ASSET PURCHASE AGREEMENT
This Agreement (the "Agreement"), dated as of November 17, 1999, by and
between Ortho-McNeil Pharmaceutical, Inc., a Delaware corporation, U.S. Route
202, Raritan, NJ 08869 ("Buyer"), and Cygnus, Inc., a Delaware corporation,
having its principal place of business at 400 Penobscot Drive, Redwood City, CA
94063 ("Seller").
RECITALS
WHEREAS, Seller owns certain assets that it uses in the conduct of the
Business (as defined below); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, such assets upon the terms and subject to the conditions of this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the following
meanings. Any of such terms, unless the context otherwise requires, may be used
in the singular or plural, depending upon the reference.
"ACT" shall mean the United States Food, Drug and Cosmetic Act
of 1938, as amended.
"AFFILIATE" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
"ANCILLARY AGREEMENTS" shall mean the Transition Agreement,
the Indemnity Escrow Agreement, the LTS Escrow Agreement and the Sanofi Side
Letter.
"ASSETS" shall mean all of Seller's right, title and interest
in and to the business, properties, contracts, claims, assets and rights of any
kind, whether tangible or intangible, real or personal and constituting, or used
or useful in connection with, or related to, the Business, including those
Assets set forth on Schedule 1.19(a) hereto, including, without limitation, all
of Seller's right, title and interest in the following:
(a) all Products and the rights to manufacture, market
distribute and sell such Products;
(b) the Assumed Contracts;
(c) all Inventory;
(d) all Books and Records;
(e) all Proprietary Rights;
(f) to the extent transferable, all Permits;
(g) all Fixtures and Equipment;
(h) all available sales and promotional literature,
customer, vendor, supplier and distributor lists and purchasing records related
to the Business; and
(i) to the extent transferable or assignable, all rights
under or pursuant to all warranties, representations and guarantees made by
suppliers in connection with the Assets or services furnished to Seller
pertaining to the Business or otherwise affecting the Assets.
"ASSUMED CONTRACTS" shall mean the Contracts listed on EXHIBIT
A.
"ASSUMED LIABILITIES" shall mean the obligations and
liabilities assumed by Buyer pursuant to Section 2.2.
"[CONFIDENTIAL TREATMENT REQUESTED] MILESTONE" shall mean
the achievement of successful [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED].
"BOOKS AND RECORDS" shall mean the following to the extent
pertaining to the Business or the Assets: (a) all records and lists of Seller,
(b) all product and business plans of Seller, (c) all books, ledgers, files,
accounts, reports, correspondence, plans, drawings and operating records of
every kind maintained by Seller and (d) all drug master files and other
regulatory files; PROVIDED that Buyer shall enter into a confidentiality
agreement with Seller substantially in the form attached hereto as EXHIBIT B
with respect to the information contained therein; and, PROVIDED FURTHER, that
Seller may redact any information contained in such Books and Records that
relate to the Excluded Business and do not relate to the Business or Assets.
"BUSINESS" shall mean the drug delivery business of Seller as
described more fully on EXHIBIT C, but shall not include the Excluded Business.
"BUYER'S NDA" shall mean an NDA filed by Buyer with respect
to [CONFIDENTIAL TREATMENT REQUESTED].
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"BUYER'S NDA APPROVAL" shall occur upon the approval by the
FDA of Buyer's NDA.
"BUYER'S NDA SUBMISSION" shall occur upon the submission to
the FDA of Buyer's NDA.
"BUYER'S REPRESENTATIVE" shall mean the person designated by
Buyer in writing to Seller as such.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder.
"CONTRACT" shall mean any agreement, contract, contract
right, lease, purchase order, note, loan, evidence of indebtedness, letter of
credit, franchise agreement, undertaking, covenant not to compete, employment
agreement, license, instrument, obligation or commitment to which Seller is a
party or is legally bound and which relates to the Business or the Assets,
whether oral or written.
"DISCLOSURE SCHEDULE" shall mean a schedule executed and
delivered by Seller to Buyer and initialed by the parties as of the date hereof
which sets forth the exceptions to the representations and warranties contained
in Article IV hereof and certain other information called for by this Agreement.
Unless otherwise specified, each reference in this Agreement to any numbered
schedule is a reference to that numbered schedule which is included in the
Disclosure Schedule.
"EMPLOYEE BENEFIT PLAN" shall mean any (a) nonqualified
deferred compensation or retirement plan or arrangement which is an Employee
Pension Benefit Plan, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (c) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" shall have the meaning set
forth in ERISA Sec. 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" shall have the meaning set
forth in ERISA Sec. 3(l).
"ENCUMBRANCE" shall mean any claim, lien, pledge, option,
charge, security interest, deed of trust, mortgage, encumbrance or other right
of third parties, whether voluntarily incurred or arising by operation of law,
and includes, without limitation, any agreement to give any of the foregoing in
the future, and any contingent sale or other title retention agreement or lease
in the nature thereof.
"ENVIRONMENTAL, HEALTH AND SAFETY LAWS" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act of 1976, and the occupational Safety
and Health Act of 1970, each as amended, together with all other laws (including
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder, or any applicable indemnity agreements or other
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contractual obligations, in each case as has been or may be amended from time to
time) of federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or chemical, industrial, hazardous, or
toxic materials or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ESCROW AGENT" shall have the meaning set forth in Section
2.4.
"ESCROW AMOUNT" shall mean all amounts to be deposited with
the Escrow Agent pursuant to Section 2.4 (whether for purposes of the Indemnity
Escrow Agreement or the LTS Escrow Agreement).
"EVRA" shall mean the contraceptive transdermal product
which is the subject of the Existing Supply Agreement.
"EXCLUDED ASSETS" notwithstanding any other provision of this
Agreement, shall mean all the assets of Seller other than the Assets, including
without limitation, (a) those related to the [CONFIDENTIAL TREATMENT REQUESTED]
Agreements, (b) certain liabilities and obligations defined under the Sanofi
Side Letter, (c) the Non-Transferable Permits (as defined hereinafter), (d) the
assets set forth on Schedule 4.5(a), and (e) cash, cash equivalents, accounts
receivable, short-term investments, prepaid expenses and deposits.
