ASSET SALE AGREEMENT
THIS SALE AGREEMENT is made as of the 3rd day of October, 2000, between
GB BIOSCIENCES CORPORATION, a Delaware corporation with a registered office at
0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("GB Biosciences" or "Seller"),
and KMG-BERNUTH, INC., a Delaware corporation with a registered office at
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx Xxxxxxxx 00000
("Purchaser") and its parent, KMG CHEMICALS, INC., a Texas corporation with a
registered office at 0000 Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 ("KMG").
WITNESSETH:
WHEREAS, Seller manufactures and/or sells and markets a
monosodium/-disodium methanearsonic acid based pesticide product line (commonly
referred to as MSMA and DSMA products and referred to herein as "MSMA products")
in the United States and certain other countries (the "Arsonates Line") and has
decided that the Arsonates Line is not one of its long term strategic
objectives; and
WHEREAS, Seller owns certain assets related to its Arsonates Line
either directly or through one or more of its affiliates (such affiliates being
listed on EXHIBIT A), which it desires to sell to Purchaser and Purchaser
desires to purchase such assets from Seller all on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the warranties, representations,
covenants and agreements hereinafter set forth, Seller and Purchaser covenant
and agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS; PURCHASE PRICE
1.1 SALE OF ASSETS
Subject to the terms and conditions of this Agreement, Seller shall or
shall procure the sale, conveyance, assignment, transfer and delivery to
Purchaser by Seller's affiliates, and Purchaser shall purchase, as hereinafter
defined, all of Seller's and its affiliates' right, title and interest in and to
those certain assets of Seller used exclusively in the conduct of the Arsonates
Line, wheresoever situated, which certain assets as of the date hereof are
listed in this Section 1.1 below (the "Assets"):
(a) all Arsonates Line active ingredient manufacturing equipment
consisting of, without limitation, process vessels, ancillary process
equipment, associated piping and the steel structure solely dedicated to the
Arsonates Line as set forth in SCHEDULE 1.1(a) (the "Manufacturing
Equipment");
(b) the trademarks associated with the Arsonates Line including, but
not limited to, those listed in SCHEDULE 1.1(b) (the "Trademarks");
(c) the registrations granted to Seller and Seller's affiliates by the
United States Environmental Protection Agency ("EPA") and by the similar
pesticide regulatory bodies in certain other countries where Seller's MSMA
products are registered, which registrations and the names of the registration
holders are listed in SCHEDULE 1.1(c) hereto (the "Registrations");
(d) the MAA Task Force Three Agreement dated effective as of October 1,
1989, as amended (the "Task Force Agreement"), the Seller's interest in the
Arsonate Herbicide Products Limited Operating Agreement ("AHP Agreement"), true
and correct copies of which are attached hereto as SCHEDULE 1.1(d) and payments
made under the Task Force Agreement and the AHP Agreement allocable to costs and
expenses to be incurred after the Closing Date;
(e) all toxicology, residue, health and environmental, and efficacy
data exclusively relating to the Seller's or Seller's affiliates' MSMA products
in the United States and in certain other countries where Seller's or Seller's
affiliates' MSMA products are registered, including, without limitation, data
filed in support of the Registrations, and all of Seller's rights to receive
data compensation therefor (the "Data");
(f) all of Seller's records (except for tax records), files and
laboratory notebooks relating exclusively to the Data and the Registrations (the
"Research Files and Records");
(g) Seller's Arsonates Line customer list as of the Closing Date, which
shall be delivered to Purchaser as SCHEDULE 1.1(g) at Closing (hereinafter
defined); and
(h) the contracts, licenses, agreements, leases and commitments listed
in SCHEDULE 1.1(h) hereto (the "Contracts").
1.2 EXCLUDED ASSETS AND PRIOR RIGHTS
Notwithstanding anything to the contrary set forth in this Agreement,
there shall be excluded from the Assets being acquired from or procured by the
Seller ("Excluded
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Assets"): (i) any property or rights which are not expressly included in
Section 1.1 of this Agreement, including without limitation the concrete
foundations and retention walls supporting and surrounding the Manufacturing
Equipment, property or rights related to the Greens Bayou, Texas,
manufacturing facility of GB Biosciences or Seller's employees, any of
Seller's manufacturing processes or agricultural chemicals other than MSMA
products, and any rights to repayment of Taxes relating to any period prior
to the Closing; (ii) any raw materials or finished goods inventory (together
the "Inventory") or prepaid items of the Arsonates Line as of the Closing
Date, as hereinafter defined; (iii) any cash (including cash equivalents and
securities) on hand or on deposit as of the Closing Date owned by Seller or
Seller's affiliates; (iv) the benefit of any insurance coverage or policies;
(v) all accounts receivable relating to the conduct of the Arsonates Line by
Seller or Seller's affiliates; and (vi) the trademarks or tradenames
consisting of or including the words "Zeneca" or "GB Biosciences" or
derivatives thereof.
1.3 ASSUMPTION OF LIABILITIES/RETAINED LIABILITIES
(a) Subject to the provisions of this Agreement, as of the Closing Date
the Purchaser shall assume and agree to undertake to pay, perform and discharge,
as and when due, each of the following obligations, responsibilities,
liabilities, and debts with respect to the Assets and the Arsonates Line (other
than "Retained Liabilities", as hereinafter defined) (all of which are
hereinafter referred to collectively as the "Assumed Liabilities"):
(i) all sales or use taxes, transfer taxes, document or excise
taxes, and all recordation or notary fees, and similar governmental
fees and expenses, incident to the transfer, perfection and
registration of the ownership to the Assets to Purchaser;
(ii) all obligations, responsibilities and liabilities
incurred in the performance or lack of performance on or after the
Closing Date under the Contracts assigned pursuant to Section 1.1(g)
hereof and under the AHP Agreement;
(iii) all obligations, responsibilities and liabilities
incurred in the performance or lack of performance, or assessments
levied, on or after the Closing Date under the Task Force Agreement.
(b) Purchaser shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of Seller of any kind or nature,
known, unknown, contingent or otherwise, other than those obligations and
liabilities expressly assumed by it pursuant to Section 1.3(a). Without limiting
the foregoing and notwithstanding
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Section 1.3(a), it is understood that Purchaser does not assume, undertake or
accept any duties, responsibilities, obligations or liabilities of Seller
(including, without limitation, any that exist now or at the Closing or that
may arise in the future with respect to matters occurring at or prior to the
Closing) that are Retained Liabilities. As used herein, "Retained
Liabilities" shall mean the following liabilities with respect to the
Arsonates Line as conducted by Seller or Seller's affiliated companies except
for the Assumed Liabilities (defined above):
(i) all Taxes, as defined in Section 12.3(a), incurred by
Seller before the Closing Date;
(ii) Taxes on any income, gain or profits realized by any of
the Seller or Seller affiliates as a result of the sale of the Assets
hereunder or under the Tolling Agreement, hereinafter defined;
(iii) To employees or former employees of Seller or any of its
beneficiaries, heirs or assigns, including for any pensions, accrued
vacation or other liabilities;
(iv) To the Pension Benefit Guaranty Corporation or any
similar organization arising out of the employment by Seller of any of
its employees or former employees;
(v) With respect to any claims for personal injuries, property
damages or consequential damages relating to defective products sold
prior to the Closing Date;
(vi) all obligations, responsibilities and liabilities
incurred in performance or lack of performance before the Closing Date
under the Contracts and the AHP Agreement;
(vii) all obligations, responsibilities and liabilities
incurred in performance or lack of performance by Seller in the sale of
MSMA products to third parties, including the obligation to pay rebates
to such third parties, but not including any obligation to fulfill
existing orders under any Contracts;
(viii) all obligations, responsibilities and liabilities
incurred in the performance or lack of performance, or assessments
levied, before the Closing Date under the Task Force Agreement; and
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(ix) all obligations, responsibilities and liabilities
incurred in the performance or lack of performance, by Seller under the
Tolling Agreement, hereinafter defined.
