1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 19, 1996
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STERIS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Ohio 0-20165 34-1482024
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
5960 Heisley Road, Mentor, Ohio 44060-1868
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(Address of Principal Executive Officers) (Zip Code)
Registrant's telephone number, including area code: (216) 354-2600
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Former Name or Former Address, if Changed Since Last Report: N/A
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 19, 1996, STERIS Corporation, through its newly-formed and
wholly-owned subsidiary Calgon Vestal, Inc., a Delaware corporation
(collectively, "STERIS"), completed the acquisition, from E.R. Squibb & Sons,
Inc. ("Squibb"), a Delaware corporation and a wholly-owned subsidiary of
Bristol-Myers Squibb Company, of the assets of the infection control and
contamination control businesses formerly carried on by Squibb through its
subsidiary, Calgon Vestal Laboratories, Inc. and the ConvaTec division of
Bristol-Myers Squibb (the "Acquired Business"). The assets acquired include two
manufacturing facilities in the St. Louis, Missouri area that STERIS intends to
use in the continuing conduct of the Acquired Business.
The purchase price for the Acquired Business, which was arrived at through
arms-length negotiations, was $75,000,000, part of which was paid from available
cash on hand and part of which was paid from a draw on STERIS's pre-existing
line of credit with a consortium of commercial banks.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION,
AND EXHIBITS
The following are filed as exhibits to this Form 8-K Current Report:
Asset Purchase Agreement by and between E.R. Squibb & Sons,
Inc. and STERIS Corporation, dated as of November 26, 1996 and
amended as of December 19, 1996 (the "Asset Purchase
Agreement")
The schedules and exhibits attached to the Asset Purchase Agreement have been
omitted pursuant to Item 601(b)(2) of Regulation S-K. Copies of these schedules
and/or exhibits will be provided to the Securities and Exchange Commission upon
request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STERIS CORPORATION
Date: January 3, 1997 By: /s/ Michael A. Keresman, III
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Michael A. Keresman, III
Senior Vice President and CFO
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EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------ -------------------
2.1 Asset Purchase Agreement by and between E.R. Squibb & Sons,
Inc. and STERIS Corporation, dated as of November 26, 1996 and
amended as of December 19, 1996
1
Exhibit 2.1
===============================================================================
ASSET PURCHASE AGREEMENT
by and between
E.R. SQUIBB & SONS, INC.
and
STERIS CORPORATION
Dated as of November 26, 1996
===============================================================================
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
1.1 Definitions............................................................... 1
ARTICLE 2
TERMS OF PURCHASE AND SALE
2.1 Purchase and Sale......................................................... 8
2.2 Purchase Price........................................................... 10
2.3 Payment of Purchase Price................................................ 13
2.4 Allocation of Purchase Price............................................. 14
2.5 Further Assurances; Consents............................................. 14
ARTICLE 3
PRELIMINARY AND FINAL CLOSING
STATEMENTS; ADJUSTMENTS
3.1 Preliminary Statement of Inventory....................................... 15
3.2 Review of Preliminary Inventory Statement................................ 16
3.3 Disputes................................................................. 16
3.4 Final Inventory Statement................................................ 16
3.5 Adjustment to the Purchase Price......................................... 17
3.6 Interest................................................................. 17
ARTICLE 4
CLOSING
4.1 Closing...................................................................... 17
4.2 Instruments of Conveyance, Transfer, Assumption, Etc......................... 17
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 Organization of the Seller and CVL; Authority........................... 19
5.2 No Violations........................................................... 19
5.3 Financial Statements.................................................... 20
5.4 Title to Properties; Absence of Liens................................... 21
5.5 Litigation.............................................................. 21
5.6 Compliance with Law..................................................... 21
5.7 Real Property........................................................... 22
5.8 Sufficiency of Assets................................................... 23
5.9 Contracts............................................................... 23
5.10 Brokers and Intermediaries.............................................. 24
5.11 Tax Matters............................................................. 25
5.12 Employee Benefits....................................................... 25
5.13 Labor Matters........................................................... 26
5.14 Intellectual Property................................................... 27
5.15 Environmental Matters................................................... 28
5.16 Products and Inventory.................................................. 29
5.17 Absence of Certain Changes or Events.................................... 29
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Organization and Authority of Buyer..................................... 30
6.2 Ability to Carry Out the Agreement...................................... 31
6.3 Brokers and Intermediaries.............................................. 31
6.4 Availability of Funds................................................... 31
6.5 Actions and Proceedings, Etc............................................ 31
ARTICLE 7
CERTAIN COVENANTS AND AGREEMENTS
OF SELLER AND BUYER
7.1 Access and Information; Confidentiality................................. 32
7.2 HSR Filings............................................................. 33
7.3 Conduct of Business; Insurance.......................................... 33
7.4 Employee Matters........................................................ 34
7.5 FIRPTA Certificate...................................................... 37
7.6 Title Insurance; Estoppel Certificates.................................. 37
7.7 Leased Vehicles......................................................... 38
7.8 Non-Solicitation of Employees........................................... 38
7.9 Books and Records; Access to Employees.................................. 39
7.10 Announcement............................................................ 39
7.11 Commercially Reasonable Efforts......................................... 40
7.12 Covenant Not to Compete; Non-Solicitation by Seller..................... 40
7.13 Confidentiality Agreements.............................................. 41
7.14 Change of Name.......................................................... 41
7.15 Use of Certain Names.................................................... 41
7.16 Consents; Transfer of Permits........................................... 42
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7.17 Mixed Product Contracts; Distributors.................................... 43
7.18 Disclaimer of Other Representations and Warranties;
Best Knowledge; Disclosure............................................... 44
ARTICLE 8
CONDITIONS PRECEDENT OF SELLER
8.1 Representations and Warranties........................................... 44
8.2 Agreements............................................................... 44
8.3 Buyer Certificate........................................................ 45
8.4 No Injunction............................................................ 45
8.5 Governmental Consents; HSR Waiting Period................................ 45
8.6 Product Supply Agreement................................................. 45
8.7 Transition Services Agreement............................................ 45
8.8 License Agreement........................................................ 45
8.9 Board of Director Approval............................................... 45
8.10 Miscellaneous Closing Deliveries......................................... 45
ARTICLE 9
CONDITIONS PRECEDENT OF BUYER
9.1 Representations and Warranties........................................... 46
9.2 Agreements............................................................... 46
9.3 Seller Certificate....................................................... 46
9.4 No Injunction............................................................ 46
9.5 Governmental Consents; HSR Waiting Period................................ 46
9.6 FIRPTA Certificate....................................................... 46
9.7 Transition Services Agreement............................................ 47
9.8 License Agreement........................................................ 47
9.9 Miscellaneous Closing Deliveries......................................... 47
ARTICLE 10
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
10.1 Survival................................................................. 47
10.2 Indemnification of Buyer and its Affiliates.............................. 47
10.3 Indemnification of Seller and its Affiliates............................. 48
10.4 Notice and Opportunity to Defend......................................... 48
10.5 Certain Limitations...................................................... 49
10.6 Product Liability Claims................................................. 50
10.7 Environmental Claims..................................................... 50
10.8 Remedies................................................................. 51
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ARTICLE 11
TERMINATION
11.1 Termination............................................................. 51
11.2 Obligations upon Termination............................................ 52
11.3 Effect of Termination................................................... 53
ARTICLE 12
MISCELLANEOUS
12.1 Bulk Transfer Laws...................................................... 53
12.2 Expenses................................................................ 53
12.3 Governing Law........................................................... 53
12.4 Waiver of Jury Trial.................................................... 53
12.5 Notices................................................................. 53
12.6 Entire Agreement........................................................ 55
12.7 Amendments.............................................................. 55
12.8 Headings; References.................................................... 55
12.9 Counterparts............................................................ 55
12.10 Parties in Interest; Assignment......................................... 55
12.11 Severability; Enforcement............................................... 56
12.12 Waiver.................................................................. 56
SCHEDULES
Schedule 1.1(a) Product Listing
Schedule 1.1(b) Licensed Patient Skin Care Products
Schedule 1.1(c) Mixed Product Contracts
Schedule 1.1(d) Retained Patient Skin Care Products
Schedule 2.5(d) Letter Regarding Warehouse Lease Extension
Schedule 5.2 No Violations and Required Consents
- Seller and CVL
Schedule 5.3 Financial Statements
Schedule 5.4 Title to Properties - Encumbrances
Schedule 5.5 Litigation
Schedule 5.6 Compliance with Law
Schedule 5.7 Real Property
Schedule 5.9 Contracts
Schedule 5.12 Employee Matters
Schedule 5.13 Labor Matters
Schedule 5.14 Intellectual Property
Schedule 5.15 Environmental Matters
Schedule 5.17 Absence of Certain Changes or Events
Schedule 5.18 Employees Receiving Increased Compensation
Schedule 7.7 Leased Vehicles
Schedule 7.12 Restricted Employees
Schedule 7.18 Seller's Knowledge
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EXHIBITS
Exhibit A Assignment of Patents
Exhibit B Assignment of Trademarks
Exhibit C Bill of Sale
Exhibit D License Agreement
Exhibit E Product Supply Agreement
Exhibit F Transition Services Agreement
Exhibit G Undertaking
Exhibit H FIRPTA Certificate
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ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT, dated as of November 26, 1996, by
and between E.R. SQUIBB & SONS, INC., a Delaware corporation (the "SELLER"), and
STERIS CORPORATION, an Ohio corporation (the "BUYER").
W I T N E S S E T H:
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WHEREAS, the Seller is in the business (the "ACQUIRED
BUSINESS") of manufacturing and selling health care infection control (including
caregiver skin care, surgical instrument decontamination and environmental
decontamination) and contamination control products listed on Schedule 1.1(a)
through ConvaTec, an unincorporated division of the Seller ("CONVATEC"), and
Calgon Vestal Laboratories, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Seller ("CVL"); and
WHEREAS, the Seller desires to sell to the Buyer, and the
Buyer desires to purchase from the Seller, certain of the assets held by the
Seller or CVL primarily for use in the Acquired Business, and the Buyer has
agreed to assume the Assumed Liabilities (as hereinafter defined), all upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual representations
and warranties and covenants made herein, the Buyer and the Seller, each
intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings set forth below:
"ACQUIRED BUSINESS" shall have the meaning set forth in
the Recital to this Agreement.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly Controlling, Controlled by, or under common
Control with such other Person.
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"AGREEMENT" means this Asset Purchase Agreement as executed on
the date hereof, together with the schedules and exhibits attached hereto, as
amended or supplemented in accordance with the terms hereof.
"ASSIGNMENT OF PATENTS" means the Assignment of Patents, to be
dated as of the Closing Date, in the form attached hereto as EXHIBIT A.
"ASSIGNMENT OF TRADEMARKS" means the Assignment of Trademarks,
to be dated as of the Closing Date, in the form attached hereto as EXHIBIT B.
"ASSUMED ENVIRONMENTAL LIABILITIES" shall have the
meaning set forth in Section 10.7(a).
"ASSUMED LIABILITIES" shall have the meaning set forth
in Section 2.2(a).
"BILL OF SALE" means the bill of sale in the form attached
hereto as EXHIBIT C.
"B-MS STOCK" means common stock, par value $0.10 per share, of
Bristol-Myers Squibb.
"BOOKS AND RECORDS" means the books, records, files and data
of the Seller and CVL relating primarily to the Acquired Business and covering
periods prior to the Closing.
"BRISTOL-MYERS SQUIBB" means Bristol-Myers Squibb Company, a
Delaware corporation and the parent company of the Seller.
"BUYER" shall have the meaning set forth in the forepart of
this Agreement.
"BUYER HOURLY PLAN TRUST" shall have the meaning set forth in
Section 7.4(c).
"BUYER INDEMNIFICATION THRESHOLD" shall have the
meaning set forth in Section 10.5(f).
"BUYER INDEMNITEE" and "BUYER INDEMNITEES" shall have the
respective meanings set forth in Section 10.2.
"CLAIMS" shall have the meaning set forth in Section
2.1(a)(ix).
"CLOSING" shall have the meaning set forth in Section
4.1.
"CLOSING DATE" shall have the meaning set forth in
Section 4.1.
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"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMPETING OPERATIONS" shall have the meaning set forth
in Section 7.12(a).
"CONFIDENTIALITY AGREEMENT" shall have the meaning set
forth in Section 7.1(b).
"CONTROL" (including the correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by contract or otherwise.
"CONVATEC" shall have the meaning set forth in the
Recitals to this Agreement;
"CVL" shall have the meaning set forth in the Recitals
to this Agreement.
"DAMAGES" shall have the meaning set forth in Section
10.2(a).
"DISPUTES AUDITOR" means Deloitte & Touche LLP or such other
public accounting firm as may be mutually agreed upon by the Seller and the
Buyer.
"DISTRIBUTORS" shall have the meaning set forth in
Section 7.17(c).
"DOJ" means the United States Department of Justice.
"EMPLOYEES" shall have the meaning set forth in Section
7.4(a).
"ENCUMBRANCES" means any and all liens, security
interests or other encumbrances.
"ENVIRONMENTAL LAWS" means any federal, state or local
statute, law or regulation in effect on the date hereof relating to pollution or
protection of the environment.
"ENVIRONMENTAL PERMITS" shall have the meaning set
forth in Section 5.15(b).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"EXCLUDED ASSETS" shall have the meaning set forth in
Section 2.1(b).
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"FINAL INVENTORY STATEMENT" shall have the meaning set
forth in Section 3.4.
"FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 5.3.
"FTC" means the United States Federal Trade Commission.
"GPO" shall have the meaning set forth in Section
7.17(b).
"HAZARDOUS MATERIALS" means any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances, pollutant,
contaminant or petroleum products (including crude oil or any fraction thereof)
defined or regulated as such in or under any Environmental Law.
"HOURLY PLAN" means the Retirement Plan for the IUE Local 823
Hourly Employees of the Seller.
"HSR ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 10.4.
"INDEMNITEE" shall have the meaning set forth in Section 10.4.
"INTELLECTUAL PROPERTY" shall have the meaning set
forth in Section 5.14.
"INVENTORY" means, collectively, (i) all raw materials, work
in progress and components either (A) located at the Properties or (B) held by
the Seller primarily for use by the Acquired Business or by third party
manufacturers or packaging contractors of the Acquired Business and (ii) all
finished products held by the Seller for use by the Acquired Business, but
excluding all finished inventories of any Retained Patient Skin Care Products.
"IUE LOCAL 823" shall have the meaning set forth in
Section 2.2(a)(iv).
"LEASE" means each lease of Leased Real Property.
"LEASED REAL PROPERTIES" means the real properties leased by
the Seller or CVL as set forth on SCHEDULE 5.7.
"LICENSE AGREEMENT" means the License Agreement to be dated as
of the Closing Date, by and between the Seller and the Buyer in the form
attached hereto as EXHIBIT D, relating to the royalty-free, non-exclusive
license to be granted by the Seller to the Buyer to use the product formulae and
certain trademarks
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in connection with the manufacture and sale by the Buyer of the Licensed Patient
Skin Care Products.
"LICENSED PATIENT SKIN CARE PRODUCTS" means the products
listed on SCHEDULE 1.1(B) packaged in the form of cartridges or refills for use
in dispensers.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
the assets, liabilities (contingent or otherwise), financial condition,
operating results or business of the Acquired Business taken as a whole.
"MATERIAL CONTRACTS" shall have the meaning set forth in
Section 5.9.
"MERCK" means Merck & Co., Inc., a Delaware corporation.
"MIXED PRODUCT CONTRACTS" means the agreements or commitments
between the Seller, ConvaTec or CVL, on the one hand, and third parties, on the
other hand, that relate to (i) both the Acquired Business and the other
businesses of the Seller, ConvaTec or CVL or (ii) both the products of the
Acquired Business and the other products of the Seller, ConvaTec or CVL,
including, without limitation, Contracts listed on SCHEDULE 1.1(C) with group
purchasing organizations or similar entities relating to the sale of products of
the Acquired Business and other products of the Seller and its Affiliates to
such group purchasing organizations or entities.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in
Section 7.4(h).
"OFFERING MEMORANDUM" shall have the meaning set forth in
Section 7.18.
"OWNED REAL PROPERTIES" means the real properties owned by CVL
as described on SCHEDULE 5.7, including buildings, improvements and fixtures
thereon or therein.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITS" shall have the meaning set forth in
Section 5.6.
"PERMITTED ENCUMBRANCES" shall have the meaning set
forth in Section 5.4(a).
"PERSON" means any individual, corporation, partnership,
trust, limited liability company, limited liability partnership or
unincorporated organization or a government or any agency or political
subdivision thereof.
"PLANS" shall have the meaning set forth in Section
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5.12(a).
"PRELIMINARY INVENTORY STATEMENT" shall have the
meaning set forth in Section 3.1.
"PRODUCT SUPPLY AGREEMENT" means the Product Supply Agreement,
to be dated as of the Closing Date, by and between the Seller and the Buyer in
the form attached hereto as EXHIBIT E, relating to the supply by the Buyer to
the Seller during the term thereof of the Retained Patient Skin Care Products.
