1
Exhibit 2.1
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
PROJECT "LATITUDE"
-----------------------------
ASSET PURCHASE
AGREEMENT
-----------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
INGREDIENTS PHARMACEUTIQUES Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
2
CONFIDENTIAL RP
DATED 2nd April 1997
-------------------------
AGREEMENT
-------------------------
BETWEEN:-
(1) CHIREX LIMITED
(2) CHIREX INC.
(3) RHONE-POULENC CHIMIE S.A.
INDEX
1. Definitions & Interpretation
2. Warranties
3. Sale & Completion
4. Option
5. Employees
6. Disqualifying Events
7. Confidentiality
8. Non-Compete
9. Guarantee
10. Indemnities
11. General
12. Jurisdiction
SCHEDULES
1. Assets
2. Products & Production Specifications
3. Warranties
4. APAP Plant
EXHIBITS
1. Supply Agreement
2. Stamp Duty Agreement
3. Releases
4. Mandate
5. Know-How Licence
6. Disclosure Letter
3
CONFIDENTIAL RP
THIS AGREEMENT is made this 2nd day of April 1997
BETWEEN:-
(1) CHIREX LIMITED
(Reg. No. 857670)
("THE VENDOR")
whose registered office is at Dudley, Cramlington, Northumberland, NE23
7QG, United Kingdom
(2) CHIREX INC.
("THE GUARANTOR")
of 65 William Street, Suite 330, Wellesley, Mass., 02181, USA
(3) RHONE-POULENC CHIMIE S.A.
(Registered in the Registre du Commerce de Nanterre under number B 642
014 526)
("THE PURCHASER")
whose principal seat is at 25 quai Paul Doumer, 92408 Courbevoie Cedex,
France, with offices at 6, rue Georges Marrane, 69200 Venissieux,
France.
WHEREAS
A. The Vendor has expressed its intention of withdrawing from the
acetaminophen ("APAP") business, which it carries out predominantly in
Europe and Australasia;
B. The Purchaser is desirous of buying from the Vendor certain of its APAP
assets;
C. The Vendor is willing:-
(i) to sell certain APAP assets to the Purchaser under the terms
of this Agreement;
(ii) to supply certain APAP products to the Purchaser under the
terms of the Supply Agreement herein mentioned.
NOW, IT IS HEREBY AGREED as follows:-
-1-
4
CONFIDENTIAL RP
1. DEFINITIONS & INTERPRETATIONS
DEFINITIONS
1.1 In this Agreement, and unless the particular context demands otherwise,
the following words and expressions have the meanings ascribed to them
below:-
"APAP PLANT" means the Vendor's key items of APAP plant
and equipment being only those listed in
Schedule 4;
"APAP PLANT PRICE" means the price to be paid by the Purchaser
to the Vendor in respect of any APAP Plant
offered for sale under Clause 4, such price
not to exceed the book values given in
respect of the relevant plant in Schedule 4,
in the Vendor's audited balance sheet as at
31 December 1996, depreciated as at 28
February 1997 (such depreciation to be in
accordance with the Vendor's accounting
standards and principles);
"ASSETS" means all of the assets agreed to be sold
and purchased under this Agreement, as
follows:-
.1 the Business;
.2 the Know-How;
.3 the Manuals;
.4 the Documents;
but excludes any Excluded Assets;
"AUTHORITY" means any body having competence in matters
of competition including Parliament or any
legislature in whose sovereignty the
Business falls or any competent court or
tribunal of law, the Director-General of the
Office of Fair Trading, the Monopolies &
Mergers Commission, any of Her Majesty's
Secretaries of State, any governmental
authority (of any state), or any organ
(including the European Parliament, the
European Commission, the ECJ&CFI) of the
European Union;
-2-
5
CONFIDENTIAL RP
"BUSINESS" means all of the business and goodwill of
the Vendor (including the benefit and the
burden of the Contracts as assigned to the
Purchaser under this Agreement) and the
right to carry on the Business as successor
in title to the Vendor) relating to the
manufacture, development and sale of the
Products;
"COMPLETION" means the completion of all the documents
and transactions set out in Clause 3,
Completion to take place on 2 April, 1997;
"COMPLETION MEETING" means the meeting of the Parties at
Frankfurt on 2 April, 1997 for the purpose
of Completion;
"CONSIDERATION" means the Down Payment and the Deferred
Payments, being in the aggregate the sum
of (pound) 4,750,000 (four million, seven
hundred and fifty thousand pounds sterling)
as consideration for the Assets, and
allocated as follows:-
(pound)
The Know-How (including the
Manuals and the Documents
pertaining thereto) 1,500,000
The non-compete covenant in
Clause 8 1
The Documents (other than
pertaining to Know-How) 1
The Goodwill 3,249,998
---------
(pound) 4,750,000
"CONTRACT(S)" means those only of the Vendor's contracts
with its customers listed in Schedule 1 as
"Contracts";
"DEFERRED PAYMENTS" means all of the First Deferred Payment and
the Second Deferred Payment and the Third
Deferred Payment;
"DISCLOSURE LETTER" means the letter in agreed form from the
Vendor to the Purchaser in respect of the
Warranties;
-3-
6
CONFIDENTIAL RP
"DISQUALIFYING EVENT" means (but only in relation to any matter
arising out of the sale of the Business
under the terms of this Agreement and
concerning anti-trust, fair trading,
restrictive trade practices or other
competition matters) any act of Parliament
or subordinate legislation, or directive or
other legislation of any organ of the
European Union or any judgment, order,
award, injunction, finding, decree,
directive, divestment order, enforcement
notice, revocation order, prohibition order
or other act or remedy having the force of
law and binding any of the parties to this
Agreement made or issued by any Authority
(whether in its own right or at the instance
of any third party);
"DOCUMENTS" means all of the Vendor's books, records and
other recorded information (not comprised in
the Manuals) relating to the Assets for the
period from 1 January 1995 to the Effective
Date and including, but not limited to:-
.1 production history, plant and
engineering layouts, process flow
charts and product formulations and
process conditions for each
Product;
.2 commercial and marketing statistics
together with full customer lists
detailing customer names,
addresses, contacts, sales volumes,
buying patterns, prices, delivery
and payment terms and payment
histories, sales force reports,
customer - specific product
specifications, and details of
potential or prospected customers;
.3 contracts, commercial documents and
correspondence;
.4 research and development records,
studies and reports;
.5 Product quality controls, records
and standards and any customer or
supplier complaints in respect of
quality and any quality complaints
against suppliers;
-4-
7
CONFIDENTIAL RP
"DOWN PAYMENT" means the sum of (pound) 2,500,000 (two
million, five hundred thousand pounds
sterling);
"EFFECTIVE DATE" means 2 April, 1997;
"EMPLOYEES" means any of the Vendor's employees or
contractors or former employees or
contractors;
"ESCROW ACCOUNT" means the interest bearing deposit banking
account in the joint names of the Parties'
Solicitors and held in the joint behalf of
the Vendor and the Purchaser, held at the
Escrow Bank on the terms of the Mandate;
"ESCROW BANK" means National Westminster Bank Plc;
"EXCLUDED ASSETS" means each business or asset (of any
description) of the Vendor other than the
Assets, and includes (without limiting the
foregoing):-
.1 all assets, plant, equipment and
tools on the Site;
.2 the benefit and burden of any
contract, order, agreement or
enquiry concerning any product
other than the Products and the
benefit and burden of any contract
or other agreement or arrangement
with or for any resellers,
distributors or agents (whether or
not for the distribution of the
Products);
.3 any real property;
.4 all of the Vendor's know-how,
commercial or confidential
information, intellectual or
industrial property right of any
description and secrets, other than
the Know-How;
.5 cash in hand and at bank, and trade
debts and receivables (including
receivables concerning Products in
respect of which the Vendor has
issued invoices prior to the
Effective Date);
.6 Stock;
-5-
8
CONFIDENTIAL RP
.7 any liability (of any
description):-
.1 in relation to any such
business or assets, and all of the
foregoing; and
.2 in relation to any Contract,
where the liability in question
(whenever it arises and whenever
any cause of action in relation
thereto accrues) concerns the
conduct of the Business prior to
Completion or the use of the Assets
by the Vendor prior to Completion;
"FIRST DEFERRED PAYMENT" means the sum of (pound) 750,000 (seven
hundred and fifty thousand pounds sterling);
"KNOW-HOW" means all of that part of the Vendor's
know-how, technology, confidential
information, trade or other secrets and
processes whether or not currently used by
the Vendor relating exclusively to the
Business and comprised in or referred to in
the Manuals and/or the Documents, together
with the Software;
"KNOW-HOW LICENCE" means a licence between the Vendor and the
Purchaser in respect of Know-How and the
permitted manufacture of Product by the
Vendor for supply to "Reserved Customers"
pursuant to Clause 3.10, and exhibited
hereto in agreed form;
"MANDATE" means the mandate to be given by the Vendor
and the Purchaser to the Parties' Solicitors
pursuant to Clause 3.5 and exhibited hereto
in agreed form;
"MANUALS" means all of the Vendor's manuals,
operations, drawings, records and other
information used in the production of the
Products as described or referred to in
Schedule 1;
-6-
9
CONFIDENTIAL RP
"PARTIES' SOLICITORS" means Dibb Lupton Alsop (acting on behalf of
the Vendor), of 117, The Headrow, Leeds, and
Eversheds, of Queens Street, Bristol (acting
on behalf of the Purchaser) or such other
solicitors in private practice and in good
standing as either the Vendor or the
Purchaser shall nominate;
"PROCEEDINGS" means any proceedings (whether legislative,
administrative, legal or quasi-judicial) by
or before any Authority touching or
concerning this Agreement or the sale of the
Assets which the Purchaser reasonably
apprehends could result in a Disqualifying
Event;
"PRODUCTS" means the acetaminophen ("APAP") products
manufactured by the Vendor at the Site
excluding derivatives thereof, provided that
such derivatives do not compete with the
acetaminophen products, details of which are
set out in Schedule 2;
"REGULATIONS" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981
as amended by the Collective Redundancies
and Transfer of Undertaking (Protection of
Employment) Regulations 1995 and the
Acquired Rights Directive;
"RELEASES" means letters exhibited hereto in agreed
form from each of Sanofi Chimie S.A. &
Smithkline Beecham Plc;
"SECOND DEFERRED PAYMENT" means the sum of (pound) 750,000 (seven
hundred and fifty thousand pounds sterling);
"SALES CONTRACT(S)" means the Contracts (or either of them, as
the context may require) as assigned to the
Purchaser under this Agreement and any
contract entered into by the Purchaser with
the other party to the Contract(s) in
substitution thereof or in succession
thereto;
"SITE" means the Vendor's site at Dudley,
Cramlington;
-7-
10
CONFIDENTIAL RP
"SOFTWARE" means the production and process computer
software (together with any source codes and
platforms owned by the Vendor), to be
delivered to the Purchaser in disk form
together with any manuals therefor, if so
required by the Purchaser;
"STAMP DUTY AGREEMENT" means the agreement exhibited hereto in
agreed form;
"STOCK" means work in progress and the stock of raw
materials and finished goods of the
Business;
"SUPPLY AGREEMENT" means a supply agreement (exhibited hereto
in agreed form) under which the Vendor shall
supply the Product to the Purchaser on the
terms set out therein;
"THIRD DEFERRED PAYMENT" means the sum of (pound) 750,000 (seven
hundred and fifty thousand pounds sterling);
"VENDOR'S ACCOUNT" means the Vendor's banking account, numbered
918 780 50, Sort Code 40-34-18, denominated
in sterling and held at Midland Bank Plc,
City Branch, Grainger Street,
Newcastle-Upon-Tyne, NE99 15A.
INTERPRETATION
1.2 This Agreement (including the Schedules and Exhibits) is the entire
agreement of the Parties and supersedes and is to the exclusion of any
prior oral or written agreement or undertaking or representation of the
Parties, in relation to the sale and purchase of the Assets other than
any obligation of secrecy or non-disclosure.
1.3 References to an agreement or document in agreed form are references to
agreements or documents in substantially the same form as the drafts
exhibited hereto.
1.4 This Agreement (and each right, obligation or remedy not fully
performed or discharged on Completion) shall unless otherwise expressed
survive Completion.
1.5 This Agreement is personal to the Parties and accordingly neither Party
shall purport to assign, sub-contract or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of
the other save that the Purchaser shall be entitled to assign the
benefit together with the burden of this Agreement to any subsequent
purchaser of the Assets:-
-8-
11
CONFIDENTIAL RP
.1 at any time (but without prejudice to the primary liability of
the Purchaser), to any such purchaser being a member of the
Rhone-Poulenc Group PROVIDED THAT should such assignee cease
to be such a member , it will immediately prior to leaving
such Group (unless the assignee is entitled to assign this
Agreement under Clause 1.5.2.) re-assign this Agreement to
another such member;
.2 at any time (and whether by the Purchaser or any member of the
Rhone-Poulenc Group to which this Agreement has been assigned
under Clause 1.5.1) after the first anniversary of the
Effective Date (provided that on the first anniversary of the
Effective Date no Proceedings are current) PROVIDED THAT the
Purchaser shall immediately prior to such assignment enter
into a guarantee in a form reasonably acceptable to the Vendor
providing a guarantee by the Purchaser of the due and prompt
payment of the Second Deferred Payment and the Third Deferred
Payment by any such purchaser of the Assets.