1.4 PURCHASE PRICE
For and in consideration of Seller's sale of the Assets to Purchaser,
Purchaser agrees to pay Seller the following consideration ("Purchase Price"),
payable in installments, as follows:
(a) US $1,300,000 due upon the Closing Date;
(b) US $1,000,000 due upon Equipment Delivery (as hereinafter
defined); plus
(c) The Earn Out (hereinafter defined) shall be paid as provided
in Section 1.5 hereof.
1.5 EARN OUT
(a) The term "Earn Out" shall mean an amount equal to the Earn Out
Percentage (hereinafter defined) multiplied by Adjusted Net Sales in each of the
five (5) 12-month periods ("Earn Out Years") beginning on the first day of the
first month in which Purchaser first sells any MSMA products produced by
Purchaser using the Manufacturing Equipment (such five (5) 12-month periods are
sometimes referred to herein as the "Earn Out Period"). The Earn Out shall be
payable annually on or before thirty (30) days after the end of each Earn Out
Year on Adjusted Net Sales made during such Earn Out Year in good funds by wire
transfer to GB Bioscience's account at [omitted subject to a request for
confidential treatment] or to such other account as GB Biosciences may designate
by notice to Purchaser.
(b) On or before thirty (30) days after the end of each Earn Out Year,
Purchaser shall provide Seller with a written statement, in a form acceptable to
Seller and certified as correct by Purchaser's chief accounting officer,
reporting on Adjusted Net Sales during the immediately prior Earn Out Year and
calculating the Earn Out thereon. Seller shall review such statement as soon as
reasonably practicable, and, no later than thirty (30) days after receipt of
statements, shall notify Purchaser of any disagreement with it. In the event
that the parties do not agree, the parties shall jointly retain an independent
accounting firm familiar with Purchaser's records, to take such reasonable and
appropriate actions necessary to resolve the dispute between the parties. The
statement delivered by the accounting firm shall be binding on the parties.
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The costs charged by the independent accounting firm shall be borne equally
by Purchaser on the one hand and by Seller on the other.
(c) [omitted subject to a request for confidential treatment]
(d) No Earn Out shall be payable on MSMA products purchased by
Purchaser under the Tolling Agreement and sold to customers of Purchaser or its
affiliates. If Purchaser has inventory comprised of both MSMA products purchased
from GB Biosciences under the Tolling Agreement and MSMA products produced by
Purchaser at its manufacturing facility, for purposes of the calculation of the
Earn Out all sales of MSMA products shall (on a product by product basis) be
deemed first to be sales of MSMA products purchased under the Tolling Agreement.
1.6 ALLOCATION OF PURCHASE PRICE
The allocation of the purchase price among such Assets are set forth
in SCHEDULE 1.6. Each party agrees to use SCHEDULE 1.6 for the purpose of
purchase price allocation and for the purposes of all income tax returns or
reports filed by the parties, and neither party will voluntarily take a
position inconsistent therewith upon examination of such tax return or
report, in any claim, in any litigation or otherwise with respect to such tax
returns, PROVIDED that any internal allocation between GB Biosciences, Zeneca
Limited, and any other or Seller's affiliates of the amount attributed to
Seller on SCHEDULE 1.6, shall be at Seller's discretion. Each party agrees to
prepare and file timely Internal Revenue Service Form 8594 (Asset Acquisition
Statement), to cooperate in every reasonable way with the other party in the
preparation of such form and to furnish the other party with a copy of such
form prepared as a draft, within a reasonable period before the due date for
filing.
ARTICLE II
CLOSING, AND FURTHER ASSURANCES
2.1 CLOSING
The closing of the transaction contemplated hereby (the "Closing")
shall take place as of 3:00 p.m. CDT (US) on October 3, 2000, at the offices of
Xxxxx & Xxxxxxx, LLC, located at 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, or
on such other date or at such other place as the parties may agree upon, but in
no event later than 12:00 noon CDT (US) on October 31, 2000. The day on which
the Closing takes place is referred to herein as the "Closing Date".
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2.2 DELIVERIES BY SELLER
At the Closing, Seller shall deliver:
(a) a xxxx of sale in form reasonably satisfactory to Purchaser
transferring all of the Assets other than the Manufacturing Equipment;
(b) the assignment agreements to record transfer of the Trademarks
substantially in the form attached as SCHEDULE 2.2;
(c) the assignment agreements to record transfer of the Registrations
and Data substantially in the form attached as SCHEDULE 2.2;
(d) one or more Assignment and Assumption Agreements in a form
reasonably satisfactory to Purchaser with respect to the Assumed Liabilities;
(e) any other documents contemplated by this Agreement to be delivered
at Closing.
All of the foregoing documents and any other documents contemplated by this
Agreement to be delivered at the Closing are to be executed by an appropriate
duly authorized representative of Seller.
2.3 DELIVERIES BY PURCHASER
At the Closing, Purchaser shall deliver the first installment of the
Purchase Price (as provided in Section 1.4(a)) in good funds by wire transfer to
GB Biosciences' account at [omitted subject to a request for confidential
treatment] and any other documents contemplated by this Agreement to be
delivered at Closing. All such documents are to be executed by an appropriate
duly authorized representative of Purchaser.
2.4 FURTHER ASSURANCE
(a) From time to time, pursuant to the request of the other party and
without further consideration, Seller and Purchaser shall execute or have
executed, and shall deliver such other instruments of sale, transfer, conveyance
and assignment as the other party may reasonably request in order to sell,
convey, transfer and assign to the other party or to perfect or record the other
party's interest in or title to the Assets. All costs of recording such
instruments shall be borne by Purchaser.
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(b) To the extent that any of the Assets are owned by Seller's
affiliates, Seller shall use all reasonable efforts to procure that such
affiliates sign such documents as are necessary to convey title to Purchaser.
ARTICLE III
TOLLING AGREEMENT AND THE MANUFACTURING EQUIPMENT DELIVERY
3.1 TOLLING AGREEMENT
Seller and Purchaser entered into a manufacturing and formulating
agreement dated effective the date hereof for the toll manufacture of MSMA
products by Seller for Purchaser ("Tolling Agreement") at a price and on the
terms and conditions set forth therein, a true and correct copy of which is
attached as EXHIBIT B.
3.2 EQUIPMENT DELIVERY
Upon Plant Shutdown (as defined in the Tolling Agreement), Seller shall
promptly commence, and thereafter pursue with diligence, dismantling the
Manufacturing Equipment and cleaning it satisfactorily for transport. Seller
shall then promptly load the Manufacturing Equipment on Purchaser's trucks and
deliver possession of the Manufacturing Equipment to Purchaser in a clean, dry
and dismantled condition. "Equipment Delivery" shall be deemed to have occurred
when all the Manufacturing Equipment has exited the manufacturing facility of GB
Biosciences in Greens Bayou, Texas. At Equipment Delivery,
(a) Seller shall deliver one or more bills of sale in form
reasonably satisfactory to Purchaser, or an affiliate of
Purchaser designated in writing by Purchaser, transferring all
of the Manufacturing Equipment to Purchaser, and any other
documents contemplated by this Agreement to be delivered by
Seller at Equipment Delivery; and
(b) Purchaser shall deliver the second installment of the Purchase
Price (as provided in Section 1.4(b)) in good funds by wire
transfer to Seller GB Biosciences' account at [omitted subject
to a request for confidential treatment], and any other
documents contemplated by this Agreement to be delivered by
Purchaser at Equipment Delivery.
