EXHIBIT 10.33
PORTIONS OF THIS AGREEMENT, AND THE EXHIBITS AND SCHEDULES HERETO, HAVE BEEN
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
ASSET PURCHASE AGREEMENT
among
PFIZER INC.,
the
ASSET SELLING CORPORATIONS
(named herein)
and
PHILIPP BROTHERS CHEMICALS, INC.
DATED AS OF SEPTEMBER 28, 2000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND TERMS................................................1
Section 1.1 Definitions.............................................1
Section 1.2 Other Definitional Provisions..........................12
ARTICLE II PURCHASE AND SALE..................................................12
Section 2.1 Purchase and Sale of the Conveyed Assets...............12
Section 2.2 Consents...............................................14
Section 2.3 Retained Assets........................................15
Section 2.4 Assumption of Liabilities..............................16
Section 2.5 Retained Liabilities...................................17
Section 2.6 Purchase Price.........................................18
Section 2.7 Purchase Price Adjustment..............................21
Section 2.8 Production Margin Royalty Payments.....................23
Section 2.9 Allocation of the Purchase Price.......................25
ARTICLE III CLOSING...........................................................25
Section 3.1 Closing................................................25
ARTICLE IV CONDITIONS TO CLOSING..............................................26
Section 4.1 Conditions to the Obligations of Purchaser and Pfizer..26
Section 4.2 Conditions to the Obligations of Purchaser.............26
Section 4.3 Conditions to the Obligations of Pfizer................26
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PFIZER............................27
Section 5.1 Organization...........................................27
Section 5.2 Authority; Binding Effect..............................28
Section 5.3 Non-Contravention......................................28
Section 5.4 Pfizer Consents and Approvals..........................29
Section 5.5 Financial Information..................................29
Section 5.6 Absence of Material Changes............................29
Section 5.7 No Litigation..........................................30
Section 5.8 Compliance with Laws...................................30
Section 5.9 Product Registrations; Regulatory Compliance...........30
Section 5.10 Environmental Matters..................................31
Section 5.11 Material Contracts.....................................32
i
TABLE OF CONTENTS
(continued)
Section 5.12 Intellectual Property..................................33
Section 5.13 Real Property..........................................33
Section 5.14 Assets.................................................34
Section 5.15 Employee Benefits......................................34
Section 5.16 No Questionable Payments...............................35
Section 5.17 Major Customers and Suppliers..........................35
Section 5.18 Brokers................................................36
Section 5.19 Taxes..................................................36
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER........................36
Section 6.1 Organization and Qualification.........................36
Section 6.2 Corporate Authorization................................36
Section 6.3 Binding Effect.........................................36
Section 6.4 Non-Contravention......................................37
Section 6.5 Purchaser Consents and Approvals.......................37
Section 6.6 No Litigation..........................................37
Section 6.7 Financial Capability...................................37
Section 6.8 Condition of Conveyed Assets...........................37
Section 6.9 Brokers................................................38
ARTICLE VII COVENANTS.........................................................38
Section 7.1 Information and Documents..............................38
Section 7.2 Conduct of Operations..................................39
Section 7.3 Commercially Reasonable Efforts; Certain Governmental
Matters ..............................................................40
Section 7.4 Employees and Employee Benefits........................43
Section 7.5 Bulk Transfer Laws.....................................47
Section 7.6 Noncompetition.........................................47
Section 7.7 Transitional Services..................................50
Section 7.8 Trademark License Agreements...........................50
Section 7.9 Supply and Tolling Agreement...........................50
Section 7.10 Compliance with WARN, Etc..............................50
ii
TABLE OF CONTENTS
(continued)
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT.
Section 7.11 Foreign Implementing Agreements........................50
Section 7.12 Litigation Support.....................................50
Section 7.13 Insurance; Workers' Compensation.......................51
Section 7.14 Scheduled Environmental Commitments....................51
Section 7.15 Guarulhos Site Services Agreement......................52
Section 7.16 European Communities and Denmark Actions...............52
Section 7.17 Aviax mycelium (US)....................................53
Section 7.18 Regulatory Matters.....................................53
Section 7.19 Certain Manufacturing Rights...........................53
Section 7.20 Supply/Distribution Agreements.........................54
Section 7.21 [ * ]................54
Section 7.22 Returned Products......................................55
Section 7.23 Lee's Summit Additional Support Services...............56
Section 7.24 Limitations on Refinancings, Etc.......................56
Section 7.25 Morantel/Pyrantel......................................56
ARTICLE VIII INDEMNIFICATION..................................................57
Section 8.1 Indemnification by Pfizer..............................57
Section 8.2 Indemnification by Purchaser...........................58
Section 8.3 Notice of Claims.......................................58
Section 8.4 Third Party Claims.....................................59
Section 8.5 Expiration.............................................59
Section 8.6 Certain Limitations....................................60
Section 8.7 Losses Net of Insurance, Etc...........................61
Section 8.8 Other Limitations......................................62
Section 8.9 Sole Remedy/Waiver.....................................62
Section 8.10 Indemnification Procedures for Remedial Actions on
Conveyed Properties ..................................................62
Section 8.11 Limitation on Indemnification for Remedial Action......64
Section 8.12 No Consequential Damages...............................65
iii
TABLE OF CONTENTS
(continued)
ARTICLE IX TERMINATION........................................................65
Section 9.1 Termination............................................65
Section 9.2 Effect of Termination..................................65
ARTICLE X MISCELLANEOUS.......................................................66
Section 10.1 Notices................................................66
Section 10.2 Amendment; Waiver......................................67
Section 10.3 Assignment.............................................67
Section 10.4 Entire Agreement.......................................67
Section 10.5 Fulfillment of Obligations.............................68
Section 10.6 Parties in Interest....................................68
Section 10.7 Public Disclosure......................................68
Section 10.8 Return of Information..................................68
Section 10.9 Expenses...............................................68
Section 10.10 Schedules..............................................69
Section 10.11 Governing Law..........................................69
Section 10.12 Payments and Payment Currency..........................69
Section 10.13 Counterparts...........................................69
Section 10.14 Headings...............................................69
Section 10.15 Severability...........................................69
Section 10.16 Further Assurances.....................................70
iv
TABLE OF CONTENTS
(continued)
List of Schedules
1 Products
1.1(A) Asset Selling Corporations
1.1(B) Employees (Non-US)
1.1(C) Employees (US)
1.1(D) Facilities
1.1(E) Animal Health Group Officers
2.1(a) Real Property
2.1(b) Equipment
2.1(c) Assumed Contracts
2.1(s) Remaining Unused and Uncommitted Funds - Belgian Warehouse Project
2.3(h) Retained Trademarks
2.3(i) Retained Assets of Asset Selling Corporations in Bangladesh, Egypt,
India, Nepal, Sri Lanka, Taiwan and Zimbabwe
2.3(m) Retained Equipment
2.7A Inventories -- Procedures and Principles
2.7B Categories of Retained Inventories
2.9 Allocation of the Purchase Price
4.1(a) Steps to Brazilian Closing
5.3 Required Third-Party Consents
5.4 Pfizer Consents and Approvals
5.5 Statements of Assets Acquired as of December 31, 1999 and 1998
and Statements of Revenues and Operating Expenses for the Years
Ended December 31, 1999, 1998 and 1997 with Independent Auditors'
Report
5.6 Absence of Material Changes
5.7 Litigation and Product Claims
5.8 Compliance with Laws
5.8(d) Rixensart Permits
5.9 Product Registrations; Regulatory Compliance
5.10 Environmental Matters
5.11 Material Contracts
5.12 Intellectual Property
5.13 Manufacturing Facilities
5.14 Assets: Exceptions to title
5.15 Labor Related Matters
5.17 Major Suppliers and Customers
6.5 Purchaser Consents and Approvals
7.3(d) Required Belgium Operating Permits
7.3(d)(2) Virginiamycin Supply Term Sheet
7.4(a) Employee Benefits (US)
7.4(a)(i) Employee Severance Program (US)
7.4(a)(ii) Employees (US)
v
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT.
7.4(a)(iii) Purchaser Benefit Plans
7.4(a)(iv) Pay and Benefits -- Substantial Comparability (US)
7.4(b)(ii) Purchaser Qualified Plans
7.4(e)(i) Pay and Benefits -- Substantial Comparability (non-US)
7.4(e)(ii) Employees (non-US)
7.14 Scheduled Environmental Commitments
7.16 Virginiamycin Actions
7.19 Premixes
7.21 [ * ]
7.23 Lee's Summit Additional Support Services
vi
TABLE OF CONTENTS
(continued)
List of Exhibits
A. List of instruments and documents to be provided to Purchaser
B. List of instruments and documents to be provided to Pfizer
C. Principal Terms of Transitional Services Agreement
D.-1 Principal Terms of Transitional Trademark and Tradename License Agreement
D.-2 Principal Terms of Trademark License Agreement (Pfizer to Purchaser)
D.-3 Principal Terms of Trademark License Agreement (Purchaser to Pfizer)
E. Principal Terms of Pfizer Supply and Tolling Agreement
F. Pfizer Employee Separation Plan
G. Intentionally Omitted
H. Intentionally Omitted
I. Principal Terms of the Guarulhos Site Services Agreement
J. Net Economic Benefit Letter Agreement
K. Purchaser's Note
L.-1 Supply/Distribution Agreement -- India
L.-2 Supply/Distribution Agreement -- Egypt
vii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the
28th day of September, 2000, among Pfizer Inc., a Delaware corporation
("Pfizer"), the other Asset Selling Corporations (as defined below) and Philipp
Brothers Chemicals, Inc., a New York corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Pfizer, through the Asset Selling Corporations, is engaged
in the manufacture, storage, distribution and sale of certain feed additive
products listed on Schedule 1 hereto to the global livestock industry (the
"Products"); and
WHEREAS, the Asset Selling Corporations desire to sell to Purchaser,
and Purchaser desires to purchase from the Asset Selling Corporations, certain
assets relating to the Products, upon the terms and subject to the conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and undertakings contained herein, subject to and on the terms and
conditions herein set forth, and intending to be bound hereby, the parties agree
as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:
"Accounting Expert" shall have the meaning set forth in Section
2.7(c).
"Affected Employee" shall mean an Employee (i) who shall accept an
offer of employment or offer of continuation of employment by Purchaser on or
prior to the Closing Date and work for Purchaser or any of its Affiliates at
least one (1) day, or (ii) whose employment, as a matter of Law, automatically
continues with Purchaser, or (iii) whose initial offer of employment by
Purchaser requires a relocation of more than twenty-five (25) miles which is
rejected, resulting in termination of employment, whether or not such Employee
worked for Purchaser or any of its Affiliates at least one day. For purposes of
this definition, the term "Employee" includes an Employee whose compensation is
subject to individual approval by the Pfizer Employee Compensation and
Management Development Committee.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person at any time during the period for which the determination of
affiliation is being made.
"Agreement" shall mean this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Allocation" shall have the meaning set forth in Section 2.9 hereof.
"Annual Period" shall mean each of the five (5) successive twelve
(12)-month periods consisting of four (4) Measurement Periods, beginning with
the Measurement Period commencing on the first day of the month following the
month in which the Closing Date occurs.
"Applicable Remedial Action Standard" shall have the meaning set
forth in Section 8.11.
"Asset Selling Corporations" shall mean the Persons listed on
Schedule 1.1(A) hereto.
"Assumed Contracts" shall have the meaning set forth in Section
2.1(c) hereof.
"Assumed Liabilities" shall have the meaning set forth in Section
2.4 hereof.
"Business" shall mean the manufacture, storage, distribution and
sale of the Products to the global livestock industry as conducted on the date
hereof by the Asset Selling Corporations.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banks in New York City are authorized or obligated by law or
executive order to close.
"Cash Consideration" shall have the meaning set forth in Section
2.6(a).
"Cash Equivalents" shall mean cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts, and any evidence of indebtedness issued or
guaranteed by any United States Governmental Authority.
"Closing" shall mean the closing of the transactions contemplated by
this Agreement.
"Closing Date" shall have the meaning set forth in Section 3.1(a)
hereof.
"Closing Date Payment" shall have the meaning set forth in Section
2.6(a) hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
2
"Collateral Source" shall have the meaning set forth in Section 8.7
hereof.
"Competition Laws" shall mean statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other Laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization, lessening of competition or restraint of trade.
"Competitive Activity" shall have the meaning set forth in Section
7.6(a) hereof.
"Confidentiality Agreement" shall mean the Confidentiality Agreement
between Pfizer and Purchaser dated October 7, 1999.
"Conveyed Assets" shall have the meaning set forth in Section 2.1
hereof.
"Conveyed Property" shall have the meaning set forth in Section 8.10
hereof.
"Disputed Item" shall have the meaning set forth in Section 2.7(b).
"Employee" shall mean an Employee (US) or an Employee (non-US).
"Employee (non-US)" shall mean any individual who as of the Closing
Date is an employee outside the United States of America of an Asset Selling
Corporation or another Affiliate of Pfizer who is listed on Schedule 1.1(B)
hereto.
"Employee (US)" shall mean any individual who as of the Closing Date
is an employee in the United States of America of an Asset Selling Corporation
or another Affiliate of Pfizer who is listed on Schedule 1.1(C) hereto.
"Environmental Law" shall mean any applicable Law, as in effect on
the Closing Date relating directly or indirectly to the protection of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface or subsurface land), including, but
not limited to, the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, recycling, release
or disposal of, Hazardous Substances or Hazardous Materials.
"Environmental Liability" means the Losses resulting from (i)
failure to comply with or any violation of any requirement of an Environmental
Law, (ii) failure to obtain or comply with any required Environmental Permit,
(iii) a Remedial Action or (iv) harm or injury to any property, to any Person,
to public health, or to natural resources as a result of a Release of or
exposure to Hazardous Substances or Hazardous Materials.
"Environmental Permits" shall mean a permit, license, certificate,
approval or authorization issued by a Governmental Authority pursuant to an
Environmental Law.
3
"Equipment" shall have the meaning set forth in Section 2.1(b)
hereof.
"Equipment Leases" shall have the meaning set forth in Section
2.1(b) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Environmental Liabilities" shall mean:
(i) Environmental Liabilities associated with or arising from all
facilities and assets other than those constituting part of the Conveyed
Assets;
(ii) Environmental Liabilities resulting from the off-site
transportation, storage, disposal, treatment or recycling of Hazardous
Substances or Hazardous Materials generated by and taken off-site by or on
behalf of the Asset Selling Corporations prior to and through the Closing
Date;
(iii) Remedial Actions not set forth in Schedule 7.14 to the extent
the Release resulting in such Remedial Action existed, had occurred, and
was attributable to Pfizer as of the Closing Date;
(iv) Environmental Liabilities constituting fines and penalties
imposed by Governmental Authorities resulting from the failure to comply
with any requirement of Environmental Law, including failure to comply
with or violation of foreign Environmental Laws or regulations governing
packaging, or failure to obtain or comply with any required Environmental
Permit prior to the Closing Date;
(v) Environmental Liabilities set forth in Schedule 7.14; and
(vi) Environmental Liabilities, excluding Remedial Actions, the
specific "Other Environmental Commitments of Pfizer" as set forth on
Schedule 7.14 (but only to the extent of Pfizer's specific undertakings),
and fines and penalties in subparagraph (iv) associated with or which
arise from the Conveyed Assets and that relate to conditions existing or
acts or omissions occurring prior to the Closing Date.
Notwithstanding anything to the contrary set forth in this
Agreement, capital and other costs incurred solely in connection with the
upgrading, replacing or decommissioning of an existing plant or equipment in the
ordinary course of operations shall not be deemed to be Excluded Environmental
Liabilities.
"Facilities" shall mean the facilities listed on Schedule 1.1(D)
hereto.
"Final Inventories" shall have the meaning set forth in Section
2.7(c) hereof.
4
"Financial Information" shall mean the audited financial data set
forth on Schedule 5.5 hereto.
"Foreign Implementing Agreements" shall mean the various agreements
to be executed by certain of the Asset Selling Corporations located outside of
the United States and Purchaser (or its designated Affiliates) after the date of
this Agreement for the purpose of implementing the transfer and conveyance on
the Closing Date, or as soon thereafter as can be effected, of Conveyed Assets
and Assumed Liabilities to Purchaser (or its designated Affiliate) by such Asset
Selling Corporations.
"Foreign Plans" shall mean each material pension, profit sharing,
savings, retirement, health, life, disability, deferred compensation, incentive,
severance and fringe benefit plan, program, arrangement or practice, whether
written or oral and maintained or contributed to by any Asset Selling
Corporation for the benefit of any Employees (non-US), other than plans,
programs, or arrangements required to be maintained or contributed to by the
Laws of the relevant jurisdiction and Plans maintained for the benefit of
Employees (US).
"GAAP" shall mean generally accepted accounting principles and
practices in effect in the United States as applied consistently with Pfizer's
past practices.
"Guarulhos Site Services Agreement" shall have the meaning set forth
in Section 7.15 hereof.
"Governmental Antitrust Entity" shall have the meaning set forth in
Section 7.3(c) hereof.
"Governmental Authority" shall mean any supranational, national,
federal, state or local judicial, legislative, executive or regulatory
authority.
"Governmental Authorizations" shall mean all licenses, permits,
certificates and other authorizations and approvals required for the
manufacture, storage, distribution and sale of the Products as conducted as of
the date of this Agreement under the applicable Laws of any Governmental
Authority.
"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with a
Governmental Authority.
"Gross Profit Excluding Virginiamycin" shall mean net sales (gross
sales less returns and allowances) by Purchaser and/or its Affiliates to third
parties less its and/or their actual cost of sales (standard cost plus
manufacturing variances and the impact of inventory revaluations) for all
Products, excluding Virginiamycin, and any extensions, improvements, substitutes
or replacements therefor, in each case that contain the same active ingredients
as are used in the Products, excluding Virginiamycin; provided, however, that
gross profit in respect of any products acquired by Purchaser or its Affiliates
after the Closing Date containing the same active ingredients as are used in
5
the Products (excluding Virginiamycin) shall not be included in such calculation
if the acquired products are sold under a trademark or brand name other than
those included in the Trademark Rights acquired by Purchaser hereunder. Gross
Profit Excluding Virginiamycin also shall include net royalty payments, fees and
other payments relating to the foregoing Products (including the aforementioned
extensions, improvements, substitutes or replacements) received by Purchaser
and/or its Affiliates from licensees and distributors of the foregoing Products
and other third parties appointed by Purchaser serving a similar function. For
purposes of determining cost of sales, the manufacturing variances and the
impact of inventory revaluations shall be appropriately allocated between
Virginiamycin and the other Products based on specific identification, if
feasible, or any other reasonable method that results in a fair and equitable
allocation.
"Hazardous Materials" shall mean all materials regulated pursuant to
Environmental Law as capable of causing harm or injury to health, safety or the
environment, including oils, petroleum, and petroleum products.
"Hazardous Substances" shall mean any hazardous substances within
the meaning of Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., or any pollutant or
contaminant that is listed, defined, or regulated under any Environmental Law.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in Section
8.3(a) hereof.
"Indemnifying Party" shall have the meaning set forth in Section
8.3(a) hereof.
"Intellectual Property" shall mean (i) the Patent Rights, (ii) the
Trademark Rights, (iii) inventions, discoveries, trade secrets, know-how and
ideas, rights in research and development, formulae and commercially practiced
manufacturing processes and manufacturing processes under development
(collectively, "Know-How") to the extent solely related to the Business or
solely to the manufacture, compounding or formulating of the Products and active
ingredients, whether patentable or not, in any jurisdiction, (iv) copyrights and
registrations or applications for registration of copyrights solely related to
the Business in any jurisdiction, (v) any renewals or extensions of the
foregoing and (vi) files relating to the foregoing.
"Intellectual Property Licenses" shall have the meaning set forth in
Section 2.1(e) hereof.
"Inventories" shall mean inventories of the Asset Selling
Corporations relating to the Business as described in Schedule 2.7A.
6
"Inventories Statement" shall have the meaning set forth in Section
2.7(a) hereof.
"IRS" shall mean the Internal Revenue Service of the United States.
"Knowledge of Pfizer" shall mean the actual knowledge of the Persons
listed on Schedule 1.1(E) hereto.
"Laws" shall include any federal, state, foreign or local law, the
common law, statute, ordinance, rule, regulation, code, order, injunction,
judgment or decree.
"Liabilities" shall mean any and all debts, liabilities and
obligations, whether accrued or fixed, known or unknown, absolute or contingent,
matured or unmatured or determined or determinable.
"Liens" shall mean any lien, security interest, mortgage, charge,
rights of third parties or similar encumbrance.
"Loss" or "Losses" shall have the meaning set forth in Section
8.1(a) hereof.
"Major Customers" shall have the meaning set forth in Section 5.17
hereof.
"Major Suppliers" shall have the meaning set forth in Section 5.17
hereof.
"Material Adverse Effect" shall mean a material adverse effect on
the operations, properties or assets of the Business taken as a whole, or an
effect that would materially adversely affect the ability of Pfizer to perform
the terms of this Agreement, but shall exclude any effect relating to or
resulting from (i) the execution of this Agreement or the consummation of the
transactions contemplated hereby, or (ii) any restrictions or bans imposed by
Governmental Authorities on the manufacture, storage, distribution and sale of
Virginiamycin.
"Material Contracts" shall have the meaning set forth in Section
5.11(a) hereof.
"Measurement Period" shall mean the three (3)-month period
commencing on the first day of the month following the month in which the
Closing Date occurs and ending on the last day of the month that is three (3)
months after the month in which the Closing Date occurs, and each of the
nineteen (19) successive three (3)-month periods thereafter commencing on the
first day of the month following the most recently completed Measurement Period
and ending on the last day of the month which is three (3) months after such
date, until the Measurement Period ending on the last day of the month in which
the fifth anniversary of the Closing Date occurs.
7
"Net Revenues Notice" shall have the meaning set forth in Section
2.6(c) hereof.
"Net Revenues Payment" shall have the meaning set forth in Section
2.6(b) hereof.
"Net Revenues Schedule" shall have the meaning set forth in Section
2.6(c) hereof.
"Net Virginiamycin Revenues" shall mean the gross invoice value of
all sales of Virginiamycin by Purchaser and/or its Affiliates to third parties,
net of (regardless of the period to which any such items apply) (i) all
applicable bona fide trade and volume discounts and rebates and allowances to
customers accrued on such sales and (ii) credits, allowances, refunds, returns
and adjustments actually granted to customers on account of spoiled, damaged,
outdated or returned goods; provided that in the event sales of Virginiamycin
are bundled with other products of Purchaser, the portion of the gross invoice
value derived from the sale of the bundled products attributable to
Virginiamycin for purposes hereof shall be in proportion to the most recent
published sales price for Virginiamycin as compared to the most recent published
sales price for the other bundled products. Net Virginiamycin Revenues also
shall include net royalty payments, fees and other payments relating to
Virginiamycin received by Purchaser and/or its Affiliates from licensees or
distributors of Virginiamycin and other third parties appointed by Purchaser
serving a similar function. Notwithstanding the foregoing, there shall not be
included in "Net Virginiamycin Revenues" sales of Virginiamycin by Purchaser
and/or its Affiliates to Pfizer and/or its Affiliates pursuant to the
arrangements relating to Egypt, Algeria and India entered into by the parties
pursuant to the terms of this Agreement.
"Palladium Preferred Stock" shall mean the shares of preferred stock
of Purchaser to be issued to Palladium Equity Partners II, L.P., and affiliates,
the proceeds of which will be used by Purchaser to effect the transactions
contemplated by this Agreement.
"Patent Rights" means the patents and patent applications set forth
on Schedule 5.12 hereto together with any extensions, reexaminations and
reissues of such patents, patents of addition, patent applications, divisions,
continuations, continuations-in-part, and any subsequent filings in any country
claiming priority therefrom.
"Payment Date" shall mean each day which is forty-five (45) days
after the end of a Measurement Period (or if such day is not a Business Day, the
next succeeding Business Day).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (i) all Liens approved in
writing by Purchaser, (ii) statutory Liens arising out of operation of Law with
respect to a Liability incurred in the ordinary course of business and which is
not delinquent, (iii) such Liens
8
and other imperfections of title as do not materially detract from the value or
impair the use of the property subject thereto, (iv) Liens for Taxes not yet
subject to penalties for nonpayment or which are being actively contested in
good faith by appropriate proceedings, or (v) mechanics', materialmens',
carriers', workmens', warehousemens', repairmens', landlords' or other like
Liens and security obligations that are not delinquent.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
"Pfizer" shall have the meaning set forth in the heading of this
Agreement.
"Pfizer Qualified Plans" shall have the meaning set forth in Section
7.4(b)(i) hereof.
"Pfizer Supply and Tolling Agreement" shall have the meaning set
forth in Section 7.9 hereof.
"Plan" shall mean any material employee benefit plan as defined in
Section 3(3) of ERISA and any other plan, program, agreement or arrangement or
practice, whether written or oral and whether qualified under applicable Law or
not, sponsored, maintained (or contributed to or required to be contributed to)
or entered into by any Asset Selling Corporation, for the benefit of any
Employee (US).
"PNC Credit Agreement" shall mean the amended and restated credit
agreement to be entered into by Purchaser with PNC Bank, National Association,
the purpose of which, in part, is to provide Purchaser with funds to effect the
transactions contemplated hereby.
"Product Registrations" shall have the meaning set forth in Section
5.9 hereof.
"Products" shall have the meaning set forth in the recitals of this
Agreement.
"Purchase Price" shall mean collectively the Closing Date Payment,
the aggregate Net Revenues Payments to be made pursuant to Section 2.6(b) and
the aggregate Royalty Payments to be made pursuant to Section 2.8(a).
"Purchaser" shall have the meaning set forth in the heading of this
Agreement.
"Purchaser's Documents" shall have the meaning set forth in Section
6.3.
"Purchaser's Note" shall mean the promissory note in the form of
Exhibit K attached hereto, to be executed at the Closing by the Purchaser in
favor of Pfizer, upon the terms and conditions stated therein.
9
"Purchaser Indemnified Parties" shall have the meaning set forth in
Section 8.1(a) hereof.
"Purchaser Qualified Plans" shall have the meaning set forth in
Section 7.4(b)(ii) hereof.
"Real Property" shall have the meaning set forth in Section 2.1(a)
hereof.
"Release" shall mean any spill, leaking, pumping, injection,
deposit, emitting, disposal, discharge, dispersal, or leaching into the
environment, including air, surface water, soil, sediments or groundwater of any
property or as otherwise defined under Environmental Laws.
"Remedial Action" shall mean action under Environmental Law to
investigate, remediate, monitor, or clean up a Release of Hazardous Substances
or Hazardous Materials to the environment, including air, soil, surface water,
groundwater or sediments, including, but not limited to, associated action taken
to investigate, monitor, assess and evaluate the extent and severity of any
Release; action taken to remediate any Release; post-remediation sampling and
monitoring of any Release; and preparation of all reports, studies, analyses or
other documents relating to the above. "Remedial Action" also shall refer to any
judicial, administrative or other proceeding relating to any of the above,
including, but not limited to, the negotiation and execution of judicial or
administrative consent decrees; responding to information requests by any
Governmental Authority; or defending claims brought by any Governmental
Authority or any other Person, whether such claims are equitable or legal in
nature, relating to the cleanup of soil, surface water, groundwater, and
sediments in response to a Release of Hazardous Substances or Hazardous
Materials and associated actions.
"Resolution Period" shall have the meaning set forth in Section
2.7(c) hereof.
"Retained Assets" shall have the meaning set forth in Section 2.3
hereof.
"Retained Liabilities" shall have the meaning set forth in Section
2.5 hereof.
"Retirement Plan" shall have the meaning set forth in Section
7.4(b)(i) hereof.
"Royalty Payment" shall have the meaning set forth in Section 2.8(a)
hereof.
"Royalty Payment Date" shall have the meaning set forth in Section
2.8(a) hereof.
"Royalty Payment Notice" shall have the meaning set forth in Section
2.8(b) hereof.
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
"Royalty Payment Schedule" shall have the meaning set forth in
Section 2.8(b) hereof.
"[ * ]" shall have the meaning set forth in Section 7.21 hereof.
"Savings Plan" shall have the meaning set forth in Section 7.4(b)(i)
hereof.
"Sellers' Documents" shall have the meaning set forth in Section
5.2(b) hereof.
"Specified Sections" shall have the meaning set forth in Section 8.7
hereof.
"Supply/Distribution Agreements" shall have the meaning set forth in
Section 7.20 hereof.
"Tax" or "Taxes" shall mean all taxes, charges, duties, fees, levies
or other assessments, including but not limited to, income, excise, property,
sales, value added, profits, license, withholding (with respect to compensation
or otherwise), payroll, employment, net worth, capital gains, transfer, stamp,
social security, environmental, occupation and franchise taxes, imposed by any
Governmental Authority, and including any interest, penalties and additions
attributable thereto.
"Tax Return" or "Tax Returns" shall mean any return, report,
declaration, information return, statement or other document filed or required
to be filed with any Governmental Authority, in connection with the
determination, assessment or collection of any Tax or the administration of any
Laws relating to any Tax.
"Third Party Claim" shall have the meaning set forth in Section
8.4(a) hereof.
"Trademark License Agreement (Pfizer to Purchaser)" shall have the
meaning set forth in Section 7.8(b) hereof.
"Trademark License Agreement (Purchaser to Pfizer)" shall have the
meaning set forth in Section 7.8(c) hereof.
"Trademark Rights" shall mean registered and unregistered
trademarks, service marks, brand names and certification marks set forth on
Schedule 5.12 hereto, and the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application.
"Transitional Trademark and Tradename License Agreement" shall have
the meaning set forth in Section 7.8(a) hereof.
11
"Transitional Services Agreement" shall have the meaning set forth
in Section 7.7 hereof.
"Virginiamycin" shall mean any of the Products which contain as
their active ingredient the composite virginiamycin antibiotic.
"WARN" shall mean the Worker Adjustment and Retraining Notification
Act.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereto" and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of the Conveyed Assets. Upon the terms
and subject to the conditions set forth herein, at the Closing, Pfizer shall,
and shall cause each other Asset Selling Corporation to, sell, convey, assign
and transfer to Purchaser (or one or more of its designated Affiliates), and
Purchaser (or such designated Affiliates) shall purchase, acquire and accept
from Pfizer and each of the other Asset Selling Corporations, free and clear of
all Liens, other than Permitted Encumbrances, all of each such Asset Selling
Corporation's right, title and interest in and to the following (but excluding
the Retained Assets), in each case as such assets shall exist as of the Closing
Date (collectively, the "Conveyed Assets"):
(a) the real property owned by the Asset Selling Corporations set
forth on Schedule 2.1(a) hereto (the "Real Property");
(b) the furniture, fixtures, equipment, machinery, supplies,
vehicles, spare parts, tools, and other tangible personal property owned, leased
or licensed by the Asset Selling Corporations (i) solely related to the Business
and located at the Facilities or (ii) set forth on Schedule 2.1(b) hereto (the
"Equipment" and leases relating to such Equipment so leased by the Asset Selling
Corporations, the "Equipment Leases");
(c) the contracts, licenses, agreements and commitments of the Asset
Selling Corporations relating solely to the Business and set forth on Schedule
2.1(c) hereto (the "Assumed Contracts");
12
(d) the Inventories of the Asset Selling Corporations solely to the
extent set forth on Schedule 2.7A and Section 2.7(e);
(e) all rights to Intellectual Property (the licenses relating to
Intellectual Property so licensed by the Asset Selling Corporations sometimes
referred to as the "Intellectual Property Licenses") and a worldwide,
royalty-free, non-exclusive, perpetual license to Know-How retained by Pfizer
for use in its non-feed additives businesses but which is used in the
manufacture, compounding or formulating of the Products and active ingredients,
including, without limitation, Pfizer's Morantel and Pyrantel technology for the
manufacture of the bulk actives used in the Products, the terms of such license
to be mutually agreed by the parties prior to the Closing Date (the "Know-How
License");
(f) all Product Registrations (and applications therefor) owned,
utilized or licensed by the Asset Selling Corporations relating solely to the
Products;
(g) transferable Governmental Authorizations, including
Environmental Permits, owned, utilized or licensed by the Asset Selling
Corporations relating solely to the Business;
(h) all customer and vendor lists, including customer credit
histories, to the extent relating to the Business;
(i) all customer purchase orders for the Products existing as of the
Closing Date which are unfilled;
(j) all clinical studies, data and reports associated exclusively
with the Products;
(k) all rights of any of the Asset Selling Corporations under or
pursuant to all warranties, representations and guarantees made by suppliers,
manufacturers and contractors to the extent solely relating to the Products or
affecting the Conveyed Assets;
(l) all rights, claims and causes of actions of the Asset Selling
Corporations to the extent solely relating to the Business;
(m) fermentation cultures and process details to the extent solely
relating to the manufacture of the Products;
(n) the books and records of the Asset Selling Corporations to the
extent relating solely to the Business;
(o) the quotas of Phibro Saude Internacional Ltda. owned by
Laboratorios Pfizer do Brasil Ltda.;
13
(p) laptop computers, cellular telephones, vehicles and similar
items used by Employees in the Business and owned or leased by the Asset Selling
Corporations;
(q) the goodwill and other intangible assets associated solely with
the Business;
(r) the "SAPA" and the "Remediation Agreements" defined in and to
the extent provided by that certain letter agreement, dated the date hereof,
among Pfizer, Pfizer Animal Health S.A., Purchaser, SmithKline Beecham plc and
SmithKline Beecham Biologicals S.A. (the "Rixensart Agreement");
(s) upon the transfer of the Belgian Facility to Purchaser, the
funds previously received by Pfizer from SmithKline Beecham plc to demolish and
rebuild the warehouse adjacent to the remediation area at such Facility, less
amounts expended or committed by Pfizer as of the date of this Agreement for
engineering studies regarding such replacement project, as set forth on Schedule
2.1(s) hereto; and
(t) all rights to Pfizer's proprietary ARDICIN technology in return
for a royalty on Purchaser's sales of any product covered by such technology for
seven (7) years from the first payment of royalty to Pfizer, at a royalty rate
equal to five percent (5%) of the first $5,000,000 of Purchaser's net sales of
such product in any year and ten percent (10%) of Purchaser's net sales of such
product in excess of $5,000,000 in any year; provided that no royalty will be
payable on the first $5,000,000 of Purchaser's sales of such product, all of the
foregoing to be contained in a technology transfer and royalty agreement (the
"ARDICIN Agreement") to be signed on the Closing Date in form satisfactory to
Pfizer and Purchaser.
Section 2.2 Consents.
(a) There shall be excluded from the transactions contemplated by
this Agreement any Equipment Lease, Intellectual Property License or Assumed
Contract which is not assignable or transferable without the consent of any
Person other than Pfizer, the other Asset Selling Corporations or any Affiliate
of Pfizer on the one hand or Purchaser or any Affiliate of Purchaser on the
other, to the extent that such consent shall not have been given prior to the
Closing, provided, however, that the Asset Selling Corporations and Purchaser
shall have the continuing obligation after the Closing to use their respective
commercially reasonable efforts to endeavor to obtain all necessary consents to
the assignment thereof (provided that neither Pfizer nor any of the other Asset
Selling Corporations shall be required to commence any litigation or make a
payment or offer or grant any accommodation (financial or otherwise) to any
third party) and, upon obtaining the requisite third party consents thereto,
such Equipment Leases, Intellectual Property Licenses and Assumed Contracts, if
otherwise includable in the Conveyed Assets or the transactions contemplated
hereby, shall be transferred and assigned to Purchaser (or its designated
Affiliates) hereunder.
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(b) With respect to any Equipment Lease, Intellectual Property
License or Assumed Contract that is not included in the Conveyed Assets or
assigned to Purchaser at the Closing by reason of Section 2.2(a), after the
Closing and until any requisite consent is obtained and the foregoing is sold
and assigned to Purchaser (or its designated Affiliate), the parties shall
cooperate with each other, upon written request, in endeavoring to obtain for
Purchaser, at reasonable cost for the account of Pfizer or the other Asset
Selling Corporations, an arrangement designed to provide Purchaser substantially
equivalent benefits thereof in some other manner.
Section 2.3 Retained Assets. Notwithstanding any provision in the
Agreement to the contrary, the Asset Selling Corporations shall retain all of
each such Asset Selling Corporation's right, title and interest in and to the
following assets (collectively, the "Retained Assets"):
(a) Cash Equivalents;
(b) trade accounts receivables, including intercompany receivables;
(c) all Tax losses, Tax loss carry forwards and rights to receive
refunds, credits and credit carry forwards with respect to any and all Taxes,
including, without limitation, interest thereon;
(d) except as provided in Section 2.1(n) hereof, the corporate books
and records of the Asset Selling Corporations;
(e) all current and prior insurance policies and all rights of any
nature with respect thereto, including all insurance recoveries thereunder and
rights to assert claims with respect to any such insurance recoveries;
(f) except as expressly set forth herein, all assets of any Plan or
Foreign Plan;
(g) the "Pfizer" name and logo as well as the "Pf" mark and the
color scheme currently used by Pfizer and its subsidiaries, associates and
Affiliates in connection with the corporation logo, and any other aspect of
packaging of Products in current use that constitutes protectable trade dress
and licensed to Purchaser pursuant to the Transitional Trademark and Tradename
License Agreement;
(h) the trademarks related to Terramycin(R), Terramycine(R),
Terramicina(R), Neo Terramycin(R), Neo Terramycine(R), Neo Terramicina(R), Neo
Terramix(R)and Terramix(R) as listed on Schedule 2.3(h) hereto and licensed to
Purchaser pursuant to the Trademark License Agreement (Pfizer to Purchaser);
(i) certain assets of the Asset Selling Corporations located in
Egypt, Taiwan and Zimbabwe, as set forth on Schedule 2.3(i) hereto, and in
India, Bangladesh,
15
Nepal and Sri Lanka, relating to the manufacture, storage, distribution and sale
of certain of the Products;
(j) any tangible assets relating solely to the manufacture, storage,
distribution and sale of Banminth(R) products (other than feed additive products
to the global livestock industry) in the countries in which such non-feed
formulations are sold on the date hereof;
(k) any Inventories of the Asset Selling Corporations that do not
meet the requirements of Schedule 2.7A;
(l) Pfizer's interest in Pfizer Limited, an India corporation, and
the joint venture operating in Algeria;
(m) the equipment listed on Schedule 2.3(m) hereto; and
(n) funds received from SmithKline Beecham for an air pollution
abatement system at the Belgian Facility.
Section 2.4 Assumption of Liabilities. Upon the terms and subject to
the conditions of this Agreement, Purchaser agrees, effective at the Closing, to
assume the following Liabilities of the Asset Selling Corporations to the extent
relating to the Business or the Conveyed Assets, and no other Liabilities (the
"Assumed Liabilities"):
(a) Environmental Liabilities, other than Excluded Environmental
Liabilities;
(b) Except for Liabilities (i) pursuant to warranty obligation or
otherwise relating to any alleged defects in manufacture or design or (ii) for
which Pfizer has responsibility pursuant to Section 7.22 hereof, Liabilities
arising from any returns of (x) Mecadox(R) by The Archer Daniels Midland Company
("ADM") or (y) any other Products sold prior to the Closing Date;
(c) Liabilities arising under Plans or Foreign Plans relating to
Employees solely to the extent set forth in Section 7.4;
(d) Liabilities, including all lawsuits commenced and all claims
made after the Closing Date, arising from the sale of any of the Products after
the Closing Date, including, without limitation, in respect of injuries
allegedly due and owing as a result of the use or application of a Product,
irrespective of the legal theory asserted;
(e) Liabilities arising from and after the Closing Date under the
Assumed Contracts, Equipment Leases and Intellectual Property Licenses;
(f) Liabilities arising from and after the Closing Date relating to
the ownership of the Conveyed Assets and the operation of the Business,
including Liabilities relating to Affected Employees arising from and after the
Closing Date; and
16
(g) Liabilities for which Purchaser is responsible from and after
the Closing Date pursuant to an express provision set forth elsewhere in this
Agreement.
Section 2.5 Retained Liabilities. Notwithstanding any provision in
this Agreement, the Asset Selling Corporations shall retain and be responsible
for the following Liabilities (other than the Assumed Liabilities) of the Asset
Selling Corporations relating to the Business (the "Retained Liabilities"):
(a) the Excluded Environmental Liabilities;
(b) trade accounts payable;
(c) Liabilities resulting from all lawsuits pending as of the
Closing Date, including, without limitation, the pending lawsuits listed on
Schedule 5.7 hereto;
(d) Liabilities, including all lawsuits commenced and all claims
made prior to, on, or after the Closing Date, arising from the sale of any of
the Products prior to or on the Closing Date, in respect of injuries allegedly
due and owing as a result of the use or application of a Product, irrespective
of the legal theory asserted;
(e) Liabilities for which any Asset Selling Corporation expressly
has responsibility pursuant to the terms of this Agreement;
(f) Liabilities owing to Pfizer or any of its Affiliates, including
from one Asset Selling Corporation to another Asset Selling Corporation;
(g) Liabilities relating to any Employee arising on or prior to the
Closing Date, including pursuant to any Plan or Foreign Plan and Liabilities
relating to any former (including laid-off) employee of the Business as of the
Closing Date, except as expressly provided herein;
(h) Liabilities relating to disposing, reworking, reassaying and/or
relocating Inventories that do not meet the requirements of Schedule 2.7A to the
extent set forth on Schedule 2.7A;
(i) Except as provided in Section 10.9, any and all Liabilities for
Taxes for taxable periods prior to and including the Closing Date, except for
Taxes attributable to actions of Purchaser or its Affiliates occurring on or
after the Closing; and
(j) Liabilities arising from the manufacture, storage, distribution
and sale of the Products on or prior to the Closing Date, including Liabilities
for any returns pursuant to warranty obligation or otherwise relating to any
alleged defects in manufacture or design.
17
Section 2.6 Purchase Price.
(a) In consideration of the sale and transfer of the Conveyed Assets
(other than the Conveyed Assets relating to Virginiamycin), Purchaser shall (i)
pay to Pfizer, as agent for the Asset Selling Corporations (or to Pfizer's
Affiliates as Pfizer may on behalf of the Asset Selling Corporations direct in
the written transfer instructions hereinafter referred to), an aggregate amount
of ninety million dollars ($90,000,000) (the "Closing Date Payment") at the
Closing and (ii) make the payments after the Closing required by Section 2.8.
The Closing Date Payment shall consist of fifty million dollars ($50,000,000),
in immediately available funds (the "Cash Consideration") and forty million
dollars ($40,000,000) pursuant to the execution by Purchaser and delivery to
Pfizer of the Purchaser's Note. The Cash Consideration shall be paid by wire
transfer in accordance with written instructions given by Pfizer to Purchaser
not less than two (2) Business Days prior to the Closing Date.
