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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): SEPTEMBER 30, 1998
SANGSTAT MEDICAL CORPORATION
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-22890 94-3076-069
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1505 Adams Drive, Menlo Park, California 94025
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (650) 328-0300
- --------------------------------------------------------------------------------
(Former name or Former Address, if Changed Since Last Report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On September 30, 1998, SangStat Medical Corporation, a Delaware
corporation ("SangStat" or the "Registrant"), and Pasteur Merieux Connaught
announced the completion of the acquisition of PMC's organ transplant business
known as IMTIX (the "Acquisition"). The Merger was accomplished pursuant to the
Master Agreement dated June 10, 1998, between SangStat and Pasteur Merieux
Serums & Vaccins, S.A., a Pasteur Merieux Connaught company and a French Societe
Anonyme ("PMC").
The transaction is an acquisition of the business of IMTIX Pasteur
Merieux Connaught Transplantation, a division of PMC ("IMTIX") by SangStat for
$31 million, and involves an up-front payment of $10 million and deferred cash
payments over five years of $21 million. In addition, SangStat will pay PMC
royalties on IMTIX-SangStat product sales that are variable and contingent upon
the sales of certain IMTIX-SangStat products. The transaction was structured by
having the business of IMTIX transferred to IMTIX-SangStat SAS, a French company
set up by PMC and then having 100% of the shares of IMTIX-SangStat SAS purchased
by SangStat. The transaction will be accounted for using the purchase method.
The source of funds used to acquire these assets was cash on hand at the
Company.
(b) PMC carries on the business of researching developing,
manufacturing, marketing and distributing bio-pharmaceutical products used in
organ transplantation in humans. The Registrant intends to continue such
business.
Acquisitions involve numerous risks including, but not limited to,
difficulties in the assimilation of the operations and products of the acquired
companies, the diversion of management's attention from other business concerns,
and the potential loss of key employees of the acquired company. Achieving the
anticipated benefits of the Acquisition will depend in part upon whether the
integration of the two companies' businesses and operations are accomplished in
an efficient and effective manner, and there can be no assurance that this will
occur. The successful combination of companies in the transplantation industry
may be more difficult to accomplish than in other industries. The combination of
the two companies will require, among other things, receipt of approvals by
regulatory agencies to transfer product manufacturing and marketing licenses and
the successful integration of IMTIX into SangStat. There can be no assurance
that such integration will be accomplished smoothly or successfully. The
difficulties of such integration may be increased by the necessity of
coordinating geographically separated organizations. The integration of certain
operations following a merger, including the Acquisition, will require the
dedication of management resources that may distract attention from the
day-to-day business of SangStat. The inability of management to successfully
integrate the operations of the two companies or any other company which
SangStat may acquire, could have a material adverse effect on the business and
results of operations of SangStat.
The foregoing description is qualified in its entirety by reference to
the Master Agreement, a copy of which is attached hereto as Exhibit 2.1 and
incorporated herein by reference.
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(a) Financial Statements of Business Acquired.*
(b) Pro Forma Financial Information.*
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
2.1 Master Agreement between Pasteur Merieux Serums
& Vaccins, S.A. dated June 10, 1998, including
Exhibit 8 thereto.**
99.1 Text of Press Release dated September 30, 1998.
</TABLE>
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* Pursuant to Items 7(a)(4) and 7(b)(2) of the General Instructions to Form
8-K, the Financial Statements of Business Acquired and the Pro Forma
Financial Information will be filed by amendment not later than December 14,
1998.
** Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Master Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
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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.
SANGSTAT MEDICAL CORPORATION
Date: October 14, 1998 By: /s/ JAMES F. HINRICHS
-------------------------------------
James F. Hinrichs, CFA
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
2.1 Master Agreement between SangStat Medical Corporation and Pasteur
Merieux Serums & Vaccins, S.A. dated June 10, 1998, including
Exhibit 8 thereto.*
99.1 Text of Press Release dated September 30, 1998.
</TABLE>
- --------
* Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Master Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
<PAGE> 1
EXHIBIT 2.1
MASTER AGREEMENT
(Including Exhibit 8 Thereto)*
- --------
* Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Master Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
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EXHIBIT 2.1
MADE ON JUNE 10, 1998
- --------------------------------------------------------------------------------
MASTER AGREEMENT
- --------------------------------------------------------------------------------
BETWEEN
SANGSTAT MEDICAL CORPORATION
AS BUYER
AND
PASTEUR MERIEUX SERUMS & VACCINS S.A.
AS SELLER
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CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE UNDERSIGNED....................................................... 3
WHEREAS............................................................... 3
1. INTERPRETATION................................................ 4
2. DESCRIPTION OF THE TRANSACTION................................ 8
3. PURCHASE AND SALE OF THE SHARES............................... 14
4. CONDITIONS PRECEDENT.......................................... 20
5. COVENANTS..................................................... 22
6. CLOSING DEADLINE.............................................. 27
7. REPRESENTATIONS AND WARRANTIES................................ 28
8. SHARE PURCHASE AGREEMENT...................................... 31
9. WARRANTY AGREEMENT............................................ 34
10. KNOW-HOW LICENSE AGREEMENT.................................... 34
11. LEASE AGREEMENT............................................... 35
12. SERVICE AGREEMENT FOR MANUFACTURING/EQUINE
PLASMA SUPPLY AGREEMENT....................................... 35
13. CONFIDENTIALITY............................................... 35
14. MISCELLANEOUS PROVISIONS...................................... 38
15. TERM AND TERMINATION.......................................... 42
16. GOVERNING LAW AND JURISDICTION................................ 43
</TABLE>
<TABLE>
<S> <C>
Exhibit 2.1.1 a) List of Employees
Exhibit 2.1.1 c) List of Employees (Manufacturing)
Exhibit 2.1.2 b) (i) Form of Know-How License Agreement
Exhibit 2.1.2 b) (ii) Form of Commercial Lease Agreements and of Side-Letter
Exhibit 2.1.2 b) (ii-2) Seller's Investment on V3bis Building (Avant-Projet)
Exhibit 2.1.2 b) (iii-1) Form of Service Agreement for Manufacturing
Exhibit 2.1.2 b) (iii-2) Form of Equine Plasma Supply Agreement
Exhibit 2.1.2 b) (iii-3) Form of Site Service Agreement
Exhibit 2.1.3 Distribution Agreement for Multitest
Exhibit 2.1.3-2 Form of Letter of Assignment (Celiptium)
Exhibit 2.1.4 List of General Services
Exhibit 2.2 Form of Partial Business Contribution Agreement
Exhibit 2.2.1 b) Form of Letter of Rhone-Poulenc Pharma S.A.
Exhibit 2.2.3 d) Form of Completion Acknowledgment
Exhibit 3.2.1 a) Form of Escrow Agreement
Exhibit 3.2.1 b) Calculation Formula of Direct Cost
Exhibit 4.1.3 Due Diligence List
Exhibit 4.1.3 (i) Form of Affidavit
Exhibit 4.2.2 Form of Amendment to the Manufacturing and Supply
Agreement of October 13, 1993
Exhibit 5.2.2 Steps with French Medicine Agency (Agence du
Medicament)
Exhibit 8 Form of Share Purchase Agreement
Exhibit 8 (i) Form of Letter of Credit
Exhibit 8 (i-2) Form of Certificate
Exhibit 14.2 Form of Press Release
</TABLE>
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BETWEEN THE UNDERSIGNED :
1. SANGSTAT MEDICAL CORPORATION, a corporation existing and organized under
the laws of the State of Delaware and having its principal place of
business at 1505 Adams Drive, Menlo Park, CA 94025, USA, duly represented
by Doctor Philippe Pouletty, its Chief Executive Officer,
hereinafter referred to as "BUYER" or "SMC"
ON THE FIRST PART
AND
2. PASTEUR MERIEUX SERUMS & VACCINS S.A., a Pasteur Merieux Connaught
company and a French Societe Anonyme having its registered office at 58
avenue Leclerc, 69007 Lyon, France, duly represented by Mr.
Jean-Jacques Bertrand, its Chairman and Chief Executive Officer,
hereinafter referred to as "SELLER" or "PMC"
ON THE SECOND PART
(Buyer and Seller are hereinafter collectively referred to as the "Parties" or
individually a "Party")
WHEREAS:
WHEREAS SMC is a specialty pharmaceutical company applying a disease management
approach to improve the outcome of organ transplantation;
WHEREAS the mission of PMC is to contribute to the protection and maintenance of
human health by creating superior immunological products for the prevention and
treatment of infectious diseases and cancers;
WHEREAS PMC, among its other activities, carries on the business of researching,
developing, manufacturing, marketing and distributing bio-pharmaceutical
products used in organ transplantation in humans through its division known as
IMTIX Pasteur Merieux Connaught Transplantation;
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WHEREAS PMC's strategic intent is to focus on its core business, mainly
bio-pharmaceutical products for active immunization against infectious diseases
and immunotherapy of cancers;
WHEREAS SMC's strategic intent is to develop its business throughout the whole
spectrum of transplantation indications, products and services;
WHEREAS SMC and PMC are currently parties to a development and distribution
agreement relating to transplantation products pursuant to which SMC is actively
involved in the clinical development and registration of certain transplantation
products;
WHEREAS PMC desires to sell or otherwise transfer and SMC desires to purchase or
otherwise acquire all or substantially all tangible and intangible assets of PMC
pertaining to the transplantation business upon and subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties and subject to the conditions precedent contained
herein, the Parties hereto agree as follows:
ARTICLE I - INTERPRETATION
1.1 DEFINITIONS
The following terms used herein shall have, for purposes of this
Agreement, the meanings set forth below:
- "ACTUAL SALES" shall have the meaning ascribed to it in Article
3.2.1 c) hereafter.
- "AFFIDAVIT" shall mean a letter from the Buyer in the form of
Exhibit 4.1.3 (i) hereto to the Seller indicating that the Initial
Due Diligence is satisfactory to the Buyer (Affidavit 1) and that
the Second Due Diligence is satisfactory to the Buyer (Affidavit 2).
- "AFFILIATE" shall mean, in relation to any entity, any other entity
which directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with such
entity. For the purposes of this definition, "control" shall be
defined by reference to Article 355-1 of the French Company Act
dated July 24, 1966.
- "AGREEMENT" shall mean this Master Agreement, together with all its
Exhibits.
- "AGREEMENTS" shall mean collectively this Master Agreement, the
Share Purchase Agreement, the Ancillary Agreements and the Partial
Business Contribution Agreement.
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- "ANCILLARY AGREEMENTS" shall mean collectively the following
agreements which the Parties agree are an integral part of the
overall Transaction:
- Know-How License Agreement referred to in Article 2.1.2 b) (i)
hereafter;
- Service Agreement for the Manufacturing of Thymoglobuline and
Lymphoglobuline referred to in Article 2.1.2 b) (iii) hereafter;
- Commercial Lease Agreements referred to in Article 2.1.2 b) (ii)
hereafter;
- Site Service Agreement referred to in Article 2.1.2 b) (iii)
hereafter;
- Equine Plasma Supply Agreement referred to in Article 2.1.2 b)
(iii) hereafter;
- Distribution Agreement for Multitest referred to in Article 2.1.3
hereafter.
- "ANNIVERSARY DATE(S)" shall mean the date(s) set forth in the
schedule mentioned in Article 3.2.1 c) (ii) hereof.
- "ASSETS" shall have the meaning ascribed to it in Article 2.1.2 a)
hereafter.
- "BUSINESS" shall mean the IMTIX business as described in Article
2.1.1 hereafter.
- "BUSINESS DAY" shall mean any day which is not a Saturday, a Sunday
or a holiday in France or in the U.S.
- "CHANGE OF CONTROL" shall have the meaning ascribed to it in Article
8 (iii) hereafter.
- "CLOSING DATE" shall mean the date on which the Shares are
transferred by Seller to Buyer in compliance with Article 2.2.3
hereof, by remittance to Buyer of a transfer form ("ordre de
mouvement") duly executed by Seller and its transcription in the
Company's share transfer registrar, which shall be no later than the
Closing Deadline as defined hereafter.
- "CLOSING DEADLINE" shall mean December 31, 1998.
- "COMPANY" shall mean IMTIX-SangStat SAS, a French company to be set
up by Seller in the form of a societe par actions simplifiee.
- "CONFIDENTIAL INFORMATION" shall have the meaning ascribed to it in
Article 13 a) hereafter.
- "DELIVERY DATE" shall have the meaning ascribed to it in Article
3.2.2 b) hereafter.
- "DIRECT COSTS" shall have the meaning ascribed to it in Article
3.2.1 b) hereafter.
- "DISCLOSING PERSON" shall have the meaning ascribed to it in Article
13 a) hereafter.
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- "ESCROW AGREEMENT" shall mean the escrow agreement to be executed
between Buyer, Seller and BNP 39, rue de Grenette, 69002 Lyon,
acting as escrow agent, on the Filing Date, substantially in the
form of Exhibit 3.2.1 a) hereto.
- "EXCLUDED ASSETS" shall have the meaning ascribed to it in Article
2.1.2 b) hereafter.
- "FILING DATE" shall have the meaning ascribed to it in Article
2.2.2.
- "FIXED PRICE" shall have the meaning ascribed to it in Article 3.2.1
hereafter.
- "GENERAL SERVICES" shall mean those services listed in Exhibit
2.1.4.
- "IMTIX" or "IMTIX BUSINESS" shall have the meaning ascribed to those
terms in Article 2.1.1 hereafter.
- "IMTIX PRODUCTS" shall have the meaning ascribed to it in Article
2.1.1 (b) hereafter.
- "INITIAL DUE DILIGENCE PERIOD" shall have the meaning ascribed to it
in Article 4.1.3 (i) hereafter.
- "INTERIM AGREEMENTS" shall have the meaning ascribed to it in
Article 5.3 hereafter.
- "KNOW-HOW LICENSE AGREEMENT" shall have the meaning ascribed to it
in Article 2.1.2 b) (i) hereafter.
- "MANAGEMENT COMMITTEE" shall have the meaning ascribed to it in
Article 5.2.4 hereafter.
- "MASTER AGREEMENT DATE" shall mean the date of execution of this
Agreement.
- "MINIMUM REFERENCE SALES" shall have the meaning ascribed to it in
Article 3.2.1 c) (ii).
- "NET SALES" shall have the meaning ascribed to it in Article 3.2.2
hereafter.
- "OTHER PARTY" shall have the meaning ascribed to it in Article 13 a)
hereafter.
- "PARTIAL BUSINESS CONTRIBUTION" shall have the meaning ascribed to
it in Article 2.2.3 a) hereafter.
- "PARTIAL BUSINESS CONTRIBUTION AGREEMENT" shall have the meaning
ascribed to it in Article 2.2 hereafter.
- "PAYMENT DATE(S)" shall have the meaning ascribed to it in Article
3.2.1 a) hereafter.
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- "PAYMENTS" shall have the meaning ascribed to it in Article 3.2.1 a)
hereafter.
- "PURCHASE" shall have the meaning ascribed to it in Article 2.2.3 b)
hereafter.
- "PURCHASE PRICE" shall have the meaning ascribed to it in Article
3.2 hereafter.
- "RECEIVING PERSON" shall have the meaning ascribed to it in
Article 13 a) hereafter.
- "REPRESENTATIVES" shall have the meaning ascribed to it in
Article 13 a) hereafter.
- "RETROACTIVE DATE" shall mean the first day of the month of the
Filing Date.
- "SECOND DUE DILIGENCE PERIOD" shall have the meaning ascribed to it
in Article 4.1.3 (ii) hereafter.
- "SHARE PURCHASE AGREEMENT" shall mean the share purchase agreement
to be executed between Buyer and Seller on the date hereof setting
forth the terms and conditions of the sale by Seller to Buyer of the
Shares, substantially in the form of Exhibit 8 hereto.
- "SHARES" shall mean 100% of the share capital and voting rights of
the Company.
- "SUBSIDIARIES" shall mean the 4 subsidiaries fully dedicated to the
distribution of IMTIX Products, which are IMTIX GmbH (Germany),
IMTIX B.V. (Netherlands), IMTIX Ltd (UK) and IMTIX Srl (Italy).
- "TRANSACTION" shall mean collectively the transactions contemplated
under the Master Agreement, the Partial Business Contribution
Agreement, the Share Purchase Agreement and the Ancillary
Agreements.
- "TRANSITION COMMITTEE" shall have the meaning ascribed to it in
Article 5.2.3 hereafter.
- "VARIABLE PRICE" shall have the meaning ascribed to it in Article
3.2.2 hereafter.
1.2 HEADINGS
The division of the Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms
"Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion
hereof and include any agreement supplemental hereto. Unless something in
the subject matter or
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context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
1.3 EXTENDED MEANINGS
In this Agreement words importing the singular number only shall include
the plural and vice versa, words importing the masculine gender shall
include the feminine and neuter genders and vice versa and words
importing persons shall include individuals, partnerships, associations,
trusts, unincorporated organizations and corporations.
1.4 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to a calculation to be made
in accordance with generally accepted accounting principles, such
reference shall be deemed to be (i) accounting principles usually
accepted such as defined in the French "Nouveau Plan Comptable" and set
up according to the "recommandations de l'Ordre des Experts-Comptables
francais," of the "Conseil National de la Comptabilite" and of the
"Compagnie Nationale des Commissaires aux Comptes" or (ii) as far as the
Subsidiaries are concerned, local generally accepted accounting
principles.
ARTICLE II - DESCRIPTION OF THE TRANSACTION
2.1 DESCRIPTION OF THE BUSINESS
2.1.1 The IMTIX Business:
IMTIX Business (referred to herein as "IMTIX Business", the
"Business" or "IMTIX") is an ongoing business carried on
internationally as a division of Seller ("Division") and comprised
of the research, development, manufacturing, marketing and
distribution of, and pharmacovigilance relating to pharmaceutical
products for transplantion in humans which includes, without such
list being limitative:
a) A dedicated staff of (i) 25 full-time employees for IMTIX
commercial, sales, regulatory, and medical affairs located in
an annex of Seller headquarters at 58, avenue Debourg, 69007
Lyon, France, and (ii) 15 employees employed in the
Subsidiaries; the precise list of such employees is set forth
in Exhibit 2.1.1 a) hereto, specifying their respective
names, titles, salary and other compensation; none of these
employees (except one) is "protected" as this term is
understood under French labor law (employee delegates,
members of the workers council, union representatives);
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b) A portfolio of products (either registered and/or marketed or
under development) which are:
- Thymoglobuline(R),
- Lymphoglobuline(R),
- Antilfa(R), under development,
- Celsior(R),
hereafter, the "IMTIX Products".
c) Manufacturing:
- 28 full-time employees dedicated to the manufacturing of
Thymoglobuline(R) and/or Lymphoglobuline(R); the precise
list of employees is set forth in Exhibit 2.1.1 c) hereto,
specifying their respective names, titles, salary and
other compensation; none of these employees is "protected"
as this term is understood under French labor law
(employee delegates, members of the workers council, union
representatives);
- all the equipment dedicated to the manufacturing of the
IMTIX Products, all of which is located in (i) the C4
Building located at Marcy l'Etoile dedicated to the
manufacturing of Thymoglobuline(R) and (ii) the V3 bis
Building located at Marcy l'Etoile dedicated to the
manufacturing of Lymphoglobuline(R),
- the contract manufacturing agreement with Pharmacia &
Upjohn for Celsior(R).
d) The distribution network which comprises:
- The Subsidiaries fully dedicated to the distribution of
IMTIX Products, together with all their assets and
agreements with all sellers, agents, clinical
investigators, other distributors and/or consultants for
the distribution of the IMTIX Products, and
- liaison offices in Austria, Canada and Hong Kong dedicated
to the Business;
- distribution agreements in full or in part dedicated to
the IMTIX Products, including the existing license and
supply agreements between the Parties.
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e) The network for the collection of thymus fragments in France,
Italy, Poland, Spain, Turkey, Scandinavia, Holland, the
United States of America and Canada which comprises in
particular, without limitation:
- licenses and authorizations by and/or information to
relevant Ministries of Health or other regulatory
authorities;
- agreements with hospitals under which Seller collects
thymus;
- agreements with collectors for thymus.
f) The network for the supply of rabbit products for
Thymoglobuline(R):
- all sub-contracting agreements with rabbit farms.
2.1.2 The IMTIX Assets:
a) Subject to paragraph b) hereunder, it is expressly stated
that the Parties agree to transfer all of the assets related
to the Business including, without limitation, the following
assets (the "Assets"):
(i) all interest in IMTIX products, immunogens, clones,
formulations, toxicology, pharmacology, clinical and
regulatory data, post-marketing surveillance data,
regulatory files and licenses, manufacturing and
quality control equipment located in the C4 Building
and V3 bis Building at Marcy l'Etoile, materials,
disposables, specific know-how, methods and procedures
(other than those licensed under the Know-How License
Agreement), protocols, assays, standard operating
procedures and specifications, customer information
and market research;
(ii) all materials product inventory owned by Seller,
including, without limitation, raw materials,
work-in-progress, and finished goods and supplies, it
being understood that the Company will be entitled to
sell such inventory of work-in-progress and finished
goods with their existing packaging as of the Closing
Date, until the expiration date of the shelf life of
all items of said inventory, provided such inventory
will be sold prior to any comparable products under
Buyer's packaging;
(iii) all claims and rights under all agreements, contracts,
contract rights, sales, invoices, licenses, purchase
and sale orders, and other executory commitments,
including all rights to receive payments in respect of
Thymoglobuline(R), Lymphoglobuline(R) and Celsior(R)
sales in the United States of America and Canada;
(iv) all accounts receivable;
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(v) all goodwill;
(vi) all rights, title and interest to trademarks,
trademark rights, trade secrets exclusively dedicated
to IMTIX Products, information, proprietary rights,
license rights, service marks, trade names,
copyrights, design, logos and customers and suppliers
lists, it being understood that no right shall be
granted to Buyer to the name, logo, or design of
either "Pasteur", "Merieux", or "Connaught", or any
combination thereof, anywhere in the world, subject
however to the provisions of paragraph (ii) hereabove;
(vii) all franchises, licenses, permits, consents,
authorizations, certificates and approvals of any
regulatory, administrative or other governmental
agency issued to or held by Seller or its subsidiaries
including all authorizations to export products not
licensed in France;
(viii) all rights under express or implied warranties from
suppliers and vendors of Seller and from clinical
investigators, clinical research organizations (CRO);
(ix) all of Seller's causes of action, judgments and claims
or demands;
(x) any other personal property used in the ordinary
course of the Business;
(xi) all rights under the agreements relating to the
collection of thymus fragments;
(xii) any and all patents, patent applications, such term
including continuations in part, divisions, reissues,
etc., and patent licenses relating exclusively to
IMTIX Products, and licensing agreements with
Immunotech and Assistance Publique des Hopitaux de
Paris.
b) The following assets shall be excluded from the definition of
Assets (the "Excluded Assets"), and shall be dealt with apart
in specific agreements (the "Ancillary Agreements"):
(i) any and all know-how non-specific to the Business but
necessary to operate the Business shall be licensed to
the Company under a long term worldwide, know-how
license agreement (the "Know-How License Agreement"),
substantially in the form of Exhibit 2.1.2 b) (i)
attached hereto;
(ii) the real estate relating to the C4 Building and V3 bis
Building shall be leased to the Company under
commercial lease agreements as completed by
side-letters substantially in the form of Exhibit
2.1.2 b) (ii) attached hereto; with respect to the V3
bis Building, Buyer acknowledges that it
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has been informed of the necessity to upgrade the
premises so as to comply with requirements of the
French Medicine Agency (Agence du Medicament), and of
Seller's undertaking to invest approximately (without
exceeding) 8 (eight) million French Francs for this
purpose as set forth in the draft (avant-projet)
attached as an Exhibit 2.1.2 (b) (ii-2) hereto.
(iii) all equipment other than the equipment described in
Article 2.1.1 (c) required for the manufacturing of
IMTIX Products, and in particular the filling,
packaging and the manufacturing of IMTIX Products, all
quality control and quality assurance of IMTIX
Products not performed in the C4 Building and V3 bis
Building and site services the use of which shall be
subject to the execution of the following service
agreements:
- a service agreement linked to the manufacturing of
Thymoglobuline(R) and Lymphoglobuline(R)
substantially in the form of Exhibit 2.1.2 b)
(iii-1) attached hereto including provisions
regarding quality control service;
- an equine plasma supply agreement substantially in
the form of Exhibit 2.1.2 b) (iii-2) attached
hereto;
- a site service agreement substantially in the form
of Exhibit 2.1.2 b) (iii-3) attached hereto;
(iv) the lease of the building "Le Challenge" located at 58
avenue Debourg, 69007 Lyon, France.
2.1.3 Other Products
Celiptium and Multitest are Products which are not directly linked
to the transplantation Business, but for which promotion,
distribution and sale depend on the IMTIX Division of Seller.
Multitest will be distributed by the Company according to the
Distribution Agreement for Multitest in the form attached hereto
as Exhibit 2.1.3. The Celiptium license agreement will be assigned
to the Company pursuant to an assignment letter in the form
attached hereto as Exhibit 2.1.3-2.
2.1.4 The Business, with the Ancillary Agreements and excluding the
General Services, constitutes a stand-alone Business that will
allow the Company to conduct in a normal way the Business as it
has been operated until the date hereof and as it will be operated
until the Closing Date.
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2.2 STRUCTURE OF THE ACQUISITION
The transaction is structured as follows:
The Business being located in Seller's legal structure, the Parties have
agreed to have the Business contributed to the Company before its sale to
Buyer. In this context, the contribution will be made to the benefit of a
"Societe par Actions Simplifiee" (hereinafter referred to as "SAS") to be
incorporated by Seller. The "regime juridique des scissions" will be
elected for this contribution, it being understood that the contribution
will be subject to the previous authorization by the General Manager of
the French Medicine Agency of the Company as a manufacturing
pharmaceutical establishment ("fabricant").
The Partial Business Contribution Agreement (Traite d'Apport Partiel
d'Actif) to be entered into between Seller and the Company shall be
substantially in the form of Exhibit 2.2 hereto. It shall provide for a
retroactive entering into effect of the contribution as of the
Retroactive Date.
Following this contribution, the Shares of the Company shall be purchased
by Buyer. At the same date, and in order to allow the Company to conduct
its Business in an autonomous manner (except for the Excluded Assets and
General Services), the Ancillary Agreements shall be executed.
2.2.1 On the Master Agreement Date:
a) In addition to this Agreement, the Parties shall have
executed the Share Purchase Agreement under conditions
precedent.
b) Seller shall have remitted to Buyer a certified copy of an
extract of the minutes of its Board of Directors meeting
having authorized the Transaction and empowered Mr.
Jean-Jacques Bertrand to execute this Agreement together with
a letter of its shareholder, Rhone-Poulenc Pharma S.A. in the
form of Exhibit 2.2.1 b).
c) Buyer shall have remitted to Seller a certified copy of the
minutes of its Board of Directors meeting having authorized
the Transaction and empowered Doctor Philippe Pouletty to
execute this Agreement.
2.2.2 Following the Master Agreement Date:
As soon as practicable after Seller has received the Affidavit 1
issued at the end of the Initial Due Diligence Period, as provided
under Article 4.1.3 (i) hereafter, but in no event later than 20
days following the last day of the month in which the Affidavit 1
is delivered, Seller and the Company shall file the draft Partial
Business Contribution Agreement with the competent Commercial
Court (Greffe du Tribunal de Commerce), in compliance with
applicable laws and regulations.
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<PAGE> 15
The date on which the draft Partial Business Contribution
Agreement is filed with the Commercial Court shall be referred
to as the "Filing Date".
2.2.3 Closing:
As soon as the conditions precedent referred to in Articles 4.1.2
and 4.1.3 hereafter are fulfilled and within 20 days thereafter,
the following steps shall take place:
a) The shareholders of Seller and of the Company shall be
convened at general meetings to approve the Partial Business
Contribution and complete the Partial Business Contribution
in exchange for shares of the Company (the "Partial Business
Contribution") pursuant to the Partial Business Contribution
Agreement referred to in Article 4.1.1;
b) Sale by Seller and an Affiliate of Seller to Buyer of 100% of
the Shares in the Company (the "Purchase") pursuant to the
Share Purchase Agreement attached hereto;
c) Execution of the Ancillary Agreements;
d) Execution between the Parties of a document acknowledging (i)
the fulfillment of all conditions precedent and (ii) the
completion of the sale of the Shares in the form attached in
Exhibit 2.2.3 d);
e) Completion of all the Closing Steps defined in Article 1.3 of
the Share Purchase Agreement.
The date on which the above (a), (b), (c), (d) and (e) steps take place
shall be referred to as the "Closing Date" and shall be no later than the
Closing Deadline (subject to Article VI hereof).
ARTICLE III - PURCHASE AND SALE OF THE SHARES
3.1 PURCHASE AND SALE OF THE SHARES
On the Master Agreement Date, the Parties shall execute a Share Purchase
Agreement under conditions precedent, providing for the Purchase Price
defined hereafter.
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<PAGE> 16
3.2 PRICE
The sale of the Shares shall be made for a total price (the "Purchase
Price") payable by Buyer to Seller and consisting of the sum of a fixed
price (the "Fixed Price") and a variable price (the "Variable Price")
defined respectively in Articles 3.2.1 and 3.2.2 hereafter.
