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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 1998
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SEROLOGICALS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-26126 58-2152225
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(State of other (Commission file number) (IRS Employer
jurisdiction) Identification No.)
780 Park North Blvd.
Suite 110
Clarkston, Georgia 30021
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(Address of Principal executive offices) (Zip code)
Registrant's telephone number, including area code: (404) 296-5595
(Former name or former address, if changed since last report)
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<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 29, 1998 (the "Closing Date"), Serologicals
Corporation, a Delaware corporation (the "Company"), acquired substantially
all of the net assets of the Pentex Blood Protein Business ("Pentex") of
Bayer Corporation ("Bayer"). The purchase price for Pentex was $29.0
million, subject to adjustment based on the final net assets of Pentex as of
the Closing Date. The acquisition was completed pursuant to the previously
announced Agreement of Purchase and Sale, dated as of November 30, 1998,
between the Company and Bayer. A copy of the Agreement of Purchase and Sale
is filed as an exhibit hereto. The purchase price was determined through
arms' length negotiations between the Company and Bayer and was financed with
cash on hand.
Pentex is a leader in the field of purified blood proteins that are
marketed to customers in the diagnostics and biopharmaceutical industries in
the United States and approximately 25 other countries worldwide. Pentex
operates a manufacturing facility in Kankakee, IL that produces diagnostic
products derived primarily from animal blood components. Pentex also
manufactures a range of purified cell culture products. The Company intends
to use the acquired assets for the same purpose.
Item 7. Financial Statements and Exhibits
a) Financial statements of businesses acquired
Audited Financial Statements of Pentex for the nine months ended
September 30, 1998.
At this time, it is impractical to file the required financial
statements referenced above. Such financial statements will be
filed as soon as practical, but no later than 60 days after the
date on which this Report on Form 8-K must be filed.
b) Pro Forma financial information
At this time, it is impractical to file the required pro forma
financial information. Such pro forma financial information will
be filed as soon as practical, but no later than 60 days after the
date on which this Report on
Form 8-K must be filed.
c) Exhibits
(2.1) Agreement of Purchase and Sale, dated as of
November 30, 1998, by and between Serologicals
Corporation and Bayer Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Serologicals Corporation
(Registrant)
January 11, 1998
/s/Russell H. Plumb
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Russell H. Plumb
Vice President, Finance and
Chief Financial Officer
AGREEMENT OF PURCHASE AND SALE
Dated as of November 30, 1998
by and between
BAYER CORPORATION
and
SEROLOGICALS CORPORATION
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II TERMS OF PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . 7
2.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Purchase Price and Payment . . . . . . . . . . . . . . . . . . . . 11
2.5 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . . . 11
2.6 Purchase Price Allocation. . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BAYER. . . . . . . . . . . . 13
3.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Absence of Certain Changes or Events . . . . . . . . . . . . . . . 13
3.3 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.4 Patents, Trademarks, Etc . . . . . . . . . . . . . . . . . . . . . 14
3.5 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.7 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 15
3.8 Corporate Power and Authority; Effect of Agreement . . . . . . . . 16
3.9 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 16
3.10 Governmental Consents. . . . . . . . . . . . . . . . . . . . . . . 18
3.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.12 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . 19
3.13 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.14 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 20
3.15 Finders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.16 Conveyance of Assets. . . . . . . . . . . . . . . . . . . . . . . .21
3.17 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . .21
3.18 Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
3.19 Absence of Certain Practices. . . . . . . . . . . . . . . . . . . .22
3.20 Accounts Payable. . . . . . . . . . . . . . . . . . . . . . . . . .22
3.21 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . .22
3.22 No Third Party Options. . . . . . . . . . . . . . . . . . . . . . .23
3.23 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.24 Year 2000 Issues. . . . . . . . . . . . . . . . . . . . . . . . . .23
3.25 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.26 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . .23
3.27 Equipment and Personal Property . . . . . . . . . . . . . . . . . .24
3.28 Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
3.29 Disclaimers . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
i
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . .24
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 Corporate Power and Authority; Effect of Agreement . . . . . . . . 25
4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4 Availability of Funds. . . . . . . . . . . . . . . . . . . . . . . 25
4.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.6 Finders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V COVENANTS OF BAYER . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Cooperation by Bayer . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 26
5.3 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.4 No Solicitation of Transactions. . . . . . . . . . . . . . . . . . 28
5.5 Books and Records; Personnel . . . . . . . . . . . . . . . . . . . 28
5.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 28
5.7 Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . . . . . .29
6.1 Cooperation by Purchaser . . . . . . . . . . . . . . . . . . . . . 29
6.2 Books and Records; Personnel . . . . . . . . . . . . . . . . . . . 29
6.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 30
7.1 Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 Covenant Not to Compete. . . . . . . . . . . . . . . . . . . . . . 31
7.3 Vehicle Leases. . . . . . . . . . . . . . . . . . . . . . . . . . .32
7.4 Recall and Notification . . . . . . . . . . . . . . . . . . . . . .32
7.5 Securities Exchange Act Compliance. . . . . . . . . . . . . . . . .32
7.6 Patent License . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.7 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.8 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII CONDITIONS TO PURCHASER'S OBLIGATIONS . . . . . . . . . . . . 34
8.1 Representations, Warranties and Covenants of Bayer . . . . . . . . 34
8.2 No Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3 Governmental Consents . . . . . . . . . . . . . .. . . . . . . . . 34
8.4 Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.5 Title Insurance Policy . . . . . . . . . . . . . . . . . . . . . . 34
8.6 Material Adverse Changes . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX CONDITIONS TO BAYER'S OBLIGATIONS . . . . . . . . . . . . . . . 35
9.1 Representations, Warranties and Covenants of Purchaser . . . . . . 35
9.2 No Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Governmental Consents. . . . . . . . . . . . . . . . . . . . . . . 36
9.4 Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ii
ARTICLE X EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS. . . . . . . . . . 36
10.1 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Collective Bargaining Agreement. . . . . . . . . . . . . . . . . . 36
10.3 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 36
10.4 Severance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.5 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XI TERMINATION PRIOR TO CLOSING. . . . . . . . . . . . . . . . . . 37
11.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.2 Effect on Obligations. . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XII INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.2 Indemnification by Bayer. . . . . . . . . . . . . . . . . . . . .. 38
12.3 Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . 39
12.4 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.5 Limitations on Indemnification . . . . . . . . . . . . . . . . . . 41
12.6 Title Defects; Sole Remedy . . . . . . . . . . . . . . . . . . . . 41
12.7 Right to Contest Mechanics Liens . . . . . . . . . . . . . . . . . 42
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 42
13.1 Interpretive Provisions. . . . . . . . . . . . . . . . . . . . . . 42
13.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 42
13.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.5 Modification and Waiver. . . . . . . . . . . . . . . . . . . . . . 43
13.6 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . . . . . . 43
13.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.8 Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . 43
13.9 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.10 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.11 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . 45
13.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
iii
EXHIBITS
Exhibit 1 - Deed
Exhibit 2 - Project
Exhibit 2.5(a) - Total Assets and Total Liabilities
Exhibit 7.1(a) - Bayer Supply Agreement
Exhibit 7.1(b) - Purchaser Supply Agreement
Exhibit 7.1(c) - Transition Services Agreement
Exhibit 7.1(d) - Processing Agreement
Exhibit 8.5 - Title Matters
Exhibit 10.1 - Active and Inactive Employees
Exhibit 13.1 - Bayer Personnel with Knowledge of the Business
DISCLOSURE SCHEDULE
Section 2.1(a)(i) - Real Property
Section 2.1(a)(iv) - Certain Excluded Commitments
Section 2.1(a)(vi) - Certain Proprietary Rights
Section 2.1(a)(vii) - Certain Excluded Claim Rights
Section 2.1(a)(ix) - Certain Equipment and Personal Property
Section 2.1(a)(xii) - Certain Computer Software and Hardware
Section 2.1(a)(xiii) - Certain Assets
Section 2.1(b)(viii) - Certain Excluded Assets
Section 2.2(f)(ii) - Certain Retained Liabilities
Section 3.1, Part 1 - Financial Statements
Section 3.1, Part 2 - Variance from GAAP and International Accounting
Standards
Section 3.1, Part 3 - Liabilities not on Balance Sheet
Section 3.2 - Changes to the Business
Section 3.3 - Title to Assets; Liens
Section 3.4 - Proprietary Rights and Product Registrations
Section 3.5 - Commitments
Section 3.6 - Litigation
Section 3.7(a) - Compliance with Laws
Section 3.7(b) - Recall Letters, Warning Letters and 483s
Section 3.8(d) - No Conflict
Section 3.9 - Employee Benefits Plans and Benefit Arrangements
Section 3.10 - Governmental Consents
Section 3.11 - Taxes
Section 3.12 - Undisclosed Liabilities
Section 3.13 - Labor Matters
Section 3.14(a) - Environmental Matters
Section 3.16 - Assets used by the Business which are not included in the
Assets
Section 3.17 - Owned and Leased Real Property
Section 3.18 - Software, Databases and Programs
Section 3.23 - Inventory
Section 3.28 - Project
Section 5.2 - Conduct of Business
iv
AGREEMENT OF PURCHASE AND SALE
This Agreement, dated as of this 30th day of November, 1998,
by and between Bayer Corporation, an Indiana corporation ("Bayer"),
and Serologicals Corporation, a Delaware corporation ("Purchaser").
WITNESSETH:
WHEREAS, Bayer desires to sell, transfer, convey, assign and
deliver to Purchaser, and Purchaser desires to acquire the Assets (as
defined below) and assume certain liabilities from Bayer of the
Pentex(r) blood proteins business carried on by or with respect to such
Assets (the "Business") through Bayer's Diagnostics Business Group;
WHEREAS, Bayer and Purchaser desire to enter into certain
Ancillary Agreements (as defined below);
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained
herein, and upon the terms and subject to the conditions hereinafter
set forth, and for other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS
I.1 Certain Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Acquired Business" has the meaning given it in Section 7.2(a).
"Active Employees" means all active employees whose employment
is exclusively related to the Business, as set forth in Exhibit 10.1.
"Affiliate" means a person that, directly or indirectly, controls,
or is controlled by, or is under common control with, another person.
"Agreement" means this Agreement as executed on the date hereof
and as amended or supplemented in accordance with the terms hereof.
"Ancillary Agreements" means the agreements identified in
Section 7.1.
"Ancillary Document" shall mean any agreement, certificate or
other document executed on or prior to the Closing in connection herewith,
except the Ancillary Agreements.
"Approved Survey" has the meaning given it in Section 8.5.
"Assets" has the meaning given it in Section 2.1(a).
"Assumed Liabilities" has the meaning given it in Section 2.2(a).
"Balance Sheet" has the meaning given it in Section 3.1.
"Bayer" has the meaning given it in the preamble to this Agreement.
"Bayer Certificate" means a certificate of Bayer, dated as of the
Closing Date and signed by an officer of Bayer, certifying as to the
fulfillment of the conditions set forth in Section 8.1.
"Bayer Savings Plan" has the meaning given it in Section 10.3(b).
"Bayer Supply Agreement" has the meaning given it in Section 7.1(a).
"Books and Records" means the books and records of Bayer relating
to the Business prior to the Closing.
"Business" has the meaning given it in the recitals to this Agreement
"Claim Rights" means, collectively, all causes of action, chooses in
action, judgments, claims, indemnity rights or other rights (including rights
arising under express or implied warranties).
"Closing" means the closing of the transactions contemplated hereby.
"Closing Date" has the meaning given it in Section 2.3.
"Closing Net Assets" means (x) the sum of all Total Assets less (y)
the sum of all Total Liabilities, in each case as of the Closing Date,
calculated in accordance with Section 2.5.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitments" means, collectively, all contracts and leases
(including any and all amendments thereto) exclusively related to the
Business to which Bayer or its Affiliates are parties or by which they are
bound, including, without limitation, any and all contracts, purchase orders
and other commitments and agreements relating to or arising out of the
Project (excluding purchase orders and sales orders in the ordinary course
of business).
2
"Competing Operations" has the meaning given it in Section 7.2(a).
"Confidential Information" has the meaning given it in Section 6.4.
"Confidentiality Agreement" means the letter agreement between
Purchaser and Credit Suisse First Boston Corporation, dated September 2, 1998,
relating to the possible sale of the Business.
"Contamination" means the emission, discharge, release, or
threatened emission, discharge or release, of any Hazardous Substance to,
on, onto or into the environment (indoor and outdoor) and the effects of
such emission, discharge, release or threatened emission, discharge or
release, including, without limitation, the presence, existence or threat
of any such Hazardous Substance.
"Deed" means the special warranty deed, by which conveyance of the
Real Property to Purchaser shall be accomplished, in the form attached hereto
as Exhibit 1.
"Disclosure Schedule" means the disclosure schedule, dated as of
the date of this Agreement, delivered to Purchaser by Bayer in connection
with this Agreement.
"Disputed Items" has the meaning given it in Section 2.5(b).
"Employee Benefit Plan" means any plan, program or arrangement
defined in Section 3(3) of ERISA that is related to the Business.
"Employee Pension Benefit Plan" means any plan, program or
arrangement defined in Section 3(2) of ERISA that is related to the
Business.
"Employees" shall mean all Active and Inactive Employees who are
employed by Purchaser.
"Environmental Laws" means, collectively, any and all laws,
ordinances, rules, and regulations currently in effect of any Governmental
Authority relating to Hazardous Substances, Contamination, protection of the
environment and/or protection of human health and safety.
"Environmental Matters" means any matter arising out of or relating
to occupational and human health and safety; Contamination that exceeds
applicable cleanup standards or remediation thresholds, that otherwise
triggers an obligation under applicable Environmental Laws or that otherwise
has a Material Adverse Effect on the Business or the Assets, Environmental
Laws, compliance with Environmental Laws or protection of the environment
(indoor or outdoor), including, without limitation, any of the foregoing
relating to the presence, use, production, generation, handling, transport,
management, treatment, storage, disposal, distribution, discharge, release,
migration, control or cleanup of, or exposure to, any Hazardous Substance or
Hazardous Substance-containing material.
3
"Environmental Permits" means all permits, licenses, registrations
and authorizations required by applicable Environmental Laws in order to
operate the Business as currently operated by Bayer and as operated by Bayer
as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any entity that is a member of the
"controlled group," as defined in Section 4001(a)(14) of ERISA, that
includes Bayer.
"Excluded Assets" has the meaning given it in Section 2.1(b).
"FDA" has the meaning given it in Section 3.7(b).
"Final Closing Net Assets" has the meaning given it in Section
2.5(d).
"Final Closing Net Assets Schedule" has the meaning given it in
Section 2.5(d).
"Financial Statements" has the meaning given it in Section 3.1.