3.3 CLEANING AND DISMANTLING THE MANUFACTURING EQUIPMENT
Seller will contract for the dismantling and loading of the
Manufacturing Equipment by a third party contractor reasonably acceptable to
Purchaser and Purchaser shall actively assist Seller in the supervision of such
contractor. The
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dismantling operation must comply with all Seller's safety, health and
environmental policies and procedures. The cost of cleaning and drying the
Manufacturing Equipment, any waste disposal associated with cleaning the
Manufacturing Equipment, and any concrete cleaning, dismantling, waste
disposal or removal shall be borne by Seller. The cost of the third party
contractor dismantling and removing the Manufacturing Equipment shall be
borne equally by Seller and Purchaser to a combined maximum of Six Hundred
Thousand Dollars (US$600,000.00) and any cost above that amount shall be
borne by Purchaser. Purchaser shall pay Seller for its portion of the
dismantling and removal costs within thirty (30) days after receipt of
Seller's invoice for such costs. The cost of transporting the dismantled
Manufacturing Equipment shall be borne by Purchaser.
3.4 DISCLAIMER OF WARRANTIES FOR MANUFACTURING EQUIPMENT
The Manufacturing Equipment is to be sold by Seller and purchased by
Purchasers hereunder in its AS IS condition, subject to Seller's obligation to
clean, dismantle and load the Manufacturing Equipment, WITH ALL FAULTS and
Purchaser acknowledges and agrees that SELLER MAKES NO WARRANTY OF
MERCHANTABILITY AND MAKES NO WARRANTY THAT THE MANUFACTURING EQUIPMENT IS FIT
FOR ANY PARTICULAR PURPOSE AND THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES
MADE BY SELLER AS TO THE MANUFACTURING EQUIPMENT, EXPRESSED, IMPLIED, OR
STATUTORY, EXCEPT THAT SELLER REPRESENTS AND WARRANTS THAT SELLER OWNS THE
MANUFACTURING EQUIPMENT AND HAS FULL POWER, RIGHT, AND AUTHORITY TO CONVEY TITLE
THERETO; provided, however, that Seller agrees that the Manufacturing Equipment
shall be delivered by Seller at Equipment Delivery cleaned, dry and dismantled
as set forth above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants to Purchaser that the following
statements are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date as follows:
4.1 ORGANIZATION
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.
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4.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT
Neither the execution and delivery nor performance of this Agreement or
the agreements contemplated hereby by the Seller will, with or without the
giving of notice or the passage of time, or both, violate, conflict with, result
in a breach of, constitute a default under, result in the right to accelerate or
loss of rights under, or result in the creation of any lien, charge or
encumbrance on any of the Assets, pursuant to any provision of Seller's By-Laws
or Articles of Incorporation or any franchise, mortgage, deed of trust, lease,
license, agreement, understanding, law, ordinance, rule or regulation or any
order, judgment, award or decree to which Seller is a party or by which it is
bound, except where such violation, conflict, breach, default, acceleration,
loss of rights, lien, charge or encumbrance would not have a material adverse
effect on the ability of the parties to consummate the transactions contemplated
by this Agreement or on the business, financial condition, operations, or future
prospects of the Assets or the Arsonates Line.
4.3 AUTHORITY
Subject to obtaining appropriate documentation and authorization from
any of Seller's affiliates which have title to the Assets in those countries
listed in SCHEDULE 1.1(c) and except as provided in SCHEDULE 4.5, Seller and its
affiliates have full corporate power and authority to enter into this Agreement
and the related agreements referred to herein and have full power and authority
to carry out the transactions contemplated hereby and thereby, and all corporate
and other proceedings required to be taken by Seller to authorize the execution,
delivery and performance of this Agreement and the agreements, instruments and
other documents relating hereto have been properly taken or will have been
properly taken on or before the Closing Date. This Agreement and each of the
other agreements, certificates and other documents relating hereto constitute a
legal, valid and binding obligation of Seller, enforceable in accordance with
their respective terms.
4.4 CONSENTS
To Seller's knowledge, no notice, approval, consent, withholding of
objection or other authorization is required to be obtained by Seller or its
affiliates from any court, administrative agency or governmental authority, or
any other third party in connection with the execution, delivery or performance
of this Agreement (including the related agreements referred to herein), except
as set forth in SCHEDULE 4.4 attached hereto.
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4.5 TITLE TO ASSETS
Seller or Seller's affiliates have good and marketable title to the
Assets, except that the foregoing representation is limited as to Registrations
outside the United States in the manner set forth in SCHEDULE 4.5. All of the
Assets are held free and clear of mortgages, liens, pledges, claims, charges,
options, judgments, security interests or other encumbrances and, to Seller's
knowledge, any adverse claims, except the foregoing representation is limited as
to Registrations outside the United States in the manner set forth in SCHEDULE
4.5.
4.6 FINDERS
No finder, broker, agent or other intermediary has acted on behalf of
Seller in connection with the introduction or bringing together of the parties
hereto or the negotiation or consummation of the transactions contemplated by
the Agreement. Seller has not made any representation, commitment or agreement
by which Purchaser will be obligated to pay any commission, finder's fee or
other similar compensation to any third party in connection with the
transactions contemplated by this Agreement.
4.7 TRADEMARKS
To Seller's knowlege, SCHEDULE 1.1(b) is a true and correct list that
identifies registered trademarks for MSMA products owned by Seller or Seller's
affiliates in countries in which the Seller or Seller's affiliates' MSMA
products are registered as pesticides. To the knowledge of Seller, (i) Seller
and its affiliates have received no notice of any claim or action pending or
threatened with respect to the Trademarks and (ii) the Trademarks are not
infringing any intellectual property owned by any other person or persons. It is
acknowledged and agreed between Seller and Purchaser that certain Trademarks
registered in countries other than the United States are held in the name of
third parties for the beneficial interest of Seller or its affiliates and that
transfer of such Trademarks will require the cooperation of such third parties
and that Seller cannot guarantee that such cooperation will be given without
cost or expense. Purchaser shall be responsible for all confirmatory assignments
and recording at individual registries to effectuate the transfer of each
Trademark.
4.8 CONTRACTS
Except as set forth in SCHEDULE 4.8, all the Contracts are legal,
valid, binding, enforceable and in full force and effect in all material
respects, and there are no existing material defaults (or events which, with
notice or lapse of time, or both, would constitute a material default) under any
such Contract by Seller, or, to Seller's knowledge, any other party thereunder.
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4.9 CUSTOMERS
To Seller's knowledge, the list contained in SCHEDULE 1.1(g) is a true
and correct list of all material customers of Seller and Seller's affiliates in
the countries in which the Seller or Seller's affiliates' MSMA products are
registered as pesticides as of the date hereof.
4.10 REGISTRATIONS
SCHEDULE 1.1(g) contains a true and correct list of all the
Registrations for Seller's or Seller's affiliates' of MSMA products held by
Seller, Seller's affiliates or third parties in the countries in which the MSMA
products are registered as pesticides. To Seller's knowledge, SCHEDULE 4.10(a)
contains a list of Seller's state registrations in the United States and
SCHEDULE 4.10(b) contains a list of Seller's state registrations in the United
States under Section 24(c) of the Federal Insecticide, Fungicide and Rodenticide
Act. To the knowledge of Seller, Seller and its affiliates have received no
notice of any claim or action pending or threatened with respect to the
Registrations. It is acknowledged and agreed between Seller and Purchaser that
some Registrations registered in countries other than the United States are held
in the name of third parties for the beneficial interest of Seller or its
affiliates and that transfer of such Registrations will require the cooperation
of such third parties and that Seller cannot guarantee that such cooperation
will be given without cost or expense.
