Asset Purchase Agreement - Hoffmann-La Roche Inc. and ICN Pharmaceuticals Inc.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into on October 30, 1997 by and between Hoffmann-La Roche Inc., a New Jersey
corporation, with offices at 340 Kingsland Street, Nutley, New Jersey 07110
("Seller") on the one hand and ICN Pharmaceuticals, Inc., a Delaware corporation
with offices at ICN Plaza, 3300 Hyland Avenue, Costa Mesa, California 92626
("Buyer").
This Agreement sets forth the terms and conditions upon which Buyer is
purchasing from Seller and Seller is selling to Buyer the Assets (as hereinafter
defined).
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 Ingredient" means the pharmaceutical compounds known by
the chemical names fluorouracil, edrophonium chloride and levorphanol tartrate.
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 securities of or income interest in
such corporation or other business entity; provided, however, that 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 "Assigned Agreements" has the meaning ascribed to such term in
Section 2.5.
1.5 "Buyer Indemnifiable Claims" has the meaning ascribed to such term
in Section 12.1.
1.6 "Buyer Labeling" means the printed labels, labeling and packaging
materials, including printed carton, container label and package inserts, used
by Buyer and bearing Buyer's name for each Product.
1.7 "cGMP's" means the then-current Good Manufacturing Practices
applicable to the manufacture of pharmaceutical products for human use in the
United States in accordance with FDA regulations.
1.8 "Closing" has the meaning ascribed to such term in Section 10.1.
1.9 "Closing Date" has the meaning ascribed to such term in Section
10.1.
1.10 "Closing Time" means 12:01 a.m. on the date of Closing.
1.11 "Confidentiality Agreement" has the meaning ascribed to such term
in Section 11.2.
1.12 "Copyrights" has the meaning ascribed to such term in Section
2.1.
1.13 "Damages" has the meaning ascribed to such term in Section
12.1.1.
1.14 "Data Bank Documents" has the meaning ascribed to such term in
Section 2.7.
1.15 "Disclosure Schedule" means the disclosure schedule delivered
prior to the Effective Date to Buyer by Seller or to Seller by Buyer 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 of this Agreement, except as otherwise specifically provided
herein.
1.16 "DOJ" means the United States Department of Justice.
1.17 "Effective Date" means the execution date of this Agreement.
1.18 "FDA" means the United States Food and Drug Administration.
1.19 "FTC" means the United States Federal Trade Commission.
1.20 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
1.21 "Indemnified Party" has the meaning ascribed to such term in
Section 12.3.
1.22 "Indemnifying Party" has the meaning ascribed to such term in
Section 12.3.
1.23 "Intellectual Property" means the patents, the Know-How, the
Trademarks, and the Copyrights.
1.24 "Inventory" has the meaning ascribed to such term in Section 2.4.
1.25 "Inventory Statement" has the meaning ascribed to such term in
Section 9.3.1.
1.26 "Know-How" has the meaning ascribed to such term in Section 2.4.
1.27 "Law" means any federal, state, foreign, local or other law,
ordinance, rule, regulation, or governmental requirement or restriction of any
kind, and any rules, regulations, and orders promulgated thereunder.
1.28 "Material Adverse Effect" means a material adverse effect on the
Assets, taken as a whole.
1.29 "NDA" means a New Drug Application, as such term is defined by
the FDA.
1.30 "Patent Rights" means any patents or patent applications and any
and all divisions, continuations, continuations-in-part, reexaminations,
reissues, extensions, pending or granted supplementary protection, certificates,
substitutions, confirmations, registrations, revalidations, revisions, additions
and the like, of or to said patents and patent applications.
1.31 "Products" means the finished pharmaceutical products set forth
in the Registrations, including all dosage size and forms thereof.
1.32 "Product Transfer Date" shall mean October 1, 1997.
1.33 "Registrations" has the meaning ascribed to such term in Section
2.2
1.34 "Schedule" means a schedule included as part of the Disclosure
Schedule.
1.35 "Seller Indemnifiable Claims" has the meaning ascribed to such
term in Section 12.2.
1.36 "Seller Labeling" means the printed labels, labeling and
packaging materials, including printed carton, container label and package
inserts, currently used by Seller or its Affiliates for the Product.
1.37 "Seller Process" means, for each Product, the manufacturing
process approved in the NDA for such Product.
1.38 "Seller Supply Agreement" means the Supply Agreement entered into
on the Effective Date between Seller and Buyer concerning the supply of the
Product.
1.39 "Territory" means the United States of America, and its
possessions, including the Commonwealth of Puerto Rico and the United States
Virgin Islands.
1.40 "Trademarks" has the meaning ascribed to such term in Section
2.1.