"PROPERTIES" means, collectively, the Owned Real Properties
and the Leased Real Properties.
"PURCHASE PRICE" shall have the meaning set forth in Section
2.2(a).
"PURCHASED ASSETS" shall have the meaning set forth in Section
2.1(a).
"RESTRICTED EMPLOYEE" shall have the meaning set forth in
Section 7.12(b).
"RETAINED BOOKS AND RECORDS" means, collectively, all books,
records, files and data relating primarily to any of the Excluded Assets or
Retained Liabilities or the Seller's policies and procedures which are not
applicable to the Acquired Business including, without limitation, the minute
books of the Seller and CVL.
"RETAINED LIABILITIES" shall have the meaning set forth
in Section 2.2(b).
"RETAINED PATIENT SKIN CARE PRODUCTS" means the patient skin
care products of the Acquired Business listed on SCHEDULE 1.1(D).
"SELLER" shall have the meaning set forth in the forepart of
this Agreement.
"SELLER INDEMNIFICATION THRESHOLD" shall have the meaning set
forth in Section 10.5(d).
"SELLER INDEMNITEE" and "SELLER INDEMNITEES" shall have the
respective meanings set forth in Section 10.3.
"SEVERANCE POLICY" shall have the meaning set forth in Section
7.4(i).
"STATEMENT OF ASSETS AND LIABILITIES" shall have the meaning
set forth in Section 5.3.
"STATEMENT OF REVENUES AND DIRECT EXPENSES" shall have the
meaning set forth in Section 5.3.
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"SURVIVAL DATE" shall have the meaning set forth in Section
10.1.
"TAX" or "TAXES" means any federal, state, local or foreign
income, gross receipts, gross income profits, franchise, transfer, sales, use,
payroll, occupation, property (real or personal), excise and similar taxes
(including interest, penalties or additions to such taxes).
"TEAMSTERS LOCAL NO. 688" shall have the meaning set forth in
Section 2.2(a)(iv).
"TITLE COMPANY" shall have the meaning set forth in Section
7.6(a).
"TITLE POLICY" shall have the meaning set forth in Section
7.6(a).
"TRANSFER DOCUMENTS" means, collectively, duly executed
instruments of transfer and assignment of the Purchased Assets in form
reasonably satisfactory to the Buyer and the Seller, sufficient to vest in the
Buyer the interests in the Purchased Assets to be conveyed at the Closing in
accordance with the terms of this Agreement, including the Bill of Sale, the
Assignment of Patents and the Assignment of Trademarks.
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in
Section 7.4(b)(ii).
"TRANSFERRED UNION EMPLOYEES" shall have the meaning set forth
in Section 7.4(b)(ii).
"TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement, to be dated as of the Closing Date, by and between the Seller and the
Buyer in the form attached hereto as EXHIBIT F, relating to services to be
provided by (i) the Seller to the Buyer and (ii) by the Buyer to the Seller, in
each case, in connection with the orderly transition of the Acquired Business
from the Seller and CVL to the Buyer.
"UNDERTAKING" means the undertaking of the Buyer in the form
attached hereto as EXHIBIT G.
"UNION EMPLOYEES" shall have the meaning set forth in Section
7.4(a).
"WAREHOUSE LEASE" means the Warehouse Lease, dated July 30,
1987, between Crosby Properties Company and CVL, assigned to NF Properties
Partnership and M&L Investment, Lease Extension, dated January 2, 1991,
Amendment, dated June 26, 1991, and Consent to Assignment and Estoppel
Certificate, dated December 1, 1994, between CVL and NF Properties Limited
Partnership.
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ARTICLE 2
TERMS OF PURCHASE AND SALE
--------------------------
2.1 PURCHASE AND SALE. (a) At the Closing provided for in
Section 4.1, on the terms and subject to the conditions set forth in this
Agreement, the Seller shall, or shall cause CVL to, sell, convey, transfer,
assign and deliver to the Buyer, and the Buyer shall purchase and acquire from
the Seller and CVL, all of the right, title and interest of the Seller and CVL
in and to the assets, properties and rights held by the Seller or CVL primarily
for use by the Acquired Business (other than the Excluded Assets), as the same
may exist on the Closing Date, wherever located, and whether tangible or
intangible (collectively, the "PURCHASED ASSETS"). The Purchased Assets shall
include, but not be limited to, all of the Seller's and CVL's right, title and
interest in and to the following, as the same may exist on the Closing Date:
(i) the Properties;
(ii) all machinery, equipment, fixtures, office
furniture, tools and other tangible property that is either (A) held by
the Seller or CVL primarily for use by the Acquired Business or (B)
located at the Properties (other than any Excluded Assets located at
the Properties);
(iii) all vehicles leased for use in the United
States in connection with the Acquired Business;
(iv) all Inventory;
(v) the Books and Records (including customer
and supplier lists);
(vi) subject to Section 2.5(b), all agreements,
contracts or commitments (other than the Mixed Product Contracts)
binding on the Seller or CVL and relating primarily to the Acquired
Business and Permits of the Acquired Business;
(vii) all sales and promotional literature to the
extent they pertain to the Acquired Business;
(viii) subject to Section 2.5(b) and except as set
forth in Section 2.1(b), all Intellectual Property and all common law
rights primarily relating to the Acquired Business including, without
limitation, all Intellectual Property included on the listing attached
to SCHEDULE 5.14 or that is the subject of any of the agreements set
forth on SCHEDULE 5.14 and research and development and trade secrets,
and also the Seller's rights to damages for past, present or future
infringements with respect thereto;
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(ix) except as set forth in Section 2.1(b), all
causes of action, judgments, claims or indemnity rights (collectively,
"CLAIMS") arising out of or relating primarily to the Acquired
Business;
(x) all prepaid expenses, advances and deposits
with or paid to third parties primarily relating to the Acquired
Business;
(xi) all goodwill of the Seller solely associated
with the Acquired Business as a going concern;
(xii) all assets of the Retirement Plan for the
IUE Local 823 Hourly Employees of the Seller;
(xiii) such other assets as set forth in Section
7.4(c) of this Agreement; and
(xiv) all other assets and properties of whatever
nature reflected on the Statement of Assets and Liabilities (to the
extent not disposed of in the ordinary course of business in accordance
with past practice since the date of the Statement of Assets and
Liabilities).
(b) Notwithstanding anything in this Agreement to the
contrary, specifically excluded from the Purchased Assets are the following
(collectively, the "EXCLUDED ASSETS"):
(i) all cash, short term investments and cash
equivalents held by the Seller or CVL;
(ii) all accounts receivable of the Acquired
Business (whether or not invoices have been issued) including, but not
limited to, intercompany receivables owed by any Affiliate of the
Seller;
(iii) all insurance policies and any rights
thereunder;
(iv) the names and marks "ConvaTec," "Bristol-
Myers Squibb," "Squibb" and any names or marks derived from or
including the foregoing and any logo used in the Seller's remaining
businesses;
(v) all prepaid expenses, advances or deposits
with or paid to third parties primarily relating to any of
the Excluded Assets or Retained Liabilities;
(vi) all Retained Books and Records;
(vii) all Claims to the extent primarily arising
out of or relating to any of the Excluded Assets or Retained
Liabilities;
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(viii) all refunds, credits or overpayments with
respect to Taxes paid or accrued by the Seller, CVL or any of their
Affiliates, relating to the Acquired Business and all other payments or
deposits made by the Seller, CVL or any of their Affiliates in respect
of Taxes relating to the Acquired Business in excess of the amount of
the Seller's, CVL's or such Affiliate's liability therefor;
(ix) all rights, including Intellectual Property
and product formulae, with respect to the Retained Patient Skin Care
Products;
(x) all Mixed Product Contracts;
(xi) all inventory of finished goods of any
Retained Patient Skin Care Products;
(xii) the stock of CVL;
(xiii) one AS400 computer system located at the
Properties; and
(xiv) all causes of action, judgments, claims or
indemnity rights that the Seller, CVL or their Affiliates may have
relating to or arising out of the acquisition by CVL of the Acquired
Business from Merck on January 1, 1995, including, without limitation,
all causes of action, judgments, claims or indemnity rights under that
certain Agreement of Purchase and Sale by and among Merck, Calgon
Vestal Laboratories, Inc., CVL (formerly CVL Acquisition Corp.) and
Bristol-Myers Squibb.
2.2 PURCHASE PRICE. (a) In consideration of the sale,
conveyance, transfer, assignment and delivery of the Purchased Assets by the
Seller pursuant to Section 2.1(a), the Buyer agrees to (i) pay to the Seller
seventy-five million United States dollars (U.S.$75,000,000) subject to the
adjustment, if any, set forth in Article 3 (as adjusted, the "PURCHASE PRICE"),
and (ii) undertake, assume and agree to perform and otherwise pay, satisfy and
discharge in accordance with their respective terms, and to indemnify and hold
the Seller and its Affiliates harmless with respect to the following
(collectively, the "ASSUMED LIABILITIES"):
(i) all debts, liabilities and obligations
relating to or arising out of the ownership or use of any of the
Purchased Assets or the conduct or operation of the Acquired Business
at any time after the Closing, including, without limitation,
(A) subject to Section 2.5(b), all liabilities and
obligations under or related to the agreements, contracts,
commitments and the Permits to the extent
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(1) arising after the Closing Date and (2) included in
the Purchased Assets;
(B) all liabilities and obligations arising after
the Closing Date in respect of (1) the collective bargaining
agreement between the Seller and the International Union of
Electronic, Electrical, Salaried, Machine and Furniture
Workers, AFL-CIO, Local 823 (the "IUE LOCAL 823"), and (2) the
collective bargaining agreement between the Seller and the
International Brotherhood of Teamsters, Local No. 688 (the
"TEAMSTERS LOCAL NO. 688");
(C) all liabilities arising after the Closing Date
under the Retirement Plan for the IUE Local 823 Hourly
Employees of the Seller;
(D) all liabilities and obligations relating to
all claims and litigation involving Transferred Employees or
Transferred Union Employees of the Acquired Business arising
with respect to events, acts or omissions occurring after the
Closing (including, without limitation, employee workers
compensation claims);
(E) all liabilities and obligations arising out of
or relating to any product liability claim or litigation
against or otherwise involving the Acquired Business and
relating to or arising out of products manufactured and sold
after the Closing Date;
(F) subject to any indemnification rights that the
Buyer may have under Section 10.7, all liabilities and
obligations arising out of Environmental Laws and out of the
conduct or operation of the Acquired Business after the
Closing Date;
(ii) all liabilities and obligations arising before
the Closing Date in respect of (1) the collective bargaining agreement
between the Seller and IUE Local 823, and (2) the collective bargaining
agreement between the Seller and the Teamsters Local No. 688, in each
case as and to the extent resulting directly from acts or omissions
occurring prior to the Closing Date taken at the request of the Buyer;
(iii) subject to Section 10.6, all liabilities and
obligations to the extent arising out of or relating to any product
liability claims or litigation as to which the Seller has not received
written notice on or before the Closing Date against or otherwise
involving the Acquired Business relating to or arising out of products
manufactured or sold before the Closing Date;
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(iv) liabilities arising out of Environmental Laws
in respect of the Acquired Business but only to the extent such
liabilities arise out of the presence or release of Hazardous Materials
on, in, under, at or from the Properties prior to the Closing Date; and
(v) such liabilities as set forth in Section 7.4
of this Agreement being assumed by the Buyer.
Except as otherwise set forth in this Section 2.2(a), the Assumed Liabilities do
not include any debts, liabilities or obligations relating to or arising out of
the ownership or use of any of the Purchased Assets or the conduct or operation
of the Acquired Business at any time before the Closing Date.
(b) Anything in this Agreement to the contrary
notwithstanding, the Buyer shall not assume, and the Seller shall be responsible
for the payment, performance and discharge of, and indemnify and hold harmless
the Buyer and its Affiliates from and against, the following (collectively, the
"RETAINED LIABILITIES"):
(i) all liabilities and obligations arising with
respect to any event, act or omission occurring before the Closing Date
in respect of (A) the collective bargaining agreement between the
Seller and the IUE Local 823, or (B) the collective bargaining
agreement between the Seller and the Teamsters Local No. 688 other
than, in each case, liabilities and obligations directly resulting from
acts or omissions occurring prior to the Closing Date to the extent
taken at the request of the Buyer;
(ii) all liabilities and obligations relating to all
claims and litigation involving Transferred Employees or Transferred
Union Employees of the Acquired Business arising with respect to
events, acts or omissions occurring before the Closing Date (including,
without limitation, employee workers compensation claims);
(iii) all liabilities arising from the transport,
handling and disposal of Hazardous Materials generated by or from the
Acquired Business or at the Properties but only to the extent such
liabilities arise out of the off-site disposal of Hazardous Materials
on or before the Closing Date;
(iv) all liabilities relating to any employee
employed by the Acquired Business outside of the United States unless
the Buyer affirmatively chooses to employ any such employee after the
Closing Date;
(v) except as provided in the second sentence of
Section 12.2, any liability of the Seller, CVL or any of
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their Affiliates for Taxes related to the Acquired Business
incurred on or prior to the Closing Date;
(vi) all accounts payable owed to suppliers of
the Acquired Business;
(vii) all liabilities and obligations of the
Seller primarily relating to or primarily arising out of the Excluded
Assets;
(viii) all liabilities and obligations of the
Seller pursuant to the retention agreements described in item 44 of
SCHEDULE 5.12;
(ix) all liabilities and obligations for payment of
salaries of employees of the Acquired Business accrued through and
including the Closing Date and not paid on or prior to the Closing Date
and any Federal, state and local payroll taxes related thereto;
(x) all liabilities and obligations to the
extent arising out of or relating to any product liability claims or
litigation against or otherwise involving the Acquired Business that
either (A) is pending on the Closing Date or (B) of which the Seller
has received written notice on or before the Closing Date, including,
without limitation, the actions, suits, proceedings and investigations
pending against the Seller or CVL set forth on SCHEDULE 5.5;
(xi) all liabilities and obligations arising out of
or related to returns of and rebates on products sold by the Acquired
Business on or prior to the Closing Date;
(xii) any liability or obligation of the Acquired
Business arising on or prior to the Closing Date which (absent this
Section 2.2(b)(xii)) is not otherwise an Assumed Liability or a
Retained Liability;
(xiii) such liabilities as set forth in Section 7.4
of this Agreement being retained by the Seller; and
(xiv) all liabilities and obligations of the
Seller and its Affiliates which do not primarily arise out of or
primarily relate to the Acquired Business.
Except as otherwise provided herein, for purposes of the Assumed Liabilities and
the Retained Liabilities, whenever reference is made to any liability or
obligation, such reference shall be deemed to include any liability or
obligation pertaining thereto, whether known or unknown, contingent or fixed,
and whether pending, arising now or hereafter.
2.3 PAYMENT OF PURCHASE PRICE. At the Closing, the
Buyer shall deliver to the Seller seventy-five million United
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States dollars ($75,000,000) in immediately available funds by wire transfer to
an account designated by the Seller at least two (2) business days prior to the
Closing Date.
2.4 ALLOCATION OF PURCHASE PRICE. The Seller and the Buyer
shall use all reasonable commercial efforts to agree, on or prior to the Closing
Date, to an allocation of the Purchase Price (together with the liabilities
assumed hereunder and other relevant items) among the Purchased Assets. Such
allocation will comply with the requirements of Section 1060 of the Code. The
Seller and the Buyer represent, warrant and agree that such allocation will be
determined through arm's-length negotiations. The Seller and the Buyer each
agrees that, to the extent permitted by applicable law, it will adopt and
utilize the amounts allocated to each asset or class of assets for purposes of
all federal, state and other Tax returns or reports of any nature filed by it
and that it will not voluntarily take any position inconsistent therewith upon
examination of any such Tax returns or reports, in any claim for refund, in any
litigation or otherwise with respect to such Tax returns or reports.
Notwithstanding any other provision of this Agreement, the foregoing agreement
shall survive the Closing Date without limitation.
2.5 FURTHER ASSURANCES; CONSENTS. (a) At the Closing and from
time to time after the Closing, (i) at the request of the Buyer and without
further consideration, the Seller shall promptly execute and deliver to the
Buyer such certificates and other instruments of sale, conveyance, assignment
and transfer, and take such other action, as may reasonably be requested by the
Buyer more effectively to sell, convey, assign and transfer to and vest in the
Buyer or to put the Buyer in possession of the Purchased Assets, and (ii) at the
request of the Seller and without further consideration, the Buyer shall
promptly execute and deliver to the Seller such certificates and other
instruments of assumption, and take such other action, as may reasonably be
requested by the Seller more effectively to confirm and carry out the assumption
by the Buyer of the Assumed Liabilities.