(b) In consideration of the sale and transfer of the Conveyed Assets
relating to Virginiamycin, Purchaser shall pay to Pfizer, as agent for the Asset
Selling Corporations (or to Pfizer's Affiliates as Pfizer may on behalf of the
Asset Selling Corporations direct in the written transfer instructions
hereinafter referred to), on each Payment Date an amount equal to twenty-five
percent (25%) of the Net Virginiamycin Revenues for the most recently completed
Measurement Period (each such payment, a "Net Revenues Payment"), in immediately
available funds, by wire transfer in accordance with written instructions given
by Pfizer to Purchaser not less than two (2) Business Days prior to the
respective Payment Date; provided, however, that (i) the maximum aggregate Net
Revenues Payments for any Annual Period payable to Pfizer pursuant to this
Section 2.6(b) shall be twelve million dollars ($12,000,000), provided that any
amounts in excess of twelve million dollars ($12,000,000) otherwise payable to
Pfizer pursuant to this Section 2.6(b) (if not for this clause (i)) shall be due
and payable on each subsequent Payment Date until paid in full (subject to the
same twelve million dollars ($12,000,000) maximum payment limitation for the
applicable Annual Period, except that such twelve million dollars ($12,000,000)
maximum payment limitation shall not apply to the last Annual Period) and (ii)
Purchaser shall not be required to make any further payments to Pfizer pursuant
to this Section 2.6(b) to the extent that Net Revenues Payments previously paid
to Pfizer equal fifty-five million dollars ($55,000,000) in the aggregate. Any
Net Revenues Payment made in excess of five (5) days after the applicable
Payment Date shall include interest thereon from such Payment Date to the date
such payment is made. In respect of the first thirty (30) days after such
Payment Date, interest shall accrue at an annual rate equal to twelve percent
(12%), and thereafter at two (2) times the prime rate as quoted by Chase
Manhattan Bank, N.A. (or any successor thereto) until the date of payment and,
if payment is received after 1:00 p.m. New York City time, including the date of
payment. The obligation of Purchaser to make the payments provided for in this
Section 2.6(b) shall be subject to the credit and offset provisions of Sections
2.7(d) and (f). Notwithstanding the foregoing, Purchaser, at its option, in
respect of each of the first three (3) Annual Periods, may defer the payment of
18
all or a part of the Net Revenues Payment due and owing for any two (2)
Measurement Periods in the Annual Period, provided, that the maximum aggregate
amount that may be deferred in any one (1) Annual Period is three million
dollars ($3,000,000). Any such deferred payments will bear interest at an annual
rate equal to thirteen percent (13%) from the date such deferred payment was
otherwise due and owing until the date of payment and, if payment is received
after 1:00 p.m. New York City time, including the date at payment (it being
agreed that such interest will only be due and owing on the original deferred
amount and will not compound). All such deferred amounts will be subject to
payment in whole or in part at any time at Purchaser's option without penalty
and all unpaid deferred amounts, together with accrued and unpaid interest, will
be finally due and owing on June 30, 2006. If Purchaser elects to defer the
payment of Net Revenues Payment otherwise due and owing to Pfizer, then
Purchaser will not redeem, purchase or make any other payment, including
dividend payments, in respect of any equity instrument issued by Purchaser or
any of its Affiliates (including the Palladium Preferred Stock), unless and
until all deferred Net Revenues Payments, together with accrued and unpaid
interest, have been paid in full to Pfizer. The foregoing sentence shall not
prohibit the payment by Purchaser of a management fee to Palladium in an amount
previously disclosed to Pfizer. The provisions of this Section 2.6(b) shall be
subject to the provisions of Section 7.3(d) hereof.
(c) Concurrent with each Net Revenues Payment, Purchaser shall
deliver to Pfizer a schedule of the calculations supporting Purchaser's
determination of the Net Revenues Payment for the applicable Measurement Period
(each such schedule, a "Net Revenues Schedule"), provided that if no Net
Revenues Payment shall be due, on the thirtieth day following the last day of
the relevant Measurement Period, Purchaser shall deliver to Pfizer a Net
Revenues Schedule supporting such determination. The Net Revenues Schedule shall
be expressed in U.S. dollars and for purposes thereof other currencies shall be
translated into U.S. dollars as set forth in Section 10.12. Pfizer shall have
the right, not more than once in any calendar year (unless Pfizer discovers a
material error in Purchaser's preparation of any Net Revenues Schedule, in which
event Pfizer shall have a right of inspection on a quarterly basis until it has
received two (2) Net Revenues Schedules free of material error) and no more than
twelve (12) months after the date of the relevant Net Revenues Schedule, upon
reasonable notice and at reasonable times, to cause its employees, agents and
representatives to review and examine Purchaser's books and records as they
relate to the Net Virginiamycin Revenues to verify each Net Revenues Schedule.
Following completion of each such review, if Pfizer's calculations differ from
those reflected in the applicable Net Revenues Schedule, Pfizer shall submit
such differences (a "Net Revenues Notice") to Purchaser and Pfizer and Purchaser
shall negotiate in good faith to resolve any such differences promptly. If
Pfizer and Purchaser have not reached a resolution within ten (10) Business Days
after Pfizer delivers to Purchaser the Net Revenues Notice, the differences
shall be submitted to the Accounting Expert for resolution in accordance with
the procedures set forth in Section 2.7(c). Upon written request by Pfizer,
Purchaser will provide to Pfizer monthly sales and related data with respect to
the Virginiamycin Products during the period following
19
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
the Closing Date until the fifth anniversary of the Closing Date or the earlier
payment in full of the maximum aggregate Net Revenue Payments.
(d) Purchaser agrees to use its commercially reasonable efforts to
promote the sale of Virginiamycin until the fifth anniversary of the Closing
Date or, if earlier, the date of the payment by Purchaser to Pfizer of Net
Revenue Payments aggregating fifty-five million dollars ($55,000,000),
including, without limitation, devoting sufficient personnel and resources to
the manufacture, storage, distribution and sale of Virginiamycin to support such
sales efforts, and not to take any actions during such period that would have
the effect of materially diminishing Net Virginiamycin Revenues for any
Measurement Period; provided that Purchaser shall not be deemed to have violated
its obligations pursuant to this Section 2.6(d) if (i) Purchaser curtails or
abandons its Virginiamycin sales efforts in an affected territory as the result
of any restrictions or bans imposed by Governmental Authorities after the
Closing Date on the manufacture, storage, distribution and sale of Virginiamycin
in such territory; provided, however, that Purchaser shall use its commercially
reasonable efforts to oppose any such restriction or ban prior to it being
imposed and to have it lifted or vacated once imposed, (ii) notwithstanding
Purchaser's commercially reasonable efforts to promote the sale of
Virginiamycin, the quantity of Virginiamycin produced by or on behalf of
Purchaser at the Rixensart plant or elsewhere falls below [ * ] KGA on a rolling
twelve (12)-month basis during the period commencing on the Closing Date and
ending five (5) years thereafter, or (iii) (x) there is a decline in Net
Virginiamycin Revenues for any four (4) consecutive Measurement Periods of at
least [ * ] as compared to the Net Virginiamycin Revenues for the four (4)
consecutive Measurement Periods prior to such first four (4) periods and (y)
during or prior to such affected four (4) consecutive Measurement Periods, swine
and poultry producers/processors representing individually or in the aggregate
at least [ * ] of the combined poultry and swine industry in the United States
(based on sales) publicly announced their intention to adopt a policy to cease
selling poultry and/or swine that have been raised on antibiotic feed additive
products.
(e) In the event that Purchaser sells, assigns or transfers all or
substantially all of the Conveyed Assets relating to Virginiamycin (or takes any
action that has the effect of transferring ownership to such assets) prior to
the fifth anniversary of the Closing Date or, if earlier, the date of the
payment by Purchaser to Pfizer of Net Revenue Payments aggregating fifty-five
million dollars ($55,000,000), to any Person (other than to a wholly owned
subsidiary of Purchaser), Purchaser shall be required to pay to Pfizer on the
day of such sale, assignment or transfer an amount equal to (i) fifty-five
million dollars ($55,000,000) less (ii) the aggregate Net Revenue Payments
previously made by Purchaser to Pfizer, in immediately available funds, by wire
transfer in accordance with written instructions given by Pfizer to Purchaser
not less than two (2) Business Days prior to the due date for such payment.
Notwithstanding the foregoing, Pfizer may, in its sole discretion, waive
Purchaser's obligation to make the foregoing payment upon any such sale,
assignment or transfer in exchange for the succeeding party's agreement to
assume Purchaser's obligations under this Section 2.6.
20
Section 2.7 Purchase Price Adjustment.
(a) Within sixty (60) days after the Closing Date, Pfizer shall
deliver to Purchaser a statement of the Inventories of the Asset Selling
Corporations as of the Closing Date, without giving effect to any possible
delayed transfers of Conveyed Assets held by Asset Selling Corporations
operating in Belgium, Japan and/or China (the "Inventories Statement"). The
Inventories Statement shall be unaudited and shall state the Inventories of the
Asset Selling Corporations as of the Closing Date by following and applying the
procedures and valuation and other principles set forth on Schedule 2.7A hereto
and, to the extent not addressed in Schedule 2.7A, the Inventories Statement
shall be prepared in accordance with GAAP. Purchaser shall provide Pfizer with
access to the Inventories, books, records, and personnel of Purchaser necessary
for Pfizer to prepare the Inventories Statement.
(b) Purchaser may dispute the amounts reflected on the Inventories
Statement (a "Disputed Item"), but only on the basis a Disputed Item does not
reflect, or is not consistent or in compliance with, the provisions of this
Agreement; provided, however, that Purchaser shall notify Pfizer in writing of
each Disputed Item, and specify the amount thereof in dispute and the basis
therefor, within sixty (60) days after receipt of the Inventories Statement. The
failure by Purchaser to provide a notice of Disputed Items to Pfizer within such
sixty (60) day period will constitute Purchaser's acceptance of the Inventories
Statement.
(c) If a notice of Disputed Items shall be timely delivered pursuant
to subclause (b) above, Pfizer and Purchaser shall, during the ten (10) Business
Days following the date of such delivery (the "Resolution Period"), negotiate in
good faith to resolve the Disputed Items. If, during such Resolution Period the
parties are unable to reach agreement, Pfizer and Purchaser shall refer all
unresolved Disputed Items to an accounting firm or expert of nationally
recognized standing as Pfizer and Purchaser shall mutually agree upon or, if the
parties are unable to so agree, as appointed by the American Arbitration
Association (the "Accounting Expert"). The Accounting Expert shall make a
determination with respect to each unresolved Disputed Item within fifteen (15)
days after its engagement by Pfizer and Purchaser to resolve such Disputed
Items, which determination shall be made in accordance with the rules set forth
in this Section 2.7. The Accounting Expert shall deliver to Pfizer and
Purchaser, within such fifteen (15) day period, a report setting forth its
adjustments, if any, to the Inventories Statement and the calculations
supporting such adjustments. Such report shall be final and binding on the
parties and conclusive. Pfizer and Purchaser shall each pay one-half of all the
costs incurred in connection with the engagement of the Accounting Expert. As
used herein, "Final Inventories" shall mean (i) if no notice of Disputed Items
is delivered by Purchaser within the period provided in subclause (b) above,
Inventories as shown in the Inventories Statement as prepared by Pfizer, or (ii)
if such a notice of Disputed Items is delivered by Purchaser, either (x) as
agreed to in writing by Pfizer and Purchaser, or (y)
21
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
Inventories as shown in the Accounting Expert's calculation delivered pursuant
to this subclause (c).
(d) If the Final Inventories is less than sixty-three million five
hundred thousand dollars ($63,500,000) but equal to or greater than fifty-three
million five hundred thousand dollars ($53,500,000), then the aggregate
principal amount of the Purchaser's Note will be reduced on a dollar-for-dollar
basis by the difference between sixty-three million five hundred thousand
dollars ($63,500,000) and the Final Inventories. If the Final Inventories is
less than fifty-three million five hundred thousand dollars ($53,500,000), then
Purchaser also (in addition to the adjustment described in the preceding
sentence) will receive a credit and may offset against the Net Revenues Payments
in respect of the first Annual Period (without giving effect to the deferral
option provided for therein) an amount equal to the difference between
fifty-three million five hundred thousand dollars ($53,500,000) and the Final
Inventories. Further, if (x) the difference between fifty-three million five
hundred thousand dollars ($53,500,000) and the Final Inventories is greater than
(y) the Net Revenues Payments Purchaser is required to make to Pfizer pursuant
to Section 2.6(b) in respect of the first Annual Period (without giving effect
to the deferral option provided for therein but giving effect to any credit due
and owing to Purchaser provided for in Section 2.7(f)(ii)), then, within ten
(10) days after the last Payment Date in the first Annual Period, Pfizer shall
pay to Purchaser the difference between (x) and (y) in immediately available
funds by wire transfer in accordance with written instructions given by
Purchaser to Pfizer not less than two (2) Business Days prior to such date.
(e) If the Final Inventories is greater than sixty-three million
five hundred thousand dollars ($63,500,000), there shall be no Purchase Price
adjustment; provided, that in such circumstance, notwithstanding the provisions
of Section 2.1(d) hereof, Pfizer may retain and not sell to Purchaser at Closing
pursuant to the provisions of this Agreement Inventories in such excess amount
related to the Products identified on Schedule 2.7B hereto. Such retained
Inventories shall be selected by Pfizer in its sole discretion and held by
Pfizer for subsequent sale to Purchaser pursuant to the terms of the Pfizer
Supply and Tolling Agreement or such other purpose not in contravention of the
terms of this Agreement. Purchaser shall cooperate with any reasonable requests
for assistance made by Pfizer for purposes of implementing the provisions of
this Section 2.7(e).
(f) (i) [ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
22
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
[ * ]
[ * ]
[ * ]
(ii) [ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
(g) Within five (5) Business Days after the Closing, Pfizer shall
deliver to Purchaser its calculation of the vacation accrual on its books and
records in respect of Employees (US) who are hired by Purchaser. Simultaneously
therewith, Pfizer shall pay such amount to Purchaser by wire transfer of
immediately available funds in accordance with written instructions given by
Purchaser to Pfizer not less than two (2) Business Days prior thereto.
(h) Any disputes between the parties regarding the matters set forth
in Sections 2.7(f) or 2.7(g) that are not resolved by the parties shall be
certified to the Accounting Expert for resolution in accordance with the
procedures set forth in Section 2.7(c) hereof, whose final determination shall
be binding on the parties.
Section 2.8 Production Margin Royalty Payments.
(a) As further consideration of the sale and transfer of the
Conveyed Assets (other than the Conveyed Assets relating to Virginiamycin),
Purchaser shall pay to Pfizer, as agent for the Asset Selling Corporations (or
to Pfizer's Affiliates as Pfizer may on behalf of the Asset Selling Corporations
direct in the written transfer instructions hereinafter referred to) forty-five
(45) days after the conclusion of each Annual Period (i.e., a five (5)-year
payment period, subject to the proviso set forth in this sentence below), or if
such day is not a Business Day, the next succeeding Business Day (such day, a
"Royalty Payment Date") an amount equal to twenty-five percent (25%) of the
amount by which the Gross Profit Excluding Virginiamycin exceeds fifty million
dollars ($50,000,000) for the most recently completed Annual Period (each such
payment, a "Royalty Payment"), in immediately available funds, by wire transfer
in accordance with written instructions given by Pfizer to Purchaser not less
than two (2) Business Days prior to the respective payment date; provided,
however, that the maximum aggregate Royalty Payments that Purchaser is required
to make to Pfizer pursuant to this Section 2.8 shall be ten million dollars
($10,000,000). Any Royalty Payment made in excess of five (5) days after the
applicable Royalty Payment Date shall include interest thereon from such Royalty
Payment Date to the date such payment is made. In respect of the first thirty
(30) days after such Royalty Payment Date, interest shall accrue at an annual
rate equal to twelve percent (12%), and thereafter at two (2) times the prime
rate as quoted by
23
Chase Manhattan Bank, N.A. (or any successor thereto) until the date of payment
and, if payment is received after 1:00 p.m. New York City time, including the
date of payment.
(b) Concurrent with each Royalty Payment, Purchaser shall deliver to
Pfizer a schedule of the calculations supporting Purchaser's determination of
the Royalty Payment for the applicable Annual Period (each such schedule, a
"Royalty Payment Schedule"), provided that if no Royalty Payment shall be due in
respect of such Annual Period, on the thirtieth day after the last day of the
Annual Period, Purchaser shall deliver to Pfizer a Royalty Payment Schedule
supporting such determination. The Royalty Payment Schedule shall be expressed
in U.S. dollars and for purposes thereof other currencies shall be translated
into U.S. dollars as set forth in Section 10.12. Pfizer shall have the right,
not more than twelve (12) months after the date of the relevant Royalty Payment
Schedule, upon reasonable notice and at reasonable times, to cause its
employees, agents and representatives to review and examine Purchaser's books
and records as they relate to the Gross Profit Excluding Virginiamycin to verify
each Royalty Payment Schedule. Following completion of each such review, if
Pfizer's calculations differ from those reflected in the applicable Royalty
Payment Schedule, Pfizer shall submit such differences (a "Royalty Payment
Notice") to Purchaser and Pfizer and Purchaser shall negotiate in good faith to
resolve any such differences promptly. If Pfizer and Purchaser have not reached
a resolution within ten (10) Business Days after Pfizer delivers to Purchaser
the Royalty Payment Notice, the differences shall be submitted to the Accounting
Expert for resolution in accordance with the procedures set forth in Section
2.7(c). Upon written request by Pfizer, Purchaser will provide to Pfizer monthly
sales and related data with respect to the Products (excluding the Virginiamycin
Products) during the period following the Closing Date until the fifth
anniversary of the Closing Date or the earlier payment in full of the maximum
aggregate Royalty Payments.
(c) Purchaser agrees to use its commercially reasonable efforts to
promote the sale of the Products (excluding the Virginiamycin Products) and any
extensions, improvements, substitutes or replacements therefor, in each case
that contain the same active ingredients as the Products, until the fifth
anniversary of the Closing Date or, if earlier, the date of the payment by
Purchaser to Pfizer of Royalty Payments aggregating ten million dollars
($10,000,000). The foregoing agreement includes, without limitation, devoting
sufficient personnel and resources to the manufacture, storage, distribution and
sale of such Products to support such sales efforts, and not to take any actions
during such period that would have the effect of materially diminishing Gross
Profit Excluding Virginiamycin for any Annual Period.
(d) Until the fifth anniversary of the Closing Date or, if earlier,
the date of the payment by Purchaser to Pfizer of Royalty Payments aggregating
ten million dollars ($10,000,000), should the Purchaser sell, assign or transfer
to any third party its right to manufacture, store, distribute and sell any of
the Products, the gross margin annually derived from such Products, based on the
annual average historical sales during the twenty-four (24) months preceding the
date of sale, assignment or transfer, will continue to be included in the "Gross
Profit Excluding Virginiamycin" calculation notwithstanding their prior sale,
assignment or transfer.
24
Section 2.9 Allocation of the Purchase Price. Pfizer, on behalf of
itself and the other Asset Selling Corporations, and Purchaser have agreed to
the allocation of the Purchase Price among the Asset Selling Corporations as set
forth in Schedule 2.9 hereto (the "Allocation"). Purchaser will prepare and
Pfizer will agree, such agreement not to be unreasonably withheld, to a
suballocation among the Conveyed Assets, separately for each Asset Selling
Corporation, in accordance with the requirements of Section 1060 of the Code.
Each of Pfizer and the other Asset Selling Corporations on the one hand and
Purchaser on the other shall (i) be bound by the Allocation for purposes of
determining any Taxes, (ii) prepare and file, and cause its Affiliates to
prepare and file, its Tax Returns on a basis consistent with the Allocation, and
(iii) take no position, and cause its Affiliates to take no position,
inconsistent with the Allocation on any applicable Tax Return or in any
proceeding before any taxing authority or otherwise. The Asset Selling
Corporations and Purchaser shall cooperate in the filing of any forms (including
Form 8594) with respect to such Allocation, including any amendments to such
forms required with respect to any Purchase Price adjustment pursuant to this
Agreement. In the event that the Allocation is disputed by any taxing authority,
the party receiving notice of the dispute shall promptly notify the other party
hereto concerning resolution of the dispute. Each of the Asset Selling
Corporations and Purchaser acknowledge that the Allocation was done at arm's
length based upon a good faith estimate of fair market values.
ARTICLE III
CLOSING
Section 3.1 Closing.
(a) The Closing shall take place at the offices of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York, at 10:00 A.M., New York time,
on the fifth Business Day following the completion and/or satisfaction of the
steps to closing in Brazil as provided for in Schedule 4.1(a) hereto; provided,
however, if such steps are completed or satisfied on or prior to November 27,
2000, then the Closing shall take place on November 30, 2000. Notwithstanding
the foregoing, the Closing may take place at such other place, time and/or date
as may be agreed upon by Pfizer and Purchaser. The date on which the Closing
occurs is called the "Closing Date." The Closing shall be deemed to occur and be
effective as of the close of business on the Closing Date. Notwithstanding the
foregoing, the transfer of certain of the Conveyed Assets and the assumption of
the Assumed Liabilities in Belgium, China and Japan may take place separately
from the rest of the Business as provided for in Section 7.3(d) hereof.
(b) At the Closing, the Asset Selling Corporations shall deliver or
cause to be delivered to Purchaser (or its designated Affiliates) the
instruments and documents set forth in Exhibit A hereto in form reasonably
acceptable to Purchaser.
25
(c) At the Closing, Purchaser shall deliver to Pfizer, as agent for
the Asset Selling Corporations, the following: (i) the Cash Consideration by
wire transfer in immediately available funds to one or more accounts specified
in writing by Pfizer at least two (2) Business Days prior to the Closing Date
and the Purchaser's Note and (ii) the instruments and documents set forth in
Exhibit B hereto, in form reasonably acceptable to Pfizer.
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions to the Obligations of Purchaser and Pfizer.
The respective obligations of each of the parties to consummate the transactions
contemplated by this Agreement shall be subject to the completion and/or
satisfaction of the steps to closing in Brazil as provided for in Schedule
4.1(a) hereto and the satisfaction of the condition that there shall not (i) be
in effect any Law or Governmental Order that makes illegal or enjoins or
prevents in any material respect the consummation of the transactions
contemplated by this Agreement, or (ii) have been commenced, and shall be
continuing, or threatened in writing any material action or proceeding by any
Governmental Authority which seeks to prevent or enjoin in any material respect
the transactions contemplated by this Agreement.
Section 4.2 Conditions to the Obligations of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement also shall be subject to the satisfaction of the following conditions
precedent:
(a) Pfizer shall have performed in all material respects its
agreements and obligations contained in this Agreement required to be performed
by it at or before the Closing, and the representations and warranties of Pfizer
contained herein shall have been true and correct in all material respects when
made and shall be true and correct in all material respects as of the Closing,
as if made as of the Closing (except for those representations and warranties
that address matters as of a particular date, which need only be true and
correct in all material respects as of such date), except for changes
contemplated or permitted by this Agreement. Purchaser shall have received a
certificate of Pfizer, dated as of the Closing Date and signed by an officer of
Pfizer, certifying as to the fulfillment of the foregoing;
(b) Pfizer shall have made or caused to be made delivery to
Purchaser of the items required by Section 3.1(b); and
(c) Since June 30, 2000, there shall not have occurred a Material
Adverse Effect.
Section 4.3 Conditions to the Obligations of Pfizer. The obligation
of Pfizer to consummate the transactions contemplated by this Agreement also
shall be subject to the satisfaction of the following conditions precedent:
26
(a) Purchaser shall have performed in all material respects its
agreements and obligations contained in this Agreement required to be performed
by it at or before the Closing, and the representations and warranties of
Purchaser contained herein shall have been true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Closing, as if made as of the Closing, except for (i) changes contemplated
or permitted by this Agreement, and (ii) those representations and warranties
that address matters as of a particular date, which need be true and correct in
all material respects only as such date. Pfizer shall have received a
certificate of Purchaser, dated as of the Closing Date and signed by an officer
of Purchaser, certifying as to the fulfillment of the foregoing;
(b) Purchaser and its designated Affiliates shall have made or
caused to be made delivery to Pfizer of the items required by Section 3.1(c);
(c) Purchaser shall have delivered to Pfizer an executed copy of the
PNC Credit Agreement and the terms of such PNC Credit Agreement, insofar as they
relate to the priority of payment of, collateral security for, and payment
schedule relating to the Purchaser's Note, in the reasonable judgment of Pfizer,
shall be at least as favorable to Pfizer as reflected in the term sheet relating
to the PNC Credit Agreement furnished to Pfizer prior to the date hereof;
(d) Purchaser shall have delivered to Pfizer executed copies of the
certificate of designations, purchase agreement and other principal documents
relating to the Palladium Preferred Stock and the terms of such certificate of
designations, purchase agreement and other documentation, insofar as they relate
to the priority of payment of, collateral security for, and payment schedule
relating to the Purchaser's Note, in the reasonable judgment of Pfizer, shall be
at least as favorable to Pfizer as reflected in the term sheet relating to the
Palladium Preferred Stock furnished to Pfizer prior to the date hereof; and
(e) Pfizer shall have obtained a first priority secured security
interest in the Belgian Facility (subject to the provisions of Section 7.3(d)),
Brazilian Facility and foreign inventories, free and clear of any claims of
third party creditors, as security for repayment of the Purchaser's Note, on
terms reasonably satisfactory to Pfizer.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PFIZER
Pfizer hereby represents and warrants to Purchaser as follows:
Section 5.1 Organization. Pfizer is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Each other Asset Selling Corporation is a corporation duly organized, validly
existing and, where applicable, in good standing under the Laws of the
jurisdiction of its organization. Each of the Asset Selling Corporations is duly
qualified or licensed as a foreign
27
corporation to do business, and, where applicable, is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except where the failure to be qualified, licensed or in good
standing would not have a Material Adverse Effect.
Section 5.2 Authority; Binding Effect.
(a) Pfizer and the other Asset Selling Corporations each has all
requisite corporate power and authority to own the Conveyed Assets and
manufacture and sell the Products and to execute and deliver this Agreement and
to perform its obligations hereunder. The execution and delivery by Pfizer and
the other Asset Selling Corporations of this Agreement, and the performance by
Pfizer and the other Asset Selling Corporations of their respective obligations
hereunder, have been duly authorized by all requisite corporate action and no
other corporate proceedings are required in connection with the execution,
delivery and performance of this Agreement.
(b) This Agreement and each of the agreements and other documents to
be executed by Pfizer and/or one or more of the other Asset Selling Corporations
and delivered to Purchaser and/or its designee pursuant to the provisions of
this Agreement (the "Sellers' Documents") constitutes and will constitute a
valid and binding obligation of Pfizer and/or each of the other Asset Selling
Corporations, as the case may be, enforceable against each of them in accordance
with their terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law).
Section 5.3 Non-Contravention. The execution, delivery and
performance of this Agreement and the Sellers' Documents by Pfizer and/or the
other Asset Selling Corporations and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any provision of
the certificate of incorporation, bylaws or other comparable organizational
documents of Pfizer or any other Asset Selling Corporation, (ii) subject to
obtaining the consents referred to in Schedule 5.3, conflict with, or result in
the breach of, or constitute a default under, or result in the termination,
cancellation or acceleration (whether after the giving of notice or the lapse of
time or both) of any obligation of Pfizer or any other Asset Selling Corporation
under, or to a loss of any benefit to which Pfizer or any other Asset Selling
Corporation is entitled under, any Assumed Contract or Intellectual Property
License to which any Asset Selling Corporation is a party or to which its assets
are subject, (iii) result in the creation or imposition of any Lien, other than
a Permitted Encumbrance, on any Conveyed Asset, (iv) subject to obtaining the
consents and approvals referred to in Sections 5.4 and 6.5, violate or result in
a breach of or constitute a default under any Law or other restriction of any
Governmental Authority to which any Asset Selling Corporation is subject,
except, with respect to clauses (ii), (iii) and (iv), for any violations,
conflicts, defaults, terminations, cancellations, accelerations or Liens which
28
are not reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect.
Section 5.4 Pfizer Consents and Approvals. Other than as set forth
in Schedule 5.4, the execution and delivery of this Agreement and the Sellers'
Documents by Pfizer and/or the other Asset Selling Corporations and the
consummation of the transactions contemplated herein and therein by Pfizer and
the other Asset Selling Corporations do not or will not require any consent or
approval of any Governmental Authority, except consents or approvals, the
failure of which to obtain would not be reasonably likely to have a Material
Adverse Effect.
Section 5.5 Financial Information. Except as set forth in Schedule
5.5, the Financial Information has been prepared in accordance with Pfizer's
policies and procedures, and in accordance with Pfizer's books and records and
is in accordance with GAAP, and present fairly in accordance with such policies
and procedures (i) in all material respects, the book value of the inventory,
property, plant and equipment and intangible assets included in the Conveyed
Assets as of the date therein specified and (ii) the selected income data for
the periods therein specified. The Inventories reflected in the Financial
Information are valued at the lower of cost or market value with allowance for
obsolescence, in accordance with GAAP. The summary of adjustments appearing on
Attachment A to Schedule 5.5 is, in Pfizer's judgment, a reasonable estimate of
factors that reconcile the difference between operating income appearing in the
column "Carling Revised" on such Attachment and operating income appearing in
the Financial Information. Purchaser acknowledges that such adjustments (i) are
based solely on Pfizer's judgment and estimates and have not been reviewed by
Pfizer's auditors, (ii) may not result in any benefit to Purchaser following
Purchaser's acquisition of the Conveyed Assets due to changes in cost
structures, operations, and other relevant matters, and (iii) are not meant in
any way to be a guarantee of benefits to be received by Purchaser following the
Closing Date or any level of profitability or cash flows to be achieved by the
Business from and after the Closing Date.
Section 5.6 Absence of Material Changes. Since June 30, 2000, except
to the extent as set forth in Schedule 5.6, there has not been any:
(a) Material Adverse Effect;
(b) damage, destruction or condemnation (whether or not covered by
insurance) of any Conveyed Asset resulting in a loss, individually or in the
aggregate, in excess of $250,000;
(c) sale, lease, license, abandonment or other disposition by any of
the Asset Selling Corporations of any material assets used in the manufacture,
storage, distribution and sale of the Products, except in the ordinary course of
business;
(d) increase or enhancement of the compensation or benefits of
Employees other than in the ordinary course of business;
29
(e) Lien, other than Permitted Encumbrances, placed on any of the
Conveyed Assets; or
(f) material change in the past practices of the Asset Selling
Corporations in the operation of the Business.
Section 5.7 No Litigation. Except as set forth on Schedule 5.7
hereto, there are no material claims, actions, suits or proceedings pending nor,
to the Knowledge of Pfizer, are there any material investigations pending or any
material claims, actions, suits, proceedings or investigations threatened or any
order, injunction or decree outstanding against any of the Asset Selling
Corporations relating to the Business.
Section 5.8 Compliance with Laws. Except with respect to
Environmental Laws (which are the subject of Section 5.10) and Product
Registrations (which are the subject of Section 5.9), and except as to matters
otherwise set forth in the Agreement or set forth in Schedule 5.8 hereto:
(a) Each Asset Selling Corporation is in compliance in all material
respects with all Laws and Governmental Authorizations applicable to the
ownership or operation of the Conveyed Assets owned or leased by such Asset
Selling Corporation and to the Business;
(b) Each Asset Selling Corporation possesses all material
Governmental Authorizations necessary for the conduct of the Business in the
countries where the Business currently is conducted by it;
(c) To the Knowledge of Pfizer, neither Pfizer nor any Asset Selling
Corporation has received within the past two (2) years any written notice from a
Governmental Entity that the operation of the Business is in violation of any
such Laws or Governmental Authorizations; and
(d) Schedule 5.8(d) hereto sets forth, as of the date hereof, a list
of all material operating permits granted to Pfizer or any of its Affiliates by
a Belgium Governmental Authority in respect of the Belgian Facility and any
pending applications for any such material operating permits made by Pfizer or
any of its Affiliates with a Belgium Governmental Authority.
Section 5.9 Product Registrations; Regulatory Compliance. Except
with respect to Environmental Permits (which are the subject of Section 5.10):
(a) Schedule 5.9 hereto sets forth, as of the date hereof, a list of
all Governmental Authorizations granted to Pfizer or any of its Affiliates by or
pending with any Governmental Authority in any particular country to market any
of the Products (the "Product Registrations");
30
(b) Except as set forth in Schedule 5.9, to the Knowledge of Pfizer,
all products sold under the Product Registrations are manufactured and marketed
substantially in accordance with the specifications and standards contained in
such Product Registrations;
(c) except as set forth in Schedule 5.9, an Asset Selling
Corporation is the sole and exclusive owner of the Product Registrations and has
not granted any right of reference with respect thereto;
(d) To the Knowledge of Pfizer, neither Pfizer nor any Asset Selling
Corporation has received within the past two (2) years any written notice from a
Governmental Entity that the operation of the Business is in violation of any
such Product Registrations; and
(e) Except as disclosed in Schedule 5.9, Pfizer currently is not
conducting any research that is expected to result in a commercial feed additive
product that would be competitive with any of the Products.
Section 5.10 Environmental Matters. Except as set forth in Schedule
5.10:
(a) (i) the Conveyed Assets, including the Facilities, the Real
Property and the Business are in compliance in all material respects with
all applicable Environmental Laws and Environmental Permits, and (ii) none
of the Conveyed Assets, including the Facilities, the Real Property and
the Business are undertaking, nor has Pfizer or any of the other Asset
Selling Corporations received notice that they are subject to, Remedial
Action or enforcement action under any or all applicable Environmental
Laws or Environmental Permits or otherwise are not in compliance with
applicable Environmental Laws;
(b) Pfizer or an Asset Selling Corporation has obtained all material
Environmental Permits required under all applicable Environmental Laws in
relation to the Conveyed Assets, including the Facilities, the Real
Property and the Business;
(c) no material claims have been made or, to the Knowledge of
Pfizer, are threatened, that could reasonably be expected to result in
Environmental Liability or Losses arising from or as a result of (i)
on-site exposures to Hazardous Substances or Hazardous Materials at the
Conveyed Assets, including the Facilities, the Real Property and the
Business, (ii) Releases of Hazardous Substances or Hazardous Materials at
or from any Conveyed Assets, including the Facilities, the Real Property
and the Business, (iii) off-site treatment, transportation, storage or
disposal of Hazardous Substances or Hazardous Materials from the Conveyed
Assets, including the Facilities, the Real Property and the Business, (iv)
the handling of products by employees of others or by the Release of
products into the environment as a result of transportation, treatment,
31
storage or disposal from the Conveyed Assets, including the Facilities,
the Real Property and the Business or (v) non-compliance with any
Environmental Law at any of the Conveyed Assets, including the Facilities,
the Real Property and the Business;
(d) Pfizer has made available to Purchaser during Purchaser's due
diligence review all material environmental reports, notices of violation,
assessments, audits, inspections, investigations, data, Environmental
Permits, and other material written information relating to the Conveyed
Assets, including the Facilities, the Real Property and the Business;
(e) to the Knowledge of Pfizer, none of the Conveyed Assets,
including the Facilities and the Real Property, contains any Hazardous
Substances or Hazardous Materials in, on, over, under or at it, in
concentrations which would be reasonably likely to result in the
imposition of a material Environmental Liability; and
(f) to the Knowledge of Pfizer, no reason exists why Purchaser
should not be able to operate the Conveyed Assets, including the
Facilities and Real Property, after the Closing Date in substantially the
same manner as currently operated, in material compliance with currently
applicable Environmental Laws and the existing Environmental Permits.
Section 5.11 Material Contracts.
(a) Except for agreements set forth on Schedule 5.11 or entered into
after the date hereof in accordance with Section 7.2 (the "Material Contracts"),
none of the Asset Selling Corporations is a party to or bound by:
(i) any contract, agreement or other arrangement for the purchase or
sale of Inventories or other personal property or real property for use
solely in connection with, or for the furnishing of services solely with
respect to, the Business extending beyond one (1) year from the date
hereof or the terms of which provide for financial commitments in excess
of $250,000;
(ii) any broker, distributor, dealer, manufacturer's representative,
franchise and agency agreements solely related to the Business that is not
cancelable on sixty (60) days' notice or less without financial penalty of
more than $250,000; and
(iii) any patent, technology, or trademark licensing agreements
solely relating to the Intellectual Property or other contract or
commitment to pay any royalty, license or management fee solely relating
to the Business, the terms of which provide for aggregate commitments to
be paid by or to an Asset Selling Corporation in excess of $100,000.
32
(b) Except as disclosed in Schedule 5.11, (i) each Assumed Contract
is valid and binding on the Asset Selling Corporation that is a party thereto,
and to the Knowledge of Pfizer, the other party thereto, and is in full force
and effect, and (ii) no Asset Selling Corporation is in breach of, or default
under, any Assumed Contract, which breach or default would be reasonably likely
to result in a Material Adverse Effect.
(c) Except as disclosed in Schedule 5.11, the Assumed Contracts,
together with the Pfizer Supply and Tolling Agreement, the Guarulhos Site
Services Agreement, the Transitional Services Agreement, the Transitional
Trademark and Tradename License Agreement and the Trademark License Agreement
(Pfizer to Purchaser), are all the contracts necessary for the conduct of the
Business as presently conducted.
Section 5.12 Intellectual Property. Schedule 5.12 sets forth a list
of all material Intellectual Property which are used in connection with the
Business or the manufacture, storage, distribution and sale of the Products.
Upon the purchase of the Conveyed Assets, Purchaser will own or have the right
to use, including pursuant to the Pfizer Supply and Tolling Agreement, the
Transitional Services Agreement, the Transitional Trademark and Tradename
License Agreement and the Trademark License Agreement (Pfizer to Purchaser), all
patents, designs, art work, designs-in-progress, formulations, know-how,
inventions, trademarks, trade styles, service marks, copyrights, manufacturing
processes, and confidential or proprietary information necessary for the conduct
of the Business as presently conducted. No claim is pending or, to the Knowledge
of Pfizer, threatened, and the Asset Selling Corporations have not received
notice that the conduct of the Business (including without limitation, the Asset
Selling Corporations' use of any Intellectual Property) infringes upon or
conflicts with in any material respect any rights claimed therein by any third
party. No use by the Asset Selling Corporations of any Intellectual Property
licensed to them and used in connection with the Business violates in any
material respect the terms of any agreement pursuant to which it is licensed. No
claim is pending or, to the Knowledge of Pfizer, threatened which alleges that
any Intellectual Property owned or licensed by the Asset Selling Corporations
for use in the Business is invalid or unenforceable by the Asset Selling
Corporations. Except as set forth on Schedule 5.12, no royalties or fees are
payable by the Asset Selling Corporations to anyone for use of the Intellectual
Property. All agreements pursuant to which the Asset Selling Corporations have
any license or right to use any Intellectual Property in connection with the
Business are in full force and effect and Pfizer or the other Asset Selling
Corporations party thereto have not defaulted on any of its obligations under
such agreements that would give the non-defaulting party a right to terminate
such agreement or a right to receive any payment pursuant to such agreement.
Except as set forth on Schedule 5.12, all Intellectual Property used in the
Business and registrations, applications, and agreements related thereto are
fully assignable to Purchaser without the consent of any third party.
Section 5.13 Real Property. (a) Schedule 5.13 hereto sets forth a
description of all of the facilities owned by any of the Asset Selling
Corporations and used in connection with the manufacture of the Products. Each
Asset Selling Corporation
33
has good fee title to all the Real Property owned by it, free and clear of any
Liens, other than (i) Permitted Encumbrances, (ii) easements, covenants,
rights-of-way and other encumbrances or restrictions of record and (iii) zoning,
building and similar restrictions. Except as set forth in Schedule 2.1(a), no
material portion of any of the Real Property is leased to any Person.
(b) Except as set forth in Schedule 5.13, there is no (i) pending
or, to the Knowledge of Pfizer, proposed annexation or condemnation or similar
proceeding affecting, or that would affect, all or any portion of the Real
Property, (ii) pending or, to the Knowledge of Pfizer, proposed proceeding to
change or redefine the zoning classification of all or any portion of the Real
Property or (iii) to the Knowledge of Pfizer, proposed change in road patterns
or grades that may adversely affect access to any roads providing a means of
ingress to or egress from the Real Property.
Section 5.14 Assets. Except as set forth on Schedule 5.14 hereto or
as otherwise provided in this Agreement, each Asset Selling Corporation owns,
leases or has the legal right to use the Conveyed Assets owned by it (other than
Intellectual Property and Real Property, which are the subject of Sections 5.12
and 5.13, respectively). Except as disclosed on Schedule 5.14, each Asset
Selling Corporation has good title to (or in the case of leased Conveyed Assets,
valid leasehold interests in) all the Conveyed Assets owned (or leased) by it
(other than Intellectual Property and Real Property, which are the subject of
Sections 5.12 and 5.13, respectively), free and clear of any Liens, except for
Permitted Encumbrances.
Section 5.15 Employee Benefits.
(a) Set forth on Schedule 7.4(a) is a list of each Plan in effect as
of the date hereof. Pfizer represents and warrants that it will deliver to
Purchaser a list of each Foreign Plan in effect at the time of delivery on or
prior to the thirtieth day after the date of this Agreement.
(b) As applicable with respect to each Plan and Foreign Plan, Pfizer
has made or will make available to Purchaser as of the Closing Date, copies of
(i) each Plan, including all amendments thereto, (ii) the current summary plan
description and each summary of material modifications thereto, (iii) the most
recent IRS determination letter, (iv) the annual report filed on Form 5500 for
the past three (3) years, (v) the most recent actuarial report, and (vi) any
insurance contracts under such Plan.
(c) Each Plan has been maintained, operated and administered in
compliance in all material respects with its terms and the applicable provisions
of ERISA and the Code.
(d) Each Foreign Plan has been maintained, operated and administered
in compliance in all material respects with its terms and the applicable Laws of
the relevant jurisdiction.
34
(e) To the Knowledge of Pfizer, no strike, work stoppage, slowdown
or labor dispute involving the Business currently is pending or threatened. To
the Knowledge of Pfizer and except as set forth on Schedule 5.15 hereto, there
is no unfair labor practice charge or complaint against the Asset Selling
Corporations pending before the National Labor Relations Board, any state labor
relations board or any court or tribunal and, to the Knowledge of Pfizer, none
is currently being threatened. To the Knowledge of Pfizer, each of the Asset
Selling Corporations has complied in all material respects with all applicable
wage and hour, equal employment, safety and other legal requirements relating to
the Employees, and is not engaged in any material unfair labor practice.
(f) Pfizer has or will make available to the Purchaser on or prior
to the Closing Date any collective bargaining agreements applicable to
Employees.