"EXCLUDED BUSINESS" shall mean the business conducted by
Seller other than the Business, including without limitation, as relates to the
[CONFIDENTIAL TREATMENT REQUESTED] Agreements and certain liabilities and
obligations defined under the Sanofi Side Letter, as described more fully on
Schedule 1.1(b) hereto.
"EXISTING SUPPLY AGREEMENT" shall mean the existing Product,
Development and Supply Agreement, dated as of June 8, 1994, by and between
Seller and Buyer, and all amendments thereto.
"FDA" shall mean the United States Food and Drug
Administration.
"FIXTURES AND EQUIPMENT" shall mean all of the fixtures,
machinery, tooling, equipment, molds and dyes and other tangible personal
property owned by Seller and used in connection with the Business (other than
those described on Schedules 1.1(a) and 4.5(a) hereto), as described more fully
on Schedule 1.1(c) hereto.
"HAZARDOUS SUBSTANCE" shall mean any pollutants, contaminants,
waste, or any substance or material listed, defined, designated or classified as
hazardous or toxic or otherwise regulated under any Environmental Law.
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"INDEMNITY ESCROW AGREEMENT" shall mean the Indemnity Escrow
Agreement by and between Seller, Buyer and Escrow Agent, in substantially the
form attached hereto as EXHIBIT D.
"INVENTORY" shall mean each item of inventory and the
materials set forth on Schedule 1.1(d) hereto.
"KNOWLEDGE" shall mean actual knowledge after reasonable
investigation.
"LTS" shall mean LTS Lohmann Therapy Systems Corp.
"LTS ESCROW AGREEMENT" shall mean the Escrow Agreement by and
between Seller, Buyer and Escrow Agent, in substantially the form attached
hereto as EXHIBIT E.
"LTS SUPPLY AGREEMENT" shall mean the Supply Agreement dated
as of September 30, 1999 by and between Seller and LTS, as amended by Amendment
No. 1 thereto, together with the Side Letter between the parties of even date
therewith.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" shall
mean with respect to the Business or the Assets any material adverse effect on
or change in the condition (financial or other), business, results of
operations, assets, liabilities or operations of the Business and/or the Assets
or the ability of Seller to consummate the transactions contemplated hereby, or
any event or condition which would, with the passage of time, constitute a
"material adverse effect" or "material adverse change."
"MULTIEMPLOYER PLAN" shall have the meaning set forth in ERISA
Sec. 3(37).
"NDA" shall mean any new drug application and all supplements
thereto filed with the FDA including all documents, data, and other information
concerning any Product as more fully defined in 21 CFR Sec. 314.50, et. seq.
"[CONFIDENTIAL TREATMENT REQUESTED] AGREEMENTS" shall mean
each of (i) the Nicotine Agreement, dated May 21, 1998, between [CONFIDENTIAL
TREATMENT REQUESTED] Limited ("[CONFIDENTIAL TREATMENT REQUESTED]") and Seller
(as amended by Amendment No.1 to Nicotine Agreement, dated August 21, 1998),
and (ii) the Agreement, dated February 4, 1999, between Seller and
[CONFIDENTIAL TREATMENT REQUESTED] (as amended by Letter Agreement Amendment,
dated February 4, 1999), and any other amendment(s) thereto.
"PERMITS" shall mean all licenses, permits, franchises,
approvals, authorizations, consents or orders of, or filings with, any
governmental agency or authority, whether foreign, federal, state or local, or
any other person, necessary for the conduct of, or relating to the operation of
the Business.
[CONFIDENTIAL TREATMENT REQUESTED] shall mean the
[CONFIDENTIAL TREATMENT REQUESTED], [CONFIDENTIAL TREATMENT REQUESTED].
"PRODUCTS" shall mean the products listed on EXHIBIT F
attached hereto.
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"PROPRIETARY RIGHTS" shall have the meaning set forth in
Section 4.16(a).
"REPRESENTATIVE" shall mean any officer, director, principal,
attorney, agent, employee or other representative of the respective party.
"SANOFI AGREEMENTS" shall mean, collectively, (a) the Amended
August 29, 1986 Agreement dated May 30, 1988 by and between Seller and Sanofi,
S.A., a French corporation ("Sanofi"), as amended by Amendments dated as of May
4, 1990 and August 31, 1990 and as may have been amended otherwise from time to
time, and (b) the Final Award of the International Chamber of Commerce dated
December 11, 1997 (ICC No. 8309/HV/AMW).
"SANOFI SIDE LETTER" shall mean the Letter Agreement by and
between Seller and Buyer, in substantially the form attached hereto as EXHIBIT
G.
"SNDA" shall mean the supplemental new drug application for
[CONFIDENTIAL TREATMENT REQUESTED] produced by [CONFIDENTIAL TREATMENT
REQUESTED]that supplements the NDA submitted using [CONFIDENTIAL TREATMENT
REQUESTED] produced by Seller.
"SNDA APPROVAL" shall occur upon the approval by the FDA of
the SNDA.
"SNDA SUBMISSION" shall occur upon the submission by Buyer to
the FDA of the SNDA.
"SUBSIDIARY" shall mean (a) any corporation in an unbroken
chain of corporations beginning with a party if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain, (b) any partnership in which a party is a
general partner, or (c) any partnership in which a party possesses a 50% or
greater interest in the total capital or total income of such partnership.
"TAX" shall mean any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Sec. 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"TAX RETURN" shall mean any return, declaration, report,
notice, form, statement or other information required to be supplied to a taxing
authority in connection with any Tax, including any schedule or attachment
thereto, and including any amendment thereof.
"TRANSITION AGREEMENT" shall mean the Agreement by and between
Seller and Buyer, substantially in the form of EXHIBIT H attached hereto.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 TRANSFER OF ASSETS. Upon the terms and subject to the
conditions contained herein, at the Closing, Seller shall sell, convey,
transfer, assign and deliver to Buyer, and Buyer shall acquire from Seller, the
Assets.
