Exhibit 10.1
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as amended. The omitted
portions of this exhibit have been filed separately with the Securities and
Exchange Commission.
PURCHASE AGREEMENT
among
AMERICAN HOME PRODUCTS CORPORATION
AHP SUBSIDIARY HOLDING CORPORATION
and
IMMUNEX CORPORATION
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS........................................................1
ARTICLE II. THE SALE; PURCHASE PRICE..........................................8
2.1. PURCHASE AND SALE...................................8
2.2. NET ASSETS AND OTHER PAYMENTS.......................8
2.3 TRANSFER TAXES.....................................10
2.4 ADDITIONAL COSTS...................................11
ARTICLE III. CLOSING.........................................................11
3.1. THE CLOSING........................................11
3.2. DELIVERIES BY BUYER................................11
3.3. DELIVERIES BY SELLERS..............................12
3.4. FURTHER ASSURANCES.................................12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS........................13
4.1 ORGANIZATION.......................................13
4.2 CAPITALIZATION OF GREENWICH........................13
4.3 CORPORATE AUTHORITY................................13
4.4 NO VIOLATION.......................................14
4.5 LITIGATION.........................................14
4.6 FINANCIAL STATEMENTS; ABSENCE OF CERTAIN
CHANGES OR EVENTS..................................14
4.7 TITLE TO PROPERTIES; ABSENCE OF LIENS..............15
4.8 CONDITION OF PHYSICAL ASSETS; INTELLECTUAL
PROPERTY...........................................17
4.9 EMPLOYEE MATTERS...................................17
4.10 COMPLIANCE WITH LAW................................18
4.11 CONTRACTS AND COMMITMENTS. (a).....................18
4.12 BROKERS AND INTERMEDIARIES.........................19
4.13 LICENSES AND PERMITS...............................19
4.14 ENVIRONMENTAL MATTERS..............................19
4.15 TAXES..............................................20
4.16 DISCLAIMER.........................................21
4.17 DISCLOSURE IN SCHEDULES............................21
(i)
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER............................21
5.1 ORGANIZATION.......................................21
5.2 CORPORATE AUTHORITY................................21
5.3 NO VIOLATION.......................................21
5.4 FINANCIAL ABILITY TO PERFORM.......................22
5.5 BROKERS AND INTERMEDIARIES.........................22
ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING...........................23
6.1. OPERATION OF FACILITY PRIOR TO THE CLOSING DATE....23
6.2. PERMITTED ACTIONS..................................24
6.3 ACCOUNTING RECORDS.................................26
ARTICLE VII ADDITIONAL AGREEMENTS............................................27
7.1 ANCILLARY AGREEMENTS...............................27
7.2 ACCESS TO INFORMATION AND CONFIDENTIALITY..........27
7.3 REGULATORY FILINGS.................................28
7.4 COMMERCIALLY REASONABLE EFFORTS....................29
7.5 NOTICES OF CERTAIN EVENTS..........................29
7.6 START-UP AND OPERATION OF THE FACILITY.............29
7.7 CAPITAL IMPROVEMENT CONTRACTS......................30
7.8 BUYER PERSONNEL COSTS..............................30
7.9 STAFFING...........................................30
7.10 FACILITY USE.......................................30
7.11 TRANSFER OF SELLER EMPLOYEES.......................31
7.12 ASSIGNMENT OF BUYER EMPLOYEES......................31
7.13 TRANSFER OF PERMITS; CONTRACTS ....................32
7.14 TAX MATTERS........................................32
ARTICLE VIII AGREEMENTS WITH RESPECT TO EMPLOYEES AND EMPLOYEE MATTERS.......35
8.1 BUYER'S OBLIGATIONS TO EMPLOYEES...................35
ARTICLE IX. CONDITIONS.......................................................38
9.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO
EFFECT THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT..........................................38
9.2. CONDITIONS TO THE OBLIGATION OF SELLERS............39
9.3. CONDITIONS TO THE OBLIGATION OF BUYER..............39
ARTICLE X. TERMINATION, AMENDMENT AND WAIVER.................................40
10.1 TERMINATION........................................40
(ii)
10.2 EFFECT OF TERMINATION..............................40
ARTICLE XI. INDEMNIFICATION..................................................41
11.1 INDEMNIFICATION BY SELLER..........................41
11.2 INDEMNIFICATION BY BUYER...........................42
11.3 CERTAIN LIMITATIONS................................42
ARTICLE XII. GENERAL PROVISIONS..............................................43
12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.........43
12.2 COOPERATION........................................44
12.3 WAIVER.............................................44
12.4 NOTICES............................................44
12.5 GOVERNING LAW AND CONSENT TO JURISDICTION..........44
12.6 COUNTERPARTS.......................................45
12.7 HEADINGS...........................................45
12.8 ENTIRE AGREEMENT...................................45
12.9 AMENDMENT AND MODIFICATION.........................45
12.10 BINDING EFFECT; BENEFITS...........................45
12.11 ASSIGNABILITY......................................45
12.12 SELLERS' KNOWLEDGE.................................46
12.13 SEVERABILITY.......................................46
(iii)
PURCHASE AGREEMENT
This PURCHASE AGREEMENT dated as of November 6, 2001 (the
"Agreement") by and among AMERICAN HOME PRODUCTS CORPORATION, a Delaware
corporation ("AHP"), AHP SUBSIDIARY HOLDING CORPORATION, a Delaware corporation
("Holdings", and together with AHP, the "Sellers") and IMMUNEX CORPORATION, a
Washington corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Sellers desire to sell to Buyer and Buyer desires to
acquire from Holdings one thousand (1,000) shares (the "Shares") of common
stock, no par value per share, of GREENWICH HOLDINGS INC., a Delaware
corporation ("Greenwich"), which shares constitute all of the issued and
outstanding shares of capital stock of Greenwich, all on the terms and subject
to the conditions set forth herein; and
WHEREAS, in connection with such sale Buyer shall pay to Holdings
certain costs incurred by Sellers related to readying the Facility (as defined
below) for approval by the Food and Drug Administration (the "FDA") and EMEA (as
defined below); and
WHEREAS, this Agreement shall govern the parties' management of the
Facility from the date first written above to the Closing Date (as defined
below);
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly indicated
by the context, the terms defined below shall have the indicated meanings:
1.1 "Accountants" shall have the meaning set forth in Section 2.2(e)
hereof.
1.2 "Affiliate" shall mean, with respect to any Person, any Person which
directly or indirectly through stock ownership or through other arrangements
either controls, or is controlled by or is under common control with, such
Person, provided, however, for purposes of this Agreement the term "Affiliate"
shall not include subsidiaries or other entities in which a Person owns a
majority of the ordinary voting power to elect the majority of the board of
directors or other governing board but is restricted from electing such majority
by contract or otherwise, until such time as such restrictions are no longer in
effect. For purposes of this Agreement, Buyer
1
shall not be deemed to be an Affiliate of Greenwich or either Seller, and AHP,
Greenwich and Holdings shall not be deemed to be Affiliates of Buyer.
1.3 "Applicable Laws" shall mean all laws, statutes, regulations,
interpretations, publicly available policies which are published by a
Governmental Authority, decrees, injunctions, judgments, orders, rulings,
assessments, writs, directives, rules, codes of conduct and ordinances of any
Governmental Authority.
1.4 "Applicable Permits" shall mean any waiver, exemption, variance,
permit, certificate of occupancy, authorization, membership, approval, consent,
clearance, franchise, orders, license or similar approval or notification
required to be obtained, maintained or made under Applicable Laws in connection
with the Facility or the Assets or necessary to the operation of the Facility as
presently conducted.
1.5 "Assets" shall mean collectively, all of the assets (both tangible and
intangible), rights, interests, privileges, appurtenances, easements,
reservations, estates, awards and properties of any kind, nature and description
owned by Greenwich, including, without limitation:
(i) the Real Property, including the Facility;
(ii) Personal Property;
(iii) Transferred Books and Records;
(iv) Applicable Permits;
(v) all Contracts, including without limitation the EDC Ground Lease
and the Phase B Ground Lease; and
(vi) all of Sellers' or Greenwich's rights, claims, causes of action
or rights of set-off against third parties relating to the foregoing,
including, without limitation, unliquidated rights under manufacturers'
and vendors' warranties.
1.6 "Buyer Indemnified Claims" shall have the meaning set forth in Section
11.1 hereof.
1.7 "Buyer Indemnitees" shall have the meaning set forth in Section 11.1
hereof.
1.8 "Buyer Losses" shall have the meaning set forth in Section 11.1
hereof.
1.9 "Catalytica Facility" shall have the meaning set forth in Section 1.8
of the Supply Agreement among AHP, Buyer and Catalytica Pharmaceuticals, Inc.
effective as of October 16, 2000.
1.10 "Closing" shall have the meaning set forth in Section 3.1 hereof.
2
1.11 "Closing Date" shall have the meaning set forth in Section 3.1
hereof.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.13 "Collaboration Agreement" shall mean that certain agreement entered
into between AHP and/or one or more of its Affiliates and Buyer simultaneously
with the execution of this Agreement regarding the management, inventory and
allocation of Enbrel supplies substantially in the form of Exhibit A, attached
hereto.
1.14 "Contracts" shall mean each contract, agreement, understanding,
arrangement or commitment outstanding as of the date hereof (a) to which
Greenwich is a party, or (b) to which one or more Sellers is a party and which
relates primarily to the Assets.
1.15 "Disclosure Schedule" shall mean that certain schedule identified as
such and delivered by Sellers to Buyer pursuant to the Agreement as the same may
be supplemented and updated from time to time pursuant to the Agreement.
1.16 "EDC Ground Lease" shall mean (i) the ground lease dated March 7,
2001 with Greenwich as lessor and the EDC as lessee for the portion of the Real
Property identified therein, and (ii) the subground lease dated March 7, 2001
with the EDC as lessor and Greenwich as lessee for such portion of the Real
Property.
1.17 "EMEA" shall mean the European Medicines Evaluation Agency.
1.18 [*]
1.19 "Encumbrances" shall mean all claims, security interests, liens,
pledges, charges, escrows, options, proxies, rights of first refusal, preemptive
rights, mortgages, deeds of trust, hypothecations, prior assignments,
rights-of-way, easements, encroachments, title retention agreements, indentures,
security agreements or any other encumbrances of any kind.
1.20 "Environmental Laws" shall mean all Applicable Laws relating to the
protection or pollution of the environment, including, but not limited to, laws
protecting natural resources, laws protecting plant and animal species or
habitat, and laws relating to the protection of public health or occupational
health, including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act, Clean Air Act, the Federal Water Pollution
Control Act, the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act of 1976 and the Toxic Substances Control Act, and
analogous state statutes.
1.21 "ERISA" shall mean the Employee Retirement Income Security Act, as
amended from time to time, and related regulations.
1.22 "ERISA Affiliate" shall mean any corporation, partnership, limited
liability company, sole proprietorship, trade, business, or other entity or
organization that, together with
* Confidential Treatment Requested.
3
Greenwich, is or was treated as a single employer under Section 414(b), (c),
(m), or (o) of the Code.
1.23 "Excluded Assets and Liabilities" shall mean the following assets and
liabilities of Greenwich:
(i) intercompany receivables and payables;
(ii) deferred tax assets and deferred tax liabilities;
(iii) any personnel costs for employees of a Seller or Greenwich
whose responsibilities at the Facility are for training only
to eventually be transferred to another facility and other
employee costs where such personnel costs are not related to
(A) the Real Property, (B) the Project, (C) readying the
Facility and the Catalytica Facility for approval by the FDA
and/or EMEA or (D) production of Enbrel; and
(iv) any costs already paid by Buyer pursuant to the Phase B Ground
Lease between Buyer and Greenwich.
1.24 "Facility" shall mean Greenwich's biopharmaceutical manufacturing
facility located at 40 Technology Way, West Greenwich, Rhode Island, which such
Facility is under renovation in accordance with plans approved by Sellers and
Buyer.
1.25 "Facility Costs" shall mean any costs incurred directly or indirectly
by Sellers or Greenwich (other than the purchase price paid by Sellers for the
Facility) after September 24, 1999 related to (i) the Real Property, (ii) the
Project, (iii) readying the Facility and the Catalytica Facility for approval by
the FDA and/or EMEA, and (iv) manufacturing Enbrel at the Facility. All Facility
Costs shall be reflected within Net Assets.
1.26 "Facility Employees" shall have the meaning set forth in Section 4.9
hereof.
1.27 "GAAP" shall mean United States of America generally accepted
accounting principles.
1.28 "Governmental Authority" shall mean any governmental department,
commission, board, bureau, agency, regulatory or revenue authority, court or
other instrumentality (including non-statutory authorities) of the United
States, or any other nation or international body, or of any state, county, or
any jurisdiction, municipality, territory (including, without limitation, Puerto
Rico) or other political subdivision thereof or of any supranational authority.
1.29 "Greenwich" shall have the meaning set forth in the first WHEREAS
clause of this Agreement.
1.30 "Hazardous Materials" shall mean any hazardous materials, hazardous
wastes, hazardous constituents or hazardous or toxic substances defined or
regulated as such in or under any Environmental Laws.
4
1.31 "HSR Act" shall mean Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the related regulations.
1.32 "Inventory" shall mean all manufactured etanercept (finished product
bulk drug substance and drug product), work in-process and all raw materials.
