<PAGE>
As filed with the Securities and Exchange Commission on November 17, 1999
Registration No. 333-90947
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
AMENDMENT NO. 1
TO
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SHIRE PHARMACEUTICALS GROUP plc
(Exact name of Registrant as specified in its charter)
England and Wales 2834 Not Applicable
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
East Anton William A. Nuerge
Andover Shire Richwood Inc.
Hampshire SP10 5RG 7900 Tanners Gate Drive
ENGLAND Florence, Kentucky 41042
(44)1-264-333-455 (606) 282-2100
(Address, including zip code, and (Name, address, including zip code,
telephone number, and telephone number,
including area code, of including area code, of agent for
Registrant's principal executive service)
offices)
Copies to:
John P. Mitchell, Esq. Lawrence Lederman, Esq.
Cahill Gordon & Reindel Milbank, Tweed, Hadley & McCloy LLP
80 Pine Street 1 Chase Manhattan Plaza
New York, New York 10005 New York, New York 10005
(212) 701-3000 (212) 530-5000
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 is being filed solely for the purpose of filing exhibits.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification Of Directors And Officers.
Except as hereinafter set forth, there is no charter provision, by-law,
contract, arrangement or statute under which any director or officer of Shire
is insured or indemnified in any manner against any liability which he may
incur in his capacity as such.
Pursuant to Paragraph 141 of the Articles of Association of Shire, every
person who was or is a director, alternate director or secretary of Shire shall
be indemnified out of the assets of Shire for all costs, charges, losses and
liabilities incurred in the proper execution of such person's duties or the
proper exercise of such person's powers, authorities and discretions.
Under Section 310 of the Companies Act, Shire may not indemnify an officer
against any liability that by virtue of any rule of law would otherwise attach
to him in respect of any negligence, default, breach of duty or breach of trust
of which he may be guilty in relation to Shire, except that, under Section
310(3) of the Companies Act, Shire is not prevented, inter alia, (a) from
purchasing and maintaining for any such officer insurance against any such
liability, or (b) from indemnifying an officer against any liability incurred
by him in defending any proceedings (whether civil or criminal), in which
judgment is given in his favor or he is acquitted, or in connection with any
application in which relief is granted to him by the court in case of honest
and reasonable conduct.
Shire maintains an insurance policy for its directors and officers in
respect of liabilities arising out of any act, error or omission while acting
in their capacities as directors or officers.
Item 21. Exhibits and Financial Statements.
(a) Exhibits
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
***2.1 Agreement and Plan of Merger by and among Shire Pharmaceuticals
Group plc ("Shire"), Ruby Acquisition Sub Inc. and Roberts
Pharmaceutical Corporation dated as of July 26, 1999 (attached as
Annex A to the Prospectus-Proxy Statement included in this
Registration Statement)
*3.1 Memorandum and Articles of Association of Shire
*4.1 Form of Deposit Agreement among Shire, Morgan Guaranty Trust
Company of New York and Holders from time to time of Shire's ADSs
*4.2 Form of Ordinary Share certificate
*4.3 Form of ADR certificate (included within Exhibit 4.1)
5.1 Opinion of Slaughter and May as to certain Shire related matters
8.1 Opinion of Milbank, Tweed, Hadley & McCloy LLP regarding United
States tax consequences of the merger
*+10.1 Supply Agreement between Shire and Arenol Corporation dated
January 1, 1996
*+10.2 License Agreement between Shire and Nycomed Pharma AS dated
January 14, 1987, as amended
*10.3 License Agreement between Shire and Nycomed Pharma AS dated May
25, 1992
*+10.4 Agreement by and between Shire and Nycomed Pharma AS dated
September 27, 1993
*+10.5 Trademark License Agreement between Shire and Nycomed Pharma AS
dated October 23, 1995
*+10.6 License Agreement between Shire and Novartis Pharma A.G. dated as
of August 31, 1995
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
*+10.7 Agreement between Shire and MacFarlan Smith Limited dated June 16,
1997
*+10.8 Extraction Agreement between Shire and MacFarlan Smith Limited
dated June 16, 1997
*+10.9 License Agreement between Shire and Johnson Matthey plc dated
February 2, 1996
*+10.10 License Agreement between Shire, Johnson Matthey plc and Anormed
Inc. dated as of December 15, 1997
*+10.11 License Agreement between Shire and Johnson Matthey plc dated
December 15, 1997
*+10.12 License Agreement between Shire and Synaptech Inc. dated November
30, 1995
*+10.13 Agreement between Shire and Janssen Pharmaceutica N.V. dated
November 30, 1995
*+10.14 Global Co-Development, Know-how and Supply Agreement between Shire
and Janssen Pharmaceutica N.V. dated November 30, 1995
*+10.15 Patent License Agreement between Shire and Ernir Snorrason dated
March 31, 1992, as amended
*+10.16 Pharmaceutical Formulation License Agreement between Shire and
Hyal Pharmaceutical Corporation dated as of March 1, 1995
*+10.17 Sale and Assignment Agreement between Athena Neurosciences, Inc.,
Elan, SLI and Shire dated December 23, 1997
*+10.18 Development and License Agreement between Shire and NeuroSearch
A/S dated February 5, 1998
*10.19 Agreement and Plan of Merger among Shire and Pharmavene, Inc.
dated as of February 24, 1997
*10.20 Agreement and Plan of Merger among Shire and Richwood
Pharmaceutical Company, Inc. dated as of August 1, 1997
*10.21 SHL Scheme
*10.22 SPC Scheme
*10.23 Executive Scheme
*10.24 Sharesave Scheme
*10.25 Employee Stock Purchase Plan
10.26 Asset Purchase Agreement among Shire, Shire Supplies U.S. LLC,
Arenol Corporation, Richard Vorisek and Robert Jaeder dated as of
March 5, 1999
++10.27 Amendment Agreement to Global Co-Development, Know-How and Supply
Agreement between Shire and Janssen Pharmaceutica N.V. dated July
22, 1999
**10.28 Option Agreement by and between Roberts Pharmaceutical Corporation
and Shire dated as of July 26, 1999
10.29 Share Purchase Agreement among Fuisz International Limited, Fuisz
Technologies Ltd. and Shire Holdings Europe Limited dated October
22, 1999.
10.30 Amended and Restated Credit Agreement by and among Shire
Pharmaceutical Group plc, as guarantor, Shire Partners, Shire
Laboratories Inc., Shire Richwood Inc., Shire Supplies U.S. LLC
and Roberts Pharmaceutical Corporation, as borrowers, various
financial institutions, as lenders and DLJ Capital Funding, Inc.,
as syndication agent and administrative agent
***21.1 List of subsidiaries
***23.1 Consent of Arthur Andersen Chartered Accountants
***23.2 Consent of Ernst & Young LLP
***23.3 Consent of PricewaterhouseCoopers LLP
***23.4 Consent of Ernst & Young LLP
***23.5 Consent of PricewaterhouseCoopers LLP
23.6 Consent of Slaughter and May (included in Exhibit 5.1)
23.7 Consent of Milbank, Tweed, Hadley & McCloy LLP (included in
Exhibit 8.1)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
***24.1 Power of Attorney as set forth on the signature page of this
Registration Statement.
99.1 Opinion of PaineWebber Incorporated (attached as Annex B to the
Prospectus-Proxy Statement included in this Registration
Statement)
99.2 Opinion of Bear, Stearns & Co. Inc. (attached as Annex C to the
Prospectus-Proxy Statement included in this Registration
Statement)
***99.3 Consent of Ronald M. Nordmann
***99.4 Consent of Joseph E. Smith
***99.5 Consent of Zola P. Horovitz, Ph.D.
***99.6 Consent of John T. Spitznagel
99.7 Consent of Robert A. Vukovich, Ph.D.
</TABLE>
- --------
* Incorporated by reference to the exhibits to Shire's Registration Statement
on Form F-1 (No. 333-8394).
** Incorporated by reference to Shire's Form 6-K filed on July 26, 1999.
*** Previously filed.
+ Portions of this document, for which Shire has been granted confidential
treatment, have been redacted and filed separately with the Securities and
Exchange Commission.
++ Subject of a confidentiality treatment request. Certain portions have been
omitted which have been filed separately with the Securities and Exchange
Commission.
Item 22. Undertakings.
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change
to such information in this Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such post-
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof;
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
4. To file a post-effective amendment to this Registration Statement to
include any financial statements required by Rule 3-19 of Regulation S-X at
the start of any delayed offering or throughout a continuous offering.
5. That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934),
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
6. That, prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will
II-3
<PAGE>
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
7. That every prospectus (i) that is filed pursuant to paragraph (6)
immediately preceding or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject of Rule 415, will be filed as a part of an
amendment to this Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
8. To (i) respond to requests for information that is incorporated by
reference into the prospectus pursuant to items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means;
and (ii) arrange or provide for a facility in the U.S. for the purpose of
responding to such requests. The undertaking in subparagraph (i) above
includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
9. To supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 20 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the Town
of Andover, England, on, November 16, 1999.