3.2.1 Fixed Price:
a) Payment Schedule
Subject to adjustments effected pursuant to Articles 3.2.1
b), c) and d) hereafter, the Fixed Price shall be of a total
amount of $33 (thirty three) million US Dollars payable in
several successive payments (the "Payment(s)") in accordance
with the following schedule, it being specified that $12
(twelve) million US Dollars shall, on the Filing Date, be
placed in escrow pursuant to the Escrow Agreement to be
executed upon the Filing Date in the form of Exhibit 3.2.1 a)
attached hereto. Dates set forth in this schedule shall
hereafter be referred to as the "Payment Date(s)".
<TABLE>
<CAPTION>
PAYMENT
PAYMENT DATE (IN US DOLLARS)
------------------- ---------------
<S> <C>
Closing Date ("CD") $12.0 million
6 months after CD $ 1.5 million
12 months after CD $ 1.5 million
18 months after CD $ 1.5 million
24 months after CD $ 1.5 million
30 months after CD $ 3.0 million
36 months after CD $ 3.0 million
42 months after CD $ 2.5 million
48 months after CD $ 2.5 million
54 months after CD $ 2.0 million
60 months after CD $ 2.0 million
</TABLE>
Sums placed in escrow as provided hereabove shall be released
to the benefit of Seller upon Closing Date, or, should the
Purchase not take place because of the non-fulfillment prior
to the Closing Deadline of any of the conditions precedent
referred to in Article 4.1 hereof, shall be refunded to
Buyer.
b) Adjustment of the Payments by reference to Thymoglobuline(R)
direct costs
The Payments due 12 months after Closing Date (for an amount
of $1,500,000 (one million five hundred thousand) US Dollars)
and 24 months after Closing Date (for an amount of $1,500,000
(one million five hundred thousand) US Dollars) shall however
be readjusted by reference to the average
15
<PAGE> 17
Thymoglobuline Direct Costs (as defined hereafter) during the
12 month-period preceding each of these 2 dates in accordance
with the following table. For the purposes of this Agreement,
"Direct Costs" shall mean a list of items of French Francs
amount computed on the basis of the calculation formula set
forth in Exhibit 3.2.1 b) attached hereto with figures as of
the Closing Date as an example. In case of any dispute
between the Parties on this calculation of such amount, the
dispute shall be referred to an expert in accordance with
provisions of Article 3.2.1 c) (ii) hereafter.
<TABLE>
<CAPTION>
IMPACT ON PAYMENTS
CONDITION (IN US DOLLARS)
---------------------------------------- -----------------------------
<S> <C>
if Direct Costs above [_____*] FF/vial Decrease by [$_____*] million
if Direct Costs between [_____*] FF/vial Decrease by [$_____*] million
if Direct Costs between [_____*] FF/vial Increase by [$_____*] million
if Direct Costs below [_____*] FF/vial Increase by [$_____*] million
</TABLE>
The Payments other than the two Payments referred to
hereabove shall not be affected by the Thymoglobuline(R)
Direct Costs.
c) Other adjustment of the Payments
(i) The Payment normally due as of any Payment Date shall
be canceled and Buyer shall definitively be released
from making any such Payment, unless on any such
Payment Date:
(a) Seller is performing at least one (1) of the
services identified in the Service Agreement for
the Manufacturing with respect to Thymoglobuline,
or if Seller is not performing at least one (1)
of the services, such failure to perform is due
to (i) an event of force majeure, (ii) a request
from Buyer, (iii) or a termination of the Service
Agreement for the Manufacturing due to Buyer's
fault; or
(b) At least one (1) product license with respect to
Thymoglobuline is then issued and valid in any
E.U. country or in the U.S.A., provided that if
no licenses are then issued and valid, the reason
for the failure to maintain such license is
caused, at least in part, by the inability of
Seller to perform under the Service Agreement for
the Manufacturing of Thymoglobuline and is not
due to an event of force majeure.
- ----------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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<PAGE> 18
(ii) Additionally, the Payment normally due as of any
Payment Date shall be canceled and Buyer shall
definitively be released from making such Payment, if
on any such Payment Date (or, if such Payment Date is
not an Anniversary Date as this term is defined in the
schedule hereafter, on the preceding Anniversary
Date), the Actual Sales (as defined hereafter) are,
despite reasonable commercial efforts of Buyer, lower
than the minimum reference sales set forth for that
date in the schedule hereafter, and, provided that
Buyer has not arbitrarily changed its allocation of
products to markets other than the E.U. and the U.S.A.
solely in order to avoid making Payments hereunder.
<TABLE>
<CAPTION>
MINIMUM
ANNIVERSARY DATE REFERENCE SALES OF THYMOGLOBULINE
---------------------------- ---------------------------------
<S> <C>
12 months after Closing Date [_____*] vials
24 months after Closing Date [_____*] vials
36 months after Closing Date [_____*] vials
48 months after Closing Date [_____*] vials
60 months after Closing Date [_____*] vials
</TABLE>
It is understood between the Parties that:
- for the second Payment Date (6 months after Closing Date),
the minimum sales test shall be applied to the 6-month
period preceding such date; as a result, no payment shall
be due on such date if Actual Sales on this 6-month period
are lower than [_____*] vials;
- for all Payment Dates which are not Anniversary Dates of
the Closing Date, the minimum sales test to be referred to
shall be as of the preceding Anniversary Date.
For the purposes hereof, on each Anniversary Date of the
Closing Date, the Company will measure the total number of
Thymoglobuline(R) vials sold on the USA and European Union
market during the 12-month period preceding such date ( the
"Actual Sales").
Buyer shall maintain complete records of Actual Sales and
shall permit an independent certified public accountant from
a major international accounting firm ("CPA"), appointed by
Seller, to inspect and audit the Company's books
- ----------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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<PAGE> 19
and records relating to Actual Sales upon 10 Business Days
prior written notice. The CPA shall report to Seller, with a
copy to Buyer, only the extent of any discrepancy between the
Actual Sales reported by Buyer and the amount of Actual Sales
calculated by CPA. Seller may exercise the rights hereunder
only once each calendar year and this right shall terminate
72 months after the Closing Date. Seller will then have the
right to notify to Buyer, within 15 days from the remittance
by CPA to Seller of its report with a copy to Buyer, its
decision to refer the matter to Ernst & Young, for
determining the Actual Sales amount, acting as an expert
pursuant to the provisions of Article 1592 of the French
Civil Code, jointly appointed between the Parties or, in case
of default by such expert, to any other expert which shall be
appointed by the President du Tribunal de Grande Instance de
Paris at the request of the most diligent party (the
"Expert"). The Expert shall be fluent in both English and
French. The Parties undertake to fully cooperate with the
Expert. The Expert shall be instructed to render the report
within one (1) month of referral to him. The Expert's report
shall be binding on the Parties. The Expert's fees shall be
borne by Seller unless the valuation effected by the Expert
differs by more than 3% (three percent) from the initial
valuation of Buyer, in which case Buyer shall bear the costs.
Seller and Buyer shall obtain no later than the Closing Date
a letter by Ernst & Young stating its approval to this
assignment.
d) Additional Readjustment of the Payments
In the event that the Company is not allowed by the German
regulatory authorities to distribute on a usual commercial
basis Thymoglobuline for the German market by September 30,
1998, subsequent Payments shall be reduced by [$__________
(_____)]* US Dollars per month. Payment reduction will not be
made in any month in which batches of Thymoglobuline, in
adequate amounts to reasonably address the German market
opportunity, are released for sale prior to the license being
renewed by the German regulatory authorities. In no event
shall the cumulative amount of the reduction exceed
[$__________ (_____)]* US Dollars, nor shall there be any
Payment reductions after September 30, 2000.
Additionally, in the event that the U.S. approval for
Thymoglobuline has not been granted by December 31, 1998 and
the only remaining blocking issue for non-approval is due to
manufacturing, chemistry, control or site inspection issues
("ELA related") identified in the previous FDA deficiency
letter dated January 16, 1998 or Form 483 dated January 16,
1998, FDA letter dated March 26, 1998 and subsequent letters
relating to such issues, subsequent Payments shall be reduced
by [$__________ (_____)]* US Dollars per month
- ----------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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<PAGE> 20
until such time as the U.S. approval is granted. In no event
shall the cumulative amount of the reduction exceed
[$__________ (_____)]* US Dollars.
If the Parties disagree on whether the failure to receive
U.S. approval is due to an ELA related matter as set forth
above, or if Seller considers that the inability to resolve
the issue is attributable to Buyer, the Parties shall submit
the question to an expert in U.S. regulatory matters whose
decision shall be binding on the Parties and which shall be
jointly appointed by the Parties or, failing such joint
appointment within 15 days from the occurrence of such
disagreement, by the President du Tribunal de Grande Instance
de Paris ruling under the refere proceedings upon the request
of the most diligent party.
3.2.2 Variable Price:
The Variable Price, which shall be payable by wire transfer within
60 days of each Payment Date, shall consist of a first part based
on the amount of Lymphoglobuline Net Sales (a) and a second part
based on Antilfa Net Sales (b), and payable as set forth
hereafter. For the purposes of this Agreement, "Net Sales" shall
mean the amount actually received on sales of Lymphoglobuline or
Antilfa by the Company or by its Affiliates, or by its authorized
sublicensees (it being specified that IMTIX Products manufactured
for clinical trial shall not be taken into account for the
calculation of Net Sales) to third parties during the preceding
six-month period less deductions for (i) normal and customary
trade, quantity and cash discounts and emergency drug releases
where such releases are provided by the Company or its Affiliates
without charge, (ii) amounts repaid or credited by reason of
rejection or return; (iii) V.A.T. on sales, withholding and excise
taxes and duties levied on and/or other governmental charges made
as to production, sale, importation, transportation, delivery or
use paid by or on behalf of the Company, and (iv) transportation
costs including insurance.
a) Payments on Lymphoglobuline Net Sales shall be equal to
[_____*] of the amount of such Net Sales every six months for
a period of 10 years as from the Closing Date.
b) Payments on Antilfa for a period of 10 years starting on the
date referred to hereafter as the "Delivery Date" which shall
be the earlier of (i) the date of delivery by FDA of the BLA
marketing approval in the USA for solid organ transplants for
Antilfa and (ii) the date of delivery of the equivalent
marketing approval in European Union according to the
centralized market approval procedure or in any E.U. country
if a marketing approval is delivered for such country only,
shall be calculated as follows:
- ----------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
19
<PAGE> 21
(i) One-time payment of [$__________ (_____)]* million US
Dollars upon Delivery Date;
(ii) a payment based on Antilfa Net Sales equal to (i)
[ *] of the amount of such Net Sales by the Company
and its Affiliates, or (ii) if Net Sales are made by
Company's authorized sublicensees [ *] of such
Company's authorized sublicensees Net Sales every six
months for a period of 10 years as from the Delivery
Date.
3.2.3 If, at the time the payment of a part of the Purchase Price
becomes due, an arbitration award rendered pursuant to Article XVI
hereafter shall have upheld (i) a claim by Buyer under the Share
Purchase Agreement referred to in Article IX hereafter, or (ii) a
claim by Buyer based on any other breach of representations,
warranties or covenants by Seller to Buyer under any agreement
referenced herein, Buyer shall be entitled to setoff the payment
of such part of the price against the amount of such claim.
ARTICLE IV - CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT
The completion of the Purchase shall be subject to the fulfillment, no
later than the Closing Deadline, of the following conditions precedent,
which are cumulatively stipulated for the benefit of Buyer and which only
Buyer may therefore waive, except conditions stipulated under Articles
4.1.1 and 4.1.2 which neither Party can waive.
4.1.1 Completion of the Partial Business Contribution by Seller to the
Company
The Business shall have been contributed to the Company under a
Partial Business Contribution (Apport Partiel d'Actif) meeting the
following conditions. The Partial Business Contribution shall have
been duly authorized by the shareholders of Seller and the Company
and effected in application of the Partial Business Contribution
Agreement (Traite d'Apport Partiel d'Actif) substantially in the
form of Exhibit 2.2 hereto and with valuations of assets and
liabilities which will have been submitted to Buyer during the
Second Due Diligence Period hereafter. It is understood that such
condition precedent shall not be fulfilled before the completion
of conditions precedent set forth in Articles 4.1.2 and 4.1.3
hereafter.
4.1.2 Delivery by the General Manager of the French Medicine Agency
("Agence du Medicament") of (i) the authorization to operate as a
manufacturing pharmaceutical
- ----------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
20
<PAGE> 22
establishment ("Autorisation d'Etablissement Pharmaceutique
Fabricant") to the Company and (ii) the corresponding amendment to
the existing Seller's Autorisation d'Etablissement Pharmaceutique.
4.1.3 Completion of legal, technical and financial due diligence by
Buyer and its counsels satisfactory to Buyer on the items listed
in Exhibit 4.1.3 and on the latest available draft of the Partial
Business Contribution Agreement which will have been sent to the
prospective contribution auditor ("Commissaire a la Scission") and
delivered to Buyer at the latest 15 days prior to the expiration
of the Initial Due Diligence Period as defined below, which due
diligence shall not have revealed an event which may materially
adversely affect the Business. This due diligence will be carried
out in two phases:
(i) Seller shall, within 15 days from the Master Agreement Date,
set up a data room for a period of five Business Days, unless
Seller consents to an extension up to three additional
Business Days, which consent shall not be unreasonably
withheld, which data-room can be located outside the premises
of Seller, and containing all documents required by Buyer as
per the list attached hereto as Exhibit 4.1.3 and due
diligence will be conducted by Buyer and its counsels within
30 days following the day when all information is available
to Buyer (the "Initial Due Diligence Period"). No copies
shall be made of documents in the data room without Seller's
consent which shall not be unreasonably withheld. All
documents delivered by Seller pursuant to a due diligence
request shall be considered Confidential Information under
Article XIII hereof.
Upon expiration of the Initial Due Diligence Period, Buyer
shall remit to Seller a certificate acknowledging the
completion to its satisfaction of the Initial Due Diligence
in the form of the Affidavit 1, provided that if Buyer does
not deliver the Affidavit 1, Buyer shall inform Seller in
writing at the same date of its reasons for not delivering
the Affidavit 1.
(ii) Buyer shall, in addition, have the right, for 5 Business Days
following the Filing Date to make review of the final
valuation of assets and liabilities in the Partial Business
Contribution Agreement it would estimate appropriate (the
"Second Due Diligence Period").
Upon expiration of the Second Due Diligence Period, Buyer
shall remit to Seller a certificate acknowledging the
completion to its satisfaction of such due diligence in the
form of the Affidavit 2, provided that if Buyer does not
deliver the Affidavit 2, Buyer shall inform Seller in writing
at the same date of its reasons for not delivering the
Affidavit 2.
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<PAGE> 23
4.2 FULFILLMENT
4.2.1 Provided the above conditions precedent set forth in Articles
4.1.2 and 4.1.3 are fulfilled, the Parties undertake to close the
Transaction and therefore to complete the steps set forth in
Article 2.2.3 hereabove at the date of satisfaction of the last
condition precedent to be satisfied and in no event later than the
Closing Deadline, subject to the provisions of Articles 4.2.2 and
4.2.3 hereafter.
4.2.2 Buyer shall have no obligation to close and consummate the
Transaction if Buyer determines that a material adverse change,
whether legal, financial or of any kind, has occurred in the
Business, the Company or the Seller in connection with the
Business prior to the Closing Date. Buyer shall specify such a
material adverse change in writing to Seller. If Buyer exercises
its rights under this clause, Buyer will only be allowed not to
close the Transaction and shall not be allowed to attempt to
renegotiate the terms of the Transaction. Additionally, an
amendment to the existing Manufacturing and Supply Agreement dated
October 13, 1993 between the Parties in the form attached hereto
as Exhibit 4.2.2 shall automatically become enforceable.
4.2.3 Seller shall have no obligation to close and consummate the
Transaction if prior to the Closing Date:
(i) there is a Change of Control of Buyer;
(ii) Buyer becomes subject to voluntary or involuntary
bankruptcy under applicable law;
(iii) Buyer is enjoined from conducting all clinical trials in
the United States of America;
(iv) an event has occurred which makes the occurrence of either
(i), (ii) or (iii) above unavoidable.
ARTICLE V - COVENANTS
5.1 COVENANT ON CONDITIONS PRECEDENT/CONTRIBUTION AGREEMENT
Each Party undertakes to take in a timely manner all necessary actions
and to make its best efforts in order that the conditions precedent set
forth in Article IV hereabove be met as soon as possible and to inform
from time to time the other Party on the implementation of those actions.
22
<PAGE> 24
In particular, the Parties will use their best efforts to obtain the
authorization of the General Manager of the French Medicine Agency
referred to in Article 4.1.2 hereabove.
Seller also undertakes to take in a timely manner all necessary actions
and to make its best efforts in order that steps described in Articles
2.2.2 and 2.2.3 hereabove shall be completed as soon as possible. Seller,
acting as shareholder of the Company, hereby covenants to vote in favor
of the contribution at the shareholders' meeting of the Company to be
convened as provided under Article 2.2.3 hereabove. In addition, pursuant
to a letter in the form attached as Exhibit 2.2.1 b, Rhone-Poulenc Pharma
S.A., acting as shareholder of Seller, has confirmed its approval of the
Transaction provided all other conditions precedent have been fulfilled.
5.2 OBLIGATION TO COOPERATE
5.2.1 During the Initial Due Diligence Period and the Second Due
Diligence Period set forth in Article 4.1.3 hereabove, Seller will
provide Buyer and its representatives with complete information
requested in compliance with, respectively, Articles 4.1.3 (i) and
(ii) hereabove.
Seller will organize reasonable appointments with those senior
employees and, to the extent possible, external advisors
considered as involved in the Business in order to perform the
Initial Due Diligence provided that Buyer has requested previously
to Seller its need for such appointments, it being understood that
all costs of external advisors (except reasonable attorney's fees)
requested by Buyer and invoiced to Seller by such advisors in this
respect shall be borne by Buyer.
5.2.2 - Seller, which has a good knowledge of the organization of the
French Medicine Agency and of other French and foreign public
authorities having competence over the pharmaceutical sector,
undertakes to use all its efforts and expertise to facilitate
in a timely manner the discussions with French and foreign
public authorities for the purposes of completion of this
Transaction.
- The Parties will use their best efforts to promptly obtain (i)
the prior authorization of the General Manager of the French
Medicine Agency ("Directeur General de l'Agence du Medicament")
to transfer to the Company all the French "Autorisations de
Mise sur le Marche" held by Seller and Affiliates related to
the IMTIX Products, (ii) from any other foreign public
authorities the approval to transfer foreign licenses on IMTIX
Products held by Seller or its Affiliates (other than those
held by the Subsidiaries) to the Company (to the extent
permitted by local regulations and laws), and (iii) the U.S.
PLA/ELA approval for Thymoglobuline (R). For information
purposes, a list of key steps to be taken with the French
Medicine Agency, together with an estimated timetable is
attached hereto in Exhibit 5.2.2.
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<PAGE> 25
- Seller will use its best efforts to have its Affiliates (other
than Subsidiaries) transfer all franchises, licenses, permits,
consents, authorizations, certificates, trademarks as listed in
the Partial Business Contribution Agreement and approvals of
any regulatory, administrative or other governmental agency
issued to or held by them, including all authorizations to
export products not licensed in France, to the extent relating
to the IMTIX Products, to the Company, except where this
transfer would violate local regulatory laws.
- Seller will use its best efforts to have third parties, which
are party to agreements attached in part only to the Business,
enter into new agreements with the Company covering the part of
those agreements attached to the Business, to the extent such
agreements are material to the Business.
5.2.3 As of the date of this Agreement and until the expiration of a
12-month period after the Closing Date:
- The Parties undertake to set up a transition committee (the
"Transition Committee") which will review and advise on
transition activities and include:
(i) until the Closing Date for Seller: Gilles Alberici, Rene
Labatut, a Regulatory Affairs representative, a QA/QC
representative, a Finance representative and any other
necessary people; and for Buyer: the head of Regulatory
Affairs, the CEO, the VP of Operations, the VP of
Pharmaceutical Development, and
(ii) after the Closing Date, for Seller, the same persons
(except Gilles Alberici and Rene Labatut), for the
Company, Gilles Alberici, for Buyer, the same persons, it
being specified that Rene Labatut will also be a member of
the Transition Committee whether as a representative of
Seller or of the Company, subject to Article 5.5
hereafter.
The Transition Committee will meet in France, no less than
once every quarter and more often if appropriate. Until
the Closing Date, the Transition Committee will be chaired
by Seller's Senior Vice President and Chief Financial
Officer and, as from the Closing Date, by Buyer's CEO or a
designated representative.
5.2.4 As of the Filing Date and until the Closing Date:
- The parties will establish a management committee (the
"Management Committee") which will consist of the members of
the Transition Committee referenced above in Article 5.2.3. The
Management Committee will oversee the operations of the Company
and the Business and specifically will have on an internal
basis management control and decision-making power regarding
but not limited to, the following:
24
<PAGE> 26
a) defining clinical development and Phase IV programs;
b) all regulatory matters;
c) manufacturing planning and operations;
d) marketing, sales and product distribution plans for all
territories;
e) recruiting, legal and financial matters.
Subject to any legal obligations and restrictions applicable to
Seller, Seller will use its best efforts to implement the
Management Committee's decisions without materially adversely
affecting Seller's non-IMTIX business. Only the representatives
of Buyer will have voting power on the Management Committee;
all other members will have advisory powers only. The
Management Committee will meet on a monthly basis either in
person in France, or telephonically and more often as
reasonably requested by Buyer. Subject to decisions of the
Management Committee, Seller agrees to manage and operate the
Business and the Company according to normal business practices
and in the ordinary course of business.
The Management Committee shall act only according to normal
business practices and in the ordinary course of business.
The Management Committee shall not be entitled to recommend or
decide any dismissal of employee (other than in case of "faute
lourde" or "faute grave"), any divestment of or investment in
intangible or tangible assets nor any change in the strategy
followed by the Seller for the Business until the Filing Date.
5.2.5 Cooperation for SEC audits
Seller has been informed of the obligations of Buyer to perform
audits of the Company and the Business for the purpose of
information of the U.S. SEC as requested under applicable laws and
regulations. Seller agrees to provide information to Buyer and
cooperate with Buyer for this purpose, to the extent requests of
Buyer in this respect are reasonable.
5.2.6 Immunotech Agreement
The parties shall exercise best efforts to transfer and assign the
contract between PMC and Immunotech dated June 15, 1989, but if,
in spite of all best efforts, they are unable to do so, PMC shall,
subject to legal or contractual limitations in such contract,
grant to Buyer or its Affiliate a sublicense that achieves as
closely as possible, the same effect in all respects as a transfer
and assignment of such contract would achieve.
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<PAGE> 27
5.3 INTERIM AGREEMENTS
In the event that the transfer to the Company of all the French
"Autorisations de Mise sur le Marche" or equivalent authorizations in
foreign countries held by Seller or its Affiliates related to the IMTIX
Products has not been authorized as of the Closing Date, the Parties
agree to use their best efforts to negotiate and consummate a transaction
having business, financial, tax and legal effects as similar to the
Transaction as reasonably possible so as to take into account the delay
in transfer of such authorizations.
5.4 MANAGEMENT OF THE BUSINESS AND THE COMPANY
Between the date of this Agreement and the Closing Date and subject to
the prerogatives granted to the Management Committee pursuant to Article
5.2.4 hereabove, Seller hereby undertakes to manage and operate the
Business and the Company according to normal business practices and in
the ordinary course of business, and undertakes to, with respect to the
Business, and shall procure that, with respect to the Business, the
Company and the Subsidiaries do not take any of the following actions
without having received the prior written consent of Buyer, which shall
not be unreasonably or untimely withheld and which consent shall be
deemed granted if Buyer has not responded otherwise prior to the
expiration of a 15-day period following a written request for consent:
(1) enter into or vary any material contract or undertaking other than
in the ordinary course of business;
(2) give or discharge any guarantee, or any loan or financing or any
security in relation to such guarantees, loans or financing;
(3) subscribe or extend any borrowing;
(4) enter into any agreement or agreements requiring capital
expenditure in aggregate of more than 500,000 French Francs (VAT
not included);
(5) pass any board or shareholders resolution other than for the
purposes of this Agreement or the Transaction;
(6) dispose of any assets other than in the ordinary course of
business;
(7) vary or terminate any insurance policies dedicated to the Business
and the Company notably decrease product liability insurance, and
subject to reasonable changes of Rhone-Poulenc Group policies it
being understood that Seller's insurance policies linked to the
Business will terminate at the Closing Date;
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(8) settle any existing litigation in excess of 150,000 French Francs;
(9) enter into or vary any material transaction with a related party
(including the shareholders or the managers);
(10) hire or terminate (for reasons other than "faute lourde" or "faute
grave") the employment of any employee with an annual gross salary
in excess of 250,000 French Francs or of several employees the
gross salary of which, in aggregate, exceeds 500,000 French
Francs;
(11) reallocate any employee of the Business to any other division,
business or entity of the Seller;
(12) disclose any proprietary or confidential information to third
parties;
(13) modify the C4 building or the V3bis building, or their equipment,
in any way, unless in response to a specific request from the FDA
or to a request of Buyer or as provided under Article 2.1.2 b)
(ii) hereof.
5.5 STATUS OF MR. R. LABATUT ("R.L.")
Seller hereby expressly agrees to the following:
- Buyer will be entitled to make an offer to R.L. to join the
Company, which offer Buyer will not have to disclose to Seller.
- If R.L. decides to remain with Seller rather than accepting
Buyer's proposal, and for so long as R.L. so remains, Seller
undertakes to dedicate continuously R.L. to Buyer at cost (based
on time actually spent at Buyer's request), for a period of 3
years, for up to (i) 45% of his time for the first year, (ii) 35%
for the second year and (iii) 25% for the third year. Every six
months as from the Closing Date, Buyer shall provide estimates of
its needs for the following 12 months, of which the first 6 months
estimates only shall be binding.
The above shall not prohibit Seller from dismissing R.L. in case of
"faute lourde" or "faute grave", in which case Seller shall be released
from the foregoing obligation.
5.6 NON-SOLICITATION
Seller undertakes, unless otherwise mutually agreed between the Parties,
in the event that any of the employees dedicated to the Business listed
in Exhibits 2.1.1 a) and 2.1.1 c) hereto would refuse to become an
employee of the Company or resign from Seller or the
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Company after the transfer of the Business, not to hire such employee or
to make any offer to the same for any position in Seller or any of its
Affiliates.
As a general principle, each Party undertakes not to solicit, directly or
indirectly, or entice away from employment with the other Party (or with
the Company) any person employed thereby in the capacity of employee,
director, representative or consultant, except with the prior written
approval of the other Party.
The above provisions shall remain in effect as from the Closing Date and
until expiration of a 5-year period from the same.
It is understood between the Parties that provisions of this Article 5.6
are stipulated without prejudice to Article 5.5 hereof.
ARTICLE VI - CLOSING DEADLINE
If, as of thirty days prior to the Closing Deadline, the condition in Article
4.1.2 has not been met, the Parties agree as follows:
(i) The Parties shall jointly appoint a regulatory expert, who shall
be fluent in French and in English and who shall be a recognized
professional in the pharmaceutical business community. If the
Parties fail to agree on such expert, such expert shall be
appointed by the President du Tribunal de Grande Instance de Paris
at the request of the most diligent party. Such expert shall
review the status of the pharmaceutical establishment license
application. If the expert, who shall deliver his or her report
within 15 days of appointment, determines that it is probable that
a pharmaceutical establishment license at least with respect to
Thymoglobuline will be granted to the Company prior to August 31,
1999, then the Parties agree to enter into a restated Master
Agreement reiterating substantially all the provisions of this
Agreement, as adjusted to conform with any legal, tax and
accounting requirements, and with a new Closing Deadline as of
August 31, 1999;
(ii) If the Closing Deadline is redefined as set forth above, the
Parties agree to use their best efforts to negotiate and
consummate agreements having business, financial, tax and legal
effects as similar to the Transaction as reasonably possible for
the period ending on August 31, 1999;
(iii) The Parties also agree that the valuations in the Partial Business
Contribution Agreement shall be reset to January 1, 1999;
(iv) Additionally, if the Transaction contemplated hereby is not
consummated prior to the Closing Deadline, as redefined, Buyer
shall have a right of first offer with respect to a sale of the
Business in any form by Seller until February 29, 2000. In the
event
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Seller receives a bona fide offer from a third party to buy the
Business at any time prior to February 29, 2000, Seller shall
provide written notice to Buyer of such bona fide third party
offer, which notice shall include all material terms, including
price. Buyer shall have fifteen (15) days to review the proposed
sale and shall have the right, upon written notice to Seller
within such 15-day period to exercise its right to purchase the
Business on the same financial terms as provided in the notice.
Upon notice of Buyer's intention to exercise its purchase rights
hereunder, the Parties shall be bound by the terms and conditions
as provided for in the notice and they agree to negotiate in good
faith and to promptly execute and deliver all agreements and
documents which are necessary to consummate such a transaction. If
Buyer does not exercise its purchase rights hereunder, Seller
shall have the right to enter into definitive acquisition
documents with such third party provided it is on substantially
the same financial terms as set forth in the notice to Buyer, and
provided further that the financial terms may be changed if there
has been a major change in the Business after delivery of the
notice.