"Foreign Employees" has the meaning given it in Section 10.1.
"GAAP" has the meaning given it in Section 3.1.
"Governmental Authority" means any nation, or any political
subdivision thereof, or any agency, court or body of any such governmental
authority exercising executive, legislative, judicial, regulatory or
administrative functions.
"Governmental Plan" means any plan that is sponsored or maintained
by a Governmental Authority to which Bayer contributes, or is required to
contribute, on behalf of any Active or Inactive Employee.
"Hazardous Substance" means any element, substance, compound or
mixture, whether solid, liquid or gaseous, that: (i) is subject to
regulation by any Governmental Authority pursuant to one or more
Environmental Laws; or (ii) the presence, existence or threat of which can
give rise to a claim or liability under one or more Environmental Laws.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Inactive Employees" means all employees whose employment is
exclusively related to the Business and who on the Closing Date are on a
nonmedical leave, short-term disability or a medical leave of absence, as set
forth in Exhibit 10.1.
"Indemnified Party" has the meaning given it in Section 12.4.
4
"Indemnifying Party" has the meaning given it in Section 12.4.
"Inventory" means, collectively, all inventories, raw materials,
supplies and work-in-process used in the operation of the Business and owned
by Bayer.
"IRS" means the Internal Revenue Service.
"Liens" means liens, charges, claims, options, pledges, security
interests or other encumbrances.
"Litigation" means any action, proceeding, claim, suit or
investigation pending in any court by or before any Governmental Authority
or by or before any arbitrator or mediator.
"Loss" or "Losses" shall mean each and all of the following items
to the extent actually incurred: claims, losses, liabilities, damages,
judgments, interest, penalties and reasonable costs and expenses incurred in
connection therewith (including, without limitation, reasonable fees and
disbursements of consultants and counsel). Losses shall exclude any and all
special, consequential, punitive, exemplary and duplicative damages.
"Material Adverse Effect" means a material adverse effect on the
assets, financial condition, operating results or business of the Business
taken as a whole.
"Mechanics' Liens" means Liens for mechanics, materialmen,
laborers, employees or other persons or entities who supplied (or hereafter
supply) work, materials or labor with respect to all or any portion of the
Real Property or any future improvement or addition thereto.
"Non-Compete Covenant" means the covenants and agreements contained
in Section 7.2.
"Patent" means U.S. Patent 4,290,774 and all unexpired ex-U.S.
equivalents to U.S. Patent 4,290,774.
"Permits" means, collectively, governmental permits, licenses and
other authorizations required under law or necessary in connection with the
conduct of the Business as currently conducted by Bayer other than
Environmental Permits.
"Permitted Liens" means, collectively, (a) Liens that are disclosed
in the Disclosure Schedule or Exhibit 8.5 or that secure liabilities which
are disclosed in the Disclosure Schedule; (b) imperfections of title or Liens
that individually or in the aggregate do not have a Material Adverse Effect;
(c) Liens for Taxes, fees, levies, duties or other governmental charges of
any kind which are (i) being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in
accordance with the accounting principles utilized in preparing the Financial
Statements or (ii) which are not yet delinquent; (d) Mechanics Liens; (e)
such other matters as Purchaser may approve, and (f) as to Real Property
only, survey matters as described in Section 8.5.
5
"Plan" has the meaning given it in Section 3.9(d).
"Project " means the expansion project at the Bayer plant located
at 195 West Birch Street, Kankakee, Illinois, more particularly described on
Exhibit 2.
"Proposed Closing Net Assets Schedule" has the meaning given it in
Section 2.5(a).
"Proprietary Rights" has the meaning given it in Section 3.4.
"Purchase Price" has the meaning given it in Section 2.4.
"Purchase Price Adjustment" has the meaning given it in Section
2.4.
"Purchase Price Allocation" has the meaning given it in Section
2.6.
"Purchaser" has the meaning given it in the preamble to this
Agreement.
"Purchaser Disclosure Schedule" means the disclosure schedule
relating to Purchaser, if any.
"Purchaser Certificate" means a certificate of Purchaser, dated as
of the Closing Date and signed by an officer of Purchaser, certifying as to
the fulfillment of the conditions set forth in Section 9.1.
"Purchaser Supply Agreement" has the meaning given it in Section
7.1(b).
"Real Property" has the meaning given it in Section 2.1(a)(i).
"Real Property Leases" has the meaning given it in Section 3.17.
"Restricted Employee" has the meaning given it in Section 7.2(b).
"Retained Books and Records" means, collectively, all books,
records, files and data to the extent arising out of or relating to any of
the Excluded Assets or Retained Liabilities or to Bayer policies or
procedures which are not applicable to the Business.
"Retained Liabilities" has the meaning given it in Section 2.2(h).
"Savings Plan" has the meaning given it in Section 10.3(b).
"Savings Plan Employees" has the meaning given it in Section
10.3(b).
"Subsidiary" means, with respect to any person, any corporation or
other legal entity of which such person (either alone or through or together
with any other Subsidiary) owns more than fifty percent (50%) of the stock or
other equity interests, the holders of which are entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
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"System" shall have the meaning given to it in Section 3.24.
"Tax" has the meaning given it in Section 3.11.
"Tax Benefit" means any item of loss, deduction or credit or any
other item to the extent such item decreases Taxes paid or payable, including
any interest with respect thereto or interest that would have been payable
but for such item.
"Tax Return" has the meaning given it in Section 3.11.
"Third Party Claims" has the meaning given it in Section 12.4.
"Title Company" has the meaning given it in Section 8.5.
"Title Insurance Policy" has the meaning given it in Section 8.5.
"Total Assets" has the meaning given it in Section 2.5(a).
"Total Liabilities" has the meaning given it in Section 2.5(a).
"Transfer Documents" means, collectively, duly executed instruments
of transfer and assignment of the Assets (other than the Real Property) in
form reasonably satisfactory to Purchaser and Bayer, subject only to
Permitted Liens, sufficient to vest in Purchaser the interests in the Assets
to be conveyed at the Closing in accordance with the terms of this Agreement.
"Transition Services Agreement" has the meaning given it in Section
7.1(d).
"United States" means the United States of America, all of the
States thereof, the District of Columbia and all possessions and territories
of the United States of America, including, without limitation, the
Commonwealth of Puerto Rico.
"Year 2000 Compliant" shall have the meaning given to it in Section
3.24.
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ARTICLE II
TERMS OF PURCHASE AND SALE
II.1 Purchase and Sale. (a) At the Closing, on the terms and
subject to the conditions set forth in this Agreement, Bayer shall sell,
convey, transfer, assign and deliver to Purchaser, and Purchaser shall
purchase and acquire from Bayer, all of Bayer's right, title and interest in
and to the following assets, properties, rights and claims of the Business,
as the same may exist on the Closing Date, and whether tangible or intangible
(collectively, the "Assets"):
(i) certain real property of Bayer located in Kankakee, Illinois,
and described in Section 2.1(a)(i) of the Disclosure Schedule, together with
all buildings, structures, fixtures and improvements of Bayer (including
those related to the Project) located thereon excluding underground storage
tanks, if any (the "Real Property");
(ii) all Inventory;
(iii) all accounts receivable of the Business;
(iv) subject to Section 5.1(b), the rights of Bayer under all
Commitments of the Business, other than those Commitments set forth in
Section 2.1(a)(iv) of the Disclosure Schedule;
(v) all other sales and promotional literature and all books,
records, customer and supplier lists, or copies thereof, to the extent
pertaining to the Business, except for personnel records and files, copies
of which will be provided to Purchaser to the extent permitted by law;
(vi) all Proprietary Rights that are set forth in Section
2.1(a)(vi) of the Disclosure Schedule, together with all documents relating
thereto;
(vii) all Claim Rights relating to the Assets or the Business,
except as excluded in Section 2.1(a)(vii) of the Disclosure Schedule;
(viii) all goodwill associated with the Business as a going
concern;
(ix) all equipment and other tangible personal property set forth
in Section 2.1(a)(ix) of the Disclosure Schedule (together with any
transferable warranties with respect to such property);
(x) subject to Section 5.1(b), all Permits and Environmental
Permits of the Business;
(xi) all prepaid expenses, advances or deposits relating to the
Assets;
8
(xii) all computer software, computer databases, computer
programs, application software, source codes, and object codes owned by Bayer
and used or held for use exclusively in the Business, which are specified in
Section 2.1(a)(xii) of the Disclosure Schedule; and
(xiii) all other assets and properties set forth in Section
2.1(a)(xiii) of the Disclosure Schedule.
(b) Notwithstanding anything in this Agreement to the contrary,
specifically excluded from the Assets are any assets of Bayer used in the
Business which are not specifically set forth in Section 2.1(a)
(collectively, the "Excluded Assets") including, but not limited to, the
following:
(i) all cash, short term investments and cash equivalents;
(ii) all insurance policies and any rights thereunder;
(iii) all security bonds;
(iv) all prepaid expenses, advances or deposits relating to any of
the Excluded Assets or Retained Liabilities;
(v) all Retained Books and Records;
(vi) all Claim Rights in the proportion arising out of or relating
to any of the Excluded Assets or Retained Liabilities;
(vii) all refunds, credits or overpayments with respect to Taxes
paid or accrued by Bayer and all other payments or deposits made by Bayer in
respect of Taxes in excess of the amount of Bayer's liability therefor unless
such amounts are listed on the Final Closing Net Assets Schedule; and
(viii) any other assets set forth as "Excluded Assets" in Section
2.1(b)(viii) of the Disclosure Schedule.
(c) At the Closing (or as soon thereafter as reasonably
practicable with respect to trademarks), (i) Bayer shall deliver to Purchaser
duly executed Transfer Documents, in form reasonably satisfactory to
Purchaser and Bayer; (ii) Bayer shall deliver to Purchaser the duly executed
Deed, customary Sellers' title affidavit and realty transfer tax form; (iii)
Purchaser shall deliver to Bayer duly executed instruments of assumption
evidencing the assumption by it of the Assumed Liabilities in form reasonably
satisfactory to Purchaser and Bayer; (iv) Bayer shall deliver to Purchaser
the Bayer Certificate; (v) Bayer shall deliver to Purchaser a copy of the
resolutions of Bayer's Executive Committee of its Board of Directors,
certified by an officer of Bayer, authorizing the execution, delivery and
performance of this Agreement; (v) Purchaser shall deliver to Bayer the
Purchaser Certificate; (vii) Bayer shall deliver to Purchaser such consents
to assignment and/or transfer from third parties as Bayer has obtained on or
prior to the Closing Date; and (viii) Purchaser shall deliver to Bayer a copy
of the resolutions of Purchaser's Board of Directors, certified by an officer
of Purchaser, authorizing the execution, delivery and performance of this
Agreement. Bayer and Purchaser shall equally share the cost of (A) any
documentary, stamp, sales, excise, transfer or other taxes or recording fees
payable (other than taxes based on or measured by income of Bayer which Bayer
shall pay) in respect of the sale of the Assets, (B) all costs associated
with any title searches, title commitments and the Title Insurance Policy,
(C) all costs relating to any update of the survey of any of the Real
Property, and (D) the filing fee required under the HSR Act.
9
II.2 Assumed Liabilities. At the Closing, Purchaser shall assume
(collectively, the "Assumed Liabilities") only the following liabilities and
obligations (and no other liabilities or obligations of Bayer) and shall not
assume liability for such matters, if any, for which Bayer has agreed to
indemnify Purchaser pursuant to Article 12 hereof: (a) all accounts payable
and accrued liabilities reflected in the Financial Statements to the extent
existing as of the Closing Date; (b) any and all liabilities or obligations
pursuant to agreements, contracts, purchase orders or leases related to or
arising out of the Project (except to the extent related to a breach thereof
or a default thereunder by Bayer); (c) any and all liabilities and/or
obligations incurred in the ordinary course of the Business since the date of
the Financial Statements and reflected on the Final Closing Net Assets
Schedule; and (d) all liabilities and obligations related to or arising out
of Purchaser's acquisition, ownership and/or use of the Assets and/or
Purchaser's operation or conduct of the Business, arising after the Closing
Date and not relating to periods before the Closing Date, including but not
limited to:
(i) all liabilities and obligations arising after the Closing Date
under the Commitments, the Permits and other intangible property to the
extent included in the Assets and not arising from a breach or default
thereunder by Bayer; and
(ii) all liabilities and obligations for Environmental Matters
concerning or affecting the Business or the Assets (including, without
limitation, the Real Property) to the extent that such Environmental Matters
arise from acts, omissions, facts, circumstances, or events (including,
without limitation, the release or disposal of Hazardous Substances) first
occurring after the Closing Date.
(e) Purchaser shall pay each Assumed Liability (or reimburse Bayer
therefor) on the later of the date on which such Assumed Liability becomes
due or within five (5) days after Bayer advises Purchaser in writing of the
amount thereof, provided that Purchaser may dispute such Assumed Liability
with the third party to whom the Assumed Liability is owed, in good faith, by
appropriate proceedings. The grant to Purchaser of such right to dispute
shall not in any way affect the obligation of Purchaser pursuant to Section
12.3(c) to indemnify Bayer and its Affiliates against Losses sustained or
incurred by any of them arising out of or relating to such Assumed Liability,
including by reason of Purchaser's disputing such Assumed Liability.
(f) Subject always to the terms of Article 12, Purchaser shall not
assume, and Bayer shall be responsible for the payment, performance and
10
discharge of, and indemnify and hold harmless Purchaser and its Affiliates
from and against, the following liabilities and obligations (collectively,
the "Retained Liabilities"):
(i) any liability of Bayer for Taxes arising prior to the Closing
Date or relating to periods before the Closing Date;
(ii) the liabilities and obligations the responsibility for which
is expressly set forth in Section 2.2(f)(ii) of the Disclosure Schedule as
being retained by Bayer or any Affiliate thereof;
(iii) all liabilities and obligations against which Bayer has
indemnified Purchaser pursuant to Section 12.2 to the extent of such
indemnification;
(iv) all liabilities and obligations relating to or arising out of
the Excluded Assets; and
(v) all liabilities and obligations of Bayer which do not arise
out of or relate to the Business.
For purposes of the Assumed Liabilities and the Retained Liabilities,
whenever reference is made to any liability or obligation, such reference
shall be deemed to include any liability or obligation pertaining thereto,
whether known or unknown, contingent or fixed, and whether pending, arising
now or hereafter.
II.3 The Closing. Subject to the terms and conditions of this
Agreement, the Closing shall take place at the New York offices of Jones,
Day, Reavis & Pogue, commencing at 9:00 a.m., New York City time, on the
later of (a) December 31, 1998 and (b) the last business day of the first
month during which the satisfaction or waiver of all the conditions set forth
in Articles VIII and IX occurs (or at such other time and/or place and/or on
such other date as the parties may mutually agree) (the "Closing Date").
