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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT dated as of January 14, 1997 (the
"Agreement") by and between AMERICAN HOME PRODUCTS CORPORATION, a Delaware
corporation ("AHP"), AMERICAN CYANAMID COMPANY, a Maine corporation
("Cyanamid"), X.X. Xxxxxx Company, Incorporated, a Delaware corporation ("X.X.
Xxxxxx" and together with Cyanamid and AHP, "Sellers") and Selfcare, Inc., a
Delaware corporation ("Selfcare") and Selfcare Acquisition Corp., a Delaware
corporation, and a wholly-owned subsidiary of Selfcare ("Acquisition Corp." and
together with Selfcare, "Buyers").
W I T N E S S E T H:
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WHEREAS, Sellers are engaged in, among other things, the marketing and sale
of certain over-the-counter branded products sold in the vitamin and nutritional
supplements categories which branded products are listed on EXHIBIT A attached
hereto (the "Brands");
WHEREAS, Buyers desire to purchase certain assets of Sellers relating to
the Brands in the Territory (as defined below), and Sellers desire to sell such
assets to Buyers, upon the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement the terms defined below shall have the
indicated meanings:
1.1 "AFFILIATE" shall mean, with respect to any Person, any Person which
directly or indirectly through stock ownership or through other arrangements
either controls, or is controlled by or is under common control with, such
Person, PROVIDED, HOWEVER, for purposes of this Agreement the term "Affiliate"
shall not include subsidiaries in which a Person owns a majority of the ordinary
voting power to elect a majority of the board of directors but is restricted
from electing such majority by contract or otherwise, until such time as such
restrictions are no longer in effect.
1.2 "AGGRIEVED PARTY" shall have the meaning set forth in Section 8.2.
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1.3 "ALLOCATION STATEMENT" shall have the meaning set forth in
Section 2.7.
1.4 "APPLICABLE LAWS" shall mean, with respect to the Brands or the
Purchased Assets in the Territory, all laws, treaties, statutes, ordinances,
judgments, decrees, directives, rules, injunctions, writs, regulations, binding
arbitration rulings, orders, judicial or administrative interpretations or
authorization of, any Governmental Authority having jurisdiction over the Brands
or the Purchased Assets in the Territory, as may be in effect on the Closing
Date.
1.5 "APPLICABLE PERMITS" shall mean any waiver, exemption, variance,
permit, authorization, license or similar approval, required to be obtained
under Applicable Laws in connection with the manufacture of the Products (to the
extent Sellers manufacture the Products), distribution or sale of the Products
or the ownership of the Purchased Assets, each in the Territory.
1.6 "ASSUMED LIABILITIES" shall mean (i) all future obligations that are
required to be performed and fulfilled after the Closing under the terms of the
Contracts, (ii) except to the extent Buyers are entitled to indemnification
pursuant to Section 8.1(a)(v), obligations for the return of Products returned
after the Closing Date, and (iii) except to the extent Buyers are entitled to
indemnification pursuant to Section 8.1(a)(vi), obligations for trade
advertising, promotion and coupons relating to the Brands each as in existence
as of the Closing Date.
1.7 "BOOKS AND RECORDS" shall mean the books and records of the Sellers to
the extent related exclusively to the Brands or the Purchased Assets and copies
of such other books and records of Sellers to the extent related to the
Purchased Assets.
1.8 "BRANDS" shall have the meaning set forth in the first whereas clause
of this Agreement.
1.9 "CLOSING" shall have the meaning set forth in Section 2.3.
1.10 "CLOSING DATE" shall have the meaning set forth in Section 2.3.
1.11 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.12 "COMPETITION LAWS" shall mean all Applicable Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
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1.13 "CONTRACTS" shall mean all agreements, insurance policies, sales
orders, licenses, purchase orders, guarantees and any and all other contracts or
binding arrangements to which Sellers are a party specifically relating to the
Purchased Assets, but excluding any contracts or other binding arrangements to
the extent related to the Excluded Assets.
1.14 "COSTS" shall have the meanings set forth in Section 8.1.
1.15 "CUSTOMER" shall have the meaning set forth in Section 3.15.
1.16 "ENCUMBRANCES" shall mean all claims, security interests, liens,
pledges, charges, escrows, options, proxies, rights of first refusal, preemptive
rights, mortgages, hypothecations, prior assignments, title retention
agreements, indentures, security agreements or any other encumbrances of any
kind.
1.17 "EXCLUDED ASSETS" shall mean any of the assets of Sellers not
primarily related to the Brands or included among the Purchased Assets,
including but not limited to, cash, cash equivalents, accounts receivables, any
type of receivable for Taxes, inventories (including raw materials and works in
progress) machinery and equipment (other than machinery and equipment included
in the Purchased Assets) and Intellectual Property set forth on SCHEDULE 3.6 or
otherwise retained by Sellers pursuant to the terms of Section 2.8 hereof.
1.18 "EXCLUDED LIABILITIES" shall mean any liabilities to the extent
relating to the Brands or the Purchased Assets other than Assumed Liabilities.
1.19 "FINANCING" shall have the meaning set forth in Section 4.6.
1.20 "FINANCING AGREEMENTS" shall have the meaning set forth in Section
4.6.
1.21 "GAAP" shall mean United States generally accepted accounting
principles consistently applied.
1.22 "GOVERNMENTAL AUTHORITY" shall mean any governmental department,
commission, board, bureau, agency, court or other instrumentality of the United
States, any foreign government or any jurisdiction, municipality or other
political subdivision thereof.
1.23 "HSR ACT" shall have the meaning set forth in Section 6.3.
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1.24 "INDEMNIFYING PARTY" shall have the meaning set forth in Section
8.2(i).
1.25 "INDICIA" shall have the meaning set forth in Section 2.8.
1.26 "INTELLECTUAL PROPERTY" shall mean the following properties: (i)
subject to Section 2.8, all Know-how; (ii) all Trademarks (subject to the
Trademark License Agreement); (iii) all copyrights, copyright registrations and
applications for registration, designs, industrial models and utility models
(including registrations and applications for registration thereof), and (iv)
subject to Section 2.8, all trade secrets, insofar as on or before the Closing
Date (i), (ii), (iii) and/or (iv) are (a) owned or acquired by Sellers, and (b)
employed in connection with the manufacture, use, promotion, advertisement,
distribution and/or sale of the Products in the Territory, but not including the
Excluded Assets.
1.27 "KNOW-HOW" shall mean non-exclusive rights to all product
specifications, processes, product designs, plans, ideas, concepts,
manufacturing, engineering and other manuals and drawings, technical
information, data, research records, promotional literature, customer and
supplier lists and similar data and information, and other confidential or
proprietary technical and business information which on or before the Closing
Date are (a) owned or acquired by Sellers, and (b) employed in connection with
the manufacture, use, promotion, advertisement, distribution and/or sale of the
Products in the Territory, but not including the Excluded Assets.
1.28 "MATERIAL ADVERSE CHANGE" shall mean a change that has had a Material
Adverse Effect.
1.29 "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
Purchased Assets or the business, operations or financial condition of the
manufacture, distribution and sale of the Products, whether or not covered by
insurance.
1.30 "MINIMUM LOSS" shall have the meaning set forth in Section 8.3.
1.31 "PERMITTED ENCUMBRANCES" shall have the meaning set forth in Section
3.5(b).
1.32 "PERSON" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
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1.33 "POST-CLOSING TAX PERIOD" shall mean any Tax period (or portion
thereof) beginning on the Closing Date.
1.34 "PRE-CLOSING TAX PERIOD" shall mean any Tax period (or portion
thereof) ending before the Closing Date.
1.35 "PRODUCT LIABILITY CLAIMS" shall have the meaning set forth in Section
3.14.
1.36 "PRODUCTS" shall mean all products of Sellers bearing the Trademarks
sold prior to Closing.
1.37 "PROMISSORY NOTE" shall mean the promissory note of Selfcare in the
principal amount of $6 million in the form attached hereto as EXHIBIT E.
1.38 "PURCHASED ASSETS" shall mean, collectively, the Intellectual Property
(subject to Section 2.8), and to the extent related to the Brands in the
Territory, sales and promotional material (including without limitation
pertaining to radio, television and print campaigns), customer lists and Books
and Records, Applicable Permits (if assignable) and the plates, dyes and custom
molds (if applicable) listed on SCHEDULE 1.36, all transferable licenses,
permits or other Governmental Authority authorizations exclusively relating to
the Brands, the rights and future obligations of Sellers under the Contracts,
and all goodwill directly related to the Brands; provided, however, that the
Purchased Assets shall not include (i) the trademark FERRO SEQUELS(R) that is
subject to the Trademark License Agreement and (ii) the Excluded Assets.
1.39 "PURCHASE PRICE" shall have the meaning set forth in Section 2.1.
1.40 "RECALL CAMPAIGNS" shall have the meaning set forth in Section 3.14.
1.41 "SUPPLY AGREEMENTS" shall mean the supply agreements related to
certain products in finished packaged form to be provided by Sellers, their
Affiliates or third party manufacturers to Buyers, substantially in the form of
EXHIBIT B attached hereto.
1.42 "STATEMENTS OF NET REVENUE" shall have the meaning set forth in
Section 3.3.
1.43 "TAXES" (and with correlative meanings, "TAX," "TAXES" and "TAXABLE")
shall mean all taxes of any kind imposed by a federal, state, local or foreign
Governmental Authority, including but not limited to those on, or measured by or
referred to as income, gross receipts, financial operation, sales, use, ad
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valorem, value added, franchise, profits, license, excise, stamp, premium,
property, transfer or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by such
Governmental Authority with respect to such amounts.
1.44 "TERMINATION DATE" shall have the meaning set forth in Section 9.1.
1.45 "TERRITORY" shall mean the United States of America (which shall not
include its Territories).
1.46 "TRADEMARK LICENSE AGREEMENT" shall mean the Trademark License
Agreement with respect to the FERRO SEQUELS trademark, substantially in the form
of EXHIBIT C hereto.
1.47 "TRADEMARKS" shall mean (a) the trademarks listed on SCHEDULE 3.9(a),
as well as (b) trade dress, labels, logos and all other names and slogans
associated with the Brands in the Territory or embodying associated goodwill of
the Brands within the Territory, whether or not registered, and any applications
or registrations therefor, and (c) any associated goodwill incident to (a) or
(b) above. It is understood by the parties that Trademarks shall not include the
Excluded Assets, as well as the names "American Home Products Corporation",
"American Cyanamid Company", "Lederle", "X.X. Xxxxxx", "Xxxxxxxxx-Xxxxxx",
"Xxxxxxxxx-Xxxxxx Healthcare", the "Spectrum" trademark, the "Whitehall Temple
Design" logo, the "Spectrum" design xxxx as identified on SCHEDULE 3.6 and any
derivatives or variations thereof used by Sellers on or before the Closing Date.
1.48 "TRANSITION SERVICES AGREEMENT" shall mean the transition services
agreement between Sellers or their Affiliates and Buyers to be entered into
prior to Closing based on the business terms contained in the term sheet set
forth on EXHIBIT D hereto.
ARTICLE 2
PURCHASE AND SALE; CLOSING; ALLOCATION
2.1 PURCHASE AND SALE. Upon the terms and subject to conditions of this
Agreement, (a) Sellers shall sell, assign, transfer and deliver to Buyers the
Purchased Assets, and (b) Buyers shall purchase and accept the Purchased Assets
from Sellers, subject to the Assumed Liabilities, for an aggregate purchase
price of Thirty-Six Million Dollars ($36,000,000.00) (the "Purchase Price"). The
Purchase Price shall be payable as provided in Section 2.4(a) and (b).
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2.2 ASSUMPTION OF LIABILITIES. With respect to the purchase and sale of
the Purchased Assets, in addition to payment of the Purchase Price and pursuant
to assumption agreements to be executed and delivered in accordance with Section
2.4(h), Buyers will assume at the Closing and subsequently, in due course, pay,
honor and discharge (except where it is contesting in good faith) all of the
Assumed Liabilities.
2.3 THE CLOSING. Unless this Agreement shall have been terminated, on the
terms and subject to the conditions of this Agreement, the closing of the sale
and purchase of the Purchased Assets and the consummation of the other
transactions contemplated hereby (the "Closing") shall take place at the offices
of AHP, Five Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 on the later of February
10, 1997 or the third business day after the date on which the last to be
fulfilled or waived of the conditions set forth in Article 7 (other than those
contemplated to be satisfied at Closing) shall be fulfilled or waived in
accordance with this Agreement or at such other time, date or place as the
parties may mutually agree upon in writing (the "Closing Date"). At the Closing,
the parties to this Agreement will exchange funds, certificates and other
documents specified in this Agreement. For purposes of this Agreement the
Closing will be treated as if it occurred at 12:01 a.m. on the Closing Date.
2.4 DELIVERIES BY Buyers. At the Closing, Buyers shall deliver, or cause
to be delivered, to Sellers the following:
(a) cash in the amount of Thirty Million Dollars ($30,000,000) payable
by wire transfer in immediately available funds to a U.S. bank account of
Sellers (which account shall be designated by Sellers no fewer than two business
days prior to the Closing Date);
(b) the Promissory Note duly executed by Selfcare;
(c) the certificate executed by an authorized officer of each of
Buyers required to be delivered pursuant to Section 7.2(c);
(d) a certificate, executed by an authorized officer of each of
Buyers, certifying (i) the due organization and good standing of Buyers, (ii)
the certificate of incorporation of Selfcare and Acquisition Corp., each
certified by the Secretary of State of Delaware; (iii) the corporate resolutions
of Buyers authorizing the transactions contemplated by this Agreement, and (iv)
the incumbency of officers of each of Buyers executing this Agreement, the
Promissory Note and the other agreements, instruments or certificates delivered
at the Closing;
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(e) the Transition Services Agreement, duly executed by Buyers;
(f) the Supply Agreements, duly executed by Buyers;
(g) the Trademark License Agreement, duly executed by Buyers;
(h) such instruments of assumption and other certificates, instruments
or documents, in form and substance reasonably acceptable to Sellers, as may be
necessary to effect Buyers' assumption under Applicable Laws of the Assumed
Liabilities; and
(i) such other instruments and documents, in form and substance
reasonably acceptable to Buyers and Sellers, as may be necessary to effect the
Closing.