1.6 No waiver, time granted or other indulgence granted by any Party shall
in any way impair the rights and remedies of that Party.
1.7 This Agreement (and any agreement in agreed form) may be executed by
each Party in any number of counterparts each of which shall (when all
Parties shall have executed a counterpart) be a binding original but
which shall when taken together constitute one instrument.
1.8 This Agreement is governed by English law and remedies.
2. WARRANTIES
2.1 Each of the Parties hereby warrants to the other Parties:-
.1 that it has full capacity and full authority in accordance
with its memorandum and articles of association or regulations
or other statutes to enter into and be bound by the terms of
this Agreement and that is has taken all corporate or legal
steps for the purposes hereof; and
.2 that it has not relied upon any representation, warranty or
promise whatsoever (including any given by any third party
other than its own professional advisers) other than the
express terms of this Agreement.
2.2 The Vendor hereby warrants and undertakes to the Purchaser in the terms
of the warranties set out in Schedule 3 ("Warranty(ies)").
2.3 The Vendor shall not be liable in respect of any Warranty unless the
Purchaser shall have given written notice of any claim or alleged claim
in respect of such liability, together with full and fair particulars
of the nature and circumstances thereof, on or before the first
anniversary of the Effective Date.
-9-
12
CONFIDENTIAL RP
2.4 The Purchaser shall:-
.1 at all times take all reasonable and practicable steps to
mitigate any loss caused or likely to be caused in connection
with such liability;
.2 on giving notice in accordance with Clause 2.3 keep the Vendor
regularly advised and informed of the nature and development
of the circumstances of any claim;
.3 on giving notice in accordance with Clause 2.3 notwithstanding
the giving of any notice, permit the Vendor to inspect, survey
or audit any thing, site or record as may be necessary in the
circumstances and co-operate to enable the Vendor to bring or
defend any proceedings in connection with any such liability
or alleged liability.
2.5 The maximum aggregate liability of the Vendor to the Purchaser arising
in connection with any breach of Warranty as set out in Schedule 3 is
hereby limited to the sum of (pound sterling) 100,000 (one hundred
thousand pounds sterling) save in respect of any breach of any Warranty
relating to the Vendor's title to any of the Assets or to its capacity
to enter into this Agreement, which shall be without limitation as to
sum or duration.
2.6 The Purchaser shall not bring any claim in respect of any Warranty
unless such individual claim exceeds (pound sterling) 1,000 and until
the aggregate of such claims exceeds (pound sterling) 5,000 (but
thereafter the Purchaser shall be entitled to claim the whole amount
claimed and not merely any excess).
2.7 Where any amount in respect of a claim under the Warranties is adjudged
by a competent tribunal from which no appeal lies, or is agreed by the
Vendor as, due to the Purchaser, the Purchaser shall first have
recourse in satisfaction or partial satisfaction (as the case may be)
to the Deferred Payments (without reference to the allocation of the
Consideration as set out in Clause 1.1).
2.8 Any amounts paid by the Vendor in respect of any claim under any
Warranty shall be treated as a pound for pound reduction in the
Consideration.
2.9 To the extent that a breach of Warranty is capable of being remedied
then the Purchaser shall afford the Vendor a reasonable opportunity to
remedy such breach.
2.10 The Vendor shall not be liable in respect of any Warranty to the extent
that:-
.1 the Purchaser caused or contributed to the same or to the acts
and/or omissions giving rise to such claim;
.2 that the matter to which it relates is fully and promptly made
good by the Vendor without cost to the Purchaser.
2.11 The Purchaser shall not be entitled to make a claim under the
Warranties if and to the extent that the facts or information upon
which the claim is based are fully and fairly disclosed in the
Disclosure Letter.
-10-
13
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
2.12 The Vendor shall not be liable to make any payment in respect of any
claim under the Warranties based on a contingent liability of the
Purchaser until the liability of the Purchaser becomes an actual
liability. Nothing in this Clause 2.12 shall prejudice any right of
set-off available under Clauses 2.7, 5 and ****** of this Agreement and
Clauses 10.6 and 17 of the Supply Agreement.
2.13 The Vendor acknowledges that the Purchaser has relied on and been
induced into entering this Agreement, by the Warranties and continues
after Completion to rely on the Warranties.
3. SALE & COMPLETION
EFFECT OF SIGNATURE & COMPLETION
3.1 For the avoidance of doubt, risk in the Assets shall not pass to the
Purchaser until Completion but title shall pass immediately to the
Purchaser on payment of the Down Payment in accordance with Clause 3.3.
SALE
3.2 On the Effective Date, the Vendor shall sell with full title guarantee
and the Purchaser shall buy the Assets for the Consideration, payable
in accordance with Clauses 3.3 and 3.4.
PAYMENT
3.3 The Purchaser shall pay the Down Payment to the Vendor on the Effective
Date by electronic funds transfer to the Vendor's Account, in sterling
for value.
3.4 The Purchaser shall pay the Deferred Payments to the Vendor (subject to
any recourse thereto under Clauses 2.7, 5 or *****) in sterling for
value to the Vendor's Account by electronic funds transfer as follows:-
First Deferred Payment on the first anniversary of the Effective Date;
Second Deferred Payment on the second anniversary of the Effective
Date;
Third Deferred Payment on the third anniversary of the Effective Date,
(but where any such anniversary is not a normal business day for banks
in London and Paris, then on the first such business day thereafter).
The Purchaser shall not be entitled to make any withholding, set-off or
deduction, on any grounds whatsoever against the Deferred Payments save
as set out in Clauses 2.7, 5 and ***** of this Agreement, and Clauses
10.6 and 17 of the Supply Agreement. -
-11-
14
CONFIDENTIAL RP
DOCUMENTS IN AGREED FORM
3.5 At the Completion Meeting, the Parties shall execute (and, in the case
of the Mandate, execute and deliver the same to the Parties'
Solicitors) each of the following agreements in the agreed form:-
.1 the Supply Agreement;
.2 the Stamp Duty Agreement;
.3 the Mandate;
.4 the Know-How Licence;
.5 the Disclosure Letter.
DELIVERY & ASSIGNMENT OF ASSETS
3.6 At the Completion Meeting, the Vendor shall deliver to the Purchaser
each of the Assets (including, if required, the Software) title to
which is capable of passing by delivery, together with the originals of
the Contracts (or certified copies thereof, provided that the Vendor
shall promptly deliver such originals on retrieving or locating the
same).
3.7 The Vendor hereby assigns to the Purchaser all of its right, interest
and title in or to each of the following:-
.1 the Business;
.2 the Contracts (and, at the option of the Purchaser, the Vendor
shall assign insofar as it is able to do so and subject to any
third party consent any other agreement, order or enquiry
received on or after the Effective Date concerning the
Products);
.3 the Know-How;
.4 at the option of the Purchaser, contracts or licences, if any,
concerning the Software;
.5 each other Asset the transfer of title of which is required to
be made in writing.
3.8 The foregoing assignments shall take effect:-
.1 on and from the Effective Date (save where any third party
does not consent to such assignment, in which case the Vendor
shall hold the benefit of the relevant agreement upon trust
for the Purchaser until consent is given at which time the
assignment shall become effective); and
.2 so as to pass all the rights and (to the extent that they are
not Excluded Assets) obligations of the Vendor to the
Purchaser.
-12-
15
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
3.9 The Purchaser shall hand to the Vendor the Releases at the Completion
Meeting.
RESERVED CUSTOMERS
3.10 Where any customer of the Business is not willing to consent to the
transfer of its contracts or orders for the Product from the Vendor to
the Purchaser and the Vendor is desirous of supplying such customer, (a
"Reserved Customer") then:-
.1 the Vendor & Purchaser shall enter into the Know-How Licence
in respect of the supply by the Vendor of Product to a
Reserved Customer;
.2 the Vendor shall ensure that its supplies to Reserved
Customers shall not in any way prejudice or impair its ability
to fulfil its obligations under the Supply Agreement;
.3 (without prejudice to the other provisions of this Agreement)
the Vendor shall not in any event seek to supply any Reserved
Customer unless the Vendor and Purchaser have entered into the
Know-How Licence, and in any case not after the first
anniversary of the Effective Date;
.4 the Vendor shall (if the Purchaser so requires) use all
reasonable endeavours to solicit on behalf of the Purchaser
the custom of Reserved Customers for Products in succession to
the Vendor.
3.11 The Vendor shall not, save with the prior written consent of the
Purchaser, in any event make supplies to Reserved Customers:-
.1 in the aggregate exceeding ***** of Product;
.2 on terms reducing the price of such supply to Reserved
Customers compared to the price they enjoyed prior to the
Effective Date, or on other terms as would improve the terms
of such supply to Reserved Customers compared to the terms
they enjoyed prior to the Effective Date.
HANDOVERS
3.12 The Parties shall co-operate after the Effective Date in order to
transfer customers to the Purchaser with all due expedition and
otherwise as is reasonable in order to facilitate the transition of the
Business to the Purchaser, and shall accordingly co-ordinate joint
customer visits, trade announcements and the familiarisation of the
Purchaser's personnel with sales, ordering and invoicing procedures
established between the Vendor and its customers of the Business.
-13-
16
CONFIDENTIAL RP
4. OPTION
4.1 In the event that the Vendor intends to sell any of the APAP Plant
before the fifth anniversary of the Effective Date, then in
consideration of the sum of one pound (receipt of which is hereby
acknowledged) the Vendor hereby grants to the Purchaser an option ("the
Option") to purchase APAP Plant for the APAP Plant Price which the
Purchaser intends to sell or otherwise dispose of to a third party.
4.2 The Vendor shall not (unless the Purchaser shall agree in writing)
before the fifth anniversary of the Effective Date offer for sale or
otherwise dispose of APAP Plant to any third party without first giving
the Purchaser thirty days' written notice in which to exercise the
Option, such notice to be accompanied by full particulars of the APAP
Plant intended to be sold or disposed of.
4.3 Save that the APAP Plant shall be free from any lien, charge or other
encumbrance and that the Vendor shall sell with full title guarantee,
the sale of the APAP Plant to the Purchaser shall be without any
warranty of quality, condition or fitness for use or purpose.
4.4 The Purchaser shall promptly reimburse the Vendor its actual and
reasonable costs of removing the APAP Plant, and for any reasonable
rectification work caused by such removal, and of shipping the same.
4.5 The Purchaser shall pay the APAP Plant Price on delivery of the APAP
Plant.
5. EMPLOYEES
5.1 The Parties apprehend that there are no Employees to whom the
Regulations apply in respect of the transactions contemplated herein.
5.2 If, notwithstanding the foregoing, the Regulations are found by any
competent tribunal or alleged by any Employee(s) to apply in connection
with this Agreement (and whether as to the transfer or putative
transfer of the contract of employment of any Employee(s) to the
Purchaser, or to any Regulation requiring consultation of any
Employee(s) by any of the Parties, or otherwise) (a "Relevant Event")
then this Clause 5 shall apply.
5.3 On the occurrence or threat of a Relevant Event, the Vendor shall
indemnify and keep indemnified the Purchaser from and against any and
all claims, costs, legal costs (on an indemnity basis), proceedings,
damages, orders (including orders of reinstatement or re-engagement
under the Regulations or under the Employment Rights Act 1996 or at
law) or awards whatsoever arising out of or in connection with a
Relevant Event or otherwise touching or concerning the contract of
employment of any Employee(s) including, without limiting the
foregoing, the termination of that contract or the terms thereof or the
novation or transfer thereof.
-14-
17
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
5.4 The Purchaser agrees to co-operate with the Vendor and to allow the
Vendor to conduct (subject to the Vendor indemnifying the Purchaser
from any costs on a full indemnity basis) in the name of the Purchaser
any proceedings relating to a Relevant Event provided that the
Purchaser shall be under no such obligation if the Vendor fails
promptly and after written notice from the Purchaser requesting the
same to indemnify the Purchaser as aforesaid and the Purchaser shall be
at liberty on such failure to conduct such proceedings as it shall see
fit (including, after written notice to the Vendor of its intention to
do so, the admission of any liability or the failure to defend any
proceedings) without prejudice to its rights under this Clause 5. The
Purchaser will promptly notify the Vendor of any claim it receives from
or on behalf of any Employee.