II.4 Purchase Price and Payment. The aggregate purchase price to
be paid by Purchaser under this Agreement (the "Purchase Price") shall
consist of cash in the amount of $29,000,000 subject to adjustment, as
provided in Section 2.5(e) hereof (the "Purchase Price Adjustment"). Payment
of the Purchase Price (excluding the amount of the Purchase Price Adjustment,
which shall be paid in accordance with Section 2.5(f) hereof) shall be made
no later than 12:00 noon, New York City time, on the Closing Date by wire
transfer in immediately available funds to the account of Bayer specified by
it at least two (2) business days prior to the Closing.
II.5 Purchase Price Adjustment. (a) Promptly after the Closing,
Bayer, with the cooperation of Purchaser, shall prepare schedules (the
"Proposed Closing Net Assets Schedule") setting forth (x) those Assets
constituting total assets ("Total Assets") and those Assumed Liabilities
constituting total liabilities ("Total Liabilities"), in each case as of the
Closing Date, and (y) Closing Net Assets. For purposes of this Agreement,
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(i) the Proposed Closing Net Assets Schedule and the Final Closing Net Assets
Schedule shall be prepared (and Total Assets and Total Liabilities shall be
calculated) in accordance with the accounting procedures and policies
followed in preparing the Financial Statements referred to in Section 3.1,
(ii) the term "Total Assets" shall include those assets set forth on
Exhibit 2.5(a), and (iii) the term "Total Liabilities" shall include those
liabilities set forth on Exhibit 2.5(a). Bayer shall consult with Purchaser in
connection with the preparation of the Proposed Closing Net Assets Schedule and
shall have access to the records and working papers of the Business to the
extent necessary to prepare the Proposed Closing Net Assets Schedule. As
promptly as practicable, but no later than sixty (60 days) after closing, Bayer
shall deliver its Proposed Closing Net Assets Scedule to Purchaser.
(b) Within thirty (30) days after delivery of the Proposed Closing
Net Assets Schedule, the parties shall attempt to resolve any items or
amounts of Total Assets or Total Liabilities as to which Purchaser objects
(the "Disputed Items"). Any specific individual discrepancy which amounts to
two thousand five hundred dollars ($2,500) or less shall not be included as a
Disputed Item, and the aggregate of all Disputed Items must exceed twenty-
five thousand dollars ($25,000) before the procedures set forth in Section
2.5(c) hereof will be instituted.
(c) If during such thirty (30) day period any such Disputed Items
cannot be resolved, (i) those items to the extent of the amounts agreed upon
by the parties shall no longer constitute Disputed Items and shall be
conclusive for purposes of preparing the Final Closing Net Assets Schedule
and calculation of Closing Net Assets and (ii) the parties shall promptly
thereafter, but in no event more than ten (10) days thereafter, cause an
independent accounting firm of internationally recognized standing reasonably
satisfactory to Bayer and Purchaser promptly to review the remaining Disputed
Items for purposes of resolving such Disputed Items. Such accounting firm
shall make a determination only of Disputed Items not resolved by the
parties. Such accounting firm shall deliver to Bayer and Purchaser, as
promptly as practicable, a report setting forth its resolution of the
remaining Disputed Items. Such report shall be final and binding upon the
parties hereto and shall be conclusive for purposes of calculating Closing
Net Assets. The cost of such review and report shall be borne by the party
against whom the disagreement is in greater part resolved or, if the
resolution does not favor either party, such costs shall be borne equally by
Bayer and Purchaser. Each party agrees not to select the other party's
primary accounting firm to review Disputed Items pursuant to this Section
2.5(c).
(d) Closing Net Assets agreed to by the parties or as calculated
following resolution of all Disputed Items pursuant to Section 2.5(c) above,
as the case may be, shall be the "Final Closing Net Assets," and the Proposed
Closing Net Assets Schedule, adjusted to reflect Final Closing Net Assets,
shall be the "Final Closing Net Assets Schedule," which shall be conclusive
for all purposes of this Agreement. The determination of Final Closing Net
Assets shall represent the resolution of both the amount of Closing Net
Assets and the effect of Closing Net Assets on the Financial Statements for
all purposes of this Agreement, including any claims made for indemnification
pursuant to Section 12.2 hereof.
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(e) If the amount of Final Closing Net Assets exceeds Nine Million
Thirty-Five Thousand dollars ($9,035,000), Purchaser shall promptly pay to
(or as directed by) Bayer the amount of such excess. If the amount of Final
Closing Net Assets is less than Nine Million Thirty-Five Thousand dollars
($9,035,000), Bayer shall promptly pay to (or as directed by) Purchaser the
amount of such deficit. Any such payment pursuant to this Section 2.5(e)
shall be made within ten (10) days after (i) Purchaser and Bayer agree upon
Final Closing Net Assets pursuant to Section 2.5(d) or (ii) if Disputed Items
are referred to a firm of independent accountants pursuant to Section 2.5(c),
the delivery of the report of such firm referred to in Section 2.5(c).
(f) Any payments pursuant to this Section 2.5 shall be made by
wire transfer of immediately available funds to such account of Bayer as
Bayer specifies, or Purchaser as Purchaser specifies, as applicable, at least
two (2) business days prior to the date of such payment. The amount of the
payment to be made pursuant to this Section 2.5 shall bear interest from and
including the date on which Bayer delivers to Purchaser the Proposed Closing
Net Assets Schedule to but excluding the date of payment at a rate per annum
equal to the three (3) month London Interbank Offered Rate as published in
The Wall Street Journal for the Closing Date. Such interest shall be payable
at the same time as the payment to which it relates and shall be calculated
daily on the basis of a year of three hundred sixty-five (365) days and the
actual number of days for which due.
II.6 Purchase Price Allocation. The parties shall allocate the
Purchase Price (as may be adjusted pursuant to Section 2.5) and the
assumption of the Assumed Liabilities among the Assets and the agreements
contained in Sections 7.1 and 7.2 hereof in a manner reasonably determined by
the parties and consistent with Section 1060 of the Code (the "Purchase Price
Allocation"). Bayer and Purchaser shall timely file with the IRS a Form 8594
consistent with the allocations determined by the parties. Bayer and
Purchaser shall report the transfer of the Assets in a manner consistent with
the Purchase Price Allocation and such form 8594 for all federal state, local
and foreign Tax purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BAYER
Bayer represents and warrants to Purchaser as of the date hereof and of the
Closing as provided below.
III.1 Financial Statements. Bayer has delivered to Purchaser (a)
unaudited pro forma balance sheets of the Business as of September 30, 1998
(the "Balance Sheet") and as of December 31, 1997, and (b) the related
unaudited statements of operations of the Business for the (9) months ended
September 30, 1998 and the fiscal year ended December 31, 1997 (collectively,
the "Financial Statements"), copies of which are included in Section 3.1 of
the Disclosure Schedule. Except as set forth in Section 3.1 of the
Disclosure Schedule, the Financial Statements (i) have been prepared based on
13
books and records of Bayer, which books and records for the United States
have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") and which books and records for the rest of
the world have been prepared in accordance with International Accounting
Standards, except that they do not contain notes and (ii) fairly present in
all material respects the financial position of the Business as of September
30, 1998 and December 31, 1997 and the results of operations of the Business
for the nine (9) month period ended September 30, 1998 and the fiscal year
ended December 31, 1997, respectively (it being understood that materiality
under GAAP for purposes of the Financial Statements shall be material to the
Business, not Bayer as a whole).
III.2 Absence of Certain Changes or Events. Except as set forth
in Section 3.2 of the Disclosure Schedule or permitted by this Agreement,
since the date of the Balance Sheet up to the date of this Agreement, the
Business has not (a) suffered any damage, destruction or casualty loss to its
physical properties which has had a Material Adverse Effect; (b) incurred or
discharged any obligation or liability or entered into any other transaction
except in the ordinary course of business and except for obligations,
liabilities and transactions that do not individually or in the aggregate
have a Material Adverse Effect; (c) suffered any change in its business,
financial condition or in its relationship with its suppliers, customers,
distributors, lessors, licensors, licensees or other third parties other than
changes which individually or in the aggregate do not have or are not
reasonably likely to have a Material Adverse Effect; (d) other than with
respect to agreements for which Purchaser and the Business will have no
liability after Closing, increased the rate or terms of compensation or
benefits payable to or to become payable by it to its directors, officers or
key employees or increased the rate or terms of any bonus, pension or other
employee benefit plan covering any of its directors, officers or key
employees except in each case increases occurring in the ordinary course of
business in accordance with its customary practice (including normal periodic
performance reviews and related compensation and benefits increases) or as
required by any pre-existing Commitment; (e) created, assumed, guaranteed or
incurred any indebtedness for borrowed money or mortgaged, pledged or
subjected any of the Assets to any Lien, except for Permitted Liens, other
than in the ordinary course of business; (f) forgiven or canceled any
indebtedness owing to it or waived any claims or rights of material value, in
each case except in the ordinary course of business; (g) sold, leased,
licensed or otherwise disposed of any of its material assets other than (x)
sales of Inventory and (y) sales of obsolete assets in the ordinary course of
business; (h) amended or terminated any material Commitment to which it is a
party other than in the ordinary course of business; (i) received notice or
had knowledge of any actual or threatened labor dispute, strike or other
occurrences, event or condition of any similar character; (j) made
commitments or agreements for capital expenditures or capital additions or
betterments (except for the construction of the Project), other than in the
ordinary course of business; (k) changed any of the accounting principles
followed by it or the methods of applying such principles; or (l) committed
pursuant to a legally binding agreement to do any of the things set forth in
clause (b) and clauses (d) through (k) above.
III.3 Title to Assets. Except as set forth in Section 3.3 of the
Disclosure Schedule, Bayer has good, valid and marketable title to the
equipment and other tangible personal property described in Section
2.1(a)(ix) and the Real Property, and will convey same to Purchaser, and the
equipment and other tangible personal property described in Section
2.1(a)(ix) and the Real Property are free and clear of any Liens, except
Permitted Liens.
14
III.4 Patents, Trademarks, Etc. Section 3.4 of the Disclosure
Schedule sets forth a complete list, of all material United States and
foreign patents, trademarks, trade names, service marks and copyrights,
registered or filed for, or licensed by, Bayer and used in the Business other
than the names, trademarks and/or service marks "Bayer," the "Bayer" logo and
any name or mark containing such names or marks (collectively, the
"Proprietary Rights"). Except as disclosed in Section 3.4 of the Disclosure
Schedule, (i) to Bayer's knowledge, the Proprietary Rights are subsisting and
are not invalid or unenforceable, in whole or in part; (ii) Bayer is the sole
and exclusive owner of the Proprietary Rights free and clear of all Liens;
provided, that the foregoing representation regarding ownership shall not be
deemed to include any representation as to the validity of the Proprietary
Rights; (iii) Bayer has the power and authority to transfer to Purchaser all
of the registrations of Proprietary Rights to be transferred to Purchaser
under this Agreement and, to Bayer's knowledge, Bayer has the power and
authority to transfer to Purchaser all of the Proprietary Rights to be
transferred hereunder; (iv) to Bayer's knowledge, there are no claims,
judgments or settlements against or owed by Bayer, or pending or threatened
claims or litigation, in each case, relating to the Proprietary Rights; (v)
to Bayer's knowledge, the Proprietary Rights are not being infringed by any
person; and (vi) the Patents and the registered trademarks included in the
Proprietary Rights were duly issued to Bayer and Bayer has title to such
Patents and registered trademarks free and clear of any Liens (other than
claims).
III.5 Commitments. Section 3.5 of the Disclosure Schedule
contains a list of each Commitment (a) which involves payment over the
remaining term of such Commitment of more than fifty thousand dollars
($50,000) or requires the Business to provide goods or services worth more
than fifty thousand dollars ($50,000) and which in each case is not
cancelable upon ninety (90) days' notice or less without penalty, (b) which
evidences or provides for any indebtedness of the Business or any Lien
securing such indebtedness on any of the Assets, (c) which guarantees the
performance, liabilities or obligations of any other entity, (d) which
restricts the Business from competing in any line of business, (e) which
relates to the distribution or marketing of the products of the Business and
involves payment over the remaining term of such Commitment of more than
fifty thousand dollars ($50,000) and is not cancelable upon ninety (90) days'
notice or less without penalty, or (f) which is otherwise material to the
Business. Except as set forth in Section 3.5 of the Disclosure Schedule, the
Business is not in breach of any of its Commitments, nor to Bayer's knowledge
is any third party in breach thereof, in either case except for such breaches
which individually or in the aggregate do not have or are not reasonably
likely to have a Material Adverse Effect. Each Commitment is in full force
and effect, and is a legal, valid and binding obligation of Bayer and, to the
knowledge of Bayer, each of the other parties thereto, enforceable in
accordance with its terms, except to the extent that such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditors' rights generally, and is subject
to general principles of equity. Except as set forth in Section 3.5 of the
Disclosure Schedule and except for purchase orders, no consents are required
for the assignment of any Commitment to Purchaser. Except as set forth in
Section 3.5 of the Disclosure Schedule, true and complete copies of all of
the written Commitments listed in Section 3.5 of the Disclosure Schedule have
previously been made available to Purchaser.
15
III.6 Litigation. Except as set forth in Section 3.6 of the
Disclosure Schedule and except with respect to Environmental Matters (which
are the subject of Section 3.14), as of the date of this Agreement, there is
no Litigation pending or, to Bayer's knowledge, threatened (i) against the
Business which has or is reasonably likely to have a Material Adverse Effect,
or (ii) which seeks to enjoin or obtain damages in respect of the
consummation of the transactions contemplated hereby nor does Bayer know of
any reasonably likely basis for such litigation described in Section 3.6 (i)
and (ii). Except as set forth in Section 3.6 of the Disclosure Schedule,
Bayer is not subject to any outstanding orders, rulings, judgments or decrees
concerning or affecting the Business or the Real Property that have or are
reasonably likely to have a Material Adverse Effect on the Business.
III.7 Compliance With Laws. (a) Except as set forth in Section
3.7(a) of the Disclosure Schedule, and except with respect to Environmental
Matters (which are the subject of Section 3.14), the Business has complied
with and has not violated any and all applicable laws, rules and regulations
in effect at the particular time and is in compliance with and is not in
violation of all applicable laws, rules and regulations currently in effect,
except where the failure to comply therewith does not, individually or in the
aggregate, have a Material Adverse Effect. The Business has all Permits
necessary for the conduct of its business as presently conducted except where
the absence thereof individually or in the aggregate does not have a Material
Adverse Effect. Each Permit the absence of which would have a Material
Adverse Effect is listed in Section 3.7(a) of the Disclosure Schedule.