1.33 "Material Adverse Effect" shall mean, assuming full utilization of
the Facility, (i) a material adverse effect on the operation or the use of the
Assets (including the cost thereof, whether or not considered as an expense
under GAAP) in the manner currently operated or used and (ii) any material
adverse effect on the ability of Sellers or Buyer to consummate and perform
their obligations under this Agreement (without, in the case of this clause
(ii), giving effect to any change in the manner that the Assets are currently
operated or used, or are intended to be used by Buyer, assuming full utilization
of the Facility).
1.34 "Material Permit" shall have the meaning set forth in Section 4.13
hereof.
1.35 "Material Contract" shall mean each Contract set forth in Section
4.11(a) of the Disclosure Schedule.
1.36 "MOU" shall mean the Memorandum of Understanding Regarding
Greenwich's West Greenwich, RI Biopharmaceutical Facility executed by Buyer and
AHP dated August 9, 2000, as amended.
1.37 "Multiemployer Plan" means each employee benefit plan described in
Article VIII hereof that is a multiemployer plan, as defined in Section 3(37) of
ERISA.
1.38 "Net Assets" shall mean, collectively, (i) the sum of the book value
of all the Assets of any kind, nature and description, (ii) minus the sum of the
book value of the liabilities of Greenwich, each so determined in accordance
with GAAP. Net Assets shall include, but not be limited to,
1) fees of any legal counsel, accountants and other advisors,
excluding any fees or costs of legal counsel and accountants
directly related to the negotiations for the purchase and sale
of the Shares contemplated herein, or for legal counsel who
are employees of Greenwich, or for legal counsel and
accountants of a Seller, or an Affiliate of a Seller other
than Greenwich;
2) Inventory;
3) the Real Property;
4) the Personal Property;
5) the cost of obtaining approvals and Applicable Permits;
6) the cost of obtaining agreements or cooperation from
Governmental Authorities;
7) deposits;
8) prepaid expenses;
9) accounts payable and accrued expenses; and
5
10) all Facility Costs.
Regardless of the above, the Net Assets shall not include the Excluded Assets
and Liabilities.
1.39 "Permitted Encumbrances" shall have the meaning set forth in Section
4.7 hereof.
1.40 "Person" shall mean an individual, a corporation, a partnership, an
association, limited liability company or partnership, a trust or other entity,
joint venture or organization, including a government or political subdivision
or an agency or instrumentality thereof.
1.41 "Personal Property" shall mean (i) all tangible personal property of
Greenwich, including without limitation all machinery, equipment, furniture,
office equipment, communications equipment, vehicles, storage tanks, spare and
replacement parts, fuel and other tangible property and all warranties and
guaranties relating thereto (all of such warranties and guaranties are
transferred to Buyer without recourse to Sellers).
1.42 "Phase B" shall mean Buyer's planned construction of additional
biotechnology manufacturing capacity on the land leased by Greenwich to Buyer
under the Phase B Ground Lease.
1.43 "Phase B Ground Lease" shall mean that ground lease, dated March 9,
2001, between Greenwich, as lessor, and Immunex Manufacturing Corporation, a
wholly-owned subsidiary of Buyer, as lessee.
1.44 "Project" shall have the meaning set forth in Section 6.2(a) hereof.
1.45 "Purchase Price" shall have the meaning set forth in Section 2.1
hereof.
1.46 "Real Property" shall mean all real property of Greenwich, as more
fully described on Section 4.7(a) of the Disclosure Schedule, including the
Facility and any other buildings, structures and improvements thereon, all off
street parking rights and spaces, all fixtures, equipment and machinery attached
thereto, all oil, gas and mineral rights related to the foregoing, all
development rights, land use entitlements and rights in any off-site facilities
and amenities servicing the land or any improvements located thereon, all air
rights, water, water rights, and riparian rights, all rights in and to all
strips and gores, all alleys adjoining the land, and all right in and to the
land lying in the bed of any street, road or avenue, open or proposed adjoining
the land, all right, title and interest in and to any condemnation award or to
any payment in lieu thereof for any taking or for any change in grade of any
street, road or avenue thereto and all easements, rights of way, reservations,
privileges, appurtenances and other estates and rights pertaining thereto owned
by Greenwich and primarily related to the Facility and all warranties and
guaranties relating thereto (all of such warranties and guaranties are
transferred without recourse to Sellers).
1.47 "Returns" shall mean all returns, declarations, reports, statements,
and other documents required to be filed in respect of Taxes (as defined below),
and any claims for refund
6
of Taxes, including any amendments or supplements to any of the foregoing. The
term "Return" shall mean any one of the foregoing Returns.
1.48 "Seller Employees" shall have the meaning set forth in Section 7.11
hereof.
1.49 "Sellers' Employee Benefit Plans" shall mean all employee benefit
plans applicable to Sellers' employees, including the Facility Employees,
including but not limited to Sellers' Savings Plan, Sellers' Retirement Plan,
Sellers' Retiree Benefits Plans, Sellers' Spending Account Plans, as well as
Sellers' medical, insurance, holiday, vacation, stock option, stock incentive
plans, and any other employee benefit plan, fund, policy or program.
1.50 "Sellers Indemnified Claims" shall have the meaning set forth in
Section 11.2 hereof.
1.51 "Seller Indemnitees" shall have the meaning set forth in Section 11.2
hereof.
1.52 "Sellers Losses" shall have the meaning set forth in Section 11.2
hereof.
1.53 "Shares" shall have the meaning set forth in the first WHEREAS clause
of this Agreement.
1.54 "Signing" shall mean the date of execution of this Agreement.
1.55 "Steering Committee" shall have the meaning set forth in Section
6.2(b) hereof.
1.56 "Successfully Manufactured" shall mean bulk drug substance Enbrel
that has been produced at the Facility and meets (i) all applicable Enbrel bulk
drug substance specifications, and (ii) applicable FDA regulatory requirements.
1.57 "Suite A" shall mean Suites A and D of the Facility.
1.58 "Suite A-3" shall mean Suite B of the Facility.
1.59 "Tax" or "Taxes" shall mean any income, corporation gross receipts,
profits, gains, capital stock, capital duty, franchise, withholding social
security, unemployment, disability, property, wealth, welfare, stamp, excise,
occupation, sales, use, value added, alternative minimum, estimated or other
similar tax (including any fee, assessment or other charge in the nature of or
in lieu of any tax) imposed by any Governmental Authority (whether national,
local, municipal or otherwise) or political subdivision thereof, and any
interest, penalties, additions to tax or additional amounts in respect of the
foregoing, and including any transferee or secondary liability in respect of any
tax (whether imposed by law, contractual agreement or otherwise) and any
liability in respect of any tax as a result of being a member of an affiliated,
consolidated, combined, unitary or similar group.
1.60 "Technology Transfer Agreement" shall mean that certain technology
transfer agreement between AHP and Buyer, to be entered into simultaneously with
the Signing, substantially in the form of Exhibit B hereto.
7
1.61 "Termination Date" shall have the meaning set forth in Section 10.1
hereof.
1.62 "Transferred Books and Records" shall mean owner or use guides, all
construction records and invoices related to the Facility, engineering and other
manuals and drawings for operation of the Facility and the machinery and
equipment contained therein, as well as all Applicable Permits, Contracts,
utility bills and documents evidencing ownership of the Assets; provided, that
Transferred Books and Records shall also include all books and records relating
to the Assets or the manufacture of Enbrel (or copies thereof) including, but
not limited to, all regulatory documents, Facility inspection records,
validation records, protocols and standard operating procedures related thereto.
Sellers shall be entitled to keep copies of any Transferred Books and Records,
subject to confidentiality obligations to which Sellers are subject under this
Agreement or other applicable agreements.
1.63 "Transferred Employees" shall have the meaning set forth in Section
8.1 hereof.
1.64 "WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act.
Certain other terms are defined as indicated throughout this Agreement.
ARTICLE II.
THE SALE; PURCHASE PRICE
2.1. PURCHASE AND SALE.
Upon the terms and subject to the conditions of this Agreement, (i)
Holdings shall sell, assign, transfer and deliver to Buyer the Shares, effective
as of Closing, and (ii) Buyer shall purchase and accept the Shares from Holdings
for an aggregate purchase price (the "Purchase Price") equal to the sum of (x)
Sixty Million Dollars ($60,000,000), payable at Closing, (y) the Interest
Payments, and (z) an amount equal to the book value of the Net Assets as of the
Closing Date, payable as provided for herein. Sellers shall not charge or
otherwise pass through to Immunex any cost of capital for any portion of the
Purchase Price or Net Assets except as provided for in Section 2.2(c).
2.2. NET ASSETS AND OTHER PAYMENTS.
(a) Within one (1) day of Signing, Buyer shall pay Holdings fifty
percent (50%) of the book value of the Net Assets as of the last day of
the calendar quarter ending immediately prior to the Signing for which
financial statements of Greenwich have been prepared and are available.
Payment of the book value of the Net Assets shall be based upon an invoice
furnished by Sellers to Buyer prior to the Signing, which invoice is
accompanied by an unaudited statement of Net Assets and a calculation of
the payment
8
due under this Section 2.2(a). Buyer shall have dispute and audit rights
as set forth in Section 2.2(e).
(b) Buyer shall pay Holdings fifty percent (50%) of the sum of the
book value of the Net Assets as of the last day of each calendar quarter
following the quarter for which the book value of the Net Assets was
calculated in Section 2.2(a) until the Closing, minus amounts previously
paid by Buyer under this Section 2.2(b) of the Agreement or Section
2.2(a), within thirty (30) days after receipt of Sellers' invoice, which
invoice shall be accompanied by an unaudited statement of Net Assets and a
calculation of the payment due under this Section 2.2(b). Buyer shall have
dispute and audit rights as set forth in Section 2.2(e).
(c) Sellers shall invoice Buyer at the Signing, or as soon as
practicable thereafter, for the "Interest Payment," as detailed below, and
Buyer shall pay Holdings the Interest Payment within thirty (30) days
after receiving the invoice. Interest at the Interest Rate began accruing
on May 1, 2001 (as if the Signing had occurred on such date) on one-half
(1/2) of the book value of the Net Assets as of such date and, thereafter,
interest at the "Interest Rate" accrued as of the last day of each month
with respect to one-half (1/2) of the book value of the Net Assets at the
end of such month, up to and until the date of payment pursuant to
subsection (a) above. So long as the Interest Payment is paid within such
thirty (30) day period, no interest shall accrue after the payment
pursuant to subsection (a) above. "Interest Rate" shall be defined as "the
three-month LIBOR rate as published in the Wall Street Journal on May 1,
2001 plus 50 basis points and then on the first date of each calendar
quarter plus 50 basis points, which shall be the interest rate for that
calendar quarter. Buyer shall have dispute and audit rights as set forth
in Section 2.2(e). Notwithstanding the foregoing, between November 8, 2001
and the date of the payment due under subsection (a) above, the Interest
Rate shall be the applicable LIBOR rate plus 250 basis points, and if not
paid prior to December 1, 2001, such rate shall be the applicable LIBOR
rate plus 600 basis points.
(d) On the Closing Date, Buyer shall pay Holdings (i) the Sixty
Million Dollars ($60,000,000) referred to in Section 2.1(ii)(x) above,
plus (ii) an amount equal to the estimated book value of the Net Assets as
of the Closing Date, or another date mutually agreed to by the parties,
minus the sum of all of the amounts previously paid by Buyer pursuant to
Sections 2.2(a) and 2.2(b) above. Not less than five (5) days prior to the
Closing, Sellers shall provide Buyer an invoice detailing the amounts that
will be payable at the Closing. As soon as practicable after the Closing,
Sellers shall provide Buyer with an invoice detailing the actual book
value of the Net Assets as of Closing and any amount due the Sellers or
Buyer as a result of finalizing the actual book value of the Net Assets or
the amounts previously paid by the Buyer. In addition, if Sellers pay any
Facility Costs to any third party after the Closing, Sellers shall
promptly provide Buyer with an invoice detailing such payment. Buyer shall
pay all invoices provided by Sellers after the Closing within thirty (30)
days after Buyer's receipt thereof. Buyer shall have dispute and audit
rights as set forth in Section 2.2(e).
9
(e) With each invoice submitted by Sellers to Buyer pursuant to
Section 2.2(b) through (d), Sellers shall submit the applicable supporting
documentation set forth in Exhibit C attached hereto, unless otherwise
agreed by the parties. With respect to the invoice submitted pursuant to
Section 2.2(a), Sellers shall submit such supporting documentation within
twenty (20) days of Signing. Buyer may, upon reasonable advance notice to
Sellers and during Sellers' usual business hours, examine or have Buyer's
independent public accountants examine Sellers' books and records related
to any invoice delivered pursuant to Section 2.2 and Section 2.4. Buyer
may, in good faith, dispute amounts invoiced under Section 2.2 and Section
2.4 by paying such invoice and thereafter raising the dispute after the
Closing Date and within one hundred twenty (120) days after the Closing
Date or, in the case of invoices provided pursuant to the third or fourth
sentence of Section 2.2(d), the receipt of such invoice. In the event that
Buyer disputes any invoiced amount, Buyer shall notify Seller in writing
that Buyer disputes the accuracy or appropriateness of such invoiced
amount and specify the particular respects by balance sheet line item in
which Buyer believes that such invoiced amount is inaccurate or
inappropriate. The parties shall negotiate in good faith to resolve any
such dispute and shall exchange any documentation reasonably required to
assist in such resolution.