4.11 SALES REPORTS
Attached hereto as EXHIBIT C are true and correct reports on sales of
MSMA products (collectively the "Sales Report"): (i) an arsonates gross sales
report (U.S. domestic) as of and for the fiscal years ended December 31, 1998
and December 31, 1999 (the "Most Recent Fiscal Year End"); (ii) an arsonates
gross sales report (U.S. domestic) as of and for the eight months ended August
31, 2000 (the "Most Recent Fiscal Month End") for the Arsonates Line; (iii) an
arsonates gross sales report (Mexico only) as of and for the Most Recent Fiscal
Year and the five months ended May 31, 2000; (iv) an arsonates gross sales
report of Zeneca Brasil Ltda. as of and for the Most Recent Fiscal Year and the
five months ended May 31, 2000; and (v) an arsonates gross sales report of ISK
Bioscience Commercial Ltda. as of and for the Most Recent Fiscal Year. The Sales
Reports have been prepared from the books and records of Seller on a
consistent basis throughout the periods covered thereby and present fairly
the material concerning the Arsonates Line set forth thereon as of such dates.
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4.12 EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END
Except as otherwise previously disclosed to Purchaser, since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of the Arsonates Line taken as a whole. Without limiting the
generality of the foregoing, since that date:
(a) Seller has not sold, leased, transferred, or assigned any
material assets, tangible or intangible, pertaining to the Arsonates Line
outside the ordinary course of business;
(b) Seller has not entered into any material agreement, contract,
lease, or license pertaining to the Arsonates Line outside the ordinary course
of business; and
(c) no party (including Seller) has accelerated, terminated, made
material modifications to, or canceled any material agreement, contract,
lease, or license (including but not limited to the Registrations) pertaining
to the Arsonates Line to which Seller is a party or by which any of them is
bound.
4.13 LEGAL COMPLIANCE
Seller has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments
respecting the Arsonates Line (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against any of them alleging any failure so
to comply, except where the failure to comply would not have a material
adverse effect on the business, financial condition, operations, results of
operations, or future prospects of the Arsonates Line.
4.14 PRODUCT LIABILITY
Seller has no material liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due) arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by any of the Arsonates Line.
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4.15 DISCLOSURE
The representations and warranties contained in this Article IV do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Article IV not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND KMG
Purchaser and KMG represent and warrant to Seller that the following
statements are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date as follows:
5.1 ORGANIZATION
Purchaser and KMG are corporations duly organized, validly existing
and in good standing under the laws of the jurisdiction in which they are
incorporated.
5.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT
Neither the execution and delivery nor performance of this Agreement
or the agreements contemplated hereby by the Purchaser or KMG will, with or
without the giving of notice or the passage of time, or both, violate,
conflict with, result in a breach of, constitute a default under, result in
the right to accelerate or loss of rights under, or result in the creation of
any lien, charge or encumbrance on any of their assets pursuant to any
provision of either Purchaser's or KMG's By-Laws or Articles of Incorporation
or any franchise, mortgage, deed of trust, lease, license, agreement,
understanding, law, ordinance, rule or regulation or any order, judgment,
award or decree to which Purchaser or KMG is a party or by which it is bound,
except where such violation, conflict, breach, default, acceleration, loss of
rights, lien, charge or encumbrance would not have a material adverse effect
on the ability of the Purchaser or KMG to consummate the transactions
contemplated by this Agreement.
5.3 AUTHORITY
Purchaser and KMG have full corporate power and authority to enter
into this Agreement and the related agreements referred to herein and to carry
out the transactions contemplated hereby and thereby, and all corporate and
other proceedings required to be taken by Purchaser or KMG to authorize the
execution, delivery and performance of this Agreement and the agreements,
instruments and other documents
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relating hereto have been properly taken. This Agreement and each of the other
agreements, certificates and other documents relating hereto constitute the
valid and binding obligation of Purchaser and KMG, enforceable in accordance
with their respective terms.
5.4 CONSENTS
No notice, approval, consent, withholding of objection or other
authorization is required to be obtained by Purchaser or KMG from any court,
administrative agency or governmental authority in connection with the
execution, delivery or performance by Purchaser or KMG of this Agreement
(including the related agreements referred to herein) or any other third
party, except as set forth in SCHEDULE 5.4 attached hereto.
5.5 FINDERS
No finder, broker, agent or other intermediary has acted on behalf of
Purchaser or KMG in connection with the introduction or bringing together of
the parties hereto, or the negotiation or consummation of the transaction
contemplated by this Agreement. Purchaser and KMG have not made any
representation, commitment or agreement by which Seller will be obligated to
pay any commission, finder's fee or other similar compensation to any third
party in connection with the transactions contemplated by this Agreement.
ARTICLE VI
GUARANTEE BY KMG
[Intentionally deleted.]
ARTICLE VII
COVENANTS OF SELLER AND PURCHASER
7.1 CONDUCT OF THE LINE
From the date hereof until the Equipment Delivery, except as
contemplated by this Agreement or the Tolling Agreement or as necessary to
carry out the transactions contemplated hereby,
(a) Seller shall conduct the Arsonates Line in substantially the same
manner as it has heretofore been conducted and shall procure that Seller's
affiliates in the countries in which the MSMA products are sold are required
to do the same;
15
(b) Seller shall, and shall procure that Seller's affiliates shall,
not enter into any material transactions relating to the Arsonates Line
without Purchaser's consent, other than transactions that are entered into in
the ordinary course of business.
7.2 ACCESS AND INQUIRY
Prior to the Closing, except for books, records and information
constituting or related solely to the Retained Liabilities, Seller shall
provide Purchaser with such information or access as Purchaser may from time
to time reasonably request with respect to the Assets (other than the customer
list which shall be provided only upon the terms set forth in Section 1.1(g)
above). Any disclosure whatsoever during such investigation by Purchaser shall
not constitute an enlargement of or additional warranties or representations
of Seller beyond those specifically set forth in this Agreement.
7.4 REGISTRATIONS
Immediately following the Closing Date, Seller and Purchaser shall
jointly take such action as may be necessary to evidence or effectuate
transfer of the Registrations as promptly as reasonably possible. Where such
Registrations are held in the names of third parties, Seller shall use its
best efforts, and procure that Seller's affiliates shall use their best
efforts, transfer to Purchaser such Registrations. All filing fees or transfer
fees payable upon the transfer of the Registrations shall be the
responsibility of the Purchaser. Upon transfer of said registrations, Seller
shall have no responsibility for implementing the necessary steps to maintain
federal, state and county registrations. Following the Closing but prior to
the transfers described above, Seller shall, or shall procure that Seller's
affiliates shall, take such steps as reasonably necessary to maintain such
Registrations, in cooperation with Purchaser and at Purchaser's expense.
Purchaser will be responsible for identifying suitable legal entities for the
transfer of Registrations outside the United States.
7.5 TRADEMARKS
Immediately following the Closing Date, Seller and Purchaser shall
jointly take such action as may be necessary to evidence or effectuate the
transfer of the registrations for the Trademarks as promptly as possible.
