Exhibit 2.1
Execution Copy
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
dated as of May 17, 2007
among
INVERNESS MEDICAL SWITZERLAND GMBH,
PROCTER & XXXXXX INTERNATIONAL OPERATIONS, SA
and
SPD SWISS PRECISION DIAGNOSTICS GMBH
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 PURCHASE AND SALE.............................................. 3
Section 1.1 Purchase and Sale...................................... 3
Section 1.2 Purchased Assets....................................... 3
Section 1.3 Excluded Assets........................................ 5
Section 1.4 Liabilities Not Assumed by PGIO........................ 7
Section 1.5 Purchase Price; Allocation of Purchase Price........... 7
ARTICLE 2 CLOSING........................................................ 7
Section 2.1 Closing................................................ 7
Section 2.2 Closing Deliveries..................................... 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF IMS.......................... 8
Section 3.1 Organization and Existence............................. 8
Section 3.2 Power and Authority; Binding Agreement................. 9
Section 3.3 Noncontravention....................................... 9
Section 3.4 Compliance with Laws................................... 10
Section 3.5 Governmental Licenses.................................. 10
Section 3.6 Financial Statements................................... 11
Section 3.7 Absence of Changes or Events........................... 12
Section 3.8 Undisclosed Liabilities................................ 12
Section 3.9 Assets other than Real Property........................ 12
Section 3.10 [Reserved]............................................. 12
Section 3.11 Contracts.............................................. 12
Section 3.12 Intellectual Property.................................. 14
Section 3.13 Legal Proceedings...................................... 18
Section 3.14 Tax Matters............................................ 18
Section 3.15 Insurance.............................................. 18
Section 3.16 Benefit Plans.......................................... 18
Section 3.17 Employee and Labor Matters............................. 19
Section 3.18 Environmental Matters.................................. 20
Section 3.19 Transactions with Affiliates........................... 21
Section 3.20 Certain Business Practices............................. 21
Section 3.21 Regulatory Compliance.................................. 22
Section 3.22 Product Liability Claims; Product Recalls.............. 23
Section 3.23 Product Registrations.................................. 23
Section 3.24 Brokers' Fees.......................................... 24
ARTICLE 4 COVENANTS...................................................... 24
Section 4.1 Filings................................................ 24
Section 4.2 Access and Investigation............................... 24
Section 4.3 Conduct of Business.................................... 25
Section 4.4 Commercially Reasonable Efforts........................ 27
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Section 4.5 Public Announcements................................... 28
Section 4.6 Enforcement............................................ 28
Section 4.7 Inventory.............................................. 28
Section 4.8 Transfer............................................... 28
Section 4.9 Further Assurances..................................... 29
Section 4.10 Accounts Receivable.................................... 30
Section 4.11 Expenses............................................... 30
Section 4.12 Confidentiality........................................ 30
Section 4.13 [Reserved]............................................. 31
Section 4.14 Preparation for Transition............................. 31
Section 4.15 Other Subsidiaries..................................... 31
Section 4.16 Compliance with Contractual Obligations................ 32
Section 4.17 Reserved............................................... 32
Section 4.18 Unipath Purchase....................................... 32
Section 4.19 Transition Assets...................................... 32
Section 4.20 Disclosure Supplements................................. 34
ARTICLE 5 TAX MATTERS.................................................... 34
Section 5.1 Cooperation............................................ 34
Section 5.2 Apportioned Obligations................................ 34
Section 5.3 Transfer Taxes......................................... 34
Section 5.4 Tax Payments........................................... 35
ARTICLE 6 CONDITIONS TO CLOSING.......................................... 35
Section 6.1 Conditions to Each Party's Obligations................. 35
Section 6.2 Conditions to PGIO's Obligations....................... 36
Section 6.3 Conditions to IMS's Obligations........................ 38
ARTICLE 7 INDEMNIFICATION................................................ 38
Section 7.1 Indemnification of PGIO................................ 38
Section 7.2 Indemnification of IMS................................. 39
Section 7.3 Indemnification Claims................................. 40
Section 7.4 Survival............................................... 41
Section 7.5 Sole and Exclusive Remedy.............................. 42
ARTICLE 8 TERMINATION.................................................... 42
Section 8.1 Termination............................................ 42
Section 8.2 Effect of Termination.................................. 43
Section 8.3 Amendment.............................................. 43
Section 8.4 Extension; Waiver...................................... 43
ARTICLE 9 GENERAL PROVISIONS............................................. 43
Section 9.1 Notices................................................ 43
Section 9.2 Definitions............................................ 45
Section 9.3 Descriptive Headings; Certain Interpretations.......... 52
Section 9.4 Assignment............................................. 52
Section 9.5 Specific Enforcement................................... 52
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Section 9.6 Entire Agreement....................................... 52
Section 9.7 No Third-Party Beneficiaries........................... 52
Section 9.8 Counterparts........................................... 53
Section 9.9 Governing Law.......................................... 53
Section 9.10 Arbitration............................................ 53
Section 9.11 Severability........................................... 54
Section 9.12 Nonassignable Contracts................................ 54
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INDEX OF DEFINED TERMS
--A--
Accounts Receivable....................................................... 30
Affiliate................................................................. 45
Agreement................................................................. 1
Apportioned Obligations................................................... 34
Arbitration Request....................................................... 53
--B--
Benefit Plans............................................................. 19
Bond Indenture............................................................ 36
Business Contract......................................................... 45
Business Day.............................................................. 45
Business Intellectual Property............................................ 14
Business Purchased Intellectual Property.................................. 4
Business Registered Intellectual Property................................. 45
--C--
CD Business............................................................... 1
CD Financial Statements................................................... 11
Claim Notice.............................................................. 40
Closing................................................................... 7
Closing Date.............................................................. 7
COBRA..................................................................... 19
Code...................................................................... 45
Company................................................................... 1
Confidential Information.................................................. 30
Constitutive Documents.................................................... 45
Contingent Obligation..................................................... 46
Contract.................................................................. 46
Contributed Asset......................................................... 46
Contributed CD Business................................................... 2
Contributed US CD Business................................................ 2
Contribution Agreement.................................................... 2
Control................................................................... 46
Controlled................................................................ 46
--D--
Distribution Arrangements................................................. 2
--E--
Environmental Law......................................................... 46
Environmental Liability................................................... 46
Environmental Permits..................................................... 47
ERISA..................................................................... 19
Exchange Act.............................................................. 10
Excluded Assets........................................................... 5
Excluded Businesses....................................................... 5
Excluded Contracts........................................................ 6
Excluded Liabilities...................................................... 7
--F--
FDA....................................................................... 10
FDCA...................................................................... 22
Financial Investor........................................................ 47
Finished Product Purchase Agreement....................................... 2
First Check Diagnostics Business.......................................... 47
--G--
GAAP...................................................................... 11
General Limitations....................................................... 9
Global Trademark Assignments.............................................. 47
Governmental Entity....................................................... 47
Governmental Licenses..................................................... 3
Guarantee................................................................. 2
--H--
Hazardous Materials....................................................... 47
House Marks............................................................... 6
HSR Act................................................................... 10
--I--
IMA....................................................................... 1
IMA Audited Financial Statements.......................................... 11
IMA Balance Sheet Date.................................................... 11
IMA Facilities............................................................ 47
IMA Financial Statements.................................................. 11
IMA Indemnified Party..................................................... 39
IMA Indemnity Threshold................................................... 39
IMA License Agreements.................................................... 47
IMA Services Agreement.................................................... 47
IMA Transition Services Agreement......................................... 48
IMA Unaudited Financial Statements........................................ 11
IMS....................................................................... 1
Indebtedness.............................................................. 48
Indemnified Party......................................................... 48
Indemnifying Party........................................................ 48
Intellectual Property..................................................... 48
Intellectual Property Rights.............................................. 49
IP Liens.................................................................. 14
IRS....................................................................... 19
--J--
Judgment.................................................................. 9
--K--
Knowledge................................................................. 49
Xxxx...................................................................... 1
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--L--
Labeling.................................................................. 22
Xxxxxx.................................................................... 1
Law....................................................................... 9
Legal Proceedings......................................................... 14
License Agreements........................................................ 49
Lien...................................................................... 9
Losses.................................................................... 49
--M--
Material Adverse Effect................................................... 49
Most Recent Balance Sheet................................................. 11
Most Recent Balance Sheet Date............................................ 11
--N--
Nonassignable Contract.................................................... 54
--O--
Option Agreement.......................................................... 49
Ordinary Course of Business............................................... 12
Original Agreement........................................................ 1
Outside Date.............................................................. 42
--P--
Permitted IP Liens........................................................ 49
Permitted Liens........................................................... 49
Person.................................................................... 50
PGIO...................................................................... 1
PGIO Contribution Agreement............................................... 2
PGIO Indemnified Party.................................................... 00
XXXX License Agreements................................................... 50
PGIO Services Agreement................................................... 50
PGUS...................................................................... 2
Post-Closing Tax Period................................................... 34
PRC....................................................................... 5
Pre-Closing Tax Periods................................................... 18
Product................................................................... 50
Product Agreement......................................................... 50
Product Registrations..................................................... 50
Purchased Assets.......................................................... 3
Purchased CD Business..................................................... 1,2
--R--
Representatives........................................................... 50
Restructuring............................................................. 1
Retained Contracts........................................................ 33
Retained Inventory........................................................ 6
Returned Inventory........................................................ 28
--S--
Sale...................................................................... 3
Scheduled Contracts....................................................... 12
SEC....................................................................... 10
Share..................................................................... 50
Share Transfer Agreement.................................................. 1
Shareholder Agreement..................................................... 1
Shareholders.............................................................. 50
Strategic Investor........................................................ 51
Subsequent Transfer Date.................................................. 4
Subsidiary................................................................ 51
--T--
Tax....................................................................... 51
Tax Return................................................................ 51
Third Party Claim......................................................... 51
Trademarks................................................................ 51
Transaction Agreements.................................................... 51
Transfer Taxes............................................................ 34
Transferred Employee...................................................... 51
Transition Assets......................................................... 3
Transition Period......................................................... 32
--U--
UK Newco.................................................................. 2
UK Newco Investment Agreement............................................. 52
Unipath................................................................... 2
Unipath Purchase Agreement................................................ 2
US CD LLC................................................................. 2
US Contribution Agreement................................................. 2
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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT, dated as of May 17,
2007 (this "Agreement"), among Inverness Medical Switzerland GmbH, a
Swiss company ("IMS"), Procter & Xxxxxx International Operations, SA,
a Swiss company ("PGIO") and SPD Swiss Precision Diagnostics GmbH, a
Swiss company (the "Company")
INTRODUCTION
The Company was formed on December 19, 2006 by Xxxxxxxxx Xxxx ("Xxxx")
and Xxxxx Xxxxxx ("Xxxxxx"), each a resident of Switzerland, on behalf of IMS.
In connection with the formation of the Company, each of Xxxx and Xxxxxx, on
behalf of IMS, contributed CHF 10,000 to the Company and as consideration for
such contribution received one quota (one Share of the Company, representing,
immediately following such contribution, 50% of the outstanding Shares of the
Company).
Effective December 21, 2006, Xxxx and IMS entered into a share
transfer agreement, pursuant to which Xxxx sold to IMS and IMS purchased from
Xxxx, one Share of the Company for a purchase price of CHF 10,000. Following the
consummation of such sale and purchase, each of Xxxxxx, on behalf of IMS, and
IMS owned one quota (one Share of the Company, representing 50% of the
outstanding Shares of the Company).
On or prior to the date hereof, Xxxxxx, on behalf of IMS, and PGIO
entered into a Share Transfer Agreement (the "Share Transfer Agreement"),
pursuant to which Xxxxxx sold and PGIO purchased the Share of the Company owned
by Xxxxxx, on behalf of IMS, for a purchase price of CHF 10,000. Immediately
following such sale and purchase, and effective upon the Closing, each of IMS
and PGIO own 50% of the Company's outstanding Shares.
On the Closing Date, PGIO, IMS and the Company will enter into a
shareholder agreement in a form to be mutually agreed upon (the "Shareholder
Agreement"), which shall establish the respective rights and obligations of PGIO
and IMS with respect to the Company.
IMS, Inverness Medical Innovations, Inc. ("IMA") and certain of their
Affiliates are in the business of developing, manufacturing, marketing, selling
and distributing human diagnostics and monitoring products for sale and
distribution through over-the-counter channels, including retail outlets and
emerging channels located in such retail outlets (the "CD Business").
Prior to the Closing Date, IMA and certain of its Subsidiaries
(including IMS) will restructure (the "Restructuring") their businesses.
IMS, PGIO and the Company entered into an Asset Purchase Agreement,
dated as of December 22, 2006 (the "Original Agreement"), to provide for the
sale by IMS and the purchase by PGIO of certain assets of the CD Business, and
the assumption by PGIO of certain liabilities of the CD Business, in each case,
as set forth in the Original Agreement.
IMS, PGIO and the Company desire to enter into this Agreement to amend
and restate the Original Agreement and to provide for the sale by IMS and the
purchase by PGIO on the Closing Date of certain assets of the CD Business (the
"Purchased CD Business"), subject to
the terms set forth in this Agreement (including with respect to the Excluded
Assets and Excluded Liabilities). Simultaneously with the Closing hereunder,
PGIO will contribute the Purchased CD Business to the Company pursuant to the
PGIO Contribution Agreement (the "PGIO Contribution Agreement").
On the Closing Date, IMA will execute a guarantee (the "Guarantee"),
pursuant to which IMA guarantees all of IMS's obligations under this Agreement,
the Contributed Note (as defined in the Contribution Agreement) and the
Contribution Agreement, and all of IMS's and Unipath's respective obligations
under the Unipath Purchase Agreement.
Concurrently with the execution of this Agreement, (a) IMS is entering
into an Amended and Restated Contribution Agreement (the "Contribution
Agreement") with PGIO and the Company pursuant to which IMS will contribute to
the Company (i) cash, (ii) a promissory note in an original principal amount of
$22,326,000 and (ii) certain assets of the CD Business, and the Company will
assume certain liabilities of the CD Business, in each case, on terms and
conditions set forth in the Contribution Agreement (the "Contributed CD
Business"). Such contributions will be consummated concurrently with the Closing
hereunder; (b) SPD Development Company, Ltd. ("UK Newco"), and Unipath Limited
("Unipath") are entering into an Asset Purchase Agreement (the "Unipath Purchase
Agreement"), pursuant to which Unipath will sell and UK Newco will purchase
certain assets of the R&D Operations and the UK Call Center (each as defined in
the Unipath Purchase Agreement), and UK Newco will assume certain liabilities of
the R&D Operations and the UK Call Center, in each case, as set forth in the
Unipath Purchase Agreement (the "Purchased UK Operations"); and (c) IMA, Procter
& Xxxxxx RHD, Inc., ("PGUS") and US CD LLC, a Delaware limited liability company
("US CD LLC"), are entering into a Contribution Agreement (the "US Contribution
Agreement") whereby IMA will contribute to the US CD LLC certain assets of the
US CD Business (as defined in the US Contribution Agreement), and the US Company
will assume certain liabilities of the US CD Business, in each case, as set
forth in the US Contribution Agreement (the "Contributed US CD Business").
On the Closing Date, the Company and IMA and certain of its
Subsidiaries will enter into a mutually agreeable finished product purchase
agreement (the "Finished Product Purchase Agreement"), pursuant to which IMA
and/or such Subsidiaries will manufacture and sell to the Company the products
described therein.
On and following the Closing Date, the Company and (a) certain
Affiliates of PGIO and (b) IMA or certain Affiliates of IMA will enter into
distribution and commissionaire arrangements pursuant to which such Affiliates
of PGIO or IMA, as applicable, will distribute and act as sales agents for
products of the Company (collectively, the "Distribution Arrangements").
Capitalized terms shall have the meanings assigned to them in Section
9.2 or as otherwise provided in this Agreement.
In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:
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ARTICLE 1
PURCHASE AND SALE
Section 1.1 Purchase and Sale. Subject to the terms and conditions of
this Agreement, PGIO agrees to purchase the Purchased Assets from IMS, and IMS
agrees to sell the Purchased Assets to PGIO, at the Closing.
Section 1.2 Purchased Assets. Except for the Excluded Assets as
provided in Section 1.3 and without duplication of the Contributed CD Business,
at the Closing and with effect as of the Closing Date (or such later date as
provided under this Section 1.2), IMS shall, or shall cause its Affiliates to,
assign, transfer, convey and deliver to PGIO, free and clear of all Liens except
Permitted Liens (the "Sale"), and PGIO shall acquire from IMS, all of the right,
title and interest of IMS in and to any and all of the assets, properties,
rights and business of the Purchased CD Business of every kind, nature, type and
description, real, personal and mixed, tangible and intangible, whether known or
unknown, fixed or unfixed, or otherwise, whether or not specifically referred to
in this Agreement and whether or not reflected on the books and records of IMS
(collectively, the "Purchased Assets"), including the following:
(i) all tangible assets, furniture, fixtures and property, if any,
used by the Transferred Employees upon the hiring of such Transferred
Employees;
(ii) the Business Contracts (other than the Excluded Contracts) not
included within the Transition Assets;
(iii) the Business Contracts included within the Transition Assets,
which shall be transferred to the Company on the applicable Subsequent
Transfer Date;
(iv) except for the Product Registrations, all licenses,
registrations, notifications, franchises, qualifications, provider numbers,
permits, approvals, clearances and authorizations issued by any
Governmental Entity that relate to the Purchased CD Business or the
Purchased Assets (collectively, the "Governmental Licenses"), in each case
to the extent transferable or assignable and subject to IMA retaining such
of the foregoing as are necessary for IMA and/or certain of its
Subsidiaries to fulfill their respective obligations under the Finished
Product Purchase Agreement, the IMA Transition Services Agreement, the
Product Agreement, the Regulatory Transition Agreement or as a distributor
under the Distribution Arrangements (the foregoing licenses, registrations,
notifications, franchises, qualifications, provider numbers, permits,
approvals, clearances and authorizations, all lists, documents, records,
information and other assets and rights of IMS or any of its Affiliates, in
each case excluding the Excluded Assets, necessary for IMA and/or its
Subsidiaries to perform such obligations being referred to hereunder as the
"Transition Assets"); provided that the Transition Assets shall be
transferred to the Company, without the payment of additional consideration
by the Company, upon the termination or expiration of the Finished Product
Purchase Agreement, the applicable Transition Period (as defined in the IMA
Transition Services Agreement) under the IMA Transition Services Agreement,
the Regulatory Transition Agreement or the term of the applicable
Distribution Agreement,
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as applicable (such applicable date, the "Subsequent Transfer Date"), in
each case to the extent transferable or assignable;
(v) all lists, documents, records, written information, computer files
and other computer readable media concerning present customers, and to the
extent reasonably available, past and potential customers, of goods or
services arising from or used in the Purchased CD Business, excluding any
of the foregoing included within the Transition Assets, which shall be
transferred to the Company on the applicable Subsequent Transfer Date;
(vi) all lists, documents, records, written information, computer
files and other computer readable media concerning present suppliers and
vendors of goods or services, and to the extent reasonably available, past
and potential suppliers and vendors, arising from or used in the Purchased
CD Business, excluding any such lists, records, written information,
computer files and other media included within the Transition Assets, which
shall be transferred to the Company on the applicable Subsequent Transfer
Date;
(vii) all product records, product data, correspondence with and to
customers of the CD Business, production records, contract files,
technical, accounting, and procedural manuals, studies, reports or
summaries relating to the general condition of the Purchased Assets, and
any confidential information which has been reduced to writing or
electronic form, to the extent that any of the foregoing relate to or arose
from the Purchased CD Business, which shall be transferred to the Company
on the applicable Subsequent Transfer Date;
(viii) all rights under express or implied warranties from the
suppliers and vendors relating to or arising out of the operation of the
Purchased CD Business, except for such rights arising out of or relating to
the manufacturing of any product of the CD Business;
(ix) to the extent related to an Assumed Liability, all claims,
warranties, guarantees, refunds, causes of action, rights of recovery,
rights of set-off and rights of recoupment of any kind and nature;
(x) all currently outstanding unfilled purchase orders and proposals
(or portions thereof) received for the purchase of inventory of the
Purchased CD Business following the termination of the Transition Period;
(xi) all (A) Intellectual Property owned by IMS or any of its
Affiliates that are exclusively used in the CD Business, including those
Trademarks of which IMS is the registered owner as set forth on Section
3.12(a) of the Disclosure Schedule, and (B) Trademarks (other than House
Marks) owned by IMS or IMA or any of their respective Subsidiaries that are
not presently exclusively used by the CD Business or any other business of
IMS or such Affiliate but that were exclusively used by the CD Business in
the past, in each case including the Business Registered Intellectual
Property (the "Business Purchased Intellectual Property");
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(xii) to the extent assignable, all rights under any non-disclosure
agreements, non-solicitation agreements and non-competition agreements
entered into with any parties, to the extent that any of the foregoing
relates to or arose from the Purchased CD Business;
(xiii) all rights and claims, including refunds, to the extent that
such rights and claims relate to or arose from the Purchased CD Business;
(xiv) all insurance policies (to the extent separable and assignable)
with respect to the CD Business, and rights, benefits, claims and proceeds
thereunder arising from or relating to the Assumed Liabilities;
(xv) other than Retained Inventory, all other tangible assets or
movable property used in connection with the Purchased CD Business, if any;
and
(xvi) all goodwill relating to the foregoing.