(b) To the extent that any consents, waivers or approvals
necessary to convey items of Purchased Assets to the Buyer are not obtained
prior to the Closing, after the Closing the Seller shall use all reasonable
commercial efforts to: (i) obtain such consents, waivers and approvals (provided
that the Seller shall not be obligated to pay any consideration QUID PRO QUO for
any such consents, waivers and approvals) and (ii) pending receipt of such
consents, waivers or approvals (A) provide to the Buyer, at the reasonable
request of the Buyer, the benefits of any such Purchased Asset, and hold the
same in trust for the Buyer, and (B) enforce and perform, at the reasonable
request and expense of the Buyer, for the account of the Buyer, any rights or
obligations of the Seller arising from any such Purchased Asset against or in
respect of any third person, including the right to elect to terminate any
contract,
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arrangement or agreement in accordance with the terms thereof upon the advice of
the Buyer. The failure to obtain any consent, waiver or approval to any
agreement, contract or commitment which requires consent, waiver or approval
shall not be a condition to the Buyer's obligation to consummate the
transactions contemplated hereby.
(c) To the best knowledge of Seller, Seller is not aware of
any specific facts or events that would prevent the parties from obtaining the
material consents listed on Schedule 5.2 taken as a whole.
(d) The Buyer agrees to cooperate fully with the Seller as and
to the extent reasonably requested by the Seller in attempting to obtain any
consent that may be required from the landlord to assign the Warehouse Lease to
the Buyer, and will offer to agree with the landlord to an extension of the term
of the Warehouse Lease on the terms set forth in the letter attached as Schedule
2.5(d) or terms, the economic and operational effect of which is no less
favorable to the Buyer. If the consent of the landlord under the Warehouse Lease
is not obtained notwithstanding the Buyer's offer to agree as described above
and the Buyer is provided with notice of default or termination or similar
notice or is evicted from the Warehouse that is subject to the Warehouse Lease,
the Seller agrees to indemnify and hold harmless the Buyer for any reasonable
relocation cost that it may incur in connection with relocating to a new
facility from such Warehouse. If the Buyer extends the Warehouse Lease and
exercises the one-time early termination right set forth in the letter attached
as Schedule 2.5(d), the Seller shall reimburse the Buyer for the two-month rent
payment payable in connection with the exercise of such termination right.
ARTICLE 3
PRELIMINARY AND FINAL CLOSING
STATEMENTS; ADJUSTMENTS
-----------------------------
3.1 PRELIMINARY STATEMENT OF INVENTORY. As soon as reasonably
practicable after the Closing Date but in any event within thirty (30) days
thereafter, the Buyer shall direct the preparation of, and deliver to the
Seller, a statement of Inventory as of the Closing Date (the "PRELIMINARY
INVENTORY STATEMENT"). The Preliminary Inventory Statement shall be prepared in
accordance with the inventory valuation methods utilized by the Seller in
connection with the preparation of the Statement of Assets and Liabilities and
shall reflect the results of the physical inventory count to be performed by the
Buyer's independent public accountant on the Closing Date. The Buyer agrees that
Bristol-Myers Squibb and its representatives, including, without limitation,
Price Waterhouse LLP, shall have
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the right to observe the performance of the physical inventory count
contemplated by this Section 3.1.
3.2 REVIEW OF PRELIMINARY INVENTORY STATEMENT. The Seller and
its independent public accountants may review the Preliminary Inventory
Statement and may make inquiry of the Buyer and its representatives, and the
Buyer will, and will cause the Acquired Business to, make available to the
Seller and its representatives, as reasonably requested by the Seller, all
books, records and other documents pertaining to the Inventory deemed necessary
or desirable by the Seller in connection with its review of the Preliminary
Inventory Statement and personnel responsible for performing the physical
inventory count. The Preliminary Inventory Statement shall be binding and
conclusive upon, and deemed accepted by, the Seller unless the Seller shall have
notified the Buyer in writing within thirty (30) days after receipt of the
Preliminary Inventory Statement of any objections thereto. A notice under this
Section 3.2 shall specify in reasonable detail the reasons for such dispute.
3.3 DISPUTES. (a) At the request of either party, any dispute
between the parties relating to the Preliminary Inventory Statement which cannot
be resolved by them within thirty (30) days after receipt by the Buyer of notice
of any objections to such Preliminary Inventory Statement pursuant to Section
3.2 shall be referred to the Disputes Auditor for final decision. If the
Disputes Auditor is unavailable, then the Buyer and the Seller shall select an
independent nationally recognized accounting firm to decide the matter. The
Disputes Auditor's decision on any matter referred to it shall be final and
binding on the Seller and the Buyer. The fee of the Disputes Auditor shall be
borne by the Seller and the Buyer in equal portions unless the Disputes Auditor
decides, based on its determination with respect to the reasonableness of the
respective positions of the parties, that the fee shall be borne in unequal
proportions.
(b) The parties shall, as promptly as practicable, submit
evidence in accordance with the procedures established by the Disputes Auditor,
and the Disputes Auditor shall decide the dispute in accordance therewith as
promptly as practicable.
3.4 FINAL INVENTORY STATEMENT. The Preliminary Inventory
Statement shall become final and binding on both parties upon the earliest of
(i) if no such notice has been given, the expiration of the period within which
the Seller may notify the Buyer of any objections thereto pursuant to Section
3.2, (ii) agreement by the Seller and the Buyer that such Preliminary Inventory
Statement, together with any modifications thereto agreed by the Seller and the
Buyer, shall be final and binding and (iii) the date on which the Disputes
Auditor shall issue its decision with respect to any dispute relating to such
Preliminary Inventory Statement. The Preliminary Inventory Statement, as
adjusted pursuant to any agreement between the
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parties or pursuant to the decision of the Disputes Auditor, when final and
binding on both parties, is herein referred to as the "FINAL INVENTORY
STATEMENT".
3.5 ADJUSTMENT TO THE PURCHASE PRICE. As soon as practicable
(but not more than five (5) business days) after the determination and delivery
of the Final Inventory Statement in accordance with Section 3.4, (i) the amount,
if any, by which the Inventory as reflected on the Final Inventory Statement is
less than the Inventory as of June 30, 1996 as reflected on the Statement of
Assets and Liabilities shall result in an immediate downward adjustment of the
Purchase Price equal to such amount, which amount shall be payable by the Seller
to the Buyer in immediately available funds and (ii) the amount, if any, by
which the Inventory as reflected on the Final Inventory Statement is greater
than the Inventory as of June 30, 1996 as reflected on the Statement of Assets
and Liabilities shall result in an immediate upward adjustment of the Purchase
Price equal to such amount, which amount shall be payable by the Buyer to the
Seller in immediately available funds.
3.6 INTEREST. All payments required to be made pursuant to
this Article 3 shall be with interest thereon at a rate of six percent (6%) per
annum and accruing from the Closing Date to the date of payment.
ARTICLE 4
CLOSING
-------
4.1 CLOSING. The closing of the transactions provided for
herein (the "CLOSING") will take place at the offices of Winthrop, Stimson,
Putnam & Roberts, One Battery Park Plaza, New York, New York 10004, at 10:00
a.m. (local time) on the fifth business day following the satisfaction or waiver
of all of the conditions set forth in Articles 8 and 9, or at such other time
and place as the Buyer and the Seller shall agree (the date of the Closing being
the "CLOSING DATE").
4.2 INSTRUMENTS OF CONVEYANCE, TRANSFER, ASSUMPTION, ETC. (a)
The Seller shall execute and deliver to the Buyer at the Closing (or at such
time set forth below):
(i) the Bill of Sale;
(ii) the Assignment of Patents;
(iii) the Assignment of Trademarks;
(iv) limited warranty deeds for each parcel of
Owned Real Property;
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(v) subject to obtaining necessary consent in
accordance with Section 2.5(b), the Assignment of the
Warehouse Lease;
(vi) at the Closing or as soon thereafter as
reasonably practicable, subject to Section 2.5(b), any consents,
waivers or approvals of any third party that may be obtained by the
Seller under any agreement, contract or commitment constituting a
Purchased Asset, in each case in form reasonably satisfactory to the
Buyer;
(vii) the Transition Services Agreement;
(viii) the License Agreement;
(ix) the Product Supply Agreement;
(x) at the Closing or as soon thereafter as
reasonably practicable, each of the items referred to in Section 7.6;
and
(xi) each of the certificates and other documents
contemplated by Article 9 hereof.
(b) At the Closing, the Buyer shall deliver to the
Seller the following:
(i) by wire transfer in immediately available
funds to the account designated by the Seller, the Purchase
Price;
(ii) duly executed Undertaking and such other
instruments of assumption evidencing the assumption by the Buyer of the
Assumed Liabilities in form reasonably satisfactory to the Seller;
(iii) the Product Supply Agreement;
(iv) the License Agreement;
(v) the Transition Services Agreement;
(vi) each of the certificates and other documents
contemplated by Article 8 hereof.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Except as otherwise set forth in any Schedule attached hereto,
the Seller represents and warrants to the Buyer that:
5.1 ORGANIZATION OF THE SELLER AND CVL; AUTHORITY. (a) Each of
the Seller and CVL is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Each of
the Seller and CVL is qualified to do business and in good standing in each
jurisdiction in which the nature of the Acquired Business or the ownership,
leasing or holding of the Purchased Assets requires it to be so qualified,
except to the extent that the failure to be so qualified or be in good standing,
either singly or in the aggregate, are not reasonably expected to have a
Material Adverse Effect. Each of the Seller and CVL has all requisite corporate
power and authority, and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary, to enable it to own, lease or
hold the Purchased Assets and to carry on the Acquired Business as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, either singly or in the aggregate, are not
reasonably expected to have a Material Adverse Effect.
(b) The Seller has the corporate power and authority to enter
into this Agreement and, subject to the approval of the Board of Directors of
Bristol-Myers Squibb, the Seller and CVL have the corporate power and authority
to consummate the transactions contemplated hereby. Subject to the approval of
the Board of Directors of Bristol-Myers Squibb, the execution and delivery of
this Agreement by the Seller and the consummation by the Seller and CVL of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Seller and CVL and, subject to the approval
of the Board of Directors of Bristol-Myers Squibb, no other corporate action is
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Seller and (assuming due authorization, execution and delivery hereof by the
Buyer) constitutes the valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance and
other laws affecting creditors' rights generally from time to time in effect and
to general equitable principles (whether considered in a proceeding at law or in
equity).
5.2 NO VIOLATIONS. Except as disclosed on SCHEDULE 5.2, the
execution and delivery of this Agreement by the Seller do not, and the
consummation by the Seller and CVL of the
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transactions contemplated hereby will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination under, or accelerate the
performance required by, or result in the creation of any Encumbrance upon any
of the Purchased Assets under, any provision of
(i) any law, statute, regulation or judicial or
administrative decision applicable to the Seller, CVL or the
Purchased Assets,
(ii) the certificate of incorporation or by-laws
of the Seller or CVL,
(iii) any mortgage, note, deed of trust, license,
governmental permit, lease, contract or agreement or other instrument
or obligation to which the Seller or CVL is a party or by which the
Purchased Assets are legally bound, or
(iv) any judgment, order, writ, injunction or
decree of any court, governmental body, administrative agency or
arbitrator applicable to the Seller, CVL or the Purchased Assets,
other than immaterial conflicts, violations, defaults, rights of termination or
Encumbrances. Except as disclosed on SCHEDULE 5.2, no material consent, approval
or authorization of, or registration, declaration or filing with, any
governmental authority and no consent of any Person under any material Contract,
is required to be obtained or made by the Seller or CVL in connection with the
execution and delivery of this Agreement by the Seller or the consummation by
the Seller or CVL of the transactions contemplated hereby, other than compliance
with and filings under the HSR Act.
5.3 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 5.3 are
(i) audited special purpose Statement of Assets to be Acquired and Liabilities
to be Assumed of the Acquired Business as of June 30, 1996 and December 31, 1995
(the "STATEMENT OF ASSETS AND LIABILITIES") and (ii) audited special purpose
Statement of Revenues and Direct Expenses of the Acquired Business for the
six-month period ended June 30, 1996 and the fiscal year ended December 31, 1995
(the "STATEMENT OF REVENUES AND DIRECT EXPENSES;" and collectively with the
Statement of Assets and Liabilities, the "FINANCIAL STATEMENTS"). The Financial
Statements (i) have been prepared in accordance with United States generally
accepted accounting principles, consistently applied and (ii) present fairly, in
all material respects, the assets and liabilities of the Acquired Business as of
June 30, 1996 and December 31, 1995 as described in Note 2 to the Financial
Statements, and the revenues and direct operating expenses of the Acquired
Business for the six-month period ended June 30, 1996 and the fiscal year ended
December 31, 1995 as described in Note 2 to the Financial Statements. The Buyer
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acknowledges that the Financial Statements do not include any Excluded Assets,
but do include certain Retained Liabilities, and that there is no statement of
cash flow with respect to the Acquired Business.
5.4 TITLE TO PROPERTIES; ABSENCE OF LIENS. (a) The Seller or
CVL has good and valid title to all of the Purchased Assets, free and clear of
any Encumbrances, except for (i) Encumbrances reflected in the Statement of
Assets and Liabilities as of June 30, 1996 or created in the ordinary course of
business subsequent to June 30, 1996, (ii) non-monetary Encumbrances that do
not, either singly or in the aggregate, materially interfere with the present
use by the Acquired Business of the Purchased Assets subject thereto or affected
thereby, (iii) Encumbrances for taxes, assessments or governmental charges, or
landlords', mechanics', workmen's, materialmen's or similar Encumbrances, in
each case that are not delinquent or which are being contested in good faith and
(iv) Encumbrances identified on SCHEDULE 5.4 (collectively, "PERMITTED
ENCUMBRANCES").
(b) This Section 5.4 does not relate to the Intellectual
Property which is the subject of Section 5.14.
5.5 LITIGATION. Except as disclosed on SCHEDULE 5.5, as of the
date hereof, there is no action, suit, proceeding or investigation pending or,
to the best of the Seller's knowledge, threatened in writing against the Seller
or CVL, or any officer or director of the Seller or CVL, before any court or
governmental agency or authority which (i) involves a claim against the Seller
or CVL of more than $100,000 or (ii) seeks any material injunctive relief
against the Seller or CVL which, in each case, (x) primarily arises out of or
otherwise primarily relates to the operation of or involves the Acquired
Business or the Purchased Assets or (y) relates to the transactions contemplated
by this Agreement. Neither the Seller nor CVL is subject to any material
judgment, order, injunction or decree of any court or governmental agency or
authority which is applicable to the Acquired Business or the Purchased Assets.
5.6 COMPLIANCE WITH LAW. (a) The conduct of the Acquired
Business complies in all material respects with all laws, statutes and
regulations of any governmental authority applicable to the Acquired Business or
the Purchased Assets. Except as set forth on SCHEDULE 5.6, neither the Seller
nor CVL has received written notice from any governmental authority regarding
any actual, alleged or potential material violation of any such laws, statutes
or regulations that has not been fully resolved.
(b) All governmental approvals, permits, licenses,
registrations and clearances (other than Environmental Permits and such other
governmental approvals, permits, licenses, registrations and clearances which
are not material to the conduct of the Acquired Business) including, without
limitation,
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all EPA product registrations, state product registrations, and FDA product
clearances (collectively, the "PERMITS") required in connection with the conduct
of the Acquired Business have been obtained, are in full force and effect and
are being complied with in all material respects. To the best knowledge of the
Seller, neither the Seller nor CVL is in default under, and no event has
occurred which, with the lapse of time or action by a third party, could result
in a default under, the terms of any Permit. Neither the Seller nor CVL has
received any written notice from any governmental authority regarding any
actual, alleged or potential material default under the terms of any Permit.
(c) The provisions of this Section shall not apply to
Environmental Laws which are covered exclusively in Section 5.15.
5.7 REAL PROPERTY. (a) SCHEDULE 5.7 sets forth a
true and complete list, as of the date hereof, of all Properties.
(b) Complete copies of all deeds, mortgages, deeds of trust,
Leases and guarantees of Leases concerning the Properties and the interests of
the Seller or CVL therein currently in effect (including title policies and
surveys, if any) have been delivered to the Buyer.
(c) Each of the Owned Real Property is owned by CVL free and
clear of any Encumbrances except for Permitted Encumbrances. Each of the Leases
is in full force and effect and the Seller or CVL has a valid and subsisting
leasehold interest in the Leased Real Property pursuant to the respective Lease,
free and clear of any Encumbrance other than Permitted Encumbrances.
(d) None of the Properties has been condemned or otherwise
taken by public authority and, to the best knowledge of the Seller, no such
condemnation or taking is threatened.
(e) The Seller or CVL is in peaceful and undisturbed
possession under each Lease. Except as set forth on SCHEDULE 5.7, there are no
material defaults by the Seller or CVL or, to the best knowledge of the Seller,
the landlord, under any of the Leases.
(f) Neither the Seller nor CVL has received any notice of a
violation of any material applicable zoning law, regulation or other law, order,
regulation or requirement relating to or affecting any of the Properties.
(g) Neither the Seller nor CVL has received any notice of any
dispute regarding the boundaries of any of the Properties, and no such disputes
are pending or, to the best knowledge of the Seller, threatened.