It is agreed between the Parties that, should the Closing not take place prior
to the Closing Deadline due to a delay attributable to the French Medicine
Agency in granting the Pharmaceutical Establishment authorization referred to in
Article 4.1.2 hereof, the provisions hereabove shall apply. Should the Closing
not take place prior to the Closing Deadline because of a delay in receiving the
Pharmaceutical Establishment authorization referred to in Article 4.1.2 hereof,
due to issues relating to Lymphoglobuline manufacturing, the Parties agree to
negotiate in good faith a contract manufacturing and distribution agreement with
respect to Lymphoglobuline and more generally to use their best efforts to
negotiate and consummate a transaction having business, financial, tax and legal
effects as similar to the Transaction as reasonably possible.
ARTICLE VII - REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants for itself, the Subsidiaries and the
Company to Buyer the following as of the Master Agreement Date and as of
the Closing Date
7.1.1 Organization
Seller, the Company and the Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of
France (or under the laws of their country of incorporation for
the Subsidiaries) and have all requisite corporate power and
authority to own or lease and operate their properties and to
carry on their business.
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7.1.2 Capacity and Power of Seller; Binding effect
Seller has duly executed this Agreement and no further proceeding,
action or consent is necessary to authorize the execution of this
Agreement and the consummation of the Transaction, except for
Board of Directors' and shareholders' authorization relating to
the Partial Business Contribution Agreement as set forth herein.
This Transaction has been duly authorized by Seller's Board of
Directors, and Seller's Work Council (Comite Central d'Entreprise)
has been duly consulted in compliance with provisions of the
French Labor Code. This Agreement represents a validly binding
obligation of Seller in accordance with its terms.
7.1.3 Non-Violation
The performance of this Agreement and the consummation of the
Transaction by Seller, the Company and the Subsidiaries will not
constitute a violation of, or a default under, or conflict with
(i) any provision of the Articles of Incorporation of Seller, the
Company or the Subsidiaries or (ii) any legal requirement,
judgment or administrative decision which may apply to Seller, the
Company or the Subsidiaries or by which Seller, the Company or the
Subsidiaries are bound or (iii) any agreement or undertaking to
which Seller, the Company or the Subsidiaries are a party or by
which any of the same are bound, the consequence of which could
materially affect the validity and the enforceability of this
Agreement or of the Transaction.
7.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer represents and warrants to Seller the following as of the Master
Agreement Date and as of the Closing Date:
7.2.1 Organization
Buyer is a company duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own or lease and
operate its properties and to carry on its business.
7.2.2 Capacity and Power of Buyer; Binding effect
Buyer has duly executed this Agreement and no further proceeding,
action or consent is necessary to authorize the execution of this
Agreement and this Agreement has been duly authorized by Buyer's
Board of Directors. This Agreement represents a validly binding
obligation of Buyer in accordance with its terms.
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7.2.3 Non-Violation
The performance of this Agreement and consummation of the
transactions contemplated hereby by Buyer will not constitute a
violation of, or a default under, or conflict with (i) any
provision of the Articles of Incorporation of Buyer or (ii) any
legal requirement, judgment or administrative decision which may
apply to Buyer or by which Buyer is bound or (iii) any agreement
or undertaking to which Buyer is a party or by which it is bound,
the consequence of which could materially affect the validity and
the enforceability of this Agreement or of the Transaction.
7.2.4 Structure of the Transaction
Buyer acknowledges that at its request the Company to which Seller
will contribute the Business will have the form of a societe par
actions simplifiee ("SAS") and hereby undertakes to indemnify and
hold Seller harmless from and against any liability that it may
incur only as a direct consequence of the choice of an SAS as
opposed to an Societe Anonyme ("SA") as the legal form of the
Company.
7.2.5 Environmental Provisions
Buyer acknowledges that it is jointly bound by and guarantees the
due performance of those environmental provisions set forth under
each of the Commercial Lease Agreements to be executed in the form
attached as Exhibit 2.1.2 b) (ii) hereto and this guarantee shall
survive 18 (eighteen) months after expiration date of the
Commercial Lease Agreements.
ARTICLE VIII - SHARE PURCHASE AGREEMENT
As mentioned hereabove, the Parties shall execute on the Master Agreement Date a
Share Purchase Agreement under conditions precedent substantially in the form of
Exhibit 8 hereto which the Parties agree is an integral part of the overall
Transaction. The Share Purchase Agreement will contain the following provisions
with respect to security interest to be granted by Buyer:
(i) In order to secure Payments hereunder, Buyer shall provide that a
letter of credit from Nationsbank, or a financial institution of
equivalent standing, in the amount of $6 (six) million US Dollars
be issued in favor of Seller for a period of 2 1/2years beginning
on the Closing Date substantially in the form attached hereto as
Exhibit 8 (i). Such letter of credit shall provide that Seller
shall be entitled to payment after delivering a certificate also
in the form attached in Exhibit 8 (i-2), executed solely by Seller
to Nationsbank. At the expiration of such 2 1/2year period, Buyer
shall provide that a new letter of credit in the amount of $4
(four) million US Dollars be issued in favor of Seller for an
additional 2 1/2year period in the form attached hereto as Exhibit
8 (i). The transaction costs of issuing such letters of credit
shall be shared
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equally between Buyer and Seller, and Seller agrees to immediately
reimburse Buyer for 50% of such costs with Seller's portion not to
exceed 0.5% of the secured amount per year upon invoice, provided
that Buyer shall remain solely responsible for any pledge of
assets associated therewith.
(ii) In the event that Buyer is unable or fails to make Payments, and
such failure is not cured within 30 days of written notice from
Seller to Buyer of such failure, then at such time SMC shall
immediately issue to Seller up to 100,000 (one hundred thousand)
shares of the common stock of SMC at no cost to Seller, such
number of shares to be proportionally adjusted in case of stock
splits, dividends and recapitalization. SMC shall at all times
keep such 100,000 (one hundred thousand) shares reserved and
available for immediate issuance to Seller. In order to determine
the amount paid through the issuance of 100,000 (one hundred
thousand) shares, the shares shall be valued at their fair market
value at the time of issuance. However, the valuation shall only
be definitive at the time Seller has been able to sell the shares
and to recover the corresponding price. Such recovered price shall
be the sole amount to be offset against failed Payments. Any
recovered amount in excess of the failed Payments shall not be
reimbursed to Buyer, and shall be considered as an indemnification
for late payment. The recovery of any failed Payment not
recovered, in full or in part, through the sale of shares will be
pursued by any other means. At the Closing Date, SMC shall deliver
to Seller a certificate stating the fair market value of the
100,000 (one hundred thousand) shares as of the Closing Date, and
the corresponding percentage in SMC's capital stock on a fully
diluted basis.
(iii) In the event that there is a "Change of Control" (as defined
below) of either the Company or Buyer involving an unrelated third
party after the Closing Date, Buyer will provide that a letter of
credit be issued by Nationsbank, or a financial institution of
equivalent standing, in favor of Seller with respect to all unpaid
Payments as of the date of the Change of Control. For purposes of
this Article, a "Change of Control" shall mean a sale of
substantially all of the assets of either the Company or Buyer to
a non-Affiliate of Buyer or any transfer by way of contribution,
merger or reorganization of more than 50% of the voting power of
the capital stock of either the Company or Buyer to a
non-Affiliate of Buyer. In the event that such letter of credit
has been issued, clauses (i) and (ii) hereof automatically
terminate.
(iv) In no event shall Seller be entitled to cumulative remedies and
guarantees pursuant to this Article VIII in an amount which
exceeds the amount of unpaid Payments, plus any interest accrued
at the French legal rate (taux d'interet legal) between the
Payment Date and the effective date of Payment.
The Share Purchase Agreement will, in addition, contain the following
non-competition provisions.
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a) As of the Closing and continuing for a period of 5 (five)
years after the Closing, Seller undertakes, unless
otherwise mutually agreed between the Parties, in the event
that any of the employees dedicated to the Business listed
in Exhibits 2.1.1 (a) and 2.1.1 (c) hereto would refuse to
become an employee of the Company or resign from Seller,
the Company or any of the Subsidiaries after the transfer
of the Business, not to hire such employee or to make any
offer to the same for any position in Seller or any of its
Affiliates.
b) As of the Closing and continuing for a period ending five
(5) years after the Closing, PMC agrees that it shall not
(and cause its Affiliates other than its shareholders not
to) engage, associate itself with, or collaborate in,
directly or indirectly, in any country, whether for its own
account or as a shareholder (other than as a less than 3%
shareholder of a publicly-held company), partner, joint
venturer, firm, corporation, or other entity, in any
activity in the fields of R&D, production, marketing,
distribution or management relating to the field of (i)
transplantation or (ii) immunosuppression (within or
outside of the field of transplantation) using anti Tcell
agents.
This provision shall not preclude Seller from acquiring
companies or businesses which involve organ transplantation
activity provided (i) that such activity represents only a
minor portion of such company or business and (ii) that
Seller shall in such case notify Buyer of such event and
offer for sale to Buyer such branch of activity at a
reasonable price based on the price paid by Seller.
Seller further undertakes not to grant or transfer any
license or right whatsoever, relating to the field of (i)
transplantation or (ii) immunosuppression (within or
outside of the field of transplantation) using anti Tcell
agents, which is the subject of a license or grant to the
Company or Buyer pursuant to this Agreement and the
Ancillary Agreements in relation to the Business to any
Affiliate (including its shareholders) or third party.
(c) As of the Closing and continuing for a period of 5 (five)
years after the Closing, PMC agrees that it shall not (and
cause its Affiliates not to):
(i) solicit, directly or indirectly, or entice or
endeavor to solicit or entice away from employment
with Buyer, the Company or any of the Subsidiaries
any person employed thereby in the capacity of
employee, director, representative, consultant,
except with the prior written approval of Buyer, the
Company or any of the Subsidiaries, and Buyer agrees
to take the same commitment in favor of PMC;
(ii) use any trademark, tradename or any other
identifying symbol presently used by the Company in
the Business.
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(d) Except as required by law or expressly permitted under this
Agreement or any of the other Agreements, PMC shall cause
its respective Affiliates, officers, directors, employees,
agents and subcontractors (collectively, "Representatives")
and Representatives of its Affiliates to keep confidential
any and all technical, commercial, scientific, financial
and other data, processes, documents or other information
(whether in oral or written form) or physical object
(including, without limitation, intellectual property,
marketing data, agreements with any third party, license
applications, business plans and projections) it may have
with respect to the IMTIX Products, the Assets, the
Business, the Company or any of the Subsidiaries and cease
use of proprietary and other confidential business and
technical information related to the same, for a period
expiring 15 (fifteen) years as from the Closing.
(e) The Parties agree that due to the unique nature of the
experience, knowledge and capabilities of PMC, there can be
no adequate remedy at law for any breach of its obligations
hereunder, that any such breach may allow PMC, and/or third
parties to unfairly compete with Buyer, the Company or the
Subsidiaries resulting in irreparable harm to Buyer, the
Company or the Subsidiaries, and therefore, that upon any
such breach or any threat thereof, Buyer, or the Company,
or the Subsidiaries, shall be entitled to appropriate
equitable remedy it might have at law.
ARTICLE IX - WARRANTY AGREEMENT
The Share Purchase Agreement that the Parties shall enter into on the Master
Agreement Date substantially in the form of Exhibit 8 hereto will necessarily
include a warranty agreement as to the assets and liabilities of the Company,
among other things, as is common practice.
Concerning tax liabilities, the following provisions are here specified:
-- Buyer shall be liable for any transfer tax stemming from the
Transaction after the Closing Date, directly caused by an act or
omission to act by the Buyer,
-- Other than the 1% registration tax (not to exceed 20,000 French
Francs) which shall be borne by Buyer in connection with the
purchase of the Shares, Buyer and Seller shall share equally any
other additional registration tax stemming from the Transaction
and assessed after the Closing Date and resulting from Case Law or
a retroactive change of Law.
ARTICLE X - KNOW-HOW LICENSE AGREEMENT
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The Parties undertake to execute the worldwide Know-How License Agreement
between Seller and the Company substantially in the form of Exhibit 2.1.2 b) (i)
hereto, which the Parties agree is an integral part of the overall Transaction.
It is specified that as from year 11, the Know-How License Agreement will remain
in effect if renewed by Buyer regardless of the fact that no royalties may be
due by the Company.
With respect to patents, to Seller's best knowledge, Seller has no rights under
any patents that cover or otherwise affect the development, manufacture,
distribution or use of the IMTIX Products. In the event that at any future time,
it is determined that such patent(s) has such effect, then they will each
automatically be deemed licensed pursuant to and as part of the Know-How
license, without further action by the parties, effective as of the Closing
Date.
ARTICLE XI - LEASE AGREEMENT
The Parties undertake to execute the Commercial Lease Agreements between Seller
and the Company and the side letter substantially in the form of Exhibit 2.1.2
b) (ii) hereto, which agreements and letter the Parties agree are an integral
part of the overall Transaction.
ARTICLE XII - SERVICE AGREEMENT FOR MANUFACTURING/EQUINE PLASMA SUPPLY AGREEMENT
The Parties undertake to execute the Service Agreement for Manufacturing and the
Equine Plasma Supply Agreement between Seller and the Company respectively in
the form of Exhibit 2.1.2 b) (iii-1) and Exhibit 2.1.2 b) (iii-2) hereto, which
the Parties agree are both an integral part of the overall Transaction.
ARTICLE XIII - CONFIDENTIALITY
a) General:
Except as expressly set forth in this Article, each Party shall cause its
respective Affiliates, officers, directors, employees, agents and
subcontractors (collectively, "Representatives") and Representatives of
its Affiliates to keep confidential any and all technical, commercial,
scientific and other data, processes, documents or other information
(whether in oral or written form) or physical object (including, without
limitation, intellectual property, marketing data, agreements between any
Party and a third party, license applications, and business plans and
projections of any Party) acquired from the other Party (the "Other
Party"), its Affiliates or its Representatives prior to or after the date
of this Agreement and which relates to the Transaction, including all
information exchanged as of the date of this Agreement; provided in each
case that such information is marked "confidential" or, if
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verbal, such information is reduced to writing and marked "confidential"
within 30 days of the date of disclosure ("Confidential Information"),
and each Party shall not disclose, directly or indirectly, and shall
cause its Representatives not to disclose, directly or indirectly, any
Confidential Information to anyone outside such person, such Affiliates
and their respective Representatives, except that the following
information disclosed hereunder to any Party will not be deemed
Confidential Information for purposes of this Agreement, if such person
(the "Receiving Person") can demonstrate that such Confidential
Information:
(i) is or hereafter becomes generally available to the trade or public
other than by reason of any breach or default by the Receiving
Person, any of its Affiliates or any Representative of the
foregoing with respect to a confidentiality obligation under this
Agreement;
(ii) was already known to the Receiving Person or such Affiliate or
Representative prior to disclosure; provided, however, that this
exception shall not apply to any Confidential Information
transferred by Seller to Buyer by virtue of the Transaction;
(iii) is disclosed to the Receiving Person or such Affiliate or
Representative by a third party who has the right to disclose such
information;
(iv) based on such Receiving Person's good faith judgment with the
advice of counsel, is otherwise required to be disclosed in
compliance with applicable legal requirements to a public
authority.
Whenever the Receiving Person becomes aware of any state of facts which
would or might result in disclosure of Confidential Information pursuant
to subparagraph (iv) above, it shall, if possible, promptly notify the
person making disclosure (the "Disclosing Person") prior to any such
disclosures so that the Disclosing Person may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of
this Agreement. In any event, if the Receiving Person is unable to
promptly notify the Disclosing Person or if such protective order or
other remedy is not obtained, or if the Disclosing Person waives
compliance with the provisions of this Agreement, the Receiving Person
will furnish only that portion of the information which it is advised by
counsel is legally required and will exercise reasonable efforts to
obtain assurance that confidential treatment will be accorded to the
Confidential Information.
b) Use of Confidential Information:
Each Party agrees that no Confidential Information shall:
(i) be used in its own business except as necessary to the fulfillment
of the rights and obligations of such Party under this Agreement;
(ii) be assigned, licensed, sublicensed, marketed, transferred or
loaned, directly or indirectly to any third party other than a
Representative or an Affiliate Representative
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of such Party, except as necessary to the fulfillment of the
rights and obligations of the Parties under this Agreement;
(iii) be used or exploited by such Party or any of its Affiliates or
their Representatives for its or their respective benefit or the
benefit of any other relationships with customers of such Party
and its Affiliates.
Without limiting the generality of the foregoing, each Party agrees that
it shall not (and shall not permit any of its Affiliates) at any time use
any Confidential Information in the conduct of its business without the
prior written consent of the other Party. The obligations set forth in
this Article shall extend to copies, if any, of Confidential Information
made by any Representatives referred to in paragraph (a) and to documents
prepared by such Persons which embody or contain Confidential
Information.
The present confidentiality provisions shall not prevent the Parties from
providing information requested by the French Medicine Agency (Agence du
Medicament) in order to obtain the approval of the Company as a
pharmaceutical establishment and the transfer of all licenses.
c) Protection of Confidential Information:
Each Party shall deal with Confidential Information so as to protect it
from disclosure with a degree of care not less than that used by it in
dealing with its own confidential information and shall take reasonable
steps to minimize the risk of disclosure of Confidential Information
which shall include, without limitation, ensuring that only its
Affiliates and its and their Representatives who have a bona fide "need
to know" such Confidential Information for purposes permitted or
contemplated by this Agreement shall have access thereto. Each Party
shall notify all of its Representatives who have access to Confidential
Information of its confidentiality and the care therefor required, and
shall obtain from any Affiliate or any agent or subcontractor who is a
Representative that is permitted access to such Confidential Information
in accordance with this Article, an agreement of confidentiality
incorporating provisions at least as restrictive as those set forth
herein, unless such Representative is a legal counsel legally bound by
such confidentiality.
d) Term of Confidentiality Obligations / Survival:
Notwithstanding any contrary provisions provided elsewhere in this
Article, the obligations set forth in this Article shall (i) terminate 15
(fifteen) years after the Closing in case the Transaction is completed,
or (ii) survive for a period of five (5) years as from the Closing
Deadline if this Transaction is not completed.
e) Return of Confidential Information:
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In the event the contemplated Transaction were not completed for whatever
reason, within thirty (30) days after such decision not to carry out the
Transaction, the Receiving Person shall (and shall cause its Affiliates'
Representatives and its Affiliates to) return to the Disclosing Person or
destroy all related documents and tangible items then in its possession
which it has received from the Disclosing Person or any Affiliate or
Representative thereof pertaining, referring or relating to the
Disclosing Person's Confidential Information, as well as all copies,
summaries, records, descriptions, modifications and duplications that it,
or any of its Affiliates or Representatives, has made from the documents
or tangible items received from the Disclosing Person or any Affiliate or
Representative thereof; provided, however, that the Receiving Person may
retain one copy of each document in its legal files solely to permit the
Receiving Person to continue to comply with its obligations hereunder
and, in addition, may upon notice to the Disclosing Person, retain in its
legal files or in the offices of outside legal counsel one copy of any
document solely for use in any pending legal proceeding to which such
document relates.
f) Confidential Disclosure Agreement of October 16, 1997:
The obligations set forth in this Article supersede the Confidential
Disclosure Agreement executed between Seller and Buyer on October 16,
1997.
ARTICLE XIV - MISCELLANEOUS PROVISIONS
14.1 SCOPE OF OBLIGATIONS
This Agreement shall be binding on and inure to the benefit of Buyer,
Seller, their heirs, successors and successors in law, subject to Article
14.5 hereof.
14.2 PRESS RELEASES
An initial press release announcing the Parties' intent to consummate the
Transaction shall be in the form attached hereto as Exhibit 14.2.
All other major public communication of any kind relating to the
Transaction or any transactions contemplated thereby (hereinafter "Press
Release") shall be jointly drafted and reviewed by a press release review
committee which shall be composed by:
For PMC: the General Counsel
For SangStat: CEO
In the event that a Press Release is not jointly drafted or that one
Party desires to draft the Press Release first, the drafting Party shall
communicate to the other Party the draft of the Press Release at least
three Business Days before the date of external communication for
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review. Written approval or comments by the non drafting Party's persons
sitting on the press release review committee shall be given as soon as
practicable and in any event no later than 3 Business Days after receipt.
The above mentioned procedure may be waived in writing by the non
drafting Party's CEO or the non drafting CFO and General Counsel jointly.
In no event shall either Party be prohibited from making any disclosures
it determines are required by applicable law; nevertheless, to the extent
practicable, the procedure described hereabove shall be respected.
Additionally, in no event shall either Party be prohibited from making
any public communications relating to and substantially in the form of
prior approved communications.
In addition, occasional brief comments by the respective officers of SMC
and PMC regarding this Agreement shall be allowed only to the extent such
statements are consistent with guidelines for public statements as may be
mutually agreed upon by SMC and PMC and if made in connection with
routine interviews with analysts or members of the financial press.
14.3 EXPENSES
Each of the Parties shall pay its own fees and expenses in relation to
the negotiation, preparation and execution of this Agreement and more
generally in relation to the Transaction contemplated hereby, including
lawyers', brokers' and accountants' fees. Except as otherwise provided
herein, in the Share Purchase Agreement or in the Ancillary Agreements,
each Party shall be responsible for their own tax obligations as a result
of this Agreement and the Transaction.
14.4 AMENDMENTS; WAIVER
No provision of this Agreement may be amended, waived or otherwise
modified without the prior written consent of the Parties duly
represented.
14.5 ASSIGNMENT
Without prejudice of the right of substitution of Buyer as set forth in
Article 14.10 hereof, neither Party shall transfer or assign this
Agreement, in whole or in part without the other Party's prior written
consent, except that either Party may transfer, assign and delegate this
Agreement to an Affiliate or in connection with a merger, reorganization
or sale of substantially all of its assets, without the other Party's
consent.
39
<PAGE> 41
14.6 ENTIRE AGREEMENT
The terms and provisions of this Agreement and the Exhibits hereto
constitute the entire agreement between the Parties with respect to the
subject matter hereof and shall prevail over any prior written or oral
communications, declarations or agreements between the parties hereto
concerning the subject matter hereof. The Parties agree that this
Agreement may only be amended by a written document signed by the Parties
hereto in which this Agreement is specifically identified.
14.7 SEVERABILITY
Any provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in
any other jurisdiction, as long as this does not materially affect the
economics of the Transaction.
14.8 NON-DISCLOSURE
a) Notwithstanding anything to the contrary in this Agreement and
except as required by law, the Parties expressly agree that this
Agreement shall remain strictly confidential and each Party
therefore undertakes not to provide any copy of the same to any
third party and to ensure that its officers, directors, employees
and agents similarly respect the present confidentiality
obligation.
b) The non-complying party will be responsible for all adverse
effects resulting from such breach.
14.9 CONFLICT
In the case of any conflict or contradiction whatsoever between (i) the
provisions of this Agreement and (ii) those of the Partial Business
Contribution Agreement or the Share Purchase Agreement or any of the
Ancillary Agreements, the provisions of the agreements listed in (ii)
shall prevail.
14.10 BUYER'S RIGHT OF SUBSTITUTION
SMC may substitute any of its Affiliates for the purposes hereof provided
that, in this case, SMC will remain jointly liable for the obligations of
such Affiliate including but not limited to payments under the terms
hereof. In such a case, the term "Buyer" as used herein shall mean SMC
and its substituted Affiliate.
40
<PAGE> 42
14.11 NOTICES
Notices and other communications required or called for under this
Agreement shall be in writing, shall be transmitted by fax and by
certified mail postage prepaid, and shall be deemed delivered upon
receipt by the Party to whom it is addressed.
In the case of SMC such communications shall be addressed to:
SangStat Medical Corporation
1505 Adams Drive
Menlo Park, CA 94025
Attention: _____________, Chief Executive Officer
In the case of PMC, such communications shall be addressed to:
Pasteur Merieux Serums et Vaccins S.A.
58, avenue Leclerc
69007 Lyon
FRANCE
Attention: ____________, Chairman, and Chief Executive Officer,
with copy to the "Directeur Juridique"
or to the attention of such other individual or to such other address as
either Party may give to other in writing.
14.12 FORCE MAJEURE
No Party hereto (or any of its Affiliates) shall be responsible or liable
to the other Party hereto (or any of its Affiliates) for any failure to
perform any of its agreements, covenants or obligations under this
Agreement if such failure results from events or circumstances reasonably
beyond the control of such Party (or of its Affiliates), including,
without limitation, war or other national emergency, riot, fire,
explosion, flood or other Act of God, general and long-lasting strike
affecting the entire activity of Seller on the site of Marcy l'Etoile,
any injunction, decree, order, law or regulation of any public authority,
or inability to obtain electricity or fuel or raw material (collectively,
"Events of Force Majeure").
The affected Party shall (i) forthwith inform the other Party in writing
of the occurrence of the Event of Force Majeure, and (ii) exert best
efforts to eliminate, cure or overcome any such Event of Force Majeure
and to resume performance hereunder with all possible speed; provided,
however, that nothing contained herein shall require any Party to settle
on terms unsatisfactory to such Party any strike. To the extent that an
Event of Force
41
<PAGE> 43
Majeure continues for a period in excess of six (6) months, the Parties
agree to negotiate in good faith either (i) to resolve the Event of Force
majeure, if possible, (ii) to extend by mutual agreement the time period
to resolve, eliminate or overcome such Event, or (iii) to terminate this
Agreement.
ARTICLE XV - TERM AND TERMINATION
15.1 TERM
Without prejudice of the survival of the confidentiality provisions set
forth in Article XIII and 14.8 of this Agreement, this Agreement shall
expire 25 (twenty-five) years after the Closing Date.
15.2 TERMINATION
This Agreement may be terminated and shall be of no further force and
effect:
a) upon mutual written agreement by the Parties; or
b) subject to Article VI, if the Closing has not occurred by December
31, 1998.
Additionally, (i) in the event any of the conditions precedent of Article
4 hereof is not fulfilled on or before the Closing Deadline and subject
to waiver by Buyer of Condition 4.1.3, or (ii) in the event Buyer has
exercised its right under Article 4.2.2 hereabove or Seller has exercised
its right under Article 4.2.3 hereabove, this Agreement shall be
considered as null and void and with no further force or effect. In such
a case, it is expressly agreed however that the confidentiality
commitment from the Parties set forth in Article XIII and 14.8 hereof,
will remain in force according to its terms.
ARTICLE XVI - GOVERNING LAW AND JURISDICTION
16.1 GOVERNING LAW
The Agreement is governed by, and shall be construed in accordance with,
French law.
16.2 DISPUTE RESOLUTION
Any and all disputes arising in connection with this Agreement which will
not be solved on an amicable basis between the Parties shall be finally
settled by arbitration under the
42
<PAGE> 44
Rules of Conciliation and Arbitration of the International Chamber of
Commerce, rules that the Parties recognize that they know. The
arbitration shall be conducted in Paris, France, in English by one
arbitrator if the dispute involves a claim of damage of and below five
hundred thousand (500.000) US Dollars or by three arbitrators if the
dispute involves a claim of damage above five hundred thousand (500.000)
US Dollars appointed in accordance with the said rules. The arbitrator(s)
shall apply French law to the merits of the case. The arbitration shall
be final and binding upon the parties.
Executed in Menlo Park, California (U.S.A.)
in two (2) originals on June 10, 1998.
Buyer Seller
represented by Philippe Pouletty represented by Jean-Jacques Bertrand
/s/ PHILIPPE POULETTY /s/ JEAN-JACQUES BERTRAND
- -------------------------------- ------------------------------------
Philippe Pouletty Jean-Jacques Bertrand
43
<PAGE> 45
AMENDMENT TO THE MASTER AGREEMENT
DATED JUNE 10,1998
Between the undersigned:
1. Sangstat Medical Corporation, a corporation existing and organized
under the laws of the State of Delaware and having its principal place
of business at 1505 Adam Drive, Menlo Park, CA 94025, USA, duly
represented by Doctor Philippe Pouletty, its Chief Executive Officer,
hereinafter referred to as "Buyer" or "SMC"
ON THE FIRST PART
AND
2. Pasteur Merieux Serums Section Vaccins S.A., a Pasteur Merieux
Connaught company and a French "Societe Anonyme" having its registered
office at 58 avenue Leclerc, 69 007 Lyon, France, duly represented by
Mr. Jean-Jacques Bertrand, its Chairman and Chief Executive Officer,
hereinafter referred to as "Seller" or "PMC"
ON THE SECOND PART.
Buyer and Seller are hereinafter referred to as the "Parties" or individually a
"Party".
WHEREAS:
Whereas the Parties have signed on the date hereof an agreement entitled Master
Agreement,
Whereas the Parties agreed to amend some Articles of the Master Agreement
through the present amendment,
THE PARTIES AGREED TO AMEND THE MASTER AGREEMENT AS FOLLOWS:
1. Article 1.1 Definitions:
The definition of "Retroactive Date" is replaced by:
""Retroactive Date" shall mean the first day of the month of the
Filing Date, or the 1st of July if the Filing Date is in August."