2.2 ASSUMPTION OF LIABILITIES. Upon the terms and subject to
the conditions contained herein, at the Closing, Buyer shall assume all
obligations and liabilities accruing, arising out of, or relating to events or
occurrences happening after the Closing under the Assumed Contracts or with
respect to the operation by Buyer of the Business after the Closing ("Assumed
Liabilities"); PROVIDED, HOWEVER, that Buyer shall not assume or have any
liability with respect to any obligation or liability in connection with any
such Assumed Contract or with respect to the operation of the Business, in each
case occurring on or prior to the Closing.
2.3 EXCLUDED LIABILITIES. Except as otherwise expressly
provided for in this Agreement, Buyer shall not assume, or otherwise be
responsible for, any liabilities or obligations of Seller, whether actual or
contingent, matured or unmatured, liquidated or unliquidated, or known or
unknown whether arising out of occurrences prior to, at or after the Closing
("Excluded Liabilities"), which Excluded Liabilities include, without
limitation:
(a) any liability or obligation to or in respect of any
employees or former employees of Seller including, without limitation, (i) any
employment agreement, whether or not written, between Seller and any person,
(ii) any liability under any Employee Benefit Plan at any time maintained,
contributed to or required to be contributed to by or with respect to Seller or
under which Seller may incur liability, or any contributions, benefits or
liabilities therefor, or any liability with respect to Seller's withdrawal or
partial withdrawal from or termination of any Employee Benefit Plan, (iii) any
obligation for those employees of Seller on long-term and short-term disability
at the Closing and (iv) any claim of an unfair labor practice, or any claim
under any group insurance or under any state unemployment compensation or
worker's compensation law or regulation or under any federal or state employment
discrimination law or regulation, which shall have been asserted on or prior to
the Closing or is based on acts or omissions which occurred on or prior to the
Closing;
(b) any liability or obligation of Seller in respect of any
Tax;
(c) any liability or obligation arising from any injury to or
death of any person or damage to or destruction of any property, whether based
on negligence, breach of warranty, strict liability, product liability,
enterprise liability or any other legal or equitable theory arising from defects
or alleged defects in products manufactured and/or sold by or on behalf of
Seller or any other person or entity or from actions or inactions prior to
Closing under or resulting from any Environmental, Health and Safety Law or
resulting from any Hazardous Substance;
(d) any liability or obligation of Seller arising out of or
related to any Action against Seller or any Action which adversely affects the
Assets and which shall have been asserted
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on or prior to the Closing Date or to the extent the basis of which shall have
arisen on or prior to the Closing Date;
(e) any liability or obligation of Seller resulting from
entering into, performing its obligations pursuant to or consummating the
transactions contemplated by, this Agreement;
(f) any expenses of Seller incurred in connection with the
transactions contemplated by this Agreement; and
(g) any liability or obligation related to the Excluded Assets
or any other Contract other than Assumed Contracts.
2.4 PURCHASE PRICE. (a) INITIAL PAYMENT. As partial
consideration of the sale, assignment, transfer and delivery of the Assets to be
sold, assigned, transferred and delivered pursuant to this Agreement and for
Seller's agreement not to compete as set forth in Section 6.8, Buyer shall upon
Closing, pay to Seller the aggregate amount (the "Initial Payment") of Twenty
Million Dollars ($20,000,000) by wire transfer of immediately available funds to
an account designated by Seller pursuant to Section 11.3.
(b) ADDITIONAL CONTINGENT PAYMENTS. As partial additional
consideration of the sale, assignment, transfer and delivery of the Assets to be
sold, assigned, transferred and delivered pursuant to this Agreement, Buyer
shall disburse the additional amounts (the "Additional Payments") as follows:
(i) in the event [CONFIDENTIAL TREATMENT REQUESTED] occurs:
(x) on or prior to [CONFIDENTIAL TREATMENT REQUESTED], Buyer
shall (1) pay to Seller, within five (5) business days after
the occurrence of [CONFIDENTIAL TREATMENT REQUESTED], the
aggregate amount of [CONFIDENTIAL TREATMENT REQUESTED], (2)
deposit with the Escrow Agent, within five (5) business days
after the occurrence of [CONFIDENTIAL TREATMENT REQUESTED],
the aggregate amount of [CONFIDENTIAL TREATMENT REQUESTED] to
be held in escrow pursuant to the LTS Escrow Agreement, and
(3) deposit, within five (5) business days after the
occurrence of [CONFIDENTIAL TREATMENT REQUESTED], the
aggregate amount of [CONFIDENTIAL TREATMENT REQUESTED] with
the Escrow Agent, to be held in escrow pursuant to the
Indemnity Escrow Agreement, such amount to be used to satisfy
any indemnification claim made by Buyer against Seller
pursuant to Section 10.3 hereof; or
(y) after [CONFIDENTIAL TREATMENT REQUESTED], (1) Buyer shall
(A) deposit, within five (5) business days after the
occurrence of [CONFIDENTIAL TREATMENT REQUESTED], the
aggregate amount of [CONFIDENTIAL TREATMENT REQUESTED] with
the Escrow Agent, to be held in escrow pursuant to the
Indemnity Escrow Agreement, such amount to be used to satisfy
any indemnification claim made by Buyer against Seller
pursuant to Section 10.3 hereof, (B) deposit with the Escrow
Agent, within five (5) business days after the occurrence
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of [CONFIDENTIAL TREATMENT REQUESTED], the aggregate amount of
[CONFIDENTIAL TREATMENT REQUESTED] to be held in escrow
pursuant to the LTS Escrow Agreement; and, (2) Seller shall
deposit, within five (5) business days after the occurrence of
[CONFIDENTIAL TREATMENT REQUESTED], the aggregate amount of
[CONFIDENTIAL TREATMENT REQUESTED] with the Escrow Agent, to
be held in escrow pursuant to the Indemnity Escrow Agreement,
such amount to be used to satisfy any indemnification claim
made by Buyer against Seller pursuant to Section 10.3 hereof;
(ii) upon the occurrence of the [CONFIDENTIAL TREATMENT
REQUESTED] Milestone, Buyer shall (x) pay to Seller, within
five (5) business days after the occurrence thereof, the
aggregate amount of [CONFIDENTIAL TREATMENT REQUESTED] and (y)
deposit, within five (5) business days after the occurrence
