Asset Purchase Agreement - F. Hoffman-La Roche LTd. and ICN Pharmaceuticals Inc.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
2 October 1998 by and between F.Hoffmann-La Roche Ltd, Grenzacherstrasse 124,
CH-4070 Basel, Switzerland ("Seller") on the one hand and ICN Puerto Rico, Inc.
with registered offices at Bo. Mariana Road 909 KM 1.1 Humacao, Puerto Rico
00791-9731 ("Buyer"), a wholly-owned subsidiary of ICN Pharmaceuticals, Inc.,
ICN Plaza, 3300 Hyland Avenue, Costa Mesa, CA 92626 ("ICN") and ICN acting
either as a direct party to this Agreement with respect to certain matters or as
a guarantor of performance by Buyer hereunder on the other hand.
WHEREAS Seller and Buyer are both engaged in the pharmaceutical business;
WHEREAS Seller wishes to sell and Buyer wishes to buy the Assets (as hereinafter
defined) related to certain pharmaceutical products of Seller;
WHEREAS in connection with the contemplated purchase of the Assets Seller and
ICN wish for ICN to engage also as a party to this Agreement with regard to
specific matters and to guarantee due performance by Buyer under this Agreement;
NOW THEREFORE, in consideration of the representations, warranties, covenants
and agreements set forth herein, the parties hereto agree as follows:
1. DEFINITIONS
1.1 "Active Ingredients" mean the pharmaceutical compounds known by the
chemical names set forth in Schedule 1.1 hereto.
1.2 "Affiliate" of a party means any corporation or other business entity
controlled by, controlling or under common control with, such party.
For this purpose "control" shall mean direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting or income
interest in such corporation or other business entity; provided,
however, Genentech, Inc., with offices located at 460 Point San Bruno
Boulevard, South San Francisco, California, 94080, shall not be
considered an Affiliate of Seller.
1.3 "Assets" has the meaning ascribed to such term in Article 2.
1.4 "Business" means the business as currently conducted by Seller and its
Affiliates with respect to manufacture and sale of the Products in the
Territory.
1.5 "cGMP's" shall mean the then-current Good Manufacturing Practices
applicable to the manufacture of pharmaceutical products for human use
in the Territory in accordance with regulations of the competent
authority in the Territory.
1.6 "Closing" has the meaning ascribed to such term in Article 10.1.
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1.7 "Closing Date" has the meaning ascribed to such term in Article 10.1.
1.8 "Damages" has the meaning ascribed to such term in Article 12.2.1.
1.9 "Disclosure Schedule" means the disclosure schedule delivered prior to
the Effective Date to Buyer by Seller in connection with this
Agreement. The sections of the Disclosure Schedule correspond to the
sections of this Agreement, but information disclosed in any section
of the Disclosure Schedule shall be deemed to be disclosed as to all
relevant sections thereof, except as otherwise specifically provided
herein.
1.10 "Distribution Agreements" means the agreements referred to in Article
8.10.
1.11 "DOJ" means the United States Department of Justice.
1.12 "Effective Date" means 1 October 1998.
1.13 "FDA" means the United States Food and Drug Administration.
1.14 "FTC" means the United States Federal Trade Commission.
1.15 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
1.16 "Indemnifiable Claims" has the meaning ascribed to such term in
Article 12.2.1 and 12.3.
1.17 "Indemnified Party" has the meaning ascribed to such term in Article
12.4.
1.18 "Indemnifying Party" has the meaning ascribed to such term in Article
12.4.
1.19 "Inventory" has the meaning ascribed to such term in Article 2.6.
1.20 "Know-How" has the meaning ascribed to such term in Article 2.3.
1.21 "Litigation" has the meaning as ascribed to such term in Art. 4.13.
1.22 "Marketing and Promotional Documents" has the meaning ascribed to such
term in Article 2.5.
1.23 "Material Adverse Effect" means an event that has a material adverse
effect on the Assets, taken as a whole.
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1.24 "Patents" means any patent or patent application and any and all
divisions, continuations, continuations-in-part, re-examinations,
reissues, extensions, pending or granted supplementary protection
certificates, substitutions, confirmations, registrations,
revalidations, revisions, additions and the like, of or to said patent
and patent application.
1.25 "Products" means each packaging size of each finished pharmaceutical
dosage form identified by the Trademarks as defined in Art. 2.1 below
and marketed or formerly marketed by Seller or its Affiliates or third
party distributors of Seller or Seller's Affiliates in the Territory
as defined in Art. 1.33 hereinbelow.
1.26 "Purchase Price" means such term as used in Article 3.
1.27 "Registrations" has the meaning ascribed to such term in Article 2.2.
1.28 "Roche Labeling" means the printed labels, labeling and packaging
materials, including printed carton, container label and package
inserts, as currently used by Seller and its Affiliates for each
Product.
1.29 "Roche Net Sales" means gross sales after deduction of returns,
distributor discounts, sales rebates (price reduction) and volume
(quantity) discount as well as sales taxes (e.g. value added taxes)
and other taxes directly linked to the sales (e.g. excise taxes).
1.30 "Roche Process" means, for each Product, the manufacturing process
approved in the Registrations for each such Product.
1.31 "Roche Sales Statements" means the monthly Roche Net Sales by Product
in the Territory for the twelve month period ended 31 July 1998,
attached as Schedule 1.31.
1.32 "Toll Manufacturing Agreements" means the agreement referred to in
Article 8.9.
1.33 "Territory" means worldwide except India. Buyer acknowledges that
Assets may not exist and Products may not be marketed in all countries
of the Territory.
1.34 "Trademarks" has the meaning ascribed to such term in Article 2.1.
1.35 "World-wide Safety Reports" has the meaning ascribed to such term in
Article 2.4.
2 ASSETS BEING SOLD
Subject to the terms and conditions of this Agreement, at Closing,
Seller shall sell, transfer, assign, convey and deliver or cause an
Affiliate of Seller to sell, transfer, assign, convey and deliver to
Buyer, forever, all of the rights, title, and interest of Seller or
Seller's Affiliates in the assets solely and exclusively used
for/dedicated to the Products in the Territory as listed below
(collectively, the "Assets") and Buyer shall assume all rights, title,
and interest of Seller in the Assets and all obligations and
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responsibilities associated therewith; provided that Buyer shall not
assume any liabilities relating to the Assets or the Business arising
prior to Closing or from events preceding Closing.
2.1 Trademarks: Trademarks mean the trademarks, service marks,
registrations and applications for the Territory and all goodwill
related thereto, which are set forth on Schedule 2.1 including for
each Trademark the registration or application number, owner,
registration and expiration dates, marks and class. The trademark
files contain, to the extent available, the pertaining documents, such
as the usual consent letters, coexistence and prior right agreements
which are not included in Schedule 2.1 or Schedule 2.1 (a). Schedule
2.1 may contain trademark registrations and applications which may not
be supported by use and therefore may unavoidably expire due to
non-use. Trademarks also includes any copyrights and any unregistered
trade dress that are owned by Seller which are associated solely with
the Products and (only as to trade dress) currently used on or in
association with such Products in the Territory. "Trademarks" shall
not include copyrights and trade dress associated with the divisions,
companies or corporate entities of Seller, its Affiliates or
distributors. "Trademarks" also does not include copyrights and trade
dress associated with the Products and also associated with products
not being transferred by Seller. Trademarks does not include the word
"Roche", the Roche logo, the housemark Roche or the hexagon used by
Roche. Trademarks does also not include the trademarks associated with
the hexagon or with trademarks used by Seller or its Affiliates for
other products which are not subject matter of this Agreement. Buyer
is aware that Trademarks does additionally not include the following
trademarks: (a) trademarks which are subject matter of agreements with
third parties which are listed in Schedule 2.1(a); (b) trademarks
combined with "Roche" which are listed in Schedule 2.1(b); and (c) the
associated trademarks which are listed in Schedule 2.1(c). Details and
consequences of the trademarks listed in Schedule 2.1(a), 2.1(b) and
2.1(c) are regulated in Art. 4.16 and 8.3 below.
2.2 Registrations: All marketing approvals, registrations, regulatory
files and approvals, governmental authorizations, licenses and
permits, and applications therefor, required for the marketing and
sale of the Products in the Territory that are owned by Seller or its
Affiliates (the "Registrations"), as well as the pertaining
registration dossiers. The Registrations include, without limitation,
registrations covering all sales reflected in the Roche Sales
Statements set forth in Schedule 1.31, as well as the registrations
listed in Schedule 2.2, for which there are no current sales.
2.3 Manufacturing Technology and Know-How: The ownership and/or beneficial
interest of Seller in the Roche manufacturing technology and know-how
that is solely and exclusively used in the pharmaceutical
manufacturing of any Product for the Territory, including but not
limited to specifications and test methods (Products, raw material,
packaging, stability and other applicable specifications),
pharmaceutical manufacturing and packaging instructions, master
formula, validation reports (process, analytical methods and cleaning)
to the extent available, stability data, analytical methods, records
of complaints, annual product reviews to the extent available, and
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other master documents necessary to manufacture, control, and release
of the Products by Seller (the "Know-How") including all documents
associated therewith; and a non-exclusive, perpetual, paid-up,
irrevocable, royalty-free license, with right to sub-license, to use
any manufacturing technology and know-how that are necessary or used
in pharmaceutical manufacturing of any Product (but not exclusively
used thereto) with such license or sub-license being restricted to use
for the Products in the Territory and Seller retains the right to use
or to license such manufacturing technology and know-how for use with
any products in the Territory except for Competing Products as defined
in Art. 6.5. Seller shall, to the extent available, provide a list of
all suppliers of components and raw materials, and copies of GMP audit
reports of all suppliers, whether third parties or Affiliates.
2.4 World-wide Safety Reports: A copy of the world-wide safety reports
with respect to the Products (the "World-wide Safety Reports"). Seller
shall make available to Buyer for transfer a print-out and an
electronic copy of the World-wide Safety Reports with respect to the
Products but Buyer shall have all responsibility and shall pay all
costs associated with converting such electronic copy of the
World-wide Safety Reports into the format from which Buyer can access
that information.