2. The first paragraph of article 2.2.3 is replaced by:
44
<PAGE> 46
"As soon as the conditions precedent referred to in Articles 4.1.2 and
4.1.3 hereafter are fulfilled and within 20 days thereafter, it being
specified that, due to legal requirements, the minimum period of time
between the Filing Date and the Closing Date must be at least 30 days,
the following steps shall take place:"
3. Article 4.1.3 is amended as follows:
The first paragraph is replaced by:
"Completion of legal, technical and financial due diligence by Buyer
and its counsels satisfactory to Buyer on the items listed in Exhibit
4.1.3, which due diligence shall not have revealed an event which may
materially adversely affect the Business. This due diligence will be
carried out in two phases:"
Paragraph (ii) is replaced by:
"(ii) Buyer shall, in addition, have the right, for 10 Business Days
following the Filing Date to make review of the valuation of
the assets and liabilities in the Partial Business Contribution
Agreement it would estimate appropriate (the "Second Due
Diligence Period")"
4. Article 14.10: The following sentence is added at the end of the
Article:
"Should the substitution apply, SMC shall provide Seller with an
assignment contract signed by duly authorized representatives of
signatories, including in exhibit the Master Agreement dated June 10,
1998, in a form preserving the rights of Seller under the Master
Agreement."
The Parties agreed that this amendment is a part of the Master Agreement dated
June 10, 1998.
Executed in San Francisco
In two originals
On June 10, 1998
Pasteur Merieux Serums & Vaccins Sangstat Medical Corporation
/s/ JEAN-JACQUES BERTLAND /s/ PHILIPPE POULETTY
- ------------------------------------- --------------------------------
Represented by Jean-Jacques Bertrand Represented by Philippe Pouletty
45
<PAGE> 47
AMENDMENT NO. 2 TO THE MASTER AGREEMENT
DATED JUNE 10, 1998
Between the undersigned:
1. Sangstat Medical Corporation, a corporation existing and organized
under the laws of the State of Delaware and having its principal place
of business at 1505 Adams Drive, Menlo Park, CA 94025, USA, duly
represented by Doctor Philippe Pouletty, its Chief Executive Officer,
hereinafter referred to as "Buyer" or "SMC"
ON THE FIRST PART
AND
2. Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux Connaught
company and a French "Societe Anonyme" having its registered office at
58 Avenue Leclerc, 69007 Lyon, France, duly represented by Mr.
Jean-Jacques Bertrand, its Chairman and Chief Executive Officer,
hereinafter referred to as "Seller" or "PMC"
ON THE SECOND PART,
Buyer and Seller are hereinafter referred to as the "Parties" or individually a
"Party".
WHEREAS:
Whereas the Parties have signed on the date hereof an agreement entitled Master
Agreement,
Whereas the Parties agreed to amend some Articles of the Master Agreement
through the present amendment,
THE PARTIES AGREED TO AMEND THE MASTER AGREEMENT AS FOLLOWS:
1. Article 2.2.1(a) is hereby amended to include the following:
"To the extent PMC cannot, pursuant to the Partial Business
Contribution Agreement, transfer to Buyer all of the persons identified
in Exhibit A to this Amendment No. 2 to the Master Agreement, PMC
agrees to use its best efforts to have such non-transferred employees
accept employment voluntarily with Buyer at the Closing. PMC's best
efforts will include, but not be limited to, informing such
non-transferred employees in writing as soon as practicable of Buyer's
offer of employment under similar terms and
46
<PAGE> 48
conditions, and taking any other actions reasonably requested by Buyer.
PMC further agrees that the provisions of Article 5.6 of the Master
Agreement regarding non-solicitation will apply to all of such
non-transferred employees" of PMC and subsidiaries and PMC will use
best efforts to cause Rhone Poulens and its subsidiaries to apply such
provision.
The parties agreed that this amendment is a part of the Master Agreement dated
June 10, 1998.
Executed in San Francisco
In two originals
One June 10, 1998
Pasteur Merieux Serums & Vaccins Sangstat Medical Corporation
/s/ JEAN-JACQUES BERTLAND /s/ PHILIPPE POULETTY
- ------------------------------------- --------------------------------
Represented by Jean-Jacques Bertrand Represented by Philippe Pouletty
47
<PAGE> 49
AMENDMENT NO. 3 TO THE MASTER AGREEMENT
DATED JUNE 10, 1998
Between the undersigned:
1. Sangstat Medical Corporation, a corporation existing and organized
under the laws of the State of Delaware and having its principal place
of business at 1505 Adams Drive, Menlo Park, CA 94025, USA, represented
by Doctor Philippe Pouletty, its Chief Executive Officer, duly
empowered for the purpose hereof,
hereinafter referred to as "Buyer" or "SMC"
ON THE FIRST PART
AND
2. Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux Connaught
company and a French "Societe Anonyme" having its registered office at
58 avenue Leclerc, 69 007 Lyon, France, represented by Mr. Herve
Tainturier, duly empowered for the purpose hereof,
hereinafter referred to as "Seller" or "PMC"
ON THE SECOND PART.
Buyer and Seller are hereinafter referred to as the "Parties" or individually a
"Party".
WHEREAS:
Whereas the Parties have signed on June 10, 1998 an agreement entitled Master
Agreement, as well as an amendment to this Master Agreement,
Whereas the Parties agreed to amend some Articles of the Master Agreement as
amended on June 10, 1998 through the present amendment,
THE PARTIES AGREED TO AMEND THE MASTER AGREEMENT AS OF THE 31st OF JULY 1998 AS
FOLLOWS:
48
<PAGE> 50
1. Article 1.1 Definitions:
The definition of "Retroactive Date" is replaced by:
""Retroactive Date" shall mean the first day of the month of the Filing
Date, or the 1st of July if the Filing Date is in August or in
September."
2. Article 2.2.2: the following sentence is added at the end of the first
paragraph:
"Shall the Affidavit 1 be remitted in July, the computation of the 20
days for the filing of the draft Partial Business Contribution
Agreement shall start as from August 31."
3. Article 2.2.3: the following sentence is added at the end of paragraph
a):
"Should the 20 day period hereabove not allow Seller and the Company to
hold these general meetings the last day of a month, this 20 day period
shall be extended to the last day of the month during which the 20 day
period ended;".
4. Article 3.2.1 a) of the Master Agreement is hereby amended to provide
that the Fixed Price as defined therein shall be reduced to a total
amount of thirty-one million ($31,000,000) US Dollars payable in
several successive payments (the "Payment(s)"), it being specified that
ten million ($10,000,000) US Dollars shall, on the Filing Date, be
placed in escrow pursuant to the Escrow Agreement to be executed upon
the Filing Date in the form of Exhibit 3.2.1 a). The above mentioned
reduction in the Fixed Price has been agreed upon by the Parties [*] of
the Share Purchase Agreement signed between the Parties on June 10,
1998, as amended on June 10, 1998 and as of July 31, 1998). Such
reduction in Fixed Price [*].
Additionally, the table of payments set forth in Article 3.2.1
a) is hereby replaced in its entirety with the following:
<TABLE>
<CAPTION>
PAYMENT DATE PAYMENT (IN U.S. DOLLARS)
------------ -------------------------
<S> <C>
Closing Date ("CD") $10.0 million
6 months after CD $1.5 million
12 months after CD $1.5 million
18 months after CD $1.5 million
24 months after CD $1.5 million
30 months after CD $3.0 million
36 months after CD $3.0 million
42 months after CD $2.5 million
</TABLE>
- --------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
49
<PAGE> 51
<TABLE>
<CAPTION>
PAYMENT DATE PAYMENT (IN U.S. DOLLARS)
------------ -------------------------
<S> <C>
48 months after CD $2.5 million
54 months after CD $2.0 million
60 months after CD $2.0 million
</TABLE>
5. Article 3.2.1c) (I)(a) of the Master Agreement is hereby amended to
read in its entirety as follows:
"(a) Seller is performing at least one (1) of the services identified
in the Service Agreement for the Manufacturing with respect to
Thymoglobuline, or if Seller is not performing at least one (1)
of the services, such failure to perform is due to (i) an event
of force majeure, (ii) a request from Buyer, (iii) or a
termination of the Service Agreement for the Manufacturing due
to Buyer's fault; and"
6. The table set forth in Article 3.2.1 c) (ii) of the Master Agreement is
hereby replaced in its entirety with the following:
<TABLE>
<CAPTION>
MINIMUM
REFERENCE SALES OF
ANNIVERSARY DATE THYMOGLOBULINE MARKET
- ---------------- -------------- ------
<S> <C> <C>
12 months after Closing Date [*] vials Worldwide
24 months after Closing Date [*] vials European Union and USA
36 months after Closing Date [*] vials European Union and USA
48 months after Closing Date [*] vials European Union and USA
60 months after Closing Date [*] vials European Union and USA
</TABLE>
Additionally, the two paragraphs immediately following the table in Article
3.2.1 c) (ii) are hereby replaced in their entirety with the following:
"It is understood between the Parties that:
* for the second Payment Date (6 months after Closing Date), the
minimum sales test shall be applied to the 6-month period preceding
such date; as a result, no payment shall be due on such date if
Actual Sales in this 6-month period are lower than [*] vials;
* for all Payment Dates which are not Anniversary Dates of the Closing
Date, the minimum sales test to be referred to shall be as of the
preceding Anniversary Date.
For the purposes hereof, on each Anniversary Date of the Closing Date,
the Company will measure the total number of Thymoglobuline(R) vials
sold on the market referred to
- --------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
50
<PAGE> 52
in the schedule hereabove mentioned during the l2-month period
preceding such date (the "Actual Sales")."
7. Paragraph (i) of Article 4.1.3 and correlatively the first paragraph of
Article 2.2.2 are hereby amended to provide that due to the extension
of the Initial Due Diligence Period, the Affidavit acknowledging the
completion to Buyer's satisfaction of the Initial Due Diligence, shall
be remitted on the date hereof.
8. Amendment dated June 10, 1998, paragraph 3., Article 4.1.3: the title
of the second paragraph is to be read as follows:
"The first paragraph of paragraph (ii) is replaced by:"
instead of
"Paragraph (ii) is replaced by:"
9. Article 5.2 of the Master Agreement is hereby amended to include a new
Article 5.2.7 which shall read in its entirety as follows:
"5.2.7 [*]
Seller shall use its best efforts to contribute to the development of
an [*] test for Thymoglobuline by August 31, 1998, and such best
efforts shall include, but not be limited to, (i) having one (1)
trained biochemist from Seller dedicated to this development effort for
the four (4) weeks preceding August 31, 1998, (ii) retaining at
Seller's expense the services of one external immunochemistry
laboratory and (iii) interacting with Buyer with respect to Buyer's own
laboratory work regarding the above mentioned test."
The Parties agreed that this amendment no. 3 is a part of the Master Agreement
dated June 10, 1998. Any provision of the Master Agreement not expressly
modified by this amendment no. 3 shall remain unchanged. All Exhibits shall be
deemed to be modified to the extent necessary to make each of them consistent
with this Amendment no. 3. Capitalized terms in this amendment no. 3 shall have
the meaning set-forth in the Master Agreement.
Executed in two originals
In Lyon In Menlo Park
For Pasteur Merieux Serums & Vaccins S.A. For SangStat Medical Corporation
- --------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
51
<PAGE> 53
/s/ HERVE TAINTURIER /s/ PHILIPPE POULETTY
- ------------------------------- --------------------------------
Represented by Herve Tainturier Represented by Philippe Pouletty
52
<PAGE> 54
AMENDMENT NO. 4 TO THE MASTER AGREEMENT
DATED JUNE 10, 1998
Between the undersigned:
1. SangStat Medical Corporation, a corporation existing and organized
under the laws of the State of Delaware and having its principal place
of business at 1505 Adams Drive, Menlo Park, CA 94025, USA, duly
represented by Doctor Philippe Pouletty, its Chief Executive Officer,
hereinafter referred to as "BUYER" or "SMC"
ON THE FIRST PART
And:
2. Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux Connaught
company and a French "Societe Anonyme" having its registered office at
58 Avenue Leclerc, 69007 Lyon, France, duly represented by Mr. Herve
Tainturier, duly empowered for the purpose hereof,
hereinafter referred to as "SELLER" or "PCM"
ON THE SECOND PART,
Buyer and Seller are hereinafter referred to as the "PARTIES" or individually a
"PARTY".
WHEREAS:
Whereas the Parties have signed on the 10th of June 1998 an agreement entitled
Master Agreement,
Whereas the Parties have amended the Master Agreement through three amendments
dated June 10, 1998 and July 31, 1998,
Whereas the Parties agreed to amend this Master Agreement through the present
amendment,
THE PARTIES AGREED TO AMEND THE MASTER AGREEMENT AND THE AMENDMENTS TO THE
MASTER AGREEMENT DATED JUNE 10, 1998 AND JULY 31, 1998 AS FOLLOWS:
53
<PAGE> 55
The paragraph (ii) of Article 4.l.3 of the Master Agreement and the last
paragraph of section 3 of the amendment to the Master Agreement dated June 10,
1998 are replaced by:
"(i) Buyer shall, in addition, have the right, for 12 Business Days
following the Filing Date to make review of the valuation of the
assets and liabilities in the Partial Business Contribution
Agreement it would estimate appropriate (the "SECOND DUE
DILIGENCE PERIOD").
Upon expiration of the Second Due Diligent period, that is to
say at the latest on the 10th September 1998 at 11:59 p.m.
California time, Buyer shall remit to Seller a certificate
acknowledging the completion to its satisfaction of such due
diligence in the form of the Affidavit 2, provided that if Buyer
does not deliver the Affidavit 2, buyer shall inform Seller in
writing at the same date of its reasons for not delivering the
Affidavit 2."
Section 8 of the amendment to the Master Agreement dated July 31, 1998 shall be
deemed to be modified to the extent necessary to make it consistent with this
amendment no. 4.
The Parties agreed that this amendment no. 4 is a part of the Master Agreement
dated June 10, 1998. Any provision of the Master Agreement and of the amendments
to the Master Agreement not expressly modified by this amendment no. 4 shall
remain unchanged. All Exhibits shall be deemed to be modified to the extent
necessary to make each of them consistent with this amendment no. 4. Capitalized
terms of this amendment no. 4 shall have the meaning set forth in the Master
Agreement.
Executed in Lyon
In two originals
On September 9, l998
Pasteur Merieux Serums & Vaccins SangStat Medical Corporation
/s/ HERVE TAINTURIER /s/ PHILIPPE POULETTY
- ------------------------------- --------------------------------
Represented by Herve Tainturier Represented by Philippe Pouletty
54
<PAGE> 56
[Exhibit 2.1.1 a)]
LIST OF EMPLOYEES
55
<PAGE> 57
[Exhibit 2.1.1 c)]
LIST OF EMPLOYEES (MANUFACTURING)
56
<PAGE> 58
[Exhibit 2.1.2 b) (i)]
FORM OF KNOW-HOW LICENSE AGREEMENT
57
<PAGE> 59
[Exhibit 2.1.1 b) (ii)]
FORM OF COMMERCIAL LEASE AGREEMENTS AND OF SIDE-LETTER
58
<PAGE> 60
[Exhibit 2.1.2 b) (ii-2)]
SELLER'S INVESTMENT ON V3BIS BUILDING (AVANT-PROJET)
59
<PAGE> 61
[Exhibit 2.1.2 b) (iii-1)]
FORM OF SERVICE AGREEMENT FOR MANUFACTURING
60
<PAGE> 62
[Exhibit 2.1.2 b) (iii-2)]
FORM OF EQUINE PLASMA SUPPLY AGREEMENT
61
<PAGE> 63
[Exhibit 2.1.2. b) (iii-3)]
FORM OF SITE SERVICE AGREEMENT
62
<PAGE> 64
[Exhibit 2.1.3]
DISTRIBUTION AGREEMENT FOR MULTITEST
63
<PAGE> 65
[Exhibit 2.1.3-2]
FORM OF LETTER OF ASSIGNMENT (CELIPTIUM)
64
<PAGE> 66
[Exhibit 2.1.4]
LIST OF GENERAL SERVICES
65
<PAGE> 67
[Exhibit 2.2]
FORM OF PARTIAL BUSINESS CONTRIBUTION AGREEMENT
66
<PAGE> 68
[Exhibit 2.2.1 b)]
FORM OF LETTER OF RHONE-POULENC PHARMA S.A.
67
<PAGE> 69
[Exhibit 2.2.3 d)]
FORM OF COMPLETION ACKNOWLEDGMENT
68
<PAGE> 70
[Exhibit 3.2.1 a)]
FORM OF ESCROW AGREEMENT
69
<PAGE> 71
[Exhibit 3.2.1 b)]
CALCULATION FORMULA OF DIRECT COST
70
<PAGE> 72
[Exhibit 4.1.3]
DUE DILIGENCE LIST
71
<PAGE> 73
[Exhibit 4.1.3 (i)]
FORM OF AFFIDAVIT
72
<PAGE> 74
[Exhibit 4.2.2]
FORM OF AMENDMENT TO THE MANUFACTURING AND SUPPLY AGREEMENT OF OCTOBER 13, 1993
73
<PAGE> 75
[Exhibit 5.2.2]
STEPS WITH FRENCH MEDECINE AGENCY (AGENCE DU MEDICAMENT)
74
<PAGE> 76
[Exhibit 8]
FORM OF SHARE PURCHASE AGREEMENT
75
<PAGE> 77
SHARE PURCHASE AGREEMENT
BY AND AMONG
PASTEUR MERIEUX SERUMS & VACCINS, S.A.
AND
SANGSTAT MEDICAL CORPORATION
1
<PAGE> 78
TABLE OF CONTENTS
<TABLE>
<S> <C>
Whereas..................................................................................................5
A. Definitions.........................................................................................6
B. Headings...........................................................................................10
C. Extended Meanings..................................................................................10
D. Accounting Principles..............................................................................10
1. Purchase and Sale of Shares........................................................................11
1.1 Purchase and Sale of Shares...............................................................11
1.2 Conditions Precedent......................................................................17
1.3 Closing...................................................................................20
2. Representations and Warranties of PMC..............................................................23
2.1 Organization, Good Standing and Qualification.............................................23
2.2 Shares....................................................................................23
2.3 Subsidiaries..............................................................................24
2.4 Authorization.............................................................................24
2.5 Governmental Consents and Authorizations..................................................24
2.6 Financial Information.....................................................................24
2.7 Receivables...............................................................................25
2.8 Compliance With Law.......................................................................25
2.9 Necessary Assets; Entire Business.........................................................25
2.10 Operating Condition.......................................................................26
2.11 Litigation................................................................................26
2.12 Patents and Trademarks....................................................................26
2.13 No Conflict or Default....................................................................27
2.14 Third Party Consents......................................................................27
2.15 Finders' Fees.............................................................................27
2.16 Certain Payments..........................................................................27
2.17 Permits...................................................................................27
2.18 Complete Disclosure.......................................................................28
2.19 Title to Property and Assets..............................................................28
2.20 Changes...................................................................................28
2.21 Tax Returns, Payments and Elections.......................................................29
2.22 Inventory.................................................................................29
2.23 Product Liability.........................................................................30
2.24 Employees.................................................................................30
2.25 Contracts in General......................................................................31
2.26 Contracts Outside the Ordinary Course of Business,
Contracts with Shareholders...............................................................32
2.27 Insurance.................................................................................32
2.28 Scope and Accuracy of the Representations.................................................32
</TABLE>
2
<PAGE> 79
<TABLE>
<S> <C>
3. Representations and Warranties of Buyer............................................................33
3.1 Authorization.............................................................................33
3.2 Organization..............................................................................33
3.3 Non-Violation.............................................................................33
4. Covenants..........................................................................................33
4.1 Covenant on Conditions Precedent / Contribution Agreement.................................33
4.2 Obligation to Cooperate...................................................................34
4.3 Interim Agreements........................................................................37
4.4 Management of the Business and the Company................................................37
4.5 Status of Mr. R. Labatut (R.L.)...........................................................38
4.6 Non-Competition/Non-Solicitation..........................................................38
5. Indemnification....................................................................................40
6. Miscellaneous......................................................................................44
6.1 Successors and Assigns....................................................................44
6.2 Governing Law and Jurisdiction............................................................44
6.3 Expenses..................................................................................44
6.4 Amendments and Waivers....................................................................45
6.5 Severability..............................................................................45
6.6 Press Release.............................................................................45
6.7 Buyer's Right of Substitution.............................................................46
6.8 Termination...............................................................................46
6.9 Notices...................................................................................46
6.10 Force Majeure.............................................................................47
7. Closing Deadline...................................................................................47
8. Confidentiality....................................................................................48
Exhibits
Exhibit 1.1.1(a) Form of Escrow Agreement
Exhibit 1.1.1(b) Calculation Formula of Direct Costs
Exhibit 1.1.1 (c)(i)(a) Form of Service Agreement for the Manufacturing
Exhibit 1.1.4 (i) Form of Letter of Credit
Exhibit 1.1.4 (i-2) Form of Certificate
Exhibit 1.2.1(a) Form of Partial Business Contribution Agreement
Exhibit 1.2.1(c) Due Diligence List
Exhibit 1.2.1(c)(i) Form of Affidavit 1/Form of Affidavit 2
Exhibit 1.2.2(b) Form of Amendment to the Manufacturing and Supply Agreement of October 13, 1993
Exhibit 1.3.1 (a)(i) Form of Reiteration
Exhibit 2 Schedule of Exceptions
</TABLE>
3
<PAGE> 80
<TABLE>
<S> <C>
Exhibit 2.5(a) Exceptions to Article 2.5 (licenses)
Exhibit 2.5(b) Permits and Authorizations
Exhibit 2.6 Management Accounts
Exhibit 2.9 List of General Services
Exhibit 2.11 Disputes with Employee Committee and Work Council
Exhibit 2.12 Exceptions to Article 2.12 (outstanding options, licenses or agreements)
Exhibit 2.14 Third Party Consents
Exhibit 2.17 List of Licenses Held by Third Party Distributors
Exhibit 2.24(a) List of Employees
Exhibit 2.24(h) Pension and Employee Insurance Plans
Exhibit 2.24(i) Loans to Employees, agents or representatives
Exhibit 2.26 Contracts Outside the Ordinary Course of Business
Exhibit 4.2.2 Steps with French Medicine Agency (Agence du Medicament)
Exhibit 6.6 Press Release
</TABLE>
4
<PAGE> 81
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT is made as of the 10th day of June, 1998,
by and among Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux Connaught
company and a French Societe Anonyme having its registered office at 58 Avenue
Leclerc, 69007 Lyon, France, duly represented by Mrs. Oleanda Izquierdo pursuant
to a power of attorney granted by Mr. Jean-Jacques Bertrand, its Chairman and
Chief Executive Officer ("PMC" or "Seller") and SangStat Medical Corporation, a
corporation existing and organized under the laws of the State of Delaware and
having its principal place of business at 1505 Adams Drive, Menlo Park,
California, 94025 USA, duly represented by Mr. Robert Floc'h pursuant to a
resolution of the board of directors ("SMC" or "Buyer"), in relation to the sale
of the shares of IMTIX-SangStat, S.A.S., a French corporation to be registered
in the form of a societe par actions simplifiee (the "Company").
Buyer and Seller are hereinafter collectively referred to as the
"Parties" or individually as a "Party".
WHEREAS:
WHEREAS SMC is a specialty pharmaceutical company applying a disease management
approach to improve the outcome of organ transplantation;
WHEREAS the mission of PMC is to contribute to the protection and maintenance of
human health by creating superior immunological products for the prevention and
treatment of infectious diseases and cancers;
WHEREAS PMC, among its other activities, carries on the business of researching,
developing, manufacturing, marketing and distributing bio-pharmaceutical
products used in organ transplantation in humans through its division known as
IMTIX Pasteur Merieux Connaught Transplantation;
WHEREAS PMC's strategic intent is to focus on its core business, mainly
bio-pharmaceutical products for active immunization against infectious diseases
and immunotherapy of cancers;
WHEREAS SMC's strategic intent is to develop its business throughout the whole
spectrum of transplantation indications, products and services;
WHEREAS SMC and PMC are currently parties to a development and distribution
agreement relating to transplantation products pursuant to which SMC is actively
involved in the clinical development and registration of certain transplantation
products;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties and subject to the conditions precedent contained
herein,
5
<PAGE> 82
THE PARTIES HEREBY AGREE AS FOLLOWS:
A- Definitions
- "Actual Sales" shall have the meaning ascribed to it in Article
1.1.1 c)(ii) hereafter;
- "Affidavit" shall mean a letter from the Buyer in the form of
Exhibit 1.2.1(c)(i) hereto to the Seller indicating that the
Initial Due Diligence is satisfactory to the Buyer (Affidavit 1)
and that the Second Due Diligence is satisfactory to the Buyer
(Affidavit 2);
- "Affiliate" shall mean, in relation to any entity, any other
entity which directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with such entity. For the purposes of this definition,
"control" shall be defined by reference to Article 355-1 of the
French Company Act dated July 24, 1966;
- "Agreement" shall mean this Share Purchase Agreement, together
with all its Exhibits;
- "Agreements" shall mean collectively this Agreement, the Ancillary
Agreements and the Partial Business Contribution Agreement;
- "Ancillary Agreements" shall mean collectively the following
agreements, which the Parties agree shall be part of the overall
Transaction:
- Know-How License Agreement
- Service Agreement for the Manufacturing of Thymoglobuline and
Lymphoglobuline
- Commercial Lease Agreements
- Site Service Agreement
- Equine Plasma Supply Agreement
- Distribution Agreement for Multitest;
- "Anniversary Date(s)" shall mean the date(s) set forth in the
schedule mentioned in Article 1.1.1(c)(ii) hereafter;
- "Assets" shall mean those assets listed in the Partial Business
Contribution Agreement;
- "Business" shall mean the IMTIX Business as described in the
Partial Business Contribution Agreement;
6
<PAGE> 83
- "Business Day" shall mean any day which is not a Saturday, a
Sunday or a holiday in France or in the U.S.;
- "Change of Control" shall have the meaning ascribed to it in
Article 1.1.4 (iii) hereafter;
- "Claim" shall have the meaning ascribed to it in Article 5 b)
hereafter;
- "Closing" shall mean the sale of the Shares by PMC to Buyer and
the settlement of the Closing Payment of $12 (twelve) million US
Dollars by Buyer to PMC which shall take place on the Closing Date
as set forth in Article 1.3 hereafter;
- "Closing Date" shall have the meaning ascribed to it in Article
1.2.2 a) hereafter;
- "Closing Deadline" shall mean December 31, 1998;
- "Commercial Lease Agreement" shall mean the commercial lease
agreement to be executed on the Closing Date between PMC and the
Company setting forth the terms and conditions of the lease by PMC
to the Company of the real estate relating to the C4 Building and
V3 bis Building;
- "Contribution Valuations" shall have the meaning ascribed to it in
Article 2.6 hereafter;
- "Damages" shall have the meaning ascribed to it in Article 5 a)
hereafter;
- "Delivery Date" shall have the meaning ascribed to it in Article
1.1.2 b) hereafter;
- "Direct Costs" shall have the meaning ascribed to it in Article
1.1.1 b) hereafter;
- "Distribution Agreement for Multitest" shall mean the distribution
agreement to be executed between PMC and the Company on the
Closing Date setting forth the terms and conditions of the
distribution by the Company of Multitest which is and will be
manufactured by PMC;
- "Employees" shall have the meaning ascribed to it in Article 2.24
hereafter;
- "Environmental and Safety Law" shall have the meaning ascribed to
it in Article 2.8 hereafter;
- "Equine Plasma Supply Agreement" shall mean the equine plasma
supply agreement to be executed on the Closing Date between PMC
and the Company setting forth the terms and conditions of the
supply by PMC to the Company of equine plasma for Lymphoglobuline
(R) manufacturing;
7
<PAGE> 84
- "Escrow Agreement" shall mean the escrow agreement to be executed
between Buyer, Seller and BNP 39, rue Grenette, 69002 Lyon, acting
as escrow agent, on the Filing Date, substantially in the form of
Exhibit 1.1.1 a) hereto;
- "Filing Date" shall have the meaning ascribed to it in Article
1.1.1 a) hereafter;
- "First Notice of Claim" shall have the meaning ascribed to it in
Article 5 b) hereafter;
- "Fixed Price" shall have the meaning ascribed to it in Article
1.1.1 hereafter;
- "General Services" shall mean the general services set forth in
Exhibit 2.9 hereto;
- "IMTIX Products" shall mean those products listed in the Form of
the Partial Business Contribution Agreement set forth in Exhibit
1.2.1 (a) hereto;
- "Initial Due Diligence Period" shall have the meaning ascribed to
it in Article 1.2.1 c) (i) hereafter;
- "Interim Agreements" shall have the meaning ascribed to it in
Article 4.3 hereafter;
- "Know-How License Agreement" shall mean the know-how license
agreement to be executed on the Closing Date between PMC and the
Company setting forth the terms and conditions of the license by
PMC to the Company of any and all know-how non-specific to the
Business but necessary to operate the Business;
- "Laws" shall have the meaning ascribed to it in Article 2.8
hereafter;
- "Management Accounts" shall have the meaning ascribed to it in
Article 2.6 hereafter;
- "Management Committee" shall have the meaning ascribed to it in
Article 4.2.4 hereafter;
- "Minimum Reference Sales" shall have the meaning ascribed to it in
Article 1.1.1(c)(ii) hereafter;
- "Net Sales" shall have the meaning ascribed to it in Article 1.1.2
hereafter;
- "Partial Business Contribution" shall mean the contribution to be
made by PMC to the Company in accordance with the Partial Business
Contribution Agreement (as defined hereafter);
- "Partial Business Contribution Agreement" shall mean the partial
business contribution agreement (traite d'apport partiel d'actif)
to be executed substantially in
8
<PAGE> 85
the form of Exhibit 1.2.1(a) hereto between PMC and the Company
setting forth the terms and conditions of the contribution by PMC
to the Company of the IMTIX Business;
- "Payments" shall have the meaning ascribed to it in Article 1.1.1
a) hereafter;
- "Payment Date(s)" shall have the meaning ascribed to it in Article
1.1.1 a) hereafter;
- "Press Release" shall have the meaning ascribed to it in Article
6.6 hereafter;
- "Purchase" shall have the meaning ascribed to it in Article 1.1
hereafter;
- "Purchase Price" shall have the meaning ascribed to it in Article
1.1 hereafter;
- "Representatives" shall have the meaning ascribed to it in
Articles 4.6 d) and 8a) hereafter;
- "Retroactive Date" shall mean the first day of the month of the
Filing Date;
- "Schedule of Exceptions" shall have the meaning ascribed to it in
Article 2 hereafter;
- "Second Due Diligence Period" shall have the meaning ascribed to
it in Article 1.2.1 c) (ii) hereafter;
- "Second Notice of Claim" shall have the meaning ascribed to it in
Article 5(d)(i) hereafter;
- "Second Shareholder" shall mean Rhone-Poulenc Pharma S.A., an
Affiliate of Seller and French societe anonyme having its
registered office at 25 quai Paul Doumer, 92400 Courbevoie;
- "Service Agreement for Manufacturing" shall mean the service
agreement to be executed on the Closing Date between PMC and the
Company setting forth the terms and conditions of the rendering by
PMC for the Company of certain services required for the
manufacturing of Thymoglobuline and Lymphoglobuline;
- "Shares" shall mean all of the shares of the Company held by PMC
and the Second Shareholder at Closing and representing 100% of the
share capital (capital social) and voting rights of the Company;
- "Site Service Agreement" shall mean the site service agreement to
be executed on the Closing Date between PMC and the Company
setting forth the terms and conditions of the use by the Company
of PMC's site services;
9
<PAGE> 86
- "Subsidiaries" shall mean the 4 subsidiaries fully dedicated to
the distribution of IMTIX Products, which are IMTIX GmbH
(Germany), IMTIX B.V. (Netherlands), IMTIX Ltd (UK) and IMTIX Srl
(Italy);
- "Transaction" shall mean collectively the transactions
contemplated in the Agreements;
- "Transition Committee" shall have the meaning ascribed to it in
Article 4.2.3 hereafter;
- "Variable Price" shall have the meaning ascribed to it in Article
1.1.2 hereafter.