thereof, the aggregate amount of [CONFIDENTIAL TREATMENT
REQUESTED] with the Escrow Agent, to be held in escrow
pursuant to the LTS Escrow Agreement; PROVIDED, that in the
event that all data necessary to make the determination with
respect to the [CONFIDENTIAL TREATMENT REQUESTED] Milestone is
not available to Buyer on or prior to [CONFIDENTIAL TREATMENT
REQUESTED], then the aggregate payments (and deposits) set
forth in this subsection (ii) shall be reduced at a rate of
[CONFIDENTIAL TREATMENT REQUESTED] per month upon the last day
of each successive month until such data is available to Buyer
or no payment amount remains; and, PROVIDED FURTHER, that such
reduction shall be made first from the payments to Seller
pursuant to subsection (ii)(x) and then from the amounts
deposited to Escrow Agent pursuant to subsection (ii)(y);
(iii) Buyer shall pay to Seller the aggregate amount of
[CONFIDENTIAL TREATMENT REQUESTED] upon the first to occur of
(1) [CONFIDENTIAL TREATMENT REQUESTED], and (2) Buyer
[CONFIDENTIAL TREATMENT REQUESTED]; PROVIDED, in either case,
such [CONFIDENTIAL TREATMENT REQUESTED] occurs on or prior to
[CONFIDENTIAL TREATMENT REQUESTED] (the "[CONFIDENTIAL
TREATMENT REQUESTED]"); and
(iv) Buyer shall pay to Seller the aggregate amount of
[CONFIDENTIAL TREATMENT REQUESTED] upon the first to occur of
(1) [CONFIDENTIAL TREATMENT REQUESTED], and (2) Buyer
[CONFIDENTIAL TREATMENT REQUESTED]; PROVIDED, in either case,
such [CONFIDENTIAL TREATMENT REQUESTED] occurs on or prior to
[CONFIDENTIAL TREATMENT REQUESTED] (the "[CONFIDENTIAL
TREATMENT REQUESTED]");
PROVIDED, HOWEVER, that in the event [CONFIDENTIAL TREATMENT
REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED] with
respect to [CONFIDENTIAL TREATMENT REQUESTED] is not obtained
from the FDA ("[CONFIDENTIAL TREATMENT REQUESTED]") on or
prior to [CONFIDENTIAL TREATMENT REQUESTED] for any reason
other than as a result of an act or omission on the part of
Seller (which shall include, without limitation, any failure,
defect or omission in (1) the [CONFIDENTIAL TREATMENT
REQUESTED] references of such [CONFIDENTIAL TREATMENT
REQUESTED] which were prepared by Seller
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prior to the Closing, or (2) the [CONFIDENTIAL TREATMENT
REQUESTED] section of such [CONFIDENTIAL TREATMENT
REQUESTED]), then (x) the [CONFIDENTIAL TREATMENT REQUESTED]
shall be extended for a period of time equal to the number of
days past [CONFIDENTIAL TREATMENT REQUESTED] that
[CONFIDENTIAL TREATMENT REQUESTED] is obtained, PROVIDED that
in no event shall the [CONFIDENTIAL TREATMENT REQUESTED] be
extended beyond [CONFIDENTIAL TREATMENT REQUESTED], and (y)
the [CONFIDENTIAL TREATMENT REQUESTED] shall be extended until
the date which is [CONFIDENTIAL TREATMENT REQUESTED] year from
the [CONFIDENTIAL TREATMENT REQUESTED]; and
PROVIDED FURTHER, that in the event Buyer discontinues
[CONFIDENTIAL TREATMENT REQUESTED] with respect to Seller's
[CONFIDENTIAL TREATMENT REQUESTED] product (aa) on or prior
to [CONFIDENTIAL TREATMENT REQUESTED], then the payments
provided for pursuant to subsection 2.4(b)(i)(x) above
shall become due upon such discontinuance, and (bb) after
[CONFIDENTIAL TREATMENT REQUESTED], then the payments
provided for pursuant to subsection 2.4(b)(i)(y) above
shall become due upon such discontinuance.
2.5 ALLOCATION. The parties agree to allocate the purchase
price among the Assets and for Seller's agreement not to compete for all
purposes (including financial accounting and tax purposes) in accordance with
the schedule to be provided by Buyer.
2.6 RIGHT OF SETOFF. Seller agrees that to the extent any
amount payable by Seller to Buyer pursuant to the indemnification obligation set
forth in Section 10.3 is in excess of the Escrow Amount, Buyer shall have the
right, after notification to Seller, to set off such amount from the Additional
Payments to be made, if any, pursuant to Section 2.4(b) above; PROVIDED, that
such right of set off shall be in addition to, and shall not in anyway limit,
Buyer's other remedies available under common law, statute, principals of equity
or otherwise.
2.7 ACKNOWLEDGEMENT OF CONTINGENCIES. The parties acknowledge
that Seller has entered into this Agreement with the anticipation of receiving
the Additional Payments set forth in Section 2.4(b) above and agree that such
Additional Payments are contingent upon satisfaction of conditions provided for
in Section 2.4(b) which may not be satisfied and, as a result, some or all of
such payments may not become obligations of Buyer and may therefore never be
paid. Furthermore, Seller acknowledges that the Initial Payment, deposit into
escrow of the Escrow Amount, and the possibility of receiving such Additional
Payments in accordance with the terms set forth in Section 2.4, constitute
sufficient consideration for entering into this Agreement. Neither party has
made a representation or warranty to the other that any such conditions will be
satisfied. Accordingly, in the event such conditions to any payments are not
satisfied, no party shall have any recourse against the other hereunder unless
there is an independent breach of this Agreement. The parties acknowledge and
agree that Buyer has only the obligations with respect to the Additional
Payments expressly provided in Section 2.4 and in the event Buyer determines
(which determination shall be made after consultation with Seller) that Buyer
will postpone or not continue the efforts to achieve [CONFIDENTIAL TREATMENT
REQUESTED] or to make the [CONFIDENTIAL TREATMENT REQUESTED] or Buyer's
[CONFIDENTIAL TREATMENT REQUESTED] or obtain [CONFIDENTIAL TREATMENT REQUESTED]
or Buyer's [CONFIDENTIAL
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TREATMENT REQUESTED], it will have no further liability or obligation to make
the Additional Payments; PROVIDED, that Buyer's determination is made in the
exercise of its business judgment and not made arbitrarily to avoid such
payments. Buyer shall be under no obligation to use its reasonable or best
efforts or any other standard of diligence with respect to satisfying the
conditions to any payment hereunder. Seller hereby acknowledges and agrees that
in no event shall it have incurred at any point in time, nor shall it seek from
Buyer, any damages in an amount in excess of the amounts owed and not as of such
time paid by Buyer pursuant to Section 2.4 above and that the amount of the
payments under Section 2.4 above shall be deemed the maximum damages which
Seller could conceivably incur with respect to any breach hereunder or as a
result of any act or omission of Buyer.