2.5 Marketing and Promotional Documents: The marketing and promotional
documents, such as clients lists, promotional plans and items,
promotional materials and training manuals, that are solely and
exclusively used with the Products, to the extent available in the
Territory (the "Marketing and Promotional Documents"). All such
documents shall be shipped Ex Works (Incoterms 1990) Seller's
location.
2.6 Inventory: Buyer shall in addition, pursuant to the Supply Agreement
attached as Schedule 2.6, purchase Seller's and its Affiliates'
Inventory of all finished Products (including samples), that are owned
by Seller or an Affiliate of Seller and that have been approved by
Seller as meeting specifications and otherwise saleable in the
ordinary and normal course of business as of the Effective Date (the
"Inventory").; the quantity which shall be set forth in a document
delivered by Seller at Closing, and based on a physical inventory to
be taken on 30 September 1998. The Inventory shall be shipped EX WORKS
(Incoterms 1990) Seller's location at dates mutually agreed upon by
Seller and Buyer consistent with the transfer of the marketing
responsibilities from either party to the other.
2.7 Assumed Agreements: Subject to Art. 6.2 and 7.1 Seller agrees or shall
cause an Affiliate to agree that the agreements with unaffiliated
third parties relating to the Products listed in Schedule 2.7 (the
"Assumed Agreements") shall be assigned to Buyer and Buyer shall
assume the Assumed Agreements on the same terms now existing,
provided, however, that if such Assumed Agreements cover also other
products than the Products, they shall only be assigned and assumed to
the extent they relate to the Products. Some of the Assumed Agreements
are licence manufacturing agreements under which the third party
formulates the Products ex active substances delivered by the Seller
or its Affiliates and distributes them locally for its own account.
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3 PURCHASE PRICE
3.1 Purchase Price: The purchase price for the sale, conveyance,
assignment, transfer and delivery of the Assets (except the Inventory)
provided for in Article 2 hereof shall be US$ 178,800,000.-- (US
Dollars one hundred seventy eight million eight hundred-thousand (the
"Purchase Price").
The Purchase Price shall be allocated among the Affiliates/countries
in accordance with Schedule 3.1.
3.2 Payment of Purchase Price
3.2.1 Note. At the Closing, Buyer shall deliver the Purchase Price to Seller
in the form of (a) a cash payment in the principal amount of US$
89,400,000.-- and (b) a promissory note from Buyer, as maker, to
Seller, as payee, in the principal amount of US$ 89,400,000.-- in a
form a set forth under Schedule 3.2.1(the "Note"). Concurrently with
the delivery of the Note, Seller shall assign the Note to ICN in
exchange for 2,883,871 shares of the common stock, $.01 par value
("Common Stock") of ICN. For purposes hereof, the term "Original
Common Stock" shall mean such 2,883,871 shares of Common Stock
received hereunder. The shares of Original Common Stock shall be
registered in the name of Seller (or an Affiliate of Seller, as
designated by Seller). In the event such shares are held by an
Affiliate of Seller, such Affiliate shall be deemed "Seller" for
purposes of this Section 3.2 and Seller hereby guaranties all
obligations of such Affiliate under this Section 3.2.
3.2.2 Price Guaranty. ICN guarantees that Seller will get the full Purchase
Price by December 31, 2000, or earlier if there is a change of control
over ICN, and hence, since part of the Purchase Price is paid by
shares of ICN which, at the time of signature are traded approximately
at 50% of the Guaranteed Price (as defined hereinafter) which trade
price may or may not move up to the Guaranteed Price until December
31. 2000 (or the date of a change of control), the parties agree on
the following price guaranty wording:
On December 31, 1999, on December 31, 2000 and on a Restriction
Termination Date (as defined under section 3.2.4 below and occurring
before December 31, 2000) (each a "Guaranty Date"), ICN guaranties to
Seller that the then current market price per share of ICN's Common
Stock, based on the average closing sale price on the New York Stock
Exchange for the 10 trading days prior to each such Guaranty Dates
(plus dividends paid to Seller since the Closing on such shares) (the
"Current Market Price") shall equal or exceed the applicable
Guaranteed Price (as defined below) for such Guaranty Date.
For purposes hereof, "Guaranteed Price" shall be US$ 31 (thirty one US
Dollars) plus 6% p.a. from Effective Date).
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In the event that the Current Market Price is less than the Guaranteed
Price on a Guaranty Date, ICN shall pay to Seller not later than 30
days following such Guaranty Date ((i)on December 31, 2000 and on a
Restriction Termination Date (at a Restriction Termination Date only
at the option of Seller upon Seller's request which shall be made
within 10 business days upon written information by ICN to Seller that
a Restriction Termination Date has occurred) in cash of US Dollars and
(ii) on December 31, 1999 in the form of additional shares of Common
Stock or of non-voting preferred shares (if Seller's holding in Common
Stock would increase over five percent) at the option of Seller,
valued at the then Current Market Price as of the date of payment,
which additional shares of Common Stock shall be referred to as the
"Additional Shares", or in cash as the parties shall agree; however,
in the event that ICN until and including December 31, 1999 shall have
disposed (or committed to dispose) of a material portion of its assets
the payment shall be in cash) the amount by which (A) the product (the
"Guaranteed Value") of the Guaranteed Price for such Guaranty Date
times the number of shares of Original Common Stock, owned on such
date by Seller ("Seller's Common Stock") exceed (B) the sum (the
"Actual Value") of (i) the product of the then Current Market Price
times the aggregate of the number of shares of Seller's Common Stock
and number of Additional Shares, if any, and (ii) the amount of any
dividends paid to Seller since the Closing on any Additional Shares
theretofore received by Seller (whether or not such Additional Shares
are then owned by Seller) (the "Dividend Payment") and (iii) any cash
payment made on December 31, 1999, plus interest of 6 % p.a. on such
cash payment.
In the event that, on December 31, 2000, the Actual Value exceeds the
Guaranteed Value, Seller shall, within 30 days after such date, return
to ICN (i) that amount of cash received on December 31, 1999, (only),
plus interest of 6 % p.a. on such cash payment, or (ii) that number of
Additional Shares (only) received hereunder , and valued as of the
date of such return, in the same manner as stated above, in either
case equal to the amount by which the Actual Value exceeds the
Guaranteed Value.
3.2.3 Capital Gains. In the event that Seller shall, at any time prior to
December 31, 2000, sell to any third party, excluding any Affiliate of
Seller, ICN or any Affiliate of ICN, any shares of Original Common
Stock received hereunder for a net sale price per share in excess of
the Guaranteed Price, fifty percent of such excess shall be paid to
ICN] in the form of the return of shares of Original Common Stock
received hereunder, valued, based on the Current Market Price, as of
the date of payment or in cash at Seller's option 10 days after the
month in which the sale occurred. The remaining fifty percent of such
excess shall be kept by Seller as participation in such capital gain.
On December 31, 2000, any Original Common Stock received hereunder
which remains unsold shall be deemed sold at the Current Market Price
on that date and the capital gain, if any, divided according to the
formula above. After December 31, 2000, Seller is entitled to all
additional capital gains.
3.2.4 Restrictions on Transfer. Except as provided for in this Section
3.2.4, prior to December 31, 2000, Seller shall not, without ICN's
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prior written consent, sell any of the shares of Common Stock received
hereunder unless the net price to be received by Seller would exceed
the Guaranteed Price. Seller undertakes that such a sale will be made
in a way which does not hurt the market;. Any shares of Common Stock
may be sold by Seller to an Affiliate of Seller, at any time without
restriction, provided that such Affiliate shall agree to be bound by
the terms of this Agreement relating to any such shares purchased by
it.
The foregoing restrictions shall terminate in the event (the day of
any such event, the "Restriction Termination Date") that (i) ICN shall
enter into an agreement (x) to merge or consolidate with or into any
other corporation or entity or other person (whether or not ICN is the
surviving corporation), or (y) to transfer all or a substantial part
of ICN's assets to any other unaffiliated corporation or other entity
or person, or (ii) there occurs any other corporate reorganization or
transaction or series of related transactions, following which the
present shareholders of ICN would be expected to own less in the
aggregate than 50 % of the voting power or equity of the ultimate
parent corporation or other entity surviving or resulting from such
merger, consolidation, reorganization or other transaction, or (iii)
any person shall have commenced a tender or exchange offer for any
shares of ICN Common Stock.
3.2.5 Voting Rights. Seller shall take such action as may be required so
that all shares of Common Stock received hereunder and owned by Seller
are voted in accordance with the recommendations of ICN's Board of
Directors.
3.2.6 Anti-Dilution Adjustments to Guaranteed Price. In the event that ICN
issues additional shares of Common Stock pursuant to a stock dividend,
stock distribution or subdivision, the then applicable Guaranteed
Price shall, concurrently with the effectiveness of such stock
dividend, stock distribution or subdivision, be proportionately
reduced, and in the event the outstanding shares of Common Stock of
ICN shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the
Guaranteed Price shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
3.2.7 Investment Representations of Seller. The Seller represents and
warrants to ICN as follows:
(a) Experience. It is knowledgeable, sophisticated and
experienced in making investments, and is qualified to make
decisions with respect to investment in the Common Stock.
(b) Investment. It is acquiring the Common Stock for investment
for its own account and not with a view to, or for resale in
connection with, any distribution thereof. It understands
that the shares of Common Stock (the "Shares") have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") by reason of a specified exemption from
the registration provisions of the Securities Act which
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depends upon, among other things, the bona fide nature of
its investment intent as expressed herein.
(c) Rule 144. It acknowledges that the Shares must be held
indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is
available. It has been advised or is aware of the provisions
of Rule 144 promulgated under the Securities Act.
(d) Access to Data. It has had an opportunity to discuss
business, management and financial affairs with its
management and has had the opportunity to view ICN's
facilities.
(e) Financial Condition. Its financial condition is such that it
is able to bear all risks of holding the Shares for an
indefinite period of time.
(f) Authorization. It is duly authorized to enter into this
Agreement and to consummate the transactions contemplated
hereby.