2.5 DELIVERIES BY SELLERS. At the Closing, Sellers shall deliver to Buyers
the following:
(a) the certificate executed by authorized officers of each of Sellers
required to be delivered pursuant to Section 7.3(c);
(b) a certificate, executed by an authorized officer of each of the
Sellers, certifying (i) the due organization and good standing of Sellers, (ii)
the corporate resolutions of Sellers authorizing the transactions contemplated
by this Agreement, and (iii) the incumbency of officers of the Sellers executing
this Agreement and the other agreements, instruments or certificates delivered
upon the Closing;
(c) the Transition Services Agreement, duly executed by Sellers;
(d) the Supply Agreements, duly executed by Sellers;
(e) the Trademark License Agreement, duly executed by Sellers;
(f) bills of sale and any other appropriate instruments of sale and
conveyance, in form and substance reasonably acceptable to Buyers, transferring
under Applicable Laws all tangible personal property included in the Purchased
Assets to Buyers or its Affiliates;
(g) bills of sale and any other appropriate instruments of sale and
conveyance, in form and substance reasonably acceptable to Buyers, transferring
under Applicable Laws all Intellectual Property included within the Purchased
Assets to Buyers or its Affiliates, including assignments of
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trademarks suitable for recording with the United States Patent and Trademark
Office.
(h) assignments, in form and substance reasonably acceptable to
Buyers, assigning to Buyers or its Affiliates under Applicable Laws all
Contracts; and
(i) such other instruments and documents, in form and substance
reasonably acceptable to Buyers and Sellers, as may be necessary to effect the
Closing.
2.6 FURTHER ASSURANCES.
(a) From time to time, at Buyers' or Sellers' request and in
accordance with Section 6.2, whether at or after the Closing Date, Buyers or
Sellers, as the case may be, shall, and shall cause their respective Affiliates
to, execute and deliver such further instruments of conveyance, transfer and
assignment, cooperate and assist in providing information for making and
completing regulatory filings, and take such other actions as Buyers or Sellers,
as the case may be, may reasonably require of the other party to more
effectively assign, convey and transfer to such party the Purchased Assets and
to assume the Assumed Liabilities, as contemplated by this Agreement.
(b) To the extent that the assignment of any Contract to Buyers
hereunder shall require the consent of the other party thereto, this Agreement
shall not constitute an agreement to assign the same if an attempted assignment
would constitute a breach thereof. Sellers will use their diligent efforts to
obtain the consent of the other parties to such assumed Contracts for the
assignment thereof to Buyers, PROVIDED, HOWEVER, that Sellers shall not be
obligated to make any payment or take any other detrimental action to obtain any
such consent. If any such consent is not obtained, Sellers shall, and shall
cause their Affiliates to, cooperate with Buyers in any arrangement reasonably
requested by Buyers to provide for Buyers the same or similar benefits under any
such Contract, including the enforcement at the cost of and for the benefit of
Buyers of any and all rights thereunder of Sellers or their respective
Affiliates against the other party thereto.
2.7 ALLOCATION.
(a) Prior to Closing, Buyers and Sellers shall use diligent efforts to
agree in good faith upon a statement (the "Allocation Statement") setting forth
the value of the Purchased Assets, which shall be used for the allocation of the
Purchase Price among the Purchased Assets.
(b) The Sellers and Buyers covenant and agree to report for Tax
purposes the allocation of such Purchase Price
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among the Purchased Assets in a manner entirely consistent with the Allocation
Statement and agree to act in accordance with such Allocation Statement and in
the filing of all tax returns (including, without limitation, filing Form 8594
with its federal income tax return for the taxable year that includes the date
of the Closing) and in the course of any tax audit, tax review or tax litigation
relating thereto.
2.8 SELLERS' RETENTION OF CERTAIN RIGHTS. Notwithstanding anything to the
contrary contained in this Agreement other than the provisions of this Section
2.8, Sellers shall retain rights in and to the Know-how and trade secrets for
the following purposes: to utilize the Know-how and trade secrets (a) without
restriction outside the Territory and (b) within the Territory (i) to
manufacture, distribute, promote, advertise, use, and/or sell products other
than the Products, and (ii) to manufacture, distribute, promote, advertise, use
and/or sell Products for direct export by Sellers and/or their Affiliates
outside of the Territory; provided however, that nothing contained herein shall
permit Sellers and/or their Affiliates to promote, advertise or sell in the
Territory the Products to retail customers.
This Agreement shall not affect the rights of Sellers, and/or their
Affiliates, to utilize in countries and territories other than the Territory,
Sellers' trademarks, copyrights, trade dress, product shapes, packaging, label,
product, and other designs and indicia of Sellers' ownership.
Sellers agree not to sell or distribute products (which if sold or
distributed within the Territory would infringe Buyers' rights in the
Trademarks) to any Person that Sellers and/or their Affiliates know (i) intends
to export or sell, directly or indirectly, or (ii) does export or sell, directly
or indirectly, such products into the Territory.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to Buyers as
follows:
3.1 ORGANIZATION, GOOD STANDING, POWER, ETC. Each Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation. Each Seller has the requisite corporate power and
authority to execute and deliver this Agreement and the other agreements
contemplated hereby, and each Seller has all requisite corporate power to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement by each Seller, the execution and delivery by each
Seller of the other agreements contemplated hereby, and the consummation by each
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Seller of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of each Seller and no
other or further corporate proceedings will be necessary for the execution and
delivery of such agreements by each Seller, the performance by each Seller of
its obligations hereunder and thereunder and the consummation by each Seller of
the transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by each Seller and constitutes a legal, valid and binding
obligation of each Seller enforceable against such Seller in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws of general applicability relating to or affecting
the enforcement of creditors' rights and general principles of equity.
3.2 GOVERNMENTAL AUTHORIZATION; REQUIRED CONSENTS. The execution, delivery
and performance by Sellers of this Agreement and the other agreements
contemplated hereby and the consummation by Sellers of the transactions
contemplated hereby and thereby will not require any notice to, filing with, or
the consent, approval or authorization of, any Person or Governmental Authority,
except as contemplated in Section 6.3 hereof or as set forth in SCHEDULE 3.2,
other than where the failure to obtain such consent, approval or authorization,
or to give or make any such notice or filing, would not be reasonably expected
to have a Material Adverse Effect. Except as contemplated in Section 6.3 hereof
or as set forth in SCHEDULE 3.2, neither the execution, delivery or performance
of this Agreement or of the other agreements contemplated hereby nor the
consummation of the transactions contemplated hereby or thereby will (i) violate
or result in a breach or result in the acceleration or termination of, or the
creation in any third party of the right to accelerate, terminate, modify or
cancel, any Contract or other material obligation or liability to which any of
the Sellers is a party or is bound or to which any of the Purchased Assets are
subject, (ii) conflict with, violate or result in a breach of any provision of
the incorporation documents or by-laws of any of Sellers in any material
respect, or (iii) conflict with or violate any Applicable Laws in any material
respect or court order.
3.3 STATEMENTS OF BRAND INCOME. The audited statements of Net Revenues in
Excess of Direct Expenses for the years ended November 30, 1995 and 1996, are
attached hereto as EXHIBIT F (collectively, the "STATEMENTS OF NET REVENUE").
The information contained in the Statements of Net Revenue fairly present in all
material respects Net Revenues, cost of sales, direct marketing expenses, direct
selling, general and administrative expenses and net revenues in excess of
direct expenses, in conformity with GAAP applied on a consistent basis (except
as may be indicated in the notes thereto) for the periods then ended.
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3.4 ABSENCE OF CERTAIN CHANGES. Except (x) to the extent arising out of or
relating to the transactions contemplated by this Agreement or (y) for matters
listed on SCHEDULE 3.4, since November 30, 1996, (i) the Purchased Assets have
been utilized in the ordinary course of business of Sellers in a manner
consistent with past practice and (ii) other than the general decline in the
business related to the Purchased Assets described on SCHEDULE 3.4, there has
not been any Material Adverse Change or any damage, destruction, loss or claim,
whether or not covered by insurance, or condemnation or other taking adversely
affecting in any material respect the Purchased Assets taken as a whole.
3.5 PROPERTIES.
(a) Except as set forth on SCHEDULE 3.5(a), Sellers have good and
marketable title to all Purchased Assets.
(b) No Purchased Asset is subject to any Encumbrance, except (i)
liens for Taxes, assessments and other governmental charges not yet due and
payable or being contested in good faith; (ii) immaterial mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other like liens arising or incurred
in the ordinary course of business (all items included in items (i) and (ii) are
referred to collectively herein as the "Permitted Encumbrances").
(c) No violation of any Applicable Law relating to the Purchased
Assets currently exists, except for violations which have not had or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
3.6 SUFFICIENCY OF THE PURCHASED ASSETS. Upon the Closing, Buyers will
acquire good and marketable title in and to each of the Purchased Assets, free
and clear of all Encumbrances, except the Permitted Encumbrances. Other than as
described on SCHEDULE 3.6 and except for the Excluded Assets, the Intellectual
Property included in the Purchased Assets constitutes, and on the Closing Date
will constitute, all of the intellectual property (including without limitation,
the Intellectual Property) that Sellers have used, held for use or is necessary
for the use, in the manufacture, use, advertising, promotion, sale and
distribution of the Products in the Territory on the Closing Date.
3.7 LITIGATION. (a) Except as set forth in SCHEDULE 3.7(a), there is no
civil, criminal or administrative action, suit, hearing, proceeding or
investigation pending or, to the knowledge of Sellers, threatened against the
Seller in connection with the Brands, the Purchased Assets or the transactions
contemplated hereby.
(b) Except as set forth in SCHEDULE 3.7(b), the Sellers are not
subject to any order, writ, judgment, award,
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injunction, or decree of any court or governmental or regulatory authority or
any arbitrator or arbitrators relating to the Purchased Assets.
3.8 CONTRACTS. SCHEDULE 3.8(i) sets forth a list, as of the date hereof,
of each Contract. Except as set forth in SCHEDULE 3.8(ii), each Contract is a
valid and binding agreement and is in full force and effect. Except as otherwise
provided in SCHEDULE 3.8(iii), Sellers are not in default and have no knowledge
of any default by the other party thereto under any Contract listed in SCHEDULE
3.8(i). To Sellers' knowledge, there is no assertion by any third party of any
claim of material default or breach under any of the Contracts except for such
claim as would not be reasonably expected to have a Material Adverse Effect.
3.9 INTELLECTUAL PROPERTY RIGHTS.
(a) LIST OF CERTAIN INTELLECTUAL PROPERTY. SCHEDULE 3.9(a) lists all
Intellectual Property that is registered with or issued by the United States
Patent and Trademark Office and the United States Copyright Office. The list
specifies, where applicable, the jurisdictions in which each has been issued or
registered, including the respective registration or application numbers and
names of all registered owners.
(b) NO CONFLICT. To the knowledge of the Sellers, there is no
unauthorized use, infringement or misappropriation of any of the Intellectual
Property by any Person, including without limitation, any employee or former
employee of the Sellers.
To the knowledge of Sellers, except as set forth in SCHEDULE 3.9(b), with
respect to the Intellectual Property, no Person has asserted or threatened, in
writing, to assert any claim:
(i) that the manufacturing, use, sale, marketing, advertising, promotion
or distribution of any one or more of the Purchased Assets infringes
or misappropriates any intellectual property right of any Person;
(ii) adverse to Sellers' use of the Intellectual Property; or
(iii) challenging Sellers' ownership of, or the validity of or right to
enforce, the Intellectual Property.
(c) OWNERSHIP WARRANTY. Except as disclosed on SCHEDULE 3.9(c),
Sellers represent and warrant that:
(i) Sellers own all right, title, and interest in and to the
properties described in Section 1.26(ii) and (iii);
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(ii) Sellers own the properties described in Section 1.26(i) and
(iv);
(iii) no other Person has any ownership interest with respect to
the Trademarks in the Territory; and
(iv) no Intellectual Property is subject to any outstanding
decree, order, judgment, settlement, or stipulation restricting in any manner
the assignment or sale thereof by the Sellers or use or exploitation thereof by
the Buyers in the Territory.
(d) STATUS OF REGISTRATION. All of the Intellectual Property listed on
SCHEDULE 3.9(a) that is issued by, registered with or filed with the U.S. Patent
and Trademark Office or the U.S. Copyright Office has been duly issued by or
registered with or duly filed in such office, as the case may be, and has been
properly maintained and renewed in accordance with all applicable provisions of
applicable law and regulations in the U.S. To the best of Sellers' knowledge,
the Sellers have taken, and where applicable, not failed to take, reasonable
precautions to (i) protect their rights in the Trademarks and (ii) maintain the
confidentiality of the proprietary Know-how. Except as disclosed on SCHEDULE
3.9(d), to the knowledge of Sellers', Sellers are not in breach of any material
provision of any written contract, license, sublicense, assignment or
indemnification which relates to the Intellectual Property and have not taken or
failed to take any action that would preclude or hinder the protection or
enforcement of the Trademarks.
(e) PATENTS. Subject to the provisions of SCHEDULE 3.6, as of the
Closing Date, Sellers neither own nor have acquired any patents (including
applications, renewals, reissues, divisions, continuations,
continuations-in-part, and extensions thereof) which are used or held for use in
the manufacture, promotion, use, advertisement, distribution and/or sale of the
Products in the Territory.
3.10 COMPLIANCE WITH LAW; APPLICABLE PERMITS. Except as set forth in
SCHEDULE 3.7(b) or SCHEDULE 3.10, the Purchased Assets are being utilized in
compliance with all Applicable Laws, except where the failure so to comply would
not be reasonably expected to have a Material Adverse Effect. Sellers have all
Applicable Permits necessary to own, operate or lease their respective
properties and to utilize the Purchased Assets as currently conducted, other
than those the absence of which would not be reasonably expected to have a
Material Adverse Effect. There are no proceedings pending or, to the knowledge
of Sellers, threatened which may result in the revocation, cancellation or
suspension of any such Applicable Permits, except those the
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absence of which would not be reasonably expected to have a Material Adverse
Effect.
3.11 FDA MATTERS. Except as set forth on SCHEDULE 3.11, none of the
Products is being manufactured, assembled (other than the manufacture or
assembly in connection with research and development) or sold by the Sellers
which at the date hereof would require any approval of the United States Food
and Drug Administration (the "FDA") or any other Governmental Authority for the
purpose for which they are being manufactured, assembled or sold which approval
has not been obtained. Except as set forth on SCHEDULE 3.11, the Brands now
being commercially distributed by Sellers in the Territory meet the applicable
legal requirements of any such jurisdiction in all material respects and all
requisite Applicable Permits have been duly obtained and are in full force and
effect. There is no action or proceeding by the FDA or any other Governmental
Authority, including, but not limited to, recall procedures, pending or, to the
knowledge of Sellers, threatened against Sellers relating to safety or efficacy
of any of the Products.