If Sellers agree with Buyer that the results of Buyer's review of
such invoices properly indicates that that Buyer has been overcharged (net
of any undercharges disclosed by such examination), Sellers shall pay
Buyer the amount of the net overcharge, plus interest at the Interest Rate
between the date of payment and thirty (30) days prior to the date of
payment of the overcharge. In the event Sellers do not agree with Buyer's
calculation, the parties shall negotiate in good faith to resolve any such
dispute and shall exchange any documentation reasonably required to assist
in such resolution. In the event that the parties cannot agree on the
proper amount of the disputed calculation, the parties agree to select a
mutually acceptable firm of nationally recognized independent public
accountants to determine disputed amounts. If the parties cannot agree on
an acceptable firm, each party shall submit the name of its independent
public accountant, who shall mutually select the nationally recognized
independent public accountants to resolve the dispute. (The firm chosen by
the parties or their representatives to resolve the dispute shall be
referred to herein as the "Accountants"). The parties agree to submit
disputed items to the Accountants, pursuant to procedures established by
the Accountants, whose determination shall be binding on the parties. In
the event that the amount in the aggregate invoiced to Buyer exceeds by
ten percent (10%) or more the amount owed to Sellers in the aggregate, as
finally determined by the Accountant, the Sellers shall bear the cost of
the review and determination by the Accountant. In all other cases, Buyer
shall bear such costs.
2.3 TRANSFER TAXES.
All sales tax and assignment or transfer fees and taxes (exclusive
of federal or state taxes on or measured by income) payable in connection with
the transactions contemplated hereby shall be paid one-half by Sellers and
one-half by Buyer.
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2.4. ADDITIONAL COSTS.
If the Closing occurs after manufacture of commercial Enbrel at the
Facility has begun, and Greenwich or a Seller has incurred costs associated with
such manufacture prior to the Closing, and such costs cannot, in Sellers'
opinion, be included within the book value of the Net Assets payable by Buyer
hereunder in accordance with GAAP, such costs shall nevertheless be deemed to be
included within Net Assets payable by Buyer in accordance with the terms hereof.
Buyer shall have the dispute and audit rights set forth in Section 2.2(e) with
respect to any such costs.
ARTICLE III.
CLOSING
3.1. THE CLOSING.
Unless this Agreement shall have been terminated in accordance with
the terms hereof, on the terms and subject to the conditions of this Agreement,
the closing of the sale and purchase of the Shares and the Assets and the
consummation of the other transactions contemplated hereby (the "Closing") shall
take place at the offices of American Home Products Corporation, Five Xxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 on (a) the later of (i) January 3, 2002 (it
being understood that the parties intend to work together to have the Closing
deemed effective January 1, 2002); or (ii) the next succeeding business day on
which the last to be fulfilled or waived of the conditions set forth in Article
9 shall be fulfilled or waived in accordance with this Agreement or (b) at such
other time, date or place as the parties may mutually agree upon in writing (the
"Closing Date"). At the Closing, the parties to this Agreement will exchange
funds, certificates and other documents specified in this Agreement. For
purposes of this Agreement, the Closing will be treated as if it occurred at
12:01 a.m. on the Closing Date.
3.2. DELIVERIES BY BUYER
At the Closing, Buyer shall deliver, or cause to be delivered, to
Sellers the following:
(a) the amounts specified in Sections 2.1 and 2.2 hereof,
respectively, to be paid at Closing, payable by wire transfer of immediately
available funds on the Closing Date to an account specified in writing by
Sellers, with such notice of such account to be delivered to Buyer no less than
two (2) business days prior to the Closing Date;
(b) the certificate by an officer of Buyer required to be delivered
pursuant to Section 9.2(c) hereof;
(c) a certificate, signed by an authorized officer of Buyer,
certifying (i)
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Buyer's due organization and the fact that Buyer is current in payment of its
franchise taxes, (ii) the corporate resolutions of Buyer authorizing the
transactions contemplated by this Agreement, and (iii) the incumbency of
officers of Buyer executing this Agreement and the other agreements, instruments
or certificates delivered upon the Closing; and
(d) such other instruments and documents, in form and substance
reasonably acceptable to Buyer and Sellers, as may be reasonably necessary to
effect the Closing.
3.3. DELIVERIES BY SELLERS.
At the Closing, Sellers shall deliver to Buyer the following:
(a) certificates representing the Shares duly endorsed for transfer
to Buyer or accompanied by stock powers duly executed in blank;
(b) the certificate by officers of Sellers required to be delivered
pursuant to Section 9.3(c) hereof;
(c) a certificate, signed by authorized officers of Sellers,
certifying (i) the due organization and good standing of Sellers, (ii) the
corporate resolutions of Sellers authorizing the transactions contemplated by
this Agreement, and (iii) the incumbency of officers of Sellers executing this
Agreement and the other agreements, instruments or certificates delivered upon
the Closing;
(d) the stock books, stock ledgers, minute books and corporate seals
of Greenwich;
(e) all consents and approvals of third parties (including
Governmental Agencies) that are required to transfer the Shares;
(f) a Foreign Investment in Real Property Tax Act Affidavit pursuant
to Section 1445(b)(2) of the Code duly executed by Holdings, which affidavit
shall indicate that no federal withholding shall be required;
(g) such other instruments and documents, in form and substance
reasonably acceptable to Buyer and Sellers, as may be reasonably necessary to
effect the Closing; and
(h) letters of resignation executed by the directors and officers of
Greenwich.
3.4. FURTHER ASSURANCES.
From time to time, at Buyer's or Sellers' request, whether at or
after the Closing Date, Buyer or Sellers, as the case may be, shall execute and
deliver such further instruments of conveyance, transfer and assignment,
cooperate and assist in providing information for making and completing
regulatory filings, and take such other actions as Buyer or Sellers, as the case
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may be, may reasonably require of the other party to more effectively assign,
convey and transfer to such party the Shares, as contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to Buyer as follows (except to
the extent that any representations or warranties are affected by conduct of
Buyer, its employees, agents or advisors, and Sellers are not aware of such
conduct):
4.1 ORGANIZATION.
(a) Greenwich is a corporation duly organized, validly existing and
in good standing under the laws of Delaware. Greenwich has the requisite
corporate power and authority to own, operate or lease the properties that
it purports to own, operate or lease and to carry on its business as it is
now being conducted and is duly licensed or qualified as a foreign
corporation and is in good standing in each domestic or foreign
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties owned or leased by it makes such
licensing or qualification necessary.
(b) Each of Sellers is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(c) Holdings is not, and as of the Closing shall not be, a "foreign
person" as defined in Section 1445 of the Code and any related
regulations.
4.2. CAPITALIZATION OF GREENWICH.
The authorized and issued capital stock of Greenwich consists of one
thousand (1,000) shares of common stock, no par value per share, all of which
are validly issued, outstanding, fully paid and non-assessable. All of the
Shares are owned by Holdings, free and clear of any security interests, liens,
claims, pledges, rights of first refusal or other encumbrances of any nature
whatsoever. There are no outstanding rights of first refusal or offer,
preemptive rights, options, warrants, conversion rights, stock purchase rights
or other agreements, either directly or indirectly, for the purchase or
acquisition from Greenwich or the Sellers of any securities of Greenwich.
Greenwich is not a party or subject to any agreement or understanding and, to
the knowledge of Greenwich or the Sellers, there is no agreement or
understanding between any Persons that affects or relates to the voting or
giving of written consents with respect to any securities of Greenwich or the
voting by any director of Greenwich.
4.3. CORPORATE AUTHORITY. Each of the Sellers has the full corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Sellers of the Agreement have been duly authorized by all requisite corporate
action of Sellers. This Agreement has been duly
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executed and delivered by Sellers, and (assuming due execution and delivery by
Buyer) this Agreement constitutes a valid and binding obligation of Sellers,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally or by general equitable principles.
4.4. NO VIOLATION. Except as disclosed in Section 4.4 of the
Disclosure Schedule, the execution, delivery and performance by Sellers of this
Agreement do not and will not contravene or conflict with (a) in any material
respect any Applicable Laws (assuming compliance with the applicable
requirements of the HSR Act), (b) the articles or certificate of incorporation
or by-laws of Sellers or Greenwich, (c) in any material respect any mortgage,
deed of trust, lease, note, contract, agreement, bond, indenture, license,
permit, or trust to which Sellers or Greenwich are or any one of them is a
party, or (d) in any material respect, any judgment, order, writ, injunction,
consent decree or decree of any court, Governmental Authority, administrative
agency or arbitrator to which Sellers or Greenwich are or any one of them is a
party;
that in any case would prevent or be violated by or under which there would be a
default as a result of, the execution, delivery and performance by either of the
Sellers of this Agreement and the consummation of the transactions contemplated
hereby. Except as disclosed in Section 4.4 of the Disclosure Schedule, and
assuming material compliance with any applicable requirements of the HSR Act, no
material consent, approval, or authorization of or declaration or filing with
any Person or Governmental Agency is required for the valid execution, delivery
and performance by Sellers of the Agreement and the consummation by Sellers of
the transactions contemplated hereby.
4.5 LITIGATION.
Except as disclosed in Section 4.5 of the Disclosure Schedule
attached hereto, as of the date hereof, there is no in rem proceeding with
respect to the Assets or any action, suit, dispute or governmental,
administrative, arbitration or regulatory proceeding pending or, to Sellers'
knowledge, threatened against Greenwich.
4.6. FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Sellers and Greenwich have delivered to Buyer (a) unaudited
balance sheets of Greenwich as of December 31, 2000 and (b) an unaudited
balance sheet of Greenwich as of September 30, 2001. All the foregoing
financial statements are herein referred to as the "Greenwich Balance
Sheets." The account balances (assets and liabilities) of the Greenwich
Balance Sheets have been determined in accordance with GAAP on a basis
consistent with Sellers' accounting practices for capital projects and
fairly present the Net Assets of Greenwich as of the dates indicated. All
of the assets primarily related to the Project and the Facility are assets
of Greenwich and not of Seller, or any other Affiliate of Seller.
Greenwich has no liabilities or obligations of any nature (absolute,
contingent or otherwise) that are required by GAAP to be included in the
Greenwich Balance Sheet and that are not fully reflected or reserved
against therein, except liabilities or obligations incurred since the date
of the Greenwich Balance Sheet in
14
the ordinary course of business. Greenwich is not a guarantor, indemnitor,
surety or other obligor of any indebtedness for borrowed money of any
other Person.
(b) Except for transactions specifically contemplated in this
Agreement, since September 30, 2001 and except for actions taken in the
ordinary course of business, neither Greenwich nor any of its officers or
directors in their representative capacities on behalf of Greenwich have:
(i) taken any action or entered into or agreed to enter into
any transaction, agreement or commitment other than in the ordinary
course of business;
(ii) granted any increase in the compensation of employees;
(iii) suffered any change having a Material Adverse Effect;
(iv) borrowed or agreed to borrow any funds except
intercompany transactions;
(v) except to the extent related to the construction of the
Facility, purchased or sold, transferred or otherwise disposed of
any of its material properties or Assets (real, personal or mixed,
tangible or intangible);
(vi) made any change in accounting methods or practices or
internal control procedure;
(vii) issued any capital stock or other securities; or
(viii) agreed, whether in writing or otherwise, to take any
action described in this Section 4.6 (b).
4.7. TITLE TO PROPERTIES; ABSENCE OF LIENS.
(a) Section 4.7 of the Disclosure Schedule lists all Real Property
and includes a legal description thereof. Greenwich represents and
warrants that it (1) has fee simple title to the Real Property and (2) has
good title to all of the Personal Property, in the case of clauses (1) and
(2), free and clear of any Encumbrances, except for the following, which
are referred to collectively as "Permitted Encumbrances":
(i) Encumbrances set forth in Section 4.7(a) of the Disclosure
Schedule;
(ii) Encumbrances of record;
(iii) Encumbrances related to the Phase B construction project
or otherwise caused by Buyer;
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(iv) Encumbrances for taxes, assessments or governmental
charges (including, without limitation, any assessments relating to
the Real Property), or mechanics', workmen's, materialmen's or
similar liens, in each case that are (A) not delinquent or (B) which
are being contested in good faith and are listed on Section
4.7(a)(iii) of the Disclosure Schedule.
(v) Encumbrances that are reflected in the following: Title
Policy No. 5312-669278 dated September 27, 1999 issued by Fidelity
National Title Insurance Company of New York; and
(vi) Encumbrances that an accurate survey of the Real Property
would disclose; provided, however, that any such Encumbrance
described in this clause (vi) shall not constitute a Permitted
Encumbrance if (x) such Encumbrance is not shown or disclosed on
that survey of the Real Property entitled "Plan of Land in West
Greenwich and Coventry Rhode Island surveyed for American Home
Products Corporation by Xxxxxxx Surveying Inc. August 1999" and (y)
such Encumbrance has or would reasonably be expected to have, a
Material Adverse Effect.
Greenwich has no leasehold interest in any real property
related to the Facility nor has Greenwich leased (as lessor) or
pledged all or any part of the Assets, except in connection with the
Phase B Ground Lease, License and Indemnity Agreement, Easement
Agreement and the EDC Ground Lease.