3.2.8 Registration Rights Agreement. ICN shall agree to register the Shares
under the Securities Act pursuant to a Registration Rights Agreement
in the form attached hereto as Schedule 3.2.9, which Agreement shall
be executed and delivered at the Closing.
3.3 Termination of Certain Provisions. Notwithstanding any provision of
this Agreement to the contrary, the rights and obligations of Seller
and ICN with respect to shares of Common Stock received hereunder (and
any shares issued in dividends or distributions thereon) and set forth
in Section 3.2.4 and 3.2.5. shall terminate, with respect to any such
shares of Common Stock, upon the sale of such shares by Seller to a
third party.
3.4 Payment for Inventory: In addition to the Purchase Price according to
Article 3.1 above, Buyer shall pay to Seller or an Affiliate of Seller
in US Dollars, where this is the national currency, or in Swiss
Francs, in all other countries, for the Inventory, based on the
quantity document delivered by Seller at Closing, price per unit as
set forth in Schedule 2.6. Buyer shall effect such payment so that
Seller shall receive it on its designated bank account within 90
(ninety) days from the Effective Date (but in no event prior to
Closing) subject to confirmation that inventories (other than those
for the Products Dalmane/Dalmadorm and Librax for the U.S.-market)
will not exceed 120 days supply in average
3.5 Purchase Price Adjustment: In the event a regulatory authority finally
refuses, through no fault of Buyer, to assign a Registration (i.e. a
Registration needed by Buyer to sell the Products in the market as
currently done by Seller and its Affiliates; not a registration of a
change of manufacturer, process, analysis, specification or
manufacturing site etc.) to Buyer within 2 (two) years from the
Closing Date, the Purchase Price shall be adjusted downward by an
amount based on the sales associated with such non-assigned
Registration as reflected in the Roche Sales Statements. Such purchase
price adjustment shall be paid by Seller to Buyer by returning an
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appropriate amount of shares of Original Common Stock, valued at the
Guaranteed Price as of the Guaranty Date next preceding such
adjustment plus pro rata 6% p.a or in cash at the option of Seller.
4 REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Organization: Seller is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization, with full corporate power and authority to consummate
the transactions contemplated hereby.
4.2 Authority; The execution and delivery of this Agreement by Seller and
the consummation and performance of the transactions contemplated
hereby, have been duly and validly authorized by all necessary
corporate and other proceedings, and this Agreement has been duly
authorized, executed, and delivered by Seller and, assuming the
enforceability against Buyer, constitutes the legal, valid and binding
obligation of Seller, enforceable in accordance with its terms.
4.3 Title to Assets; Except as set forth in Schedule 4.3 Seller or an
Affiliate of Seller has good and marketable title to all the Assets
and will convey good and marketable title at Closing, free and clear
of any and all liens, encumbrances, charges, claims, restrictions,
pledges, security interests, or impositions of any kind (including
those of secured parties). None of the Assets is leased, rented,
licensed, or otherwise not owned by Seller or an Affiliate.
4.4 No Violation or Conflict: The execution and delivery of this Agreement
by Seller and the performance of this Agreement (and the transactions
contemplated herein) by Seller (a) do not and will not conflict with,
violate or constitute or result in a default under any law, judgment,
order, decree, the articles of incorporation or bylaws of Seller or
any contract or agreement to which Seller is a party or by which
Seller is bound or (b) will not result in the creation or imposition
of any lien, charge, mortgage, claim, pledge, security interest,
restriction or encumbrance of any kind on, or liability with respect
to, the Assets except as otherwise provided herein or otherwise
disclosed on the Disclosure Schedule.
4.5 Patents: Seller does not own any Patents with respect to the Active
Ingredients or the Products or the manufacturing of Active Ingredients
or the Products in the Territory.
4.6 Registrations: As per Seller's central registration data bank, the
registrations covering the sales reflected in the Roche Sales
Statements, together with the registrations listed on Schedule 2.2,
constitute all Registrations held by Seller or its Affiliates in the
Territory. In the event additional registrations are discovered at any
time, they will be transferred forthwith to Buyer at Seller's expense.
Except as set forth on Schedule 4.6 of the DISCLOSURE SCHEDULE, the
Registrations (a) are in the name of Seller or an Affiliate of Seller,
(b) constitute all licenses, permits, approvals, qualifications, and
governmental specifications, authorizations or requirements which
Seller or its Affiliates have in connection with the marketing and
sale of the Products in the Territory, and (c) to the best knowledge
of Seller after due inquiry made, constitute all such licenses,
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permits, approvals, qualifications, and governmental specifications,
authorizations, and requirements necessary for the marketing and sale
of the Products in the Territory as currently conducted by Seller and
its Affiliates. All Registrations are in full force and effect. Seller
has complied with all its obligations under these Registrations and
all applicable laws and regulations. To Seller's knowledge, no
Registration is likely to be suspended, cancelled or revoked or is
likely not to qualify for assignment to Buyer provided Buyer makes
best efforts to obtain the authorities' consent to such an assignment.
It is, however, understood that Seller does not warrant the
possibility of continuation of any Registration in the name of Buyer
in the event Buyer decides to have Products manufactured by an entity
other than the company which is actually manufacturing that Product as
of the Closing Date, and, finally, Seller does not warrant any
continuation of price reimbursement for the Products by social
security institutions following the transfer of the Registrations to
Buyer. Roche shall bear 50 % of a total amount of up to USD one
million of registration fees due by Buyer for the assignment and
re-registration of the Registrations, any exceeding fees being borne
entirely by Buyer.
4.7 Inventory: As of the Effective Date, each Product in the Inventory
shall meet the specifications therefor as set forth in the
manufacturing documentation and Registrations for such Product with
the competent authority in the country concerned of the Territory. The
Inventory will be in good condition, properly stored and in compliance
with applicable laws, usable and saleable in the ordinary course of
business. The Inventory shall in each case be sufficient to maintain a
running business for 90 days. Seller represents and warrants that
since January 1, 1998 it has not made or instituted any unusual or
novel method of sale in the conduct of the Business inconsistent with
past practices.
4.8 Taxes: As of the date hereof, there are no liens for taxes upon the
Assets except for liens for current taxes not yet due and payable.
4.9 Absence of Certain Changes: As of the date hereof and as of the
Closing Date and except as otherwise disclosed on the Disclosure
Schedule, there has not been any material adverse change in the Assets
and Seller is not aware of any facts, circumstances, or proposed or
contemplated events that would have a Material Adverse Effect after
Closing.
4.10 Violations of Law: Except as set forth in Schedule 4.10, to the best
of Seller's knowledge after due inquiry made, the operation of the
Assets by Seller (i) does not violate or conflict with any law,
governmental specification, authorization, or requirement, or any
decree, judgment, order, or similar restriction in any material
respect, or (ii) has not been the subjectof an investigation or
inquiry by any governmental agency or authority regarding violations
or alleged violations, or found by any such agency or authority to be
in violation, of any law, other than investigations, inquiries or
findings that have not had, or are reasonably likely not to have, a
Material Adverse Effect.
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4.11 Financial Information:
4.11.1 Roche Sales Statements. The Roche Sales Statements are accurate and
complete in all material respects, reflect only actual bona fide
transactions, are consistent with the accounting records of the Roche
legal entities, and were prepared in accordance with International
Accounting Standards ("IAS") consistently applied.
4.11.2 Liabilities. Seller and its Affiliates have no liabilities,
contingent, absolute, accrued or otherwise, relating to the Assets.
4.12 No Government Restrictions: The Seller believes that no consent,
approval, order or authorization of, or registration, declaration or
filing with, any governmental agency is required to be obtained or
made by or with respect to Seller in connection with the execution and
delivery of this Agreement by Seller or the consummation by it of the
transactions contemplated hereby to be consummated by it except with
respect to the filing of a pre-merger notification report under the
HSR Act.
4.13 Litigation: Except as set forth on Schedule 4.13 of the Disclosure
Schedule or for adverse drug reports annexed to Schedule 4.13, the
Assets are not the subject of (i) any outstanding judgment, order,
writ, injunction or decree of any arbitrator or administrative or
governmental authority or agency, limiting, restricting or affecting
the Assets in a way that would have a Material Adverse Effect, (ii)
any pending or, to the best of Seller's knowledge, after due inquiry
made, threatened claim, suit, proceeding, charge, inquiry,
investigation or action of any kind, and (iii) any court suits filed
with respect to the Assets since 1 January 1990. To the best knowledge
of Seller, there are no claims, actions, suits, proceedings or
investigations pending or threatened by or against Seller with respect
to the transactions contemplated hereby, at law or in equity or before
or by any supranational, federal, state, municipal or other
governmental department, commission, board, agency, instrumentality or
authority.
4.14 Agreements; Required Consents for Assignment or Termination: To the
best of Seller's knowledge, Schedule 2.7 sets forth all of the Assumed
Agreements. Seller and its Affiliates and, to the best knowledge of
Seller, each other party to each Assumed Agreement has performed in
all material respects each term, covenant and condition of each
Assumed Agreement which is to be performed by them at or before the
date hereof. Each of the Assumed Agreements is in full force and
effect and constitutes the legal and binding obligation of Seller or
its Affiliate and, to the best knowledge of Seller, the other parties
thereto. Subject to Art. 6.2 and 7.1 (consent of counterparties) the
Assumed Agreements, to the extent related to the Products, are
assignable to and assumable by Buyer.
4.15 Manufacturing Technology and Know-How: The Manufacturing Technology
and Know-How will be sufficient to enable Buyer to manufacture the
Products to the same standard as Seller currently enjoys. The Product
formulations fully conform with the pertaining Registrations approved
by the competent government authorities in the Territory.
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13
4.16 Trademarks Seller or an Affiliate of Seller owns the Trademarks set
forth in Schedule 2.1 which are formally registered or applied. All
Trademark registrations set forth in Schedule 2.1 have been duly
issued and have not been cancelled, abandoned or otherwise terminated
to the best knowledge of Seller. All Trademark applications set forth
in Schedule 2.1 have been duly filed and maintained to the best
knowledge of Seller. Seller shall not be obliged to maintain any
Trademark after the Closing.