5.5 The Purchaser shall on the Vendor failing to indemnify the Purchaser
under Clause 5.3 as aforesaid be entitled to set-off against the
Deferred Payments any amounts (whether arising by way of claims for
damages or other awards made against the Purchaser, or for its costs
and expenses) in connection with a Relevant Event.
6. DISQUALIFYING EVENTS
6.1 If before the first anniversary of the Effective Date the Purchaser is
party to or is served with or otherwise receives written notice of any
Proceedings (whether or not the Purchaser is a party thereto) then this
Clause 6 shall apply.
6.2 The Vendor undertakes to the Purchaser, as a separate and independent
stipulation from any other provision of this Agreement, to pay to the
Purchaser a sum equal to any loss suffered by the Purchaser as a result
of any Disqualifying Event insofar as it concerns the Sales Contracts
or otherwise impairs the Purchaser in its conduct of the Business from
the Effective Date.
6.3 *****
6.4 The Vendor's total liability under Clause 6.2 is limited to *****.
6.5 The Purchaser shall use all reasonable efforts to minimise the adverse
impact of any Proceedings.
6.6 If Proceedings are current on any due date for payment under Clause 3.4
of the Deferred Payments, then the Purchaser shall (notwithstanding
Clause 3.4) pay such Deferred Payment(s) into the Escrow Account on
such due date.
-15-
18
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
6.7 In the event that the amount payable to the Vendor under Clause 3.4 is
reduced by the application of this Clause 6 and the Purchaser has
disposed of any part of the Business as a result of a Disqualifying
Event, then the Purchaser shall pay over to the Vendor a sum equal to
any value received in connection with such disposal up to the maximum
amount payable by the Vendor under Clauses 6.2 and 6.4, forthwith to
the Vendor.
6.8 For the avoidance of doubt, the Purchaser's only remedy under this
Agreement against the Vendor in respect of a Disqualifying Event (other
than one caused by the Vendor breaching Clause 8 or any Warranty) shall
be the *****. For the avoidance of doubt, the Purchaser shall not have
recourse to the Down Payment in respect of a Disqualifying Event.
6.9 Nothing in this Clause 6 shall limit the Purchaser's remedies in
respect of any breach of Warranty or other breach of this Agreement by
the Vendor.
6.10 Where Proceedings are finally concluded without there arising a
Disqualifying Event, *****.
7. CONFIDENTIALITY
7.1 Each Party undertakes to each other Party to keep the subject matter of
this Agreement (and the Know-How in particular) and any confidential or
commercially sensitive information or knowledge relating to the
transfer of the Business (whether or not so labelled and whether or not
stored or recorded in any medium) belonging to or coming from each
other Party as strictly confidential.
7.2 No Party shall disclose or permit the disclosure of any such
information without the prior, written consent of the other Party.
7.3 Each Party shall use its best endeavours to procure compliance with
this Clause 7 by its agents, employees or associates.
7.4 This Clause 7 shall not apply to any such information which is in or
becomes a part of information in the public domain without fault on the
part of the Party making any relevant disclosure of the Party's
information or which is required to be disclosed by compulsion of law
or order of court (and then only so far as is so compelled).
7.5 Where such information falls within the public domain, no Party shall
attribute such information to the other Party without that Party's
consent or demand.
7.6 No Party shall make any statement to the public concerning the subject
matter of this Agreement except as is otherwise agreed, or as may be
required by law or under the rules of any recognised stock exchange
(and then subject to the Party requiring to make such statement first
consulting the other).
-16-
19
CONFIDENTIAL RP
7.7 The Parties:-
.1 shall not themselves institute any Proceedings or make any
notification to any Authority concerning any matter which
could constitute or result in a Disqualifying Event (unless,
and then only to the extent that, a Party is legally obliged
(or obliged by the rules of any recognised stock exchange) to
furnish any particulars or make any other disclosures or
filings to or with any Authority, subject to that Party
notifying the others of such obligations);
.2 shall co-operate so far as may be lawful in any Proceedings;
.3 shall use their reasonable efforts in defending any
Proceedings.
7.8 The obligations of the Parties under this Clause 7 shall (save in
respect of Know-How) cease and be of no further effect on the fifth
anniversary of the Effective Date.
8. NON-COMPETE
8.1 Neither the Vendor nor the Guarantor shall without the prior written
consent of the Purchaser before the fifth anniversary of the Effective
Date:-
.1 manufacture or sell or distribute the Products whether on
their own account or on the account of any third party (save
only to the extent permitted under the Know-How Licence, if
entered into pursuant to Clause 13.10.1);
.2 be otherwise engaged by joint venture, investment or by or
through any company for the time being a member of the same
group of companies to which the Vendor and/or the Guarantor
belongs ("the Vendor Group") in the manufacture or sale of the
Products as aforesaid save where such activity arises from an
acquisition by the Vendor and/or by any member of the Vendor
Group of any business or businesses comprising a capability to
manufacture or sell the Products or the acquisition of shares
or other securities in any corporation having such businesses
(provided that such capability does not represent more than
fifteen per cent of the turnover of the acquired business or
businesses).
8.2 The Vendor and the Guarantor shall procure compliance with Clause 8.1
by each member for the time being of the Vendor Group.
8.3 The Parties agree that damages may not be a sufficient or adequate
remedy in respect of any breach of the foregoing.
8.4 Each Party acknowledges and represents to the other that the
restrictive provisions herein (if at all) are fair, reasonable,
objectively justifiable and freely undertaken.
-17-
20
CONFIDENTIAL RP
8.5 The Vendor and the Guarantor acknowledge that the Purchaser conducts
its APAP business on a worldwide basis by itself and through
RHONE-POULENC S.A. or its subsidiaries ("the R-P Group") and
accordingly acknowledge and agree:-
.1 that the Purchaser's APAP business may, as a result of breach
of this Clause 8 by the Vendor or the Guarantor, suffer
damages itself or through damages suffered by any relevant
member of the R-P Group engaged in such business;
.2 that (without prejudice to any other right or remedy, but not
so as to allow any double recovery) any such damages shall be
deemed to have been suffered by the Purchaser.
9. GUARANTEE
9.1 The Guarantor hereby irrevocably guarantees to the Purchaser the due
and full discharge by the Vendor of each of its obligations under this
Agreement as and when each such obligation falls to be performed or
otherwise discharged.
9.2 The Guarantor's obligation hereunder shall be as primary obligor and
not merely as surety and accordingly (and for the avoidance of doubt):-
.1 the Purchaser shall not be under any obligation to proceed
first against the Vendor before making any or any alleged
claim hereunder against the Guarantor;
.2 each defence, set-off or counterclaim which would have been
available to the Vendor shall likewise be available to the
Guarantor to the extent that the same has not been exhausted
by the Vendor;
.3 the Guarantor hereby waives notice to it of any amendment or
modification of this Agreement (other than to this Clause 9)
made between the Purchaser and the Vendor;
.4 no time, waiver or other indulgence granted by any Party to
the other, and no change in the corporate existence or
identity of the Vendor shall in any way impair, negative or
reduce the Guarantor's obligation hereunder.
-18-
21
CONFIDENTIAL RP
10. INDEMNITIES
10.1 On and from Completion the Vendor shall indemnify and keep indemnified
the Purchaser and each member of the R-P Group from and against each
and any liability of whatever nature whether incurred by itself or by
or to any third party and any claim, damages, costs, legal costs,
orders or awards granted to or threatened or brought by or on behalf of
itself or any third party (including any governmental or other
regulatory authority) in respect of any act or omission of the Vendor
or in any way concerning the Business as conducted by the Vendor prior
to Completion and/or the Assets as used by the Vendor prior to
Completion and/or in any way touching or concerning the Excluded Assets
and/or the Site, whether and wherever arising in contract, tort or
otherwise at law or under any statute or European Union laws or
directives.
10.2 On and from Completion the Purchaser shall indemnify and keep
indemnified the Vendor and the Guarantor and each member of the Vendor
Group from and against each and any liability of whatever nature
whether incurred by itself or by or to any third party and any claim,
damages, costs, legal costs, orders or awards granted to or threatened
or brought by or on behalf of itself or any third party (including any
governmental or other regulatory authority) in respect of any act or
omission of the Purchaser concerning the Business as conducted by the
Purchaser and/or the Assets as used by the Purchaser and/or the APAP
products manufactured and sold by the Purchaser (without prejudice,
however, to the terms of the Supply Agreement) whether and whenever
arising in contract, tort or otherwise at law or under any statute or
applicable European Union laws or directives.
10.3 If either Party receives notice of or becomes aware of any matter
whatsoever which does or may give rise to a right to indemnification by
the other the first Party shall communicate such matter to the other as
soon as is practicable and in any event within twenty days of such
awareness.
10.4 This Clause 10 is without prejudice to any other express right or
obligation of indemnification arising under this Agreement.
11. GENERAL
11.1 The Purchaser shall account to the Inland Revenue for (and shall
indemnify the Vendor from any liability for) any stamp or other duty
payable upon this Agreement or any agreement or conveyance executed by
the Parties in contemplation hereof.
11.2 The purchase price of the Assets and the Business stated in this
Agreement is exclusive of Value Added Tax.
-19-
22
CONFIDENTIAL RP
11.3 The Parties intend that the provisions of Section 49 of the Value Added
Tax 1994 and Article 5 of the Value Added Tax (Special Provisions)
Order 1995 shall apply to the sale of the Business and the Assets and,
accordingly, no VAT shall be charged by the Vendor on them. The Vendor
and the Purchaser shall each promptly following Completion inform their
respective VAT Offices of the sale and purchase under this Agreement,
complete all relevant forms for VAT purposes relating to such sale and
purchase and take all reasonable steps to ensure that the sale of the
business and assets is treated neither as a supply of goods nor a
supply of services for the purposes of VAT but as the transfer of a
going concern. In the event that it is at any time determined by H. M.
Customs & Excise or, on appeal, by the Tribunal or the Court that
Section 49 of the Value Added Tax Act 1994 and Article 5 of the Value
Added Tax (Special Provisions) Order 1995 do not apply to the sale of
the business and assets or any part of them, the Purchaser shall pay to
the Vendor, the amount of the VAT in question on the later of the
business day before such amount is due to be paid by the Vendor to
Customs & Excise and the day on which the Vendor delivers to the
Purchaser, a valid VAT invoice or invoices in respect thereof.
11.4 The Parties shall do all deeds and assurances as may be reasonable to
give effect to each of the foregoing assignments (the costs of the
preparation, execution and filing of all such deeds and assurances and
any registrations, filings and notifications with or to any regulatory
body to be borne by the Vendor and the Purchaser equally), and the
Purchaser shall allow the Vendor, on reasonable prior notice, to
inspect the Purchaser's books and records relating exclusively to any
matters under Clause 6.
11.5 Save as is expressly provided otherwise, each Party shall bear its own
costs in connection with the negotiation or preparation or completion
of this Agreement.
11.6 Each Party unconditionally waives any rights it may have to claim
damages against the other on the basis of any written or oral statement
made by the other (whether made carelessly or not) not set out or
referred to in this Agreement (or for breach of any warranty given by
the other not so set out or referred to) unless such statement or
warranty was made or given fraudulently.
11.7 Each Party unconditionally waives any rights it may have to seek to
rescind this Agreement on the basis of any written or oral statement
made by the other (whether made carelessly or not) whether or not such
statement is set out or referred to in this Agreement unless such
statement was made fraudulently.
12. JURISDICTION
12.1 The Parties hereby submit to the exclusive jurisdiction of the English
Courts but without prejudice to the enforcement or execution of any
judgment, order or award thereof, or to any interlocutory or injunctive
proceedings in any other jurisdiction. This Clause 12.1 is without
prejudice to Clause 12.3.
-20-
23
CONFIDENTIAL RP
12.2 For the purposes of Order 10, Rule 3, Rules of the Supreme Court (or
any modification thereof), the Parties agree that any process or other
legal proceedings may be served on any of them by leaving a copy
thereof or by posting a copy thereof addressed to a Party at its
address first stated above.
12.3 If there is any disagreement between the Parties relating to any matter
arising under Clause 6, then either of them may notify the other to
concur in the appointment of an arbitrator, and if the other fails or
refuses to concur within fourteen days of such notice, then either
shall be at liberty to request the President of the Law Society of
England and Wales to nominate Queen's Counsel and either shall then be
at liberty to refer any such dispute (and only such dispute) to the
final and binding determination of such Queen's Counsel acting as
arbitrator, such arbitration to be in accordance with the Rules of
Arbitration then in force of the International Chamber of Commerce, the
venue of such arbitration to be London. PROVIDED THAT it shall be a
requirement of the appointment of such arbitration that such Queen's
Counsel give (as circumstances dictate) "Counsel's Certificate" as
required pursuant to the Mandate. The costs of such arbitration shall
be in the award of such Queen's Counsel.
