transfer documentation with various regulatory authorities with respect
to the transfer of title to the vehicle to be conveyed to the Purchaser.
(d) ALL TANGIBLE PURCHASED ASSETS. Each of SCHEDULE 1.1(A)(II) and
SCHEDULE 1.1(A)(III) hereto sets forth an accurate list and summary description
of all tangible Purchased Assets and Leased Assets where the net book value of
an individual item exceeds $5,000. All of the Purchased Assets and the Leased
Assets are located at the Facilities other than the Purchased Assets listed on
SCHEDULE 3.1(D), which are within the control of the Purchaser.
(e) TITLE TO PURCHASED ASSETS. The Seller has good and valid legal
title to all of its assets included in the Purchased Assets, free and clear of
all mortgages, liens, pledges, security interests, charges, claims, restrictions
and other encumbrances and defects of title except for liens, imperfections of
title, easements and encumbrances that are (i) for current taxes not yet due and
payable or (ii) disclosed in any of the Schedules hereto.
(f) COMPLIANCE WITH LAW; AUTHORIZATIONS. To the best of the
Seller's and Cephalon's knowledge, the Seller and Cephalon have complied in all
respects with each, and are not in violation of any, law, ordinance, or
governmental or regulatory rule or regulation (including without limitation
environmental laws), whether federal, state, local or foreign, to which the
Seller's or Cephalon's business, operations, assets or properties used at the
Facilities or included in the Purchased Assets or the Leased Assets are subject.
The Seller or Cephalon owns, holds, possesses or lawfully uses in the operation
of the Facilities and use of the Purchased Assets and the Leased Assets all
material franchises, licenses, permits, easements, rights, applications,
filings, registrations and other authorizations (each, an "AUTHORIZATION") which
are necessary for it to operate the Facilities and use the Purchased Assets and
the Leased Assets. To the best of the Seller's and Cephalon's knowledge, neither
the Seller nor Cephalon is in violation of or default in, nor has the Seller or
Cephalon received any notice of any claim of default or violation with respect
to, any such Authorization.
(g) LITIGATION. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
best knowledge of the Seller and Cephalon, threatened against the Seller or
Cephalon or which relates to the Purchased Assets or the Leased Assets which
would have a material adverse effect on the Facilities, the Purchased Assets or
the Leased Assets.
(h) CONTRACTS AND COMMITMENTS. Except as set forth on SCHEDULE
3.1(H) hereto, neither the Seller nor Cephalon is a party to any written or
oral:
(i) agreement, contract or commitment for the employment of
any person, including any consultant, employed at the Facilities in
connection with the conduct of the Seller's business;
(ii) agreement, contract, commitment or arrangement with any
labor union or other representative of employees relating to the
Facilities or the Purchased Assets;
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(iii) loan agreements and other debt instruments that in any
manner encumber any of the Purchased Assets;
(iv) agreement, contract or commitment relating to the
Facilities or the Purchased Assets not otherwise required to be listed
on SCHEDULE 3.1(H) hereto or not required to be listed by virtue of
another provision of this SECTION 3.1(H), and continuing over a period
of more than six months from the date hereof or exceeding with respect
to the Facilities or the Purchased Assets, $10,000 in value;
(v) conditional sale agreement or lease under which the
Seller is either purchaser, lessor or lessee relating to the Purchased
Assets or any property at which Purchased Assets are located;
(vi) commitment or agreement for any capital expenditure or
leasehold improvement in excess of $25,000 relating to the Facilities
or the Purchased Assets;
(vii) agreement, contract or commitment relating to the
Facilities or the Purchased Assets limiting or restraining the Seller
or Cephalon or any successor thereto, to the best of the Seller's and
Cephalon's knowledge, from using or operating the Purchased Assets in
any legal manner, nor, to the Seller's or Cephalon's knowledge, is any
employee of the Seller engaged in the use of the Purchased Assets
subject to any such agreement, contract or commitment; and
(viii) license, franchise or distributorship agreement
relating to the Facilities or the Purchased Assets.
Except as may be disclosed on SCHEDULE 3.1(H), each of the agreements,
contracts, commitments, leases, plans and other instruments, documents and
undertakings listed on SCHEDULE 3.1(H) under which the Purchaser is to acquire
rights or obligations hereunder is valid and enforceable in accordance with its
terms, except as may be limited by bankruptcy laws and other similar laws
affecting the rights of creditors generally and principles of equity; the Seller
and Cephalon are in compliance with the provisions thereof; neither the Seller
nor Cephalon is, and to the Seller's or Cephalon's knowledge no other party
thereto is, in default in the performance, observance or fulfillment of any
material obligation, covenant or condition contained therein, and no event has
occurred which with or without the giving of notice or lapse of time, or both,
would constitute a default thereunder. Except as set forth on SCHEDULE 3.1(H),
no written or oral agreement, contract or commitment described in SCHEDULE
3.1(H), requires the consent of any party to its assignment in connection with
the transactions contemplated hereby.
(i) INTELLECTUAL PROPERTY, VIOLATIONS, ETC. Subject to Section 2.3
above, the Purchased Assets include all licenses from manufacturers of the
Purchased Assets necessary for the use of the Purchased Assets within their
respective functional specifications. No patent, trademark, tradename,
servicemark, copyright or trade secret is necessary for the configuration of the
Purchased Assets or the Leased Assets as currently configured. To the best
knowledge of the Seller, the Purchased Assets and the Leased Assets as
configured by the Seller do not infringe
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upon or unlawfully or wrongfully use any patent, trademark, tradename, service
xxxx, copyright or trade secret owned or claimed by another.