2.8 CLOSING COSTS: TRANSFER TAXES AND FEES. All applicable
sales, value added, transfer, documentary, use, filing and other taxes and fees
(other than income taxes) that may be levied on the sale, assignment, transfer
or delivery of the Assets or otherwise hereunder, whether levied on Seller or
Buyer, shall be borne by Seller. Seller shall, at its own expense, file all
necessary Tax Returns and other documentation with respect to all such sales or
transfer taxes and, if required by applicable law, Buyer shall join in the
execution of any such Tax Returns or other documentation. Buyer shall pay all
costs of applying for new Permits, PROVIDED that Seller shall pay all costs
associated with obtaining the transfer of existing Permits which may be lawfully
transferred. As required by statute, Buyer shall be responsible for paying any
filing fees required to be paid by Buyer under the HSR Act (as defined
hereinafter).
ARTICLE III
CLOSING
3.1 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the place agreed to by the
parties, commencing at 10:00 a.m. local time on the date which is five (5)
business days following the satisfaction or waiver of all conditions to the
obligations of each of the parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective party shall
take at the Closing itself) or such other date as the parties may mutually
determine (the "CLOSING DATE").
3.2 CONVEYANCES AT CLOSING.
(a) INSTRUMENTS AND POSSESSION. Seller will, at the Closing,
execute and deliver to Buyer:
(i) one or more bills of sale, substantially in the form of
the Bill of Sale attached hereto as EXHIBIT I, conveying in the aggregate all of
Seller's owned personal property included in the Assets;
(ii) assignments of all rights under the Assumed Contracts,
substantially in the form of the Assignment and Assumption attached hereto as
EXHIBIT J (the "Assignment and Assumption");
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(iii) Assignments of Patents and Trademarks and other
Proprietary Rights, each substantially in the form attached hereto as EXHIBIT K,
in recordable form to the extent necessary to assign such rights;
(iv) copies of manuals, dockets, plans, specifications,
drawings, lists and other tangible embodiments of know-how relating to the
Business and such other copies as specified herein; and
(v) such other instruments of sale, transfer, conveyance and
assignment as shall reasonably be requested by Buyer.
(b) ASSUMPTION DOCUMENT. Upon the terms and subject to the
conditions contained herein, at the Closing, Buyer shall deliver to Seller an
instrument of assumption substantially in the form of the Assignment and
Assumption, evidencing Buyer's assumption, pursuant to Section 2.2, of the
Assumed Liabilities (the "Assumption Document").
(c) FORM OF INSTRUMENTS. To the extent that a form of any
document to be delivered hereunder is not attached as an exhibit hereto, such
document shall be in form and substance, and shall be executed and delivered in
a manner, reasonably satisfactory to Buyer.
(d) CERTIFICATES; AGREEMENTS. Buyer and Seller shall deliver
the certificates, agreements and other matters described in Articles VII and
VIII.
(e) CONSENTS. Seller shall deliver all Permits and any
consents listed on Schedule 4.7.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows, except as
otherwise set forth on the Disclosure Schedule, which representations and
warranties are, as of the date hereof, and will be, as of the Closing Date,
true, complete and correct:
4.1 ORGANIZATION OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 SUBSIDIARIES. Seller does not have any Subsidiaries that
are used in the conduct of the Business or that own any of the Assets. Seller
has no direct or indirect stock or other equity or ownership interest (whether
controlling or not) in any corporation, association, partnership, joint venture
or other entity relating to the Business.
4.3 AUTHORIZATION. Seller has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the Board of Directors of Seller has duly
authorized
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the execution, delivery, and performance of this Agreement by Seller. This
Agreement constitutes the valid and legally binding obligation of Seller,
enforceable in accordance with its terms and conditions. Seller has all
requisite power and authority, and has taken all corporate action necessary, to
own, lease and operate the Assets, and to conduct the Business as it is
presently being conducted.
4.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
1999, Seller has operated the Business in the ordinary course consistent with
past practice and since that date there has not been any material adverse change
with respect to the Business or the Assets. Without limiting the generality of
the foregoing, since September 30, 1999, there has not been any:
(a) damage, destruction or loss (whether or not covered by
insurance) adversely affecting the Assets or the Business, except as set forth
on Schedule 4.4(a);
(b) amendment, cancellation or termination of any material
Contract, commitment, agreement, transaction or Permit relating to the Assets or
the Business or entry into any Contract, commitment, agreement, transaction or
Permit (other than as provided for under the terms hereof) relating to the
Assets or the Business which is not in the ordinary course of the Business,
including, without limitation, any employment or consulting agreements;
(c) mortgage, pledge or other encumbrance of any Assets,
except purchase money mortgages arising in the ordinary course of the Business;
(d) sale, assignment, lease or transfer of any of the Assets,
other than for fair consideration and in the ordinary course of the Business;
(e) in connection with Business, incurrence by Seller of
liabilities, except liabilities incurred in the ordinary course of the Business
and consistent with Seller's past practice;
(f) disposition or lapsing of any Registered or Pending
Proprietary Rights (as defined in Section 4.16) or any licenses, sublicenses,
disposition or disclosure to any person of any Proprietary Rights not
theretofore a matter of public knowledge; or
(g) any agreement by Seller to do any of the things described
in the preceding clauses (a) through (f) other than as expressly provided for
herein.