3.12 INSURANCE. All of the policies of insurance and bonds presently in
force with respect to the Purchased Assets are listed in SCHEDULE 3.12.
3.13 BROKER'S FEES. Except for the retention of Xxxxxxxx & Xxxxxxxx and
Xxxxxx Xxxx Incorporated, the fees and expenses of which will be paid by Sellers
pursuant to Section 6.1, the Sellers have not employed any broker, finder or
investment banker or incurred any liability for any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement.
3.14 WARRANTIES AND RECALLS. There are no current general recall campaigns
or programs relating to the Products ("Recall Campaigns"), except as set forth
on SCHEDULE 3.15. Except as set forth on SCHEDULE 3.7(a) or SCHEDULE 3.14, no
product liability or similar claims or proceedings ("Product Liability Claims")
are pending or have been instituted or, to the knowledge of Sellers, threatened
in writing since January 1, 1994.
3.15 CUSTOMERS. SCHEDULE 3.16 sets forth a list as of the date hereof of
the name of (i) each of Sellers' twenty most significant customers (in terms of
payments by such persons in 1996) (a "Customer"). There is no pending material
dispute with any Customer and, to the knowledge of Sellers, no Customer has
threatened in writing to decrease materially its purchases of the Products.
3.16 DEPOSITS AND PREPAYMENTS. Sellers have not received any payments or
deposits from Customers for products relating to the Products not yet shipped by
Sellers to such Customers.
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3.17 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations
and warranties of Sellers expressly set forth in this Agreement, neither Sellers
nor any other Person makes any other express or implied representation or
warranty on behalf of Sellers, or otherwise with respect to the Purchased
Assets.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each of the Buyers hereby jointly and severally represent and warrant to
Sellers that:
4.1 CORPORATE ORGANIZATION. Each of the Buyers is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Each of the Buyers has the requisite corporate power and authority to own,
operate or lease the properties that it purports to own, operate or lease and to
carry on its business as it is now being conducted and is duly licensed or
qualified as a foreign corporation in each domestic or foreign jurisdiction in
which the nature of the business conducted by it or the character or location of
the properties owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not be
reasonably expected to have a material adverse effect on the business,
operations or financial condition of each of the Buyers and their subsidiaries,
taken as a whole.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of the Buyers has the
requisite corporate power and authority to execute and deliver this Agreement,
the Promissory Note (with respect to Selfcare) and the other agreements
contemplated hereby and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by each of the Buyers of this Agreement, the
Promissory Note (with respect to Selfcare), and the other agreements
contemplated hereby and the consummation by Buyers of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of each of the Buyers and no other corporate
proceeding is necessary for the execution and delivery of this Agreement, the
Promissory Note, or such other agreements contemplated hereby, the performance
by Buyers of their obligations hereunder or thereunder and the consummation by
Buyers of the transactions contemplated hereby and thereby. This Agreement has
been duly executed and delivered by each of the Buyers and constitutes a legal,
valid and binding obligation of Buyers, enforceable against Buyers in accordance
with its terms, except as the same may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws of general applicability relating to
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or affecting the enforcement of creditor's rights and general principles of
equity.
4.3 CAPITALIZATION OF BUYERS (a) As of the date hereof, the authorized
capital stock of Selfcare consists of (i) 40,000,000 shares of Common Stock,
$.001 par value per share, and (ii) 5,000,000 shares of Preferred Stock, $.001
par value per share, of which 10,000 shares are designated as Series A
Convertible Preferred Stock. As of November 13, 1996, (i) 5,874,367 shares of
Common Stock are issued and outstanding, all of which have been validly issued
and are fully paid and non-assessable, and (ii) 5,500 shares of Series A
Convertible Preferred Stock are issued and outstanding, all of which have been
validly issued and are fully paid and non-assessable.
(b) As of the date of this Agreement, the authorized capital stock of
Acquisition Corp. consists of 1,000 shares of Common Stock, $.01 par value. As
of the date hereof, 1,000 shares of Common Stock are issued and outstanding, all
of which have been validly issued and are fully paid and non-assessable. All
shares of Acquisition Corp. are owned solely by Selfcare.
4.4 BROKER'S FEES. Except for the retention of Xxxxxxxxx Associates, the
fees and expenses of which will be paid by Buyers pursuant to Section 6.1, none
of Buyers or any of its Affiliates has employed any broker, finder or investment
banker or incurred any liability for any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement.
4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as contemplated by
Section 6.3 hereof, no material filing with, and no material permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Buyers of the transactions contemplated by this
Agreement or the other agreements which Buyers will execute pursuant to the
terms of this Agreement. Except as contemplated by Section 6.3 hereof, the
execution and delivery of this Agreement and such other agreements and the
consummation of the transactions contemplated hereby and thereby will not (x)
conflict with or result in a breach of any of the provisions of the Certificate
of Incorporation or by-laws of Buyers, or (y) contravene in any material respect
any law, rule or regulation of any state, the federal laws of the United States
or any foreign country or any order, writ, judgment, injunction, decree,
determination or award currently in effect that is binding upon Buyers or any of
their subsidiaries or any of their respective properties.
4.6 FINANCING. Buyers will use their commercially reasonable efforts to
receive and furnish a copy to Sellers of a commitment letter (the "Commitment
Letter") from a bank of national or international standing acceptable to Sellers
in their
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reasonable judgement (it being understood that Fleet Bank so qualifies and is
satisfactory to Sellers) in an amount no less than $27 million. Buyers will use
their commercially reasonable efforts to enter into financing (loan or equity)
agreements (the "Financing Agreements") so that the aggregate proceeds of the
bank and/or equity financing (together with Buyers' cash on hand, the
"Financing") will be in an amount sufficient to pay any amounts at Closing
necessary to acquire the Purchased Assets, and to pay all related fees and
expenses required to be borne by Buyers.
4.7 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations
and warranties of Buyers expressly set forth in this Agreement, neither Buyers
nor any other Person makes any other express or implied representation or
warranty on behalf of Buyers.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE CLOSING
Sellers agree that:
5.1 CONDUCT OF THE BUSINESS. From the date hereof until the Closing Date
(a) Sellers shall utilize the Purchased Assets in the ordinary course consistent
with past practice and use their diligent efforts to preserve intact
relationships with third parties, including the Customers. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date,
Sellers will not acquire, sell, lease, license or otherwise dispose of any
Purchased Assets except in the ordinary course consistent with past practice of
Sellers; and (b) without the written consent of Buyers, Sellers will not enter
into any Contract which, had it been in existence on the date hereof, would have
been required to be listed in SCHEDULE 3.8.
5.2 ACCESS TO INFORMATION. From the date hereof until the Closing Date,
Sellers (a) will give Buyers, their counsel, financial advisors, lenders,
auditors and other authorized representatives full access on reasonable notice
and at reasonable times to the books and records of Sellers to the extent
relating to the Brands or the Purchased Assets, (b) will furnish to Buyers, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information to the extent relating to the
Purchased Assets as such Persons may reasonably request and (c) will instruct
counsel and financial advisors of Sellers to cooperate with Buyers in its
investigation of the Purchased Assets PROVIDED that any investigation pursuant
to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of Sellers. In
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connection therewith, the parties will comply with the terms of the
Confidentiality Agreement dated January 10, 1996 between Selfcare and Xxxxxx
Xxxx Incorporated, as agent of AHP, which agreement shall survive the
termination of this Agreement.
5.3 NOTICES OF CERTAIN EVENTS. (a) Sellers shall promptly notify Buyers
of:
(i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental Authority
in connection with the Brands, the Purchased Assets or the transactions
contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to
or involving or otherwise affecting Sellers or the Purchased Assets that,
if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.7 or Section 3.14 or that relate to
the consummation of the transactions contemplated by this Agreement; and
(iv) any notice or other communication (A) from a Customer that the
Customer intends to decrease materially its purchases of the Products or
(B) from a supplier of the Products that the supplier intends to
discontinue supplying, or increase materially the price of, the goods or
services provided by such supplier.
5.4 BUYERS' NOTIFICATION. Buyers shall promptly notify Sellers of (i) all
significant developments relating to the Financing, and (ii) any facts and
circumstances that are reasonably likely to result in (a) any of the conditions
set forth in the Financing Agreements not being satisfied, or (b) the conditions
set forth in Section 7.1(d) not being satisfied.
5.5 CERTAIN ACTIONS. Sellers shall not waive, release, grant or transfer
any Intellectual Property included in the Purchased Assets or any right thereto
or modify or change in any material respect any existing material license,
distribution agreement or other document, in each case, other than in the
ordinary course of business.
ARTICLE 6
ADDITIONAL AGREEMENTS
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The parties hereto agree that:
6.1 EXPENSES. Except as expressly set forth herein, all expenses,
including the fees of any attorneys, accountants, investment bankers or others
engaged by a party, incurred in connection with this Agreement and the
transactions contemplated hereby, shall be paid by the party incurring such
expenses whether or not the transactions contemplated by this Agreement are
consummated.
6.2 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees (i) to use all reasonable efforts to
do, or cause to be done, all things necessary, proper or advisable to consummate
the transactions contemplated by this Agreement and to cooperate with each other
in connection with the foregoing, (ii) to defend all lawsuits or other legal
proceedings challenging this Agreement or the consummation of the transactions
contemplated hereby, (iii) to use all reasonable efforts to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby, and (iv) to
use all reasonable efforts to effect all necessary registrations and filings and
submissions of information required or requested by Governmental Authorities
with respect to the transactions contemplated hereby.
6.3 FILINGS AND AUTHORIZATIONS. The Sellers and Buyers have filed or
supplied or will, as promptly as practicable, file or supply, or cause to be
filed or supplied, all notifications and information required to be filed or
supplied pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR Act") and, if necessary, any other Competition Laws, in
connection with the transactions contemplated by this Agreement. Sellers and
Buyers, as promptly as practicable, (a) will make, or cause to be made, all such
other filings and submissions under Applicable Laws, or to their subsidiaries
and Affiliates, as may be required for them to consummate the transactions
contemplated hereby in accordance with the terms of this Agreement, and (b) will
use reasonable efforts to obtain, or cause to be obtained, all authorizations,
approvals, consents and waivers from all Governmental Authorities necessary to
be obtained by them, or their Affiliates, in order for them so to consummate
such transactions.
6.4 INFORMATION FOR OTHER FILINGS. The parties represent to each other
that the information provided and to be provided by Buyers and Sellers,
respectively, for use in any document to be filed under the HSR Act or any other
Competition Law, shall, at the respective times such documents are filed with
such Governmental Authority, and if so required and on the Closing Date, be true
and correct in all material respects and shall not omit to state any material
fact required to be stated therein or
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necessary in order to make such information not false or misleading in any
material respect, and Sellers and Buyers each agree that if so required to so
correct any such information provided by it for use in such documents that shall
have become false or misleading in any material respect.
6.5 TAX MATTERS.
(a) Buyers and Sellers agree to furnish or cause to be furnished to
each other, upon request, as promptly as practicable, such information and
assistance relating to the Purchased Assets as is reasonably necessary for the
filing of all returns, and making of any election related to Taxes, the
preparation for any audit by any taxing authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax return. Sellers and
Buyers shall cooperate with each other in the conduct of any audit or other
proceeding related to Taxes involving the Purchased Assets and each shall
execute and deliver such documents as are necessary to carry out the intent of
this Section 6.5(a).
(b) All personal property taxes and similar ad valorem obligations
levied with respect to the Purchased Assets for a taxable period which includes
(but does not end on) the Closing Date (collectively, the "APPORTIONED
OBLIGATIONS") shall be apportioned between Sellers and Buyers as of the Closing
Date based on the number of days of such taxable period included in the
Pre-Closing Tax Period and the number of days of such taxable period included in
the Post-Closing Period. Sellers shall be liable for the proportionate amount of
such taxes that is attributable to the Pre-Closing Tax Period, and Buyers shall
be liable for the proportionate amount of such taxes that is attributable to the
Post-Closing Tax Period. Within 60 days after the Closing, Sellers and Buyers
shall present statements to each other setting forth the amount of reimbursement
to which each is entitled under this Section 6.5(b) together with such
supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within 30 days after the delivery of such statement. Thereafter, Sellers shall
notify Buyers upon receipt of any xxxx for personal property taxes relating to
the Purchased Assets, part or all of which are attributable to the Post-Closing
Tax Period, and shall promptly deliver such xxxx to Buyers who shall pay the
same to the appropriate Taxing Authority. In the event that either Sellers on
the one hand or Buyers on the other hand shall thereafter make a payment for
which it is entitled to reimbursement under this Section 6.5(b), the other party
shall make such reimbursement promptly but in no event later than 30 days after
the presentation of a statement setting forth the amount of reimbursement to
which the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement.
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Any payment required under this Section and not made within 10 days of delivery
of the statement shall bear interest at the rate per annum determined, from time
to time, under the provisions of Section 6621(a)(2) of the Code from the
delivery date for each day until paid.
(c) Any transfer, documentary, sales, use or other Taxes assessed upon
or with respect to the transfer of the Purchased Assets to Buyers and any
recording or filing fees with respect thereto shall be borne equally by Sellers
on the one hand and Buyers on the other.
6.6 USE OF CERTAIN NAMES. Following the Closing, Buyers shall revise
product literature and labeling (including stickering), change packaging and
stationery, and otherwise discontinue use of the names "American Cyanamid,"
"American Home Products," "Lederle," "X.X. Xxxxxx," "Xxxxxxxxx-Xxxxxx
Healthcare," "Whitehall" and derivatives and variations thereof in the manner
set forth in the Supply Agreements.
6.7 OTHER AGREEMENTS. At the Closing, Sellers and Buyers will enter into
the Supply Agreements, the Trademark License Agreement and Transition Services
Agreement and Selfcare will execute and deliver the Promissory Note.
6.8 TERMINATION OF SALE DISCUSSIONS. Upon the execution of this Agreement,
Sellers shall promptly terminate all pending discussions with prospective buyers
of the Purchased Assets other than Buyers. During the period between the date
hereof and the Closing, unless this Agreement is terminated by either party in
accordance with the provisions hereof, neither Sellers nor any of their
respective officers, directors, Affiliates, employees or agents will, directly
or indirectly, solicit any offers, bids or indications of interest, with respect
to the Purchased Assets nor shall Sellers furnish, or authorize any agent or
representative to furnish, any information concerning the Purchased Assets to
any third party.