12.4 The Parties hereby agree that they shall use their reasonable
endeavours to seek to settle any dispute and to negotiate the same in
good faith prior to instituting any proceedings (or seeking to
arbitrate pursuant to Clause 12.3).
-21-
24
CONFIDENTIAL RP
IN WITNESS WHEREOF this Agreement has been signed the day and year first before
written:-
For & on behalf of
CHIREX LIMITED
/s/ DAVID F. RAYNOR /s/ I.A. MORRIS
- ---------------------------- : ---------------------------
DIRECTOR WITNESS
For & on behalf of
CHIREX INC.
/s/ DAVID F. RAYNOR /s/ I.A. MORRIS
- ----------------------------- : ---------------------------
DIRECTOR WITNESS
For & on behalf of
RHONE-POULENC CHIMIE S.A.
/s/ JEAN MICHEL DELOLME /s/ PETER STEVENSON
- ----------------------------- : ---------------------------
DIRECTOR WITNESS
-22-
25
CONFIDENTIAL RP
PROJECT "LATITUDE"
SCHEDULE 1
----------------------------
ASSETS
----------------------------
Rhone-Poulenc Chimie Legal Affairs (Paris)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
Ingredients Pharmaceutiques Legal Affairs (UK)
6, rue Georges Marrane Tel: 01923 201 515 RN
69200 Venissieux 201 511 LAR
France Fax: 01923 201 931
RP-Tel: 450 2+ ***
26
CONFIDENTIAL RP
CONTRACTS
- ---------------------------------------------------------------------------------------------------
Parties Date Product
- ---------------------------------------------------------------------------------------------------
Sanofi Winthrop Limited (1) 17 June 1994 Paracetamol
Sterling Organics Limited (2) (as amended 29 September 1994)
Sterling Winthrop Inc (3)
- ---------------------------------------------------------------------------------------------------
Sanofi (1) 10 August 1995 Paracetamol
Sterling Organics Limited (2)
- ---------------------------------------------------------------------------------------------------
27
CONFIDENTIAL RP
MANUALS
28
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
R&D REPORTS (APAP)
*****
29
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
*****
30
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
QUALITY DOCUMENTS
*****
SALES INFORMATION
*****
MISC
*****
31
CONFIDENTIAL RP
PROJECT "LATITUDE"
SCHEDULE 2
-----------------------
PRODUCTS
AND
PRODUCT SPECIFICATIONS
-----------------------
Rhone-Poulenc Chimie Legal Affairs (Paris)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
Ingredients Pharmaceutiques Legal Affairs (UK)
6, rue Georges Marrane Tel: 01923 201 515 RN
69200 Venissieux 201 511 LAR
France Fax: 01923 201 931
RP-Tel: 450 2+ ***
32
CONFIDENTIAL RP
[ChiRex Limited Letterhead]
Portions of this Exhibit have been omitted
pursuant to a request for confidential
treatment. The omitted portions are marked
***** and have been filed separately with
the Commission.
PARACETAMOL
*****
The information contained in this document is given in good faith and
is correct at the time of printing
33
CONFIDENTIAL RP
PROJECT "LATITUDE"
SCHEDULE 3
-----------------------
VENDOR'S WARRANTIES
-----------------------
Rhone-Poulenc Chimie Legal Affairs (Paris)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
Ingredients Pharmaceutiques Legal Affairs (UK)
6, rue Georges Marrane Tel: 01923 201 515 RN
69200 Venissieux 201 511 LAR
France Fax: 01923 201 931
RP-Tel: 450 2+ ***
34
CONFIDENTIAL RP
-----------------------
VENDOR'S WARRANTIES
-----------------------
TITLE
- -----
1. The Vendor sells all of the Assets with full title guarantee.
2. Without prejudice to the foregoing: --
.1 the Vendor has good and marketable title to all of the Assets;
.2 none of the Assets is subject to any mortgage, lien, pledge, charge,
claim or encumbrance;
.3 none of the Assets is subject to any proprietary or possessory right
of any third party.
KNOW-HOW
- --------
3. No licences (or other dispositions in any form) have been granted or made
to any person in respect of the Know-How.
4. The practice of the Know-How is not dependant on any other know-how,
technology or process not in the public domain.
5. The Business is not dependant on any know-how, technology or processes
other than the Know-How and any know-how in the public domain.
6. So far as the Vendor is aware, practice of the Know-How does not breach
any patent or any intellectual or industrial property of any third party.
7. The Know-How has not been published or disseminated by the Vendor into the
public domain.
8. The Vendor's employees treat the Know-How as confidential to the Vendor
and the Vendor has entered into suitable agreements as to confidentiality
of the Know-How with its agents, contractors and consultants.
9. There are no patents or other intellectual property of the Vendor in
existence in connection with the Business.
EMPLOYEES
- ---------
10. The Vendor has complied fully with all of its obligations under the
Regulations and will on Completion continue so to comply insofar as
material to the Business or this Agreement.
35
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
BUSINESS
11. The sales data, records and accounts of the Business included int he
Documents are true and accurate except for that information which on
its face has been prepared by third parties.
12. There has been no material adverse change in the Business between 1
January 1997 and Completion.
13. In the three months preceding Completion, the Vendor has not received
or accepted any orders (or other commitments) for Products other than
in the normal course of the Business.
14. The Vendor has conducted the Business in its normal course and so far
as the Vendor is aware in compliance with English law and will continue
so to do until the Effective Date.
15. The Vendor is not aware of any customer (other than Reserved Customers)
of the Business who will or is likely to refuse to continue to do
business with the Business as conducted by the Purchaser after the
Effective Date.
16. The Vendor is not (nor will it after Completion agree to be) committed
to supply any Reserved Customer with Products at a price equivalent to
less than *****.
17. The Vendor's co-contractors under the Contracts have at all times
materially observed, performed and otherwise honored their respective
Contracts save for initial delays in payments of sums due, which have
since been rectified.
18. The average annual sales volumes under the Contracts in the three years
preceding the Effective Date have been respectively ***** and *****.
CLAIMS
19. Save in respect of debt collections of less than (pound)10,000 in the
normal course of business, the Vendor has not made or received in
connection with the Business (nor apprehends or has grounds to believe
that it is likely to make or receive, after the Effective Date in
connection with the Business):
.1 (save in the ordinary course of business) any complaints or
notices of non-conformance to sample or specifications in
respect of the Products or the raw materials therefor nor
carriage & delivery thereof in the fifteen months preceding
the Effective Date;
.2 any proceedings or other litigation or threats in any
jurisdiction in connection with the Business in the three
years preceding the Effective Date;
36
CONFIDENTIAL RP
PROJECT "LATITUDE"
SCHEDULE 4
-----------------------
APAP PLANT
-----------------------
Rhone-Poulenc Chimie Legal Affairs (Paris)
25 quai Paul Doumer Tel:33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
Ingredients Pharmaceutiques Legal Affairs (UK)
6, rue Georges Marrane Tel: 01923 201 515 RN
69200 Venissieux 201 511 LAR
France Fax: 01923 201 931
RP-Tel: 450 2+ ***
37
ChiRex Ltd.
Paracetamol Plant Equipment
N.B.V.
Purchased G.B.V. @ 28 2 97
--------- ------ ---------
4 Rotary Vac Filters 9/88 34,141 5,118
Flake Ice Making Machine 2/76 237,791 0
Paracetamol Mills 8/94 66,000 48,950
------- ------
337,932 54,068
38
CONFIDENTIAL RP
PROJECT "LATITUDE"
EXHIBIT 1
---------------------------------
AGREED FORM OF
SUPPLY AGREEMENT
---------------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
Ingredients Pharmaceutiques Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
39
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
DATED APRIL 2ND, 1997
-------------------------
AGREEMENT
-------------------------
BETWEEN:-
(1) CHIREX LIMITED
(2) RHONE-POULENC CHIMIE S.A.
INDEX
1. Definitions
2. Term
3. Licence
4. Product Quantity/Forecasts
5. Price
6. Delivery
7. Title and Risk of loss
8. Payment
9. Stocks
10. Warranty/Liability
11. Compliance
12. Transition Procedure
13. Force Majeure
14. Access/inspection
15. Reporting
16. Insurance
17. Employees
18. Transfer
19. Severability
20. Notices
21. Jurisdiction
22. Entire Agreement
SCHEDULES
1. Product grades and Specifications
2. RPC's committment to purchase ***** of Product by grades.
3. Packaging Specifications
40
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
SUPPLY AGREEMENT
This Supply Agreement is between CHIREX LIMITED, (registered number 857670) a
corporation organized under the laws of England with an office at Dudley,
Cramlington, Northumberland NE 23 7QG, England ("Chirex"), and RHONE POULENC
CHIMIE S.A, (registered in the "Registre du Commerce de Nanterre under number B
642 014 526) a corporation organized under the laws of France with headquarters
located at 25 Quai Paul Doumer, 92408 COURBEVOIE and for the purpose of this
Supply Agreement, an office located at 6 rue Georges Marrane, 69200 VENISSIEUX,
France, acting in its name or in the name of its concerned affiliate ("RPC").
WHEREAS as of April 2nd 1997, RPC and Chirex have entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") regarding the sale to RPC of certain
of Chirex's APAP Assets (including the Business) as defined in the Asset
Purchase Agreement.
WHEREAS pursuant to Article 3.5 of the Asset Purchase Agreement, Chirex and RPC
shall execute a Supply Agreement according to which Chirex shall supply and RPC
shall purchase the Product (as defined in the Asset Purchase Agreement) pursuant
to this Supply Agreement.
The parties agree as follows:
1. DEFINITIONS:
All terms defined in the Asset Purchase Agreement shall have the same
meaning in this Supply Agreement.
2. TERM:
This Supply Agreement shall become effective upon the Effective Date of
the Asset Purchase Agreement and shall terminate at the end of the
***** period from such Effective Date.
3. LICENCE
During the term of this Supply Agreement, and exclusively for the
purpose of this Supply Agreement, RPC hereby grants Chirex a
non-exclusive and royalty free licence of the Know-How transferred by
Chirex to RPC pursuant to Article 3 of the Asset Purchase Agreement, in
order to enable Chirex to manufacture, pack and supply the Product
hereunder.
41
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
4. PRODUCT QUANTITY/FORECASTS
4.1. Maximum and Minimum Quantities
During the term of this Supply Agreement, Chirex shall make, pack and
supply to RPC and RPC shall purchase from Chirex that portion of RPC's
requirements of Product (which RPC elects to purchase from Chirex) up
to a maximum quantity of ***** of Product, which shall be
made up of all existing grades of paracetamol defined in Schedule 1,
using Chirex paracetamol manufacturing facility at Dudley, Cramlington,
Northumberland, England, and RPC shall purchase from Chirex a minimum
quantity of ***** of Product.
4.2. Forecasts/Orders
(a) As of the date of this Supply Agreement the grades of the *****
of Product that RPC commits to purchase from Chirex for
SmithKline Beecham p.l.c. and of the ***** that RPC commits
to purchase from Chirex for Sanofi Chimie S.A. are set forth in
Schedule 2.
(b) Thereafter, by May 5th, 1997 RPC will communicate to Chirex its
commitment to purchase further volumes of Product for SmithKline
Beecham p.l.c., up to a maximum of *****, together with a
non-binding estimate of its other requirements of Product, if any.
By end of May 1997, RPC will again communicate to Chirex its commitment
to purchase further volumes of Product for SmithKline Beecham p.l.c. if
any, up to a maximum of *****, together with a non-binding
estimate of its other requirements of Product, if any.
On or before June 20th, 1997, RPC shall provide Chirex with the
quantities of Product that RPC commits to purchase from Chirex through
the remainder of the term of this Supply Agreement and Chirex shall not
be obliged to supply Product in respect of any orders placed after June
20th, 1997.
(c) RPC's firm purchase orders will be communicated in writing by RPC
to Chirex at least thirty (30) days prior to the requested delivery
date.
42
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
4.3. Maximum quantity of Crystal grade Product
Without prejudice to any other obligation, Chirex shall not be obliged
to supply to RPC more than the following tonnages of Crystal grade
Product, depending the quantity of Product manufactured by Chirex for
RPC hereunder:
- If RPC orders ***** of Product, Chirex commits to supply RPC up
to ***** Crystal Grade,
- If RPC orders ***** of Product, Chirex commits to supply RPC up
to ***** Crystal Grade,
- If RPC orders ***** of Product, Chirex commits to supply RPC up
to ***** Crystal Grade,
5. PRICE:
The price for the Product is ***** Chirex's Dudley Plant
(Incoterms 1990) and is exclusive of any value added tax.
6. DELIVERY:
6.1.Delivery shall be in accordance with the details specified in the
relevant purchase order.
6.2. At RPC's request, and on its behalf, Chirex shall directly ship
the Product to any place, as designated in each order for the Product
communicated to it by RPC and shall arrange transportation at
reasonable cost including designating carriers and routes. RPC shall
reimburse Chirex for all transportation invoices paid by Chirex for
Product shipped hereunder, provided that Chirex forwards the relevant
copy invoices to RPC for payment.