Section 1.3 Excluded Assets. Notwithstanding the provisions of Section
1.2, the parties hereto acknowledge and agree that the following are not
included among either the Purchased Assets or the Contributed Assets (as defined
in the Contribution Agreement) and are excluded from the Sale (collectively, the
"Excluded Assets"):
(i) the assets, properties, Contracts and rights of IMS and its
Affiliates in the Excluded Fields (which shall include, for the avoidance
of doubt, the tangible assets and real property located at Stirling,
Scotland) and the Intellectual Property of IMS and its Affiliates in the
Excluded Fields;
(ii) (A) Intellectual Property owned by third parties and licensed to
IMS or one or more of its Affiliates for use in the CD Business and which
are listed in Section 1.3(ii) of the Disclosure Schedule, (B) Intellectual
Property, other than Trademarks, not used exclusively in the CD Business,
and (C) Trademarks that have never been at any time exclusively used in the
CD Business (other than Trademarks that have been held for use in the CD
Business but have never been used by any business);
(iii) the assets, properties, Contracts and rights of IMS and its
Affiliates (including vendor and supplier contracts, information, files and
data) used in the manufacturing of the products of the CD Business,
including all tangible assets, properties, and contracts of IMS' or its
Affiliates' manufacturing facilities located in Bedford, England, Hangzhou,
People's Republic of China ("PRC") and Shanghai, PRC, excluding any product
specifications, product registrations or similar assets, used in the
conduct of the CD Business;
(iv) the assets, properties, Contracts and rights arising from or used
in IMA's and its Subsidiaries' professional diagnostics and nutritional
supplement businesses (collectively, the "Excluded Businesses");
(v) all accounts receivable, and notes receivable (if any), of any
nature arising from the Purchased CD Business existing on the Closing Date;
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(vi) all prepaid expenses and other deposits related to the Purchased
CD Business;
(vii) the Contracts arising from the CD Business set forth on Section
1.3(vii) of the Disclosure Schedule (the "Excluded Contracts");
(viii) the Trademarks or trade names "Inverness," and any variants
thereof that include "Inverness," internet domain names that include
"Inverness," and the Inverness "little man" logo (collectively, the "House
Marks");
(ix) real property, buildings, structures and improvements thereon,
whether owned or leased by IMS or its Affiliates, and all fixtures and
fittings attached thereto, including all manufacturing, distribution and
administration facilities of IMS and its Affiliates;
(x) rights to refunds of Taxes paid by or on behalf of IMS or any of
its Affiliates (other than those paid by the Company);
(xi) except as provided in Section 1.2(xiv), insurance policies and
rights and benefits and claims thereunder;
(xii) tangible assets, properties, Contracts and Intellectual Property
of IMA or its Subsidiaries (including animals and cell lines) used in the
manufacturing, production and storage of reagents and other biological
materials used in the CD Business;
(xiii) all inventory, including all raw materials, work-in-process,
supplies and finished goods, including goods in transit, as sold, used or
held for use as part of the CD Business, wherever located (the "Retained
Inventory");
(xiv) all currently outstanding unfilled purchase orders and proposals
(or portions thereof) received for the purchase of inventory of the
Purchased CD Business during the period prior to the termination of the
Transition Period;
(xv) the services of any employees of IMA or its Subsidiaries (except
for Transferred Employees upon hiring of such Transferred Employees by the
Company or a Subsidiary of the Company) or assets of any employee benefit
plan, arrangement, or program maintained or contributed to by IMA or any of
its Subsidiaries with respect to any employees other than Transferred
Employees (upon the hiring of such Transferred Employees by the Company or
a Subsidiary of the Company);
(xvi) the assets, properties, Contracts and rights arising from or
used in the Purchased UK Operations, the Contributed US CD Business and the
First Check Diagnostics Business; and
(xvii) any other assets, tangible or intangible, wherever situated,
not included in the Purchased Assets, including those used in the Excluded
Businesses;
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provided that IMS and its Affiliates, upon reasonable request and to the extent
IMS or any of its Affiliates has the right to so provide, will provide the
Company reasonable access during normal business hours to the Excluded Assets
that, prior to the Closing Date, were used in the CD Business and are not being
transferred pursuant to this Agreement or the Contribution Agreement, for the
Company's use to facilitate its manufacturing, research and development and
marketing, sales and distribution activities; provided, further, that with
respect to access to the Bedford, England, Hangzhou, PRC or Shanghai, PRC
manufacturing facilities, the terms of the Finished Product Purchase Agreement
shall control and this provision shall not expand the rights set forth therein.
Section 1.4 Liabilities Not Assumed by PGIO. Notwithstanding anything
to the contrary in this Agreement, PGIO shall not assume, or in any way be
liable or responsible for any, and IMS and its Affiliates shall pay, perform and
discharge all, obligations and liabilities of them, direct or indirect, known or
unknown, fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise (collectively,
the "Excluded Liabilities") and IMS shall hold PGIO harmless with respect to the
Excluded Liabilities.
Section 1.5 Purchase Price; Allocation of Purchase Price. (a) In
consideration of the Sale of the Purchased Assets, on the Closing Date, IMS
shall receive $282,849,900 in cash.
(b) As soon as practicable after the Closing, PGIO shall deliver to
IMS a allocation statement, allocating such purchase price among the Purchased
Assets in accordance with Section 1060 of the Code. If within 10 days after the
delivery of such allocation statement, IMS notifies PGIO in writing that IMS
objects to the allocation set forth in such allocation statement, PGIO and IMS
shall use commercially reasonably efforts to resolve such dispute within 20
days. In the event that PGIO and IMS are unable to resolve such dispute within
20 days, PGIO and IMS shall jointly retain a nationally recognized accounting
firm to resolve the disputed items. Upon resolution of the disputed items, the
allocation reflected on such allocation statement shall be adjusted to reflect
such resolution.
ARTICLE 2
CLOSING
Section 2.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be held at the offices of Xxxxxxxxx &
Xxxxxxx LLP, 0000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX, at 10:00 a.m. on the
date as soon as practicable, and in any event not later than two Business Days,
following satisfaction of all conditions and taking of all other actions (other
than those that by their terms are to be satisfied or taken at the Closing) set
forth in Article 6 (or, to the extent permitted by Law, waived by the parties
hereto entitled to the benefits thereof), or on such other date, and at such
other time or place, as PGIO and IMA may mutually agree in writing. The date on
which the Closing occurs is referred to in this Agreement as the "Closing Date."
Section 2.2 Closing Deliveries. (a) At the Closing, PGIO shall deliver
or cause to be delivered to IMS cash in an amount equal to $282,849,900.
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(b) At the Closing, IMS shall deliver or cause to be delivered to
PGIO:
(i) an instrument of sale, assignment or contribution in a form
reasonably satisfactory to PGIO transferring to PGIO all of IMS and its
Affiliates' right, title and interest in and to the Purchased Assets,
executed by IMS;
(ii) such other bills of sale, endorsements, assignments and other
instruments of transfer, conveyance and assignment (in a form reasonably
satisfactory to PGIO) as shall be required by Law or necessary in the
reasonable judgment of PGIO to transfer, convey and assign the Purchased
Assets to PGIO, executed by IMS;
(iii) the Guarantee, in a form reasonably acceptable to PGIO, under
which IMA guarantees all of the obligations of IMS hereunder, under the
Contributed Note and under the Contribution Agreement, and all of IMS's and
Unipath's respective obligations under the Unipath Purchase Agreement,
executed by IMA; and
(iv) the Share Transfer Agreement, executed by Xxxxxx.
(c) At the Closing, PGIO shall deliver or cause to be delivered to the
Company:
(i) the PGIO Contribution Agreement, executed by PGIO;
(ii) such bills of sale, endorsements, assignments and other
instruments of transfer, conveyance and assignment, in each case in
substantially the same form as those delivered pursuant to Section 2.2(b)
but substituting (x) the Company for PGIO and (y) PGIO for IMS and with
such other conforming changes as PGIO and IMS shall mutually agree,
executed by PGIO; and
(iii) the Share Transfer Agreement, executed by PGIO.
(d) At the Closing, the Company shall deliver or cause to be delivered
to PGIO the PGIO Contribution Agreement, executed by the Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF IMS
IMS represents and warrants to the Company and PGIO as follows, as of
December 22, 2006 and as of the Closing:
Section 3.1 Organization and Existence. Each of IMS and the Company is
duly organized and validly existing under the Laws of Switzerland, has all
requisite power and authority to carry on the CD Business as now being conducted
and is duly qualified or licensed to do business and in good standing in each
jurisdiction in which the nature of the CD Business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where the failure to be so qualified or licensed
would not have a Material Adverse Effect. Other than wholly-owned Subsidiaries,
IMA has no
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Subsidiaries or Affiliates that conduct the CD Business or own Contributed
Assets other than Inverness Medical (Shanghai), Co., Ltd.
Section 3.2 Power and Authority; Binding Agreement. Each of IMS and
the Company has all requisite power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations hereunder, and has, or on the Closing Date will have, the requisite
power and authority to enter into each of the Transaction Agreements to which it
is a party and to perform its obligations thereunder. This Agreement is a valid
and binding obligation of each of IMS and the Company, enforceable against each
of them in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other Laws affecting the
rights of creditors generally and subject to the rules of Law governing (and all
limitations on) specific performance, injunctive relief and other equitable
remedies (the "General Limitations"). When executed, each other Transaction
Agreement to which either of IMS or the Company is a party will be the valid and
binding obligation of each of IMS and the Company enforceable against each of
them in accordance with its terms, except as the same may be limited by the
General Limitations. Except as set forth in Section 3.2 of the Disclosure
Schedule, no other act, approval or proceedings on the part of IMS or the
Company is, or will be, required to authorize the execution and delivery of this
Agreement and the other Transaction Agreements to which either of them is a
party or the consummation of the transactions contemplated hereby and thereby.
Section 3.3 Noncontravention. (a) Except as set forth in Section
3.3(a) of the Disclosure Schedule, the execution and delivery by IMS or the
Company of this Agreement and the other Transaction Agreements to which either
of them is a party, and the consummation of the transactions contemplated hereby
and thereby and the compliance by either of them with the provisions hereof and
thereof do not and will not result in the creation of any lien, pledge, claim,
charge, mortgage, encumbrance or other security interest of any kind, whether
arising by Contract or by operation of Law (a "Lien"), in or upon any of the
properties or assets of IMS or its Affiliates that are material to the conduct
of the CD Business. Except as set forth in Section 3.3(a) of the Disclosure
Schedule, the execution and delivery by IMS or the Company of this Agreement and
the other Transaction Agreements to which either of them is a party, and the
consummation of the transactions contemplated hereby and thereby and the
compliance by either of them with the provisions hereof and thereof do not and
will not (i) conflict with or result in any violation or default (with or
without notice or lapse of time or both) under, (ii) give rise to a right of, or
result in, termination or cancellation of, or acceleration of any obligation
under, (iii) result in a loss of a material benefit under, or (iv) give rise to
any increased, additional, accelerated or guaranteed rights or entitlements
under, any provision of (A) the Constitutive Documents of IMS or the Company,
(B) any material Business Contract to which IMS or any of its Affiliates or the
Company is a party or is bound by, or any Purchased Assets are bound by or
subject, or under which IMS or any of its Affiliates or the Company has material
rights or benefits or (C) subject to the governmental filings and other matters
referred to in Section 3.3(b), any constitution, act, statute, law (including
common law), ordinance, treaty, rule or regulation of any Governmental Entity (a
"Law") or any judgment, order or decree (a "Judgment"), in each case applicable
to IMS or any of its Affiliates or the Contributed Assets or the Purchased
Assets, or the Company.
-9-
(b) No consent, approval, license, permit, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required by or with respect to IMS or the Company in connection with the
execution and delivery of this Agreement, the other Transaction Agreements to
which either of them is a party, the consummation of the transactions
contemplated hereby or thereby or the compliance by IMS or the Company with the
provisions hereof and thereof, except (i) for filings required under, and
compliance with other applicable requirements of, the Xxxx Xxxxx Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), and any similar competition
filing with any Governmental Entity, if applicable to this Agreement, the other
Transaction Agreements and the transactions contemplated hereby and thereby;
(ii) the filing with the Securities and Exchange Commission (the "SEC")of such
reports under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and the other
Transaction Agreements and the transactions contemplated hereby and thereby;
(iii) filings with, and notices and submissions to, the United States Food and
Drug Administration (the "FDA"); (iv) such filings as may be required to
transfer the ownership of Intellectual Property Rights; and (v) such other
consents, approvals, orders, authorizations, registrations, declarations,
filings and notices, the failure of which to be obtained or made individually or
in the aggregate would not impair in any material respect the ability of IMS or
the Company to perform its obligations under this Agreement or prevent or
materially impede or delay the consummation of the transactions contemplated
hereby.
Section 3.4 Compliance with Laws. Except as set forth in Section 3.4
of the Disclosure Schedule, IMS and its Affiliates are in compliance in all
material respects with all applicable Laws and Judgments. Except as set forth in
Section 3.4 of the Disclosure Schedule, since January 1, 2004 neither IMS nor
any of its Affiliates has received a written notice from a Governmental Entity
alleging a possible violation by it of any applicable Law or Judgment applicable
to the CD Business. Notwithstanding the foregoing, this Section 3.4 shall not
constitute a representation or warranty as to intellectual property, tax,
employee benefit plan, environmental or the specific regulatory matters covered
in Sections 3.21, 3.22 and 3.23 which are limited to those representations and
warranties set forth in Sections 3.12, 3.14, 3.16, 3.17, 3.18, 3.21, 3.22 and
3.23, respectively.
Section 3.5 Governmental Licenses. IMS and its Affiliates validly hold
and have in full force and effect all Governmental Licenses that are material to
the conduct of the CD Business, and neither IMS nor any of its Affiliates is in
violation (other than an immaterial violation) of, or default (with or without
notice or lapse of time or both) (other than an immaterial default) under, or
event giving to any other Person any right of termination, amendment or
cancellation of, any Governmental License material to the conduct of the CD
Business. Each of IMS and its Affiliates is in compliance in all material
respects with the terms and conditions of all Governmental Licenses issued to or
held by it that are material to the CD Business, and such Governmental Licenses
will not be subject to suspension, modification, revocation or nonrenewal as a
result of the execution and delivery of this Agreement or the other Transaction
Agreements to which either of them is a party or the consummation of the
transactions contemplated hereby and thereby. No proceeding is pending or, to
the Knowledge of IMS or IMA, threatened seeking the revocation or limitation of
any Governmental License that is material to the conduct of the CD Business.
Section 3.5 of the Disclosure Schedule lists each Governmental License held by
IMS or its Subsidiaries that is material to the conduct of the CD Business,
except for any licenses related to, or necessary for, the manufacture or storage
of
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the products of the CD Business. Except as set forth therein, all of the
Governmental Licenses listed in Section 3.5 of the Disclosure Schedule are held
in the name of IMS or its Affiliates, and none are held in the name of any
current or former director, officer, employee, independent contractor or
consultant of IMS or its Affiliates or agents or otherwise on behalf of IMS or
its Affiliates. Except for those Governmental Licenses retained by IMS pursuant
to Section 1.2(vi) of the Contribution Agreement in order to perform the
obligations under the Finished Product Purchase Agreement or as set forth in
Section 3.5 of the Disclosure Schedule, all Governmental Licenses that are
material to the conduct of the CD Business are transferable to the Company.
Notwithstanding the foregoing, this Section 3.5 shall not constitute a
representation or warranty as to the specific regulatory matters covered in
Sections 3.21 and 3.23.
Section 3.6 Financial Statements. (a) Section 3.6(a) of the Disclosure
Schedule refers to the audited consolidated balance sheets of IMA as of December
31, 2005 (the "IMA Balance Sheet Date"), and December 31, 2004 and audited
statements of income and cash flows of IMA for each of the fiscal years ending
on such dates, together with any notes thereto and accountant's reports thereon
(collectively, the "IMA Audited Financial Statements"), and the unaudited
consolidated balance sheet of IMA as of September 30, 2006 and the unaudited
statement of income of IMA for the period ending on such date (collectively, the
"IMA Unaudited Financial Statements" and together with the IMA Audited Financial
Statements, the "IMA Financial Statements"). Except as disclosed in Section
3.6(a) of the Disclosure Schedule, the IMA Financial Statements fairly present,
in all material respects, the consolidated financial position and results of
operations and cash flows of IMA for the periods and as of the dates referred to
in the IMA Financial Statements, all in accordance with United States generally
accepted accounting principles, consistently applied ("GAAP") (except, in the
case of the IMA Unaudited Financial Statements, for the absence of footnotes and
normal year-end adjustments that are not material individually or in the
aggregate). The IMA Financial Statements are consistent in all material respects
with the books and records of IMA, subject, in the case of the IMA Unaudited
Financial Statements, to normal year-end adjustments that are not material
individually or in the aggregate.