(b) Except for matters described in Section 3.7(b) of the
Disclosure Schedule, the Business, for the five (5) years immediately prior
to the Closing, has adhered to standard operating procedures accepted by the
United States Federal Drug Administration ("FDA") for the products of the
Business regulated by the FDA and has properly tested and/or secured
appropriate testing of all of the Business' products subject to regulation by
the FDA. Section 3.7(b) of the Disclosure Schedule sets forth a true,
correct and complete list of all recall letters, "warning letters", "483s"
and correspondence relating to customer inspection deficiencies received by
Bayer and related to the Business during the five (5) year period immediately
preceding the Closing.
III.8 Corporate Power and Authority; Effect of Agreement.
(a) Bayer is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has all
requisite corporate power and authority to execute, deliver and perform this
Agreement, to consummate the transactions contemplated hereby, to own, lease
and operate its properties, and to conduct the Business. Bayer is duly
qualified or licensed to do business and in good standing as a foreign
corporation in each jurisdiction where the conduct of the Business by it
requires it to be so qualified.
(b) The execution, delivery and performance by Bayer of this
Agreement, and the consummation by Bayer of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on its
part.
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(c) This Agreement has been duly and validly executed and
delivered by Bayer and constitutes the valid and binding obligation of Bayer,
enforceable against Bayer in accordance with its terms, except to the extent
that such enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors'
rights generally, and (ii) is subject to general principles of equity.
(d) Except as set forth in Section 3.8(d) of the Disclosure
Schedule, the execution, delivery and performance by Bayer of this Agreement
and the consummation by Bayer of the transactions contemplated hereby will
not, with or without the giving of notice or the lapse of time or both, (i)
violate any provision of law, rule or regulation to which Bayer is subject,
(ii) violate any order, judgment or decree applicable to Bayer or the
Business, (iii) violate or conflict with any provision of the Certificate of
Incorporation, the By-laws or other organizational documents of Bayer or (iv)
conflict with, violate or cause a default in any provision of any Commitment
or any other contract or agreement to which Bayer is a party, except where
any such violation would not have a Material Adverse Effect.
III.9 Employee Benefit Plans.
(a) Bayer does not maintain, and is not a party to or obligated to
contribute to any Employee Benefit Plan, guaranteed annual income plan, fund
or arrangement, or any incentive, bonus, pension, profit-sharing, deferred
compensation, stock option or purchase plan or agreement or arrangement, or
any non-competition agreement, or any severance or termination pay plans or
policies, any hospitalization, disability or other insurance plans, or any
other employee fringe benefit plans, in each case, related to the Business,
except those set forth in Section 3.9 of the Disclosure Schedule. True,
complete and accurate copies of all of the written plans and agreements and
correct and true, complete and accurate summaries of all oral plans and
agreements described in Section 3.9 of the Disclosure Schedule are or have
been made available to Purchaser. In addition, Bayer has provided, or has
made available, to the Purchaser with respect to each plan and agreement
described in the Disclosure Schedule, (1) any summary plan description for
such plan (and summary of material modification thereto) and any other
material employee communication relating to the plan, (2) a copy of any trust
or funding agreement or arrangement for such plan, and (3) as applicable to
the plan or agreement, the most recent financial statement, annual report
filed with the government and actuarial report for such plan.
(b) With respect to any Employee Benefit Plan that covers
employees of Bayer: (1) neither such Employee Benefit Plan nor, to the
knowledge of Bayer, any plan fiduciary has engaged in a prohibited
transaction as defined in Section 406 of ERISA (for which no individual or
class exemption exists under Section 408 of ERISA) or any prohibited
transaction as defined in Section 4975 of the Code (for which no individual
or class exemption exists under Section 4975 of the Code) involving such
Employee Benefit Plan that resulted in any liability which has not been
satisfied; (2) all filings and reports as to such Employee Benefit Plan
required to have been made to the IRS, to the U.S. Department of Labor or, if
applicable, to the Pension Benefit Guaranty Corporation have been made; (3)
there is no litigation, disputed claim (other than routine claims for
benefits), governmental proceeding or investigation commenced, pending or
threatened with respect to any such Employee Benefit Plan or its related
trust; (4) such Employee Benefit Plan has been established, maintained,
funded and administered in all material respects in accordance with (x) its
governing documents and (y) any applicable provisions of ERISA, the Code and
final regulations promulgated thereunder; (5) no Employee Benefit Plan is an
unfunded plan of deferred compensation; and (6) neither Bayer nor any ERISA
Affiliate has, during the preceding five (5) year period, incurred any
liability under Title 4 of ERISA from or with respect to a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA.
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(c) With respect to any Employee Benefit Plan that covers
employees of Bayer and that is intended to be qualified under Section 401(a)
or Section 501(c)(9) of the Code, except as set forth in Section 3.9 of the
Disclosure Schedule, favorable determination or approval letters as to
qualification of such Employee Benefit Plan under Section 401(a) or Section
501(c)(9) of the Code have been issued by the IRS, and to Bayer's knowledge,
no event has occurred or condition exists which would adversely affect such
qualification.
(d) With respect to any other plan, fund or arrangement listed on
Section 3.9 of the Disclosure Schedule not covered by paragraph (b) or (c)
above, whether or not subject to ERISA (a "Plan"): (1) there is no
litigation, disputed claim (other than routine claims for benefits),
governmental proceeding or investigation commenced or pending with respect to
such Plan or its related trust that, if determined adversely, would cause a
material liability; (2) such Plan has been administered in all material
respects in accordance with its governing documents; and (3) if funding is
required, such Plan has been funded in accordance with its governing
documents and such Plan may be terminated without causing a material
liability.
(e) There has not been any termination or partial termination of
any Employee Pension Benefit Plan maintained by Bayer or any ERISA Affiliate,
during the period of such common control, at a time when Title IV of ERISA
applied to such Plan, that resulted in a material liability to Bayer that has
not been satisfied.
(f) Except as set forth in Section 3.9 of the Disclosure Schedule,
no plan or agreement, which is included on the Disclosure Schedule, and which
provides any hospital, medical, dental, vision, sickness, accident, survivor
or death benefit (1) provides any benefit other than through a policy or
policies of insurance or (2) provides benefit coverage to any former or
retired employee, director or consultant of Bayer except under the COBRA
requirements of Section 4980B of the Code or Sections 601 to 608 of ERISA.
(g) No ERISA Affiliate has incurred any liability, excise tax,
fine or penalty with respect to any employee benefit plan, arrangement,
agreement or policy which could be asserted against any plan or arrangement
included on the Disclosure Statement or against the Purchaser or any of its
affiliates after the consummation of the transactions contemplated by this
Agreement.
(h) All contributions which are required to be made to or under
any plan or arrangement included on the Disclosure Schedule, under the terms
of such plan or agreement or by applicable law, have been made in a timely
manner.
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III.10 Governmental Consents. Except as set forth in Section 3.10
of the Disclosure Schedule and except as may be necessary as a result of
facts or circumstances relating solely to Purchaser, no consent, approval,
order or authorization of, or exemption by, or registration, declaration or
filing with, any Governmental Authority, other than pursuant to the Illinois
Responsible Property Transfer Act, the HSR Act and the antitrust laws and
regulations of any applicable non-United States jurisdictions, is required to
be obtained or made by or with respect to Bayer in connection with the
execution, delivery and performance by Bayer of this Agreement or the taking
by Bayer of any other action contemplated hereby.
III.11 Taxes. (a) For purposes of this Agreement, the terms
"Tax" and "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including, without limitation, all net income, gross
income, gross receipts, premium, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, property or other taxes,
fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties (including penalties for failure to file in
accordance with applicable information reporting requirements), and additions
to tax by any authority, whether federal, state, or local or domestic or
foreign. The term "Tax Return" shall mean any report, return, form,
declaration or other document or information required to be supplied to any
authority in connection with Taxes.
(b) Bayer has filed all Tax Returns that were required to be filed
with respect to the Business. All such Tax Returns were when filed, and
continue to be, correct and complete in all material respects. All Taxes
owed by Bayer with respect to the Business (whether or not shown on any Tax
Return) have been timely paid. Bayer is not currently the beneficiary of any
extension of time within which to file any Tax Return with respect to the
Business. No claim has ever been made by a Governmental Authority in a
jurisdiction where Bayer does not file Tax Returns with respect to the
Business that it is or may be subject to taxation by that jurisdiction.
(c) There are no Liens with respect to Taxes on any of the Assets,
except for Permitted Liens.
(d) Bayer has withheld or collected and paid all Taxes with
respect to the Business required to have been withheld or collected and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party, or otherwise.
(e) There is no dispute or claim concerning any Tax Liability of
Bayer with respect to the Business either (A) claimed or raised by any
authority in writing or (B) as to which Bayer has knowledge. There are no
audits, investigations or proceedings with respect to Taxes in which issues
related to the Business have been raised. To the knowledge of Bayer, no
audit or investigation with respect to Taxes relating to the Business has
been threatened.
(f) No ruling with respect to Taxes relating to the Business has
been requested by or on behalf of Bayer.
19
(g) For purposes of this Section 3.11 references to Bayer shall
also refer to any predecessor companies.
III.12 Absence of Undisclosed Liabilities. As of the date of the
Balance Sheet and as of the date hereof and as of the Closing Date, the
Business did not have any liability or obligation of any kind or nature
(fixed or contingent or otherwise) that is required to be recorded in the
books and records of Bayer for the Business, which books and records of the
Business have been prepared in accordance with GAAP, (it being understood
that the requirements of GAAP will be interpreted to relate to the Business,
not Bayer as a whole), which is not reflected, reserved against or disclosed
in the Financial Statements or disclosed elsewhere in the Disclosure
Schedules or in the documents listed in the Disclosure Schedules, other than
(i) Retained Liabilities and (ii) liabilities incurred in the ordinary course
of business and consistent with past practice since the date of the Balance
Sheet.
III.13 Labor Matters. Except as set forth in Section 3.13 of the
Disclosure Schedule, (a) the Business is in substantial compliance with all
laws regarding employment and employment practices, (b) there is no unfair
labor practice charge or complaint against the Business pending before the
National Labor Relations Board nor is there any grievance nor any arbitration
proceeding arising out of or under collective bargaining agreements pending
with respect to the Business, (c) there is no labor strike, slowdown, work
stoppage or lockout in effect, or, to the knowledge of Bayer, threatened
against or otherwise affecting the Business, and the Business has not
experienced any such labor controversy within the past five years, (d) there
is no charge or complaint pending against the Business before the Equal
Employment Opportunity Commission, the Office of Federal Contract Compliance
programs or any similar state, local or foreign agency responsible for the
prevention of unlawful employment practices, (e) the Business is not a party
to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices; (f) the
Business will not have any liability under any benefit or severance policy,
practice, agreement, plan or program which exists or arises, or may be deemed
to exist or arise, under any law or otherwise, as a result of the
transactions contemplated hereunder; (g) the Business is not a party to any
collective bargaining agreement; and (h) the Business is in compliance with
its obligations pursuant to the Work Adjustment and Retraining Notification
Act of 1988 ("WARN Act"), and, except as would not have a Material Adverse
Effect, all other notification and bargaining obligations arising under any
collective bargaining agreement, statute or otherwise. To the knowledge of
Bayer, the Business has not received written notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of
employment laws to conduct an investigation of or relating to the Business,
and no such investigation is in progress.
III.14 Environmental Matters. (a) Except as set forth in Section
3.14(a) of the Disclosure Schedule and except for such of the following as
individually or in the aggregate do not have a Material Adverse Effect:
(i) To Bayer's knowledge, Bayer and the Business have complied in
all material respects with all applicable Environmental Laws for the five (5)
- - year time period immediately preceding the Closing; currently are in
material compliance with all applicable Environmental Laws; and have not
20
received any written notice that Bayer or the Business is in violation of
applicable Environmental Laws.
(ii) There are no pending claims or litigation or, to Bayer's
knowledge, any threatened claims or any bases for any claims that Bayer is in
violation or breach of or liable under any Environmental Law applicable to
the Business and the Assets.
(iii) Bayer has obtained and to Bayer's knowledge has complied
with the terms of all Environmental Permits required under applicable
Environmental Laws to operate the Business and the Assets as currently
operated by Bayer and to store, dispose of and otherwise handle any Hazardous
Substances used in or maintained in connection with the Business.
(iv) Bayer has received no request for information, notice, demand
letter, administrative inquiry or compliance notice from a Governmental
Authority or other third-party, and has no other knowledge, with respect to
the presence of Contamination exceeding applicable clean-up standards or
remediation thresholds in, on, under or about or emanating or migrating from
the Real Property or the threat of migration of Contamination exceeding
applicable clean-up standards or remediation thresholds onto, at, into, under
or from the Real Property.
(v) Bayer has received no request for information, notice, demand
letter or inquiry from a Governmental Authority or other third-party, and has
no other knowledge, concerning Contamination or threatened Contamination at
any off-site location or locations to which Bayer transported or arranged for
the transportation of Hazardous Substances generated by Bayer during Bayer's
operation of the Business and/or ownership of the Assets.
(vi) Bayer is not subject to any outstanding orders, rulings,
judgments, decrees or settlement agreements concerning any Environmental
Matter related to the Assets, the Business or the Real Property.
(b) Purchaser acknowledges that the representations and warranties
contained in this Section 3.14 are the only representations and warranties
being made in this Agreement with respect to Environmental Matters, that no
other representation contained in this Agreement shall apply to any
Environmental Matter, and that no other representation or warranty, express
or implied, is being made with respect thereto.
III.15 Finders. No broker's, finder's, financial advisor's or any
similar fee or commission will be incurred by or on behalf of Bayer or the
Business in connection with the origin, negotiation, execution or performance
of this Agreement or the transactions contemplated hereby for which Purchaser
or any of its Affiliates or the Business shall have any liability.
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III.16 Conveyance of Assets. Except as set forth in Section 3.16
of the Disclosure Schedule, the Assets include all assets which are
reasonably necessary for the conduct of Bayer's Pentex blood proteins
business as currently conducted.
III.17 Title to Properties. Section 3.17 of the Disclosure
Schedule sets forth a true, accurate, correct and complete list and
description of all real property owned, leased or subleased by Bayer which
relate to, or are used in connection with, the Business (which, to the extent
that they are leases or subleases, are referred to herein as "Real Property
Leases").
(a) Bayer is the sole and exclusive legal and equitable owner of
the Real Property and of a valid leasehold or subleasehold estate with
respect to leased or subleased premises, in each case free and clear of all
Liens, except for Permitted Liens. Bayer has been in peaceable possession of
the premises covered by each of the Real Property Leases since the
commencement of the original term of such Lease, except as otherwise provided
in Section 3.17 of the Disclosure Schedule.