(b) The Real Property contains approximately seventy-three (73)
acres and the Facility on the Real Property contains a total of at least
two hundred thousand (200,000) square feet of floor area. To Sellers'
knowledge, except as shown in a survey referred to in Section (a) above,
all buildings, structures and other material improvements, including, but
not limited to, any driveways, garages, parking areas and stalls, fences,
overhangs, storage, docking and loading areas, landscaped areas and sewer
systems, and all means of access to the Real Property are located
completely within the boundary lines of the Real Property and do not
encroach upon or under the property of any other Person in any material
respect. Except as disclosed in Section 4.7(b) of the Disclosure Schedule,
no improvements constructed on the property of any other Person encroaches
upon or under the Real Property in a manner that would be reasonably
likely to cause a Material Adverse Effect. To Sellers' knowledge, except
as shown on the survey referred to in Section 4.7(a) above, there is no
other Person or any property of any other Person that encroaches upon the
Real Property such that any such encroachments, either alone or in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
The Real Property abuts a public way or a private way to which the Buyer
shall have both pedestrian and vehicular access and such private way is
duly laid out or accepted as such by the city or town in which the Real
Property is located.
(c) Upon consummation of the transactions contemplated hereby,
Buyer, by purchasing the Shares, will have acquired fee simple title to
the Real Property, the Personal Property, and all other Assets owned by
Greenwich free and clear of all
16
Encumbrances other than Permitted Encumbrances (and other than
Encumbrances or other defects in title attributable to facts or
circumstances related to, or actions taken by, Buyer).
4.8. CONDITION OF PHYSICAL ASSETS; INTELLECTUAL PROPERTY.
(a) Except as disclosed in Section 4.8 of the Disclosure Schedule,
to Sellers' knowledge, the buildings, structures, and improvements on the
Real Property (including the Facility) and the Personal Property (in the
aggregate) are in good working order, normal wear and tear excepted,
taking into account that the Facility remains under construction and no
representation is being given as to the operational effectiveness of the
Facility. No costs referred to in Section 2.4 have been incurred to date,
and assuming a Closing of January 3, 2001, no such costs are reasonably
foreseeable prior to Closing.
(b) Greenwich does not own any registered trademarks, tradenames,
copyrights or patents, nor does a Seller own any such intellectual
property rights primarily related to the Assets.
4.9. EMPLOYEE MATTERS. (a) Section 4.9(a) of the Disclosure Schedule
sets forth the name, title and present salary of each present employee of
Greenwich listed on the payroll for the Facility as of the date hereof
("Facility Employees"). Except as set forth in Section 4.9(a) of the
Disclosure Schedule, neither Greenwich nor Sellers are a party to or bound
by any collective bargaining or other labor agreement with respect to the
Facility Employees, and there are no labor unions or other organizations
representing or, to the knowledge of the Sellers, purporting to represent
or attempting to represent, any Facility Employees.
(b) Neither the Sellers nor any of their Affiliates are currently
required to contribute to any Multiemployer Plan, nor have they been
assessed liability for any Multiemployer Plan. The Sellers are not subject
to and do no reasonably expect to incur any withdrawal liability under
Title IV of ERISA which Sellers or their Affiliates will not be able to
satisfy.
(c) Sellers maintain the Sellers' Savings Plan which is intended to
be tax-qualified under Section 401(a) of the Code (and the trust related
thereto) and such Plan is intended to be tax exempt under Section 501(a)
of the Code. The Sellers' Savings Plan has a favorable determination
letter from the Internal Revenue Service covering the Tax Reform Act of
1986 and, to the knowledge of Sellers, such letter has not been revoked
nor has such Plan been amended in any respect or any actions taken or
operational defects occurred since the receipt of such letter which would
result in the disqualification of Sellers' Savings Plan by the Internal
Revenue Service.
(d) Except for any routine contributions owed by Greenwich on behalf
of the Transferred Employees to one or more of Sellers' Employee Benefit
Plans for a period preceding the Closing Date, and except as set forth in
Article VIII, Buyer shall not incur any liability with respect to the
Sellers' Employee Benefit Plans as a result of (i) the
17
Transferred Employees' cessation of participation in such Sellers'
Employee Benefit Plans on the Closing Date, (ii) any claims under such
Sellers' Employee Benefit Plans arising on, prior to, or after the Closing
Date, (iii) any failure by the Sellers, Greenwich, any ERISA Affiliate of
a Seller or Greenwich, or any third party to comply with any provision of
ERISA or the Code or any other Applicable Law; or (iv) the imposition of
any term under a Sellers' Employee Benefit Plan which is triggered by the
consummation of the transactions described in this Agreement.
4.10. COMPLIANCE WITH LAW. Except as disclosed in Section 4.10 of
the Disclosure Schedule attached hereto, (a) the operation of the Facility is
being conducted in compliance with, and the Real Property and all Assets comply
with all Applicable Laws, as of the date hereof, except for violations, if any,
which singly or in the aggregate have not had, and would not reasonably be
expected to have, a Material Adverse Effect, (b) to the knowledge of Sellers,
the operation of the Facility has been conducted in compliance with, and the
Real Property and all Assets have complied with, all Applicable Laws, from
September 24, 1999 up to the date hereof, except for violations, if any, which
singly or in the aggregate have not had, and would not reasonably be expected to
have, a Material Adverse Effect. Except as disclosed in Section 4.10 of the
Disclosure Schedule, all Applicable Permits required in connection with the
operation of the Facility as currently operated, have been obtained and are in
full force and effect and are being complied with in all material respects,
except for such failures which singly or in the aggregate have not had, and
would not reasonably be expected to have, a Material Adverse Effect.
4.11. CONTRACTS AND COMMITMENTS. (a) Section 4.11(a) of the
Disclosure Schedule attached hereto sets forth a complete and accurate list of
each contract, agreement, understanding, arrangement or commitment relating to
the Facility or the Assets outstanding as of the date hereof to which Sellers or
Greenwich is a party and which:
(i) imposes a right of first refusal, option or other
restriction with respect to any Asset; or
(ii) is or contains a lease, license (other than software,
shrinkwrap licenses), joint venture agreement, partnership agreement or
similar contract or arrangement, or confidentiality agreement;
(iii) is or contains a non-competition agreement or other
agreement which limits the freedom of Sellers or Greenwich to own,
operate, sell, transfer, pledge, or otherwise dispose of or encumber any
Asset or that would bind any other assets of Buyer now or in the future;
(iv) is a contract involving more than $100,000 in payments or
receipts annually, except for purchase orders entered into in connection
with the construction of the Facility or entered into in the ordinary
course of business; or
(v) is a contract that guarantees any indebtedness of any
other Person in excess of $100,000 in the aggregate.
18
The contracts, agreements, understandings, arrangements, and commitments set
forth on Section 4.11(a) of the Disclosure Schedule are hereinafter collectively
referred to as the "Material Contracts".
(b) Each Material Contract is a valid and binding agreement of
Sellers or Greenwich, as the case may be. There is no material default by the
Sellers or Greenwich or, to the knowledge of the Sellers, by any third party,
under any Material Contract. A true and complete copy of each Material Contract
will be made available to Buyer and as of the Closing will have been made
available to Buyer.
4.12. BROKERS AND INTERMEDIARIES. Neither the Sellers nor their
Affiliates or any of them has employed or dealt with any broker or finder in
connection with the transactions contemplated by this Agreement which would be
entitled to a broker's or finder's, or similar fee or commission in connection
therewith or upon the consummation thereof.
4.13. LICENSES AND PERMITS. Section 4.13 of the Disclosure Schedule
attached hereto correctly describes each material Applicable Permit, together
with the name of the Governmental Authority issuing such license or permit (the
"Material Permits"). Except as set forth in Section 4.13 of the Disclosure
Schedule, to Sellers' knowledge, such Material Permits are valid and in full
force and effect.
4.14. ENVIRONMENTAL MATTERS.
To the knowledge of Sellers, each of the representations and
warranties set forth in subsections (a) through (e) of this Section 4.14 is true
and correct with respect to the Assets, except to the extent that the facts and
circumstances giving rise to any such failure to be so true and correct would
not reasonably be expected to have a Material Adverse Effect.
(a) Except as set forth in Section 4.14(a) of the Disclosure
Schedule, no Hazardous Materials are present in, on, or under the Real Property,
including, without limitation, the soil and groundwater thereunder;
(b) Except as set forth in Section 4.14(b) of the Disclosure
Schedule, the Real Property and all operations and facilities at the Real
Property as operated since September 24, 1999 have been in compliance in all
material respects with all Environmental Laws, and all governmental approvals,
Applicable Permits and licenses required under Environmental Laws for the Real
Property and all operations and facilities of the Real Property as operated
since September 24, 1999 have been obtained and are in full force and effect and
are being complied with in all material respects;
(c) Except as set forth in Section 4.14 (c) of the Disclosure
Schedule, neither the Sellers, Greenwich nor any of their Affiliates have
received any written governmental complaint, notice of violation, alleged
violation, or investigation or notice of potential liability or of potential
responsibility regarding environmental protection matters or permit compliance
with regard to the Real Property which either singly or in the aggregate would
constitute a Material Adverse Effect;
19
(d) Except as set forth in Section 4.14(d) of the Disclosure
Schedule, Hazardous Materials have not been generated, stored, transported,
treated or disposed of on the Real Property or transferred from the Real
Property to any other location except in compliance in all material respects
with all Environmental Laws in effect at the time of such activities, and
(e) Except as set forth in Section 4.14(e) of the Disclosure
Schedule, since September 24, 1999 there have been no governmental,
administrative actions or judicial proceedings pending or threatened under any
Environmental Laws to which the Sellers or Greenwich are named or to be named as
a party with respect to the Real Property or any Hazardous Materials transferred
from the Real Property, nor have there been any consent decrees or other
decrees, consent orders, administrative orders or other orders, under any
Environmental Law with respect to any of the Real Property.
Anything in this Agreement to the contrary notwithstanding, this Section 4.14
and Section 4.5 hereof shall be the exclusive representation and warranty of
Sellers under this Agreement relating to environmental matters.
4.15. TAXES.
(a) On or prior to the date hereof, Sellers and Greenwich have
properly completed and filed on a timely basis and in the correct form all
Returns with respect to Greenwich or the Assets required to be filed on or
prior to the date hereof (taking into account any extensions) that a
reasonable person would deem material. As of the time of filing, the
foregoing Returns correctly reflected, in all respects that a reasonable
person would deem material, the facts regarding income, business, assets,
operations, activities, status or other matters therein or any other
information required to be shown thereon. In particular, and without in
any manner limiting the foregoing, none of the foregoing Returns contains
any position which is or would subject Greenwich, a Seller, or Buyer to
penalties under section 6662 of the Code (or any corresponding provision
of state, local or foreign tax law).
(b) With respect to all amounts in respect of Taxes imposed upon
Greenwich, or for which Sellers or Greenwich are or could be liable
related to the Assets, with respect to all taxable periods (or portions
thereof) ending on or before the Signing or the Closing Date, as
applicable, all material applicable tax laws and agreements have been
fully complied with, and all such amounts required to be paid to taxing
authorities or others on or before the date hereof have been fully and
timely paid.
(c) Except as set forth on Section 4.15(c) of the Disclosure
Schedule, (i) other than with respect to Returns for which AHP files on a
consolidated, combined or unitary basis, no issues have been raised (and
are currently pending) by any taxing authority in connection with any
Returns of Greenwich or Sellers related to the Assets, (ii) other than
with respect to Returns for which AHP files on a consolidated, combined or
unitary basis, no extensions or waivers of statutes of limitation with
respect to any Returns of Greenwich or Sellers related to the Assets have
been given by or requested by Greenwich
20
or Sellers, and (iii) there are no liens for Taxes (other than Permitted
Encumbrances) upon the Assets.
4.16. DISCLAIMER. Except as expressly set forth in this Agreement,
SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES (WHETHER EXPRESS OR IMPLIED) OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE OR OTHERWISE IN REGARD
TO THE ASSETS.
4.17. DISCLOSURE IN SCHEDULES. Any disclosure contained in any
section of the Disclosure Schedule to this Agreement shall, should the
disclosure be relevant to any other section of the Disclosure Schedule to this
Agreement, be deemed to be disclosed with respect to that other Schedule to the
Agreement where such disclosure and its significance would be reasonably obvious
to the party to whom the disclosure is made. Certain information set forth in
the Schedules is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any
information shall not be deemed to constitute an acknowledgment that such
information is required to be disclosed in connection with the representations
and warranties made by Sellers in this Agreement or is material, nor shall such
information be deemed to establish a standard of materiality.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers that:
5.1. ORGANIZATION. Buyer is a corporation duly organized and validly
existing under the laws of the State of Washington and has paid all excise taxes
required by the Washington Department of Revenue.
5.2. CORPORATE AUTHORITY. Buyer has full corporate power and
authority to enter into the Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Buyer of this
Agreement have been duly authorized by all requisite corporate action on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer, and
(assuming due execution and delivery by Sellers) this Agreement constitutes a
valid and binding obligation of Buyer, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles.
5.3. NO VIOLATION. The execution, delivery and performance by Buyer
of this Agreement do not and will not contravene or conflict with:
(a) assuming compliance with the applicable requirements of the HSR
Act, in any material respect, any Applicable Laws;
(b) the articles or certificate of incorporation or by-laws of
Buyer;
21
(c) in any material respect, any mortgage, deed of trust, lease,
note, contract, agreement, bond, indenture, license, permit or trust to which
Buyer or any of its Affiliates is a party; or
(d) in any material respect, any judgment, order, writ, injunction
or decree of any court, governmental body, Governmental Authority, or
arbitrator, to which Buyer or any of its Affiliates is a party, that, in any
case, would prevent or be violated by, or under which there would be a default
as a result of, the execution, delivery and performance by Buyer of this
Agreement and the consummation of the transactions contemplated hereby. Assuming
compliance with any applicable requirements of the HSR Act, no material consent,
approval or authorization of or declaration or filing with any Person or
Governmental Authority is required for the valid execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby.