6.9 ACCESS TO RECORDS AFTER EFFECTIVE TIME. (a) For a period of six years
after the Closing, or, if later, until the end of the statute of limitations
period with respect to Taxes regarding the Purchased Assets, Sellers and their
representatives shall have reasonable access to all of the books and records of
the Buyers relating to the Purchased Assets with respect to periods prior to the
Closing Date to the extent that such access may reasonably be required by
Sellers in connection with matters relating to or affected by the operations of
the Purchased Assets prior to the Closing Date. Buyers shall afford such access
upon receipt of reasonable advance notice and during normal business hours.
Sellers shall be solely responsible for any costs and expenses incurred by them
pursuant to this Section 6.9. If Buyers shall desire to dispose of any of such
books and records
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prior to the expiration of such six-year period (or, if later, until the end of
the statute of limitations period with respect to Taxes regarding the Purchased
Assets), the Buyers shall, prior to such disposition, give Sellers a reasonable
opportunity, at Sellers' expense, to segregate and remove such books and records
as Sellers may elect.
(b) To the extent not included in the Books and Records, for a period
of six years after the Closing Date, or until the end of the period of the
statute of limitations with respect to Taxes regarding the Purchased Assets,
Buyers, and their respective representatives shall have reasonable access to all
of the books and records relating to the Purchased Assets. Such access shall be
afforded by Sellers and their Affiliates upon receipt of reasonable advance
notice and during normal business hours. Buyers shall be solely responsible for
any costs and expenses incurred by them pursuant to this Section 6.9(b). If
Sellers or any of their Affiliates shall desire to dispose of any of such books
and records prior to the expiration of such six-year period, Sellers shall,
prior to such disposition, give Buyers and its Affiliates opportunity, at
Buyers's expense, request delivery of any such books and records to Buyers.
6.10 NON-SOLICITATION. Until the first anniversary of the Closing Date,
Buyers agree that they and their Affiliates will not, directly or indirectly,
for their own benefit or as agent for another, without the prior consent of
Sellers, hire any person employed by Sellers with whom Buyers have had contact
in connection with this transaction or solicit to leave the employ of Sellers;
PROVIDED THAT, such covenant shall not restrict Buyers and their Affiliates from
conducting a general employee solicitation act not targeted at Sellers or their
Affiliates. This provision does not survive termination of the Agreement.
ARTICLE 7
CONDITIONS
7.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. The obligation of each party to effect the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions:
(a) all consents and approvals of Governmental Authorities, if any,
necessary to permit the consummation of the transactions contemplated by this
Agreement shall have been obtained and any waiting period (including any
extension thereof) applicable to the consummation of the Agreement under the HSR
Act or under other Competition Laws shall have expired or been terminated;
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(b) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a Governmental
Authority or executive order promulgated or enacted by any Governmental
Authority shall be in effect that would restrain or otherwise prevent the
consummation of the transactions contemplated by the Agreement;
(c) Buyers and Sellers shall have entered into the Transition Services
Agreement, the Supply Agreements and the Trademark License Agreement; and
(d) Buyers shall have obtained funds from the Financing and/or cash
on hand sufficient to enable it to pay the cash portion of the Purchase Price
for the Purchased Assets.
7.2 CONDITIONS TO THE OBLIGATION OF SELLERS. The obligation of Sellers to
effect the transactions contemplated by this Agreement is subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Buyers shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by it hereunder at or prior to the
Closing Date;
(b) the representations and warranties of Buyers in this Agreement
shall be accurate in all material respects, as of the Closing Date with the same
force and effect as though made at such time, except for changes contemplated by
this Agreement and except for those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as of
such date);
(c) Buyers shall have furnished to Sellers a certificate, dated as of
the Closing Date, signed by a duly authorized officer of each of the Buyers to
the effect that all conditions set forth in Sections 7.2(a) and (b) have been
satisfied; and
(d) the Board of Directors of AHP shall have approved the transactions
contemplated by this Agreement; provided, however, that the transaction shall be
presented to the AHP Board of Directors for consideration at the next scheduled
Board meeting following Buyers' delivery of a Commitment Letter to AHP
satisfactory to AHP in its reasonable judgment.
7.3 CONDITIONS TO THE OBLIGATION OF BUYERS. The obligation of Buyers to
effect the transactions contemplated by this Agreement is subject to the
fulfillment at or prior to the Closing Date of the following conditions:
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(a) Sellers shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by them hereunder at or prior to the
Closing;
(b) the representations and warranties of Sellers in this Agreement,
to the extent qualified as to materiality shall be accurate in all respects,
and, to the extent not so qualified, shall be accurate in all material respects,
as of the Closing Date with the same force and effect as though made at such
time, except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such date);
(c) Sellers shall have furnished to Buyers a certificate, dated as of
the Closing Date, signed by a duly authorized officer of each of the Sellers to
the effect that all conditions set forth in Sections 7.3(a) and (b) have been
satisfied;
(d) The consents of third parties, including Governmental Authorities,
set forth in SCHEDULE 7.3(d), shall have been obtained or arrangements shall
have been made reasonably satisfactory to Buyers and Sellers to allow Buyers to
receive substantially the same economic benefits as if all such consents have
been obtained; and
(e) Since the date of this Agreement, there shall not have occurred a
Material Adverse Effect.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION. (a) Subject to Section 8.3, Sellers shall jointly and
severally indemnify, defend and hold harmless Buyers and its Affiliates, and
their respective officers, directors, employees and controlling Persons from any
liability, damage, deficiency, loss, judgments, assessments, cost or expense,
including reasonable attorneys' fees and costs of investigating and defending
against lawsuits, complaints, actions or other pending or threatened litigation
(being hereafter referred to in this Article VIII as "Costs"), arising from or
attributable to:
(i) The breach of any representation or warranty made by Sellers in
this Agreement;
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(ii) Any failure of Sellers duly to perform or observe any covenant or
agreement to be performed or observed by Sellers pursuant to this
Agreement;
(iii) The Excluded Liabilities;
(iv) Except as otherwise specifically set forth in the Supply
Agreement, all Product Liability claims directly related to products
manufactured and sold by Sellers prior to Closing;
(v) All obligations for the return of Products returned subsequent to
the Closing Date but prior to the nine-month anniversary of the Closing
Date which the customer has previously taken title to, or otherwise
accepted for delivery, in an amount not to exceed EIGHT HUNDRED FIFTY
THOUSAND DOLLARS ($850,000), it being understood that for purposes of
satisfying the indemnity contained herein, such returns shall be valued at
the price paid by such customer for such returned Product, and Buyers shall
remit to Sellers any consideration received after such return for such
returned Product; and
(vi) All obligations for the redemption of coupons issued prior to
Closing but redeemed prior to the nine-month anniversary of the Closing
Date, in an amount not to exceed ONE HUNDRED THOUSAND DOLLARS ($100,000).
(b) Buyers shall jointly and severally indemnify and hold harmless
Sellers, their respective officers, directors, employees and Affiliates from
Costs arising from or attributable to:
(i) The breach of any representation or warranty made by Buyers in
this Agreement;
(ii) Any failure of Buyers duly to perform or observe any covenant or
agreement to be performed or observed by Buyers pursuant to this Agreement;
(iii) The Assumed Liabilities;
(iv) Except as specifically set forth in the Supply Agreements, all
Product Liability claims related to products manufactured or sold by Buyers
or its Affiliates on or after the Closing; and
(v) Except to the extent indemnification is provided for in Section
8.1(a)(v), all obligations for Products sold prior to or subsequent to the
Closing Date and returned subsequent to the Closing Date.
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(c) Sellers and Buyers shall indemnify the other for all Taxes for the
periods and in the manner described in Section 6.5 which shall be the sole and
exclusive basis of indemnity for Taxes under this Agreement.
8.2 PROCEDURES.
(i) Promptly after the receipt by any Person entitled to indemnity
hereunder of notice under this paragraph 8.2, of (a) any claim or (b) the
commencement of any action or proceeding, such Person (the "Aggrieved
Party") will, if a claim with respect thereto is to be made against any
party obligated to provide indemnification pursuant to this Article 8 (the
"Indemnifying Party"), give such Indemnifying Party written notice of such
claim or the commencement of such action or proceeding and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting from such claim, and, upon such assumption, shall
cooperate fully with the Indemnifying Party in the conduct of such defense.
Failure by the Indemnifying Party to notify the Aggrieved Party of its
election to defend any such action within a reasonable time, but in no
event more than fifteen days after notice thereof shall have been given to
the Indemnifying Party, shall be deemed a waiver by the Indemnifying Party
of its right to defend such action. If the Indemnifying Party assumes the
defense of any such claim or litigation resulting therefrom, the
obligations of the Indemnifying Party as to such claim shall be limited to
taking all steps reasonably necessary in the defense or settlement of such
claim or litigation resulting therefrom. The Aggrieved Party may
participate, at its expense, in the defense of such claim or litigation
provided that the Indemnifying Party shall direct and control the defense
of such claim or litigation. The Indemnifying Party shall not, in the
defense of such claim or any litigation resulting therefrom, consent to
entry of any judgment, except with the written consent of the Aggrieved
Party, or enter into any settlement, except with the written consent of the
Aggrieved Party, which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Aggrieved Party of a
release from all liability in respect of such claim or litigation. In
addition, all awards and costs payable by a third party to the Aggrieved
Party or the Indemnifying Party previously paid by an Indemnifying Party
shall belong to the Indemnifying Party.
(ii) If the Indemnifying Party shall not assume the defense of any
such claim or litigation resulting therefrom, the Aggrieved Party may
defend against such claim or litigation in such manner as it may deem
appropriate and, unless the Indemnifying Party shall deposit with the
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28
Aggrieved Party a sum equivalent to the total amount demanded (subject to
the limitation set forth in Section 8.3(b)) in such claim or litigation
less the Minimum Loss, or shall deliver to the Aggrieved Party a surety
bond in form and substance reasonably satisfactory to the Aggrieved Party
in such amount, the Aggrieved Party may settle such claim or litigation on
such terms as it may deem appropriate, and the Indemnifying Party shall
promptly reimburse the Aggrieved Party for the amount of all expenses,
legal or otherwise, incurred by the Aggrieved Party in connection with the
defense against or settlement of such claim or litigation. If no settlement
of such claim or litigation is made, the Indemnifying Party shall promptly
reimburse the Aggrieved Party for the amount of any judgment rendered with
respect to such claim or in such litigation and of all expenses, legal or
otherwise, incurred by the Aggrieved Party in the defense against such
claim or litigation subject to the limitations set forth in Article 8.
8.3 LIMITATIONS. (a) An Aggrieved Party shall not be entitled to recover
any Costs under Section 8.1(a)(i), (ii) and (iv) until the aggregate amount of
the Costs suffered by the Aggrieved Party thereunder shall exceed $350,000.00
(the "Minimum Loss"), at which time the indemnification provided under Section
8.1(a)(i), (ii) and (iv) shall apply to all Costs in excess of the Minimum Loss,
and (b) the maximum liability under Section 8.1(a)(i), (ii) and (iv) or
8.1(b)(i) and (ii), as the case may be, for an Indemnifying Party shall not
exceed $18,000,000.00 in the aggregate. Solely for purposes of Article 8, if a
breach of representation or warranty has occurred in accordance with its terms
(including giving effect to any materiality qualifications), in determining the
amount of Costs resulting therefrom, such representation or warranty shall be
read and interpreted as if any materiality qualifications were not contained
therein.
8.4 INDEMNIFICATION AS SOLE REMEDY. To the fullest extent permitted by
law, the indemnification provided in this Article 8, subject to the limitations
set forth herein, shall be the exclusive post-Closing remedy for damages
available to any Aggrieved Party.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by mutual written consent of Buyers and Sellers;
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29
(b) by Buyers or Sellers if the Closing shall not have occurred on or
prior to February 28, 1997, PROVIDED, HOWEVER, that a party shall not have the
right to terminate under this Section 9.1(b) if such party's (or such party's
Affiliates) failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in the failure of the Closing to occur on or before such
date;
(c) subject to Section 6.3, by Buyers or Sellers if a court of
competent jurisdiction or Governmental Authority shall have issued an order,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable; or
(d) by Sellers at any time after February 6, 1997 if Sellers have not
received a copy of the Commitment Letter satisfactory to Sellers in their
reasonable judgement.
The date on which this Agreement is terminated pursuant to any of the
foregoing subsections of this Section 9.1 is herein referred to as the
"Termination Date."
9.2 EFFECT OF TERMINATION. Except as set forth in Section 5.2, upon the
termination of this Agreement pursuant to Section 9.1, this Agreement shall
forthwith become null and void, except that nothing herein shall relieve any
party from liability for breach of this Agreement prior to such termination and
the provisions of Articles 8 and 10 shall survive such termination with respect
to any such breach.
ARTICLE 10
GENERAL PROVISIONS
10.1 PUBLIC STATEMENTS. So long as this Agreement is in effect, none of the
parties hereto shall issue or cause the publication of any press release or
other announcement with respect to this Agreement or the transactions
contemplated hereby without consulting with and obtaining the consent of the
other party which shall not be unreasonably withheld or delayed; PROVIDED,
HOWEVER, that such consent shall not be required where such release or
announcement is required by applicable law.
10.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by reputable overnight courier or certified mail (return receipt
requested) or sent by telecopier (confirmed thereafter by certified mail) to the
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parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) if to Sellers:
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Senior Vice President
Telecopier Number: (000) 000-0000
with a copy to:
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Senior Vice President and General
Counsel
Telecopier Number: (000) 000-0000
(b) if to Buyers:
Selfcare, Inc.
000 Xxxxxxxx Xx.
Xxxxxxx, XX 00000
Attention: President
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxx, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Xx.
Telecopier Number: (000) 000-0000
Notice so given shall (in the case of notice so given by mail) be
deemed to be given and received on the third calendar day after mailing or the
next business day if sent by a reputable overnight courier and (in the case of
notice so given by telecopier or personal delivery) on the date of actual
transmission or (as the case may be) personal delivery.