Seller will pay any fees for such renewals of any of the Trademarks as
were initiated by it prior to the Closing. All other renewal and
maintenance fees as well as the costs and expenses of defending the
Trademarks against infringements by third parties occurring after the
Closing Date shall be paid by Buyer.
Seller will arrange for the files relating to the Trademarks to be
handed over to Buyer without delay after the Closing.
Until 31 December 1998 Seller will promptly notify Buyer of any
infringement or threatened infringement of any of the Trademarks
coming to its attention and will, if the registration of the
Trademarks is still in its name, at the expense of Buyer take such
action against the infringer as Buyer may reasonably request to
restrain such infringement, or alternatively authorize Buyer or its
nominee to take such action in its own name. In the latter event,
Seller or its Affiliate will at Buyer's expense provide reasonable
assistance to Buyer.
With respect to the trademarks listed in Schedule 2.1(a) Buyer is
aware that such a trademark cannot be assigned to Buyer unless the
third party gives its consent to the assignment as may be required by
the third party or unless it is clarified that Buyer is entitled to
enter in the agreement with the third party or unless the agreement
with the third party is terminated. After Closing Seller and Buyer
will enter into negotiation with the third parties in good faith.
With respect to the trademarks listed in Schedule 2.1(b) Buyer is
aware that such a trademark cannot be assigned to Buyer as long as the
third party is entitled to insist on the use of the trademark in
combination with the trademark ROCHE. After Closing Seller and Buyer
will enter into negotiations with the third parties in good faith to
obtain their permission to the use of the trademark without the
trademark ROCHE or to obtain their permission to use trademark in
combination with a trademark owned by Buyer.
With respect to the trademarks listed in Schedule 2.1(c) Buyer is
aware that such an associated trademark can only be assigned under the
conditions that the trademark is not associated with the hexagon or
with a trademark used by Roche for other products which are not
subject matter of this Agreement and the association can be dissolved.
After Closing Seller will use all reasonable effort to obtain the
consent of the competent Trademark Authorities that the according
trademark can be assigned separately to Buyer.
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14
Seller grants to Buyer the non-exclusive right, subject to the Assumed
Agreements according to Art. 2.7 and 6.2 hereof, to use the Trademarks
listed in Schedule 2.1(a) and 2.1(c) until the aforesaid obstacles
have been removed. Seller will not grant to any further third party
the right to use the trademarks listed in Schedule 2.1(a), 2.1(b) and
2.1(c).
When the aforesaid obstacles have been removed Seller is obliged to
assign the according Trademark listed in Schedule 2.1(a), 2.1(b) and
2.1(c) to Buyer without any culpable delay according to Art. 8.3.
4.17 No Infringement of Third Party Rights: Except as set forth herein or
in the Disclosure Schedule, the use of the Assets by Seller in the
Territory does not infringe any third party rights.
5 REPRESENTATIONS AND WARRANTIES OF BUYER AND ICN
5.1 Organization: Buyer and ICN each is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization, with full corporate power and authority
to consummate the transactions contemplated hereby.
5.2 Authority: The execution and delivery of this Agreement and all other
Agreements to be executed in connection with this Agreement by Buyer
and ICN, and the consummation and performance of the transactions
contemplated hereby and thereby, have been duly and validly authorized
by all necessary corporate and other proceedings, and this Agreement
and all other Agreements to be executed in connection with this
Agreement has been duly authorized, executed, and delivered by Buyer
and ICN and, assuming the enforceability against Seller, constitutes
the legal, valid and binding obligation of Buyer and ICN respectively,
enforceable in accordance with its terms.
5.3 No Violation or Conflict:. The execution and delivery of this
Agreement and all other Agreements to be executed in connection with
this Agreement by Buyer and ICN and the performance of this Agreement
and all other Agreements to be executed in connection with this
Agreement (and the transactions contemplated herein and thereby) by
Buyer and ICN do not and will not conflict with, violate or constitute
or result in a default under any law, judgment, order, decree, the
articles of incorporation or bylaws of Buyer or ICN, or any contract
or agreement to which Buyer or ICN is a party or by which Buyer or ICN
is bound.
5.4 No Government Restrictions: Except as set forth on Schedule 5.4 and
for consents the failure of which to obtain would not have a material
adverse effect no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental agency is
required to be obtained or made by or with respect to Buyer or ICN in
connection with the execution and delivery of this Agreement and all
other Agreements to be executed in connection with this Agreement by
Buyer or ICN or the consummation by either Buyer or ICN of th
<PAGE>
15
transactions contemplated hereby to be consummated by either Buyer or
ICN except with respect to the filing of a pre-merger notification
report under the HSR Act.
5.5 Litigation: There are no claims, actions, suits, proceedings or
investigations pending or, to the best of Buyer's or ICN's knowledge,
threatened by or against Buyer or ICN with respect to the transactions
contemplated hereby, at law or in equity or before or by any
supranational, federal, state, municipal or other governmental
department, commission, board, agency, instrumentality or authority.
5.6 Capitalization. The authorized capital stock of ICN consists of
200,000,000 authorized shares of Common Stock, $ .01 par value, and
10,000,000 authorized shares of Preferred Stock, $ .01 par value. As
of May 11, 1998 there were outstanding 72,863,133shares of Common
Stock, as of July 1, 1998, 821 shares of Series D Convertible
Preferred Stock, and as of December 31, 1997 employee stock options to
purchase an aggregate of 8,920,000 shares of ICN Common Stock (of
which options to purchase an aggregate of 5,643,000 shares of ICN
Common Stock were exercisable). As of June 23, 1998 a total of 615,750
shares of Common Stock were issuable upon conversion of ICN's Series D
Convertible Preferred Stock, and a total of 20,917 shares of Common
Stock were issuable upon the conversion of certain other convertible
debt securities of ICN. All outstanding shares of capital stock of ICN
have been duly authorized and validly issued and are fully paid and
non-assessable. Except as set forth in this Section and this
Agreement, that certain Agreement for the Sale and Purchase of a
Portfolio of Pharmaceutical, OTC and Consumer Healthcare Products by
and between Smith Kline Beecham P.L.C. and ICN Pharmaceuticals, Inc.
and that certain Stock Purchase Agreement by and between ICN
Pharmaceuticals, Inc. and Schering-Plough Corporation dated July 28,
1995, and except for changes since December 31, 1997 resulting from
the exercise of employee stock options outstanding on such date, there
are outstanding (a) no shares of capital stock or other voting
securities of ICN, (b) no securities of ICN convertible into or
exchangeable for shares of capital stock or voting securities of ICN,
and no options or other rights to acquire from ICN, and (c) no
obligation of ICN to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or
voting securities of ICN (the items in clauses (a), (b) and (c) being
referred to collectively as "Company Securities"). There are no
outstanding obligations of ICN or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities.
<PAGE>
16
5.7 Shares to be Issued to Seller. Upon the consummation of the
transactions contemplated hereby, all shares of Common Stock of ICN to
be issued to Seller will have been validly issued, fully paid and
non-assessable and will be free and clear of any lien, charge or other
encumbrance or claim and the issuance thereof will not be subject to
any preemptive or similar rights.
5.8 SEC Filings.
(a) ICN has made available to Seller the annual reports on Form
10-K for its fiscal years ended December 31, 1996 and 1997,
its quarterly reports on Form 10-Q for its fiscal quarters
ended March 31 and June 30, 1998 its proxy or information
statements relating to meetings of, or actions taken without
a meeting by, the stockholders of ICN held since December
31,1995, and all of its other reports, statements, schedules
and registration statements filed with the Securities and
Exchange Commission (the "SEC") since December 31, 1996.
(b) As of its filing date, each such report or statement filed
pursuant to the Securities Exchange Act of 1934, as amended,
did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make
the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) Each such registration statement, as amended or
supplemented, if applicable, filed pursuant to the
Securities Act of 1933, as amended, as of the date such
statement or amendment became effective did not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading.
5.9. Financial Statements. The audited consolidated financial statements
and unaudited consolidated interim financial statements of ICN
included in its annual reports on Form 10-K and the quarterly report
on Form 10-Q referred to in Section 5.8 fairly present, in conformity
with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the
consolidated financial position of ICN and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then
ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements). For purposes of this
Agreement, "Balance Sheet" means the consolidated balance sheet of ICN
as of December 31, 1997 set forth in ICN 10-K and "Balance-Sheet Date"
means December 31, 1997.
5.10. Absence of Certain Changes. Since the Balance Sheet Date, ICN and its
subsidiaries have conducted their business in the ordinary course
consistent with past practice and, except as described in ICN's
subsequent SEC-filings, there has not been any event, occurrence or
development of a state of circumstances or facts which has had or
reasonably could be expected to have a material adverse effect on ICN.
<PAGE>
17
5.11 No Undisclosed Material Liabilities. There are no liabilities of ICN
or any of its subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other
than: (i) liabilities disclosed or provided for in the Balance Sheet;
(ii) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in
the aggregate are not material to ICN and its subsidiaries, taken as a
whole; and (iii) liabilities under this Agreement.
6 SELLER'S COVENANTS
6.1 Maintenance of Assets: Seller agrees that from the date hereof until
the Closing Date that, except as specifically disclosed in Schedule
6.1 or unless otherwise consented to by Buyer in writing, Seller shall
6.1.1 except as disclosed on the DISCLOSURE SCHEDULE maintain the Assets in
good status and condition and not sell or dispose of any of the Assets
except in the ordinary course of business;
6.1.2 continue the Business in the ordinary course of business and not make
or institute any unusual or novel methods of purchase, sale,
management, operation, or other business practice in the conduct of
the Business inconsistent with past practices;
6.1.3 not enter into any material contract or commitment, engage in any
transaction, extend credit or incur any obligation with respect to the
Assets/Business, in each case not in the usual and ordinary course of
business and consistent with normal business practices;
6.1.4 use best efforts to maintain Roche Net Sales of the Products in the
Territory until Closing. it being understood that Seller is not liable
for the effects of exchange rate fluctuations and the effects of
currency translations; and
6.1.5 promptly inform Buyer of any change in the Assets that could have a
Material Adverse Effect.