B- Headings
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "Agreement",
"hereof", "hereunder" and similar expressions refer to this Agreement and not to
any particular Article, Section or other portion hereof and include any
agreement supplemental hereto. Unless something in the subject matter or context
is inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections of this Agreement.
C- Extended Meanings
In this Agreement words importing the singular number only shall
include the plural and vice versa, words importing the masculine gender shall
include the feminine and neuter genders and vice versa and words importing
persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations.
D- Accounting Principles
Wherever in this Agreement reference is made to a calculation to be
made in accordance with generally accepted accounting principles, such reference
shall be deemed to be (i) accounting principles usually accepted such as defined
in the French "Nouveau Plan Comptable" and set up according to the
"recommandations de l'Ordre des Experts-Comptables francais," of the "Conseil
National de la Comptabilite" and of the "Compagnie Nationale des Commissaires
aux Comptes" or (ii) as far as the Subsidiaries are concerned, local generally
accepted accounting principles.
10
<PAGE> 87
1. Purchase and Sale of Shares.
1.1 Purchase and Sale of Shares. Subject to the terms and conditions of
this Agreement, in particular to the conditions precedent provided in Article
1.2 below, Buyer agrees to purchase at the Closing and PMC agrees to sell to
Buyer at the Closing, the Shares for the purchase price defined as follows (the
purchase of the Shares by Buyer being referred to hereafter as the "Purchase").
The sale of the Shares shall be made for a total price (the "Purchase
Price") payable by Buyer to Seller and consisting of the sum of a fixed price
(the "Fixed Price") and a variable price (the "Variable Price") defined
respectively in Articles 1.1.1 and 1.1.2 hereafter.
1.1.1 Fixed Price:
a) Payment Schedule
Subject to adjustments effected pursuant to Articles
1.1.1 b), c) and d) hereafter, the Fixed Price shall
be of a total amount of $33 (thirty three) million US
Dollars payable in several successive payments (the
"Payment(s)") in accordance with the following
schedule, it being specified that $12 (twelve)
million US Dollars shall, on the date on which the
draft Partial Business Contribution Agreement is
filed with the Commercial Court of Commerce (the
"Filing Date"), be placed in escrow pursuant to the
Escrow Agreement to be executed upon the Filing Date
in the form of Exhibit 1.1.1 a) attached hereto.
Dates set forth in this schedule shall hereafter be
referred to as the "Payment Date(s)".
<TABLE>
<CAPTION>
Payment
Payment Date (in US Dollars)
------------ ---------------
<S> <C>
Closing Date ("CD") $ 12.0 million (the "Closing Payment")
6 months after CD $ 1.5 million
12 months after CD $ 1.5 million
18 months after CD $ 1.5 million
24 months after CD $ 1.5 million
30 months after CD $ 3.0 million
36 months after CD $ 3.0 million
42 months after CD $ 2.5 million
48 months after CD $ 2.5 million
54 months after CD $ 2.0 million
60 months after CD $ 2.0 million
</TABLE>
Sums placed in escrow as provided hereabove shall be released
to the benefit of Seller upon Closing Date, or, should the
Purchase not take place because of the
11
<PAGE> 88
non-fulfillment prior to the Closing Deadline of any of the
conditions precedent referred to in Article 1.2 hereof, shall
be refunded to Buyer.
b) Adjustment of the Payments by reference to
Thymoglobuline (R) direct costs
The Payments due 12 months after Closing Date (for an
amount of $1,500,000 (one million five hundred
thousand) US Dollars) and 24 months after Closing
Date (for an amount of $1,500,000 (one million five
hundred thousand) US Dollars) shall however be
adjusted by reference to the average Thymoglobuline
Direct Costs (as defined hereafter) during the 12
month-period preceding each of these 2 dates in
accordance with the following table. For the purposes
hereof, "Direct Costs" shall mean a list of items of
French Francs amount computed on the basis of the
calculation formula set forth in Exhibit 1.1.1 b)
attached hereto with figures as of the Closing Date
as an example. In case of any dispute between the
Parties on this calculation of such amount, the
dispute shall be referred to an expert in accordance
with provisions of Article 1.1.1 c) (ii) hereafter.
<TABLE>
<CAPTION>
Impact on Payments
Condition (in US Dollars)
--------- ---------------
<S> <C>
if Direct Costs above [_____*] FF/vial Decrease by [$_____*] million
if Direct Costs between [_____*] FF/vial Decrease by [$_____*] million
if Direct Costs between [_____*] FF/vial Increase by [$_____*] million
if Direct Costs below [_____*] FF/vial Increase by [$_____*] million
</TABLE>
The Payments other than the two Payments referred to hereabove
shall not be affected by the Thymoglobuline (R) Direct Costs.
c) Other adjustment of the Payments
(i) The Payment normally due as of any Payment Date shall
be canceled and Buyer shall definitively be released
from making any such Payment, unless on any such
Payment Date:
(a) Seller is performing at least one (1) of the
services identified in the Service Agreement
for the Manufacturing attached hereto as
Exhibit 1.1.1 c)(i)(a) with respect to
Thymoglobuline, or if Seller is not
performing at least one (1) of the services,
such failure to perform is due to (i) an
event of force majeure, (ii) a request from
- ----------------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
12
<PAGE> 89
Buyer, (iii) or a termination of the Service
Agreement for the Manufacturing due to
Buyer's fault; or
(b) At least one (1) product license with
respect to Thymoglobuline is then issued and
valid in any E.U. country or in the U.S.A.,
provided that if no licenses are then issued
and valid, the reason for the failure to
maintain such license is caused, at least in
part, by the inability of Seller to perform
under the Service Agreement for the
Manufacturing of Thymoglobuline and is not
due to an event of force majeure.
(ii) Additionally, the Payment normally due as of any
Payment Date shall be canceled and Buyer shall
definitively be released from making such Payment, if
on any such Payment Date (or, if such Payment Date is
not an Anniversary Date as this term is defined in
the schedule hereafter, on the preceding Anniversary
Date), the Actual Sales (as defined hereafter) are,
despite reasonable commercial efforts of Buyer, lower
than the minimum reference sales set forth for that
date in the schedule hereafter, and, provided that
Buyer has not arbitrarily changed its allocation of
products to markets other than the E.U. and the
U.S.A. solely in order to avoid making Payments
hereunder.
<TABLE>
<CAPTION>
Anniversary Date Minimum Reference Sales of Thymoglobuline
---------------- -----------------------------------------
<S> <C>
12 months after Closing Date [_____*] vials
24 months after Closing Date [_____*] vials
36 months after Closing Date [_____*] vials
48 months after Closing Date [_____*] vials
60 months after Closing Date [_____*] vials
</TABLE>
It is understood between the Parties that:
- for the second Payment Date (6 months after Closing
Date), the minimum sales test shall be applied to the
6-month period preceding such date; as a result, no
payment shall be due on such date if Actual Sales on
this 6-month period are lower than [_____*] vials;
- for all Payment Dates which are not Anniversary Dates
of the Closing Date, the minimum sales test to be
referred to shall be as of the preceding Anniversary
Date.
- ----------------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
13
<PAGE> 90
For the purposes hereof, on each Anniversary Date of the
Closing Date, the Company will measure the total number of
Thymoglobuline (R) vials sold on the USA and European Union
market during the 12-month period preceding such date ( the
"Actual Sales").
Buyer shall maintain complete records of Actual Sales and
shall permit an independent certified public accountant from a
major international accounting firm ("CPA") appointed by
Seller to inspect and audit the Company's books and records
relating to Actual Sales upon 10 Business Days prior written
notice. The CPA shall report to Seller, with a copy to Buyer,
only the extent of any discrepancy between the Actual Sales
reported by Buyer and the amount of Actual Sales calculated by
CPA. Seller may exercise the rights hereunder only once each
calendar year and this right shall terminate 72 months after
the Closing Date. Seller will then have the right to notify to
Buyer, within 15 days from the remittance by CPA to Seller of
its report with a copy to Buyer, its decision to refer the
matter to Ernst & Young, for determining the Actual Sales
amount, acting as an expert pursuant to the provisions of
Article 1592 of the French Civil Code, jointly appointed
between the Parties or, in case of default by such expert, to
any other expert which shall be appointed by the President du
Tribunal de Grande Instance de Paris at the request of the
most diligent party (the "Expert"). The Expert shall be fluent
in both English and French. The Parties undertake to fully
cooperate with the Expert. The Expert shall be instructed to
render the report within one (1) month of referral to him. The
Expert's report shall be binding on the Parties. The Expert's
fees shall be borne by Seller unless the valuation effected by
the Expert differs by more than 3% (three percent) from the
initial valuation of Buyer, in which case Buyer shall bear the
costs. Seller and Buyer shall obtain no later than the Closing
Date a letter by Ernst & Young stating its approval to this
assignment.
d) Additional Readjustment of the Payments
In the event that the Company is not allowed by the German
regulatory authorities to distribute on a usual commercial
basis Thymoglobuline for the German market by September 30,
1998, subsequent Payments shall be reduced by [$__________
(_____)]* US Dollars per month. Payment reduction will not be
made in any month in which batches of Thymoglobuline in
adequate amounts to reasonably address the German market
opportunity are released for sale prior to the license being
renewed by the German regulatory authorities. In no event
shall the cumulative amount of the reduction exceed
[$__________ (_____)]* US Dollars, nor shall there be any
Payment reductions after September 30, 2000.
- ----------------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
14
<PAGE> 91
Additionally, in the event that the U.S. approval for
Thymoglobuline has not been granted by December 31, 1998 and
the only remaining blocking issue for non-approval is due to
manufacturing, chemistry, control or site inspection issues
("ELA related") identified in the previous FDA deficiency
letter dated January 16, 1998 or Form 483 dated January 16,
1998, the FDA letter dated March 26, 1998 and subsequent
letters relating to such issues, subsequent Payments shall be
reduced by [$__________ (_____)]* US Dollars per month until
such time as the U.S. approval is granted. In no event shall
the cumulative amount of the reduction exceed [$__________
(_____)]* US Dollars.
If the Parties disagree on whether the failure to receive U.S.
approval is due to an ELA related matter as set forth above,
or if Seller considers that the inability to resolve the issue
is attributable to Buyer, the Parties shall submit the
question to an expert in U.S. regulatory matters whose
decision shall be binding on the Parties and which shall be
jointly appointed by the Parties or, failing such joint
appointment within 15 days from the occurrence of such
disagreement, by the President du Tribunal de Grande Instance
de Paris ruling under the refere proceedings upon the request
of the most diligent party.
1.1.2 Variable Price:
The Variable Price, which shall be payable by wire transfer within 60
days of each Payment Date, shall consist of a first part based on the amount of
Lymphoglobuline Net Sales (a) and a second part based on Antilfa Net Sales (b),
and payable as set forth hereafter. For the purposes of this Agreement, "Net
Sales" shall mean the amount actually received on sales of Lymphoglobuline or
Antilfa by the Company or by its Affiliates, or by its authorized sub-licensees
(it being specified that IMTIX Products manufactured for clinical trial shall
not be taken into account for the calculation of Net Sales) to third parties
during the preceding six-month period less deductions for (i) normal and
customary trade, quantity and cash discounts and emergency drug releases where
such releases are provided by the Company or its Affiliates without charge, (ii)
amounts repaid or credited by reason of rejection or return; (iii) V.A.T. on
sales, withholding and excise taxes and duties levied on and/or other
governmental charges made as to production, sale, importation, transportation,
delivery or use paid by or on behalf of the Company, and (iv) transportation
costs including insurance.
a) Payments on Lymphoglobuline Net Sales shall be equal to 8% of
the amount of such Net Sales every six months for a period of
10 years as from the Closing Date.
- ----------------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
15
<PAGE> 92
b) Payments on Antilfa for a period of 10 years starting on the
date referred to hereafter as the "Delivery Date" which shall
be the earlier of (i) the date of delivery by FDA of the BLA
marketing approval in the USA for solid organ transplants for
Antilfa and (ii) the date of delivery of the equivalent
marketing approval in European Union according to the
centralized market approval procedure or in any E.U. country
if a marketing approval is delivered for such country only,
shall be calculated as follows:
(i) One-time payment of [$__________ (_____*)] million US
Dollars upon Delivery Date;
(ii) a payment based on Antilfa Net Sales equal to (i)
[_____*] of the amount of such Net Sales by the
Company and its Affiliates, or (ii) if Net Sales are
made by the Company's authorized sublicensees,
[_____*] of such Company's authorized sublicensees
Net Sales, every six months for a period of 10 years
as from the Delivery Date.
1.1.3 If, at the time the payment of a part of the Purchase
Price becomes due, an arbitration award rendered pursuant to Article 6.2
hereafter shall have upheld (i) a claim by Buyer under this Agreement, or (ii) a
claim by Buyer based on any other breach of representations, warranties or
covenants by Seller to Buyer under any agreement referenced herein, Buyer shall
be entitled to set-off the payment of such part of the price against the amount
of such claim.
1.1.4 Issue of a security interest
(i) In order to secure Payments hereunder, Buyer shall
provide that a letter of credit from Nationsbank, or
a financial institution of equivalent standing, in
the amount of $6 (six) million US Dollars be issued
in favor of Seller for a period of 21/2years
beginning on the Closing Date substantially in the
form attached hereto as Exhibit 1.1.4 (i). Such
letter of credit shall provide that Seller shall be
entitled to payment after delivering a certificate
also in the form attached in Exhibit 1.1.4 (i-2),
executed solely by Seller to Nationsbank. At the
expiration of such 21/2year period, Buyer shall
provide that a new letter of credit in the amount of
$4 (four) million US Dollars be issued in favor of
Seller for an additional 21/2year period in the form
attached hereto as Exhibit 1.1.4 (i). The transaction
costs of issuing such letters of credit shall be
shared equally between Buyer and Seller, and Seller
agrees to immediately reimburse Buyer for 50% of such
costs with Seller's portion not to exceed 0.5% of the
secured amount per year upon
- ----------------------------------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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invoice, provided that Buyer shall remain solely
responsible for any pledge of assets associated
therewith.
(ii) In the event that Buyer is unable or fails to make
Payments, and such failure is not cured within 30
days of written notice from Seller to Buyer of such
failure, then at such time SMC shall immediately
issue to Seller up to 100,000 (one hundred thousand)
shares of the common stock of SMC at no cost to
Seller, such number of shares to be proportionally
adjusted in case of stock splits, dividends and
recapitalization. SMC shall at all times keep such
100,000 (one hundred thousand) shares reserved and
available for immediate issuance to Seller. In order
to determine the amount paid through the issuance of
100,000 (one hundred thousand) shares, the shares
shall be valued at their fair market value at the
time of issuance. However, the valuation shall only
be definitive at the time Seller has been able to
sell the shares and to recover the corresponding
price. Such recovered price shall be the sole amount
to be offset against failed Payments. Any recovered
amount in excess of the failed Payments shall not be
reimbursed to Buyer, and shall be considered as an
indemnification for late payment. The recovery of any
failed Payment not recovered, in full or in part,
through the sale of shares will be pursued by any
other means. At the Closing Date, SMC shall deliver
to Seller a certificate stating the fair market value
of the 100,000 (one hundred thousand) shares as of
the Closing Date, and the corresponding percentage in
SMC's capital stock on a fully diluted basis.
(iii) In the event that there is a "Change of Control" (as
defined below) of either the Company or Buyer
involving an unrelated third party after the Closing
Date, Buyer will provide that a letter of credit be
issued by Nationsbank, or a financial institution of
equivalent standing, in favor of Seller with respect
to all unpaid Payments as of the date of the Change
of Control. For purposes of this article, a "Change
of Control" shall mean a sale of substantially all of
the assets of either the Company or Buyer to a
non-Affiliate of Buyer or any transfer by way of
contribution, merger or reorganization of more than
50% of the voting power of the capital stock of
either the Company or Buyer to a non-Affiliate of
Buyer. In the event that such letter of credit has
been issued, clauses (i) and (ii) hereof
automatically terminate.
(iv) In no event shall Seller be entitled to cumulative
remedies and guarantees pursuant to this Article
1.1.4 in an amount which exceeds the amount of unpaid
Payments, plus any interest accrued at the French
legal rate (taux d'interet legal) between the Payment
Date and the effective date of Payment.
1.2 Conditions Precedent.
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1.2.1 Conditions Precedent
The completion of the Purchase shall be subject to the
fulfillment, no later than the Closing Deadline, of the following conditions
precedent which are cumulatively stipulated for the benefit of Buyer, and which
only Buyer may therefore waive, except conditions stipulated under a) and b)
hereafter, which neither Party can waive.
a) Completion of the Partial Business Contribution by Seller to
the Company:
The Business shall have been contributed to the Company under
a Partial Business Contribution (Apport Partiel d'Actif)
meeting the following conditions. The Partial Business
Contribution shall have been duly authorized by the
shareholders of Seller and the Company and effected in
application of the Partial Business Contribution Agreement
(Traite d'apport partiel d'actif) substantially in the form of
Exhibit 1.2.1(a) hereto and with valuations of assets and
liabilities which will have been submitted to Buyer at the
beginning of the Second Due Diligence Period hereafter. It is
understood that such condition precedent shall not be
fulfilled before the completion of conditions precedent set
forth in Articles 1.2.1 b) and 1.2.1 c) hereafter.
b) Delivery by the General Manager of the French Medicine Agency
("Agence du Medicament") of (i) the authorization to operate
as a manufacturing pharmaceutical establishment ("Autorisation
d'Etablissement Pharmaceutique Fabricant") to the Company, and
(ii) the corresponding amendment to the existing Seller's
Autorisation d'Etablissement Pharmaceutique.
c) Completion of legal, technical and financial due diligence by
Buyer and its counsels satisfactory to Buyer on the items
listed in Exhibit 1.2.1 c) and on the latest available draft
of the Partial Business Contribution Agreement which will have
been sent to the prospective contribution auditor
("Commissaire a la Scission") and delivered to Buyer at the
latest 15 days prior to the expiration of the Initial Due
diligence Period as defined below, which due diligence shall
not have revealed an event which may materially adversely
affect the Business.
This due diligence will be carried out in two phases:
(i) Seller shall, within 15 days as from the date hereof,
set up a data room for a period of five Business
Days, unless Seller consents to an extension up to
three additional Business Days, which consent shall
not be unreasonably withheld, which data-room can be
located outside the premises of Seller, and
containing all documents required by Buyer as per the
list attached hereto as Exhibit 1.2.1 c) and due
diligence will be conducted by Buyer and its counsels
within 30 days following the day when all information
is available to Buyer (the "Initial Due Diligence
Period"). No copies shall be made of documents in the
data room without
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Seller's consent which shall not be unreasonably
withheld. All documents delivered by Seller pursuant
to a due diligence request shall be considered
Confidential Information as provided for in Articles
4.6 d) and 8) hereafter.
Upon expiration of the Initial Due Diligence Period,
Buyer shall remit to Seller a certificate
acknowledging the completion to its satisfaction of
the Initial Due Diligence in the form of the
Affidavit 1, provided that if Buyer does not deliver
the Affidavit 1, Buyer shall inform Seller in writing
at the same date of its reasons for not delivering
the Affidavit 1.
(ii) Buyer shall, in addition, have the right, for 5
Business Days following the Filing Date to make
review of the final valuation of assets and
liabilities in the Partial Business Contribution
Agreement it would estimate appropriate (the "Second
Due Diligence Period").
Upon expiration of the Second Due Diligence Period,
Buyer shall remit to Seller a certificate
acknowledging the completion to its satisfaction of
such due diligence in the form of the Affidavit 2,
provided that if Buyer does not deliver the Affidavit
2, Buyer shall inform Seller in writing at the same
date of its reasons for not delivering the Affidavit
2.
The Parties agree that the Purchase will enter into force without any
retroactive effect after the completion of the above conditions
precedent and on the date of fulfillment of the last of those
conditions.
1.2.2 Fulfillment
a) At the date of satisfaction of the last condition precedent to
be satisfied (the "Closing Date"), the Parties undertake to
proceed with the sale of the Shares and therefore to complete
the steps set forth in Article 1.3 hereafter subject to the
provisions of paragraphs b) and c) hereafter, and in no event
later than the Closing Deadline.
b) Buyer shall have no obligation to close and consummate the
Transaction if Buyer determines that a material adverse
change, whether legal, financial or of any kind, has occurred
in the Business, the Company or the Seller in connection with
the Business prior to the Closing Date. Buyer shall specify
such a material adverse change in writing to Seller. If Buyer
exercises its rights under this clause, Buyer will only be
allowed not to close the Purchase and shall not be allowed to
attempt to renegotiate the terms of the Transaction.
Additionally, an amendment to the existing Manufacturing and
Supply Agreement dated October 13, 1993 between the Parties in
the form attached hereto as Exhibit 1.2.2 b) shall
automatically become enforceable.
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c) Seller shall have no obligation to close and consummate the
Transaction if prior to the Closing Date:
(i) there is a Change of Control of Buyer;
(ii) Buyer becomes subject to voluntary or involuntary
bankruptcy under applicable law;
(iii) Buyer is enjoined from conducting all clinical trials
in the United States of America;
(iv) an event has occurred which makes the occurrence of
either (i), (ii) or (iii) above unavoidable.
1.3 Closing.
On the Closing Date, on which the transfer of title of
ownership of the Shares from Buyer to Seller shall occur, the following steps
shall be completed simultaneously:
1.3.1 The Parties will exchange the following documents:
a) PMC will provide Buyer with the following documents:
(i) the share transfer forms ("ordres de mouvement") in
favor of Buyer, duly signed by PMC and the Second
Shareholder, as well as evidence that the transfer of
the Shares has been inscribed in the register of
transfers of the Company as well as a duly signed
reiteration in French of this Agreement (such
document not being a translation but a summarized
document referring only to the Parties, the context
of the sale, the price and object of the sale) for
purposes of registration with French tax authorities,
in the form attached in Exhibit 1.3.1 a) (i) hereto;
(ii) the corporate books of the Company (register of
transfers, shareholders accounts, minutes of the
board of directors and of the general meetings of the
shareholders, attendance registers of the board of
directors and attendance sheets of the shareholders'
meetings);
(iii) relevant extracts of the minutes of the meetings of
PMC's Employee Committee ("Comite d'Entreprise") and
Central Employee Committee ("Comite Central
d'Entreprise") consulted on the Transaction;
(iv) the minutes (or relevant extracts of the minutes) of
(a) the board of directors meetings of PMC approving
the Transaction, this Agreement, and the Partial
Business Contribution Agreement to be filed with the
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Commercial Court of Commerce, (b) the board of
directors (or other competent corporate body)
meetings of the Company approving the Partial
Business Contribution Agreement to be filed with the
Commercial Court of Commerce, (c) the shareholder's
meetings of each of PMC and the Company deciding the
Partial Business Contribution to the Company, and (d)
the meeting of the board of directors (or other
competent corporate body) of the Company and the
Subsidiaries, if applicable, each convening an
ordinary shareholders meeting for the purpose of
electing new directors and new statutory auditors, as
applicable, which election shall take place
immediately after completion of the sale;
(v) letters of resignation of, all members of the board
of directors, if any, the President of the Company
and of the Subsidiaries (if requested by Buyer),
specifying in addition that the Company or the
Subsidiaries do not owe them any moneys or any other
compensation ;
(vi) letters of resignation of the statutory auditors of
the Company and the Subsidiaries, as applicable;
(vii) a copy certified true and accurate of the Partial
Business Contribution Agreement duly signed;
(viii) all documents from the German regulatory authorities
evidencing the renewal of the Thymoglobuline (R)
market approval and from the U.S. regulatory
authorities evidencing the approval of Thymoglobuline
(R) in the U.S., it being understood that, should
such renewal and authorization not be granted as of
the Closing Date, Seller covenants to remit to Buyer
copy of the same documents as soon as they are
available to it and provisions of Article 1.1.1 d)
shall apply;
(ix) all documents evidencing (a) the delivery by the
General Manager of the French Medicine Agency
("Directeur General de l'Agence du Medicament") of
the authorization to operate the Company as a
manufacturing pharmaceutical establishment and the
corresponding amendment to the existing Seller's
authorization (which corresponds to condition
precedent of Article 1.2.1(b) hereabove), (b) the
delivery by the General Manager of the French
Medicine Agency ("Directeur General de l'Agence du
Medicament") of the authorization to transfer all the
French "Autorisations de Mise sur le Marche" related
to the IMTIX Products to the Company, and (c) the
delivery by any foreign public authorities of
approvals to transfer to the Company foreign licenses
on IMTIX Products, it being understood that, for
those of the approvals referred to in (b) and (c)
which would not be granted as of the Closing Date,
Seller covenants to remit to Buyer copy of the same
documents as soon as they are available to it and
provisions of Article 4.3 shall apply;
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(x) a certified copy of the declaration filed with the
competent council of the Pharmacists' Association
("Ordre des Pharmaciens") in connection with the
change of control of the Company, in compliance with
Article R.5015-17 of the French Public Health Code
("Code de la Sante Publique");
b) Buyer will provide PMC with the following documents:
(i) a certified copy of the declaration for foreign
investment to be filed by Buyer or its advisers, with
the French Treasury Department;
(ii) a Letter of Credit of an amount of $6,000,000 (six
million U.S. dollars) substantially in the form of
Exhibit 1.1.4 (i) hereto, as provided for under
Article 1.1.4 hereof;
(iii) three insurance certificates certifying that Buyer
has subscribed for insurance coverage for the Company
against (a) general and product liabilities, (b)
property and business interruption, and (c)
environmental liability (comparable and prorated to
PMC's external environmental insurance coverage) ;
1.3.2 The Parties will remit to the Escrow Agent a joint letter of
instruction, in the form specified under the Escrow Agreement,
giving instruction to the Escrow Agent to release the amount
of $12,000,000 (twelve million U.S dollars) held in escrow
since the Filing Date to Seller, in accordance with provisions
of Article 1.1.1 a) hereof.
1.3.3 The Escrow Agent shall remit to Seller the Payment of
$12,000,000 (twelve million U.S. dollars).
1.3.4 Buyer and Seller shall duly execute the Ancillary Agreements.
1.3.5 Buyer and Seller shall have obtained from Ernst & Young a
letter stating its approval to the assignment set forth in
Article 1.1.1 c) (ii) and Article 1.1.1. b) hereabove.