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(h) Except as set forth on SCHEDULE 5.7, the buildings or
structures located on the Property are sufficient for their intended use, and
are, to the best knowledge of the Seller, free of any material structural or
engineering defects.
(i) All facilities located on the Property are supplied with
utilities and other services necessary for the operation of such facilities as
presently operated.
5.8 SUFFICIENCY OF ASSETS. The Purchased Assets comprise all
the material assets and personal properties that, taking into account (i) any
consents, waivers or approvals necessary to convey items of Purchased Assets to
the Buyer not obtained on or prior to the Closing Date, (ii) the services that
will be made available by the Seller or any of its Affiliates to the Buyer upon
the request of the Buyer under the Transition Services Agreement, (iii) the
intellectual property to be licensed by the Seller to the Buyer under the
License Agreement and the terms, restrictions and conditions contained therein
and (iv) the retention by the Seller of the Excluded Assets, are sufficient for
the conduct of the Acquired Business as a going concern and, the machinery and
equipment of the Acquired Business taken as a whole are in a condition adequate,
in accordance with reasonable commercial standards, to operate the Acquired
Business as heretofore conducted.
5.9 CONTRACTS. (a) SCHEDULE 5.9 sets forth each written
contract or agreement and, to the best knowledge of the Seller, a description of
the principal terms of each oral contract or agreement outstanding as of the
date hereof to which the Seller or CVL is a party or is legally bound that
primarily relates to the Acquired Business (excluding bids submitted to
customers, purchase orders and sales orders in the ordinary course of business,
the Leases and the Mixed Product Contracts) and which,
(i) is an agreement or contract with the
Acquired Business' distributors, customers or suppliers and which
involves or is expected to involve payment or receipt of funds in
excess of $100,000 during the calendar year ending December 31,
1996;
(ii) is an agreement relating to the borrowing of
in excess of $50,000 by the Seller or CVL for use in the Acquired
Business, is a guarantee by the Seller or CVL in respect of
indebtedness of any Person which may involve future payment in excess
of $50,000 and which relates to the Acquired Business or is a mortgage,
security agreement or other collateral arrangement securing
indebtedness of any Person in excess of $50,000 and creating an
Encumbrance on the Purchased Assets with an aggregate value in excess
of $50,000;
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(iii) is a lease providing for annual rental
payments in excess of $100,000 in any calendar year ending on or after
December 31, 1996 (exclusive of charges for taxes, insurance,
utilities, maintenance and repair);
(iv) is an employment or consulting contract
pursuant to which the Acquired Business may reasonably be expected to
make payment in excess of $100,000 in any calendar year ending on or
after December 31, 1996 or providing any term of employment or
compensation guarantee extending for a period longer than one (1) year;
(v) is a license agreement or otherwise relates
to Intellectual Property and is material to the Acquired Business;
(vi) restricts the Acquired Business from
competing in any line of business; or
(vii) is an agreement with any Transferred Employee
the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the
Acquired Business of the nature contemplated by this Agreement, other
than the retention agreements described on SCHEDULE 5.13.
The contracts and agreements listed on SCHEDULE 5.9 are
hereinafter collectively referred to as the "MATERIAL CONTRACTS." True and
complete copies of each written Material Contract (including any amendment
thereto) (other than agreements with group purchasing organizations listed under
"Contracts with Customers") have heretofore been provided or made available to
the Buyer.
(b) Each Material Contract listed on SCHEDULE 5.9 is a valid
and binding obligation of the Seller or CVL, as the case may be, and is in full
force and effect. The Seller and CVL have performed in all material respects the
obligations required to be performed by them under each of the Material
Contracts, and no event or condition exists which constitutes or, after notice
or lapse of time or both, would constitute a material default on the part of the
Seller or CVL under any Material Contract. Except as set forth on SCHEDULE 5.9,
to the best knowledge of the Seller, the other parties to each of the Material
Contracts have performed in all material respects the obligations required to be
performed by them under the Material Contracts and, to the best knowledge of the
Seller, no event or condition exists which constitutes or, after notice or lapse
of time or both, would constitute a default on the part of any such party under
any Material Contract.
5.10 BROKERS AND INTERMEDIARIES. Except for The Blackstone
Group L.P., the Seller and its Affiliates have not employed any broker, finder,
advisor or intermediary in
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connection with the transactions contemplated by this Agreement which would be
entitled to a broker's, finder's or similar fee or commission in connection
therewith or upon the consummation thereof. The Seller shall be responsible for
making any payments to which The Blackstone Group L.P. shall be entitled.
5.11 TAX MATTERS. (a) All Tax returns relating to the Acquired
Business that are required to be filed for all periods prior to or including the
Closing Date have been or will be filed when due, and all such Tax returns are
or will be complete and correct in all material respects, except where the
failure to file such returns or the failure of such returns to be complete and
correct, has not resulted, and will not result, in the imposition of an
Encumbrance (other than a Permitted Encumbrance) on any of the Purchased Assets
or in any liability on the part of the Buyer as successor to the Acquired
Business.
(b) All Taxes relating to the Acquired Business which the
Seller is required by law to withhold or collect have been or will be withheld
or collected, and have been or will be timely paid over to the proper
authorities to the extent due and payable.
5.12 EMPLOYEE BENEFITS. (a) SCHEDULE 5.12 sets forth a list of
all employee benefit plans (as defined in Section 3(3) of ERISA) and all bonus,
deferred compensation, incentive compensation, severance or termination pay,
change in control, compensation and death benefit plans, retirement, savings and
other employee benefit agreements or arrangements, maintained or contributed to
by Bristol-Myers Squibb, the Seller or CVL and applicable to employees and
former employees of the Acquired Business and their beneficiaries (the "PLANS").
(b) The Hourly Plan has been administered in substantial
compliance with its terms and with the requirements of any applicable law,
including but not limited to ERISA and the Code. Without limiting the generality
of the foregoing:
(i) with respect to the Hourly Plan, all
contributions required to be made through the Closing Date under the
terms of such plan or by law have been made or will be made by the
Closing Date;
(ii) at the end of its most recent plan year, the
Hourly Plan satisfied the minimum funding standards provided for in
Section 412 of the Code;
(iii) the Hourly Plan (and any trust relating
thereto) is intended to be a qualified plan under Section 401(a) of the
Code and prior to December 31, 1996 will be the subject of an
application for a determination letter from the IRS that such Plan is
so qualified;
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(iv) no "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) with respect to the
Hourly Plan has occurred that is likely to result in any penalties or
taxes under Section 502(i) of ERISA or Section 4975 of the Code and no
reportable event under Section 4043 of ERISA (other than any such event
with respect to which the thirty (30) day notice requirement has been
waived by regulation) has occurred with respect to the Hourly Plan;
(v) all reporting and disclosure requirements of
ERISA and the Code have been complied with in all material respects
with respect to the Hourly Plan; and
(vi) the fair market value of the assets of the
Hourly Plan exceeds the present value of the "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA) as of the end of the most
recent plan year ending prior to the date hereof, calculated on the
basis of the actuarial assumptions used in the most recent actuarial
valuation for such Plan as of the date hereof.
(c) With respect to the Hourly Plan, the Seller has delivered
to the Buyer a true and correct copy of (i) the most recent annual report on
Form 5500, if any, filed with the IRS, (ii) such Plan, (iii) the trust agreement
and insurance contract relating to such Plan, (iv) the most recent summary plan
description for such Plan, (v) the most recent actuarial report or valuation if
such Plan is subject to Title IV of ERISA.
(d) The Multiemployer Plan is the only Plan that is a
multiemployer plan within the meaning of Sections 3(37) and 4001(a)(3) of ERISA.
Neither the Seller nor CVL has any withdrawal liability with respect to any such
"multiemployer plan" applicable to the present or former employees of the
Acquired Business. With respect to the Multiemployer Plan, all contributions
required to be made through the Closing Date under the terms of such plan or by
law have been made or will be made by the Closing Date.
5.13 LABOR MATTERS. (a) Except as set forth on SCHEDULE 5.13,
the Acquired Business is not a party to or currently negotiating any collective
bargaining agreement or other agreement or understanding with a labor union or
labor organization, any employment agreement or any agreement, plan or
arrangement which provide for severance payments to any employee of the Acquired
Business upon termination of employment or which provides benefits upon a change
in control of the Acquired Business. To the best knowledge of the Seller, there
is no organizational activity the purpose of which is to achieve representation
of some or all of the employees of the Acquired Business by a union for purposes
of collective bargaining, and no application for certification of a collective
bargaining agent is pending or, to the best knowledge of the Seller, threatened.
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(b) Except as set forth on SCHEDULE 5.13, there is no unfair
labor practice, charge or complaint, nor any proceeding seeking to compel the
Acquired Business to bargain with any labor organization as to wages or
conditions or employment, pending against the Acquired Business, nor is there
any material labor strike, work stoppage, grievance or other labor dispute
pending or, to the best knowledge of the Seller, threatened against the Acquired
Business.
5.14 INTELLECTUAL PROPERTY. (a) SCHEDULE 5.14 sets forth a
list, as of the date hereof, of all patents, trademarks, servicemarks, trade
names and copyrights, owned or used by, the Seller or CVL and primarily relating
to the Acquired Business (collectively, the "INTELLECTUAL PROPERTY"). The
Intellectual Property is subject to the terms of the agreements governing such
Intellectual Property set forth on SCHEDULE 5.14. Except as disclosed on
SCHEDULE 5.14, (i) the Seller owns or possesses, or owns or possesses licenses
or other valid rights to use, all Intellectual Property; (ii) none of the
Intellectual Property material to the conduct of the Acquired Business as now
being conducted infringes or conflicts with, nor has such material Intellectual
Property been alleged to infringe or conflict with, nor, to the best knowledge
of the Seller, is there any basis for asserting that such material Intellectual
Property infringes or conflicts with any patents, trademarks, trade names,
copyrights or other intellectual property rights of others; and (iii) to the
best knowledge of the Seller, none of the Intellectual Property is being
infringed by the design, manufacture, sale or distribution of products by
others, and, to the knowledge of the Seller, none of the Intellectual Property
has been misappropriated by any other Person.
(b) Except as contained in the agreements governing licensed
Intellectual Property or the agreements containing non-competition provisions,
in each case listed on SCHEDULE 5.9 or SCHEDULE 5.14, there is no agreement to
which the Seller or CVL is a party or by which the Seller or CVL is legally
bound, that contains any restriction which materially and adversely affects the
Acquired Business.
(c) To the best knowledge of the Seller, except as set forth
on SCHEDULE 5.14, on the date hereof (i) there are no pending re-examination,
opposition, interference, cancellation or other administrative proceedings with
respect to any of the Intellectual Property, and (ii) no order, holding,
decision or judgment has been rendered by any court of law or other governmental
authority, and no agreement, consent or pending litigation in a court of law or
before any other governmental authority exists to which the Seller or CVL is a
party, which would prevent the Seller or, to the best knowledge of the Seller,
the Buyer or the Acquired Business from using or enjoying any of the
Intellectual Property.
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(d) Except as disclosed on Schedule 5.14, to the best
knowledge of the Seller, on the date hereof there is no pending claim of
infringement or misappropriation of any of the Intellectual Property asserted
against the Seller or CVL and, to the best knowledge of the Seller, none has
been threatened.
(e) Except as disclosed on SCHEDULE 5.14, no Person is
presently authorized by the Seller or CVL to use any of the Intellectual
Property owned by the Seller or CVL including, but not limited to, the Calgon
Vestal Laboratories, Inc. name.
(f) Seller will deliver to Buyer good and marketable title to
all of the Intellectual Property, subject to Permitted Encumbrances and
Encumbrances set forth on SCHEDULE 5.9 and SCHEDULE 5.14.
5.15 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
5.15:
(a) The Properties do not contain, in, on, or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials, except in compliance in all material respects with all
Environmental Laws.
(b) The Seller and CVL have obtained any and all material
permits, licenses and other authorizations that are required with respect to the
operation of the Acquired Business and the Properties under any Environmental
Law (such material permits, licenses and authorizations being hereinafter
referred to as the "ENVIRONMENTAL PERMITS").
(c) The Properties, all operations and facilities at the
Properties and the Acquired Business are in compliance in all material respects
with all Environmental Laws and Environmental Permits.
(d) Neither the Seller nor CVL has received any governmental
complaint, notice of violation, alleged violation, or investigation or notice of
potential liability or of potential responsibility regarding Environmental Laws
or Environmental Permits that are material with regard to the Properties or the
Acquired Business, including, without limitation, any notices or demand letters
or requests for information from any Federal or state environmental agency, nor
does the Seller have knowledge that any governmental authority is planning to
deliver any such notice to the Seller or CVL.
(e) There are no material governmental or administrative
actions or judicial proceedings pending under any Environmental Laws to which
the Seller or CVL is named as a party with respect to the Properties or the
Acquired Business, nor are there any material consent decrees or other decrees,
consent orders, administrative orders or other orders, under any
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Environmental Law with respect to any of the Properties or the Acquired
Business.
(f) To the best knowledge of the Seller, none of the
Properties includes any equipment, machinery, device or other apparatus that
contains polychlorinated biphenyl that is now leaking, any asbestos that is in a
condition that reasonably may threaten the health and/or safety of a person
exposed to the asbestos, or, other than those described on SCHEDULE 5.15, any
underground storage tank.
(g) The Seller has delivered to Buyer true, complete, and
correct copies of results of any material non-privileged reports, studies,
audits, assessments, analyses or tests in the possession of the Seller or any
Affiliate of the Seller, pertaining to the existence of Hazardous Materials
relating to any of the Properties or the Acquired Business, or concerning
compliance with or liability under the Environmental Laws.
5.16 PRODUCTS AND INVENTORY. The Seller has not received any
written notice with respect to the recall of any of the finished products of the
Acquired Business. To the knowledge of the Seller, there is no basis to believe
that any of the finished products of the Acquired Business may be subject to
recall. The raw materials, supplies and work-in-process included in the
Inventory are usable in the ordinary course of business, and the finished goods
included in the Inventory are in merchantable condition in the ordinary course
of business, except for obsolete and slow moving Inventories for which adequate
reserves have been made. The raw materials, supplies and work-in-progress
included in the Inventory are similar in quality and quantity to the raw
materials, supplies and work-in-progress generally included in the Inventory of
the Acquired Business in the past.
5.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Except as set
forth on SCHEDULE 5.17 or as contemplated by this Agreement, since June 30,
1996, there has not been any material adverse change in the assets, liabilities
(contingent or otherwise), financial condition, operating results or business of
the Acquired Business, taken as a whole, other than changes relating to United
States or foreign economies in general or the Acquired Business' industries in
general and not specifically relating to the Acquired Business.
(b) Except as set forth on SCHEDULE 5.17 or as contemplated by
this Agreement, since June 30, 1996, the Acquired Business has been conducted in
the ordinary course and the Acquired Business has not,
(i) incurred any obligation or liability in excess of $100,000
in the aggregate, except obligations and liabilities incurred in the
ordinary course of business and consistent with prior practice;
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(ii) mortgaged, pledged or subjected to Encumbrance any of
the Purchased Assets except for Permitted Encumbrances;
(iii) suffered any material damage, destruction or casualty
loss of the Purchased Assets;
(iv) except with respect to agreements for which the Buyer
will have no liability after the Closing, increased materially the
compensation or benefits of any officer or employee of the Acquired
Business, whether by means of salary, bonus, pension plan, profit
sharing, deferred compensation, savings, insurance, retirement, or
otherwise, except in the ordinary course of business consistent with
prior practice;
(v) adopted or amended in any material respect any Plan or
collective bargaining agreement, except as required by law,
(vi) canceled any material indebtedness or waived any claims
or rights of material value, in each case except in the ordinary course
of business,
(vii) sold, transferred, leased to others or otherwise
disposed of any material assets of the Acquired Business, except for
inventory sold to customers or returned to vendors and sales of
obsolete assets, in each case in the ordinary course of business; or
(viii) amended or terminated any material Contract applicable
to the Acquired Business other than in the ordinary course of business.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
The Buyer represents and warrants to the Seller that:
6.1 ORGANIZATION AND AUTHORITY OF BUYER. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Ohio, with the corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of the Buyer. This Agreement has been duly executed and delivered by the Buyer
and (assuming due authorization, execution and delivery hereof by the Seller)
constitutes the valid, binding and enforceable obligation of the Buyer, subject
to applicable bankruptcy, reorganization,
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insolvency, moratorium, fraudulent conveyance and other laws affecting
creditors' rights generally from time to time in effect and to general equitable
principles (whether considered in a proceeding at law or in equity).