(b) Section 3.6(b) of the Disclosure Schedule sets forth the unaudited
pro forma balance sheet (the "Most Recent Balance Sheet") of CD Business as of
September 30, 2006 (the "Most Recent Balance Sheet Date"), and the unaudited pro
forma statements of revenues and direct expenses of the CD Business for the
period then ended (the financial statements collectively, the "CD Financial
Statements"). Except as set forth in Section 3.6(b) of the Disclosure Schedule,
the CD Financial Statements (i) are consistent with the books and records of IMS
and IMA, (ii) have been prepared in accordance with GAAP and (iii) present
fairly the pro forma financial condition, results of operations of the CD
Business as of the respective dates thereof and for the periods referred to
therein, subject to normal year-end adjustments that are not material
individually or in the aggregate.
(c) IMA maintains a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the
-11-
existing assets at reasonable intervals and appropriate actions are taken with
respect to any differences.
Section 3.7 Absence of Changes or Events. Since the IMA Balance Sheet
Date, (a) except as set forth in Section 3.7 of the Disclosure Schedule, the CD
Business has been conducted only in the ordinary course of business consistent
with past practice (the "Ordinary Course of Business"), (b) there has occurred
no Material Adverse Effect, and (c) other than as set forth in Section 3.7 of
the Disclosure Schedule, none of IMA and its Subsidiaries has taken any actions
that, if taken after the date of this Agreement, would constitute a breach of
any of the covenants set forth in Section 4.3(a), (b) and (c).
Section 3.8 Undisclosed Liabilities. Except with respect to their
respective obligations under this Agreement, the Contribution Agreement, the
other Transaction Agreements and the Contributed Note, neither IMS nor IMA has
liabilities or obligations relating to the CD Business (in each case whether
known, absolute, contingent, accrued or otherwise), except for such liabilities
and obligations (a) to the extent shown on the Most Recent Balance Sheet, (b)
incurred in the Ordinary Course of Business since the Most Recent Balance Sheet
Date, (c) under the Business Contracts, other than liabilities and obligations
due to any material breaches or non-performance thereunder, or (d) listed in
Section 3.8 of the Disclosure Schedule.
Section 3.9 Assets other than Real Property. Except as set forth in
Section 3.9 of the Disclosure Schedule, (a) each of IMS and IMA owns outright
and has good and marketable title to all of the tangible Purchased Assets free
and clear of all Liens; (b) other than the Excluded Assets and together with the
assets contributed by IMA to the Company pursuant to the Contribution Agreement,
the Company's rights under the IMA License Agreements, the Finished Product
Purchase Agreement, the Distribution Arrangements and the IMA Transition
Services Agreement, the Purchased Assets constitute all of the assets,
properties, permits, rights, agreements and other Contract rights and interests
that are necessary to enable the Company after the Closing to operate the CD
Business in a manner consistent with the manner in which the CD Business is
currently being operated; (c) the Sale will vest good and marketable title in
and to the tangible Purchased Assets in PGIO free and clear of all Liens except
for Permitted Liens; and (d) the consummation of the transactions contemplated
by the PGIO Contribution Agreement will vest good and marketable title in and to
the tangible Purchased Assets in the Company free and clear of all Liens except
for Permitted Liens. To the Knowledge of IMS or IMA, the tangible Contributed
Assets are in good operating condition and repair and none of such tangible
assets that are material to the conduct of the CD Business is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost.
Section 3.10 [Reserved].
Section 3.11 Contracts. (a) Section 3.11(a) of the Disclosure Schedule
sets forth a true, accurate and complete list of each Business Contract
(collectively, "Scheduled Contracts") to which IMA, IMS or any of their
respective Subsidiaries is a party that (x) is material to the CD Business; (y)
provides for aggregate annual payments, or has a value in excess, of fifty
thousand dollars ($50,000); or (z) falls within one or more of the following
categories:
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(i) Contracts under which IMA, IMS or any of their respective
Subsidiaries own, have under license, have a right to acquire (by option or
otherwise), have a right to use or exercise (including any covenant not to
xxx or other similar right of forbearance), or otherwise Control, or have
any other right or interest in or to any Intellectual Property that is
necessary to the conduct of the CD Business as currently conducted;
(ii) Contracts with any labor union or similar representative covering
any Transferred Employee;
(iii) Contracts under which products of the CD Business are
manufactured or distributed by IMA, IMS or any of their respective
Subsidiaries, including any distribution agreements, wholesalers,
manufacturing and supply agreements and Contracts with managed care
organizations or Governmental Entities; and
(iv) Contracts limiting or restraining IMA, IMS or any of their
respective Subsidiaries in any material respect from engaging or competing
in any business of the CD Business with any Person or from purchasing any
products, services or inventory from any third parties.
Notwithstanding the foregoing, neither IMA nor IMS shall be required to set
forth on the aforementioned Section 3.11(a) of the Disclosure Schedule any
Contract relating to IMA's and certain of its Subsidiaries' manufacturing of
products of the CD Business, including Contracts to purchase raw materials,
components or supplies, Contracts to supply or procure reagents or other
biological components and Contracts with subcontractors, suppliers or service
providers used in the conduct of such manufacturing activity.
(b) Except as indicated in Section 3.11(b) of the Disclosure Schedule,
IMA has delivered or made available to PGIO complete and correct copies of all
written Scheduled Contracts, including all amendments, modifications and
material waivers relating thereto.
(c) Each Scheduled Contract is in full force and effect in accordance
with the terms thereof and constitutes a legal, valid and binding agreement of
IMA, IMS or one or more of their respective Subsidiaries, as applicable, and is
enforceable in accordance with its terms by IMA, IMS or such Subsidiaries, as
applicable, against each counterparty thereto, except as the same may be limited
by General Limitations. IMA, IMS and their respective Subsidiaries, as
applicable, have performed in all material respects all of their obligations,
and are not in default under, any Business Contract. To IMS's or IMA's
Knowledge, except as indicated in Section 3.11(c) of the Disclosure Schedule, no
other party to any Business Contract is in material breach of or default under
such Business Contract.
(d) Except as set forth in Section 3.11(d) of the Disclosure Schedule,
neither IMA nor IMS has any Knowledge that any party to any Scheduled Contract
(i) intends to either terminate or not renew such Scheduled Contract, or (ii)
has or intends to submit to IMA, IMS or any of their respective Subsidiaries any
claim of material breach by any such party with respect to the performance of
its obligations under any such Scheduled Contract.
(e) Section 3.11(e) of the Disclosure Schedule sets forth a true,
accurate and complete list of the Scheduled Contracts for which third party
consents are required to assign
-13-
such Business Contracts to the Company. Subject to the receipt of the third
party consents listed on Section 3.11(e) of the Disclosure Schedule and Closing,
the Company will succeed to all rights, title and interests of IMA, IMS or their
respective Subsidiaries under each such Contract without the necessity to obtain
the consent of any other Person(s) to the assignment of such Contract.
(f) None of the Business Contracts have been entered into by IMA, IMS
or any of their respective Subsidiaries other than in its or their Ordinary
Course of Business (other than agreements in settlement of any investigation,
claim, action, suit, complaint, dispute, audit, demand, litigation or judicial,
administrative or arbitration proceeding (collectively, "Legal Proceedings")
listed on Section 3.13 of the Disclosure Schedule) and other than on an arm's
length basis.
(g) Except as set forth in Section 3.11(g) of the Disclosure Schedule,
the Scheduled Contracts do not contain any provision that provides for automatic
termination upon the occurrence of the transactions contemplated hereby or for
the right of any party to any such Contract to terminate, accelerate or receive
any payment or other more favorable terms and conditions upon occurrence of the
transactions contemplated hereby.
(h) Except as set forth in Section 3.11(h) of the Disclosure Schedule,
there are no Persons holding a power of attorney on behalf of IMS, IMA or any of
their respective Subsidiaries that would enable such Persons to sell, lease or
otherwise encumber any Purchased Asset.
Section 3.12 Intellectual Property. (a) Section 3.12(a) of the
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list of all Business Registered Intellectual Property. "Business Intellectual
Property" means (i) Business Contributed Intellectual Property (as defined in
the Contribution Agreement), (ii) Business Purchased Intellectual Property and
(iii) all other Intellectual Property constituting Inverness Licensed IP and
Inverness Licensed Trademarks (each as defined in the IMA License Agreements).
Except to the extent indicated in Section 3.12(a) of the Disclosure Schedule,
all Business Intellectual Property is either (x) owned by, or subject to an
obligation of sole and exclusive assignment to, IMS or IMA or one of their
respective Subsidiaries free and clear of all Liens or other exceptions to title
that affect such Business Intellectual Property or restrict the use by IMS or
IMA or any of their respective Subsidiaries of the Business Intellectual
Property in any way or require IMS or IMA or any of their respective
Subsidiaries to make any payment or give anything of value as a condition to its
use in any way of such Business Intellectual Property (collectively, "IP
Liens"), except in each case for Permitted IP Liens or (y) Controlled but not
owned by IMS or IMA or one of their respective Subsidiaries pursuant to a
license from, or a similar agreement with, a third party free and clear, to the
Knowledge of IMS and IMA, of all IP Liens except for Permitted IP Liens. To the
Knowledge of IMS or IMA, with respect to all Business Intellectual Property
owned by IMS or IMA or one of their respective Subsidiaries that are United
States patents or applications subject to a terminal disclaimer against another
patent or application, each such patent or application has been and remains
commonly owned with the patent or application it is terminally disclaimed
against since the terminal disclaimer was filed with the United States Patent
Office. Except to the extent indicated in Section 3.12(a) of the Disclosure
Schedule, IMS or IMA or one of their respective Subsidiaries is (A) the sole
owner of all Business Contributed
-14-
Intellectual Property and all Business Purchased Intellectual Property and (B)
the sole owner or sole and exclusive licensee (as the case may be) of all
Inverness Licensed IP and Inverness Licensed Trademarks. There are no actions
pending or, to the Knowledge of IMS or IMA, threatened with regard to the
ownership or Control by IMS or IMA or one of their respective Subsidiaries of
any Business Intellectual Property. Except as specified in Section 3.12(a) of
the Disclosure Schedule, each of IMS and IMA has the legal power to convey or
license (as applicable) to the Company all of its or its Subsidiaries' right,
title and interest that is being conveyed or licensed in and to the Business
Intellectual Property. No Business Intellectual Property will terminate or cease
to be valid Intellectual Property by reason of the execution and delivery of
this Agreement by IMS and IMA, the performance of IMS and IMA of their
obligations hereunder, or the consummation by IMS and IMA of the transactions
contemplated hereby.
(b) Except as disclosed in Section 3.12(b) of the Disclosure Schedule,
to the Knowledge of IMS or IMA, there is no unauthorized use, infringement,
misappropriation or violation of any of the Business Intellectual Property by
any Person.
(c) Except as disclosed in Section 3.12(c) of the Disclosure Schedule,
there are no pending or, to the Knowledge of IMS or IMA, threatened written
claims that the CD Business has infringed or is infringing any Intellectual
Property of any Person. Except for any third-party Intellectual Property
referred to in Section 3.12(c) of the Disclosure Schedule, to the Knowledge of
IMS or IMA, there are no patents or patent applications of any third party that
claim the same subject matter as a patent or patent application included in the
Business Intellectual Property that could reasonably serve as the basis for an
interference proceeding involving a patent or patent application included in the
Business Intellectual Property.
(d) (i) The patent applications owned by IMS or IMA or one of their
respective Subsidiaries and included in the Business Intellectual Property and,
to the Knowledge of IMS or IMA, the patent applications licensed by any third
party to IMS or IMA or one of their respective Subsidiaries and included in the
Business Intellectual Property, are pending and have not been abandoned, and
have been and continue to be prosecuted. All patents, registered Trademarks and
applications for Trademarks owned by IMS or IMA or one of their respective
Subsidiaries and included in the Business Intellectual Property and, to the
Knowledge of IMS or IMA, all patents, registered Trademarks and applications for
Trademarks licensed by any third party to IMS or IMA or one of their respective
Subsidiaries and included in the Business Intellectual Property, have been duly
registered or filed with or issued by the appropriate Governmental Entity, all
necessary affidavits of continuing use have been timely filed, and all necessary
maintenance fees timely paid to continue all such rights in effect. Except as
set forth on Section 3.12(d)(i) of the Disclosure Schedule, none of the patents
owned by IMS or IMA or one of their respective Subsidiaries and included in the
Business Intellectual Property and, to the Knowledge of IMS or IMA, none of the
patents licensed by any third party to IMS or IMA or one of their respective
Subsidiaries and included in the Business Intellectual Property, have expired or
been declared invalid, in whole or in part, by any Governmental Entity. Except
as set forth in Section 3.12(d) of the Disclosure Schedule, there are no ongoing
interferences, oppositions, reissues, or reexaminations or other proceedings
that could result in a loss or limitation of a patent right or claim involving
any of the patents or patent applications owned by IMS or IMA or one of their
respective Subsidiaries and included in the Business Intellectual Property. To
the Knowledge of IMS or IMA, there are no ongoing interferences,
-15-
oppositions, reissues, or reexaminations or other proceedings that could result
in a loss or limitation of a patent right or claim involving any of the patents
or patent applications licensed by any third party to IMS or IMA or one of their
respective Subsidiaries and included in the Business Intellectual Property.
(ii) To the Knowledge of IMS or IMA, (A) the patents included in the
Business Intellectual Property have not been declared invalid or
unenforceable by any court, (B) there is no reason to believe that any
patent included in the Business Intellectual Property and material to the
CD Business would be declared invalid or unenforceable by a court, and (C)
each of IMS and IMA has met its duty of candor as required under 37 C.F.R.
1.56 and complied with analogous Laws outside the United States requiring
disclosure of references. To the Knowledge of IMS or IMA, each of the
patents and patent applications included in the Business Intellectual
Property that were filed by IMS or IMA or one of their respective
Subsidiaries properly identifies each and every inventor of the claims
thereof as determined in accordance with the Laws of the jurisdiction in
which such patent is issued or such patent application is pending.
(iii) Each inventor named on the patents and patent applications
included in the Business Intellectual Property that were filed by IMS or
IMA or one of their respective Subsidiaries, alone or together with any
joint owners, has executed an agreement agreeing to assign or actually
assigning his or her entire right, title and interest in and to such patent
or patent application, and the inventions embodied and claimed therein, to
IMS or IMA or such Subsidiary, alone or together with any joint owners as
appropriate, except as indicated in Section 3.12(a) of the Disclosure
Schedule. To the Knowledge of IMS or IMA, no such inventor has any
contractual or other obligation that would preclude any such assignment or
otherwise conflict with the obligations of such inventor to IMS or IMA or
such Subsidiary.
(e) Section 3.12(e) of the Disclosure Schedule sets forth a true,
complete and accurate list of all Contracts with respect to any options, rights,
licenses or interests of any kind relating to Business Intellectual Property
that have been granted (i) by a third party to IMS or IMA or any of their
respective Subsidiaries, or (ii) by IMS or IMA or any of their respective
Subsidiaries to any other Person (in the case of either clauses (i) or (ii)
above, other than agreements commonly generated in the Ordinary Course of
Business (including software licenses for generally available software, employee
assignment agreements, nondisclosure agreements, consulting agreements, material
transfer agreements, clinical trial agreements and evaluation agreements) that
individually and in the aggregate have not caused and would not reasonably be
expected to cause a Material Adverse Effect). In addition, Section 3.12(e) of
the Disclosure Schedule sets forth a true, complete and accurate list of all
Contracts under which IMS or IMA or any of their respective Subsidiaries is
obligated to make to, or receives from third parties payments (in any form,
including royalties, license fees, milestones and other contingent payments) for
use of any Business Intellectual Property. Other than as set forth on Section
3.12(e) of the Disclosure Schedule, no royalties, license fees or other payment
obligations are owed to any Person in connection with the exercise of
Intellectual Property Rights in the conduct of the CD Business after the Closing
Date by IMS or IMA or any of their respective Subsidiaries under any Contract
(other than Contracts relating to "off the shelf" commercially available
software) to which any of them are a party. Each of IMS and IMA and their
respective Subsidiaries is in compliance in all material respects with the terms
of all
-16-
Contracts set forth on Section 3.12(e) of the Disclosure Schedule and, to the
Knowledge of IMS or IMA, each of the licensees and licensors, as the case may
be, is in compliance in all material respects with all such Contracts, and there
are no material disputes or proceedings threatened or pending regarding the
same.
(f) The Business Intellectual Property constitutes all the
Intellectual Property necessary and sufficient to conduct the CD Business as
currently conducted; provided, that this Section 3.12(f) shall not constitute a
non-infringement representation (which non-infringement representation is the
subject of Section 3.12(g) below).
(g) Except as disclosed in Section 3.12(g) of the Disclosure Schedule,
to the Knowledge of IMS or IMA, the operation of the CD Business does not, and
as a result of Closing will not, infringe on or violate the rights of any Person
under any Intellectual Property.
(h) Each of IMS and IMA and their respective Subsidiaries has taken
reasonable steps to protect the confidentiality of the confidential information
and trade secrets included in the Business Intellectual Property, including by
entering into Contracts that generally require licensees, contractors and other
third persons with access to such trade secrets to keep such trade secrets
confidential.
(i) Each of IMS and IMA uses reasonable procedures designed to ensure
the recording and maintenance of all know-how that is included in the Business
Intellectual Property and material to the conduct of the CD Business.
(j) All former and current employees, consultants and contractors of
IMS or IMA or any of their respective Subsidiaries (i) having access to the
Business Intellectual Property have executed and delivered to IMS or IMA or the
relevant Subsidiary an agreement regarding the protection of the confidential
information included in the Business Intellectual Property and (to the extent
required by any customer or business partner or IMS or IMA) confidential
information of IMS's or IMA's customers or business partners made available to
such employees, consultants or contractors and (ii) who were involved in, or who
contributed to, the creation or development of any Business Intellectual
Property have executed and delivered to IMS or IMA or the relevant Subsidiary an
agreement regarding the assignment by such employees, consultants and
contractors to IMS or IMA (or the relevant Subsidiary) of any and all Business
Intellectual Property; and true and complete copies of all such agreements have
been made available to PGIO. Each of IMS and IMA and their respective
Subsidiaries has secured from all former and current employees, consultants and
contractors who were involved in, or who contributed to, the creation or
development of the subject matter of any patents that are included in Business
Intellectual Property that is owned by IMS or IMA or the relevant Subsidiary,
valid written assignments of the rights to such contributions that may be owned
by such persons or that IMS or IMA or the relevant Subsidiary does not already
own by other agreement or operation of Law, including obtaining valid written
assignments from the inventors of any and all pending patent applications.