(g) The Conveyed Assets have not been subject to a Lien under ERISA
or the Code and there is no basis for such Liability or the assertion of any
such Lien with respect to the Conveyed Assets as such Liability or the assertion
of any such Lien with respect to the Conveyed Assets as the result of or after
the consummation of the transactions contemplated by this Agreement.
(h) None of the Plans is a multiemployer plan, as defined in Section
3(37) or Section 4001 of ERISA.
(i) Except as expressly provided for in this Agreement, the
consummation of the transactions contemplated by this Agreement will not give
rise any Liability for which Purchaser will have responsibility, including,
without limitation, Liability for severance pay, unemployment compensation,
termination pay, or withdrawal Liability, or accelerate the time of payment or
vesting or increase the amount of compensation or benefits due to any Employee
or their beneficiaries solely by reason of such transactions.
Section 5.16 No Questionable Payments. Neither Pfizer nor any Asset
Selling Corporation, any director, officer, agent, employee or other Person
associated with or acting on behalf of Pfizer or any Asset Selling Corporation
has: used any corporate funds for unlawful contributions, gifts, entertainment
or other unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds; or violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended.
Section 5.17 Major Customers and Suppliers. Schedule 5.17 sets forth
the five (5) largest suppliers to the Business, based on payments made or to be
made by the Business in respect of 1999 (the "Major Suppliers"). Schedule 5.17
also sets forth the five (5) largest customers of the Business based on 1999
sales (the "Major Customers"). Except as reflected on Schedule 5.17, to the
Knowledge of Pfizer, no material is used in the manufacture of the Products that
is available from only one commercial source of
35
supply. Except as set forth on Schedule 5.17, neither any of the Major Suppliers
nor any of the Major Customers has terminated, or threatened in writing to
terminate, its relationship with the Business.
Section 5.18 Brokers. Except for Lazard Freres & Co. LLC, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Pfizer. Pfizer is solely
responsible for the fees and expenses of Lazard Freres & Co. LLC
Section 5.19 Taxes. Since January 1, 1997, each Asset Selling
Corporation has either (i) timely filed with the appropriate Governmental
Authorities or (ii) obtained valid extensions of time for filing (which
extensions have not expired) from the appropriate Governmental Authorities all
Tax Returns required to be filed by the Asset Selling Corporations in connection
with the Business in all jurisdictions in which the Tax Returns are required to
be filed. All Taxes related to the Business which are called for by the Tax
Returns have been fully paid or appropriate deposits have been made therefor or
are being contested in good faith.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Pfizer as follows:
Section 6.1 Organization and Qualification. Purchaser is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation.
Section 6.2 Corporate Authorization. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Purchaser of this Agreement have been duly authorized by all requisite corporate
action on the part of Purchaser and no other corporate proceedings on the part
of Purchaser are required in connection with the execution, delivery and
performance by Purchaser of this Agreement.
Section 6.3 Binding Effect. This Agreement and each of the
agreements and other documents to be executed by Purchaser and/or one or more of
its Affiliates and delivered to Pfizer and/or one or more of the Asset Selling
Corporations pursuant to the provisions of this Agreement (the "Purchaser's
Documents") constitutes and will constitute a valid and legally binding
obligation of Purchaser and/or its Affiliates, as the case may be, enforceable
against Purchaser in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally or by general principles of equity
(regardless or whether enforcement is sought in a proceeding in equity or law).
36
Section 6.4 Non-Contravention. The execution, delivery and
performance by Purchaser of this Agreement and the Purchaser's Documents by
Purchaser and/or its Affiliates, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) violate any provision
of the certificate of incorporation, bylaws or other organizational documents of
Purchaser, (ii) subject to obtaining the consents referred to in Schedule 6.5,
conflict with, or result in the breach of, or constitute a default under, or
result in the termination, cancellation or acceleration (whether after the
giving of notice or the lapse of time or both) of any obligation of Purchaser,
or to a loss of any benefit to which Purchaser is entitled under, any contract,
lease, indenture or other agreement to which Purchaser is a party or to which
its assets are subject, including, without limitation, the indentures governing
Purchaser's outstanding debt, or (iii) assuming compliance with the matters set
forth in Sections 5.4 and 6.5, violate or result in a breach of or constitute a
default under any Law or other restriction of any Governmental Authority to
which Purchaser is subject, except, with respect to clauses (ii) and (iii), for
any violations, conflicts, defaults, terminations, cancellations or
accelerations which would not impair the ability of Purchaser to perform its
obligations hereunder.
Section 6.5 Purchaser Consents and Approvals. Except as set forth in
Schedule 6.5 hereto, the execution and delivery of this Agreement and the
Purchaser's Documents by Purchaser and/or its Affiliates and the consummation of
the transactions contemplated hereby and thereby by Purchaser do not and will
not require any material consent or approval of any Governmental Authority.
Section 6.6 No Litigation. No litigation, investigation or
proceeding by or before any court or Governmental Authority or arbitrator is
pending against or, to the knowledge of Purchaser, threatened in writing against
Purchaser (i) that relates to any of the transactions contemplated hereby or
(ii) that would adversely affect the Purchaser's ability to perform its
obligations under this Agreement.
Section 6.7 Financial Capability. Purchaser will have sufficient
funds to pay the Closing Date Payment on the Closing Date and the Net Revenues
Payments to be made by Purchaser under Article II at the time such payments are
due on the terms and conditions contemplated by this Agreement.
Section 6.8 Condition of Conveyed Assets. Purchaser and its
representatives and agents have had and exercised, prior to the date hereof, the
right to enter upon the Real Property and to make inspections and investigations
of the Conveyed Assets requested by Purchaser. Purchaser is purchasing the
Conveyed Assets based solely on the results of its inspections and
investigations, and not on any representation or warranty of Pfizer or any of
the Asset Selling Corporations not expressly set forth in this Agreement,
including the Exhibits and Schedules hereto and ancillary agreements provided
for herein. Any claims Purchaser may have for breach of representation or
warranty shall be based solely on the representations and warranties of Pfizer
set forth in this Agreement, including the Exhibits and Schedules hereto and
ancillary agreements provided for herein. ALL WARRANTIES OF HABITABILITY,
37
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES
ARISING UNDER THE UNIFORM COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS), ARE HEREBY
DISCLAIMED BY PFIZER. In addition, without limitation, notwithstanding anything
in Article V to the contrary, Purchaser acknowledges that Pfizer makes no
representation or warranty of any kind as to the prospects of the future
distribution and sale of Virginiamycin or any other Product in any country or
territory. In addition, Purchaser acknowledges that the Conveyed Assets and
Employees do not constitute all of the facilities, assets and personnel owned,
leased and employed by the Asset Selling Corporations in connection with the
manufacture, storage, distribution and sale of the Products and that additional
facilities, assets and personnel are necessary to manufacture, store, distribute
and sell the Products as currently conducted by the Asset Selling Corporations.
Neither Pfizer nor any other Person will have or be subject to any liability to
Purchaser resulting from the distribution to Purchaser or its representatives or
Purchaser's use of any information regarding any of the Products, the Asset
Selling Corporations, the Conveyed Assets or the Assumed Liabilities not
expressly set forth in this Agreement or the Exhibits and Schedules hereto and
ancillary agreements, including, without limitation, any confidential memoranda
distributed on behalf of Pfizer relating to the Products or other publication
provided to Purchaser or its representatives, or any other document or
information provided to Purchaser or its representatives in connection with the
sale of the Products.
Section 6.9 Brokers. Except for Chase Securities Inc., no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Purchaser. Purchaser is solely
responsible for the fees and expenses of Chase Securities Inc.
ARTICLE VII
COVENANTS
Section 7.1 Information and Documents. (a) From and after the date
hereof and pending the Closing, upon reasonable advance notice, the Asset
Selling Corporations shall permit Purchaser and its representatives to have
access, during regular business hours, to the Facilities, assets, employees,
books and records of the Asset Selling Corporations relating to the Products and
Product Registrations, and shall furnish, or cause to be furnished, to
Purchaser, such financial, Tax and operating data and other available
information with respect to the Products as Purchaser shall from time to time
reasonably request; provided, that no such access shall unreasonably interfere
with the Asset Selling Corporations' operation of their respective businesses,
including, without limitation, the manufacture, storage, distribution and sale
of the Products; provided further, that all information received by Purchaser
and given by or on behalf of the Asset Selling Corporations in connection with
this Agreement and the transactions contemplated hereby will to the extent
permitted under applicable Law, be held by Purchaser and its Affiliates, agents
and representatives as Confidential Information, as defined in, and pursuant to
the terms of, the Confidentiality Agreement.
38
(b) On or prior to October 31, 2000, Pfizer will deliver to
Purchaser a profit and loss statement for the Business for the nine months ended
September 30, 2000, prepared on a basis consistent with the preparation of the
Financial Information.
(c) On or prior to October 31, 2000, Pfizer will deliver to
Purchaser a listing of Inventories as of September 30, 2000 by location, SKU and
expiry.
(d) For so long as any amounts remain outstanding under the
Purchaser's Note, Purchaser will (i) grant Pfizer the same access rights to
information, facilities, documents, personnel, accountants and other
representatives as are granted to PNC, National Association, under the PNC
Credit Agreement (or any successor or substitute credit agreement), (ii)
simultaneously furnish to Pfizer copies of all financial information and other
information and documents furnished to PNC, National Association pursuant to the
terms of the PNC Credit Agreement (or any successor or substitute credit
agreement) and (iii) make the appropriate personnel available for semi-annual
meetings with Pfizer personnel to discuss Purchaser's operations and business.
Section 7.2 Conduct of Operations. From and after the date hereof
and to the Closing, except as otherwise contemplated by this Agreement or as
Purchaser shall otherwise consent in writing, which consent shall not be
unreasonably withheld, Pfizer agrees that it will, and it will cause the Asset
Selling Corporations to, continue to manufacture, store, distribute and sell the
Products in the ordinary and usual course consistent with past practice, and use
its reasonable best efforts to preserve intact relationships with customers,
suppliers and other third parties and keep available the services of the present
Employees. From and after the date hereof and to the Closing, except as
otherwise contemplated by this Agreement or as Purchaser shall otherwise consent
in writing, which consent shall not be unreasonably withheld, Pfizer covenants
and agrees that it shall, and it shall cause the Asset Selling Corporations, in
each case with respect to the Business, to:
(a) maintain insurance coverage for the Conveyed Assets at levels
consistent with presently existing levels so long as such insurance is available
at commercially reasonable rates;
(b) complete the emission control project regarding an air pollution
abatement system at the Belgian Facility;
(c) not incur, create or assume any Lien with respect to any
Conveyed Assets outside of the ordinary course of business consistent with past
practice, other than Permitted Encumbrances;
(d) not acquire or dispose of any Conveyed Assets outside of the
ordinary course of business consistent with past practice, except for the
transfer of Assets that constitute the Brazilian "estabelecimento" by
Laboratorios Pfizer do Brasil Ltda. to Phibro Saude Internacional Ltda.;
39
(e) not increase or enhance the compensation or benefits of
Employees other than in the ordinary course of business;
(f) not enter into any contracts which provide for annual payment
obligations of the Business in excess of $100,000;
(g) not amend any term of, or waive any right under, any Assumed
Contract outside of the ordinary course of business consistent with past
practice;
(h) from November 1, 2000 through the Closing Date, not make any
sales of Products other than pursuant to then prevailing normal terms and
pricing; and
(i) not agree to take any of the actions described in subparagraphs
(c) through (h) above.
Section 7.3 Commercially Reasonable Efforts; Certain Governmental
Matters.
(a) Upon the terms and subject to the conditions herein provided,
each of the parties hereto agrees to use its commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary for it to do under applicable Laws to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, to (i) comply promptly with all legal requirements which may be
imposed on it with respect to this Agreement and the transactions contemplated
hereby (which actions shall include, without limitation, furnishing all
information required by applicable Law in connection with approvals of or
filings with any Governmental Authority), (ii) satisfy the conditions precedent
to the obligations of the other party hereto, (iii) obtain any consent,
authorization, order or approval of, or any exemption by, any Governmental
Authority or other public or private third party required to be obtained or made
by Purchaser or the Asset Selling Corporations or any of their respective
Affiliates in connection with the acquisition of the Conveyed Assets or the
taking of any action contemplated by this Agreement, (iv) to the extent that the
terms of certain Environmental Permits or the Environmental Laws pursuant to
which those Environmental Permits were issued allow those Environmental Permits
to be transferred or assigned to Purchaser, to convey or assign those
Environmental Permits to the Purchaser at the Closing (to the extent that the
terms of certain Environmental Permits or the Environmental Laws pursuant to
which those Environmental Permits were issued do not allow those Environmental
Permits to be transferred or assigned, Pfizer and the Asset Selling Corporations
shall cooperate fully with Purchaser in its efforts to have those Environmental
Permits reissued or to have new Environmental Permits issued to Purchaser
effective as of the Closing Date or as soon thereafter as practicable), and (v)
take any action reasonably necessary to defend, lift, mitigate and/or rescind
the effect of any litigation or administrative proceeding adversely affecting
the acquisition of the Conveyed Assets or this Agreement, including promptly
appealing any adverse court or administrative decision.
40
(b) Subject to appropriate confidentiality protections, each of the
parties hereto will furnish to the other party such necessary information and
reasonable assistance as such other party may reasonably request in connection
with the foregoing and will provide the other party with copies of all filings
made by such party with any Governmental Authority and, upon request, any other
information supplied by such party to a Governmental Authority in connection
with this Agreement and the transactions contemplated hereby.
(c) Without limiting the generality of the undertakings pursuant to
this Section 7.3, Purchaser and Pfizer agree to provide promptly to Governmental
Authorities with regulatory jurisdiction over enforcement of any applicable
Competition Laws ("Governmental Antitrust Entity") information and documents
requested by any Government Antitrust Entity or necessary, proper or advisable
to permit consummation of the acquisition of the Conveyed Assets and the
transactions contemplated by this Agreement. Each of Pfizer and Purchaser will
provide to the other copies of all correspondence between it (or its advisor)
and any Government Antitrust Entity relating to the acquisition of the Conveyed
Assets or any of the matters described in this Section 7.3. Pfizer and Purchaser
agree that all telephone calls and meetings with a Government Antitrust Entity
regarding the acquisition of the Conveyed Assets or any of the matters described
in this Section 7.3 shall, to the extent practicable, include representatives of
Pfizer and Purchaser. Pfizer and Purchaser acknowledge that each has made the
requisite filings pursuant to the HSR Act and all applicable waiting periods
thereunder have expired or terminated.
(d) (i) The parties acknowledge that Purchaser cannot acquire the
Belgian Facility until it has obtained the necessary operating permits from the
applicable Belgian Governmental Authorities set forth in Schedule 7.3(d). If
Purchaser obtains all such permits listed on Schedule 7.3(d) on or prior to the
Closing Date, then the Belgian Facility will be transferred to Purchaser as part
of the Closing. If this does not occur on or prior to the Closing Date, then the
Closing will occur as scheduled on the Closing Date with respect to all Conveyed
Assets and Assumed Liabilities (except for the Belgian Facility and the
Equipment located at the Belgium Facility (the "Belgian Facility and Related
Assets")), and Purchaser will make payment of the Closing Date Payment on the
Closing Date and the Net Revenues Payments (subject to the terms of this
subsection (d)(i)) and Royalty Payments on the dates such payments are due. In
addition, from the Closing Date to the time the Purchaser obtains the necessary
operating permits and the Belgian Facility and Related Assets are transferred to
Purchaser (such period, the "Belgium Interim"), Virginiamycin will be supplied
by Pfizer to Purchaser pursuant to a supply agreement to be mutually agreed to
by the parties reflecting the terms set forth on the term sheet appearing as
Schedule 7.3(d)(2) (the "Belgian Supply Agreement"). If Purchaser has not
obtained the necessary operating permits and the Belgian Facility and Related
Assets are not transferred to Purchaser on or prior to the start of the fifth
Annual Period, then any Net Revenues Payments attributable to sales of
Virginiamycin during the fifth Annual Period that falls within the Belgium
Interim will not be paid to Pfizer but instead will be paid to an escrow agent
mutually agreed to by the parties and be invested
41
and held pursuant to an escrow agreement acceptable to Pfizer, Purchaser and
such escrow agent. If the Belgian Facility and Related Assets are transferred to
Purchaser or its designated Affiliate on a date (the "Belgian Transfer Date")
that is on or prior to the last day of the fifth Annual Period, then any such
escrowed amounts, and all earnings therein (such escrowed amounts and earnings,
the "Escrowed Fund") will be paid to Pfizer within five (5) Business Days
following the Belgian Transfer Date. If the Belgian Transfer Date does not occur
on or prior to the end of the fifth Annual Period, then the Escrowed Fund will
be transferred to Purchaser within five (5) Business Days of the end of the
fifth Annual Period and the obligation of Purchaser to pay Net Revenues Payments
attributable to sales of Virginiamycin during the fifth Annual Period shall be
extinguished. If Purchaser obtains the necessary operating permits for the
transfer of the Belgian Facility and Related Assets following the end of the
fifth Annual Period, then Purchaser shall have the option to purchase the
Belgian Facility and Related Assets for a purchase price equal to the amount of
the Escrowed Fund. To exercise such option, Purchaser must notify Pfizer in
writing that it is exercising such option within sixty (60) days of its receipt
of the necessary operating permits for the transfer of the Belgian Facility and
Related Assets, and if Pfizer does not receive a written notice of exercise
within such sixty (60) day period, such option shall lapse.
(ii) The parties further acknowledge that they will not effect the
transfer of the Conveyed Assets and assumption of the Assumed Liabilities in
China and Japan (such jurisdictions, the "Affected Jurisdictions") until
Purchaser is in a position to receive such Conveyed Assets and assume such
Assumed Liabilities, which will occur as soon as reasonably practicable. Pfizer
and Purchaser agree to effect the Closing (including payment of the Closing Date
Payment on the Closing Date and the Net Revenues Payments and Royalty Payments
on the dates such payments are due), subject to the terms of this Agreement,
with respect to all Conveyed Assets and Assumed Liabilities outside of the
Affected Jurisdictions on the Closing Date. The obligations of the parties
hereto set forth in this Section 7.3 shall continue with respect to the steps to
closing in the Affected Jurisdictions until all such steps have been taken and
completed, at which time the parties shall effect the transfer of the relevant
Conveyed Assets. As of the Closing Date, Pfizer and Purchaser shall, subject to
applicable Law, enter into a "net economic benefit" letter agreement in the form
attached hereto as Exhibit J to provide Purchaser with the net economic benefit
or loss of the Business in the Affected Jurisdictions from and after the Closing
Date until transfer of the affected Conveyed Assets is effected.
(e) If Virginiamycin is reinstated for sale in the European Union
(EU) after the Closing Date, Pfizer will provide reasonable assistance to
Purchaser, at Purchaser's request, in connection with Purchaser's
re-registration of certain claims for Virginiamycin as contemplated by Pfizer as
of the date of this Agreement. Pfizer's obligation to assist in such
re-registration process shall be subject to the availability of the process
described in Pfizer's confirmation letter of January 21, 2000 to the EU Council
regarding the provisions of EU Council Directive 96/51/EC.
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
Section 7.4 Employees and Employee Benefits.
(a) Employees (US) - Offer of Employment; Continued Employment;
Severance. Purchaser agrees to offer employment as of 12:01 a.m. on the day
immediately following the Closing Date to each Employee (US) in the same or a
comparable position and at a rate of pay at least equal to such Employee's rate
of pay in effect on the Closing Date and with benefits which shall be
substantially comparable to the employee benefits as are set forth in Schedule
7.4(a), and substantially comparable to such other benefits as are set forth in
the Employee Severance Program (US) in Schedule 7.4(a)(i). For purposes of this
Section 7.4, references to "pay" shall include base pay plus any commission,
bonus or incentive pay, but excluding retention and retention/performance
allowances. Pfizer and Purchaser acknowledge that the pay and benefits described
on Schedule 7.4(a)(iv) would satisfy the "substantial comparability" provisions
of the first sentence of this Section 7.4(a). Such employment shall be at a
location within a twenty-five (25) mile radius of the Employee's location of
employment as of the Closing Date (which, in the case of a sales Employee, shall
mean such Employee's sales territory on the Closing Date). Schedule 7.4(a)(ii)
(which shall be updated by Pfizer on the Closing Date) shall set forth the name
of each Employee (US), and his or her current rate of pay, position and date of
hire. Purchaser shall have no obligation whatsoever with regard to Employees who
do not accept the offer of employment or continuation of employment given by
Purchaser in accordance with this Section 7.4(a) and do not work for Purchaser
or its Affiliates for at least one (1) day, unless such Employee is otherwise an
Affected Employee. Purchaser shall be solely responsible for all salaries or
wages (including bonuses, incentive payments and commissions) accruing after the
Closing Date with respect to the Affected Employees. Purchaser may, at its
discretion, change the conditions of employment after the Closing Date except
for (i) the location requirement described in this Section 7.4(a), (ii) the pay
and benefits comparability requirements described in this Section 7.4(a) and
(iii) separation plan obligations and other benefits described in Schedule
7.4(a)(i), all of which matters shall remain unchanged until the date
immediately following the second anniversary of the Closing Date.
Notwithstanding the foregoing sentence, Purchaser or its Affiliates may
terminate an Employee (US) during such two (2) year period due to
"Performance-Related Terminations" or "Curtailment or Cessation of
Operations/Reorganization/Position Elimination" (as those terms are described in
Exhibit F, the Pfizer Employee Separation Plan) as long as Purchaser or its
Affiliates (i) first offers such Employee the opportunity to sign a release
agreement reasonably satisfactory to Pfizer, (ii) pays or otherwise provides
severance benefits to such Employee in accordance with Pfizer's Employee
Separation Plan and (iii) provides benefits continuation and other benefits as
set forth in Schedule 7.4(a)(i), provided, however, that Purchaser or its
Affiliates may terminate an Employee (US) without paying or otherwise providing
severance benefits to such Employee in accordance with such policy and practice
if such Employee is terminated, in the reasonable discretion of Purchaser or its
Affiliates, "for cause" (as such term is defined in the Pfizer Employee
Separation Plan).
[ * ]
[ * ]
43
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] Notwithstanding anything to the contrary herein, immediately
following the second anniversary of the Closing Date, Purchaser shall provide
pay and benefits and severance plans, programs and policies which are no less
favorable than those provided to other similarly situated employees of
Purchaser, as the case may be. Employees also shall be provided credit by
Purchaser for all service with Pfizer and its Affiliates, to the same extent as
such service was credited for such purpose by Pfizer and its Affiliates, under
(x) all employee benefit plans, programs, policies and fringe benefits of
Purchaser described in Schedule 7.4(a)(iii) for purposes of eligibility, vesting
and benefit accrual (other than under the pension plan maintained by Purchaser)
and (y) severance plans, programs and policies for purposes of calculating the
amount of each such Employee's severance benefits.
(b) Qualified Plans.
(i) Pfizer sponsors the following Plans which are intended to be
qualified under Section 401(a) of the Code (collectively, the "Pfizer
Qualified Plans"): the Pfizer Savings and Investment Plan (the "Savings
Plan") and the Pfizer Retirement Annuity Plan (the "Retirement Plan").
Effective as of the Closing Date, the Asset Selling Corporations shall
cause each Affected Employee who is a participant in one or both Pfizer
Qualified Plans to become one hundred percent (100%) vested in his or her
accrued benefit under each such Plan.
(ii) Effective as of 12:01 a.m. on the day immediately following the
Closing Date, each participant in a Pfizer Qualified Plan who is an
Affected Employee shall cease to be an active participant under each such
Plan to the extent he or she becomes an employee of Purchaser, and shall
become a participant in the Purchaser Qualified Plans as listed in
Schedule 7.4(b)(ii) (such plans being collectively referred to as the
"Purchaser Qualified Plans"). Purchaser shall ensure that the Purchaser
Qualified Plans will recognize the accrued service of each Affected
Employee to the extent he or she becomes an employee of Purchaser with
Pfizer and its Affiliates up to and including the Closing Date for
purposes of vesting and eligibility only, to the extent credited under the
terms of the corresponding Pfizer Qualified Plan as in effect on the
Closing Date. It is expressly agreed that the Purchaser shall not grant to
Affected Employees past service credit for purposes of benefit accrual
(including eligibility for early retirement subsidies) under the Purchaser
defined benefit Qualified Plans. As soon as practicable after the Closing
Date, Pfizer shall deliver such accrued service data to Purchaser.
(iii) Pfizer will give Purchaser reasonable access to records of
Pfizer necessary to administer the retirement benefits of Affected
Employees.
44
(c) Accrued Entitlements. Purchaser shall be responsible for all
accrued entitlements, including vacation days, for Affected Employees who become
employees of Purchaser as of the Closing Date consistent with Pfizer's policy in
respect thereof. Purchaser shall maintain Pfizer's vacation plan in effect
through the end of calendar year 2001. Pfizer shall be responsible for the
payment of bonuses earned by Affected Employees through the Closing Date, such
payments to be determined based upon actual performance and the number of days
elapsed in the year as of the Closing Date in accordance with Pfizer's
established incentive compensation plans.
(d) Medical and Welfare Plan Obligations. At the request of
Purchaser (but without in any way limiting Purchaser's obligation under
subsection (a)) Pfizer will arrange for the Employees (US) to continue to be
covered under COBRA or otherwise at the applicable premium by Pfizer's medical,
dental, life and short and long term disability plans until such time as such
Employees (US) are covered by such plans maintained by Purchaser. Purchaser
shall pay for the costs of the foregoing COBRA coverage.
(e) Employees (non-US) - Offer of Employment; Continued Employment;
Severance. (i) Purchaser agrees to offer employment as of 12:01 a.m. on the day
immediately following the Closing Date to each Employee (non-US) in the same or
a comparable position and at a rate of pay at least equal to such Employee's
rate of pay in effect on the Closing Date and with benefits which shall be
substantially comparable to such Employee's benefits which are in effect on the
Closing Date. Pfizer and Purchaser acknowledge that the pay and benefits
described on Schedule 7.4(e)(i) would satisfy the "substantial comparability"
provisions of the preceding sentence. Schedule 7.4(e)(ii) hereto (which shall be
updated by Pfizer on the Closing Date) shall set forth the name of each Employee
(non-US).
(ii) It is the intention of the parties to this Agreement to deal
with employee matters, including, without limitation, offers of employment,
compensation, benefits, and severance payment and benefit continuation matters
for Employees (non-US) in a manner substantially similar to the manner in which
Employees (US) matters have been dealt with in this Article VII, subject to: (A)
with regard to each Pfizer Foreign Plan which is a defined contribution or
benefit plan (other than the Belgian and Brazilian pension plans), to either
distribute or retain (for the benefit of the Affected Employee) the account
balance of each Affected Employee (non-US) to the extent permitted by applicable
local Law, or, if not so permitted, such account balance will be dealt with in a
manner agreed to by the parties; (B) with regard to the Belgian pension plan,
Pfizer will transfer to the corresponding Purchaser Foreign Plan as soon as
practicable following the Closing Date Belgian pension plan assets sufficient to
satisfy the liability of the plan with respect to the applicable Affected
Employees, such liability to be calculated on a basis and methodology to be
agreed to by the parties between the date hereof and the tenth Business Day
prior to the Closing Date and (C) with regard to the Brazilian pension plan,
Laboratorios Pfizer do Brasil Ltda. will transfer prior to the Closing Date plan
assets attributable to the applicable Affected Employees to the corresponding
plan established by Phibro Saude International Ltda. Within two weeks of
45
the signing of this Agreement, Pfizer shall provide to Purchaser the following
information and/or documents relating to the assumptions for the basis of the
asset transfer: (i) discount rate assumed, (ii) salary increase rate assumed,
(iii) inflation rate assumed, (iv) retirement age assumptions, (v) assumed
mortality table, (vi) turnover rate assumed, (vii) assumptions as to form of
benefits (lump sum, annuity, or a combination of both) and all other related
documents and/or assumptions. Additionally, within two weeks of the signing of
this Agreement, Pfizer shall provide to Purchaser the following information with
respect to each Employee who participates in the Belgian Pension Plan: (i) name,
(ii) date of birth, (iii) date of hire, (iv) pensionable salary, and (v)
accumulated employee contributions. Purchaser, on the one hand, and Pfizer, on
the other hand, each agree to use its best efforts and to cooperate with the
other to effect as promptly as possible the transfers of assets contemplated
under this Section 7.4(e)(ii), subject to Pfizer's receipt of satisfactory
evidence that the Purchaser Foreign Plans are in compliance with all relevant
Laws; and (C) such modifications as are necessary to comply with applicable Laws
of the foreign countries and their political subdivisions; applicable labor
agreements; local Pfizer policies, programs and practices; and established local
business custom in similar transactions; provided, however, that in no event
shall Pfizer retain any Liability with respect to any Foreign Plan with respect
to Employees (non-US) except to the extent that Pfizer retains assets in a
funded Foreign Plan (as a result of Pfizer electing not to transfer applicable
plan assets to a comparable plan of Purchaser) which provides for benefits for
such Employees (non-US).
(f) Employees (US) and Employees (non-US) Absent on Disability or
Leaves of Absence - Offer of Employment; Continued Employment; Severance. When
an Employee (US) or Employee (non-US) who is, on the Closing Date, absent due to
illness or on short-term disability (including maternity disability) or workers'
compensation seeks to return to active employment, Purchaser shall offer
immediate employment to such Employee in the same or a comparable position to
that which the Employee occupied before such absence but only at such time that
such Employee is medically capable of performing the essential functions of the
position occupied immediately before such absence. In addition, immediate
employment in the same or comparable positions will be offered to those
Employees (US) and Employees (non-US) returning from authorized leaves of
absence such as parental, family and medical, and military leaves or other
leaves where return to work is subject to statutory requirements. Such
Employees, returning from disability or leaves of absence, will be subject to
the same pay, benefits, severance and all other policies, plans, programs and
arrangements as stipulated in this Article VII for similarly situated Employees
(US) and Employees (non-US) and, in the case of Employees (non-US), as otherwise
required by applicable local Law. Notwithstanding anything herein to the
contrary, Purchaser shall have no obligations or Liabilities with respect to
Employees on disability or other leave who do not work for Purchaser for at
least one day.
(g) Other Matters. Nothing contained herein, expressed or implied,
is intended to confer upon any Employee of any Asset Selling Corporation any
benefits under any benefit plans, programs, policies or other arrangements,
including, but not
46
limited to, severance benefits or right to employment or continued employment
with Purchaser or any Affiliate of Purchaser for any period by reason of this
Agreement. In addition, the provisions of this Agreement, in particular this
Article VII, are for the sole benefit of the parties to this Agreement and are
not for the benefit of any other third party.
Section 7.5 Bulk Transfer Laws. Purchaser acknowledges that the
Asset Selling Corporations have not taken, and do not intend to take, any action
required to comply with any applicable bulk sale or bulk transfer laws or
similar laws.
Section 7.6 Noncompetition.
(a) Subject to the provisions of this Section 7.6, Pfizer agrees
that for a period of five (5) years from the Closing Date, Pfizer and its
Affiliates shall not manufacture, distribute or sell to the global livestock
industry feed additive products that are competitive with the Products
("Competitive Activity"); provided, however, that it shall not be deemed to be a
violation of this subsection (a) for Pfizer or any of its Affiliates to (u)
invest in or own any debt securities or other debt obligations (other than
convertible debt), (v) invest in any third Person (including, without
limitation, any corporation or mutual or other fund) which invests in, manages
or operates a Competitive Activity, so long as such aggregate investment is less
than twenty percent (20%) of the outstanding equity interests in such third
Person (taking into account the conversion of any convertible securities held by
Pfizer and any of its Affiliates) and Pfizer and its Affiliates do not control
such third Person or control or conduct such Competitive Activity, (w) invest
in, own an interest in, or acquire all or a majority of the stock or assets of
any Person that is not "engaged primarily in a Competitive Activity" (as
hereinafter defined), subject to the divestiture requirement noted below in
subsection (b), (x) invest in securities having less than five percent (5%) of
the outstanding voting power of any Person, the securities of which are publicly
traded or listed on any securities exchange or automated quotation system or (y)
own any equity interests through any employee benefit plan or pension plan.
Notwithstanding anything in this Agreement to the contrary, the foregoing
covenant shall not apply with respect to any Person that acquires a majority of
the stock or assets of Pfizer or any of its Affiliates and that prior to such
acquisition already was engaged in a Competitive Activity. Further,
notwithstanding anything to the contrary contained in this subsection (a),
Pfizer and its Affiliates shall not be deemed to have violated the restrictions
contained in this subsection (a) by virtue of the manufacture, storage,
distribution and sale of certain Products in India, Bangladesh, Nepal and Sri
Lanka, provided that the Asset Selling Corporation in India does not sell or
export Products to any country other than Bangladesh, Nepal and Sri Lanka. For
purposes of this subsection, "engaged primarily in a Competitive Activity" shall
mean that greater than fifty percent (50%) of the consolidated net revenue
derived during the last complete fiscal year of the acquired Person is derived
from a Competitive Activity. Each investment or acquisition made by Pfizer or
its Affiliates which is subject to the provisions of this Section 7.6 must be
permissible hereunder at the time of such investment, provided, however, that
any such
47
investment which was permissible when made cannot thereafter be the basis of a
claim of violation of this Section 7.6.
(b) Notwithstanding the exception described in clause (w) in
subsection (a) above, in the event that Pfizer or an Affiliate acquires or
invests in any Person that is not engaged primarily in a Competitive Activity
but that Person owns and conducts a Competitive Activity representing more than
five percent (5%) of the consolidated net revenue for the last complete fiscal
year of such Person, Pfizer or such Affiliate, subject to the following
sentence, thereafter shall divest such Person's Competitive Activity within 24
months from the date of purchase. If Pfizer is required to divest a portion of a
Person that is not engaged primarily in a Competitive Activity pursuant to the
preceding sentence, Pfizer shall, prior to soliciting offers from any other
third party, give written notice thereof to Purchaser and Purchaser will have
twenty (20) days (which period can be extended by mutual written agreement) from
receipt of such notice to propose an offer to acquire such Competitive Activity
by delivery to Pfizer of a written notice setting forth with specificity the
principal terms of Purchaser's offer (including, without limitation, the
purchase price, the form of consideration, any closing conditions and the
closing date). If Pfizer, in its sole discretion, elects to pursue Purchaser's
offer, then Pfizer and Purchaser agree to negotiate in good faith for thirty
(30) days (which period can be extended by mutual written agreement) to reach a
definitive agreement on mutually agreeable terms. If (i) Purchaser fails to make
an offer, (ii) Purchaser makes an offer that Pfizer elects not to pursue or
(iii) Purchaser makes an offer that Pfizer elects to pursue but Pfizer and
Purchaser do not come to mutual agreement by the end of the thirty (30) day time
period (as it may be extended) referenced above, then Pfizer shall have the
right to solicit proposals and negotiate and enter into definitive agreements
with any third parties regarding the sale of such Competitive Activity.
(c) Notwithstanding anything to the contrary set forth in this
Section 7.6(a), Pfizer shall not be deemed to have violated the provisions of
Section 7.6(a) by reason of its acquisition of a Person engaged primarily in a
Competitive Activity if, prior to consummating such acquisition, it has entered
into a definitive agreement to sell the to-be-acquired Person's Competitive
Activity to a third party. Pfizer hereby grants Purchaser the same "right of
first negotiation" arrangement previously described in Section 7.6(b) prior to
entering into any such agreement with a third party to acquire the Competitive
Activity of a Person engaged primarily in a Competitive Activity.
(d) For a period of two (2) years after the Closing Date, Pfizer and
its Affiliates shall not, directly or indirectly, induce or attempt to induce
any officers, employees, representatives or agents of Purchaser or any of its
Affiliates engaged solely in the manufacture, storage, distribution or sale of
the Products to leave the employ of Purchaser or any such Affiliate, or violate
the terms of their contracts, or any employment arrangements, with Purchaser or
any such Affiliate, except that nothing in this sentence shall restrict or
preclude the rights of Pfizer and its Affiliates to make generalized searches
for employees by the use of advertisements in the media (including trade media)
48
or by engaging search firms to engage in searches that are not targeted or
focused on the employees engaged in such activities.
(e) Purchaser agrees that for a period of five (5) years from the
Closing Date, Purchaser and its Affiliates shall not distribute or sell or
promote the distribution and sale of any product that is competitive with
Pfizer's Strongid(R) product line as marketed on the date hereof in any country
in which such products are sold as of the date hereof. Such prohibition shall
include the sale by Purchaser of any active ingredient used in Strongid(R)
products to any third party who, to the knowledge of Purchaser, is purchasing
such active ingredient for the purpose of the manufacture, distribution or sale
of a product that is competitive with the Strongid(R) line of products.
(f) Prior to the Closing, except as otherwise agreed in writing,
neither Purchaser nor any of its Affiliates will offer or provide employment on
a full-time or part-time or consulting basis to any individual employed by
Pfizer or any of its Affiliates and engaged in the manufacture, storage,
distribution or sale of the Products. For a period of two (2) years after the
Closing Date, Purchaser and its Affiliates shall not, directly or indirectly,
induce or attempt to induce any officers, employees, representatives or agents
of Pfizer's Animal Health Group, or any employees of Pfizer or any of its
Affiliates which Purchaser, its representatives or agents were introduced to in
the connection with the transactions contemplated by this Agreement, to leave
the employ of Pfizer or any such Affiliate, or violate the terms of their
contracts, or any employment arrangements, with Pfizer or any such Affiliate,
except that nothing in this sentence shall restrict or preclude the rights of
Purchaser and its Affiliates to make generalized searches for employees by the
use of advertisements in the media (including trade media) or by engaging search
firms to engage in searches that are not targeted or focused on the employees
engaged in such activities.
(g) Pfizer and Purchaser acknowledge that this Section 7.6
constitutes an independent covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement. Each of Pfizer and
Purchaser has independently consulted with its counsel and after such
consultation agrees that the covenants set forth in this Section 7.6 are
reasonable and proper. It is the desire and intent of the parties that the
provisions of this Section 7.6 shall be enforced to the fullest extent
permissible under applicable Law. If all or part of this Section 7.6 is held
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect. Each of the parties agrees that in the event of a breach by a
party of the provisions of this Section 7.6, money damages would not be an
adequate remedy and that the other party shall be entitled to seek temporary,
preliminary or permanent injunctive relief without the necessity of proving
damages or posting a bond. If any part of this Section 7.6 is held to be
excessively broad as to duration, scope, activity or subject, such part will be
construed by limiting and reducing it so as to be enforceable to the maximum
extent compatible with applicable Law.
49
Section 7.7 Transitional Services. At the Closing, Purchaser and
Pfizer shall enter into, execute and deliver a transitional services agreement
in form and substance reasonably satisfactory to each of them substantially upon
the principal terms set forth in Exhibit C (the "Transitional Services
Agreement").
Section 7.8 Trademark License Agreements. (a) At the Closing,
Purchaser and Pfizer shall enter into, execute and deliver a transitional
trademark and tradename license agreement in form and substance reasonably
satisfactory to each of them substantially upon the principal terms set forth in
Exhibit D-1 (the "Transitional Trademark and Tradename License Agreement").
(b) At the Closing, Purchaser and Pfizer shall enter into, execute
and deliver an agreement pursuant to which Pfizer will grant Purchaser a
trademark license for Terramycin(R), Terramycine(R), Terramicina(R), Neo
Terramycin(R), Neo Terramycine(R), Neo Terramicina(R), Neo Terramix(R) and
Terramix(R) in all countries of the world, other than India, Bangladesh, Nepal
and Sri Lanka, in form and substance reasonably satisfactory to each of them
substantially upon the principal terms set forth in Exhibit D-2 (the "Trademark
License Agreement (Pfizer to Purchaser)").
(c) At the Closing, Purchaser and Pfizer shall enter into, execute
and deliver an agreement pursuant to which Purchaser will grant Pfizer and its
Affiliates a trademark license solely to the extent of products marketed on the
date of this Agreement for Banminth(R), Pro-Banminth(R), Mecadox(R) and Vibravet
(R), in all countries of the world in connection with the sale of non-feed
formulations. Such arrangement shall be in form and substance reasonably
satisfactory to each of them substantially upon the principal terms set forth in
Exhibit D-3 (the "Trademark License Agreement (Purchaser to Pfizer)").
Section 7.9 Supply and Tolling Agreement. At the Closing, Purchaser
and Pfizer shall enter into, execute and deliver a supply and tolling agreement
in form and substance reasonably satisfactory to each of them substantially upon
the principal terms set forth in Exhibit E (the "Pfizer Supply and Tolling
Agreement"), pursuant to which Pfizer shall provide Purchaser certain supply and
tolling services for a specified period after the Closing Date.
Section 7.10 Compliance with WARN, Etc. With respect to WARN or
other similar statutes or regulations of any jurisdiction, Purchaser will timely
give any notices required to be given thereunder.
Section 7.11 Foreign Implementing Agreements. As promptly as
practicable after the date hereof, Pfizer and Purchaser shall cause any Foreign
Implementing Agreements deemed necessary by the parties to be prepared and
executed by their applicable Affiliates.
Section 7.12 Litigation Support. Purchaser and its Affiliates, on
the one hand, and Pfizer and its Affiliates, on the other hand, will cooperate
with each other in
50
the defense or settlement of any Liabilities (including, without limitation,
Product Claims) or lawsuits involving the Products for which they have
responsibility under this Agreement by providing the other party and such other
party's legal counsel and other Persons access to employees, records, documents,
data, equipment, facilities, products, parts, prototypes and other information
regarding the Products as such other party may request, to the extent maintained
or under the possession or control of the requested party. The requesting party
shall reimburse the other party for its reasonable out-of-pocket expenses paid
to third parties in performing its obligations under this Section 7.12. Pfizer
shall keep Purchaser informed of the status of the pendency of the relevant
Liabilities and lawsuits involving the Products for which it has responsibility
under this Agreement, will advise Purchaser of material issues involved in the
litigation and will use its reasonable best efforts to seek a confidentiality
agreement with respect to any settlements of such lawsuits. For so long as any
Liabilities or lawsuits involving the Products for which Pfizer has
responsibility under this Agreement remain outstanding, Purchaser will advise
Pfizer of material issues involved in the lawsuits involving the Products for
which it has responsibility and will use its commercially reasonable efforts to
seek a confidentiality agreement with respect to any settlements of such
lawsuits.
Section 7.13 Insurance; Workers' Compensation. As of the Closing
Date, the coverage under all insurance policies related to the manufacture,
storage, distribution and sale of the Products and all workers' compensation
policies related to the Employees (which coverage shall be maintained by Pfizer
from the date hereof through the Closing Date) shall continue in force only for
the benefit of the Asset Selling Corporations and their Affiliates and not for
the benefit of Purchaser. Purchaser agrees to arrange for its own insurance
policies with respect to the manufacture, storage, distribution and sale of the
Products and workers' compensation policies with respect to the Employees, in
each case covering all periods and agrees not to seek, through any means, to
benefit from any of Asset Selling Corporations' or their Affiliates' insurance
policies or workers' compensation policies which may provide coverage for claims
relating in any way to the manufacture, storage, distribution and sale of the
Products or the Employees on or prior to the Closing Date.