6.2 ABILITY TO CARRY OUT THE AGREEMENT. The execution and
delivery of this Agreement by the Buyer do not, and the consummation by the
Buyer of the transactions contemplated hereby will not, conflict with, or result
in any violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination under, any provision of
(i) any law, statute, regulation or judicial or
administrative decision applicable to the Buyer,
(ii) the certificate of incorporation or by-laws
of the Buyer,
(iii) any material mortgage, lease, contract or
agreement to which the Buyer is a party or by which any of
its assets are bound, or
(iv) any judgment, order, writ, injunction or
decree of any court, governmental body, administrative agency or
arbitrator applicable to the Buyer,
other than conflicts, violations, defaults, or rights of termination which,
either singly or in the aggregate, are not reasonably expected to have a
material adverse effect on the Buyer or a material adverse effect on the
enforceability or validity of this Agreement. No material consent, approval or
authorization of, or registration, declaration or filing with, any governmental
authority and no consent of any Person, is required to be obtained or made by
the Buyer in connection with the execution and delivery of this Agreement by the
Buyer or the consummation by the Buyer of the transactions contemplated hereby,
other than compliance with and filings under the HSR Act.
6.3 BROKERS AND INTERMEDIARIES. The Buyer has not employed any
broker, finder, advisor or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to a broker's, finder's,
or similar fee or commission in connection therewith or upon the consummation
thereof.
6.4 AVAILABILITY OF FUNDS. The Buyer has cash available or has
existing credit or borrowing facilities which together are sufficient to enable
it to pay the Purchase Price and to consummate the transactions contemplated by
this Agreement.
6.5 ACTIONS AND PROCEEDINGS, ETC. There are no (i)
outstanding judgments, orders, writs, injunctions or decrees of any court,
governmental body, administrative agency or arbitrator
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against the Buyer which would reasonably be expected to have a material adverse
effect on the ability of the Buyer to consummate the transactions contemplated
hereby or (ii) actions, suits, claims or legal, administrative or arbitration
proceedings or investigations pending or, to the knowledge of the Buyer,
threatened against the Buyer, which would reasonably be expected to have a
material adverse effect on the ability of the Buyer to consummate the
transactions contemplated hereby.
ARTICLE 7
CERTAIN COVENANTS AND AGREEMENTS
OF SELLER AND BUYER
--------------------------------
7.1 ACCESS AND INFORMATION; CONFIDENTIALITY. (a) The Seller
shall permit the Buyer and its representatives after the date of this Agreement
and prior to the Closing Date to have reasonable access during normal business
hours, upon reasonable advance notice, to the books and records, personnel and
properties of the Acquired Business for the purpose of verifying the
representations and warranties of the Seller hereunder; PROVIDED, HOWEVER, that
such access shall be conducted by the Buyer and its representatives in such a
manner as not to interfere unreasonably with the businesses or operations of the
Seller, CVL or the Acquired Business.
(b) The Buyer acknowledges that all information provided to
the Buyer pursuant hereto shall be subject to that certain confidentiality
agreement, dated October 7, 1996, executed by the Buyer and Bristol-Myers Squibb
(the "CONFIDENTIALITY AGREEMENT"). Effective upon, and only upon the Closing,
except as provided in this Section 7.1(b), the Confidentiality Agreement shall
terminate; PROVIDED, HOWEVER, that the Buyer acknowledges and agrees that
paragraph 1 of the Confidentiality Agreement shall survive for the remainder of
the term of the Confidentiality Agreement with respect to any and all other
information provided to it by or on behalf of the Seller or its Affiliates not
related primarily to the Acquired Business.
(c) If the transactions contemplated by this Agreement are
consummated, for a period of five (5) years from the Closing Date, the Buyer
will maintain the confidentiality of any and all information, documents and
materials relating to any business of the Seller or any of its Affiliates (other
than the Acquired Business) which (i) were provided to or obtained by the
employees of the Acquired Business, (ii) remain in the possession of Acquired
Business or (iii) were provided to or obtained by the Buyer in connection with
the transactions contemplated hereby, including, without limitation,
information, documents and materials (i) provided to the Acquired Business by
Bristol-Myers Squibb and/or its Affiliates in connection with the supply of
certain infection control and contamination control products by
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the Acquired Business to Bristol-Myers Squibb and/or such Affiliates and (ii)
located at the Properties but not primarily related to the Acquired Business,
except to the extent the disclosure of any such information (or any portion
thereof) is authorized in writing by the Seller or is compelled by law or legal
process. The provisions of this Section 7.1(c) shall not apply to any
information, documents or material which are or come into the public domain
other than by reason of a breach of this Section 7.1(c). In the event of any
breach of any of the provisions of this Section 7.1(c), the Seller and its
Affiliates, in addition to any other rights and remedies existing in their
favor, shall be entitled to injunctive relief or other equitable remedies
(without the posting of a bond or other security).
7.2 HSR FILINGS. (a) Each of the Seller and the Buyer will as
promptly as practicable, but in no event later than November 29, 1996, file with
the FTC and the DOJ the notification and report form required for the
transactions contemplated hereby and will provide promptly upon request of the
FTC or the DOJ any supplemental information requested in connection therewith
pursuant to the HSR Act. Any such notification and report form and supplemental
information will be in substantial compliance with the requirements of the HSR
Act. Each of the Buyer and the Seller shall furnish to the other such necessary
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission which is necessary under the
HSR Act. The Seller and the Buyer shall keep each other apprised of the status
of any communications with, and inquiries or requests for additional information
from, the FTC and the DOJ and shall comply promptly with any such inquiry or
request.
(b) In connection with the foregoing, the Buyer shall use its
best efforts to resolve objections (including, but not limited to, objections
raised by the FTC and the DOJ), if any, as may be asserted with respect to the
transactions contemplated hereby under any antitrust or trade or regulatory laws
or regulations of any governmental authority. In complying with the foregoing,
the Buyer shall use all measures available to it to consummate the transactions
contemplated hereby. Anything in this Section 7.2(b) to the contrary
notwithstanding, the Buyer shall not be required in connection with its
obligations under this Section 7.2(b) to divest of any business or product line
constituting in excess of five percent (5%) of the Buyer's annual sales for the
twelve-month period ended March 31, 1996.
7.3 CONDUCT OF BUSINESS; INSURANCE. (a) Between the date
hereof and the Closing Date, except as otherwise contemplated by this Agreement
or consented to or approved by the Buyer, the Seller shall cause the Acquired
Business to be operated only in the ordinary course consistent with prior
practice and not to take any action referred to in Section 5.17, except as
permitted therein.
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(b) Between the date hereof and the Closing Date, the Seller
shall use all commercially reasonable efforts to preserve the Acquired Business
and to keep available to the Buyer the services of the present officers and
employees of the Acquired Business and to preserve for the Buyer in all material
respects the relationships of the Acquired Business with its suppliers,
customers, distributors and others having business relations with the Acquired
Business.
(c) Between the date hereof and the Closing Date, the Seller
shall use all commercially reasonable efforts to continue in full force and
effect all material insurance policies (or comparable insurance policies)
insuring the Acquired Business and its assets and business.
7.4 EMPLOYEE MATTERS.
(a) DEFINITIONS. The term "EMPLOYEES" shall mean all current
employees of the Acquired Business based in the United States (including those
on short-term disability or approved leave of absence), other than employees who
are covered by a collective bargaining agreement (the "UNION EMPLOYEES").
(b) EMPLOYMENT. (i) As of the Closing Date, the Buyer shall
offer employment to, and continue the employment of, all current Employees and
Union Employees at substantially the same salaries and wages (including bonus,
commission and sales incentive programs) and in comparable positions as those in
effect immediately prior to the Closing Date. The Buyer has no obligation under
this Agreement to offer employment to, or provide any other benefit to, any
employee of the Acquired Business who is not an Employee or a Union Employee.
(ii) After the Closing Date, all Employees, other
than Union Employees, who become employees of the Buyer as of the
Closing Date ("TRANSFERRED EMPLOYEES"), shall be treated in a similar
manner as the other employees of the Buyer similarly situated with
respect to the terms and conditions of employment. The Buyer agrees
that all service of a Transferred Employee or a Union Employee who
becomes an employee of the Buyer (a "TRANSFERRED UNION EMPLOYEE") with
the Seller or credited by the Seller or Bristol-Myers Squibb shall be
recognized by the Buyer under all employee benefit plans and
arrangements of the Buyer or any of its subsidiaries in which the
Transferred Employee or Transferred Union Employee becomes a
participant for purposes of eligibility and vesting, to the same extent
as if such service were rendered to the Buyer.
(c) UNION EMPLOYEE DEFINED BENEFIT PLAN. The Seller shall vest
the Transferred Union Employees who participate in the Hourly Plan in their
accrued benefit as of the Closing Date, but contingent on the Closing, under the
Hourly Plan. As of the Closing Date, the Buyer shall assume all assets and
liabilities
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under the Hourly Plan. As soon as practicable after the Closing Date,
Bristol-Myers Squibb shall cause the assets of the Hourly Plan to be transferred
to a trust qualified under Section 501 of the Code established or designated by
the Buyer (the "BUYER HOURLY PLAN TRUST"), PROVIDED, HOWEVER, that prior to any
such transfer, the Buyer shall provide evidence reasonably satisfactory to
Bristol-Myers Squibb that the Buyer Hourly Plan Trust is qualified under Section
501 of the Code.
(d) TRANSFERRED EMPLOYEES ON SHORT TERM DISABILITY ON THE
CLOSING DATE. The Seller agrees that should any Transferred Employee who is on
short-term disability on the Closing Date continue to be permanently disabled
after the end of the applicable short-term disability period, then the Seller
shall provide long-term disability benefits to such disabled Transferred
Employee and the Buyer shall not be liable for any long-term disability benefits
to such disabled Transferred Employee.
(e) MAINTENANCE OF BENEFITS. The Buyer shall not be required
to provide (or to cause any of its Affiliates to provide) the Transferred
Employees with benefits that are similar to those provided by Seller pursuant to
the [Plans]. Notwithstanding the foregoing, the Buyer shall initially provide to
each Transferred Employee benefits (including, to the extent generally provided,
401(k), life, short-term disability, long-term disability, vacation, and
medical/dental) that are generally consistent with those provided by Buyer at
its similar operations as of the Closing Date.
(f) PARTICIPATION IN BENEFITS PLANS. The Buyer shall cause to
be waived any pre-existing condition limitation under its welfare plans that
might otherwise apply to a Transferred Employee, or shall take such other action
(such as self-insurance or direct reimbursement to affected Transferred
Employees) as may be necessary to provide the equivalent of such waiver to all
Transferred Employees.
(g) VACATION AND OTHER PAY. The Buyer shall assume the
obligations of the Seller and/or its Affiliates with respect to accrued but
untaken vacation pay earned by Transferred Employees as of the Closing, as
calculated under the vacation pay plan applicable to the Transferred Employees
as that plan was in effect on June 30, 1996, up to an aggregate number of
vacation days equal to the number of Transferred Employees multiplied by five.
(h) MULTIEMPLOYER PLAN. (i) After the Closing Date, the Buyer
agrees to tender contribution to the Central States, Southeast and Southwest
Areas Pension Fund (the "MULTIEMPLOYER PLAN") for substantially the same number
of contribution base units with respect to the operations of the Acquired
Business for which the Seller had an obligation to contribute (as defined in
Section 4212 of ERISA) to the Multiemployer Plan pursuant to the
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collective bargaining agreement between the Seller and the Teamsters Local No.
688.
(ii) Unless the PBGC has issued a variance or
exemption under Section 4204(c) of ERISA reasonably satisfactory to the
Seller, the Buyer hereby agrees to provide to the Multiemployer Plan on
or as soon as possible after the Closing Date, for a period of five
consecutive plan years commencing after the Closing Date, a bond issued
by a surety company that is an acceptable surety for purposes of
Section 412 of ERISA. Such bond shall be in a form reasonably
satisfactory to the Seller and shall be in an amount equal to the
greater of (i) the average annual contribution that the Seller was
required to make under the Multiemployer Plan with respect to the
operations of the Acquired Business for the last plan year immediately
preceding the plan year in which the Closing Date occurs or (ii) the
annual contribution that the Seller has required to make under the
Multiemployer Plan with respect to the operations of the Acquired
Business for the last plan year immediately preceding the plan year in
which the Closing Date occurs.
(iii) Unless the PBGC has issued a variance or
exemption reasonably satisfactory to the Seller, if (i) the Buyer
completely or partially withdraws from the Multiemployer Plan prior to
the end of the fifth plan year beginning after the Closing Date, and
(ii) the resulting liability of the Buyer with respect to the
Multiemployer Plan is not paid, the Seller shall be secondarily liable
for any withdrawal liability the Seller would have had to the
Multiemployer Plan but for Section 4204 of ERISA. In the event the
Seller becomes secondarily liable for withdrawal liability under the
Multiemployer Plan, the Buyer shall reimburse the Seller for any and
all costs and expenses incurred by the Seller with respect to such
secondary liability.
(iv) The Seller will cooperate with the Buyer in the
preparation and submission to the PBGC of a request for an individual
variance or exemption from the surety bond requirements of Section 4204
of ERISA.
(i) SEVERANCE. (i) The Buyer agrees to provide severance pay
which may be owing to any Transferred Employee whose employment is terminated by
the Buyer within six months after the Closing Date. Such severance pay
entitlements shall be determined in accordance with the severance policy of the
Acquired Business ("SEVERANCE POLICY") as in effect on June 30, 1996 applicable
to the Employees. For purposes of determining severance benefits, the Buyer
shall count (x) all service of a Transferred Employee that would have been
counted under the Severance Policy had such Transferred Employee been terminated
by
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the Seller on the Closing Date and (y) all service of such Transferred Employee
with the Buyer.
(ii) The Seller shall reimburse the Buyer with
respect to all costs of providing severance pay to the first twenty one
(21) Transferred Employees who become entitled to severance benefits
under the Severance Policy by reason of being terminated within six
months after the Closing Date.
7.5 FIRPTA CERTIFICATE. The Seller shall provide the Buyer, on
or before the Closing Date, with an affidavit in the form of EXHIBIT H to the
effect that Seller is not a "foreign person" within the meaning of Code Section
1445. If, on or before the Closing Date, the Buyer shall not have received such
affidavit, the Buyer may withhold from the Purchase Price payable at Closing to
the Seller pursuant hereto such sums as are required to be withheld therefrom
under Section 1445 of the Code.
7.6 TITLE INSURANCE; ESTOPPEL CERTIFICATES. (a) After the date
hereof, the Seller shall use all reasonable commercial efforts to assist the
Buyer at the Closing or within ninety (90) days thereafter to obtain (i) a
commitment or commitment to issue, on such ALTA or other forms as are reasonably
acceptable to the Buyer, a title insurance policy or policies and (ii) the
related insurance policy or policies (the "TITLE POLICY") for each parcel of
Owned Real Property, in amounts not less than the value of each such property,
as reasonably determined by the Buyer, insuring fee title thereto to be free and
clear of all Encumbrances, except Permitted Encumbrances. The cost of obtaining
such commitment and such Title Policy shall be borne equally by the Buyer and
the Seller. Each commitment and Title Policy shall be issued by a reputable
title insurance company or companies licensed in the state where the Owned Real
Property is located (any or each such company, the "TITLE COMPANY"). At the time
of delivery of such documents, the Seller shall use all reasonable commercial
efforts to deliver to the Buyer and the Title Company the usual and customary
affidavits, indemnification agreements or other documents as may be required in
order to omit from the Title Policy all exceptions other than Permitted
Encumbrances.
(b) At the time of delivery of the documents referred to in
Section 7.6(a), the Seller shall deliver such evidence as may be reasonably
required by the Title Company of the due authorization, execution and delivery
of this Agreement and the Transfer Documents. The Seller and the Buyer shall
also deliver to the Title Company, along with the Transfer Documents, such
transfer tax and other tax forms (including sales tax forms in connection with
its payment of sales taxes, if any) that are required to effectuate the
conveyance of the Properties.
(c) The Seller and the Buyer shall use all reasonable
commercial efforts in order to deliver (or cause to be delivered) to the Buyer,
at or prior to the Closing or within ninety (90)
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days after the Closing, any consent of the landlord that may be required under
any Lease by reason of the transactions contemplated hereby.
(d) The Seller and the Buyer shall use reasonable commercial
efforts in order to deliver (or cause to be delivered) to the Buyer, at or prior
to the Closing or within ninety (90) days after the Closing, a certificate from
the landlord under a Lease (or from each tenant where CVL is itself leasing or
subleasing any of the Properties), dated not more than thirty (30) days prior to
delivery, certifying (i) that the Lease is in good standing and in full force
and effect in accordance with its terms and has not been modified (except for
modifications set forth in the certificate), (ii) the date(s) to which rent and
other charges thereunder have been paid and (iii) that there is not a default
thereunder on the part of any party thereto.
7.7 LEASED VEHICLES. The Seller and the Buyer covenant and
agree to use all commercially reasonable efforts promptly after the Closing (but
in any event not more than ninety (90) days thereafter) to amend, or cause to be
amended, the automobile leases relating to the vehicles that are currently
leased by the Seller or its Affiliates for use by the Employees and listed on
SCHEDULE 7.7 so as to cause the Buyer to become the lessee of all such vehicles
and to relieve the Seller of all obligations under such leases.