2. Representations and Warranties of PMC.
PMC hereby represents and warrants for itself, the
Subsidiaries and the Company to Buyer that, except as set forth on a Schedule of
Exceptions (the "Schedule of Exceptions") (attached hereto as Exhibit 2), and it
being understood that any representation made hereafter with respect to the
Company shall be deemed to have been made also with respect to PMC in relation
to the Business before the contribution to the Company of the Business and with
respect
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to the Subsidiaries, and that the following representations and warranties are
true and accurate as of the date hereof and shall be true and accurate as of the
Closing Date, on which date they will be deemed reiterated.
2.1 Organization, Good Standing and Qualification. PMC, the Company and the
Subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of France (or under the laws of their country of
location for the Subsidiaries) and have all requisite corporate power and
authority to own or lease and operate their properties and to carry on their
business. There has been no formal request for the annulment or dissolution of
the Company or any of the Subsidiaries, nor has any petition been filed with any
competent authorities requesting the initiation of any restructuring or
liquidation procedures, and none of the Company or any of the Subsidiaries is
insolvent.
2.2 Shares.
a) The Shares represents 100% of the share capital and of the
voting rights of the Company, fully paid and non-assessable
and were duly and validly authorized and issued in accordance
with the French Company Act n(degree) 66-537 dated July 24,
1966 as amended and the Decree n(degree) 67-236 dated March
23, 1967 as amended. The Shares will entitle Buyer to receive
all dividends distributed by the Company as of its
incorporation.
b) There are not any outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements for
the purchase or acquisition of any shares of the share capital
of the Company. The Company is not a party or subject to any
agreement or understanding, and there is no agreement or
understanding between any persons and/or entities, which
affects or relates to the voting rights or share capital of
the Company.
c) PMC and the Second Shareholder have good title to the Shares,
free and clear of any liens, encumbrances, equities and
claims, and full right, power and authority to effect the sale
and delivery of such Shares; upon the delivery of, against
payment for, such Shares pursuant to this Agreement, Buyer
will acquire good title thereto, free and clear of any liens,
encumbrances, equities and claims.
2.3 Subsidiaries. Other than the Subsidiaries, the Company does not presently
own or control, directly or indirectly, any interest in any other corporation,
association, grouping or partnership of whatever kind, including any "Groupement
d'Interet Economique", "Societe en Participation", "Societe Civile" or other
entity in which the liability of the members and partners is not limited to
their ownership interest, or other business entity. The Company is not a
participant in any joint venture, partnership, or similar arrangement. The
outstanding shares of the Subsidiaries are all duly and validly authorized and
issued and fully paid-up and were issued in accordance with the laws of their
country of location. These shares are free of all rights, charges, liens or
encumbrances whatsoever and there are not outstanding any options, warrants,
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rights (including conversion or preemptive rights) or agreements for the
purchase or acquisition of such shares except as contemplated under the
Agreements.
2.4 Authorization. All action on the part of the Company, its officers,
directors and shareholders and all action on the part of PMC, its officers,
directors and shareholders, necessary for the authorization and execution of the
Agreements, the performance of all obligations of the Company and PMC hereunder
and thereunder, and the sale of the Shares has been taken and this Agreement and
the other Agreements constitute valid and legally binding obligations of the
Company and PMC subject to Article 1.2.1 a), enforceable in accordance with
their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies. In particular, this Agreement has been duly authorized
by PMC's Board of Directors and PMC's Employee Committees ("Comites
d'Etablissement") and Work Council ("Comite Central d'Entreprise") have been
duly informed and consulted in compliance with provisions of the French Labor
Code.
2.5 Governmental Consents and Authorizations. Except as provided in Exhibit 2.5
(a) attached hereto, the Company and the Subsidiaries have been granted all
licenses, permits, authorizations and approvals from governmental or other
regulatory bodies (including in particular the ones set forth in Exhibit 2.5 (b)
which Exhibit contains a list of all permits and authorizations with respect to
their assets and the operation of the Business in relation to Thymoglobuline and
Lymphoglobuline) necessary to carry on the Business, and each of such permits is
currently valid and in full force and effect.
In addition, no consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
governmental or other authority on the part of the Company and the Subsidiaries
is required in connection with the consummation of the transactions contemplated
by the Agreements.
2.6 Financial Information. PMC's existing management accounts as already
provided relating to the Business as of December 31, 1997 attached hereto as
Exhibit 2.6 (the "Management Accounts") accurately describe and fairly present
the financial condition and operating results of the Business as of the date,
and for the period, indicated therein. The valuations of the assets and
liabilities of the Business attached to the Partial Business Contribution
Agreement (the "Contribution Valuations") as of the Retroactive Date accurately
describe and fairly present all the assets and liabilities attached to the
Business as of such date. The accounts of the Subsidiaries as of December 31,
1997 attached to the Partial Business Contribution Agreement shall have been or
have been duly established in accordance with all applicable legal and
administrative provisions and accounting principles and rules. They accurately
describe and fairly present the financial condition and operating results of the
Subsidiaries as of the dates, and for the periods, indicated therein. All
financial information previously provided by Seller to Buyer relating to the
Business is accurate in all material respects, provided however that no
representation or warranty is made with respect to financial and sales
projections other than that such projections represent Seller's best estimate
under the
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circumstances of what it reasonably believes. PMC does not make any other
representations or warranty regarding such financial and sales projections. All
expenses and financial undertakings (whether contingent or not) borne by the
Company and the Subsidiaries necessary to the operation of the Business are
properly accounted for in their accounts, and due provisions have been made by
the Company and the Subsidiaries for all charges relating to the Business, all
in accordance with the generally accepted accounting principles of the country
of location of the Company and the Subsidiaries.
2.7 Receivables. All accounts receivable arisen in the ordinary course of
business, have been collected or are collectible in the book amounts thereof and
none of such accounts receivable are subject to any material claim of offset,
recoupment, setoff, or counter-claim and neither the Company nor PMC nor the
Subsidiaries has any knowledge of any specific facts or circumstances (whether
asserted or unasserted) that would give rise to any such claim. The accounts
receivable have been accurately accounted and reserved in the Contribution
Valuations.
2.8 Compliance With Law. The use of the Assets and PMC's and the Company's and
the Subsidiaries' conduct of the Business is and has been in compliance, in all
material respects, with all applicable laws and regulations (each and all of the
foregoing being herein referred to as "Laws"), including Laws relating to the
pharmaceutical sector, employment, employment practices, labor and safety, and
Laws relating to the generation, handling, storage, release, discharge or
transportation of hazardous materials or substances or the environmental or
occupational health and safety ("Environmental and Safety Laws"), and the
Company and the Subsidiaries are not subject to any liability in connection with
any such Laws.
2.9 Necessary Assets; Entire Business. The present representation and warranty
2.9 shall be deemed only made as of the Closing Date. Except for the Excluded
Assets, as defined in the Partial Business Contribution Agreement, and for the
General Services, PMC has contributed to the Company the entire Business
(including any receivables from SangStat U.S. to PMC under the existing license
agreement which have become an asset of the Company) and the Assets constitute
all assets related to and necessary for the conduct of the Business. The said
contribution has been effected in accordance with the Partial Business
Contribution Agreement such as filed with the Court of Commerce. The Company has
not sold, leased or otherwise encumbered any of the Assets since the date of
said contribution, except under ordinary course of business. As a result, the
Company owns (or otherwise manages through the Ancillary Agreements) the entire
Business which, with the Ancillary Agreements and excluding the General Services
listed in Exhibit 2.9 hereto, constitutes a stand-alone business that will allow
the Company to conduct in a normal way the Business as it has been operated
until the date hereof and as it will be operated until the Closing Date.
2.10 Operating Condition. All of the tangible assets necessary for the operation
of the Business are suitable for the purposes for which they are used, are in
good operating condition and in reasonable repair (ordinary wear and tear
excepted).
2.11 Litigation. Neither PMC, the Company, the Subsidiaries, nor any of their
officers or directors is engaged in, or has received any threat of, any
litigation, arbitration, investigation, or
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other proceeding, at law or in equity, before any court, regulatory agency, or
other governmental authority, involving the Company, the Subsidiaries, the
Business or the Assets, the employees of the Business in a Business-related
matter, or the transactions contemplated by any of the Agreements. During the
process of consultation of the Employee Committees ("Comites d'Etablissement")
and Work Council ("Comite Central d'Entreprise") in relation to the Transaction,
no dispute has arisen other than as summarized in Exhibit 2.11 hereto. There is
no action, suit, proceeding, or investigation pending or to the knowledge of PMC
threatened against the Company, the Subsidiaries or their officers or directors
that questions the validity of any of the Agreements, or the right of the
Company or PMC, to enter into the Agreements (to the extent each is a party to
such agreements), to consummate the transactions contemplated hereby or thereby,
or that might result in any material adverse change in the Business, the Assets
or the results of operations or financial condition of the Business, the
Subsidiaries or the Company, each taken as a whole. Neither the Company, nor the
Subsidiaries, nor their officers or directors is bound by any judgment, decree,
injunction, ruling, or order of any court, governmental, regulatory or
administrative department, commission, agency or instrumentality or arbitrator,
that has or is reasonably likely to have a material adverse effect on the
Business, the Assets, or the results of operations or financial condition of the
Business, the Subsidiaries or the Company, each taken as a whole. Without
prejudice to the foregoing, PMC shall indemnify and hold Buyer harmless against
all Claims relating to the operation of the Business until the Closing Date, in
accordance with the terms of Article 5. Neither PMC, the Company, the
Subsidiaries nor any of their officers, directors has received any
correspondence, notice, request, or threat thereof, orally or in writing, from
any regulatory agency which could affect existing or future regulatory approvals
or licenses related to the Business or the Assets.
2.12 Patents and Trademarks. The Company, except for the name "SangStat" which
is part of the corporate name of the Company, and the Subsidiaries have
sufficient title and ownership of or appropriate licenses to all know-how,
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for their Business as
now conducted (including under the Know-How License Agreement) without any
conflict with or infringement of the rights of others, except for such items as
have yet to be conceived or developed. Except as provided in Exhibit 2.12
attached hereto, there are no outstanding options, licenses, or agreements of
any kind relating to the foregoing, nor is the Company, nor the Subsidiaries
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of any
other person or entity. Neither the Company, nor the Subsidiaries, nor PMC has
received any communications alleging that the Company, the Subsidiaries or PMC
has violated or would violate any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any
other person or entity.
2.13 No Conflict or Default. The execution of this Agreement or any of the other
Agreements by PMC or the Company or the Subsidiaries, nor compliance by PMC or
the Company or the Subsidiaries with the terms and provisions hereof and
thereof, including without limitation, the consummation of the transactions
contemplated hereby, will violate any statute, regulation, or ordinance of any
governmental authority, or conflict with or result in the breach of any term,
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condition, or provision of the Articles of Incorporation ("Statuts") of PMC, the
Company or the Subsidiaries or of any order, decree, legal obligation, to which
PMC, the Company or the Subsidiaries is a party or by which it or any of the
assets are or may be bound, or constitute a default (or an event which, with the
lapse of time or the giving of notice, or both, would constitute a default)
thereunder, where such violation, conflict and/or default could have a material
adverse effect on (i) the continued operation by Buyer of the Business after the
Closing on substantially the same basis as theretofore operated by PMC or the
Company or the Subsidiaries, (ii) the consummation of the transactions
contemplated by this Agreement or any of the other Agreements, or (iii) the
results of operations or financial condition of the Business or the Assets, or
result in the creation or imposition of any material lien, charge, or
encumbrance, or restriction with respect to any of the Assets, or give to any
third party any rights of termination, acceleration, or cancellation in or with
respect to the Assets.
2.14 Third Party Consents. Without prejudice to provision of Article 2.5
hereabove, no consent, approval or authorization of or registration,
qualification, designation, declaration, or filing with any third party, on the
part of PMC or the Company or the Subsidiaries is required in connection with
the consummation of the transactions contemplated hereunder, except as provided
in Exhibit 2.14, where the failure to obtain such consent, approval, and/or
authorization could have a material adverse effect on (i) the consummation of
the transactions contemplated by the Agreements or (ii) the Assets or the
Business.
2.15 Finders' Fees. No third party shall be entitled to receive any finder's
fees, fees for financial advisory services or similar compensation in connection
with the transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of the Company.
2.16 Certain Payments. To the knowledge of PMC, in connection with the Business,
neither the Company, nor the Subsidiaries, nor PMC with respect to the Business,
nor any person directly or indirectly on behalf of the Company, PMC with respect
to the Business and the Subsidiaries, has made or received any payment that was
not legal to make or receive.
2.17 Permits. Subject to licences held by the distributors which are listed in
Exhibit 2.17 hereto, the Company and Subsidiaries have all franchises, permits,
licenses, and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, or financial condition of the Company and
Subsidiaries, and the Company and Subsidiaries believe they can obtain, without
undue burden or expense, any similar authority for the conduct of its business
as planned to be conducted. The Company and the Subsidiaries are not in default
in any material respect under any of such franchises, permits, licenses, or
other similar authority.
2.18 Complete Disclosure. The Company and PMC have fully provided Buyer with all
the information that Buyer has requested and all information that the Company
and PMC, after due inquiry with all officers and directors involved in the
Business (including, but not limited to, manufacturing, QA/AC, regulatory,
marketing, sales, finance, administration, human resources in France and other
countries where the Business is operated), believe is material and related to
the
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Business. Neither this Agreement, or any of the other Agreements, nor any other
statements or certificates made or delivered in connection herewith contains any
untrue statement of a material fact.
2.19 Title to Property and Assets. The Company as of the Closing Date and the
Subsidiaries own their property and assets (including the Assets) free and clear
of all mortgages, liens, loans and encumbrances, except such encumbrances and
liens that arise in the ordinary course of business and do not materially impair
the Company's and Subsidiaries' ownership or use of such property or assets.
With respect to the property and assets it leases, the Company and Subsidiaries
are in compliance with such leases and, to the best of its knowledge, holds a
valid leasehold interest free of any liens, claims or encumbrances.
2.20 Changes. Since December 31, 1997 for the Subsidiaries and, for the Company,
since the Retroactive Date on which the Contribution Valuations will have been
established, there has not been, subject to decisions taken by the Management
Committee:
a) any change in the assets, liabilities or financial condition
of the Business, the Company or the Subsidiaries from that
reflected in the financial documents referred to in Article
2.6 hereabove, except changes in the ordinary course of
business that have not been, in the aggregate, materially
adverse;
b) any change in the Business and management of the Company (or
Subsidiaries) which have been carried on in the ordinary
course, in a reasonable manner, "en bon pere de famille" as it
is understood under French law, and in a consistent manner in
order to ensure the continuity of the Business, and the
Company and Subsidiaries have not entered into any agreement
or taken any decision outside the ordinary course of business;
c) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the Assets or
the Business or, any occurrence, circumstance, or combination
thereof which reasonably could be expected to result in any
such change;
d) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Business; or
e) any dividends, nor any distribution of any profits whatsoever;
f) any change in the Company's or the Subsidiaries' accounting
methods; any written off debts;
g) any granting by the Company or the Subsidiaries to any officer
or employee, any increase in compensation in any form, or any
severance or termination pay, any entering into by the Company
or the Subsidiaries of any employment agreement, any adoption
or amendment of any collective bargaining, bonus,
compensation,
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stock option, pension, retirement, deferred compensation or
other plan, agreement, trust, fund or arrangement for the
benefit of employees;
h) to the best of PMC and the Company's knowledge, any other
event or condition of any character that might materially and
adversely affect the Assets, Business or the Company and
Subsidiaries (as such Business is presently conducted);
i) any communication with any regulatory agencies worldwide,
relating to the Business, except in the ordinary course of
business and that do not and will not have a material adverse
effect on the Business or the Assets.
2.21 Tax Returns, Payments and Elections. The Company and each of the
Subsidiaries, and PMC with respect to the Business, has filed all tax returns
and reports (including information returns and reports) as required by law,
including, but not limited to, the tax, customs and social security taxes. These
returns and reports are true and correct in all material respects. The Company,
the Subsidiaries and PMC with respect to the Business have paid all taxes and
other assessments due. There is no current dispute with any governmental
authority concerning taxes, customs or social security charges and to the best
knowledge of PMC and the Company, there is no reason to believe any such dispute
might arise.
2.22 Inventory. The inventories shown on the Management Accounts, the
Contribution Valuations and the balance sheet and accounts of the Subsidiaries
or thereafter acquired by PMC, or the Company or the Subsidiaries and relating
to the Business, consist of items of a quality usable or sellable in the
ordinary course of business. Neither PMC nor the Company nor the Subsidiaries
have received notice that it will experience in the foreseeable future any
difficulty in obtaining, in the desired quantity and quality and at a reasonable
price and upon reasonable terms and conditions, the raw materials, supplied or
component products required for the manufacture or production of products
relating to the Business. Due provision has been made on the books of the
Company and Subsidiaries in the ordinary course of business consistent with past
practices to provide for the obsolete, or unusable inventories to their
estimated useful or scrap values and such inventory reserves are adequate to
provide for such obsolete or unusable inventory. It is specified that the
Company will be entitled to sell inventory of work-in-progress and finished
goods with their existing packaging as of the Closing Date, until the expiration
date of the shelf life of all items of said inventory, provided such inventory
will be sold prior to any comparable products under Buyer's packaging.
2.23 Product Liability. Neither PMC nor the Company nor the Subsidiaries nor any
of their respective officers or directors is engaged in, or has received any
threat of any litigation, action, arbitration, investigation, or other
proceeding, at law or in equity, before any court, regulatory agency, or other
governmental authority in connection with any damages, loss, accident, disaster
caused by or related to a defect of any of the IMTIX Products and which would be
likely to incur the Company's or any of the Subsidiaries' liability. Neither PMC
nor the Company nor the Subsidiaries have received any client complaint or other
information whatsoever in relation to the same. In any event, it is agreed
between the Parties that any liabilities related to damages caused by the IMTIX
Products manufactured or sold by PMC, the Company or the Subsidiaries
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before the Closing Date will be assumed by PMC only and PMC will indemnify and
hold harmless Buyer, or the Company, or the Subsidiaries, against any such
liabilities. It is expressly specified between the Parties that any liability
arising in connection with those representations of Article 2.23 shall be
subject to the specific limitation provided under Article 5 e) (iii) hereafter.
2.24 Employees.
a) No sum is due to any present or former employee, agent or
representative of the Company, the Subsidiaries or of the
Seller (dedicated to the Business) in connection with their
employment and/or other contracts or agreements other than
rights to payments accrued but not yet payable or to repayment
of business expenses, or debts disclosed in the Management
Accounts, in the Contribution Valuations and the balance
sheets and accounts of the Subsidiaries. The names of the
employees of the Business and the Subsidiaries as at the date
hereof, along with an indication of their age, seniority,
current salary, bonuses and other compensation, are listed in
Exhibit 2.24 (a) (the "Employees"). No promise to hire any
person has been granted. Only one (1) of the Employees is a
"protected employee" as this term is understood under French
labor law (employee delegate, member of the workers council,
union representative) or any equivalent foreign laws.
b) The Company and the Subsidiaries have not paid or agreed to
pay any sum of any kind to any of their employees, agents or
representatives that is not tax deductible.
c) The Company and the Subsidiaries have incurred no obligations
of any kind toward former employees, especially unfulfilled
obligations resulting from the breach of any labor or service
contract or from indemnities for dismissal or indemnities for
unjustified dismissal or from not having complied with the
obligation to reinstate an employee.
d) The Company and the Subsidiaries have complied with all
instructions and obligations imposed by the competent
authorities in the fields of labor law, social security law,
health and safety law and all other laws and regulations
applicable to employment.
e) The regulations relating to the representation of the
employees in the Company and the Subsidiaries have been duly
complied with.
f) No employment contract has been concluded with any current or
former employee, representative or agent, which breaches
applicable laws and regulations and the collective bargaining
agreement applicable to the Company or Subsidiaries.
g) No executive or manager has resigned from the Company or the
Subsidiaries nor notified in writing of an intention to resign
since December 31, 1997.
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h) All pension and employee insurance plans in which the Company
and the Subsidiaries participate are mentioned in Exhibit 2.24
(h).
i) The Company and the Subsidiaries have not made any loans to
its employees, agents or representatives other than specified
under Exhibit 2.24i).
j) All contributions payable and due by the Company and the
Subsidiaries under retirement, dismissals and benefit plans
and all future obligations of the Company and the Subsidiaries
thereunder have been duly paid or reserved for in the
Contribution Valuations or the balance sheets and accounts of
the Subsidiaries in accordance with GAAP of their country of
location.
2.25 Contracts in General. The Company and the Subsidiaries are validly bound by
all their contracts in force and their co-contractors specifically dedicated to
the Business are validly obligated to them. The Company and the Subsidiaries
have performed and will perform all their obligations under these contracts. All
agreements to which the Company and the Subsidiaries are a party are in the form
of appropriate legal documentation allowing the Company and the Subsidiaries to
exercise and enforce all its rights thereunder. Without prejudice to the
generality of the preceding terms, there exists no commercial litigation or any
other event of whatever nature that might affect the timely performance of these
contracts.
As far as the following contracts are concerned, there exists
no event that might bring about the nullification or termination of these
contracts, that might entitle a third party to demand an early payment
thereunder, or that might involve in any manner the liability of the Company or
the Subsidiaries or that of their directors or employees:
- Various rabbit supply agreements;
- Agreement dated October 27, 1997 with Pharmacia & Upjohn;
- Agreements entered into with Immunotech and APHP respectively
on June 15, 1989 and March 6, 1995.
2.26 Contracts Outside the Ordinary Course of Business, Contracts with
Shareholders. Except as indicated in Exhibit 2.26 or permitted by the Management
Committee, the Company and the Subsidiaries:
a) have not concluded any contract which would involve their
joint or unlimited liability;
b) have not concluded any license agreement, any option to enter
into a license agreement nor any distribution agreement;
c) have not concluded any contract which would expressly or
implicitly provide for an early termination as a consequence
of the Transaction;
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d) have not concluded any contract which by its terms cannot be
terminated without paying a penalty in excess of FF 25,000 or
without giving prior notice more than 3 months in advance;
e) have not concluded any agreement or arrangement limiting their
freedom to compete in any line of business with any person or
in any geographic area;
f) are not a party to any contract or agreement with any
Affiliate of PMC nor with any director of PMC or Affiliate of
PMC;
g) have not incurred, vis-a-vis PMC or an Affiliate of PMC, any
obligation or debt;
h) have not modified or received any request for modification of
any existing license, distribution or manufacturing agreement.
2.27 Insurance. The Company and the Subsidiaries shall have been insured until
the Closing Date under insurance policies for which all premiums have been paid
when due and which cover under normal conditions the risks regularly incurred by
companies operating a business similar to that of the Company. Neither the
Company nor any of the Subsidiaries have committed or omitted any act which
might render null or inoperative such insurance policies or might bring about
their cancellation.
There is no pending lawsuit involving the application of the
Company's or the Subsidiaries' insurance policies, and no event has occurred
which might bring about such a lawsuit.
2.28 Scope and Accuracy of the Representations. Buyer has undertaken to buy the
Shares upon the making of the above representations by PMC and on the express
condition that PMC grant the warranties referred to in Article 5 of this
Agreement. All information contained in this Agreement and the Exhibits thereto
is true and accurate. The above representations and warranties are stipulated
for the benefit of Buyer and its Affiliates.
3. Representations and Warranties of Buyer. Buyer hereby represents and warrants
that:
3.1 Authorization. Buyer has full power and authority to enter into the
Agreements, and the Agreements constitute valid and legally binding obligations,
enforceable in accordance with their terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
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3.2 Organization. Buyer is a company duly organized, validly existing and in
good standing under the laws of its country of incorporation and has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business.
3.3 Non-Violation. The performance of the Agreements and consummation of the
transactions contemplated hereby and thereby by Buyer will not constitute a
violation of, or a default under, or conflict with (i) any provision of the
Articles of Incorporation ("Statuts") of Buyer or (ii) any legal requirements,
judgment or administrative decision which may apply to Buyer or by which Buyer
is bound or (iii) any agreement or undertaking to which Buyer is a party or by
which it is bound, the consequence of which could affect the validity and the
enforceability of the Agreements or of the transactions contemplated hereby or
thereby.
4. Covenants.
4.1 Covenant on Conditions Precedent/Contribution Agreement. Each Party
undertakes to take in a timely manner all necessary actions and to make its best
efforts in order that the conditions precedent set forth in Article 1.2
hereabove be met as soon as possible and to inform from time to time the other
Party on the implementation of those actions.
In particular, the Parties will use their best efforts to
obtain the authorization of the General Manager of the French Medicine Agency
referred to in Article 1.2.1 b) hereabove.
Seller also undertakes to take in a timely manner all
necessary actions and to make its best efforts in order that the Partial
Business Contribution shall be completed as soon as possible. In particular, as
soon as practicable after Seller has received the Affidavit 1 issued at the end
of the Initial Due Diligence Period, as provided under Article 1.2.1(c)
hereafter, but in no event later than 20 days following the last day of the
month in which the Affidavit 1 is delivered, Seller and the Company shall file
the draft Partial Business Contribution Agreement with the competent Commercial
Court (Greffe du Tribunal de Commerce), in compliance with applicable laws and
regulations.
As soon as the conditions precedent referred to in Articles
1.2.1 b) and 1.2.1 c) hereafter are fulfilled and within 20 days thereafter, the
shareholders of Seller and of the Company shall be convened at general meetings
to decide upon the Partial Business Contribution and complete the Partial
Business Contribution of the Business in exchange for shares of the Company,
pursuant to the Partial Business Contribution Agreement, as provided under
Article 1.2.1(a) hereabove.
4.2 Obligation to Cooperate.
4.2.1 During the Initial Due Diligence Period and the Second Due Diligence
Period set forth in Article 1.2.1 c) hereabove, Seller will provide Buyer and
its representatives with complete information requested in compliance
respectively with Articles 1.2.1 c) (i) and (ii) hereabove.
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Seller will organize reasonable appointments with those senior
employees, and to the extent possible, external advisors, considered as involved
in the Business in order to perform the Initial Due Diligence provided that
Buyer has requested previously to Seller its need for such appointments, it
being understood that all costs of external advisors (except reasonable
attorney's fees) requested by Buyer and invoiced to Seller by such advisors in
this respect shall be borne by Buyer.
4.2.2 - Seller, which has a good knowledge of the organization of the
French Medicine Agency and of other French and foreign public
authorities having competence over the pharmaceutical sector,
undertakes to use all its efforts and expertise to facilitate
in a timely manner the discussions with French and foreign
public authorities for the purposes of completion of the
Transaction.
- The Parties will use their best efforts to promptly obtain (i)
the prior authorization of the General Manager of the French
Medicine Agency ("Directeur General de l'Agence du
Medicament") to transfer to the Company all the French
"Autorisations de Mise sur le Marche" related to the IMTIX
Products, (ii) from any other foreign public authorities the
approval to transfer foreign licenses on IMTIX Products held
by Seller or its Affiliates (other than those held by the
Subsidiaries) to the Company (to the extent permitted by local
regulations and laws), and (iii) the U.S. PLA/ELA approval for
Thymoglobuline (R). For information purposes, a list of
key-steps to be taken with the French Medicine Agency,
together with an estimated timetable is attached hereto in
Exhibit 4.2.2.
- Seller will use its best efforts to have its Affiliates other
than Subsidiaries transfer all franchises, licenses, permits,
consents, authorizations, certificates, trademarks as listed
in the Partial Business Contribution Agreement and approvals
of any regulatory, administrative or other governmental agency
issued to or held by them, including all authorizations to
export products not licensed in France, to the extent relating
to the IMTIX Products, to the Company, except where this
transfer would violate local regulatory laws.
- Seller will use its best efforts to have third parties, which
are party to agreements attached in part only to the Business,
enter into new agreements with the Company covering the part
of those agreements attached to the Business, to the extent
such agreements are material to the Business.
4.2.3 As of the date of this Agreement and until the expiration of a 12-month
period after the Closing Date:
- The Parties undertake to set up a transition committee (the
"Transition Committee") which will review and advise on
transition activities and include:
(i) until the Closing Date for Seller: Gilles Alberici,
Rene Labatut, a Regulatory Affairs representative, a
QA/QC representative, a Finance
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representative and any other necessary people; and
for Buyer: the head of Regulatory Affairs, the Chief
Executive Officer, the VP of Operations, the VP of
Pharmaceutical Development, and
(ii) after the Closing Date, for Seller, the same persons
(except Gilles Alberici, and Rene Labatut), for the
Company, Gilles Alberici, for Buyer, the same
persons, it being specified that Rene Labatut will
also be a member of the Transition Committee whether
as a representative of Seller or of the Company,
subject to Article 4.5 hereafter.
The Transition Committee will meet in France, no less
than once every quarter, except otherwise agreed
between the Parties, and more often if appropriate.
Until the Closing Date, the Transition Committee will
be chaired by Seller's Senior Vice President and
Chief Financial Officer and, as from the Closing
Date, by Buyer's Chief Executive Officer or a
designated representative.
4.2.4 As of the Filing Date and until the Closing Date:
- The parties will establish a management committee (the
"Management Committee") which will consist of the members of
the Transition Committee referenced above in Article 4.2.3.
The Management Committee will oversee the operations of the
Company and the Business and specifically will have on an
internal basis management control and decision-making power
regarding but not limited to, the following:
a) defining clinical development and Phase IV programs;
b) all regulatory matters;
c) manufacturing planning and operations;
d) marketing, sales and product distribution plans for
all territories;
e) recruiting, legal and financial matters.