5.4. FINANCIAL ABILITY TO PERFORM. As of the Closing Date, the Buyer
will have sufficient funds to pay the Purchase Price on the terms and conditions
contemplated by this Agreement. The Buyer acknowledges and agrees that the
Buyer's performance of its obligations under this Agreement is not in any way
contingent upon the availability of financing to the Buyer.
5.5. BROKERS AND INTERMEDIARIES. Neither the Buyer nor its
Affiliates or any of them has employed any broker or finder in connection with
the transactions contemplated by this Agreement which would be entitled to a
broker's or finder's, or similar fee or commission in connection therewith or
upon the consummation thereof.
5.6 DUE DILIGENCE. Prior to the Closing, Sellers and Greenwich shall
afford to Buyer, its employees, accountants, counsel and other representatives
full access to (a) all of the Assets, books, Contracts, commitments, records and
other document of Greenwich, and (b) all books, contracts, commitments, records
and other documents of Sellers that are reasonably necessary for Buyer to
evaluate and undertake the transaction contemplated by this Agreement. Sellers
and Greenwich shall, prior to Closing, furnish promptly to Buyer all other
information concerning the business, Assets, records and Facility Employees as
Buyer may reasonably request for such purpose. In connection with such due
diligence, as well as Buyer's participation in the operation of the Steering
Committee and its management of the Assets (including the Facility) Buyer will,
as of Closing, have performed a comprehensive due diligence investigation of the
Assets and obtained a thorough understanding of the operation of the Assets. In
the course of these activities, nothing has come to the attention of Buyer as of
the Signing (that Sellers do not have actual knowledge of) that there is a
material inaccuracy in any representation or warranty of Sellers contained
herein and Buyer shall disclose to Sellers any such findings between Signing and
Closing (that Sellers do not have actual knowledge of). Provided that Buyer has
not breached the representation and warranty set forth above in this Section
5.6, no investigation conducted pursuant to this Section 5.6 or prior to the
Closing shall be deemed to modify any representation or warranty made by Sellers
or Greenwich herein or any obligation of Sellers or Greenwich hereunder.
22
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1. OPERATION OF FACILITY PRIOR TO THE CLOSING DATE.
Sellers agree that, between the date hereof and the Closing, except
as (i) contemplated by this Agreement, (ii) permitted by the prior consent of
Buyer or as permitted pursuant to Section 6.2 hereof, (iii) a result of actions
directly or indirectly under the authority or supervision of the Site Manger so
long as the Site Manager is an employee of Buyer or its Affiliates, or (iv)
pursuant to the approval or instructions of the Steering Committee:
(a) Sellers shall cause Greenwich to use commercially reasonable
efforts to maintain the Assets in their as-is condition, reasonable wear and
tear excepted (it being understood that the facility is under ongoing
construction). Sellers shall cause Greenwich to continue the construction of the
facility in the ordinary course of business.
(b) Sellers shall cause Greenwich to operate the Facility in
compliance with all Applicable Laws in all material respects.
(c) Sellers shall cause Greenwich not to do the following except in
the ordinary course of business:
(i) enter into a legally binding commitment to sell, transfer,
pledge or lease (as lessor) any asset that is or would be, had such
asset not been sold or transferred, an Asset (or commit to do any of
the foregoing) if such asset had a fair market value in excess of
One Million Dollars ($1,000,000);
(ii) impose or permit to be imposed any Encumbrances, other
than Permitted Encumbrances, upon the Shares or any of the Assets;
(iii) make any change in the amount of salary or other
compensation of any Facility Employee;
(iv) Enter into any employment or severance agreement with any
Facility Employee, or enter into any collective bargaining
agreements or arrangements for the benefit of Facility Employees,
except as may be required pursuant to existing agreements or
Applicable Law;
(v) amend or otherwise change Greenwich's certificate of
incorporation or by-laws;
(vi) issue, sell, contract to issue or sell, pledge, dispose
of, grant, encumber or authorize the issuance, sale, pledge,
disposition, grant or Encumbrance of (i) any shares of capital stock
of Greenwich, or (ii) any options,
23
warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest) of
Greenwich;
(vii) reclassify, combine, split, subdivide, redeem, purchase
or otherwise acquire, directly or indirectly, any of Greenwich's
capital stock or other securities;
(viii) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or division thereof or any
material amount of assets not related to the ongoing construction of
the Facility;
(ix) incur any indebtedness for borrowed money or issue any
debt securities or guarantee the payment obligations for borrowed
money of any third party Person,;
(x) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past
practice, with respect to accounting methods, policies or procedures
(including, without limitation, procedures with respect to the
payment of accounts payable and collection of accounts receivable);
(xi) make any Tax election or settle or compromise any Tax
liability;
(xii) enter into any contract not related to the Project or
the Facility, except any contract entered into in the ordinary
course of business and consistent with past practice;
(xiii) authorize any single capital expenditure by Greenwich
not related to the Project or the Facility which is in excess of one
hundred thousand dollars ($100,000) or capital expenditures not
related to the Project or the Facility which are, in the aggregate,
in excess of five hundred thousand dollars ($500,000);
(xiv) agree to do any of the foregoing in this Section 6.1(c).
6.2. PERMITTED ACTIONS.
(a) Between the date hereof and the Closing Date, Buyer and Sellers,
together with their respective Affiliates, shall retrofit Suite A of the
Facility to accommodate the commercial manufacture of Enbrel, to perform
the initial validation runs for Enbrel and to commence commercial
production of Enbrel. Further, the parties have determined that, in lieu
of building out Suite A-3, they will undertake the "Greenwich Project",
pursuant to which Greenwich shall construct the administration building
and parking facility planned to be located on the Real Property. (The
retrofit of Suite A and the Greenwich Project are hereinafter collectively
referred to as the "Project".) The Project shall be
24
overseen by a Steering Committee, whose objective is to recognize and
utilize the strengths and competencies of each party to perform the
Project. All costs incurred by Sellers or Greenwich in performing their
obligations under this Section 6.2(a) shall be reflected in the book value
of the Net Assets even if not appropriate under GAAP to be included
because such Greenwich Project is discontinued at the direction of the
Steering Committee or the Buyer.
(b) If not formed before the Signing, a Steering Committee shall be
formed following the date hereof, which shall have six (6) members, with
Buyer and Sellers each having the right to appoint three (3) members (the
"Steering Committee"). The Steering Committee shall oversee the Project
through the Closing Date and shall have the following powers and duties:
(i) The Steering Committee shall approve an annual budget
for the Facility, including a capital budget;
(ii) the Steering Committee shall approve in advance any
capital expenditures by any third party or by Sellers
associated with the fill and finish of bulk drug
substance Enbrel manufactured at the Facility;
(iii) the Steering Committee shall meet on at least a
quarterly basis or more frequently as necessary, and
decisions of the Steering Committee shall be made by
consensus. The Steering Committee shall endeavor to
reach a consensus on all matters within its authority
which are in dispute within a period of ten (10) days
after receiving notification from either Buyer or
Sellers that such dispute has been referred to the
Steering Committee for resolution. If such a resolution
cannot be reached in that time period (or earlier at the
election of either party), the matter shall be referred
to the Chief Operating Officer of Buyer and the
President of AHP's Wyeth-Ayerst Division, or their
designees, for resolution in a period of ten (10) days
(or such other time period agreed by the parties)
through good faith discussions, or if still unresolved,
the parties shall endeavor in good faith to promptly
agree upon a binding third party dispute resolution
mechanism intended promptly and fairly to resolve the
matter in dispute.
(iv) The Steering Committee shall be disbanded upon the
Closing Date.
(c) Sellers shall be permitted to cause Greenwich to transfer to
Holdings by way of a distribution or otherwise all cash and cash
equivalents held by Greenwich from time to time up to and including the
Closing Date. In the event all such cash or cash equivalents are not
transferred to Sellers at Closing, Sellers shall include such cash or cash
equivalents in the invoice to be provided by Sellers to Buyer as soon as
practicable
25
after the Closing, pursuant to Section 2.2(c) of this Agreement.
(d) Buyer may perform or have performed a construction cost audit of
the Project. Sellers shall pay the costs of any such audit that occurs
prior to Closing and include such cost in the book value of the Net Assets
whether or not appropriate under GAAP to be included.
(e) Buyer may perform or have performed a cost segregation analysis
and state tax analysis of the Project. Sellers shall pay the costs of any
such analyses that occur prior to Closing and include such costs in the
book value of the Net Assets.
(f) Buyer may take actions prior to Closing in order to facilitate
the smooth transition of ownership and operation of Greenwich Holdings to
Buyer. Such actions may include, but are not limited to, hiring of support
and administrative staff and implementation of systems and processes
consistent with those of Buyer. Any costs of such actions that are
incurred by Sellers prior to Closing shall be included in the book value
of the Net Assets whether or not appropriate under GAAP to be included.
6.3. ACCOUNTING RECORDS.
The accounting records supporting all expenditures of Greenwich
shall include a classification of expenditures into the following categories:
(a) Construction and make-ready Costs; (such costs shall further be
supported by detailed listing of individual assets and related costs);
(b) Facility testing costs (including all costs to test and validate
the manufacturing processes and systems including the costs of performing
the test production runs);
(c) FDA filing costs (including all costs of preparing and filing
the facility license application with the FDA);
(d) FDA conformance runs (the cost of producing the lots of Enbrel
that will be used to support the FDA filing);
(e) Catalytica Facility validation costs; and
(f) Start-up and operating costs (all costs incurred following
completion of the FDA conformance runs).
26
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. ANCILLARY AGREEMENTS.
Simultaneous with the Signing, AHP and Buyer will enter into the
Collaboration Agreement, the Technology Transfer Agreement, [*]. Between Signing
and Closing, it is anticipated that a Seller and Buyer will enter into a
transition services agreement for certain services related to the operation of
the Facility.
7.2 ACCESS TO INFORMATION AND CONFIDENTIALITY.
(a) During the period commencing on the date hereof and continuing
through the Closing Date and, provided that the Closing occurs, for a
period of at least six (6) years after the Closing Date or, with respect
to any Taxes, the applicable statute of limitations, with respect to books
and records reasonably deemed by Sellers to be necessary in connection
with (i) the preparation or examination of Tax Returns, (ii) the Excluded
Assets and Liabilities, and (iii) financial reporting, Buyer shall afford
to the Sellers and to Sellers' accountants, counsel, and other
representatives, reasonable access to all of the Assets, books, Contracts,
commitments, records, facilities, technical and personnel information,
and, during such period, shall furnish reasonably promptly to Sellers all
documents and information concerning the Assets and Transferred Employees
as Sellers may reasonably request; provided that the above activities do
not interfere unreasonably with the conduct of the business of Buyer and
provided further that Buyer shall not be required to disclose any
documents or information related to Transferred Employees that would
violate any Applicable Law.
(b) Any information that Buyer discloses to Sellers, or to which
Sellers have access, as a result of Section 7.2(a) above shall be deemed
"Buyer Confidential Information" if such information (i) is designated as
"Confidential" in writing at the time of any written disclosure or (ii)
even if not so identified as "Confidential", would reasonably be
identified or understood by Sellers as the confidential or proprietary
information of Buyer. Buyer Confidential Information shall not, however,
include:
(1) information which was already known by the Sellers at the time
of its disclosure hereunder, as evidenced by Sellers' written
records;
(2) information disclosed to Sellers by a third party lawfully in
possession of such information and not under an obligation of
nondisclosure to Buyer in respect thereof;
* Confidential Treatment Requested.
27
(3) information which at the time of disclosure is or subsequently
becomes patented, published or otherwise part of the public domain,
except by breach of this Agreement by Sellers;
(4) information developed by Sellers independently of information
obtained from Buyer; or
(5) information which is required to be disclosed by law, regulation
or the order of a judicial or administrative authority; provided,
however, that Sellers (A) give Buyer prompt written notice prior to
disclosure by Sellers to permit Buyer to seek a protective order or
other similar order with respect to Buyer Confidential Information,
and (B) thereafter disclose only the minimum Buyer Confidential
Information required to be disclosed in order to comply, whether or
not a protective order or other similar order is obtained by Buyer.
Unless Sellers have obtained Buyer's prior written consent, Sellers shall
hold confidential all Buyer Confidential Information, shall not disclose
it to any third party, and shall use it only for purposes consistent with
this Agreement. The provisions of this Section 7.2(b) shall survive the
expiration or termination of this Agreement or the Closing, whichever
occurs first, for a period of four (4) years from the each such disclosure
of Confidential Information; provided, however, that with respect to Buyer
Confidential Information related to the Facility Employees, the provisions
of this Section 7.2(b) shall survive indefinitely; and provided further
that this Agreement shall not be deemed to alter any prior confidentiality
obligations among the parties, including those related to Enbrel or the
manufacture thereof.