<PAGE>
2. ASSETS BEING SOLD
Subject to the terms and conditions of this Agreement, at Closing,
Seller shall sell, transfer, assign, convey and deliver to Buyer, its successors
and assigns forever, all of the right, title, and interest of Seller in and to
the assets listed below in the Territory (collectively, the "Assets") and Buyer
shall assume all of the right, title, and interest of Seller in and to the
Assets and, all of the liabilities, obligations and responsibilities associated
therewith. Except as expressly stated herein, Seller does not intend to convey
and Buyer does not intend to purchase the right, title and interest of Seller in
and to any assets not listed in this Article 2 or which may be outside of the
Territory, or the obligations and responsibilities associated therewith.
2.1 Trademarks. The trademark/service mark registrations and
applications that are set forth on Schedule 2.1 and the goodwill symbolized by
such trademarks/service marks (the "Trademarks") , and any copyrights and any
unregistered trade dress that are owned by Seller which are associated solely
with the Products and used by Seller solely on or in association with such
Products (the "Copyrights"). "Trademarks" shall not include any
trademark/service marks outside of the Territory that are the same as or similar
to the Trademarks or the right to register any such trademarks-service marks.
Neither "Trademarks" nor "Copyrights" shall include copyrights, service marks
and trade dress used outside the Territory or that are primarily associated with
the divisions, companies or corporate entities of either Roche Products, Inc. or
Hoffmann-La Roche Inc., or their distributors or Affiliates.
2.2 Registrations. The NDAs that are set forth on Schedule 2.2 and the
regulatory files relating thereto (the "Registrations");
2.3 Manufacturing Technology and Know-How.
2.3.1. The manufacturing technology and know-how that is exclusively
used in the pharmaceutical manufacturing of the Products, including but not
limited to the Seller Processes, specifications and test methods for Products,
raw material, packaging, stability and other applicable specifications,
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 other master documents necessary for the manufacture,
control, and release of the Product as conducted by, or on behalf of Seller (the
"Know-How");
2.3.2 A non-exclusive, perpetual, paid-up, irrevocable and
royalty-free license, with the right to sublicense, to use any pharmaceutical
manufacturing technology and know-how that are necessary or used in
manufacturing any Product (but not exclusively used therein) with such license
being restricted to use for purposes of manufacturing, using or selling Products
only in the Territory. In no event shall "Know-How" include any pharmaceutical
manufacturing technology and know-how relating to the manufacture, use or sale
of products other than as specified herein.
2.4 Inventory.
2.4.1 The inventory consisting of the Products that are owned by
Seller and that have been approved by the Parties as meeting specifications and
otherwise saleable in the ordinary and normal course of business as of October
1, 1997, the quantity and the location of which shall be agreed upon by the
parties prior to Closing. "Inventory" shall be as described in Schedule 2.4.1
and shall not include Products that have been shipped from the plant or a
warehouse directly to distributors, wholesalers, or customers prior to October
1, 1997. Subject to Article 3, Inventory shall be shipped FOB Seller's location
to a destination designated by Buyer in writing on or before Closing By the
closing date a physical inventory will be provided by Seller of finished goods.
The October 1 inventory shall be calculated based on this closing date inventory
plus units sold in October and November, less units produced in October and
November and adjusted for any units destroyed or samples distributed in October
and November.
2.5 Assigned Agreements .
2.5.1 Trademark Agreements. All of the Seller's rights, and all
liabilities, obligations and responsibilities associated with those agreements
set forth on Schedule 2.5.1 but only to the extent such agreements relate to the
Trademarks.
2.6 Manufacturing Information. Accurate and complete copies of
Seller's Manufacturing Worksheets and copies of Seller's Manufacturing Quality
Assurance Notebooks to the extent available, as well as relevant packaging
information.
2.7 Data Bank Documents. The right to obtain copies of and reference
the animal toxicology, animal mutagenicity, human clinical study and final
reports, and drug monograph/investigator brochures, listed on Schedule 2.7 (the
"Data Bank Documents").
2.8 Worldwide Safety Reports. A hard copy of Seller's Worldwide Safety
Reports with respect to Products, but Buyer shall have all responsibility and
shall pay all costs associated with converting such Worldwide Safety Reports
into the format from which Buyer can access that information.
2.9 Marketing Information. Copies of current and past advertising and
promotional materials, to the extent that they relate exclusively to the
Products, with the understanding that Buyer will reformat same to substitute its
name for that of HLR or RPI as the case may be.
2.10 Patent Rights All patent rights to those patents that are set
forth on Schedule 2.10, and the relevant files related thereto.