(k) Under any and all Contracts under which a third party has granted
IMA, IMS or any of their respective Subsidiaries any Intellectual Property
Rights that are used in the CD Business and on which IMA, IMS or such Subsidiary
relies to allow its Subsidiaries of which IMA, IMS or such Subsidiary owns 50%
or more of the voting equity to exercise the Intellectual Property Rights
thereunder, the Company shall have the right to exercise (subject to
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the terms and conditions in the Transaction Documents) such Intellectual
Property Rights for so long as IMS owns 50% or more of the interest in the
Company.
Section 3.13 Legal Proceedings. Except as disclosed in Section 3.13 of
the Disclosure Schedule, (a) neither IMS nor IMA is, or since January 1, 2004
has it been, a party to, or to its Knowledge threatened with, any material Legal
Proceeding with respect to or in connection with the CD Business, (b) to the
Knowledge of IMS or IMA, there are no facts or circumstances that would
reasonably be expected to give rise to any material Legal Proceeding with
respect to or in connection with the CD Business and (c) there are no Judgments
outstanding against IMS or IMA with respect to or in connection with the CD
Business.
Section 3.14 Tax Matters. Except as set forth in Section 3.14 of the
Disclosure Schedule (with paragraph references corresponding to those set forth
below):
(a) All Tax Returns required to be filed by IMS or IMA, and any
affiliated, combined, consolidated or unitary group of which IMS or IMA is or
has been a member, have been timely filed, except where failure to file would
not have a Material Adverse Effect.
(b) Each of IMS and IMA has timely paid all Taxes which were required
to have been paid on or prior to the date hereof, the nonpayment of which could
result in a Lien on any Purchased Asset. Each of IMS and IMA has established, in
accordance with GAAP, adequate reserves for the payment of, and will timely pay,
all Taxes which arise from or with respect to the Purchased Assets or the
operation of the CD Business and are incurred or attributable to taxable periods
(or portions thereof) prior to the Closing (the "Pre-Closing Tax Periods"), the
nonpayment of which would result in a Lien on any Purchased Asset.
(c) Each of IMS and IMA has withheld and paid all Taxes required by
Law to have been withheld and paid and has complied in all respects with all
rules and regulations relating to the withholding or remittance of Taxes
(including employee-related Taxes), except where failure to so withhold, pay or
comply would not impose a liability or other obligation on the Company.
Section 3.15 Insurance. IMS and IMA maintain, with respect to the CD
Business, or under contractual arrangements is named as an additional insured
in, policies or binders of fire, liability (including product liability),
workers' compensation, vehicular and other insurance customarily maintained by
Persons engaged in businesses similar to the CD Business. A true, correct and
complete list of such policies insuring the CD Business is set forth in Section
3.15 of the Disclosure Schedule. Such policies and binders are in full force and
effect.
Section 3.16 Benefit Plans. (a) Section 3.16(a) of the Disclosure
Schedule contains a list of all written plans, programs, or arrangements
maintained by IMS or IMA or any of their respective Subsidiaries, in each case
as and to the extent related to the CD Business, or providing benefits to
employees of the CD Business, or under which IMS or IMA or any of their
respective Subsidiaries, in each case as and to the extent related to the CD
Business, or providing benefits to employees of the CD Business, has or may have
any obligation to contribute, with respect to any employee of them, whether such
plan, program or arrangement is formal or informal, written or unwritten, and
whether or not such plan, program, or arrangement is an
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"employee benefit plan" subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") (collectively, the "Benefit Plans"). The Company
will not be responsible for any existing or future liability under any Benefit
Plan.
(b) Each of IMS and IMA has made available to or provided to PGIO true
and complete copies of: (i) each Benefit Plan that is an "employee welfare
benefit plan" under Section 3(1) of ERISA; (ii) each Benefit Plan that is an
"employee pension benefit plan" under Section 3(2) of ERISA; (iii) the most
recent annual report required to be filed, including Form 5500, for each Benefit
Plan described under clauses (i) and (ii) of this Section 3.16(b); (iv) the
current summary plan description and any material modifications thereto; and
(iv) the most recent determination or opinion letter received from the Internal
Revenue Service (the "IRS") upon which IMS and IMA are entitled to rely with
respect to a Benefit Plan described under clause (ii) of this Section 3.16(b)
that is intended to be tax-qualified under Section 401(a) of the Code, or the
application therefor, if such letter has not been issued by the IRS.
(c) Except as set forth on Section 3.16(c) of the Disclosure Schedule,
neither IMS nor IMA or any of their respective Subsidiaries, in each case as and
to the extent related to the CD Business, or providing benefits to employees of
the CD Business, has offered to provide health or life insurance coverage to any
individual, or to the family members of any individual, for any period extending
beyond the termination of the individual's employment by IMS or IMA, except to
the extent required by the health care continuation (also known as "COBRA")
provisions of ERISA and the Code or similar state benefit continuation Laws.
Each Benefit Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code, complies in all material respects with Sections
601 et seq. and 701 et seq. of ERISA and Section 4980B and Subtitle K of the
Code.
(d) The Company will not be responsible for any existing Contract
between IMS or IMA and any business employee of them, including a Contract (i)
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction in the nature of any of the
transactions contemplated by this Agreement or any other Transaction Agreement,
(ii) providing any term of employment or compensation guarantee or (iii)
providing severance benefits or other benefits after the termination of
employment of such employee regardless of the reason for such termination of
employment.
Section 3.17 Employee and Labor Matters. Except as set forth on
Section 3.17 of the Disclosure Schedule, there is not, and since January 1, 2004
there has not been, any labor strike, dispute, work stoppage, slowdown or
lockout against IMS or IMA with respect to the CD Business and, except as set
forth on Section 3.17 of the Disclosure Schedule, there is not any pending, or,
to the Knowledge of IMS or IMA, threatened, labor strike, dispute, work
stoppage, slowdown or lockout against IMS or IMA with respect to the CD
Business. To the Knowledge of IMS or IMA, since January 1, 2004, no union
organizational campaign or petition for certification is in progress with
respect to personnel of the CD Business. Neither IMS nor IMA is a party to any
collective bargaining or other similar labor Contracts with respect to any
personnel of the CD Business. There are no pending, or, to the Knowledge of IMS
or IMA, threatened, charges against IMS or IMA or any business personnel of them
before the Equal Employment Opportunity Commission or any other Governmental
Entity responsible for the prevention of unlawful employment practices. Except
as set forth on Section 3.17 of the
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Disclosure Schedule, since January 1, 2004, neither IMS nor IMA has received
written notice of the intent of any Governmental Entity responsible for the
enforcement of labor or employment Laws to conduct an investigation of IMS or
IMA with respect to the CD Business and, to the Knowledge of IMS or IMA, no such
investigation is in progress. To the Knowledge of IMS or IMA, no activity of any
executive officer or significant employee of the CD Business as or while an
employee of the CD Business has caused a material violation of any such
employee's employment Contract, confidentiality agreement, patent disclosure
agreement or other similar Contract. The Restructuring will be effected in
compliance in all material respects with all applicable employment Laws.
Section 3.18 Environmental Matters. Except as disclosed in Section
3.18 of the Disclosure Schedule and except for such matters as would not cause a
material Loss to the Company or PGIO:
(a) The CD Business and IMA Facilities are and have for the past four
years been in compliance in all material respects with all Environmental Laws
and Environmental Permits. The CD Business and IMA Facilities have no material
unbudgeted or unreserved environmental capital expenditure necessary to achieve
or maintain compliance in all material respects with Environmental Laws and
Environmental Permits. There are no unresolved or, to the Knowledge of IMS or
IMA, threatened (whether orally or in writing) claims, demands, notices, suits,
investigations, inquiries, proceedings or actions against IMS, IMA or the IMA
Facilities, alleging non-compliance in any material respect with Environmental
Law or Environmental Permits. To the Knowledge of IMS or IMA, there are no
circumstances or conditions involving the CD Business or IMA Facilities or any
real property currently owned, operated or leased by any of them that could
reasonably be expected to result in any material Environmental Liability for
which the Company or PGIO would be responsible.
(b) No property constituting a Contributed Asset or a Purchased Asset
(including soils, groundwater, surface water, buildings or other structures)
currently owned, operated or leased by the CD Business and no IMA Facilities are
contaminated with any Hazardous Material at levels or in amounts that violate or
require investigation, monitoring or response actions pursuant to applicable
Environmental Laws. Neither IMS or IMA nor any of their respective Subsidiaries
is subject to any material Environmental Liability for Hazardous Material
disposal or contamination on any third party property. Neither IMS or IMA nor
any of their respective Subsidiaries has manufactured, generated, received,
used, handled, processed, stored, treated, released, discharged, emitted,
shipped or disposed of any Hazardous Material (whether or not on its own leased,
owned or operated properties or properties owned leased or operated by others)
except in material compliance with all Environmental Laws.
(c) The CD Business and IMA Facilities have obtained and maintained in
effect all Environmental Permits material to the conduct of their businesses
and, where applicable, have filed timely applications for renewal or
modification of Environmental Permits. No Environmental Permit material to the
conduct of the CD Business or the operation of the IMA Facilities is subject to
major modification, revision, rescission, public notice and comment or prior
consent by any Governmental Entity as a result of the consummation of the
transactions contemplated by this Agreement and the other Transaction
Agreements.
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(d) Neither the CD Business nor any of the IMA Facilities has received
any notice from any Person or is aware of any condition, event or circumstance
(including the release or threatened release of any Hazardous Material at any
property currently or formerly owned, leased or used by IMS or IMA, any
Affiliate, or any third party) that would reasonably be expected to result in a
material Environmental Liability for which the Company or PGIO could be
responsible.
(e) Except for indemnifications under manufacturing, supply or similar
agreements set forth in Section 3.18 of the Disclosure Schedule, neither IMS or
IMA nor any of their respective Subsidiaries has assumed or retained by
operation of Law or by Contract any Environmental Liability of any third-party
for which the Company or PGIO could be responsible.
(f) To the Knowledge of IMS and IMA, no Lien or "super lien" has been
placed on any site owned or operated by the CD Business or IMA Facilities
pursuant to the Federal Comprehensive, Environmental Response, Compensation, and
Liability Act of 1980 or any similar Law.
(g) This Section 3.18 constitutes the sole representations and
warranties of IMS or IMA relating to environmental matters.
Section 3.19 Transactions with Affiliates. Section 3.19 of the
Disclosure Schedule describes any material transaction, since January 1, 2004,
between IMS or IMA, on the one hand, and any of their Affiliates (other than
wholly-owned Subsidiaries of IMS or IMA and the Inverness Medical (Shanghai),
Co., Ltd.), on the other hand, with respect to the CD Business, other than any
employment Contract, Contract with any employee pertaining to any Benefit Plan
or equity incentive award, Contract not to compete with IMS or IMA, Contract to
maintain the confidential information of IMS or IMA, or Contract assigning
Intellectual Property Rights to IMS or IMA. Except as set forth in Section 3.19
of the Disclosure Schedule, no Affiliate of IMS or IMA (other than wholly-owned
Subsidiaries of IMS or IMA and Inverness Medical (Shanghai), Co., Ltd.) (a) owns
or has any interest in any property (real or personal, tangible or intangible),
Intellectual Property Rights or Contract used or held for use in or pertaining
to the CD Business; (b) to the Knowledge of IMS or IMA, has any claim or cause
of action against IMS or IMA with respect to the CD Business; or (c) owes any
money to, or is owed any money by, IMS or IMA with respect to the CD Business
except, in each case, pursuant to any employment Contract, Benefit Plan or for
reimbursement of business expenses in the Ordinary Course of Business. For the
avoidance of doubt, the matters set forth in this Section 3.19 are neither
intended to relate to, nor is any disclosure provided with respect to,
intercompany arrangements, Contracts or understandings among IMA and its
Subsidiaries or Inverness Medical (Shanghai), Co., Ltd.
Section 3.20 Certain Business Practices. Neither IMS or IMA nor any of
their directors, officers, agents or employees, has (a) used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to political activity; (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
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1977 or similar Laws in any other jurisdiction; or (c) made any payment in the
nature of criminal bribery.
Section 3.21 Regulatory Compliance. (a) Except as set forth in Section
3.21(a) of the Disclosure Schedule, each Product that is subject to the
jurisdiction of the FDA or similar Governmental Entity, or subject to the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated
thereunder (the "FDCA") or similar Laws in any foreign jurisdiction, is being
formulated, developed, manufactured, packaged, tested, advertised, marketed,
promoted, distributed and sold by IMS, IMA or one of their respective
Subsidiaries in compliance in all material respects with all applicable
requirements under the FDCA and similar Laws, including those relating to
investigational use, good clinical practices, current good manufacturing
practices, introduction of products into interstate commerce, record keeping,
advertising and marketing, reporting of adverse events and filing of other
reports. Except as set forth in Section 3.21(a) of the Disclosure Schedule,
since January 1, 2004, neither IMS nor IMA nor any of their respective
Subsidiaries has received any written notice from the FDA or any other
Governmental Entity alleging any material violation of any Law by IMS or IMA or
any of their respective Subsidiaries applicable to any Product. Except as set
forth in Section 3.21(a) of the Disclosure Schedule, since January 1, 2004,
neither IMS nor IMA nor any of their respective Subsidiaries has received any
written notices of inspectional observations (including those recorded on form
FDA 483), establishment inspection reports, warning letters and any other
documents received from or issued by the FDA or any similar Governmental Entity
asserting non-compliance in any material respect with FDA regulatory
requirements or other applicable Laws of any similar Governmental Entity by IMS
or IMA or any of their respective Subsidiaries with respect to the CD Business
or Persons otherwise performing services for the benefit of IMS or IMA or any of
their respective Subsidiaries with respect to the CD Business, except for
matters resolved prior to the date hereof. In addition, no Governmental Entity
or other Person has commenced or, to the Knowledge of IMS or IMA, threatened to
initiate any proceeding alleging any violations of any federal, state or local
consumer protection Laws.
(b) Section 3.21(b) of the Disclosure Schedule sets forth for each
Product a true, correct and complete list of all pre-clinical and clinical
studies and trials ongoing with respect to such Product as of the date hereof.
(c) All packaging, instructions for use and physician and consumer
product information required to accompany the distribution of each Product
(hereafter "Labeling") complies in all material respects with all Laws and
guidelines published and enforced by the FDA, including Section 502 (21 U.S.C.
Section 352) of the FDCA and 21 C.F.R. Section 801, or similar Laws in any
foreign jurisdiction.
(d) For each Product, all required post-approval regulatory reports
and submissions, including those required by 21 C.F.R. Parts 803 and 806, or
similar Laws in any foreign jurisdiction, have been timely submitted and all
post-marketing obligations have been timely completed or fulfilled, except where
such failure to so timely submit, complete or fulfill would not prohibit or
delay the continued manufacture, sale and distribution of any Product currently
manufactured, marketed, sold and distributed by the CD Business. Except as set
forth on Section 3.21(d) of the Disclosure Schedule, there has not been any
occurrence of any
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medical device report concerning any Products under 21 C.F.R. Part 803 that has
not been resolved prior to the date hereof.
(e) Except as set forth on Section 3.21(e) of the Disclosure Schedule,
neither IMS or IMA or any of their respective Subsidiaries, nor, to their
Knowledge, any officer, employee or agent of them, has made an untrue statement
of a material fact or fraudulent statement to the FDA or any other Governmental
Entity, failed to disclose a material fact required to be disclosed to the FDA
or any other Governmental Entity, or committed an act, made a statement, or
failed to make a statement that, at the time such disclosure was made, would
reasonably be expected to provide a basis for the FDA or any other Governmental
Entity to invoke its policy respecting "Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities," set forth in 56 Fed. Reg. 46191
(September 10, 1991) or any similar policy. Neither IMS or IMA nor, to their
Knowledge, any officer, employee or agent of them, has been convicted of any
crime or engaged in any conduct for which debarment is mandated by 21 U.S.C.
Section 335a(a) or any similar Law or authorized by 21 U.S.C. Section 335a(b) or
any similar Law, nor has IMS or IMA (or any of their respective Subsidiaries)
received written notice of any proposed disqualification, debarment or exclusion
including exclusion under 42 U.S.C. Section 1320a-7 or any similar Law. Neither
IMS or IMA or any of their respective Subsidiaries nor, to their Knowledge, any
officer, employee or agent of them, has been convicted of any crime or engaged
in any conduct for which such Person or entity could be excluded from
participating in the federal health care programs under Section 1128 of the
Social Security Act or any similar Law.
Section 3.22 Product Liability Claims; Product Recalls. Except as set
forth on Section 3.22 of the Disclosure Schedule, since January 1, 2004 neither
IMS nor IMA has received any written notice from any Person regarding any
actual, alleged, possible or potential claim by any Person or group of Persons,
including any Governmental Entity, for money damages or any other form of
relief, whether at law or in equity, in respect of potential or actual injury or
harm allegedly resulting from or due and owing in connection with the purchase,
use, application of, or defect (including alleged failure to warn) relating to
any of the Products, irrespective of the legal theory of liability except for
Product returns in the Ordinary Course of Business and other claims that were
resolved prior to the date hereof without payment of significant money damages
or the entry of, or agreement to, other forms of relief that were material to
the CD Business. Except as set forth on Section 3.22 of the Disclosure Schedule,
since January 1, 2004 no Product has been the subject of any recall, market
withdrawal, correction, or removal, and neither IMS nor IMA has received any
written notice that the FDA or any other Governmental Entity has (a) commenced
or threatened in writing to initiate any action to withdraw its approval or
request the recall, market withdrawal, correction, or removal of any Product or
(b) commenced or threatened in writing to initiate, any action to enjoin
production of any Product at any facility. Except as set forth in Section 3.22
of the Disclosure Schedule, no event has occurred, and to the Knowledge of IMS
or IMA, no condition or circumstance exists (including any adverse reactions or
Product failure), that might (with or without notice or lapse of time) directly
or indirectly give rise to or serve as a basis for any such recall, market
withdrawal, correction, or removal or other similar actions relating to any such
Product.