4.5 ASSETS. (a) Seller will obtain and transfer at the Closing
valid title to the Assets and upon the consummation of the transactions
contemplated hereby, Buyer will acquire valid title to all of the Assets, free
and clear of any Encumbrances or restrictions on transfer. The tangible Assets
are free from defects (latent and patent), have been maintained in accordance
with normal industry practice and are in good operating condition and repair
(ordinary wear and tear excluded), and ready and useable for the operations as
contemplated.
(b) Except for (i) inventories sold, some obsolete assets not
necessary for the conduct of the Business, and properties or assets replaced by
equivalent or superior properties or assets, in each case in the ordinary course
of business and consistent with past practice and (ii) the Excluded Assets, the
Assets, taken as a whole, constitute all of the properties and assets relating
to or used or held for use in connection with the Business during the past
twelve months. The Assets,
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other than as set forth on Schedule 4.5(a), comprise all assets the use of which
is necessary for the continued conduct of the Business by Buyer as now being
conducted by Seller and as conducted by Seller, except as set forth on Schedule
4.5(b), for the past twelve months.
4.6 CONTRACTS AND COMMITMENTS.
(a) CONTRACTS. Schedule 4.6 sets forth a complete and accurate
list of all Contracts of the following categories:
(i) contracts not made in the ordinary course of
business;
(ii) employment contracts and severance agreements,
including, without limitation, Contracts that will result in the payment by, or
the creation of any commitment or obligation (absolute or contingent) to pay on
behalf of Buyer or Seller any severance, termination, "golden parachute," or
other similar payments to any present or former personnel following termination
of employment or otherwise as a result of the consummation of the transactions
contemplated by this Agreement;
(iii) labor or union contracts;
(iv) contracts related to any of the Proprietary
Rights;
(v) distribution, franchise, license, sales or
commission contracts;
(vi) partnership, joint venture or other agreements
or arrangements involving sharing of profits, expenses, or assets;
(vii) contracts or commitments to sell, lease or
dispose of assets other than in the ordinary course of business;
(viii) contracts containing covenants limiting the
freedom of Seller to engage in any line of business or compete with any person;
(ix) contracts involving expenditures or
liabilities, actual or potential, in excess of $10,000 or otherwise material to
the Business or the Assets; and
(x) governmental or regulatory permits required to
conduct the Business as presently conducted.
Seller has delivered to Buyer true, correct and complete copies of all of such
Contracts, including without limitation, the Assumed Contracts, including all
amendments and supplements thereto.
(b) ABSENCE OF BREACHES OR DEFAULTS. All of the Assumed
Contracts are legal, valid, binding, enforceable in accordance with their terms
and are in full force and effect. Seller has duly performed all of its
obligations under the Assumed Contracts to the extent those obligations to
perform have accrued, and no violation of, or default or breach under any
Assumed Contracts by
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Seller or, to the Knowledge of Seller, any other party has occurred and neither
Seller nor, to the Knowledge of Seller, any other party has repudiated any
provisions thereof.
4.7 PERMITS. Seller has all Permits required to conduct the
Business as now being conducted. All Permits of Seller are valid and in full
force and effect and are listed on Schedule 4.7; PROVIDED that Buyer
acknowledges that those Permits set forth on such schedule which have been
marked with an asterisks (the "Non-Transferable Permits") are not transferable
and such Non-Transferable Permits may be necessary for Buyer to obtain in order
to operate the Business as contemplated hereby. No notice to, declaration,
filing or registration with, or Permit from, any domestic or foreign
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by Seller or any Affiliate of Seller in
connection with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated hereby, other than obtaining
permits to replace Non-Transferable Permits or other Permits which may be
required due solely to the specific nature and identity of Buyer. Schedule 4.7
sets forth all consents required for the assignment by Seller to Buyer of the
rights, benefits and claims under the Assumed Contracts and for the valid
transfer of the Assets and Business and consummation of the transactions
contemplated by this Agreement. Except as set forth on Schedule 4.7, (a) none of
the rights of Seller in the Assumed Contracts or Permits will be impaired by
reason of the consummation of the transactions contemplated by this Agreement,
and (b) all of the rights of Seller in the Assumed Contracts will be enforceable
by Buyer after the Closing to the same extent as if the transactions
contemplated hereby had not been consummated.
4.8 NO CONFLICT OR VIOLATION. Neither the execution, delivery
or performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Seller with any of the provisions hereof,
will (a) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Seller, (b) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Encumbrance upon any of the Assets under, any of the terms, conditions or
provisions of any Contract, indebtedness, note, bond, indenture, security or
pledge agreement, commitment, license, lease, franchise, Permit, agreement, or
other instrument or obligation (i) to which Seller is a party or (ii) by which
the Assets are bound, (c) violate any statute, rule, regulation, ordinance,
code, order, judgment, ruling, writ, injunction, decree or award, or (d) impose
any Encumbrance, restriction or charge on the Assets or the Business except in
the case of each of clauses (b), (c) and (d) above, for such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of
Encumbrances which, in the aggregate would not have a material adverse effect on
the Assets, the Business or on the ability of Seller to consummate the
transactions contemplated hereby, or (e) require any notice to, declaration,
filing or registration with, or authorization, consent or approval of, or permit
from, any domestic or foreign governmental or regulatory body or authority, or
any other person or entity, except in connection with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act").
4.9 BOOKS AND RECORDS. Seller has made and kept (and given
Buyer access to) Books and Records, which, in reasonable detail, accurately and
fairly reflect the activities of the Business. Buyer acknowledges that it is not
entitled to review or obtain any books and records of the Seller which do not
relate to the Business.