10.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the parties hereto shall survive the Closing
and shall remain in full force and effect for a period of 18 months after the
Closing Date except for those relating to Taxes, which representations and
warranties shall survive until the period of the applicable statute of
limitations has expired. Except for claims relating to Taxes, in no event shall
any amounts be recovered from an Indemnifying Party under Article 8 or otherwise
for any breaches of representations or warranties for which a written notice of
claim specifying in reasonable detail the specific nature of the Costs
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31
and the estimated amount of such Costs ("Claim Notice") is not delivered to the
other party prior to the close of business on the 18 month anniversary date of
the Closing Date, and the indemnities related to breaches of representations and
warranties granted by the Sellers and Buyers in Article 8 shall terminate 18
months after the Closing Date; PROVIDED, HOWEVER, that such indemnities shall
survive with respect only to the specific matter that is the subject of any
Claim Notice delivered in good faith within such 18 month period and otherwise
in compliance with the requirements of Article 8 until the earlier to occur of
(A) the date on which a final nonappealable resolution of the matter described
in such Claim Notice has been reached or (B) the date on which the matter
described in such Claim Notice has otherwise reached final resolution.
10.4 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
10.5 WAIVER. At any time prior to the Closing, any term, provision or
condition of this Agreement may be waived in writing (or the time for
performance of any of the obligations or other acts of the parties hereto may be
extended) by the party that is entitled to the benefits thereof.
10.6 PARTIES IN INTEREST. This Agreement may not be assigned by a party
without the prior written consent of the other parties hereto; PROVIDED,
HOWEVER, that Buyers may assign its rights and obligations to an Affiliate of
Buyers. This Agreement shall not run to the benefit of or be enforceable by any
person other than a party to this Agreement and, subject to the first sentence
of this Section, its successors and assigns PROVIDED, HOWEVER, the persons
entitled to indemnification under Article 8 shall be beneficiaries of such
provisions.
10.7 ENTIRE AGREEMENT; GOVERNING LAW; MISCELLANEOUS. This Agreement
(including the documents and instruments referred to herein) constitutes the
entire agreement and supersedes all other prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof; is not intended to confer upon any other person any
rights or remedies hereunder; and shall be governed in all respects, including
validity, interpretation and effect, by the internal laws of the State of New
York without giving effect to the principles of conflicts of laws thereunder.
This Agreement may be executed in one or more counterparts which together shall
constitute a single agreement. If any provisions of this Agreement shall be held
to be illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification shall
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32
render it legal, valid and enforceable, then this Agreement shall be construed
as if not containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.
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33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
AMERICAN CYANAMID COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name:
Title:
X.X. XXXXXX COMPANY, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name:
Title:
SELFCARE, INC.
By: /s/
-----------------------------------
Name:
Title:
SELFCARE ACQUISITION CORP.
By: /s/
-----------------------------------
Name:
Title:
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
AMERICAN HOME PRODUCTS CORPORATION
By:
-----------------------------------
Name:
Title:
AMERICAN CYANAMID COMPANY
By:
-----------------------------------
Name:
Title:
X.X. XXXXXX COMPANY, INCORPORATED
By:
-----------------------------------
Name:
Title:
SELFCARE, INC.
By: /s/ XXX XXXXXXXXX
-----------------------------------
Name: XXX XXXXXXXXX
Title: CEO
SELFCARE ACQUISITION CORP.
By: /s/ XXX XXXXXXXXX
-----------------------------------
Name: XXX XXXXXXXXX
Title: CEO
35
Direct Manufacture
MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION
Exhibit B(1)
SUPPLY AGREEMENT
AGREEMENT, effective this _____ day of ________, 1997 ("Effective Date") by
and between AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation ("AHP"),
AMERICAN CYANAMID COMPANY, a Maine corporation, ("ACY") and X.X. Xxxxxx Company,
Incorporated, a Delaware corporation ("X.X. Xxxxxx" and together with AHP and
ACY, "Sellers") and SELFCARE, INC., a Delaware corporation ("SelfCare") and
SELFCARE ACQUISITION CORP., a wholly owned subsidiary of SelfCare, Inc., a
Delaware corporation (together with SelfCare, "Buyers").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Sellers are engaged, among other things, in the marketing and sale
of certain over-the-counter products sold in the vitamin and nutritional
supplement categories;
WHEREAS, Buyers desire to purchase certain assets of Sellers relating to
such products in the Territory (as hereinafter defined), and Sellers desire to
sell such assets to Buyers;
36
- 2 -
WHEREAS, Sellers and Buyers have entered into an agreement with respect to
the purchase of such assets ("Asset Purchase Agreement");
WHEREAS, Buyers wish to secure a short term supply of such products and
desires Sellers to manufacture and furnish Buyers with such supply; and
WHEREAS, Sellers desire to manufacture and furnish to Buyers such supply of
products.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 "Act" shall mean the Federal Food Drug and Cosmetic Act, as
amended.
1.2 "Affiliate" shall mean any individual, corporation or other entity
that, directly or indirectly, through stock ownership or otherwise, controls, is
controlled by, or is under
37
- 3 -
common control with, the designated party, but only for so long as
the relationship exists.
1.3 "Current Products" shall mean Products having packaging bearing
the names of the Sellers or their Affiliates or any trademarks or tradedress of
Sellers not included as Purchased Assets as defined in the Asset Purchase
Agreement.
1.4 "Effective Date" shall be the date first written above.
1.5 "FDA" shall mean the United States Food and Drug Administration,
any of its successor agencies or departments, or any other agency serving the
same or similar function.
1.6 "Loss" or "Losses" shall mean all liability claims, demands,
damages, actions, suits, and judgments instituted by third parties against
either of the parties hereunder attributable to bodily injury, sickness,
disease, death, injury to property, infringement of intellectual property rights
or otherwise, including, without limitation, reasonable attorney's fees and
investigation and other costs.
1.7 "Product(s)" shall mean the vitamin and nutritional supplement
products defined in the Specifications (as hereinafter defined). The identities
of the Products are set forth in EXHIBIT A. Products included in Exhibit A and
indicated as "stock only" are included in this Agreement only for the purpose of
the sale of inventories of such "stock only" products existing as of the
Effective Date. The manufacture and supply of such "stock only"
38
- 4 -
manufactured products are covered by the corresponding Supply Agreement
(Contract Manufacture) executed concurrently herewith.
1.8 "Specifications" shall mean the finished product and process and
manufacturing specifications and instructions, quality assurance and other
applicable procedures, and product descriptions applicable to the Product and/or
the packaging thereof, consistent with Sellers' past practices. The initial
Specifications shall be delivered to the Buyers by Sellers on or prior to the
Effective Date and shall be reasonably acceptable to Buyers.
1.9 "Term" shall mean the period set forth under Article 3.
1.10 "Territory" shall mean The United States of America (which shall
not include its territories or possessions).
2. SUPPLY AND LICENSE.
------------------
2.1 (a) During the Term of this Agreement, Sellers shall, subject to
the terms and conditions of this Agreement, manufacture the Products for, and
shall sell the Products to, Buyers, and shall remain able (subject to force
majeure) to manufacture and to make the Products available to Buyers during the
Term of this Agreement.
(b) Buyers shall, during the Term of this Agreement, purchase
Products from Sellers in accordance with the terms of Paragraphs 5 and 6 hereof.
39
- 5 -
(c) Nothing in this Agreement shall restrict Buyers or Sellers
from manufacturing, purchasing or distributing other products which may be
competitive with any of the Products.
2.2 In supplying the Products, Sellers shall be responsible for
obtaining all raw materials, shippers, packers, and packaging materials and for
providing all labor and other overhead necessary to manufacture the Products.
2.3 The costs associated with any and all changes in packaging and/or
labeling components of the Products requested in writing by Buyers shall be
borne exclusively by Buyers.
2.4 (a) For a period of six (6) months from the Effective Date (and
subject to modification by Paragraph 2.4(d) hereof), Sellers hereby grant
Buyers, and Buyers hereby accept, a limited, implied non-exclusive, royalty-free
license under U.S. Patent No. 5,381,912 and U.S. Design Patent Nos. 359,907;
359,908; 359,909 and 359,910 (the "Packaging Patents") to distribute and/or sell
those Products produced by Sellers as of the Closing Date (as defined in the
Asset Purchase Agreement) in the packaging which are covered by the Packaging
Patents.
(b) During the six month term recited in Paragraph 2.4(a), Buyers
shall use their best efforts to convert the packaging of such Product(s) to
packaging which is commercially available from third parties other than Sellers
or its designees.
(c) Should Buyers be unable to convert such packaging as required
under Paragraph 2.4(b) despite exercise of their best efforts to do so within
the six (6) month term set forth in
40
- 6 -
Paragraph 2.4(a), Sellers agree to grant an extension of the license term until
expiration of the Term to allow for the completion of the conversion.
(d) The implied license of Paragraph 2.4(a) or any extension thereof shall
terminate immediately upon the expiration or termination of this Agreement.
2.5 To facilitate Buyers' change to Product bottles not covered by the
Packaging Patents, Sellers shall conduct the stability testing reasonably
associated with such change. The parties hereby agree that such stability
testing shall be limited to a three (3) month accelerated stability testing or
as subsequently mutually agreed by the parties. The testing protocol(s) to be
used by Sellers shall be reviewed with, and approved by, Buyers prior to Sellers
conducting such testing. The costs associated with all such stability testing
shall be borne exclusively by Buyers.
3. TERM.
----
3.1 Subject to earlier termination as hereinafter provided, the term
of this Agreement shall commence on the Effective Date and shall continue for up
to twelve (12) months following the Effective Date.
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4. FORECASTS AND ORDERS.
--------------------
4.1 (a) Buyer has provided Sellers with a non-binding forecast of its
purchases of Products for the Term within the Territory, said forecast being
attached hereto as EXHIBIT B.
(b) Within ten (10) business days of the Effective Date, Buyer shall
update the forecast described in Paragraph 4.1(a). Such amended forecast shall
be a non-binding (except as provided in Paragraph 14.1(c)) forecast of their
purchases of Products for the Term within the Territory ("Annual Forecast").
Each Product is to be identified in such Annual Forecast by individual SKU.
4.2 (a) Every thirty (30) days during the term hereof, Buyer shall
provide Sellers with a good faith, non-binding forecast of its purchases of
Products during the next three (3) month period. Such forecasts shall be made
recognizing the requirements for Batch Sizes and Lead Times as defined in
Paragraph 4.2(b) hereof.
(b) Sellers have presented Buyers with, and Buyers acknowledge the
receipt of, a document listing the Products, the batch size used in the
production of each such Product ("Batch Size"), and the lead times required to
manufacture each of said Products ("Lead Times"), such document being appended
hereto as EXHIBIT D.
4.3 (a) Buyers shall authorize the manufacture and packaging of a
Product by issuing a purchase order ("Purchase Order") to Sellers and Sellers
shall fill such Purchase Orders (on a FIFO basis) from Sellers' stocks of
Current Product existing as
42
-8-
of the Effective Date ("Stocks") or as necessary, Sellers shall manufacture and
package, or have packaged, such Products. Each Purchase Order shall be in a form
and contain terms previously agreed to by the parties. Each Purchase Order shall
correspond to a total quantity of Product which is a whole number multiple of
the applicable Batch Size as set forth in EXHIBIT D. The proposed delivery date
recited in the Purchase Order shall also be equal to or greater than the
applicable Lead Time for each such Product as set forth in EXHIBIT D. Each
Purchase Order shall further specify the following: (i) the identity of Product
by SKU, and (ii) the quantity of such Product.
(b) Sellers shall promptly acknowledge each Purchase Order by
signing and returning to Buyers the acknowledgment copy of each Purchase Order
promptly after its receipt. Failure of the Sellers to deliver to Buyers a
written notice objecting to a Purchase Order within five (5) business days after
receipt of the Purchase Order shall constitute Sellers' acceptance of the
Purchase Order.
(c) In the event of any conflict between the terms and conditions
of this Agreement and the terms and conditions of Buyer's Purchase Order, the
terms and conditions of this Agreement shall be controlling.
4.4 Buyers may request Seller to accept an increase in Buyers' Annual
Forecast of Product(s). Sellers' obligation with respect thereto shall solely be
to exercise commercially reasonable efforts to accommodate Buyers' request so
long as (a) such increase represents a whole number multiple of the Batch Size
of each such
43
-9-
Product, (b) the period until the proposed date(s) of delivery is greater than
the applicable Lead Time for each such Product, (c) the proposed date(s) of
delivery is within the Term, and (d) the proposed increase does not represent
more than fifty percent (50%) of the Annual Forecast of such Product.
5. PRICE AND PAYMENT.
-----------------
5.1 Subject to the terms and conditions of this Agreement, Buyers
shall purchase all Products for which a Purchase Order has been submitted and
accepted by Sellers. Buyers shall pay Sellers the prices listed in the Product
and Price List (attached hereto as EXHIBIT C) for such Products.
5.2 Except as provided in Paragraph 14.1(b) hereof, Sellers shall
invoice Buyers for each shipment of Products (including Inventory as defined in
Paragraph 14.1(e) hereof) promptly upon shipment of such Products from Sellers'
loading dock. Payment for such Products shall be made by Buyers to Sellers in
United States dollars within forty-five (45) days from the date of Sellers'
invoice.
5.3 Concurrently herewith, the parties have entered into an agreement
under which Sellers shall provide Buyers with transitional services related to
the Products ("Transition Services Agreement"). In the event of any conflict
between the terms of this Agreement and the terms and conditions of the
Transition Services Agreement, the terms and conditions of the Transition
Services Agreement shall control.
44
- 10 -
6. DELIVERY.
--------
6.1 All Products manufactured by Sellers during the Term shall be
delivered F.O.B. Sellers' manufacturing facilities on the date specified in the
applicable Purchase Order. All Stock shall be delivered F.O.B. Sellers'
warehouse facilities on the date specified in the applicable Purchase Order.
Inventory (as defined in Paragraph 14.1(e) hereof) shall be delivered to Buyers
promptly upon the expiration or termination of this Agreement, as applicable.
Title, possession, and risk of loss shall pass to Buyers upon delivery of
Products to Buyers' carrier at Sellers' loading docks. Upon delivery of
Products, Buyers shall promptly inspect all Products in a manner determined by
Buyers.
6.2 Prior to, or upon, Product delivery, Sellers shall provide to
Buyers a certificate of analysis with each shipment of Products stating that the
Products conform to the Specifications.
6.3 Subject to the terms and conditions of this Agreement, Sellers
shall deliver all Products so ordered on such scheduled delivery date(s). If the
amount of Products ordered to be delivered in a calendar quarter exceeds the
amount so forecast for that calendar quarter, Sellers shall deliver the
forecasted amount on the scheduled delivery date and will employ commercially
reasonable efforts to deliver the additional amount in accordance with the terms
of the Purchase Order for such order.