Where such Trademarks are held in the names of third parties, Seller shall,
and procure that Seller's affiliates shall, seek to transfer to Purchaser such
Trademarks. All filing fees or transfer fees payable upon the transfer of the
registrations for the Trademarks shall be the responsibility of the Purchaser.
Following the Closing but prior to the transfers described above, Seller
shall, or shall procure that Seller's affiliates shall, take such steps as
reasonably necessary to maintain such Trademarks, in cooperation with
Purchaser and at
16
Purchaser's expense. Purchaser will be responsible for identifying suitable
legal entities for the transfer of Trademarks outside the United States.
7.6 NOTICES TO AND CONSENT OF THIRD PARTIES
Purchaser and Seller shall cooperate to make all other filings and to
give notice to or request consent from all other third parties that may
reasonably be required to consummate the transactions contemplated by this
Agreement.
7.7 REASONABLE EFFORTS
In making reasonable efforts or otherwise performing their
obligations under this Agreement, neither the parties nor any of their
respective affiliates shall be required to make any payment that it is not
presently contractually required to make under this Agreement or otherwise,
divest any assets (including but not limited to assets of the Arsonates Line),
make any change in the conduct of its business or of the Arsonates Line,
accept any limitation on the future conduct of its business or of the
Arsonates Line, enter into any other agreement or arrangement with any person
that it is not presently contractually required to enter into, accept any
significant modification in any existing agreement or arrangement, or agree to
any of the foregoing.
7.8 CUSTOMER ASSISTANCE AFTER CLOSING
After Closing, Seller shall, and shall procure that Seller's
affiliates shall, provide reasonable transition assistance to Purchaser.
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7.9 SALES REPRESENTATIVE
At the Closing, Seller and Purchaser shall enter into a secondment
agreement acceptable to the parties by which Xxxxxx Xxxxx is seconded to
Purchaser, on the terms and conditions set forth in the Secondment Agreement,
a copy of which is attached hereto as EXHIBIT D.
7.10 NONCOMPETITION
For a period of ten years from and after the Closing Date, the Seller
and its successors and assigns will not engage directly or indirectly in the
manufacture or sale of MSMA products (except pursuant to the Tolling
Agreement) in any geographic area worldwide; provided, however, that no owner
of less than 1% of the outstanding stock of any publicly traded corporation
shall be deemed to engage solely by reason thereof in any of its businesses;
provided, further, that if Seller or its successors or assigns shall, during
such ten-year period, become an affiliate of any corporation or other entity
that is now manufacturing MSMA products and that, upon becoming an affiliate
of Seller or its successors or assigns, is then manufacturing MSMA products
and has assets in excess of $15 billion, the provisions of this Section 7.10
shall not prevent or restrict such affiliate from continuing to manufacture
and sell MSMA products. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 7.10 is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified after the expiration of
the time within which the judgment may be appealed.
7.11 TASK FORCE AGREEMENT REIMBURSEMENTS
GB Biosciences and other members of the AHP Agreement have made
contributions in calendar year 2000 as required by the terms of the Task Force
Agreement. According to the Task Force Agreement, Xxxxxxx, Inc. ("Xxxxxxx") is
required to make a contribution to reimburse GB Biosciences and other members
of the AHP Agreement for their contributions. Seller and Purchaser agree that
to the extent that Purchaser receives a reimbursement under the Task Force
Agreement for the portion of the above contributions on account of a payment
by Xxxxxxx, Purchaser will promptly reimburse GB Biosciences that amount.
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ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
All obligations of Purchaser under this Agreement, unless waived in a
writing executed by Purchaser, are subject to the fulfillment of each of the
following conditions:
8.1 ACCURACY OF SELLER'S REPRESENTATIONS AND WARRANTIES
Each and every representation and warranty of Seller under this
Agreement shall be true and correct in all material respects at and as of the
Closing Date.
8.2 PERFORMANCE OF COVENANTS AND AGREEMENTS
Seller shall have performed in all material respects all of the
covenants and agreements and all other obligations required to be performed by
it at or prior to the Closing pursuant to this Agreement.
8.3 CONSENTS
All material consents, approvals, authorizations, filings and waivers
from and with third parties and governmental bodies (if any) required to
consummate the transaction contemplated by this Agreement shall have been
obtained or shall in Purchaser's reasonable judgment be obtainable without
additional liability after the Closing, and all applicable waiting periods
(and any extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have
expired or otherwise been terminated. Purchaser acknowledges that transfer of
the Registrations, the Data, and the Trademarks all are obtainable after the
Closing Date.
8.4 NO GOVERNMENTAL ACTION
There shall not be in effect any statute, rule or regulation that
renders the consummation of any material part of the transactions contemplated
by this Agreement illegal or any order, decree or judgment of a court or any
other governmental body or agency enjoining such consummation.
8.5 LITIGATION
No action, suit, proceeding, investigation, or inquiry by any third
person (including but not limited to any governmental authority) shall have
been instituted or threatened (and remain pending or threatened on the date of
the Closing) against Seller or Purchaser that questions, or reasonably could
be expected to lead to subsequent
19
questioning of, the validity or legality of this Agreement or the transactions
contemplated by this Agreement which, if successful, would materially
adversely affect the right of Purchaser to consummate the transactions
contemplated by this Agreement or to continue the Arsonates Line substantially
as currently operated.
8.6 TRANSACTION DOCUMENTS
All material documents and agreements required to be delivered to
Purchaser at or prior to the Closing shall have been so delivered.
8.7 XXXXXX XXXXX SECONDMENT
Xxxxxx Xxxxx shall enter into appropriate secrecy, noncompetition and
other agreements pertaining to his secondment with Purchaser on terms and
conditions satisfactory to Purchaser.
8.8 CERTIFICATE OF SELLER
There shall be delivered to Purchaser certificates executed by the
President or a Vice President and the Secretary or an Assistant Secretary, as
the case may be, of Seller, or other duly authorized representatives of Seller
acceptable to Purchaser, dated as of the Closing Date, certifying that the
conditions set forth in Section 8.1 and 8.2 have been fulfilled and including
appropriate approvals, bylaws and articles.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
All obligations of Seller under this Agreement are subject, unless
waived in a writing executed by Seller, to the fulfillment of each of the
following conditions:
9.1 ACCURACY OF PURCHASER'S REPRESENTATIONS AND WARRANTIES
Each and every representation and warranty of Purchaser under this
Agreement shall be true and accurate in all material respects at and as of the
Closing.
9.2 PERFORMANCE OF COVENANTS AND AGREEMENTS
Purchaser shall have performed in all material respects at or prior
to the Closing all of the covenants and agreements required to be performed by
it at or prior to the Closing pursuant to this Agreement.
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9.3 CONSENTS
All material consents, approvals, authorizations, filings and waivers
from and with third parties and governmental bodies (if any) required to
consummate the transaction contemplated by this Agreement shall have been
obtained or shall in Seller's reasonable judgment be obtainable without
additional liability after the Closing. Seller acknowledges that transfer of
the Registrations, the Data and the Trademarks all are obtainable after the
Closing Date.
9.4 NO GOVERNMENTAL ACTION
There shall not be in effect any statute, rule or regulation that
renders the consummation of any material part of the transactions contemplated
by this Agreement illegal or any order, decree or judgment of a court or any
other governmental body or agency enjoining such consummation.
9.5 LITIGATION
No action, suit, proceeding, investigation or inquiry by any third
person (including but not limited to any governmental authority) shall have
been instituted or threatened (and remain pending or threatened on the date of
the Closing) against the Seller or the Purchaser that questions, or reasonably
could be expected to lead to subsequent questioning of, the validity or
legality of this Agreement or the transactions contemplated by this Agreement
which, if successful, would materially adversely affect the right of Seller to
consummate the transactions contemplated by this Agreement or might involve
material liability on the part of Seller.