6.2 Consents: Seller shall use all reasonable best efforts to cooperate
with Buyer in obtaining the consents of the third parties to the
assignment to Buyer of the Assumed Agreements, to the extent they
relate to the Products, at the same terms as currently contained in
the Assumed Agreements; provided, however, Seller shall not be
required to make any payment of any kind whatsoever to Buyer or any
third party, or waive any rights or assume any obligations other than
those obligations set forth in the Assumed Agreements, in connection
with obtaining any such required consents.
<PAGE>
18
6.3 Disclosure Supplements: From time to time prior to the Closing Date,
Seller will promptly inform Buyer, in writing, with respect to any
matter that may arise hereafter and that, if existing or occurring
prior to the Closing Date, would have been required to be set forth or
described herein or in the Disclosure Schedule.
6.4 Access: From and after the date hereof and up to Closing (except as
otherwise provided herein), Buyer and its authorized agents, officers,
and representatives shall have access to the Assets during normal
business hours upon reasonable prior notice and at a time and manner
mutually agreed upon between Buyer and Seller in order to conduct such
examination and investigation of the Assets as is reasonably
necessary, provided that such examinations shall not unreasonably
interfere with Seller's operations and activities.
6.5 Non-Compete: Seller covenants and agrees that for a period of five
years following the Closing Date, neither Seller nor any of its
Affiliates will directly or indirectly engage in the Territory in the
manufacture, marketing and distribution of products having both the
same chemical substance and being promoted for the same indication as
the Products (hereinafter "Competing Products"). Should, during the
aforesaid five year period, either Seller or an Affiliate of Seller
as a consequence of an acquisition of a company or a business acquire
any Competing Products, Buyer shall have the right of first refusal to
acquire such Competing Products from Seller or its Affiliate at
conditions to be negotiated in good faith. Should Buyer not exercise
its right of first refusal or should subsequently held negotiations
between Seller and Buyer fail, Seller shall make good faith-efforts to
divest the Competing Products to a third party.
6.6 Further Assurances: Seller shall use all reasonable efforts to
implement the provisions of this Agreement, and for such purpose
Seller, at the request of Buyer, at or after Closing, will, without
further consideration, execute and deliver, or cause to be executed
and delivered, to Buyer such deeds, assignments, bills of sale,
consents and other instruments in addition to those required by this
Agreement, in form and substance satisfactory to Buyer, as Buyer may
reasonably deem necessary or desirable to implement any provision of
this Agreement.
7 BUYER'S COVENANTS
7.1 Consents: Buyer shall use all reasonable best efforts to obtain the
consents of the third parties to the assignment to Buyer of the
Assumed Agreements, to the extent they relate to the Products, at the
same terms as currently contained in the Assumed Agreements; provided,
however, Buyer shall not be required to make any payment of any kind
whatsoever to Seller or any third party, or waive any rights or assume
any obligations other than those obligations set forth in the Assumed
Agreements, in connection with obtaining any such required consents.
If Buyer is unable to obtain a required consent within a reasonable
period of time, Seller may, but is not obliged to terminate the
pertaining Assumed Agreement (for the Products or as a whole). For as
long as an Assumed Agreement has neither been assumed nor terminated
with respect to the Products, Seller shall continue to honor the terms
of the relevant Assumed Agreement, for the Products for the account
<PAGE>
19
and benefit of Buyer, and Buyer shall indemnify Seller for all
liability relating to the Products (and only the Products) under such
Assumed Agreement other than any liability arising from Seller's
negligence or failure to perform. Buyer shall give Seller all licenses
and marketing authorizations necessary or required and deliver all
active substances and Products received from Buyer or its Affiliates
or manufactured by Buyer or its Affiliates or third parties to
continue to fulfill its obligations under these Assumed Agreements and
any other agreement which by mistake was not listed under Schedule 2.7
(but which shall be added to Schedule 2.7) until such Assumed
Agreements (or other agreement) expire, terminate or are assigned to
Buyer with respect to the Products.
7.2 Transfer of Products: Following Closing, Buyer shall use all
reasonable best efforts and, except as otherwise set forth herein, at
its own expense, to obtain as expeditiously as possible such
governmental approvals and registrations from the competent regulatory
authorities in the Territory, as may be necessary with respect to the
manufacture and sale of the Products by Buyer or its designee (other
than Seller or an Affiliate of Seller). Notwithstanding the foregoing,
Seller shall at its expense assist with such transfers by (a) making
available to Buyer the equivalent in man-hours of time with DRAC
company (Dr. Peter) for up to an amount of Swiss Francs 20,000
(twenty-thousand)and (b) providing in an expeditious manner all
information in Seller's possession reasonably requested by Buyer to
facilitate the registration transfers. If such governmental approvals
and registrations from the competent regulatory authorities in the
Territory are not obtained by Buyer within five months from Closing
due to Buyer's failure to obtain such approvals and registrations as
expeditiously as possible, Seller and its Affiliates shall be entitled
to do anything necessary to avoid the duty, if any, to distribute the
Products concerned in the Territory concerned, including, as action of
last resort and only if Buyer fails to use its reasonable best efforts
to obtain such approvals as expeditiously as possible, the right to
de-register the Products concerned in such Territory.
7.3 Labeling: Following Closing, Buyer shall at its own expense and as
expeditiously as possible use all reasonable efforts to obtain such
approvals of competent government authorities in the Territory as may
be necessary to change Buyer's labeling for each Product in such a way
that any reference to Seller or its Affiliates are removed as well as
implement such change of labeling. Buyer may use the current Labeling
on the Inventory existing at Closing approved by Seller prior to such
use until such inventory is exhausted, subject to applicable laws and
regulations in the Territory. Buyer may, however, use the Roche
labeling only in connection with clearly identifying Buyer as the
responsible person for commercializing the Products in a way which is
customary in the industry and is to be approved in advance by Seller.
7.4 References to Seller: Other than as set forth in Article 7.3
hereinabove, any reference to Seller or its Affiliates or any use of
the trademarks, tradenames, or logos of Seller or its Affiliates by
Buyer in connection with the Products after Closing must be approved
by Seller prior to such use. It is understood that the Trademarks do
not fall under this provision.
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20
7.5 Further Assurances: Buyer shall use all reasonable efforts to
implement the provisions of this Agreement, and for such purpose
Buyer, at the request of Seller, at or after Closing, will, without
further consideration, execute and deliver, or cause to be executed
and delivered, to Seller such consents and other instruments in
addition to those required by this Agreement, in form and substance
satisfactory to Seller, as Seller may reasonably deem necessary or
desirable to implement any provision of this Agreement.
8 COVENANTS BY BUYER AND SELLER
8.1 Technology Transfer: Buyer and Seller shall work together to commence
transfer of the Know-How to Buyer promptly after Closing. Seller shall
use all reasonable efforts to assist Buyer in assuming manufacture of
the Products, provided, however, that Seller cannot ensure Buyer's
ability to successfully manufacture the Products. Seller shall have no
obligation to provide manufacturing support for any Product and Seller
shall not be responsible for any delay and other consequences, if
Buyer elects to use a process that is materially different from a
Roche Process. If Buyer elects to transfer a Roche Process, Seller
shall provide reasonable access to Seller's manufacturing facilities
and for a period of up to two years up to 50 (fifty)total man-days of
technical support free-of-charge. Thereafter, Buyer shall reimburse
Seller for providing such technical assistance at Seller's
then-standard hourly charge for rendering technical assistance, which
as of the date of this Agreement is US$ 150.00 (one hundred fifty
United States Dollars) per hour, plus all reasonable out-of-pocket
expenses incurred by Seller in rendering such assistance. Seller's
obligation to provide hands-on manufacturing support for a transferred
Product shall cease following successful manufacture of the
registration batch for such Product.
8.2 Stability Studies: As soon as possible following execution of this
Agreement, Buyer shall qualify appropriate testing sites for future
stability studies. Seller shall continue through completion all
on-going stability studies for the Products and provide Buyer with
copies of the resulting data as available.
8.3 Assignment of Trademarks: By or before Closing, Buyer and Seller shall
prepare in good faith an assignment pursuant to which Seller agrees
the Trademarks shall be assigned to Buyer. Schedule 2.1 contains
trademark registrations and applications which, as indicated by
Seller, are not supported by use and therefore may unavoidably expire
due to non-use prior to Closing. Following Closing, Buyer shall
prepare and Seller shall execute such documents as Buyer may
reasonably request in order to assign and record the assignment of the
Trademarks. Buyer shall use all reasonable efforts to record, as
expeditiously as possible, the transfer of the Trademarks in the major
markets with the competent authorities in the Territory, provided that
Buyer shall not have an obligation to transfer Trademarks in minor
markets which Buyer may not want to use. Buyer will inform Seller
within a reasonable period of time about the Trademarks Buyer does not
wish to transfer. The responsibility and expense of preparing and
filing such documents and any actions required ancillary thereto,
shall be borne solely by Buyer. Notwithstanding anything contained
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21
elsewhere herein, Buyer shall hold Seller and its Affiliates harmless
from and against any loss or damage, including but not limited to
fees, penalties, fines or third party claims, due to Buyer's failure
to record any assignment of any such Trademarks pursuant to this
Article, except if such loss or damage is due to the conduct of
Seller. The aforesaid is applicable accordingly in case that an
assignment has to be made regarding a trademark which is listed in
Schedule 2.1(a), 2.1(b) and 2.1(c).
8.4 Assignment of Registrations: As soon as practicable and in any event
within 45 (forty five) days from Closing Seller shall deliver to Buyer
current box, label and package inserts for each pack of Products as
registered in the Territory. At or following Closing, Buyer shall
prepare and Seller shall execute such documents as Buyer may
reasonably request in order to record the assignment of the
Registrations. Buyer shall pay any user fees associated with any
Product that accrues after Closing but prior to transfer of such
Registration. Notwithstanding anything contained elsewhere herein,
Buyer shall hold Seller and its Affiliates harmless from and against
any loss or damage, including but not limited to fees, penalties,
fines or third party claims, due to Buyer's failure to record any
assignment of any such Registrations pursuant to this Article, except
if such loss or damage is due to the conduct of Seller.