(c) During the period commencing on the Signing and continuing
through the Closing Date, Sellers (i) will give and will cause Greenwich
to give to Buyer, its counsel, financial advisors, auditors and other
authorized representatives reasonable access to all of the offices,
properties, books, records, Contracts, commitments, facilities, technical
information, and personnel of Sellers or Greenwich relating to the Assets,
(ii) will permit and facilitate any reasonable interview process for
potential continued employment of the Facility Employees with Buyer, and
(iii) will give and will cause Greenwich to give to Buyer reasonable
access to Greenwich's engineering and other Facility Employees to provide
planning and technical assistance related to Buyer's intended use of the
Assets after the Closing as Buyer may reasonably request.
7.3 REGULATORY FILINGS.
Each of the parties hereto will furnish to the other party hereto
such necessary information and reasonable assistance as such other party may
reasonably request in connection with its preparation of necessary filings or
submissions to any Governmental Authority. Buyer and Sellers each agree to file
any information required by the HSR Act as soon as reasonably practicable after
the date hereof and each agrees promptly to supplement such information and
promptly use commercially reasonable efforts to effect compliance with the
conditions specified
28
in Article 9 hereof and shall cooperate with one another to furnish promptly to
Governmental Authorities any additional information reasonably requested by them
in connection with such filings. Neither party shall be required, however, to
divest or outlicense products or assets or change its business or intended use
of the Facility if doing so is a condition of obtaining approval under the HSR
Act or other governmental approvals of the transaction contemplated by this
Agreement. Each of the parties shall use commercially reasonable good faith
efforts to eliminate any concerns on the part of federal or state antitrust
authorities, including, without limitation, cooperating in good faith with any
government investigation, including prompt production of documents and
information demanded by a second request for documents and of witnesses if
requested. Each party will consult and cooperate with the other party and will
consider in good faith the view of the other party in connection with any
analysis, appearance, presentation, memorandum, brief, opinion or proposal made
or submitted in connection with any action, request or investigation under or
relating to the HSR Act or any other national, federal or state antitrust,
competition or fair trade law.
7.4 COMMERCIALLY REASONABLE EFFORTS.
Each of the parties hereto shall use commercially reasonable efforts
to fulfill or obtain the fulfillment of the conditions of the Closing,
including, without limitation, the execution and delivery of all agreements
contemplated hereunder to be so executed and delivered.
7.5 NOTICES OF CERTAIN EVENTS.
Sellers shall promptly notify Buyer, and Buyer shall promptly notify
Sellers, as the case may be, of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement;
and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of the notifying party's knowledge threatened against,
relating to or involving or otherwise affecting Sellers, Buyer, the Shares or
the Assets that, if pending on the date of this Agreement, would have been
required to have been disclosed hereunder or that relate to the consummation of
the transactions contemplated by this Agreement.
7.6 START-UP AND OPERATION OF THE FACILITY.
During the period of Sellers' ownership of the Shares, and
thereafter for such transition period as may be agreed to by the parties (which
period shall not be longer than the period set forth in the Technology Transfer
Agreement), a reasonable number of Buyer and Sellers and Sellers' Affiliates
personnel shall be involved in all aspects of start-up and operation
29
of the Facility as are agreed by the parties, and shall also have access to all
engineering, manufacturing, quality assurance, quality control, regulatory, and
all other documentation related to the Facility and the Enbrel product(s)
manufactured at the Facility to facilitate Sellers' and its Affiliates'
knowledge and understanding of manufacturing commercial quantities of Enbrel;
provided, however, that the above activities do not interfere unreasonably with
the business of Buyer, and provided further that, during the term of either
party's ownership of the Shares, and consistent with the terms hereunder, such
party will have ultimate decision making authority with respect to day-to-day
operations of the Facility.
7.7 CAPITAL IMPROVEMENT CONTRACTS.
Sellers shall allow Buyer to (a) review and approve each contract
entered into after the Signing involving capital improvements to the Facility
which would reasonably be expected to result in payments by or on behalf of
Sellers or Greenwich greater than Three Million Dollars ($3,000,000) in the
aggregate, (b) review and consult with Sellers on all contracts involving the
Facility and its operation of duration greater than one (1) year which would
reasonably be expected to require payments by or on behalf of Sellers or
Greenwich in an amount greater than Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate under such contract and (c) review and approve each
contract involving the fill and finish of Enbrel produced at the Facility. Buyer
shall be a party to each such contract under clause (c) of this Section 7.7, and
to the extent practicable, Sellers shall name or shall cause Greenwich to name
Buyer a third party beneficiary under each such contract under clauses (a) and
(b) of this Section 7.7.
7.8 BUYER PERSONNEL COSTS.
Technical assistance provided by Buyer to Sellers related to the
Enbrel manufacturing process shall be governed by the Technology Transfer
Agreement.
7.9 STAFFING.
For periods prior to the Closing, and then following the Closing,
Sellers and Buyers shall enter into the respective [*]. Between the Signing and
the Closing Date, Buyer and Sellers shall consult with each other in good faith
on all hires at or relating to the Facility for the position of manager and
above and for key technical positions. Neither Sellers nor Greenwich shall hire
any such prospective employee whose titles are Manager or above who is likely to
become a Transferred Employee if Buyer has a good faith reasonable objection to
such employee that does not violate any Applicable Law.
7.10 FACILITY USE.
Buyer will have complete access to the Facility through the Closing
Date, subject to standard safety and security procedures, to facilitate Buyer's
participation in the Project. As
* Confidential Treatment Requested.
30
between the parties, Buyer shall have the final authority with respect to
decisions related to Phase B, including general timelines relating thereto, and
with respect to conceptual design, basic engineering and detailed engineering.
Such general timelines for Phase B shall be conducted in a manner which does not
materially impact the schedule for the retrofit of Suite A.
7.11 TRANSFER OF SELLER EMPLOYEES.
Buyer acknowledges that as of the Signing, there are approximately
[*] of Sellers or their Affiliates working at the Facility. Such employees are
not deemed to be Facility Employees, and will not be deemed to be Transferred
Employees at the Closing. Notwithstanding the proceeding sentence, the parties
agree that coincident with, or prior to Closing, Sellers may transfer the number
of persons (having the job titles indicated) preliminarily set forth in Section
7.11(a) of the Disclosure Schedule (which such Disclosure Schedule may be
updated until Closing) from the Facility to one or more of Sellers'
biopharmaceutical manufacturing facilities to ensure their successful
construction, start-up and operation (collectively, the "Sellers Employees").
The total number of Seller Employees shall not, under any circumstances, exceed
[*] percent ([*]%) of the total number of Facility Employees at the time of the
Signing. Sellers shall, not later than the Closing, provide Buyer written notice
of each such Seller Employee, and in all cases, shall give Buyer at least [*]
months' written notice of the transfer of each Seller Employee, in order to
allow Buyer sufficient time to recruit and to train replacement personnel at the
Facility; provided, however, that upon Buyer's written consent, such consent not
to be unreasonably withheld, such written notice period may be shortened.
Seller Employees shall not become Transferred Employees pursuant to
Section 8.1(a) hereof, but shall remain or become employees of one of the
Sellers or their Affiliates. Seller Employees shall remain on the payroll of
Sellers and be covered by Sellers' Employee Benefit Plans and insurance
coverage, including workers compensation, after the Closing. Seller Employees
shall remain employed at the Facility until the earlier of the date Seller
Employees are no longer needed upon mutual agreement between Buyer and Seller,
or the end of the written notice period. If any Seller Employees are performing
activities or services at the Facility that contribute to the operation of the
Facility or the manufacture of Enbrel at the Facility, Buyer shall reimburse
Seller for the full allocated costs associated with the Seller Employees after
the Closing Date [*].
7.12 ASSIGNMENT OF BUYER EMPLOYEES
[*]. In addition, prior to Closing, Buyer may assign one or
more of its employees to the Facility to ensure the successful transition of the
business. Buyer may also, after being notified by Sellers of the identity of
Seller Employees in Section 7.11, hire replacement workers. Buyer's employees
assigned to work at the Facility, and replacement workers Buyer hires to work
with Seller Employees prior to Closing (collectively "Buyer
* Confidential Treatment Requested.
31
Transition Employees") shall remain on or be assigned to the payroll of Buyer
and shall not be covered by Sellers' Employee Benefit Plans and insurance
coverage, including workers compensation. If any Buyer Transition Employees are
performing activities or services at the Facility that contribute to the
operation of the Facility or the manufacture of Enbrel at the Facility, Sellers
shall reimburse Buyer for the full allocated costs associated with the Buyer
Transition Employees prior to the Closing Date [*].
7.13 TRANSFER OF PERMITS; CONTRACTS .
Before and, to the extent necessary after, the Closing, Sellers
shall use, and shall cause Greenwich to use, commercially reasonable efforts to
assist Buyer (without any obligation to make any payment of consideration) in
effectuating transfer or reissuance of Applicable Permits required for operation
of the Facility under any Environmental Laws or other Applicable Laws and
Sellers shall use, and shall cause Greenwich to use, commercially reasonable
efforts (without any obligation to make any payment of consideration) to obtain
any necessary consents to assignment of the Contracts from Sellers or Greenwich
to Buyer.
7.14 TAX MATTERS
(a) AHP shall have the exclusive authority and obligation to prepare
and execute on behalf of Greenwich and timely file all Returns with
respect to Greenwich or the Assets for any taxable period ending on or
prior to the Closing Date. Buyer shall have the exclusive authority and
obligation to prepare and timely file all Returns with respect to
Greenwich or the Assets for all other taxable periods.
(b) AHP shall be responsible for the timely payment of all Taxes
imposed on or with respect to Greenwich or the Assets for all taxable
periods ending on or prior to the Closing Date, including without
limitation (a) any federal income Tax liability imposed on Sellers or
Greenwich resulting from the Section 338(h)(10) Election, as defined in
Section 7.14(e)(i) below, and (b) any state, local, or foreign tax imposed
on Sellers or Greenwich attributable to an election under the state, local
or foreign law similar to the election available under Section 338(h)(10)
of the Code; provided, however, that if a state, local or foreign
jurisdiction does not have provisions similar to the election available
under Section 338(h)(10) of the Code, Sellers shall be liable for any Tax
based on income imposed on Sellers by such state, local and/or foreign
jurisdiction resulting from the transaction contemplated by this
Agreement. Buyer shall be responsible for the timely payment of all Taxes
imposed on or with respect to Greenwich or the Assets for all other
taxable periods, except to the extent otherwise expressly set forth
herein. With respect to any taxable period beginning before and ending
after the Closing Date (an "Overlap Period"), Taxes shall be apportioned
between Sellers and Buyer as follows: (x) in the case of Taxes other than
income, sales and use and withholding Taxes, on a per
* Confidential Treatment Requested.
32
diem basis; and (y) in the case of income, sales and use and withholding
Taxes, as determined as though the taxable period ended on the Closing
Date. The parties agree to consult in good faith regarding the calculation
of such Taxes and apportionment.
(c) Except as otherwise provided in this Section 7.14(c), AHP shall
have the exclusive authority to control any audit or examination by any
taxing authority, initiate any claim for refund, amend any Return, and
contest, resolve and defend against any assessment for additional Taxes,
notice of tax deficiency or other adjustment of Taxes ("Tax
Controversies") with respect to Greenwich or the Assets for any taxable
period ending on or prior to the Closing Date. Buyer shall have the
exclusive authority over Tax Controversies with respect to Greenwich or
the Assets for all other taxable periods and Tax Controversies which (x)
arise after the Closing Date and (y) relate to Taxes for which Buyer has
paid Sellers under Article 2 hereof as Net Assets or otherwise..
Notwithstanding the foregoing, with respect to any Overlap Period and with
respect to any Tax Controversies that could possibly affect the Tax
liability of both (a) Buyer or its Affiliates and (b) one or more Sellers
or their Affiliates):
(i) no party shall, without the prior written consent of the
other parties, which consent shall not be unreasonably
withheld or delayed, enter into any settlement of any
contest or otherwise compromise any issue that affects
or may affect the Tax liability of the other parties or
any of their Affiliates;
(ii) with respect to any Overlap Period, any additional Taxes
determined to be payable and any refund of Taxes shall
be apportioned as provided in Section 7.14(b) hereof;
and
(iii) the parties agree to consult in good faith regarding any
Tax Controversies with respect to Greenwich or the
Assets, including to provide each other draft copies of
proposed audit adjustments and other documents with
respect to Tax Controversies for review and comment.
(d) Notwithstanding anything to the contrary contained in this
Section 7.14, Buyer shall be liable for all Taxes (including Taxes arising
from Tax Controversies) other than Income Taxes, which constitute either
Facility Costs or amounts of Net Assets and shall pay such Taxes to the
appropriate taxing authorities or to Sellers in accordance with the
provisions of Sections 2.2 or 11.2 hereof, as the case may be.
(e) Section 338(h)(10) election.
(i) Sellers represent that they filed a consolidated income
tax return with Greenwich for the taxable year
immediately preceding the current taxable year and that
Sellers are eligible to make an election under section
338(h)(10) of the Code (and any comparable
33
election under state, local or foreign law) (the
"338(h)(10) Election") with respect to Greenwich.
(ii) Buyer and Sellers shall jointly make an election under
section 338(h)(10) of the Code (and any comparable
election under state, local or foreign tax law) with
respect to the acquisition of Greenwich by Buyer. Buyer
and Sellers shall cooperate fully with each other in the
making of such election. Not withstanding any language
contained in this Agreement, Sellers and Buyer agree
that for Tax purposes, all monies or consideration paid
under this Agreement by Buyer are for the express
purpose of purchasing the Shares.