Shire Pharmaceuticals Group plc
*
By: _________________________________
Stephen Stamp
Group Finance Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chief Executive November 16, 1999
____________________________________ (Principal executive
Rolf Stahel officer)
* Non-executive Chairman November 16, 1999
____________________________________
Dr. James Henry Cavanaugh
* Group Finance Director November 16, 1999
____________________________________ (Principal financial
Stephen Anthony Stamp officer and principal
accounting officer)
* Director November 16, 1999
____________________________________
Dr. Wilson Totten
* Director November 16, 1999
____________________________________
Dr. Barry John Price
* Director November 16, 1999
____________________________________
Dr. Bernard Canavan
* Authorized Representative in November 16, 1999
____________________________________ the U.S.
William Alfred Nuerge
/s/ Stephen Anthony Stamp
*By: _________________________________
Stephen Anthony Stamp
as Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
***2.1 Agreement and Plan of Merger by and among Shire Pharmaceuticals
Group plc ("Shire"), Ruby Acquisition Sub Inc. and Roberts
Pharmaceutical Corporation dated as of July 26, 1999 (attached as
Annex A to the Prospectus-Proxy Statement included in this
Registration Statement)
*3.1 Memorandum and Articles of Association of Shire
*4.1 Form of Deposit Agreement among Shire, Morgan Guaranty Trust
Company of New York and Holders from time to time of Shire's ADSs
*4.2 Form of Ordinary Share certificate
*4.3 Form of ADR certificate (included within Exhibit 4.1)
5.1 Opinion of Slaughter and May as to certain Shire related matters
8.1 Opinion of Milbank, Tweed, Hadley & McCloy LLP regarding United
States tax consequences of the merger
*+10.1 Supply Agreement between Shire and Arenol Corporation dated
January 1, 1996
*+10.2 License Agreement between Shire and Nycomed Pharma AS dated
January 14, 1987, as amended
*10.3 License Agreement between Shire and Nycomed Pharma AS dated May
25, 1992
*+10.4 Agreement by and between Shire and Nycomed Pharma AS dated
September 27, 1993
*+10.5 Trademark License Agreement between Shire and Nycomed Pharma AS
dated October 23, 1995
*+10.6 License Agreement between Shire and Novartis Pharma A.G. dated as
of August 31, 1995
*+10.7 Agreement between Shire and MacFarlan Smith Limited dated June 16,
1997
*+10.8 Extraction Agreement between Shire and MacFarlan Smith Limited
dated June 16, 1997
*+10.9 License Agreement between Shire and Johnson Matthey plc dated
February 2, 1996
*+10.10 License Agreement between Shire, Johnson Matthey plc and Anormed
Inc. dated as of December 15, 1997
*+10.11 License Agreement between Shire and Johnson Matthey plc dated
December 15, 1997
*+10.12 License Agreement between Shire and Synaptech Inc. dated November
30, 1995
*+10.13 Agreement between Shire and Janssen Pharmaceutica N.V. dated
November 30, 1995
*+10.14 Global Co-Development, Know-how and Supply Agreement between Shire
and Janssen Pharmaceutica N.V. dated November 30, 1995
*+10.15 Patent License Agreement between Shire and Ernir Snorrason dated
March 31, 1992, as amended
*+10.16 Pharmaceutical Formulation License Agreement between Shire and
Hyal Pharmaceutical Corporation dated as of March 1, 1995
*+10.17 Sale and Assignment Agreement between Athena Neurosciences, Inc.,
Elan, SLI and Shire dated December 23, 1997
*+10.18 Development and License Agreement between Shire and NeuroSearch
A/S dated February 5, 1998
*10.19 Agreement and Plan of Merger among Shire and Pharmavene, Inc.
dated as of February 24, 1997
*10.20 Agreement and Plan of Merger among Shire and Richwood
Pharmaceutical Company, Inc. dated as of August 1, 1997
*10.21 SHL Scheme
*10.22 SPC Scheme
*10.23 Executive Scheme
*10.24 Sharesave Scheme
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
*10.25 Employee Stock Purchase Plan
10.26 Asset Purchase Agreement among Shire, Shire Supplies U.S. LLC,
Arenol Corporation, Richard Vorisek and Robert Jaeder dated as of
March 5, 1999
++10.27 Amendment Agreement to Global Co-Development, Know-How and Supply
Agreement between Shire and Janssen Pharmaceutica N.V. dated July
22, 1999
**10.28 Option Agreement by and between Roberts Pharmaceutical Corporation
and Shire dated as of July 26, 1999
10.29 Share Purchase Agreement among Fuisz International Limited, Fuisz
Technologies Ltd. and Shire Holdings Europe Limited dated October
22, 1999.
10.30 Amended and Restated Credit Agreement by and among Shire
Pharmaceutical Group plc, as guarantor, Shire Partners, Shire
Laboratories Inc., Shire Richwood Inc., Shire Supplies U.S. LLC
and Roberts Pharmaceutical Corporation, as borrowers, various
financial institutions, as lenders and DLJ Capital Funding, Inc.,
as syndication agent and administrative agent.
***21.1 List of subsidiaries
***23.1 Consent of Arthur Andersen Chartered Accountants
***23.2 Consent of Ernst & Young LLP
***23.3 Consent of PricewaterhouseCoopers LLP
***23.4 Consent of Ernst & Young LLP
***23.5 Consent of PricewaterhouseCoopers LLP
23.6 Consent of Slaughter and May (included in Exhibit 5.1)
23.7 Consent of Milbank, Tweed, Hadley & McCloy LLP (included in
Exhibit 8.1)
***24.1 Power of Attorney as set forth on the signature page of this
Registration Statement.
99.1 Opinion of PaineWebber Incorporated (attached as Annex B to the
Prospectus-Proxy Statement included in this Registration
Statement)
99.2 Opinion of Bear, Stearns & Co. Inc. (attached as Annex C to the
Prospectus-Proxy Statement included in this Registration
Statement)
***99.3 Consent of Ronald M. Nordmann
***99.4 Consent of Joseph E. Smith
***99.5 Consent of Zola P. Horovitz, Ph.D.
***99.6 Consent of John T. Spitznagel
99.7 Consent of Robert A. Vukovich, Ph.D.
</TABLE>
- --------
* Incorporated by reference to the exhibits to Shire's Registration Statement
on Form F-1 (No. 333-8394).
** Incorporated by reference to Shire's Form 6-K filed on July 26, 1999.
*** Previously filed.
+ Portions of this document, for which Shire has been granted confidential
treatment, have been redacted and filed separately with the Securities and
Exchange Commission.
++ Subject of a confidentiality treatment request. Certain portions have been
omitted which have been filed separately with the Securities and Exchange
Commission.
II-7
<PAGE>
Exhibit 5.1
[Letterhead of Slaughter and May]
CE993160172
Shire Pharmaceuticals Group plc
East Anton,
Andover,
Hants. SP10 5RG
16th November, 1999
Dear Sirs,
Introduction
- ------------
1. We have acted as English legal advisers to you (the "Company") in
connection with the Registration Statement on Form F-4 filed with the
Securities and Exchange Commission (the "SEC") by the Company (the
"Prospectus-Proxy Statement"), relating to the proposed issue of ordinary
shares of nominal value of five pence each in the capital of the Company
(the "Shares").
Scope
- -----
2. This opinion is confined to matters of English law. Accordingly, we have
not made any investigation of, and do not express any opinion on, the law
of any jurisdiction other than England and Wales. In particular, we
express no opinion on European Community law as it affects any
jurisdiction other than England.
3. We have examined copies of the documents mentioned herein and such other
documents as we have considered necessary. Our role has not been to
investigate or verify the accuracy, completeness or fairness of any facts
or statements contained or made in the Prospectus-Proxy Statement and we
have not undertaken any exercise which is not described in this letter.
Accordingly and save as expressly provided in this letter we assume no
responsibility for the accuracy or completeness of any of the information
<PAGE>
Shire Pharmaceuticals Group Plc, 2 . November, 1999
contained in the Prospectus-Proxy Statement or for any omission therefrom
or for the reasonableness of any statement of opinion contained therein.
Documents examined
- ------------------
4. For the purposes of this opinion we have examined and relied upon the
following documents:-
(A) a substantially final draft of the Prospectus-Proxy Statement;
(B) a copy of the agreement and plan of merger entered into by the
Company, Ruby Acquisition Sub Inc and Roberts Pharmaceutical
Corporation as of 26th July, 1999 (the "Merger Agreement");
(C) a substantially final draft of the circular to be posted on or about
18th November, 1999 to the Company's shareholders comprising listing
particulars prepared in accordance with the listing rules made under
section 142 of the Financial Services Act 1986 (the "Circular");
(D) copies of the minutes of all relevant meetings of the Board of
Directors of the Company or, in the case of the meeting approving the
Prospectus-Proxy Statement, a substantially final draft thereof (the
"Board Minutes");
(E) copies of the minutes of all relevant General Meetings of the
Company or, in the case of the meeting notice of which is contained in
the Circular, a substantially final draft thereof (the "GM Minutes");
and
(F) such other documents and records as we have considered necessary or
appropriate for the purposes of this opinion.
Assumptions
- -----------
5. In giving this opinion, we have assumed:-
(A) that the statements contained in the Board Minutes, the GM Minutes,
the Merger Agreement and the Circular are complete and accurate as at
the date of this opinion and that the directors of the Company present
at the meetings recorded in the Board Minutes were acting in the
interests and for a proper purpose of the Company;
(B) the authenticity, completeness and conformity to original documents of
all copy documents examined by us;
(C) that all signatures purporting to be on behalf of (or to witness the
execution on behalf of) the Company or any director of the Company
<PAGE>
Shire Pharmaceuticals Group Plc, 3 . November, 1999
are genuinely those of the persons whose signatures they purport to
be;
(D) that, where a document has been examined by us in draft form, it has
been or will be signed and/or given final approval in the form of that
draft;
(E) that words and phrases used in the Prospectus-Proxy Statement have
the same meaning and effect as they would if those documents were
governed by English law and there is no provision of any law (other
than English law) which would affect anything in this opinion letter;
and
(F) that no other event occurs after the date hereof which would affect
the opinions herein stated.
Opinion
- -------
6. We are of the opinion that, relying on the assumptions listed in
paragraph 5 and subject to the reservations mentioned below, the Company
has the requisite corporate power to issue the Shares and, once the
shareholder resolution set out in the Notice of Extraordinary General
Meeting contained in the Circular has been passed at the relevant General
Meeting of the Company, all shareholder resolutions necessary to
authorise such issue will have been passed. The Shares to be issued by
the Company will when so issued, have been validly authorised, allotted
and issued as fully paid and non-assessable. On this basis, the issue of
Shares will be free of any pre-emptive rights and no personal liability
by way of call will attach to the holders of the Shares as such holders
under English law;
Reservations
- ------------
7. Our opinion is qualified by the following reservations and by any matter of
fact not disclosed to us:-
(A) English law, the Articles of Association of the Company and the
Listing Rules of the London Stock Exchange contain restrictions on the
transfer of shares and voting rights in certain limited circumstances
including the following:-
(i) transfers of shares may be avoided under the provisions of
insolvency law, or where any criminal or illegal activity is
involved, or where the transferor or transferee does not have
the requisite legal capacity or authority, or where the
transferee is subject to restrictions or constraints;
(ii) the registration of a transfer of shares by a particular
shareholder may be restricted if that shareholder has failed
to
<PAGE>
Shire Pharmaceuticals Group Plc, 4 . November, 1999
disclose his interest in shares in the Company after having
been served with a notice by the Company requesting such
disclosure pursuant to Section 212 of the Companies Act 1985;
(iii) save in the case of depositary schemes or clearance services,
no transfer will be registered unless the appropriate stamp
duty has been paid at the rate of 0.5 per cent. (rounded up if
necessary to the nearest multiple of five pounds sterling
((Pounds)5)) of the stated consideration or if the stock
transfer form is otherwise not in order;
(iv) any holder of shares who is a director of the Company is bound
by the Model Code for Dealing in Securities promulgated by the
London Stock Exchange which imposes restrictions on the
ability of directors to transfer shares in the two months
prior to the announcement of interim and final results and at
other times when directors are in possession of unpublished
price sensitive information;
(v) under the Companies Act 1985, and subject to the
Uncertificated Securities Regulations 1995, the Company can
close its register of members from time to time for periods
not exceeding 30 days in aggregate in any calendar year and
during any such period no transfer of shares may be
registered;
(vi) no share may be transferred after the passing of a resolution
for the winding-up of the Company;
(vii) a company or the Court may impose restrictions on the
transferability and other rights of shares held by persons
who do not comply with that company's proper enquiries, under
the Companies Act 1985 or that company's articles of
association (if they so provide), considering the ownership
of shares; and
(viii) there may be circumstances in which a holder of shares
becomes obliged to transfer those shares under the provisions
of the Companies Act 1985, for example following the
implementation of a takeover where minority shareholders are
compulsorily bought out or following the implementation of a
scheme of arrangement. Once a holder of shares becomes
<PAGE>
Shire Pharmaceuticals Group Plc, 5 . November, 1999
obliged to make such a transfer he may not transfer to any
other person;
(B) shareholders can make arrangements outside the Company's
constitutional documents in respect of restrictions on transfer or
pre-emptive rights relating to shares, about which we express no
opinion; and
(C) the obligations of the Company under the Shares will be subject to any
law from time to time in force relating to bankruptcy, insolvency,
liquidation, reorganisation or administration or any other law or
legal procedure affecting generally the enforcement of creditors'
rights.