6.3. Any problems or potential problems in relation to delivery of the
Product shall at all times be notified forthwith by Chirex to RPC and
Chirex shall take the necessary steps to resolve the problem.
6.4. For some deliveries following the Effective Date, RPC may ask
Chirex to administer sales order processing for certain customers, in
which case Chirex shall issue such invoices on RPC's request, and on
its behalf and in the manner agreed with RPC.
7. TITLE AND RISK OF LOSS:
Title and risk of loss shall transfer from Chirex to RPC according to
the Incoterms 1990 Ex-Works Chirex's Dudley Plant.
43
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
8. PAYMENT:
8.1. For every shipment Chirex shall issue an invoice to RPC (which
shall include any applicable value added tax).
8.2. Each invoice issued by Chirex hereunder shall be limited to :
(a) the price in respect of the Product delivered, plus VAT
(if any); and
(b) where RPC instructs Chirex to arrange for transportation,
the costs of transportation;
(c) any out of pocket expenses incurred by Chirex at the
written request of RPC.
8.3. Payment by RPC will be made on the date which is 30 days from the
end of the month in which the invoice is issued.
9 STOCKS
9.1. Chirex hereby warrants that Chirex will have at the
Effective Date a sufficient inventory of saleable Product (conforming
with Article 10.1 requirements) in order to deliver the orders accepted
by Chirex before the Effective Date, for delivery after the Effective
Date.
9.2. Chirex also undertakes to keep during the term of this
Supply Agreement adequate inventories of saleable Product (conforming
with Article 10.1 requirements) in line with RPC's customers' orders
accepted by RPC after the Effective Date (taking into account of RPC's
commitments in Schedule 2 and of its further requirements through the
remainder of the Term of this Supply Agreement as referred to in
Article 4.2(b) hereabove).
9.3. The parties acknowlege that the minimum level of
inventory at the end of each month is ***** of Product available for
delivery and use.
For the last outstanding orders under this Supply Agreement,
the minimum level of inventory shall be ***** or the level of
inventory required by such outstanding orders, whichever is the lesser.
9.4. The above inventories shall be stocked in adequate
storage facilities located at Chirex Dudley Plant or at any other
location agreed with RPC.
44
CONFIDENTIAL RP
9.5. Upon the termination (for any reason other than a reason
attributable to Chirex's default) or expiry of this Supply Agreement,
RPC undertakes to purchase at the price set out in Article 5 of this
Supply Agreement, any inventory of Product which is in conformity with
the specifications and other requirements defined in Article 10.1 below
and which is held by Chirex at the effective date of such termination
or expiry of this Supply Agreement, provided always that RPC has no
obligation to buy any more than one hundred (100) tonnes of Product
from Chirex in such circumstances.
Notwithstanding the provisions of Article 10.1, such inventory
of Product shall not have been produced more than fifteen (15) months
prior to such purchase by RPC.
9.6. Chirex shall provide for storage of the Product until
June 30th, 1997 and thereafter on terms to be agreed.
10 . WARRANTY/LIABILITY:
10.1. Chirex hereby warrants that all Product delivered
pursuant to this Supply Agreement :
(a) Shall conform in all respects to the specifications set
forth in Schedule 1 ("Specifications").
It is expressly understood and agreed that such Specifications
are identical to the specifications currently used by Chirex to
manufacture and sell Product to the former Chirex customers transferred
by Chirex to RPC pursuant to the Asset Purchase Agreement;
(b) Shall conform in all respects to the packaging
specifications set forth in Schedule 3;
(c) Shall be free from defect or from any deleterious or
excipient material, and in any event shall not comprise any Product as
is referred to in Chirex's "Disclosure Letter" of April 2nd, 1997 to
RPC;
(d) Shall not have been produced more than eighteen(18) months
prior to delivery and shall have a shelf-life of not less than twenty
four (24) months; and
(e) Shall be manufactured at all times in strict conformity
with the Good Manufacturing Practices ("GMP"), for which the following
GMP reference documents will apply :
45
CONFIDENTIAL RP
-"Guidelines for the manufacture of active ingredients" edited
by the PIC convention, Document PH 2/87 of June 1987."
Note : Commission Directive 91/356/EEC of 13 June 1991
refers to this PIC guide as being applicable to active
pharmaceutical ingredients producers.
-"Good Manufacturing Practices for active Ingredients
Manufacturers", EFPIA / CEFIC August 1996.
Payment, inspection, acceptance or proper use of Product shall not
affect Chirex's obligations under this warranty.
10.2. If the Parties should fail to agree whether a consignment of
Product complies with the warranty of Article 10.1, the matter shall be
finally determined by an independent expert to be appointed jointly by
the Parties. If the Parties are unable to agree on who the expert
should be, they will request the President of the Law Society to choose
the expert. The fees and expenses of the expert (who shall act as an
expert and not as an arbitrator) shall be for the account of the party
against whom the decision of the expert is given.
10.3. Chirex agrees promptly to replace free of any additional
charge consignments of the Product which fail to comply with the
warranty of Article 10.1 after which the parties will work together to
determine how the production problems which led to any such failures
may be overcome.
10.4. Chirex shall not make any change to the Product
manufacturing process without first obtaining RPC's prior written
approval to such change.
10.5. If Chirex is in breach of any of its obligations under this
Supply Agreement, RPC may demand that Chirex immediately takes the
necessary steps to meet its obligations and to remedy the breach at its
own expense. Chirex shall also be liable to and will indemnify RPC in
respect of all costs, losses, damages, suits and proceedings suffered
by RPC as a consequence of a non-delivery or a defective delivery made
by Chirex hereunder. Provided that the maximum liability of Chirex in
respect of any breach of this Supply Agreement shall be limited (save
in respect of death or personal injury) to (pound sterling) 2,250,000
in respect of any negligent act on its part, but shall be without
limitation in respect of any wilful act.
46
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
10.6. Chirex acknowledges that RPC has relied on and been induced
into entering the Asset Purchase Agreement by the present Chirex supply
obligations and continues after the Effective Date to rely on such
supply obligations.
Without prejudice to the provision of Article 10.5 hereabove and
to other rights and remedies, should Chirex by negligence or wilful
act, not supply the Product ordered by RPC hereunder, then any costs,
losses or damages suffered by RPC as a consequence of such breach will
be paid by Chirex to RPC. Without prejudice to any other remedy, RPC
shall be entitled to recover such damages, by way of set off against
the Deferred Payments where such damages exceed (pound sterling)
150,000 and where Chirex has failed to make good such damages or to
remedy any such breach as aforesaid within fourteen (14) days of notice
to it by RPC requiring the same.
*****
11. COMPLIANCE:
11.1. Chirex shall comply with all laws, regulations, or other
governmental regulations applicable to the Product, the production,
packing, storage and delivery of the Product and shall indemnify,
defend and hold harmless RPC against Chirex's failure to comply with
this provision.
11.2. Chirex agrees to cooperate with RPC to the best of its
abilities in the implementation of any of RPC's customers' emergency
plan that may need to be implemented as a result of any quality and/or
contamination problems relating to the Product.
12. TRANSITION PROCEDURE:
12.1. It is expressely agreed that as from the Effective Date,
Chirex shall not accept nor enter orders in respect of the Product from
such of Chirex former customers who have agreed to transfer to RPC
under the Asset Purchase Agreement, nor invoice such
47
CONFIDENTIAL RP
customers, except as provided for in Article 6.4 above. Any order
received by Chirex from such former Chirex customers in respect of
Product as from such Effective Date shall be immediately communicated
to RPC which shall be responsible for order entry, invoicing and any
receivables.
12.2. It is acknowleged that certain customers of Chirex may not
agree to transfer to RPC under the terms of the Asset Purchase
Agreement and that the Asset Purchase Agreement sets out the provisions
which will apply in this event.
12.3. All orders received by Chirex in respect of Product from
Chirex former customer before the Effective Date for a delivery and
invoicing after the Effective Date shall be communicated by Chirex to
RPC on the Effective Date and RPC will invoice or request Chirex to
administer the concerned shipments under Article 6.4.
13. FORCE MAJEURE:
If either party to this Agreement is prevented or delayed in the
performance of any of its obligations and/or warranties hereunder by
force majeure and if such party gives written notice thereof to the
other party within ten (10) days of the first day of such event
specifying the matters constituting force majeure, together with such
evidence thereof as it reasonably can give, then the party so prevented
or delayed will be excused from the performance or punctual
performance, as the case may be, of such obligations, as from the date
of such event for so long as such cause of prevention or delay
continues. For the purpose of this Supply Agreement, the term "force
majeure" shall be deemed to be any cause which affects the performance
of this Supply Agreement, arising or attributable to, acts of God, war,
hostilities, riot, compliance with new governmental legislation,
provided that, for the avoidance of doubt, any of the above shall only
constitute force majeure if it occurs beyond the reasonable control of
the party affected and in any event in the absence of negligence or
wilful default on the part of the party claiming force majeure.
In the event of any one or more of the above causes or
circumstances occurring the concerned party shall use its best
endeavours to eliminate any such contingence.
If such event affects Chirex's ability to supply the Product,
Chirex shall give RPC priority over the Reserved Customers for the
supply of Product. If such event affects Chirex's raw materials and/or
utilities, Chirex shall allocate them in priority to RPC and to its
other customers under contract in proportion to the contracted volumes.
The minimum and maximum volumes obligations referred to in Article
4.1 above shall be reduced in proportion to the quantities of Product
which are not supplied by Chirex as a
48
CONFIDENTIAL RP
result of such force majeure event where such event applies for more
than sixty (60) days.
14. ACCESS/INSPECTION:
14.1. Chirex shall procure that RPC or its duly authorised
representatives be permitted to enter Chirex's manufacturing site and
offices concerned by this Supply Agreement on reasonable notice and
subject to the conclusion of any necessary and usual confidentiality
undertaking, to visit and/or inspect the storage, manufacture, packing
and delivery of the Products for the purpose of ensuring compliance of
the Products with the warranties defined herebove and to examine the
condition and quality of the packaging materials and or the Products
stored herein.
14.2. Chirex shall operate all appropriate quality management
systems relating to the Products at its manufacturing site, including
the storage of samples of the Products from each batch, at its
manufacturing site. RPC shall monitor product quality by appropriate
means in consultation with Chirex, who will cooperate with RPC in
relation thereto.
15. REPORTING:
Upon notification by RPC, Chirex shall submit to RPC within
fifteen (15) days, such monthly reports as RPC may reasonably require,
such reports to include in respect of such months, statements of :
(a) the quantity of Product manufactured by Chirex for RPC; and
(b) the quantity of the Product delivered by Chirex to RPC or to
RPC's customers, including the dates of despatch and the size of the
consignment; and
(c) inventory level by grade and packaging.
16. INSURANCE
Chirex shall at its cost maintain with reputable insurers product
liability insurance in respect of the Product (including coverage of
all risks associated with Chirex's obligations under this Supply
Agreement) to such reasonable level as shall be consistent with the
normal practice of Chirex Limited.
49
CONFIDENTIAL RP
Chirex shall provide RPC with evidence as to the existence of the
above insurance policies on RPC's reasonable request.
17. EMPLOYEES
17.1. The Parties apprehend that there are no Employees to whom
the Regulations apply in respect of this Supply Agreement.
17.2. If notwithstanding the foregoing, the Regulations are found
by any competent Tribunal or alleged by any Employee(s) to apply in
connection with this Supply Agreement (and whether as to the transfer
or putative transfer of the contract of employment of any Employee(s)
to RPC or to any Regulation requiring consultation of any Employee(s)
by any of the Parties, or otherwise) (a "Relevant Event"), then this
Article 17 shall apply.
17.3. On the occurrence or threat of a Relevant Event, Chirex
shall indemnify and keep indemnified RPC from and against any and all
claims, costs, legal costs (on an indemnity basis), proceedings,
damages, orders (including orders of reinstatement or re-engagement
under the Regulations or under the Employment Rights Act 1996 or at
law) or awards whatsoever arising out of or in connection with a
Relevant Event or otherwise touching or concerning the contract of
employment of any Employee(s) including, without limiting the
foregoing, the termination of that contract or the terms thereof or the
novation or transfer thereof.
17.4. RPC agrees to co-operate with Chirex and to allow Chirex to
conduct such proceedings in its name (subject to Chirex indemnifying
RPC from any costs on a full indemnity basis) in the conduct of any
proceedings relating to a Relevant Event provided that RPC shall be
under no such obligation if Chirex fails promptly and after written
notice from RPC requesting the same to indemnify RPC as aforesaid and
RPC shall be at liberty on such failure to conduct such proceedings as
it shall see fit (including after written notification to Chirex of its
intention to do so, the admission of any liability or the failure to
defend any proceedings) without prejudice to its rights under this
Article 17. RPC will immediately notify Chirex of any claim it receives
from or on behalf of any Employee(s).