Section 7.14 Scheduled Environmental Commitments. (a) Pfizer has
agreed to retain the environmental liabilities associated with the covenants set
forth in Section 7.14 and Schedule 7.14 ("Scheduled Environmental Commitments")
and shall undertake the Scheduled Environmental Commitments in prompt and
expeditious fashion. After the Closing, all decisions relating to the Scheduled
Environmental Commitments shall be made by Pfizer. Pfizer shall consult with
Purchaser on all material decisions relating to Scheduled Environmental
Commitments, including but not limited, retention of a qualified environmental
consultant, negotiations with regulatory authorities, the development of work
plans, and draft and final reports. Pfizer shall keep Purchaser regularly
informed concerning its undertaking of the Scheduled Environmental Commitments
and shall consult regularly with Purchaser, and solicit Purchaser's comments, on
the development and implementation of the plans for the undertaking of the
Scheduled Environmental Commitments. Pfizer shall seriously consider Purchaser's
51
comments on its plans or proposals and shall use reasonable efforts to
incorporate Purchaser's reasonable comments into the development and
implementation of the plans for the undertaking of the Scheduled Environmental
Commitments. Pfizer shall comply with all applicable Environmental Laws with
respect to the Scheduled Environmental Commitments, and will provide to
Purchaser copies of all material written notices, correspondence with and
submissions to Governmental Authorities, work plans, data, sampling results and
final reports concerning the Scheduled Environmental Commitments. Pfizer shall,
to the extent practicable, minimize the disruptive impact of Scheduled
Environmental Commitments upon the operations of Purchaser. Purchaser shall
provide Pfizer, its agents, employees, and consultants with reasonable access to
the Facilities to carry out the Scheduled Environmental Commitments, which shall
be at Pfizer's cost and expense, and upon reasonable notice to Purchaser. In
addition to the costs and expenses of the Scheduled Environmental Commitments,
Pfizer shall be responsible only for Purchaser's reasonable costs and expenses
associated with the implementation of Scheduled Environmental Commitments.
Purchaser will cooperate with Pfizer in the implementation of Scheduled
Environmental Commitments, including providing reasonable access to employees
and documents as necessary. In addition, Purchaser will provide a reasonable
level of facility staff support to Pfizer consistent with past practice in
connection with its completion of the emission control project regarding an air
pollution abatement system at the Belgian Facility.
(b) Section 8.11 shall govern with respect to the Applicable
Remedial Action Standard and the standard for determining completion of the
Remedial Actions set forth on Schedule 7.14.
Section 7.15 Guarulhos Site Services Agreement. At the Closing,
Purchaser and Pfizer shall enter into, execute and deliver a site services
agreement relating to the Guarulhos, Brazil Facility in form and substance
reasonably satisfactory to each of them substantially upon the principal terms
set forth in Exhibit I (the "Guarulhos Site Services Agreement").
Section 7.16 European Communities and Denmark Actions. Purchaser
acknowledges that Pfizer has previously commenced an action in the Court of
First Instance of the European Communities challenging the validity of Council
Regulation No. 2821/98 which, inter alia, withdrew the authorization pursuant to
Directive 70/524/EEC for the use of Virginiamycin as a feed additive for growth
promotion in the European Union and that there are two (2) actions pending in
Denmark as set forth on Schedule 7.16 relating to Virginiamycin (collectively,
the "Virginiamycin Actions"). Purchaser agrees that, after the Closing Date,
Pfizer shall continue to control the prosecution of the Virginiamycin Actions
and Purchaser agrees to make its personnel available to Pfizer to provide
assistance to Pfizer on matters related to the actions and provide Pfizer, its
agents, employees or consultants access to its books and records as they may
relate to the actions until such time as (i) Pfizer obtains a favorable or final
non-appealable judgment or (ii) Pfizer abandons the actions. Purchaser agrees
that Pfizer shall have no obligation to continue to prosecute the Virginiamycin
Actions and can abandon any of the actions at any time in its sole discretion,
provided that Pfizer agrees to
52
provide notice to Purchaser of any decision to abandon any such action. If
Pfizer determines to abandon one or more of the Virginiamycin Actions, Pfizer
shall, at Purchaser's request, assign to Purchaser, to the extent practicable,
any rights it may have with respect to any such action so that Purchaser can
continue to prosecute the action in Pfizer's stead. In such event, Purchaser
shall control the prosecution of any such action abandoned by Pfizer and Pfizer
agrees, at the expense of Purchaser, to make its personnel available in response
to reasonable requests of Purchaser to provide assistance to Purchaser on
matters related to any such action and to provide Purchaser, its agents,
employees or consultants, reasonable access to its books and records as they
relate to any such action. Pfizer will provide Purchaser with status updates
regarding the Virginiamycin Actions on a semi-annual basis or as material
developments occur.
Section 7.17 Aviax mycelium (US). Pfizer will conduct, report and
submit to the Center for Veterinarian Medicine ("CVM") within 12 months of the
Closing, all studies indicated in the most recent "incomplete letters" relating
to Aviax mycelium (US) from the CVM. Pfizer will provide answers to any
follow-up questions that result from the response to the aforementioned
incomplete letters. At such time that CVM acknowledges that a satisfactory
response has been provided to the current incomplete letters and there are no
additional questions stemming from Pfizer's response to follow-up questions,
Purchaser will assume full regulatory and development responsibilities for any
new questions and for the administrative approval of Aviax (semduramicin)
mycelium. Pfizer will be available to serve on a consulting basis for any
additional questions that may be raised by the CVM. However, Pfizer will not be
required to and will not bear additional costs associated with study conduct. In
the event that a question is posed that can only be answered by using Pfizer
internal expertise, the parties will discuss a mutually agreeable manner in
which to proceed.
Section 7.18 Regulatory Matters. Subject to the provisions of the
Transitional Services Agreement, upon transfer of the Product Registrations to
Purchaser, Purchaser shall assume the regulatory responsibilities applicable to
the owner of the Products, reporting and otherwise, except such responsibilities
as Pfizer may have under applicable Law. Subject to appropriate confidentiality
protections, Pfizer shall maintain an archival copy of all clinical studies,
data, and reports transferred pursuant to this Agreement.
Section 7.19 Certain Manufacturing Rights. Notwithstanding anything
in this Agreement to the contrary, including, without limitation, Section 7.6
hereof, Purchaser agrees that Pfizer from and after the Closing Date may
continue to manufacture in Taiwan certain non-medicated premixes listed on
Schedule 7.19 hereof, which manufactured premixes Purchaser shall have the
option to purchase and distribute at such price and other terms as to be
mutually agreed between Pfizer and Purchaser. If Purchaser does not elect to
purchase and distribute the manufactured premixes or the parties do not reach
mutually agreeable terms, Pfizer shall have the right to sell the manufactured
premixes to any one or more third Persons on such terms as Pfizer may determine
in its sole discretion.
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
Section 7.20 Supply/Distribution Agreements. At the Closing,
Purchaser and Pfizer shall enter into, execute and deliver supply and/or
distribution agreements in form and substance reasonably satisfactory to each of
them substantially upon the principal terms set forth in Exhibits L-1 and L-2
(the "Supply/Distribution Agreements") in respect of the supply and distribution
of the Products for sale in Egypt and India, Bangladesh, Nepal and Sri Lanka.
With respect to Taiwan and Zimbabwe, Purchaser will continue to negotiate the
terms of distribution arrangements in these countries with the Pfizer employees
who expect to take over the distribution of Products, with a target for
completing those negotiations by thirty (30) days after the execution of this
Agreement. Upon the Closing, if the employees in Taiwan and Zimbabwe are not in
a position to distribute Products on behalf of Purchaser, Pfizer will either
enter into substantially identical distribution agreements with Purchaser and
assign these agreements to the employees (or their designated entities) when
they are in a position to distribute Purchaser's Products or, if mutually agreed
by both parties, operate the Business in these countries under the terms of a
"net economic benefit" letter agreement in substantially the form of Exhibit J
with appropriate revisions to be agreed to by the parties.
Section 7.21 (a) [ * ]
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
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(c) [ * ]
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Section 7.22 Returned Products.
(a) [ * ]
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(b) [ * ]
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
(e) [ * ]
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(f) [ * ]
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Section 7.23 Lee's Summit Additional Support Services. Pfizer shall
provide technical support to Purchaser to assist in the transfer of production
of Product to alternative sources of supply as designated by Purchaser.
Purchaser will provide Pfizer with the details of its plans for the transfer
within ninety(90) days after the Closing Date, including the sources of
commercial neomycin sulfate and OTC (which will include samples for evaluation),
a list of all of the formulations that Pfizer will be asked to assist in
qualifying and the name of the laboratory that Pfizer will be asked to assist in
qualifying. As a part of this support, Pfizer shall provide, at no cost to
Purchaser, analytical/laboratory and manufacturing services to support the
following projects: (i) substitution of Sandwich, UK-sourced TMQ for Terre
Haute-sourced TMQ; (ii) replacement of Terre Haute-sourced Neomycin Sulfate with
purchased Neomycin Sulfate; (iii) substitution of purchased OTC base for TMQ;
(iv) alternate formulation site approvals, and (v) alternate lab approvals, all
to the extent as set forth on Schedule 7.23. Purchaser acknowledges that the
provision by Pfizer of the services provided for in this Section 7.23 will not
guarantee the receipt by Purchaser of the necessary FDA approvals for the
transfer of production or that Purchaser otherwise will be successful in
achieving its goals with respect to these projects.
Section 7.24 Limitations on Refinancings, Etc. For so long as any
amounts remain outstanding under the Purchaser's Note, Purchaser agrees that it
will not (x) refinance, replace or modify the debt and equity facilities under
the PNC Credit Agreement and/or Palladium Preferred Stock or (y) enter into new
arrangements with debt and/or equity financing sources, in each case on terms
that would be, in the reasonable judgment of Pfizer, less favorable as they
relate to the priority of payment of, collateral security for, and payment
schedule of the Purchaser's Note than the terms of the borrowings under the PNC
Credit Agreement and the Palladium Preferred Stock.
Section 7.25 Morantel/Pyrantel. [ * ]
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56
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification by Pfizer.
(a) Pfizer, on behalf of itself and the Asset Selling Corporations,
agrees to defend, indemnify and hold harmless Purchaser and its Affiliates, and
their respective directors, officers, agents, employees, successors and
permitted assigns (collectively, the "Purchaser Indemnified Parties") from and
against any and all claims, actions, causes of action, judgments, awards,
liabilities, losses, costs or damages, including reasonable attorneys' fees
(collectively, a "Loss" or, the "Losses") claimed or arising from: (i) any
Retained Liability, (ii) any Excluded Environmental Liabilities, (iii) any
breach by Pfizer or any of the other Asset Selling Corporations of any of their
respective covenants or agreements contained in this Agreement or in any
Sellers' Document, including, without limitation, the Rixensart Agreement, (iv)
any breach of any warranty or representation of Pfizer contained in this
Agreement or in any Sellers' Document, including, without limitation, the
Rixensart Agreement or (v) Pfizer's failure to comply with the covenants set
forth in Section 7.14 and Schedule 7.14.
(b) Purchaser acknowledges and agrees that Pfizer shall not have any
liability under any provision of this Agreement for any Environmental Liability
to the extent that such Environmental Liability arises out of any negligent
actions taken by Purchaser or its Affiliates after the Closing Date, except to
the extent Purchaser's action is required by Law or the requirements of a
Governmental Authority. Purchaser shall take and shall cause its Affiliates to
take all reasonable steps to mitigate any Loss upon becoming aware of any event
which would reasonably be expected to, or does, give rise thereto.
(c) Notwithstanding anything to the contrary in this Article VIII,
Pfizer shall not be required to indemnify Purchaser or its Affiliates for any
Loss under Section 8.1(a)(ii) that falls under subparagraphs (iii), (iv) or (vi)
of the definition of Excluded Environmental Liabilities or is an Environmental
Liability set forth in Schedule 7.14 following the completion of the Scheduled
Environmental Commitment relating thereto, except to the extent any such
Environmental Liability exceeds, with respect to subparagraphs (iii) or (vi)
only of the definition of Excluded Environmental Liability, $25,000 for any
individual Environmental Liability (i.e., this individual Environmental
Liability threshold does not apply to fines and penalties covered by
subparagraph (iv)) or, with respect to subparagraphs (iii), (iv) and (vi) of the
definition of Excluded Environmental Liability, $100,000 for all such Losses, in
the aggregate, and then further subject to the limitations set forth in Sections
8.5 and 8.6 to the extent applicable. Further, the obligation of Pfizer to
indemnify Purchaser or its Affiliates for any Environmental Liability under
Section 8.1(a)(iv) by reason of a breach of any representation or warranty
contained in Section 5.10 hereof shall be subject to the same provisions of this
Article VIII as are applicable to Pfizer's obligation to indemnify Purchaser or
its Affiliates for any such Environmental Liability under Section 8.1(a)(ii)
57
that also would constitute an Excluded Environmental Liability (e.g., any such
breach that is of a nature that falls under subparagraphs (iii), (iv) and (vi)
of the definition of Excluded Environmental Liabilities would be subject to the
provisions of the preceding sentence).
Section 8.2 Indemnification by Purchaser.
(a) Purchaser agrees to defend, indemnify and hold harmless Pfizer
and the other Asset Selling Corporations and their Affiliates, and their
respective directors, officers, agents, employees, successors and permitted
assigns from and against any and all Losses claimed or arising directly from (i)
any Assumed Liability, (ii) any breach by Purchaser of any of its covenants or
agreements in this Agreement or in any Purchaser's Document or (iii) any breach
of any warranty or representation of Purchaser contained in this Agreement or in
any Purchaser's Document.
(b) Pfizer and the other Asset Selling Corporations shall take and
shall cause their respective Affiliates to take all commercially reasonable
steps to mitigate any Loss upon becoming aware of any event which would
reasonably be expected to, or does, give rise thereto.
Section 8.3 Notice of Claims.
(a) If any of the Persons to be indemnified under this Article VIII
(the "Indemnified Party") has suffered or incurred any Loss, the Indemnified
Party shall so notify the party from whom indemnification is sought (the
"Indemnifying Party") promptly in writing describing such Loss, the amount or
estimated amount thereof, if known or reasonably capable of estimation, and the
method of computation of such Loss, all with reasonable particularity and
containing a reference to the provisions of this Agreement or any other
agreement, instrument or certificate delivered pursuant hereto in respect of
which such Loss shall have occurred. If any action at Law or suit in equity is
instituted by or against a third party with respect to which the Indemnified
Party intends to claim any liability or expense as a Loss under this Article
VIII, the Indemnified Party shall promptly notify the Indemnifying Party of such
action or suit and tender the Indemnified Party the defense of such action or
suit. A failure to give notice and to tender the defense of the action or suit
in a timely manner pursuant to this Section 8.3 shall not limit the obligation
of the Indemnifying Party under this Article VIII, except (i) to the extent such
Indemnifying Party is prejudiced thereby, (ii) to the extent expenses are
incurred during the period in which notice was not provided, and (iii) as
provided by Section 8.5 below.
(b) Except when a notice, report or other filing must be filed
immediately pursuant to Environmental Laws, Purchaser will provide notice and an
opportunity to comment to Pfizer before Purchaser files any Required
Governmental Report or any other report, notification or filing with any
Governmental Authority or third party in connection with an event that would be
reasonably likely to result in a Loss subject to the indemnification provisions
of this Article VIII. In the event Purchaser is
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required to file a Required Governmental Report or any other report,
notification or filing immediately, Purchaser will provide simultaneous notice
to Pfizer when it files the report with the Governmental Authority. Failure to
comply with this Section 8.3(b) shall only affect Pfizer's obligation under this
Article VIII to the extent that Pfizer is materially prejudiced by the failure
to have been provided timely notice.
Section 8.4 Third Party Claims.
(a) The Indemnifying Party under this Article VIII shall have the
right, but not the obligation, to conduct and control, through counsel of its
choosing, any third party claim, action or suit (a "Third Party Claim"), and the
Indemnifying Party may compromise or settle the same, provided that the
Indemnifying Party shall give the Indemnified Party advance notice of any
proposed compromise of settlement. No Indemnified Party may compromise or settle
any Third Party Claim for which it is seeking indemnification hereunder without
the consent of the Indemnifying Party. The Indemnifying Party shall permit the
Indemnified Party to participate in, but not control, the defense of any such
action or suit through counsel chosen by the Indemnified Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnified Party.
If the Indemnifying Party elects not to, or fails within forty-five (45) days of
receipt of written notice from the Indemnified Party of a Third Party Claim to,
control or conduct the defense or prosecution of a Third Party Claim, the
Indemnified Party shall have the right to conduct and control the defense or
prosecution of the Third Party Claim and, at the expense of the Indemnifying
Party, to employ counsel for such purpose chosen by the Indemnified Party and
reasonably satisfactory to the Indemnifying Party.
(b) The parties hereto shall cooperate in the defense or prosecution
of any Third Party Claim, with such cooperation to include (i) the retention and
the provision to the Indemnifying Party of records and information that are
reasonably relevant to such Third Party Claim, and (ii) the making available of
employees on a mutually convenient basis for providing additional information
and explanation of any material provided hereunder.
Section 8.5 Expiration. Notwithstanding anything in this Agreement
to the contrary, if the Closing shall have occurred, all covenants, agreements,
warranties and representations made herein or in any Sellers' Document or
Purchaser's Document delivered pursuant hereto shall survive the Closing
indefinitely, but all representations and warranties made herein or in any
certificate delivered pursuant hereto, and all indemnification obligations under
Sections 8.1 and 8.2 with respect to any such representation or warranty, shall
terminate and expire on, and no action or proceeding seeking damages or other
relief for breach of any thereof or for any misrepresentation or inaccuracy with
respect thereto shall be commenced after, the second anniversary of the Closing
Date with respect to all claims of any party, and of any indemnified persons
under this Article VIII, unless written notice thereof shall have been
previously given to the Indemnifying Party under Section 8.3; provided, however,
(x) as to indemnification obligations under Section 8.1(a)(ii) with respect to
subparagraphs (i) and (ii) of the definition of Excluded Environmental
Liabilities, such obligations shall not terminate and
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shall not expire and shall survive indefinitely, (y) as to indemnification
obligations under Section 8.1(a)(ii) with respect to subparagraphs (iii) and
(vi) of the definition of Excluded Environmental Liabilities, such obligations
shall terminate and expire on, and no action or proceeding seeking damages,
relief or indemnity with respect thereto shall be commenced, after the fifth
anniversary of the Closing Date unless written notice thereof shall have been
previously given to Pfizer under Section 8.3, (yy) as to indemnification
obligations under Section 8.1(a)(ii) with respect to subparagraph (iv) of the
definition of Excluded Environmental Liabilities, such obligations shall
terminate and expire on, and no action or proceedings seeking damages, relief or
indemnity with respect thereto shall be commenced after the sixth anniversary of
the Closing Date and (z) as to indemnification obligations under Section
8.1(a)(ii) with respect to subparagraph (v) of the definition of Excluded
Environmental Liabilities that arise following completion of the Scheduled
Environmental Commitments set forth in Section 7.14, such obligations shall
terminate and expire and no action or proceeding seeking damages, relief or
indemnity with respect thereto shall be commenced, after the fifth anniversary
following completion of the Scheduled Environmental Commitments, unless written
notice thereof shall have been previously given to Pfizer under Section 8.3; and
(zz) as to indemnification obligations under Sections 8.1(a)(iv) and
8.2(a)(iii), such obligations shall terminate and expire on, and no action or
proceeding seeking damages, relief or indemnity with respect thereto shall be
commenced, after the second anniversary of the Closing Date (except for actions
or proceedings relating to the representations and warranties contained in
Sections 5.2 and 5.14, which shall survive indefinitely, and Section 5.10, which
shall survive until the fifth anniversary of the Closing Date), unless written
notice thereof shall have been previously given to the Indemnifying Party under
Section 8.3. Notwithstanding the foregoing, if the Belgian Facility is not
transferred to Purchaser within six months from the Closing, then Pfizer's
obligations to indemnify the Purchaser Indemnified Parties in respect of
subparagraphs (iii), (iv) and (vi) of the definition of Excluded Environmental
Liabilities and breaches of Section 5.10, in each case pertaining to occurrences
at the Belgian Facility, shall, instead of expiring on the fifth and sixth
anniversaries of the Closing Date as provided above, instead expire on the fifth
and sixth anniversaries, respectively, after the transfer date of the Belgian
Facility.
Section 8.6 Certain Limitations. (a) Notwithstanding anything in
this Agreement to the contrary, (A) Pfizer shall not have any obligation to
indemnify any Purchaser Indemnified Party under Section 8.1(a) (iv) for Losses
unless the aggregate of all such Losses for which Pfizer would, but for this
provision, be liable exceeds on a cumulative basis $750,000, in which event
Pfizer shall be responsible only for Losses in excess of $750,000 and (B) Pfizer
shall not have any obligation to indemnify any Purchaser Indemnified Party under
Section 8.1(a) (iv) for Losses on a cumulative basis, including Losses incurred
by any other Purchaser Indemnified Party, in excess of an amount equal to the
Closing Date Payment less any (x) reductions in the principal amount of the
Purchaser's Note, (y) credits against the payments otherwise due and owing
pursuant to Section 2.6(b), and (z) payments made by Pfizer to Purchaser, each
of (x), (y) and (z) pursuant to Section 2.7(d).
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(b) With respect to Environmental Claims (as defined herein) seeking
additional Remedial Action arising from unknown or unforeseen conditions related
to a Scheduled Environmental Commitment following the completion of such
Scheduled Environmental Commitment, Pfizer's indemnification obligations shall
be subject to the following cost sharing: (i) if an Environmental Claim is
asserted in the first year following completion of a Scheduled Environmental
Commitment, Pfizer shall bear seventy-five percent (75%) of the costs and
Purchaser twenty-five percent (25%) of the costs; (ii) if an Environmental Claim
is asserted in the second or third year following completion of a Scheduled
Environmental Commitment, Pfizer shall bear fifty percent (50%) of the costs and
Purchaser fifty percent (50%) of the costs; and (iii) if an Environmental Claim
is asserted in the fourth or fifth year following completion of a Scheduled
Environmental Commitment, Pfizer shall bear twenty-five percent (25%) of the
costs and Purchaser seventy-five percent (75%) of the costs. With respect to any
Environmental Claims asserted in the sixth year or thereafter following
completion of a Scheduled Environmental Commitment, Purchaser shall bear all
costs of additional Remedial Actions. For purposes of this Section,
"Environmental Claim" means any notice of violation, action, claim, demand,
abatement or other order or direction (conditional or otherwise) arising under
Environmental Laws by any Governmental Authority or any other Person.
Section 8.7 Losses Net of Insurance, Etc. The amount of any Loss for
which indemnification is provided under Sections 8.1 or 8.2 (the "Specified
Sections") shall be net of (i) any amounts recovered by the Indemnified Party
pursuant to any indemnification by or indemnification agreement with any third
Person, (ii) any insurance proceeds or other cash receipts or sources of
reimbursement received from any third Person as an offset against such Loss
(each Person named in clauses (i) and (ii), a "Collateral Source"), and (iii) an
amount equal to the value of the Tax benefit, if any, attributable to such Loss
recognized and received by Purchaser in the year in which the indemnification
payment is recognized and received by Purchaser. Indemnification under this
Article VIII shall not be available to Purchaser or Pfizer, as the case may be,
unless the party seeking indemnification under this Article VIII first uses all
reasonable efforts to seek recovery from all Collateral Sources. The
Indemnifying Party may require an Indemnified Party to assign the rights to seek
recovery pursuant to the preceding sentence to the Indemnifying Party; provided,
that the Indemnifying Party will then be responsible for pursuing such claim at
its own expense. If the amount to be netted hereunder from any payment required
under Sections 8.1 or 8.2 is determined after payment by the Indemnifying Party
of any amount otherwise required to be paid to an Indemnified Party pursuant to
this Article VIII, the Indemnified Party shall repay to the Indemnifying Party,
promptly after such determination, any amount that the Indemnifying Party would
not have had to pay pursuant to this Article VIII had such determination been
made at the time of such payment. All amounts paid by Pfizer or Purchaser under
this Article VIII shall be treated for all Tax purposes as adjustments to the
Purchase Price, except to the extent such treatment is not recognized by
applicable Tax Governmental Authorities, in which case the Indemnifying Party's
indemnification obligation shall be increased such that the indemnification
payment less the income
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Taxes payable by the Indemnified Party with respect to the inclusion of such
amount in the Indemnified Party's Taxable income equals the Loss giving rise to
the indemnification payment.
Section 8.8 Other Limitations. No claim for breach of representation
or warranty shall be made by Purchaser under Section 8.1(a)(iv) if Closing
occurs and (a) such claim is based on a fact or an event occurring prior to
Closing (whether or not also occurring prior to the date of this Agreement), (b)
such fact or event was disclosed to Purchaser by Pfizer in writing prior to
Closing and (c) such fact or event would render the condition precedent set
forth in Section 4.2(a) incapable of being satisfied on the date it was
disclosed to Purchaser.
Section 8.9 Sole Remedy/Waiver. Other than the remedies available in
respect of the Rixensart Agreement, the parties hereto acknowledge and agree
that the remedies provided for in this Agreement shall be the parties' sole and
exclusive remedy with respect to the subject matter of this Agreement. In
furtherance of the foregoing, the parties hereby waive, to the fullest extent
permitted by applicable Law, any and all other rights, claims and causes of
action (including rights of contributions, if any) known or unknown, foreseen or
unforeseen, which exist or may arise in the future, that it may have against the
Asset Selling Corporations or any of their Affiliates, or Purchaser or any of
its Affiliates, as the case may be, arising under or based upon any federal,
state or local Law (including, without limitation, any such Law relating to
environmental matters or arising under or based upon any securities Law, common
law or otherwise). The Rixensart Agreement shall be the sole remedy for
Purchaser regarding Remedial Action at that Facility that was not attributable
to Pfizer.
Section 8.10 Indemnification Procedures for Remedial Actions on
Conveyed Properties.
(a) Other than Scheduled Environmental Commitments set forth in
Section 7.14 and Schedule 7.14, Pfizer shall have the right but not the
obligation to conduct and control the management of a Remedial Action at a
property included in the Conveyed Assets (a "Conveyed Property") that is subject
to a claim for indemnification pursuant to this Agreement. Pfizer must notify
Purchaser, within thirty (30) days of receipt of notice of Purchaser's claim for
indemnification for such matter, that (i) it intends to undertake said
responsibility or (ii) that more information is needed from Purchaser before
Pfizer can reasonably determine that Purchaser's claim is subject to
indemnification pursuant to this Agreement. Purchaser shall promptly respond to
such requests for information (to the extent such information is reasonably
available to Purchaser) and, within thirty (30) days of receipt of such
information, Pfizer shall notify Purchaser as to whether it shall undertake the
Remedial Action. Prior to a determination by Pfizer that it will undertake a
Remedial Action pursuant to this Section 8.10, Purchaser shall take only those
actions necessary to comply with applicable Environmental Laws or the
requirements of a Governmental Authority or to address conditions that pose an
imminent risk to health or the environmental, unless any other actions are
approved by Pfizer.
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(b) In undertaking a Remedial Action pursuant to this Section 8.10,
Pfizer shall retain a qualified independent environmental consultant, which
consultant shall be subject to Purchaser's approval (such approval not to be
unreasonably delayed or withheld). Pfizer shall undertake such Remedial Action
in a prompt and expeditious fashion in accordance with applicable Environmental
Laws and shall not cause, through its own inaction, any undue delay in obtaining
and shall obtain written notice from the appropriate Governmental Authority that
no further Remedial Action is necessary with respect to the matter that is the
subject of the indemnification claim to meet the Applicable Remedial Action
Standards, or, if no Governmental Authority is involved in such matter, the
standard set forth in Section 8.11 for determining when a Remedial Action being
undertaken by Pfizer is completed shall govern. Pfizer shall comply with all
applicable Laws, including all applicable Environmental Laws, with respect to
its performance pursuant to this Section 8.10. All decisions relating to such
Remedial Action shall be made by Pfizer. Pfizer shall consult with Purchaser on
all material decisions relating to such Remedial Action, including but not
limited to, negotiations with regulatory authorities and the development and
implementation of work plans. Pfizer shall keep Purchaser regularly informed
concerning its undertaking of such Remedial Action and shall consult regularly
with Purchaser, and solicit Purchaser's comments, on the development and
implementation of the plans for the undertaking of such Remedial Action. Pfizer
shall seriously consider Purchaser's comments on its plans or proposals and
shall use reasonable efforts to incorporate Purchaser's reasonable comments into
the development and implementation of the plans for the undertaking of such
Remedial Action. Pfizer shall provide to Purchaser copies of all material
written notices, correspondence with and submissions to Governmental
Authorities, work plans, data, sampling results and final reports concerning
such Remedial Action. Pfizer shall, to the extent practicable, minimize the
disruptive impact of such Remedial Action upon the operations of Purchaser.
Purchaser shall provide Pfizer, its agents, employees, and consultants with
reasonable access to the Facilities to carry out such Remedial Action, which
shall be at Pfizer's expense and upon reasonable notice to Purchaser. Purchaser
will cooperate with Pfizer in the implementation of such Remedial Action,
including providing reasonable access to employees and documents as necessary.
(c) Except with respect to Scheduled Environmental Commitments set
forth on Schedule 7.14, to which this subparagraph does not apply, if Pfizer
declines to undertake the performance of a Remedial Action as provided in
Section 8.10(a), Purchaser shall be entitled to undertake the Remedial Action to
bring the Conveyed Property into conformance with the Applicable Remedial Action
Standards. Purchaser shall promptly provide copies to Pfizer of all notices,
correspondence, draft reports, submissions, work plans, and final reports and
shall give Pfizer a reasonable opportunity (at Pfizer's own expense) to comment
on any material submissions Purchaser intends to deliver or submit to the
appropriate Governmental Authority prior to said submission. Pfizer may, at its
own expense, hire its own consultants, attorneys or other professionals to
monitor the Remedial Action, including any field work undertaken by Purchaser,
and Purchaser shall provide to Pfizer the results of all such field work.
Notwithstanding the above, Pfizer shall not take any actions that shall
unreasonably interfere with Purchaser's
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performance of the Remedial Action. Pfizer's decision to allow Purchaser to
undertake any Remedial Action hereunder shall not limit or affect Pfizer's
obligation to indemnify Purchaser for said Remedial Action to bring the Conveyed
Property into conformance with the Applicable Remedial Action Standards as
otherwise provided in this Agreement.
Section 8.11 Limitation on Indemnification for Remedial Action.
(a) Notwithstanding anything to the contrary in this Agreement, with
respect to Pfizer's indemnification obligations under Section 8.1(a)(ii) with
respect to subparagraphs (iii) and (v) of the definition of Excluded
Environmental Liabilities and those indemnification obligations related to a
Scheduled Environmental Commitment following the completion of such Scheduled
Environmental Commitment: (x) Pfizer shall be responsible for the costs of such
Remedial Action only to the extent necessary to meet the least stringent, most
cost-effective standard required by applicable Environmental Law and consistent
with the use of the Facility or Conveyed Property as of the Closing Date, or a
standard pursuant to applicable Environmental Laws acceptable to the relevant
Governmental Authorities with jurisdiction over the Remedial Action (the
"Applicable Remedial Action Standard"), (y) Pfizer shall not be responsible for
those costs incurred in connection with a Remedial Action to the extent such
costs arise from or are exacerbated by any negligent acts or omissions of
Purchaser, (z) except with respect to Scheduled Environmental Commitments,
Pfizer shall not be responsible for costs incurred in connection with a Remedial
Action, unless such Remedial Action is pursuant to a Third Party Claim or a
violation of Environmental Law posing a non-trivial risk of harm to health,
safety or the environment reasonably likely to exceed $25,000 to cure or address
the violation and (zz) Pfizer shall be responsible only for Purchaser's
reasonable costs and expenses associated with the implementation of Pfizer's
obligations.
(b) With respect to any Remedial Actions undertaken by Pfizer under
this Agreement, including the Remedial Actions scheduled on Schedule 7.14 and
any Remedial Action Pfizer elects to undertake pursuant to Section 8.10,
Pfizer's obligations to perform such Remedial Action shall be deemed to be
complete: (x) upon receipt of written notice from the relevant Governmental
Authority indicating that no further Remedial Action is required to be conducted
(a "Governmental Sign-off") or, (y) if no Governmental Authority has asserted
jurisdiction or if for any other reason a Governmental Sign-off is not
obtainable, when Pfizer's and Purchaser's environmental consultants jointly
agree, in writing, that the Remedial Action has been completed in accordance
with the Applicable Remedial Action Standard; provided, however, that if
Pfizer's and Purchaser's environmental consultants are unable to reach such a
joint agreement, then Pfizer's and Purchaser's environmental consultants shall
jointly select an independent third environmental consultant (the "Independent
Consultant") acceptable to each of them and that Independent Consultant shall
review all relevant information provided by Pfizer and Purchaser and shall make
a determination, which determination shall be binding on both Pfizer and
Purchaser, as to whether the Remedial Action has achieved the Applicable
Remedial Action Standard and no further action is required. In the event the
Independent Consultant finds that additional work is required, the scope and
extent of that work shall be negotiated by the parties. All fees, costs and
expenses of the
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Independent Consultant shall be borne equally (50% each) by Pfizer and
Purchaser.
Section 8.12 No Consequential Damages.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO PARTY
TO THIS AGREEMENT SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO ANY OTHER PARTY
HERETO OR ANY AFFILIATE OF ANY OTHER PARTY HERETO FOR CONSEQUENTIAL, INCIDENTAL
OR PUNITIVE DAMAGES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH THEREOF OR ANY LIABILITY RETAINED OR ASSUMED HEREUNDER.
ARTICLE IX
TERMINATION
Section 9.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by written agreement of Purchaser and Pfizer;
(b) by either Purchaser or Pfizer, by giving written notice of such
termination to the other party, if the Closing shall not have occurred on or
prior to March 31, 2001 (unless the failure to consummate the Closing by such
date shall be due to the failure of the party seeking to terminate this
Agreement to have fulfilled any of its obligations under this Agreement); or
(c) by either Pfizer or Purchaser if any United States court of
competent jurisdiction or other competent United States Governmental Authority
shall have issued a Governmental Order or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such Governmental Order or other action shall have become
final and nonappealable.
Section 9.2 Effect of Termination.
(a) In the event of the termination of this Agreement in accordance
with Section 9.1 hereof, this Agreement shall thereafter become void and have no
effect, and no party hereto shall have any liability to the other party hereto
or their respective Affiliates, directors, officers or employees, except for the
obligations of the parties hereto contained in this Section 9.2 and in Sections
7.1(a), 10.1, 10.7, 10.8, 10.9 and 10.11 hereof, and except that nothing herein
will relieve any party from Liability for any breach of any covenant set forth
in this Agreement prior to such termination.
(b) In the event this Agreement shall be terminated and at such time
any party is in material breach of or default under any term or provision
hereof, such termination shall be without prejudice to, and shall not affect,
any and all rights to
65
damages that the other party may have hereunder or otherwise under applicable
Law. The damages recoverable by the non-defaulting party shall include, without
limiting the generality of the immediately preceding sentence, all attorneys'
fees and brokerage, finder's or other advisory fees reasonably incurred by such
parties in connection with the transactions contemplated hereby.
(c) If this Agreement is terminated in accordance with Section 9.1,
for a period of three (3) years after such termination, Purchaser and its
Affiliates shall not, directly or indirectly, induce or attempt to induce any
officers, employees, representatives or agents of Pfizer's Animal Health Group,
or any employees of Pfizer or any of its Affiliates which Purchaser, its
representatives or agents were introduced to in the connection with the
transactions contemplated by this Agreement, to leave the employ of Pfizer or
any such Affiliate, or violate the terms of their contracts, or any employment
arrangements, with Pfizer or any such Affiliate, except that nothing in this
sentence shall restrict or preclude the rights of Purchaser and its Affiliates
to make generalized searches for employees by the use of advertisements in the
media (including trade media) or by engaging search firms to engage in searches
that are not targeted or focused on the employees engaged in such activities.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by telecopier, provided that the telecopy is promptly
confirmed by telephone confirmation thereof, to the person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such person:
To Pfizer or any other Asset Selling Corporation:
Pfizer Inc.
235 East 42nd Street
New York, NY 10017
Telephone: 212-573-3637
Telecopy: 212-573-1445
Attn: Paul S. Miller, Esq.
Executive Vice President and
General Counsel
66
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Raymond O. Gietz, Esq.
To Purchaser:
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, NJ 07024
Telephone: 201-944-6020
Telecopy: 201-944-5937
Attn: Jack C. Bendheim,
President
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attn: Ronald R. Papa, Esq.
Section 10.2 Amendment; Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Pfizer, or in the case of
a waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 10.3 Assignment. No party to this Agreement may assign any
of its rights or obligations under this Agreement, including by sale of stock or
by operation of Law in connection with a merger or sale of all or substantially
all the party's assets, without the prior written consent of the other party
hereto, except that Purchaser may without such consent assign its rights to
purchase the Conveyed Assets hereunder to one or more of its Affiliates,
provided that no such assignment by Purchaser shall relieve Purchaser of any of
its obligations hereunder.
Section 10.4 Entire Agreement. This Agreement (including all
Schedules and Exhibits hereto) contains the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
except for the Confidentiality Agreement which will remain in full force and
effect for the term
67
provided for therein and other than any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.
Section 10.5 Fulfillment of Obligations. Any obligation of any party
to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section 10.6 Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any Person other than Pfizer, Purchaser, the other
Asset Selling Corporations and their successors or permitted assigns any rights
or remedies under or by reason of this Agreement.
Section 10.7 Public Disclosure. Notwithstanding anything herein to
the contrary, each of the parties to this Agreement hereby agrees with the other
parties hereto that, except as may be required to comply with the requirements
of any applicable Laws, and the rules and regulations of each stock exchange
upon which the securities of one of the parties is listed, if any, no press
release or similar public announcement or communication shall, if prior to the
Closing, be made or caused to be made concerning the execution or performance of
this Agreement unless the parties shall have consulted in advance with respect
thereto.
Section 10.8 Return of Information. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, Purchaser shall
promptly return to Pfizer all books and records furnished by Pfizer, any other
Asset Selling Corporation, any of their respective Affiliates or any of their
respective agents, employees, or representatives (including all copies,
summaries and abstracts, if any, thereof) in accordance with the terms of the
Confidentiality Agreement.
Section 10.9 Expenses. Except as otherwise expressly provided in
this Agreement, whether or not the transactions contemplated by this Agreement
are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the party
incurring such expenses. The liability for Taxes and fees relating to the
transfer of the Conveyed Assets as between Pfizer and Purchaser shall be borne
as follows: (x) in respect of any such Taxes and fees which are refundable to
Purchaser or in respect of which a credit is or becomes available to Purchaser,
by Purchaser; and (y) in respect of any other such Taxes and fees not falling
within subsection (x) above, by the Person having responsibility by Law,
provided that if any such Tax or fee which is eligible for a refund or a credit
to Purchaser becomes non-refundable or payable without credit as a result of
Purchaser's failing to take any action which is a condition to such eligibility,
such Tax or fee shall be borne by the Purchaser solely. Pfizer and Purchaser, as
the case may be, will on demand reimburse the other for its share of any such
Taxes and fees paid by the other in accordance with the foregoing provisions of
this Section.
68
Section 10.10 Schedules. Any amendment or supplement to a Schedule
must be approved by Purchaser. The disclosure of any matter in any Schedule to
this Agreement shall not be deemed to constitute an admission by Pfizer or any
other Asset Selling Corporation or Purchaser, or to otherwise imply, that any
such matter is material for the purposes of this Agreement.
Section 10.11 Governing Law. THE AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, BUT WITHOUT APPLICATION OF ITS RULES OF CONFLICT
OF LAWS. Pfizer and Purchaser hereby agree and consent to be subject to the
jurisdiction of the United States District Court for the Southern District of
New York and in the absence of such Federal jurisdiction, the parties consent to
be subject to the jurisdiction of the Supreme Court of the State of New York,
County of New York.
Section 10.12 Payments and Payment Currency. All payments required
to be made under this Agreement shall be made in U.S. dollars. For purposes of
determining any amounts to be paid under this Agreement, any amounts in foreign
currencies shall be converted into U.S. dollars at a rate equal to the average
of the prevailing commercial rates of exchange for purchasing U.S. dollars with
such foreign currency as published in The Financial Times during the calendar
quarter prior to the calendar quarter in which the payment is to be made, or in
the absence of publication of such prevailing commercial rates, the rate at
which the parties mutually agree. In the case of any payments pursuant to
Section 2.6 or 2.8 hereof, Purchaser shall include the relevant calculations of
such average exchange rate in each Net Revenues Schedule and Royalty Payments
Schedule.
Section 10.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same agreement.
Section 10.14 Headings. The heading references herein and the table
of contents hereto are for convenience purposes only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
Section 10.15 Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction
69
Section 10.16 Further Assurances. Each of Pfizer and Purchaser agree
that, from time to time, whether before, at or after the Closing Date, each of
them will execute and deliver such further instruments of conveyances and
transfer and take such other action as may be necessary to carry out the
purposes and intent of this Agreement, including, without limitation, effecting
the transfer to Purchaser of any assets that are identified after the Closing
Date as Conveyed Assets and were not transferred to Purchaser on the Closing
Date.
70
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
PFIZER INC. (on its own behalf and on
behalf of each Asset Selling Corporation)
By: /s/Brian W. Barrett
-------------------------------------
Name: Brian W. Barrett
Title: Vice President
PHILIPP BROTHERS CHEMICALS, INC.
By: /s/Jack C. Bendheim
-------------------------------------
Name: Jack C. Bendheim
Title: President
71
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
Schedule 7.3(d)(2)
Virginiamycin Supply Term Sheet
o Term - initial term of 7 years; renewable by PB for additional 7 year
term. Either party can terminate if PB has received necessary permits to
be able to operate the plant, i.e. conditions to transfer of plant have
been met.
o Cost - "VM Cost" shall include:
- Labor/Benefits for all Rix labor
- Salaries/Benefits for all Rix managers
- Supplies and Raw Materials
- Utilities
- Waste Disposal Costs
- Off-site warehouse lease
- - Depreciation of capital required to maintain plant and operations at Pfizer
Standards and any capital expenditure approved by PB
- Redundancy costs due to headcount reductions
o Excluded from VM Cost
- Environmental Remediation Work
- Off site allocations unless for functions that support the plant
operations directly, and that plant would otherwise have to provide for
itself, e.g. IT support for financial and payroll systems
o Plant Operating Committee - Pfizer and PB to designate 3 members each,
Pfizer to chair. Committee to meet quarterly or more often upon request of
either party and determine operating issues. Chair to have casting vote to
break any ties.