(j) PURCHASED ASSETS. Except as set forth in SCHEDULE 3.1(J) and
except for the Excluded Assets, the Purchased Assets include all material
property owned by the Seller or to which Seller has rights necessary to possess
and utilize the Purchased Assets by the Purchaser in the manner presently
configured by the Seller.
(k) TAX RETURNS. All material federal, state, local, foreign or
other governmental income, profit and franchise, gross receipts, sales, use,
intangibles, inventory, capital stock, ad valorem, transfer, employment,
payroll, withholding, occupation, property, license, stamp and excise taxes,
customs duties or other taxes, fees, assessments or charges whatsoever, together
with any interest and any penalties, additions to tax or additional amounts with
respect thereto (collectively, "TAXES" or a "TAX") due with respect to the
Seller or Cephalon which could result in any lien or encumbrance on the
Purchased Assets have been fully paid by the Seller or Cephalon.
(l) INSURANCE. SCHEDULE 3.1(L) hereto lists all policies of
insurance covering any casualty to the Facilities or the Purchased Assets in
force on the date of this Agreement.
(m) CONDITION OF ASSETS. Except as set forth in SCHEDULE 3.1(M)
hereto, all of the Purchased Assets, taken as a whole, are, and each of the
Purchased Assets listed on SCHEDULE 1.1(A)(II) or included within the Equipment
Leases that has a net book value greater than $5,000 is, in good operating
condition and repair, subject to normal wear and tear, and are usable in the
regular and ordinary course of the business of the Seller and fit for their
intended purposes. No regular, ordinary or required maintenance has been
deferred with respect to any of the Purchased Assets or the Leased Assets,
except for annual maintenance on the Purchased Assets that would normally have
been performed in August 1996, which the Purchaser acknowledges has not been
performed by the Seller for the mutual convenience of the Purchaser and the
Seller.
(n) FDA MATTERS. The Seller operates and uses the Purchased Assets
and the Leased Assets in accordance with 21 U.S.C. Section 351(a)(2)(B) and the
regulations promulgated thereunder by the Food and Drug Administration (the
"FDA")(such law and regulations being collectively referred to herein as "CGMP")
and will continue to do so through the Closing Date. SCHEDULE 3.1(N) also
includes a listing of all written inspection reports or observations,
establishment inspection reports, complaints, warning letters or any other
similar documentation issued to the Seller or Cephalon by the FDA or any
comparable foreign regulatory authority that relates in any way to the
Facilities or the Purchased Assets, including without limitation, all Form 483s
and EIRs (collectively, "Inspection Reports"), as well as all responses thereto
and resolutions thereof by the Seller or Cephalon. The Seller previously
provided to the Purchaser a true and complete copy of each of the items listed
on SCHEDULE 3.1(N) hereto, and to the Seller's and Cephalon's knowledge there
are no outstanding or unresolved issues under any such Inspection Report.
Neither the Seller nor Cephalon makes any representation or warranty that the
Facilities will meet CGMP standards for the Purchaser's intended process.
(o) WARN ACT. At all times from 90 days prior to the date of this
Agreement through the Closing, the Seller has employed fewer than 50 people,
including those employees
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experiencing an "employment loss" under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Section 2101 ET SEQ. ("WARN ACT"), within such time
period. The Seller is in full compliance with the WARN Act and its obligations
thereunder.
(p) ENVIRONMENTAL MATTERS.
(i) CONDITION OF FACILITIES. Except as set forth on SCHEDULE
3.1(P), or as expressly authorized by an effective permit or by
applicable law, there have been no releases, discharges or emissions of
any Hazardous Substances into, onto, under or from the Facilities
during the Seller's occupancy thereof or to the Seller's or Cephalon's
knowledge at any other time; and no Hazardous Substances have at any
time been disposed of in any amount on, at or under the Facilities
during the Seller's occupancy thereof or to the Seller's or Cephalon's
knowledge at any other time.
(ii) USE OF FACILITIES. Except as set forth on SCHEDULE 3.1(P)
attached hereto or as expressly authorized by an effective permit or by
applicable law, neither the Seller nor Cephalon has conducted, engaged
in or permitted others to conduct or engage in any business, operation
or activity on or at the Facilities involving the use, manufacture,
treatment, storage or disposal of any Hazardous Substances.
(iii) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Seller and
Cephalon are in material compliance with all Environmental Laws
applicable to the Facilities or the Purchased Assets or the Leased
Assets. Without limiting the foregoing, the Seller and Cephalon are in
material compliance with all laws, rules, ordinances and regulations
applicable to the Facilities or the Purchased Assets or the Leased
Assets relating to (A) the release, discharge, emission or disposal of
Hazardous Substances or other wastes to air, water, land or
groundwater; (B) the use, manufacture, importing, handling, generation,
treatment, storage, transportation, disposal or other management of
Hazardous Substances or other wastes; (C) the exposure of persons to
toxic, hazardous, harmful or other controlled, prohibited or regulated
substances; and (D) judicial and administrative orders, injunctions,
judgments, declarations, directives, notices or demands with respect to
the foregoing matters.
(iv) ENVIRONMENTAL AUTHORIZATIONS. SCHEDULE 3.1(O) sets forth a
true and complete list of all environmental permits, authorizations and
licenses under all applicable United States federal, state and local
laws, rules, ordinances and regulations necessary for the operation of
the Facilities and the Purchased Assets or the Leased Assets, and such
permits, authorizations and licenses are in full force and effect.
(v) NO LITIGATION. To the best knowledge of the Seller and
Cephalon, there is no pending legal action, claim, proceeding,
investigation or controversy against the Seller or Cephalon relating to
the Facilities or the Purchased Assets or the Leased Assets by any
third party (including any
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government or governmental agency or body) arising under or relating to
any matters cognizable under Environmental Laws nor does any valid
basis for such a legal action, claim, proceeding, investigation or
controversy exist.