(iii) Buyer shall initially prepare a complete IRS Form 8023
(and any comparable forms required to be filed under
state, local or foreign tax laws) and any additional
data or materials required to be attached to Form 8023
pursuant to the Treasury Regulations promulgated under
Section 338 of the Code (the "Section 338 Forms"). AHP
shall deliver to Buyer, no later than one hundred twenty
(120) days prior to the date the Section 338 Forms are
required to be filed, such documents and other
information as reasonably requested by Buyer to complete
the Section 338 Forms. Buyer shall deliver said forms to
AHP for review no later than sixty (60) days prior to
the date the Section 338 Forms are required to be filed.
In the event AHP objects to the manner in which the
Section 338 Forms have been prepared, AHP shall notify
Buyer within thirty (30) days of receipt of the Section
338 Forms of such objection, and the parties shall
endeavor within the next fifteen (15) days in good faith
to resolve such dispute. If the parties are unable to
resolve such dispute within said fifteen (15) day
period, Buyer and AHP shall submit such dispute to an
independent accounting firm chosen in the manner
described in Section 2.2(e) above (the "Allocation
Arbiter") selected by Buyer and AHP. Promptly, but not
later than fifteen (15) days after its acceptance of
appointment hereunder, the Allocation Arbiter will
determine (based solely on presentations of Buyer and
AHP and not by independent review) only those matters in
dispute and will render a written report as to the
disputed matters and the resulting preparation of the
Section 338 Forms shall be conclusive and binding upon
the parties.
34
ARTICLE VIII
AGREEMENTS WITH RESPECT TO EMPLOYEES
AND EMPLOYEE MATTERS
8.1 BUYER'S OBLIGATIONS TO EMPLOYEES.
(a) Effective on the Closing Date, Buyer shall be obligated to
continue the employment of all Facility Employees (except Seller
Employees) at [*] salary [*] such Facility Employee immediately prior to
the Closing Date (hereinafter referred to as "Transferred Employees")
(assuming Seller's compliance with Section 7.2(c)(ii)), subject to Buyer's
ability to discontinue employment of Transferred Employees pursuant to
Sections 8.1(h) and (l) below. [*]. All Transferred Employees shall be
entitled to participate in the benefit plans, programs and arrangements of
Buyer on the day after the Closing Date as set forth below.
(b) Buyer maintains a defined contribution 401(k) plan on behalf of
its employees ("Buyer's Tax-Deferred Savings Plan"). Buyer agrees that
effective immediately after the Closing Date, Buyer shall promptly take
all action necessary to extend coverage under Buyer's Tax-Deferred Savings
Plan to the Transferred Employees who have satisfied such plan's
eligibility requirements. Buyer shall credit all service completed by
Transferred Employees with Greenwich or Sellers, as the case may be, prior
to the Closing Date for eligibility and vesting purposes under Buyer's
Tax-Deferred Savings Plan. Sellers shall amend its defined contribution
401(k) savings plan and nonqualified supplemental savings plan ("Sellers'
Savings Plans") to provide that Transferred Employees shall be fully
vested in all employer matching contributions as of the Closing Date.
Sellers agree and acknowledge that the consummation of the transactions
contemplated by this Agreement will result in, and constitute, a
distributable event pursuant to Code Section 401(k)(10)(A)(iii) (the
"Distributable Event") with respect to Sellers' Savings Plans for all
Transferred Employees. Buyer's Tax-Deferred Savings Plan shall accept
elective transfers of distributions of benefits, including notes
representing participant's loans from Sellers' Savings Plan. Sellers shall
amend its defined benefit pension plan and non-qualified supplemental
pension plan ("Sellers' Retirement Plans") to provide that service with
Buyer after the Closing Date shall continue to be credited under Sellers'
Retirement Plans for purposes of vesting and eligibility for early
retirement subsidies but not for benefit accrual purposes. Transferred
Employees shall not be eligible to commence receipt of retirement benefits
under Sellers' Retirement Plans until they have satisfied the age and
service requirements under Sellers' Retirement Plans and terminated
employment with Buyer or any successor thereto.
(c) Buyer provides to its employees medical (including prescription
drugs), dental, vacation, life insurance, accidental death and
dismemberment, spending account plans, short-term disability and long-term
disability benefit plans ("Buyer's Welfare Plans") for its employees; [*].
Immediately after the Closing Date, Transferred Employees shall be
eligible to participate in such Buyer's Welfare Plans in accordance
* Confidential Treatment Requested.
35
with the terms of such plans, and employment with Sellers or any
predecessor shall be taken into account for purposes of determining
eligibility for participation and benefits under such Buyer's Welfare
Plans; provided, however, the Transferred Employees shall participate in
such Buyer's Welfare Plans that are core plans provided to all Buyer's
employees (and not optional or supplemental plans) (i) without any waiting
periods, pre-existing condition restrictions or evidence of insurability
[*]; and (ii) Buyer shall count claims arising on or prior to the Closing
Date, during the calendar year of the Closing, for purposes of satisfying
deductibles, out-of-pocket maximums, lifetime maximums, and other similar
limitations, and (iii) Transferred Employees shall participate in Buyer's
vacation plan according to the terms set forth in Section 8.1(g) below.
Prior to the Closing Date, according to a schedule agreed upon by Sellers
and Buyer, Sellers shall provide Buyer with all of the information
necessary to facilitate the Transferred Employees' participation in
Buyer's Welfare Plans on the day after the Closing in accordance with the
terms of this Agreement, including without limitation information
regarding claims arising on or prior to the Closing Date. Sellers and
Buyer shall cooperate as necessary after the Closing to ensure that such
information is complete and updated.
(d) Sellers maintain a program of medical and life insurance
benefits for certain retired employees ("Sellers' Retiree Benefit Plans").
All Transferred Employees who satisfy the eligibility criteria for
benefits under Sellers' Retiree Benefit Plans on or prior to the Closing
Date shall be entitled to benefits from Sellers' Retiree Benefit Plans
following termination from Buyer or any successor thereto or its
Affiliates, in accordance with the terms of Sellers' Retiree Benefit
Plans. However, Transferred Employees shall not be eligible to receive
medical and life insurance benefits under Sellers' Retiree Benefit Plans
while the Transferred Employees are eligible for coverage under Buyer's
Welfare Benefit Plans. Transferred Employees shall receive primary
coverage under Buyer's retiree welfare plans, if Buyer institutes any such
plans in the future, ("Buyer's Retiree Welfare Plans") upon termination of
employment if the Transferred Employees are eligible for coverage under
Buyer's Retiree Welfare Plans, with Sellers' Retiree Welfare Plans being
responsible for secondary coverage. Transferred Employees shall
participate in Buyer's Retiree Welfare Plans, if any, in accordance with
the terms of such plans (but only to the extent Transferred Employees
elect to participate therein) and Buyer shall recognize service with
Sellers or its Affiliates or predecessors for purposes of Buyer's Retiree
Welfare Plans.
(e) Sellers agree that any claims for welfare benefits arising on or
before the Closing Date with respect to any Transferred Employees (or
their covered dependents or beneficiaries) shall be the responsibility of
Sellers, and Buyer agrees that any claims arising subsequent to the
Closing Date with respect to any Transferred Employees (or their covered
dependents or beneficiaries) shall be the responsibility of Buyer. A claim
is deemed to have arisen when the event giving rise to the claim occurred
or, with respect to health coverages, when the related health services
were rendered. Notwithstanding the foregoing, however, a Transferred
Employee's claim for long-term disability coverage
* Confidential Treatment Requested.
36
shall be deemed to have arisen when the initial claim for such disability
was submitted if such employee (a) is already on long-term disability
coverage on the Closing Date, or (b) is on short-term disability coverage
on the Closing Date.
(f) Sellers shall be responsible for any legally-mandated
continuation of health care coverage for Facility Employees and/or their
covered dependents who have a loss of health care coverage due to a
"qualifying event" (as defined in Section 4980B of the Code or any
successor thereto and the regulations thereunder) that occurs on or prior
to the Closing Date, including any Facility Employee or covered dependent
who is receiving health care coverage under COBRA on the Closing Date.
Buyer shall be responsible for any legally-mandated continuation of health
care coverage for Transferred Employees and/or their covered dependents
who have a loss of health coverage due to a qualifying event that occurs
after the Closing Date as described in Exhibit F.
(g) Effective as of the Closing Date, all service completed by
Transferred Employees with the Sellers, Greenwich or a predecessor thereof
on or prior to the Closing Date shall be recognized by Buyer for purposes
of determining the Transferred Employees' [*]. [*]. Sellers shall, within
a reasonable time prior to Closing, provide Buyer with a schedule of
accrued vacation time and completed service for each Transferred Employee.
(h) Buyer shall be free to terminate the employment of any
Transferred Employee in accordance with Buyer's policies and practices
generally applicable to all of its employees, as well as Applicable Laws.
Buyer shall be responsible for severance liabilities, in accordance with
the severance policy set forth in Exhibit F, attached hereto, only to
Transferred Employees who meet the following criteria whose employment is
terminated by Buyer after the Closing Date:
(i) [*]
(ii) [*]
Severance payments hereunder shall include [*]. [*]. Such extension
shall represent the first six (6) months of any COBRA continuation
coverage.
(i) Sellers maintain spending account plans for the benefit of their
employees ("Sellers' Spending Account Plans"). For a period of ninety (90)
days following the Closing Date, Transferred Employees who are
participants in Sellers' Spending Accounts Plans shall be permitted to
submit claims for expenses incurred during the plan year on or prior to
the Closing Date. At the end of the ninety (90)-day period, Sellers shall
cause the account balances remaining in the accounts of Transferred
Employees to be transferred in cash to the spending account plans of Buyer
("Buyer's Spending Account Plans"). Following such transfer, Buyer (or one
of its Affiliates) shall be responsible for all liabilities for
Transferred Employees under Buyer's Spending Account Plans and shall be
* Confidential Treatment Requested.
37
entitled to all funds forfeited from such plans.
(j) If, after the Closing, a bonus plan established by Sellers for
Facility Employees prior to Closing is still in effect, Buyer shall assume
liability for payments to Transferred Employees under such bonus plan that
have not yet been made as of Closing and shall make all such payments in
accordance with the plan. At the conclusion of such bonus plan, Buyer
shall then be free to implement a different bonus plan for Transferred
Employees.
(k) Buyer shall not have taken any action on the Closing Date or
within ninety (90) days on or after the Closing Date the result of which
would be to effectuate a "plant closing" or "mass layoff" as those terms
are defined in the WARN Act. Buyer shall assume all liabilities arising
under any state law related to severance for actions taken on or after
Closing.
(l) No provision of this Agreement shall create any third party
beneficiary or other rights to any Facility Employee or Transferred
Employee (including any beneficiary or dependent thereof) or any other
Persons in respect of continued employment with Buyer, with Sellers or any
of their Affiliates and no provisions of this Agreement shall create any
rights in any such persons in respect of any benefits which may be
provided, directly or indirectly, under any benefit plans, programs or
arrangements which may be operated or maintained by either Buyers or any
of its Affiliates. Notwithstanding anything herein seemingly to the
contrary, subject to the provisions of this Article VIII, no provision of
this Agreement shall constitute a limitation on the right of Buyer or any
of its Affiliates, in its sole discretion, to terminate any Transferred
Employee at will, to modify the terms of employment or salary of any
Transferred Employee, or to change the terms of any of Buyer's Welfare
Plans or other employee benefit plans.
(m) [*]
(n) All Transferred Employees shall become eligible to enroll in
Buyer's employee stock purchase plan during the next open enrollment
period following the Closing.
ARTICLE IX.
CONDITIONS
9.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
The obligation of each party to effect the transactions contemplated
by this
* Confidential Treatment Requested.
38
Agreement shall be subject to the fulfillment by such party or written waiver by
the other party at or prior to the Closing Date of the following conditions:
(a) all governmental and other consents and approvals, if any,
necessary to permit the consummation of the transactions contemplated by this
Agreement shall have been obtained and any waiting period (and any extension
thereof) applicable to the consummation of the Agreement under the HSR Act or
under other Applicable Laws shall have expired or been terminated; and
(b) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a Governmental
Authority nor any Applicable Law shall be in effect as of the Closing Date that
would restrain or otherwise prevent the consummation of the transactions
contemplated by this Agreement.
9.2. CONDITIONS TO THE OBLIGATION OF SELLERS.
The obligation of Sellers to effect the transactions contemplated by
this Agreement is subject to the fulfillment by Buyer or written waiver by
Sellers at or prior to the Closing Date of the following conditions:
(a) Buyer shall have performed in all material respects each
obligation and agreement and complied in all material respects with each
covenant to be performed and complied with by it hereunder at or prior to the
Closing Date, including without limitation Buyer's delivery obligations as set
forth in Section 3.2; and
(b) the representations and warranties of Buyer in this Agreement
shall be true and correct in all material respects as of the Closing Date with
the same force and effect as though made at such time except (i) for changes
expressly permitted by this Agreement and (ii) to the extent that any
representation and warranty is made as of a specified date (other than Signing),
in which case such representation and warranty shall be true in all material
respects as of such date and (iii) for results of actions directly or indirectly
under the authority or supervision of the Plant Manager so long as the Plant
Manager is an employee of Buyer or its Affiliates; and
(c) Buyer shall have furnished to Sellers a certificate, dated as of
the Closing Date, signed by a duly authorized officer of Buyer to the effect
that all conditions set forth in Sections 9.2(a) and (b) above have been
satisfied.