Issues to be handled:
- Plant volume
- Changes in headcount
- New volume (different products)
- Any issue having material effect on VM Cost or cost of other
products
o Operating Cost Savings to be passed through to PB upon implementation
o Pfizer to operate plant in accordance with Pfizer Maintenance and
Environmental, Health and Safety Standards ("Pfizer Standards")
o [ * ]
[ * ]
[ * ]
[ * ]
[ * ]
o PB shall have the right to use otherwise vacant office space at Rixensart
for use by sales, marketing and other commercial PB employees. If no such
office space is available, and PB wishes new office space to be built, the
parties will mutually agree upon the specification for
such space and the timing of PB's reimbursement of Pfizer for construction
and other capital costs.
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
SCHEDULE 7.21
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT.
[ * ]
[ * ]
[ * ]
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT.
Schedule 7.3(d)(2)
Virginiamycin Supply Term Sheet
o Term - initial term of 7 years; renewable by PB for additional 7 year
term. Either party can terminate if PB has received necessary permits to
be able to operate the plant, i.e. conditions to transfer of plant have
been met.
o Cost - "VM Cost" shall include:
- Labor/Benefits for all Rix labor
- Salaries/Benefits for all Rix managers
- Supplies and Raw Materials
- Utilities
- Waste Disposal Costs
- Off-site warehouse lease
- - Depreciation of capital required to maintain plant and operations at Pfizer
Standards and any capital expenditure approved by PB
- Redundancy costs due to headcount reductions
o Excluded from VM Cost
- Environmental Remediation Work
- Off site allocations unless for functions that support the plant
operations directly, and that plant would otherwise have to provide for
itself, e.g. IT support for financial and payroll systems
o Plant Operating Committee - Pfizer and PB to designate 3 members each,
Pfizer to chair. Committee to meet quarterly or more often upon request of
either party and determine operating issues. Chair to have casting vote to
break any ties.
Issues to be handled:
- Plant volume
- Changes in headcount
- New volume (different products)
- Any issue having material effect on VM Cost or cost of other
products
o Operating Cost Savings to be passed through to PB upon implementation
o Pfizer to operate plant in accordance with Pfizer Maintenance and
Environmental, Health and Safety Standards ("Pfizer Standards")
o [ * ]
[ * ]
[ * ]
[ * ]
[ * ]
o PB shall have the right to use otherwise vacant office space at Rixensart
for use by sales, marketing and other commercial PB employees. If no such
office space is available, and PB wishes new office space to be built, the
parties will mutually agree upon the specification for
such space and the timing of PB's reimbursement of Pfizer for construction
and other capital costs.
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
SCHEDULE 7.21
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
[ * ]
[ * ]
[ * ]
Exhibit A
List of instruments and documents to be provided by Pfizer:
(a) executed copies of the Transitional Services Agreement, the Pfizer Supply
and Tolling Agreement, the Transitional Trademark and Tradename License
Agreement, the Trademark License Agreement (Pfizer to Purchaser), the
Know-How License, the ARDICIN Agreement and the Guarulhos Site Services
Agreement;
(b) a receipt for the Closing Date Payment;
(c) a good standing certificate for each of the Asset Selling Corporations and
a certificate of the Secretary or an Assistant Secretary for the Asset
Selling Corporations as to the resolutions adopted by the Board of
Directors of each of the Asset Selling Corporations relating to the
transactions contemplated hereby;
(d) the certificate referred to in Section 4.2(a) hereof;
(e) Foreign Implementing Agreements;
(f) executed general warranty deeds, assignments, patent assignments (in
recordable form), a general trademark assignment, lease assignments (where
appropriate, in recordable or registrable form), bills of sale or
certificates of title, dated the Closing Date, transferring to Purchaser
all of each of the Asset Selling Corporation's right, title and interest
in and to the Conveyed Assets owned by it;
(g) the Belgian Supply Agreement, if applicable.
Exhibit B
List of instruments and documents to be provided by Purchaser:
(a) Executed assumption agreements and all other instruments appropriate to
evidence Purchaser's assumption of the Assumed Liabilities;
(b) executed copies of the Transitional Services Agreement, the Transitional
Trademark and Tradename License Agreement, the Trademark Agreement
(Purchaser to Pfizer), the Know-How License, the ARDICIN Agreement and the
Guarulhos Site Services Agreement;
(c) executed collateral documents evidencing Pfizer's first priority security
interest in the Brazilian and Belgium facilities and the foreign
inventories as collateral for repayment of the Purchaser's Note;
(d) a good standing certificate for Purchaser and a certificate of the
Secretary or an Assistant Secretary of Purchaser as to the resolutions
adopted by the Board of Directors of Purchaser relating to the
transactions contemplated hereby;
(e) the certificate referred to in Section 4.3(a) hereof;
(f) Foreign Implementing Agreements; and
(g) the Belgian Supply Agreement, if applicable.
EXHIBIT C
TRANSITIONAL SERVICES AGREEMENT
TRANSITIONAL SERVICES AGREEMENT, dated as of ___________ 2000 (this
"Agreement"), by and between Pfizer Inc, a Delaware corporation (together with
its Affiliates, "Pfizer"), and Philipp Brothers Chemicals, Inc., a New York
corporation (together with its Affiliates, "Buyer").
W I T N E S S E T H
WHEREAS, Pfizer and Buyer have entered into an Asset Purchase
Agreement, dated as of September 28, 2000 (the "Purchase Agreement"), whereby
Pfizer has agreed to sell (or cause the other Asset Selling Corporations to
sell), and Buyer has agreed to purchase, thc Conveyed Assets relating to the
Products (as each such term is defined in the Purchase Agreement);
WHEREAS, Section 7.7 of the Purchase Agreement provides for Pfizer
and Buyer to enter into an agreement relating to the provision by Pfizer of
certain transitional services to Buyer; and
WHEREAS, it is the intention of thc parties that Pfizer will provide
the Services provided for herein during the Services Period (as such terms are
hereinafter defined), subject to and on the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, the parties hereto agree as follows:
Section 1. Definitions
Capitalized terms used and not otherwise defined herein shall have
the meaning ascribed to those terms in the Purchase Agreement. The following
terms used herein have the following meanings:
"Fully Allocated Cost" shall mean all of Pfizer's costs, direct and
indirect, of providing the Services, including all labor, occupancy, material
expenditures and overhead, calculated and allocated on the same basis as such
costs were charged to the Business prior to Closing as set forth on Schedule 1
hereto.
"Locations" shall mean all of the locations described on Schedule 1
hereto.
"Services" shall mean the services listed on Schedule 1 hereto, as
more fully described on Exhibit A hereto, which Schedule and Exhibit are
incorporated herein by reference as if expressly set forth herein.
"Services Period" shall mean, with respect to a particular Service,
the period of time commencing on the date hereof and ending at the expiration of
the period of time such Service will be provided pursuant hereto as indicated in
Schedule 1 and/or Exhibit A hereto.
Section 2. Services
(a) Pfizer agrees to provide to Buyer and/or its Affiliates the
Services at the Locations during the applicable Services Period.
(b) Pfizer will perform, or will ensure that the Services are
performed, in a manner which is substantially similar in nature, quality and
timeliness to those provided to the Business prior to the Closing Date, except
as expressly set forth in Exhibit A hereto; provided, however, that Pfizer shall
provide or cause to be provided Services only to the extent such Services relate
to the Buyer's continued operation of the Business; provided, further, that
except as required by Section 5(d) hereof, Pfizer will not be required to
perform or to cause to be performed any of the Services for the benefit of any
third party or any other entity other than Buyer or any wholly owned subsidiary
or majority owned Affiliate of Buyer. Pfizer makes no other warranties, express
or implied, with respect to the Services.
(c) Services provided pursuant to the terms of this Agreement shall
be charged at prices equal to Pfizer's Fully Allocated Cost.
(d) Pfizer shall not be obligated to perform or to cause to be
performed any Service in a volume or quantity which exceeds the historical
volumes or quantities of Services performed for the Business. Pfizer may, upon
the written reasonable request of Buyer, elect to provide any Services in excess
of such historical volumes or quantities; provided, however, that Pfizer will be
reasonable in exercising its election to accommodate any such reasonable
request, all on the terms and conditions set forth herein. In the event Pfizer
agrees to any such reasonable request, Buyer shall pay the Fully Allocated Cost
for any such Services, including any incremental costs attributable to such
increased level of Service. In the event of non-performance of any Service due
to Force Majeure (as hereinafter defined), the parties agree to work together in
good faith to arrange for an alternative means by which Buyer may obtain, at
Buyer's sole cost, the Services so affected.
(e) At Buyer's request, Pfizer agrees to allow Buyer reasonable
access to Pfizer's employees that perform the Services (the "Services
Personnel") during the term of this Agreement, as well as the Pfizer personnel
responsible for the Services listed on Schedule 2, provided that with respect to
legal services, Buyer's "reasonable access" shall be limited to answering
inquiries as Buyer may request in the transfer of such services and that the
access to such personnel would not be deemed to be legal
representation of Buyer by Pfizer (and in no event shall Pfizer be required to
so undertake legal representation), for the purpose of assisting Buyer in the
operation of the Business and transferring the Services to Buyer or to third
parties designated by Buyer. Buyer agrees to schedule such access so as to
minimize disruption to such Services Personnel's employment obligations to
Pfizer. Buyer will reimburse Pfizer, promptly following Pfizer's delivery to
Buyer of supporting documentation, for any reasonable out-of-pocket expenses
incurred by Pfizer in connection with such assistance provided by the Services
Personnel (including, without limitation, documented reasonable travel
expenses).
(f) All existing contractual arrangements regarding the provision of
services between the Business and Pfizer or any of its Affiliates shall
terminate at Closing and shall be superseded at Closing, as appropriate, by this
Agreement and other agreements which Pfizer and Buyer have entered into
contemporaneously herewith.
Section 3. Reimbursement and Billing
Charges for Services (i) shall be charged to and payable by Buyer or
the recipient of the Services in the local currency where such Services are
provided, (ii) shall be billed monthly, on the fifteenth day of the month
following the month in which such Services were rendered, and (iii) shall be
paid within 30 days of the date billed and following receipt of supporting
documentation. Charges not paid on or before the due date shall bear interest
from the date such payment is due until the date it is actually received by
Pfizer at an annual rate equal to twelve percent (12%) in respect of the first
thirty (30) days from such due date and thereafter at two times the prime rate
announced from time to time by Chase Manhattan Bank, N.A. (or any successor
thereto).
Section 4. Term and Termination
(a) Notwithstanding anything to the contrary herein, Pfizer shall
not be required to provide or to cause to be provided any Services hereunder
after the last day of the [______ month] after the Closing Date.
(b) Buyer shall have the right at any time during the term of this
Agreement to terminate its obligation to purchase any individual Service, upon
the giving of not less than 30 days advance written notice to Pfizer.
Section 5. Miscellaneous
(a) Pfizer's maximum liability to, and the sole remedy of, Buyer for
breach of this Agreement shall be the greater of (i) a refund of the price paid
for the particular Service or (ii) Buyer's incremental cost of performing the
Service itself or (iii) Buyer's incremental cost of obtaining the Service from a
third party; provided, that Buyer shall exercise all reasonable efforts under
the circumstances to minimize the costs of any such alternatives to the Services
by selecting a commercially reasonable alternative which provides the functional
equivalent of the Services replaced. Notwithstanding anything to the contrary
herein, in no event shall Pfizer have any liability or loss of profit, goodwill
or other special or consequential damages as a result of provision of or failure
to provide the Services under the terms of this Agreement.
(b) Buyer shall indemnify, defend and hold harmless Pfizer and its
Affiliates from, against and in respect of any Losses imposed on, sustained,
incurred or suffered by or asserted against Pfizer or any of its Affiliates,
directly or indirectly relating to or arising out of any act or omission of
Buyer or any of its Affiliates in connection with their use of the Services,
except to the extent any Losses are due to the gross
negligence, willful misconduct or fraud of Pfizer or any of its Affiliates or a
failure by Pfizer to comply with its obligations under this Agreement. To the
extent Buyer may be obligated to indemnify Pfizer pursuant to this Section 5(b),
Pfizer shall take and cause its Affiliates to take all reasonable steps to
mitigate any Loss upon becoming aware of any event which would reasonably be
expected to, or does, give rise thereto, including incurring costs only to the
minimum extent necessary to remedy the breach which gives rise to the Loss.
(c) Neither party shall be responsible for failure or delay in
performance of any Services, nor shall either party be responsible for failure
or delay in receiving such Service, if caused by an act of God, act of public
enemy, war, government acts or regulations, fire, flood, hurricane, embargo,
quarantine, epidemic, labor stoppages beyond its reasonable control, accident,
explosion, unusually severe weather or other cause similar or dissimilar to the
foregoing beyond their control (herein called "Force Majeure"). Notwithstanding
the foregoing, to the extent Services are available after the occurrence of a
"Force Majeure" event, Buyer shall be entitled to, and Pfizer shall provide, a
level of Services equivalent to the proportionate share of Services used by the
Business immediately prior to the occurrence of any such Force Majeure event.
(d) Neither party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
party hereto. Notwithstanding the foregoing, (i) either party may assign its
rights and obligations with respect to the provision of Services hereunder to
any wholly owned subsidiary or majority owned Affiliate, provided, that any such
assignment shall terminate in the event such wholly owned subsidiary or majority
owned Affiliate ceases
to be such; and (ii) with the prior written consent of Pfizer (which shall not
be unreasonably withheld), Buyer may assign its rights and obligations with
respect to the provision of Services under this Agreement to any purchaser of
all or substantially all of the Business, so long as Buyer remains liable for
all (i) representations, warranties and agreements made herein and (ii) all
increased costs attributable thereto.
(e) Any term or provision of this Agreement may be waived, or the
time for its performance may be extended, by the party entitled to the benefit
thereof. The failure of any party hereto to enforce at any time any provision of
this Agreement shall not be construed as a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
(f) In the event of a conflict between the terms and conditions of
this Agreement and the terms and conditions of the Purchase Agreement, the terms
and conditions of the Purchase Agreement shall govern, supersede and prevail.
(g) This Agreement shall be governed and construed under the
substantive laws of the State of New York without reference to the conflicts of
laws principles thereof, except that for purposes of determining compliance with
or the existence of liabilities under Environmental Laws, the Environmental Laws
of the Governmental Authority with jurisdiction over the Real Property, Facility
or activity involved shall govern. Each party hereby irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County and (b) the United States District Court for the Southern District
of New York for the purposes of any suit, action
or other proceeding arising out of this Agreement or any transaction
contemplated hereby.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
(i) Each party recognizes that in the performance of this Agreement
confidential and/or proprietary information belonging to the other party
regarding the Services may be disclosed or become known to the other party or
its respective Affiliates ("Confidential Information"). Unless otherwise
expressed in writing to the other party, information, including that expressed
orally, that is exchanged between the parties shall be presumed to be
confidential and/or proprietary. Each party agrees to take such precautions as
it normally takes with its confidential and/or proprietary information to hold
in confidence for a period of ten (10) years after termination of this Agreement
any and all written confidential and/or proprietary information with respect to
the Services which belongs to the other party. Notwithstanding the foregoing,
each party shall hold all information regarding the other party's business
operations or business systems in trust and confidence for such other party and
not use it or disclose it to any person. In addition, each party shall hold all
confidential and proprietary information of other vendors with whom the other
party has a contractual or other business relationship in trust and confidence
for such other party and such vendors, shall not use or disclose such
information to any person. This obligation shall not apply to:
(A) information that, at the time of disclosure, is in the
public domain;
(B) information that, after disclosure, is published or
otherwise becomes part of the public domain through no fault of the party to
whom the information was disclosed;
(C) information that a party can show through its records was
in its possession or the possession of an Affiliate at the time of disclosure
(except for confidential information regarding the Business in Pfizer's
possession, which shall continue to be confidential): and
(D) information that may be received by a party in good faith
from a source other than the other party which source either has no duty of
non-disclosure to such other party or, if such source does have a duty of
non-disclosure, the receiving party was unaware of or had no reasonable basis
for knowing thereof.
(i) Each party shall maintain, however, the right to disclose such
information if required to do so by law, but shall endeavor to keep and assist
the other parties in keeping it confidential by all appropriate means. If a
party finds it necessary to disclose any such information in any judicial or
administrative hearing or proceeding, the party shall attempt to disclose such
information "in camera" or subject to "protective order" or on some other
non-public basis.
(ii) Upon termination of this Agreement, the parties shall return
each other's Confidential Information, provided that the parties shall be
entitled to retain one record copy in their legal departments to determine the
extent of their continuing obligations.
(j) All notices or other communications hereunder shall be deemed to
have been duly given (i) on the date of delivery if delivered personally, (ii)
on the date of
transmission if sent via facsimile transmission to the facsimile number given
below, and a telephone confirmation of receipt is obtained promptly after
completion of transmission; (iii) on the date after delivery to a reputable
nationally recognized overnight courier service; or (iv) three days after being
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
To Pfizer:
PFIZER INC
235 East 42nd Street
New York, New York 10017
Telephone: (212) 573-3637
Telecopy: (212) 573-1445
Attn: General Counsel
To Buyer:
PHILIPP BROTHERS CHEMICALS, INC.
One Parker Plaza
Fort Lee, New Jersey 07024
Telephone:
Telecopy:
Attn:
or to such other address as shall be specified by a party by notice to the other
party pursuant to this Section 5(j). All such notices and other communications
shall be deemed delivered, if sent by mail as aforesaid, on the second Business
Day after the mailing thereof on the date of delivery.
(k) This Agreement, including the schedules and exhibits attached
hereto, and the Purchase Agreement, including the schedules and exhibits
attached thereto, and the other agreements which Pfizer and Buyer have entered
into contemporaneously
herewith, constitute the entire agreement and understanding of the parties with
regard to the subject matter thereof and supersede any prior agreements,
understandings, negotiations, whether written or oral pertaining to the subject
matter hereof.
(l) This Agreement shall be binding upon and shall inure to the
benefit of and be enforceable by, the parties hereto and their respective
successors and permitted assigns. This Agreement is for the sole benefit of the
parties hereto and nothing in this Agreement, express or implied, is intended or
shall be construed to confer upon any Person other than Pfizer, Buyer, or their
successors or assigns permitted by Section 5(d), any right, remedy or claim
under or by reason of this Agreement.
(m) Pfizer shall provide to Buyer and its auditors and authorized
representatives such information relating to the Services and the accuracy of
fees invoiced (including the basis on which such fees were derived) as Buyer
shall from time to time reasonably request, and shall permit Buyer and its
auditors and authorized representatives reasonable access, during regular
business hours and upon reasonable notice, to Pfizer's books and records
relating to the Services for purposes of verifying the Services provided and the
charges therefor.
(n) Buyer, on the one hand, and Pfizer on the other, acknowledge
that they are separate entities, each of which has entered into this Agreement
for independent business reasons. The relationship of Pfizer and Buyer hereunder
is that of one independent contractor to another and nothing contained herein
shall be deemed to create a joint venture, partnership or any other
relationship.
(o) Both parties are obliged to undertake all reasonable efforts to
solve in an amiable way any controversy arising in connection with this
Agreement.
(p) Notwithstanding termination of this Agreement, Buyer shall
remain obligated to pay all amounts due and payable as of the date of
termination in the manner provided by this Agreement. Section 5(a) (limitations
of damages), 5(b) (indemnification) and 5(i) (confidentiality) shall survive
termination of this Agreement.
(q) Buyer shall cause its employees to comply with all of Pfizer's
security requirements at the Locations. Buyer agrees that all such employees
shall be treated as "contractors" at such Locations and, consequently, access to
unrelated areas thereat will be accordingly restricted by Pfizer.
(r) Buyer shall, if required by the terms of any agreement governing
the use of proprietary software and upon notice from Pfizer, be responsible for
obtaining and paying for any licenses in respect of such proprietary software of
a third party.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
executed as of the date first written above.
PFIZER INC.
By:_____________________________________
Name:
Title:
PHILIPP BROTHERS CHEMICALS, INC.
By:_____________________________________
Name:
Title:
SCHEDULE 1
Services
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Location Description of Service Services Period Fees
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SCHEDULE 2
Responsible Persons
EXHIBIT D.-1
TRANSITIONAL TRADEMARK AND TRADENAME LICENSE AGREEMENT
This TRADENAME AND TRADEMARK LICENSE AGREEMENT, dated as of this
____ day of ____________, 2000, is by and between Pfizer Inc., a Delaware
corporation ("Pfizer") (referred to herein, together with its Affiliates, as
"Licensor") and Philipp Brothers Chemicals, Inc., a New York corporation
(referred to herein, together with its Affiliates, as "Licensee").
RECITALS
WHEREAS, Licensor owns certain trademarks, tradenames and trade
dress which have heretofore been used by Licensor on or in connection with
certain products:
WHEREAS, Licensor and Licensee have entered into an Asset Purchase
Agreement dated as of September 28, 2000 (the "Asset Purchase Agreement"),
pursuant to which Licensor is selling certain assets relating to the Products
(as defined in the Asset Purchase Agreement) to Licensee;
WHEREAS, the assets being sold to Licensee pursuant to the Asset
Purchase Agreement include Inventories bearing certain trademarks and trade
names and trade dress that are owned by Licensor;
WHEREAS, Section 7.8(a) of the Asset Purchase Agreement provides
that Licensor and Licensee shall enter into an agreement in order to permit
Licensee to sell Inventories under certain trademarks, trade names and trade
dress for a transitional period; and
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth for such terms in the Asset Purchase Agreement. The
following terms used herein have the following meanings:
"Agreement" shall mean this Transitional Trademark and Tradename
License Agreement, as the same may be amended or supplemented from time to time
in accordance with the terms hereof.
"Closing" shall mean the closing of the transactions contemplated by
the Asset Purchase Agreement.
"Inventories" shall mean the Inventories in existence as of Closing.
"Licensed Intellectual Property" shall mean the Licensed Trademarks,
the Licensed Trade Names and the Licensed Trade Dress, collectively.
"Licensed Products" shall mean the Inventories.
"Licensed Trade Dress" shall mean Licensor's corporation logo and
the color scheme currently used by the Licensor and its subsidiaries, associates
and affiliates in connection with such corporation logo, and any other aspect of
Product Packaging in current use that constitutes protectible trade dress not
assigned to Licensee pursuant to the Asset Purchase Agreement.
"Licensed Trademarks" shall mean those unregistered or registered
trademarks listed on Schedule A hereto.
"Licensed Trade Names" shall mean those registered or unregistered
trade names set forth on Schedule A hereto.
"Product Packaging" shall mean any packaging, material or article
accompanying and/or affixed to the Licensed Products.
ARTICLE II.
GRANT OF LICENSE: BEST EFFORTS
2.1 Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee and its affiliates a nonexclusive, worldwide,
royalty-free right and license to use the Licensed Intellectual Property in
connection with the packaging, sale, marketing, and distribution of the Licensed
Products, but only to the extent the Licensed Intellectual Property was used by
Licensor for such purposes prior to the Closing in connection with the Licensed
Products.
2.2 Licensee shall not use any Licensed Intellectual Property in
connection with any articles of any description other than Licensed Products.
2.3 In the event there are omissions or errors in Schedule A hereto,
including, but not limited to the listing of Licensed Trademarks or the omission
of any trademark or trade name falling within the definition of a Licensed
Trademark or Licensed Trade Name, the parties shall modify Schedule A with
correct information.
2.4 The purpose of this Agreement is to provide Licensee with a
reasonable transitional period in which to substitute its own corporate
identification for the Licensed Intellectual Property. Licensee agrees to use
its commercially reasonable efforts throughout the term of this Agreement to
discontinue its use of the Licensed Intellectual Property as soon as
practicable.
ARTICLE III.
ASSIGNMENT; SUBLICENSING
3.1 Licensee shall not assign, transfer, sublicense or in any manner
convey all or any part of its rights or obligations under this Agreement to any
other party, without the prior written consent of Licensor.
ARTICLE IV.
TERM OF AGREEMENT
4.1 The term of this Agreement ("Term") shall commence as of the
date hereof and, unless sooner terminated in accordance with the terms hereof,
shall expire on the earlier of (i) Licensee's actual discontinuance of the use
of the Licensed Intellectual Property or (ii) two (2) years after the date
hereof; provided, however, that for this purpose, "actual discontinuance" means
such time when Licensee has completed the transfer of product registrations from
Licensor to Licensee, plus a reasonable time, not to exceed three (3) months, to
allow the utilization of packaging and bags that contain Licensor's name and
registration number.
ARTICLE V.
QUALITY CONTROL
5.1 Licensor shall have the right to exercise quality control over
the Licensed Products and Licensee's use of the Licensed Intellectual Property
to a degree necessary to maintain the validity of the Licensed Intellectual
Property and to protect the goodwill associated therewith. Licensor acknowledges
that the quality of the Licensed Products and Product Packaging sold by Licensor
prior to the Closing is adequate for this purpose. Accordingly, Licensee shall,
in its sale, marketing and distribution of the Licensed Products and Product
Packaging, adhere to a level of quality at least as high as that set by Licensor
for the sale, marketing and distribution of the Licensed Products and Product
Packaging prior to the Closing.
5.2 Licensee shall comply with all applicable laws and regulations
in the sale, distribution and marketing of the Licensed Products and Product
Packaging, and Licensee shall use all legends, notices, and markings as required
by law.
5.3 Licensee shall, upon reasonable request by Licensor, submit to
Licensor samples of Licensed Products and Product Packaging and representative
samples of all publicly distributed materials bearing the Licensed Intellectual
Property or Product Packaging which are then currently sold or distributed by
Licensee. In the event that Licensor finds that such samples of Licensed
Products or Product Packaging materially deviate from the Licensed Products or
Product Packaging as sold or distributed by Licensor prior to the Closing or
that such promotional or publicly distributed materials misuse the Licensed
Intellectual Property or misrepresent the Licensed Products in any material
respect, Licensee shall, upon notice from Licensor, immediately take steps which
are necessary to correct the deviations or misrepresentation in, or misuse of,
the
respective items; provided, however, in the event Licensor reasonably determines
that the defect poses a threat to public health or safety, or to the validity of
the Licensed Intellectual Property or to the goodwill associated herewith,
Licensee shall, upon notice from Licensor, immediately cease and desist all
distribution, sale and marketing of the nonconforming items, and shall
immediately direct its distributors and retailers to cease shipment and sale of
such nonconforming items. In addition, Licensor shall have the right to inspect
upon reasonable notice and during normal business hours such premises of
Licensee where applicable activities relating to the packaging, sale,
distribution or marketing of Licensed Products are conducted, subject to
appropriate confidentiality restrictions reasonably requested by Licensee, in
order to ensure the quality of the Product Packaging and Licensed Products
bearing the Licensed Intellectual Property.
5.4 Licensee shall otherwise endeavor to comply with such other
reasonable requests as are made by Licensor to enable Licensor to assure the
quality of the Licensed Products bearing the Licensed Intellectual Property.
ARTICLE VI.
USE OF LICENSED INTELLECTUAL PROPERTY
6.1 Licensee shall use the Licensed Intellectual Property in
accordance with sound trademark and trade name usage principles and in
accordance with all applicable laws and regulations as necessary to maintain the
validity and enforceability of the Licensed Intellectual Property. Licensee
shall not use any Licensed Intellectual Property in any manner which might
tarnish, disparage, or reflect adversely on Licensor or the Licensed
Intellectual Property.
6.2 Licensee shall not materially alter the appearance of the
Licensed Intellectual Property on Licensed Products or Product Packaging, or in
any advertising, marketing, distribution, or sales materials, or any other
publicly distributed materials, from the appearance of the Licensed Intellectual
Property used by Licensor in connection with the Licensed Products prior to the
Closing.
6.3 Licensee acknowledges that its rights to use the Licensed
Intellectual Property are nonexclusive. Licensee agrees that it shall cooperate
to avoid confusion or conflict arising out of Licensor's simultaneous use of the
Licensed Intellectual Property, and to resolve any such conflicts to the
satisfaction of Licensor.
ARTICLE VII.
PROPERTY OF LICENSOR
7.1 Licensee acknowledges that the Licensed Intellectual Property
and all rights therein (with the exception of those rights expressly granted to
Licensee hereunder) and the goodwill pertaining thereto belong exclusively to
Licensor. Licensee's use of the Licensed Intellectual Property shall inure to
the benefit of Licensor for all purposes, including trademark registration.
Without limiting the generality of the foregoing, Licensee shall not challenge
the validity of Licensor's ownership of the Licensed Intellectual Property or
any registration of application for registration thereof or
contest the fact that Licensee's rights under this Agreement are solely those of
a Licensee, which rights terminate upon expiration or termination of this
Agreement.
7.2 Licensor shall be responsible for the prosecution and
maintenance of registrations of the Licensed Intellectual Property, at
Licensor's expense. Licensee shall cooperate with Licensor, and shall execute
any documents required by Licensor and supply Licensor with a reasonable number
of specimens to assist Licensor, in the registration, enforcement, or
maintenance of any Licensed Intellectual Property or recordal of Licensee as a
registered user or Licensee.
7.3 Licensee agrees not to register, or attempt to register, the
Licensed Intellectual Property or any confusingly similar intellectual property
in its own name or any other name, or to use the Licensed Intellectual Property
in commerce other than as provided herein.
7.4 The provisions of this Article 7 shall survive the termination
of this Agreement.
ARTICLE VIII
PROTECTION OF THE LICENSED INTELLECTUAL PROPERTY
8.1 In the event that Licensee learns of any infringement or
unauthorized use of the Licensed Intellectual Property in connection with the
Licensed Products or similar products, it shall promptly notify Licensor.
Licensor shall have the sole initial right to bring infringement actions or
other similar proceedings against third parties in order to protect the Licensed
Intellectual Property. If requested to do so, Licensee shall reasonably
cooperate with Licensor in any such action, including but not limited to joining
the action as a party if necessary to maintain standing, at Licensor's expense.
Any award, or portion of an award, recovered by Licensor in any such action or
proceeding commenced by Licensor shall belong solely to Licensor after recovery
by both parties of their respective, actual out-of-pocket costs.
8.2 If Licensor determines not to take any such action, then
Licensee may take such action in its own name at its own expense; provided that
it first obtains the consent of Licensor and keeps Licensor informed of the
status of, and its respective activities regarding such action and any
settlement or other resolutions thereof. Licensor may cooperate with Licensee or
join such action at its sole discretion, at Licensee's expense. Any award
recovered by Licensee in any action or proceeding commenced by Licensee as
permitted herein shall belong solely to Licensee, after recovery by both parties
of their respective, actual out-of-pocket costs.
8.3 Licensor shall indemnify, defend and hold Licensee harmless from
and against any and all claims, losses, damages and associated legal expenses
arising out of any allegation that the Licensed Intellectual Property infringes
the rights of any third party. In the event of the institution of any
infringement action by a third party against Licensee for use of the Licensed
Intellectual Property in accordance with the provisions of this Agreement,
Licensee shall promptly notify Licensor of such action in writing.
Licensor shall have the obligation to join and control the defense of such
action at Licensor's expense, and Licensee shall cooperate in such defense as
requested by Licensor, at Licensee's expense. All judgments and settlements
resulting from such action shall be paid by the Licensor and any award received
by Licensor or Licensee in such an action shall belong solely to Licensor.
8.4 Licensee shall keep Licensor informed of the status of, and its
activities regarding, any litigation, and settlement or other resolution
thereof, concerning the Licensed Intellectual Property. No settlement or consent
judgment or other voluntary final disposition of any action defended or action
brought by Licensee may be entered into without the written consent of Licensor.
ARTICLE IX.
INDEMNIFICATION
9.1 Licensee shall indemnify, defend, and hold Licensor harmless
from and against any and all claims, losses, damages and associated legal
expenses arising out of Licensee's use of the Licensed Intellectual Property or
the manufacture, use, and sale of products or any product packaging under such
Licensed Intellectual Property, other than claims, losses, damages and
associated legal expenses for which the Licensor is responsible or is obligated
to indemnify, defend, and hold harmless Licensee pursuant to Section 8.3 hereof,
the provisions of the Pfizer Supply and Tolling Agreement, or the provisions of
the Asset Purchase Agreement.
9.2 The provisions of this Article IX shall survive the termination
of this Agreement.
ARTICLE X.
TERMINATION
10.1 In the event that either party commits a material breach of
this Agreement, the non-breaching party shall notify the breaching party of the
breach in writing. If the breaching party fails to cure the breach within thirty
(30) days from its receipt of such notice, or such lesser period set forth
herein (the "Cure Period"), the non-breaching party may, upon written notice
effective upon receipt, terminate this Agreement. Notwithstanding the foregoing,
however, if the breaching party is unable to cure its breach within the Cure
Period for reasons of Force Majeure, notice shall be given in compliance with
Article XIV herein.
ARTICLE XI.
CONSEQUENCE OF EXPIRATION OR
TERMINATION OF THIS AGREEMENT
11.1 Upon and after the expiration or termination of this Agreement
with respect to the Inventories:
(a) all rights granted to Licensee hereunder shall revert to
Licensor;
(b) Licensee shall cease all use of the Licensed Intellectual
Property or of any trademark, trade name or trade dress confusingly similar
thereto, and Licensee shall remove all uses of the Licensed Intellectual
Property from the applicable Licensed Products and destroy all remaining
applicable Product Packaging, signage, stationery, or other materials bearing
the Licensed Intellectual Property; and
(c) Licensee shall not make reference in its consumer or trade
advertising to having been formerly associated with or a licensee of Licensor
under the Licensed Intellectual Property.
11.2 The provisions of this Article XI shall survive the termination
of this Agreement.
ARTICLE XII.
REPRESENTATIONS AND WARRANTIES
12.1 Each party represents to the other party, respectively, that:
(i) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(ii) it has full corporate power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder;
(iii) the execution and delivery by it of this Agreement, and the
performance by it of its obligations hereunder have been duly authorized by all
requisite corporate action on the part of it, and no other corporate proceedings
on the part of it are required in connection with the execution, delivery and
performance by it of this Agreement; and
(iv) this Agreement constitutes a valid and legally binding
obligation of it, enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general equity
principles.
12.2 Licensor represents and warrants that:
(i) the Licensed Intellectual Property is free and clear of any
Liens; and
(ii) the registrations included in the Licensed Intellectual
Property are owned or controlled by Licensor and, to the Knowledge of Licensor,
are valid and in full force effect in those territories in which Licensor used
the applicable Licensed Intellectual Property as of the Closing.
ARTICLE XIII.
CHOICE OF LAW; FORUM
THE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT APPLICATION OF ITS RULES OF CONFLICT OF LAWS. LICENSOR AND
LICENSEE HEREBY AGREE AND CONSENT TO BE SUBJECT TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IN THE
ABSENCE OF SUCH FEDERAL JURISDICTION, THE PARTIES CONSENT TO BE SUBJECT TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK.
ARTICLE XIV.
FORCE MAJEURE
Neither Licensee nor Licensor shall be considered in default in the
performance of its obligations hereunder if such performance is prevented or
delayed because of war, hostilities, revolution, civil commotion, strike,
lock-out, epidemic, accident, fire, wind, flood, or because of any law, order,
proclamation, regulation, or ordinance of any government or of any subdivision
thereof, or because of any act of God, or any other unforeseeable act or action
of like character ("Force Majeure"); provided that notice of such Force Majeure
is given by the affected party to the other within seven (7) days of the
beginning of said Force Majeure or the date on which it becomes reasonably
apparent that the controlling event will create a state of Force Majeure.
ARTICLE XV.
MISCELLANEOUS
15.1 Notices. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by telecopier, provided that the telecopy is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
To Licensor:
PFIZER INC.
235 East 42nd Street
New York, NY 10017
Telephone: 212-573-3637
Telecopy: 212-573-1445
Attn: Paul S. Miller, Esq.
Executive Vice President and
General Counsel
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Raymond O. Gietz, Esq.
To Licensee:
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, NJ 07024
Telephone: 201-944-6020
Telecopy: 201-944-5937
Attn: Jack C. Bendheim,
President
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attn: Ronald R. Papa, Esq.
15.2 The termination or expiration of this Agreement for any reason
whatsoever shall not release any party hereto from any liability which at the
time of termination or expiration had already accrued to the other party in
respect to any act or omission prior thereto. The expiration or termination of
this Agreement for any reason shall not affect the continued operations or
enforcement of any provision of this Agreement which, by its express terms, is
to survive expiration or termination.
15.3 The parties hereto shall not directly or indirectly, disclose
or use at any time (either during or after the termination or expiration of the
term of this Agreement), except to or for the benefit of the other as such other
party may direct in writing, any confidential information of the other provided
in the context of the parties' relationship as Licensor and Licensee under this
Agreement, provided that the foregoing shall not apply to information that: (i)
is or hereafter becomes generally available to the public other than by reason
of any default with respect to confidentiality under this Agreement; (ii) is
disclosed to such party by a third party who is not in default of any
confidentiality obligation to the other party; (iii) is developed by or on
behalf of such party, without reliance on confidential information acquired from
the other party; (iv) is required to be disclosed in compliance with applicable
laws or regulations or order by a court of competent jurisdiction, provided that
reasonable measures shall be taken to assure confidential treatment of such
information; or (v) is provided by such party under
appropriate terms and conditions, including confidentiality provisions
equivalent to those in this Agreement, to third parties for consulting,
accounting, legal and similar purposes.
15.4 Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Licensor and Licensee, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
15.5 This Agreement (including all Schedules and Exhibits hereto)
and the agreements expressly referred to herein contain the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters, other than any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.
15.6 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than Licensee, Licensor, or their successors or permitted assigns,
any rights or remedies under or by reason of this Agreement.
15.7 Nothing herein contained shall be construed to place the
parties in the relationship of partners, joint venturers, principal and agent,
or employer and employee. Neither party shall have the power to assume, create,
or incur liability or any obligation of any kind, express or implied, in the
name of or on behalf of the other party by virtue of this Agreement.
15.8 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same agreement.
15.9 The heading references herein are for convenience purposes
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
15.10 The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
15.11 Any provision which expressly provides for survival and all
obligations of indemnification shall survive the termination or expiration of
this Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
PFIZER INC.
By:___________________________
Name:
Title:
PHILIPP BROTHERS CHEMICALS, INC.
By:___________________________
Name:
Title:
SCHEDULE A
Licensed Trademarks and Trade Names
EXHIBIT D.-2
TRADEMARK LICENSE AGREEMENT (PFIZER TO PURCHASER)
This TRADEMARK LICENSE AGREEMENT (PFIZER TO PURCHASER), dated as of
this ____ day of ____________, 2000, is by and between Pfizer Inc., a Delaware
corporation ("Pfizer") (referred to herein, together with its Affiliates, as
"Licensor") and Philipp Brothers Chemicals, Inc., a New York corporation
(referred to herein, together with its Affiliates, as "Licensee").
RECITALS
WHEREAS, Licensor owns certain trademarks, tradenames and trade
dress which have heretofore been used by Licensor on or in connection with
certain products:
WHEREAS, Licensor and Licensee have entered into an Asset Purchase
Agreement dated as of September 28, 2000 (the "Purchase Agreement") pursuant to
which Licensor is selling certain assets relating to the Products (as defined in
Purchase Agreement) to Licensee;
WHEREAS, Section 7.8(b) of the Purchase Agreement provides that
Licensor and Licensee shall enter into a Trademark License Agreement in order to
permit Licensee to sell products under certain trademarks.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth for such terms in the Purchase Agreement. The
following terms used herein have the following meanings:
"Agreement" shall mean this Trademark License Agreement, as the same
may be amended or supplemented from time to time in accordance with the terms
hereof.
"Closing" shall mean the closing of the transactions contemplated by
the Purchase Agreement.
"Licensed Trademarks" shall mean those unregistered or registered
trademarks listed on Schedule A hereto.
"Products" shall mean those livestock feed additive products that
are the subject of the Purchase Agreement.
ARTICLE II.
GRANT OF LICENSE
2.1 Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee a nonexclusive, royalty-free right and license to use
the Licensed Trademarks in connection with the packaging, sale, marketing, and
distribution of the Products in all countries of the world, other than India,
Bangladesh, Nepal and Sri Lanka.
2.2 Licensee shall not use any Licensed Trademarks in connection
with any articles of any description other than Products.
2.3 In the event there are omissions or errors in Schedule A hereto,
including, but not limited to the listing of Licensed Trademarks or the omission
of any trademark or trade name falling within the definition of a Licensed
Trademark, the parties shall modify Schedule A with correct information.
ARTICLE III.
ASSIGNMENT; SUBLICENSING
3.1 Licensee shall not assign, transfer, sublicense or in any manner
convey all or any part of its rights or obligations under this Agreement to any
other party, without the prior written consent of Licensor.
ARTICLE IV.
TERM OF AGREEMENT
4.1 The term of this Agreement shall commence on the date hereof
and, unless sooner terminated as provided herein, shall continue for a period of
ten (10) years from the Closing.
ARTICLE V.
QUALITY CONTROL
5.1 Licensor shall have the right to exercise quality control over
the Products and Licensee's use of the Licensed Trademarks to a degree necessary
to maintain the validity of the Licensed Trademarks and to protect the goodwill
associated therewith. Licensor acknowledges that the quality of the Products
sold by Licensor prior to the Closing is adequate for this purpose. Accordingly,
Licensee shall, in its sale, marketing and distribution of the Products, adhere
to a level of quality at least as high as that set by Licensor for the sale,
marketing and distribution of the Products prior to the Closing.
5.2 Licensee shall comply with all applicable laws and regulations
in the sale, distribution and marketing of the Products, and Licensee shall use
all legends, notices, and markings as required by law.
5.3 Licensee shall, upon reasonable request by Licensor, submit to
Licensor samples of products and product packaging and representative samples of
all publicly distributed materials bearing the Licensed Trademarks which are
then currently sold or distributed by Licensee. In the event that Licensor finds
that such samples of products or product packaging materially deviate from the
Products or product packaging as sold or distributed by Licensor prior to the
Closing or that such promotional or publicly distributed materials misuse the
Licensed Trademarks or misrepresent the Products in any material respect,
Licensee shall, upon notice from Licensor, immediately take steps which are
necessary to correct the deviations or misrepresentation in, or misuse of, the
respective items; provided, however, in the event Licensor reasonably determines
that the defect poses a threat to public health or safety, or to the validity of
the Licensed Trademark or to the goodwill associated herewith, Licensee shall,
upon notice from Licensor, immediately cease and desist all distribution, sale
and marketing of the nonconforming items, and shall immediately direct its
distributors and retailers to cease shipment and sale of such nonconforming
items. In addition, Licensor shall have the right to inspect upon reasonable
notice and during normal business hours such premises of Licensee where
applicable activities relating to the packaging, sale, distribution or marketing
of Products are conducted, subject to appropriate confidentiality restrictions
reasonably requested by Licensee, in order to ensure the quality of the Products
bearing the Licensed Trademarks.