(b) Each of the Real Property Leases (and leases underlying such
subleases) is in full force and effect and contains no terms other than the
terms contained in the copies heretofore delivered to Purchaser. Bayer has
complied with all commitments and obligations on its part to be performed or
observed under such Real Property Lease. Bayer has not received any notice
of a default, offset or counterclaim under any Real Property Lease (or lease
underlying such sublease) and no event or condition has happened or presently
exists which constitutes a default or, after notice or lapse of time or both,
would constitute a default under any Real Property Lease (or lease underlying
such sublease). The consummation of the Closing will not constitute a
default under any of the Real Property Leases. All required consents with
respect to the Real Property Leases, if any, have been or shall be obtained,
copies of which shall be delivered to Purchaser at or prior to Closing.
(c) There is no pending or, to the knowledge of Bayer, threatened
actions or proceedings (including condemnation and foreclosure) which could
affect the Real Property. Any service contracts, warranties and guaranties
covering any portion of the Real Property are and shall be at the Closing in
full force and effect, copies of which shall be delivered to Purchaser at or
prior to Closing. To Bayer's knowledge, there are no assessments affecting
the Real Property, and to Bayer's knowledge, no assessments are contemplated.
There are no Tax abatements or exemptions affecting the Real Property. All
public utilities required for the operation of the Real Property either enter
the Real Property through adjoining public streets or if they pass through
adjoining private land do so in accordance with valid public easements or
private easements which will inure to the benefit of Purchaser after the
Closing. All property taxes with respect to the Real Property which are due
and payable have been paid in full.
(d) Bayer has delivered to Purchaser an as-built survey of each
parcel of land comprising the Real Property owned by Bayer as presently
exists.
(e) To the knowledge of Bayer, there are no defaults by the
landlords under any of Real Property Leases and such landlords have performed
22
all of their obligations thereunder. Bayer has not waived any obligations of
any such landlord or any right under any of the Real Property Leases. There
is no pending or, to the knowledge of Bayer, threatened actions or
proceedings which could affect the Real Property Leases.
III.18 Software. Section 3.18 of the Disclosure Schedule contains
a complete and accurate list of all computer software, databases and programs
utilized by Bayer exclusively with respect to the Business. Except as set
forth in Section 3.18 all such computer software, databases and programs are
owned by, or are licensed to, Bayer.
III.19 Absence of Certain Practices. To the knowledge of Bayer,
neither the Business, nor any director, officer, agent, employee or other
person acting on its behalf, has given or agreed to give any gift or similar
benefit of more than nominal value to any customer, supplier, or governmental
employee or official or any other person who is or may be in a position to
help or hinder the Business or assist the Business in connection with any
proposed transaction involving the Business which gift or similar benefit, if
not given in the past, would have materially and adversely affected the
business or prospects of the Business. To the knowledge of Bayer, neither
the Business, nor any director, officer, agent, employee, or other person
acting on its behalf has (i) used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to, or on behalf of, governmental
officials or others or (ii) accepted or received any unlawful contributions,
payments, gifts or expenditures.
III.20 Accounts Payable. All accounts payable and accrued
expenses reflected on the Balance Sheet and to be reflected on the Final
Closing Net Assets Schedule arose or will arise (as the case may be) from
bona fide transactions in the ordinary course of the Business or pursuant to
the Project.
III.21 Accounts Receivable. All accounts receivable on the
Balance Sheet and to be reflected on the Final Closing Net Assets Schedule
arose or will arise (as the case may be) from bona fide transactions in the
ordinary course of the Business and are collectible at the face amount
thereof in the ordinary course of business, subject to reserves with respect
thereto reflected on the Balance Sheet or to be reflected on the Final
Closing Net Assets Schedule, respectively.
III.22 No Third Party Options. There are no existing agreements,
options, commitments, or rights with, of or to any person to acquire any of
the assets, properties or rights included in the Assets or any interest
therein, except for those contracts entered into in the normal course of
business consistent with past practice for the sale of inventory of the
Business.
23
III.23 Inventory. Except as set forth in Section 3.23 of the
Disclosure Schedule, all Inventory of the Business used in the conduct of the
Business was acquired, manufactured or produced and has been maintained in
the ordinary course of the Business; is of good and merchantable quality;
consists substantially of a quality, quantity and condition usable, leasable
or saleable as labeled in the ordinary course of the Business, and is valued
at reasonable amounts based on the ordinary course of the Business; and is
not subject to any material write-down or write-off. The Business is not
under any liability or obligation with respect to the return of a material
amount of inventory in the possession of wholesalers, retailers or other
customers.
III.24 Year 2000 Issues. (a) Any failure of any of the software,
computers, network equipment, technical infrastructure, production equipment
and other equipment and systems that are material to the operation of the
Business and included in the Assets or utilized in the provision of services
under the Transition Services Agreement and that rely on, utilize or perform
date or time processing ("System") to be Year 2000 Compliant will not cause a
Material Adverse Effect.
(b) "Year 2000 Compliant" means a System will at all times: (i)
consistently and accurately handle and process date and time information and
data values before, during and after January 1, 2000, including but not
limited to accepting date input, providing date output, and performing
calculations on or utilizing dates or portions of dates; (ii) function
accurately and in accordance with its specifications without interruption,
abnormal endings, degradation, change in operation or other impact, or
disruption of other Systems, resulting from processing date or time data with
values, before, during and after January 1, 2000; (iii) respond to and
process two-digit date input in a way that resolves any ambiguity as to
century; and (iv) store and provide output of date information in ways that
are unambiguous as to century.
III.25 Disclosure. No representation, warranty or statement made
by Bayer in (i) this Agreement, (ii) the Disclosure Schedule, or (iii) any
other written materials furnished or to be furnished by Bayer to Purchaser or
its representatives, attorneys and accountants pursuant to this Agreement,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
III.26 Books and Records. The books and records of the Business
have been maintained in the ordinary course of business and reflect, in all
material respects, the transactions of the Business described therein.
III.27 Equipment and Personal Property All of the equipment and
personal property included in the Assets is in working order.
III.28 Project (a) Bayer represents to Purchaser that the
Project was planned and designed with the intention of meeting, to Bayer's
knowledge, cGMP standards existing as of June 30, 1998 for the manufacture of
tissue culture media components for use in the manufacture of pharmaceutical
components and that all work relating to the Project as of the date hereof
and as of the Closing Date has been performed in accordance with such intent
and in accordance with such standards and procedures as Bayer customarily
requires for its own activities.
(b) Bayer has provided Purchaser with a copy of Bayer's budget for
the Project.
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(c) Except as set forth in Section 3.28 of the Disclosure
Schedule, all contractors under the Project have been paid in the ordinary
course of business as of the Closing Date.
III.29 Disclaimers. EXCEPT AS SET FORTH IN THIS AGREEMENT OR IN
THE ANCILLARY AGREEMENTS, BAYER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED (INCLUDING WITHOUT LIMITATION THOSE REFERRED TO IN SECTION 2-312
OF THE NEW YORK STATE UNIFORM COMMERCIAL CODE OR IN ANY STATUTE APPLICABLE TO
REAL PROPERTY), AND THE ASSETS AND BUSINESS OF THE BUSINESS BEING TRANSFERRED
TO PURCHASER UPON THE ACQUISITION BY PURCHASER OF THE ASSETS AT THE CLOSING
ARE TO BE CONVEYED HEREUNDER "AS IS WHERE IS" ON THE CLOSING DATE, AND IN
THEIR THEN PRESENT CONDITION, AND PURCHASER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, BAYER
MAKES NO WARRANTY OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR QUALITY, WITH RESPECT TO ANY OF THE ASSETS BEING SO TRANSFERRED,
OR AS TO THE CONDITION OR WORKMANSHIP THEREOF OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Bayer as follows:
IV.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, and has all requisite corporate power and authority to
carry on its business as it is now being conducted, and to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby.
IV.2 Corporate Power and Authority; Effect of Agreement.
(a) The execution, delivery and performance by Purchaser of this Agreement
and the consummation by Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Purchaser.
(b) This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
to the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally, and (ii) is subject to general principles of
equity.
25
(c) Except as set forth in the Purchaser Disclosure Schedule, the
execution, delivery and performance by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby will not,
with or without the giving of notice or the lapse of time, or both, (i)
violate any provision of law, rule or regulation to which Purchaser is
subject, (ii) violate any order, judgment or decree applicable to Purchaser,
(iii) violate any provision of the Certificate of Incorporation or by-laws of
Purchaser, or (iv) violate any provision of any loan agreement to which
Purchaser is a party or any other contract or agreement, except where any
such violation would not have a material adverse effect on Purchaser's
ability to perform its obligations hereunder or prevent the consummation of
the transactions contemplated hereby.
IV.3 Consents. No consent, approval or authorization of, or
exemption by, or filing with, any Governmental Authority, other than pursuant
to the HSR Act or the antitrust laws or regulations of any applicable non-
United States jurisdictions, is required to be obtained by Purchaser in
connection with the execution, delivery and performance by Purchaser of this
Agreement, or the taking by Purchaser of any other action contemplated
hereby.
IV.4 Availability of Funds. Purchaser has sufficient cash and
committed facilities to consummate the transactions contemplated hereby and
will have available on the Closing Date sufficient funds in U.S. currency to
enable it to consummate the transactions contemplated by this Agreement.
IV.5 Litigation. As of the date of this Agreement, there is no
Litigation pending or, to Purchaser's knowledge, threatened (a) against
Purchaser or any of its Affiliates which is reasonably likely to have a
material adverse effect on the ability of Purchaser to perform its
obligations under this Agreement, or (b) which seeks to enjoin or obtain
damages in respect of the consummation of the transactions contemplated
hereby. Neither Purchaser nor any of its Affiliates is subject to any
outstanding orders, rulings, judgments or decrees which would have a material
adverse effect on the ability of Purchaser to perform its obligations under
this Agreement.
IV.6 Finders. No broker's, finder's or any similar fee will be
incurred by or on behalf of Purchaser in connection with the origin,
negotiation, execution or performance of this Agreement or the transactions
contemplated hereby for which Bayer or any of its Affiliates shall have any
liability.
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ARTICLE V
COVENANTS OF BAYER
Bayer hereby covenants and agrees with Purchaser as follows:
V.1 Cooperation by Bayer.
(a) From the date hereof and prior to the Closing, Bayer will use
its reasonable best efforts and will cooperate with Purchaser, to promptly
secure all necessary licenses, permits, consents, approvals, authorizations,
exemptions and waivers from third parties, including, without limitation,
under the HSR Act and the antitrust laws and regulations of any applicable
non-United States jurisdictions, as shall be required in order to enable
Bayer to promptly effect the transactions contemplated hereby, and will
otherwise use its reasonable best efforts to cause the prompt consummation of
such transactions in accordance with the terms and conditions hereof. Bayer
shall cooperate with Purchaser such that initial filings required to be made
pursuant to the HSR Act in connection with the transactions contemplated
hereby will be made no later than December 1, 1998.
(b) In connection with the foregoing, Bayer shall use its
reasonable best efforts to resolve objections, if any, as may be asserted
with respect to the transactions contemplated hereby under any antitrust or
trade or regulatory laws or regulations of any Governmental Authority.
(c) Notwithstanding anything herein to the contrary, to the extent
the assignment of any Commitment, Permit or Environmental Permit included in
the Assets to be assigned to Purchaser pursuant to the provisions hereof
shall require the consent of any other party, this Agreement shall not
constitute a breach thereof or create rights in others not desired by
Purchaser. If any such consent is not obtained, Bayer shall, at Purchaser's
request and expense, cooperate with Purchaser in any reasonable arrangement
to provide for Purchaser the benefit of any such Commitment, Permit or
Environmental Permit, including using its reasonable efforts to enforce any
and all rights of Bayer against the other party to any such Commitment,
Permit or Environmental Permit arising out of the breach or cancellation
thereof by such parties or otherwise.
(d) Bayer shall permit Purchaser to use any and all packaging and
labeling materials used in the Business bearing Bayer's logo, trademark or
trade dress for a period ending the earlier of one year from the Closing Date
or the date upon which the last of such materials transferred to Purchaser
pursuant to this Agreement have been used in the ordinary course of business.
Bayer hereby grants Purchaser a license for such time period to use Bayer's
logo, trademark or trade dress in connection with products manufactured by
the Business. Purchaser agrees that it shall have no other right to use
Bayer's logo, trademark or trade dress and that it will apply such logo,
trademark or trade dress only in connection with the sale of products
manufactured by the Business.
V.2 Conduct of Business. Except as may be otherwise contemplated
by this Agreement or the Ancillary Agreements or required by any of the
27
documents listed in Section 5.2 of the Disclosure Schedule or except as
Purchaser may otherwise consent to in writing (which consent shall not be
unreasonably withheld), from the date hereof to the Closing, Bayer will (a)
in all material respects, operate the Business only in the ordinary course in
substantially the manner heretofore conducted; (b) use reasonable best
efforts to continue all material existing insurance policies (or comparable
insurance, including as to scope and amount of coverage) insuring the
Business and its assets and business in full force and effect; (c) use
reasonable efforts to keep available the services of the employees of the
Business and use reasonable best efforts to preserve the relationships of the
Business with its material suppliers, customers, distributors, lessors,
licensors and others having material business dealings with it; (d) other
than with respect to agreements for which Purchaser and the Business have no
liability and will have no liability after the Closing, not enter into any
employment or termination agreement or effect any increase in the rate or
terms of compensation payable or to become payable to directors, officers or
employees of the Business or effect any general increase in the compensation
of other employees of the Business, or increase the rate or terms of any
bonus, pension or other employee benefit plan covering any of its directors,
officers or key employees except in each case increases occurring in the
ordinary course of business in accordance with its customary practice
(including normal periodic performance reviews and related compensation and
benefits increases) or as required by any pre-existing Commitment; and (e)
not (i) create, assume, guarantee or incur any indebtedness for borrowed
money other than in the ordinary course of business for which Purchaser will
be liable following the Closing, (ii) sell, lease, license or otherwise
dispose of any material asset of the Business, other than sales of Inventory
and sales of obsolete assets in the ordinary course of business, (iii)
purchase or enter into any lease for real property for the Business, (iv)
create, incur or permit any consensual Lien on any of the assets of the
Business other than Permitted Liens, (v) forgive or cancel any indebtedness
owing to the Business or waive any claims or rights of material value other
than in the ordinary course of business, (vi) enter into, modify, amend or
terminate any Commitment (except modifications, terminations or amendments in
the ordinary course of business); (vii) change any of its accounting
principles, methods or practices with respect to the Business, (viii) create
any unfulfilled commitment as of the date of this Agreement requiring
expenditures by the Company exceeding $25,000 (excluding commitments
expressly described in the Disclosure Schedule; (ix) dispose of or allow the
lapse of any material patent, trademark, trade name, service mark or
copyright or any application for the foregoing, or disposition of any
technology, software or know-how or any license, permit or authorization to
use any of the foregoing; or (x) enter into a legally binding agreement to do
any of the things set forth in this clause (e). Notwithstanding anything else
contained in this Agreement to the contrary, in the event Bayer requests
Purchaser's consent hereunder to enter into any agreement or take any action
related to or arising out of the Project and such consent is not reasonably
provided, Bayer shall have no liability to Purchaser for any and all Losses
and/or liabilities resulting from or arising out of such lack of consent.