6.4 Buyers shall have the right to reject or revoke acceptance of any
Products which are not as warranted in Paragraph 9.1 for a period of forty-five
(45) days following the date of Sellers' delivery, pursuant to Paragraph 6.1, of
such Products. In
45
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such event, Sellers shall be responsible for the shipping costs associated with
returning the non-conforming Products to Sellers' loading dock.
7. SPECIFICATIONS.
--------------
7.1 Sellers represent that, as of the date hereof, they are capable of
manufacturing and packaging the Product in conformance with the Specifications.
7.2 During the term of this Agreement, the parties may revise the
Specifications only by mutual written agreement.
8. REGULATORY MATTERS AND DOCUMENTATION.
------------------------------------
8.1 During the term of this Agreement, Sellers shall perform all of
its obligations under this Agreement in compliance with the Specifications and
all applicable local, state, federal, laws and regulations, including but not
limited to the Act and the applicable Current Good Manufacturing Practices and
any other relevant regulations promulgated by the FDA.
8.2 Sellers shall keep complete and accurate records of all operations
in the manufacture and supply of Products under this Agreement.
8.3 Upon reasonable prior notice, Sellers shall permit Buyers, their
designated agents and representatives, or representatives of any United States
regulatory agency to inspect, during normal business hours, any facility used by
Sellers in performing their obligations under this Agreement. Such inspection
may include, without limitation, a review of Sellers' manufacturing
46
-12-
procedures, quality assurance procedures, and any records relating to the
manufacture and supply of Products under this Agreement. Sellers shall promptly
notify Buyers in the event of any such inspection by representatives of any
United States regulatory agency and shall provide copies to Buyers of any
documents relating to such inspection, including, without limitation, the
respective agency's inspection report and Sellers' response.
9. WARRANTY.
--------
9.1 Sellers warrant that at the time of delivery to Buyers' carrier
the Products shall (a) conform to the Specifications, and (b) not be adulterated
or misbranded within the meaning of the Act.
9.2 (a) If Sellers dispute any finding by Buyers that any Products
fail to conform to the applicable Specifications, or are adulterated or
misbranded, such dispute shall be resolved by an independent laboratory selected
by Sellers, acceptable to Buyers. All fees and disbursements incurred in
connection with the independent determination shall be borne by the party which
determined incorrectly that the Products do or do not conform to the
Specifications, or are or are not adulterated or misbranded.
(b) Sellers shall promptly replace any Products not conforming to the
applicable Specifications, or otherwise adulterated or misbranded (unless such
non-conformance is due to any act or omission by Buyers or its agents or
subcontractors).
(c) Sellers, at their option, may instruct Buyers to (i) return to
Sellers (via a carrier and at a cost approved by
47
-13-
Sellers), or (ii) destroy in an environmentally acceptable manner at Sellers'
expense, any Product order, or portion thereof, which does not conform to the
applicable Specifications or is otherwise adulterated or misbranded.
9.3 THE WARRANTIES CONTAINED IN THIS PARAGRAPH 9 SHALL SUPERSEDE ALL
OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THOSE SET FORTH IN ANY
PURCHASE ORDER OR INVOICE RECEIVED PURSUANT TO THIS AGREEMENT.
10. INDEMNIFICATION.
---------------
10.1 (a) Sellers shall, at their expense, defend any action or claim
instituted against Buyers or their Affiliates and indemnify and hold harmless
Buyers and their Affiliates, together with their respective officers, directors,
employees, agents, and insurers for any Loss arising out of Sellers' breach of
any of (i) the warranties set forth in Paragraph 9.1, or (ii) Sellers'
covenants under this Agreement.
(b) Buyers shall, at their expense, defend any action or claim
instituted against Sellers or their Affiliates and indemnify and hold harmless
Sellers and their Affiliates, together with their respective officers,
directors, employees, agents, and insurers for any Loss other than those
described in Paragraph 10.1(a) hereof.
10.2 The parties hereto agree that a party seeking indemnification
hereunder shall implement the procedure set forth in Article 8.2 of the Asset
Purchase Agreement.
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11. RECALLS.
-------
11.1 If either party determines that it may be necessary to recall any
Products, it shall immediately notify the other party. The decision to implement
any such recall of Product(s) shall be made solely by Buyer.
11.2 Prior to commencing any recall, the parties shall review with one
another the manner in which the recall is to be carried out and any instructions
or suggestions of the applicable regulatory authorities.
11.3 The cost associated with any such recall shall be borne by the
party whose actions necessitated the recall.
12. INTELLECTUAL PROPERTY.
---------------------
12.1 (a) Buyers may advertise, promote, market and/or sell the
Products under any of its trademarks, copyrights, tradenames, or logos, whether
registered or unregistered.
(b) Except in association with the sale of Current Products,
Buyers shall not utilize the names of any of the Sellers or their Affiliates in
conjunction with the advertisement, promotion, marketing and/or sale of the
Products.
12.2 Except for the trademarks specifically mentioned in the Trademark
License Agreement as defined in the Asset Purchase Agreement and except for the
Trademarks as such term is defined in the Asset Purchase Agreement, Buyer shall
not use in the labeling, marketing, promotion or any other advertising of the
Products any trademarks of Sellers or their Affiliates, or any marks which are
49
-15-
confusingly similar to any trademarks of Sellers of their Affiliates.
12.3 (a) Within one hundred and twenty (120) days after the Effective
Date, Buyers shall submit to Sellers its labeling and packaging requirements for
each of the Products (the "Label Requirements"). The Label Requirements shall be
of a content and style of Buyers' choosing, except that they shall not contain a
reference to Sellers or their Affiliates (unless so required by the Trademark
License Agreement). The Label Requirements may be, but need not be, identical to
the labels and packaging for the Current Products (except for the aforementioned
deleted reference to Sellers or their Affiliates and presence of a new UPC
code). Promptly after receipt of the Label Requirements, Sellers shall produce
for inspection by Buyers a sample label and/or package for each Product, which
shall be consistent with the applicable Label Requirements. Buyers shall inspect
the sample and either (i) approve it by sending Sellers written notice of
approval, or (ii) send Sellers written change instructions, in which case
Sellers shall promptly make such changes and submit a new sample for Buyers'
approval. An approved label and/or package shall hereinafter be known as a
"Label". All applicable Products manufactured following delivery of Labels to
Sellers shall bear a Label. Buyers may change a Label during the Term.
(b) Within ten (10) business days after the Effective Date, Buyers shall
submit to Sellers a new UPC code for each of the Products. Should Sellers be
required to order new Product labels prior to production of a Label as described
in Paragraph 12.3(a)
50
-16-
above, such new Product labels (containing the new UPC code and Buyer's name in
place of that of Sellers) shall be ordered in reasonable quantities as agreed to
by Sellers and Buyers and be used in the production of the applicable Product
until exhausted.
(c) Prior to Sellers' production of Product bearing Labels, Sellers agree
that Buyers may sell and distribute the Product using Sellers' labeling and/or
packaging.
13. FORCE MAJEURE.
-------------
Neither party shall be liable for failure to perform any of its
obligations under this Agreement during any period in which, and to the extent
which, such performance is delayed by fire, flood or other natural disaster,
embargo, riot, changes in applicable laws, rules or regulations, whether foreign
or domestic, the intervention of any governmental authority, or any other
reasons or conditions beyond the control of the parties. Seller and Buyer shall
promptly notify the other of the occurrence of any such conditions.
14. TERMINATION.
-----------
14.1 (a) In the event that either party materially breaches or
defaults on any of its obligations, representations, warranties, or covenants
under this Agreement, the other party may give notice to the defaulting party
setting forth in reasonable detail the nature of such breach or default. If the
defaulting party fails to cure such breach or default within sixty (60) days
from the date of such notice, this Agreement shall be subject to
51
-17-
immediate termination by the terminating party upon additional written notice to
the defaulting party.
(b) If Buyers apply for or consent to the appointment of a
receiver, trustee or liquidator for all or a substantial part of their assets;
admits in writing their inability to pay their debts generally as they mature;
makes a general assignment for the benefit of creditors; is adjudicated a
bankrupt; submits a petition or an answer seeking an arrangement with creditors;
takes advantage of any insolvency law except as a creditor; submits an answer
admitting the material allegations of a petition in bankruptcy or insolvency
proceeding; has an order, judgment or decree entered by any court of competent
jurisdiction approving a petition seeking reorganization of such party or
appointing a receiver, trustee or liquidator for such party, or for all or a
substantial part of any of their assets and such order, judgment or decree shall
continue unstayed and in effect for a period of ninety (90) consecutive days;
files a voluntary petition of bankruptcy or fails to remove an involuntary
petition in bankruptcy filed against their within ninety (90) days of the filing
thereof (each of which shall hereinafter be referred to as an "Insolvency
Instance"), Sellers shall have no further obligation to deliver Product(s) to
Buyers unless Buyers (i) agree to accept such Products C.O.D., (ii) post a
letter of credit, or (iii) provide Sellers with other reasonable assurances that
payment for such Products shall be made (the reasonableness of such assurances
to be made by Sellers' in their sole discretion). The cessation of
52
-18-
Product delivery hereunder shall not relieve Buyers from their obligations to
purchase the Inventory as hereinafter defined.
(c) Buyers may terminate the Agreement upon sixty (60) days
written notice to Sellers. However, such early termination shall not relieve
Buyers of their obligations to purchase Products as set forth herein.
(d) In the event that a condition of force majeure, as defined in
Paragraph 13, prevents either party from performing any of its material
obligations for more than sixty (60) days, then the other party may immediately
terminate this Agreement by giving written notice to the other party which is
being prevented from performing.
(e) Upon the earlier of expiration of the Term or termination of
this Agreement for any reason, Buyers shall purchase from Sellers any work in
process, all raw materials, all finished goods (Product), labeling and packaging
materials for the Products in an amount of up to and including one hundred and
fifty percent (150%) of the Annual Forecast less the total amount of Products
recited in submitted Purchase Orders and previously delivered to Buyer
("Inventory"). Buyer shall purchase such Inventory from Sellers at a price equal
to Sellers' cost for such Inventory, as determined by third party invoices
received by Sellers.
14.2 The termination of this Agreement by either party pursuant to
this Paragraph 14 hereof shall not affect the rights of the terminating party
under this Agreement or under applicable laws.
53
-19-
15. NOTICES.
-------
All notices, requests, demands or other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if made in accordance with the provisions of Paragraph 10.2 of the Asset
Purchase Agreement.
16. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to its conflict of laws
and principles.
17. INSURANCE.
---------
17.1 During the Term, Buyers shall maintain Comprehensive General
Liability Insurance, including full Products Liability coverage, with an
insurance carrier reasonably acceptable to Sellers, and coverage limits of not
less than $2,000,000.00 per occurrence and at least $5,000,000.00 aggregate
coverage for claims of bodily injury and property damage arising out of any
Loss. Such policy or policies shall extend coverage with respect to occurrences
during a policy period, regardless of the dates on which claims arising from
such an occurrence are made, and shall name Sellers as additional insureds. Such
policy or policies shall also expressly cover any liability Buyers may incur as
an indemnitor under this Agreement.
54
-20-
18. GENERAL PROVISIONS.
------------------
18.1 ASSIGNABILITY. This Agreement is assignable by Buyers, in whole
or in part, provided that Buyers provide Sellers with prior written notice of
such assignment, and provided further that such assignment shall not relieve
Buyers of any of their obligations under Paragraphs 2.3, 5.1, 5.2 and 10.1(b)
hereof. Neither this Agreement nor any rights or obligations hereunder are
assignable by Sellers without the prior written consent of the Buyers, which
consent shall not be unreasonably withheld or delayed; provided, however that
Sellers may assign this Agreement and the rights and obligations hereunder to
any third party who purchases or otherwise acquires all or substantially all of
Sellers' assets. Further, Sellers may, at its sole option, elect to assign any
of their rights or obligations hereunder to an Affiliate or have any of its
Affiliates perform any of their obligations hereunder, provided that such
assignment shall not relieve Sellers of its liability for satisfaction of the
obligations contained herein.
18.2 INDEPENDENT CONTRACTORS. Both parties agree to perform under
this Agreement solely as independent contractors and shall not hold themselves
out as employees or agents of the other.
18.3 HEADINGS. The section and subsection headings of this Agreement
are for convenience of reference only and shall not be deemed to alter or affect
the provisions hereof.
18.4 WAIVER. Neither the failure nor any delay on the part of either
party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, or of any other
55
-21-
right, power or remedy or preclude any further or other exercise thereof, or the
exercise of any other right, power or remedy.
18.5 BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the exclusive benefit of the respective parties, their legal
representatives, successors, or permitted assigns. This Agreement is not
intended to, nor shall it create any right in any other party.
18.6 VALIDITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provisions hereof, and
this Agreement shall be construed in all other respect as if such invalid and
unenforceable provisions were omitted.
18.7 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.
18.8 NO CONFLICT. Each of the parties does hereby represent and
warrant to the other that nothing herein conflicts with or shall cause a default
under any document, agreement, instrument or other writing to which said party
is a party or by which said party is bound.
18.9 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the transaction contemplated herein
and shall not be modified or amended except by an instrument in writing signed
by the parties hereto. Any purchase order used by Buyers for the purpose of
ordering Products shall be solely for the purpose of specifying the
56
-22-
type and quantity of Products so ordered and Buyers' delivery requirements.
18.10 SURVIVAL. The provisions contained in Paragraphs 1, 2.1(c), 5,
6,8-12, and 14-18 shall survive the termination for any reason of this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers as of the Effective Date.
AMERICAN HOME PRODUCTS SELFCARE INC.
CORPORATION
By: By:
------------------------ -----------------------
Its: Its:
------------------------ -----------------------
AMERICAN CYANAMID SELFCARE ACQUISITION CORP.
COMPANY
By: By:
------------------------ ------------------------
Its: Its:
------------------------ -----------------------
57
CONFIDENTIAL TREATMENT
-23-
EXHIBIT A
---------
PRODUCTS
--------
PRODUCT SKU
------- ---
XXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXX
XXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXX XXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
58
CONFIDENTIAL TREATMENT
-24-
EXHIBIT B
---------
ANNUAL FORECAST
---------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXX XXXXXX
XXXXXXXXXXXXXXXXXXXX XXXXXX
XXXXXXXXXXXXXXXXXXXXXX XXXXX
XXXXXXXXXXXXXX
XXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXX
XXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXX XXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
59
CONFIDENTIAL TREATMENT
-25-
EXHIBIT C
---------
PRODUCT AND PRICE LIST
----------------------
XXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXX XXXXXXXXXX
XXXXXXXXXXXXX XXXXXXXXX
XXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXX XXXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXX XXXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
60
CONFIDENTIAL TREATMENT
-26-
EXHIBIT D
---------
BATCH SIZE (DOZ.)