5.4 Licensee shall otherwise endeavor to comply with such other
reasonable requests as are made by Licensor to enable Licensor to assure the
quality of the Products bearing the Licensed Trademarks.
ARTICLE VI.
USE OF LICENSED INTELLECTUAL PROPERTY
6.1 Licensee shall use the Licensed Trademarks in accordance with
sound trademark and trade name usage principles and in accordance with all
applicable laws and regulations as necessary to maintain the validity and
enforceability of the Licensed Trademarks. Licensee shall not use any Licensed
Trademarks in any manner which might tarnish, disparage, or reflect adversely on
Licensor or the Licensed Trademarks.
6.2 Licensee shall not materially alter the appearance of the
Licensed Trademarks on Products, or in any advertising, marketing, distribution,
or sales materials, or any other publicly distributed materials, from the
appearance of the Licensed Trademarks used by Licensor in connection with the
Products prior to the Closing.
6.3 Licensee acknowledges that its rights to use the Licensed
Trademarks are nonexclusive. Licensee agrees that it shall cooperate to avoid
confusion or conflict arising out of Licensor's simultaneous use of the Licensed
Trademarks, and to resolve any such conflicts to the satisfaction of Licensor.
ARTICLE VII.
PROPERTY OF LICENSOR
7.1 Licensee acknowledges that the Licensed Trademarks and all
rights therein (with the exception of those rights expressly granted to Licensee
hereunder) and the goodwill pertaining thereto belong exclusively to Licensor.
Licensee's use of the Licensed Trademarks shall inure to the benefit of Licensor
for all purposes, including trademark registration. Without limiting the
generality of the foregoing, Licensee shall not challenge the validity of
Licensor's ownership of the Licensed Trademarks or any registration of
application for registration thereof or contest the fact that Licensee's rights
under this Agreement are solely those of a Licensee, which rights terminate upon
expiration or termination of this Agreement.
7.2 Licensor shall be responsible for the prosecution and
maintenance of registrations of the Licensed Trademarks, at Licensor's expense.
Licensee shall cooperate with Licensor, and shall execute any documents required
by Licensor and supply Licensor with a reasonable number of specimens to assist
Licensor, in the registration, enforcement, or maintenance of any Licensed
Trademarks or recordal of Licensee as a registered user or licensee.
7.3 Licensee agrees not to register, or attempt to register, the
Licensed Trademarks or any confusingly similar intellectual property in its own
name or any other name, or to use the Licensed Trademarks in commerce other than
as provided herein.
7.4 The provisions of this Article 7 shall survive the termination
of this Agreement.
ARTICLE VIII
PROTECTION OF THE LICENSED INTELLECTUAL PROPERTY
8.1 In the event that Licensee learns of any infringement or
unauthorized use of the Licensed Trademarks in connection with the Products or
similar products, it shall promptly notify Licensor. Licensor shall have the
sole initial right to bring infringement actions or other similar proceedings
against third parties in order to protect the Licensed Trademarks. If requested
to do so, Licensee shall reasonably cooperate with Licensor in any such action,
including but not limited to joining the action as a party if necessary to
maintain standing, at Licensor's expense. Any award, or portion of an award,
recovered by Licensor in any such action or proceeding commenced by Licensor
shall belong solely to Licensor after recovery by both parties of their
respective, actual out-of-pocket costs.
8.2 If Licensor determines not to take any such action, then
Licensee may take such action in its own name at its own expense; provided that
it first obtains the consent of Licensor and keeps Licensor informed of the
status of, and its respective activities regarding such action and any
settlement or other resolutions thereof. Licensor may cooperate with Licensee or
join such action at its sole discretion, at Licensee's expense. Any award
recovered by Licensee in any action or proceeding commenced by Licensee as
permitted herein shall belong solely to Licensee, after recovery by both parties
of their respective, actual out-of-pocket costs.
8.3 Licensor shall indemnify, defend and hold Licensee harmless from
and against any and all claims, losses, damages and associated legal expenses
arising out of any allegation that any Licensed Trademark infringes the rights
of any third party. In the event of the institution of any infringement action
by a third party against Licensee for use of the Licensed Trademarks in
accordance with the provisions of this Agreement, Licensee shall promptly notify
Licensor of such action in writing. Licensor shall have the obligation to join
and control the defense of such action at Licensor's expense, and Licensee shall
cooperate in such defense as requested by Licensor, at Licensee's expense. All
judgments and settlements resulting from such action shall be paid by the
Licensor and any award received by Licensor or Licensee in such an action shall
belong solely to Licensor.
8.4 Licensee shall keep Licensor informed of the status of, and its
activities regarding, any litigation, and settlement or other resolution
thereof, concerning the Licensed Trademarks. No settlement or consent judgment
or other voluntary final disposition of any action defended or action brought by
Licensee may be entered into without the written consent of Licensor.
ARTICLE IX.
INDEMNIFICATION
9.1 Licensee shall indemnify, defend, and hold Licensor, its
Affiliates and their respective officers, and directors harmless from and
against any and all claims, losses, damages and associated legal expenses
arising out of Licensee's use of the Licensed Trademarks or the manufacture,
use, and sale of products or any product packaging under such Licensed
Trademarks, other than claims, losses, damages and associated legal expenses for
which the Licensor is responsible or is obligated to indemnify, defend and hold
harmless Licensee pursuant to Section 8.3 hereof, the provisions of the Pfizer
Supply and Tolling Agreement or the provisions of the Purchase Agreement .
9.2 The provisions of this Article IX shall survive the termination
of this Agreement.
ARTICLE X.
TERMINATION
10.1 In the event that either party commits a material breach of
this Agreement, the non-breaching party shall notify the breaching party of the
breach in writing. If the breaching party fails to cure the breach within thirty
(30) days from its receipt of such notice, or such lesser period set forth
herein (the "Cure Period"), the non-breaching party may, upon written notice
effective upon receipt, terminate this Agreement. Notwithstanding the foregoing,
however, if the breaching party is unable to cure its breach within the Cure
Period for reasons of Force Majeure, notice shall be given in compliance with
Article XIV herein.
ARTICLE XI.
CONSEQUENCE OF EXPIRATION OR
TERMINATION OF THIS AGREEMENT
11.1 Upon and after the expiration or termination of this Agreement:
(a) all rights granted to Licensee hereunder shall revert to
Licensor;
(b) Licensee shall cease all use of the Licensed Trademarks or of
any trademark, trade name or trade dress confusingly similar thereto, and
Licensee shall remove all uses of the Licensed Trademarks from the applicable
Products and destroy all remaining applicable product packaging, signage,
stationery, or other materials bearing the Licensed Trademarks; and
(c) Licensee shall not make reference in its consumer or trade
advertising to having been formerly associated with or a licensee of Licensor
under the Licensed Trademarks.
11.2 The provisions of this Article XI shall survive the termination
of this Agreement.
ARTICLE XII.
REPRESENTATIONS AND WARRANTIES
12.1 Each party represents to the other party, respectively, that:
(i) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(ii) it has full corporate power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder;
(iii) the execution and delivery by it of this Agreement, and the
performance by it of its obligations hereunder, have been duly authorized by all
requisite corporate action on the part of it, and no other corporate proceedings
on the part of it are required in connection with the execution, delivery and
performance by it of this Agreement; and
(iv) this Agreement constitutes a valid and legally binding
obligation of it, enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general equity
principles.
12.2 Licensor represents and warrants that:
(i) the Licensed Trademarks are free and clear of any Liens except
for claims or conflicts listed in Schedule B; and
(ii) the registrations included in the Licensed Trademarks are owned
or controlled by Licensor and, to the Knowledge of Licensor, are valid and in
full force effect in those territories in which Licensor used the applicable
Licensed Trademarks as of the Closing.
ARTICLE XIII.
CHOICE OF LAW; FORUM
THE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT APPLICATION OF ITS RULES OF CONFLICT OF LAWS. LICENSOR AND
LICENSEE HEREBY AGREE AND CONSENT TO BE SUBJECT TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IN THE
ABSENCE OF SUCH FEDERAL JURISDICTION, THE PARTIES CONSENT TO BE SUBJECT TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK.
ARTICLE XIV.
FORCE MAJEURE
Neither Licensee nor Licensor shall be considered in default in the
performance of its obligations hereunder if such performance is prevented or
delayed because of war, hostilities, revolution, civil commotion, strike,
lock-out, epidemic, accident, fire, wind, flood, or because of any law, order,
proclamation, regulation, or ordinance of any government or of any subdivision
thereof, or because of any act of God, or any other unforeseeable act or action
of like character ("Force Majeure"), provided that notice of such Force Majeure
is given by the affected party to the other within seven (7) days of the
beginning of said Force Majeure or the date on which it becomes reasonably
apparent that the controlling event will create a state of Force Majeure.
ARTICLE XV.
MISCELLANEOUS
15.1 Notices. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by telecopier, provided that the telecopy is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
To Licensor:
PFIZER INC.
235 East 42nd Street
New York, NY 10017
Telephone: 212-573-3637
Telecopy: 212-573-1445
Attn: Paul S. Miller, Esq.
Executive Vice President and
General Counsel
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Raymond O. Gietz, Esq.
To Licensee:
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, NJ 07024
Telephone: 201-944-6020
Telecopy: 201-944-5937
Attn: Jack C. Bendheim,
President
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attn: Ronald R. Papa, Esq.
15.2 The termination or expiration of this Agreement for any reason
whatsoever shall not release any party hereto from any liability which at the
time of termination or expiration had already accrued to the other party in
respect to any act or omission prior thereto. The expiration or termination of
this Agreement for any reason shall not affect the continued operations or
enforcement of any provision of this Agreement which, by its express terms, is
to survive expiration or termination.
15.3 The parties hereto shall not directly or indirectly, disclose
or use at any time (either during or after the termination or expiration of the
term of this Agreement), except to or for the benefit of the other as such other
party may direct in writing, any confidential information of the other provided
in the context of the parties' relationship as Licensor and Licensee under this
Agreement, provided that the foregoing shall not apply to information that: (i)
is or hereafter becomes generally available to the public other than by reason
of any default with respect to confidentiality under this Agreement; (ii) is
disclosed to such party by a third party who is not in default of any
confidentiality obligation to the other party; (iii) is developed by or on
behalf of such party, without reliance on confidential information acquired from
the other party; (iv) is required to be disclosed in compliance with applicable
laws or regulations or order by a court of competent jurisdiction, provided that
reasonable measures shall be taken to assure confidential treatment of such
information; or (v) is provided by such party under appropriate terms and
conditions, including confidentiality provisions equivalent to those in this
Agreement, to third parties for consulting, accounting, legal and similar
purposes.
15.4 Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Licensor and Licensee, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
15.5 This Agreement (including all Schedules and Exhibits hereto)
and the agreements expressly referred to herein contain the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters, other than any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.
15.6 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than Licensee, Licensor, or their successors or permitted assigns,
any rights or remedies under or by reason of this Agreement.
15.7 Nothing herein contained shall be construed to place the
parties in the relationship of partners, joint venturers, principal and agent,
or employer and employee. Neither party shall have the power to assume, create,
or incur liability or any obligation of any kind, express or implied, in the
name of or on behalf of the other party by virtue of this Agreement.
15.8 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same agreement.
15.9 The heading references herein are for convenience purposes
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
15.10 The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
15.11 Any provision which expressly provides for survival and all
obligations of indemnification shall survive the termination or expiration of
this Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
PFIZER INC.
By:___________________________
Name:
Title:
PHILIPP BROTHERS CHEMICALS, INC.
By:___________________________
Name:
Title:
SCHEDULE A
Licensed Trademarks and Trade Names
Terramycin(R)
Terramycine(R)
Terramicina(R)
Neo Terramycin(R)
Neo Terramycine(R)
Neo Terramicina(R)
Neo Terramix(R)
Terramix(R)
SCHEDULE B
None
EXHIBIT D.-3
TRADEMARK LICENSE AGREEMENT (PURCHASER TO PFIZER)
This TRADEMARK LICENSE AGREEMENT (PURCHASER TO PFIZER), dated as of
this ___ day of _________, 2000, is by and between Philipp Brothers Chemicals,
Inc., a New York corporation (referred to herein, together with its Affiliates,
as "Licensor") and Pfizer Inc., a Delaware corporation ("Pfizer") a Delaware
corporation (referred to herein, together with its Affiliates, as "Licensee").
RECITALS
WHEREAS, Licensor and Licensee have entered into an Asset Purchase
Agreement dated as of September 28, 2000 (the "Purchase Agreement") pursuant to
which Licensee is selling certain assets (as described in Purchase Agreement) to
Licensor, including, without limitation, the Licensed Trademarks;
WHEREAS, Licensee has heretofore used the Licensed Trademarks in
connection with certain non-feed additive products which are not being sold
pursuant to the Purchase Agreement but which are marketed under the Licensed
Trademarks (the "Products");
WHEREAS, Section 7.8(c) of the Purchase Agreement provides that
Licensor and Licensee shall enter into a Trademark License Agreement in order to
permit Licensee to continue to use the Licensed Trademarks in connection with
the sale of the Products.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth for such terms in the Purchase Agreement. The
following terms used herein have the following meanings:
"Agreement" shall mean this Trademark License Agreement, as the same
may be amended or supplemented from time to time in accordance with the terms
hereof.
"Closing" shall mean the closing of the transactions contemplated by
the Purchase Agreement.
"Licensed Trademarks" shall mean those unregistered or registered
trademarks listed on Schedule A hereto.
ARTICLE II.
GRANT OF LICENSE: BEST EFFORTS
2.1 Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee a nonexclusive, royalty-free right and license to use
the Licensed Trademarks in connection with the packaging, sale, marketing, and
distribution of the Products in all countries of the world.
2.2 Licensee shall not use any Licensed Trademarks in connection
with any articles of any description other than Products.
2.3 In the event there are omissions or errors in Schedule A hereto,
including, but not limited to the listing of Licensed Trademarks or the omission
of any trademark or trade name falling within the definition of a Licensed
Trademark, the parties shall modify Schedule A with correct information.
ARTICLE III.
ASSIGNMENT; SUBLICENSING
3.1 Licensee shall not assign, transfer, sublicense or in any manner
convey all or any part of its rights or obligations under this Agreement to any
other party, without the prior written consent of Licensor.
ARTICLE IV.
TERM OF AGREEMENT
4.1 The term of this Agreement shall commence on the date hereof
and, unless sooner terminated as provided herein, shall continue for a period of
fifty (50) years.
ARTICLE V.
QUALITY CONTROL
5.1 Licensor shall have the right to exercise quality control over
the Products and Licensee's use of the Licensed Trademarks to a degree necessary
to maintain the validity of the Licensed Trademarks and to protect the goodwill
associated therewith. Licensor acknowledges that the quality of the Products
sold by Licensee prior to the Closing is adequate for this purpose. Accordingly,
Licensee shall, in its sale, marketing and distribution of the Products, adhere
to a level of quality at least as high as that maintained by it for the sale,
marketing and distribution of the Products prior to the Closing.
5.2 Licensee shall comply with all applicable laws and regulations
in the sale, distribution and marketing of the Products, and Licensee shall use
all legends, notices, and markings as required by law.
5.3 Licensee shall, upon reasonable request by Licensor, submit to
Licensor samples of products and product packaging and representative samples of
all publicly distributed materials bearing the Licensed Trademarks which are
then currently sold or distributed by Licensee. In the event that Licensor finds
that such samples of products or product packaging materially deviate from the
Products or product packaging as sold or distributed by Licensee prior to the
Closing or that such promotional or publicly distributed materials misuse the
Licensed Trademarks or misrepresent the Products in any material respect,
Licensee shall, upon notice from Licensor, immediately take steps which are
necessary to correct the deviations or misrepresentation in, or misuse of, the
respective items; provided, however, in the event Licensor reasonably determines
that the defect poses a threat to public health or safety, or to the validity of
the Licensed Trademark or to the goodwill associated herewith, Licensee shall,
upon notice from Licensor, immediately cease and desist all distribution, sale
and marketing of the nonconforming items, and shall immediately direct its
distributors and retailers to cease shipment and sale of such nonconforming
items. In addition, Licensor shall have the right to inspect upon reasonable
notice and during normal business hours such premises of Licensee where
applicable activities relating to the packaging, sale, distribution or marketing
of Products are conducted, subject to appropriate confidentiality restrictions
reasonably requested by Licensee, in order to ensure the quality of the Products
bearing the Licensed Trademarks.
5.4 Licensee shall otherwise endeavor to comply with such other
reasonable requests as are made by Licensor to enable Licensor to assure the
quality of the Products bearing the Licensed Trademarks.
ARTICLE VI.
USE OF LICENSED INTELLECTUAL PROPERTY
6.1 Licensee shall use the Licensed Trademarks in accordance with
sound trademark and trade name usage principles and in accordance with all
applicable laws and regulations as necessary to maintain the validity and
enforceability of the Licensed Trademarks. Licensee shall not use any Licensed
Trademarks in any manner which might tarnish, disparage, or reflect adversely on
Licensor or the Licensed Trademarks.
6.2 Licensee shall not materially alter the appearance of the
Licensed Trademarks on Products, or in any advertising, marketing, distribution,
or sales materials, or any other publicly distributed materials, from the
appearance of the Licensed Trademarks used by Licensee in connection with the
Products prior to the Closing.
6.3 Licensee acknowledges that its rights to use the Licensed
Trademarks are nonexclusive. Licensee agrees that it shall cooperate to avoid
confusion or conflict arising out of Licensor's simultaneous use of the Licensed
Trademarks, and to resolve any such conflicts to the satisfaction of Licensor.
ARTICLE VII.
PROPERTY OF LICENSOR
7.1 Licensee acknowledges that the Licensed Trademarks and all
rights therein (with the exception of those rights expressly granted to Licensee
hereunder) and the goodwill pertaining thereto belong exclusively to Licensor.
Licensee's use of the Licensed Trademarks shall inure to the benefit of Licensor
for all purposes, including trademark registration. Without limiting the
generality of the foregoing, Licensee shall not challenge the validity of
Licensor's ownership of the Licensed Trademarks or any registration of
application for registration thereof or contest the fact that Licensee's rights
under this Agreement are solely those of a Licensee, which rights terminate upon
expiration or termination of this Agreement.
7.2 Licensor shall be responsible for the prosecution and
maintenance of registrations of the Licensed Trademarks, at Licensor's expense.
Licensee shall cooperate with Licensor, and shall execute any documents required
by Licensor and supply Licensor with a reasonable number of specimens to assist
Licensor, in the registration, enforcement, or maintenance of any Licensed
Trademarks or recordal of Licensee as a registered user or licensee.
7.3 Licensee agrees not to register, or attempt to register, the
Licensed Trademarks or any confusingly similar intellectual property in its own
name or any other name, or to use the Licensed Trademarks in commerce other than
as provided herein.
7.4 The provisions of this Article 7 shall survive the termination
of this Agreement.
ARTICLE VIII
PROTECTION OF THE LICENSED INTELLECTUAL PROPERTY
8.1 In the event that Licensee learns of any infringement or
unauthorized use of the Licensed Trademarks in connection with the Products or
similar products, it shall promptly notify Licensor. Licensor shall have the
sole initial right to bring infringement actions or other similar proceedings
against third parties in order to protect the Licensed Trademarks. If requested
to do so, Licensee shall reasonably cooperate with Licensor in any such action,
including but not limited to joining the action as a party if necessary to
maintain standing, at Licensor's expense. Any award, or portion of an award,
recovered by Licensor in any such action or proceeding commenced by Licensor
shall belong solely to Licensor after recovery by both parties of their
respective, actual out-of-pocket costs.
8.2 If Licensor determines not to take any such action, then
Licensee may take such action in its own name at its own expense; provided that
it first obtains the consent of Licensor and keeps Licensor informed of the
status of, and its respective activities regarding such action and any
settlement or other resolutions thereof. Licensor may cooperate with Licensee or
join such action at its sole discretion, at Licensee's expense. Any award
recovered by Licensee in any action or proceeding commenced by Licensee as
permitted herein shall belong solely to Licensee, after recovery by both parties
of their respective, actual out-of-pocket costs.
8.3 Licensor shall indemnify, defend and hold Licensee harmless from
and against any and all claims, losses, damages and associated legal expenses
arising out of any allegation that any Licensed Trademark infringes the rights
of any third party. In the event of the institution of any infringement action
by a third party against Licensee for use of the Licensed Trademarks in
accordance with the provisions of this Agreement, Licensee shall promptly notify
Licensor of such action in writing. Licensor shall have the obligation to join
and control the defense of such action at Licensor's expense, and Licensee shall
cooperate in such defense as requested by Licensor, at Licensee's expense. All
judgments and settlements resulting from such action shall be paid by the
Licensor and any award received by Licensor or Licensee in such an action shall
belong solely to Licensor.
8.4 Licensee shall keep Licensor informed of the status of, and its
activities regarding, any litigation, and settlement or other resolution
thereof, concerning the Licensed Trademarks. No settlement or consent judgment
or other voluntary final disposition of any action defended or action brought by
Licensee may be entered into without the written consent of Licensor.
ARTICLE IX.
INDEMNIFICATION
9.1 Licensee shall indemnify, defend, and hold Licensor, its
Affiliates and their respective officers, and directors harmless from and
against any and all claims, losses, damages and associated legal expenses
arising out of Licensee's use of the Licensed Trademarks or the manufacture,
use, and sale of products or any product packaging under such Licensed
Trademarks other than claims, losses, damages and associated legal expenses for
which the Licensor is responsible or is obligated to indemnify, defend and hold
harmless Licensee pursuant to Section 8.3 hereof, the provisions of the Pfizer
Supply and Tolling Agreement or the provisions of the Purchase Agreement.
9.2 The provisions of this Article IX shall survive the termination
of this Agreement.
ARTICLE X.
TERMINATION
10.1 In the event that either party commits a material breach of
this Agreement, the non-breaching party shall notify the breaching party of the
breach in writing. If the breaching party fails to cure the breach within thirty
(30) days from its receipt of such notice, or such lesser period set forth
herein (the "Cure Period"), the non-breaching party may, upon written notice
effective upon receipt, terminate this Agreement. Notwithstanding the foregoing,
however, if the breaching party is unable to cure its breach within the Cure
Period for reasons of Force Majeure, notice shall be given in compliance with
Article XIV herein.
ARTICLE XI.
CONSEQUENCE OF EXPIRATION OR
TERMINATION OF THIS AGREEMENT
11.1 Upon and after the expiration or termination of this Agreement:
(a) all rights granted to Licensee hereunder shall revert to
Licensor;
(b) Licensee shall cease all use of the Licensed Trademarks or of
any trademark, trade name or trade dress confusingly similar thereto, and
Licensee shall remove all uses of the Licensed Trademarks from the applicable
Products and destroy all remaining applicable product packaging, signage,
stationery, or other materials bearing the Licensed Trademarks; and
(c) Licensee shall not make reference in its consumer or trade
advertising to having been formerly associated with or a licensee of Licensor
under the Licensed Trademarks.
11.2 The provisions of this Article XI shall survive the termination
of this Agreement.
ARTICLE XII.
REPRESENTATIONS AND WARRANTIES
12.1 Each party represents to the other party, respectively, that:
(i) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(ii) it has full corporate power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder;
(iii) the execution and delivery by it of this Agreement, and the
performance by it of its obligations hereunder, have been duly authorized by all
requisite corporate action on the part of it, and no other corporate proceedings
on the part of it are required in connection with the execution, delivery and
performance by it of this Agreement; and
(iv) this Agreement constitutes a valid and legally binding
obligation of it, enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general equity
principles.
12.2 Licensor represents and warrants that:
(i) the Licensed Trademarks are, to the knowledge of Licensor, free
and clear of any Liens except for claims or conflicts listed in Schedule B; and
(ii) the registrations included in the Licensed Trademarks are owned
or controlled by Licensor.
ARTICLE XIII.
CHOICE OF LAW; FORUM
THE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT APPLICATION OF ITS RULES OF CONFLICT OF LAWS. LICENSOR AND
LICENSEE HEREBY AGREE AND CONSENT TO BE SUBJECT TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IN THE
ABSENCE OF SUCH FEDERAL JURISDICTION, THE PARTIES CONSENT TO BE SUBJECT TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK.
ARTICLE XIV.
FORCE MAJEURE
Neither Licensee nor Licensor shall be considered in default in the
performance of its obligations hereunder if such performance is prevented or
delayed because of war, hostilities, revolution, civil commotion, strike,
lock-out, epidemic, accident, fire, wind, flood, or because of any law, order,
proclamation, regulation, or ordinance of any government or of any subdivision
thereof, or because of any act of God, or any other unforeseeable act or action
of like character ("Force Majeure"), provided that notice of such Force Majeure
is given by the affected party to the other within seven (7) days of the
beginning of said Force Majeure or the date on which it becomes reasonably
apparent that the controlling event will create a state of Force Majeure.
ARTICLE XV.
MISCELLANEOUS
15.1 Notices. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by telecopier, provided that the telecopy is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
To Licensor:
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, NJ 07024
Telephone: 201-944-6020
Telecopy: 201-944-5937
Attn: Jack C. Bendheim,
President
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attn: Ronald R. Papa, Esq.
To Licensee:
PFIZER INC.
235 East 42nd Street
New York, NY 10017
Telephone: 212-573-3637
Telecopy: 212-573-1445
Attn: Paul S. Miller, Esq.
Executive Vice President and
General Counsel
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Raymond O. Gietz, Esq.
15.2 The termination or expiration of this Agreement for any reason
whatsoever shall not release any party hereto from any liability which at the
time of termination or expiration had already accrued to the other party in
respect to any act or omission prior thereto. The expiration or termination of
this Agreement for any reason shall not affect the continued operations or
enforcement of any provision of this Agreement which, by its express terms, is
to survive expiration or termination.
15.3 The parties hereto shall not directly or indirectly, disclose
or use at any time (either during or after the termination or expiration of the
term of this Agreement), except to or for the benefit of the other as such other
party may direct in writing, any confidential information of the other provided
in the context of the parties' relationship as Licensor and Licensee under this
Agreement, provided that the foregoing shall not apply to information that: (i)
is or hereafter becomes generally available to the public other than by reason
of any default with respect to confidentiality under this Agreement; (ii) is
disclosed to such party by a third party who is not in default of any
confidentiality obligation to the other party; (iii) is developed by or on
behalf of such party, without reliance on confidential information acquired from
the other party; (iv) is required to be disclosed in compliance with applicable
laws or regulations or order by a court of competent jurisdiction, provided that
reasonable measures shall be taken to assure confidential treatment of such
information; or (v) is provided by such party under appropriate terms and
conditions, including confidentiality provisions equivalent to those in this
Agreement, to third parties for consulting, accounting, legal and similar
purposes.
15.4 Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Licensor and Licensee, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
15.5 This Agreement (including all Schedules and Exhibits hereto)
and the agreements expressly referred to herein contain the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters, other than any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.
15.6 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than Licensee, Licensor, or their successors or permitted assigns,
any rights or remedies under or by reason of this Agreement.
15.7 Nothing herein contained shall be construed to place the
parties in the relationship of partners, joint venturers, principal and agent,
or employer and employee. Neither party shall have the power to assume, create,
or incur liability or any obligation of any kind, express or implied, in the
name of or on behalf of the other party by virtue of this Agreement.
15.8 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same agreement.
15.9 The heading references herein are for convenience purposes
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
15.10 The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
15.11 Any provision which expressly provides for survival and all
obligations of indemnification shall survive the termination or expiration of
this Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
PHILIPP BROTHERS CHEMICALS, INC.
By:___________________________
Name:
Title:
PFIZER INC.
By:___________________________
Name:
Title:
SCHEDULE A
Licensed Trademarks and Trade Names
Banminth(R)
Pro-Banminth(R)
Mecadox(R)
Vibravet(R)
SCHEDULE B
None
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
EXHIBIT E
PFIZER SUPPLY AND TOLLING AGREEMENT
This Agreement, dated as of ____________ __, 2000, is by and between
Philipp Brothers Chemicals, Inc. (hereinafter referred to as "Phibro" or the
"Buyer"), a corporation duly organized and existing under the laws of the State
of New York, and Pfizer Inc., a corporation duly organized and existing under
the laws of the State of Delaware (hereinafter referred to as "Pfizer"). Phibro
and Pfizer are hereafter sometimes individually called a "Party" and
collectively called the "Parties".
W I T N E S S E T H
WHEREAS, Phibro and Pfizer have entered into an Asset Purchase Agreement,
dated as of September 28, 2000 (the "Asset Purchase Agreement"), pursuant to
which Pfizer has sold, and Phibro has purchased, certain products and related
assets of Pfizer; and
WHEREAS, pursuant to the terms of the Asset Purchase Agreement, Pfizer has
agreed to supply to Phibro for a limited time certain Product Lines (as
hereinafter defined) and Products (as hereinafter defined);
WHEREAS, Phibro and Pfizer desire to define their respective rights and
obligations with regard to the supply of the Product Lines and Products in this
Agreement.
NOW, THEREFORE, it is agreed as follows:
SECTION 1 - DEFINITIONS
As used in this Agreement, the terms defined below shall have the
following meanings:
1.1 "Bulk Active" shall mean the active drug ingredient manufactured or
purchased by Pfizer or Phibro and used in the manufacture of a
Product.
1.2 "Product" shall mean individual product and package presentations
within a Product Line.
1.3 "Product Lines" shall mean any or all of the product lines of which
the Products are a part as produced by Pfizer and sold by Pfizer as
of the date of the Asset Purchase Agreement, including [ * ]
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
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1.5 "Term" shall include the "Standard Term", meaning the period
beginning with the date hereof and ending 18 months thereafter, with
Phibro having the ability to extend such period at its option for an
additional three months if Pfizer is notified of Phibro's intention
to extend the Term six months prior to the end of the original 18
month Term.
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* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
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All capitalized terms used but not otherwise defined herein will have the
meanings assigned to them in the Asset Purchase Agreement.
SECTION 2 - SALES TO PHIBRO
2.1 During the Term of this Agreement, Pfizer agrees to sell to or toll
for Phibro such quantities of Products as Phibro may from time to
time order pursuant to the provisions of Section 2.2 hereof. All
deliveries shall be made to such locations designated by Phibro to
Pfizer from time to time in writing; provided, however, that Pfizer
will not ship Products from its manufacturing locations to Phibro's
customers, except as provided in the terms of the Transitional
Services Agreement between the Parties executed pursuant to the
terms of the Asset Purchase Agreement.
2.2 During the Term of this Agreement, Phibro shall purchase from Pfizer
and Pfizer shall supply Phibro according to the following
provisions:
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
(a) [
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(b) [ * ]
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(c) On the 91st day after the date hereof, Phibro will provide to
Pfizer its forecast of its requirements for all Products and Product
Lines by quarter for the remainder of the Term, with the first
period of that forecast being at least 3 months and ending with the
end of the next succeeding calendar quarter. The forecasts also will
indicate whether Pfizer or Phibro will supply the Bulk Active for
each ordered Product as well as the manufacturing site for each
Product. At that time, Phibro will give to Pfizer purchase and
tolling orders that reflect the forecast for the first period noted
above in the first sentence of this subparagraph (c).
(d) Following the delivery of the forecast described in subparagraph
(c) above, Phibro will deliver to Pfizer, on the first business day
of each succeeding calendar quarter, an updated quarterly forecast
and issue
purchase and tolling orders for one additional calendar quarter
beyond those orders already given to Pfizer until forecasts and
purchase and tolling orders have been given for all quarters
remaining in the Term. Six months prior to the expiration of the
original Term, Phibro will issue firm purchase and tolling orders
for the remainder of the Term or, for those sites where the Standard
Term is in effect, Phibro will inform Pfizer of its intention to
extend the Term for an additional 3 months, in which case it will
issue firm purchase and tolling orders for the next calendar quarter
and will, six months prior to the expiration of the extended Term,
issue firm purchase and tolling orders for the remainder of the
extended Term. All purchase orders hereunder shall not exceed
forecast quantities by more than 25% without Pfizer's prior
approval, which approval shall not be unreasonably withheld.
(e) Phibro's annual and quarterly forecasts and the aggregate of all
purchase and tolling orders must be within Pfizer's capacity as
specified in Appendix B. [Note: Facility capacity numbers for each
site must be included in Appendix B.]
(f) Pfizer is obligated to maintain its capacity for any given
Product or Product Line until the earlier of (x) the time that
Phibro terminates Pfizer's manufacture of such Product Line in
accordance with the terms of this Agreement, (y) the end of the
Term, or (z) at each manufacturing site at which Product is to be
manufactured pursuant to this Agreement, until Pfizer has completed
the manufacture of sufficient Product to satisfy the final purchase
and tolling orders provided to Pfizer hereunder. Once Pfizer's
obligation to maintain its capacity for any given Product has been
terminated, Pfizer shall not be obligated to resume manufacture of
such Product.
(g) Pfizer will produce the products following the same practices
and procedures in effect as of the Closing. Pfizer has absolute and
exclusive control of its manufacture and tolling, as the case may
be, of the Products. Phibro's specification of manufacturing site
and quantities for all forecasts and purchase orders made pursuant
to this Section 2.2 must be consistent with Pfizer's capabilities
and production experience at, and regulatory approvals obtained for
the designated site for each Product as of the date of this
Agreement. Either Pfizer or Phibro may elect to change the
manufacturing site of one or more Products to another Pfizer site,
provided that the site to which manufacturing activities are to be
moved has the requisite capacity, expertise and regulatory approvals
necessary to manufacture and supply the particular Product in
accordance with the terms of this Agreement. The party wishing to
initiate such a move will notify the other in writing of its desire
and, subject to the foregoing conditions, the move will become
effective at the earliest practicable time as determined by Pfizer.
Any increased shipping costs or increases in
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
[ * ] that result from such a move initiated by Pfizer will be
borne by Pfizer. If a move is initiated by Phibro, then Phibro will
be responsible for any increases in the costs for which it has
responsibility under the terms of this Agreement. Similarly, it will
benefit from any decreases in costs for which it has responsibility
hereunder.
2.3 All Products to be supplied by Pfizer hereunder are guaranteed as of
the date of each shipment to Phibro to be in compliance in all
material respects with the product specifications and quality
control standards set forth in Appendix C. Within thirty (30) days
of receipt of Products by Phibro under this Agreement, Phibro shall
have the right to test and inspect Products and reject Products
which do not conform to such specifications and quality control
standards. In the event of such rejection, Phibro shall notify
Pfizer within 72 hours of such rejection, and Pfizer shall, at
Pfizer's option, within 30 days from its receipt of Phibro's
rejection notice and accompanying rationale as to why such Products
failed to meet such specifications and quality control standards,
either commit to replace rejected Products as promptly as
practicable or notify Phibro that Pfizer disputes that the subject
Products failed to meet such specifications and quality control
standards, in which case the parties shall submit samples of such
disputed batches of Products and accompanying documentation to a
mutually acceptable independent laboratory for testing. The losing
party shall bear the cost and expenses of the related laboratory
tests. If Pfizer chooses to replace nonconforming Product for which
Phibro has supplied the Bulk Active, Pfizer shall pay Phibro the
actual cost of the Bulk Active that was consumed by Pfizer in the
manufacture of the nonconforming Product, unless such Bulk Active
was, itself, nonconforming, in which case Phibro shall be obligated
to pay Pfizer for the nonconforming Product as though such Product
was conforming. Phibro shall have no remedy in respect of any such
noncompliance except as described in this Section 2.3.
2.4 [ * ]
[ * ]All Taxes,
if any, payable to any jurisdiction by reason of any sales and
purchases of Product hereunder shall be paid or provided for by
Phibro and Pfizer shall be entitled to reimbursement from Phibro for
any Taxes for which it has responsibility to a Governmental
Authority as a result of its activities hereunder, other than Taxes
measured by the income to Pfizer resulting from its activities
hereunder.
2.5 Products will be manufactured or tolled in the locations indicated
in Appendix B. [ * ]
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[ * ] Phibro shall bear the cost of
shipping and
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
insurance. Title and risk of loss for the Products for which Pfizer
supplies the Bulk Active shall pass to Phibro at the point of
shipment. Title and risk of loss for the Products for which Phibro
supplies the Bulk Active shall remain with Phibro at all times.
2.6 The invoice for all sales of Products will be issued on the date of
shipment in the local currency of the manufacturing site. Terms of
payment shall be net sixty (60) days after the date of shipment in
accordance with the purchase orders. Such invoices shall include
Pfizer's cost of transportation. Payment shall be made by Phibro by
check delivered to Pfizer's address as designated in such invoices
or by wire transfer to an account designated by Pfizer. Any required
payment hereunder not made by Phibro on or before the date specified
in this Section 2.6 shall bear interest from the date such payment
is due until the date it is actually received by Pfizer at an annual
rate equal to twelve percent (12%).
2.7 Phibro will promptly notify Pfizer of any changes to the
specifications in Appendix B that are required by changes in Laws or
are otherwise desired by Phibro, including changes to the packaging
of the Products. Any such changes will be subject to the prior
approval of Pfizer, and Pfizer will use reasonable business efforts
to accommodate such changes.[ * ]
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2.8 Pfizer will provide Phibro with copies of certificates of analysis
and will maintain, at the respective manufacturing sites,
manufacturing records for each Product it is then manufacturing for
Phibro under this Agreement for inspection by Phibro. These
manufacturing records shall include: (a) copies of all analytical
results for the Products; (b) copies of analytical results for raw
materials used; (c) copies of change control documentation,
including supporting information describing the nonstandard
production operation and the rationale and (d) any such other
information as Phibro may reasonably request from time to time.
2.9 (a) Pfizer will provide reasonable technical support to Phibro to
assist in the transition of production of the Product Lines to
alternative sources of supply as designated by Phibro. This
technical support will consist of: i) direct
production/manufacturing support, which will include training of
Phibro employees in the manufacture of the Products; ii)
process/facility design support, which will include assistance in
the development of overall process designs, material and energy
balances, the development of equipment specifications, capital cost
estimates related to Phibro's designs and the evaluation of Phibro's
detailed designs prior to their
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
implementation; and iii) support in the technology transfer of
analytical/QC/QA policies and procedures. Pfizer does not warrant
the quality of the services to be provided under this Section 2.9.
(b) [ * ]
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(c) Phibro will reimburse Pfizer for the reasonable travel, lodging
and meal expenses of the persons providing the services described in
this Section 2.9. Phibro shall assume liability for any personal
injuries sustained by Pfizer personnel in the course of providing
these services.
(d) Pfizer's obligations to provide the services described in this
Section 2.9 will terminate and be of no further force or effect if
and to the extent Phibro or its Affiliates hire Pfizer personnel
providing the technical support to Phibro hereunder. Pfizer will use
its commercially reasonable efforts to maintain sufficient technical
support personnel to provide the services described in this Section
2.9. Support beyond the levels described in this Section 2.9 is in
Pfizer's sole discretion and will be reimbursed to Pfizer on a per
diem, plus expenses, basis.
(e) Within 90 days after Closing, Phibro will provide to Pfizer a
forecast of the technical support needs in each of clauses i), ii)
and iii) of subparagraph (a) above for the next calendar quarter and
for the remainder of the Term. Such forecasts shall be updated each
calendar quarter, and will be provided to Pfizer together with the
forecasts and purchase and tolling orders referenced above.
2.10 Pfizer will permit Phibro and its customers (subject to each such
customer's execution of an agreement to maintain any information
made available in connection therewith as confidential in accordance
with the terms of this Agreement) to have access during normal
business hours to Pfizer's manufacturing facilities upon reasonable
notice at any time during the manufacture of the Products for audits
and/or technical training. Such visits will be arranged to be
mutually convenient and involve minimum interruption to Pfizer's
operations.
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
2.11 Phibro will be responsible for handling any customer and regulatory
complaints or inquiries with respect to the Products. Phibro will
promptly notify Pfizer of any customer or regulatory complaint or
inquiry Phibro receives with respect to the Products. Pfizer will
promptly notify Phibro of any customer or regulatory complaint or
inquiry Pfizer receives and will reasonably cooperate with Phibro in
connection with the handling of all customer or regulatory
complaints or inquiries. Should Phibro fail to adequately respond to
a customer or regulatory complaint and Pfizer determines that it is
in Pfizer's interest to respond to said complaint, Pfizer shall
respond and the reasonable cost of Pfizer's response shall be billed
to Phibro.
2.12 [ * ]
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2.13 If Phibro cancels any purchase or tolling order made hereunder, in
reliance on which Pfizer has begun or completed manufacture or
preparation of such order, Phibro shall reimburse Pfizer for all of
the costs incurred by Pfizer in the manufacture or preparation
thereof, including but not limited to the cost of labor, raw
materials, energy and packaging thereof.
2.14 Pfizer will continue to use Pfizer labeling on the Products
manufactured for Phibro hereunder until inventories of labels and
pre-printed Product packaging have been consumed. Phibro will
provide Pfizer with its label copy as soon as practicable from the
date Phibro completes the related registration process, but in no
event later than ninety (90) days thereafter, and Pfizer will
procure new labeling and pre-printed packaging and will transition
to this Phibro labeling once inventories of Pfizer labeling have
been depleted. Should Phibro wish to substitute its label copy for
any Product prior to the depletion of the inventories of Pfizer
labeling or pre-printed Product packaging acquired to meet Phibro's
requirements, then Phibro shall reimburse Pfizer for the value of
the unused labeling and/or pre-printed packaging at Pfizer's full
cost.
2.15 Pfizer will provide Phibro with a monthly report, by manufacturing
site, for each Product Line it is then producing for Phibro under
the terms of
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
this Agreement. The monthly report will include production data for
the prior month, including the actual quantities of Products
produced during the month and year to date ("YTD"), the Product
yield for the month and YTD, copies of Pfizer's product cost
statements for the Product Lines, if such product cost statements
exist, a brief narrative on significant process or maintenance
issues encountered during the month, and any information regarding
production issues anticipated in the succeeding months, including,
but not limited to, shutdowns or planned maintenance activities.
This report will also record Phibro's use of the technical support
that Pfizer had provided to Phibro as provided in Section 2.9
hereof.
SECTION 3 - TERM AND TERMINATION
3.1 Pfizer will manufacture any Product Line for Phibro for a period not
to exceed the Term. Phibro may terminate Pfizer's supply of any
Product hereunder upon three (3) month's advance written notice, or
as otherwise agreed to by the Parties. Upon the presentation by
Phibro of written notice to terminate Pfizer's supply of any
Product, Phibro will also present a final purchase order for the
additional quantity of said Product beyond that already ordered, to
be produced prior to the termination of supply by Pfizer, subject to
Pfizer's capacity limitations as set forth in Appendix B. Once
Pfizer's obligation to manufacture a Product is terminated, Pfizer
will not be required to and will not maintain manufacturing capacity
or capability for that Product and it shall be relieved of the
obligation to further provide such Product hereunder.