V.3 Access. From the date hereof to the Closing, Bayer shall,
provide Purchaser with such information as Purchaser may from time to time
reasonably request with respect to the Business and the transactions
contemplated by this Agreement, and shall provide Purchaser and its
representatives, accountants and lenders reasonable access during regular
business hours and upon reasonable notice to the employees, properties, books
and records of the Business as Purchaser may from time to time reasonably
request. Any disclosure whatsoever during such investigation by Purchaser
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shall not constitute an enlargement of or additional representations or
warranties of Bayer beyond those specifically set forth in this Agreement.
Until the Closing, all such information and access shall be subject to the
terms and conditions of the Confidentiality Agreement.
V.4 No Solicitation of Transactions. Until the Closing or the
prior termination of this Agreement in accordance with its terms, Bayer shall
not, nor shall it permit any of its officers or directors or other
representatives nor authorize any other persons to, solicit or encourage any
third party to offer to acquire the Business or the Assets or participate in
discussions with, or, except as may be legally required, provide (directly or
indirectly) any information to, any corporation, partnership, person or other
entity or group concerning any merger, consolidation, recapitalization, sale
of substantial assets, sale of capital stock or similar transaction involving
the Business.
V.5 Books and Records; Personnel. For a period of seven (7) years
from the Closing Date:
(a) Bayer shall allow Purchaser and its agents reasonable access
to all Retained Books and Records relating to the Business in Bayer's
possession and not in Purchaser's possession upon prior written notice during
normal working hours at Bayer's principal place of business or at any
location where such Retained Books and Records are stored, and Purchaser
shall have the right, at its own expense, to make copies of such Retained
Books and Records; provided, however, that any such access or copying shall
be had or done in such a manner so as not to unreasonably interfere with the
normal conduct of Bayer's business, and provided further that (i) if
disclosure of any information contained in the Retained Books and Records is
compelled by legal process, and such information is not publicly available
and disclosure thereof would adversely affect Bayer, Bayer shall have the
right to contest the disclosure of such information (which it shall do
promptly and with diligence or it shall forfeit such right) and shall
indemnify Purchaser and its Affiliates and hold them harmless against any
Losses incurred by any of them by reason of the non-disclosure of such
information, and (ii) if disclosure of any such information is not compelled
by legal process, Bayer shall first have the opportunity to require Purchaser
not to disclose such information by agreeing in writing, in form and
substance reasonably satisfactory to Purchaser, to assume any liability
occasioning Purchaser's request or otherwise to indemnify Purchaser and its
Affiliates and hold them harmless against any Losses incurred by any of them
by reason of such non-disclosure.
(b) Bayer shall make available to Purchaser upon written request
(i) copies of any Retained Books and Records, (ii) personnel to assist
Purchaser in locating and obtaining any Retained Books and Records, and (iii)
any of its personnel whose assistance or participation is reasonably required
by Purchaser or any of its Affiliates in anticipation of, or preparation for,
existing or future Litigation or other matters in which Purchaser or any of
its Affiliates is involved. In addition, Bayer shall otherwise cooperate
with any reasonable request of Purchaser in connection with the performance,
defense or discharge of the Assumed Liabilities. Purchaser shall reimburse
Bayer for the reasonable out-of-pocket expenses incurred by it in performing
the covenants contained in this Section 5.5(b).
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V.6 Further Assurances. At any time or from time to time after
the Closing, Bayer shall, at the request of Purchaser, execute and deliver
any further instruments or documents and take all such further action as
Purchaser may reasonably request in order to accomplish the consummation of
the transactions contemplated hereby.
V.7 Disclosure Schedule. At least one day prior to the Closing
Date, Bayer will supplement or amend the Disclosure Schedule with respect to
any matter hereafter arising which, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in the
Disclosure Schedule. No supplement to or amendment of the Disclosure
Schedule made pursuant to this Section shall be deemed to cure any breach of
any representation or warranty made in this Agreement unless Purchaser
specifically agrees thereto in writing.
ARTICLE VI
COVENANTS OF PURCHASER
Purchaser hereby covenants and agrees with Bayer as follows:
VI.1 Cooperation by Purchaser. (a) From the date hereof and
prior to the Closing, Purchaser will use its reasonable best efforts and will
cooperate with Bayer, to promptly secure all necessary consents, approvals,
authorizations, exemptions and waivers from third parties, including without
limitation, under the HSR Act and the antitrust laws and regulations of any
applicable non-United States jurisdictions, as shall be required in order to
enable Purchaser to promptly effect the transactions contemplated hereby, and
will otherwise use its reasonable best efforts to cause the prompt
consummation of such transactions in accordance with the terms and conditions
hereof. Purchaser shall cooperate with Bayer such that initial filings
required to be made pursuant to the HSR Act in connection with the
transactions contemplated hereby will be made no later than December 1, 1998.
(b) In connection with the foregoing, Purchaser shall use its
reasonable best efforts to resolve objections, if any, as may be asserted
with respect to the transactions contemplated hereby under any antitrust or
trade or regulatory laws or regulations of any Governmental Authority.
VI.2 Books and Records; Personnel. For a period of seven (7)
years from the Closing Date:
(a) Purchaser shall not dispose of or destroy any of the Books and
Records that may be relevant to Bayer without first offering to turn over
possession thereof to Bayer, at Bayer's cost, by written notice to Bayer at
least thirty (30) days prior to the proposed date of such disposition or
destruction.
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(b) Purchaser shall allow Bayer and its agents reasonable access
to all Books and Records in Purchaser's possession and not in Bayer's
possession upon prior written notice during normal working hours at the
principal place of business of the Business or at any location where any
Books and Records are stored, and Bayer shall have the right, at its own
expense, to make copies of any such Books and Records; provided, however,
that any such access or copying shall be had or done in such a manner so as
not to unduly interfere with the normal conduct of Purchaser's business, and
provided further that (i) if disclosure of any information contained in the
Books and Records is compelled by legal process, and such information is not
publicly available and disclosure thereof would adversely affect Purchaser,
Purchaser shall have the right to contest the disclosure of such information
(which it shall do promptly and with diligence or it shall forfeit such
right) and shall indemnify Bayer and its Affiliates and hold them harmless
against any Losses incurred by any of them by reason of the non-disclosure of
such information, and (ii) if disclosure of any such information is not
compelled by legal process, Purchaser shall first have the opportunity to
require Bayer not to disclose such information by agreeing in writing, in
form and substance reasonably satisfactory to Bayer, to assume any liability
occasioning Bayer's request or otherwise to indemnify Bayer and its
Affiliates and hold them harmless against any Losses incurred by any of them
by reason of such non-disclosure.
(c) Purchaser shall make available to Bayer upon written request
(i) copies of any Books and Records, (ii) Purchaser's personnel to assist
Bayer in locating and obtaining any Books and Records, and (iii) any of
Purchaser's personnel whose assistance or participation is reasonably
required by Bayer or any of its Affiliates in anticipation of, or preparation
for, existing or future Litigation or other matters in which Bayer or any of
its Affiliates is involved. In addition, Purchaser shall otherwise cooperate
with any reasonable request of Bayer in connection with the performance,
defense or discharge of the Retained Liabilities. Bayer shall reimburse
Purchaser for the reasonable out-of-pocket expenses incurred by it in
performing the covenants contained in this Section 6.2(c).
VI.3 Further Assurances. At any time or from time to time after
the Closing, Purchaser shall, at the request of Bayer, execute and deliver
any further instruments or documents and take all such further action as
Bayer may reasonably request in order to accomplish the consummation of the
transactions contemplated hereby.
ARTICLE VII
ADDITIONAL AGREEMENTS
Bayer and Purchaser hereby covenant and agree with one another as
follows:
VII.1 Ancillary Agreements. Bayer and Purchaser shall execute and
deliver:
(a) a supply agreement in the form attached hereto as Exhibit 7.1
(a) (the "Bayer Supply Agreement"), providing for the supply by Bayer or its
Affiliates to Purchaser of specific products for resale;
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(b) a supply agreement in the form attached hereto as Exhibit
7.1(b) (the "Purchaser Supply Agreement"), providing for the supply by
Purchaser to Bayer and its Affiliates of specific products; (c) a
transition services agreement in the form attached hereto as Exhibit
7.1(c) (the "Transition Services Agreement"); and
(d) a processing agreement in the form attached hereto as Exhibit 7.1(d)
(the "Processing Agreement").
VII.2 Covenant Not to Compete. (a) For the period ending on the third
(3rd) anniversary of the Closing Date, neither Bayer nor any Subsidiary or
Affiliate of Bayer, shall engage, in any geographical area in which the
Business currently does business, in the Business through the manufacture
(other than for Bayer's internal use), sale or distribution of any purified
animal blood protein product manufactured, sold or distributed for use in
diagnostic reagents or in culture media for the production of
biopharmaceuticals (other than pursuant to the Ancillary Agreements);
provided, however, that nothing contained herein shall preclude Bayer or any
Affiliate of Bayer from acquiring any interest in any business (the "Acquired
Business") some or all of the operations of which would otherwise violate the
foregoing prohibitions (the "Competing Operations") so long as (i) the annual
revenues attributable to the Competing Operations for its most recently
completed fiscal year exceed neither (x) ten percent (10%) of the annual
revenues of the Acquired Business nor (y) 100% of the annual revenues of the
Business, in each such case, such annual revenues to be the annual revenues
of the most recently completed fiscal year of the Acquired Business or the
Business, as the case may be, or (ii) if they do, the acquiring entity
divests itself of the Competing Operations as soon as practicable, but no
later than twelve (12) months, after such acquisition.
(b) For the period ending on the second (2nd) anniversary of the
Closing Date, neither Bayer nor any Subsidiary or Affiliate of Bayer shall
solicit any person who is an Employee (a "Restricted Employee") to leave the
employ of Purchaser or any of its Subsidiaries. Bayer or any of its
Subsidiaries may rehire any Restricted Employee upon the earlier to occur of
(i) the first (1st) anniversary of the date on which a Restricted Employee
voluntarily terminates his or her employment with Purchaser or (ii) the
second (2nd) anniversary of the Closing Date, and may rehire at any time a
Restricted Employee whose employment is involuntarily terminated by
Purchaser.
(c) Without intending to limit the remedies available to
Purchaser, Bayer agrees that damages at law would be an insufficient remedy
to Purchaser in the event of any breach by Bayer or any Subsidiary of Bayer
of this Section 7.2 and that Purchaser shall be entitled to injunctive relief
or other equitable remedies in the event of any such breach (without the
posting of a bond or other security).
(d) If any of the provisions of this Section 7.2 are held to be
unenforceable because of the scope, term or area of their applicability, then
33
the court making such determination shall modify such scope, term or area or
all of them to the extent necessary to render this Section 7.2 enforceable
under applicable law, and such provisions shall then be enforced in such
modified form.
(e) Notwithstanding the foregoing, from and after the Closing
Date, Bayer shall not use the names of Pentex or Ex-Cyte or any names similar
thereto or variants thereof or apply to use such names in any jurisdiction.
VII.3 Vehicle Leases. Bayer and Purchaser each covenant and agree
to use reasonable commercial efforts to amend, or cause to be amended, the
leases relating to the vehicles listed on Schedule 2.1(a)(ix) that are
currently leased to Bayer so as to cause Purchaser to become the lessee
thereof.
VII.4 Recall and Notification In the event of a product recall,
corrective action or any other customer notification arising due to a safety
or quality issue and related to products of the Business both (i)
manufactured by Bayer on or prior to the Closing and (ii) sold by Bayer on or
before the Closing Date or sold by Purchaser on or before the one hundred
fiftieth (150th) day after the Closing Date, Purchaser will administer and
perform such recall, corrective action or notification program, and Bayer
will reimburse Purchaser for Purchaser's reasonable, direct, out of pocket
costs and expenses related to such program on the condition that either (a)
such recall, corrective action or notification as performed was mandated by a
Governmental Authority, or (b) such recall, corrective action or
notification was administered and performed in consultation with and approved
in advance by Bayer.
VII.5 Securities Exchange Act Compliance. Bayer shall use its
reasonable efforts to assist Purchaser in preparing audited financial
statements of the Business in connection with the Purchaser's preparation and
filing of such reports as are required under the Securities Exchange Act of
1934 after the Closing. Bayer's efforts shall include, but are not limited
to, authorizing Bayer's accountants and allowing Bayer's personnel to assist
Purchaser, obtaining applicable representation letters and providing such
other cooperation and support as is reasonably necessary.
VII.6 Patent License. If and to the extent Purchaser is unable to
supply Bayer's quantities of cholesterol superstrate 82023 under the
Purchaser Supply Agreement, for a period of three (3) consecutive months,
then for the remaining life of the Patent, Purchaser hereby grants, and by
execution of this Agreement does grant, to Bayer and its Affiliates a non-
exclusive, royalty free, world wide license to make, have made and to use
internally products whose manufacture and/or use would otherwise infringe any
claim of the Patent, subject to the provisions of Section 7.2 hereof. The
provisions hereof shall survive the Closing.
VII.7 Confidentiality. (a) Except as otherwise provided in this
Section 7.7, each of the Purchaser, on the one hand, and Bayer, on the other
hand, shall keep confidential all information and records, whether written or
oral, which were obtained, directly or indirectly, form the other party
concerning the business of the other party ("Confidential Information") for a
period of five (5) years after the Closing Date. Prior to the Closing, each
of the Purchaser and Bayer shall use the Confidential Information solely in
connection with its analysis and review of the transactions contemplated by
this Agreement; provided, that upon and subsequent to the Closing all
Confidential Information included in the Assets or provided Purchaser by
Bayer under the Confidentiality Agreement shall be kept in confidence by
Bayer for a period of three (3) years after the Closing, and Purchaser shall
keep confidential in accordance with the terms of this Section 7.7 the
information and records obtained by Purchaser pursuant to Section 5.5, for a
period of five (5) years after the Closing.