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4.10 LITIGATION. Except as set forth on Schedule 4.10, there
is no action, order, writ, injunction, judgment or decree outstanding or any
claim, suit, litigation, proceeding, labor dispute, arbitral action,
governmental audit or investigation (collectively, "Actions") pending, or to the
best of Seller's Knowledge, threatened or-anticipated (a) against, related to or
affecting the Business or the Assets, or, with respect to the Business or the
Assets, Seller or any employees, officers or directors of Seller as such, (b)
seeking to delay, limit or enjoin the transactions contemplated by this
Agreement or (c) in which Seller is a plaintiff and related to or affecting the
Business or the Assets, including any derivative suits brought by or on behalf
of Seller. Seller is not in default with respect to or subject to any judgment,
order, writ, injunction or decree of any court or governmental agency, and there
are no unsatisfied judgments against the Business or the Assets or against
Seller in connection with the Business or the Assets. There is not a reasonable
likelihood of an adverse determination of any pending Action which may have a
material adverse effect on the Seller or the Business.
4.11 LABOR MATTERS. Seller is not a party to any labor
agreement, with respect to the employees employed in the Business, with any
labor organization, union, group or association and there are no employee unions
(nor any other similar labor or employee organizations) under local statutes,
custom or practice. With respect to the Business, Seller is in compliance in all
material respects with all applicable laws respecting employment practices,
employee documentation, terms and conditions of employment and wages and hours
and is not and has not engaged in any unfair labor practice.
4.12 LIABILITIES. With respect to the Business or the Assets,
there are no liabilities, obligations or commitments of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether matured or
unmatured), including, without limitation, Tax liabilities due or to become due,
except liabilities, obligations or commitments reflected on or reserved against
on the Balance Sheet dated September 30, 1999 or incurred in the ordinary course
of business since September 30, 1999.
4.13 COMPLIANCE WITH LAW. Except as otherwise disclosed in
Sections 4.19 and 4.20 hereof with respect to FDA regulatory matters and
Environmental Health and Safety Laws, the Business has not been conducted in
violation of, and is in compliance with, all laws, statutes, ordinances,
regulations, rules and orders of any foreign, federal, state or local government
including, without limitation, the Act, Environmental, Health and Safety Laws,
and any other governmental department or agency, and any judgment, decision,
decree or order of any court or governmental agency, department or authority,
relating to the Assets or the Business or operations of Seller.
4.14 NO BROKERS. Neither Seller nor any of its officers,
directors, employees, shareholders or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in the obligation of Buyer or any of its Affiliates to pay any
finder's fee, brokerage fees or commission or similar payment in connection with
the transactions contemplated hereby.
4.15 NO OTHER AGREEMENTS TO SELL THE ASSETS. Neither Seller
nor any of its officers, directors, shareholders or Affiliates have any
commitment or legal obligation, absolute or contingent, to any other person or
firm other than the Buyer to sell, assign, transfer, dispose of or license any
of
16
the Assets or the Business (other than inventory in the ordinary course of
business) or to enter into any agreement or cause the entering into of an
agreement with respect to any of the foregoing.
4.16 PROPRIETARY RIGHTS.
(a) PROPRIETARY RIGHTS. Schedule 4.16 lists all of Seller's
domestic (federal or state) or foreign registrations of trademarks and of other
marks, trade names or other trade rights, and all pending applications for any
such registrations and all of Seller's patents and copyrights and all pending
applications therefor in connection with the Business ("Registered or Pending
Proprietary Rights"), all other trademarks and other marks, trade names and
other trade rights or in which Seller has any interest whatsoever, and all other
trade secrets, patents, trademarks, designs, plans, specifications, technical
information and other proprietary rights, whether or not registered or created
by or on behalf of Seller, that are used in connection with the Business
(collectively, "Proprietary Rights"). True and correct copies of all patents,
and all pending applications for patents, owned, controlled, created or used by
or on behalf of Seller in connection with the Business have been provided to
Buyer.
(b) ROYALTIES AND LICENSES. Except as set forth on Schedule
4.16, (i) no person (including any corporation, association or governmental
agency) has a right to receive a royalty or similar payment in respect of any
Registered or Pending Proprietary Rights whether or not pursuant to any
contractual arrangements entered into by Seller or by virtue of any employment
arrangement or co-inventorship with any third party, and (ii) Seller has no
licenses granted, sold or otherwise transferred by or to it nor other agreements
to which it is a party, relating in whole or in part to any of the Registered or
Pending Proprietary Rights.
(c) OWNERSHIP AND PROTECTION OF PROPRIETARY RIGHTS. Except as
set forth on Schedule 4.16, Seller owns and has the sole right to use each of
the Registered or Pending Proprietary Rights. Except for applications pending,
all of the patents, registered designs and trademarks listed in the Disclosure
Schedule have been duly issued and all of the other Registered or Pending
Proprietary Rights exist, are registered and are subsisting. There are no
adverse third party actions or claims pending against Seller or any Affiliate
thereof, in any court or by or before any government body or agency, or any
written adverse third party allegations with respect to any Proprietary Right
and none of the Proprietary Rights is involved in any other pending or
threatened litigation. Seller has taken all reasonable and prudent steps to
protect the Registered or Pending Proprietary Rights from infringement by any
other firm, corporation, association or person. No other firm, corporation,
association or person (i) has notified Seller that it is claiming any ownership
of or right to use such Proprietary Rights or (ii) to the best of Seller's
Knowledge, is infringing upon any such Proprietary Rights in any way. To the
best of Seller's Knowledge, Seller's use of the Proprietary Rights is not
infringing upon or otherwise violating the rights of any third party, and no
proceedings have been instituted against or notices received by Seller that are
presently outstanding alleging that Seller's use of the Proprietary Rights
infringes upon or otherwise violates any rights of a third party. All of the
Registered or Pending Proprietary Rights are valid and enforceable rights of
Seller and will not cease to be valid and in full force and effect by reason of
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement. Seller has disclosed to Buyer
any and all material information of which it is aware concerning any potential
restrictions on Buyer's right to sell products manufactured and marketed by
Buyer in connection with the Business.