<PAGE>
3. PURCHASE PRICE
3.1 Purchase Price. Subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties, covenants and
agreements of the Seller contained herein, and in consideration of the sale,
conveyance, assignment, transfer and delivery of the Assets provided for in
Article 2 hereof, Buyer will deliver at Closing the Purchase Price, consisting
of United States forty-five million eight hundred seventy-three thousand dollars
(US $45,873,000). On request of Seller, the Parties shall consult not later than
five (5) days prior to Closing to define the mode of payment.
3.2 Inventory. In addition to the Purchase Price, any finished goods
Inventory in the Inventory Statement shall be purchased by Buyer from Seller at
the price per unit as set forth in Schedule 3.2. Payment shall be made within
sixty (60) days of Closing.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth on the Disclosure Schedule attached hereto as
Schedule 4, Seller hereby represents and warrants to the Buyer as follows:
4.1 Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the New Jersey, with full
corporate power and authority to consummate the transactions contemplated
hereby.
4.2 Authority. The execution and delivery of this Agreement, and the
Supply Agreement, (collectively, the "Transaction Agreements") by Seller 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 each of the Transaction Agreements 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, except as enforcement thereof may be
limited by general principles of equity and the effect of applicable bankruptcy,
insolvency, moratorium and other similar laws of general application relating to
or affecting creditors' rights generally, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers.
4.3 Title to Assets. Except as set forth in Schedule 4.3, Seller has
good and marketable title to all the Assets it is obligated to convey hereunder,
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.
4.4 No Violation or Conflict . The execution and delivery of the
Transaction Agreements by Seller and the performance of the Transaction
Agreements (and the transactions contemplated herein) by Seller or its
Affiliates (a) will not conflict with, violate or constitute or result in a
default under any Law, judgment, order, decree, the certificate of incorporation
or bylaws of Seller, or any material contract or agreement to which Seller is a
party or by which Seller is bound, except for any conflicts, violations or
defaults that are not, singly or in the aggregate, material to Seller's ability
to consummate the transactions contemplated hereby, and (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 Registrations. The Registrations are the only registrations
currently required by the FDA to sell and market the Products in the Territory.
All registrations listed on Schedule 2.2 are valid and held by Seller.
4.6 Inventory. As of Closing, the Inventory shall meet the
specifications therefor as set forth in the manufacturing documentation and
Registrations. The Inventory will be in good condition, properly stored and
usable and saleble in the ordinary course of business. The Inventory to be
purchased by Buyer shall in each case be sufficient to maintain a running
business for ninety (90) days. Since January 1, 1997, Seller has not made or
instituted any unusual or novel method of sale concerning the Products
inconsistent with past practices.
4.7 Taxes. As of Closing, there will be no liens for taxes upon the
Assets except for liens for current taxes not yet due and payable.
4.8 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.
4.9 Violations of Law. The use of the Assets (i) does not violate or
conflict with any Law, any decree, judgment, order, or similar restriction in
the Territory in any material respect, and (ii) to the best of Seller's
knowledge, has not been the subject of 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 not reasonably
likely to have, a Material Adverse Effect.
4.10 Restrictions . Except as listed or described on the Disclosure
Schedule, and except 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 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 for the
filing of a pre-merger notification report under the HSR Act.
4.11 Litigation. Except as set forth in the Disclosure Schedule, the
Assets are not the subject of (i) any outstanding judgment, order, writ,
injunction or decree of, or settlement agreement with, any person, corporation,
business entity, court, arbitrator or administrative or governmental authority
or agency, limiting, restricting or affecting the Assets in a way that would
have a Material Adverse Effect, or (ii) to the best of Seller's knowledge, any
pending or threatened claim, suit, proceeding, charge, inquiry, investigation or
action of any kind, and (iii) any court suits filed with respect to the Product
since January 1, 1991. To the best of Seller's knowledge, 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 federal, state, municipal or other governmental
department, commission, board, agency, instrumentality or authority.
4.12 Limitation of Warranty and Disclaimers. Seller will not and does
not warrant that owners of products that are substantially similar to or
identical with the Products will not attempt to register and sell such products
in the Territory. Seller makes no representation or warranty as to the
prospects, financial or otherwise, of marketing the Products in the Territory.
EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION
AGREEMENT: (A) SELLER MAKES NO WARRANTY OF MERCHANTABILITY OF ANY OF THE ASSETS
OR OF THE FITNESS OF ANY OF THE ASSETS FOR ANY PURPOSE, AND (B) THE ASSETS ARE
TO BE SOLD PURSUANT TO THIS AGREEMENT IN AN "AS IS" CONDITION.
4.13 Sales. Net sales of Efudex in the territory for the twelve (12)
month period ending September 30, 1997 shall be no less than US $13,227,000.