Consent
- -------
8. We hereby consent to the disclosure of this opinion letter as an exhibit
to the Prospectus-Proxy Statement and its consequent filing with the SEC
and to the use of our name therein and in the Prospectus-Proxy Statement
under the caption "Certain Legal Matters".
Yours faithfully,
/s/ Slaughter and May
<PAGE>
Exhibit 8.1
[Letterhead of Milbank, Tweed, Hadley & McCloy LLP]
November 16, 1999
Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, New Jersey 07724
Dear Sirs:
You have requested our opinion concerning certain federal income tax
consequences of the merger of Ruby Acquisition Sub Inc. ("Sub"), a New Jersey
corporation wholly-owned by Shire Pharmaceuticals Group plc ("Shire"), a public
limited company organized under the laws of England and Wales, into Roberts
Pharmaceutical Corporation ("Roberts"), a New Jersey corporation, pursuant to
the Agreement and Plan of Merger, dated as of July 26, 1999, by and among Shire,
Sub and Roberts (the "Merger Agreement").
Except as otherwise provided, capitalized terms used in this letter have
the meanings set forth in the Merger Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986 (the "Code").
In providing our opinion, we have examined and relied upon (i) the Merger
Agreement and related agreements, (ii) the Proxy Statement/Prospectus (the
"Prospectus") filed as part of the Registration Statement on Form F-4, filed by
Roberts and Shire with the Securities and Exchange Commission, (iii) the written
representations by Roberts and Shire in letters to us dated November 16, 1999
(the Representation Letters") and (iv) other documents, records or oral
representations of Roberts, Shire and their representatives we have deemed
necessary.
We have assumed (i) the Merger will qualify as a merger under applicable
state law, (ii) the transactions related to the Merger will be consummated as
described in the
<PAGE>
Roberts Pharmaceutical Corporation
November 16, 1999
Page 2
Prospectus, and (iii) the statements made in the Representation Letters were
accurate and complete when made and will be accurate as of the Effective Time of
the Merger.
We also assume that all representations and facts set forth in the Merger
Agreement are accurate, and the transaction described in the Merger Agreement
will be carried out in accordance with its terms. In addition, insofar as our
opinion address the federal tax consequences of the Merger to any United States
person who is a "five-percent transferee shareholder," as defined in Treasury
Regulation (S) 1.367(a)-3(c)(5)(ii), we assume that the shareholder will enter
into five-year gain recognition agreement as required by Treasury Regulation (S)
1.367(a)-3(c)(1)(iii)(B).
Based upon and subject to the assumptions, representations and limitations
described above, we are of the opinion that:
(1) The Merger will constitute a reorganization within the meaning of Code
section 368(a);
(2) Roberts shareholders will recognize no gain or loss upon the exchange
of Roberts common stock for Shire ADSs or Shire ordinary shares pursuant to the
Merger (except with respect to cash received in lieu of fractional Shire ADSs or
Shire ordinary shares);
(3) The aggregate tax basis to each Roberts shareholder of the ADSs or
ordinary shares received, including fractional units for which cash is received,
will be the same as the aggregate tax basis of the Roberts common stock
surrendered in exchange therefor in the Merger;
(4) Each Roberts shareholder's holding period of the ADSs or ordinary
shares received, including fractional units for which cash is received, will
include the holding period of Roberts common stock held as a capital asset
surrendered in exchange therefor in the Merger;
(5) A Roberts shareholder who receives cash in lieu of fractional Shire
ADSs or fractional Shire ordinary shares will recognize gain or loss equal to
the difference, if any, between that shareholder's tax basis allocable to the
fractional share and the amount of cash received; and
(6) Statements in the Prospectus under the captions "Material Tax
Consequences--United States Tax Consequences of the Merger to U.S. Persons That
Beneficially Own Shares of Roberts Common Stock," and "Material Tax
Consequences--United States Tax Consequences of the Ownership of Ordinary Shares
and ADSs to U.S. Persons that Beneficially Own Shares of Roberts Common Stock,"
to the extent they state matters of law or legal conclusions, are an accurate
summary of the material United States federal income tax consequences of the
Merger in all material respects.
These opinions are based upon existing statutory, regulatory and judicial
authority and administrative interpretations, any of which may be changed with
retroactive effect. These
<PAGE>
Roberts Pharmaceutical Corporation
November 16, 1999
Page 3
opinions are also based entirely on the accuracy and veracity, as of the
Effective Time of the Merger, of the information obtained from the documents we
have examined and the statements contained in the Representation Letters. Our
opinions cannot be relied upon if any of the facts pertinent to the federal
income tax consequences of the Merger are different than we have assumed or the
law changes with retroactive effect. Although this letter represents our opinion
concerning the matter specifically discussed, it is not binding on the courts or
on any administrative agency, including the U.S. Internal Revenue Service, and a
court or agency may act or hold to the contrary. We undertake no obligation to
update this letter or our opinion at any time after the Closing Date. Finally,
our opinions are limited to the tax matters expressly set forth above and we
express no opinion on any other aspect of the Merger.
We hereby consent to the reference to Milbank, Tweed, Hadley & McCloy LLP
in the Prospectus under the caption "Material Tax Consequences--United States
Tax Consequences of the Merger to U.S. Persons That Beneficially Own Shares of
Roberts Common Stock" and to the filing of this opinion as an exhibit to the
Registration Statement, but do not thereby admit that we are within the category
of persons whose consent is required by Section 7 of the Securities Act of 1933,
as amended.
Very truly yours,
/s/ Milbank, Tweed, Hadley & McCloy LLP
RAJ/DLP/TFB
<PAGE>
Exhibit 10.26
___________________
ASSET PURCHASE AGREEMENT
AMONG
SHIRE PHARMACEUTICALS GROUP PLC,
SHIRE SUPPLIES U.S. LLC,
ARENOL CORPORATION,
RICHARD VORISEK
AND
ROBERT JAEDER
DATED AS OF MARCH 5, 1999
___________________
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1. Definitions............................................................1
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1. Purchase and Sale of Assets............................................9
2.2. Purchase Price.........................................................9
2.3. Arbitration...........................................................13
2.4. Restricted Assets.....................................................13
2.5. Instruments of Transfer and Conveyance................................14
2.6. Assumption of Contracts...............................................15
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Seller..........................15
(a) Organization; Standing and Power.................................15
(b) Subsidiaries.....................................................15
(c) Capitalization; Ownership........................................16
(d) Authority........................................................16
(e) Noncontravention.................................................16
(f) Non-Government Approval; Consents................................17
(g) Financial Statements.............................................17
(h) Absence of Certain Changes or Events.............................17
(i) Compliance with Law..............................................18
(j) Litigation.......................................................18
(k) Taxes and Tax Returns............................................18
(l) Personal Property................................................19
(m) Licenses, Permits and Authorizations.............................19
(n) ERISA and Employee Matters.......................................19
(o) Labor Relations..................................................20
(p) Intellectual Property Rights.....................................20
(q) Insurance........................................................21
(r) Contracts........................................................22
(s) Undisclosed Liabilities..........................................22
(t) FDA, DEA Matters.................................................22
(u) Environmental Matters............................................24
(v) Products.........................................................26
-i-
<PAGE>
Page
----
(w) Investment Intent................................................27
(x) Brokers or Finders...............................................27
3.2. Representations and Warranties of Shire and the Buyer.................27
(a) Organization; Standing and Power.................................27
(b) Authority........................................................27
(c) Non-Government Approval; Consents................................28
(d) Ordinary Shares..................................................28
(e) Brokers or Finders...............................................28
ARTICLE IV
COVENANTS OF THE SELLER
4.1. Regular Course of Business............................................28
4.2. Certain Prohibited Company Activities.................................28
4.3. Notice of Certain Events..............................................30
4.4. Access................................................................30
4.5. Approvals.............................................................30
4.6. Agreement Not to Compete..............................................30
4.7. Application of Insurance Proceeds.....................................32
4.8. Restriction on Sale or Disposition of Ordinary Shares.................32
4.9. Payment of WARN Liabilities...........................................32
4.10. Replacement of Documents..............................................32
ARTICLE V
COVENANTS OF SHIRE AND THE BUYER
5.1. Notice of Certain Events..............................................33
5.2. Approvals.............................................................33
5.3. Release of Claims.....................................................33
ARTICLE VI
CLOSING DATE; CLOSING
6.1. Closing Date; Closing.................................................33
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to the Obligations of Each Party to Effect the Closing.....34
(a) Certain Approvals................................................34
(b) No Proceeding or Litigation......................................34
-ii-
<PAGE>
Page
----
(c) Registration Rights Agreement....................................34
(d) Supply Agreement.................................................34
7.2. Additional Conditions to the Obligations of the Seller................34
(a) Agreements.......................................................35
(b) Representations and Warranties...................................35
(c) Officer's Certificate............................................35
(d) Consents from Third Parties......................................35
7.3. Additional Conditions to the Obligations of Shire and the Buyer.......35
(a) Agreements.......................................................35
(b) Representations and Warranties...................................35
(d) Officer's Certificate............................................35
(e) Consents from Third Parties......................................35
(f) Material Adverse Change..........................................36
(g) BI Agreement.....................................................36
(h) ISRA Declarations................................................36
(i) Transfers........................................................36
ARTICLE VIII
REMEDIES FOR BREACHES BY THE SELLER
OF THIS AGREEMENT
8.1. Investigations; Survival of Representations and Warranties............36
8.2. Indemnification.......................................................36
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination...........................................................37
9.2. Effect of Termination.................................................38
9.3. Amendment.............................................................38
9.4. Waiver................................................................39
ARTICLE X
GENERAL PROVISIONS
10.1. Public Statements.....................................................39
10.2. Notices...............................................................39
10.3. Interpretation........................................................40
10.4. Counterparts..........................................................41
10.5. Entire Agreement......................................................41
10.6. Governing Law.........................................................41
10.7. Validity..............................................................41
-iii-
<PAGE>
Page
----
10.8. Assignment............................................................41
10.9. Expenses..............................................................41
10.10. Enforcement...........................................................42
-iv-
<PAGE>
EXHIBITS
Exhibit 1 Form of Buyer Loan Note
Exhibit 2 Form of Shire Loan Note
Exhibit 3 Form of Registration Rights Agreement
SCHEDULES
Schedule 3.1(a) Articles of Incorporation and By-Laws
Schedule 3.1(d) Authorization
Schedule 3.1(e) Noncontravention
Schedule 3.1(f) Seller Government Approvals; Consents
Schedule 3.1(h) Certain Changes and Events
Schedule 3.1(i) Violations of Law
Schedule 3.1(j) Litigation
Schedule 3.1(k) Tax Matters
Schedule 3.1(l) Personal Property
Schedule 3.1(m) Permits
Schedule 3.1(n) Employee Matters
Schedule 3.1(o) Labor Relations
Schedule 3.1(p) Intellectual Property
Schedule 3.1(q) Insurance
Schedule 3.1(r) Contracts
Schedule 3.1(s) Liabilities
Schedule 3.1(t) FDA, DEA and Other Regulatory Matters
Schedule 3.1(u) Environmental Matters
Schedule 3.1(v) Products
Schedule 3.1(x) Brokers
Schedule 3.2(c) Shire Governmental Approvals; Consents
Schedule 4.1 Operating Agreements
Schedule 4.2 Permitted Activities
-v-
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of March 5,
---------
1999, among Shire Pharmaceuticals Group plc, a public limited company organized
under the laws of England and Wales ("Shire"), Shire Supplies U.S. LLC, a
-----
Delaware corporation (the "Buyer") and a wholly owned Subsidiary of Shire
-----
Partners, ARENOL CORPORATION, a New Jersey corporation (the "Seller"), and
------
Richard Vorisek and Robert Jaeder (the "Principal Shareholders").