9.6 TRANSACTION DOCUMENTS
All documents and agreements required to be delivered to Seller at or
prior to the Closing shall have been so delivered.
9.7 NO DEFAULT UNDER TOLLING AGREEMENT
No default by GB Biosciences (or events which, with notice or lapse
of time, or both, would constitute a default) shall have occurred under the
Tolling Agreement.
9.8 CERTIFICATE OF PURCHASER
There shall be delivered to Seller a certificate executed by the
President or a Vice President and the Secretary or an Assistant Secretary of
Purchaser, or other duly authorized representatives of Purchaser acceptable to
Seller, dated as of the Closing,
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certifying that the conditions set forth in Sections 9.1 and 9.2 have been
fulfilled and including appropriate approvals, bylaws and articles.
ARTICLE X
TERMINATION
10.1 RIGHTS TO TERMINATE BY PURCHASER AND SELLER
(a) This Agreement may be terminated at any time prior to the Closing
by written agreement of Seller and Purchaser.
(b) If for any reason the Closing shall not have taken place on or
before October 31, 2000, (or any later date and time prior to 12 noon, Eastern
(US) Time, October 31, 2000, agreed to in an amendment to this Agreement
executed in accordance with Section 14.6), Seller may immediately terminate
this Agreement at any time thereafter by giving notice of such termination to
the Purchaser in the manner provided in Section 13.1.
(c) This Agreement may be terminated at any time prior to the Closing
by the Purchaser if there has been a material breach by the Seller of any of
their warranties or covenants which breach has not been cured by thirty (30)
days of the date notice of such breach is given to the Seller or by the
Closing Date, whichever is earlier, or if any of the conditions specified in
Article VIII hereof shall not have been fulfilled by the time required and
shall not have been waived by the Purchaser.
(d) This Agreement may be terminated at any time prior to the Closing
by the Seller if there has been a material breach by the Purchaser of any of
its warranties or covenants which breach has not been cured within thirty (30)
days of the date notice of such breach is given to Purchaser or by the Closing
Date, whichever is earlier, or if any of the conditions specified in Article
IX hereof shall not have fulfilled by the time required and shall not have
been waived by the Seller.
(e) If Seller or Purchaser terminate this Agreement, all rights and
obligations of the parties hereunder shall terminate without any liability of
any party to any other party (except any liability of any party then in breach
of this Agreement and except that GB Biosciences shall repurchase any MSMA
Products purchased by Purchaser under the Tolling Agreement at the price paid
for such MSMA Products by Purchaser); provided, however, that the
confidentiality provisions contained in Section 14.8 shall survive the
termination. In addition, the obligations of the parties under Article XI
shall survive any termination of this Agreement.
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ARTICLE XI
REMEDIES FOR BREACH OF THIS AGREEMENT
11.1 DEFINITION
As used in this Article, the term "Adverse Consequences" has the
meaning specified or referred to below:
"Adverse Consequences" means any actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, losses, fines, penalties,
liabilities, awards, assessments, charges, fees, including court costs and
expenses related thereto (including but not limited to, related costs of
defense and reasonable attorneys' and reasonable consultants' fees and
disbursements). "Adverse Consequences" shall also include but not be limited
to costs of investigation, remediation, removal or other similar expense
(including but not limited to costs to assess, evaluate and monitor and costs
of disposal of removed material).
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties of the Seller contained in
Sections 4.7 through 4.15 shall survive the Closing (even if the Purchaser
knew or has reason to know of any misrepresentation or breach of warranty at
the time of Closing) for a period ending one year after Equipment Delivery.
All the other representations and warranties of the parties contained in this
Agreement (including the representations and warranties of Seller contained
in Sections 4.1 through 4.6 above) shall survive the Closing (even if the
damaged party knew or had reason to know of any misrepresentation or breach
of warranty at the time of Closing) forever thereafter (subject to any
applicable statutes of limitations).
11.3 INDEMNIFICATION BY SELLER
(a) If Seller breachs any of its representations, warranties or
covenants contained in this Agreement, and, if there is an applicable
survival period pursuant to Section 11.2 above, Purchaser makes a written
claim for indemnification against Seller within such survival period, then
Seller agrees to indemnify, protect, defend as provided in Section 11.5, and
hold harmless Purchaser and its affiliates, directors, officers,
shareholders, employees and agents (individually a "Purchaser Indemnitee" and
collectively the "Purchaser Indemnitees") from and against the entirety of
any Adverse Consequences the Purchaser Indemnitees may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences the Purchaser Indemnitees may suffer after the end of any
applicable survival period)
23
resulting or arising from, caused by or incurred in connection with the
breach; provided, however:
(i) Seller shall not have any obligation to indemnify
Purchaser Indemnitees against any Adverse Consequences resulting from,
arising out of, relating to, in the nature of or caused by the breach
of any representation or warranty contained in Sections 4.7 through
4.15 until the aggregate amount of the Adverse Consequences Purchaser
Indemnitees have suffered by reason of all such breaches exceeds the
sum of One Hundred Thousand Dollars (US$100,000.00) (after which point
the Seller will be obligated to indemnify Purchaser Indemnities from
and against the entirety of such Adverse Consequences, and
(ii) there will be an aggregate maximum ceiling of One Million
Dollars (US$1,000,000.00) on the obligation of Seller to indemnify
Purchaser Indemnitees from and against any Adverse Consequences
resulting from, arising out of, relating to, in the nature of or caused
by the breach of any representation or warranty contained in Sections
4.7 through 4.15.
(b) Seller agrees to indemnify and hold harmless Purchaser
Indemnitees from and against the entirety of any Adverse Consequences
resulting from, arising out of, relating to, in the nature of, or caused by
any liability of Seller which is not an Assumed Liability (including any
liability under any bulk transfer law).
11.4 INDEMNIFICATION BY PURCHASER
(a) If Purchaser breaches any of its representations,
warranties or covenants contained in this Agreement, and, if there is an
applicable survival period pursuant to Section 11.2 above, Seller makes a
written claim for indemnification against Purchaser within such survival
period, then Purchaser agrees to indemnify, protect, defend as provided in
Section 11.5, and hold harmless Seller and its affiliates, directors,
officers, shareholders, employees and agents (individually a "Seller
Indemnitee" and collectively the "Seller Indemnitees") from and against the
entirety of any Adverse Consequences the Seller Indemnitees may suffer
through and after the date of the claim for indemnification (including any
Adverse Consequences the Seller Indemnitees may suffer after the end of any
applicable survival period) resulting or arising from, caused by or incurred
in connection with the breach.
(b) Purchaser agrees to indemnify and hold harmless Seller
Indemnitees from and against the entirety of any Adverse Consequences
resulting from, arising out of, relating to, in the nature of, or caused by
any Assumed Liability.
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11.5 MATTERS INVOLVING THIRD PARTIES
(a) If a Purchaser Indemnitee or a Seller Indemnitee
(collectively and individually, an "Indemnified Party") receives notice from
a third party of a matter ("Third Party Claim") which may give rise to a
claim for indemnification against a party (an "Indemnifying Party"), then the
Indemnified Party shall give prompt notice thereof to the Indemnifying Party
in writing; provided, however, that the failure so to notify the Indemnifying
Party shall not relieve it of any liability that it may have to any
Indemnified Party except to the extent (and then solely to the extent) that
the Indemnifying Party demonstrates that the defense of such action is
prejudiced thereby.