4.14 Trademarks. Seller owns the Trademarks set forth in Schedule 2.1
which are formally registered. All Trademarks registrations set forth in Section
2.1 have been duly issued and have not been canceled, abandoned or otherwise
terminated to the best knowledge of Seller. Seller shall not be obligated to
maintain any Trademark after the Closing.
4.15 No Infringement of Third Party Rights. Except as set forth herein
or in the Disclosure Schedule, the use of the Products by Seller in the
Territory does not infringe any third party rights.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth on the Disclosure Schedule attached hereto as
Schedule 5, Buyer hereby represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to consummate the transactions contemplated
hereby.
5.2 Authority. The execution and delivery of this Agreement by Buyer,
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 Buyer and, assuming the enforceability against Seller, constitutes
the legal, valid and binding obligation of Buyer, enforceable in accordance with
its terms, except as enforcement thereof may be limited by general principles of
equity and the effect of applicable bankruptcy, insolvency, moratorium and other
similar laws of general application relating to or affecting creditors' rights
generally, including, without limitation, the effect of statutory or other laws
regarding fraudulent conveyances and preferential transfers.
5.3 Binding Effect. Each of the Transaction Agreements will, when
delivered at the Closing, have been duly authorized, executed and delivered by
Buyer and, assuming the enforceability against Seller, constitute the legal,
valid and binding obligation of Buyer, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by general
principles of equity and the effect of applicable bankruptcy, insolvency,
moratorium and other similar laws of general application relating to or
affecting creditors' rights generally, including, without limitation, the effect
of statutory or other laws regarding fraudulent conveyances and preferential
transfers.
5.4 No Violation or Conflict. The execution and delivery of the
Transaction Agreements by Buyer and the performance of the Transaction
Agreements (and the transactions contemplated herein) by Buyer 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
any material contract or agreement to which Buyer is a party or by which Buyer
is bound.
5.5 No Government Restrictions. Except 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 in connection with the execution and delivery of this Agreement by Buyer
or the consummation by it of the transactions contemplated hereby to be
consummated by it, except for the filing of a pre-merger notification report
under the HSR Act.
5.6 Litigation. There are no claims, actions, suits, proceedings or
investigations pending or threatened by or against Buyer with respect to the
transactions contemplated hereby, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
agency, instrumentality or authority.
<PAGE>
6. SELLER'S COVENANTS
6.1 Use of Assets . Seller agrees that from the Effective Date until
the Closing Date that, except as specifically disclosed in Schedule 6.1 as of
the Effective Date or unless otherwise consented to by Buyer in writing, Seller
shall:
6.1.1 maintain the Assets in good status and condition normal wear and
tear excepted and not sell or dispose of any Assets except sales of Product in
the ordinary course of business;
6.1.2 not make or institute any unusual or novel methods of purchase,
sale, management, operation, or other business practice with regard to the
Assets;
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, outside of the ordinary course of business;
6.1.4 not engage in any special pricing, rebate, allowance,
promotional or marketing programs inconsistent with past practices or for the
purpose of maintaining customer inventory levels of Product in excess of those
levels maintained in the past; and
6.1.5 promptly inform Buyer of any change in the Assets that could
have a Material Adverse Effect.
6.1.6 not act or omit to take any act which will cause a material
breach of any agreement impacting the Assets which would have a Material Adverse
Effect.
6.1.7 maintain insurance covering the Assets in such amounts and of
such kinds as are comparable to that in effect on the date of this Agreement, if
any;
6.1.8 shall not incur any indebtedness or liability which will or
likely would create a lien or other encumbrance against any of the Assets;
6.2 Compliance with Laws. Except as otherwise disclosed on the
Disclosure Schedule, Seller shall comply or begin to remedy such non-compliance
upon notification thereof in all material respects with all Laws and orders of
any court or federal, state, local or other governmental entity applicable to
the Assets except where such non-compliance will not have a Material Adverse
Effect.
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 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
contract assignments, bills of sale, consents and other instruments in addition
to those required by this Agreement, in form and substance reasonably
satisfactory to Buyer, as Buyer may reasonably deem necessary or desirable to
implement any provision of this Agreement.
6.6 Non-Compete: Except for products currently marketed by Seller or
its affiliates, 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.
6.7 Audit: Seller shall engage reputable auditors to conduct an audit
of the Products and the Assets transferred under this Agreement, which is
required under Regulation S-X of the U.S. Securities and Exchange Commission,
which audit will be completed and delivered to Buyer within seventy (70) days of
the Closing Date. The cost of the audit shall be the obligation of Seller.
7. BUYER'S COVENANTS
7.1 Buyer Labeling. Following Closing, Buyer shall at its own expense
and as expeditiously as possible use all reasonable efforts to notify FDA of the
transfer and to obtain such FDA approvals necessary for Buyer Labeling for each
Product.