Subject to any legal obligations and restrictions applicable
to Seller, Seller will use its best efforts to implement the Management
Committee's decisions, without materially affecting Seller's non-IMTIX business.
Only the representatives of Buyer will have voting power on the Management
Committee; all other members will have advisory powers only. The Management
Committee will meet on a monthly basis, either in person in France, or
telephonically and more often as reasonably requested by Buyer. Subject to
decisions of the Management Committee, Seller agrees to manage and operate the
Business and the Company according to normal business practices and in the
ordinary course of business.
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The Management Committee shall act only according to normal
business practices and in the ordinary course of business.
The Management Committee shall not be entitled to recommend or
decide any dismissal of employee (other than in case of "faute lourde" or "faute
grave"), any divestment of or investment in intangible or tangible assets nor
any change in the strategy followed by the Seller for the Business until the
Filing Date.
4.2.5 Obligation to cooperate for SEC audits
Seller has been informed of the obligations of Buyer to
perform audits of the Company and the Business for the purpose of information of
the U.S. SEC as requested under applicable laws and regulations. Seller agrees
to provide information to Buyer and cooperate with Buyer for this purpose, to
the extent requests of Buyer in this respect are reasonable.
4.2.6 Immunotech Agreement
The parties shall exercise best efforts to transfer and assign
the contract between PMC and Immunotech dated June 15, 1989, but if, in spite of
all best efforts, they are unable to do so, PMC shall, subject to legal or
contractual limitations in such contract, grant to Buyer or its Affiliate a
sublicense that achieves as closely as possible, the same effect in all respects
as a transfer and assignment of such contract would achieve.
4.3 Interim Agreements. In the event that the transfer to the Company of all the
French "Autorisations de Mise sur le Marche" or equivalent authorizations in
foreign countries held by Seller or its Affiliates related to the IMTIX Products
has not been authorized as of the Closing Date, the Parties agree to use their
best efforts to negotiate and consummate a transaction having business,
financial, tax and legal effects as similar to the Transaction as reasonably
possible so as to take into account the delay in the transfer of such
authorizations.
4.4 Management of the Business and the Company. Between the date of this
Agreement and the Closing Date and subject to the prerogatives granted to the
Management Committee pursuant to Article 4.2.4 hereabove, Seller hereby
undertakes to manage and operate the Business and the Company according to
normal business practices and in the ordinary course of business and undertakes
to with respect to the Business, and shall procure that, with respect to the
Business, the Company and the Subsidiaries not to take any of the following
actions without having received the prior written consent of Buyer, which shall
not be unreasonably or untimely withheld and which consent shall be deemed
granted if Buyer has not responded otherwise prior to the expiration of a 15-day
period following a written request for consent:
(1) enter into or vary any material contract or undertaking other
than in the ordinary course of business;
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(2) give or discharge any guarantee, or any loan or financing or
any security in relation to such guarantees, loans or
financing;
(3) subscribe or extend any borrowing;
(4) enter into any agreement or agreements requiring capital
expenditure in aggregate of more than 500,000 French Francs
(VAT not included);
(5) pass any board or shareholders resolution other than for the
purposes of this Agreement or the Transaction;
(6) dispose of any assets other than in the ordinary course of
business;
(7) vary or terminate any insurance policies dedicated to the
Business and the Company notably decrease product liability
insurance, and subject to reasonable changes of Rhone-Poulenc
Group policies, it being understood that Seller insurance
policies linked to the Business will terminate at the Closing
Date;
(8) settle any existing litigation in excess of 150,000 French
Francs;
(9) enter into or vary any material transaction with a related
party (including the shareholders or the managers);
(10) hire or terminate (for reasons other than "faute lourde" or
"faute grave") the employment of any employee with an annual
gross salary in excess of 250,000 French Francs or of several
employees the gross salary of which, in aggregate, exceeds
500,000 French Francs;
(11) reallocate any employee of the Business to any other division,
business or entity of the Seller;
(12) disclose any proprietary or confidential information to third
parties;
(13) modify the C4 building, the V3bis building or their equipment,
in any way, unless in response to a specific request from the
FDA or to a request of Buyer or as provided under Exhibit 3 to
the V3bis Commercial Lease Agreement.
4.5 Status of Mr. R. Labatut (R.L). Seller hereby expressly agrees to the
following:
- Buyer will be entitled to make an offer to R.L. to join the
Company, which offer Buyer will not have to disclose to
Seller.
- If R.L. decides to remain with Seller rather than accepting
Buyer's proposal, and for so long as R.L. so remains, Seller
undertakes to dedicate continuously R.L. to
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Buyer at cost (based on time actually spent at Buyer's
request), for a period of 3 years, for up to (i) 45% of his
time for the first year, (ii) 35% for the second year, and
(iii) 25% for the third year. Every six months as from the
Closing Date, Buyer shall provide estimates of its needs for
the following 12 months, of which the first 6 months estimates
only shall be binding.
The above shall not prohibit Seller from dismissing R.L. in
case of "faute lourde" or "faute grave", in which case Seller shall be released
from the foregoing obligation.
4.6 Non-Solicitation.
a) As of the Closing and continuing for a period ending five (5)
years after the Closing, Seller undertakes unless otherwise
mutually agreed between the Parties, in the event that any of
the employees dedicated to the Business listed in Exhibit
2.2.4 (a) hereto would refuse to become an employee of the
Company or resign from Seller, the Company or any of the
Subsidiaries after the transfer of the Business, not to hire
such employee or to make any offer to the same for any
position in Seller or any of its Affiliates.
b) As of the Closing and continuing for a period ending five (5)
years after the Closing, PMC agrees that it shall not (and
cause its Affiliates other than its shareholders not to)
engage, associate itself with, or collaborate in, directly or
indirectly, in any country, whether for its own account or as
a shareholder (other than as a less than 3% shareholder of a
publicly-held company), partner, joint venturer, firm,
corporation, or other entity, in any activity in the fields of
R&D, production, marketing, distribution or management
relating to the field of (i) transplantation or (ii)
immunosuppression (within or outside of the field of
transplantation) using anti Tcell agents.
This provision shall not preclude Seller from acquiring
companies or businesses which involve organ transplantation
activity provided (i) that such activity represents only a
minor portion of such company or business and (ii) that Seller
shall in such case notify Buyer of such event and offer for
sale to Buyer such branch of activity at a reasonable price
based on the price paid by Seller.
Seller further undertakes not to grant or transfer any license
or right whatsoever, relating to the field of (i)
transplantation or (ii) immunosuppression (within or outside
of the field of transplantation) using anti Tcell agents,
which is the subject of a license or grant to the Company or
Buyer pursuant to this Agreement and the Ancillary Agreements
in relation to the Business to any Affiliate (including its
shareholders) or third party.
(c) As of the Closing and continuing for a period of 5 (five)
years after the Closing, PMC agrees that it shall not (and
cause its Affiliates not to):
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(i) solicit, directly or indirectly, or entice or
endeavor to solicit or entice away from employment
with Buyer, the Company or any of the Subsidiaries
any person employed thereby in the capacity of
employee, director, representative, consultant,
except with the prior written approval of Buyer, the
Company or any of the Subsidiaries, and Buyer agrees
to take the same commitment in favor of PMC;
(ii) use any trademark, tradename or any other identifying
symbol presently used by the Company in the Business.
(d) Except as required by law or expressly permitted under this
Agreement or any of the other Agreements, PMC shall cause its
respective Affiliates, officers, directors, employees, agents
and subcontractors (collectively, "Representatives") and
Representatives of its Affiliates to keep confidential any and
all technical, commercial, scientific, financial and other
data, processes, documents or other information (whether in
oral or written form) or physical object (including, without
limitation, intellectual property, marketing data, agreements
with any third party, license applications, business plans and
projections) it may have with respect to the IMTIX Products,
the Assets, the Business, the Company or any of the
Subsidiaries and cease use of proprietary and other
confidential business and technical information related to the
same, for a period expiring 15 (fifteen) years as from the
Closing.
(e) The Parties agree that due to the unique nature of the
experience, knowledge and capabilities of PMC, there can be no
adequate remedy at law for any breach of its obligations
hereunder, that any such breach may allow PMC, and/or third
parties to unfairly compete with Buyer, or the Company, or the
Subsidiaries, resulting in irreparable harm to Buyer, or the
Company, or the Subsidiaries, and therefore, that upon any
such breach or any threat thereof, Buyer, or the Company, or
the Subsidiaries, shall be entitled to appropriate equitable
remedy it might have at law.
5. Indemnification.
The application of this Article shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf of the
Parties to this Agreement, notably the Due Diligences.
a) Seller shall indemnify and hold harmless Buyer (or the
Company, if Buyer elects to choose so) against and in respect
of all claims, losses, liabilities, damages, reduction of
value of assets, costs and expenses (including reasonable fees
and expenses of counsel) which Buyer, the Company or the
Subsidiaries may suffer in connection with (a) a breach of
representations and warranties such as
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described in d) hereafter, or (b) an increase of liability or
reduction of value of assets such as described in d)
hereafter. All such adverse consequences shall be referred to
herein collectively as "Damages".
b) Obligations of Buyer in the event of claims, losses,
liabilities, damages, reduction of value of assets, costs and
expenses, shall be referred to herein collectively as "Claim".
Any initial notification by any social, tax or customs
authority (such as "avis de controle fiscal") shall also be
referred for the purpose hereof as Claim.
Buyer and/or the Company, as the case may be, shall notify Seller in
writing of any Claim.
Such notification shall be made within a maximum period of:
(i) At the latest 15 (fifteen) calendar days after
reception of written notice of the Claim by social,
tax, or customs authorities against Buyer, the
Company or the Subsidiaries. However, Buyer will use
its best efforts to provide notice within 5 (five)
Business days after reception of the same;
(ii) 30 (thirty) calendar days after receipt of written
notice of other Claims by a third party against
Buyer, the Company or the Subsidiaries. However, if
an answer to such third party Claims is due sooner
than 30 (thirty) days, the time period for notice
shall be no later than 5 (five) days prior to the
date the answer is due;
(iii) 30 (thirty) calendar days after the discovery by
Buyer and/or the Company of any other Damage than
those covered by (i) and (ii).
and shall include either a copy of the original Claim or, if not
possible, a brief description of the nature of this Claim, the identity
of the person for whom it is being investigated, and an estimate of the
Damage for Buyer or the Company which could result therefrom. Seller,
or his duly appointed counsel, shall have access to all books and other
necessary documents of the Company, as the case may be, relating to
such Claim, which shall be made available at the registered office of
the Company or at any place mutually agreed upon, subject to reasonable
notice and for reasonable periods.
Such notice shall be labeled "First Notice of Claim", and shall serve
to preserve Buyer's rights to seek indemnification from Seller. Should
Buyer or the Company fail to send the First Notice of Claim within the
applicable period of time such as described hereinabove, Seller shall
be relieved of its obligation to indemnify Buyer or the Company with
respect to such corresponding matters.
c) Right of Defense:
Within a maximum period of 10 (ten) Business days following
the receipt of the First Notice of Claim by which Seller was
informed that a Claim was lodged by a third party against
Buyer, the Company or the Subsidiaries, and that Buyer
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requires indemnification from Seller, Seller shall notify
Buyer in writing if it chooses to settle such Claim or to
defend the matter at its own expense, provided that if Seller
elects to control the defense of the third-party claim, Seller
will be deemed obligated to indemnify Buyer for Damages as set
forth herein as a result of such procedure under the terms and
conditions of this Agreement, as long as Buyer provides
reasonable requested information. If it opts to defend such
Claim, Seller shall inform Buyer of the identity of the
counsel it has chosen to defend the Claim and keep Buyer
regularly informed of the developments of the defense.
Buyer shall retain the right to participate, either directly
or indirectly, at its own expense and with the counsel of its
choice in the defense of the matter, it being understood that
Seller's position shall prevail. The Company shall in this
situation forward the defense as prepared by Seller without
modification.
If Seller fails to respond within the above required period of
time to the notice sent by Buyer or the Company, or elects not
to control the defense, Buyer or the Company, as the case may
be, shall, acting alone, have the power to settle, negotiate,
or otherwise resolve the matter relating to the Claim.
d) Indemnification:
(i) Subject to (ii) hereafter, and provided the procedure
set up in the present Article is respected, Seller
shall indemnify and hold harmless Buyer (or the
Company, if Buyer elects to do so), 30 (thirty) days
after receipt from Buyer or the Company of a Claim
for indemnification labeled "Second Notice of Claim".
Such Second Notice of Claim shall be sent only in the
following cases and at the following period of time:
- a judgment is rendered against Buyer, the Company or
the Subsidiaries which is no longer appealable, or,
if a settlement is reached with the third party
claimant and such judgement or settlement is based on
events which occurred prior to the Retroactive Date,
except with respect to product liability claims which
are covered by Article 5e)(iii) hereof;
- a liability which does not appear in the Partial
Business Contribution Agreement approved by the
Extraordinary Shareholders Meeting of Seller and the
Company is finally due and effectively paid, or a
reduction of value of assets is definitively
assessed, in so far as such liability or reduction of
value of assets is based on events which occurred
prior to the Retroactive Date. Concerning the
Subsidiaries, the balance sheets as of December 31,
1997, attached to the Partial Business Contribution
Agreement will be considered as the basis of
references to determine if an increase of liability
or decrease of assets was suffered;
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- any other Damage that is finally suffered by Buyer,
the Company or the Subsidiaries, to the extent that
it results from an inaccuracy in the representations
and warranties appearing in the final version of the
representation and warranties as of the Closing Date.
(ii) In the case Seller challenges such Claim of Buyer or
the Company, Seller shall indemnify Buyer within 10
(ten) days following the final award rendered
pursuant to Article 6.2.
(iii) The amount to be paid shall be equal and limited to
the actual damage suffered and the cost effectively
borne by Buyer. Thus:
- Damages shall be reduced by an amount by which the
actual value as of the Retroactive Date of the assets
contributed to the Company by Seller pursuant to the
Partial Business Contribution Agreement turns out to
be greater than the value of such assets as it was
initially listed in the Partial Business Contribution
Agreement;
- Damages shall give right to indemnification after
deduction of the tax economy which may be made by
Buyer, the Company or the Subsidiaries due to such
Damage. All value added tax or all advances with
respect to corporation tax, which may be recuperated
by Buyer, the Company or the Subsidiaries, shall be
excluded from the actual damage.
(iv) Payments due according to this Article shall be made
within 30 (thirty) days of the Second Notice of Claim
as indicated by Buyer in the Second Notice of Claim,
either:
- by means of set-off, in accordance with provisions of
Article 1.1.3 hereof, against what Buyer owes to
Seller, in particular against the deferred portion of
the payment of the Purchase Price; or
- by means of an actual payment.
e) Duration, Limitations and Threshold:
(i) Duration:
Buyer must notify Seller's representative of all
demands of payments of indemnification under this
Article:
- as far as they relate to tax, customs or social
security matters, no later than the expiration of
their respective applicable statute of limitation;
and
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- as far as they relate to any other matter, not later
than the expiration of an 18 (eighteen) month period
starting as from the Retroactive Date.
Seller shall remain liable for Damage notified before these
dates.
(ii) Threshold:
No claim for payment shall be made by Buyer until the
aggregate of all Damages exceeds $500,000 (five hundred
thousand U.S. dollars), it being specified between the Parties
that this amount constitutes a threshold and that, if the
aggregate amount of Damages exceeds that amount, then Buyer
shall be entitled to indemnification for:
- the total amount of such Damage;
- less a one-time deduction of $200,000 (two hundred
thousand U.S. dollars).
Nevertheless, the procedure described in this Article remains
applicable regardless of the application of the present
section (ii).
(iii) The total amount of indemnification pursuant to the
Agreement shall not exceed the total amount of the
Fixed Price (i.e., $33,000,000 (thirty-three million
US Dollars), or the Fixed Price such as reduced in
accordance with Articles 1.1.1 b), c) and d)). It is
expressly agreed between the Parties that, with
respect to Damages consisting in product liability
which would arise in connection with representations
of Article 2.23 hereof:
(i) any Damages resulting from a product manufactured
prior to the Retroactive Date shall give right to a
full indemnification without any limitation of amount
applying,
(ii) any Damages resulting from a product manufactured
between the Retroactive Date and the Closing Date
shall give right to an indemnification limited to an
amount of $70,000,000 (seventy million US Dollars),
unless such Damages are due to the distribution (and
not to the manufacturing) of the products, in which
case no indemnification shall be due.
6. Miscellaneous.
6.1 Successors and Assigns. Without prejudice of the right of substitution of
Buyer as set forth in Article 6.7 hereof, neither Party shall transfer or assign
this Agreement, in whole or in part without the other Party's prior written
consent, except that either Party may transfer, assign
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and delegate this Agreement to an Affiliate or in connection with a merger,
reorganization or sale of substantially all of its assets, without the other
Party's consent.
6.2 Governing Law/Dispute Resolution. This Agreement is governed by, and shall
be construed in accordance with, French law. Any and all disputes arising in
connection with this Agreement which will not be solved on an amicable basis
between the Parties shall be finally settled by arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce, rules
that the Parties recognize that they know. The arbitration shall be conducted in
Paris, France, in English by one arbitrator if the dispute involves a claim of
damage of and below five hundred thousand (500.000) US Dollars or by three
arbitrators if the dispute involves a claim of damage above five hundred
thousand (500.000) US Dollars appointed in accordance with the said rules. The
arbitrator(s) shall apply French law to the merits of the case. The arbitration
shall be final and binding upon the Parties.
6.3 Expenses. Subject to Article 5(a), each Party hereto shall pay all costs and
expenses that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement. If any action at law is necessary to enforce or
interpret the terms of this Agreement, the winning Party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such Party may be entitled.
6.4 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of PMC and Buyer.
6.5 Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction, as long as this does not materially affect the economics of
the Transaction.
6.6 Press Release. An initial press release announcing the Parties' intent to
consummate the Transaction shall be in the form attached hereto as Exhibit 6.6.
All other major public communication of any kind relating to
the Transaction or any transactions contemplated thereby (hereinafter "Press
Release") shall be jointly drafted and reviewed by a press release review
committee which shall be composed by:
For PMC: a General Counsel
For SangStat: CEO
In the event that a Press Release is not jointly drafted or
that one Party desires to draft the Press Release first, the drafting party
shall communicate to the other Party the draft of the Press Release at least
three Business Days before the date of external communication for
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review. Written approval or comments by the non drafting Party's persons sitting
on the press release review committee shall be given as soon as practicable and
in any event no later than 3 Business Days after receipt.
The above mentioned procedure may be waived in writing by the
non drafting Party's CEO or the non drafting CFO and General Counsel jointly.
In no event shall either Party be prohibited from making any
disclosures it determines are required by applicable law, nevertheless, to the
extent practicable, the procedure described hereabove shall be respected.
Additionally, in no event shall either Party be prohibited
from making any public communications relating to and substantially in the form
of prior approved communications.
In addition, occasional brief comments by the respective
officers of SMC and PMC regarding this Agreement shall be allowed only to the
extent such statements are consistent with guidelines for public statements as
may be mutually agreed upon by SMC and PMC and if made in connection with
routine interviews with analysts or members of the financial press.
6.7 Buyer's Right of Substitution. Buyer may substitute any of its Affiliates
(as defined herein) for the purposes hereof provided that, in this case, Buyer
will remain jointly liable for the obligations of such Affiliate, including but
not limited to payments of the Price, under the terms hereof. In such a case,
the term "Buyer" as used herein shall mean SMC and its substituted Affiliate.
6.8 Termination. This Agreement may be terminated and of no further force and
effect:
a) upon mutual written agreement by the Parties; or
b) subject to Article 7, if the Closing has not occurred by
December 31, 1998.
Additionally, (i) in the event any of the conditions precedent
of Article 1.2.1 hereof is not fulfilled on or before the Closing Deadline and
subject to waiver by Buyer of Condition 1.2.1 c), or (ii) in the event Buyer has
exercised its right of Article 1.2.2 b) hereabove or Seller has exercised its
right of Article 1.2.2 c) hereabove, this Agreement shall be considered as null
and void and with no further force or effect. In such a case, it is expressly
agreed however that the confidentiality commitment from the Parties set forth in
Article 8 hereof will remain in force according to its terms.
6.9 Notices. Notices and other communications required or called for under this
Agreement (including notices provided under Article 5) shall be in writing, and
shall be transmitted by fax and by certified mail postage prepaid, and shall be
deemed delivered upon receipt by the Party to whom it is addressed.
In the case of SMC such communications shall be addressed to:
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SangStat Medical Corporation
1505 Adams Drive
Menlo Park, CA 94025
Attention: Chief Executive Officer
In the case of PMC, such communications shall be addressed to:
Pasteur Merieux Serums et Vaccins S.A.
58, avenue Leclerc
69007 Lyon
FRANCE
Attention: Chairman, and Chief Executive Officer
with copy to the
"Directeur Juridique"
or to the attention of such other individual or to such other address
as either Party may give to other in writing.
6.10 Force Majeure.
No Party hereto (or any of its Affiliates) shall be
responsible or liable to the other Party hereto (or any of its Affiliates) for
any failure to perform any of its agreements, covenants or obligations under
this Agreement if such failure results from events or circumstances reasonably
beyond the control of such Party (or of its Affiliates), including, without
limitation, war or other national emergency, riot, fire, explosion, flood or
other Act of God, general and long-lasting strike affecting the entire activity
of Seller on the site of Marcy l'Etoile, any injunction, decree, order, law or
regulation of any public authority, or inability to obtain electricity or fuel
or raw material (collectively, "Events of Force Majeure").
The affected Party shall (i) forthwith inform the other Party
in writing of the occurrence of the Event of Force Majeure, and (ii) exert best
efforts to eliminate, cure or overcome any such Event of Force Majeure and to
resume performance hereunder with all possible speed; provided, however, that
nothing contained herein shall require any Party to settle on terms
unsatisfactory to such Party any strike. To the extent that an Event of Force
Majeure continues for a period in excess of six (6) months, the Parties agree to
negotiate in good faith either (i) to resolve the Event of Force majeure, if
possible, (ii) to extend by mutual agreement the time period to resolve,
eliminate or overcome such Event, or (iii) to terminate this Agreement.
7. Closing Deadline.
If, as of thirty days prior to the Closing Deadline, the
condition in Article 1.2.1(b) has not been met, the Parties agree as follows:
(i) The Parties shall jointly appoint a regulatory
expert, who shall be fluent in French and in English
and who shall be a recognized professional in the
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pharmaceutical business community. If the Parties
fail to agree on such expert, such expert shall be
appointed by the President du tribunal de Grande
Instance de Paris at the request of the most diligent
Party. Such expert shall review the status of the
pharmaceutical establishment license application. If
the expert, who shall deliver his/her report within
15 days of appointment, determines that it is
probable that a pharmaceutical establishment license
at least with respect to Thymoglobuline will be
granted to the Company prior to August 31, 1999, then
the Parties agree to enter into a restated Share
Purchase Agreement reiterating substantially all the
provisions of this Agreement, as adjusted to conform
with any legal, tax and accounting requirements, and
with a new Closing Deadline as of August 31, 1999;
(ii) If the Closing Deadline is redefined as set forth
above, the Parties agree to use their best efforts to
negotiate and consummate agreements having business,
financial, tax and legal effects as similar to the
Transaction as reasonably possible for the period
ending on August 31, 1999;
(iii) The Parties also agree that the valuations in the
Partial Business Contribution Agreement shall be
reset to January 1, 1999;
(iv) Additionally, if the Transaction contemplated hereby
is not consummated prior to the Closing Deadline, as
redefined, Buyer shall have a right of first offer
with respect to a sale of the Business or the Shares
(as long as the Partial Business Contribution has
been completed) in any form by Seller until February
29, 2000. In the event Seller receives a bona fide
offer from a third party to buy the Business or the
Shares (as long as the Partial Business Contribution
has been completed) at any time prior to February 29,
2000, Seller shall provide written notice to Buyer of
such bona fide third party offer, which notice shall
include all material terms, including price. Buyer
shall have fifteen (15) days to review the proposed
sale and shall have the right, upon written notice to
Seller within such 15 -day period to exercise its
right to purchase the Business or the Shares on the
same financial terms as provided in the notice. Upon
notice of Buyer's intention to exercise its purchase
rights hereunder, the Parties shall be bound by the
terms and conditions as provided for in the notice
and they agree to negotiate in good faith and to
promptly execute and deliver all agreements and
documents which are necessary to consummate such a
transaction. If Buyer does not exercise its purchase
rights hereunder, Seller shall have the right to
enter into definitive acquisition documents with such
third party provided it is on substantially the same
financial terms as set forth in the notice to Buyer,
and provided further that the financial terms may be
changed if there has been a major change in the
Business after delivery of the notice.
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It is agreed between the Parties that, should the Closing not
take place prior to the Closing Deadline due to a delay attributable to the
French Medicine Agency in granting the Pharmaceutical Establishment
authorization referred to in Article 1.2.1 b) hereof, the provisions hereabove
shall apply. Should the Closing not take place prior to the Closing Deadline
because of a delay in receiving the Pharmaceutical Establishment authorization
referred to in Article 1.2.1 b) hereof, due to issues relating to
Lymphoglobuline manufacturing, the Parties agree to negotiate in good faith a
contract manufacturing and distribution agreement with respect to
Lymphoglobuline and more generally to use their best efforts to negotiate and
consummate a transaction having business, financial, tax and legal effects as
similar to the Transaction as reasonably possible.
8. Confidentiality.
a) General:
Except as expressly set forth in this Article, each Party
shall cause its respective Affiliates, officers, directors,
employees, agents and subcontractors (collectively,
"Representatives") and Representatives of its Affiliates to
keep confidential any and all technical, commercial,
scientific and other data, processes, documents or other
information (whether in oral or written form) or physical
object (including, without limitation, intellectual property,
marketing data, agreements between any Party and a third
party, license applications, and business plans and
projections of any Party) acquired from the other Party (the
"Other Party"), its Affiliates or its Representatives prior to
or after the date of this Agreement and which relates to the
Transaction, including all information exchanged as of the
date of this Agreement; provided in each case that such
information is marked "confidential" or, if verbal, such
information is reduced to writing and marked "confidential"
within 30 days of the date of disclosure ("Confidential
Information"), and each Party shall not disclose, directly or
indirectly, and shall cause its Representatives not to
disclose, directly or indirectly, any Confidential Information
to anyone outside such person, such Affiliates and their
respective Representatives, except that the following
information disclosed hereunder to any Party will not be
deemed Confidential Information for purposes of this
Agreement, if such person (the "Receiving Person") can
demonstrate that such Confidential Information:
(i) is or hereafter becomes generally available to the
trade or public other than by reason of any breach or
default by the Receiving Person, any of its
Affiliates or any Representative of the foregoing
with respect to a confidentiality obligation under
this Agreement;
(ii) was already known to the Receiving Person or such
Affiliate or Representative prior to disclosure;
provided, however, that this exception shall not
apply to any Confidential Information transferred by
Seller to Buyer by virtue of the Transaction;
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(iii) is disclosed to the Receiving Person or such
Affiliate or Representative by a third party who has
the right to disclose such information;
(iv) based on such Receiving Person's good faith judgment
with the advice of counsel, is otherwise required to
be disclosed in compliance with applicable legal
requirements to a public authority.
Whenever the Receiving Person becomes aware of any state of
facts which would or might result in disclosure of Confidential Information
pursuant to subparagraph (iv) above, it shall, if possible, promptly notify the
person making disclosure (the "Disclosing Person") prior to any such disclosures
so that the Disclosing Person may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Agreement. In any
event, if the Receiving Person is unable to promptly notify the Disclosing
Person or if such protective order or other remedy is not obtained, or if the
Disclosing Person waives compliance with the provisions of this Agreement, the
Receiving Person will furnish only that portion of the information which it is
advised by counsel is legally required and will exercise reasonable efforts to
obtain assurance that confidential treatment will be accorded to the
Confidential Information.
b) Use of Confidential Information:
Each Party agrees that no Confidential Information shall:
(i) be used in its own business except as necessary to
the fulfillment of the rights and obligations of such
Party under this Agreement;
(ii) be assigned, licensed, sublicensed, marketed,
transferred or loaned, directly or indirectly to any
third party other than a Representative or an
Affiliate Representative of such Party, except as
necessary to the fulfillment of the rights and
obligations of the Parties under this Agreement;
(iii) be used or exploited by such Party or any of its
Affiliates or their Representatives for its or their
respective benefit or the benefit of any other
relationships with customers of such Party and its
Affiliates.
Without limiting the generality of the foregoing, each Party
agrees that it shall not (and shall not permit any of its Affiliates) at any
time use any Confidential Information in the conduct of its business without the
prior written consent of the other Party. The obligations set forth in this
Article shall extend to copies, if any, of Confidential Information made by any
Representatives referred to in paragraph (a) and to documents prepared by such
Persons which embody or contain Confidential Information.
The present confidentiality provisions shall not prevent the
Parties from providing information requested by the French Medicine Agency
(Agence du Medicament) in order to obtain the approval of the Company as a
pharmaceutical establishment and the transfer of all licenses.