(vi) NOTICES OF ENVIRONMENTAL PROBLEMS. Except as set forth on
SCHEDULE 3.1(P), neither the Seller nor Cephalon has received nor does
the Seller or Cephalon reasonably expect to receive any notice, letter,
citation, order, warning, complaint, inquiry, claim or demand alleging
or asserting that: (a) the Seller or Cephalon has violated, or is about
to violate, any Environmental Laws applicable to the Facilities or the
Purchased Assets or the Leased Assets; (b) there has been a release or
there is a threat of a release of any Hazardous Substance at, from or
onto any of the Facilities; (c) the Seller or Cephalon may be or is
liable, in whole or in part, for the costs of cleaning up, remediating,
removing or responding to a release or threat of a release of Hazardous
Substances at, from or onto any of the Facilities or, as a result of
its operating of such Facilities, at, from or onto any other property
wherever located; or (d) the Facilities are subject to a lien in favor
of any governmental entity for any liability, costs or damages, under
Environmental Laws, arising from costs incurred by such governmental
entity.
For purposes of this SECTION 3.1(P), "ENVIRONMENTAL LAWS" shall mean
all United States federal, state and local laws, regulations, standards, rules,
ordinances, policies and other binding governmental requirements, judicial or
administrative orders and common law legal obligations pertaining to
environmental concerns, or to employee and occupational health and safety, or to
public health, including without limitation the federal Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
ET SEQ., the federal Resource Conservation and Recovery Act, 42 U.S.C. Sections
6901 ET SEQ., the federal Clean Water Act, 33 U.S.C. Sections 1251 ET SEQ., the
federal Clean Air Act, 42 U.S.C. Sections 7401 ET SEQ. and analogous state and
local laws and "HAZARDOUS SUBSTANCES" shall mean petroleum products and wastes,
asbestos, radon, PCBs, and those materials designated or defined as hazardous
substances, pollutants, toxic pollutants, toxic substances, hazardous
pollutants, hazardous wastes, regulated substances or other similar terms in any
Environmental Laws, or any other substance which by law or regulation requires
special handling in its collection, storage, treatment, disposal or
transportation.
(q) NO OTHER WARRANTIES. In connection with the transactions
contemplated hereby and the Facilities and the Purchased Assets, except as
expressly set forth in this SECTION 3.1, THE SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR STATUTORY, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE.
(r) FACILITIES LEASES AND EQUIPMENT LEASES. All of the documents
comprising the Equipment Leases and the Facilities Leases are listed in SCHEDULE
3.1(R) hereto, and the Seller has previously delivered to the Purchaser true and
complete copies thereof. The Equipment Leases and the Facilities Leases are in
full force and effect and the Seller and Cephalon, as applicable, are in
compliance with their respective obligations under the provisions thereof.
Neither the Seller nor Cephalon is in default, and to the Seller's and
Cephalon's knowledge, no other party is in material default, in the performance,
observance or fulfillment of any obligation, covenant or condition contained in
any of the Equipment Leases or the Facilities Leases, and no
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event has occurred which, with or without the giving of notice or lapse of time
or both, would constitute a default thereunder.
(s) "KNOWLEDGE OF THE SELLER AND CEPHALON". For purposes of this
SECTION 3.1, "to the Seller's knowledge," "to Cephalon's knowledge," "best
knowledge of the Seller and Cephalon" or words of similar import shall be
conclusively deemed to be only that knowledge actually possessed by those
persons identified in SCHEDULE 3.1(S), who are employees of the Seller or
Cephalon and who have oversight responsibility at the Facilities. The Seller
shall not be deemed to have actual or constructive knowledge of any fact,
circumstance or occurrence known to any person other than as set forth in the
preceding sentence.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to the Seller as follows:
(a) CORPORATE EXISTENCE. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of Canada. The
Purchaser has the corporate power and authority to conduct its business as now
being conducted and to own, lease and operate the properties and assets now
owned, leased and being operated by it. The Purchaser is duly qualified or
licensed to do business and is in good standing as a foreign corporation in
Maryland. No action has been taken or authorized by the Purchaser to liquidate
or dissolve or to transfer any assets in a manner inconsistent with this
Agreement.
(b) CORPORATE POWER AND AUTHORIZATION. The Purchaser has the
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement by the
Purchaser have been duly authorized by all necessary corporate and shareholder
action. This Agreement has been, and the other agreements, documents and
instruments required to be delivered by the Purchaser in accordance with the
provisions hereof (the "PURCHASER'S DOCUMENTS") will be, duly executed and
delivered on behalf of the Purchaser and this Agreement constitutes, and the
Purchaser's Documents when executed and delivered will constitute, the legal,
valid and binding obligations of the Purchaser enforceable against the Purchaser
in accordance with their respective terms, except as may be limited by
bankruptcy laws and other similar laws affecting the rights of creditors
generally and principles of equity.
(c) VALIDITY OF CONTEMPLATED TRANSACTIONS, ETC. The execution,
delivery and performance of this Agreement by the Purchaser does not and will
not violate or result in the breach of any material term, condition or provision
of, or require the consent of any other person which has not been obtained
under, (i) any material law, ordinance, or governmental rule or regulation to
which the Purchaser is subject, (ii) any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to the Purchaser, (iii) the charter
documents of the Purchaser, or (iv) any material mortgage, indenture, agreement,
lease, plan or Authorization, to which the Purchaser is a party or by which the
Purchaser is otherwise bound, except for the filing of premerger notification
and the expiration or early termination of the waiting period required by HSR.