7.2 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 reasonably satisfactory to Seller, as Seller may
reasonably deem necessary or desirable to implement any provision of this
Agreement.
7.3 Taxes. Buyer covenants and agrees to pay on a timely basis all
federal, state and local sales, transfer and use taxes and customs duties with
respect to the sale and purchase of the Assets, and Buyer covenants to reimburse
Seller for any such taxes and duties for which Seller is liable for payment
within twenty (20) business days of receiving notice from Seller of such
payment.
7.4 Operational Changes. Buyer shall not engage in any special
pricing, rebate allowance, promotional or marketing program or activities,
special returns policy or special restocking program that would impact the
normal course or level of expected returns with respect to Products sold prior
to Closing.
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 25
(twenty-five) 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 and 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 Supply Agreement . Buyer and Seller, or their respective
affiliates shall on or before Closing enter into the Supply Agreement attached
hereto as Exhibit A.
8.3 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.
8.4 Labeling. In accordance with Section 7.1, Buyer is responsible for
having Buyer Labeling submitted to the FDA as soon as possible following
Closing. Buyer may use the Seller Labeling on the Inventory until such Inventory
is exhausted. In addition, Buyer may use the Seller Labeling on each Product
manufactured by Seller or its Affiliates for Buyer until the earlier of the date
(i) the FDA approves the Buyer Labeling for use on such Product and Buyer, using
all reasonable efforts, has obtained sufficient supplies of materials with such
Labeling for use on such Product, or (ii) six (6) months following Closing,
provided, however, if at the end of such six (6) month period the FDA has not
yet approved the Buyer Labeling, then such six (6) month period shall be
extended for a period of time to be mutually agreed by the parties reasonably
required to obtain such approval, but in no event greater than an additional six
(6) months.
8.5 Use of Seller Trademarks. Other than the use of the Seller
Labeling as set forth in Section 8.4, or with respect to the Trademarks, Buyer
shall not have the right to use any trademarks, tradenames, or logos of Seller
without Seller's consent, and any such use must be approved by Seller in
advance.
8.6 Customers. All contracts governing the Products with customers of
Seller or Seller's Affiliates shall be terminated as to the Products upon
expiration of the applicable notice period, and customers shall be notified of
that termination upon Closing. Seller shall provide updated information to
assist Buyer in quantifying the impact of these terminations, provided, however,
no pricing information will be exchanged. Seller shall provide all necessary
information (except pricing information) regarding customers and contracts to
Buyer to assist in Buyer's determination of whether to enter into new contracts.
8.7 Assignment of Trademarks. At or prior to Closing, Buyer shall
prepare and Seller shall execute such assignment documents as Buyer may
reasonably request in order to record the assignment of the Trademarks. The
responsibility and expense of filing such documents and any actions required
ancillary thereto, shall be borne solely by Buyer. 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 Trademarks pursuant to this subsection, except if such
loss or damage is due to the conduct of the Seller.
8.8 Transfer of Registrations. At Closing, Buyer and Seller shall
execute such documents as Buyer may reasonably request in order to transfer the
Registrations. Buyer shall pay any user fees associated with any Product that
accrue after Closing, including user fees that accrue prior to transfer of such
Registrations. 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 file any Registration pursuant to this subsection, except
if such loss or damage is due to the conduct of the Seller.
8.9 Access to Information. Buyer and Seller will, upon reasonable
prior notice, make available to the other party such information or records
relating to the Assets which is in its possession after Closing, to the extent
reasonably required for the purpose of assisting the other party in the
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 , other than in the case of litigation
between the parties hereto, such information or records (or copies thereof) in
their possession after Closing (except if such information or records are
protected by the attorney-client privilege and the provision thereof would
destroy such privilege). Buyer and Seller shall also provide each other with
periodic drug safety updates and other information related to the Products, as
more specifically set forth in Schedule 8.9 for so long as each party continues
to manufacture and sell products containing the Active Ingredient.
8.10 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.
8.11 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.
8.12 Government Filings.
8.12.1 Within three (3) business days after the Effective Date, Buyer
will, and Seller will, or will cause the ultimate parent entity of Seller to,
make such filings, together with a request for early termination, as may be
required by the HSR Act with respect to the consummation of the transactions
contemplated by this Agreement. Thereafter, Buyer will, and Seller will, or will
cause the ultimate parent entity of Seller to, each file or cause to be filed as
promptly as practicable with the FTC and the DOJ any supplemental information
that may be requested pursuant to the HSR Act. All such filings will comply in
all material respects with the requirements of the HSR Act.
8.12.2 Within three (3) business days following the Closing Date,
Seller shall notify the Health Care Financing Administration of the transfer of
the ownership of the products to Buyer.