Section 3.23 Product Registrations. Section 3.23 of the Disclosure
Schedule sets forth, as of the date hereof, a list of all material Product
Registrations. Except as set forth in
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Section 3.23 of the Disclosure Schedule, (a) all Products sold under the Product
Registrations are manufactured and marketed in accordance with the
specifications and standards contained in such Product Registrations, (b) IMS or
IMA is the sole and exclusive owner of the Product Registrations and has not
granted any right of reference to any Person with respect thereto, and (c) the
Product Registrations do not include or require reference to any other
Governmental Licenses or other filings with any Governmental Entity. The Product
Registrations are all the registrations, approvals, licenses or authorizations
required to market the Products currently marketed by the CD Business. IMS and
IMA have made available to PGIO true, complete and accurate copies of all
Product Registrations and all material correspondence, written notices or
written communications received from or sent to the FDA or other Governmental
Entities relating to the Products.
Section 3.24 Brokers' Fees. No broker, finder, financial advisor,
investment banker or other Person is or will be entitled to any brokerage,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement and the Transaction
Agreements to which IMA, IMS or any of their respective Affiliates is a party
for which PGIO or the Company could be liable.
ARTICLE 4
COVENANTS
Section 4.1 Filings. Each of the parties hereto agrees to cooperate
fully with the others in the preparation and filing, whether before or after the
Closing Date, of all documents and instruments required to be filed by PGIO,
IMS, IMA or the Company in connection with the transactions contemplated by this
Agreement and the other Transaction Agreements, including any business
certificate, or any trade, assumed or fictitious name certificates, or any
applications for authority to do business, or any registrations or assignments
of registrations of any patents, trademarks, trade names, service marks,
copyrights or similar rights.
Section 4.2 Access and Investigation. (a) Subject to Section 4.12
hereof, prior to the Closing Date and subject to any restrictions imposed by
applicable Law or any Business Contract, IMS, IMA and their Affiliates and
Representatives shall: (i) afford PGIO and its Affiliates and Representatives,
during normal business hours and upon reasonable notice, full and free access to
the personnel, properties, contracts, books and records, and other documents and
data relating to the CD Business; (ii) furnish PGIO and its Representatives with
copies of all such contracts, books and records, and other existing documents
and data relating to the CD Business, as PGIO may from time to time reasonably
request; and (iii) furnish PGIO and its Representatives with such additional
financial, operating, and other data and information relating to the CD Business
as PGIO may reasonably from time to time request; provided that any such
investigation by PGIO shall be conducted in such a manner as not to interfere
unreasonably with the normal operations of IMS or IMA.
(b) Subject to Section 4.12 hereof, prior to the Closing Date and
subject to any restrictions imposed by applicable Law, PGIO, and its Affiliates
and Representatives shall: (i) afford IMS and its Affiliates and
Representatives, during normal business hours and upon reasonable notice, full
and free access to the personnel, properties, contracts, books and records,
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and other documents and data relating to the portions of PGIO that will perform
services under the Transaction Agreements to the extent reasonably necessary to
plan to integrate, as applicable, the operations and activities of the CD
Business with the Company and PGIO; (ii) furnish IMS and its Representatives
with copies of all such contracts, books and records (if any), and other
existing documents and data relating to the portions of PGIO that will perform
services under the Transaction Agreements as IMS may from time to time
reasonably request to the extent reasonably necessary to plan to integrate, as
applicable, the operations and activities of the CD Business with the Company
and PGIO; and (iii) furnish IMS and its Representatives with such additional
financial, operating, and other data and information relating to the portions of
PGIO that will perform services under the Transaction Agreements as IMS may
reasonably from time to time request to the extent reasonably necessary to plan
to integrate, as applicable, the operations and activities of the CD Business
with the Company and PGIO; provided that any such investigation by IMS shall be
conducted in such a manner as not to interfere unreasonably with the normal
operations of PGIO.
Section 4.3 Conduct of Business. (a) From the date hereof through the
Closing Date, IMS and IMA shall (x) except as set forth in Section 4.3(a) of the
Disclosure Schedule, conduct the CD Business only in the Ordinary Course of
Business, (y) use their commercially reasonable efforts to preserve the CD
Business intact and (z) use their commercially reasonable efforts to keep
available to the CD Business the services of its present officers, employees,
consultants and agents, maintain its present vendors, customers, suppliers and
distributors and preserve and enhance its goodwill. Without limiting the
generality of the foregoing:
(b) Except as set forth in Section 4.3(b) of the Disclosure Schedule,
from the date hereof through the Closing Date, except as otherwise expressly
required or permitted pursuant to this Agreement or in connection with the
Restructuring, neither IMS nor IMA shall, without the prior written consent of
PGIO, which consent shall not be unreasonably withheld, take or cause to be
taken any of the following actions with respect to the CD Business:
(i) (A) sell, transfer, license, mortgage, lease or otherwise dispose
of or agree to sell, transfer, license, mortgage, lease or otherwise
dispose of or otherwise encumber or subject to any Lien, other than a
Permitted Lien or any Lien that will be unconditionally and fully released
prior to the Closing, any Purchased Assets, which are material,
individually or in the aggregate, to the CD Business (excluding sales of
inventory in the Ordinary Course of Business) or (B) acquire any assets,
except in the Ordinary Course of Business, which are material, individually
or in the aggregate, to the CD Business except for (I) any such
acquisitions set forth in IMA's current budget applicable the CD Business
previously provided to PGIO or (II) any other acquisition that will be
offered to the Company pursuant to or on terms consistent with Article 12
of the Shareholder Agreement;
(ii) (A) increase or adjust in any manner the compensation (wages,
salaries, bonuses or other compensation) of the employees of the CD
Business or any of its consultants or agents that will become consultants
or agents of the Company pursuant to this Agreement, unless such increase
or adjustment is pursuant to Law or any applicable collective bargaining
agreement or any existing agreement with such Person and except for
increases in the compensation of employees of the CD Business made
consistently
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with past practice and in the Ordinary Course of Business or (B) except in
the Ordinary Course of Business, hire or dismiss (except for cause or
breach or upon termination of the applicable engagement) any officer or
significant employee of the CD Business, any other employee of the CD
Business whose compensation is in excess of $100,000 per annum, or any
sales agent or consultant of the CD Business, except as otherwise
contemplated by this Agreement;
(iii) make any material capital expenditures or improvements in the CD
Business not provided for in the current budget for the CD Business
previously provided to PGIO;
(iv) cancel or waive any material claim or right relating to the CD
Business;
(v) cancel without replacement or reduce in any material respect any
of the insurance coverages for the CD Business;
(vi) except for actions permitted or required by this Agreement or
necessary to consummate the transactions contemplated hereby, take any
action or fail to take any action that permits any Governmental License
material to the conduct of the CD Business to expire, be cancelled or be
amended in a manner adverse to the CD Business;
(vii) incur any obligation under any Business Contract or accounts
payable of the CD Business, in each case that are to be Assumed Liabilities
(as defined in the Contribution Agreement), other than in the Ordinary
Course of Business;
(viii) amend or terminate any Business Contract or Governmental
License material to the conduct of the CD Business to which IMS or IMA is a
party, except amendments or terminations of such Business Contracts or
Governmental Licenses that are in the Ordinary Course of Business;
(ix) except as required by applicable Law or any Judgment arising from
any Legal Proceeding, make any commitment to or incur liability to any
labor organization that represents, purports to represent or is attempting
to represent, employees of the CD Business;
(x) make any material change of the policies or practices with respect
to the CD Business;
(xi) make any material change in any method of accounting or auditing
practice, principle or policy of the CD Business, change or revalue any
material assets or make or change any Tax election or tax accounting method
relating to the CD Business except, in each case, as required by GAAP or
any applicable Law;
(xii) collect the accounts receivable relating to the CD Business
other than in the Ordinary Course of Business;
(xiii) write-down of the value of any of the Contributed Assets except
in the Ordinary Course of Business or as required by GAAP;
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(xiv) engage in any other extraordinary corporate transactions that
would materially impede the transactions contemplated by this Agreement; or
(xv) agree, whether in writing or otherwise, to take any of the
actions set forth in Sections 4.3(b)(i)-(xiv).
(c) From the date hereof through the Closing Date, IMS and IMA shall:
(i) maintain and purchase adequate levels of inventories to carry on
the CD Business in the Ordinary Course of Business;
(ii) make capital expenditures in accordance in all material respects
with the budget for the CD Business previously provided to PGIO;
(iii) pay and discharge its liabilities and obligations, including
accounts payable, with respect to the CD Business in the Ordinary Course of
Business;
(iv) to the extent permitted by applicable Law, confer with PGIO
concerning operation matters of a material nature with respect to the CD
Business;
(v) use commercially reasonable efforts to preserve the
confidentiality of all trade secrets eligible for protection under
applicable trade secret Law and material to the operation of the CD
Business; and
(vi) to the extent permitted by applicable Law, otherwise report
periodically to PGIO concerning the status of the operations and finances
of the CD Business.
(d) PGIO and the Company (i) shall take no action, nor make any public
announcement or any other disclosure concerning any actions, the effect of which
may be to frustrate IMS's and IMA's ability to fulfill their obligations under
this Section 4.3, and (ii) shall use commercially reasonable efforts to assist
IMS and IMA in fulfilling their respective obligations under the preceding
sentence, including taking such actions as may be reasonably requested by IMS or
IMA in furtherance of the foregoing.
Section 4.4 Commercially Reasonable Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
hereto shall use commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement and the other Transaction
Agreements, including (a) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (b) the obtaining of all necessary consents, approvals or
waivers from third parties, and (c) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by this
Agreement and the other Transaction Agreements and to fully carry out the
purposes of this Agreement and the other Transaction Agreements.
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Section 4.5 Public Announcements. No party to this Agreement (nor any
agent or Representative thereof) will make any disclosure or public announcement
with respect to this Agreement, the other Transaction Agreements and the
transactions contemplated hereby and thereby without the written approval of the
other party; provided that any party may make such disclosure (including filings
with the SEC) or public announcement if it is advised by counsel that such
disclosure or public announcement is legally advisable in light of the prior
public disclosure practice of such party (in which case such party shall use its
reasonable best efforts to consult with the other party regarding such
disclosure or public announcement prior to the making of such disclosure).
Section 4.6 Enforcement. All representations, warranties, covenants
and other agreements made by IMS or IMA to the Company herein or in other
Transaction Agreements are also expressly made for the benefit of PGIO and may
be enforced by PGIO both in its own right and on behalf of the Company.
Section 4.7 Inventory. From and after the Closing Date, with respect
to any inventory of the CD Business that is shipped to customers of the CD
Business prior to the Closing and is returned by such customers ("Returned
Inventory"), IMS shall be entitled to receive such Returned Inventory and IMS,
without modification to the then-outstanding principal amount of the Contributed
Note or setoff against any other amount then owing to the Company by IMS or any
of its Affiliates, shall credit to such customer the full value of such Returned
Inventory against the applicable account receivable of IMS.
Section 4.8 Transfer. (a) IMS shall take, and shall cause IMA to take,
all necessary actions to ensure that any asset that would constitute a
Contributed Asset or a Purchased Asset that is held by a Subsidiary of IMS or
IMA (other than any asset that constitutes an Excluded Asset) are transferred to
IMS on or prior to the Closing Date (or, with respect to any Purchased Asset
included within the Transition Assets, on or prior to the applicable Subsequent
Transfer Date), but in any event in advance of the Closing (or the applicable
Subsequent Transfer Date) contemplated by this Agreement such that such asset is
transferred by IMS to PGIO as contemplated hereby. From and after the Closing,
IMS shall, and shall cause IMA to, take, or cause to be taken, all action
necessary to transfer to PGIO (which shall simultaneously contribute such assets
to the Company) without consideration any assets owned by them or their
Affiliates that should have been transferred to PGIO at or prior to the Closing
(or, with respect to any Purchased Asset included within the Transition Assets,
at or prior to the applicable Subsequent Transfer Date) pursuant to this
Agreement.
(b) To the extent that any list, document, record, written
information, computer file or other computer readable media described in Section
1.2(v) or 1.2(vi) includes matters unrelated to the CD Business that cannot be
separated by IMS, IMA or a Subsidiary thereof without materially affecting the
Company's use of such list, document, record, written information, computer file
or other computer readable media, IMA and IMS shall provide the PGIO with a
complete copy of such list, document, record, written information, computer file
or other computer readable media; provided that the PGIO shall not acquire any
title to, or rights in, any portion of such list, document, record, written
information, computer file or other computer readable media that is not related
to the CD Business; and provided, further, that the Company shall not use or
disclose any portion of such list, document, record, written
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information, computer file or other computer readable media that is not related
to the CD Business.
Section 4.9 Further Assurances. Each of PGIO, IMS, IMA and the Company
shall execute, following the Closing, such documents and other papers and
perform such further acts as may be reasonably required or desirable to Transfer
all Contributed Assets and Purchased Assets to the Company or PGIO (which shall
simultaneously contribute them to the Company), respectively, and otherwise to
carry out the provisions hereof and the transactions contemplated hereby or to
carry out the provisions of the Contribution Agreement and the transactions
contemplated thereby.
Without limiting the generality of the foregoing and Section 4.1, to
the extent that any filings with applicable Governmental Entities are required
to assign Business Registered Intellectual Property to PGIO or to the Company,
as applicable, IMS shall (a) within ten (10) Business Days following the
Closing, file (or cause a designated foreign associate to file) a fully-executed
copy of the Global Trademark Assignments, and any other agreements, documents
and other instruments of transfer required under applicable Laws to effect such
assignments, with the applicable Governmental Entities in the United States and
Canada and (ii) within thirty (30) days following the Closing, obtain
confirmation from each applicable Governmental Entity in the United States and
Canada that such Global Trademark Assignments and such other agreements have
been recorded; and (b) (i) within ten (10) Business Days following the Closing,
provide fully-executed copies of the Global Trademark Assignments (as defined in
the Contribution Agreement) to its designated foreign associate in each
jurisdiction other than the United States and Canada in which any Business
Registered Intellectual Property is registered, together with instructions to
(x) prepare any other agreements, documents and other instruments of transfer
required under applicable Laws to effect such assignments, in forms acceptable
for filing with the applicable Governmental Entities, and (y) file such Global
Trademark Assignments and such other agreements described in clause (x) with the
applicable Governmental Entities as promptly as possible after Closing, and (ii)
within ninety (90) days following the Closing, obtain confirmation from each
applicable Governmental Entity that such Global Trademark Assignments and such
other agreements described in clause (x) above have been recorded.
Notwithstanding the foregoing, IMS shall use commercially reasonable efforts to
obtain confirmation that the Global Trademark Assignments (and all other
agreements described above) have been recorded as promptly as possible after
Closing. In the event that IMS fails to satisfy the obligations set forth in
either clause (a) or clause (b) above within the applicable time periods set
forth therein, then upon the written request of the Company or PGIO, IMS shall,
and it shall cause IMA and each Affiliate of either of them which is a
registered owner of such Business Registered Trademarks, promptly to prepare,
execute, if required by applicable Law, have notarized or authenticated, and
deliver to PGIO for filing with the applicable Governmental Entities, all such
agreements, documents and other instruments of transfer, and to the extent
required by applicable Law, powers of attorney in favor of PGIO, necessary for
PGIO to make filings with Governmental Entities necessary to effect the
assignment to PGIO and to the Company or directly to the Company, as applicable,
of such Business Registered Trademarks. In the event that PGIO elects to make
such filings on behalf of IMS, IMS, promptly following receipt of an invoice and
reasonable supporting documentation for the same, shall reimburse PGIO for all
filings fees and reasonable out-of-pocket expenses incurred by or on behalf of
PGIO in connection therewith.
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Section 4.10 Accounts Receivable. Following the termination of the
Transition Period, IMS agrees to promptly remit to the Company any amounts in
respect of accounts receivable arising from the CD Business after the Closing
Date ("Accounts Receivable") that are collected or received by IMS or its
Affiliates. From and after the termination of the Transition Period, the Company
will ensure that all invoices delivered to customers are conspicuously marked as
payable to the Company. From and after the termination of the Transition Period,
IMS agrees to reasonably cooperate with the Company with respect to the
collection of Accounts Receivable.
Section 4.11 Expenses. Whether or not the Closing occurs, each of the
parties hereto shall bear its own fees and expenses incurred or owed in
connection with this Agreement, the other Transaction Agreements and the
transactions contemplated hereby and thereby and the negotiations thereof
(including any due diligence or other investigation costs relating to such
transactions).
Section 4.12 Confidentiality. Each party hereto will hold, and will
cause its Affiliates, Representatives and employees to hold, in strict
confidence from any Person (other than any such Affiliate, Representative or
employee with a need to know), the terms of this Agreement and all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Affiliates, Representatives and
employees in connection with this Agreement and the transactions contemplated
hereby, including documents and information disclosed prior to the date hereof
(collectively, "Confidential Information"); provided, that a party hereto may
disclose, or cause its Affiliates, Representatives and employees to disclose,
Confidential Information if and to the extent
(a) compelled to disclose by judicial or administrative process
(including in connection with obtaining the necessary approvals of this
Agreement, the Transaction Agreements and the transactions contemplated hereby
and thereby of Governmental Entities) or by other requirements of Law or, if
advised by legal counsel that disclosure is required, as requested by a
Governmental Entity having jurisdiction over such party;
(b) disclosed in a Legal Proceeding brought by a party hereto in
pursuit of its rights or in the exercise of its remedies hereunder;
(c) disclosed to (i) the managing underwriter or placement agent for
any sale of the securities of the receiving party, and such managing
underwriter's or placement agent's Representatives, (ii) the lead lender,
arranger, representative or agent for any other financing transaction of the
receiving party, and such lead lender's, arranger's, representative's or agent's
Representatives, (iii) any Person whose voting securities are acquired in a
single transaction by the receiving party in such an amount so as to grant
Control over such Person to the receiving party and such Person's
Representatives, or (iv) any Financial Investor in the receiving party, and such
Financial Investor's Representatives; or
(d) following receipt from the disclosing party of written consent to
such disclosure, which consent may not be unreasonably withheld, disclosed to
any Strategic Investor or potential acquiror of the receiving party, and the
Representatives of either;
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provided, that in the case of any disclosure permitted under clause (c) or (d)
above, such disclosure shall consist solely of the terms of this Agreement (and
not any other Confidential Information) and shall in no event include any
schedules (including the Disclosure Schedule) or exhibits to this Agreement;
and, provided further, that any Person receiving any disclosure pursuant to this
Section 4.12 from a party hereto, or any of such party's Affiliates,
Representatives or employees, must be bound by an established legal privilege,
or agree in writing, to hold in strict confidence from any other Person
(including with respect to disclosure permitted under clauses (c) and (d), any
member of an underwriting or lending syndicate, or any Person to whom a portion
of such financing is participated or otherwise transferred in connection with
such sale or financing, or any Affiliate, shareholder or member of or any
investor in such Person) the Confidential Information so disclosed.