3.2 Upon termination of Pfizer's manufacturing of any Product, Phibro
will purchase all merchantable inventory, including finished goods,
work in process, raw materials, packaging materials and labeling;
provided, however, that Phibro shall not be required to purchase any
finished goods inventory to the extent it exceeds the quantity
authorized by Phibro's purchase orders delivered under Sections 2
and 3 of this Agreement.[ * ]
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3.3 If either party is in material default of this Agreement and if the
default has not been corrected within 60 days after written notice
has been given to the defaulting Party by the non-defaulting Party,
then the non-defaulting Party shall have the right to terminate this
Agreement by giving written notice of termination to the defaulting
Party.
SECTION 4 - CONFIDENTIALITY AND TECHNOLOGY OWNERSHIP
4.1 Any cost information, process improvements and/or technical
innovations, whether patents or know-how, to the extent related
primarily to the Product Lines, which are developed during the Term
and result solely from the services provided under the terms of this
Agreement (and not in any way resulting from any other part of
Pfizer's operations), will be the property of Phibro; subject,
however, to a non-exclusive, non-cancelable, non-transferable,
world-wide, royalty-free license which Phibro hereby grants to
Pfizer to use such improvements and innovations to and for the
benefit of Pfizer to use such items in any business other than the
Business. Any process improvements and/or technical innovations,
whether patents or know-how, that do not relate primarily to the
Product Lines, which are developed during the Term and which result
solely from the services provided under the terms of this Agreement
will be the property of Pfizer; subject, however, to a
non-exclusive, non-cancelable, non-transferable, world-wide
royalty-free license which Pfizer hereby grants to Phibro to use
such improvements and innovations to and for the benefit of Phibro.
Any process improvements and/or technical innovations, whether
patents or know-how, arising hereunder or otherwise developed by
Pfizer not described under the preceding two sentences shall as
between Phibro and Pfizer, be the sole and exclusive property of
Pfizer.
4.2 Each Party recognizes that in the performance of this Agreement or
as a result of the Parties' ongoing relationships, confidential
and/or proprietary information belonging to the other Party
regarding the services provided under the terms of this Agreement or
any other information about the other Party may be disclosed or
become known to the other Party or its respective Affiliates
("Confidential Information"). Unless otherwise expressed in writing
to the other Party, any oral, visual or written information that is
exchanged between the Parties shall be presumed to be Confidential
Information. Each Party agrees to take the necessary precautions to
assure that the other Party's Confidential Information remains
confidential and to hold in confidence after termination of this
Agreement any and all oral, visual or written confidential and/or
proprietary information with respect to such services or any other
information about the other Party which belongs to the other Party.
Notwithstanding the foregoing, this obligation shall not apply to:
(i) information that, at the time of disclosure, is in the public
domain;
(ii) information that, after disclosure, is published or otherwise
becomes part of the public domain through no fault of the
Party to whom the information was disclosed;
(iii) information that a Party can show through its records was in
its possession or the possession of an Affiliate at the time
of disclosure (except for Confidential Information regarding
the Business in Pfizer's possession, which shall continue to
be confidential); and
(iv) information that may be received by a Party in good faith from
a source other than the other Party, which source either has
no duty of nondisclosure to such other Party or, if such
source does have a duty of non-disclosure, the receiving Party
was unaware of or had no reasonable basis for knowing thereof.
Each Party shall maintain the right to disclose Confidential
Information if required to do so by Law, but shall endeavor to keep
and assist the other Party in keeping it confidential by all
appropriate means, and shall afford the other Party the opportunity
to contest the disclosure obligation. If a Party finds it necessary
to disclose any such information in any judicial or administrative
hearing or proceeding, the Party shall attempt to disclose such
information "in camera" or subject to "protective order" or on some
other non-public basis.
The provisions of this Section 4.2 shall survive the termination of
this Agreement and as to any particular piece of Confidential
Information, shall continue for a period of five (5) years from such
termination or until such information becomes public knowledge
through no fault of either Party, whichever occurs first. Upon
termination of this Agreement for any reason whatsoever, each Party
will make no further use or disclosure of such Confidential
Information and upon written request, such Party further will
immediately deliver to the other Party all such Confidential
Information as shall be in written or other tangible form (including
all copies thereof); provided, that one copy of any document may be
kept by the legal department of each Party solely to ascertain its
obligations.
4.3 If either Party shall make any unauthorized use or disclosure of
Confidential Information of the other Party and such use or
disclosure is not remedied within a period of 60 days after written
notice thereof shall have been given to the defaulting Party by the
other Party hereto, then in any such case such other Party shall
have the right to terminate this Agreement by giving written notice
of such termination to the defaulting Party and upon the giving of
such notice this Agreement shall immediately terminate.
Notwithstanding the foregoing, if such unauthorized use or
disclosure of the Confidential Information is not capable of being
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT
remedied, the non-defaulting Party shall have the right to
immediately terminate this Agreement without notice or liability.
4.4 [ * ]
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SECTION 5 - FORCE MAJEURE
5.1 Neither Party shall be responsible to the other for any failure or
delay in performing any of its obligations under this Agreement or
for other non-performance hereof if such delay or non-performance is
caused by strike, stoppage of labor, lockout or other labor trouble,
fire, flood, accident, act of God or of any Government Authority or
by any cause unavoidable or beyond the reasonable control of either
Party (or any customer or supplier thereof); provided, however, that
except as provided for in Section 5.2 below, the Party affected
shall exert its reasonable commercial efforts to eliminate or cure
or overcome any of such causes and to resume performance of its
covenants with all possible speed.
5.2 In the event of any force majeure event which substantially
incapacitates a Pfizer Manufacturing Facility (as defined below) and
such substantial incapacity may not be eliminated or overcome
without material cost to Pfizer and in a period of time not
exceeding 25% of the remainder of the Term of this Agreement
following such event, then in such event Pfizer shall have no
obligation to repair such damage or eliminate or overcome such
causes and may terminate its obligation to supply any affected
Products. For purposes of this Section 5.2, Manufacturing Facility
shall mean each and every building or facility owned or leased by
Pfizer and used for the manufacture or storage of Products or
Product Lines.
SECTION 6 - LIMITATION OF WARRANTIES AND DAMAGES
Pfizer's warranties in connection with the Products manufactured and
delivered hereunder are limited solely to those expressed in Section
2.3 hereof, and Pfizer shall have no further obligation or liability
with respect to the Products. ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR ARISING FROM A COURSE OF DEALING OR USAGE OF
TRADE, ARE HEREBY DISCLAIMED.
Pfizer's representations and warranties in connection with the
Products set forth in Section 2.3 shall not apply to any Product
manufactured by Pfizer and delivered to Phibro in accordance with
this Agreement (i) for which Phibro has supplied Bulk Active that is
found to be non-conforming with the agreed-upon specification or
(ii) which is subsequently altered outside of Pfizer's facilities,
without Pfizer's supervision and approval or (iii) which is
improperly used by Phibro or any third party.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES CAUSED BY OR ARISING
OUT OF ANY BREACH OF THIS AGREEMENT.
SECTION 7 - MISCELLANEOUS
7.1 This Agreement shall not be assignable either in whole or in part by
either Party without the prior written consent of the other Party,
except that either Party may assign this Agreement in whole or in
part to any wholly owned subsidiary or majority owned Affiliate (the
assignee agreeing to be bound by all the provisions in this
Agreement), but any such assignment shall not relieve the assigning
Party of its obligations under this Agreement. Any such assignment
shall be valid only as long as such subsidiary or Affiliate remains
wholly owned or majority owned by such Party, as the case may be.
7.2 This Agreement shall be binding upon, and shall inure to the benefit
of and be enforceable by, the Parties hereto and their respective
successors and permitted assigns. This Agreement is for the sole
benefit of the Parties hereto and nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer
upon any Person (as defined in the Asset Purchase Agreement), other
than the Parties and successors and assigns permitted by Section
7.1, any right, remedy or claim under or by reason of this
Agreement.
7.3 All notices and other communications hereunder shall be in writing
and shall be deemed given (a) on the date of delivery if delivered
personally; (b) on the date of transmission if sent via facsimile
transmission to the facsimile number given below, and a telephonic
confirmation of receipt is obtained promptly after completion of
transmission; (c) on the date after delivery to a reputable
nationally recognized overnight courier service; or (d) three days
after being mailed by registered or certified mall (return receipt
requested) to the Parties at the following addresses (or at such
other address for a Party as shall be specified by like notice):
(a) If to Pfizer, to:
President, Pfizer Global
Manufacturing
Pfizer Inc.
235 E. 42nd Street
New York. NY 10017
Fax No.: (212) 672-7517
With copies to:
Office of General Counsel
Pfizer Inc.
235 E. 42nd Street
New York, NY 10017
Fax No.: (212) 808-8924
(b) If to Phibro, to:
With copies to:
or to such other address as shall be specified by a Party by notice
to the other Party pursuant to this Section 7.3. All such notices
and other communications shall be deemed delivered, if sent by mail
as aforesaid, on the second Business Day after the mailing thereof,
and otherwise on the date of delivery.
7.4 All captions contained in this Agreement are for convenience of
reference only, are not deemed part of the content of this Agreement
and shall not in any way affect the meaning or interpretation of
this Agreement.
7.5 This Agreement (including the appendices) constitutes the entire
Agreement and understanding between the Parties pertaining to the
subject matter hereof, and supersede all prior Agreements,
understandings, negotiations and discussions of the Parties, whether
written or oral. No amendment, supplement, or modification of this
Agreement shall be binding or effective unless executed in writing
and signed on behalf of each Party.
7.6 Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the Party or Parties
entitled to the
benefit thereof. The failure of any Party hereto to enforce at any
time any provision of this Agreement shall not be construed to be a
waiver of such provision, nor in any way to affect the validity of
this Agreement or any part hereof or the right of any Party
thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.
7.7 This Agreement shall be governed and construed under the substantive
laws of the State of New York, without reference to conflicts of
Laws principles, except that for purposes of determining compliance
with or the existence of Liabilities under Environmental Laws, the
Environmental Laws of the Governmental Authority with jurisdiction
over the Real Property, personal property, Facility or activity
involved shall govern. Each Party hereby irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New
York, New York County and (b) the United States District Court for
the Southern District of New York for the purposes of any suit,
action or other proceeding arising out of this Agreement or any
transaction contemplated hereby.
7.8 Both Parties are obliged to undertake all reasonable efforts in
order to resolve in an amicable way any controversy arising in
connection with this Agreement.
7.9 Notwithstanding termination of this Agreement, Phibro shall remain
obligated to pay all amounts due and payable as of the date of
termination in the manner provided by this Agreement. Sections 4
(Confidentiality) and 6 (Limitation of Warranties and Damages) shall
also survive termination of this Agreement.
7.10 Neither Party is now, nor shall it be made by this Agreement, an
agent or legal representative of the other Party for any purpose,
and neither Party has any right or authority to create any
obligation, express or implied, on behalf of the other Party, to
accept any service of process upon it, or to receive any notices of
any kind on its behalf.
7.11 To the extent that any purchase orders, invoices, sales receipts,
shipping documents, forms, billing documents or other similar
documents issued in connection with the manufacture and delivery of
Products by Pfizer contain terms or conditions which are in conflict
with, or derogate from this Agreement, they shall be null and void
and the terms of this Agreement shall control.
7.12 In the event of a conflict between the terms and conditions of this
Agreement and the terms and conditions of the Asset Purchase
Agreement, the terms and conditions of the Asset Purchase Agreement
shall control.
7.13 This Agreement may be executed in any number of counterparts, each
of which will be deemed an original but all of which shall
constitute one and the same instrument.
7.14 Wherever possible, each provision hereof shall be interpreted in
such manner as to be effective and valid under applicable Laws (as
defined in the Asset Purchase Agreement) but in case any one or more
of the provisions contained herein shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change
as to cause completion of the transactions contemplated hereby to be
unreasonable.
IN WITNESS WHEREOF, Pfizer and Phibro have caused this Agreement to be
executed by their respective duly authorized officers.
By:_____________________________ By:_____________________________
EXHIBIT I
GUARULHOS SITE SERVICES AGREEMENT
GUARULHOS SITE SERVICES AGREEMENT (this "Agreement"), dated as of [____],
2000, between PFIZER INC., a Delaware corporation ("Pfizer" or the "Seller") and
PHILIPP BROTHERS CHEMICALS, INC., a [ ] corporation ("Phibro" or the
"Buyer"). Pfizer and Phibro are together referred to as "the Parties."
W I T N E S S E T H
WHEREAS, Pfizer and Phibro have entered into an Asset Purchase Agreement,
dated as of [ ], 2000 (the "Asset Purchase Agreement"), whereby Pfizer has
sold, and Phibro has purchased, certain assets and property, including certain
assets and property located at the Guarulhos Facility in Guarulhos, Brazil (the
"Guarulhos Property"), of Pfizer; and
WHEREAS, as a result of the transactions contemplated by the Asset
Purchase Agreement, each Party will be providing certain Services (as defined
herein) to the other Party at the Guarulhos Property; and
WHEREAS, the Parties will be occupying each of their respective facilities
and will be operating each of their respective businesses at the Guarulhos
Property in close proximity to each other, and as a result desire to create
certain mutual obligations in order to minimize the impact of each of their
operations on the other, each with the objective of acting in good faith and
mutually attempting to resolve any conflicts in a cooperative spirit.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions and terms set forth herein, the Parties hereto agree as follows:
1. SERVICES
During the Term (as defined below) of this Agreement for each particular
Service (as defined below), Pfizer will supply Phibro with and Phibro will take
and pay for the Pfizer Services (as defined below), and Phibro will supply
Pfizer with and Pfizer will take and pay for the Phibro Services (as defined
below), subject to the terms and conditions hereinafter contained. Without
specifically committing as to a time schedule, Pfizer and Phibro acknowledge
that they intend to develop separate facilities over time for the provision on
the Phibro Property and the Pfizer Property, respectively, of Pfizer Services
and Phibro Services.
2. DEFINITIONS
As used in this Agreement, the terms defined below shall have the
following meanings:
a. "CETESB" means [ ]
b. "Confidential Information" has the meaning set forth in Section 11.
c. "Force Majeure" has the meaning set forth in Section 15.a.
d. "Fully Allocated Cost" means all of a Party's costs, direct and
indirect, of providing its Services, including all labor, occupancy, material
expenditures and overhead, calculated and allocated on the same basis that such
costs were charged to the Business prior to Closing.
e. "Guarulhos Property" has the meaning set forth in the recitals of this
Agreement.
f. "IGPM-FGV Index" means Indice Geral de Precos -- Mercado (Fundac).
g. "Pfizer Property" means that portion of the Guarulhos Property shown as
"Parcel A" on Attachment A.
h. "Pfizer Services" means the services to be performed by Pfizer as
specified in Appendices A and C (the "Pfizer Support and Administrative
Services") and Appendices B and C (the "Pfizer Utility Services"), together with
such additional or changed services Pfizer agrees to perform pursuant to this
Agreement.
i. "Phibro Property" means that portion of the Guarulhos Property shown as
"Parcel B" on Attachment A.
j. "Phibro Services" means the services to be performed by Phibro as
specified in Appendices A and C (the "Phibro Support and Administrative
Services") and Appendices B and C (the "Phibro Utility Services"), together with
such additional or changed services Phibro agrees to perform pursuant to this
Agreement.
k. "S&A Term" has the meaning set forth in Section 10.a.
l. "Services" means the Pfizer Services and the Phibro Services.
m. "Support and Administrative Services" means the Phibro Support and
Administrative Services and the Pfizer Support and Administrative Services.
n. "Term" has the meaning set forth in Section 10.a.
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o. "Utilities and Environmental Management Committee" has the meaning set
forth in Section 9.a.
p. "Utility Services" means the Pfizer Utility Services and the Phibro
Utility Services.
q. "Utilities Term" has the meaning set forth in Section 10.a.
r. "Well Water" has the meaning set forth in Appendix C-10.
All capitalized terms used but not otherwise defined herein will have the
meanings assigned to them in the Asset Purchase Agreement.
3. ADDITIONAL SERVICES
The Parties have endeavored to specify herein and in the Appendices to
this Agreement the complete list of Services that will enable the Parties to
each operate their respective businesses in harmony with each other and the
length of time that the Services are to be provided, it being the express intent
of the Parties that both businesses will ultimately be separate and independent
operational businesses with only such interdependent services (if any) as the
Parties will expressly agree in the future.
If either of the Parties is of the opinion that Support and Administrative
Services in addition to or in excess of the quantities then provided for in this
Agreement are required from the other Party, or that an extension of the Term
during which such Services are to be provided is required, then such Party will
so notify in writing the other Party of the need and the reasonable basis on
which said additional services should be provided or such Term extension should
be granted. The Party receiving said notice may approve and grant or deny such
request in its discretion, and will provide such approval or denial in writing.
If such a request is made and approved, then the Parties will enter into a
supplement or amendment to this Agreement and the defined terms "Services" and
"Term" shall be deemed to be supplemented or amended in the manner provided for
in such supplement or amendment.
4. CHARGES AND PAYMENTS
Each Party will send the other Party an invoice specifying charges for the
Services provided pursuant to this Agreement. Such invoices will be furnished on
a monthly basis, no later than the 15th day of the month following the month in
which such Services were rendered, and charges will be payable in Brazil Real
("BRL"). Invoices shall be due and payable within 30 days of the date billed and
uncontested charges not paid on or prior to 45 days after the date billed will
be charged by 1% interest per month plus monetary correction calculated on pro
rata basis according to the monthly variation of the IGPM-FGV index.
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5. SERVICE LEVEL
All Services will be performed in a manner which is substantially similar
in nature, quality, quantity and timeliness to those provided at the Guarulhos
Property prior to the Closing under the Asset Purchase Agreement, unless
otherwise stated in the Appendices to this Agreement or agreed to in writing by
the Parties.
6. FORECAST; UTILITIES CONSUMPTION
During the Term, each Party will provide the other on July 1 of each
calendar year with a forecast of its needs for Services from the other Party for
the remainder of the Term of this Agreement, as well as forecasts of each
Party's own utilities consumption for the remainder of the Term. This forecast
is to be by calendar quarter for the following calendar year and by year
thereafter. The Party receiving the forecast will use it in the determination of
the allocation of costs for the next calendar year.
Each Party's consumption of each Utility Service will be established for
each calendar year on an allocation basis utilizing the methodology for the
determination of the assessment quantities that has been used, historically, by
Pfizer.
7. COST OF SERVICES
a. The 2000 annual cost of each Support and Administrative Service is
listed in Appendix A. The following year annual cost for each Support and
Administrative Service (beginning with 2001) will be determined by December 1 of
the preceding year, based on the forecasts provided by each Party pursuant to
Section 6 hereof. The cost for such Services will be equal to the Fully
Allocated Cost to the provider of the Services in providing the Services to the
other Party. At the beginning of each calendar quarter during the Term, the cost
for each Support and Administrative Service will be adjusted and indexed for
inflation/deflation using the IGP-M- FGV Index for the corresponding time period
(or as nearly corresponding as possible). If any Support and Administrative
Service is provided for a partial year, the cost thereof shall be pro-rated for
the amount of time during which the Service is actually provided.
b. The 2000 unit costs for each Utility Service is listed in Appendix B.
Charges for these Services shall be on a use basis or as otherwise described in
Appendix C. The following year annual cost for each Utility Service (beginning
with 2001) will be determined by October 1 of the preceding year, based on the
forecasts provided by each Party pursuant to Section 6 hereof. The cost for such
Services will be equal to the Fully Allocated Cost of the provider of the
Services in providing the Services to the other. The cost determined by this
process will be in effect for the full calendar year. At the beginning of each
calendar quarter, the cost for each Utility Service also will be adjusted and
indexed for inflation/deflation using changes to the IGP-M-FGV Index for the
corresponding time period (or as nearly corresponding as possible). Should the
annual quantity of any Utility Service consumed by either Party vary by more
than
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20% from the most recent July 1 forecast that was used to determine the cost of
the Utility Service, then the cost of each such Utility Service will be
recalculated based on the actual consumption levels of that Utility Service
during such year. In addition, should the cost of any component of Utility
Service, other than those provided by the Party that owns the Utility Service,
changes in cost from one calendar quarter to the next and if such cost change
would result in a change of the Fully Allocated Cost of that Utility Service of
more than 1%, in which case the unit cost for that Utility Service would be
appropriately adjusted to reflect the increased Fully Allocated Cost in
providing the Service, but only to the extent that the total cost change of that
component is greater, positively or negatively, than the change in the IGP-M-FGV
index for the corresponding calendar quarter..
8. LIMITATION OF LIABILITY; INDEMNIFICATION
a. Subject to the last sentence of this Section 8.a., if Pfizer fails to
provide the quantity or quality of Pfizer Services required by this Agreement
and as a result, Phibro obtains replacement Services from a third party,
Pfizer's liability shall be limited to (and Phibro's sole remedy shall be to be
reimbursed by Pfizer for) Phibro's incremental cost of obtaining such Pfizer
Service from such third party in excess of the Fully Allocated Cost of the
Services until the earlier of such time as (i) such Pfizer Services are restored
to the level and quality of Service as was provided prior to such failure, (ii)
Pfizer is no longer required to provide such Pfizer Service, or (iii) this
Agreement is terminated pursuant to Section 10 hereof; provided, that Phibro
shall exercise all reasonable efforts under the circumstances to minimize the
cost of any such alternatives to the Pfizer Services by selecting the most
commercially reasonable cost effective alternatives which provide the functional
equivalent of the Pfizer Services replaced; and provided, further, that in no
event shall Pfizer's maximum aggregate liability under this Section 8.a exceed
$2,000,000. Notwithstanding the foregoing, Pfizer will have no such liability to
Phibro unless its failure to provide the quantity or quality of Pfizer Services
required by this Agreement was due to its gross negligence or willful
misconduct.
b. Subject to the last sentence of this Section 8.b., if Phibro fails to
provide the quantity or quality of Phibro Services required by this Agreement
and as a result, Pfizer obtains replacement Services from a third party,
Phibro's liability shall be limited to (and Pfizer's sole remedy shall be to be
reimbursed by Phibro for) Pfizer's incremental cost of obtaining such Phibro
Service from such third party in excess of the Fully Allocated Cost of the
Services until the earlier of such time as (i) such Phibro Services are
restored, (ii) Phibro is no longer required to provide such Phibro Service, or
(iii) this Agreement is terminated pursuant to Section 10 hereof; provided, that
Pfizer shall exercise all reasonable efforts under the circumstances to minimize
the cost of any such alternatives to the Phibro Services by selecting the most
commercially reasonable cost effective alternatives which provide the functional
equivalent of the Phibro Services replaced; and provided, further, that in no
event shall Phibro's maximum aggregate liability under this Section 8.b. exceed
$5,000,000. Notwithstanding the foregoing, Phibro will have no such liability to
Pfizer unless its failure to provide the quantity or quality of
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Phibro Services required by this Agreement was due to its gross negligence or
willful misconduct.
c. Subject to the limitations in Sections 8.a. and 8.b. herein, each Party
shall indemnify, defend and hold the other and its Affiliates harmless from,
against and in respect of any Losses imposed on, sustained, incurred or suffered
by or asserted against said other Party or any of its Affiliates, directly or
indirectly relating to or arising out of (i) any breach of this Agreement, (ii)
damage to, if Phibro is the Indemnifying Party, the Pfizer Property or if Pfizer
is the Indemnifying Party, the Phibro Property, solely related to or in
connection with the provision of Services, the exercise of any rights or the
fulfillment of any obligations hereunder by such Party hereunder, and (iii) any
violation of Law on the part of an Indemnifying Party.
d. Phibro hereby agrees that it will operate the manufacturing operations,
process wastewater system, solid waste management system, process and gas
emissions systems and scrubber system discharges in accordance with (i) all
applicable laws, rules and regulations and (ii) Pfizer's practices and
procedures for the operation of such systems as such exist or are applied on the
date hereof. Phibro shall indemnify, defend and hold Pfizer and its Affiliates
harmless from, against and in respect of any Losses imposed on, sustained,
incurred or suffered by or asserted against Pfizer or any of its Affiliates,
directly or indirectly relating to or arising out of Phibro's process wastewater
system, solid waste management, gas emissions, scrubber system discharges or any
other equipment, operation or process that leads to any complaint, charge,
allegation, or other action by CETESB or any other regulatory agency or the
public, unless the Losses are caused by Pfizer's breach of this Agreement or
unless the Loss is cause by Pfizer's violation of Law. The $5,000,000 liability
limitation provided or in Section 8.b does not apply to this Section.
e. Neither Party shall be liable to the other Party for loss of profit,
goodwill or other special or consequential damages as a result of any breach of
this Agreement, unless such breach is due to willful misconduct or gross
negligence on the part of the breaching Party.
f. The amount of any Loss for which one Party provides indemnification
shall be net of any insurance proceeds or other reimbursements from third
parties received by the Party sustaining the Loss.
g. The procedures for indemnification hereunder shall be as set forth in
Sections 8.3, 8.4 and 8.10 of the Asset Purchase Agreement. Such Sections of the
Asset Purchase Agreement are incorporated herein by reference and all references
therein to the "Agreement" shall be deemed to refer to this Agreement for
purposes hereof.
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9. UTILITY SERVICES
a. The Parties shall organize a committee, composed of the respective site
leaders, the utilities managers and the EHS managers, that will oversee the
operation and regulatory compliance of all utilities and environmental control
facilities located on the Phibro Property and the Pfizer Property (the
"Utilities and Environmental Management Committee"). The mission of the
Utilities and Environmental Management Committee is to assure that Pfizer and
Phibro, respectively, are conducting their operations in accordance with the
provisions of this Agreement. Disagreement between Pfizer and Phibro over any
fundamental issue shall be referred jointly to the Guarulhos site leaders of
Pfizer and Phibro for resolution, failing which, either party shall have the
right to refer the dispute jointly to Pfizer's President, Global Manufacturing
and Phibro's Chief Operating Officer for final resolution.
b. Each Party's obligation to provide Utility Services is limited to that
contained in Appendices B and C.
(i) The annual capacity of each Utility Service as of [ ], 2000,
the 2000 utilization of each Utility Service by Pfizer and those
operations that are to be owned by Phibro and the estimated future
utilization by Pfizer and by Phibro are listed in the Addendum to Appendix
B.
(ii) During the Term of this Agreement, the Parties will provide,
upon the other Party's reasonable request and at the then unit cost for
each Utility Service, additional quantities of Utility Services if Pfizer
or Phibro, as the case may be, has sufficient excess capacity after
providing for reserves to assure an adequate margin of capacity for
existing uses.
c. Each Party will operate and maintain the assets that each Party owns
that are used to provide Utility Services in the same manner as has been
Pfizer's custom prior to the Closing and with the objective of providing
reliable Utility Services.
d. Except as described below, neither Party is obligated to make any
capital investment for the expansion of utilities capacity.
e. Each Party must notify the other of any limitations on its ability to
provide Utility Services that result from operational, maintenance or regulatory
issues.
f. The Parties will coordinate their production schedules to accommodate
planned shutdowns and service interruptions.
g. Capital costs for any expansion of utilities capacity beyond the levels
shown on the Addendum to Appendix B required to accommodate production growth
shall be borne by Phibro, as the majority utility user in light of the excess
capacity that currently exists, except in the event
7
that Pfizer's proposed consumption of a Utility Service exceeds its 2000
consumption of that Utility Service as shown in Appendix B by more than XX%, in
which case Pfizer may elect to reduce its consumption of that Utility Service to
below the XX% increase threshold, or will contribute to the capital cost
necessary for the expansion of that Utility Service on a pro rata basis, with
Pfizer's share of the cost being Pfizer's incremental usage of the Utility
Service (above the 2000 base usage) divided by Phibro's total increase in the
usage of the Utility Service (above the 2000 base usage), times 100%.
h. If the level of any Utility Service must be curtailed due to a
regulatory requirement, or for operational reasons, unless such curtailment was
the result of the failure of the Utility Service provider to adhere to
regulatory requirements or appropriate operating practices, then any reduction,
modification or elimination of the emission or discharge which triggered the
regulatory requirement will be borne pro-rata by the Parties based on each
Party's anticipated proportionate contribution to the emission or discharge. The
same pro-rata distribution will be applied to any costs that are necessary to
achieve the reduction, modification or elimination or any other action necessary
to allow the resumption of full Utility Service. If the curtailment was due to a
violation of regulatory requirements or failure to operate in accordance with
the requirements of this Agreement, then the service provider is obliged to
provide the same level of service to the other Party as was being provided
immediately prior to the curtailment.
10. TERM; TERMINATION AND SUSPENSION
a. The duration of this Agreement with respect to the Utility Services is
for a period of two (2) years from the date herein, subject to extension as
provided below (the "Utility Term"). Pfizer has the option of extending any
Utility Term for successive six (6) month periods, effective upon the expiration
of the previous corresponding Utility Term; provided, however, that Pfizer
provides notice to Phibro of its intention to do so, in writing, not less than
three (3) months prior to the expiration of the previous Utility Term.
Notwithstanding the foregoing, Well Water from Pfizer is not subject to the
Utility Term, and Pfizer will supply such Well Water indefinitely, subject,
however, to Pfizer's ability to supply water from the subject wells based on the
output of said wells and Pfizer's captive use of water from those wells after
the water utilities have been separated. With respect to the Support and
Administrative Services, the duration of this Agreement (the "S&A Term") is
defined specifically, by each Support and Administrative Service, in Appendices
C (collectively, with the Utility Term, the "Term").
b. Either party has the right to terminate its obligation to purchase any
or all Services as follows: (i) with respect to a Utility Service, on not less
than twelve (12) months advance written notice to the other party, which notice
may not be given prior to one (1) year from the date hereof; and (ii) with
respect to Support and Administrative Services, on not less than three (3)
months advance written notice to the other party.
8
c. Either Party may terminate this Agreement in the event of a material
breach of this Agreement by the other Party, if: (i) within thirty (30) days
after receipt of written notice of such breach, the breaching Party has not
commenced and is not diligently implementing such a cure; or (ii) the breach has
continued uncured for a period of sixty (60) days after the breaching Party has
been notified in writing of such breach.
d. In addition to any other remedies either Party may have at law, equity
or under this Agreement, either Party may terminate this Agreement in the event
the other Party fails to comply with the constraints set forth in Section 14 of
this Agreement.
11. CONFIDENTIALITY
a. Each Party recognizes that in the performance of this Agreement or as a
result of the Parties' ongoing relationships, confidential and/or proprietary
information belonging to the other Party regarding the Services or any other
information about the other Party may be disclosed or become known to the other
Party or its respective Affiliates ("Confidential Information"). Unless
otherwise expressed in writing to the other Party, any oral, visual or written
information, that is exchanged between the Parties shall be presumed to be
Confidential Information. Each Party agrees to take the necessary precautions to
assure that the other Party's Confidential Information remains confidential and
to hold in confidence after termination of this Agreement any and all oral,
visual or written confidential and/or proprietary information with respect to
the Services or any other information about the other Party which belongs to the
other Party. Notwithstanding the foregoing, that this obligation shall not apply
to:
(i) information that, at the time of disclosure, is in the public
domain;
(ii) information that, after disclosure, is published or otherwise
becomes part of the public domain through no fault of the Party to whom
the information was disclosed;
(iii) information that a Party can show through its records was in
its possession or the possession of an Affiliate at the time of disclosure
(except for Confidential Information regarding the Business in Pfizer's
possession, which shall continue to be confidential); and
(iv) information that may be received by a Party in good faith from
a source other than the other Party, which source either has no duty of
nondisclosure to such other Party or, if such source does have a duty of
non-disclosure, the receiving Party was unaware of or had no reasonable
basis for knowing thereof.
b. Each Party shall maintain the right to disclose Confidential
Information if required to do so by Law, but shall endeavor to keep and assist
the other Party in keeping it confidential by all appropriate means, and shall
afford the other Party the opportunity to contest the disclosure obligation. If
a Party finds it necessary to disclose any such information in any judicial or
9
administrative hearing or proceeding, the Party shall attempt to disclose such
information "in camera" or subject to "protective order" or on some other
non-public basis.
c. The provisions of this Section 11 shall survive the termination of this
Agreement and as to any particular piece of Confidential Information, shall
continue for a period of five (5) years from such termination or until such
information becomes public knowledge through no fault of either Party, whichever
occurs first. Upon termination of this Agreement for any reason whatsoever, each
Party will make no further use or disclosure of such Confidential Information
and upon written request, such Party further will immediately deliver to the
other Party all such Confidential Information as shall be in written or other
tangible form (including all copies thereof); provided, that one copy of any
document may be kept by the legal department of each Party solely to ascertain
its obligations.
12. COMPLIANCE WITH LAWS
Each Party agrees to comply in all material respects with all applicable
Laws in respect of providing and use of the Services set forth herein.
13. COOPERATION
The Parties hereto acknowledge that the operation of each of their
respective facilities and the conduct of operations thereto will occur in close
proximity to each other. Accordingly, the Parties agree to: (i) be considerate
of each other and each Party's operations; (ii) communicate with each other from
time to time on matters which may, in the reasonable judgment of each such
Party, affect the other Party, its facilities or its operations at the Guarulhos
Property, including, without limitation, communicating with each other regarding
planned or anticipated shutdowns or interruptions of Services or fluctuations in
production schedules; (iii) provide each other copies of any written studies,
reports or audits provided to or obtained from any Governmental Authority which
relate to environmental or employee health and safety matters; (iv) establish
and enforce policies and procedures requiring the continuous and effective
operation of all emission control devices on each Party's site; and (v) prepare,
implement and give each other a hazardous substance accidental release
prevention/minimization plan which is designed to prevent accidental releases,
to minimize the consequences of those that happen and to provide each other with
adequate notice of activities involving the shipment, delivery, presence or
generation of hazardous substances.
14. EASEMENTS AND RESTRICTIVE COVENANTS [Additional easements to come.]
a. The Parties agree to grant each other and their successors and assigns
reciprocal easements or reservations of rights for access to (1) maintain and/or
repair structures or facilities on the other Party's property used in connection
with the provision of Services and (2) during the time Services are provided, to
inspect and monitor the other Party's activities and audit such Party's
compliance with Environmental Laws as such activities and compliance relate to
the
10
Services to be provided pursuant to this Agreement. Neither Party's grant or
reservation of rights for access to audit or inspect obligates such Party to
inspect or audit the other's activities or relieves either Party of any duty or
obligation to do so under this Agreement, the Asset Purchase Agreement or
pursuant to Environmental Law.
b. In addition to the foregoing and any limitations and restrictions in
the Appendices to this Agreement, the Parties covenant and agree that neither
they nor their successors and assigns will use or store Hazardous Substances at
locations which violate setback requirements under applicable Laws or other
reasonable setback requirements imposed by either Party on the other to prevent
or minimize adverse impacts to the requesting Party's property; provided,
however, that neither Party may request such additional restrictions on the
other to apply to Hazardous Substances as presently used or stored by the
Business.
15. MISCELLANEOUS
a. Neither Party shall be responsible for failure or delay in performance
of any Services, nor shall either Party be responsible for failure or delay in
receiving such Service, if caused by an act of God, act of public enemy, war,
government acts or regulations, fire, flood, hurricane, embargo, quarantine,
epidemic, labor stoppages beyond its reasonable control, accident, explosion,
unusually severe weather or other cause similar or dissimilar to the foregoing
beyond their control ("Force Majeure"). Notwithstanding the foregoing, to the
extent Services are available after the occurrence of a Force Majeure event, the
Parties shall each be entitled to, and the other Party shall provide, a level of
Services equivalent to the proportionate share of the Services used by the
Parties immediately prior to the occurrence of any such Force Majeure event.
b. This Agreement shall not be assignable either in whole or in part by
either Party without the prior written consent of the other Party, except that
either Party may assign this Agreement in whole or in part to any Affiliate;
provided, that any such assignment shall not relieve the assignor of its
respective obligations under this Agreement. Any assignment, regardless of
whether to an Affiliate or(with the consent of the non-assigning Party) to a
third party, must include a written commitment by the assignee to be bound by
the provisions of this Agreement.
c. Any waiver of any provision of this Agreement must be in writing and
signed by the Party against whom it is to be effective in order to be effective.
A waiver in one instance of a provision shall not be deemed a waiver of such
term or condition in any other instance. No failure or delay by any Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Any amendment of this Agreement must be in writing and signed by each of the
Parties hereto.
11
d. All notices and other communications hereunder shall be in writing and
shall be deemed given: (i) on the date of delivery if delivered personally; (ii)
on the date of transmission if sent via facsimile transmission to the facsimile
number given below, and a telephonic confirmation of receipt is obtained
promptly after completion of transmission; (iii) on the date after the date of
delivery to a reputable nationally recognized overnight courier service or (iv)
three days after being mailed by registered or certified mail (return receipt
requested) to the Parties at the following addresses (or at such other address
for a Party as shall be specified by like notice):
(i) If to Seller, to:
Plant Manager
Pfizer Inc.
Guarulhos, Brazil
Telecopy: [ ]
With copies to:
President, Global Manufacturing
Pfizer Inc.
235 E. 42nd Street
New York, NY 10017
Telecopy: 212-672-7517
With copies to:
General Counsel
Pfizer Inc.
235 E. 42nd Street
New York, NY 10017
Telecopy: 212-808-8924
(ii) If to Buyer, to:
e. In the event of a conflict between the terms and conditions of this
Agreement and the terms and conditions of the Asset Purchase Agreement, the
terms and conditions of this Agreement shall govern, supersede and prevail.
12
f. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without reference to the choice of law
principles thereof.
g. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
h. This Agreement, including the Appendices attached hereto, and the other
agreements which Pfizer and Phibro have entered into contemporaneously herewith
and therewith, embody the entire agreement of the Parties with regard to the
subject matter hereof and supersede any prior communications, commitments,
representations or warranties, both written and oral, relating to the subject
matter hereof.
i. Subject to Section 15.b of this Agreement and Section 10.3 of the Asset
Purchase Agreement, this Agreement shall inure to the benefit of and be binding
upon the Parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
person other than Pfizer, Phibro, or their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.
* OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT.
j. [ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
k. Each Party shall provide the other Party and its auditors and
authorized representatives such information relating to the Services and the
accuracy of fees invoiced (including the basis on which such fees were derived)
as such Party shall from time to time reasonably request, and shall permit such
Party and its auditors and authorized representatives reasonable access, during
regular business hours and upon reasonable notice, to such Party's books and
records relating to the Services for purposes of verifying the Services provided
and the charges therefor.
l. The Parties acknowledge, except as specifically provided in Sections
8.a and 8.b of this Agreement, that the provisions of this Agreement are unique
and that it would be impractical to measure damages in the event of a breach of
this Agreement. Accordingly, subject to the limitation on damages in Sections
8.a and 8.b hereof, any other breach of this Agreement shall
13
entitle the injured party to equitable relief (including specific performance or
injunctive relief) without having to post a bond or security, and the breaching
Party consents to the issuance of such injunction or grant of such specific
performance. In any action or proceeding to enforce the provisions of this
Agreement, the breaching Party waives the defense that a remedy of damages will
be adequate for the breach of its duties under this Agreement, except as
provided under Section 8.a and 8.b of this Agreement.
m. Phibro, on the one hand, and Pfizer on the other, acknowledge that they
are separate entities, each of which has entered into this Agreement for
independent business reasons. The relationship of Pfizer and Phibro hereunder is
that of one independent contractor to another, and nothing contained herein
shall be deemed to create a joint venture, partnership or any other
relationship.
n. Headings contained in this Agreement are for reference purposes only
and should not be incorporated into this Agreement and shall not be deemed to be
any indication of the meaning of the clauses to which they relate.
o. Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable laws, but in case any one
or more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change as to cause
completion of the transactions contemplated hereby to be unreasonable.
14
IN WITNESS WHEREOF, this Agreement has been executed the date first herein
written.
PFIZER INC.
By: _______________________________
Name:
Title:
PHILIPP BROTHERS CHEMICALS, INC.
By: _______________________________
Name:
Title:
15
ATTACHMENT 1 -- PLOT PLAN OF GUARULHOS SITE
16
Since both Administrative and Utilities services are being costed on an
allocation basis, we may want to combine Appendices A & B into a single
Appendix.
APPENDIX A -- SUPPORT AND ADMINISTRATIVE SERVICES
One page listing each of the Support and Administrative Services to be
provided by Pfizer to Phibro and by Phibro to Pfizer, and each of the Service's
2001 annual cost, which is to be paid pro-rata for the time the service is first
used. Each of the listed Services has a corresponding Appendix C which describes
the Service, the expected duration of the Service, the anticipated long term
disposition of the service and information which indicate define ownership and
responsibilities related to the provision of the service.
17
APPENDIX B - UTILITY SERVICES - SUMMARY AND 2001 PRICES
One page listing of each of the Utility Services that Phibro will provide
to Pfizer and the one Utility Service that Pfizer will provide Phibro. As above,
each of the Utility Services has a corresponding Appendix C that lists the same
type of information as described above.
18
ADDENDUM TO APPENDIX B -- UTILITIES CAPACITY AND BASE UTILIZATION
This Addendum is a spreadsheet that used in the determination of the
proportional cost sharing for utilities expansions which may become necessary
due to increased demand. This Addendum is a model of utility usage based on 2000
standard utilization factors. The volumes of the various Pfizer and Phibro
product lines are "grandfathered", in that it is Phibro's responsibility to
provide those levels of utility support services with no capital contribution
from Pfizer.
19
APPENDICES C-1 THROUGH C-33
C-1 Intentionally left blank
C-2 Steam Generation and Distribution
C-3 Intentionally left blank
C-4 Intentionally left blank
C-5 Electricity and Emergency Power
C-6 Intentionally left blank
C-7 Wastewater Treatment and Sewer Systems
Addendum to C-7 -- Limitations on Discharge of Process Wastewater
C-8 Stormwater/Non-Process Wastewater System
Addendum to C-8 -- Limitations on Discharge of Non-Process Wastewater
C-9 Other Utilities
C-10 Well Water
C-11 Engineering/Maintenance Facilities ???? Shouldn't this cover Pfizer's use
of the maintenance shops?
C-12 Administration Space
C-13 Quality Operations/Control Space
C-14 Developmental Laboratory Space
C-15 Intentionally left blank
C-16 Intentionally left blank
20
C-17 Plant Security and Plant Entrances
C-18 Plant IT Services
C-19 Accounting Services
C-20 Purchasing Services
C-21 Intentionally left blank
C-22 Canteen
C-23 Bank
C-24 Medical Department Services
C-25 Intentionally left blank
C-26 Intentionally left blank
C-27 Intentionally left blank
C-28 Intentionally left blank
C-29 Intentionally left blank
C-30 Intentionally left blank
C-31 Intentionally left blank
C-32 Intentionally left blank
C-33 Third Party Contracts
C-34 Intentionally left blank
C-35 Pfizer Club
C-36 Intentionally left blank
C-37 Intentionally left blank
21
C-38 Spare Parts Storage and Administration
C-39 Temperature Monitoring ???? Part of Security?