8.13 Rebates. Seller or its Affiliates shall be responsible for any
rebate payments to non-Affiliates with respect to the Products, whether by
agreements, government mandate or otherwise, for all Products dispensed prior to
the Product Transfer Date and for a period of thirty (30) days thereafter, and
Buyer shall be responsible for any rebate payments with respect to the Products,
whether by agreements, government mandate or otherwise, for all Products
dispensed on or after thirty (30) days following the Product Transfer Date. With
respect to Products dispensed during the calendar quarter in which Closing
occurs, Seller shall be responsible for making such rebate payments, but the
amount of such payments shall be prorated between Buyer and Seller based on the
number of days remaining in said quarter as of thirty (30) days following the
Product Transfer Date, or the end of that calendar quarter, whichever is
earlier. If Seller or an Affiliate makes payment of rebates in its own name
(after the thirty day period above) due to governmental requirements pertaining
to Products for which Buyer is responsible, Buyer will reimburse Seller or its
Affiliate such amount within thirty (30) days following the date Seller or its
Affiliate notifies Buyer that Seller or its Affiliate has made such payments.
Buyer reserves the right to request Seller to audit at Buyer's expense
($150/hour) any particular rebate charge to determine whether the rebate should
be charged to Buyer or Seller under the terms hereof.
8.14 Contract Chargebacks. As of the Closing Date, Seller or its
Affiliates shall notify all parties with purchase contracts covering the
Products that said contract will terminate as to the Product in accordance with
its terms which in no case shall exceed sixty (60) days. Seller shall be
responsible for all costs and expenses with respect to claims under contract
chargebacks for the Product for chargeback requests for Product with an invoice
date prior to Closing or during a period of sixty (60) days following Closing.
8.15 Returns. Following the Closing Date, Seller shall be responsible
for the cost and proper handling of all returns in connection with Products sold
under Seller NDC code, with the exception of the Products specified in the
Inventory Statement, and Buyer shall be responsible for the cost and proper
handling of all returns in connection with Products sold under Buyer's NDC code,
as well as those lots of Product specified in Inventory Statement.
8.16 Cooperation. Prior to the Closing Date, the parties agree to each
designate a key contact person or persons to work out further details and
procedures as the need may arise for each subsection in Article 8. These contact
persons shall be guided by the principles in Article 8, and the parties agree to
good faith cooperation to share relevant information in order to facilitate the
respective Covenants set forth in Article 8. In the event the Closing Date
occurs in the middle of a calendar quarter, the parties agree to cooperate with
each other to facilitate the timely filing of any necessary government filings.
As part of this duty to cooperate, Buyer agrees to devote sufficient corporate
resources to this specialized field of rebates and chargebacks so that Seller is
not penalized in any way.
9. CONDITIONS PRECEDENT TO CLOSING
9.1 Conditions to Obligation of Buyer. The obligations of Buyer under
this Agreement to complete the transactions contemplated hereby are 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 material 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 Third Party Approvals . All governmental approvals and any other
consents or approvals of third parties necessary for Seller to execute and
deliver this Agreement and perform its obligations hereunder shall have been
obtained and, in the case of any regulatory approval (including under the HSR
Act), all notice and waiting periods with respect thereto shall have expired or
terminated and all conditions contained in any such approval required to be
satisfied prior to consummation of the transactions contemplated hereby shall
have been satisfied, and Seller shall have delivered to Buyer copies or other
evidence of such approvals.
9.1.4 No Adverse Change. During the period from the Effective Date 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.
9.1.5 Officer's Certificate. Seller shall have delivered to Buyer a
certificate, dated the Closing Date and executed by an officer of Seller,
certifying to the fulfillment of all conditions set forth in this Section 9.1.
9.1.6 Certificate of Good Standing. Seller shall have delivered to
Buyer a certificate of good standing for Seller issued by the State of New
Jersey and the Republic of Panama dated within thirty (30) business days prior
to the Closing Date ("Seller Certificate of Good Standing").
9.1.7 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.
9.1.8 Delivery of Other Documents. Buyer shall have received (a) if
authorization and approval of the Board of Directors of Seller is required, a
certified copy of the resolutions of the Board of Directors of Seller, in effect
as of the Closing Date, authorizing and approving the execution, delivery and
performance by Seller of this Agreement and (b) such additional documents
evidencing or certifying satisfaction of the conditions specified in this
Section 9.1 as reasonably may be requested by Buyer.
9.1.9 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Buyer and Buyer's counsel, and Seller
shall have made available to Buyer for examination the originals or true and
correct copies of all documents which Buyer may reasonably request in connection
with the transactions contemplated by this Agreement.