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c) Protection of Confidential Information:
Each Party shall deal with Confidential Information so as to
protect it from disclosure with a degree of care not less than
that used by it in dealing with its own confidential
information and shall take reasonable steps to minimize the
risk of disclosure of Confidential Information which shall
include, without limitation, ensuring that only its Affiliates
and its and their Representatives who have a bona fide "need
to know" such Confidential Information for purposes permitted
or contemplated by this Agreement shall have access thereto.
Each Party shall notify all of its Representatives who have
access to Confidential Information of its confidentiality and
the care therefor required, and shall obtain from any
Affiliate or any agent or subcontractor who is a
Representative that is permitted access to such Confidential
Information in accordance with this Article, an agreement of
confidentiality incorporating provisions at least as
restrictive as those set forth herein, unless such
Representative is a legal counsel legally bound by such
confidentiality.
d) Term of Confidentiality Obligations / Survival:
Notwithstanding any contrary provisions provided elsewhere in
this Article, the obligations set forth in this Article shall
(i) terminate 15 (fifteen) years after the Closing in case the
Transaction is completed, or (ii) survive for a period of five
(5) years as from the Closing Deadline if this Transaction is
not completed.
e) Return of Confidential Information:
In the event the contemplated Transaction were not completed
for whatever reason, within thirty (30) days after such
decision not to carry out the Transaction, the Receiving
Person shall (and shall cause its Affiliates' Representatives
and its Affiliates to) return to the Disclosing Person or
destroy all related documents and tangible items then in its
possession which it has received from the Disclosing Person or
any Affiliate or Representative thereof pertaining, referring
or relating to the Disclosing Person's Confidential
Information, as well as all copies, summaries, records,
descriptions, modifications and duplications that it, or any
of its Affiliates or Representatives, has made from the
documents or tangible items received from the Disclosing
Person or any Affiliate or Representative thereof; provided,
however, that the Receiving Person may retain one copy of each
document in its legal files solely to permit the Receiving
Person to continue to comply with its obligations hereunder
and, in addition, may upon notice to the Disclosing Person,
retain in its legal files or in the offices of outside legal
counsel one copy of any document solely for use in any pending
legal proceeding to which such document relates.
f) Confidential Disclosure Agreement of October 16, 1997:
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The obligations set forth in this Article supersede the
Confidential Disclosure Agreement executed between Seller and
Buyer on October 16, 1997.
IN WITNESS WHEREOF, the parties have executed this Agreement
in Lyon (France) as of the date first above written.
SELLER:
/s/ OLEANDA IZQUIERDO
-------------------------------------
Pasteur Merieux Serums & Vaccins S.A.
By: Oleanda Izquierdo
BUYER:
/s/ ROBERT FLOC'H
-------------------------------------
SANGSTAT MEDICAL CORPORATION
By: Robert Floc'h
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AMENDMENT TO THE SHARE PURCHASE AGREEMENT
DATED JUNE 10,1998
This amendment of the Share Purchase Agreement is made as of the 10th of June
1998 by and among Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux
Connaught company and a French Societe Anonyme having its registered office at
58 Avenue Leclerc, 69007 Lyon, France, duly represented by Mrs. Oleanda
Izquierdo, ("PMC" or "Seller") and SangStat Medical Corporation, a corporation
existing and organized under the laws of the State of Delaware and having its
principal place of business at 1505 Adams Drive, Menlo Park, California, 94025
USA, duly represented by Mr. Robert Floc'h ("SMC" or "Buyer"), in relation to
the sale of the shares of IMTIX-SangStat, S.A.S., a French corporation
registered in the form of a societe par actions simplifiee (the "Company").
Seller and Buyer are hereinafter referred to as the "Parties" or individually a
"Party".
WHEREAS:
Whereas the parties have signed on the date hereof an agreement entitled Share
Purchase Agreement,
Whereas the parties agreed to amend some Articles of the Share Purchase
Agreement through the present amendment,
The parties agreed to amend the Share Purchase Agreement as follows:
1. The retroactive date mentioned in the definitions page 9 is replaced by:
""Retroactive date" shall mean the first day of the month of the Filing Date,
or the 1st of July if the filing Date is in August."
2. Article 1.2.1 c)
- The first paragraph is replaced by:
"Completion of legal, technical and financial due diligence by Buyer and its
counsels satisfactory to Buyer on the items listed in Exhibit 1.2.1 c) which
due diligence shall not have revealed an event which may materially adversely
affect the Business. This due diligence will be carried out in two phases."
- The paragraph (ii) is replaced by:
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"(ii) Buyer shall, in addition, have the right, for 10 Business Days
following the filing Date to make review of the valuation of assets
and liabilities in the Partial Business Contribution Agreement it
would estimate appropriate (the "Second Due Diligence Period")."
3. Article 1.3.1 b)
A paragraph (iv) is added as follows:
"(iv) Should the effective Buyer not be SMC but one of its Affiliates
according to Article 6.7: an assignment contract signed by duly
authorized representatives of signatories, including in exhibit the
Share Purchase Agreement, and in a form preserving the rights of
Seller under the Share Purchase Agreement and in a form in compliance
with the requests of a notary."
4. Article 1.3.4 is replaced by:
"The Ancillary Agreements shall be duly executed".
The Parties agreed that:
- This amendment is a part of the Share Purchase Agreement dated June
10, 1998,
- The Share Purchase Agreement will be filed with a notary on the
Closing Date, it being expressly specified that, should the notary
request that the Share Purchase Agreement be translated into French,
in the case of a conflict or contradiction whatsoever between the
Share Purchase Agreement and its translation into French, the
provision of the Share Purchase Agreement (in English) shall prevail
over those of the French translation.
Executed in Lyon
In two originals
on June 10,1998
Pasteur Merieux Serums & Vaccins SangStat Medical Corporation
/s/ OLEANDRA IZQIERDO /s/ ROBERT FLOC'H
- ------------------------------------- ---------------------------------------
Represented by Oleanda Izquierdo Represented by Robert Floc'h
53
<PAGE> 130
AMENDMENT NO. 2 TO THE SHARE PURCHASE AGREEMENT
DATED JUNE 10,1998
This amendment of the Share Purchase Agreement is made as of the 31st of July
1998 by and among Pasteur Merieux Serums & Vaccins S.A., a Pasteur Merieux
Connaught company and a French Societe Anonyme having its registered office at
58 Avenue Leclerc, 69007 Lyon, France, represented by Mr. Herve Tainturier, duly
empowered for the purpose hereof ("PMC" or "Seller"), and SangStat Medical
Corporation, a corporation existing and organized under the laws of the State of
Delaware and having its principal place of business at 1505 Adams Drive, Menlo
Park, California, 94025 USA, represented by Doctor Philippe Pouletty its Chief
Executive Officer, duly empowered for the purpose hereof ("SMC" or "Buyer"), in
relation to the sale of the shares of IMTIX-SangStat S.A.S., a French
corporation registered in the form of a societe par actions simplifiee (the
"Company").
Seller and Buyer are hereinafter referred to as the "Parties" or individually a
"Party".
WHEREAS:
Whereas the Parties have signed on June 10, 1998 an agreement entitled Share
Purchase Agreement, as well as an amendment to this Share Purchase Agreement,
Whereas the parties agreed to amend some Articles of the Share Purchase
Agreement as amended on June 10, 1998 through the present amendment,
The parties agreed to amend the Share Purchase Agreement as follows:
1. The definition of "Closing" (page 7) is replaced by:
""Closing" shall mean the sale of the Shares by PMC to Buyer and the
settlement of the Closing Payment of $10 (ten) million US Dollars by Buyer to
PMC which shall take place on the Closing Date as set forth in Article 1.3
hereafter;"
2. The Retroactive Date mentioned in the definitions page 9 is replaced by:
""Retroactive Date" shall mean the first day of the month of the Filing Date,
or the 1st of July if the Filing Date is in August or in September;"
3. Article 1.1.1 a) of the Share Purchase Agreement is hereby amended to provide
that the Fixed Price as defined therein shall be reduced to a total amount of
thirty-one million ($31,000,000) US Dollars payable in several successive
payments (the "Payment(s)"), it being specified that ten million ($10,000,000)
US Dollars shall, on the date on which the draft partial Business Contribution
Agreement is filed with the Commercial Court of Commerce (the "Filing
54
<PAGE> 131
Date"), be placed in escrow pursuant to the Escrow Agreement to be executed upon
the Filing Date in the form of Exhibit 1.1.1 a). The above mentioned reduction
in the Fixed Price has been agreed upon by the Parties [*] of the Schedule of
Exceptions as amended hereafter). Such reduction in Fixed Price shall be [*]
Additionally, the table of payments set forth in Article 1.1.1 a) is hereby
replaced in its entirety with the following:
<TABLE>
<CAPTION>
PAYMENT
PAYMENT DATE (IN US DOLLARS)
------------ ---------------
<S> <C>
Closing Date ("CD") $10.0 million (the "Closing Payment")
6 months after CD $1.5 million
12 months after CD $1.5 million
18 months after CD $1.5 million
24 months after CD $1.5 million
30 months after CD $3.0 million
36 months after CD $3.0 million
42 months after CD $2.5 million
48 months after CD $2.5 million
54 months after CD $2.0 million
60 months after CD $2.0 million
</TABLE>
4. Article 1.1.1c) (i) (a) of the Share Purchase Agreement is hereby amended to
read in its entirety as follows:
"(a) Seller is performing at least one (1) of the services identified in the
Service Agreement for the Manufacturing attached hereto as Exhibit
1.1.1c)(i)(a) with respect to Thymoglobuline, or if Seller is not
performing at least one (1) of the services, such failure to perform is
due to (i) an event of force majeure, (ii) a request from Buyer, (iii)
or a termination of the Service Agreement for the Manufacturing due to
Buyer's fault; and"
5. The table set forth in Article 1.1.1c) (ii) of the Share Purchase Agreement
is hereby replaced in its entirety with the following:
- --------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
55
<PAGE> 132
<TABLE>
<CAPTION>
Minimum
Reference Sales of
Anniversary Date Thymoglobuline Market
---------------- ------------------ ------
<S> <C> <C>
12 months after Closing Date [*] vials Worldwide
24 months after Closing Date [*] vials European Union and USA
36 months after Closing Date [*] vials European Union and USA
48 months after Closing Date [*] vials European Union and USA
60 months after Closing Date [*] vials European Union and USA
</TABLE>
Additionally, the two paragraphs immediately following the table in
Article 1.1.1.c) (ii) are hereby replaced in their entirety with the following:
"It is understood between the Parties that:
- - for the second Payment Date (6 months after Closing Date), the minimum sales
test shall be applied to the 6-month period preceding such date; as a result,
no payment shall be due on such date if Actual Sales in this 6-month period
are lower than [_____]* vials;
- - for all Payment Dates which are not Anniversary Dates of the Closing Date,
the minimum sales test to be referred to shall be as of the preceding
Anniversary Date.
For the purposes hereof, on each Anniversary Date of the Closing Date, the
Company will measure the total number of Thymoglobuline R vials sold on the
market referred to in the schedule hereabove mentioned during the 12-month
period preceding such date (the "Actual Sales")."
6. Paragraph (i) of Article 1.2.1 c) and correlatively the third paragraph of
Article 4.1 are hereby amended to provide that due to the extension of the
Initial Due Diligence Period, the Affidavit 1 acknowledging the completion to
Buyers satisfaction of the Initial Due Diligence, shall be remitted on the
date hereof.
7. Amendment dated June 10, 1998, paragraph 2., Article 1.2.1 c): the title of
the second dash is to be read as follows:
"- The first paragraph of paragraph (ii) is replaced by:"
instead of
"- The paragraph (ii) is replaced by:"
8. Article 1.3.2 is replaced by:
- --------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
56
<PAGE> 133
"The Parties will remit to the Escrow Agent a joint letter of instruction,
in the form specified under the Escrow Agreement, giving instruction to the
Escrow Agent to release the amount of $10,000,000 (ten million U.S. dollars)
held in escrow since the Filing Date to Seller, in accordance with
provisions of Article 1.1.1. a) hereof."
9. Article 1.3.3 is replaced by:
"The Escrow Agent shall remit to Seller the Payment of $10,000,000 (ten
million U.S. dollars)."
10. Article 4.1:
- the following sentence is added at the end of the third paragraph:
"Shall the Affidavit 1 be remitted in July, the computation of the 20 days
for the filing of the draft Partial Business Contribution Agreement shall
start as from August 31."
- the fourth paragraph is replaced by:
"As soon as the conditions precedent referred to in Articles 1.2.1 b) and
1.2.1 c) hereafter are fulfilled and within 20 days thereafter, it being
specified that, due to legal requirements, the minimum period of time
between the Filing Date and the Closing Date must be at least 30 days, the
shareholders of Seller and of the Company shall be convened at general
meetings to decide upon the Partial Business Contribution and complete the
Partial Business Contribution of the Business in exchange for shares of the
Company, pursuant to the Partial Business Contribution Agreement, as
provided under Article 1.2.1 a) hereabove. Should the 20 day period
hereabove not allow Seller and the Company to hold these general meetings
the last day of a month, this 20 day period shall be extended to the last
day of the month during which the 20 day period ended."
11. Article 4.2 of the Share Purchase Agreement is hereby amended to include a
new Article 4.2.7 which shall read in its entirety as follows:
"4.2.7 [*]
Seller shall use its best efforts to contribute to the development of an [*]
test for Thymoglobuline by August 31, 1998, and such best efforts shall
include, but not be limited to, (i) having one (1) trained biochemist from
Seller dedicated to this development effort for the four (4) weeks preceding
August 31, 1998, (ii) retaining at Seller's expense the services of one
external immunochemistry
- --------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
57
<PAGE> 134
laboratory and (iii) interacting with Buyer with respect to Buyer's own
laboratory work regarding the above mentioned test."
12. Article 5.e:
The first paragraph of paragraph (iii) is replaced by:
"The total amount of indemnification pursuant to the Agreement shall not
exceed the total amount of the Fixed Price (i.e., $31,000,000 (thirty-one
million U.S. Dollars), or the Fixed Price such as reduced in accordance with
Articles 1.1.1 b), c) and d)). It is expressly agreed between the Parties
that, with respect to Damages consisting in product liability which would
arise in connection with representations of Article 2.23 hereof:"
Paragraph (ii) of paragraph (iii) is replaced by:
"any Damages resulting from a product manufactured between the Retroactive
Date and the Closing Date shall give right to an indemnification limited to
an amount of $68,000,000 (sixty-eight million U.S. Dollars), unless such
Damages are due to the distribution (and not to the manufacturing) of the
products, in which case no indemnification shall be due."
13. The schedule of Exceptions in section 2.22 (Inventory) of Exhibit 2. to the
Share Purchase Agreement is amended as follows:
The first paragraph is replaced by:
"Existing inventories of Thymoglobuline [*] which could through time [*]
according to the current test method within the limits of specificity,
accuracy and uncertainty of such method."
The following paragraph is added after the first paragraph:
[*]
<TABLE>
<CAPTION>
BATCH NO. [*]
--------- -----
<S> <C>
[*] - [*]
- [*]
- [*]
[*] [*]
[*] [*]
[*] [*]
</TABLE>
- --------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
58
<PAGE> 135
The Parties agreed that this amendment no. 2 is a part of the Share Purchase
Agreement dated June 10, 1998. Any provision of the Share Purchase Agreement not
expressly modified by this amendment no. 2 shall remain unchanged. All Exhibits
shall be deemed to be modified to the extent necessary to make each of them
consistent with this amendment no. 2. Capitalized terms in this amendment no. 2
shall have the meaning set-forth in the Share Purchase Agreement.
Executed in two originals
In Lyon In Menlo Park
For Pasteur Merieux Serums & Vaccins For SangStat Medical Corporation
/s/ HERVE TAINTURIER /s/ PHILIPPE POULETTY
- ----------------------------------- ------------------------------------
Represented by Mr. Herve Tainturier Represented by Mr. Philippe Pouletty
- --------
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
59
<PAGE> 136
AMENDMENT NO. 3 TO THE SHARE PURCHASE AGREEMENT
DATED JUNE 10,1998
This amendment of the Share Purchase Agreement is made as of the 9th of
September 1998 by and among Pasteur Merieux Serums & Vaccins S.A., a Pasteur
Merieux Connaught company and a French Societe Anonyme having its registered
office at 58 Avenue Leclerc, 69007 Lyon, France, duly represented by Mr. Herve
Tainturier, duly empowered for the purpose hereof ("PMC" or "Seller") and
SangStat Medical Corporation, corporation existing and organized under the laws
of the State of Delaware and having its principal place of business at 1505
Adams Drive, Menlo Park, California, 94025 USA, duly represented by Mr. Philippe
Pouletty ("SMC" or "Buyer"), in relation to the sale of the shares of
IMTIX-SangStat, S.A.S., a French corporation registered in the form of a societe
par actions simplifiee (the "COMPANY").
Seller and Buyer are hereinafter referred to as the "PARTIES" or individually a
"PARTY".
WHEREAS:
Whereas the Parties have signed on the 10th of June 1998 an agreement entitled
Share Purchase Agreement,
Whereas the Parties have amended the Share Purchase Agreement through two
amendments dated June 10, 1998 and July 31, 1998,
Whereas the Parties agreed to amend this Share Purchase Agreement through the
present amendment,
The Parties agreed to amend the Share Purchase Agreement and the amendments to
the Share Purchase Agreement dated June 10, 1998 and July 31, 1998 as follows:
The paragraph (ii) of Article 1.2.1 c) of the Share Purchase Agreement and the
last paragraph of section 2 of the amendment to the Share Purchase Agreement
dated June 10, 1998 are replaced by:
"(ii) Buyer shall, in addition, have the right, for 12 Business Days
following the filing Date to make review of the valuation of assets
and liabilities in the Partial Business Contribution Agreement it
would estimate appropriate (the "SECOND DUE DILIGENCE PERIOD").
Upon expiration of the Second Due Diligence period, that is to say at
the latest on the 10th September 1998 at 11:59 p.m. California time,
Buyer shall remit to Seller
60
<PAGE> 137
a certificate acknowledging the completion to its satisfaction of
such due diligence in the form of the Affidavit 2, provided that if
Buyer does not deliver the Affidavit 2, Buyer shall inform Seller in
writing at the same date of its reasons for not delivering the
Affidavit 2."
Section 7 of the amendment to the Share Purchase Agreement dated July 31, 1998
shall be deemed to be modified, to the extent necessary to make it consistent
with this amendment no. 3.
The Parties agreed that this amendment no. 3 is a part of the Share Purchase
Agreement dated June 10, 1998. Any provision of the Share Purchase Agreement and
of the amendments to the Share Purchase Agreement not expressly modified by this
amendment no. 3 shall remain unchanged. All Exhibits shall be deemed to be
modified to the extent necessary to make each of them consistent with this
amendment no. 3. Capitalized terms of this amendment no. 3 shall have the
meaning set forth in the Share Purchase Agreement.
Executed in Lyon
In two originals
On September 9, 1998
Pasteur Merieux Serums & Vaccins SangStat Medical Corporation
/s/ HERVE TAINTURIER /s/ PHILEPPE POULETTY
- ----------------------------------- ------------------------------------
Represented by Mr. Herve Tainturier Represented by Mr. Philippe Pouletty
61
<PAGE> 138
[Exhibit 1.1.1 (a)]
FORM OF ESCROW AGREEMENT
62
<PAGE> 139
[Exhibit 1.1.1 (b)]
CALCULATION FORMULA OF DIRECT COST
63
<PAGE> 140
[Exhibit 1.1.1 (c)(i)(a)]
FORM OF SERVICE AGREEMENT FOR THE MANUFACTURING
64
<PAGE> 141
[Exhibit 1.1.4 (i)]
FORM OF LETTER OF CREDIT
65
<PAGE> 142
[Exhibit 1.1.4 (i-2)]
FORM OF CERTIFICATE
66
<PAGE> 143
[Exhibit 1.2.1 (a)]
FORM OF PARTIAL BUSINESS CONTRIBUTION AGREEMENT
67
<PAGE> 144
[Exhibit 1.2.1 (c)]
DUE DILIGENCE LIST
68
<PAGE> 145
[Exhibit 1.2.1 (c)(1)]
FORM OF AFFIDAVIT 1/FORM OF AFFIDAVIT 2
69
<PAGE> 146
[Exhibit 1.2.2 (b)]
FORM OF AMENDMENT TO THE MANUFACTURING AND SUPPLY AGREEMENT OF OCTOBER 13, 1993
70
<PAGE> 147
[Exhibit 1.3.1 (a)(i)]
FORM OF REITERATION
71
<PAGE> 148
[Exhibit 2]
SCHEDULE OF EXCEPTIONS
72
<PAGE> 149
[Exhibit 2.5 (a)]
EXCEPTIONS TO ARTICLE 2.5 (LICENSES)
73
<PAGE> 150
[Exhibit 2.5 (b)]
PERMITS AND AUTHORIZATIONS
74
<PAGE> 151
[Exhibit 2.6]
MANAGEMENT ACCOUNTS
75
<PAGE> 152
[Exhibit 2.9]
LIST OF GENERAL SERVICES
76
<PAGE> 153
[Exhibit 2.11]
DISPUTES WITH EMPLOYEE COMMITTEE AND WORK COUNCIL
77
<PAGE> 154
[Exhibit 2.12]
EXCEPTIONS TO ARTICLE 2.12 (OUTSTANDING OPTIONS, LICENSES OR AGREEMENTS)
78
<PAGE> 155
[Exhibit 2.14]
THIRD PARTY CONSENTS
79
<PAGE> 156
[Exhibit 2.17]
LIST OF LICENSES HELD BY THIRD PARTY DISTRIBUTORS
80
<PAGE> 157
[Exhibit 2.24 (a)]
LIST OF EMPLOYEES
81
<PAGE> 158
[Exhibit 2.24 (h)]
PENSION AND EMPLOYEE INSURANCE PLANS
82
<PAGE> 159
[Exhibit 2.24 (i)]
LOANS TO EMPLOYEES, AGENTS OR REPRESENTATIVES
83
<PAGE> 160
[Exhibit 2.26]
CONTRACTS OUTSIDE THE ORDINARY COURSE OF BUSINESS
84
<PAGE> 161
[Exhibit 4.2.2]
STEPS WITH FRENCH MEDECINE AGENCY (AGENCE DU MEDICAMENT)
85
<PAGE> 162
[Exhibit 6.6]
PRESS RELEASE
86
<PAGE> 163
[Exhibit 8 (i)]
FORM OF LETTER OF CREDIT
87
<PAGE> 164
[Exhibit 8 (i-2)]
FORM OF CERTIFICATE
88
<PAGE> 165
[Exhibit 14.2]
PRESS RELEASE
89
<PAGE> 1
EXHIBIT 99.1
TEXT OF PRESS RELEASE DATED SEPTEMBER 30, 1998
MENLO PARK, Calif. and LYON, France--(BW HealthWire)--Sept. 30,
1998--SangStat, The Transplant Company(R) (Nasdaq: SANG - news) and Pasteur
Merieux Connaught (Rhone-Poulenc group) announced today the closing of the
acquisition of Pasteur Merieux Connaught's organ transplant business known as
IMTIX. The resulting wholly owned subsidiary of SangStat, named IMTIX-SangStat,
is dedicated to the development, manufacturing and sale of transplantation
products in more than 60 countries outside of North America, and is expected to
generate sales of approximately $22-28 million in 1998.
"The successful creation of IMTIX-SangStat is a key component of our
global plan to become a competitive force in the $2 billion worldwide transplant
market," said Philippe Pouletty, M.D., SangStat's Chairman and CEO. "We look
forward to the productive integration of IMTIX into SangStat and to the many
value-added benefits that this very timely union offers given the potential
European CYCLOSPORINE approval in 1999."
The transaction is an acquisition of IMTIX by SangStat for $31 million,
and involves an up-front payment of $10 million and deferred cash payments over
five years of $21 million. In addition, SangStat will pay Pasteur Merieux
Connaught royalties on IMTIX-SangStat product sales that are variable and
contingent upon the sales of certain IMTIX-SangStat products. The transaction
will be accounted for using the purchase method.
"IMTIX's products and turn-key sales and manufacturing operations are a
welcome addition to our current portfolio of transplant products and services,"
said Jean-Jacques Bienaime, SangStat's President and COO. "The significant
development, marketing and sales synergies offered by this acquisition should
contribute to SangStat's growth over the coming years and help us to penetrate
the large European market."
IMTIX
Pasteur Merieux Connaught's organ transplant business operated as a
business unit called IMTIX. Established in 1995, IMTIX is dedicated to the
research, development, manufacture and marketing of pharmaceuticals for
transplantation. Its portfolio includes i) products for prevention and treatment
of rejection, THYMOGLOBULIN(R) and LYMPHOGLOBULINE(R), polyspecific antibodies
currently distributed in Europe and other countries, ii) Odulimomab
(anti-LFA-1), a monoclonal antibody currently in Phase III for prevention of
delayed graft function in transplant patients, and iii) Celsior(R), an organ
preservation solution. Based in Lyon, France, with several European subsidiaries
and offices, IMTIX has approximately 80 employees, of whom approximately 50 are
dedicated to R&D, regulatory, medical affairs, marketing and sales, and
approximately 30 to product manufacturing. Products are manufactured in Lyon and
distributed by Pasteur Merieux Connaught's affiliates in more than 60 countries
outside of North America, including most of the EU countries, Brazil, South
Africa and Japan. "We are pleased to contribute, through the sale of IMTIX to
SangStat, to the growth of a focused transplant care company," said Jean-Jacques
Bertrand, Chairman and
<PAGE> 2
CEO of Pasteur Merieux Connaught. "Since initiating our collaboration with
SangStat in 1993, with the licensing of THYMOGLOBULIN and CELSIOR North American
rights to SangStat, our two companies have built a fruitful and cooperative
relationship."
"This is viewed within our organization as a very positive step
forward," said Dr. Gilles Alberici, previously the Head of IMTIX, Pasteur
Merieux Connaught Transplant Division and the newly appointed President of
IMTIX-SangStat. "We are excited about the opportunity to work within a company
that is completely focused on organ transplantation."
Products Included In Acquisition
THYMOGLOBULIN is a pasteurized, rabbit anti-human thymocyte
immunoglobulin, which induces immunosuppression as a result of T-cell depletion.
It was first registered in 1985, is currently marketed in 51 countries
worldwide, and has been used in more than 40,000 patients worldwide for the
treatment and prevention of acute graft rejection episodes in transplant
recipients. CELSIOR is an organ preservation solution currently used for heart
preservation and available in three countries so far. SangStat acquired
exclusive licenses from Pasteur Merieux Connaught in 1993 to market
THYMOGLOBULIN and CELSIOR in the United States and Canada. An application for
market clearance for THYMOGLOBULIN in the United States is in the final stages
of review at the U.S. Food and Drug Administration, and an application for
510(k) clearance of the one-bag system for CELSIOR is expected to be filed later
in the year. LYMPHOGLOBULINE is a horse anti-human thymocyte immunoglobulin
available in 55 countries for the prevention and treatment of graft rejection
and for treatment of severe hematological disorders, and Odulimomab (anti-LFA-1)
is a monoclonal antibody in Phase III in North America and Europe for the
prevention of delayed graft function in transplant patients.
SangStat, The Transplant Company(R) and Pasteur Merieux Connaught
SangStat is a specialty pharmaceutical company applying a disease
management approach to improve the outcome of organ transplantation. The Company
has a total of 12 monitoring and therapeutic products and product candidates to
address the pre-transplant, acute care and chronic phases of transplantation.
SangStat is located in Menlo Park, California, and operates The Transplant
Pharmacy(R), a comprehensive pharmacotherapy management program, and
wholly-owned subsidiaries, SangStat Atlantique S.A.S., SangStat's European base
of operations in Nantes, France, SangStat Canada, Ltd., in Mississauga, Ontario,
Canada and Human Organ Sciences(TM), Inc. in Menlo Park, California.
Pasteur Merieux Connaught is the world's largest vaccine company with
the broadest range of products. The company produces more than one billion doses
every year. Rhone-Poulenc SA is a leading life sciences company, growing through
innovations in human, plant and animal health and through its specialty
chemicals subsidiary, Rhodia. With sales in 1997 of FF90 billion (US$15
billion), the company employs 68,000 people in 160 countries worldwide.
This press release contains forward-looking statements that involve
risks and uncertainties. Forward-looking statements reflect SangStat and Pasteur
Merieux Connaught's current views with respect to future events. Actual results
may vary materially and adversely
<PAGE> 3
from those anticipated, believed, estimated, or otherwise indicated. Important
factors common to the drug review and clearance process by the FDA and EU
regulatory agencies could cause actual results to differ materially with regard
to the approvability and possible market acceptance of THYMOGLOBULIN,
CYCLOSPORINE, and other product candidates. Other risks associated with this
acquisition could cause actual results to differ materially. These factors
include, without limitation, receipt of approvals by regulatory agencies to
transfer product manufacturing and marketing licenses, the successful
integration of IMTIX into SangStat and failure to successfully exploit the
potential benefits and synergies of the acquisition.
Other factors that could cause actual results to differ materially
include, without limitation, uncertainty relating to the current or future
manufacturing of commercial quantities of products on commercially favorable
terms, market size, market acceptance, profitability and competition. For a
discussion of factors that might result in different outcomes, see SangStat's
1997 Form 10-K and most recent 10-Q filed with the Securities and Exchange
Commission.