----------------------
WHEREAS, Shire, the Seller and Boehringer Ingleheim Chemicals Inc., a
Delaware corporation ("BI"), are parties to a letter of intent dated August 21,
--
1998 (the "Letter of Intent") which contemplates the execution, delivery and
----------------
performance of this Agreement;
WHEREAS, the Seller and BI intend to enter into an agreement (the "BI
--
Agreement"). In anticipation of the execution of the BI Agreement certain
- ---------
equipment and assets of the Seller heretofore used for the production of the
Four Salts (as defined) has been moved to BI's plant at 2820 North Normandy
Drive, Petersburg, Virginia (the "Plant"); and
-----
WHEREAS, subject to the terms and conditions of this Agreement, the
Buyer desires to purchase from the Seller, and the Seller wishes to sell to the
Buyer, certain assets as more fully described herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. For all purposes of this Agreement, except as
-----------
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article have the meanings assigned to them in this Article:
"ADHD" means Attention Deficit Hyperactivity Disorder.
----
<PAGE>
-2-
"Agreed Disposition Value" means, with respect to any action, suit,
------------------------
proceeding or claim, the amount by which (i) the sum of (a) the amount (as
agreed in good faith by Shire and the Seller) which will be required to
satisfy such action, suit, proceeding or claim pursuant to a settlement,
judgment or arbitration and (b) the amount (as agreed in good faith by
Shire and the Seller) of all fees, disbursements and expenses (including
fees and expenses of counsel) of the Seller and Shire Indemnified Persons
which will be incurred until such action, suit, proceeding or claim is
finally disposed of or pursuant to a final settlement or a non-appealable
judgment or non-appealable arbitration, exceeds (ii) the insurance coverage
with respect to such action, suit, proceeding or claim as acknowledged in
writing without reservation by the insured providing coverage with respect
thereto.
"Agreement" has the meaning set forth in the preamble hereto.
---------
"Arbitrators" has the meaning set forth in Section 2.3.
-----------
"Assets" has the meaning set forth in Section 2.1.
------
"BI" has the meaning set forth in the preamble hereto.
--
"BI Agreement" has the meaning set forth in the preamble hereto.
------------
"BI Indemnified Amounts" means all Losses imposed on or incurred by
----------------------
the Seller or by the Shire Indemnified Persons, directly or indirectly, by
reason of any claim, action, suit or proceeding brought by BI relating to
the BI Agreement or the Letter of Intent.
"Business Day" means a day other than a Saturday, a Sunday or a day on
------------
which banks in New York, New York or London, England are permitted or
required by law to close.
"Buyer" has the meaning set forth in the preamble hereto.
-----
"CERCLA" has the meaning set forth in Section 3.1(u).
------
"Closing" has the meaning set forth in Section 6.1.
-------
<PAGE>
-3-
"Closing Date" has the meaning set forth in Section 6.1.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Competitive Business" has the meaning set forth in Section 4.6.
--------------------
"Confidential Disclosure Agreement" means the confidential disclosure
---------------------------------
agreement entered into among BI, SRI and the Seller entered into in August
1998.
"Contracts" has the meaning set forth in Section 3.1(r).
---------
"Conversion Price" means (Pounds)3.565.
----------------
"DEA" has the meaning set forth in Section 3.1(t).
---
"Deferred Claim Amount", as of any date, means, (a) with respect to
---------------------
any action, suit, proceeding or claim against the Seller or its respective
officers, directors, or shareholders (or with respect to which any of them
are required to indemnify others (other than Shire Indemnified Persons
hereunder)), for which Shire or the Buyer may ultimately become liable,
arising out of or relating to the Incident or conduct by the Seller of its
business prior to the Closing Date which action, suit, proceeding or claim
has been finally settled or subject to a non-appealable judgment or non-
appealable arbitration award, the amount of such settlement or judgment
award or arbitration award, to the extent unpaid as of such date and not
fully covered by insurance with the applicable insurer agreeing to such
coverage in writing, (b) with respect to any action, suit, proceeding or
claim against the Seller or its respective officers, directors or
shareholders (or with respect to which any of them are required to provide
indemnity to others (other than Shire Indemnified Persons hereunder)), for
which Shire or the Buyer may ultimately become liable, arising out of or
relating to the Incident or the conduct by the Seller of its business prior
to the Closing Date, which action, suit, proceeding or claim has not been
finally settled or disposed of pursuant to a non-appealable judgment or
non-appealable arbitration, the Agreed Disposition Value of such action,
suit, proceeding or claim; and (c) with respect to any action, suit,
proceeding or claim against any Shire Indemnified Persons arising out of
<PAGE>
-4-
or relating to the Incident or the conduct by the Seller of its business
prior to the Closing Date, which action, suit, proceeding or claim has not
been finally settled or disposed of pursuant to a non-appealable judgment
or non-appealable arbitration, the Agreed Disposition Value of such
action, suit, proceeding or claim; provided that the Deferred Claim Amount
--------
with respect to any action, suit, claim or proceeding shall be zero until
the sum of (x) the aggregate of all Seller Indemnified Amounts, paid or
unpaid, to such date and (y) the aggregate Deferred Claim Amounts
(including the Deferred Claim Amount in question) as of such date exceeds
U.S.$100,000.
"Deferred Claim Maturity Date" means with respect to any action, suit,
----------------------------
proceeding or claim giving rise to a Deferred Claim Amount, the date on
which such action, suit, claim or proceeding is disposed of pursuant to a
final binding settlement or non-appealable judgment or non-appealable
arbitration award and, if applicable, the applicable settlement amount or
judgment award or arbitration award (or indemnity therefor) is paid or
satisfied in full.
"Disregarded Claims" has the meaning set forth in Section 8.2.
------------------
"DMF" means Drug Master File.
---
"DOJ" has the meaning set forth in Section 3.1(t).
---
"Environmental Law" means CERCLA, the Resource Conservation and
-----------------
Recovery Act of 1976, as amended, the Toxic Substances Control Act, as
amended, and any other applicable federal, state or local statute, rule,
regulation, order, judgment, directive, decree or the common law
regulating, relating to or imposing liability or standards of conduct
concerning air emissions, water discharges, noise emissions, the release or
threatened release or discharge of any Hazardous Material into the
environment, the generation, handling, use, treatment, storage, transport,
disposal or remediation of any Hazardous Material or otherwise concerning
pollution or the protection of the outdoor or indoor environment and
natural resources, including, without limitation, ambient or indoor air,
surface water, groundwater, soil, subsurface strata and wetlands, or public
or employee health or safety.
<PAGE>
-5-
"Environmental Permit" means any permit, license, approval, consent or
--------------------
other authorization by a federal, state or local government or regulatory
entity pursuant to any Environmental Law.
"ERISA Affiliate" shall mean any person or entity that, together with
---------------
Seller, is treated as a single employer under Section 414(b), (c), (m) or
(o) of the Code.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended.
"Exchange Rate" means on any day the exchange rate of British Pounds
-------------
for U.S. Dollars based on the noon buying rate on such day in New York City
for cable transfers as certified for customs purposes by the Federal
Reserve Bank of New York as reported in The Wall Street Journal.
-----------------------
"FDA" has the meaning set forth in Section 3.1(t).
---
"Financial Statements" has the meaning set forth in Section 3.1(g).
--------------------
"First Announcement Date" has the meaning set forth in Section 2.2.
-----------------------
"First Buyer Loan Note" has the meaning set forth in Section 2.2(a).
---------------------
"First Loan Note" has the meaning set forth in Section 2.2(a).
---------------
"Four Salts" means Dextroamphetamine Sulphate USP, Amphetamine
----------
Sulphate USP, Dextroamphetamine Saccharate and Amphetamine Aspartate.