(b) The Indemnifying Party shall be entitled to assume the
defense of any Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party by giving Indemnified Party written
notice thereof within thirty (30) days after the Indemnified Party has given
notice of the Third Party Claim; provided, however, that the Indemnifying
Party must conduct the defense of the Third Party Claim actively and
diligently thereafter in order to preserve its rights in this regard. The
Indemnified Party shall cooperate with the Indemnifying Party in the defense
against any Third Party Claim and, in any event, shall have the right to
retain co-counsel at its own expense and participate in the defense of the
Third Party Claim.
(c) If an Indemnifying Party assumes and is conducting the
defense of a Third Party Claim as provided in Section 11.5(b) above:
(i) the Indemnifying Party will not consent to the entry of
any judgment or enter into any compromise or settlement thereof without
the Indemnified Party's prior written consent (which shall not be
unreasonably withheld) unless:
(A) the judgment or proposed compromise or
settlement contains no finding or admission of any violation
of law and no injunctive or other equitable relief is imposed
on the Indemnified Party; and
(B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party; and
(ii) the Indemnified Party will not consent to the entry of
any judgment or enter into any compromise or settlement thereof without
the Indemnifying Party's prior written consent (which shall not be
unreasonably withheld).
25
(d) If notice is given to an Indemnifying Party of the
commencement of any Third Party Claim and Indemnifying Party does not assume
and conduct the defense of the Third Party Claim in accordance with Section
11.5(b) above:
(i) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect
to such Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain
any consent from, the Indemnifying Party in connection therewith), and
(ii) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting or
arising from, caused by or incurred in connection with the Third Party
Claim to the fullest extent provided in this Article XI.
11.6 INDEMNIFICATION AS EXCLUSIVE REMEDY
The indemnification provisions provided in Article XI shall, to the
extent permitted by law, be the sole and exclusive remedy of Purchaser and
Seller with respect to the Arsonates Line and the transactions contemplated
by this Agreement and, without limiting the generality of the foregoing, the
Purchaser and Seller hereby waive all other rights and remedies available
under contract, tort or any other legal theory, for any breach of any
representation, warranty or covenants contained in this Agreement or
otherwise arising out of the transactions contemplated hereby, except for
those rights and remedies available under the Tolling Agreement.
11.7 DETERMINATION OF ADVERSE CONSEQUENCES
The parties shall make appropriate adjustments for tax consequences
and insurance coverage and take into effect the time cost of money (using the
prime rate as of the date hereof) in determining Adverse Consequences for
purposes of this Article XI. All indemnification payments under Article XI
shall be deemed adjustments to the Purchase Price.
ARTICLE XII
COOPERATION IN RECORDS DELIVERY AND TAX
12.1 DELIVERY OF FILES AND RECORDS AND OTHER ASSETS
Seller shall, promptly after the Closing Date but not later than 30
days thereafter, at Seller's expense, deliver the Research Files and Records
and other Assets in its possession relating to the Arsonates Line, to
Purchaser in accordance with
26
Purchaser's instructions. Notwithstanding the foregoing, U.S. registration
records and files shall be sent to Purchaser no later than 14 days following
transfer of Registrations.
12.2 PRESERVATION OF DATA AND RESEARCH FILES AND RECORDS
Purchaser shall preserve all Data required to maintain Registrations
for the time period required by the laws and regulations of any country in
which the Seller held a Registration. Purchaser shall preserve all other
Research Files and Records relating to the Arsonates Line prior to the
Closing, for a period of at least three years after the Closing, and not
dispose of any items thereof, except that at any time after the Closing,
Purchaser may give Seller written notice of its intention to dispose of any
such Research Files and Records that are more than three years old,
specifying the items to be disposed of in reasonable detail. Seller may,
within a period of sixty (60) days after receipt of any such notice, notify
Purchaser of Seller's desire to retain one or more of the items to be
disposed of. Purchaser shall, upon receipt of such a notice from Seller,
deliver to Seller, at Seller's expense, the items which Seller has elected to
retain. After the Closing, Purchaser shall allow Seller reasonable access
during normal business hours to the Research Files and Records and permit
Seller to make copies and extracts therefrom at Seller cost and expense.
12.3 TAX COOPERATION
(a) The terms "Tax," "Taxes," Taxation" and "Tax Returns" shall
refer to any federal, state, local, foreign or other taxes including, but not
limited to, income (net or gross), corporation, gross receipts, profits,
alternative or add-on minimum, franchise, capital, capital stock, intangible,
premium, transfer, sales, social security contribution, payroll, wage,
employment, occupation, property (real or personal), import, excise, custom,
stamp, duty, ad valorem or use tax, withholding or estimated taxes, fees,
duties, assessments, withholdings or like governmental charges (including
interest, penalties, sur-taxes, additions to tax or additional amounts) with
respect to such taxes.
(b) It is hereby acknowledged that each party hereto shall have
the right to full information in respect of any matter of Taxation relating
to the Arsonates Line with respect to the Assets. Each party accordingly
undertakes to the other party hereto that it shall make available to the
other on reasonable request and as soon as practicable, all records, files,
documents and other material of such party so far as relevant to the other's
matter of Taxation relating to the Arsonates Line with respect to the Assets
and (on reasonable request) shall allow the other to take copies thereof (or,
to the extent required by applicable law, shall allow the other reasonable
access to the originals of or such records, files, documents and other
materials). Each party
27
shall provide reasonable access, up to the extent that the normal business
operations of such party will not be significantly disrupted, to the
employees of such party to the other party including, without limitation, the
right of the other party to interview such employees in connection with the
foregoing. The inspecting party shall pay its own costs and the costs of any
copying it requests.
(c) Purchaser and Seller will cooperate with each other in
connection with any audit by the Internal Revenue Service or any other Tax
authority (including, but not limited to, U.S. federal, state, or local
authorities) of any Tax Return or report in connection with the Assets
(including the use, operation or ownership thereof), or the sale of the
Assets acquired hereunder for periods on or prior to the Closing Date. The
party responsible for the applicable Tax liability will have the sole right,
at its sole expense, to conduct any audit or any other proceeding before any
Tax authority, to prepare and file any amended Tax Return, claim for refund
or court petition, to prosecute any such claim and to select counsel, to
engage in litigation and to consent to any settlement in connection therewith
with respect to any Taxes for any such period, and the other party will
execute and deliver, or cause to be executed and delivered, to the
responsible party or its designees all instruments (including, without
limitation, powers of attorney) reasonably requested by the responsible party
in order to implement the provisions of this Section 12.3; provided, however,
that such responsible party shall consult and confer with the other party and
keep the other party reasonably informed and shall take no action after the
Closing Date that would have a material adverse effect on the other party (or
the entity subject to Tax) without reference to and obtaining the consent of
such other party, which consent shall not be unreasonably withheld or delayed.
(d) Seller and Purchaser shall cooperate in every reasonable
way in minimizing any Taxes. In particular, Purchaser shall provide to Seller
duly completed and executed resale and exemption certificates relating to the
Assets. Further, the Seller and Purchaser, and their respective affiliates
shall comply with any obligation under applicable law to file any Tax Return
with or provide notice to any Tax authority relating to the transfer of
Assets, and Seller and Purchaser shall cooperate with each other in
discharging such obligations.
(e) Seller and Purchaser agree to maintain, for at least seven
(7) years following the Closing Date, all Taxation records relating to the
Arsonates Line during the period of Seller's ownership, through the Closing
Date.