9.2 Conditions to Obligations of Seller. The obligations of Seller
under this Agreement to complete the transactions contemplated hereby at Closing
are 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 material 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 Third Party Approvals . All governmental approvals and any other
consents or approvals of third parties necessary for Buyer to execute and
deliver this Agreement and perform its obligations hereunder shall have been
obtained and, in the case of any regulatory approval (including under the HSR
Act), all notice and waiting periods with respect thereto shall have expired or
terminated and all conditions contained in any such approval required to be
satisfied prior to consummation of the transactions contemplated hereby shall
have been satisfied, and Buyer shall have delivered to Seller copies or other
evidence of such approvals.
9.2.4 Officer's Certificate. Buyer shall have delivered to Seller a
certificate, dated the date of Closing and executed by an officer of Buyer,
certifying to the fulfillment of all conditions specified in this Section 9.2.
9.2.5 Certificate of Good Standing. Buyer shall have delivered to
Seller a certificate of good standing for Buyer issued by the State of Delaware
dated within thirty (30) business days prior to the Closing Date ("Buyer
Certificate of Good Standing").
9.2.6 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.
9.2.7 Delivery of Other Documents. Seller shall have received (a) a
certified copy of the resolutions of the Board of Directors of Buyer, in effect
as of the Closing Date, authorizing and approving the execution, delivery and
performance by Buyer of this Agreement and (b) such additional documents
evidencing or certifying satisfaction of the conditions specified in this
Section 9.2 as reasonably may be requested by Seller.
9.2.8 Proceedings and Instruments Satisfactory. Proceedings and
Instruments Satisfactory. All proceedings, corporate or other, to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller and Seller's counsel, and Buyer shall have made available to
Seller for examination the originals or true and correct copies of all documents
which Seller may reasonably request in connection with the transactions
contemplated by this Agreement.
9.3 Other Conditions. In addition to the conditions set forth in
Sections 9.1 and 9.2 above, the obligations of the parties to be performed at
the Closing are subject to the satisfaction on or prior to the Closing Date of
the following conditions:
9.3.1 Inventory Statement. Seller and Buyer shall have agreed upon and
delivered the Inventory Statement described in Section 2.4 and Article 3 above,
which shall detail the Closing Inventory and any additional Inventory.
9.3.2 Supply Agreement. Seller and Buyer, or their Affiliates, shall
have executed the Supply Agreement.
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
9:00 a.m. (local time) as soon as possible following the expiration or
termination of all required waiting periods under the HSR Act or December 1,
1997, whichever is later (the "Closing Date") at the offices of Buyer or its
Affiliate or at such other time, date and place as the parties hereto may agree
in writing. The transfer of the Assets shall be deemed to have occurred as of
the Closing Time.
10.2 Deliveries by Seller. At Closing, Seller shall deliver to Buyer
in form reasonably satisfactory to Buyer, each properly executed and dated as of
the Closing Date, where appropriate:
10.2.1 A general conveyance of the Assets;
10.2.2 Seller Certificate of Good Standing;
10.2.3 Secretary's Certificate certifying that the Board of Directors
of Seller has authorized this Agreement;
10.2.4 Officer's Certificate described in Section 9.1.5;
10.2.5 the statement of the quantity and location of inventory
described in Section 2.4;
10.2.6 completed disclosure schedules required hereunder;
10.2.7 the Supply Agreement
10.2.8 a receipt for the Purchase Price;
10.2.9 the NDA's including all correspondence with FDA related to the
Products; and
10.2.10 transfer of ownership letters to FDA;
10.3 Deliveries by Buyer. At Closing, Buyer shall deliver or cause to
be delivered to Seller:
10.3.1 The Initial Purchase Price payable in accordance with Article
3;
10.3.2 Buyer Certificate of Good Standing;
10.3.3 Secretary's Certificate certifying that the Board of Directors
of Buyer has authorized this Agreement.
10.3.4 Officer's Certificate described in Section 9.2.4; and
10.3.5 the Supply Agreement with Seller,
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.
Within sixty (60) days of Closing, Seller shall remit to Buyer a sum
representing the net proceeds of sales to customers of the Products between
October 1, 1997 and Closing. This sum shall account for historical rates of
product returns, contract chargebacks, rebates and any other offsets on these
sales, as well as allow Seller a 5% fee for distribution, general and
administrative and collection costs.