Notwithstanding anything in this Section 4.12 to the contrary, Confidential
Information shall not include any such documents or information that the
receiving party can demonstrate were (A) previously known by the party receiving
such documents or information, (B) in the public domain (either prior to or
after the furnishing of such documents or information hereunder) through no
fault of such receiving party, (C) later acquired by the receiving party from
another source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential or (D) developed by employees of the receiving party without
knowledge of the documents and information of the other party or any of its
Affiliates. The receiving party agrees that it will not, and it will cause each
of its Affiliates, Representatives and employees not to, use Confidential
Information in any way, for its own account or the account of any third Person,
except for the exercise of its rights and performance of its obligations under
this Agreement and the other Transaction Agreements. The receiving party shall
be jointly and severally liable for any breach by its Affiliates,
Representatives and employees of the restrictions set forth in this Agreement.
Section 4.13 [Reserved].
Section 4.14 Preparation for Transition. Each of IMS and PGIO agrees
to use, and to cause any of its Affiliates to use, its commercially reasonable
efforts to cooperate with the other and the Company after the date of this
Agreement in planning to implement any actions with respect to the CD Business
reasonably requested by PGIO in preparation for PGIO or its Affiliates to be
able to provide certain services to the Company upon Closing.
Section 4.15 Other Subsidiaries. PGIO and IMS agree that there will be
certain costs and expenses associated with the IMA's Subsidiaries listed on
Section 4.15 of the Disclosure Schedule either ceasing to conduct the CD
Business that such entities had conducted or otherwise terminating activities
(including through liquidation, dissolution or similar activity) with respect to
the CD Business. Each of PGIO and IMS agree to bear an equal (50-50) share of
all costs, fees and expenses (other than Taxes, which shall be borne by IMS or
its Affiliates) arising from, relating to or resulting from such cessation or
termination of CD Business activities by, or liquidation, dissolution or similar
activity with respect to, such Subsidiaries, including costs, fees and expenses
incurred or to be incurred in connection with employee matters, including
severance or similar costs, cancellation of leases, restructuring costs, fees
and expenses arising from, relating to or resulting from such cessation or
termination. Each of PGIO and IMA shall use commercially reasonable efforts to
implement such cessation or termination as promptly as reasonably practicable
following any decision by IMA or a Subsidiary thereof to so
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cease or terminate activities, including sharing estimated costs, fees and
expenses and proposed timelines for such cessation or termination.
Section 4.16 Compliance with Contractual Obligations. The Company
agrees that it will comply, to the extent applicable, with the provisions of
those agreements set forth in Section 4.16 of the Disclosure Schedule.
Section 4.17 [Reserved].
Section 4.18 Unipath Purchase. Concurrently with the Closing, UK
Newco, shall purchase the Purchased UK Operations pursuant to the Unipath
Purchase Agreement, which shall contain mutually agreeable terms with such
provisions as are necessary to comply with applicable Law. Pursuant to the
Contribution Agreement and the PGIO Contribution Agreement, each of IMS and
PGIO, respectively, at the Closing shall contribute to the Company $11,269,050,
which contributions shall be allocated to the share capital of the Company.
Concurrently with the Closing, the Company shall contribute such $22,538,100 to
UK Newco, pursuant to the terms of the UK Newco Investment Agreement, and UK
Newco shall use such contribution to fund the purchase of the Purchased UK
Operations.
Section 4.19 Transition Assets.
(a) Obligations During the Transition Period. From the Closing Date
through the final Subsequent Transfer Date for any Transition Assets (the
"Transition Period"), without limiting the standard of care or other obligations
imposed on IMA, IMS or any of their respective Affiliates under any other
applicable Transaction Agreement during such period, IMS and IMA shall, and
shall cause their respective Affiliates to, hold in trust for the exclusive
benefit of the Company the Transition Assets, and in connection therewith shall,
and shall cause their respective Affiliates to, (x) conduct the portion of the
CD Business comprised of Transition Assets only in the Ordinary Course of
Business, and (y) use their commercially reasonable efforts to preserve the
portion of the CD Business comprised of Transition Assets intact (except to the
extent that Transition Assets are transferred to the Company pursuant to any
Transaction Agreement). Without limiting the generality of the foregoing, during
the Transition Period, IMS, IMA and their respective Affiliates, without the
prior written consent of the Company:
(i) shall maintain, purchase and sell inventory of the Company only in
the Ordinary Course of Business;
(ii) shall not take any action or fail to take any action that
permits, any Governmental License included within the Transition Assets
material to the conduct of the CD Business to expire, be cancelled or be
amended in a manner adverse to the CD Business;
(iii) except to the extent contemplated by the parties hereto in
connection with the transition to the Company of services provided by IMA
or any of its Subsidiaries to the Company under the IMA Transition Services
Agreement or any other applicable Transaction Agreement, shall not (A)
sell, transfer, license, mortgage, lease or otherwise dispose of or agree
to sell, transfer, license, mortgage, lease or otherwise dispose of or
otherwise encumber or subject to any Lien not in existence at Closing, any
Transition
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Assets (excluding sales of inventory in the Ordinary Course of Business) or
(B) acquire any assets on behalf of the Company or its Affiliates, except
in the Ordinary Course of Business;
(iv) shall not incur any obligation under any Business Contract
included within the Transition Assets or incur any accounts payable of the
CD Business, in each case that are to be Assumed Liabilities, other than in
the Ordinary Course of Business;
(v) shall not amend, terminate, renew or fail to renew any Business
Contract or Governmental License included within the Transition Assets
material to the conduct of the CD Business to which IMS, IMA or any of
IMA's Subsidiaries is a party, except amendments or terminations of such
Business Contracts or Governmental Licenses that are in the Ordinary Course
of Business or are contemplated by the parties hereto in connection with
the transfer to the Company of services provided by IMA or any of its
Subsidiaries to the Company under the IMA Transition Services Agreement or
any other applicable Transaction Agreement;
(vi) enter into any new Business Contract material to the conduct of
the CD Business on behalf of the Company or its Affiliates;
(vii) shall not cancel or waive any material claim or right relating
to any Transition Assets; and
(viii) subject to Section 4.10, shall not collect any Accounts
Receivable that arise from any Transition Assets other than in the Ordinary
Course of Business.
(b) Transfer of Transition Assets. On the applicable Subsequent
Transfer Date for any Transition Assets, without the taking of any further
action or the payment of additional consideration by any party hereto, all of
the right, title and interest of IMS in and to any and all of such Transition
Assets shall be assigned, transferred, conveyed and delivered to PGIO (who
immediately thereafter shall contribute such Transition Asset to the Company),
free and clear of all Liens except Permitted Liens. In furtherance of the
transactions contemplated under this subsection (b), on the applicable
Subsequent Transfer Date for any Transition Assets, each of the Company, PGIO,
IMS and any applicable Affiliate of either PGIO or IMS shall execute and deliver
to the others such bills of sale, endorsements, assignments and other
instruments of transfer, conveyance, contribution and assignment, in forms
reasonably satisfactory to PGIO and IMS, as shall be required by Law or
necessary in the reasonable judgment of PGIO or the Company to transfer, convey
and assign all of IMS and its Affiliates' right, title and interest in and to
such Transition Assets to the Company. Transition Assets transferred to PGIO
under this Section shall be deemed "Purchased Assets" upon the consummation of
such transfer and assumption thereof.
(c) Transfer of Business Contracts. The parties acknowledge and agree
that certain Contracts relating to the marketing, sales and distribution
activities of IMS and its Affiliates set forth on Section 4.19(c) of the
Disclosure Schedule (the "Retained Contracts") shall be Excluded Contracts and
thereby be retained by IMS or its Affiliates during the Transition Period for
the territory or activity to which such Retained Contract relates. IMS and
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its Affiliates shall conduct their activities with respect to such Retained
Contracts solely in accordance with Section 4.19(a) as if such Retained
Contracts were Transition Assets and such Retained Contracts shall be held and
managed for the benefit of the Company. Subject to compliance with the foregoing
requirements, IMS and its Affiliates shall include the revenues from, and
expenses, costs and liabilities arising under, such Retained Contracts in the
amounts calculated and remitted under the IMA Transition Services Agreement. At
the end of the applicable Transition Period, IMS shall or shall cause its
Affiliates to transfer or assign the Retained Contracts to an Affiliate of PGIO
or such other Person as the Company may request and such Affiliate of PGIO or
other Person shall assume any and all rights and obligations under such Retained
Contracts arising after the date of such transfer or assignment.
Section 4.20 Disclosure Supplements. IMS shall supplement or amend the
Disclosure Schedule (a) with respect to any matter which, if existing or
occurring prior to December 22, 2006, would have been required to be set forth
or described in the Disclosure Schedule to the Original Agreement and (b) to
reflect matters, events, conditions, facts or circumstances occurring after
December 22, 2006. Any such supplement shall not constitute an admission of
materiality nor shall it be construed in any way as an admission that IMS would
not be prepared to satisfy the conditions set forth in Section 6.2(i), (ii),
(iii), or (v) of this Agreement. The Parties acknowledge and agree that such
delivery shall not affect any rights of PGIO or the Company under Article 7.
ARTICLE 5
TAX MATTERS
Section 5.1 Cooperation. After the Closing, each of the Company, PGIO,
IMS and IMA shall reasonably cooperate in preparing and filing all Tax Returns
to the extent such filing requires providing necessary information, records and
documents relating to the Purchased Assets or the CD Business. Each of the
Company, PGIO, IMS and IMA shall cooperate in the same manner in defending or
resolving any audit, examination or litigation relating to Taxes.
Section 5.2 Apportioned Obligations. All real property taxes, personal
property taxes and similar ad valorem obligations levied with respect to the
Purchased Assets for a taxable period that includes (but does not end on) the
Closing Date (collectively, the "Apportioned Obligations") shall be apportioned
between the Company and IMA 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 after the Closing Date (any such portion of such taxable period, the
"Post-Closing Tax Period"). IMA shall be liable for the proportionate amount of
such Apportioned Obligations attributable to the Pre-Closing Tax Period, and the
Company shall be liable for the proportionate amount of such Apportioned
Obligations attributable to the Post-Closing Tax Period.
Section 5.3 Transfer Taxes. All transfer, value-added, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) ("Transfer Taxes") incurred in connection with the transactions
contemplated by this Agreement and the PGIO Contribution Agreement (including
any real property transfer Tax and similar Tax) shall
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be borne and paid by IMS. The party required by applicable Law to file any Tax
Return in respect of any such Transfer Taxes shall file such Tax Returns and
other documentation with respect to all such Transfer Taxes and, if required by
applicable Law, the non-filing party shall join in the execution of any such Tax
Returns and other documentation, provided that any costs, fees, or other
expenses in connection with the foregoing shall be borne by IMS and IMA.
Section 5.4 Tax Payments. Apportioned Obligations and Transfer Taxes
shall be timely paid, and all applicable filings, reports and returns shall be
filed, as provided by applicable Law. The paying party shall be entitled to
reimbursement from the non-paying party in accordance with Section 5.2 or 5.3,
as the case may be. Upon payment of any such Apportioned Obligation or Transfer
Tax, the paying party shall present a statement to the non-paying party setting
forth the amount of reimbursement to which the paying party is entitled under
Section 5.2 or 5.3, as the case may be, together with such supporting evidence
as is reasonably necessary to calculate the amount to be reimbursed. The
non-paying party shall make such reimbursement promptly but in no event later
than 10 days after the presentation of such statement.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1 Conditions to Each Party's Obligations. The respective
obligations of each of PGIO, IMS, IMA and the Company to enter into and complete
the Closing shall be subject to the satisfaction (or express written waiver by
PGIO and IMA) on or prior to the Closing Date of the following conditions:
(i) Anti-Trust. Any waiting period (and any extension thereof)
applicable to this Agreement, the other Transaction Agreements or the
transactions contemplated hereby or thereby under the HSR Act (or any
similar Law of any Governmental Entity) shall have been terminated or shall
have expired.
(ii) No Injunction or Restraint.
(A) No temporary restraining order, preliminary or permanent
injunction or other order or decree issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby and by the other
Transaction Agreements shall be in effect; and
(B) There shall not be pending or threatened by any Governmental
Entity any Legal Proceeding (or by any other Person any Legal Proceeding
which has a reasonable likelihood of success), (1) challenging or seeking
to restrain or prohibit the transactions contemplated by this Agreement or
the other Transaction Agreements or seeking to obtain in connection with
such transactions any damages that are material in relation to the CD
Business, (2) seeking to prohibit or limit the ownership or operation by
the Company of any material portion of their respective businesses or
assets, or to compel the Company to dispose of, hold separate or license
any material portion of their respective businesses or assets, as a result
of the transactions contemplated by this Agreement and the other
Transaction Agreements, (3) seeking to impose limitations on the ability of
PGIO or the
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Company to acquire or hold, or exercise full rights of ownership of, the CD
Business or any of the Contributed Assets or the Purchased Assets, or (4)
seeking to prohibit PGIO or the Company from effectively controlling in any
material respect the CD Business or the operation thereof.
(iii) Shareholder Agreement. The Shareholder Agreement shall have been
executed and delivered by each party thereto.
(iv) Contribution Agreement. The closing of the transactions
contemplated in the Contribution Agreement shall have taken place
concurrently with the Closing hereunder.
(v) Share Transfer Agreement. The closing of the transactions
contemplated in the Share Transfer Agreement shall have taken place
concurrently with the Closing hereunder.
(vi) Senior Lender Consent. IMA shall have received the consent of its
senior lender to the consummation of the transactions contemplated by, and
the performance of its and its Subsidiaries' obligations (including the
release of Liens and IMS's performance under the Contributed Note) under
this Agreement, the Contribution Agreement, and the other Transaction
Documents, in form and substance reasonably satisfactory to PGIO.
(vii) Bonds. IMA shall either (A) provide an officer's certificate
with respect to its bonds due 2012 to the effect that the transactions
contemplated hereby are permitted under the applicable indenture governing
such bonds (the "Bond Indenture"), as well as a copy of the certificate(s)
required to be delivered by IMA under Section 4.12(a)(2) of the Bond
Indenture, or (B) have prepaid in full or defeased such bonds.
(viii) US CD LLC Transaction. Affiliates of IMS and PGIO shall have
entered into a mutually agreeable US Contribution Agreement with respect to
certain assets used in the CD Business in the United States and a mutually
agreeable Membership Unit Purchase Agreement under which an Affiliate of
IMS shall sell and an Affiliate of PGIO shall purchase certain membership
units of US CD LLC, and the closings thereunder shall have taken place
concurrently with the Closing hereunder.
(ix) Unipath Purchase. The closing of the transactions contemplated by
the Unipath Purchase Agreement shall have taken place concurrently with the
Closing hereunder.
(x) Tax Rulings. Tax rulings from the Swiss taxing authorities shall
have been received with respect to the transactions contemplated hereby in
form and substance reasonably satisfactory to IMS, IMA and PGIO.
Section 6.2 Conditions to PGIO's Obligations. The obligations of PGIO
to enter into and complete the Closing is subject to the satisfaction (or
express written waiver by PGIO) on or prior to the Closing Date of the following
conditions:
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(i) Representations, Warranties. The representations and warranties of
IMS set forth in this Agreement and in the Contribution Agreement shall be
true and correct as of the Closing Date or such other date that any such
representation or warranty speaks as of, except where the failure to be
true and correct would not, individually or in the aggregate (A) have a
Material Adverse Effect, or (B) materially impair the ability of IMS, IMA
or the Company to consummate the transactions contemplated by this
Agreement and the Contribution Agreement or to perform their obligations
under this Agreement or the other Transaction Agreements.
(ii) Performance. All the terms, covenants, agreements and conditions
of this Agreement and the Contribution Agreement to be complied with and
performed by the Company, IMS and IMA on or before the Closing Date shall
have been complied with and performed prior to or on the Closing Date,
except where the failure to so perform would not, individually or in the
aggregate (A) have a Material Adverse Effect, or (B) materially impair the
ability of the Company, IMS or IMA to consummate the transactions
contemplated by this Agreement or the Contribution Agreement or to perform
their respective obligations under this Agreement or the other Transaction
Agreements.
(iii) No Material Adverse Effect. Since the Most Recent Balance Sheet
Date, there shall not have been a Material Adverse Effect.
(iv) Consents and Approvals. PGIO shall have received evidence, in
form and substance reasonably satisfactory to it, that all consents and
approvals of third parties set forth in Section 3.3(a) of the Disclosure
Schedule or otherwise required under any Business Contract (in each case
pursuant to written instruments in form and substance reasonably
satisfactory to PGIO and without payment of any consideration by PGIO or
the Company) or from any Governmental Entity in connection with this
Agreement, the other Transaction Agreements and the transactions
contemplated hereby and thereby, have been obtained and are in full force
and effect, except for any such consents and approvals the absence of which
would not (A) have a Material Adverse Effect, or (B) materially impair the
operation of the CD Business.
(v) Manager's Certificate. IMS shall have delivered to PGIO a
certificate, dated the Closing Date and signed by its manager, confirming
the satisfaction of the conditions set forth in Section 6.2(i), (ii) and
(iii) and such other matters as may be reasonably requested by PGIO.
(vi) Transaction Agreements. Each of IMS and IMA (and, as applicable,
Subsidiaries thereof) and the Company shall have executed and delivered
this Agreement and each other Transaction Agreement (other than
Distribution Arrangements for territories other than the United States) to
which it is a party.
(vii) Trademark Assignments. IMS shall have delivered, or caused to
have been delivered, to PGIO the Global Trademark Assignments, executed
(where applicable) by IMS.
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Section 6.3 Conditions to IMS's Obligations. The obligations of IMS to
enter into and complete the Closing is subject to the satisfaction (or express
written waiver by IMS) on or prior to the Closing Date of the following
conditions:
(i) Performance. All the terms, covenants, agreements and conditions
of this Agreement and the Contribution Agreement to be complied with and
performed by PGIO on or before the Closing Date shall have been complied
with and performed prior to or on the Closing Date, except where the
failure to so perform would not materially impair PGIO's ability to
consummate the transactions contemplated by this Agreement or to perform
its obligations under this Agreement or the other Transaction Agreements.
(ii) Governmental Consents and Approvals. IMS shall have received
evidence, in form and substance reasonably satisfactory to it, that
consents of Governmental Entities required in connection with this
Agreement, the other Transaction Agreements and the transactions
contemplated hereby and thereby, have been obtained and are in full force
and effect, except for any such consents and approvals the absence of which
would not materially impair the ability of PGIO or the Company to
consummate the transactions contemplated by this Agreement and the
Contribution Agreement or to perform their respective obligations under
this Agreement or the other Transaction Agreements.
(iii) Transaction Agreements. PGIO or its Affiliates shall have
executed and delivered this Agreement and each other Transaction Agreement
(other than Distribution Arrangements for territories other than the United
States) to which it is a party.