(d) INVESTIGATION AND EVALUATION. The Purchaser acknowledges that
(i) the Purchaser and its directors, officers, attorneys, accountants and
advisors have been given or will
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be given prior to the Closing the opportunity to examine all books, records and
other information with respect to the Seller, the Facilities, the Purchased
Assets, and the Assumed Liabilities made available to the Purchaser under
SECTION 4.3 hereof, (ii) the Purchaser has taken full responsibility for
determining the scope of its investigations of the Seller, the Facilities, the
Purchased Assets, and the Assumed Liabilities, and for the manner in which such
investigations have been conducted, (iii) the Purchaser is fully capable of
evaluating the adequacy and accuracy of the information and material obtained by
the Purchaser in the course of such investigations, (iv) the Purchaser has not
relied on the Seller with respect to any matter in connection with the
Purchaser's evaluation of the Seller, the Facilities, the Purchased Assets, and
the Assumed Liabilities, other than the representations and warranties of the
Seller specifically set forth in SECTION 3.1 and other agreements of the Seller
set forth herein, and (v) the Seller is making no representations or warranties,
express or implied, of any nature whatever with respect to the Seller, the
Purchased Assets, and the Assumed Liabilities, other than the representations
and warranties specifically set forth in SECTION 3.1 and elsewhere herein.
3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by each party in this ARTICLE 3 or in any attachment, Exhibit,
Schedule, certificate, document or list delivered by any such party pursuant
hereto or in connection with the transactions contemplated hereby shall survive
the Closing.
ARTICLE 4 - AGREEMENTS PENDING CLOSING.
4.1 AGREEMENTS OF THE SELLER PENDING THE CLOSING. The Seller and
Cephalon, jointly and severally, covenant and agree that, pending the Closing
and except as otherwise agreed to in writing by the Purchaser:
(a) other than the Seller's reduction and termination of its
production activities at the Facilities in contemplation of SECTION 2.6 hereof,
the business of the Seller shall be conducted only in, and the Seller and
Cephalon shall not take any action with respect to the Facilities or the
Purchased Assets or the Leased Assets except in, the ordinary course of business
and substantially in the same manner as carried on as of the date of this
Agreement, but in all events Seller shall operate the Facilities and use the
Purchased Assets and the Leased Assets in accordance with CGMP;
(b) the Seller and Cephalon will promptly advise the Purchaser in
writing of any known threat of or the commencement of any dispute, claim,
action, suit, proceeding, arbitration or investigation against or involving the
Purchased Assets or the Facilities, when the amount claimed is $10,000 or more
in the aggregate or if such proceeding or investigation is initiated by the FDA
or other regulatory agency or of the occurrence of any development known to the
Seller or Cephalon (exclusive of general economic factors affecting business in
general) of a nature that is or may be materially adverse to the business,
operations, properties, assets or prospects of the Seller or Cephalon;
(c) the Seller and Cephalon will use their reasonable efforts to
conduct their business in such a manner that on the Closing Date the
representations and warranties of the Seller and Cephalon contained in this
Agreement shall be true, except as specifically
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contemplated by this ARTICLE 4, as though such representations and warranties
were made on and as of such date. Furthermore, the Seller and Cephalon will use
their reasonable efforts to cause all of the conditions to the obligations of
the Purchaser, the Seller and Cephalon under this Agreement to be satisfied on
or prior to the Closing Date and shall make such filings, take such actions and
cooperate fully, at its expense, with the Purchaser in securing the expiration
or termination of the waiting period required under HSR as promptly as
practicable;
(d) the Seller and Cephalon shall use their reasonable efforts, to
the extent not prohibited by the foregoing provisions of this SECTION 4.1, to
maintain their relationships with those suppliers and vendors subject to
agreements included in Schedule 1.1(a)(iv);
(e) the Seller and Cephalon will maintain themselves at all times
as corporations duly incorporated, validly existing and in good standing, as
applicable, under the laws of the State of Delaware and the Seller shall
maintain itself at all times in good standing under the laws of the
jurisdictions under which it is doing business as a foreign corporation;
(f) the Seller and Cephalon will continue to carry and maintain
all of its existing insurance relating to the Facilities and the Purchased
Assets and the Leased Assets;
(g) the Seller and Cephalon will maintain the Purchased Assets and
the Leased Assets in good operating condition and repair, usable in the regular
and ordinary course, fit for the purposes intended, other than as provided in
SECTION 3.1(M) hereof;
(h) Neither the Seller nor Cephalon shall cause or permit any
amendment to, or any modification, cancellation, or renewal or extension of, any
of the Facilities Leases or the Equipment Leases without the prior written
consent of the Purchaser; and
(i) the Seller shall promptly deliver to the Purchaser written
notice of any event or development that would (i) render any statement,
representation or warranty of the Seller or Cephalon in this Agreement
(including exceptions set forth in the schedules attached hereto) inaccurate or
incomplete in any material respect, or (ii) constitute or result in a breach by
the Seller or Cephalon of, or a failure by the Seller or Cephalon to comply
with, any agreement or covenant in this Agreement applicable to the Seller or
Cephalon.
4.2 AGREEMENTS OF THE PURCHASER PENDING THE CLOSING. The Purchaser
covenants and agrees that, pending the Closing and except as otherwise agreed to
in writing by the Seller:
(a) the Purchaser will not take any action that would result in a
breach of any of its representations and warranties hereunder. Furthermore, the
Purchaser shall cooperate with the Seller and use reasonable efforts to cause
all of the conditions to the obligations of the Purchaser and the Seller under
this Agreement to be satisfied on or prior to the Closing Date and shall make
such filings and take such actions as shall be reasonably necessary to obtain
expiration or early termination of the waiting period required by the HSR as
promptly as practicable;
(b) the Purchaser will maintain itself at all times as a
corporation duly incorporated, validly existing and in good standing, as
applicable, under the laws of the jurisdictions under which it is incorporated
and doing business as a foreign corporation; and
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(c) the Purchaser shall promptly deliver to the Seller written
notice of any event or development that would (i) render any statement,
representation or warranty of the Purchaser in this Agreement (including
exceptions set forth in the schedules attached hereto) inaccurate or incomplete
in any material respect, or (ii) constitute or result in a breach by the
Purchaser of, or a failure by the Purchaser to comply with, any agreement or
covenant in this Agreement applicable to the Purchaser.