8.5 Access to Information: Buyer and Seller will, upon reasonable prior
notice, make available to the other, to the extent reasonably required
for the purpose of assisting Seller or Buyer in obtaining governmental
approvals and preparation of tax returns relating to the Assets, and
prosecuting or defending or preparing for the prosecution or defense
of any action, suit, claim, complaint, proceeding or investigation at
any time brought by or pending against Seller or Buyer relating to the
Assets or the Toll Manufacturing Agreements, other than in the case of
litigation between the parties hereto, such information or records (or
copies thereof) in their possession after Closing, it being understood
that attorney-client privileged information shall be excepted. In the
event Buyer or ICN are required under accounting Regulation S-X of the
U.S. Securities and Exchange Commission to file audited financial
statements of the business acquired hereunder, Buyer and Seller shall
cooperate to produce any required documents and Seller shall use all
reasonable efforts to provide Buyer in a timely manner with all
information available to Seller and necessary for Buyer to prepare
such financial statements, it being understood that Buyer shall be
responsible and pay for preparing and auditing such financial
statements. Notwithstanding any provision of this Agreement it is
understood that neither party shall be required to have any
information audited or to reconcile such information with the
accounting standards used by the receiving party or required by any
government authority.
8.6 Press Releases: Neither the Seller nor the Buyer, nor any Affiliate
thereof, will issue or cause publication of any press release or other
announcement or public communication with respect to this Agreement or
the transactions contemplated hereby without the prior written consent
of the other party, which consent will not be unreasonably withheld or
delayed. Unless otherwise required by applicable law, the Purchase
Price shall not be disclosed.
<PAGE>
22
8.7 Customer Information: Buyer and Seller shall agree on the text of a
joint announcement informing the customers in the Territory of the
transfer of the Products to Buyer or its relevant Affiliate. Should it
be appropriate for any party to make an announcement on its own, it
will have to be approved by the other party, which approval will not
be unreasonably withheld or delayed.
8.8 Government Filings: Each of the parties will use its respective
reasonable good faith efforts to obtain, and to cooperate with the
other in obtaining, all authorizations, consents, orders and approvals
of any governmental agencies, that may be or become necessary in
connection with the consummation of the transactions contemplated by
this Agreement prior to or after Closing, and to take all reasonable
actions to avoid the entry of any order or decree by any governmental
agency prohibiting the consummation of the transactions contemplated
hereby, provided, however, that Seller and its Affiliates shall not be
required to agree to any consent decree or order in connection with
the objections of the FTC or DOJ to the transactions contemplated by
the Agreement.
8.9 Toll Manufacturing Arrangements and Supply of active substances and
Products:
Before Closing Buyer and the Affiliates of Seller which manufacture
the Products shall enter into the Toll Manufacturing Agreements,
effective as from the Effective Date, in the form and with the Roche
Affiliates as attached as Schedule 8.9 (a) hereto, under which Seller
or Seller's Affiliates shall toll manufacture for Buyer or its
Affiliates the Products on the basis of active substances and/or other
necessary materials supplied by Buyer or its Affiliates free of charge
(existing toll manufacturing agreements are not renegotiated; e.g.
Taiwan). If not all Toll Manufacturing Agreements are signed until
Closing Date they shall be signed until November 30, 1999, at the
latest. The manufacturing fee for the Basel site and the fee for the
Nutley site for Fluoro-Uracil is attached under Schedule 8.9 (aa).
If the parties cannot agree otherwise, such Toll Manufacturing
Agreements shall expire 18 month after Effective Date at the latest.
Until 18 month after Effective Date Seller or its Affiliates will
supply to Buyer or its Affiliates free of charge Ex Works Basel
(Incoterms 1990) the quantities of active substances for the Products
(U.S Products excluded; see below) as set forth in Schedule 8.9 (b).
Neither Seller nor its Affiliates will manufacture and/or supply any
additional active substances.
The above does not relate to the Products Dalmane/Dalmadorm and Librax
for the U.S.-market. Seller and its Affiliates have stopped producing
active substance and galenical production of these Products. There
will therefore be no supply of active substances or finished Products
for the U.S.-market of these Products other than the inventory of such
finished Products which is purchased under this Agreement.
<PAGE>
23
Seller represents and warrants that the above mentioned active
substances shall be manufactured in accordance with the Know-How, the
applicable laws and regulations and cGMPs, and that as of the date
shipped, shall meet the specifications. Each such shipment shall be
analyzed in accordance with Seller's methods of analysis. Seller makes
no further representations and disclaims any warranties of any kind,
express or implied, to Buyer for any active substance supplied by
Seller hereunder, including without limitation any warranties of
merchantability or fitness for a particular purpose.
Subject to the following limitations, with respect to the active
substances mentioned above, Seller shall be liable for and shall
indemnify and hold harmless Buyer in respect of any and all
liabilities, losses, damages, claims or lawsuits, including but not
limited to any liabilities, losses, damages, claims or lawsuits
arising out of the manufacture, use, sale or marketing of these active
substances, including but not limited to any claims made (directly or
indirectly) by or on behalf of consumers who have purchased or
otherwise obtained and/or used the Products containing the active
substances, arising from Seller's (i) breach of this Agreement, (ii)
negligence or willful misconduct, (iii) breach of statutory duty or
(iv) act, omission or default howsoever caused on the part of Seller,
its Affiliates, employees and agents. Notwithstanding the foregoing,
(i) Seller shall not be liable to Buyer, whether in contract, tort or
otherwise, for any consequential, indirect, economic or financial loss
or damage (including, without prejudice to the generality of the
foregoing, any loss of turnover, revenue, profits, business or
goodwill) howsoever caused, and (ii) Seller's liability in respect of
shipments of active substances which do not conform to specifications
shall be limited as set out hereinabove.
Subject to the following limitations, with respect to the active
substances mentioned above, Buyer shall be liable for and shall
indemnify and hold harmless Seller in respect of any and all
liabilities, losses, damages, claims or lawsuits, including but not
limited to any liabilities, losses, damages, claims or lawsuits
arising out of the manufacture, use, sale or marketing of these active
substances, including but not limited to any claims made (directly or
indirectly) by or on behalf of consumers who have purchased or
otherwise obtained and/or used the active substances or Products
containing the active substances, arising from Buyer's (i) breach of
this Agreement, (ii) negligence or willful misconduct, (iii) breach of
statutory duty or (iv) act, omission or default howsoever caused on
the part of Buyer, its employees and agents. Notwithstanding the
foregoing, Buyer shall not be liable to Seller, whether in contract,
tort or otherwise, for any consequential, indirect, economic or
financial loss or damage (including, without prejudice to the
generality of the foregoing, any loss of turnover, revenue, profits,
business or goodwill) howsoever caused.
<PAGE>
24
8.10 Distribution Arrangements: Buyer and Seller, or their Affiliates, at
Closing shall enter into the Distribution Agreement, effective as from
the Effective Date, attached as Schedule 8.10 hereto, under which
Seller or its Affiliates shall distribute for Buyer or its Affiliates
the Products for a period of up to six month after Effective Date in
geographical areas in which such Products are currently sold and
distributed by Seller and its Affiliates (not by third parties), but
in which Buyer and its Affiliates have not yet obtained the necessary
approvals for the distribution of the Products.
8.11 Returns: Until the Closing Date, Seller shall be responsible for all
returns. From and after the Closing Date, Seller shall be responsible
for all returns arising from sales before Closing and Buyer shall be
responsible for all returns arising from sales after Closing. The
situation whereby returns after Closing increase materially beyond the
level of the previous business year, shall be governed by particular
provisions in the Distribution Agreement, the principle thereof being
to split the responsibility of such returns in a fair way between the
parties.
8.12 Adverse Events Reports. Seller shall, for as long as Seller or an
Affiliate of Seller markets products identical with the Products
outside the Territory, provide Buyer with a copy of all serious (as
defined by the International Conference on Harmonization) adverse
events concerning the Products which come to the attention of Seller.
Buyer shall, for as long as Buyer or an Affiliate of Buyer markets the
Products, provide Seller with a copy of all serious (as defined by the
International Conference on Harmonization) adverse events concerning
the Products which come to the attention of Buyer. The copies shall be
supplied as CIOMS I forms within 2 days of being processed by either
Seller or Buyer, as the case may be.
9 CONDITIONS PRECEDENT TO CLOSING
9.1 Conditions to Obligations of Buyer: The obligation of Buyer to
complete the transactions contemplated hereby is subject to the
satisfaction on or prior to the Closing Date of the following
conditions (all or any of which may be waived in whole or in part by
Buyer):
9.1.1 Representations and Warranties: The representations and warranties
made by Seller in this Agreement shall have been true and correct in
all respects as of the Closing Date with the same force and effect as
though said representations and warranties had been made on the
Closing Date (except for representations and warranties made as of a
specified date, which will be true and correct in all respects as of
the specified date).
9.1.2 Performance: Seller shall have performed and complied in all material
respects with all agreements, obligations and conditions required by
this Agreement to be so performed or complied with by it prior to or
at Closing.
9.1.3 HSR Act Approvals: All required waiting periods under the HSR Act
shall have expired or been terminated or approval has been received
from the FTC or DOJ.
<PAGE>
25
9.1.4 Government Approvals: All approvals of the competent authorities in
the Territory required for the consummation of the transactions
contemplated by this Agreement, if any, have been obtained and all
waiting periods under applicable laws, if any, shall have expired or
been terminated.
9.1.5 Litigation: No investigation, suit, action, or other proceeding shall
be threatened or pending before any court or governmental agency that
seeks the restraint, prohibition, damages, or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement unless such action would not have a
Material Adverse Effect.
9.1.6 No Adverse Change: During the period from the date of this Agreement
to the Closing Date there shall not have occurred or been discovered,
and there shall not exist on the Closing Date except for that which
has been otherwise disclosed elsewhere in this Agreement or in the
Disclosure Schedule, any condition or fact that would have a Material
Adverse Effect.