7.8 NON-SOLICITATION OF EMPLOYEES. (a) If this Agreement is
terminated, for a period of two (2) years thereafter, the Buyer will not,
directly or indirectly, solicit, encourage, entice or induce any person who is
an employee of the Acquired Business at the date hereof or at any time hereafter
that precedes such termination, to terminate his or her employment with the
Acquired Business, nor may the Buyer employ any such employee during the first
year of such two year period, PROVIDED that the Buyer will not be precluded from
hiring any such employee who (i) initiates discussions regarding such employment
without any direct or indirect solicitation by the Buyer or its Affiliates, (ii)
responds to any public advertisement placed by the Buyer or its Affiliates in
any publication of general circulation or (iii) has been terminated by the
Acquired Business prior to the commencement of employment discussions between
the Buyer or any of its Affiliates and such employee.
(b) For the period ending on the second anniversary of the
Closing Date, the Buyer will not, directly or indirectly, solicit, encourage,
entice or induce any person who is an employee of ConvaTec at the date hereof,
to terminate his or her employment with ConvaTec, nor may the Buyer employ any
such employee during the first year of such two year period, PROVIDED that the
Buyer will not be precluded from hiring any such employee who (i) initiates
discussions regarding such employment without any direct or indirect
solicitation by the Buyer or its
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Affiliates, (ii) responds to any public advertisement placed by the Buyer or its
Affiliates in any publication of general circulation or (iii) has been
terminated by the Acquired Business prior to the commencement of employment
discussions between the Buyer or any of its Affiliates and such employee.
(c) The Buyer agrees that money damages will not be an
adequate remedy and that the Seller shall be entitled to equitable relief,
including but not limited to injunction, in the event of any breach by the Buyer
of this Section 7.8, in addition to any other remedies available to the Seller
at law.
7.9 BOOKS AND RECORDS; ACCESS TO EMPLOYEES. The Buyer shall,
and shall cause the Acquired Business to, retain all books, records and other
documents pertaining to the Acquired Business in existence on the Closing Date
and to make the same available after the Closing Date for inspection and copying
by the Seller or any Affiliate of the Seller at the Seller's expense during the
normal business hours of the Buyer or any Affiliate of the Buyer, as applicable,
upon reasonable request and upon reasonable notice including, without
limitation, in connection with the defense, compromise or settlement by the
Seller of any action, suit, proceeding or investigation relating to the Retained
Liabilities described in Section 2.2(b)(x). No such books, records or documents
shall be destroyed or disposed of by the Buyer or any Affiliate of the Buyer
prior to the fifth (5th) anniversary of the Closing Date without first advising
the Seller in writing and giving the Seller a reasonable opportunity to obtain
copies thereof. The Buyer shall, and shall cause its Affiliates to, make
available to the Seller, the Affiliates of the Seller and their respective
representatives all information and employees of the Acquired Business
reasonably deemed necessary or desirable by the Seller or such Affiliates
including, but not limited to, in connection with (i) preparing their respective
Tax returns and financial statements, and conducting any audits or proceedings
in connection therewith and asserting or defending any Claims and (ii) the
defense, compromise or settlement by the Seller of any action, suit, proceeding
or investigation relating to the Retained Liabilities described in Section
2.2(b)(x); PROVIDED that the Seller agrees to reimburse the Buyer for reasonable
out of pocket expenses, if any, incurred by any such employee in connection
therewith.
7.10 ANNOUNCEMENT. Neither the Seller nor the Buyer will issue
any press release or otherwise make any public statement with respect to this
Agreement or the transactions contemplated hereby without the prior consent of
the other (which consent shall not be unreasonably withheld), except as may be
required by applicable law or stock exchange regulation, in which case the party
required to issue the press release or make the statement shall allow the other
party reasonable time to comment on such release or statement in advance of such
issuance.
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7.11 COMMERCIALLY REASONABLE EFFORTS. Each of the parties
hereto shall use all commercially reasonable efforts to fulfill or obtain the
fulfillment of the conditions of the Closing, including, without limitation, the
execution and delivery of all agreements contemplated hereunder to be so
executed and delivered.
7.12 COVENANT NOT TO COMPETE; NON-SOLICITATION BY SELLER. (a)
For the period ending on the third anniversary of the Closing Date, neither the
Seller nor any of its Affiliates, shall engage, in any geographical area in
which the Acquired Business currently does business or currently has plans to do
business, in any business which competes with the Acquired Business; PROVIDED,
HOWEVER, that nothing contained herein shall restrict the Seller or its
Affiliates from manufacturing, selling or distributing (i) the Retained Patient
Skin Care Products, (ii) Hexifoam, to the extent sold in the South Pacific
region, (iii) any other products currently manufactured, sold or distributed by
the Seller or any of its Affiliates (other than products listed on SCHEDULE
1.1(A)) and any modifications and improvements of such product, (iv) any product
marketed or sold by the Seller or any of its Affiliates to consumers and (v) any
pharmaceutical product manufactured, sold or distributed by the Seller or any of
its Affiliates, and PROVIDED, FURTHER, that nothing contained herein shall
preclude the Seller or any of its Affiliates from acquiring any interest in any
business some or all of the operations of which would otherwise violate the
foregoing prohibitions (the "COMPETING OPERATIONS") so long as (x) the annual
revenues attributable to the Competing Operations do not exceed the lesser of
$15 million or twenty five percent (25%) of the annual revenues of such business
or (y) if they do, the acquiring entity divests the Competing Operations as soon
as practicable, but not later than eighteen (18) months, after such acquisition.
(b) (i) For the period ending on the third anniversary of the
Closing Date, the Seller and its Affiliates will not, directly or indirectly,
solicit, encourage, entice or induce any person who is listed on SCHEDULE 7.12
(a "RESTRICTED EMPLOYEE") to terminate his or her employment with the Buyer, nor
may the Seller or any of its Affiliates employ any such employee during the
first year of such three year period, PROVIDED that the Seller will not be
precluded from hiring any such employee who (i) initiates discussions regarding
such employment without any direct or indirect solicitation by the Seller or its
Affiliates, (ii) responds to any public advertisement placed by the Seller or
its Affiliates in any publication of general circulation or (iii) has been
terminated by the Buyer prior to the commencement of employment discussions
between the Seller or any of its Affiliates and such employee.
(ii) For the period ending on the second anniversary
of the Closing Date, ConvaTec will not, directly or indirectly,
solicit, encourage, entice or induce any
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person who is a non-union employee of the Acquired Business at the date
hereof to terminate his or her employment with the Buyer, nor may
ConvaTec employ any such employee during the first year of such two
year period, PROVIDED that ConvaTec will not be precluded from hiring
any such employee who (i) initiates discussions regarding such
employment without any direct or indirect solicitation by ConvaTec,
(ii) responds to any public advertisement placed by ConvaTec in any
publication of general circulation or (iii) has been terminated by the
Buyer prior to the commencement of employment discussions between
ConvaTec and such employee.
(c) Each of the Seller and ConvaTec agrees that damages at law
would be an insufficient remedy to the Buyer in the event of a breach by the
Seller or any of its Affiliates or by Convatec of Section 7.12(a) and Section
7.12(b), respectively, and that the Buyer shall be entitled to injunctive relief
or other equitable remedies in the event of any such breach.
(d) If any of the provisions of Section 7.12(a) are held to be
unenforceable because of the scope, term or area of their applicability, then
the court making such determination shall modify such scope, term or area or all
of them to the extent necessary to render Section 7.12(a) enforceable under
applicable law, and such provisions shall then be enforced in such modified
form.
7.13 CONFIDENTIALITY AGREEMENTS. On the Closing Date, the
Seller shall cause Bristol-Myers Squibb to assign to the Buyer its rights under
all confidentiality agreements (other than the Confidentiality Agreement)
entered into by Bristol-Myers Squibb with prospective bidders in connection with
the proposed sale of the Acquired Business to the extent the rights relate to
confidential information of the Acquired Business (it being understood that the
Seller and its Affiliates shall retain all other rights under such
confidentiality agreements). At the Closing, the Seller will provide the Buyer
with a copy of each such confidentiality agreement. Notwithstanding the
foregoing, the Seller shall not assign, or provide copies of, any such
confidentiality agreement if doing so would result in a breach thereof.
7.14 CHANGE OF NAME. The Seller will take all necessary
corporate or other action as soon as practicable, and in any event within three
(3) months after the Closing, to change the name of CVL to a name which does not
use the "Calgon" or "Vestal" name or any substantially similar name.
7.15 USE OF CERTAIN NAMES. (a) The Buyer agrees that the
Seller may, for up to twelve (12) months after the Closing Date, use packaging,
labels, package inserts, catalogs, brochures, handbooks and similar materials
which contain the name "Calgon Vestal Laboratories" or variations thereof
(including logos), as necessary after the Closing and until the supplies
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thereof have been exhausted in connection with the Seller's sale and
distribution of the Retained Patient Skin Care Products; PROVIDED, HOWEVER, that
the Seller (i) shall use all reasonable efforts in its procurement of such
materials after the Closing to procure materials which do not include any such
names, and to overprint, sticker or otherwise identify on such materials in such
a way as to either obliterate such names or clearly indicate that neither the
Seller nor any of its Affiliates is affiliated with the Acquired Business and
(ii) shall not use any such names after the Closing in any manner or for any
purpose different from the use of such names by the Seller or its Affiliates
during the ninety (90) day period preceding the Closing.
(b) The Seller agrees that the Acquired Business may, for up
to twelve (12) months after the Closing Date, use packaging, labels, package
inserts, catalogs, brochures, handbooks and similar materials which contain the
name "ConvaTec" or variations thereof (including logos), as necessary after the
Closing and until the supplies thereof included in the Purchased Assets have
been exhausted; PROVIDED, HOWEVER, that the Buyer (i) shall use all reasonable
efforts in its procurement of such materials after the Closing to procure
materials which do not include any such names, and to overprint, sticker or
otherwise identify on such materials in such a way as to either obliterate such
names or clearly indicate that neither the Seller nor any of its Affiliates is
affiliated with the Acquired Business and (ii) shall not use any such names
after the Closing in any manner or for any purpose different from the use of
such names by the Seller or its Affiliates during the ninety (90) day period
preceding the Closing.
(c) Notwithstanding anything in this Section 7.15 to the
contrary, in no event shall the Buyer, any Affiliate of the Buyer or the
Acquired Business have the right under any circumstance to use for any purpose
the names "Bristol-Myers Squibb Company," "Bristol-Myers Squibb," "BMS," "B-MS,"
"E.R. Squibb & Sons, Inc.," "E.R. Squibb" or any variations thereof.
7.16 CONSENTS; TRANSFER OF PERMITS. (a) Except as provided in
Section 7.16(b): (i) No representation, warranty or covenant of the Seller
contained in this Agreement shall be breached or deemed breached, and no
condition shall be deemed not satisfied, as a result of (A) the failure to
obtain any consent, waiver or approval required under any agreement, contract or
commitments set forth on Schedule 5.2, or (B) any lawsuit, action, claim,
proceeding or investigation commenced or threatened by or on behalf of any
Persons arising out of or relating to the failure to obtain any such consent,
waiver or approval or any default under or acceleration or termination of any
agreement, contract or commitment.
(ii) The Seller agrees to cooperate with the Buyer after the
Closing, upon the request of the Buyer, in any reasonable manner, in connection
with the transfer of the Permits
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to the Buyer; PROVIDED, HOWEVER, that such cooperation shall not include any
requirement that the Seller, CVL or any of their respective Affiliates expend
any money, commence or participate in any litigation or offer or grant any
accommodation (financial or otherwise) to any third party.
(b) Section 7.16(a) shall not apply if and to the extent the
Seller fails to fulfill its obligations under Section 2.5(b).
7.17 MIXED PRODUCT CONTRACTS; DISTRIBUTORS. (a) Promptly after
the date hereof, the Seller shall provide to the Buyer, upon the Buyer's
reasonable request, reasonable assistance in order to assign to the Buyer all
rights, and for the Buyer to assume all obligations, under the Mixed Product
Contracts as they relate to products or business of the Acquired Business. Each
of the Buyer and the Seller acknowledges and agrees the other party hereto has
significant interests in the Mixed Product Contracts with respect to such
party's respective products and business and therefore each of the Buyer and the
Seller agrees that it will not take any action or fail to take any action that
could reasonably be expected to jeopardize or otherwise harm such other party's
or such other party's Affiliate's interest in any Mixed Product Contract or the
relationship between such other party or such other party's Affiliates and any
other party to such Mixed Product Contracts. Each of the Buyer and the Seller
and their respective Affiliates will use all reasonable commercial efforts to
facilitate the transition of the Mixed Product Contract as contemplated by and
in accordance with the terms of the Transition Services Agreement.
(b) Prior to the assignment and assumption of any Mixed
Product Contract as contemplated by Section 7.17(a), whether by means of the
execution of a new agreement by the Buyer and the other party to the Mixed
Product Contract or the execution of an assignment and assumption agreement, the
Buyer shall honor the prices and other terms set forth in such Mixed Product
Contract during the currently remaining term of such Mixed Product Contract
(including, to the extent applicable, delivering products of the Acquired
Business to a party placing purchase orders for such products after the Closing
Date on the terms contemplated by the applicable Mixed Product Contract).
(c) After the Closing Date, each of the Buyer and the Seller
shall provide to the other party, upon such other party's reasonable request,
reasonable assistance in order to facilitate the continuation of relationships
of such other party's business with the distributors of its products (the
"DISTRIBUTORS"). Each of the Buyer and the Seller acknowledges and agrees that
the other party and its respective Affiliates have significant interests in
their relationships with Distributors as such Distributors deal in the products
of the other party and such party's Affiliates and therefore each of the Buyer
and the Seller agrees that it will not take any action or fail to take any
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action that could reasonably be expected to jeopardize or otherwise harm the
other party's or such other party's Affiliate's relationships with the
Distributors.
7.18 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES; BEST
KNOWLEDGE; DISCLOSURE. (a) Whenever a representation or warranty made by the
Seller herein refers to the knowledge or expectation of the Seller, such
knowledge or expectation shall be deemed to consist only of the actual knowledge
or expectation of any of those persons listed on SCHEDULE 7.18. The Seller has
not undertaken, nor shall the Seller have any duty to undertake, any inquiry or
investigation concerning any matter as to which a representation or warranty is
made as to the Seller's knowledge or expectation except for consultation with
the individuals listed on SCHEDULE 7.18.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any of the Schedules, any information disclosed on one Schedule
shall be deemed to be disclosed on all Schedules. Certain information set forth
in the Schedules is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any
information shall not be deemed to constitute an acknowledgment that such
information is required to be disclosed in connection with the representations
and warranties made by the Seller in this Agreement or that it is material, nor
shall such information be deemed to establish a standard of materiality.
ARTICLE 8
CONDITIONS PRECEDENT OF SELLER
------------------------------
The obligation of the Seller to consummate the transactions
described in Article 2 hereof is subject to the receipt by the Seller of the
Purchase Price and the assumption by the Buyer of the Assumed Liabilities as
contemplated in Section 4.2 hereof and the fulfillment of each of the following
conditions prior to or at the Closing:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Buyer made hereunder shall be true in all material respects at
and as of the Closing Date, with the same force and effect as though made at and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement and except to the extent that any representation or warranty is made
as of a specified date, in which case such representation or warranty shall be
true in all material respects as of such date.
8.2 AGREEMENTS. The Buyer shall have performed and complied in
all material respects with all its covenants, undertakings and agreements
required by this Agreement to be
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performed or complied with by the Buyer prior to or at the Closing.
8.3 BUYER CERTIFICATE. The Seller shall have been furnished
with a certificate of an authorized officer of the Buyer, dated the Closing
Date, certifying to the effect that the conditions contained in Sections 8.1 and
8.2 have been fulfilled.
8.4 NO INJUNCTION. No injunction, restraining order or decree
of any nature of any court or governmental or regulatory authority shall be in
effect which restrains or prevents the consummation of the transactions
contemplated hereby.
8.5 GOVERNMENTAL CONSENTS; HSR WAITING PERIOD. All material
consents, approvals and authorizations of governmental and regulatory
authorities, and all material filings with and notifications of governmental
authorities and regulatory agencies, necessary on the part of the Buyer or its
Affiliates, to the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, shall have been obtained or effected,
and all applicable waiting periods, including any extensions thereof, under the
HSR Act shall have expired or terminated.
8.6 PRODUCT SUPPLY AGREEMENT. The Seller and the Buyer shall
have entered into the Product Supply Agreement.
8.7 TRANSITION SERVICES AGREEMENT. The Seller and the Buyer
shall have entered into the Transition Services Agreement.
8.8 LICENSE AGREEMENT. The Seller and the Buyer shall have
entered into the License Agreement.
8.9 BOARD OF DIRECTOR APPROVAL. This Agreement and the
transactions contemplated hereby shall have been authorized and approved by the
Board of Directors of Bristol-Myers Squibb.