4.3 ACCESS. Upon reasonable prior notice, the Seller and Cephalon shall
give to the Purchaser's officers, employees, counsel, accountants and other
representatives access to and the right to inspect, during normal business
hours, the premises, properties, assets, records, contracts and other documents
of the Seller and Cephalon relating to the Facilities and the Purchased Assets
and shall permit them to consult with the officers, employees, accountants,
counsel and agents of the Seller for the purpose of making such investigation of
the Facilities and the Purchased Assets, as the Purchaser shall reasonably
desire to make, provided that at any time prior to October 25, 1996 such
investigation shall not unreasonably interfere with the Seller's business
operations. At all times after October 25, 1996 until the Closing Date, such
access shall be unrestricted access to inspect the Facilities, the Purchased
Assets and the Leased Assets. Furthermore, the Seller and Cephalon shall furnish
to the Purchaser such documents and copies of documents and records and
information with respect to the Facilities and the Purchased Assets (including
without limitation all files and records concerning regulatory compliance) and
copies of any working papers relating thereto as the Purchaser shall from time
to time reasonably request and shall permit the Purchaser and its agents to make
such physical inventories and inspections of the Purchased Assets as the
Purchaser may reasonably request from time to time.
4.4 PRESS RELEASES. Except as required by applicable law or stock
exchange rule, neither the Seller nor the Purchaser shall make any public
statement or releases concerning this Agreement or the transactions contemplated
hereby except for such information as shall have been approved in writing by the
other party hereto, which approval shall not be unreasonably withheld.
ARTICLE 5 - CONDITIONS PRECEDENT TO THE CLOSING
5.1 CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS. All
obligations of the Purchaser under this Agreement are subject to the fulfillment
or satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER. The
representations and warranties of the Seller and Cephalon herein contained shall
have been true and correct in all material respects at the date of execution of
this Agreement and at the Closing; the Seller and Cephalon shall have performed
in all material respects all obligations and complied in all material respects
with all agreements, undertakings, covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date; and the Seller and Cephalon shall have delivered to the Purchaser a
certificate dated the Closing Date and signed by the Presidents of the Seller
and Cephalon and by the Chief Financial Officer of Cephalon to such effect.
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(b) INJUNCTIONS, ETC. There shall not be any judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality outstanding against the Seller, Cephalon or the
Purchaser that prohibits or materially restricts or delays consummation of the
Closing.
(c) CONSENTS AND APPROVALS. The Seller and Cephalon shall have
obtained the consents required by the terms of the contracts, commitments,
agreements or Authorizations listed in SCHEDULE 5.1(C) to the extent that such
consent is required or necessary under the pertinent debt, lease, contract,
commitment or agreement or other document or instrument or under applicable
orders, laws, rules or regulations, for the consummation of the transactions
contemplated hereby in the manner herein provided. The required statutory
waiting period under HSR shall have terminated.
(d) DESTRUCTION OF THE PURCHASED ASSETS. There shall have occurred
no material damage to or destruction or loss of (whether or not covered by
insurance) of any of the Purchased Assets or the Leased Assets. In the event of
any damage, destruction or loss of any of the Purchased Assets or the Leased
Assets in a single occurrence with an aggregate net book value in excess of
$25,000, the Seller shall promptly notify the Purchaser of such casualty. The
Purchaser shall thereupon be entitled to, at its sole option and in its absolute
discretion, (i) proceed to closing hereunder with no reduction in the Purchase
Price, in which event any and all proceeds of such casualty, if any, shall be
delivered to or assigned to the Purchaser at the Closing, (ii) proceed to
closing hereunder with a reduction in the Purchase Price at the Seller's
historic cost of the damaged, destroyed or lost Purchased Assets (but not Leased
Assets or Purchased Assets damaged, destroyed or lost by the Purchaser) (in
which event the Seller shall retain all rights to the proceeds of such
casualty). Notwithstanding the foregoing, if the casualty is of a magnitude that
renders the Facilities "untenantable" for the purposes intended by the
Purchaser, the Purchaser shall be entitled, at its sole option and in its
absolute discretion, to terminate this Agreement, in which event all parties
shall be relieved from any further liabilities or obligations hereunder (except
for those liabilities and obligations that expressly survive a termination of
this Agreement). As used in this subparagraph, "untenantable" shall refer to (x)
destruction of greater than 10% of the premises leased in the Facilities Leases
or (y) destruction of any portion of the Purchased Assets or the Leased Assets
utilized for manufacturing and related support functions which renders the
Purchased Assets or the Leased Assets unfit for use to manufacture in accordance
with CGMP regulations.
5.2 CONDITIONS PRECEDENT TO THE SELLER'S AND CEPHALON'S OBLIGATIONS.
All obligations of the Seller and Cephalon under this Agreement are subject to
the fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
representations and warranties of the Purchaser herein contained shall have been
true and correct in all material respects at the date of execution of this
Agreement; the Purchaser shall have performed in all material respects all
obligations and complied in all material respects with all agreements,
undertakings, covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date; and the
Purchaser shall have delivered to the Seller a certificate dated the Closing
Date and signed by the President and the Chief Financial Officer of the
Purchaser to such effect.
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(b) INJUNCTIONS, ETC. There shall not be any judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality outstanding against the Seller or the Purchaser that
prohibits or materially restricts or delays consummation of the Closing.