9.1.7 SEC Accounting Requirements: Seller shall provide Buyer prior to
Closing with information sufficient to allow Buyer to prepare any
financial statements concerning the business to be acquired by Buyer,
required under accounting Regulation S-X of the U.S. Securities and
Exchange Commission, to be filed by Buyer.
9.2 Conditions to Obligations of Seller: The obligation of Seller to
complete the transactions contemplated hereby is subject to the
satisfaction on or prior to the Closing Date of the following
conditions (all or any of which may be waived in whole or in part by
Seller):
9.2.1 Representations and Warranties: The representations and warranties
made by Buyer in this Agreement shall have been true and correct in
all respects as of the Closing Date with the same force and effect as
though said representations and warranties had been made on the
Closing Date (except for representations and warranties made as of a
specified date, which will be true and correct in all respects as of
the specified date).
9.2.2 Performance: Buyer shall have performed and complied in all material
respects with all agreements, obligations and conditions required by
this Agreement to be so performed or complied with by it prior to or
at Closing.
9.2.3 HSR Act Approvals: All required waiting periods under the HSR Act
shall have expired or been terminated or approval has been received
from the FTC or DOJ.
9.2.4 Government Approvals: All approvals of the competent authorities in
the Territory required for the consummation of the transactions
contemplated by this Agreement, if any, have been obtained and all
waiting periods under applicable laws, if any, shall have expired or
been terminated.
<PAGE>
26
9.2.5 Litigation: No investigation, suit, action, or other proceeding shall
be threatened or pending before any court or governmental agency that
seeks the restraint, prohibition, damages, or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement unless such action would not have a
Material Adverse Effect.
9.2.6 No Adverse Change: During the period from the date of this Agreement
to the Closing Date there shall not have occurred or been discovered,
and there shall not exist on the Closing Date except for that which
has been otherwise disclosed elsewhere in this Agreement any condition
or fact that would have a Material Adverse Effect.
10 THE CLOSING
10.1 The Closing: Subject to the satisfaction of all of the conditions to
each party's obligations set forth in Article 9 hereof (or, with
respect to any condition not satisfied, the waiver in writing thereof
by the party or parties for whose benefit the condition exists), the
closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at 10.00 a.m. (local time) on 1 November
1998 or, if any approval from any competent authority in the Territory
required for the consummation of the present transaction has not been
obtained or any waiting period to be observed has not expired or
terminated by 1 November 1998, the Closing shall take place after the
receipt of all required government approvals and after the expiry or
termination of all waiting periods agreed between the parties in good
faith (the "Closing Date"). The transfer of the Assets shall be deemed
to have occurred as of 00.01 a.m. of the Closing Date.
10.2 Deliveries by Seller. At Closing, Seller shall deliver to Buyer:
10.2.1 the General Conveyance, Assignment and Assumption document as set
forth in Schedule 10.2.1
10.2.2 The general form of assignment of the Trademarks as set forth in
Article 8.3;
10.2.3 a general form of assignment of the Registrations;
10.2.4 subject to the Distribution Agreement the Inventory and the statement
of the quantity and location of the Inventory as set forth in Article
2.6;
10.2.5 subject to contrary provisions in the Distribution Agreement the
Marketing and Promotional Documents as set forth in Article 2.5;
10.2.6 to the extent available and possible/practicable hard copies of the
registration files, Know-How documents, World-wide Safety Reports, all
as set forth in Article 2 hereinabove. All such documents, which
cannot be delivered to Buyer at Closing, shall be delivered by Seller
to Buyer as soon as practicable after Closing.
<PAGE>
27
10.2.7 the Toll Manufacturing Agreements (if signed until Closing Date);
10.2.8 the Distribution Agreement;
10.2.9 except as otherwise provided herein, such agreements, licenses,
notices, and authorizations as may be necessary and sufficient to
enable Buyer to use or operate under the Registrations (if legally
permissible) and Know-How and that Buyer has requested from Seller;
and
10.2.10 the Registration Rights Agreement
10.2.11 a receipt for the Purchase Price in accordance with Art. 3.
10.3 Deliveries by Buyer. At Closing, Buyer shall deliver or cause to be
delivered to Seller:
10.3.1 the General Conveyance, Assignment and Assumption document as set
forth in Schedule 10.2.1
10.3.2 The Purchase Price payable in accordance with Article 3 including
certificates representing the Original Common Stock;
10.3.3 the Toll Manufacturing Agreements(if signed until Closing Date);
10.3.4 the Distribution Agreement;
10.3.5 the Registration Rights Agreement.
10.4 Effects of Closing: Upon Closing the ownership of the Assets as well
as the full responsibility for the use of the Assets and the full
responsibility for the conduct of the business comprising the use of
the Assets shall pass from Seller to Buyer. Seller shall remain
exclusively responsible for the conduct of the Business prior to
Closing (including any consequences therefrom which may appear after
the Closing). Buyer shall be exclusively responsible for the conduct
of the Business from Closing. Buyer acknowledges that as per the
Closing the product liability insurance of Seller and its Affiliates
will terminate and Buyer shall be responsible for proper insurance of
the product liability and other risks relating to the Products.
The Closing shall further have the other effects provided for in this
Agreement.
11 TERMINATION
11.1 Termination: This Agreement and the transactions contemplated hereby
may be terminated at any time prior to the Closing Date:
11.1.1 By the mutual written consent of Seller and Buyer;
<PAGE>
28
11.1.2 By either Seller or Buyer if Closing shall not have occurred on or
before 26 February 1999;
11.1.3 By either Seller or Buyer if consummation of the transactions
contemplated hereby shall violate any non-appealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction; or
11.1.4 By either Seller or Buyer if there has been a material violation or
breach by the other party of any of the agreements, representations or
warranties contained in this Agreement that has not been waived in
writing, or if there has been a material failure of satisfaction of a
condition to the obligations of the other party that has not been
waived in writing, and such violation, breach, or failure has not been
cured within sixty (60) days of written notice to the other party.
11.2. Effect of Termination: If this Agreement is terminated pursuant to
Article 11.1, all further obligations of Seller and Buyer under this
Agreement shall terminate without further liability of Seller or Buyer
except (a) for the obligations of Buyer and Seller under Articles 8.6,
14, and 15.2; and (b) that such termination shall not constitute a
waiver by any party of any claim it may have for damages caused by
reason of a breach by the other party of a representation, warranty,
covenant or agreement.
12 INDEMNIFICATION
12.1 Remedy for Breach:
12.1.1 General Principle: After the Closing, the sole and exclusive remedy of
Buyer and Seller for any breach or inaccuracy of any representation or
warranty or any breach of any covenant under this Agreement by the
other party hereto shall be the indemnities contained in this Article
12.
12.1.2 Notice: Any claims that a party may have arising out of the other
party's breach of its representations and warranties or breach of a
covenant hereunder shall be notified to the other party promptly, but
in no event later than 90 (ninety) days after having reasonably
sufficient knowledge of the existence of a potential claim, by written
notice describing the claim in reasonable detail then known. Failure
to give such notice on time shall not affect the other party's
indemnification obligations hereunder except to the extent it is
prejudiced thereby.
12.1.3 Survival of representations and warranties: The representations,
warranties, covenants of Seller and Buyer contained in this Agreement
shall survive the Closing Date, but any claim for breach of
representations and warranties or of a covenant shall be entitled to
indemnification hereunder only if written notice of such claim is
given to the other party hereto no later than 18 (eighteen) months
following Closing Date except that (i) the representations and
warranties contained in Art. 5.6 and 5.7 shall survive indefinitely
and (ii) Buyer's right to notify claims with respect to the following
matters shall only terminate as follows:
<PAGE>
29
a) Claims for breach of warranties and representations
concerning Litigation (Art. 4.13) insofar as such Litigation
relatesto product liability matters shall be notified to
Seller no later than 5 (five) years following the Closing
Date;
b) Claims for breach of warranties and representations
concerning Trademarks (Art. 4.15) shall be notified to
Seller no later than 2 (two) years following the Closing
Date;
c) Claims for breach of warranties and representations
concerning taxes (Art. 4.8) may be notified to the Seller
until the expiration of the applicable statutes of
limitations for taxes relevant to such claims.
It is understood that if and when either party has done the
notification for the pertaining matter within the applicable
notification time, it may start court proceedings pursuant to Art. 14
at any time within one year of the date such claim was duly notified.
Seller and Buyer shall agree to use all reasonable efforts to mitigate
any loss or damage for which they may seek indemnification under this
Article 12.
12.2 Indemnification by Seller:
12.2.1 Claims: Subject to the limitations set forth in Article 12.2.2 to the
fullest extent permitted under applicable law, Seller shall indemnify
Buyer and its Affiliates against and agrees to hold Buyer and its
Affiliates harmless from any and all damage, loss, liability, third
party claims, and expense (collectively, "Damages") (including,
without limitation, reasonable expenses of investigation and
attorneys' fees and expenses in connection with any action, suit or
proceeding brought against Buyer or its Affiliates) incurred or
suffered by Buyer or its Affiliates arising out of (a) any
misrepresentation or breach of a warranty or covenant made by Seller
herein, (b) the maintenance of the Assets by Seller prior to Closing
or (c) the conduct of the Business by Seller or its Affiliates prior
to Closing (collectively, "Indemnifiable Claims").
12.2.2 Limitations: Notwithstanding anything to the contrary set forth
elsewhere herein, Buyer and its Affiliates shall not be entitled to
indemnification hereunder with respect to any Indemnifiable Claim
brought under Article 12.2.1 unless the amount of Damages with respect
to such Indemnifiable Claim exceeds US$ 30,000. However, Seller shall
in no event be required to pay Buyer and its Affiliates more than half
of the Purchase Price (Art. 3.1) in respect of aggregate damages
asserted pursuant to Article 12.2.1 (a) and (b) except that the
aforesaid limitation in respect of aggregate damages shall not apply
to any Indemnifiable Claim based on breach of Seller's warranties and
representations concerning Litigation in the field of product
liability.