(b) Each of Purchaser and Bayer may disclose Confidential
Information to any of its respective directors, officers, employees, agents,
financing sources, and advisors (each a "Representative" and, collectively,
the "Representatives") who need to know such Confidential Information, for
the purpose of assisting such party in connection with the transactions
contemplated by this Agreement; provided, however, that prior to making such
disclosure, such party shall inform each such Representative of the
provisions of this Section 7.7 and such party shall be responsible for any
breach of this Agreement by any such Representative. The Purchaser and Bayer
(the "Disclosing Party") may disclose Confidential Information if required by
legal process or by operation of applicable law; provided, however, that the
Disclosing Party shall first promptly advise and consult with the other party
(the "Subject Party") and its counsel concerning the information the
Disclosing Party proposes to disclose. The Subject Party shall have the
right to seek an appropriate protective order or other remedy concerning the
Confidential Information that the Disclosing Party proposes to disclose, and
the Disclosing Party will cooperate with the Subject Party to obtain such
protective order. In the event that such protective order or other remedy is
not obtained by the Subject Party, the Disclosing Party will disclose only
that portion of the Confidential Information which, the Disclosing Party is
legally required to disclose, and the Disclosing Party will use all
reasonable efforts to obtain assurances that confidential treatment will be
accorded to such information.
(c) The obligations of Purchaser and Bayer under this Section 7.7
do not apply to information which (i) at the time of disclosure is generally
available to and known by the public or within the industry other than as a
result of disclosure in violation of clause (a) or (b) of this Section 7.7 or
(ii) was or becomes available to a party on a non-confidential basis from a
source other than the other party or its agents or advisors; provided,
however, that such source is not bound by a confidentiality agreement or
obligation of secrecy in respect thereof.
(d) The obligations of Bayer hereunder shall not be construed to
limit Bayer's ability to reenter the Business after the expiration of the
covenant in Section 7.2.
(e) Each party acknowledges and agrees that any breach by it of
the provisions of this Section 7.7 will cause the other party irreparable
injury and damage, for which it cannot be adequately compensated in damages.
Each party, therefore, expressly agrees that the other party shall be
entitled to seek injunctive relief and/or other equitable relief to prevent
any anticipatory breach or continuing breach of the provisions of this
Section 7.7, or any part thereof, and to secure their enforcement.
VII.8 Environmental Matters On or prior to the Closing, Bayer
will engage a third party environmental consulting firm that is reasonably
acceptable to Purchaser to collect and analyze soil samples in the areas of
34
the Real Property where Bayer removed certain underground storage tanks in
1988 and where Bayer experienced a release in 1998. All costs incurred in
connection with the soil sampling and analysis described in this Section 7.8
shall be borne by Bayer. Purchaser and Bayer expressly acknowledge and agree
that Purchaser's receipt of the analytical results from the soil sampling
described in this Section 7.8 is not a condition of the Closing.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to purchase the Assets shall be
subject to the satisfaction (or waiver) on or prior to the Closing Date of
all of the following conditions:
VIII.1 Representations, Warranties and Covenants of Bayer. Bayer
shall have performed and complied in all material respects with all
agreements, obligations, and covenants contained herein to be performed by
Bayer on or prior to the Closing Date, and the representations and warranties
of Bayer contained herein which are qualified as to materiality or "Material
Adverse Effect" shall be true and correct in all respects and all other
representations and warranties of Bayer contained herein shall be true and
correct in all material respects as of the date when made and on and as of
the Closing Date with the same effect as though made on and as of the Closing
Date, except (a) where the failure to be true would not (after giving effect
to any adjustment with respect to Final Closing Net Assets Schedule) have a
Material Adverse Effect, except with respect to agreements, obligations,
covenants, representations or warranties which have been previously qualified
by Material Adverse Effect, (b) as otherwise contemplated hereby and (c) to
the extent that any such representations and warranties were made as of a
specified date which are qualified as to materiality or "Material Adverse
Effect" shall be true and correct as of the specified date and as to all
other such representations and warranties, the same shall have been true in
all material respects as of the specified date (except where the failure to
be true would not have a Material Adverse Effect). Purchaser shall have
received the Bayer Certificate.
VIII.2 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits
Purchaser from consummating the transactions contemplated hereby.
VIII.3 Governmental Consents. The applicable waiting period under
the HSR Act and any other relevant antitrust statutes shall have expired or
been terminated and no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, injunction or
other order which is in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise prohibiting consummation
of such transactions; provided, however, that the provisions of this Section
8.3 shall not apply if Purchaser has directly or indirectly solicited or
encouraged any such action.
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VIII.4 Documents. Purchaser shall have received the documents
referred to in Section 2.1(c).
VIII.5 Title Insurance Policy. Purchaser shall be able to obtain
a standard ALTA owner's title insurance policy (or an irrevocable commitment
therefor) issued by Chicago Title Insurance Company, or such other nationally
recognized title company as may be selected by Bayer (the "Title Company"),
in the amount of $9,000,000 and dated as of the Closing Date (the "Title
Insurance Policy"), insuring that Purchaser is the fee-simple owner of the
Real Property free and clear of all Liens, except for Permitted Liens,
Mechanics' Liens and the matters listed on Exhibit 8.5 attached hereto. If,
prior to Closing, Purchaser obtains a survey that enables the Title Company
to delete the standard survey exceptions from the Title Policy, (an "Approved
Survey"), the term "Permitted Liens" shall also include matters that are
disclosed by such survey; provided, however, that the same do not render
title unmarketable or uninsurable. If, prior to the Closing, Purchaser does
not obtain an Approved Survey, then the term "Permitted Liens" shall also
include the standard survey exceptions and all other matters that would have
been disclosed by an accurate survey and inspection of the Real Property.
VIII.6 Material Adverse Changes No event has occurred which has
caused the Business, operations, assets, properties, or prospects of the
business to have been materially adversely affected as a result of any event
or occurrence.
ARTICLE IX
CONDITIONS TO BAYER'S OBLIGATIONS
The obligation of Bayer to sell the Assets shall be subject to the
satisfaction (or waiver) on or prior to the Closing Date of all of the
following conditions:
IX.1 Representations, Warranties and Covenants of Purchaser.
Purchaser shall have performed and have complied in all material respects
with all agreements, obligations and covenants contained herein to be
performed by Purchaser on or prior to the Closing Date, and the
representations and warranties of Purchaser contained herein which are
qualified as to materiality or "Material Adverse Effect" shall be true and
correct in all respects and all other representations and warranties of
Purchaser contained herein shall be true and correct in all material respects
as of the date when made and on and as of the Closing Date with the same
effect as though made on and as of the Closing Date, except (a) where failure
to be true would not have a material adverse effect on Purchaser's ability to
consummate the transactions contemplated hereby, (b) as otherwise
contemplated hereby and (c) to the extent that any such representations and
warranties were made as of a specified date which are qualified as to
materiality or "Material Adverse Effect" shall be true and correct as of the
specified date and as to all other representations and warranties the same
shall have been true in all material respects as of the specified date
(except where failure to be true would not have a material adverse effect on
Purchaser's ability to consummate the transactions contemplated hereby).
Bayer shall have received the Purchaser Certificate.
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IX.2 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits Bayer
from consummating the transactions contemplated hereby.
IX.3 Governmental Consents. The applicable waiting period under
the HSR Act and any other relevant antitrust statutes shall have expired or
been terminated and no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, injunction or
other order which is in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise prohibiting consummation
of such transactions; provided, however, that the provisions of this Section
9.3 shall not apply if Bayer has directly or indirectly solicited or
encouraged any such action.
IX.4 Documents. Bayer shall have received the documents referred
to in Section 2.1(c).
ARTICLE X
EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
X.1 Employment. Purchaser agrees to offer employment to all
Active Employees (as set forth on Exhibit 10.1 hereto) at a base salary or
wage rate that is initially not less than that provided by Bayer immediately
prior to closing. Purchaser agrees to offer employment to all Inactive
Employees (as set forth on Exhibit 10.1 hereto) when eligible to return to
active status, at a base salary or wage rate that is initially not less than
that provided by Bayer immediately prior to closing. Any and all liabilities
or expenses (i)relating to or arising out of the employment, or cessation of
the employment, of any Active or Inactive Employee on or prior to the Closing
Date or (ii) relating in any manner to employees of Bayer who are eligible
for long-term disability benefits as of the Closing Date will be the sole
responsibility of Bayer; provided, however, that Bayer's obligations with
respect to accrued but untaken vacation and variable holidays will be assumed
by Purchaser to the extent reflected in the Final Closing Net Assets
Schedule. Employees who are employed at locations outside of the United
States will be referred to herein as "Foreign Employees."
X.2 Collective Bargaining Agreement. If and when Purchaser
becomes a successor employer to Bayer under applicable law, it agrees, upon
the request of the bargaining unit, to recognize the bargaining unit as the
collective bargaining unit and negotiate in good faith.
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X.3 Employee Benefit Plans.
(a) Purchaser agrees to provide Non Union Represented Employees
with salaries, wages, practices and benefits, which, in its sole discretion,
are generally comparable in the aggregate to the salaries, wages, practices
and benefits, in the aggregate, that they received as employees of Bayer
immediately prior to Closing. Purchaser agrees to provide coverage for
Foreign Employees under its employee benefit plans and programs and its
incentive compensation plans and programs that are offered to its similarly
situated employees employed in those countries. For a period of one year
following the Closing Date, Employees shall be given credit, without
duplication, for all service with Bayer or any Subsidiary or Affiliate of
Bayer (or service credited by Bayer or any Subsidiary or Affiliate of Bayer)
under (i) all employee benefit plans, programs and policies and fringe
benefits of Purchaser in which the Employees become participants for purposes
of eligibility and vesting and (ii) Purchaser's vacation, service award and
severance plans for purposes of calculating the amount of each Employee's
benefits under such plans. Furthermore, for a period of one year following
the Closing Date, Purchaser will maintain a vacation policy and holiday
schedule for the Employees that provides no less vacation than the current
Bayer policy applicable to the Transferred Employees.
(b) Effective as of the Closing Date, Purchaser shall cause its
qualified savings plan (the "Savings Plan") to accept any rollover
contribution that satisfies all applicable requirements of applicable law of
any cash distribution of account balances of Employees who were participants
in the Bayer Corporation Employee Savings Plan (the "Bayer Savings Plan").
(c) Purchaser shall waive any preexisting condition limitations
for such conditions covered under Bayer's medical, health or dental plans and
shall honor any deductible and out-of-pocket expenses incurred by Employees
and their dependents under Bayer's medical, dental or health plans during the
portion of the calendar year preceding the Closing Date. Purchaser shall
waive any medical certification under its group term life insurance plan for
any Employees up to the amount of coverage such Employee had under Bayer's
life insurance plan.
X.4 Severance. Without limiting the generality of the foregoing
provisions of this Article X, Purchaser agrees to provide severance pay and
other severance benefit entitlements which may be owing to each Employee
whose employment is terminated other than for cause by Purchaser or any
Affiliate within one (1) year after the Closing Date, and such severance pay
and severance benefit entitlements shall be determined (on an employee by
employee basis) in accordance with the severance policy of Bayer applicable
to such Employee as of the date hereof (copies of which have been furnished
to Purchaser).
X.5 Indemnity. Notwithstanding anything contained herein to the
contrary, Purchaser shall indemnify Bayer and its Affiliates and hold each of
them harmless from and against any Losses which may be incurred or suffered
by any of them (a) under the Worker Adjustment and Retraining Notification
Act arising out of, or relating to, any actions taken by Purchaser after the
Closing Date, (b) in connection with any claim made by any Employee for any
severance pay or termination pay or other severance benefit or termination
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benefit entitlement by reason of any Employee's termination or deemed
termination of employment after the Closing Date for any reason, and (c) in
connection with any claim made by any Employee for wrongful termination,
discrimination or violation of any labor law arising out of facts which occur
after the Closing Date.
ARTICLE XI
TERMINATION PRIOR TO CLOSING
XI.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of Purchaser and Bayer; or
(b) By either Bayer or Purchaser in writing, without liability to
the terminating party on account of such termination (provided the
terminating party is not otherwise in default or in breach of this
Agreement), if the Closing shall not have occurred on or before March 31,
1999; or
(c) By either Bayer or Purchaser in writing, without liability to
the terminating party on account of such termination (provided the
terminating party is not otherwise in default or in breach of this
Agreement), if (a) there shall have been a material breach by the other party
of any of its representations, warranties, covenants or agreements contained
herein and (b) such breach would result in a failure to satisfy a condition
to the terminating party's obligation to consummate the transactions provided
herein.
XI.2 Effect on Obligations. Termination of this Agreement
pursuant to this Article XI shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 3.15, 4.6, 11.2, 13.7,
13.9, 13.10, 13.11 and the last sentence of Section 5.3; provided, however,
that termination pursuant to clause (b) or (c) of Section 11.1 by reason of
breaches of covenants or agreements, or by reason of a breach by Purchaser of
its representations and warranties contained in Section 4.4 shall not relieve
the defaulting or breaching party from any liability to the other party
hereto.
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ARTICLE XII
INDEMNIFICATION
XII.1 Survival. Except as otherwise set forth in this Section
12.1, the representations and warranties made in Articles III and IV of this
Agreement shall survive the Closing and remain in full force and effect for a
period of eighteen (18) months after the Closing Date and the corresponding
obligation to indemnify under Sections 12.2(a) and 12.3(a) shall expire at
such time unless a claim has been made prior thereto, except for the
representations and warranties contained in Section 3.9 and 3.11 which shall
expire on the applicable statue of limitations unless a claim has been made
prior thereto and Sections 3.3, 3.14 and 3.15 which shall expire on the fifth
anniversary of the Closing unless a claim has been made prior thereto.
XII.2 Indemnification by Bayer. Subject to Section12.5, Bayer
shall indemnify and hold harmless Purchaser, its Affiliates, their respective
officers, directors, employees and agents from and against any and all Losses
(net of (x) any Tax Benefits, and (y) insurance payments actually received in
connection therewith, less costs of collection), based upon, arising out of,
or resulting from, any of the following:
(a) any breach by Bayer of any of the representations or
warranties made by Bayer in this Agreement;
(b) any failure by Bayer to perform any of its covenants or
agreements contained in this Agreement;
(c) the failure by Bayer to pay, perform or discharge when due any
of the Retained Liabilities (other than matters indemnified under Section
12.2(g)); or
(d) any product liability arising out of the manufacture, sale or
use of any product of the Business that is both (i) manufactured by Bayer on
or prior to the Closing Date and (ii) sold by Bayer on or before the Closing
Date or sold by Purchaser on or before the one hundred fiftieth (150th) day
after the Closing Date;
(e) any Litigation to which the Purchaser or any of its Affiliates
is or becomes subject to the extent relating to or arising from the conduct
of the Business by Bayer on or prior to the Closing Date;
(f) any liability or obligation relating to the operation and
ownership of the Business prior to the Closing other than the Assumed
Liabilities (other than matters indemnified under Section 12.2(g));
(g) any Environmental Matter concerning or affecting the Business,
the Real Property or any off-site location or locations to which Bayer
transported or arranged for the transportation of Hazardous Substances
generated by Bayer during Bayer's operation of the Business, to the extent
arising directly or indirectly from acts, omissions, facts, circumstances,
events or conditions that occurred on or prior to the Closing Date. Bayer's
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obligation to indemnify and hold Purchaser harmless as set forth in this
Section 12.2(g) shall terminate and end on the fifth anniversary of the
Closing unless a claim has been made prior thereto; or
(h) any Mechanics' Lien, but only to the extent that it relates to
(i) an obligation that is not an Assumed Liability and (ii) work, materials
or labor that does or do not relate to or arise out of the Project, which was
completed or were delivered prior to the Closing.