(c) CONSENTS AND APPROVALS. The required statutory waiting period
under HSR shall have terminated.
ARTICLE 6 - POST-CLOSING MATTERS
6.1 EMPLOYEE ARRANGEMENTS. The Seller acknowledges that the Purchaser
is not obligated to hire any employee of the Seller. From and after the Closing
Date, the Purchaser may elect, in its sole and absolute discretion, to hire
employees of the Seller on such terms and conditions as it desires. The
Purchaser shall notify the Seller of the identity of employees of the Seller, if
any, who accept an offer of employment with the Purchaser within six months
after the Closing, and the Seller will furnish to all of its other former
employees any notices and other information required by the Comprehensive
Omnibus Budget Reconciliation Act of 1985, as amended. The Seller shall fully
comply with the requirements of Part 6 of Title I of ERISA and Section 4980B of
the Code with respect to all of its employees and former employees.
6.2 DISCHARGE OF CERTAIN LIABILITIES. From and after the Closing Date,
the Purchaser shall pay and discharge all Assumed Liabilities in accordance with
their respective terms and the Purchaser shall indemnify and hold harmless the
Seller and the Seller's successors, assigns and affiliates from and against any
and all damages, losses, deficiencies, liabilities, costs and expenses incurred
or suffered by any such person that result from, relate to or arise out of any
and all Assumed Liabilities.
6.3 MAINTENANCE OF BOOKS AND RECORDS. Each of the Seller, Cephalon and
the Purchaser shall preserve until the fifth anniversary of the Closing Date all
records possessed or to be possessed by such party relating to the Facilities or
the Purchased Assets prior to the Closing Date. After the Closing Date, where
there is a legitimate purpose, such party shall provide the other parties with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (a) the officers and employees of such party
and (b) the books of account and records of such party, but, in each case, only
to the extent relating to the Facilities or the Purchased Assets prior to the
Closing Date, and the other parties and their representatives shall have the
right to make copies of such books and records; provided, however, that the
foregoing right of access shall not be exercisable in such a manner as to
interfere unreasonably with the normal operations and business of such party;
and further, provided, that, as to so much of such information as constitutes
trade secrets or confidential business information of such party, the requesting
party and its officers, directors and representatives will use due care to not
disclose such information except (x) as required by law, (y) with the prior
written consent of such party, which consent shall not be unreasonably withheld,
or (z) where such information becomes available to the public generally, or
becomes generally known to competitors of such party, through sources other than
the requesting party, its affiliates or its officers, directors or
representatives. Such records may nevertheless be destroyed by a party if such
party sends to the other parties written notice of its intent to destroy
records, specifying with particularity the
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contents of the records to be destroyed. Such records may then be destroyed
after the 30th day after such notice is given unless another party objects to
the destruction in which case the party seeking to destroy the records shall
deliver such records to the objecting party.
6.4 RESTRICTION ON USE OF NAME. In no event shall the Purchaser use the
name "Cephalon" or any variant thereof from and after the Closing Date;
provided, however, that this restriction shall not prevent any disclosure of the
transactions with Cephalon and the Seller contemplated hereby to the extent such
disclosure is permitted by SECTION 4.4 or 8.5 hereof.
6.5 SUBLICENSE. Subject to and upon consummation of the purchase and
sale contemplated by this Agreement, the Purchaser hereby grants to the Seller a
non-exclusive, non-transferable, royalty-free, perpetual license to use the
validation protocols and copies of any records included in the Purchased Assets
retained by the Seller hereunder solely for purposes of establishing regulatory
compliance and securing regulatory approval. Title to all copies of the licensed
documentation shall remain with the Purchaser.
ARTICLE 7 - INDEMNIFICATION
7.1 INDEMNIFICATION OBLIGATIONS.
(a) Cephalon and the Seller (each, an "indemnifying party") shall
jointly and severally indemnify and hold harmless the Purchaser, and the
Purchaser (another "indemnifying party") shall indemnify and hold harmless the
Seller, from, against and in respect of any and all damages, losses,
deficiencies, liabilities, costs and expenses (including attorneys' fees)
resulting from, relating to or arising out of any (i) representation or warranty
which was not true, complete and correct when made by or on behalf of the
indemnifying party in this Agreement or in any certificate delivered by one
party to the other pursuant hereto, or (ii) breach of any agreement or covenant
on the part of such indemnifying party or parties hereunder. Claims relating to
the representations contained in the first sentence of Section 3.1(m) shall be
limited to latent defects or defects that are not reasonably detectable upon
inspection. Cephalon and the Seller shall not be liable under Section 7.1(a)(i)
above for any misrepresentation or breach of warranty as to which the Puchaser
had actual knowledge on the date such representation or warranty was made. For
purposes of the foregoing sentence, "knowledge" of the Purchaser shall be deemed
to mean the actual knowledge of the persons listed on Schedule 7.1(b) hereto.
(b) An indemnified party shall make no claim against an
indemnifying party for indemnification under SECTION 7.1(A) with respect to a
misrepresentation or breach of warranty unless and until the aggregate amount of
all such claims against an indemnifying party exceeds [*]
[*] Confidential information has been omitted and filed separately with the
Commission.
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(c) Cephalon and the Seller shall further indemnify and hold
harmless the Purchaser from any and all damages, costs and expenses resulting
from, relating to or arising out of liabilities of the Seller that are not
Assumed Liabilities. Such indemnification under this clause (c) shall not be
subject to the limits of clause (b) as to aggregate amount of claims or the time
limitation for making such claims.