ARTICLE 7
Indemnification
Section 7.1 Indemnification of PGIO. From and after the Closing, IMS
shall indemnify PGIO and its Affiliates and the Company (each, a "PGIO
Indemnified Party") against and hold each PGIO Indemnified Party harmless from
any and all Losses suffered or incurred by any such PGIO Indemnified Party
arising from, relating to or otherwise in connection with:
(i) any breach or inaccuracy of any representation or warranty of IMS
contained in this Agreement or in the certificates furnished by IMS under
Section 6.2(v);
(ii) any breach or failure to perform any covenant or agreement of IMS
or IMA contained in this Agreement;
(iii) the operation of the CD Business at any time during the period
prior to the Closing (except, with respect to the Company, for Assumed
Liabilities under the Contribution Agreement);
(iv) a claim by any third Person that any product of the Company, or
the making, using, selling, offering for sale or importing of any such
product, has infringed or is infringing the Intellectual Property of such
Person the subject matter of which relates to lateral flow technology,
including components and processes used to implement lateral flow
technology;
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(v) any liability of IMS or its Affiliates related to an Excluded
Asset or any Excluded Liability (other than, with respect to the Company,
any Assumed Liability under the Contribution Agreement), including the cost
of extinguishing any Permitted Lien or Permitted IP Lien securing any such
Excluded Liabilities;
(vi) the operation of the Excluded Businesses;
(vii) any liability or obligation of IMS or its Affiliates to fund or
finance any pension or similar liabilities;
(viii) any liability arising out of the operation of the IMA
Facilities; and
(ix) any failure of IMS to make any payment required under the
Contributed Note;
provided that no PGIO Indemnified Party shall be entitled to be indemnified
pursuant to clause (i) above unless the aggregate of all Losses for which IMS
would, but for this proviso, be liable under clause (i) above or under Section
7.1(i) of the Contribution Agreement or under Section 6.2(i) of the PGIO
Contribution Agreement or under similar provisions of a purchase or contribution
agreement in connection with the sale or contribution to US CD LLC of a portion
of the CD Business or a sale of an interest in US CD LLC under the Membership
Unit Purchase Agreement, when taken together with 50% of the aggregate of all
Losses for which Unipath or IMS would, but for the application of the indemnity
threshold set forth in Section 7.1 of the Unipath Purchase Agreement, be liable
under Section 7.1(i) thereunder, exceeds on a cumulative basis $3,250,000 (the
"IMA Indemnity Threshold"), at which point each PGIO Indemnified Party shall be
entitled to be indemnified for the aggregate Losses and not just amounts in
excess of the IMA Indemnity Threshold (except that the foregoing proviso shall
not apply to any breach of the representations and warranties set forth in
Sections 3.1, 3.2, 3.3, 3.4 and 3.15, or to any act of fraud); provided,
further, that IMS's aggregate liability pursuant to clause (i) of this Section
7.1 together with (x) any other liability for indemnification for breach of
representation and warranty made by IMS or IMA under the Contribution Agreement
or under a purchase or contribution agreement in connection with the sale or
contribution to US CD LLC of a portion of the CD Business and (y) 50% of any
other liability for indemnification for breach of representation and warranty
made by Unipath under Section 7.1(i) of the Unipath Purchase Agreement, shall
not exceed $81,250,000.
Section 7.2 Indemnification of IMS. (a) From and after the Closing,
the Company shall indemnify IMS and its Affiliates (each, an "IMA Indemnified
Party") against and hold each IMA Indemnified Party harmless from any and all
Losses suffered or incurred by any such IMA Indemnified Party arising from,
relating to or otherwise in connection with:
(i) any failure to perform any covenant or agreement of the Company
contained in this Agreement; or
(ii) the operation of the CD Business (other than with respect to
Excluded Liabilities, Excluded Assets or the Transition Assets during the
Transition Period) at any time at and after the Closing; or
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(iii) any Assumed Liability under the Contribution Agreement.
(b) From and after the Closing, PGIO shall indemnify the IMA
Indemnified Parties against and hold each IMA Indemnified Party harmless from
any and all Losses suffered or incurred by any such IMA Indemnified Party
arising from, relating to or otherwise in connection with any failure to perform
any covenant or agreement of PGIO contained in this Agreement.
Section 7.3 Indemnification Claims. (a) In order for an Indemnified
Party to be entitled to any indemnification provided for under Section 7.1 or
7.2 in respect of, arising out of or involving, a Third Party Claim, such
Indemnified Party must notify the Indemnifying Party in writing of the Third
Party Claim (including in such notice a brief description of the applicable
claims, including damages sought or estimated, to the extent actually known by
the Indemnified Party) within 20 Business Days after receipt by such Indemnified
Party of notice of such Third Party Claim (a "Claim Notice"); provided that
failure to give such notification shall not affect the indemnification provided
under Section 7.1 or 7.2 except to the extent the Indemnifying Party has been
actually prejudiced as a result of such failure. Thereafter, the Indemnified
Party shall deliver to the Indemnifying Party, within 10 Business Days after the
Indemnified Party's receipt thereof, copies of all notices and documents
received by the Indemnified Party relating to such Third Party Claim.
(b) The Indemnifying Party will be entitled to participate in the
defense thereof and, if it so chooses, to assume the defense thereof (at the
sole cost and expense of the Indemnifying Party) with counsel selected by the
Indemnifying Party provided that (i) the Indemnifying Party provides the
Indemnified Party notice of its election to assume the defense of such Third
Party Claim within 15 days of receipt of the applicable Claim Notice, (ii) the
Indemnifying Party has the financial resources to pay damages that could
reasonably be expected to arise from such Third Party Claim, and (iii) such
counsel selected by the Indemnifying Party is reasonably satisfactory to the
Indemnified Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party will not be liable to the
Indemnified Party under this Section 7.3 for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation or of assistance as contemplated by this
Section 7.3; provided that (1) if the Indemnified Party reasonably determines,
after conferring with its counsel, that it is advisable for the Indemnified
Party to be represented by separate counsel due to actual or potential conflicts
of interest, the Indemnified Party shall have the right to employ counsel
(limited to one law firm) to represent it and in that event the fees and
expenses of such separate counsel shall be paid by the Indemnifying Party, and
(2) the Indemnifying Party shall be liable for the reasonable fees and expenses
of counsel employed by the Indemnified Party for any period during which the
Indemnifying Party has not assumed the defense thereof (other than during any
period in which the Indemnified Party shall have failed to give the Claim Notice
as provided above). If the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense (except as otherwise provided herein),
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. If the
Indemnifying Party assumes the defense of the Third Party Claim, it will be
conclusively established for purposes of this Agreement and the Contribution
Agreement that the claims
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made in that Third Party Claim are within the scope and subject to
indemnification pursuant to this Article 7. Notwithstanding the foregoing, the
Indemnifying Party shall not be entitled to assume the defense of any Third
Party Claim (and shall be liable for the reasonable fees and expenses of counsel
incurred by the Indemnified Party in defending such Third Party Claim) if the
Third Party Claim seeks an order, injunction or other equitable relief or relief
for other than money damages against the Indemnified Party which the Indemnified
Party reasonably determines, after conferring with its counsel, cannot be
separated from any related claim for money damages. The indemnification required
by Section 7.1 or 7.2, as the case may be, shall be made by prompt payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or the indemnifiable Loss is incurred. If the
Indemnifying Party chooses to defend or prosecute a Third Party Claim, all the
parties hereto reasonably necessary for such defense or prosecution shall
reasonably cooperate in the defense or prosecution thereof, which cooperation
shall include (upon the Indemnifying Party's reasonable request) the provision
to the Indemnifying Party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. If the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party will agree to any
settlement, compromise or discharge of such Third Party Claim which the
Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of liability in connection with such
Third Party Claim; provided that without the Indemnified Party's consent, the
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement (x) that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party or (y) that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such Third Party Claim. If the
Indemnifying Party shall have assumed the defense of a Third Party Claim, the
Indemnified Party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnifying Party's
prior written consent (which consent shall not be unreasonably withheld).
(c) In order for an Indemnified Party to be entitled to any
indemnification provided for under this Agreement other than in respect of,
arising out of or involving a Third Party Claim, such Indemnified Party shall
deliver notice of such claim with reasonable promptness to the Indemnifying
Party (including in such notice a brief description of the applicable claims,
including damages sought or estimated, to the extent actually known by the
Indemnified Party); provided that failure to give such notification shall not
affect the indemnification provided under Section 7.1 or 7.2 except to the
extent the Indemnifying Party has been actually prejudiced as a result of such
failure.
Section 7.4 Survival. (a) All representations, warranties, covenants
and agreements of IMS shall survive the execution and delivery hereof and the
Closing hereunder. Except for those representations and warranties (i) in
Sections 3.1, 3.2, 3.3, 3.8, 3.9 (the first sentence thereof only) and 3.24, all
of which representations and warranties shall survive without limitation; and
(ii) in Sections 3.12, 3.14, 3.18 and 3.21, all of which shall survive for the
applicable statute of limitations, all representations and warranties of IMS and
IMA shall terminate and expire with respect to any theretofore unasserted claim,
on the second anniversary of the Closing Date or, with respect to any Transition
Asset, on the second anniversary of the applicable Subsequent Transfer Date;
provided that to the extent applicable or related to
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Business Intellectual Property Controlled but not owned by IMS or IMA or one of
their respective Subsidiaries pursuant to a license from a third party, the
representations and warranties in Section 3.12 shall survive for so long as
IMS's, IMA's or such Subsidiary's rights in such Business Intellectual Property
exist.
Section 7.5 Sole and Exclusive Remedy. The sole and exclusive remedy
of an Indemnified Party with respect to any and all claims arising out of, in
connection with or relating to the subject matter of this Agreement will be
pursuant to the indemnification provisions set forth in Article 5 hereof, this
Article 7, and without duplication, Articles 5 and 7 of the Contribution
Agreement; provided that nothing in this Section 7.5 will prohibit claims by the
Indemnified Party for equitable relief, common law fraud and intentional
misrepresentation.
ARTICLE 8
TERMINATION
Section 8.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby abandoned, at any time prior to the Closing,
only simultaneously with a termination of the Contribution Agreement and as
provided below:
(a) by mutual written consent of PGIO and IMA;
(b) by either PGIO or IMA, (i) if the Closing has not occurred by
September 30, 2007 or, if on such date all conditions to the parties'
obligations to consummate the Closing in Article 6 (other than those which by
their nature are satisfied on the Closing Date) have been satisfied or waived
other than the condition set forth in Section 6.1(i), November 30, 2007 (the
"Outside Date"), unless the failure to effect the Closing is the result of a
material breach of this Agreement or the Contribution Agreement by the party
seeking to terminate this Agreement; (ii) if any Governmental Entity issues an
order, decree or ruling or takes any other action permanently enjoining,
restraining or otherwise prohibiting the Closing hereunder or under the
Contribution Agreement and such order, decree, ruling or other action shall have
become final and nonappealable; or (iii) if any condition to the obligation of
such party to consummate the Closing hereunder or under the Contribution
Agreement becomes incapable of satisfaction prior to the Outside Date; provided
in each case that the terminating party is not then in material breach of any
representation, warranty or covenant contained in this Agreement or the
Contribution Agreement;
(c) by PGIO, if IMS or IMA breaches or fails to perform in any
material respect any of their representations, warranties or covenants contained
in this Agreement or the Contribution Agreement, which breach or failure to
perform would give rise to a failure to satisfy the conditions set forth in
Section 6.2(i) or Section 6.2(ii) hereof or of the Contribution Agreement and
cannot be or has not been cured within 30 days after the giving of written
notice to IMA of such breach or the Outside Date, if earlier (provided that PGIO
is not then in material breach of any representation, warranty or covenant
contained in this Agreement and that neither PGIO nor the Company is then in
material breach of any representation, warranty or covenant contained in the
Contribution Agreement); or
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(d) by IMS, if PGIO breaches or fails to perform in any material
respect any of its representations, warranties or covenants contained in this
Agreement or the Contribution Agreement, which breach or failure to perform
would give rise to a failure to satisfy the condition set forth in Section
6.3(i) hereof or of the Contribution Agreement and cannot be or has not been
cured within 30 days after the giving of written notice to PGIO of such breach
or the Outside Date, if earlier (provided that neither IMA nor IMS is then in
material breach of any representation, warranty or covenant in this Agreement or
the Contribution Agreement).
Section 8.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of PGIO or
IMS, other than Sections 4.5, 4.11, 4.12, this Section 8.2 and Article 9, which
provisions shall survive such termination, and except to the extent that such
termination results from the willful and material breach by a party of any
representation, warranty or covenant set forth in this Agreement.
Section 8.3 Amendment. This Agreement may be amended by the parties
hereto at any time; provided that this Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
Section 8.4 Extension; Waiver. At any time prior to the Closing, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties of another party contained in this Agreement or
in any document delivered pursuant to this Agreement or (c) waive compliance
with any of the agreements or conditions of another party contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
ARTICLE 9
General Provisions
Section 9.1 Notices. All notices, requests, claims, demands, waivers
and other communications under this Agreement shall be in writing and shall be
by facsimile, courier services or personal delivery to the following addresses,
or to such other addresses as shall be designated from time to time by a party
hereto in accordance with this Section 9.1:
if to PGIO:
Procter & Xxxxxx International Operations, SA
c/o The Procter & Xxxxxx Company
Xxx Xxxxxxx & Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Secretary
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
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Xxxxxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: 000-000-0000
if to IMS:
Inverness Medical Switzerland GmbH
c/o Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Office of the General Counsel
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Procter LLP
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: 000-000-0000
if to the Company:
SPD Swiss Precision Diagnostics GmbH
c/o Procter & Xxxxxx International Operations, SA
SBC Saconnex Business Centre
207 route de Ferney
XX-0000 Xxxxx-Xxxxxxxx
Xxxxxx, Xxxxxxxxxxx
Attention: General Counsel
Facsimile: x00-00-000-0000
with a copy (which shall not constitute notice) to:
Inverness Medical Switzerland GmbH
c/o Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Office of the General Counsel
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
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Procter & Xxxxxx International Operations, SA
c/o The Procter & Xxxxxx Company
Xxx Xxxxxxx & Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Secretary
Facsimile: 000-000-0000
All notices and communications under this Agreement shall be deemed to have been
duly given (x) when delivered by hand, if personally delivered, (y) one Business
Day after when delivered to a courier, if delivered by commercial one-day
overnight courier service or (z) when sent, if sent by facsimile, with an
acknowledgment of sending being produced by the sending facsimile machine.
Section 9.2 Definitions. The following capitalized terms have the
following meanings:
"Affiliate" means, with respect to any Person, a Person who is an
"affiliate" of such first Person within the meaning of Rule 405 under the
Securities Act of 1933, as amended. For purposes of this definition, a Person
shall be deemed to control another Person if it owns or controls 50% or more of
the voting equity of the other Person (or other comparable ownership if the
Person is not a corporation); provided that solely for purposes of this
Agreement, the Company shall not be deemed to be an "Affiliate" of any party
hereto (or such parties' other Affiliates).
"Business Contract" means any Contract arising or resulting primarily
from or related primarily to the CD Business except for an Excluded Contract.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions located in New York City are permitted or required
by Law, executive order or decree of a Governmental Entity to remain closed.
"Business Registered Intellectual Property" means any and all
Intellectual Property owned by IMS or IMA that is exclusively used in the CD
Business and consisting of (a) patents, patent applications (including
provisional applications), (b) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks, and (c) registered copyrights and applications for
copyright registration.
"Code" means the Internal Revenue Code of 1986, as amended.
"Constitutive Documents" means (a) with respect to a Person that is a
corporation, such Person's certificate or articles of incorporation and by-laws,
(b) with respect to a Person that is a limited liability company, such Person's
certificate of formation and operating or limited liability company agreement,
(c) with respect to a Person that is a partnership, such Person's partnership
agreement, (d) with respect to a Person that is a trust, such Person's trust
instrument or agreement, and (e) with respect to a Person that is a legal entity
(including one of the type
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described in clauses (a) through (d)), any constitutive document of such entity
or other document or Contract analogous to those described in clauses (a)
through this clause (e).
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, guaranty, letter of credit or other obligation, contractual or
otherwise (the "primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
reasonably anticipated liability in respect thereof.
"Contract" means any loan or credit agreement, bond, debenture, note,
mortgage, indenture, guarantee, lease or other contract, commitment, agreement,
instrument, obligation, undertaking, license, permit, concession, franchise or
legally binding arrangement or understanding, whether written or oral.
"Contributed Asset" shall have the meaning ascribed to such term in
the Contribution Agreement.
"Control" or "Controlled" means, when used with respect to any
intellectual property right or other intangible property, and only in such case,
the possession or right of use (whether by license or ownership, or by control
over a Subsidiary having possession or right of use by license or ownership) by
a Person of the ability to grant to the other Person access, right of use or a
license or sublicense as provided herein without violating the terms of any
written contract with any third party.
"Environmental Law" means any applicable Law and legally binding
administrative or judicial interpretations thereof relating to (a) pollution,
the protection of the environment (including indoor and outdoor air, surface
water, groundwater, wetlands, drinking water supply, surface or subsurface
land), natural resources or health and safety or (b) the exposure to, or the
manufacture, handling, use, emission, storage, recycling, treatment, generation,
discharge, transportation or disposal of, the release or threatened release of,
or the removal or remediation of Hazardous Materials.
"Environmental Liability" means any and all Losses arising from or
relating to: (a) failure to comply with any requirement of an Environmental Law;
(b) failure to obtain, maintain in effect or comply with any required
Environmental Permit; (c) actual or alleged obligation to undertake
environmental investigation, risk assessment, monitoring, remediation or
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restoration, or (d) harm or injury, actual or alleged, to any real property, to
any Person, to public health, or to any natural resource as caused by any
Hazardous Material.
"Environmental Permits" means all permits, licenses, certificates,
registrations approvals or authorizations issued or required by any
Environmental Law, including all held by IMS or IMA facilities that will be used
to manufacture products for the Company under the Manufacturing Agreement.
"Financial Investor" means an investor, other than an operating
company or a Subsidiary, division, unit or business segment of an operating
company engaged primarily in investing activities, that purchases the equity
securities of another Person, whether or not such purchases or equity securities
are registered under the Securities Act, based on the prospect of financial
gain.
"First Check Diagnostics Business" means the business of First Check
Diagnostics that was acquired by IMA or a Subsidiary thereof, the consumer
diagnostics portion of which is subject to the provisions of Section 12.2(a)(ii)
of the Shareholder Agreement.
"Global Trademark Assignments" means, collectively, the Trademark
Assignment between IMS and PGIO, and the Trademark Assignment, between PGIO and
the Company, in each case, in a form reasonably satisfactory to PGIO.
"Governmental Entity" means any nation, state, province, county, city
or political subdivision and any official, agency, arbitrator, authority, court,
department, commission, board, bureau, instrumentality or other governmental
entity of any thereof, whether domestic or foreign.