"Hazardous Material" means any pollutant, contaminant or hazardous,
------------------
toxic, medical, biohazardous, infectious waste, substance, constituent or
material, subject to regulation under any Environmental Law, any asbestos,
any petroleum, oil (including crude oil or any fraction thereof), any
radioactive substance, any polychlorinated biphenyls, any toxin, chemical,
virus, infectious disease or disease-causing agent and any other substance,
waste, constituent, chemical or material that can give rise to liability
under any Environmental Law.
<PAGE>
-6-
"Incident" means the explosion and fire which took place on or about
--------
August 3, 1998 at the Seller's facilities located in Somerville, New
Jersey, and all direct and indirect consequences arising therefrom.
"Insurance Policies" has the meaning set forth in Section 3.1(q).
------------------
"ISRA" has shall mean the New Jersey Industrial Site Recovery Act,
----
N.J.S.A., 13:1K-6 et seq.
------- ------
"Letter of Intent" has the meaning set forth in the preamble hereto.
----------------
"Liability" has the meaning set forth in Section 3.1(s).
---------
"Lien" means any lien, claim as to title, assignment, hypothecation,
----
conditional sale, retention of title, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind other than a statutory
lien or any agreement to provide any of the foregoing.
"Losses" has the meaning set forth in the definition of "Seller
------ ------
Indemnified Amounts."
-------------------
"Non-Competition Period" has the meaning set forth in Section 4.6.
----------------------
"Notes" means the First Loan Note and the Second Loan Note.
-----
"Ordinary Shares" means ordinary shares, with a nominal value of U.K.
---------------
five pence each, of Shire.
"Permits" means all approvals, authorizations, qualifications,
-------
consents, licenses, franchises, orders and other permits, including DMFs,
of all governmental or regulatory agencies or bodies, whether federal,
state, local or foreign.
"Plant" has the meaning set forth in the preamble hereto.
-----
"Principal Shareholders" means Richard Vorisek and Robert Jaeder.
----------------------
<PAGE>
-7-
"Product Sites" has the meaning set forth in Section 3.1(u).
-------------
"Second Announcement Date" has the meaning set forth in Section 2.2.
------------------------
"Second Buyer Loan Note" has the meaning set forth in Section 2.2(a).
----------------------
"Second Loan Note" has the meaning set forth in Section 2.2(a).
----------------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" has the meaning set forth in the preamble hereto.
------
"Seller Governmental Approvals" has the meaning set forth in Section
-----------------------------
3.1(f).
"Seller Indemnified Amounts" means all losses, damages, liabilities,
--------------------------
costs and expenses (whether or not resulting from a third party claim),
including, without limitation, interest, penalties and fines and attorney's
fees, disbursements and expenses, imposed on or incurred by the Shire
Indemnified Persons, directly or indirectly ("Losses"), by reason of (a)
------
the Incident or the conduct, lack of conduct and/or operation by the Seller
of its business, whether before or after the Closing Date, (b) any
liability of the Seller not expressly assumed by the Buyer pursuant to
Section 2.5, (c) any inaccuracy of any representation or warranty of the
Seller contained in this Agreement or any certificate delivered by the
Seller to Shire on or prior to the Closing hereunder or (d) any failure by
the Seller to perform any covenant, obligation or agreement hereunder.
"Seller Third Party Approvals" has the meaning set forth in Section
----------------------------
3.1(f).
"Shire" has the meaning set forth in the preamble hereto.
-----
"Shire Governmental Approvals" has the meaning set forth in Section
----------------------------
3.2(c).
<PAGE>
-8-
"Shire Indemnified Persons" means Shire and the Buyer and each of
-------------------------
their respective Subsidiaries and the, affiliates, directors, officers,
employees and agents of Shire, the Buyer, and their respective
Subsidiaries, in their respective capacities as such.
"Shire Third Party Approvals" has the meaning set forth in Section
---------------------------
3.2(c).
"SRI" means Shire Richwood Inc., a Kentucky corporation and a wholly-
---
owned subsidiary of Shire Partners.
"Subsidiary" of any person means (i) any corporation of which the
----------
outstanding capital stock having at least a majority of the votes entitled
to be cast in the election of directors under ordinary circumstances shall
at the time be owned, directly or indirectly, by such person or (ii) any
other person of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by
such person.
"Supply Agreement" means the Supply Agreement dated January 1, 1996
----------------
between the Seller and Richwood Pharmaceutical Company, Inc.
"Tax" or "Taxes" means (i) all federal, state, local or foreign taxes,
--- -----
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, alternative minimum, gross receipts, capital,
sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, (ii) all interest, penalties, fines, additions to tax or other
additional amounts imposed by any taxing authority in connection with any
item described in clause (i) and (iii) all transferee, successor, joint and
several or contractual liability (including, without limitation, liability
pursuant to United States Treasury Regulation ("Treas. Reg.") (S) 1.1502-6
----------
(or any comparable state, local or foreign provisions)) in respect of any
items described in clause (i) or (ii).
"Tax Return" means all returns, declarations, reports, estimates,
----------
information returns and statements required to be filed in respect of any
Taxes.
<PAGE>
-9-
"Technical Know-How" means the information set forth in Schedule
------------------
3.1(p).
"Third Party Site" has the meaning set forth in Section 3.1(u).
----------------
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1. Purchase and Sale of Assets. Subject to the terms and
---------------------------
conditions of this Agreement, the Buyer agrees to purchase from the Seller on
the Closing Date, and the Seller agrees to sell to the Buyer on the Closing
Date, free and clear of any Lien of any kind whatsoever, the following
(collectively referred to as the "Assets"):
------
(a) the Technical Know-How of the Seller relating to the manufacture
of the Four Salts;
(b) all equipment and machinery of the Seller set forth on Schedule
3.1(l);
(c) each contract to which the Seller is a party for the acquisition
of raw materials for the production of the Four Salts or otherwise relating
to the Four Salts or the Manufacturer thereof;
(d) each DMF of the Seller for the Four Salts and each other permit,
authorization and license of the Seller of whatever nature relating to the
Four Salts or enabling the manufacture thereof;
(e) all copyrights which the Seller owns or has a right to relating
to the Four Salts; and
(f) all other intangible assets, including any intellectual property,
used by Seller for the production of the Four Salts.
2.2. Purchase Price. Subject to the terms and conditions of this
--------------
Agreement, in consideration of the transfer and sale of the Assets on the
Closing Date, Shire agrees that:
(a) On the Closing Date, the Buyer shall issue to the Seller a loan
note (the "First Buyer Loan Note") in an
---------------------
<PAGE>
-10-
aggregate principal amount of U.S. $5.8 million attached hereto as
Exhibit 1 and a second loan note (the "Second Buyer Loan Note") in an
--------- -----------------------
aggregate principal amount of U.S. $6.0 million in the form attached
hereto as Exhibit 1. The First Buyer Loan Note shall be immediately
---------
exchanged for a loan note issued by Shire (the "First Loan Note") for the
----------------
same aggregate principal amount of the First Buyer Loan Note in the form
attached hereto as Exhibit 2 and the Second Buyer Loan Note shall be
---------
immediately exchanged for a second loan note issued by Shire (the "Second
------
Loan Note") for the same aggregate principal amount of the Second Buyer
---------
Loan Note in the form attached hereto as Exhibit 2. On the first date
---------
which is no sooner than six months following the Closing that Shire
publicly announces its financial results for the preceding fiscal quarter
(the "First Announcement Date"), U.S. $3.0 million of the aggregate
-----------------------
principal amount of the First Loan Note shall be (i) cancelled to the
extent of the unpaid BI Indemnified Amounts as of the First Announcement
Date and (ii) to the extent not cancelled pursuant to the preceding clause
(i) converted into that number of Ordinary Shares equal to (x) that amount
of the U.S. $3.0 million not cancelled pursuant to the preceding clause
(i) divided by (y) the product of (A) the lower of the Conversion Price or
----------
the midmarket closing price of the Ordinary Shares on the London Stock
Exchange on the First Announcement Date and (B) the Exchange Rate on the
First Announcement Date;
(b) On the first date which is no sooner than six months following
the First Announcement Date that Shire publicly announces its financial
results for the preceding fiscal quarter (the "Second Announcement Date"),
------------------------
the then outstanding aggregate principal amount of the First Loan Note
shall be (i) cancelled to the extent of the unpaid BI Indemnified Amounts
as of the Second Announcement Date and (ii) to the extent not cancelled
pursuant to the preceding clause (i), converted into that number of
Ordinary Shares equal to (x) that portion of the First Loan Note not
cancelled pursuant to the preceding clause (i) divided by (y) the product
----------
of (A) the lower of the Conversion Price or the midmarket closing price of
the Ordinary Shares on the London Stock Exchange on the Second Announcement
Date and (B) the Exchange Rate on the Second Announcement Date;
(c) On the first anniversary of the Closing Date, U.S. $3.0 million
of the aggregate principal amount of the Second Loan Note shall be (i)
cancelled to the extent of the unpaid Seller Indemnified Amounts as of the
first an-
<PAGE>
-11-
niversary of the Closing Date, (ii) to the extent not cancelled pursuant
to the preceding clause (i), extended as to maturity to the respective
Deferred Claim Maturity Date(s), to the extent of the Deferred Claim
Amounts as of the first anniversary of the Closing Date and (iii) to the
extent not cancelled or deferred pursuant to the preceding clauses (i) and
(ii), converted into that number of Ordinary Shares equal to (x) that
amount of the U.S. $3.0 million not cancelled or deferred pursuant to the
preceding clauses (i) and (ii) divided by (y) the product of (A) the lower
----------
of the Conversion Price or the midweek closing price of the Ordinary Shares
on the London Stock Exchange on the first anniversary of the Closing Date
and (B) the Exchange Rate on the first anniversary of the Closing Date.
(d) On the second anniversary of the Closing Date, U.S. $1.5 million
of the aggregate principal amount of the Second Loan Note shall be (i)
cancelled to the extent of the unpaid Seller Indemnified Amounts as of the
second anniversary of the Closing Date, (ii) to the extent not cancelled
pursuant to the preceding clause (i), extended as to maturity to the
respective Deferred Claim Maturity Date(s) to the extent of the Deferred
Claim Amounts as of the second anniversary of the Closing Date and (iii) to
the extent not cancelled or deferred pursuant to the preceding clauses (i)
and (ii), converted into that number of Ordinary Shares equal to (x) that
amount of the U.S. $1.5 million not cancelled or deferred pursuant to the
preceding clauses (i) and (ii) divided by (y) the product of (A) the lower
----------
of the Conversion Price or the midweek closing price of the Ordinary Shares
on the London Stock Exchange on the second anniversary of the Closing Date
and (B) the Exchange Rate on the second anniversary of the Closing Date.