8.10 MISCELLANEOUS CLOSING DELIVERIES. The Seller shall have
received each of the following:
(a) all documents, instruments and other closing deliveries
specified in Section 4.2(b); and
(b) such evidence, including appropriate certificates of the
Buyer's authorized officers, as the Seller may reasonably request in order to
establish (i) the corporate power and authority of the Buyer to consummate the
transactions contemplated by this Agreement, and (ii) compliance with the
conditions of Closing set forth herein.
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ARTICLE 9
CONDITIONS PRECEDENT OF BUYER
-----------------------------
The obligation of the Buyer to consummate the transactions
described in Article 2 hereof is subject to the receipt by the Buyer of the Bill
of Sale, Assignment of Patents and Assignment of Trademarks as contemplated by
Section 4.2 hereof and the fulfillment of each of the following conditions prior
to or at the Closing:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Seller made hereunder shall be true in all material respects
at and as of the Closing Date, with the same force and effect as though made at
and as of the Closing Date, except for changes permitted or contemplated by this
Agreement and except to the extent that any representation or warranty is made
as of a specified date, in which case such representation or warranty shall be
true in all material respects as of such date.
9.2 AGREEMENTS. The Seller shall have performed and complied
in all material respects with all of its covenants, undertakings and agreements
required by this Agreement to be performed or complied with by it prior to or at
the Closing.
9.3 SELLER CERTIFICATE. The Buyer shall have been furnished
with a certificate of an authorized officer of the Seller, dated the Closing
Date, certifying to the effect that the conditions contained in Sections 9.1 and
9.2 have been fulfilled.
9.4 NO INJUNCTION. No injunction, restraining order or decree
of any nature of any court or governmental or regulatory authority shall be in
effect which restrains or prevents the consummation of the transactions
contemplated hereby.
9.5 GOVERNMENTAL CONSENTS; HSR WAITING PERIOD. All material
consents, approvals and authorizations of governmental and regulatory
authorities, and all filings with and notifications of governmental authorities
and regulatory agencies, necessary on the part of the Seller or CVL, or their
respective Affiliates, to the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, shall have been obtained
or effected, and all applicable waiting periods under the HSR Act shall have
expired or terminated.
9.6 FIRPTA CERTIFICATE. The Buyer shall have received from the
Seller one or more certificates in accordance with Treasury Regulation 1.1445-2
as contemplated by Section 7.5.
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9.7 TRANSITION SERVICES AGREEMENT. The Buyer and the Seller
shall have entered into the Transition Services Agreement.
9.8 LICENSE AGREEMENT. The Buyer and the Seller shall have
entered into the License Agreement.
9.9 MISCELLANEOUS CLOSING DELIVERIES. The Buyer shall have
received each of the following:
(a) all documents, instruments and other closing deliveries
specified in Section 4.2(a); and
(b) such evidence, including appropriate certificates of the
Seller's authorized officers, as the Buyer may reasonably request in order to
establish (i) the corporate power and authority of the Seller to consummate the
transactions contemplated by this Agreement and (ii) compliance with the
conditions of Closing set forth herein.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
-------------------------------
10.1 SURVIVAL. The respective representations and warranties
of the Seller and of the Buyer hereunder shall survive for a period of eighteen
(18) months after the Closing Date (the "SURVIVAL DATE") and thereafter shall
expire.
10.2 INDEMNIFICATION OF BUYER AND ITS AFFILIATES. Subject to
Section 10.5, the Seller agrees to defend, indemnify and hold harmless the Buyer
and its successors and assigns (individually, a "BUYER INDEMNITEE", and
collectively, the "BUYER INDEMNITEES"), against and in respect of:
(a) any and all losses, damages, deficiencies, liabilities or
expenses (including reasonable legal fees and expenses) ("DAMAGES") suffered or
incurred by any such Buyer Indemnitee which is caused by, or resulting or
arising from any failure by the Seller to perform or otherwise fulfill or comply
with any undertaking or other agreement or obligation to be performed, fulfilled
or complied with by the Seller hereunder after the Closing (including, but not
limited to, the obligations of the Seller to satisfy the Retained Liabilities);
and
(b) all Damages suffered or incurred by any Buyer Indemnitee
which is caused by, or resulting or arising from any breach of any
representation or warranty of the Seller contained in this Agreement other than
the representations and warranties set forth in Section 5.15 and Section 5.16.
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10.3 INDEMNIFICATION OF SELLER AND ITS AFFILIATES. Subject to
Section 10.5, the Buyer agrees to defend, indemnify and hold harmless the Seller
and the Seller's Affiliates, and their respective successors and assigns
(individually, a "SELLER INDEMNITEE", and collectively, the "SELLER
INDEMNITEES"), against and in respect of:
(a) any and all Damages suffered or incurred by any Seller
Indemnitee which is caused by, or resulting or arising from any failure by the
Buyer to perform or otherwise fulfill or comply with any undertaking or other
agreement or obligation to be performed, fulfilled or complied with by the Buyer
after the Closing (including, but not limited to, the undertaking and assumption
by the Buyer of the Assumed Liabilities); and
(b) all Damages suffered or incurred by any Seller Indemnitee
which is caused by, or resulting or arising from any breach of any
representation or warranty of the Buyer contained in this Agreement.
10.4 NOTICE AND OPPORTUNITY TO DEFEND. If any action, suit,
proceeding, claim, liability, demand or assessment shall be asserted against any
Buyer Indemnitee or any Seller Indemnitee (the "INDEMNITEE") in respect of which
such Indemnitee proposes to demand indemnification, such Indemnitee shall notify
the party obligated to provide indemnification pursuant to Section 10.2 or 10.3
(the "INDEMNIFYING PARTY") thereof within a reasonable period of time after
assertion thereof; PROVIDED, FURTHER, that the failure to so notify the
Indemnifying Party shall not affect the Indemnitee's right to indemnification
hereunder unless and only to the extent the Indemnifying Party's interests are
actually prejudiced thereby. Subject to rights of or duties to any insurer or
other third Person having liability therefor, the Indemnifying Party shall have
the right within ten (10) days after receipt of such notice to assume the
control of the defense, compromise or settlement of any such action, suit,
proceeding, claim, liability, demand or assessment, including, at its own
expense, employment of counsel; PROVIDED, HOWEVER, that if the Indemnifying
Party shall have exercised its right to assume such control, the Indemnitee (i)
may, in its sole discretion and at its own expense, employ separate counsel to
represent it in any such matter, and in such event counsel selected by the
Indemnifying Party shall be required to cooperate with such counsel of the
Indemnitee in such defense, compromise or settlement for the purpose of
informing and sharing information with such Indemnitee and (ii) will, at its own
expense, make available to the Indemnifying Party those employees of the
Indemnitee or any Affiliate of the Indemnitee (including, but not limited to, in
the case of the Buyer, the Acquired Business) whose assistance, testimony or
presence is desirable to assist the Indemnifying Party in evaluating and in
defending any such action, suit, proceeding, claim, liability, demand or
assessment; PROVIDED, HOWEVER, that any such access shall be conducted in such a
manner as not to interfere unreasonably with
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the operations of the businesses of the Indemnitee and its Affiliates
(including, but not limited to, in the case of the Buyer, the Acquired
Business). The Indemnifying Party shall not compromise or settle any such
action, suit, proceeding, claim, liability or assessment without the consent of
the Indemnitee, which consent shall not be unreasonably withheld or delayed, if
such compromise or settlement could adversely impact the Indemnitee.
10.5 CERTAIN LIMITATIONS. The liability of the Seller or the
Buyer, as applicable, for claims under this Agreement shall be limited by the
following:
(a) At any time after the Survival Date, (i) the Seller shall
have no further obligations under this Article 10 for breaches of
representations and warranties of the Seller, except for Damages with respect to
which the Buyer Indemnitee has given the Seller written notice prior to such
date in accordance with Section 10.4 and (ii) the Buyer shall have no further
obligations under this Article 10 for breaches of representations and warranties
of the Buyer, except for Damages with respect to which the Seller Indemnitee has
given the Buyer written notice prior to such date in accordance with Section
10.4.
(b) The amount of Damages otherwise recoverable under this
Article 10 shall be (i) reduced to the extent to which any Federal, state, local
or foreign tax liabilities of the Seller Indemnitee or the Buyer Indemnitee, as
applicable, or any of its Affiliates is decreased by reason of any Damage in
respect of which such Seller Indemnitee or Buyer Indemnitee, as applicable,
shall be entitled to indemnity under this Agreement and (ii) increased to the
extent to which any Federal, state, local or foreign tax liabilities are
incurred by the Seller Indemnitee or the Buyer Indemnitee, as applicable, or any
of its Affiliates as a result of the receipt of the indemnity so that, after any
such decrease or increase, the position of the indemnified party is the same on
an after tax basis as it would have been had there been neither any tax benefit
nor any tax cost associated with either the Damage or the indemnity.
(c) The amount of Damages otherwise recoverable under this
Article 10 shall be reduced to the extent the party seeking indemnification
receives insurance proceeds with respect to the matter for which indemnification
is sought.
(d) Notwithstanding anything to the contrary herein, any claim
by a Buyer Indemnitee against the Seller for breach of the representations and
warranties of the Seller under this Agreement shall be payable by the Seller
only in the event that the accumulated amount of the claims in respect of the
Seller's obligations to indemnify under this Agreement shall exceed
U.S.$2,000,000 in the aggregate (the "SELLER INDEMNIFICATION THRESHOLD");
PROVIDED, HOWEVER, that at such time as the aggregate amount of claims in
respect of the indemnity
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obligations of such party shall exceed the Seller Indemnification Threshold, the
Seller shall thereafter be liable only, subject to Section 10.5(e), for Damages
suffered or incurred by Buyer Indemnitees in excess of U.S.$2,000,000, it being
the intention of the parties that the initial U.S.$2,000,000 of claims excluded
under the Seller Indemnification Threshold would not be recoverable against the
Seller but would be borne by the Buyer.
(e) Notwithstanding anything to the contrary herein, in no
event shall the maximum aggregate liability of the Seller with respect to
Damages suffered or incurred by Buyer Indemnitees hereunder exceed
U.S.$37,500,000.
(f) Notwithstanding anything to the contrary herein, any claim
by a Seller Indemnitee against the Buyer for breaches of the representations and
warranties of the Buyer under this Agreement shall be payable by the Buyer only
in the event and to the extent that the accumulated amount of the claims in
respect of the Buyer's obligations to indemnify under this Agreement shall
exceed U.S.$2,000,000 in the aggregate (the "BUYER INDEMNIFICATION THRESHOLD");
PROVIDED, HOWEVER, that at such time as the aggregate amount of claims in
respect of the indemnity obligations of such party shall exceed the Buyer
Indemnification Threshold, the Buyer shall thereafter be liable, subject to
Section 10.5(g), for Damages suffered or incurred by Seller Indemnitees in
excess of U.S.$2,000,000, it being the intention of the parties that the initial
U.S.$2,000,000 of claims excluded under the Buyer Indemnification Threshold
would not be recoverable against the Buyer but would be borne by the Seller.
(g) Notwithstanding anything to the contrary herein, in no
event shall the maximum aggregate liability of the Buyer with respect to Damages
suffered or incurred by Seller Indemnitees hereunder exceed U.S.$37,500,000.
10.6 PRODUCT LIABILITY CLAIMS. Subject to the limitations set
forth in Sections 10.5(b), (c) and (e), the Seller agrees to indemnify and hold
harmless the Buyer against and in respect of fifty percent (50%) of the Assumed
Liabilities described in Section 2.2(a)(iii).
10.7 ENVIRONMENTAL CLAIMS. (a) Subject to the limitations set
forth in Sections 10.5(b), (c) and (e) and in this Section 10.7, the Seller
agrees to indemnify and hold harmless the Buyer against and in respect of fifty
percent (50%) of the Assumed Liabilities described in Section 2.2(a)(iv)
(excluding any costs and expenses incurred by the Buyer in connection with any
environmental investigation or assessment) (the "ASSUMED ENVIRONMENTAL
LIABILITIES") to the extent (and only to the extent) such liabilities and
obligations are actually incurred by the Buyer and directly arise out of or
directly relate to any violation of any Environmental Law, to investigate,
remediate, remove, treat, contain or prevent the escape or migration of
Hazardous Materials on, in, under, at or from the
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Properties in order to protect the environment. The Buyer agrees to keep the
Seller generally informed as to its plan to incur expenses covered by this
Section 10.7.
(b) Anything in this Agreement to the contrary
notwithstanding, the Seller's obligation to indemnify the Buyer for the Assumed
Environmental Liabilities pursuant to this Agreement will not extend to any cost
incurred after the third anniversary of the Closing Date and will accrue if and
only if:
(i) the aggregate amount of the Assumed Environmental
Liabilities exceeds U.S.$500,000, it being understood and agreed to by
each of the parties hereto that such U.S.$500,000 shall be borne solely
by the Buyer; and
(ii) the Buyer undertakes (at its sole cost and
expense) the environmental investigation or assessment of the
Properties giving rise to such Assumed Environmental Liabilities within
one (1) year of the Closing Date and the Buyer notifies the Seller in
writing of any potential Assumed Environmental Liabilities that are
identified in connection with such investigation or assessment within
such one-year period.
10.8 REMEDIES. Except in the case of fraud by the breaching
party, indemnification in accordance with the provisions of this Agreement shall
be the sole and exclusive remedy of the Buyer and the Seller for any Damages
suffered or incurred by Buyer Indemnitees or Damages suffered or incurred by
Seller Indemnitees, respectively, including, but not limited to, any and all
breaches of or inaccuracies in any of the respective representations or
warranties, covenants, agreements or other obligations of the Seller and the
Buyer set forth in this Agreement or in any other agreement or instrument
contemplated thereby.
ARTICLE 11
TERMINATION
-----------
11.1 TERMINATION. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of the Seller and the
Buyer;
(b) by the Seller if any of the conditions set forth in
Article 8 shall have become incapable of fulfillment and shall not have been
waived by the Seller;
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(c) by the Buyer if any of the conditions set forth in Article
9 shall have become incapable of fulfillment and shall not have been waived by
the Buyer; or
(d) by either party hereto if the Closing does not occur on or
prior to that date which is (i) ninety (90) days after the date hereof or (ii)
in the event of any inquiry or request for additional information from the FTC
or the DOJ in connection with the HSR filings contemplated by Section 7.2, one
hundred eighty (180) days after the date hereof;
PROVIDED, HOWEVER, that the party seeking to terminate this Agreement pursuant
to Section 11.1 (b), (c) or (d) is not in breach in any material respect of its
representations, warranties, covenants or agreements contained in this
Agreement.
11.2 OBLIGATIONS UPON TERMINATION. In the event of termination
by the Seller or the Buyer pursuant to Section 11.1, written notice thereof
shall forthwith be given to the other party and the transactions contemplated by
this Agreement shall be terminated, without further action by either party. If
the transactions contemplated by this Agreement are terminated as provided
herein:
(a) The Buyer shall promptly return to the Seller all
documents and copies and other material received from the Seller or any
representative of the Seller relating to the Acquired Business, the Purchased
Assets, the Excluded Assets, the Assumed Liabilities, the Retained Liabilities
or the transactions contemplated hereby, whether so obtained before or after the
execution hereof;
(b) All confidential information received by the Buyer with
respect to the Seller, any of its Affiliates, the Acquired Business, the
Purchased Assets, the Excluded Assets, the Assumed Liabilities and the Retained
Liabilities shall be treated in accordance with the terms and conditions of the
Confidentiality Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement;
(c) If such termination is pursuant to Section 11.1(b) or (d)
under such circumstances that all the conditions to Closing set forth in Article
8 and Article 9 shall have been satisfied or would have been satisfied but for
any action taken or omitted to be taken by the Buyer or any of its Affiliates,
then such termination shall not result in any liability to the Seller; and
(d) If such termination is pursuant to Section 11.1(c) or (d)
under such circumstances that all the conditions to Closing set forth in Article
8 and Article 9 shall have been satisfied or would have been satisfied but for
any action taken or omitted to be taken by the Seller or any of its Affiliates,
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then such termination shall not result in any liability to the Buyer.
11.3 EFFECT OF TERMINATION. If this Agreement is terminated
and the transactions contemplated hereby are abandoned as described in this
Article 11, this Agreement shall become void and of no further force or effect,
except for the provisions of Section 5.10, Section 6.3, Section 7.1(b), Section
7.10, Section 12.2, Section 12.3, Section 12.4 and this Section 11.3. Nothing in
this Article 11 shall be deemed to release either party from any liability for
any breach by such party of the terms and provisions of this Agreement.
ARTICLE 12
MISCELLANEOUS
-------------
12.1 BULK TRANSFER LAWS. The Buyer hereby waives compliance by
the Seller with the provisions of any so-called bulk transfer law in any
jurisdiction in connection with the transactions contemplated hereby.
12.2 EXPENSES. Each of the parties hereto shall pay the fees
and expenses of its respective counsel, accountants and other experts and shall
pay all other expenses incurred by it in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby. All costs of any documentary, stamp, sales,
excise, transfer or other tax or recording or filing fees and charges payable
(other than Income Taxes and gains Taxes payable by the Seller) in respect of
the sale of the Purchased Assets shall be borne equally by the Buyer and the
Seller.