(d) Each indemnifying party or parties hereto will indemnify and
hold harmless the indemnified party or parties hereto from, against and in
respect of any and all actions, suits, proceedings, demands, assessments,
judgments, costs (including attorneys' fees) and legal and other expenses
incident to the enforcement of this ARTICLE 7.
(e) Other than the rights of the parties to obtain specific
performance and injunctive relief relating to SECTIONS 1.3(E), 2.3, 2.4, 6.3 and
8.5 hereof, the remedy provided by this ARTICLE 7, subject to the limitations
set forth herein shall be the parties' exclusive remedy for the recovery of any
damages, losses, deficiencies, liabilities, costs and expenses resulting from,
relating to or arising out of any (i) misrepresentation or breach of warranty
made by or on behalf of the indemnifying party in this Agreement or in any
certificate delivered by one party to the other pursuant hereto, or (ii) breach
of any agreement or covenant on the part of such indemnifying party or parties
hereunder. Notwithstanding the foregoing, nothing in this Agreement shall
restrict the Purchaser's rights or remedies for fraud or intentional
misrepresentation in this Agreement by the Seller or Cephalon.
7.2 METHOD OF ASSERTING CLAIMS, ETC. All claims for indemnification
under this ARTICLE 7 shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which the Seller
would be liable to the Purchaser hereunder is asserted against or sought to be
collected by a third party, the Purchaser shall promptly notify the Seller in
writing of such claim or demand, specifying the nature of such claim or demand
and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such claim or
demand) (the "CLAIM NOTICE"). The Seller shall have 30 days from its receipt of
the Claim Notice (the "NOTICE PERIOD") to notify the Purchaser (i) whether or
not the Seller disputes its liability to the Purchaser hereunder with respect to
such claim or demand, and (ii) if the Seller does not dispute such liability,
whether or not it desires, at its sole cost and expense, to defend the Purchaser
against such claim or demand. In the event that the Seller notifies the
Purchaser within the Notice Period that the Seller does not dispute such
liability and desires to defend against such claim or demand, then the Seller
shall have the right to defend the claim. If the Purchaser desires to
participate in, but not control, any such defense or settlement it may do so at
its sole cost and expense. If the Seller disputes its liability with respect to
such claim or demand or elects not to defend against such claim or demand,
whether by not giving timely notice as provided above or otherwise, then the
Purchaser shall have the right to defend against such claim or demand (but the
Purchaser shall not have any obligation to contest any such claim or demand),
and that portion thereof as to which such defense is unsuccessful, shall be
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conclusively deemed to be a liability of the Seller hereunder (subject, if the
Seller has timely disputed liability, to a determination that the disputed
liability is covered by these indemnification provisions).
(b) In the event that the Purchaser should have a claim against the
Seller hereunder that does not involve a claim or demand being asserted against
or sought to be collected from it by a third party, the Purchaser shall promptly
send a Claim Notice with respect to such claim to the Seller. If the Seller does
not notify the Purchaser within the Notice Period that its disputes such claim,
the amount of such claim shall be conclusively deemed a liability of the Seller
hereunder.
(c) All claims for indemnification made by the Seller under this
Agreement shall be asserted and resolved under the procedures set forth above in
this SECTION 7.2 by substituting, as appropriate, "Purchaser" for "Seller" and
"Seller" for "Purchaser."
7.3 PAYMENT. In the event that any party is required to make any
payment under this ARTICLE 7, such party shall promptly pay the indemnified
party the amount so determined in cash. If there should be a dispute as to the
amount or manner of determination of any indemnity obligation owed under this
ARTICLE 7, the party from which indemnification is due shall nevertheless pay
when due such portion, if any, of the obligation as shall not be subject to
dispute. Upon the payment in full of any claim the party or entity making
payment shall be subrogated to the rights of the indemnified party against any
person, firm, corporation or other entity with respect to the subject matter of
such claim.
ARTICLE 8 - MISCELLANEOUS
8.1 TERMINATION.
(a) Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated by written notice of termination at any time
before the Closing Date only as follows:
(i) by mutual consent of the Seller and the Purchaser;
(ii) by the Purchaser, (A) at any time if the representations
and warranties of the Seller contained in SECTION 3.1 hereof were
incorrect in any material respect when made or at any time thereafter,
or (B) upon written notice to the Seller given at any time after
November 30, 1996 (or such later date as shall have been specified in a
writing authorized on behalf of the Seller and the Purchaser) if all of
the conditions precedent set forth in SECTION 5.1 hereof have not been
met; or
(iii) by the Seller, (A) at any time if the representations and
warranties of the Purchaser contained in SECTION 3.2 hereof were
incorrect in any material respect when made or at any time thereafter,
or (B) upon written notice to the Purchaser given at any time after
November 30, 1996 (or such later date as
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shall have been specified in a writing authorized on behalf of the
Seller and the Purchaser) if all of the conditions precedent set forth
in SECTION 5.2 hereof have not been met.
(b) In the event of the termination and abandonment hereof pursuant
to the provisions of this SECTION 8.1, this Agreement (except for the
obligations of the confidentiality provisions of set forth in SECTION 8.5
hereof, which shall continue) shall become void and have no effect, without any
liability on the part of any of the parties or their directors or officers or
shareholders in respect of this Agreement, except that the termination shall not
relieve a breaching party from liability incurred for breach of any
representation, warranty, covenant or agreement giving rise to such termination.
8.2 COMPLIANCE WITH BULK SALES LAWS. The Purchaser, the Seller and
Cephalon hereby waive compliance by the Purchaser, the Seller and Cephalon with
the bulk sales law and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement. The Seller and
Cephalon shall indemnify the Purchaser from, and hold it harmless against, any
liabilities, losses, damages, costs and expenses (including attorneys' fees)
resulting from or arising out of (i) the parties' failure to comply with any of
such laws in respect of the transactions contemplated by this Agreement, or (ii)
any action brought or levy made as a result thereof, other than the Assumed
Liabilities, on such terms as are expressly assumed by the Purchaser pursuant to
this Agreement.