12.2.3 Form of Indemnification: Indemnification by Seller to Buyer shall, at
Seller's option, be effected in ICN Shares, valued at the Guaranteed
Price as of the Guaranty Date next preceding such indemnification plus
pro rata 6% p.a., and/or cash. To effect any such payment in ICN
Shares, Seller shall surrender to ICN one or more certificates
representing such number of shares of Original Common Stock as shall
represent the aggregate value of the amount of any such
indemnification payment and ICN shall promptly thereupon issue to
Seller new certificates representing such number of shares of Common
Stock retained by Seller.
<PAGE>
30
12.3 Indemnification by Buyer. Buyer shall indemnify Seller and its
Affiliates against and agrees to hold Seller and its Affiliates
harmless from any and all Damages (including without limitation,
reasonable expenses of investigation and attorneys' fees and expenses
in connection with any action, suit or proceeding brought against
Seller or its Affiliates) incurred or suffered by Seller or its
Affiliates arising out of (a) any misrepresentation or breach of
warranty or covenant made by Buyer herein; or (b) the conduct of the
Business by Buyer and its Affiliates after Closing (collectively,
"Indemnifiable Claims"). Notwithstanding the foregoing, Buyer shall in
no event be required to pay Seller and its Affiliates more than half
of the Purchase Price (Art. 3.1) in respect of aggregate damages
asserted pursuant to Article 12.3 (a) and (b), except that the
aforesaid limitation shall not apply to Buyer's obligation to pay the
Purchase Price under Art. 3.1 above and the Inventory under Art. 3.5
above and all provisions related to these payments, including but not
limited to all obligations of Buyer relating to the shares of Common
Stock set forth in this Agreement and its Exhibits.
12.4 Notice: A party seeking indemnification pursuant to Article 12.2 or
12.3 (an "Indemnified Party") shall give prompt notice to the party
from whom such indemnification is sought (the "Indemnifying Party") of
the assertion of any claim, or the commencement of any action, suit or
proceeding, in respect of which indemnity is or may be sought
hereunder (whether or not the limits set forth in Article 12.2.2 have
been exceeded) and will give the Indemnifying Party such information
with respect thereto as the Indemnifying Party may reasonably request,
but no failure to give such notice shall relieve the Indemnifying
Party of any liability hereunder (except to the extent the
Indemnifying Party has suffered actual prejudice thereby).
12.5 Participation in Defense: The Indemnifying Party may, at its expense,
participate in or assume the defense of any such action, suit or
proceeding involving a third party. In such case the Indemnified Party
shall have the right (but not the duty) to participate in the defense
thereof, and to employ counsel, at its own expense, separate from
counsel employed by the Indemnifying Party in any such action and to
participate in the defense thereof. The Indemnifying Party shall be
liable for the fees and expenses of one firm as counsel (and
appropriate local counsel) employed by the Indemnified Party if the
Indemnifying Party has not assumed the defense thereof. Whether or not
the Indemnifying Party chooses to defend or prosecute any claim
involving a third party, all the parties hereto shall cooperate in the
defense or prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably
requested in connection therewith.
12.6 Settlements: The Indemnifying Party shall not be liable under this
Article for any settlement effected without its consent of any claim,
litigation or proceedings in respect of which indemnity may be sought
hereunder, unless the Indemnifying Party refuses to acknowledge
liability for indemnification under this Article 12 and/or declines to
defend the Indemnified Party in such claim, litigation or proceeding.
<PAGE>
31
3 NOTICES
Any notice required or permitted to be given hereunder shall be deemed
sufficient if sent by facsimile letter or overnight courier, or
delivered by hand to Seller or Buyer at the respective addresses and
facsimile numbers set forth below or at such other address and
facsimile number as either party hereto may designate. If sent by
facsimile letter, notice shall be deemed given when the transmission
is completed if the sender has a confirmed transmission report and if
the sender has sent a confirmation copy by registered mail. If a
confirmed transmission report does not exist, then the notice will be
deemed given when the notice is actually received by the person to
whom it is sent. If delivered by overnight courier, notice shall be
deemed given when it has been signed for. If delivered by hand, notice
shall be deemed given when received.
if to Buyer, to:
ICN Puerto Rico, Inc.
c/o ICN Pharmaceuticals, Inc.
. 3300 Hyland Avenue
. Costa Mesa, California, USA
Attention: Bill A. MacDonald
Fax: ++1 714 641 7207
if to ICN, to:
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California, USA
. Attention: General Counsel
Fax: ++1 714 641 7274
if to Seller, to:
F.Hoffmann-La Roche Ltd
CH-4070-Basel, Switzerland
Attention: Head of Corporate
Finance Business Development (CFD) department
Fax: ++41 61 688 4169
with a copy to:
F.Hoffmann-La Roche Ltd
CH-4070 Basel, Switzerland
Attention: Corporate Law Department
Fax: ++41 61 688 1396
<PAGE>
32
14 ARBITRATION AND GOVERNING LAW
14.1 Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order to preserve the status
quo or prevent irreparable harm pending the selection and confirmation
of a panel of arbitrators, any dispute, controversy, or claims arising
under, out of or relating to this Agreement (and subsequent amendments
thereof), its valid conclusion, binding effect, interpretation,
performance, breach or termination, including tort claims, shall be
referred to and finally determined by arbitration, to the exclusion of
any courts of law, in accordance with the Rules of Arbitration of the
International Chamber of Commerce as in force at the time when
initiating the arbitration. The arbitral tribunal shall consist of
three arbitrators. The place of arbitration shall be Paris, France.
The language to be used in the arbitral proceedings shall be English.
The arbitration decision shall be final and binding upon the parties
and the parties agree that any award granted pursuant to such decision
may be entered forthwith in any court of competent jurisdiction. This
arbitration clause and any award rendered pursuant to it shall be
governed by the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitration Awards signed in New York of 10
June, 1958. The party to whom a favorable ruling is awarded shall be
entitled to reimbursement of all its reasonable costs and expenses in
arbitration by the other party.
14.2 The present Agreement shall be subject to the substantive law of
Switzerland (regardless of its or any other jurisdiction's choice of
law principles).
15 ADDITIONAL TERMS
15.1 Brokers: Buyer represents to Seller that it has not employed any
investment banker, broker, finder or intermediary in connection with
the transactions contemplated hereby who might be entitled to a fee or
any commission from Seller upon consummation of the transactions
contemplated hereby. Seller represents to Buyer that it has not
employed any such Person in such connection who might be entitled to a
fee or any commission from Buyer upon consummation of the transactions
contemplated hereby.
15.2 Expenses, Taxes and Fees: Except as otherwise expressly provided in
this Agreement, all legal, accounting and other costs and expenses
incurred in connection herewith and the transactions contemplated
hereby shall be paid by the party incurring such expenses. Any
possible value added, excise or transfer taxes or HSR filing fees or
similar filing fees in other countries levied in connection with the
present Agreement shall be paid and borne solely by Buyer and are not
included in the Purchase Price according to Art. 3 above.
<PAGE>
33
15.3 Successors and Assigns: This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors
and assigns; provided that this Agreement may not be assigned by any
party without the written consent of the other party except that
either party may assign the Agreement to any of its Affiliates
provided it guarantees due performance of the Agreement by such
Affiliate.
15.4 Amendments; No Waiver: No provision of this Agreement may be amended,
revoked or waived except by a writing signed and delivered by an
authorized officer of each party. No failure or delay on the part of
either party in exercising any right hereunder will operate as a
waiver of, or impair, any such right. No single or partial exercise of
any such right will preclude any other or further exercise thereof or
the exercise of any other right. No waiver of any such right will be
deemed a waiver of any other right hereunder.
15.5 Counterparts: This Agreement may be executed in one or more
counterparts all of which shall together constitute one and the same
instrument and shall become effective when a counterpart has been
signed by Buyer and delivered to Seller and a counterpart has been
signed by Seller and delivered to Buyer.
IN WITNESS WHEREOF, this Agreement has been signed by duly authorized
representatives of each of the parties hereto as of the date first above
written.
F.Hoffmann-La Roche Ltd ICN Puerto Rico, Inc.
By /s/Dr. Max Brauchli By /s/ Bill A. MacDonald
------------------------ --------------------------------
Name Dr. Max Brauchli Name Bill A. MacDonald
------------------------ --------------------------------
Title: Title: Executive Vice President
------------------------ --------------------------------
ICN Pharmaceuticals, Inc.
By /s/ Bill A. MacDonald
---------------------------------
Name Bill A. MacDonald
---------------------------------
Title Executive Vice President
---------------------------------
<PAGE>
GUARANTY
The undersigned hereby irrevocably and unconditionally guarantees the
performance by ICN Puerto Rico, Inc. and its Affiliates of all their respective
obligations under this Agreement and the ancillary documents entered pursuant
thereto.
ICN Pharmaceuticals, Inc.
By /s/ Bill A. MacDonald
-----------------------------------
Name Bill A. MacDonald
-----------------------------------
Title Executive Vice President
-----------------------------------
<PAGE>
List of Schedules
Schedules
Schedule 1.1 (chemical names of transferred compounds)
Disclosure Schedule (Section 1.9)
Schedule 1.31 (monthly Roche Net Sales by Product for the 12 month
ended July 31, 1998)
Schedule 2.1 (Trademarks owned by Seller or an Affiliate)
Schedule 2.1(a) (Other trademark license agreements)
Schedule 2.1(b) (Trademarks combined with Roche)
Schedule 2.1(c) (Other exclusions)
Schedule 2.2 (Registrations without current sales)
Schedule 2.6 (Supply Agreement)
Schedule 2.7 (Assumed Agreements)
Schedule 3.1 (Allocation of Purchase Price)
Schedule 3.2.1 (Promissory Note)
Schedule 3.2.9 (Registration Rights Agreement)
Schedule 4.3 (Title to Assets)
Schedule 4.10 (Violations of Law)
Schedule 5.4 (Government Restrictions)
Schedule 6.1 (Maintenance of Assets)
Schedule 8.9 (a) (Toll Manufacturing Agreements)
Schedule 8.9 (aa) (Toll Fees)
Schedule 8.9 (b) (Supplied active substances)
Schedule 8.10 (Distribution Agreement)
Schedule 10.2.1 (General Conveyance, Assignment and Assumption)