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4.17 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations
or warranties by Seller in this Agreement, nor any document, exhibit, statement,
certificate or schedule heretofore or hereinafter furnished to Buyer pursuant
hereto or in connection with the transactions contemplated hereby, including,
without limitation, the Disclosure Schedule, contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
necessary to make the statements or facts contained therein not misleading.
Seller has disclosed all events, conditions and facts materially affecting the
Business, the Assets, or the prospects and financial condition of the Business.
4.18 INVENTORY. Subject to any applicable reserves set forth
on the Balance Sheet dated September 30, 1999, the Inventory is of good, usable
and merchantable quality and condition and conforms with Seller's documented
quality assurance processes. As of the Closing, the Inventory will include no
obsolete or discontinued items.
4.19 FDA AND OTHER REGULATORY MATTERS.
(a) Except as set forth on Schedule 4.19(a) hereto, there are
no unfulfilled outstanding agreements with or commitments to the FDA or any
other regulatory body of any kind or character with respect to any Product;
there are no adverse regulatory actions by the FDA or any other regulatory body
(domestic or foreign) pending with respect to any Product; and Seller does not
have any knowledge or information with respect to the initiation, pendency or
threat by the FDA or other such regulatory body of any adverse regulatory action
affecting any of the Products. Any Products manufactured or sold in the United
States (i) are not misbranded or adulterated and (ii) have been produced in
accordance with Good Manufacturing Practices, in each case within the meaning of
the Act and any applicable FDA, state and local regulations.
(b) The submissions made by Seller to obtain any NDA or any
other regulatory filing to be made with any foreign, federal, state or other
regulatory agency with respect to the Products were made in good faith and
contained accurate and complete data and information regarding the Products as
required by applicable laws, rules and, regulations.
4.20 ENVIRONMENTAL, HEALTH AND SAFETY LAWS.
(a) Except as set forth on Schedule 4.20(a), Seller has at all
times for the past two (2) years (i) complied with the Environmental, Health and
Safety Laws in all material respects (and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been filed or
commenced against Seller alleging any such failure to comply), (ii) obtained and
been in substantial compliance with all of the terms and conditions of all
material permits, licenses and other authorizations which are required under the
Environmental, Health and Safety Laws and (iii) complied in all material
respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables which are
contained in the Environmental, Health and Safety Laws.
(b) There is no material liability related to the operation of
the Business or the Assets (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due
or to become due), and in connection with the Business
18
or the Assets the Seller has not handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other individual to
any substance or condition, or owned or operated any property or facility in any
manner that could give rise to any material liability, for damage to any site,
location or body of water, for any illness of or personal injury to any employee
or other individual, or for any reason under any Environmental, Health and
Safety Law.
4.21 POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of or otherwise relating to the Business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows,
which representations and warranties are, as of the date hereof, and will be, as
of the Closing Date, true, complete and correct:
5.1 ORGANIZATION OF BUYER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
5.2 NO CONFLICT OR VIOLATION. Neither the execution, delivery
or performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Buyer with any of the provisions hereof,
will (a) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Buyer, (b) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Encumbrance upon any of Buyer's assets under, any of the terms, conditions or
provisions of any contract, indebtedness, note, bond, indenture, security or
pledge agreement, commitment, license, lease, franchise, permit, agreement, or
other instrument or obligation to which Buyer is a party, (c) violate any
statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award , except, in the case of each of clauses (b) and (c)
above, for such violations, conflicts, breaches, defaults, terminations or
accelerations which, in the aggregate, would not have a material adverse effect
on the ability of Buyer to consummate the transactions contemplated hereby.
5.3 CONSENTS AND APPROVALS. No notice to, declaration, filing
or registration with, or authorization, consent or approval of, or permit from,
any domestic or foreign governmental or regulatory body or authority, or any
other person or entity, is required to be made or obtained by Buyer in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, except in connection
with the HSR Act.
5.4 AUTHORIZATION. Buyer has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of Buyer, enforceable in accordance
with its terms and conditions.
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5.5 NO BROKERS. Neither Buyer nor any of its officers,
directors, employees, shareholders or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in the obligation of Seller or any of its Affiliates to pay any
finder's fee, brokerage fees or commission or similar payment in connection with
the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF SELLER AND BUYER
Seller and Buyer each covenant with the other as follows:
6.1 FURTHER ASSURANCES. (a) Upon the terms and subject to the
conditions contained herein, each of the parties hereto agrees, both before and
after the Closing, (i) to take, or cause to be taken, all actions and to do, or
cause to be done, all reasonable things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Articles VII and VIII below), (ii) to execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the transactions contemplated hereunder, and (iii) to cooperate with
each other in connection with the foregoing.
(b) In the event that Seller inadvertently transfers
information regarding the Excluded Business, or assets solely related thereto,
to Buyer, or Seller fails to transfer to Buyer information regarding the
Business, or assets related thereto, the parties shall cooperate with each other
to return or transfer such information or assets as is appropriate and protect
the confidentiality thereof. Buyer shall keep Seller apprised of the general
status of events pertaining directly to the Additional Payments and the
anticipated payment thereof upon Seller's reasonable request and upon reasonable
times, such requests to be made through Buyer's Representative.
6.2 NO SOLICITATION. (a) From the date hereof through the
Closing or the earlier termination of this Agreement, Seller shall not, and
shall cause its Representatives to not, directly or indirectly, enter into,
solicit, initiate or continue any discussions or negotiations with, or encourage
or respond to any inquiries or proposals by, or participate in any negotiations
with, or provide any information to, or otherwise cooperate in any other way
with, any corporation, partnership, person or other entity or group, other than
Buyer and its Representatives, concerning any sale, assignment, transfer,
disposition or licensing of all or a portion of the Assets (other than inventory
in the ordinary course of business) or the Business (each such transaction being
referred to herein as a "Proposed Acquisition Transaction").
(b) NOTIFICATION. Seller will immediately notify Buyer if any
discussions or negotiations are sought to be initiated, any inquiry or proposal
is made, or any information is requested with respect to any Proposed
Acquisition Transaction and notify Buyer of the terms of any proposal which it
may receive in respect of any such Proposed Acquisition Transaction, including
without limitation the identity of the prospective purchaser or solic