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ARTICLE XIII
NOTICES
13.1 NOTICES
All notices, requests, demands and other communications required or
permitted to be given under this Agreement shall be deemed to have been duly
given if in writing and delivered personally, by reputable overnight courier
service, by facsimile transmission, or by first-class, postage prepaid,
registered or certified mail, addressed as follows:
If to Seller:
GB Biosciences Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Fax: 000-000-0000
Phone: 000-000-0000
and:
Zeneca Agrochemicals
Xxxxxxxxx, Xxxxxxxxx
Xxxxxx XX00 0XX
Xxxxxxx
Attention Secretary
Fax:
Phone:
If to Purchaser and/or KMG:
KMG Bernuth, Inc.
KMG Chemicals, Inc.
00000 Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
Fax: 000-000-0000
Phone: 000-000-0000
29
Either party may change the address to which such communications are to
be directed to it by giving written notice to the other party in the manner
provided above.
ARTICLE XIV
GENERAL
14.1 ENTIRE AGREEMENT
This Agreement and the Tolling Agreement set forth the entire agreement
and understanding of the parties and related persons with respect to the subject
matter hereof and supersedes all prior agreements, arrangements and
understandings relating thereto. No representation, promise, inducement or
statement of intention relating to the transactions contemplated by this
Agreement has been made by any party or any related person which is not set
forth in this Agreement or the agreements referred to herein.
14.2 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
laws of the state of Delaware excluding any conflict-of-laws provisions thereof
that would otherwise require the application of the law of any other
jurisdiction.
14.3 GOVERNING LANGUAGE
The English language shall be the governing language for purposes of
this Agreement, any and all documents and communications pertaining to this
Agreement, and any resolution of disputes under this Agreement. All
communications given pursuant to this Agreement shall be in English.
14.4 DISPUTE RESOLUTION/SUBMISSION TO JURISDICTION
(a) If any dispute arises in connection with this Agreement, the
parties agree to discuss such dispute in good faith and attempt to resolve it
without recourse to the formal dispute resolution mechanism provided in Section
14.4(b).
(b) After discussions provided in Section 14.4(a) either party may
provide written notice to the other party that a dispute has arisen to be
resolved through the mechanism set forth in this Section 14.4(b). Upon issuance
and receipt of such notice, Purchaser and Seller, acting through their
designated representatives, in good faith shall strive to resolve any such
noticed dispute; those representatives may agree to retain jointly an
independent mediator to assist in resolving the dispute. If,
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however, such representatives of Purchaser and Seller fail for any reason to
resolve the dispute within ninety (90) days after the date of the written
notice of dispute resolution, then and only then shall the parties be free to
pursue their remedies at law or in equity; provided, however, that the
parties shall be free at any and all times to seek injunctive relief,
regardless of whether they have availed themselves of the dispute resolution
process set forth in Sections 14.4(a) and (b).
(c) Purchaser, KMG and Seller hereby irrevocably submit in any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other agreements related hereto to the nonexclusive jurisdiction of the state
and federal courts of Delaware, and waive any and all objections to such
jurisdiction that it may have under the laws of the State of Delaware or any
other jurisdiction.
14.5 SUCCESSORS AND ASSIGNS
This Agreement shall be assignable by Purchaser or KMG, if applicable
only with the prior consent of Seller, and by Seller only with the prior consent
of Purchaser, and any attempt to assign without such written consent shall be
null and void. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Notwithstanding the foregoing, Seller may assign this Agreement to any successor
in interest to Seller or the portion of Seller's business to which this
Agreement relates without the prior consent of Purchaser.
14.6 AMENDMENTS AND WAIVERS
This Agreement may be amended, superseded or canceled, and any of the
terms hereof may be waived, only by a written instrument specifically referring
to this Agreement and specifically stating that it amends, supersedes or cancels
this Agreement or waives any of its terms, executed by all parties, or in the
case of a waiver, by the party waiving compliance. Failure of any party to
insist upon strict compliance with any of the terms of this Agreement in one or
more instances shall not be deemed to be a waiver of its rights to insist upon
such compliance in the future, or upon compliance with other terms hereof.
14.7 CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
provided unless expressly stated otherwise:
(a) "Seller's affiliates," "affiliates of Seller," and substantively
similar phrases mean any business entity which directly or indirectly controls,
is controlled by, or is
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under common control with either Seller. A business entity shall be deemed to
control another if it owns, directly or indirectly and whether legally or
beneficially in excess of fifty percent (50%) of the outstanding voting
securities or capital stock of such business entity or other comparable
equity or ownership interest.
(b) The term "knowledge" and substantially similar phrases means actual
knowledge after reasonable investigation.
14.8 CONFIDENTIALITY AGREEMENT
That certain Confidentiality Agreement dated February 3, 2000 between
GB Biosciences and Purchaser shall remain in force and effect in accordance with
its terms notwithstanding any termination of this Agreement.
14.9 TRANSACTION EXPENSES
Whether or not the transactions contemplated hereby are consummated,
all legal and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses, except as otherwise specifically provided herein.
14.10 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be an original, but all of which shall constitute but one agreement.
14.11 CAPTIONS
The captions used in this Agreement are for convenience of reference
only and shall not be considered in the interpretation of the provisions hereof.
14.12 ANNOUNCEMENTS
Unless required to be made by governmental authority, the content of
any public announcement by either party or its affiliates shall be subject to
the review and approval of the other party, such review and approval shall be
timely and within the time requirements of any law or regulation, and shall not
be unreasonably withheld.
14.13 BULK SALES LAWS
Purchaser hereby waives compliance by Seller with the provisions of the
"bulk sales", "bulk transfer" or similar laws of any state. Seller agrees to
indemnify and hold
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Purchaser harmless against any and all claims, losses, damages, liabilities
(including tax liabilities), costs and expenses incurred by Purchaser or any
of its affiliates or successors as a result of any failure to comply with any
such "bulk sales", "bulk transfer" or similar laws.
14.14 NO OTHER REPRESENTATIONS
EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV OR ELSEWHERE IN THIS
AGREEMENT, SELLER AND SELLER'S AFFILIATES MAKE NO OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND WITH RESPECT TO ANY OF THE ASSETS OR THE ARSONATES LINE,
EXPRESS OR IMPLIED, INCLUDING NO REPRESENTATIONS OR WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE OR MERCHANTABILITY.
IN WITNESS WHEREOF, the parties have executed this instrument as of the
date first above written.
GB BIOSCIENCES CORPORATION KMG-BERNUTH, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------ ----------------------------
Name: Xxxxxxx Xxxxxxxxxx Name: Xxxxx Xxxxxxx
---------------------- --------------------------
Title: Attorney in Face Title: President
--------------------- -------------------------
KMG CHEMICALS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
--------------------------
Title: President
-------------------------
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LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A = Listed Affiliates
EXHIBIT B = Tolling Agreement
EXHIBIT C = Sales Report
EXHIBIT D = Secondment Agreement
Schedule 1.1(a) = Manufacturing Equipment
Schedule 1.1(b) = Trademarks
Schedule 1.1(c) = Registrations
Schedule 1.1(d) = Task Force and AHP Agreements
Schedule 1.1(e) = Data
Schedule 1.1(f) = Research Files and Records
Schedule 1.1(g) = Customer List
Schedule 1.1(h) = Contracts, Licenses, Etc.
Schedule 1.6 = Allocation of Purchase Price
Schedule 2.2 = Assignment Agreements
Schedule 4.4 = Consents
Schedule 4.5 = Title to Assets
Schedule 4.8 = Contracts Exceptions
Schedule 4.10(a) = State Registrations
Schedule 4.10(b) = State Registrations Under Section 24(c)