At the Closing the License Agreement and the Manufacturing Agreement
between Hoffmann-La Roche Inc. ("HLR Inc.") and ICN., both dated July 1, 1988,
as well as the related Transfer Agreement between HLR Inc. and ICN dated
November 1, 1996 pertaining to the transfer of the manufacturing of Tensilon
shall terminate with respect to Tensilon effective October 1, 1997 [subject to
business review] to the extent superseded by this Agreement, in particular the
license and the royalty provisions, it being understood that the provisions
pertaining to the transfer of the manufacturing from HLR Inc. to ICN shall
continue to apply and that HLR Inc. shall continue to supply Tensilon to ICN
until completion of the transfer of manufacturing pursuant to the Transfer
Agreement. In the event that a third party toll manufacturer manufactures these
Products for Hoffmann-La Roche Inc., the pertaining toll manufacturing
agreement(s) shall be assigned to and assumed by Buyer at Closing effective as
per the Effective Date on the same terms now existing, provided such terms are
commercially reasonable, subject to any necessary consent of the toll
manufacturer.
Similarly, at the Closing the License Agreement and the Supply
Agreement between Hoffmann-La Roche Limited ("Roche Canada.") and ICN Canada
Limited ("ICN Canada"), both dated July 1, 1988 shall terminate with respect to
Tensilon effective October 1, 1997 [subject to business review] to the extent
superseded by this Agreement, in particular the license and the royalty
provisions, it being understood that Roche Canada or an Affiliate of Roche
Canada shall continue to supply Tensilon for the period provided by this
Agreement.
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;
11.1.2 By either Seller or Buyer, if Closing shall not have occurred
on or before March 1, 1998, unless such date has been extended by mutual
agreement in writing;
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 agency having competent jurisdiction.
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 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, except that in no event shall either party be
required to Close if any of the conditions in Article 9 have not be satisfied;
11.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 11.1, all further obligations of Seller and Buyer under this
Agreement shall terminate without further liability of Seller or Buyer except
for (a) the obligations of the parties under the Confidentiality Agreement and
(b) the obligations of Buyer and Seller under Sections 8.13, 14 and 15.2.
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 hereunder.
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 Buyer's right to notify claims with respect to the following matters
shall only terminate as follows:
a) Claims for breach of warranties and representations concerning
Litigation (Art. 4.11) insofar as such Litigation relates to 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. 4.13) 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. 4.7) 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, Seller shall surrender to ICN
one or more certificates representing such number of shares of Common Stock
and/or, at Seller's option, Preferred 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 and/or Preferred Stock retained by Seller.
12.3 Indemnification of Buyer. Buyers shall indemnify Seller and it
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 no 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 and Preferred 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 actions, 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 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>
13. NOTICES
Any notice required or permitted to be given hereunder shall be deemed
sufficient if sent by United States mail or overnight courier, or delivered by
hand to Seller or Buyer at the respective addresses set forth below or at such
other address as either party hereto may designate. 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 delivered by U.S. Mail,
notice shall be deemed given five (5) business days following the postmark date.
if to Buyer, to:
ICN Pharmaceuticals, Inc.
1330 Hyland Avenue
Costa Mesa, California 92626
Attn: President
With a copy to General Counsel
if to Seller, to:
Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attn: General Counsel
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 on 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. 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.
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 except to
an Affiliate of such party without the prior written consent of the other party
other than in connection with the reincorporation of such party in another
jurisdiction.
15.4 Exhibits and Schedules. The Exhibits and Schedules attached to
this Agreement and the principles and conditions incorporated in such Exhibits
and Schedules shall be deemed integral parts of this Agreement and all
references in this Agreement to this Agreement shall encompass such Exhibits and
Schedules and the principles and conditions incorporated in such Exhibits and
Schedules.
15.5 Entire Agreement. This Agreement, the exhibits hereto, and the
Disclosure Schedule (including Disclosure Supplements, if any) embody the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede and replace all previous negotiations, understandings,
representations, writings, and contract provisions and rights relating to the
subject matter hereof.
15.6 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.
15.7 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.
15.8 Severability. The parties agree that (a) the provisions of this
Agreement shall be severable and (b) in the event that any of the provisions
hereof are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, (i) such invalid, void or otherwise unenforceable
provisions shall be automatically replaced by other provisions that are as
similar as possible in terms to such invalid, void or otherwise unenforceable
provisions but are valid and enforceable and (ii) the remaining provisions shall
remain enforceable to the fullest extent permitted by law, provided that the
rights and interests of the parties hereto shall not be materially affected.
15.9 Captions. Captions herein are inserted for convenience of
reference only and shall be ignored in the construction or interpretation of
this Agreement. Unless the context requires otherwise, all references herein to
Articles and Sections are to the articles and sections of this Agreement.
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.
HOFFMANN-LA ROCHE INC. ICN PHARMACEUTICLS, INC.
By: /s/ Ed Thiele By: /s/ Bill A. MacDonald
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Name: Ed Thiel Name: Bill A. MacDonald
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Title: Vice President Title: Executive Vice President
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Date: October 30, 1997 Date: October 30, 1997
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