(e) On the third anniversary of the Closing Date, the then
outstanding aggregate principal amount of the Second Loan Note shall be (i)
cancelled to the extent of the unpaid Seller Indemnified Amounts as of the
third anniversary of the Closing Date, (ii) to the extent not cancelled
pursuant to the preceding clause (i), extended as to maturity to the
respective Deferred Claim Maturity Date(s) to the extent of the Deferred
Claim Amounts as of the third anniversary of the Closing Date and (iii) to
the extent not cancelled or deferred pursuant to the preceding clauses (i)
and (ii), converted into that number of Ordinary Shares equal to (x) the
principal amount of the Second Loan Note not cancelled pursuant to the
preceding
<PAGE>
-12-
clause (i) divided by (y) the product of (A) the lower of the Conversion
----------
Price or the midweek closing price of the Ordinary Shares on the London
Stock Exchange on the third anniversary of the Closing Date and (B) the
Exchange Rate on the third anniversary of the Closing Date.
(f) On each Deferred Claim Maturity Date, the then outstanding
principal amount of the Second Loan Note shall be (i) cancelled to the
extent of the unpaid Seller Indemnified Amounts as of such Deferred Claim
Maturity Date, (ii) to the extent not cancelled pursuant to the preceding
clause (i), extended as to maturity to the respective Deferred Claim
Maturity Date(s), to the extent of the Deferred Claim Amounts not fully
offset by the Second Loan Note as of such Deferred Claim Maturity Date, and
(iii) to the extent not cancelled or deferred pursuant to the preceding
clauses (i) and (ii), converted into that number of Ordinary Shares equal
to (x) the principal amount of the Second Loan Note not cancelled or
deferred pursuant to the preceding clauses (i) and (ii) divided by (y) the
----------
product of (A) the lower of the Conversion Price or the mid-market closing
price of the Ordinary Shares on the London Stock Exchange or such Deferred
Claim Maturity Date and (B) the Exchange Rate on such Deferred Claim
Maturity Date; provided that if any Deferred Claim Amounts remain
--------
outstanding on the fifth anniversary of the Closing Date, the Second Loan
Note shall be cancelled, to the extent not previously converted pursuant to
this Section 2.2(f).
(g) At any time during which the maturity of any portion of the
principal amount of the Second Loan Note shall have been extended as a
result of a Deferred Claim Amount, such principal amount may be reduced by
any unpaid Seller Indemnified Amounts during such time.
(h) No portion of any Loan Note shall be cancelled pursuant to
Section 2.2 hereto with respect to any Seller Indemnified Amounts or BI
Indemnified Amounts that are subject to arbitration pursuant to Section
2.3, until a determination as to the relevant Seller Indemnified Amounts or
BI Indemnified Amounts is made by the Arbitrators.
(i) If, within five days following the cancellation of any Loan Note
pursuant to this Section 2.2, the Seller notifies the Buyer in writing that
it does not agree with the Seller Indemnified Amounts or BI Indemnified
Amounts, as the case may be, and sets forth in such notice what it
<PAGE>
-13-
believes to be the proper determination of the Seller Indemnified Amounts
or BI Indemnified Amounts, as the case may be, the Buyer and the Seller
shall meet and attempt in good faith to agree upon such determinations.
If, after ten days, the parties shall not have agreed upon such
determinations, either the Buyer or the Seller shall have the right to
refer such determinations to the Arbitrators pursuant to Section 2.3.
2.3. Arbitration. If the Buyer or the Seller refers the
-----------
determinations of Seller Indemnified Amounts or BI Indemnified Amounts, as the
case may be, such determinations shall be resolved by final and binding
arbitration under the rules of the American Arbitration Association by three
arbitrators (the "Arbitrators"), one selected by the Buyer, one selected by the
-----------
Seller, and the third selected by the other two arbitrators. The place of
arbitration shall be New York, New York. The Seller and the Buyer shall each
submit to the Arbitrators what they each believe to be the proper amount of such
Seller Indemnified Amounts or BI Indemnified Amounts, as the case may be. The
expenses of the Arbitrators shall be (a) borne by the Buyer if the determination
of the relevant Seller Indemnified Amounts or BI Indemnified Amounts by the
Arbitrators is closer to the amount submitted by the Seller than the amount
submitted by the Buyer, (b) borne by the Seller (or by the Principal
Shareholders if, at the time of arbitration the Seller no longer exists as a
corporate entity or does not have sufficient funds available to pay the expenses
of the Arbitrators), if the determination of the relevant Seller Indemnified
Amounts or BI Indemnified Amounts by the Arbitrators is closer to the amount
submitted by the Buyer than the amount submitted by the Seller and (c) allocated
equally as set forth in clauses (a) and (b) if neither the amount submitted by
the Seller or the amount submitted by the Buyer is closer to the determination
of the Seller Indemnified Amounts or BI Indemnified Amounts, as the case may be.
2.4. Restricted Assets. (a) In the event that any Permit or
-----------------
Contract of the Seller on the Closing Date is not assignable to the Buyer by its
terms or by virtue of its subject matter (each, a "Restricted Asset"), the
----------------
Seller shall, at its own cost, use all reasonable efforts, and the Buyer shall
cooperate reasonably with the Seller, (i) to promptly obtain the consents and
waivers necessary to convey or cause to be conveyed to the Buyer all of the
Restricted Assets and (ii) as of and subject to the occurrence of the Closing,
to convey to the Buyer the Restricted Assets for which the Seller has received
the necessary consents and waivers.
<PAGE>
-14-
(b) To the extent that the consents and waivers necessary to assign,
transfer or sublicense any of the Restricted Assets are not obtained as of the
Closing Date, the Seller shall, commencing on the Closing Date and continuing
for the duration of the useful life of each such Restricted Asset, use
reasonable efforts to (i) provide to the Buyer the benefits of any such
Restricted Asset not assigned, transferred or subleased due to the Seller's
failure or inability, as the case may be, to obtain such consents or waivers,
(ii) cooperate with the Buyer to reach a reasonable and lawful arrangement
designed to provide the benefits of each such Restricted Asset to the Buyer
during the useful life of such Restricted Asset and (iii) enforce at the request
of the Buyer or allow the Buyer to enforce any rights of the Seller under any
such Restricted Asset against the issuer thereof or the other party or parties
thereto (including the right to elect to terminate such of the foregoing in
accordance with the terms thereof upon the request of the Buyer). At the end of
each such period, the Seller shall have no further duties or obligations under
this Section 2.4 with respect to such Restricted Asset and the failure or
inability to obtain any necessary consent or waiver with respect thereto shall
not be a breach of this Agreement so long as the Seller has carried out its
obligations under this Section 2.4.
(c) To the extent that the Buyer is provided the benefits of any
Restricted Asset pursuant to clause (b) of this Section 2.4, the Buyer shall
perform for the benefit of the issuer thereof, or the other party or parties
thereto, the obligations of the Seller thereunder or in connection therewith,
other than any obligations pertaining to any Environmental Laws. If the Buyer
shall fail to perform to the extent required herein, the Seller shall thereafter
cease to be obligated under this Section 2.4 to provide the Buyer with any
benefits in respect of the Restricted Asset which is the subject of such failure
to perform.
2.5. Instruments of Transfer and Conveyance. (a) The sale,
--------------------------------------
conveyance, transfer, assignment and delivery of the Assets as herein provided
shall be effected by delivery by the Seller at the Closing of such deeds, bills
of sale, endorsements, assignments, certificates or other instruments of
transfer and conveyance, duly executed by the Seller, as the Buyer shall request
to vest in the Buyer good and marketable title to the Assets (free and clear of
any Lien).
(b) The Seller agrees that it will on the Closing Date with respect
to all of the Assets, and from time to time
<PAGE>
-15-
after the Closing Date, upon the request of the Buyer, do, execute, acknowledge
and deliver, and will cause to be done, executed, acknowledged and delivered,
all such further acts, deeds, certificates, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably requested
by the Buyer to assure or confirm the Buyer's good and marketable title to and
interest in, or to enable it to deal with and dispose of any of, the Assets.
2.6. Assumption of Contracts. The parties hereto acknowledge and
-----------------------
agree that neither Shire nor the Buyer shall assume, or be obligated to assume,
any liability of the Seller other than those expressly identified in this
Section 2.6. Subject to the terms and conditions set forth in this Agreement,
at the Closing, Buyer shall assume in accordance with their respective terms the
obligations arising after the Closing Date under the contracts to be purchased
by the Buyer pursuant to Section 2.1(d) of this Agreement; provided, however,
-------- -------
that to the extent the Seller has received any payments by any party pursuant to
any contract prior to delivering any goods or services, the Seller shall
discharge its obligations pursuant to any such contract and the Buyer shall not
assume any liability. The assumption of such liabilities shall be effected by
the delivery by the Buyer at the Closing of such instruments of assumption, duly
executed by the Buyer, as the Seller shall reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Seller. The Seller
--------------------------------------------
represents and warrants to Shire and the Buyer as follows:
(a) Organization; Standing and Power. The Seller is a corporation
--------------------------------
duly organized, validly existing and in good standing under the laws of the
State of New Jersey. The Seller has all requisite corporate power and
authority to own, lease and operate its assets and to carry on its business
as now being conducted. Copies of the Articles of Incorporation and By-
Laws of the Seller as in effect on the date hereof are attached hereto as
Schedule 3.1(a).
---------------
(b) Subsidiaries. There are no, and have never been any,
------------
Subsidiaries of the Seller.
<PAGE>
-16-
(c) Capitalization; Ownership. The authorized capital stock of the
-------------------------
Seller consists of 2,500 shares of common stock (of which 600 shares are
outstanding). The Principal Shareholders own all of the issued and
outstanding capital stock of the Seller and no other person or entity has
any ownership claim or right with respect to such capital stock.