-----------------
PRODUCT BATCH SIZE (DOZ.) P.O. LEAD TIMES
XXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXX
XXXXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXX XXX XXXXXXXX
XXXXX
XXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXX XXX XXXXXXXX
XXXXXXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXXXXXXXX XXX XXX
XXXXXXXXXXXXXXXXXXXXXXXXXX XXX XXX
XXXXXXXXXXXXXXXXXXXXX XXX XXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
61
Contract Manufacture
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit B(2)
SUPPLY AGREEMENT
AGREEMENT, effective this _____ day of ________, 1997 ("Effective Date") by
and between AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation ("AHP"),
AMERICAN CYANAMID COMPANY, a Maine corporation, ("ACY"), X.X. Xxxxxx Company,
Incorporated, a Delaware Company ("X.X. Xxxxxx" and together with AHP and ACY
collectively "Sellers") and SELFCARE, INC., a Delaware corporation ("SelfCare")
and SELFCARE ACQUISITION CORP., a wholly owned subsidiary of SelfCare Inc.
(together with SelfCare "Buyers").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Sellers are, among other things, engaged in the marketing and sale
of certain over-the-counter products sold in the vitamin and nutritional
supplement categories;
WHEREAS, Buyers desire to purchase certain assets of Sellers relating to
such products in the Territory (as hereinafter defined), and Sellers desire to
sell such assets to Buyers;
62
- 2 -
WHEREAS, Sellers and Buyers have entered into an agreement with respect to
the purchase of such assets ("Asset Purchase Agreement");
WHEREAS, Buyers wish to secure a short term source of manufacture of such
products and desires Sellers to aid in Buyers' procurement of the manufacture of
such Products;
WHEREAS, Seller shall supply Buyers with its current stock of products per
the terms of the corresponding Supply Agreement (Direct Manufacture) executed
concurrently herewith; and
WHEREAS, Sellers desire to aid Buyers in the procurement of the manufacture
of such products.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 "Act" shall mean the Federal Food Drug and Cosmetic Act, as
amended.
63
-3-
1.2 "Affiliate" shall mean any individual, corporation or other entity
that, directly or indirectly, through stock ownership or otherwise, controls, is
controlled by, or is under common control with, the designated party, but only
for so long as the relationship exists.
1.3 "Current Products" shall mean Products having packaging bearing
the names of the Sellers or their Affiliates or any trademarks or tradedress of
Sellers not included as Purchased Assets as defined in the Asset Purchase
Agreement.
1.4 "Effective Date" shall be the date first written above.
1.5 "FDA" shall mean the United States Food and Drug Administration,
any of its successor agencies or departments, or any other agency serving the
same or similar function.
1.6 "Loss" or "Losses" shall mean all liability claims, demands,
damages, actions, suits, and judgments instituted by third parties against
either of the parties hereunder attributable to bodily injury, sickness,
disease, death, injury to property, infringement of intellectual property rights
or otherwise, including, without limitation, reasonable attorney's fees and
investigation and other costs.
1.7 "Product(s)" shall mean the vitamin and nutritional supplement
products defined in the Specifications (as hereinafter defined). The identities
of the Products are set forth in EXHIBIT A.
64
-4-
1.8 "Specifications" shall mean the finished product and process and
manufacturing specifications and instructions, quality assurance and other
applicable procedures, and product descriptions applicable to the Product and/or
the packaging thereof consistent with Sellers' past practices. The initial
Specifications shall be delivered to the Buyers by Sellers on or prior to the
Effective Date and shall be reasonably acceptable to Buyers.
1.9 "Term" shall mean the period set forth under Article 3.
1.10 "Territory" shall mean The United States of America (which shall
not include its territories or possessions).
1.11 "Contractor" shall mean a third party manufacturer of Product(s)
who agrees to manufacture Product(s) for Sellers during the Term.
2. SUPPLY.
------
2.1 (a) During the Term of this Agreement, Sellers shall, subject to
the terms and conditions of this Agreement, have Products conforming to the
Specifications manufactured by Contractor for, and shall sell such Products to,
Buyers. Sellers shall use commercially reasonable efforts to ensure that
Contractor shall remain able (subject to force majeure) to manufacture and to
make the Products available to Buyers during the term of this Agreement.
65
- 5 -
(b) Buyers shall, during the term of this Agreement, purchase
Products from Sellers in accordance with the terms of Paragraphs 5 and 6 hereof.
(c) Nothing in this Agreement shall restrict Buyers or Sellers
from manufacturing, purchasing or distributing other products which may be
competitive with any of the Products.
2.2 In supplying the Products, Sellers or Contractor (as determined
solely by Sellers) shall be responsible for obtaining all raw materials,
shippers, packers, and packaging materials and for providing all labor and other
overhead necessary to manufacture the Products.
2.3 The costs associated with any and all changes in packaging and/or
labeling components of the Products requested in writing by Buyers shall be
borne exclusively by Buyers.
2.4 (a) For a period of six (6) months from the Effective Date (and
subject to modification by Paragraph 2.4(d) hereof), Sellers hereby grant
Buyers, and Buyers hereby accept, a limited, implied non-exclusive, royalty-free
license under U.S. Patent No. 5,381,912 and U.S. Design Patent Nos. 359,907;
359,908; 359,909 and 359,910 (the "Packaging Patents") to distribute and/or sell
those Products produced by Sellers as of the Closing Date (as defined in the
Asset Purchase Agreement) in the packaging which are covered by the Packaging
Patents.
(b) During the six month term recited in Paragraph 2.4(a), Buyers shall use
their best efforts to convert the packaging of
66
- 6 -
such Product(s) to packaging which is commercially available from third parties
other than Sellers or its designees.
(c) Should Buyers be unable to convert such packaging as required under
Paragraph 2.4(b) despite exercise of their best efforts to do so within the six
(6) month term set forth in Paragraph 2.4(a), Sellers agree to grant Buyers an
extension of the license term until the expiration or termination of the Term to
allow for the completion of the conversion.
(d) The implied license of Paragraph 2.4(a) or any extension thereof shall
terminate immediately upon the expiration or termination of this Agreement.
2.5 To facilitate Buyers' change to a new bottle for the Protegra
Products, Sellers shall conduct the stability testing reasonably associated
with such change. The parties hereby agree that such stability testing shall
be limited to a three (3) month accelerated stability testing or as
subsequently mutually agreed to by the parties. The testing protocol(s) to be
used by Sellers shall be reviewed with, and approved by, Buyers prior to Sellers
conducting such testing. The costs associated with all such stability testing
shall be borne exclusively by Buyers.
3. TERM.
----
3.1 Subject to earlier termination as hereinafter provided, the term
of this Agreement shall commence on the Effective Date and shall continue for up
to twelve (12) months following the Effective Date.
67
-7-
4. FORECASTS AND ORDERS.
--------------------
4.1 (a) Buyers have provided Sellers with a non-binding forecast of
its purchases of Products for the Term within the Territory, said forecast being
attached hereto as EXHIBIT B.
(b) Within ten (10) business days of the Effective Date, Buyers shall
update the forecast described in Paragraph 4.1(a). Such amended forecast shall
be a non-binding (except as provided in Paragraph 14.1(c)) forecast of its
purchases of Products for the term with the Territory ("Annual Forecast"). Each
Product is to be identified in such Annual Forecast by individual SKU.
4.2 (a) Every thirty (30) days during the term hereof, Buyers shall
provide Sellers with a good faith, non-binding forecast of its purchases of
Products during the next three (3) month period. Such forecasts shall be made
recognizing the requirements for Batch Sizes and Lead Times as defined in
Paragraph 4.3(b) hereof.
(b) Sellers have presented Buyers with, and Buyers acknowledge the
receipt of, a document listing the Products, the batch size used in the
production of each such Product ("Batch Size"), and the lead times required to
manufacture each of said Products ("Lead Times"), such document being appended
hereto as EXHIBIT D.
4.3 (a) Buyers shall authorize the manufacture and packaging of a
Product by issuing a purchase order ("Purchase Order") to Sellers and Sellers
shall manufacture and package, or have packaged, such Products. Each Purchase
Order shall be in a form and contain terms previously agreed to by the parties.
Each
00
-0-
Xxxxxxxx Order shall correspond to a total quantity of Product which is a whole
number multiple of the applicable Batch Size as set forth in EXHIBIT D. The
proposed delivery date recited in the Purchase Order shall also be equal to or
greater than the applicable Lead Time for each such Product as set forth in
EXHIBIT D. Each Purchase Order shall further specify the following: (i) the
identity of Product by SKU, and (ii) the quantity of such Product.
(b) Sellers shall promptly acknowledge each Purchase Order by
signing and returning to Buyers the acknowledgment copy of each Purchase Order
promptly after its receipt. Failure of the Sellers to deliver to Buyers a
written notice objecting to a Purchase Order within five (5) business days after
receipt of the Purchase Order shall constitute Sellers' acceptance of the
Purchase Order.
(c) In the event of any conflict between the terms and conditions
of this Agreement and the terms and conditions of Buyers' Purchase Order or any
other document, the terms and conditions of this Agreement shall be controlling.
4.4 Buyers may request Sellers to accept an increase in Buyers' Annual
Forecast of Product(s). Sellers' obligation with respect thereto shall solely be
to exercise commercially reasonable efforts to accommodate Buyers' request so
long as (a) such increase represents a whole number multiple of the Batch Size
of each such Product, (b) the period until the proposed date(s) of delivery is
greater than the applicable Lead Time for each such Product, (c) the proposed
date(s) of delivery is within the Term, and (d) the
69
-9-
proposed increase does not represent more than fifty percent (50%) of the Annual
Forecast of such Product.
5. PRICE AND PAYMENT.
-----------------
5.1 Subject to the terms and conditions of this Agreement, Buyers
shall purchase all Products for which a Purchase Order has been submitted and
accepted by Sellers. Buyers shall further pay Sellers the prices listed in the
Product and Price List (attached hereto as EXHIBIT C) for such Products.
5.2 Except as provided in Paragraph 14.1(b) hereof, Sellers shall
invoice Buyers for each shipment of Product promptly upon the delivery of the
Products to Buyers' carrier at Contractor's loading dock. Payment for such
Products shall be made by Buyers to Sellers in United States dollars within
forty-five (45) days from the date of Sellers' invoice.
5.3 Concurrently herewith, the parties have entered into an agreement
under which Sellers shall provide Buyers with transitional services related to
the Products ("Transitional Services Agreement"). In the event of any conflict
between the terms of this Agreement and the terms and conditions of the
Transition Services Agreement, the terms and conditions of the Transition
Services Agreement shall control.
6. DELIVERY.
--------
6.1 All Products shall be delivered F.O.B. Contractor's manufacturing
facilities on the date specified in the applicable Purchase Order. Inventory (as
defined in Paragraph 14.1(e) hereof)
70
-10-
shall be delivered to Buyers promptly upon the expiration or termination of this
Agreement, as applicable. Title, possession, and risk of loss shall pass to
Buyers upon delivery of Products to Buyers' carrier at Contractor's loading
docks. Upon delivery of Products, Buyers shall promptly inspect all Products in
a manner determined by Buyers.
6.2 Prior to, or upon, Product delivery, Buyers shall be provided with
a certificate of analysis with each shipment of Products stating that the
Products conform to the Specifications.
6.3 Subject to the terms and conditions of this Agreement, Sellers
shall exercise reasonable commercial efforts to ensure that all Products so
ordered are delivered on such scheduled delivery date(s). If the amount of
Products ordered to be delivered in a calendar quarter exceeds the amount so
forecast for that calendar quarter, Sellers shall deliver the forecasted amount
on the scheduled delivery date and will employ commercially reasonable efforts
to secure the delivery of the additional amount in accordance with the terms of
the Purchase Order for such order.
6.4 Buyers shall have the right to reject or revoke acceptance of any
Products which are not as warranted in Paragraph 9.1 for a period of forty-five
(45) days following the date of Sellers' delivery, pursuant to Paragraph 6.1, of
such Products to Buyers' carrier at Contractor's loading dock. In such event,
Sellers shall be responsible for the shipping costs associated with returning
the non-conforming Products to Contractor's loading dock.
71
-11-
7. SPECIFICATIONS.
--------------
7.1 Subject to the terms and conditions of this Agreement, Sellers
shall have Contractor manufacture and package the Product(s) in conformance with
the Specifications.
7.2 During the term of this Agreement, the parties may revise the
Specifications only by mutual written agreement.
8. REGULATORY MATTERS AND DOCUMENTATION.
------------------------------------
8.1 During the term of this Agreement, Sellers shall use commercially
reasonable efforts to ensure that each such Contractor is in compliance with the
Specifications and all applicable local, state, federal, laws and regulations,
including but not limited to the Act and the applicable Current Good
Manufacturing Practices and any other relevant regulations promulgated by the
FDA.
8.2 Sellers shall use commercially reasonable efforts to ensure that
each such Contractor keep complete and accurate records of all operations in the
manufacture and supply of Products under this Agreement.
8.3 Upon reasonable prior notice, Sellers shall secure permission for
Buyers, their designated agents and representatives, or representatives of any
United States regulatory agency to inspect, during normal business hours, any
facility used by Contractors in the manufacture of Product(s). Such inspection
may include, without limitation, a review of Contractor's manufacturing
procedures, quality assurance procedures, and any records relating to the
manufacture and supply of Products under this Agreement. Sellers shall promptly
notify Buyers in the event of any such
72
-12-
inspection by representatives of any United States regulatory agency and shall
provide copies to Buyers of any documents relating to such inspection,
including, without limitation, the respective agency's inspection report and
Contractor's response thereto.
9. WARRANTY.
--------
9.1 Sellers warrant that at the time of delivery to Buyers' carrier
the Products shall (a) conform to the Specifications, and (b) not be adulterated
or misbranded within the meaning of the Act.
9.2 (a) If Sellers (or Contractor) dispute any finding by Buyers that
any Products fail to conform to the applicable Specifications, or are
adulterated or misbranded, such dispute shall be resolved by an independent
laboratory selected by Sellers, acceptable to Buyers. All fees and disbursements
incurred in connection with the independent determination shall be borne by the
party which determined incorrectly that the Products do or do not conform to the
Specifications, or are or are not adulterated or misbranded.
(b) Sellers shall secure the prompt replacement from Contractor of any
Products not conforming to the applicable Specifications, or otherwise
adulterated or misbranded (unless such non-conformance is due to any act or
omission by Buyers or its agents or subcontractors).