9.3. CONDITIONS TO THE OBLIGATION OF BUYER.
The obligation of Buyer to effect the transactions contemplated by
this Agreement is subject to the fulfillment by Sellers or written waiver by
Buyer at or prior to the Closing Date of the following conditions:
(a) Sellers shall have performed in all respects each of their
respective obligations and agreements required by this Agreement to be performed
or complied with by
39
them prior to or at the Closing, including without limitation Sellers' delivery
obligations as set forth in Section 3.3;
(b) the representations and warranties of Sellers in this Agreement
shall be true and correct in all material respects as of the Closing Date with
the same force and effect as though made at such time except (i) for changes
expressly permitted by this Agreement and (ii) to the extent that any
representation and warranty is made as of a specified date (other than Signing),
in which case such representation and warranty shall be true in all material
respects as of such date; and
(c) Sellers shall have furnished to Buyer a certificate, dated as of
the Closing Date, signed by a duly authorized officer of each of the Sellers to
the effect that all conditions set forth in Sections 9.3(a) and (b) above have
been satisfied.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION.
This Agreement may be terminated at any time prior to the Closing
Date:
(a) without liability on the part of any party hereto (unless
occasioned by reason of a breach by any party hereto of any of its
representations, warranties or obligations hereunder) by mutual written consent
of Buyer and Sellers;
(b) subject to Section 7.3 hereof, by Buyer or Sellers if a court of
competent jurisdiction, Governmental Authority, or other regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action, in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and nonappealable;
or
(c) by Buyer or Sellers if the Closing has not been consummated by
[*]; provided, however, that the right to terminate this Agreement under Section
10.1(c) shall not be available to any party whose willful failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur.
The date on which this Agreement is terminated pursuant to any of
the foregoing subsections of this Section 10.1 is herein referred to as the
"Termination Date."
10.2 EFFECT OF TERMINATION.
* Confidential Treatment Requested.
40
Except as set forth in Section 7.2 and this Section 10.2 hereof,
upon the termination of this Agreement pursuant to Section 10.1 above, all
further obligations of the parties under this Agreement shall terminate without
further liability of any party to the others, except that nothing herein shall
relieve any party from liability for breach of any provision of, or for any
misrepresentation under this Agreement or be deemed to constitute a waiver of
any available remedy for any such breach or misrepresentation. If this Agreement
is terminated by Buyer in accordance with Section 10.1, Sellers and Greenwich
shall repay all payments made by Buyer to a Seller or Greenwich under this
Agreement on or before the Termination Date. Such repayment shall be made by
wire transfer in immediately available funds, no later than thirty (30) days
after the Termination Date, to an account designated in writing by Buyer.
ARTICLE XI.
INDEMNIFICATION
11.1 INDEMNIFICATION BY SELLER.
Sellers hereby agree to defend, indemnify and hold harmless Buyer,
its Affiliates and its successors and assigns and their respective officers,
directors, employees, attorneys, consultants and agents (collectively, the
"Buyer Indemnitees") from and against any and all losses, deficiencies,
liabilities, damages, assessments, judgments, costs and expenses, including
reasonable attorneys', consultants', and experts' fees (collectively, "Buyer
Losses"), to the extent caused by, resulting from or arising out of:
(a) any breach of a representation or warranty hereunder on the part
of Greenwich or either or both Sellers in this Agreement;
(b) any failure by Greenwich or either or both Sellers to perform or
otherwise fulfill, any undertaking or other agreement or obligation hereunder;
(c) any Excluded Assets and Liabilities; and/or
(d) any and all actions, suits, proceedings, claims, and demands
incident to any of the foregoing or such indemnification;
provided, however, that if any claim, liability, demand, assessment, action,
suit or proceeding shall be asserted against a Buyer Indemnitee in respect of
which a Buyer Indemnitee proposes to demand indemnification ("Buyer Indemnified
Claims"), Buyer or such other Buyer Indemnitee shall notify Sellers in writing
thereof as promptly as practicable, provided further, however, that the failure
or delay to so notify Sellers of such a claim shall not reduce or affect
Sellers' obligations with respect thereto except to the extent that Sellers are
prejudiced thereby. Sellers shall have the right promptly upon receipt of such
notice to assume the control of the defense, compromise or settlement of any
such Buyer Indemnified Claims including, at their own expense, employment of
counsel reasonably satisfactory to Buyer; provided, however, that if Sellers
shall have exercised their right to assume such control, Buyer may, in its sole
discretion
41
and at its expense, employ counsel to represent it (in addition to counsel
employed by Sellers) in any such matter, and in such event counsel selected by
Sellers shall be required to cooperate with such counsel of Buyer, counsel
selected by Buyer shall be required to cooperate with such counsel of Sellers
and each of Buyer and Sellers shall be required to cooperate with such other
party and its counsel in such defense, compromise or settlement. Sellers shall
not settle or compromise any Buyer Indemnified Claim that does not result in a
full release without any obligation of Buyer and Buyer Indemnitees without the
prior written consent of Buyer, which consent shall not be unreasonably withheld
or delayed.
11.2 INDEMNIFICATION BY BUYER. Buyer hereby agrees to defend,
indemnify and hold harmless Sellers, their Affiliates and their successors and
assigns and their respective officers, directors, employees, attorneys,
consultants and agents (collectively, "Seller Indemnitees") from and against any
and all losses, deficiencies, liabilities, damages, assessments, judgments,
costs and expenses, including reasonable attorneys', consultants', and experts'
fees (collectively, "Sellers Losses"), to the extent caused by, resulting from
or arising out of:
(a) any breach of a representation or warranty hereunder on the part
of Buyer in this Agreement;
(b) any failure by Buyer to perform or otherwise fulfill, in whole
or in part, any undertaking or agreement or obligation hereunder; and/or
(c) any and all actions, suits, proceedings, claims and demands
incident to any of the foregoing or such indemnification.
provided, however, that if any claim, liability, demand, assessment, action,
suit or proceeding shall be asserted in respect of which a Seller Indemnitee
proposes to demand indemnification ("Sellers Indemnified Claims"), Sellers or
such other Seller Indemnitee shall notify Buyer in writing thereof as promptly
as practicable, provided further, however, that the failure or delay to so
notify Buyer of such a claim shall not reduce or affect Buyer's obligations with
respect thereto except to the extent that Buyer is prejudiced thereby. Buyer
shall have the right promptly upon receipt of such notice to assume the control
of the defense, compromise or settlement of any such Sellers Indemnified Claims
including, at its own expense, employment of counsel reasonably satisfactory to
Sellers; provided, however, that if Buyer shall have exercised its right to
assume such control, Sellers may, in their sole discretion and at their expense,
employ counsel to represent them (in addition to counsel employed by Buyer) in
any such matter, and in such event counsel selected by Sellers shall be required
to cooperate with such counsel of Buyer, counsel of Buyer shall be required to
cooperate with counsel of Sellers and each of Buyer and Sellers shall be
required to cooperate with such other party and its counsel in such defense,
compromise or settlement. Buyer shall not settle or compromise any Sellers
Indemnified Claim that does not result in a full release without any obligation
of Sellers and Seller Indemnitees without the prior written consent of Sellers,
which consent shall not be unreasonably withheld or delayed.
11.3 CERTAIN LIMITATIONS.
42
(a) Other than Sellers' obligation to indemnify for Buyer Losses
under Section 11.1(a) of this Agreement arising out of a breach of
representation or warranty contained in Section 4.2 (capitalization) or
Section 4.12 (brokers), Sellers' obligation to indemnify for Buyer Losses
under Section 11.1(a) of this Agreement shall not accrue until the
aggregate of all such Buyer Losses exceeds [*] Dollars ($[*]) (the "Loss
Threshold") and then Sellers shall be liable for all such Buyer Losses in
excess of such initial $[*] and shall be limited to [*] Dollars ($[*]) in
the aggregate. There shall be no Loss Threshold or limit on liability with
respect to Sellers' obligations to indemnify under Sections 11.1(b)
through (d).
(b) In no event shall any punitive, exemplary, special, indirect,
incidental or consequential damages whatsoever be recoverable by any
indemnitee under Article 11 hereof; except that, if punitive, exemplary,
special, indirect, incidental or consequential damages have been asserted
by a third party against a Seller Indemnitee or Buyer Indemnitee, the
indemnifying party shall be liable therefor under the provisions of this
Article 11.
(c) Any payment required under this Article 11 paid to any Buyer
Indemnitee or any Seller Indemnitee, as the case may be, shall be treated
by the Buyer and the Sellers as an adjustment of the Purchase Price;
provided, however, that no Buyer Losses indemnified hereunder shall be
considered payment by Sellers for Net Assets or Facility Costs, and Buyer
shall have no obligation to pay any amounts to Sellers under Article 2
with respect to such Buyer Losses.
(d) This Article 11 sets forth the exclusive rights and remedies of
Buyer and Sellers for breach of this Agreement or any of the transactions
contemplated hereby, including, without limitation, the right to obtain
compensation or otherwise seek indemnity pursuant to any cause of action
including, but not limited to, a claim for breach of contract, for any
loss directly or indirectly related to the Facility, including without
limitation, any Buyer Losses or Sellers Losses, but without prejudice to
the right of any party hereto to seek specific performance of the other
party's obligations hereunder.
ARTICLE XII.
GENERAL PROVISIONS
12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The covenants contained in this Agreement shall survive the Closing
Date without limitation except as expressly set forth herein. The
representations and warranties contained herein shall survive the Closing Date
for a period of [*], except for (i) the representations and warranties contained
in Section 4.15 (taxes), which shall survive until the expiration of the
applicable statute of limitations, and (ii) the representations and warranties
contained in Sections 4.2 (capitalization), 4.3 (corporate authority), 4.12
(brokers and intermediaries), 5.2 (corporate
* Confidential Treatment Requested.
43
authority) and 5.5 (brokers and intermediaries), which shall survive the Closing
Date without limitation. Buyer's and Sellers' right to make a claim for
indemnification under Section 11.1(a) or Section 11.2(a), respectively for a
breach of any representation or warranty expires upon the expiration of the
applicable period set forth above, it being understood that claims made on or
prior to such expiration date shall survive such expiration date.
12.2 COOPERATION. Each of the parties hereto shall use commercially
reasonable efforts to take or cause to be taken all actions, to cooperate with
the other party hereto, with respect to all actions, and to do, or cause to be
done all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
12.3 WAIVER. Any failure of Sellers to comply with any of their
obligations or agreements herein contained may be waived only in writing by
Buyer. Any failure of Buyer to comply with any of its obligations or agreements
herein contained may be waived only in writing by Sellers.
12.4 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail, return receipt requested; or telefax
transmission with confirmation of receipt:
(a) If to Sellers, to:
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Attention: General Counsel
(b) If to Buyer, to
Immunex Corporation
00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Such names and addresses may be changed by written notice to each person listed
above.
12.5 GOVERNING LAW AND CONSENT TO JURISDICTION.
(a) This Agreement shall be governed by and construed in accordance
with the internal substantive laws and not the choice of law rules of the
State of New York.
44
(b) Any judicial proceeding brought with respect to this Agreement
must be brought in any court of competent jurisdiction in (i) if brought
by Buyer, in the State of New York and (ii) if brought by any Seller, in
the State of Washington. By execution and delivery of this Agreement, each
party (x) accepts, generally and unconditionally, the exclusive
jurisdiction of such courts and any related appellate court, and
irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement and (y) irrevocably waives any objection it
may now or hereafter have as to the venue of any such suit, action or
proceeding brought in such a court or that such court is an inconvenient
forum.
THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO
WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT.
12.6 COUNTERPARTS. This Agreement may be executed simultaneously in
two (2) or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
12.7 HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.8 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits hereto and the documents referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter,
including, without limitation, the MOU.
12.9 AMENDMENT AND MODIFICATION. This Agreement may be amended or
modified only by written agreement of the parties hereto.
12.10 BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties hereto and their
respective successors and assigns (and, to the extent provided in Sections 11.1
and 11.2, the other Buyer Indemnitees and Seller Indemnitees) any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
12.11 ASSIGNABILITY. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by the Buyer or the Sellers
without the prior written consent of the other party hereto; provided, however,
that either party may assign its rights and obligations hereunder, without the
prior written consent of the other party, to an Affiliate of such party or to a
successor of the assigning party's business by reason of merger,
45
sale of all or substantially all of its assets, or other form of acquisition;
provided that such successor agrees in writing to be bound by this Agreement,
and provided further, however, that no assignment shall limit or affect the
assignor's obligations hereunder. Any attempted assignment in violation of this
Section 12.11 shall be void.
12.12 SELLERS' KNOWLEDGE.
When "to the knowledge of Sellers" or similar phrase is used herein
it shall refer to (a) the actual knowledge of any employee of Sellers and the
actual knowledge of the individuals employed by Affiliates of Sellers contained
in Section 12.12 of the Disclosure Schedule after reasonable investigation of
such matters.
12.13 SEVERABILITY.
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, all other provisions shall
continue in full force and effect.
12.14 The Parties shall be entitled to specific performance of the
payment terms of this Agreement and the transfer of the Shares, respectively, in
addition to any other remedy at law or equity.
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Finance
AHP SUBSIDIARY HOLDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
IMMUNEX CORPORATION
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President and
Chief Financial Officer
47