17.5. RPC shall, on Chirex failing to indemnify RPC under Article
17.3 as aforesaid, be entitled to set-off against the Deferred Payments
any amounts (whether arising by way of
50
CONFIDENTIAL RP
claims for damages or other awards made against RPC, or for its costs
and expenses) in connection with a Relevant Event.
18. TRANSFER:
This Supply Agreement is personal to the Parties and accordingly
neither Party shall purport to assign, sub-contract or otherwise
transfer any of its rights or obligations hereunder without the prior
written consent of the other.
19. SEVERABILITY:
If any provision of this Supply Agreement is held invalid, such
invalidity will not affect other provisions or application of this
Supply Agreement which can be given effect without the invalid
provision or application, and to this end the provisions of this Supply
Agreement are declared to be severable. If such invalidity becomes
known or apparent to Chirex and to RPC, Chirex and RPC agree to
negotiate promptly in good faith in an attempt to make appropriate
changes and adjustments to achieve as closely as possible, consistent
with applicable law, the intent and spirit of such invalid provision.
20. NOTICES:
All notices, requests, demands and other communications under
this Supply Agreement shall be in writing and shall be properly served
if sent by registered mail, or delivered by hand or by facsimile
transmission to the following addresses (or to such other addresses as
either party may direct in writing by notice as provided herein) and
shall be deemed to have been served two (2) days after the posting if
sent by first class post or if delivered by hand on the date of
delivery, or if sent by facsimile the date of transmission provided
that notice facsimile shall have no effect unless confirmed by
registered mail posted within one working day transmission :
If to RPC :
RHONE-POULENC CHIMIE
Organic and Pharmaceutical Intermediates Entreprise
6 Rue Georges Marrane,
69200 Venissieux (France)
Attention : Mr Peter Stevenson (or his successor)
Fax : (0033) 04.72.78.15.18
If to Chirex :
CHIREX LIMITED
Dudley, Cramlington
51
CONFIDENTIAL RP
Northumberland, NE23 7QG (United Kingdom)
Attention : Finance Director
Fax : (0044) (0) 191 250 1154
21. JURISDICTION:
The dispute resolution procedures set forth in Article 12 of the
Asset Purchase Agreement shall be fully applicable under this Supply
Agreement.
22. ENTIRE AGREEMENT:
This document, together with its addenda hereto, constitutes the
complete and final Supply Agreement between RPC and Chirex and
supersedes all previous agreements, undertakings and negotiations
between the parties connected therewith. Any additional or different
terms provided by either party in subsequent purchase orders or other
documents shall not be binding. This document may be modified only by
an amendment, expressly stated as such, signed by both parties.
IN WITNESS WHEREOF, the parties have caused this Supply Agreement to be executed
by their duly authorized representatives.
CHIREX LIMITED RHONE-POULENC CHIMIE
- -------------- --------------------
By : /s/ DAVID F. RAYNOR By : /s/ PETER STEVENSON
Name : David F. Raynor Name : Peter Stevenson
Title : V.P. Operations Title : Director-Pharma Ingredients
Date : 2-4-97 Date : April 2nd, 97
52
CONFIDENTIAL RP
SCHEDULE 1
PRODUCT GRADES AND SPECIFICATIONS
53
CONFIDENTIAL RP
[ChiRex Limited Letterhead]
Portions of this Exhibit have been omitted
pursuant to a request for confidential
treatment. The omitted portions are marked
***** and have been filed separately with
the Commission.
PARACETAMOL
*****
The information contained in this document is given in good faith and is
correct at the time of printing
54
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have
been filed separately with the Commission.
SCHEDULE 2
RPC'S COMMITTMENT TO PURCHASE *****
OF PRODUCT BY GRADES
*****
55
CONFIDENTIAL RP
SCHEDULE 3
PACKAGING SPECIFICATIONS
56
CONFIDENTIAL RP
REXAM DRUMS LIMITED, DISLEY, STOCKPORT, CHESIRE, SK12 2EW
SPECIFICATION OF PACKAGING
FIBREBOARD DRUMS
DATE: 18/10/96
CUSTOMER: ChiRex
TYPE: Leverpak SPEC NO. ST48069
DIMENSIONS(MM):
Internal Overall
DIAMETER 395 410
HEIGHT 700 737
CAPACITY (LITRES): 85.2
MATERIAL AND TYPE:
BODY: 5 Wraps of 300 GSM Kraft.
Wound with Minimum
Overlap.
TOP CHIME: Standard - Electrogalvanised
Steel
BASE: 100 KG Construction.
1285 GSM Tray.
BASE CHIMB: Standard- Electrogalvaniesed
Steel.
HEAD: Black Plastic Stackable Lid.
CLOSURE(TYPE): Lever Action.
SPECIAL CHARACTERISTICS: Clean Lid and Top Chimb.
Invert and Run Over Vibrating
Conveyer.
Check Tare Weight.
No Creases in Sidewall.
All measurements are to BS 1596:1992
57
CONFIDENTIAL RP
Specification of Packaging
Fibreboard Drums
DATE: 18/10/96
CUSTOMER: ChiRex
TYPE: Leverpak SPEC NO. ST48062
DIMENSIONS(MM):
Internal Overall
DIAMETER 510 525
HEIGHT 700 728
CAPACITY (LITRES): 141.9
MATERIAL AND TYPE:
BODY: 6Wraps of 300 GSM Kraft. Wound
with Minimum Overlap.
TOP CHIME: Standard - Electrogalvanised Steel
BASE: 150 KG Construction.
1050 GSM Tray.
1800 GSM Filler.
BASE CHIMB: Extended- Electrogalvanised Steel.
HEAD: Black Plastic Flat Lid.
CLOSURE(TYPE): Lever Action.
SPECIAL CHARACTERISTICS: Clean Lid and Top Chimb.
Invert and Run Over Vibrating
Conveyer.
Stamp 135045.
No Creases in Sidewall.
Check Tare Weight.
All measurements are to BS 1596:1992
58
CONFIDENTIAL RP
SPECIFICATION OF PACKAGING
FIBREBOARD DRUMS
DATE: 18/10/96
CUSTOMER: ChiRex
TYPE: Leverpak SPEC NO. ST48075
DIMENSIONS(MM):
Internal Overall
DIAMETER 470 485
HEIGHT 700 737
CAPACITY (LITRES): 121.4
MATERIAL AND TYPE:
BODY: 5 Wraps of 300 GSM Kraft.
Wound with Minimum Overlap.
TOP CHIME: Standard - Electrogalvanised Steel
BASE: 100 KG Construction.
1675 GSM Tray.
BASE CHIMB: Extended- Electrogalvanised Steel.
HEAD: Beige Plastic Stackable Lid.
CLOSURE(TYPE): Lever Action.
SPECIAL CHARACTERISTICS: Clean Lid and Top Chimb.
Invert and Run Over Vibrating
Conveyer.
Stamp 135043 and
UNIG/Y155/S/YR GB/0436.
No Creases in Sidewall.
Check Tare Weight.
All measurements are to be BS 1596:1992
59
CONFIDENTIAL RP
PARACETAMOL GRADES DRUM SPECIFICATION
Pack
Product Size Drum
Specification Grade (kg) Specification Comments
814001 Fine 75 135043
814002 Fine 75 135057 these drums are recycled 135043 from Ireland
814003 Fine 50 135050
814006 BP Powder 75 135043 fines generated from crystal grade
814007 Extra fine 75 135045
814008 Extra fine 67.5 135045
814009 Extra fine 40
814010 Superfine 50
814011 Crystal 100
814015 Capsule(80 75
mesh)
814016 Coarse 80 oversize generated from capsule grade (80 mesh)
60
CONFIDENTIAL RP
PROJECT "LATITUDE"
EXHIBIT 2
---------------------------------
AGREED FORM OF
STAMP DUTY
AGREEMENT
---------------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
INGREDIENTS PHARMACEUTIQUES Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
61
CONFIDENTIAL RP
DATED _______________ 1997
_________________________
AGREEMENT
_________________________
BETWEEN:-
(1) CHIREX LIMITED
(2) CHIREX INC.
(3) RHONE-POULENC CHIMIE S.A.
62
CONFIDENTIAL RP
THIS AGREEMENT is made this ___________ day of ___________________ 1997
BETWEEN:-
(1) CHIREX LIMITED
(Reg. No. 857670)
("THE VENDOR")
whose registered office is at Dudley, Cramlington, Northumberland, NE23
7QG, United Kingdom
(2) CHIREX INC.
("THE GUARANTOR")
of 65 William Street, Suite 330, Wellesby, Mass., 02181, USA
(3) RHONE-POULENC CHIMIE S.A.
(Registered in the Registre du Commerce de Nanterre under number B 642
014 526)
("THE PURCHASER")
whose principal seat is at 25 quai Paul Doumer, 92408 Courbevoie Cedex,
France, with offices at 6, rue Georges Marrane, 69200 Venissieux,
France.
WHEREAS
A. The Parties intend on the date hereof to enter into an asset purchase
agreement relating to the sale by the Vendor of its acetaminophen
business to the Purchaser with the Guarantor guaranteeing the Vendor's
obligations therein ("the Purchase Agreement").
B. The Purchase Agreement contemplates the execution of certain other
documents and agreements in agreed form (of which this Agreement is
one) (together, "the Documents", which expression shall include any
counterparts but excluding the Mandate so defined in the Purchase
Agreement), execution of each of the Documents to take place outside
the United Kingdom.
- 1 -
63
CONFIDENTIAL RP
NOW, THEREFORE, IT IS HEREBY AGREED as follows:-
1. In this Agreement:-
"DUTY" means any stamp duty (including any fines or
penalties) assessed or adjudicated by the
Revenue as payable on any of the Documents by
virtue of the Stamp Act 1891 (as amended) or
any statutory modification or re-enactment
thereof;
"EXCEPTED PURPOSE" means (i) any judicial proceedings before any
competent court or tribunal in the United
Kingdom or any proceedings or other dealings
with the Revenue in which any of the Documents
are or would be in issue or otherwise material
to such proceedings or other dealings or (ii)
as is otherwise required by law or the rules of
a recognised stock exchange; or (iii) in
circumstances where the Vendor is obliged to
disclose any of the Documents in originals to
any employees or employee representatives of
the Vendor in order to discharge any
obligations of consultation with such employees
or employee representatives;
"REVENUE" means Her Majesty's Inland Revenue,
commissioners or special commissioners therefor
or any of Her Majesty's Inspector of Taxes.
2. The Parties hereby irrevocably undertake to each other not to import or
permit the importation (whether temporary or otherwise) of any of the
Documents into the United Kingdom save only and strictly insofar as may
be necessary for an Excepted Purpose.
3. The Purchaser shall pay any Duty due to the Revenue and indemnify the
Vendor and the Guarantor therefrom if (but only if):-
.1 the Purchaser imports or permits the importation of any of the
Documents into the United Kingdom; or
.2 the Vendor and/or the Guarantor imports or permits the
importation of any of the Documents into the United Kingdom
strictly insofar as may be necessary for an Excepted Purpose
PROVIDED THAT the Vendor or the Guarantor (as the case may be)
shall import only such of the Documents as are necessary for
such Excepted Purpose and shall have given the Purchaser at
least ten days' prior written notice of such importation and
shall have made such Documents available to the Purchaser or
its nominees for the purpose of timely adjudication by the
Revenue.
- 2 -
64
CONFIDENTIAL RP
4. If the Vendor and/or the Guarantor imports or permits the importation
of any Documents into the United Kingdom for an Excepted Purpose the
Purchaser shall procure that the Documents are promptly submitted to
H.M. Inland Revenue for adjudication of any Duty payable and shall pay
the same within thirty days of assessment.
5. Where Duty becomes due and is paid by a Party on any Document by reason
of any other Party breaching any of its undertakings in Clause 2, then
that Party in such breach shall promptly indemnify and keep indemnified
the other Parties fully and effectively therefrom.
6. The Parties hereby undertake not to import any of the Documents or
permit the importation thereof into the United Kingdom in contemplation
of or for any purpose connected with any arbitration proceedings
between them pursuant to Clause 12.3 of the Purchase Agreement or
otherwise unless required to do so by the arbitrator and hereby agree
not to rely on any failure to have any of the Documents stamped under
the Stamp Act 1891 (as aforesaid) in any proceedings concerning any of
them outside the jurisdiction of any court of the United Kingdom,
whether in any arbitration proceedings pursuant to Clause 12.3 of the
Purchase Agreement or otherwise.
7. This Agreement shall be governed by English law.
IN WITNESS WHEREOF this Agreement has been signed the day and year first before
written:-
For & on behalf of
CHIREX LIMITED
:
- -------------------------------- -------------------------------
DIRECTOR WITNESS
For & on behalf of
CHIREX INC.