(c) Sellers (or Contractor), at their option, may instruct Buyers to
(i) return to Sellers (or Contractor) via a carrier and at a cost approved by
Sellers (or Contractor), or (ii)
73
-13-
destroy in an environmentally acceptable manner at Sellers' expense, any Product
order, or portion thereof, which does not conform to the applicable
Specifications or is otherwise adulterated or misbranded.
9.3 THE WARRANTIES CONTAINED IN THIS PARAGRAPH 9 SHALL SUPERSEDE ALL
OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THOSE SET FORTH IN ANY
PURCHASE ORDER OR INVOICE RECEIVED PURSUANT TO THIS AGREEMENT.
10. INDEMNIFICATION.
---------------
10.1 (a) Sellers shall, at their expense, defend any action or claim
instituted against Buyers or its Affiliates and indemnify and hold harmless
Buyers and its Affiliates, together with their respective officers, directors,
employees, agents, and insurers for any Loss arising out of Sellers' or
Contractor's breach of (i) the warranties set forth in this Agreement or (ii)
Sellers' covenants under this Agreement.
(b) Buyers shall, at their expense, defend any action or claim
instituted against Sellers, Contractor or their Affiliates and indemnify and
hold harmless Sellers, Contractor and their Affiliates, together with their
respective officers, directors, employees, agents, and insurers for any Loss
other than those described in Paragraph 10.1(a) hereof.
10.2 The parties hereto agree that a party seeking indemnification
hereunder shall implement the procedure set forth in Article 8.2 of the Asset
Purchase Agreement.
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11. RECALLS.
-------
11.1 If either party determines that it may be necessary to recall any
Products, it shall immediately notify the other party. The decision to implement
any such recall of Product(s) shall be made solely by Buyers.
11.2 Prior to commencing any recall, the parties shall review with one
another the manner in which the recall is to be carried out and any instructions
or suggestions of the applicable regulatory authorities.
11.3 The cost associated with any such recall shall be borne by the
party whose actions necessitated the recall.
12. INTELLECTUAL PROPERTY.
---------------------
12.1 (a) Buyers may advertise, promote, market and/or sell the
Products under any of their trademarks, copyrights, tradenames, or logos,
whether registered or unregistered.
(b) Except in association with the sale of Current Products,
Buyers shall not utilize the names of any of the Sellers or their Affiliates in
conjunction with the advertisement, promotion, marketing and/or sale of the
Products.
12.2 Except for the trademarks specifically mentioned in the Trademark
License Agreement as defined in the Asset Purchase Agreement and except for the
Trademarks as such term is defined in the Asset Purchase Agreement, Buyers shall
not use in the labeling, marketing, promotion or any other advertising of the
Products any trademarks of Sellers or their Affiliates, or any marks which are
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confusingly similar to any trademarks of Sellers of their Affiliates.
12.3 (a) Within one hundred and twenty (120) days after the Effective
Date, Buyers shall submit to Sellers their labeling and packaging requirements
for each of the Products (the "Label Requirements). The Label Requirements shall
be of a content and style of Buyers' choosing, except that they shall not
contain a reference to Sellers or their Affiliates (unless so required by the
Trademark License Agreement). The Label Requirements may be, but need not be,
identical to the labels and packaging for the Current Products (except for the
aforementioned deleted reference to Sellers or their Affiliates and presence of
a new UPC Code). Promptly after receipt of the Label Requirements, Sellers shall
produce for inspection by Buyers a sample label and/or package for each Product,
which shall be consistent with the applicable Label Requirements. Buyers shall
inspect the sample and either (i) approve it by sending Sellers written notice
of approval, or (ii) send Sellers written change instructions, in which case
Sellers shall promptly make such changes and submit a new sample for Buyers'
approval. An approval label and/or package shall hereinafter be known as a
"Label." All applicable Products manufactured following delivery of Labels shall
bear a Label. Buyers may change a Label during the Term.
(b) Within ten (10) business days after the Effective Date,
Buyers shall submit to Sellers a new UPC code for each of the Products. Should
Sellers or Contractor be required to order new Product labels prior to
production of a Label as described in
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Paragraph 12.3(a) above, such new Product labels (containing the new UPC code
and Buyers' name in place of that of Sellers) shall be ordered in reasonable
quantities as agreed by Sellers and Buyers and used in the production of the
applicable Product until exhausted.
(c) Prior to the production of Product bearing Labels, Sellers
agree that Buyers may sell and distribute the Product using Sellers' labeling
and/or packaging.
13. FORCE MAJEURE.
-------------
Neither party shall be liable for failure to perform any of its
obligations under this Agreement during any period in which, and to the extent
which, such performance is delayed by fire, flood or other natural disaster,
embargo, riot, changes in applicable laws, rules or regulations, whether foreign
or domestic, the intervention of any governmental authority, or any other
reasons or conditions beyond the control of the parties. Seller and Buyers shall
promptly notify the other of the occurrence of any such conditions.
14. TERMINATION.
-----------
14.1 (a) In the event that either party materially breaches or
defaults on any of its obligations, representations, warranties, or covenants
under this Agreement, the other party may give notice to the defaulting party
setting forth in reasonable detail the nature of such breach or default. If the
defaulting party fails to cure such breach or default within sixty (60) days
from the date of such notice, this Agreement shall be subject to
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-17-
immediate termination by the terminating party upon additional written notice to
the defaulting party.
(b) If Buyers apply for or consent to the appointment of a
receiver, trustee or liquidator for all or a substantial part of their assets;
admits in writing their inability to pay their debts generally as they mature;
make a general assignment for the benefit of creditors; are adjudicated a
bankrupt; submit a petition or an answer seeking an arrangement with creditors;
take advantage of any insolvency law except as a creditor; submit an answer
admitting the material allegations of a petition in bankruptcy or insolvency
proceeding; have an order, judgment or decree entered by any court of competent
jurisdiction approving a petition seeking reorganization of such party or
appointing a receiver, trustee or liquidator for such party, or for all or a
substantial part of any of their assets and such order, judgment or decree shall
continue unstayed and in effect for a period of ninety (90) consecutive days;
file a voluntary petition of bankruptcy or fail to remove an involuntary
petition in bankruptcy filed against them within ninety (90) days of the filing
thereof (each of which shall hereinafter be referred to as an "Insolvency
Instance"), neither Sellers nor Contractor shall have further obligations to
deliver Product(s) to Buyers unless Buyers (i) agree to accept such Products
C.O.D., (ii) post a letter of credit, or (iii) provide Sellers or Contractor
with other reasonable assurances that payment for such Products shall be made
(the reasonableness of such assurances to be made by Sellers in their sole
discretion). The cessation of Product delivery
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hereunder shall not relieve Buyers from their obligations to purchase the
Inventory as hereinafter defined.
(c) Buyers may terminate the Agreement upon sixty (60) days
written notice to Sellers. However, such early termination shall not relieve
Buyers of their obligations to purchase Products as set forth herein.
(d) In the event that a condition of force majeure, as defined in
Paragraph 13, prevents either party (including, in the case of Sellers, the
Contractor) from performing any of its material obligations for more than sixty
(60) days, then the other party may immediately terminate this Agreement by
giving written notice to the other party which is being prevented from
performing.
(e) Upon the earlier of expiration of the Term or termination of
this Agreement for any reason, Buyers shall purchase from Sellers and Contractor
any work in process, all raw materials, all finished goods, all labeling and
packaging materials for the Products in an amount of up to and including one
hundred and fifty percent (150%) of the Annual Forecast less the total amount of
Products recited in submitted Purchase Orders and previously delivered to Buyers
("Inventory"). Buyers shall purchase such Inventory from Sellers and Contractor
at a price equal to the cost for such Inventory, as determined by third party
invoices received by Sellers or Contractor.
14.2 The termination of this Agreement by either party pursuant to
this Paragraph 14 hereof shall not affect the rights of the terminating party
under this Agreement or under applicable laws.
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15. NOTICES.
-------
All notices, requests, demands or other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if made in accordance with the provisions of Paragraph 10.2 of the Asset
Purchase Agreement.
16. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to its conflict of laws
and principles.
17. INSURANCE.
---------
17.1 During the Term, Buyers shall maintain Comprehensive General
Liability Insurance, including full Products Liability coverage, with an
insurance carrier reasonably acceptable to Sellers, and coverage limits of not
less than $2,000,000.00 per occurrence and at least $5,000,000.00 aggregate
coverage for claims of bodily injury and property damage arising out of any
Loss. Such policy or policies shall extend coverage with respect to occurrences
during a policy period, regardless of the dates on which claims arising from
such an occurrence are made, and shall name Sellers as additional insureds. Such
policy or policies shall also expressly cover any liability Buyers may incur as
indemnitors under this Agreement.
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18. GENERAL PROVISIONS.
------------------
18.1 ASSIGNABILITY. This Agreement is assignable by Buyers, in whole
or in part, provided that Buyers provide Sellers with prior written notice of
such assignment, and provided further that such assignment shall not relieve
Buyers of any of their obligations under Paragraphs 2.3, 4, 5.1, 5.2 and 10.1(b)
hereof. Neither this Agreement nor any rights or obligations hereunder are
assignable by Sellers without the prior written consent of the Buyers, which
consent shall not be unreasonably withheld or delayed; provided, however that
Sellers may assign this Agreement and the rights and obligations hereunder to
any third party who purchases or otherwise acquires all or substantially all of
Sellers' assets. Further, Sellers may, at their sole option, elect to assign any
of their rights or obligations hereunder to an Affiliate or have any of their
Affiliates perform any of their obligations hereunder, provided that such
assignment shall not relieve Sellers of their liability for satisfaction of
their obligations contained herein.
18.2 INDEPENDENT CONTRACTORS. Both parties agree to perform under this
Agreement solely as independent contractors and shall not hold themselves out as
employees or agents of the other.
18.3 HEADINGS. The section and subsection headings of this Agreement
are for convenience of reference only and shall not be deemed to alter or affect
the provisions hereof.
18.4 WAIVER. Neither the failure nor any delay on the part of either
party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, or of any other
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right, power or remedy or preclude any further or other exercise thereof, or the
exercise of any other right, power or remedy.
18.5 BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the exclusive benefit of the respective parties, their legal
representatives, successors, or permitted assigns. This Agreement is not
intended to, nor shall it create any right in any other party.
18.6 VALIDITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provisions hereof, and
this Agreement shall be construed in all other respect as if such invalid and
unenforceable provisions were omitted.
18.7 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.
18.8 NO CONFLICT. Each of the parties does hereby represent and
warrant to the other that nothing herein conflicts with or shall cause a default
under any document, agreement, instrument or other writing to which said party
is a party or by which said party is bound.
18.9 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the transaction contemplated herein
and shall not be modified or amended except by an instrument in writing signed
by the parties hereto. Any purchase order used by Buyers for the purpose of
ordering Products shall be solely for the purpose of specifying the
1
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type and quantity of Products so ordered and Buyers' delivery requirements.
18.10 SURVIVAL. The provisions contained in Paragraphs 1, 2.1(c), 5,
6,8-12, and 14-18 shall survive the termination for any reason of this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers as of the Effective Date.
AMERICAN HOME PRODUCTS SELFCARE, INC.
CORPORATION
By:_________________________ By:________________________
Its:________________________ Its:_______________________
AMERICAN CYANAMID COMPANY SELFCARE ACQUISITION CORP.
By:_________________________ By:________________________
Its:________________________ Its:_______________________
83
CONFIDENTIAL TREATMENT
-23-
EXHIBIT A
---------
PRODUCTS
--------
PRODUCT NAME SKU
------------ ---
XX XXXXXXXXXXXXXX XXXXXXX
XX XXXXXXXXXXXXXXXXX XXXXXXX
XX XXXXXXXXXXXXX XXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXX XXXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
84
CONFIDENTIAL TREATMENT
-24-
EXHIBIT B
---------
ANNUAL FORECAST (UNITS)
-----------------------
XX XXXXXXXXXXXXXXXXX XXXXXXX
XX XXXXXXXXXXXXXXXXX XXXXXXX
XX XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXX XXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
85
CONFIDENTIAL TREATMENT
-25-
EXHIBIT C
---------
PRODUCT AND PRICE LIST
----------------------
XX XXXXXXXXXXXXXXXXX XXXXXXXX
XX XXXXXXXXXXXXXXXXX XXXXXXXX
XX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
XXXXXXXXXXXXXXX XXXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
86
CONFIDENTIAL TREATMENT
-26-
EXHIBIT D
---------
BATCH SIZE (DOZ.)
-----------------
PRODUCT BATCH SIZE (DOZ.) P.O. LEAD TIMES
XXXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXX XXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXX XXXX XXXXXXXX
XXXXXXXXXXXXXXX XX XXXXXXXX
XXXXXXXXX XXX XXXXXXXX
XXXXXXXXXXXXXX XXXX XXXXXXXX
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
87
CONFIDENTIAL TREATMENT
EXHIBIT D
TRANSITION SERVICES
1. Commencing on the Closing, Sellers will provide to Buyers certain
transitional services relating to the Brands as set forth below and for the
periods of time as set forth below.
2. With respect to the Brands, Sellers will provide the following
administrative functions for a period not to exceed 90 days following the
Closing:
Sellers will assist Buyers to locate and enable a third party,
acceptable to Buyers, to provide customers service, warehousing and
distribution of Products for Buyers after the Closing Date. If such
third party distributor cannot be located or made available to
distribute Buyers' Products after Closing, Sellers agree to perform
such distribution services including receiving customer orders (from
Buyers), shipping Product from Sellers' distribution centers and
promptly, within 5 business days after shipment, notifying Buyers of
shipment. In addition to the provisions of the Supply Agreement,
Buyers agree to pay to Sellers a percentage of the transfer price per
Schedule __ of the respective Supply Agreement for each SKU
distributed by Sellers as follows:
First 30 days after closing - XX
Next 30 days after closing - XX
Next 30 days after closing - XX
The XXXX charge set forth above will cover all freight, warehousing
and other out-of-pocket costs of Sellers and will be due and payable
within 30 days after the receipt of Sellers' invoice for such
services. In no event shall Sellers be required to perform these
Transition Services longer than ninety days after Closing.
3. Buyers will continue to have reasonable access to Sellers' manufacturing
personnel knowledgeable about the Brands during the term of the Supply
Agreement.
4. Buyers will continue to have reasonable access to Sellers' marketing and
sales personnel knowledgeable about the Brands for 3 months following the
Closing Date.
MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