(d) Authority. The Seller has the requisite corporate power and
---------
authority to execute and deliver this Agreement and, subject to the Seller
Shareholder Approval (as defined below) and the receipt of the consents and
waivers set forth on Schedule 3.1(d) attached hereto, to consummate the
---------------
transactions contemplated by this Agreement to be consummated by the
Seller. The execution and delivery of this Agreement by the Seller and the
consummation of the transactions contemplated hereby to be consummated by
the Seller have been duly authorized by all necessary corporate action on
the part of the Seller. This Agreement has been duly executed and
delivered by the Seller and constitutes a valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
(e) Noncontravention. Except as set forth on Schedule 3.1(e)
---------------- ---------------
attached hereto, neither the execution and delivery of this Agreement by
the Seller nor the consummation of the transactions contemplated hereby nor
compliance by the Seller with any of the provisions hereof will (i)
violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or
both, could constitute a default) under, or result in the termination,
modification or suspension of, or accelerate the performance required by,
or result in a right of termination or acceleration under, or result in the
creation of any Lien upon, right to acquire or obligation to dispose of any
of the properties, assets or rights of the Seller under, any of the terms,
conditions or provisions of (x) the Articles of Incorporation or By-Laws of
the Seller or (y) any note, bond, mortgage, indenture, deed of trust,
license, Permit, authorization, lease, agreement or instrument or
obligation to which the Seller is party or by which it is bound or to which
it or any of its assets may be subject, or (ii) violate any judgment,
ruling, order, writ, injunc-
<PAGE>
-17-
tion, decree, statute, rule or regulation applicable to the Seller, its
operations or any of its assets.
(f) Non-Government Approval; Consents. All consents and approvals
---------------------------------
required to be obtained by the Seller from non-governmental third parties
("Seller Third Party Approvals") in order to lawfully and contractually
----------------------------
permit it to perform its obligations under this Agreement and consummate
the transactions contemplated hereby are set forth on Schedule 3.1(f)
---------------
attached hereto. Other than as set forth on Schedule 3.1(f), no notice to,
---------------
filing with, or authorization, consent or approval of, any domestic or
foreign public body or authority is necessary for the execution, delivery
or performance of this Agreement by the Seller or the consummation of the
transactions contemplated hereby ("Seller Governmental Approvals").
-----------------------------
(g) Financial Statements. The Seller's balance sheets and statements
--------------------
of operations and cash flows for the fiscal years ended December 31, 1997,
1996 and 1995 and the unaudited balance sheet and statements of operations
and cash flows for the six months ended June 30, 1998 (the "Financial
---------
Statements") have been prepared in accordance with Statements on Standards
----------
for Accounting and Review Services issued by the American Institute of
Certified Public Accountants and fairly present in all material respects
the financial condition of the Seller as of the respective dates thereof
and results of the Seller's operations and its cash flows for the
respective periods presented.
(h) Absence of Certain Changes or Events. Except as set forth on
------------------------------------
Schedule 3.1(h) attached hereto, since December 31, 1995, there has not
---------------
been (i) any material adverse change in the business or business prospects
of the business or operations conducted or, to the Seller's knowledge, to
be conducted at the Plant relating to the Four Salts or the manufacture
thereof, (ii) any destruction or loss of (whether or not covered by
insurance) any property, asset or right of the Seller relating to the Four
Salts or the manufacture thereof (iii) any Lien incurred on any property,
assets or rights of the Seller relating to the Four Salts or the
manufacture thereof, (iv) any incurrence by the Seller of any Liability
either (x) not in the ordinary course of business, (y) not related to the
activities contemplated by the Letter of Intent and not related to the sale
of the remainder of its business or (z) in excess of $10,000, (v) any
materially adverse de-
<PAGE>
-18-
velopment with respect to regulatory approval of any of the Seller's
products or (vi) any materially adverse development with respect to the
Seller's relationships with any supplier with which the Seller has a
business relationship relating to the Four Salts or the manufacture
thereof.
(i) Compliance with Law. Except as set forth on Schedule 3.1(i)
------------------- ---------------
attached hereto, the Seller is not, and does not have knowledge of any
facts or events which could reasonably be expected to cause it to be, in
violation or non-compliance in any material respect with any statute, law,
ordinance, regulation, rule, order or other legal requirement of any
foreign, federal, state or local government, authority or any other
governmental department or agency applicable to its business or operations,
or any judgment, decree or order of any court to which it is a party.
(j) Litigation. Except as set forth on Schedule 3.1(j) attached
---------- ---------------
hereto, there is no claim, action, suit or proceeding pending or, to the
knowledge of the Seller, threatened against the Seller or any of its
property, assets or rights before any court or governmental or regulatory
authority or body or, to the knowledge of the Seller, any reasonable basis
for the assertion thereof.
(k) Taxes and Tax Returns. Except as set forth on Schedule 3.1(k)
--------------------- ---------------
attached hereto, (i) the Seller has duly and timely filed all federal,
state, local and foreign Tax Returns required to be filed by it through the
date hereof, and each such Tax Return (other than with respect to state
payroll and state income taxes) is and, to the knowledge of the Seller,
each Tax Return with respect to state payroll and state income taxes is
complete and accurate in all material respects, (ii) the Seller has timely
paid all Taxes due and payable by it through the date hereof and has made
adequate provision (through a current accrual on its most recent financial
statements) for any Taxes attributable to any taxable period of the Seller
(or portion thereof) ending on or prior to the date hereof that are not yet
due and payable and (iii) the Seller has withheld and paid in a timely
manner all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party, including amounts of or the value of
awards and prizes paid to the Seller's employees. Schedule 3.1(k) attached
hereto sets
<PAGE>
-19-
forth a complete and accurate copy of all correspondence available to the
Seller between the Seller and any federal, state, local or foreign
governmental entity regarding Taxes or Tax Returns since December 31,
1995.
(l) Personal Property. Schedule 3.1(l) attached hereto sets forth a
----------------- ---------------
complete and accurate list of each item of equipment, machinery and other
tangible personal property of the Seller relating to the Four Salts or the
manufacture thereof. Except as set forth on Schedule 3.1(l), the Seller
---------------
alone has good and marketable title to all such property, free and clear of
all Liens. Each such item is in good operating condition and repair and is
suitable for the purposes for which it is used and intended.
(m) Licenses, Permits and Authorizations. Schedule 3.1(m) attached
------------------------------------ ---------------
hereto sets forth a complete and accurate list of all Permits, except for
any Permits that are site specific to the Somerville, New Jersey operation
and are not required to manufacture the Four Salts in locations other than
Somerville, New Jersey held by or on behalf of the Seller relating to the
Four Salts or enabling the manufacture thereof, including (i) the agency or
body issuing such Permit, (ii) the person or entity to whom such Permit was
issued and (iii) the date such Permit expires or is required to be renewed.
Except as set forth on Schedule 3.1(m), each Permit set forth on Schedule
--------------- --------
3.1(m) is in full force and effect and the Seller, or the person or entity
------
who holds such Permit on the Seller's behalf, is in compliance with all of
its obligations with respect thereto, and no event has occurred or
condition exists which permits or, upon the giving of notice or lapse of
time or both, would permit revocation, nonrenewal, modification, suspension
or termination of any such Permit.
(n) ERISA and Employee Matters. Schedule 3.1(n) attached hereto
--------------------------
contains a true and complete list of all "employee benefit plans" as
defined in Section 3(3) of ERISA, and each other plan, arrangement or
policy relating to stock options, stock purchases, compensation, deferred
compensation, severance, fringe benefits and other employee benefits which
are maintained or contributed to by the Seller or its ERISA Affiliates or
as to which the Seller has any direct or indirect, actual or contingent
liability ("Benefit Plans"), and copies of such plans and related relevant
-------------
materials have been made available to Buyer. Neither the Seller nor any of
its ERISA Affiliates
<PAGE>
-20-
have incurred, and they are not reasonably likely to incur, any liability
under Title IV of ERISA. All contributions to the Benefit Plans required
to be made by the Seller and its ERISA Affiliates in accordance with the
terms of the Benefit Plans and, when applicable, Section 302 of ERISA or
Section 412 of the Code, have been timely made. Neither the Seller nor any
of its ERISA Affiliates has ever (i) contributed, or been required to
contribute, to a "multiemployer plan" (within the meaning of Section
4001(a)(3) of ERISA) or (ii) maintained or contributed to an employee
benefit plan that is subject to Title IV of ERISA. The Seller and all
Benefit Plans are in compliance in all material respects with the
applicable provisions of ERISA and the Code. Each Benefit Plan intended
to qualify under Section 401 of the Code, is so qualified. With respect
to all Benefit Plans, there are no audits investigations or claims pending
or threatened (other than routine claims for benefits). There have been
no nonexempt prohibited transactions under the Code or ERISA with respect
to any Benefit Plans. With respect to all Benefit Plans that are welfare
plans (as defined in ERISA Section 3(1)), such plans have complied in all
material respects with the COBRA continuation coverage requirements of
Section 4980B of the Code.
(o) Labor Relations. Except as set forth on Schedule 3.1(o), (i)
--------------- ---------------
there is no unfair labor practice complaint pending against the Seller or,
to the knowledge of the Seller, threatened against the Seller, before the
National Labor Relations Board or any other governmental or regulatory
authority, and, to the knowledge of the Seller, no grievance or arbitration
proceeding is so pending against the Seller or threatened against the
Seller; (ii) to the knowledge of the Seller, there is no basis for an
unfair labor practice finding against the Seller; (iii) no strike, labor
dispute, slowdown or stoppage is pending or, to the knowledge of the
Seller, threatened against the Seller; and (iv) no union has ever
represented any employee of the Seller.
(p) Intellectual Property Rights. (i) Schedule 3.1(p) attached
---------------------------- ---------------
hereto sets forth in writing all of the Technical Know-How, including the
process by which it was obtained by Arenol and any arrangements made by the
Seller relating to the Technical Know-How, including any payments made or
to be made by the Seller. Except as set forth on Schedule 3.1(p), all the
---------------
Technical Know-How is owned by the Seller alone free and clear of all
Liens, no Technical
<PAGE>
-21-
Know-How has been canceled, abandoned or otherwise terminated. Except as
set forth on Schedule 3.1(p), the Seller has not granted any license or
---------------
other rights with respect to any Technical Know-How to any other person or
entity and, except as set forth on Schedule 3.1(p), has not disclosed any
information to any person or entity regarding the Technical Know-How.
(ii) Except as set forth on Schedule 3.1(p), (x) the use of
---------------
Technical Know-How by the Seller has not infringed and does not infringe
upon any rights of any third party, (y) no third party has claimed or
alleged that the use of Technical Know-How by the Seller has infringed upon
the rights of any third party and (z) to the Seller's knowledge, no third
party has infringed upon the rights of the Seller with respect to the
Technical Know-How.
(iii) Except as set forth on Schedule 3.1(p), the Seller has no
---------------
license or other rights with respect to any Technical Know-How owned by any
other person or entity.
(iv) All Technical Know-How used by the Seller in the manufacture
of the Four Salts is set forth on Schedule 3.1(p).