:
- -------------------------------- -------------------------------
DIRECTOR WITNESS
For & on behalf of
RHONE-POULENC CHIMIE S.A.
:
- -------------------------------- -------------------------------
DIRECTOR WITNESS
- 3 -
65
CONFIDENTIAL RP
PROJECT "LATITUDE"
EXHIBIT 3
---------------------------
AGREED FORM OF
RELEASES
----------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
INGREDIENTS PHARMACEUTIQUES Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
66
CONFIDENTIAL RP
[SMITHKLINE BEECHAM PLC]
[ 1997]
ChiRex Limited,
(formerly Sterling Organics Limited)
Dudley,
Cramlington,
Northumberland, NE23 7QG
FOR THE ATTENTION OF: A. R. CLARK, ESQ.
DEAR SIRS,
PARACETAMOL SUPPLY AGREEMENT
We refer to the paracetamol Supply Agreement dated 17 June 1994 between
yourselves and ourselves ("the Supply Agreement").
Rhone-Poulenc Chimie S.A. ("RP") has advised us that you have agreed (subject to
contract) to sell your paracetamol business to them and that on 2 April 1997 you
accordingly intend to assign to them the benefit and the burden of the Supply
Agreement with effect from that date ("the Effective Date"). We confirm (for the
avoidance of doubt) that we consent to such assignment.
RP has undertaken to certify to us the effectiveness of such sale and assignment
in the form attached to this letter.
We accordingly acknowledge that subject to RP so certifying RP has accepted all
rights and obligations under the Supply Agreement from the Effective Date in
respect of all products supplied and invoiced by them from that date, and that
ChiRex Limited is released from all rights and obligations under the Supply
Agreement with effect from the Effective Date.
This letter does not in any way impair or affect our respective rights and
obligations accrued in respect of all products supplied by you to us under the
Supply Agreement prior to the Effective Date.
Yours faithfully,
For & on behalf of
SMITHKLINE BEECHAM PLC
COUNTERPART:
WE ACKNOWLEDGE RECEIPT OF THE LETTER, OF WHICH
THIS IS A COPY, AND CONFIRM OUR ACCEPTANCE OF
AND AGREEMENT WITH THE TERMS SET OUT THEREIN.
------------------------------
FOR & ON BEHALF OF
RHONE-POULENC CHIMIE S.A.
67
CONFIDENTIAL RP
[SANOFI CHIMIE S.A.]
[ 1997]
ChiRex Limited,
(formerly Sterling Organics Limited)
Dudley,
Cramlington,
Northumberland, NE23 7QG
FOR THE ATTENTION OF: A. R. CLARK, ESQ.
DEAR SIRS,
PARACETAMOL SUPPLY AGREEMENT
We refer to the paracetamol Supply Agreement dated 10 August 1995 between
yourselves and ourselves ("the Supply Agreement").
Rhone-Poulenc Chimie S.A. ("RP") has advised us that you have agreed (subject to
contract) to sell your paracetamol business to them and that on 2 April 1997 you
accordingly intend to assign to them the benefit and the burden of the Supply
Agreement with effect from that date ("the Effective Date"). We confirm (for the
avoidance of doubt) that we consent to such assignment.
RP has undertaken to certify to us the effectiveness of such sale and assignment
in the form attached to this letter.
We accordingly acknowledge that subject to RP so certifying RP has accepted all
rights and obligations under the Supply Agreement from the Effective Date in
respect of all products supplied and invoiced by them from that date, and that
ChiRex Limited is released from all rights and obligations under the Supply
Agreement with effect from the Effective Date.
This letter does not in any way impair or affect our respective rights and
obligations accrued in respect of all products supplied by you to us under the
Supply Agreement prior to the Effective Date.
Yours faithfully,
For & on behalf of
SANOFI CHIMIE S.A.
COUNTERPART:
WE ACKNOWLEDGE RECEIPT OF THE LETTER, OF WHICH
THIS IS A COPY, AND CONFIRM OUR ACCEPTANCE OF
AND AGREEMENT WITH THE TERMS SET OUT THEREIN.
------------------------------
FOR & ON BEHALF OF
RHONE-POULENC CHIMIE S.A.
68
CONFIDENTIAL RP
[RHONE-POULENC CHIMIE]
[ 1997]
[Smithkline Beecham Plc]
FOR THE ATTENTION OF: [ ]
DEAR SIRS,
PARACETAMOL SUPPLY AGREEMENT
DATED 17 JUNE 1994 BETWEEN
YOURSELVES AND CHIREX LIMITED
CERTIFICATE
We hereby certify that the above agreement has been assigned to us with effect
from 2 April 1997 pursuant to the terms of an asset purchase agreement dated [2
April 1997] between ourselves as purchaser and ChiRex Limited as vendor of their
APAP business. The foregoing assignment takes effect so as to assign to us all
of the rights and obligations of ChiRex Limited under the above supply agreement
in respect of all APAP products supplied by us to yourselves from 2 April 1997
but is without prejudice to any accrued right or obligation between yourselves
and ChiRex Limited in respect of products supplied by them to you prior to that
date.
Yours faithfully,
For & on behalf of
RHONE-POULENC CHIMIE S.A.
69
CONFIDENTIAL RP
[RHONE-POULENC CHIMIE]
[ 1997]
[Sanofi Chimie S.A.]
FOR THE ATTENTION OF: [ ]
DEAR SIRS,
PARACETAMOL SUPPLY AGREEMENT
DATED 10 AUGUST 1995 BETWEEN
YOURSELVES AND CHIREX LIMITED
CERTIFICATE
We hereby certify that the above agreement has been assigned to us with effect
from 2 April 1997 pursuant to the terms of an asset purchase agreement dated [2
April 1997] between ourselves as purchaser and ChiRex Limited as vendor of their
APAP business. The foregoing assignment takes effect so as to assign to us all
of the rights and obligations of ChiRex Limited under the above supply agreement
in respect of all APAP products supplied by us to yourselves from 2 April 1997
but is without prejudice to any accrued right or obligation between yourselves
and ChiRex Limited in respect of products supplied by them to you prior to that
date.
Yours faithfully,
For & on behalf of
RHONE-POULENC CHIMIE S.A.
70
CONFIDENTIAL RP
PROJECT "LATITUDE"
EXHIBIT 4
---------------------------
AGREED FORM OF
MANDATE
----------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
INGREDIENTS PHARMACEUTIQUES Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
71
CONFIDENTIAL RP
MANDATE
To:
Messrs DIBB LUPTON ALSOP
And to:
Messrs EVERSHEDS
2 April 1997
DEAR SIRS,
ESCROW ACCOUNT
We hereby request that you open a sterling call deposit account in your joint
names on our behalf ("the Account") on the following terms. On your
communicating to us the name of the bank ("the Escrow Bank") name, number and
other designations of the Account, ChiRex Limited shall pay the sum of (pound
sterling) 1 to the credit of the Account, being the opening balance, and we
shall jointly bear the Escrow Bank's charges therefor, if any, equally.
TERMS
1. All communications from you concerning the Account shall be made to
each of us at our respective addresses and contact details, below.
2. You will not make any drawings on the Account except as provided for in
this Mandate.
3. Without prejudice to the generality of the foregoing, you will not:-
.1 issue or accept any cheques, bills or promissory notes in
respect of the Account other than as strictly provided for
herein;
.2 set-off against the Account any balances you may have with
either of us in respect of any other accounts (or other debts
or obligations of any description) either of us may have with
you from time to time.
4. From time to time Rhone-Poulenc Chimie S.A. may credit a deposit or
deposits to the Account (the aggregate of any such deposits being
herein referred to as "the Deposit") but nothing in this Mandate shall
oblige either of us to make such Deposit.
5. The Deposit shall accrue interest at the best available rate of the
Escrow Bank from time to time for sterling call deposit accounts in
respect of deposits of the same size as the Deposit.
- 1 -
72
CONFIDENTIAL RP
6. We may jointly at any time prior to any Deposit being made terminate
this Mandate and close the Account (subject to meeting the proper
charges and fees of the Escrow Bank in connection with the Account).
7. At any time after a Deposit is made, you will hold the same on deposit
in the Account (accruing interest as aforesaid and crediting the same
to the Account) unless and until:-
.1 we jointly instruct you in writing to pay the Deposit (or part
thereof) to such person or account as we may jointly determine
("a Joint Instruction");
.2 you obtain or are presented by either of us with leading
counsel's certificate in the form annexed hereto ("Counsel's
Certificate") (as engrossed and completed or with such parts
in Clause 3 of the proforma thereof as annexed to this Mandate
deleted by leading counsel),
subject to the other terms of this Mandate.
8. A Joint Instruction shall only bind you if presented in duplicate
originals.
9. Where, after having honoured a Joint Instruction, there remains an
amount in credit in the Account then such credit balance shall (for the
avoidance of doubt) stand as the Deposit and this Mandate shall
continue to apply thereto.
10. Counsel's Certificate shall only bind you if:-
.1 the signature thereon appears to you to be an original; and
.2 it is presented to both of you by either of us or to both of
you on behalf of either of us with our demand for payment in
the sum stated as so due in Counsel's Certificate (subject
always to Clauses 11 & 12).
11. You shall be entitled at all times (without prejudice to any of your
other rights and remedies) to debit to the Account the proper charges
and fees of the Escrow Bank in connection with the operation thereof.
12. You shall disregard any Joint Instruction or Counsel's Certificate to
the extent that any sum claimed or demanded thereunder exceeds the
Deposit after allowing for the charges and fees of the Escrow Bank as
aforesaid.
13. Where, after presentation and honouring of Counsel's Certificate (by
whomever presented) there remains any balance in the Deposit, then the
same shall be paid subject to a Joint Instruction.
14. You undertake to make any payment in satisfaction of a Joint
Instruction or the presentation of Counsel's Certificate in accordance
with this Mandate on demand and without contestation, and in spite of
any protest by either of us.
- 2 -
73
CONFIDENTIAL RP
15. The Account shall be subject to the Escrow Bank's usual terms and
conditions for the opening and operation of call deposit accounts in
joint names.
16. You shall notify us of any matter concerning this Mandate at our
addresses, below, or such other address either of us may notify to you
from time to time:-
RHONE-POULENC CHIMIE S.A. CHIREX LIMITED
6, rue Georges Marrane, Dudley,
69200 Venissieux, Cramlington,
France Northumberland,
NE23 7QG,
United Kingdom
Fax: (33) 04 72 78 15 18 Fax: (44) 0191 250 1154
Attention: Director, Pharmaceutical Ingredients Attention: Managing Director
& Finance Director
with copy to: Direction Juridique,
Rhone-Poulenc Chimie S.A.,
25 quai Paul Doumer,
92408 Courbevoie,
Fax: (33) 01 47 68 13 32
Attention: Director
17. For the avoidance of doubt, your charges and fees in connection with
this Mandate shall be paid exclusively in the case of Dibb Lupton Alsop
by ChiRex Limited, and in the case of Eversheds by Rhone-Poulenc
Chimie. Neither of you will make any debit to the Account in respect of
such charges and fees.
18. Neither of us shall have any claim against either of you in respect of
your making payment in accordance with this Mandate.
19. This Mandate shall be governed by English law and be subject to the
exclusive jurisdiction of the English courts.
- 3 -
74
CONFIDENTIAL RP
IN WITNESS WHEREOF we have caused this Mandate to be signed this 2nd day of
April 1997 by our respective officers or attorneys:-
Signed by: _______________________________
DIRECTOR
For & on behalf of
CHIREX LIMITED
in the presence of: _______________________________
Signed by: _______________________________
ATTORNEY-IN-FACT
For & on behalf of
RHONE-POULENC CHIMIE S.A.
in the presence of: _______________________________
- 4 -
75
CONFIDENTIAL RP
------------------------
ANNEXE
TO
MANDATE
-------------------------
FORM OF COUNSEL'S CERTIFICATE
TO BE ENGROSSED AND COMPLETED,
TOGETHER WITH ANY NECESSARY DELETIONS TO CLAUSE 3
BY LEADING COUNSEL
76
CONFIDENTIAL RP
[LEADING COUNSEL'S LETTERHEAD]
To [Parties' Solicitors Date [ ]*
COUNSEL'S CERTIFICATE
1. I am the duly appointed arbitrator in an arbitration ("the
Arbitration") between ChiRex Limited ("ChiRex") and Rhone-Poulenc
Chimie S.A. ("R-P") pursuant to Clause 12.3 of an asset purchase
agreement dated 2 April 1997 ("the Agreement").