"Hazardous Materials" means, whether alone or in combination, any and
all materials (including substances, chemicals, compounds, mixtures, products or
byproducts, wastes, pollutants and contaminants) that are (a) listed,
identified, licensed, prohibited, controlled, or regulated pursuant to
Environmental Law; (b) identified or classified as "hazardous," "toxic,"
"dangerous," "pollutant," "contaminant," "explosive," "corrosive," "flammable,"
"radioactive," "reactive" or "special waste"; (c) oils, petroleum, petroleum
products, wastes or byproducts, asbestos or asbestos containing materials,
nuclear materials, lead-based paint, polychlorinated biphenyls, urea
formaldehyde or explosives; or that could at some level require investigation,
risk assessment, monitoring, removal, treatment or remediation or otherwise give
rise to liability under any Environmental Law.
"IMA Facilities" means those manufacturing facilities owned, operated
or leased by IMA or its Subsidiaries that are used in the production of
products.
"IMA License Agreements" means, collectively, that certain (a) License
Agreement among the Company, as licensee, and IMA and IMS, as licensors; and (b)
License Agreement among the Company, as licensor, and IMA and IMS, as licensees.
"IMA Services Agreement" means that certain agreement among IMA, IMS
and the Company pursuant to which IMA and IMS and certain of their respective
Affiliates shall provide the Company with the services specified therein on a
continuing basis following the Closing.
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"IMA Transition Services Agreement" means that certain agreement among
IMA, IMS and the Company pursuant to which IMA and IMS shall provide the Company
with the services specified therein for certain interim periods of time
following the Closing.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, with respect to deposits or
advances of any kind or for the deferred purchase price of property or services
(other than current trade liabilities incurred in the Ordinary Course of
Business and payable in accordance with customary practices and not more than 90
days past due), (b) all obligations (except for trade payables) of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations (except for trade payables) of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property or
assets purchased by such Person, (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (f)
all guarantees by such Person of Indebtedness of others, (g) all capital lease
obligations of such Person, (h) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange agreements, caps
or collar agreements or other interest or exchange rate hedging arrangements
either generally or under specific contingencies, (i) all obligations of such
Person as an account party in respect of letters of credit and banker's
acceptances, (j) all obligations of such Person consisting of overdrafts (e.g.,
cash float reflected as a negative on the cash line), (k) all obligations of
such Person pursuant to any deferred compensation agreements and (l) any
Contingent Obligation of such Person.
"Indemnified Party" means either a PGIO Indemnified Party or a IMA
Indemnified Party.
"Indemnifying Party" means (a) with respect to a claim for
indemnification pursuant to Section 7.1, IMS, (b) with respect to a claim for
indemnification pursuant to Section 7.2(a), the Company and (c) with respect to
a claim for indemnification pursuant to Section 7.2(b), PGIO.
"Intellectual Property" means any or all of the following (in each
case in any domestic or foreign jurisdiction): (a) patents (including utility
patents, xxxxx patents, design patents and certificates of invention) and
applications therefor (including provisional, non-provisional, converted
provisional and continued prosecution applications) and all reissues,
reexaminations, revalidations, divisionals, renewals, extensions or restorations
(including any supplementary protection certificate and the like), provisionals,
continuations and continuations-in-part thereof; (b) inventions, discoveries and
ideas (whether patentable or not), (c) trade secrets, proprietary information,
know how, confidential information, technology, technical data, and all
documentation relating to any of the foregoing and rights to limit the use of
disclosure thereof by any Person; (d) copyrights, copyright registrations and
applications therefor and all other rights corresponding thereto, and writings
and other works that are the subject matter of such copyrights; (e) trade names,
trademarks, service marks, brand names, certification marks, trade dress and
other indications of origin, the goodwill associated with the foregoing, and the
registrations and applications for registration of any of the foregoing; (f)
databases and data collections and all rights therein; (g) computer software
including all source code, object code,
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firmware, development tools, files, records and data, and all media on which any
of the foregoing is recorded; and (h) Web addresses, sites and domain names.
"Intellectual Property Rights" shall mean, collectively, any and all
rights in, to and under Intellectual Property, including patent rights, trade
secret rights, copyrights, trademarks, service marks, trade dress and similar
rights of any type under the Laws of any Governmental Entity, including all
applications and registrations relating to the foregoing.
"Knowledge" means, in the case of the Company, IMS and IMA, actual
knowledge of the employees listed in Section 9.2(a) of the Disclosure Schedule
assuming each such employee has the knowledge that an employee in a similar
position would reasonably be expected to have.
"License Agreements" means, collectively, the IMA License Agreements
and the PGIO License Agreements.
"Losses" means any debts, obligations and other liabilities (whether
known or unknown, absolute or contingent, liquidated or unliquidated, due or to
become due, accrued or not accrued, asserted or unasserted or otherwise),
losses, claims, damages, Taxes, diminutions in value, interest obligations,
deficiencies, Judgments, assessments, fines, fees, penalties and expenses
(including amounts paid in settlement, interest, court costs, fees and expenses
of attorneys, accountants, financial advisors, consultants, investigators and
other experts and other expenses of litigation).
"Material Adverse Effect" means any change, circumstance, development,
state of facts, event or effect (a) that has had or would reasonably be expected
to have a material adverse change or effect (taken alone or in the aggregate
with any other adverse change or effect) in or with respect to the business,
assets, condition (financial or otherwise), or results of operations of the CD
Business other than (i) changes, circumstances, developments, state of facts,
events or effects that affect the U.S. or global economy or capital or financial
markets generally, including changes in interest or exchange rates, (ii) changes
in general legal, tax, regulatory, political or economic conditions that, in
each case, generally affect the industries in which the CD Business operates,
(iii) acts of war or terrorism or natural disasters, provided that in the case
of clauses (ii) and (iii) above, the CD Business is not disproportionately
affected by such changes, circumstances, developments, state of facts, events or
effects as compared to the industries in which it operates, taken as a whole; or
(b) that could reasonably be expected to have a material adverse effect on IMS's
ability to perform its obligations under this Agreement, the Contributed Note
and the other Transaction Agreements.
"Option Agreement" means the Option Agreement among US CD LLC, the
Company, IMA, IMS, PGIO and PGUS, dated as of the date hereof.
"Permitted IP Liens" means those Liens with respect to Business
Intellectual Property as set forth on Schedule 3.12(a).
"Permitted Liens" means the following, to the extent not securing
Indebtedness: (a) statutory Liens for Taxes not yet due or payable; (b) Liens
for assessments and other governmental charges or Liens of landlords, carriers,
warehousemen, mechanics and repairmen
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incurred in the Ordinary Course of Business, in each case for sums not yet due
and payable or due but not delinquent or being contested in good faith by
appropriate proceedings, (c) Liens incurred in the Ordinary Course of Business
in connection with workers' compensation, unemployment insurance and other types
of social security, and (d) Liens set forth in the terms of any Business
Contract (except for any Lien securing Indebtedness) that do not detract the
value of, or impair the use of, such Business Contract.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity or any Governmental Entity.
"PGIO License Agreements" mean, collectively, that certain (a) License
Agreement between US CD LLC, as licensor, and the Company, as licensee, (b)
Trademark License between US CD LLC, as licensor, and the Company, as exclusive
licensee, with respect to the U.S. Trademarks ACCU-CLEAR and ACCU-CLEAR READY OR
NOT, and (c) License Agreement between the Company, as licensor, and The Procter
& Xxxxxx Company, as licensee.
"PGIO Services Agreement" means that certain agreement between PGIO
and the Company pursuant to which PGIO shall provide the Company with the
services specified therein on a continuing basis following the Closing.
"Product" means each human diagnostics and monitoring product that is
being formulated, developed, manufactured, packaged, tested, marketed,
distributed or sold by or on behalf of IMS or IMA, in each case, as part of the
CD Business.
"Product Agreement" means that certain agreement between the Company
and IMA, dated as of the date hereof, pursuant to which IMA shall purchase from
the Company certain Products and perform certain actions with respect to such
Products in the United States, as specified therein.
"Product Registrations" means the Governmental Licenses granted to IMS
or IMA to manufacture, market, sell or distribute any of the Products and all
related Technical Files (as defined in the Contribution Agreement), and other
supporting files, writings, data, studies, reports and other written materials
filed as part of, or referenced in, such Governmental Licenses or registrations
or applications therefor or notifications with respect thereto, or maintained by
any of IMA, IMS or any of their respective Affiliates and relating to such
Governmental Licenses or registrations or applications therefor or notifications
with respect thereto.
"Representatives" means, with respect to a Person, such Person's legal
and internal and independent accounting advisors and representatives.
"Share" has the meaning ascribed to it in the Shareholder Agreement.
"Shareholders" means PGIO and IMS and all other Persons who become
shareholders of the Company in accordance with the terms of the Shareholder
Agreement, and the term "Shareholder" shall mean any of them.
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"Strategic Investor" means, with respect to any Person, an operating
company or a Subsidiary of an operating company that (whether directly or
through one or more Subsidiaries) (a) conducts business in the same industry as
that in which such Person conducts business (or in an industry functionally
related to the industry in which such Person conducts business) that purchases
the equity securities of such Person in one or more strategic transactions, or
(b) develops, manufactures, licenses or sells products, services or technology
that are of key importance to, or are reasonably likely in the future to be of
key importance with respect to, a strategic transaction involving the purchase
of equity securities of such Person, in each case whether or not such purchases
or equity securities are registered under the Securities Act.
"Subsidiary" means, with respect to any Person, an Affiliate
controlled by such Person directly, or indirectly through one or more
intermediaries.
"Tax" means: (a) any United States federal, state, local and foreign
income, profits, excise, franchise, license, capital, transfer, ad valorem,
wage, severance, occupation, import, custom, gross receipts, payroll, sales,
value added, recording, registration, intangible, documentary, goods and
services, real estate, franchise, employment, use, stamp, alternative or add-on
minimum, environmental, withholding and any other tax, duty, assessment or
governmental tax charge of any kind whatsoever, imposed or required to be
withheld by any taxing authority; (b) any interest, additions to tax, or
penalties applicable or related thereto and (c) any amount described in clause
(a) or (b) for which a Person is liable as a successor or transferee, or by
Contract, indemnity or otherwise.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement or other form relating to Taxes filed or
required to be filed with a Governmental Entity, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" means any Legal Proceeding, claim or demand by a
Person other than a Person from which indemnification may be sought under
Article 7.
"Trademarks" means trade names, trademarks, service marks, brand
names, certification marks, trade dress and other indications of origin, the
goodwill associated with the foregoing, and the registrations and applications
for registration of any of the foregoing.
"Transaction Agreements" means, collectively, this Agreement, the
Contribution Agreement, the Guarantee, the Shareholder Agreement, the Option
Agreement, the License Agreements, the Finished Product Purchase Agreement, the
Product Agreement, the Distribution Arrangements, the IMA Transition Services
Agreement, the IMA Services Agreement, the PGIO Services Agreement, the Share
Transfer Agreement, the PGIO Contribution Agreement, the Unipath Purchase
Agreement, the UK Newco Investment Agreement and the Regulatory Transition
Agreement (as defined in the Contribution Agreement).
"Transferred Employee" means each employee of IMA, IMS or any of their
respective Affiliates who is hired by the Company.
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"UK Newco Investment Agreement" means that certain Investment
Agreement between the Company and UK Newco, in form and substance satisfactory
to PGIO and IMS.
Section 9.3 Descriptive Headings; Certain Interpretations. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not control or affect the meaning or construction of this
Agreement. Except where expressly stated otherwise in this Agreement, the
following rules of interpretation apply to this Agreement: (a) "or" is not
exclusive and "include," "includes" and "including" are not limiting; (b)
"hereof," "hereto," "hereby," "herein" and "hereunder" and words of similar
import when used in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement; (c) "date hereof" refers to the date
of this Agreement; (d) "extent" in the phrase "to the extent" means the degree
to which a subject or other thing extends, and such phrase does not mean simply
"if"; (e) definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms; (f) references to an agreement or
instrument mean such agreement or instrument as from time to time amended,
modified or supplemented, and all exhibits, appendices, schedules or other
attachments thereto; (g) references to a Person are also to its permitted
successors and assigns; (h) references to an "Article," "Section," "Clause,"
"Exhibit" or "Schedule" refer to an Article, Section or Clause of, or an Exhibit
or Schedule to, this Agreement; (i) words importing the masculine gender include
the feminine or neuter and, in each case, vice versa; (j) references to a Law
include any amendment or modification to such Law and any rules or regulations
issued thereunder, whether such amendment or modification is made, or issuance
of such rules or regulations occurs, before or after the date of this Agreement;
and (k) references to monetary amounts shall be denominated in United States
Dollars.
Section 9.4 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of Law or otherwise by any of the parties hereto without the prior
written consent of the other parties hereto. Any purported assignment without
such consent shall be void. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by, the
parties hereto and their respective successors and assigns.
Section 9.5 Specific Enforcement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled at law, in
equity or otherwise.
Section 9.6 Entire Agreement. The Transaction Agreements contain the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements
(including the Original Agreement) and understandings, both written and oral,
with respect to the transactions contemplated thereby.
Section 9.7 No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted successors and assigns
and nothing herein express or implied shall give or be construed to give to any
Person, other than the parties hereto and such successors and assigns, any legal
or equitable rights or remedies.
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Section 9.8 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties hereto and delivered to the other parties hereto. Delivery
of an executed counterpart of this Agreement by facsimile or other electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of New York, regardless of
the Laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.10 Arbitration. (a) In the event that a material dispute
relating to this Agreement arises between the parties, good faith discussions
and negotiations shall be conducted by a designated management representative of
each party to resolve such dispute. If such representatives are unable to
resolve the dispute within 10 Business Days after the initial request for
negotiations at this level, then the matter shall be referred to the most senior
executive officer of each party, who shall attempt, through good faith
negotiations and discussions, to resolve the dispute within five Business Days
immediately following such initial 10 Business Day period. If the dispute is not
resolved within the aforementioned five Business Day period, then the matter may
be submitted for binding arbitration as provided in Section 9.10(b). This
Section 9.10(a) shall not apply to or limit the right of a party to seek a
temporary restraining order or other provisional or permanent remedy to preserve
the status quo or to prevent irreparable harm.
(b) Except as otherwise provided in this Agreement, any controversy or
claim arising out of or relating to this Agreement, or the breach hereof, that
has not been resolved in accordance with Section 9.10(a) shall be settled by
binding arbitration in the following manner:
(i) If a party intends to commence arbitration to resolve a dispute
arising under this Agreement, such party shall provide written notice (the
"Arbitration Request") to the other party of such intention and the issues
for resolution. Within one Business Day after the receipt of the
Arbitration Request, the other party may, by written notice, add additional
issues for resolution, provided that such issues are eligible for
arbitration under this Section 9.10(b).
(ii) Arbitration shall be held in New York City, New York under the
CPR Rules for Non-Administered Arbitration. The arbitration shall be
conducted by three arbitrators who are knowledgeable in the subject matter
at issue in the dispute. One arbitrator will be selected by PGIO, one
arbitrator will be selected by IMS, and the third arbitrator will be
selected by mutual agreement of the two arbitrators selected by the
parties. Each party shall submit to such arbitrators its proposed ruling
and remedy for each issue that is the subject of arbitration. The
arbitrators shall, within 15 days after the conclusion of the arbitration
hearing, issue a written award and statement of decision describing the
essential findings and conclusions on which the award is based, including
the calculation of any damages awarded. Any such award and decision shall
reflect the proposed ruling and remedy of one of the parties as to each
disputed issue. The arbitrators shall be authorized to award compensatory
damages, but shall not be
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authorized to award non-economic damages or punitive damages, or to reform,
modify or materially change this Agreement or any other agreements
contemplated hereunder. The arbitrators shall also be authorized to grant
any temporary, preliminary or permanent equitable remedy or relief the
arbitrators deem just and equitable and within the scope of this Agreement,
including an injunction or order for specific performance. The award of the
arbitrators shall be the sole and exclusive remedy of the parties (except
for any other remedies set forth in this Agreement). The arbitrators may
proceed to an award, notwithstanding the failure of either party to
participate in the proceedings. Judgment on the award rendered by the
arbitrators may be enforced in any court having competent jurisdiction
thereof, subject only to revocation on grounds of fraud or clear bias on
the part of the arbitrators.
Section 9.11 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties hereto as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.12 Nonassignable Contracts. (a) In the event that the
transactions contemplated by this Agreement involve the assignment of rights
under any contract, agreement, license, claim, or of other rights, assets, or
property, which are nonassignable without the consent, authorization or approval
of the other party or parties thereto or any other third party (a "Nonassignable
Contract"), and such consent, authorization or approval shall not have been
obtained by IMS or IMA prior to the Closing Date, then, notwithstanding anything
in this Agreement to the contrary (and without relieving IMS or IMA of any
liability or obligation it may have under this Agreement), any such
Nonassignable Contract shall not be assigned (except any rights to receive
payments thereunder) until all such necessary consents, authorizations and
approvals with respect to such Nonassignable Contract shall have been obtained,
whereupon IMS or IMA shall, without further consideration, promptly assign or
cause the assignment of same to the Company.
(b) Until such time, if any, as all the necessary consents,
authorizations and approvals shall have been obtained for the assignment of a
Nonassignable Contract, IMS or IMA, at its own expense, shall retain, preserve
and hold in trust for the sole benefit of the Company all rights, interests and
claims with respect to such Nonassignable Contract from and after the Closing
Date. IMS or IMA shall use commercially reasonable efforts to obtain such
consents, authorizations and approvals and shall, at the request of PGIO or the
Company, use commercially reasonable efforts to take such actions, enter into
such arrangements and do or cause to be done such things, as shall be reasonably
requested by PGIO or the Company to provide, make available and secure for the
Company's benefits all of the funds, income and payments that would have inured
to the Company upon an outright assignment of such Nonassignable Contract to the
extent permitted by Law and by contract. Except as provided by Law or the
Nonassignable Contract in question, the performance obligations of IMS or IMA
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under such Nonassignable Contract as shall arise both (x) exclusively in respect
of periods from and after the date on which the aforesaid funds are so made
available thereunder and (y) exclusively in connection with the exploitation of
such funds by the Company, shall be deemed to be sublicensed or subcontracted to
the Company but only until such time (if any) as the rights under such
Nonassignable Contract have been effectively assigned to the Company. IMS and
IMA shall pay over to the Company any amounts received by them after the Closing
Date in respect of any Nonassignable Contract, and the Company shall pay over to
IMS and IMA any amounts paid, or expenses incurred, by them in performing any
Nonassignable Contract after the Closing Date.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first herein above written.
INVERNESS MEDICAL SWITZERLAND GMBH
By: /s/ Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxx
Title: Manager
PROCTER & XXXXXX INTERNATIONAL
OPERATIONS, SA
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
By: /s/ Claus Xxxxxxx Xxxxxxx
------------------------------------
Name: Claus Xxxxxxx Xxxxxxx
Title: Director
SPD SWISS PRECISION DIAGNOSTICS GMBH
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
[Signature Page to Amended and Restated Asset Purchase Agreement]