C-40 Fire Alarm System ???? Part of Security?
22
EXHIBIT J
(Net Economic Benefit Letter)
_______, 2000
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, New Jersey 07024
Re: Asset Purchase Agreement (the "Agreement"), dated as
of September 28, 2000, between Pfizer Inc. ("Pfizer")
and Philipp Brothers Chemicals, Inc. ("Purchaser")
Gentlemen:
Reference is made to the above-mentioned Agreement. Capitalized
terms not otherwise defined herein have the meanings assigned thereto in the
Agreement.
1. Affected Jurisdictions. (a) Notwithstanding that the Closing
under the Agreement is occurring on the date of this letter agreement, pursuant
to Section 7.3(d)(ii) of the Agreement, closing of the transfer of the shares of
capital stock or assets, as the case may be, and control of the Business (the
"Transfer") located in Japan and China (individually, an "Affected
Jurisdiction," and collectively the "Affected Jurisdictions") will be delayed
with respect to each Business in the Affected Jurisdictions until all of the
steps to closing in the applicable Affected Jurisdiction have been taken and
completed (such date being referred to as the "Affected Jurisdiction Transfer
Date"). Each Transfer will be effected on its respective Affected Jurisdiction
Transfer Date without any further action on the part of either Pfizer or
Purchaser or their respective Affiliates in the Affected Jurisdictions.
(b) On, or as soon as practicable after each Affected
Jurisdiction Transfer Date (and no later than 60 calendar days thereafter),
Pfizer shall notify the Purchaser in writing of the Applicable Settlement Amount
(as defined in Section 1.1(f)). Subject to Section 1.1(f), the Applicable
Settlement Amount, if any, shall be determined by Pfizer in accordance with GAAP
applied on a basis consistent with the past practices of such Business in the
Affected Jurisdiction. Pfizer shall provide Purchaser with access to the books,
records and personnel of the Business in the Affected Jurisdiction necessary for
Purchaser to properly examine Pfizer's calculations in this regard. Purchaser
may, in each case, dispute Pfizer's calculation of the Applicable Settlement
Amount, but only on the basis that either (i) the Applicable Settlement Amount
was not determined in accordance with GAAP applied on a basis consistent with
the past practices of the Business located in the Affected Jurisdiction; or (ii)
in the event that the terms of the Agreement or this letter agreement are
breached; provided, however, the Purchaser shall notify Pfizer in writing of the
amount of the Applicable Settlement Amount in dispute and the reasons therefor,
or the nature of the breach as appropriate, within thirty (30) days, in each
case, after notification of the Applicable Settlement Amount. The failure by
Purchaser to provide a notice of dispute within such thirty (30) day period will
constitute the Purchaser's acceptance of Pfizer's calculation of the Applicable
Settlement Amount. Pfizer shall provide Purchaser with access to the books,
records, and personnel of the Business in the Affected Jurisdictions necessary
for Purchaser to properly examine the calculation of the Applicable Settlement
Amount.
(c) If a notice of dispute shall be timely delivered pursuant
to the preceding paragraph, Pfizer and Purchaser shall, during the thirty (30)
Business Days following the date of such delivery, negotiate in good faith to
resolve the disputed amount. If the parties are unable to reach an agreement
during such time period, the parties shall refer the dispute to the Accounting
Expert referenced in Section 2.7(c) of the Agreement. The Accounting Expert
shall make a determination with respect to the unresolved amount of the
Applicable Settlement Amount in dispute within fifteen (15) calendar days after
its engagement by Pfizer and the Purchaser. The Accounting Expert shall deliver
to Pfizer and the Purchaser, within such fifteen (15) day period, a report
setting forth its adjustment, if any, to the Applicable Settlement Amount and
the calculation supporting such adjustment. The determination of the Accounting
Expert shall be final, binding and conclusive on the parties. Pfizer and
Purchaser shall each pay one-half of all costs incurred in connection with the
engagement of the Accounting Expert.
(d) The Applicable Settlement Amount shall be deemed final for
the purposes of this letter agreement upon the earlier of (i) the failure of the
Purchaser to notify Pfizer of a dispute within thirty (30) days of Pfizer's
notification to the Purchaser of the Settlement Amount or (ii) the resolution
pursuant to Section 1(c) of any dispute for which the Purchaser provided proper
notification under Section 1(b) to Pfizer.
(e) (i) Within three Business Days of the Applicable
Settlement Amount being deemed final under Section 1(d), if the final Applicable
Settlement Amount is a positive number, the local Pfizer Affiliate will pay the
Applicable Settlement Amount in local currency to the local Purchaser Affiliate
in the applicable Affected Jurisdiction by wire transfer in immediately
available funds to an account designated by the Purchaser in writing.
(ii) Within three Business Days of the Settlement Amount being
deemed final under Section 1(d), if the final Settlement Amount is a negative
number, the local Purchaser Affiliate will pay the Settlement Amount in local
currency to the local Pfizer Affiliate in the Affected Jurisdiction by wire
transfer in immediately available funds to an account designated by the
Purchaser in writing.
(f) The local Pfizer and Purchaser Affiliates shall within a
period of 60 days after each Affected Jurisdiction Transfer Date calculate the
Applicable Settlement Amount and, if appropriate, make such additional payments
to each other as may be necessary to ensure that they are placed in the same
economic position as if the Business had been transferred to the local Purchaser
Affiliate on the date hereof. The Applicable Settlement Amount shall be defined
as the local currency net cash flow of the business, that has been experienced
in the Affected Jurisdiction during the period commencing on the date hereof and
ending on the Affected Jurisdiction Transfer Date (the "Affected Jurisdiction
Interim"), meaning (x) the amount of receivables collected on sales that
occurred after the Closing Date less (y) the sum of (1) SG&A costs, (2) freight
and distribution costs, (3) payables and (4) income and any other applicable
Taxes. For the avoidance of doubt, all receivables and payables generated during
the Affected Jurisdiction Interim and remaining unsettled as of the Affected
Jurisdiction Transfer Date shall be for the account of the local Purchaser
Affiliate.
2. Conduct of the Business. (a) During the Affected Jurisdiction
Interim, Pfizer shall, and shall cause its Affiliates to, conduct the Business
in the Affected Jurisdictions in the ordinary and usual course consistent with
past practice and in compliance with all applicable Laws. During the Affected
Jurisdiction Interim, Pfizer shall cause the Business in the Affected
Jurisdictions to adhere to the requirements set forth in Section 7.2 of the
Agreement.
(b) During the Affected Jurisdiction Interim, Pfizer shall
cause the Business in such Affected Jurisdictions to maintain, in all material
respects, true and complete books of account containing an accurate record of
all data necessary for the proper computation of the Settlement Amount.
(c) During the Affected Jurisdiction Interim, Purchaser shall
have, to the maximum extent legally permissible, day-to-day managerial control
over the Business in the Affected Jurisdictions and Pfizer shall follow the
directions of Purchaser and its authorized representatives in this regard.
Without limiting the foregoing, neither Pfizer nor its Affiliates shall hire or
terminate any employee of the Business in the Affected Jurisdictions during the
Affected Jurisdiction Interim without the prior consent of Purchaser.
3. Information and Documents. During the applicable Affected
Jurisdiction Interim, Pfizer and its Affiliates shall permit Purchaser and its
representatives to have access to the Business in the Affected Jurisdiction on
the terms and conditions set forth in Section 7.1 of the Agreement.
4. Aggregate Payment and Related Matters. Notwithstanding the
provisions of this letter agreement, the Closing Date Payment shall not be
affected by any term or provision of this letter agreement. Notwithstanding
anything in this letter agreement, the Inventories of the Business as of the
Closing Date relating to the Affected Jurisdictions shall be calculated as of
the Closing Date.
5. Responsibility for Liabilities. As of and from the Affected
Jurisdiction Transfer Date, Purchaser shall assume, pay and discharge all
Liabilities resulting from the operation of or otherwise relating to the
Business in the applicable Affected Jurisdiction that remain outstanding as of
such date to the extent such Liabilities would be Assumed Liabilities.
6. General Provisions. The provisions of Article X of the Agreement
shall be deemed incorporated into this letter agreement by reference, as if
herein fully set out.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Please evidence your agreement with the foregoing by executing this
letter agreement in the space indicated below.
Very truly yours,
PFIZER INC.
By: __________________________
Name:
Title:
Accepted and Agree to
As of the above date
PHILIPP BROTHERS CHEMICALS, INC.
By: __________________________
Name:
Title:
EXHIBIT K
PROMISSORY NOTE
$40,000,000 Dated: ____________, 2000
FOR VALUE RECEIVED, the undersigned, PHILIPP BROTHERS CHEMICALS,
INC., a New York corporation (the "Company"), hereby promises to pay to the
order of PFIZER INC., a Delaware corporation (the "Seller"), or to any Affiliate
(as defined in the Asset Purchase Agreement referenced below) of Pfizer if this
Note is held by such Affiliate following assignment and transfer from Pfizer
(the Seller or such Affiliate being the "Payee"), the principal amount of FORTY
MILLION UNITED STATES DOLLARS (U.S. $40,000,000) or, if less, as such amount may
be adjusted pursuant to Section 1(b), on or prior to ______________, 2003 (the
"Maturity Date") and to pay interest on the unpaid principal amount of this
Note, as set forth in Section 1 until such principal amount is paid in full.
Both principal and interest hereunder are payable in lawful money of the United
States of America to the Payee in cash or other immediately available funds as
set forth herein.
This Note is being issued pursuant to that certain Asset Purchase
Agreement, dated as of September 28, 2000, among the Purchaser and the Asset
Selling Corporations (as defined therein) (the "Asset Purchase Agreement"), and
is secured by the collateral described in the Collateral Documents. All
capitalized terms used but not otherwise defined herein shall have the meanings
set forth in the Asset Purchase Agreement.
SECTION 1. Repayment.
(a) Principal. The Company hereby promises to pay the principal
amount of this Note, as such amount may be adjusted pursuant to Section 1(b), as
set forth on Schedule 1(a) attached hereto.
(b) Principal Adjustment. The principal amount of this Note is
subject to possible reduction by an amount ("the "Reduced Principal") specified
in Section 2.7(d) of the Asset Purchase Agreement. Any interest on the Reduced
Principal paid by the Company to the Payee prior to the date of determination of
the Final Inventories shall be deducted from the next semi-annual interest
payment amount.
(c) Interest. The Company hereby promises to pay interest on the
unpaid principal amount of this Note from the date hereof until this Note shall
be paid in full in cash or other immediately available funds at the Applicable
Rate or at the maximum rate permitted by law, whichever is less. Notwithstanding
the foregoing, immediately upon the occurrence of an Event of Default, and for
as long thereafter as such Event of Default shall be continuing, the unpaid
principal amount of this Note shall bear interest at a rate which is two percent
per annum in excess of the rate of interest applicable at such time. Interest,
computed on the basis of a year of 365/6 days for the actual number of days
elapsed, shall be payable semi-annually in arrears, due and payable
on [July __th and January __th of each year] for so long as amounts are
outstanding under this Note. Schedule 1(a) sets forth the dates and amounts of
the scheduled principal and interest payments due hereunder.
(d) Payment. All amounts due and payable under this Note shall be
payable in lawful money of the United States of America, in cash or other
immediately available funds to the Payee by wire transfer to an account
designated by the Payee in writing not less than two Business Days prior to the
applicable payment due date. If the Maturity Date or other date fixed for
payment hereunder is not a Business Day, such payment date shall be extended to
the next succeeding Business Day, and during any such extension, interest on the
unpaid principal amount of this Note shall accrue and be payable at the
Applicable Rate as set forth in this Section 1.
SECTION 2. Optional Prepayment. The Company may, at any time and
from time to time, without premium or penalty, prepay all or a portion of the
unpaid principal amount of this Note, together with unpaid accrued interest on
the amount so prepaid to the date chosen for prepayment.
SECTION 3. Events of Default. (a) For purposes of this Note, an
"Event of Default" shall be deemed to have occurred upon:
(i) any failure by the Company to pay all or any portion of
principal or interest under this Note when the same shall be due and
payable in accordance with the terms hereof, whether on the Maturity
Date, a scheduled payment date, by acceleration or otherwise, which
failure continues unremedied for a period of 5 Business Days;
(ii) any failure by the Company to perform, keep or observe
any of covenants herein or in the Collateral Documents or the
failure of any representation or warranty herein made by the Company
or in the Collateral Documents to be true and correct in all
material respects as of the date when made or deemed made, and which
failure continues unremedied for a period of thirty (30) days after
written notice thereof is sent by Payee to the Company;
(iii) any failure by the Company to pay all or any portion of
any amounts due and owing to Pfizer pursuant to Sections 2.6(b) or
2.8 of the Asset Purchase Agreement, which failure continues
unremedied for a period of 5 Business Days; or
(iv) an occurrence constituting an "Event of Default" under
[Sections _______ of the Bank Credit Agreement, the terms of which
are incorporated herein by reference].
(b) Upon the occurrence and during the continuance of any Event of
Default (except an Event of Default described in Section [Payment Default]
[Bankruptcy]
of the Bank Credit Agreement), the Payee may, by written notice to the Company,
declare all or any portion of the unpaid principal amount of this Note and all
interest accrued thereon to be immediately due and payable. Upon the occurrence
of any Event of Default described in Section [Payment Default] [Bankruptcy] of
the Bank Credit Agreement, the unpaid principal amount of this Note and all
interest accrued thereon shall automatically become due and payable, without any
action or notice by the Payee. Demand, presentment, protest and notice of
non-payment are hereby waived by the Company.
SECTION 4. Note Pari Passu to Senior Indebtedness. The Company
represents and covenants that this Note and the obligations of the Company
hereunder do rank and will rank at least pari passu in priority of payment with
all other Senior Indebtedness of the Company.
SECTION 5. Remedies Cumulative. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder or under the
Collateral Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges provided herein
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 6. Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address first set forth above or any
other address notified in writing by the Payee to the Company and, if to the
Company, at its address at XXXXXXXXXXX, with a copy to XXXXXXXXXXXX, or any
other address notified in writing by the Company to the Payee. Any notice given
in conformity with the foregoing shall be deemed given when personally delivered
or upon the date of delivery specified in the registered mail receipt.
SECTION 7. Governing Law. This Note shall be governed by, and
construed and enforced in accordance with the law of the State of New York as in
effect from time to time, without giving effect to any choice of laws or
conflict of laws principles thereof (other than Section 5-1401 of the General
Obligations Law). Company and Payee hereby agree and consent to be subject to
the jurisdiction of the United States District Court for the Southern District
of New York and in the absence of such Federal jurisdiction, the parties consent
to be subject to the jurisdiction of the Supreme Court of the State of New York,
County of New York.
SECTION 8. Severability. If any provision of this Note is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of the holder hereof in order to
effectuate the provisions hereof and the invalidity of any provision hereof in
any jurisdiction shall not affect the validity or
enforceability of any other provision in any other jurisdiction, including the
State of New York.
SECTION 9. Successors and Assigns; Transferability. This Note shall
be binding upon and inure to the benefit of the Payee and the Company and their
respective transferees, successors and assigns; provided, however, that the
Company may not transfer or assign any of its rights or obligations hereunder
without the prior written consent of the Payee and Seller (and any permitted
Payee) may transfer or assign any of its rights hereunder to any of its
Affiliates without the prior written consent of the Company but any purported
transfer or assignment to any Person that is not an Affiliate will be prohibited
without the prior written consent of the Company.
SECTION 10. Replacement of Note. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and the Company's receipt of an indemnity agreement of the Payee
reasonably satisfactory to the Company, the Company will, at the expense of the
Payee, execute and deliver, in lieu thereof, a new Note of like terms.
SECTION 11. Definitions.
(a) For purposes of this Note, the following terms have the
following meanings:
"Applicable Rate" shall mean [13]% per annum.
["Bank Credit Agreement" shall mean the Credit Agreement,
dated as of _____________, among PNC Bank, National Association and
the Company, as in effect on the date of this Note and without
giving effect to any amendments, modifications or waivers thereto
made without the approval of Seller. Any repayment (including by way
of refinancing) of all amounts due and owing by Company under the
Bank Credit Agreement shall not affect references in this Note to
such Bank Credit Agreement, which shall survive any termination of
such Bank Credit Agreement.]
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in New York are authorized or
required by law to close.
"Collateral Documents" shall mean _____________________.
"Company" shall have the meaning ascribed to such term in the
first paragraph of this Note.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in
the
opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards
Board, or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession,
which are applicable to the circumstances as of the date of
determination.
"Indebtedness" shall mean any indebtedness, whether or not
contingent, for or in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property,
including pursuant to capital leases (except any such balance that
constitutes an accrued expense or a trade payable), if and to the
extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such person or entity prepared on a
consolidated basis in accordance with GAAP, and including, to the
extent not otherwise included, the guaranty (other than by
endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements
in respect thereof), of all or any part of the foregoing
indebtedness.
"Maturity Date" shall have the meaning ascribed to such term
in the first paragraph of this Note.
"Payee" shall have the meaning ascribed to such term in the
first paragraph of this Note.
"Person" means an individual, a partnership, a corporation, as
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Seller" shall mean Pfizer Inc., a Delaware corporation.
"Senior Indebtedness" shall mean [to be supplied and to
include the indebtedness outstanding under the Bank Credit
Agreement.]
(b) Unless otherwise provided herein, (i) the word "from" shall mean
from and including and (ii) the words "to" or "until" shall mean to and until
but excluding.
(c) All references to "Sections" of this Note shall be to Sections
of this Note unless otherwise specifically provided.
SECTION 12. Descriptive Headings. The descriptive headings of this
Note are inserted for convenience only and do not constitute a part of this
Note.
SECTION 13. Amendments and Waivers. Any term, covenant, condition or
other provision of this Note may be amended or compliance therewith may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Payee. Any
amendment or waiver shall be binding upon each future holder of this Note and
the Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived or impair any right consequent
thereon.
SECTION 14. Non-Recourse. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under this Note or for any claim based on, in respect
of or by reason of, such obligations or their creation. The Payee by accepting
this Note waives and releases such persons from all such liability.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
by its duly authorized officer as of the day and year first written above.
[COMPANY]
By:_______________________
Name:
Title:
EXHIBIT L.-1
, 2000
Pfizer Limited
Pfizer Centre
5 Patel Estate
Off. S. V. Road
Jogeshwari (West)
Mumbai 400 102 India
Dear Sirs,
DISTRIBUTION AGREEMENT
We (PHIBRO ANIMAL HEALTH, INC.- PHIBRO.) write to confirm that we have appointed
you as our non-exclusive distributor for the sale of certain of our medicated
feed additive products as listed in Schedule 1 to this Agreement, which may be
amended by us from time to time (the "Products") in India (the "Territory" which
in this case shall include India, Sri Lanka, Bangladesh and Nepal).
The terms and conditions relating to this appointment are as set out in the
following provisions of this letter (this "Agreement").
1. Supply of the Products
1.1 In May of each year you will send to Phibro a non-binding projection of
the requirements for the 12-month period beginning July 1. The initial
forecast is attached hereto as exhibit .
1.2 You will from time to time place firm and irrevocable orders with us or
our nominee as notified to you from time to time for the supply for your
own account of the Products. We shall confirm acceptance of your order by
facsimile and subject to availability, will use all reasonable endeavors
to fulfill and/or procure that our nominee fulfils such orders.
1.3 We agree to ensure that the Products are manufactured, packaged, tested
and stored (while under our control) in compliance with the specifications
therefor and in accordance with European Union Good Manufacturing
Practices for veterinary medicinal products ("GMP"), as well as all
applicable laws and regulations, on the understanding that you will keep
us advised of all such applicable laws and regulations in the Territory in
accordance with Clause 8 below.
1.4 All claims relating to quality, confirmity to specifications, quantity,
weight, condition and loss of or damage to any shipment of Products
supplied under this Agreement will be deemed waived by you, unless made in
writing within sixty (60) days after delivery to you of that shipment.
2
2. Repackaging and Reformulating
You are hereby authorized to repackage and reformulate the Products for
resale in the Territory, in accordance with past practice.
3. Price and Payment
3.1 You will be invoiced for the Products purchased by you under this
Agreement by us or our nominee at the prices set out in Schedule 1 hereto
on the basis of C&F [insert name of port of entry]. All prices are
specified in [US dollars. Prices shall remain firm until December 31, 2000
and, in subsequent years, for one calendar year. Beginning three months
before the start of each calendar year, new prices shall be negotiated by
the parties. Price increases may not exceed increases in fully allocated
cost plus 15%. If the parties do not agree to revised prices at least 30
days prior to the end of a calendar year, Phibro at its sole discretion
may terminate the agreement as of the end of such calendar year.
].
3.2 Unless otherwise agreed in writing by us, you shall pay for all Products
supplied under this Agreement on open account terms within sixty (60) days
of the invoice date. Payment shall be made in [US dollars] (or such other
currency as from time to time may be stipulated in the invoice) against
delivery of documents, and no fluctuation of exchange rate will affect
your obligation to pay the amount stated in the invoice. Phibro retains
the right to change the payment terms (including without limitation to COD
or letter of credfit) should the credit situation in Phibro's good faith
estimation warrant the change.
4. Authorizations
You agree to obtain from the relevant authorities in the Territory and
maintain in force, as appropriate, all import or other licenses (the
"Authorizations") that are necessary to enable the Products to be imported
and distributed within the Territory.
5. Stocks
You will maintain stocks of the Products in quantities which in your good
faith business judgment are adequate to meet the market requirements
6. Promotion
6.1 You will use your reasonable best endeavors to promote the sale and
distribution of the Products through the normal channels of trade.
6.2 You agree to ensure the satisfactory distribution of all advertising,
display and other promotional materials that may be prepared by us or our
nominees, and to see that it is used to the best advantage in accordance
with the promotional plans agreed between us.
7. Expenses
All expenses incurred by you as distributor of the Products are for your
own account unless we specifically authorize you to debit us.
3
8. Information
You will keep us advised of all laws and regulations in the Territory
affecting the importation, distribution, sales, advertising, packaging and
labeling of the Products. You will also keep us informed of competitive
activity and advertising, and local market prices.
9. Limit of Authority
Nothing in this Agreement shall render or be construed as rendering you
our agent for any purposes whatsoever, and you shall have no authority to
and will not enter into any contract, make any representation, give any
warranty or incur any liability on our behalf nor will you pledge our
credit.
10. Protection of the Products
During the term of this Agreement you will immediately advise us of any
imitations of the Products or of any actual, suspected or threatened
infringement of the trademarks relating to the Products. You shall also,
but only upon our request and at our expense, take all such action as may
be necessary to protect our rights in the Products and in the said
trademarks. Further, you shall not take or consciously permit any action
to be done which shall in any way prejudice our rights in the Products, or
in the said trademarks.
11. Trademarks and Packaging
You will sell the Products at all times only under their trademarks and
all such trademarks shall at all times remain our exclusive property. You
will comply with any and all trademark use policies that we provide you
with and will at all times use the trademarks in a manner that maintains
the quality of the trademarks, consistent with past use.
12. Exports
You will not during the term of this Agreement sell or offer for sale any
of the Products outside the Territory or for delivery outside the
Territory and you will promptly refer to us all enquiries and orders that
you receive relating to the sale of any of the Products outside the
Territory or for delivery outside the Territory
13. Adverse Effects
13.1 You will immediately inform us, initially by telephone confirmed
thereafter in writing within five (5) business days, of any adverse
reaction or undesirable effect related to the Products of which you become
aware.
13.2 You agree not to reveal or disclose any adverse reaction or undesirable
effect as referred to in Clause 13.1 above to any third party and not to
take any action in relation thereto without first obtaining our written
consent, but nothing contained in this Clause 13 shall restrict your right
to make a timely report of such matter to any government or public
authority as required by any applicable law or regulation.
4
13.3 We shall handle any claim in relation to any adverse reaction or
undesirable effect and you will provide all such information and
assistance as we may require.
14. Returned Products
14.1 If any Product is alleged to be defective or otherwise unfit for sale and
is returned to you by your customers, you shall accept that Product for
replacement or credit at your option and, subject to Clause 14.2 below,
shall bear the costs involved.
14.2 If you are able to prove, to our reasonable satisfaction, that any
returned Product was at the time of shipment to you defective or
unsaleable as the result of our fault, we shall at our option either
replace the defective or unsaleable Product or credit you with the
relevant purchase price paid by you.
14.3 WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OR
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHETHER PERTAINING
TO THE PRODUCTS AND WHETHER ARISING BY LAW, CUSTOM, CONDUCT, OR USAGE OR
TRADE, AND THE RIGHTS AND REMEDIES PROVIDED IN THIS SECTION 14 ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER RIGHTS AND REMEDIES WITH RESPECT TO ANY
MATTERS RELATING TO THE PRODUCTS.
14.4 EXCEPT FOR OUR OBLIGATION TO REFUND OR REPLACE NON-CONFORMING PRODUCT AS
SET FORTH ABOVE, WE SHALL NOT BE LIABLE TO YOU FOR, AND YOU WAIVE ANY AND
ALL CLAIMS AGAINST US FOR, ALL DAMAGES, INCLUDING SPECIAL, INDIRECT,
CONSEQUENTIAL OR INCIDENTAL DAMAGES, WHICH MAY BE CAUSED BY, RO IN ANY WAY
RESULT FROM, THE PRODUCTS OR THEIR DELIVERY UNDER THIS AGREEMENT,
INCLUDING DAMAGES RESULTING FROM DELAYS IN DELIVERY, OR FAILURE TO
DELIVER, ANY PRODUCT WHETHER BASED ON NEGLIGENCE, BREACH OF WARRANTY,
STRICT LIABILITY OR ANY OTHER CAUSE OF ACTION.
15. Indemnity
You shall indemnify us against any loss, damage, expenses or liability,
whether direct or indirect ("Damages") resulting from any claim,
complaint, suit, proceeding or cause of action against us arising from the
Products promoted, sold or otherwise provided in the Territory by or
through you, except to the extent that the alleged Damages are caused by
the Products failing to meet applicable specifications which Pfizer has
not discovered in performing its normal quality assurance tests and
procedures for purchased materials.
16. Assignment
You will not assign the whole or any part of this Agreement without our
prior consent.
17. Duration
5
This Agreement shall be deemed to have commenced on the date specified
above and, subject to Clauses 19 and 22.2 below, shall continue in
perpetuity; provided that either party may terminate this agreement by
providing six months written notice of intent to terminate. Upon
termination, you, your affiliates and assignees shall not export any
Products produced in the Territory.
18. Termination
18.1 Either party may terminate this Agreement immediately by notice if:
a) the other party commits any breach of the terms of this Agreement
and fails to remedy such breach within thirty (30) days following a
demand to remedy such breach;
b) the other party compounds or makes arrangements with its creditors
or goes into liquidation or becomes bankrupt (voluntarily or
otherwise) or a receiver or judicial manager is appointed in respect
of the whole or any part of its business, or an analogous event
occurs.
18.2 Each of us agrees to give the other notice of any change of the kind
described in Clause 19.1 above within seven (7) days of it becoming
effective.
19. Consequences on Termination
On termination of this Agreement for whatever reason, you will:
a) sell to us or our nominees at landed cost all unsold stocks of the
Products which in our bona fide opinion are in good and marketable
condition;
b) destroy at your own cost all unsold stocks of the Products which in
our bona fide opinion are not in good and marketable condition;
c) hold at our disposal all undistributed stocks of advertising display
and other promotional materials;
d) return to us all information, in whatever form, which we have
supplied to you to enable you to carry out your obligations under
this Agreement.
20. No Compensation
Upon the lawful termination of this Agreement for any reason you will not
be entitled to any compensation whatsoever.
21. Force Majeure
21.1 If the performance of any obligation under this Agreement by either party
is prevented, restricted, interfered with or delayed by a circumstance
such as war, flood, strike, accident, riots, acts of government or any
other circumstance similar to the above and over which a party shall have
no control ("Force Majeure") the party so affected shall, upon giving
notice to the other party within thirty (30) days of the Force Majeure
6
arising, be excused from performance to the extent of such prevention,
restriction, interference or delay, provided that the affected party shall
use its best efforts to continue performance with the utmost dispatch as
soon as the Force Majeure ceases to affect it.
21.2 If the performance of any obligation under this Agreement is delayed owing
to Force Majeure for a continuous period of three (3) months or more,
either party shall be entitled to terminate this Agreement immediately by
notice, whereupon the provisions of Clause 19 above shall apply.
22. Confidentiality
You will both during, and for two (2) years after the termination of this
Agreement, for whatever reason, keep, and use your reasonable best
endeavors to procure that your employees and associates keep, strictly
confidential at all times all information about the Products, including
information relating to our business and the registration, sales,
turnover, prices, price structures and margins for the Products, except to
the extent that it is necessary to disclose this information to enable you
to carry out your obligations under this Agreement.
23. Entire Agreement
This Agreement (including its Schedules) contains the entire agreement
between us regarding the subject-matter of this Agreement and supersedes
all prior oral or written agreements and understandings regarding that
subject-matter. Any amendment to this Agreement must be made in writing
and signed by both of us.
24. No Waiver
The failure of either of us at any time to enforce any of the provisions
of this Agreement or to exercise any right hereunder shall not constitute
a waiver of the same nor affect that party's right to enforce it.
25. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which shall constitute one
and the same agreement.
26. Notices
Any notice required to be given under this Agreement shall be sent by
registered letter or by facsimile which must be confirmed by registered
letter issued within seventy-two (72) hours, and shall take effect from
the date of such registered letter or facsimile.
7
27. Governing Law
This Agreement shall be governed in all respects by the laws of the State
of New York, U.S.A.
We should be grateful if you would indicate your acceptance of and agreement to
the contents of this Agreement by signing both copies hereof and returning one
copy to the undersigned.
Yours faithfully,
for and on behalf of
Philipp Brothers Chemicals Inc.
_____________________
Name:
Title:
Agreed and Accepted
for and on behalf of
Pfizer Limited
____________________
Name:
Title:
8
SCHEDULE 1
This is Schedule 1 to the Distribution Agreement
between Philipp Brothers Chemicals Inc. and Pfizer Limited
Column A Column B Column C
-------- -------- --------
Product Presentation Price
PLEASE COMPLETE COLUMN A AND COLUMN B, WE WILL THEN COMPLETE THE FORM WITH
PRICING WHICH WILL BE ON A COST PLUS BASIS.
EXHIBIT L.-2
DRAFT 09/25/00
LICENSING, SUPPLY AND MANUFACTURING AGREEMENT
This Agreement dated as of this _____ day of _______________, 2000
is between _____________________________________, a _________________ company
with offices at _____________________________________________ (hereinafter
referred to as "PB") and PfizerOverseas Inc. withoffices at 235 East 42nd
Street, New York, New York 10017 (hereinafter referred to as "Pfizer").
WHEREAS Pfizer is in the business of manufacturing and is capable of
and is desirous of manufacturing or contracting for the manufacture of PB's
products, which are listed on Exhibit A (the "Products"); and
WHEREAS PB is desirous of having its Products manufactured and
distributed by Pfizer;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereby agree as follows:
1. License. PB hereby grants Pfizer an exclusive license to
manufacture, formulate and distribute in Egypt the Products in accordance with
the specifications attached hereto as Exhibit A to this Agreement. The
specifications provided in Exhibit A may be amended from time to time by PB and
Pfizer. All Products shall be manufactured and formulated by Pfizer in Egypt in
accordance with applicable Product specifications or, with the prior written
consent of PB, which consent will not be unreasonably withheld, Pfizer shall
arrange for the contract manufacture of any or all Products in Egypt. Pfizer
hereby agrees to use reasonable commercial efforts to promote and sell the
Products in Egypt only; and not to sublicense its rights hereunder to any third
party except its affiliate, Pfizer Egypt S.A.E.
2. Relationship of the Parties. With respect to all matters relating
to this Agreement, Pfizer shall be deemed an independent contractor and shall
bear all of its own expenses in connection with this Agreement. Pfizer is not an
agent or representative of PB for any purpose.
3. Consideration. In consideration of the license granted in
paragraph 1 above, Pfizer shall pay PB a royalty equal to ten percent (10%) of
its Net Sales of the Products. Royalty payments shall be made twice a year, on
Net Sales ending May 31 and November 30 with payment due 45 days after each
fiscal half yearly period. As used herein, the term "Net Sales" shall mean gross
sales less trade and cash discounts, sales returns and allowances. With each
royalty payment, Pfizer will provide a schedule of calculations to support the
royalty payment. PB shall have the right, not more than once in any calendar
year, upon reasonable notice and at reasonable times, to cause its employees,
agents and representatives to review and examine Pfizer's sales data only to
verify royalty payments hereunder.
4. Active Substances. PB or its affiliates will sell certain Active
Substances ("Active Substances") to Pfizer to enable Pfizer to manufacture,
formulate and distribute the Products. Pfizer will purchase from PB its
requirements of Active Substances which were being supplied from Pfizer
affiliates prior to the date of this Agreement. Active Substances purchased by
PB from Pfizer or an affiliate of Pfizer shall be resold to Pfizer at the same
price paid by PB. Active Substances manufactured by PB shall be sold to Pfizer
at PB's standard cost of manufacture. Specifications for Active Substances are
as listed on Exhibit B subject to the provisions of paragraph 9 below. Each sale
shall be accompanied by a certificate of conformity issued by PB. Expiry dating
on all such Active Substances will be such that Pfizer
shall be able to do any local formulating and sell all Products in the normal
course of its business, as conducted prior to the date hereof.
5. Quality Assurance. Pfizer shall have sixty days from the date of
reception in its manufacturing plant in which to carry out all necessary tests
of the Active Substances supplied by PB and to inform PB in writing of its
observations or complaints. If Pfizer has not informed PB in writing of any
non-conformity for each lot of Active Substance it has received within ninety
days of its receipt, such lot of Active Substance supplied by PB shall be
regarded as in conformity with the specifications and as being accepted by
Pfizer, subject to the discovery of latent defects in the lot which could not
have been determined by Pfizer's acceptance testing. PB shall replace any Active
Substances which Pfizer determines, utilizing its normal quality assurance tests
and procedures for purchased raw materials, are not within specifications, free
of charge, delivered to Pfizer's warehouse within 90 days of Pfizer's
notification of non-conformity. Any treatment, destruction or repatriation of
Active Substances that are not in conformity with specifications shall be the
responsibility of PB and carried out at the sole expense of PB.
6. Storage. Pfizer agrees to store properly all Active Substances
and Products in accordance with the specifications until manufacture,
formulation or shipment to Pfizer's customers.
7. Forecasts and Orders for Active Substances. Pfizer will submit
quarterly rolling forecasts for orders of Active Substances beginning thirty
(30) days after the execution of this Agreement. It is understood and agreed by
Pfizer and PB that all forecast amounts are estimates. Upon execution of this
Agreement, Pfizer will issue binding purchase orders to PB
covering its Active Substances requirements until the beginning of the next
calendar quarter. Not later than 90 days prior to the beginning of each calendar
quarter thereafter, until the end of the Term (as defined in paragraph 11
below), Pfizer will update its rolling forecast and issue binding purchase
orders for the next calendar quarter. Six months prior to the expiration of the
Term, Pfizer will issue firm purchase orders for the remainder of the Term. PB
agrees to use reasonable efforts to supply all amounts ordered by Pfizer in
excess of the forecast amounts, including any supplementary purchase orders
issued by Pfizer in the last eight months of 2001 to accommodate PB's needs for
transitional quantities of Products.
8. Quality Control.
a. Pfizer will permit PB to carry out quality control and quality
assurance inspections and audits of its manufacturing and packaging facilities,
including such inspections and audits as will allow determination of the
analytical characterization of the Products. All such audits shall take place
upon reasonable notice and during normal business hours.
b. Regardless of any inspections or audits performed by PB under the
terms of this Agreement, Pfizer will be responsible for providing appropriate
quality control and quality assurance procedures including any such procedures
provided for in Exhibit A hereto.
9. Prices and Terms of Payment. The prices of Active Substances
purchased from PB are firm and not subject to revision for the Term. Prices are
stated FOB PB's manufacturing site or other distribution point and are in US
dollars. Payment for the Active Substances shall be in US dollars by irrevocable
letter of credit from a class A bank in the USA to a bank designated by PB
within 60 days from the date of the bill of lading.
10. Confidentiality. No information exchanged under this Agreement
shall, without the submitting party's prior written authorization, be used other
than for purposes of the Agreement, or be disclosed to any persons other than
the officers and employees of the receiving party who must have access to it in
order to carry out the purpose of this Agreement and who are bound to hold such
information in confidence. The obligations under this paragraph shall not apply
to any information which is known publicly, is in the public domain or hereafter
enters the public domain without the fault of the receiving party, or which is
hereafter disclosed to the receiving party by a third party not under an
obligation of confidence to the submitting party. Notwithstanding the above,
confidential information received under this Agreement may be disclosed to
regulatory authorities where necessary.
11. Term and Termination.
a. This Agreement shall be effective upon the date first written
above and shall remain in force until December 31, 2001 (which period is
referred to herein as the "Term"). PB may extend the Term to March 31, 2002 by
written notice to Pfizer on or before June 30, 2001.
b. At any time during the term hereof, PB may give Pfizer a notice
of intention to terminate at least 6 months following the notice if PB has
received a bona fide offer from a third party who is prepared to provide
distribution of the Products in Egypt and pay a royalty greater than 10% of
sales to PB. If Pfizer is willing to match the third party offer, this agreement
shall continue for the balance of the term. If Pfizer shall not match the third
party offer, this agreement shall terminate in accordance with PB's notice of
termination. In the event of a termination, or upon the expiration of the Term,
PB shall promptly purchase from Pfizer all saleable stocks of Products and all
useable Active Substances, raw materials,
packaging materials, promotional materials and labels, at Pfizer's cost
therefor, but excluding any inventories of Products (as such term is defined in
the Asset Purchase Agreement dated September ____, 2000 between Pfizer Inc. and
Philipp Brothers Chemicals, Inc.) ownership of which is retained by Pfizer Egypt
S.A.E. as of the date of this Agreement..
c. If either PB or Pfizer materially breaches or defaults in the
performance of any of the provisions of this Agreement, and such material breach
or default is not cured within thirty (30) days after the giving of notice by
the other party specifying such breach or default, then the non-breaching party
shall have the right to immediately terminate this Agreement effective on such
thirtieth day.
d. Any termination or expiration of the Agreement shall not affect
any obligations of any party existing prior to such termination or expiration.
In addition, the provisions of Paragraph 10 hereof related to confidentiality
shall survive the expiration or termination of this Agreement.
e. Upon the termination of this Agreement or the expiration of the
Term, Pfizer will provide reasonable technical support to PB, or its designee,
to assist in the transition of production of the Products to PB or such
designee, including any such support for the transfer of product registrations
not transferred to PB on the date hereof.
f. Upon the expiration or termination of this Agreement, PB shall
have the option to purchase equipment used exclusively for the manufacture of
the Products in Egypt at the book value of such equipment. PB will be
responsible for the costs of removal and transportation of said equipment.
12. Indemnity.
Pfizer hereby agrees to indemnify PB against and hold PB harmless
from any claims, losses, liabilities or damages (hereinafter collectively
"Damages") arising out of Pfizer's manufacture and sale of the Products except
to the extent that such Damages are caused by Active Substances which fail to
meet applicable specifications which Pfizer has not discovered in performing its
normal quality assurance tests and procedures for purchased raw materials.
13. Miscellaneous.
a. Assignment. Neither party shall assign its rights or obligations
under this Agreement without the express written consent of the other party
hereto.
b. Notices. Any notice, consent or approval required under this
Agreement shall be in writing sent registered mail, postage prepaid, return
receipt requested and addressed as follows:
If to PB:
[ ]
Attention: [ ]
If to Pfizer:
Pfizer Overseas Inc.
235 East 42nd Street
New York, N.Y. 10017
.
c. Entire Agreement: This Agreement together with the exhibits
hereto sets forth the entire Agreement and understanding between the parties as
to the subject matter hereof and has priority over all documents, verbal
consents or understandings made between Pfizer and PB before the conclusion of
this Agreement with respect to the subject matter hereof; none of the terms of
this Agreement shall be amended or modified except in writing signed by the
parties hereto. In the event of any conflict between the terms of this Agreement
and any purchase order or invoice sent by PB to Pfizer, the terms of this
Agreement shall govern.
d. Waivers. A waiver by any party of any term or condition of this
Agreement in any one instance shall not be deemed or construed to be a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach hereof. All rights, remedies, undertakings, obligations and
agreements contained in this Agreement shall be cumulative and none of them
shall be a limitation of any other remedy, right, undertaking, obligation or
agreement of any party.
e. Severability. If and solely to the extent that any provision to
this Agreement shall be invalid or unenforceable, or shall render this entire
Agreement to be unenforceable or invalid, such offending provision shall be of
no further affect, shall be stricken from the Agreement and shall not affect the
validity of the remainder of this Agreement or any of its other provisions.
f. Jurisdiction. Both parties to this Agreement consent to the sole
jurisdiction of the Courts of New York, for the adjudication of any disputes
concerning the validity, interpretation and performance (including any alleged
non-performance) of this Agreement
and/or claims arising from the relationship between the parties created by this
Agreement, regardless of how such claims are characterized. The validity, the
interpretation and performance of this Agreement shall be governed by the Laws
of the State of New York applicable to agreements to be performed entirely
within such state.
g. Force Majeure. The obligations of either party to perform under
this Agreement shall be excused if such failure to perform or any delay is
caused by matters such as acts of God, strikes, civil commotion, riots, war,
revolution, acts of governments, world shortage of qualified materials, shortage
of fuel, or any other cause whether similar or dissimilar to those enumerated
which are reasonably beyond the control of the party obligated to perform. Upon
the occurrence of such an event, the duties and obligations of the parties shall
be suspended for the duration of the event preventing proper performance under
this Agreement; provided, however, that if such suspension shall continue in
excess of ninety (90) days, the parties shall meet and attempt to arrive at a
mutually acceptable compromise within the spirit and intent of this Agreement.
h. Headings. Headings in this Agreement are included herein for the
ease of reference only and shall have no legal affect.
IN WITNESS WHEREOF, the parties hereto have caused this
Manufacturing License Agreement to be executed as of the date first written
above.
[PB]_____________________ PFIZER OVERSEAS INC.
By: _____________________ By: ___________________________
Title: __________________ Title: ________________________
Date: ___________________ Date: _________________________
EXHIBIT L.-2
DRAFT 09/25/00
EXHIBIT A
Products Definition & Specifications, Including QA & QC Specs
EXHIBIT B
Active Substances Specifications
11