8.3 BROKERAGE; EXPENSES; ETC.
(a) The parties hereto represent and warrant that all negotiations
relative to this Agreement have been carried on by them directly without the
intervention of any person, firm or corporation. Each party will indemnify the
other and hold such other party harmless against and in respect of any claim for
brokerage, finder's or other commissions or fees relative to this Agreement or
the transactions contemplated hereby made by any person, firm or corporation
claiming through it.
(b) Except as otherwise expressly provided herein, each party
hereto shall pay its own expenses, including without limitation, the reasonable
fees and expenses of its counsel, incurred in connection with this Agreement and
the transactions contemplated hereby.
(c) The Purchaser shall pay all federal, state and local sales,
documentary and other transfer taxes, if any, due as a result of the purchase,
sale or transfer of the Purchased Assets (excluding any income, profit or gains
taxes payable by the Seller) in accordance herewith whether imposed by law on
the Seller or the Purchaser, and the Purchaser shall indemnify, reimburse and
hold harmless the Seller in respect of the liability for payment of or failure
to pay any such taxes or the filing of or failure to file any reports required
in connection therewith.
8.4 CONTENTS OF AGREEMENT; AMENDMENT; PARTIES IN INTEREST, ASSIGNMENT,
ETC. This Agreement sets forth the entire understanding of the parties hereto
with respect to the subject matter hereof. Any previous agreements or
understandings between the parties regarding the subject matter hereof are
merged into and superseded by this Agreement. This Agreement may be amended,
modified or supplemented only by written instrument duly executed by each of the
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parties hereto. All representations, warranties, covenants, terms and conditions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and
permitted assigns of the parties hereto, provided that no party hereto shall
assign this Agreement or any right, benefit or obligation hereunder, other than
to an affiliated entity. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
8.5 CONFIDENTIALITY. Each party will hold in strict confidence all
confidential information obtained from the other party in connection with the
transactions contemplated by this Agreement and will not disclose such
confidential information to any party (other than their respective employees,
consultants and advisors), nor use or permit such information to be used for any
purpose other than in connection with the transactions contemplated hereby.
Notwithstanding the foregoing, confidential information shall not include any
information which (i) is in its possession prior to disclosure by the other
party hereto, (ii) was or becomes part of the public domain, except by breach of
the disclosing party's confidentiality obligations hereunder, (iii) is
independently developed by the disclosing party without use of confidential
information, or (iv) is lawfully received by the disclosing party from a third
party having a right to disclose such information to the disclosing party. Each
party shall be authorized to disclose confidential information of the other
where disclosure is made pursuant to a court rule or order, or governmental law
or regulation, provided that the disclosing party gives the other party hereto
an opportunity to limit such disclosure. If the transaction contemplated hereby
is not consummated, each party will, promptly upon the other party's request,
deliver to such party all confidential information in its possession and will
use all reasonable efforts to cause all copies and summaries or synopses thereof
to be returned or destroyed. Such destruction shall be confirmed in writing to
the other party. Information regarding the Purchased Assets shall, at all times
prior to the Closing Date, be deemed to be confidential information of the
Seller, and shall, at all times after the Closing Date, be deemed to be
confidential information of the Purchaser. This Section 8.5 shall survive for a
period of two years following the date hereof.
8.6 NOTICES. All notices, consents or other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally, delivery charges
prepaid, or three business days after being sent by registered or certified mail
(return receipt requested), postage prepaid, or one business day after being
sent by a nationally recognized express courier service, postage or delivery
charges prepaid, to the parties at their respective addresses stated below.
Notices may also be given by prepaid telegram or facsimile and shall be
effective on the date transmitted if confirmed within 24 hours thereafter by a
signed original sent in the manner provided in the preceding sentence. Any party
may change its address for notice and the address to which copies must be sent
by giving notice of the new address to the other parties in accordance with this
SECTION 8.6.
If to the Purchaser, to:
North American Vaccine, Inc.
00000 Xxxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Senior Vice President -
Legal Affairs and General Counsel
FAX: (000) 000-0000
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With a required copy to:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
FAX: (000) 000-0000
If to the Seller, to:
Cephalon Property Management, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
FAX: (000) 000-0000
With a required copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
FAX: (000) 000-0000
8.7 MARYLAND LAW TO GOVERN. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of Maryland,
without giving effect to conflicts of law principles.
8.8 NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors and assigns, and they shall not
be construed as conferring any rights on any other persons.
8.9 HEADINGS, GENDER AND "PERSON." All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
8.10 SCHEDULES AND EXHIBITS. All Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
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8.11 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and in lieu of any such invalid or
unenforceable provision there shall be added a provision or provisions as
similar in terms to such invalid or unenforceable part as may be possible and be
valid, legal or enforceable and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
ATTEST: CEPHALON PROPERTY MANAGEMENT, INC.
By /s/ Xxxxxxx Xxxxxxxxx By /s/ J. Xxxxx Xxxxx
--------------------- --------------------------
As its Secretary As its Vice President
ATTEST: CEPHALON, INC.
By /s/ Xxxxxxx Xxxxxxxxx By /s/ J. Xxxxx Xxxxx
--------------------- --------------------------
As its Secretary As its Senior Vice President and
Chief Financial Officer
ATTEST: NORTH AMERICAN VACCINE, INC.
/s/ Xxxxxx X. Xxxxx-Nabi By /s/ Xxxxxx Mates
------------------------- ---------------------------
As its Xxxxxx X. Xxxxx-Nabi As its Xxxxxx Mates, Ph.D.
Secretary President
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