XII.3 Indemnification by Purchaser. Subject to Section 12.5, Purchaser shall
indemnify and hold harmless Bayer, its Affiliates, their respective officers,
directors, employees and agents from and against any and all Losses (net of
any Tax Benefits and insurance payments actually received in connection
therewith, less costs of collection) based upon or resulting from any of the
following:
(a) any breach by Purchaser of any of the representations or
warranties made by Purchaser in this Agreement;
(b) any failure by Purchaser to perform any of its covenants or
agreements contained in this Agreement;
(c) the failure by Purchaser to pay, perform or discharge when due
any of the Assumed Liabilities;
(d) any Losses suffered by Bayer or its Affiliates incurred or
suffered by either of them arising out of any liability or obligation of
Bayer and its Affiliates that is included as a liability in the Final Closing
Net Assets Schedule;
(e) any liability or obligation relating to the operation and
ownership of the Business by the Purchaser after the Closing and not relating
to any period prior to Closing other than Assumed Liabilities; or
(f) any liability or obligation relating to or arising out of the
Project, other than as a result of a breach of the representations in Section
3.28(a) hereof.
XII.4 Claims. When a party seeking indemnification under Sections
12.2 or 12.3 (the "Indemnified Party") receives notice of any claims made by
third parties (individually, a "Third Party Claim" and collectively, "Third
Party Claims") or has any other claim for indemnification other than a Third
Party Claim which is to be the basis for a claim for indemnification
hereunder, the Indemnified Party shall give prompt written notice thereof to
the other party (the "Indemnifying Party") reasonably indicating (to the
extent known) the nature of such claims and the basis thereof; provided,
however, that failure of the Indemnified Party to give the Indemnifying Party
prompt notice as provided herein shall not relieve the Indemnifying Party of
any of its obligations hereunder unless and only to the extent that the
Indemnifying Party shall have been prejudiced thereby. Upon notice from the
Indemnified Party, the Indemnifying Party may, but shall not be required to,
assume the defense of any such Third Party Claim, including its compromise or
settlement, and the Indemnifying Party shall pay all reasonable costs and
41
expenses thereof and shall be fully responsible for the outcome thereof;
provided, however, that in such case and except as specifically provided
below, the Indemnifying Party shall have no obligation to pay any further
costs or expenses of legal counsel of the Indemnified Party thereafter
incurred in connection with such defense other than reasonable costs of
investigation. No compromise or settlement in respect of any Third Party
Claims may be effected by the Indemnifying Party without the Indemnified
Party's prior written consent (which consent shall not be unreasonably
withheld), unless the sole relief is monetary damages that are paid in full
by the Indemnifying Party. The Indemnifying Party shall give notice to the
Indemnified Party as to its intention to assume the defense of any such Third
Party Claim within thirty (30) days after the date of receipt of the
Indemnified Party's notice in respect of such Third Party Claim. If the
Indemnifying Party does not, within thirty (30) days after the Indemnified
Party's notice is given, give notice to the Indemnified Party of its
assumption of the defense of the Third Party Claim, the Indemnifying Party
shall be deemed to have waived its rights to control the defense thereof. If
the Indemnified Party assumes the defense of any Third Party Claim because of
the failure of the Indemnifying Party to do so in accordance with this
Section 12.4, it may do so in such reasonable manner as it may deem
appropriate, and the Indemnifying Party shall pay all reasonable costs and
expenses of such defense as they are incurred. The Indemnifying Party shall
have no liability with respect to any compromise or settlement thereof
effected without its prior written consent (which consent shall not be
unreasonably withheld or delayed), unless the sole relief granted was
equitable relief for which it would have no liability or to which it would
not be subject. The Indemnified Party may participate in defense of a Third
Party Claim (which has been assumed by the Indemnifying Party) through the
Indemnified Party's own counsel, but at its own expense unless (i) the
employment of such counsel has been specifically authorized in writing by the
Indemnifying Party or (ii) the named parties in such Third Party Claim
include both the Indemnified Party and the Indemnifying Party and such
Indemnified Party has been advised in writing by its counsel that there may
be conflicting interests between the Indemnified Party and the Indemnifying
Party in the legal defense of such Third Party Claim. In connection with any
Environmental Matter, the party defending against the claim shall use all
reasonable efforts to obtain for the non-defending party any applicable
contribution protection.
XII.5 Limitations on Indemnification. (a) The provisions for
indemnity under Sections 12.2(a), 12.2(b), 12.2(g), 12.3(a) and 12.3(b), as
the case may be, shall be effective only when the aggregate amount of all
Losses for which indemnification is sought from Bayer or Purchaser under
Sections 12.2(a), 12.2(b), 12.2(g), 12.3(a) and 12.3(b), as the case may be,
exceeds one and one-half percent (1 1/2%) of the Purchase Price, in which
case the Indemnified Party shall be entitled to indemnification of its Losses
in an amount in excess of three quarters of one percent (.75%) of the
Purchase Price. The indemnification obligations of Indemnified Party's
Losses pursuant to Sections 12.2(a), 12.2(b), 12.2(g), 12.3(a) and 12.3(b),
as the case may be, shall be effective only until the dollar amount paid by
the Indemnifying Party in respect of the Losses indemnified against under
such Sections aggregates to twenty-five percent (25%) of the Purchase Price
("Indemnity Cap"); provided, however, that in no event shall more than
$2,000,000 of such Indemnity Cap be available for indemnification of Losses
related to any breach of the representations and warranties contained in
Section 3.28. The limitations set forth in Section 12.5 shall not apply to a
breach of the covenants in Sections 2.5(e) or (f).
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(b) An Indemnifying Party shall not be liable for any individual
claim under Sections 12.2(a), 12.2(b), 12.2(g), 12.3(a) and 12.3(b) that does
not exceed Ten Thousand Dollars ($10,000).
(c) Each of the parties hereto acknowledges and agrees that, from
and after the Closing, its sole and exclusive remedy with respect to any and
all claims relating to the breach of representations, warranties and
covenants contained in this Agreement and in any Ancillary Document shall be
pursuant to the indemnification provisions set forth in this Article XII, in
Section 13.6, Section 10.5 and Section 2.2(c). In furtherance of the
foregoing, each of the parties hereto hereby waives, to the fullest extent
permitted under applicable law, any and all other rights, claims and causes
of action it may have, from and after the Closing, against the other party or
their respective officers, directors, employees, agents, representatives and
Affiliates arising from the breach of representations, warranties and
covenants contained in this Agreement and in any Ancillary Document. Each of
the parties hereto further acknowledges and agrees that the rights accorded
it under this Agreement are its sole and exclusive remedy with respect to any
Environmental Matters relating to the Business, and hereby waives and
releases any other claim, demand or cause of action it may now or in the
future have with respect to any such Environmental Matters, including without
limitation any such claim, demand or cause of action pursuant to any
Environmental Laws (as they have been or may in the future be in effect).
XII.6 Title Defects; Sole Remedy. Notwithstanding anything in
this Agreement to the contrary, if any breach of any covenant, warranty or
representation in this Agreement is caused by reason of the fact that the
Real Property, or any portion thereof, is subject to any lien or encumbrance
(other than a Curable Matter) which is not one of the Permitted Liens, the
sole remedy of Purchaser (i) with respect to any such failure or breach that
is discovered prior to the Closing, shall be to elect promptly either to
terminate this Agreement (but only if such failure or breach is material) or
to proceed with the Closing without any adjustment of the Purchase Price, in
which event the matter(s) which caused such breach shall be deemed for all
purposes to be included within the term "Permitted Liens" and (ii) with
respect to any such failure or breach that is discovered after the Closing,
shall be to pursue its remedies, if any, for breach of the limited warranty
in the Deed. The term "Curable Matter" means any lien created by Bayer in
connection with a monetary debt, but only if the exact amount of such debt
can be ascertained at the time of the Closing or any other lien or
encumbrance, the cure of which (A) can be accomplished prior to the Closing
Date, (B) is within the absolute control of Bayer and (C) will not require
Bayer to spend or incur any sum or obligation that is in excess of forty-five
thousand dollars ($45,000). At the Closing, Bayer shall use reasonable best
efforts to cure any matter that is a Curable Matter at or prior to the
Closing.
XII.7 Right to Contest Mechanics Liens. Notwithstanding anything
in this Agreement to the contrary, Bayer shall have the right, at its option,
to (a) contest (for so long as Bayer reasonably deems necessary) the
validity, amount and any other aspect of any Mechanics' Lien which Bayer, in
its reasonable judgment, determines should be contested and (b) provide a
bond, title insurance and any other relief which Bayer elects to provide with
43
respect to any Mechanics' Lien in order to mitigate any damages for which it
may be liable to Purchaser under Section 12.2(h) hereof.
ARTICLE XIII
MISCELLANEOUS
XIII.1 Interpretive Provisions. Whenever used in this Agreement,
"to Bayer's knowledge" or "to the knowledge of Bayer" shall mean the actual
knowledge at the date of this Agreement of those persons who are listed on
Exhibit 13.1 and shall only include their actual knowledge obtained in their
respective capacities as such.
XIII.2 Entire Agreement. This Agreement (including the Disclosure
Schedule and all Exhibits and Annexes hereto), the Ancillary Agreements and
the Confidentiality Agreement constitute the sole understanding of the
parties with respect to the subject matter hereof. Matters disclosed by
Bayer to Purchaser pursuant to any Section of this Agreement or the
Disclosure Schedule shall be deemed to be disclosed with respect to all
Sections of this Agreement or the Disclosure Schedule.
XIII.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto; provided, however, that this
Agreement may not be assigned by Purchaser without the prior written consent
of Bayer, except that Purchaser may, at its election, (i) assign this
Agreement, in whole or in part, to any one or more Subsidiaries so long as
such assignment does not have any adverse consequences to Bayer or any of its
Affiliates (including, without limitation, any adverse tax consequences or
any adverse effect on the ability of Purchaser to consummate (or timely
consummate) the transactions contemplated hereby) and (ii) assign its rights
under the Agreement after the Closing to any party that acquires all or
substantially all of the Business, but no such assignment of this Agreement
or any of the rights or obligations hereunder shall relieve Purchaser of its
obligations under this Agreement.
XIII.4 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement are inserted for convenience only and shall not
be deemed to constitute part of this Agreement or to affect the construction
hereof.
XIII.5 Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding
unless the same shall be in writing and duly executed by the parties hereto,
except that any of the terms or provisions of this Agreement may be waived in
writing at any time by the party which is entitled to the benefits of such
waived terms or provisions. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof, (whether or not similar). No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
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XIII.6 Bulk Transfer Laws. Purchaser hereby waives compliance by
Bayer with the provisions of any so-called bulk transfer law in any
jurisdiction in connection with the transactions contemplated hereby, and
Bayer hereby agrees to indemnify Purchaser and hold it harmless from and
against any Losses which may be incurred or suffered by Purchaser as a result
of or arising from such waiver of compliance by Bayer.
XIII.7 Expenses. Except as otherwise provided herein, Bayer and
Purchaser shall each pay all costs and expenses incurred by it or on its
behalf in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, fees and expenses of its own financial
consultants, accountants and counsel.
XIII.8 Third Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended to confer upon any other person or entity any
rights or remedies of and nature whatsoever under or by reason of this
Agreement.
XIII.9 Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall
be in writing and shall be given by delivery in person, by electronic
facsimile transmission, telegram or overnight courier,
if to Bayer, to:
Bayer Corporation
511 Benedict Avenue
Tarrytown, NY 10591-5097
Attention: Vice President & Assistant General Counsel
Telecopy: (914) 524-3594
with copies to:
Bayer Corporation
100 Bayer Road
Pittsburgh, PA 15205-9741
Attention: General Counsel
Telecopy: (412) 778-4417
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and
Charles A. Schliebs, Esq.
Jones, Day, Reavis & Pogue
One Mellon Bank Center
Pittsburgh, PA 15219
Telecopy: (412) 394-7959
if to Purchaser, to:
Serologicals Corporation
780 Park North Boulevard, Suite 110
Clarkston, Georgia 30021
Attention: Russell H. Plumb
Telecopy: (404) 297-8044
with a copy to:
David S. Rosenthal, Esq.
Swidler Berlin Shereff Friedman, LLP
919 Third Avenue
New York, NY 10022
Telecopy: (212) 758-9526
or at such other address for a party as shall be specified by like notice.
The date of giving any such notice shall be the date of hand delivery, the
date sent by electronic facsimile transmission or telegram or the day after
delivery to the overnight courier service.
XIII.10 Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of New York
(without regard for conflicts of laws principles) applicable to agreements
made and to be performed wholly within such jurisdiction. Each of the
parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
United States, in each case located in the County of New York, for any
Litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any Litigation relating
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its
respective address set forth in Section 13.9 shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or
46
the United States, in each case located in the County of New York, and hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Litigation brought in any such court
has been brought in an inconvenient forum.
XIII.11 Public Announcements. Neither Bayer nor Purchaser shall
make any public statements, including, without limitation, any press
releases, with respect to this Agreement and the transactions contemplated
hereby, without the prior written consent of the other party (which consent
shall not be unreasonably withheld) except as may be required by applicable
law including, but not limited to, the Securities and Exchange Commission and
the Nasdaq National Market. If a public statement is required to be made
pursuant to the foregoing sentence, the parties shall consult with each
other, to the extent reasonably practicable in advance as to the contents and
timing thereof.
XIII.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf as of the date first above written.
BAYER CORPORATION
By: /s/W. Michael Weber
--------------------------------
Name: W. Michael Weber
Title: Senior Vice President
SEROLOGICALS CORPORATION
By: /s/Russell H. Plumb
----------------------------------
Name: Russell H. Plumb
Title: Vice President, Finance and
Chief Financial Officer
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