12.3 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware without reference
to choice of law principles, including all matters of construction, validity and
performance.
12.4 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING
ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT.
12.5 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if signed by the
respective person giving such notice or other communication (in the case of any
corporation the signature shall be by an authorized officer thereof) upon
receipt of hand delivery, certified or registered mail (return receipt
requested), or telecopy transmission with confirmation of receipt:
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If to the Seller, to:
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154-0037
Telecopy: (212) 546-4390
Attention: Mr. George P. Kooluris
Senior Vice President
Corporate Development
with a copy to:
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154-0037
Telecopy: (212) 546-9562
Attention: John L. McGoldrick, Esq.
Senior Vice President and
General Counsel
and to:
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
Telecopy: (212) 858-1500
Attention: Stephen R. Rusmisel, Esq.
If to the Buyer, to:
STERIS Corporation
5960 Heisley Road
Mentor, Ohio 44060-1868
Telecopy: (216) 639-4457
Attention: Bill R. Sanford
Chairman, President and
Chief Executive Officer
with a copy to:
STERIS Corporation
5960 Heisley Road
Mentor, Ohio 44060-1868
Telecopy: (216) 639-4457
Attention: David C. Dvorak, Esq.
General Counsel and
Secretary
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Thompson Hine & Flory LLP
3900 Key Tower
127 Public Square
Cleveland, Ohio 44114-1216
Telecopy: (216) 566-5800
Attention: Roy L. Turnell, Esq.
Such names and addresses may be changed by such notice.
12.6 ENTIRE AGREEMENT. This Agreement (including the Exhibits
and Schedules attached hereto, all of which are a part hereof) and contain the
entire understanding of the parties hereto with respect to the subject matter
contained herein, and supersede and cancel all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter, including but not limited to the Offering
Memorandum.
12.7 AMENDMENTS. This Agreement may be amended only by a
written instrument executed by the parties or their respective successors or
assigns.
12.8 HEADINGS; REFERENCES. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles", "Sections", or "Schedules" shall be deemed to
be references to Articles or Sections hereof or Schedules hereto unless
otherwise indicated.
12.9 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original.
12.10 PARTIES IN INTEREST; ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the Seller and the Buyer and their
respective successors. Except as provided in or contemplated by Article 10
(which shall confer upon the Persons referred to therein for whose benefit it is
intended the right to enforce such Article, as applicable), nothing in this
Agreement, express or implied, is intended to confer upon any Person not a party
to this Agreement any rights or remedies under or by reason of this Agreement.
This Agreement and the rights and obligations hereunder shall not be assignable
or transferable by the Buyer or the Seller without the prior written consent of
the other party hereto; PROVIDED, HOWEVER, that the Buyer may assign its right
to purchase the Acquired Business (including the Purchased Assets) hereunder to
a wholly-owned subsidiary of the Buyer without the prior written consent of the
Seller; PROVIDED FURTHER, HOWEVER, that no assignment shall limit or affect the
assignor's obligations hereunder. Any attempted assignment in violation of this
Section 12.10 shall be void.
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12.11 SEVERABILITY; ENFORCEMENT. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, each party agrees that a
court of competent jurisdiction may enforce such restriction to the maximum
extent permitted by law, and each party hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
12.12 WAIVER. Any of the conditions to Closing set forth in
this Agreement may be waived at any time prior to or at the Closing hereunder by
the party entitled to the benefit thereof. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
or non-compliance with this Agreement shall be held to be a waiver of any other
or subsequent breach or non-compliance.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
E.R. SQUIBB & SONS, INC.
By: /s/ Perry A. Karsen
-------------------------------------
Perry A. Karsen
Vice President, Corporate
Development, as Attorney-in-Fact
for J. Edward Penick, Jr., Vice
President
STERIS CORPORATION
By: /s/ Bill R. Sanford
-------------------------------------
Bill R. Sanford
Chairman, President and Chief
Executive Officer
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FIRST AMENDMENT TO THE
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
E.R. SQUIBB & SONS, INC.
AND
STERIS CORPORATION
THIS FIRST AMENDMENT (the "FIRST AMENDMENT") to the Asset
Purchase Agreement (the "ASSET PURCHASE AGREEMENT"), dated as of November 26,
1996, by and between E.R. Squibb & Sons, Inc., a Delaware corporation (the
"SELLER"), and STERIS Corporation, an Ohio corporation (the "BUYER"), is dated
as of December 18, 1996. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Asset Purchase Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties have entered into the Asset Purchase
Agreement; and
WHEREAS, the parties now desire to amend the Asset Purchase
Agreement as provided herein;
NOW, THEREFORE, in consideration of the above premises and the
mutual covenants and agreements set forth herein, the Buyer and the Seller, each
intending to be legally bound, hereby agree as follows:
1. The first sentence of Section 2.1(a) of the Asset Purchase
Agreement (Purchase and Sale) is hereby amended by deleting the present text
thereof and substituting in its place the following sentence:
"At the Closing provided for in Section 4.1, on the terms and subject
to the conditions set forth in this Agreement, the Seller shall, or
shall cause its Affiliates to, sell, convey, transfer, assign and
deliver to the Buyer, and the Buyer shall purchase and acquire from the
Seller and its Affiliates, all of the right, title and interest of the
Seller and its Affiliates in and to the assets, properties and rights
held by the Seller or such Affiliates primarily for use by the Acquired
Business (other than the Excluded Assets), as the same may exist on the
Closing Date, wherever located, and whether tangible or intangible
(collectively, the "PURCHASED ASSETS").
2. Section 2.1(a)(ii) of the Asset Purchase Agreement
(Purchase and Sale) is hereby amended by deleting the present
65
text thereof and substituting in its place the following
sentence:
"(ii) all machinery, equipment, fixtures, office furniture,
tools and other tangible property that is either (A) held by the Seller
or its Affiliates primarily for use by the Acquired Business or (B)
located at the Properties (other than any Excluded Assets located at
the Properties);"
3. Section 2.1(a)(vi) of the Asset Purchase Agreement
(Purchase and Sale) is hereby amended by deleting the present text thereof and
substituting in its place the following sentence:
"(vi) subject to Section 2.5(b), all agreements, contracts or
commitments (other than the Mixed Product Contracts) binding on the
Seller or its Affiliates and relating primarily to the Acquired
Business and Permits of the Acquired Business;"
4. Section 3.1 of the Asset Purchase Agreement (Preliminary
Statement of Inventory) is hereby amended by deleting the present text thereof
and substituting in its place the following paragraph:
"3.1 PRELIMINARY STATEMENT OF INVENTORY. As soon as
reasonably practicable after the Closing Date but in any event within
one-hundred twenty (120) days thereafter, the Buyer shall direct the
preparation of, and deliver to the Seller, a statement of Inventory as
of the Closing Date (the "PRELIMINARY INVENTORY STATEMENT"). The
Preliminary Inventory Statement shall be prepared in accordance with
the inventory valuation methods utilized by the Seller in connection
with the preparation of the Statement of Assets and Liabilities and
shall reflect the results of the physical inventory count to be
performed by the Buyer's independent public accountant (i) with respect
to Inventory located at the Properties, on or before January 5, 1997,
and (ii) with respect to Inventory not located at the Properties on the
Closing Date, at any time prior to the date on which the Preliminary
Inventory Statement is to be delivered to the Seller. The Buyer agrees
that Bristol-Myers Squibb and its representatives, including, without
limitation, Price Waterhouse LLP, shall have the right to observe the
performance of the physical inventory count contemplated by this
Section 3.1."
5. Section 4.1 of the Asset Purchase Agreement (Closing) is
hereby amended by deleting the present text thereof and substituting in its
place the following paragraph:
"4.1 CLOSING. The closing of the transactions
provided for herein (the "CLOSING") will take place at the
offices of Winthrop, Stimson, Putnam & Roberts, One Battery
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66
Park Plaza, New York, New York 10004, at 10:00 a.m. (local time), but
with effect from 12:00:01 a.m., on the fifth business day following the
satisfaction or waiver of all of the conditions set forth in Articles 8
and 9, or at such other time and place as the Buyer and the Seller
shall agree (the date of the Closing being the "CLOSING DATE")."
6. Section 7.4 of the Asset Purchase Agreement (Employee
Matters) is hereby amended by adding the following subsection:
"(j) At the Closing, the Seller and the Buyer
shall execute and deliver the Letter Agreement in the form attached hereto as
EXHIBIT I.
7. (a) Section 7.7 of the Asset Purchase Agreement (Leased
Vehicles) is hereby amended by adding to such section the following text:
"From and after the Closing Date (to the extent the automobile leases
are not amended as contemplated by this Section 7.7 prior to the
Closing Date), the Buyer hereby agrees to (i) pay directly, or to
reimburse the Seller (or its Affiliates) for, any and all costs and
expenses arising on or after the Closing Date relating to such
automobile leases, including, without limitation, the applicable lease
payments, (ii) maintain policies of insurance relating to each of the
leased vehicles with respect to periods beginning on or after the
Closing Date and (iii) indemnify and hold harmless the Seller and its
Affiliates from and against any and all losses, damages, costs and
expenses, including reasonable attorney's fees, arising out of or
relating to the use or operation of the leased vehicles from and after
the Closing Date including, without limitation, losses, damages, costs
and expenses relating to property damage, personal injury and third
party claims."
(b) SCHEDULE 7.7 of the Asset Purchase Agreement is hereby
amended by deleting the present text thereof and substituting in its place
SCHEDULE 7.7 in the form attached hereto.
8. Section 7.12(b)(ii) of the Asset Purchase Agreement
(Covenant Not to Compete; Non-Solicitation by Seller) is hereby amended by
deleting the present text thereof and substituting in its place the following
paragraph:
"(ii) For the period ending on the second anniversary
of the Closing Date, ConvaTec will not, directly or indirectly,
solicit, encourage, entice or induce any person who is a non-union
employee of the Acquired Business at the date hereof to terminate his
or her employment with the Buyer, nor may ConvaTec employ any such
employee during the first year of such two year period, PROVIDED that
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ConvaTec will not be precluded from hiring any such employee who (A) is
listed on SCHEDULE 7.12(B)(II), (B) initiates discussions regarding
such employment without any direct or indirect solicitation by
ConvaTec, (C) responds to any public advertisement placed by ConvaTec
in any publication of general circulation or (D) has been terminated by
the Buyer prior to the commencement of employment discussions between
ConvaTec and such employee. The Seller agrees that the employees listed
on SCHEDULE 7.12 (B)(II) will be made available by the Seller to the
Buyer in connection with the services to be performed pursuant to the
Transition Services Agreement."
9. Section 7.15(a) of the Asset Purchase Agreement (Use of
Certain Names) is hereby amended by deleting the present text thereof and
substituting in its place the following paragraph:
"(a) The Buyer agrees that the Seller may, (i) for up to
twelve (12) months after the Closing Date, produce and use packaging,
labels, package inserts, catalogs, brochures, handbooks and similar
materials which contain the name "Calgon Vestal Laboratories" or
variations thereof (including logos), and (ii) for up to thirty six
(36) months after the Closing Date, sell products displaying the name
"Calgon Vestal Laboratories" or variations thereof (including logos) in
connection with the sale and distribution of (x) the Retained Patient
Skin Care Products and (y) the wound care products of the Seller and
its Affiliates, in each case as necessary after the Closing; PROVIDED,
HOWEVER, that the Seller (A) shall use all reasonable efforts in its
procurement of such materials after the Closing to procure materials
which do not include any such names, and to overprint, sticker or
otherwise identify on such materials in such a way as to either
obliterate such names or clearly indicate that neither the Seller nor
any of its Affiliates is affiliated with the Acquired Business, (B)
shall not use any such names after the Closing in any manner or for any
purpose different from the use of such names by the Seller or its
Affiliates during the ninety (90) day period preceding the Closing and
(C) shall use such names after the Closing only in connection with
products of substantially similar quality to such products as
manufactured and sold during the ninety (90) day period preceding the
Closing; it being understood and agreed that in no event shall the
Seller sell any product displaying the name "Calgon Vestal
Laboratories" or variations thereof (including logos) more than thirty
six (36) months after the Closing Date. The Seller agrees to indemnify
and hold harmless the Buyer from and against any and all losses,
damages, costs and expenses, including reasonable attorney's fees,
which the Buyer may suffer or incur as a result of the Seller's use of
the name "Calgon Vestal Laboratories" or variations thereof (including
logos)
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as contemplated by this Section 7.15(a), including, without limitation,
losses, damages, costs and expenses resulting from or relating to
warranty claims, product recalls and product liability claims."
10. Section 7.15(b) of the Asset Purchase Agreement (Use of
Certain Names) is hereby amended by deleting the present text thereof and
substituting in its place the following paragraph:
"(b) The Seller agrees that the Acquired Business may, for up
to twelve (12) months after the Closing Date, produce and use
packaging, labels, package inserts, catalogs, brochures, handbooks and
similar materials which contain the name "ConvaTec" or variations
thereof (including logos), and (ii) for up to thirty six (36) months
after the Closing Date, sell products displaying the name "ConvaTec" or
variations thereof (including logos), in connection with the sale of
Inventory, in each case as necessary after the Closing ; PROVIDED,
HOWEVER, that the Buyer (i) shall use all reasonable efforts (which
shall require more than reasonable efforts but not to the level of best
commercial efforts) in its procurement of such materials after the
Closing to procure materials which do not include any such names taking
into account, INTER ALIA, the size of the product unit, and to
overprint, sticker or otherwise identify on such materials in such a
way as to either obliterate such names or clearly indicate that neither
the Seller nor any of its Affiliates is affiliated with the Acquired
Business, (ii) shall not use any such names after the Closing in any
manner or for any purpose different from the use of such names by the
Seller or its Affiliates during the ninety (90) day period preceding
the Closing and (iii) shall use such names after the Closing only in
connection with products of substantially similar quality to such
products as manufactured and sold during the ninety (90) day period
preceding the Closing; it being understood and agreed that in no event
shall the Buyer sell any product displaying the name "ConvaTec" or
variations thereof (including logos) more than thirty six (36) months
after the Closing Date. The Buyer agrees to indemnify and hold harmless
the Seller from and against any and all losses, damages, costs and
expenses, including reasonable attorney's fees, which the Seller may
suffer or incur as a result of the Buyer's use of the name "ConvaTec"
and variations thereof (including logos) as contemplated by this
Section 7.15(b), including, without limitation, losses, damages, costs
and expenses resulting from or relating to warranty claims, product
recalls and product liability claims relating to or arising out of
products manufactured on or after the Closing Date. The Seller agrees
to indemnify and hold harmless the Buyer from and against any and all
losses, damages, costs and expenses, including reasonable attorney's
fees, which the Buyer may suffer or incur as a result of the sale of
products
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manufactured by the Seller prior to the Closing Date, including,
without limitation, losses, damages, costs and expenses resulting from
or relating to warranty claims, product recalls and product liability
claims."
11. Section 7.15 of the Asset Purchase Agreement (Use
of Certain Names) is further amended by adding the following new subparagraphs:
"(d) (i) The Seller shall have the right to request in writing
that the Buyer or the Acquired Business recall products bearing the
name "ConvaTec" or variations thereof (including logos) in accordance
with Section 7.15(a) which the Seller determines in good faith after
reasonable investigation to be defective or non-conforming to product
or regulatory specifications, and each of the Seller and the Buyer
hereby agree to thereafter negotiate in good faith regarding whether a
product should be recalled and the terms and conditions of any such
product recall, PROVIDED that the Buyer shall have the final decision
on whether a product will be recalled."
(ii) The Buyer shall have the right to request in writing that
the Seller recall products bearing the name "Calgon Vestal
Laboratories" or variations thereof (including logos) in accordance
with Section 7.15(b) which the Buyer determines in good faith after
reasonable investigation to be defective or non-conforming to product
or regulatory specifications, and each of the Buyer and the Seller
hereby agree to thereafter negotiate in good faith regarding whether a
product should be recalled and the terms and conditions of any such
product recall, PROVIDED that the Seller shall have the final decision
on whether a product will be recalled."
12. SCHEDULE 5.9 of the Asset Purchase Agreement is hereby
amended by deleting the present text thereof and substituting in its place
SCHEDULE 5.9 in the form attached hereto.
13. Except as specifically amended or modified in this First
Amendment, the terms and conditions of the Asset Purchase Agreement shall remain
unaffected, unchanged and unimpaired in every particular as set forth in the
Asset Purchase Agreement.
14. This First Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this First Amendment as of the date first above written.
E.R. SQUIBB & SONS, INC.
By: /s/ Perry A. Karsen
_______________________________________
Name: Perry A. Karsen
Title: Vice President, Corporate
Development, as Attorney-in-Fact
for J. Edward Penick, Jr., Vice
President
STERIS CORPORATION
By: /s/ Bill R. Sanford
_______________________________________
Name: Bill R. Sanford
Title: Chairman, President and
Chief Executive Officer
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