2. In the Arbitration, it is my award that:-
[A Disqualifying Event has arisen under the Agreement and I accordingly
hereby certify that R-P is entitled to withhold from the Deferred
Payments or is otherwise entitled to payment by ChiRex the sum of [ ]*,
[and ChiRex is entitled to the sum of [ ]*]* in accordance with the
Agreement.]*
[No Disqualifying Event has arisen, and I accordingly hereby certify
that ChiRex is entitled to payment of the Deferred Payments, in
accordance with the Agreement.]*
3. A copy of my written award in the Arbitration is attached hereto,
signed by me for identification.
4. This letter (and my certificate) is without liability or responsibility
on my part to you.
Signed ________________________*
Name: ________________________* Q.C.
[*To be filled in or deleted by Counsel]
77
CONFIDENTIAL RP
PROJECT "LATITUDE"
EXHIBIT 5
---------------------------------
AGREED FORM OF
KNOW-HOW
LICENCE
---------------------------------
RHONE-POULENC CHIMIE LEGAL AFFAIRS (PARIS)
25 quai Paul Doumer Tel: 33 1 4768 0864 FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
LEGAL AFFAIRS (UK):
INGREDIENTS PHARMACEUTIQUES Tel: 01923 201 515 RN
6, rue Georges Marrane 201 511 LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
78
CONFIDENTIAL RP
DATED _______________ 1997
_________________________
AGREEMENT
_________________________
BETWEEN:-
(1) CHIREX LIMITED
(2) RHONE-POULENC CHIMIE S.A.
INDEX
1. Definitions & Interpretation
2. Warranty
3. Licence
4. Audit
5. Royalty
6. Term & Termination
7. Confidentiality
8. Jurisdiction
SCHEDULE
Reserved Customers
EXHIBIT
Undertaking of Confidentiality
79
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
THIS AGREEMENT is made this _________ day of _______________ 1997
BETWEEN:-
(1) CHIREX LIMITED
( "THE LICENSEE")
of Dudley, Cramlington, Northumberland, NE23 7QG, United Kingdom
(2) RHONE-POULENC CHIMIE S.A.
("RPC")
of 25 quai Paul Doumer, 92408 Courbevoie Cedex, France
WHEREAS
A. On 2 April 1997 Chirex Inc., the Licensee (as Vendor) and RPC (as
Purchaser) entered into an asset purchase agreement effective 2 April
1997 for the sale of certain of the Licensee's business & assets
relating to APAP ("the Asset Purchase Agreement")
B. It is contemplated in the Asset Purchase Agreement that certain of the
Licensee's customers might not be willing to consent to the assignment
of their contracts in relation to APAP to RPC
C. The Parties are now desirous of providing for the supply of APAP to
such customers by the Licensee on the terms herein
NOW, THEREFORE, IT IS HEREBY AGREED as follows:-
1. DEFINITIONS & INTERPRETATION
DEFINITIONS
1.1 The following words and expressions have the meanings ascribed below:-
"APAP", "BUSINESS", EFFECTIVE DATE",
"KNOW-HOW", "PRODUCT",
"RESERVED CUSTOMER", "SITE"
& "SUPPLY AGREEMENT" means the product, business, date, know-how,
customers, site and agreement so defined in
the Asset Purchase Agreement;
- 1 -
80
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
"ROYALTY" means a royalty payable in pounds sterling by
the Licensee to R-P in respect of Sales as
consideration for the licence granted herein
and is calculated by subtracting *****
from the Sales Price and dividing by two;
"SALES" means the Licensee's gross sales in pounds
sterling of Product to Reserved Customers
invoiced on or after the Effective Date
(including any sales invoiced after
termination or expiry of this Agreement);
"SALES PRICE" means the Licensee's gross invoice price
ex-works (i.e. excluding VAT, carriage, credit
notes and discounts) in pounds sterling in
respect of Sales;
"TERM" means one year, beginning on the Effective
Date.
INTERPRETATION
1.2 This Agreement is personal to the Parties. Neither Party shall assign
or sub-contract this Agreement (or any right or burden thereunder)
without the consent of the other.
1.3 Termination of this Agreement, however arising, shall automatically
terminate each licence herein granted.
1.4 Each payment or sum of money to be paid hereunder is stated exclusive
of VAT, which shall be payable in addition where applicable. All
payments hereunder shall be in pounds sterling free of all deductions.
1.5 A Party shall not be deemed to have waived any of its rights and
benefits under this Agreement unless expressly so declaring.
1.6 No warranty or representation not expressly referred to herein shall be
implied.
1.7 This Agreement shall be governed by English law.
2. RESERVED CUSTOMERS
2.1 Reserved Customers are scheduled hereto. The Parties may from time to
time add Reserved Customers to the Schedule or delete them, as they may
agree.
- 2 -
81
CONFIDENTIAL RP
2.2 For the avoidance of doubt, nothing in this Agreement shall permit the
Licensee to use or otherwise exploit the Know-How and/or to sell the
Product or in any way to undertake any business in competition with the
Business save as it is expressly licensed pursuant to Clause 3 to do in
respect of Product supplied to Reserved Customers, only.
2.3 The Licensee warrants and undertakes to RPC that (notwithstanding any
agreement with any Reserved Customer) no supply by the Licensee of any
Product to Reserved Customers shall in any way impair or prejudice the
Licensee's ability to fulfil and discharge all of its obligations under
the Supply Agreement.
3. LICENCE
3.1 RPC hereby licenses the Licensee to make and sell the Product to
Reserved Customers, only and to use and work the Know-How at the Site,
during the Term in the production of the Product for supply thereof to
Reserved Customers only, in consideration of the Royalty and subject to
the other provisions of this Agreement.
3.2 The Licensee shall not in any way assign, transfer or sub-license the
Know-How.
4. AUDIT
4.1 Twice during the Term RPC shall be entitled to conduct at its own cost
an audit of the Licensee's books and records and of the Site for the
purposes solely of ascertaining and verifying any calculation of
Royalty, (and in particular in ascertaining Sales Prices) or verifying
that the Licensee adequately maintains the confidentiality of the
Know-How.
4.2 One of the foregoing audits may be conducted by RPC within ninety days
after the end of the Term.
4.3 No audit (or failure to audit) by RPC shall in any way relieve the
Licensee from any of its obligations herein.
4.4 RPC shall procure that its auditors observe any reasonable obligations
of confidentiality to the Licensee in performing the audit.
5. ROYALTY
5.1 No later than the fifteenth of each month during the Term after the
first month thereof (and thereafter until the Licensee shall certify in
writing to RPC that the Licensee no longer has any outstanding invoices
to Reserved Customers) the Licensee shall issue a statement to RPC
stating:-
- 3 -
82
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
.1 Sales made in the preceding month, broken down by Reserved
Customer, Product, Sales Price and volume;
.2 the due date ("the Due Date") for payment by Reserved
Customers in respect of such Sales;
.3 the Royalty payable to RPC in respect of such Sales.
5.2 RPC shall from time to time (but not more frequently than monthly)
invoice the Licensee for Royalty in respect of all Sales for which the
Due Date precedes the date of such invoice.
5.3 The Licensee shall pay the Royalty against such invoices within three
days of the date thereof, such payment to be made without any
deductions, levies or set-off whatsoever.
5.4 For the avoidance of doubt if for any reason the Sales Price is less
than ***** then Royalty shall be deemed to be nil.
6. TERM & TERMINATION
6.1 Unless previously lawfully terminated, this Agreement shall subsist for
the Term and terminate automatically on the last day thereof.
6.2 Termination pursuant to Clause 6.1 shall be without prejudice to any
accrued right or obligation of the Parties but shall otherwise be
without fault or penalty on either Party.
6.3 Termination, however arising, shall not in any way limit Clause 7,
which shall continue in full force.
6.4 Without prejudice to any other right or remedy either Party may
terminate this Agreement at any time forthwith by simple notice in
writing to the other Party where that other Party:-
.1 suffers or permits the appointment of administrators,
liquidators, receivers or administrative receivers in respect
of its business and/or undertaking or part thereof, or
otherwise compounds with its creditors, or has a petition
presented for its winding-up or is insolvent within the
meaning of Section 123, Insolvency Act 1986;
.2 is in breach of this Agreement in circumstances as would allow
the first Party to treat this Agreement as repudiated at law;
.3 is in breach of this Agreement and remains in breach twenty
days after written notice from the other requiring such breach
to be remedied.
- 4 -
83
CONFIDENTIAL RP
6.5 On termination (however arising) the Licensee shall forthwith return to
RPC any Know-How reduced to writing and/or stored or recorded in any
medium or material in the Licensee's control.
7. CONFIDENTIALITY
7.1 The Licensee shall treat the Know-How as strictly confidential and
shall not disclose or permit disclosure of the same save as permitted
under Clause 7.2, nor shall the Licensee use or permit the use of the
Know-How save in the manufacture of the Product.
7.2 The Licensee shall procure that any of its employees needing to know
the Know-How shall enter into separate obligations of confidentiality
in favour of RPC in the terms exhibited hereto.
7.3 The Licensee shall not make copies of Know-How save with the consent of
RPC; any such copies shall be carefully controlled by the Licensee and
shall be marked clearly to identify RPC's ownership.
7.4 Without limiting the foregoing, each Party shall treat as strictly
confidential, and shall not use or disclose, any confidential or
commercial or technical information belonging to the other, save under
compulsion of law (and then only insofar as so compelled).
7.5 Clause 7.4 shall not apply to any information in the public domain
through no fault of the receiving Party or information developed or
received by a Party wholly independently of the other Party (the Party
claiming exemption to prove its claim).
8. JURISDICTION
8.1 The Parties hereby submit to the English jurisdiction but without
prejudice to the enforcement and execution of any order or judgment of
that jurisdiction in any other jurisdiction.
- 5 -
84
CONFIDENTIAL RP
IN WITNESS WHEREOF this Agreement has been signed the day and year first before
written:-
For & on behalf of
CHIREX LIMITED
- ------------------------------ ---------------------------------
WITNESS
For & on behalf of
RHONE-POULENC CHIMIE S.A.
- ------------------------------ ---------------------------------
WITNESS
- 6 -
85
CONFIDENTIAL RP
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
SCHEDULE
-------------------------------
RESERVED CUSTOMERS
-------------------------------
*****
- 7 -
86
CONFIDENTIAL RP
EXHIBIT
-----------------------------------------
UNDERTAKING OF CONFIDENTIALITY
-----------------------------------------
I acknowledge that I am aware of the terms of an agreement entered into between
Chirex Limited (my employers) and Rhone-Poulenc Chimie S.A. ("RPC") dated 2
April 1997 ("the Agreement") in connection with the Know-How. I also acknowledge
that RPC requires the following undertaking before permitting my employers to
use "the Know-How" defined in the Agreement.
Accordingly, I undertake to RPC to observe and be bound by Clause 7 of the
Agreement as if I were a party thereto jointly with my employers to the extent
that I become aware of any such Know-How.
I also understand that Clause 7 (and my undertaking) survives termination of the
Agreement.
NAME Position Signature Date
---- -------- --------- ----
- ---------------------- --------------------- --------------------- ---------------------
- ---------------------- --------------------- --------------------- ---------------------
- ---------------------- --------------------- --------------------- ---------------------
- ---------------------- --------------------- --------------------- ---------------------
- ---------------------- --------------------- --------------------- ---------------------
- ---------------------- --------------------- --------------------- ---------------------
- 8 -
87
CONFIDENTIAL RP
PROJECT "LATTITUDE"
EXHIBIT 6
-------------------------
DISCLOSURE LETTER
-------------------------
Rhone-Poulenc Chimie Legal Affairs (Paris)
25 quai Paul Doumer Tel: 33 1 4768 0864FT
92408 Courbevoie Cedex Fax: 33 1 4768 1332
France
Legal Affairs (UK):
Ingredients Pharmaceutiques Tel: 01923 201 515RN
6, rue Georges Marrane 201 511LAR
69200 Venissieux Fax: 01923 201 931
France RP-Tel: 450 2+ ***
88
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked ***** and have been
filed separately with the Commission.
Rhone-Poulenc Chimie Europe SA
25 Quai Paul Doumer
92408 Courbevoie Cedex
PARIS
Dear Sirs
ChiRex Limited
We refer to the agreed draft of an agreement (the "Agreement") proposed to be
entered into later today between ChiRex Limited(1), ChiRex Inc(2) and
Rhone-Poulenc Chimie SA(3) relating to the sale of the business and assets of
ChiRex Limited relating to APAP.
This letter is the disclosure letter referred to in the Agreement. This
disclosure letter places on record the disclosures made by ChiRex Limited to
Rhone-Poulenc Chimie SA in relation to the warranties contained in the
Agreement.
The following are specific disclosures:
1. *****
2. *****
89
2
Please acknowledge receipt of this letter by signing and returning the enclosed
duplicate copy.
Yours faithfully
- -------------------------
For and on behalf of
ChiRex Limited
We acknowledge receipt of this disclosure letter
Yours faithfully
- -------------------------
For and on behalf of
Rhone-Poulenc Chimie SA