---------------
(v) All technology, processes, techniques and methods of
manufacture used in or necessary to the manufacturing of the Four Salts by
the Seller, except to the extent the same are in the public domain, are
subject to valid and effective confidentiality agreements with the Seller.
(vi) Production of the Four Salts requires no technology,
processes, techniques or methods of manufacture other than the Technical
Know-How and information contained in the public domain and possession of
such will enable Buyer to produce the Four Salts.
(q) Insurance. Schedule 3.1(q) attached hereto sets forth (i) a
--------- ---------------
complete and accurate list of all policies of insurance of the Seller
currently in force, including surety bonds or other credit support therefor
(the "Insurance Policies"), the current annual premiums for each Insurance
------------------
Policy, the types of risk covered and limits of coverage and (ii) a
description of claims experience of the Seller (x) in the twelve months
immediately preceding the date hereof with respect to all matters and (y)
since its incorporation with respect to product liability matters, matters
arising by reason of environmental matters
<PAGE>
-22-
and workmen's compensation. To the knowledge of the Seller, all Insurance
Policies are in full force and effect and all premiums due thereon have
been paid. The Seller has complied in all material respects with the
terms and provisions of the Insurance Policies. Except as set forth on
Schedule 3.1(q), the Seller has never applied for and been refused or
---------------
denied any policy of insurance with respect to product liability matters,
environmental matters or workmen's compensation.
(r) Contracts. Schedule 3.1(r) attached hereto sets forth a complete
--------- ---------------
and accurate list of all contracts, agreements and commitments of the
Seller that relate to the Four Salts or the manufacture thereof (a
"Contract"). Each Contract is a valid and subsisting agreement and, to the
---------
knowledge of the Seller, no party thereto has repudiated its obligations
under such Contract. Except as set forth on Schedule 3.1(r), to the
---------------
knowledge of the Seller, no event has occurred or condition exists which
would violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or
both, could reasonably constitute a default), under, or result in the
termination, modification or suspension of, or accelerate the performance
under, or result in the creation of any Lien upon, any right to acquire or
obligation to dispose of any of the properties, assets or rights of the
Seller under, any of the terms, conditions or provisions of any Contract.
Except as disclosed on Schedule 3.1(r), no Contract provides for the Seller
---------------
to return or refund any payment received by the Seller upon the happening
of any event or occurrence or restricts in any material respect the ability
of the Seller to market, sell or price its products.
(s) Undisclosed Liabilities. Except as set forth on Schedule 3.1(s)
----------------------- ---------------
attached hereto, the Seller has no liability, whether asserted or, to the
Seller's knowledge, unasserted, absolute or, to the Seller's knowledge,
contingent, accrued or unaccrued, liquidated or unliquidated, due or, to
the Seller's knowledge, to become due, of any nature (a "Liability"),
---------
except for (i) Liabilities set forth on the most recent balance sheet
included in the Financial Statements and (ii) Liabilities which have arisen
after June 30, 1998 in the ordinary course of business.
(t) FDA, DEA Matters. Schedule 3.1(t) attached hereto sets forth a
---------------- ---------------
complete and accurate list of each filing made by the Seller with the U.S.
Food and Drug
<PAGE>
-23-
Administration (the "FDA") with respect to the Four Salts or the
---
manufacture thereof including the dates upon which any future filings are
required to be made with the FDA. Except as set forth on Schedule 3.1(t),
---------------
(i) there are no lawsuits, arbitrations, legal or administrative or
regulatory proceedings, charges, complaints or investigations by the FDA,
the U.S. Drug Enforcement Agency (the "DEA"), the U.S. Department of
---
Justice (the "DOJ") or any state or foreign regulatory agency pending or,
---
to the best knowledge of the Seller, threatened against or relating to the
Seller or any of its products, (ii) there have been no product recalls or
similar actions by the Seller, (iii) neither the Seller nor, to the best
knowledge of the Seller, its officers, employees or agents have made an
untrue statement of material fact or fraudulent statement to the FDA or the
DEA, failed to disclose a material fact required to be disclosed to the FDA
or the DEA or committed an act, made a statement or failed to make a
statement that could reasonably be expected to provide a basis for the FDA
or the DEA to invoke the policy respecting "Fraud, Untrue Statements of
Material Facts, Bribery and Illegal Gratuities" set forth in 56 Fed. Reg.
46191 (September 10, 1991), (iv) there have been no unresolved reports,
warning letters or other documents received from or issued by the FDA or
the DEA that indicate or suggest material lack of compliance with FDA or
DEA regulatory requirements by the Seller or persons providing services,
materials or products for the benefit of the Seller, (v) the Seller is in
compliance with all applicable registration and listing requirements set
forth in 21 U.S.C. Section 360 and 21 C.F.R. Part 207 and, to the extent
required, the Seller has obtained licenses from the DEA and is in
compliance with all such licenses and all applicable regulations
promulgated by the DEA, (vi) all manufacturing operations conducted by the
Seller have been and are being conducted in compliance with the good
manufacturing practice regulations set forth in 21 C.F.R. Parts 210 and
211, (vii) the Seller has not received any written notice that the FDA or
the DEA has commenced, or threatened to initiate, and has no knowledge of
any facts or events which could reasonably be expected to result in the
commencement or initiation of, any action to withdraw its approval or
enjoin production at the Plant or any facility owned or used by the Seller
or any of the Seller's manufacturing locations, (viii) as to each article
of drug or consumer product currently manufactured by the Seller, such
article is not adulterated or misbranded within the meaning of the FDCA, 21
U.S.C. Sections 301 et seq. and all advertising and
------
<PAGE>
-24-
sales promotional materials of the Seller are otherwise in conformance with
the regulations and applicable approvals of the FDA and (ix) neither the
Seller nor, to the knowledge of the Seller, any of its officers, employees,
agents or affiliates has been convicted of any crime or engaged in any
conduct for which debarment is mandated by 21 U.S.C. Section 335(a) or
authorized by 21 U.S.C. Section 335a(b). To the knowledge of the Seller,
the Seller's suppliers are in compliance with all applicable law and
regulations and in respect of the FDA and DEA have secured all licenses,
renewals and quotas necessary to their operation.
The Seller has made available to Shire copies of all written
communications to or from the FDA and the DEA relating specifically to the
Seller, its operations or business.
(u) Environmental Matters. Except as set forth on Schedule 3.1(u)
--------------------- ---------------
attached hereto:
(i) the Seller possesses all Environmental Permits required
under applicable Environmental Laws to conduct its business as
currently conducted and to own and operate its assets, and is, and has
at all times been, in compliance in all material respects with the
terms and conditions of such Environmental Permits;
(ii) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not
affect the validity or require the transfer of any Environmental
Permits held by the Seller, and will not require any notification,
disclosure, registration, reporting, filing, investigation or
remediation under any Environmental Law;
(iii) the Seller is in material compliance and has complied
in all material respects with all applicable Environmental Laws and
has not received notice of and has no material liability under any
Environmental Law;
(iv) there is no civil, criminal, or administrative action,
suit, demand, claim, hearing, notice of violation, proceeding, notice
or demand letter, or request for information pending or, to the
knowledge
<PAGE>
-25-
of the Seller, threatened under any Environmental Law (x) against the
Seller or (y) to the knowledge of the Seller against any person or
entity in connection with which liability could reasonably be expected
to imputed or attributed by law or contract to the Seller;
(v) to the knowledge of the Seller after due inquiry, no
property or facility presently or formerly owned, leased or operated
by the Seller, and no property or facility at which the Seller's
Hazardous Materials have been stored, treated or disposed of or at
which any Hazardous Materials have been manufactured, handled, tested,
formulated, prepared, encapsulated, packaged, bottled, or stored for
the Seller ("Product Sites") is listed or proposed for listing on the
-------------
National Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation & Liability Act
of 1980, as amended ("CERCLA"), or on any comparable list established
------
under any Environmental Law, nor has the Seller received any
notification of potential or actual liability or any request for
information under CERCLA or any other Environmental Law;
(vi) there has been no disposal, spill, discharge, emission or
release of any Hazardous Material by the Seller on, at, under or from
any property presently or formerly owned, leased or operated by the
Seller during the period of any such ownership, lease or operation,
and there are no Hazardous Materials located in, at, on, or under any
facility or property, or at any Product Site or other location where
the Seller's Hazardous Materials have been stored, treated or disposed
of (a "Third Party Site"), in each case that could reasonably be
----------------
expected to require investigation, removal, remedial or corrective
action, or the incurrence of any material liability, by the Seller
under any Environmental Law;
(vii) there has not been any underground or aboveground storage
tank (except for mix tanks used in process production) or other
underground storage receptacle or related piping, or any impoundment
or other outdoor storage, treatment or disposal area containing
Hazardous Materials located on any
<PAGE>
-26-
facility or property owned, leased or operated by the Seller during
the period of such ownership, lease or operation, and no asbestos or
polychlorinated biphenyls have been located at, or, disposed of, on,
or under any such facility or property during the period of such
ownership, lease or operation; and
(viii) no Lien has been recorded against any properties, assets
or facilities owned, leased or operated by the Seller under any
Environmental Law.
The Seller has made available to Shire all records and files, including,
but not limited to, all assessments, reports, studies, audits, analyses,
tests and data in possession of the Seller concerning the existence of
Hazardous Materials at facilities or properties currently or formerly
owned, operated or leased by the Seller or at any Product Site or Third
Party Site or concerning compliance by the Seller with, or liability under,
any Environmental Law.
(v) Products. Except as set forth on Schedule 3.1(v) attached
-------- ---------------
hereto, to the knowledge of the Seller, each of the products produced or
sold by the Seller (i) is, and at all times up to and including the date
hereof has been, in compliance in all material respects with all applicable
federal, state, local and foreign laws and regulations; (ii) is, and at all
relevant times has been, fit for the ordinary purposes for which it is
intended to be used and conforms in all material respects to any promises
or affirmations of fact made on the container, label or promotional
materials for such product or in connection with its sale; and (iii)
contains no design or manufacturing defect. Except as set forth on
Schedule 3.1(v), the Seller has not received notice of any product warranty
---------------
claims. Except as set forth on Schedule 3.1(v), to the knowledge of the
---------------
Seller, there are no facts which are reasonably likely to cause (i) the
denial, withdrawal, recall or suspension of any product sold or intended to
be sold by the Seller, or (ii) a change in the marketing classification,
labeling or promotional materials of any such products, or (iii) a
termination or suspension of marketing of any such products. The Seller
has not, to its knowledge, authorized any oral or written warranties with
respect to the quality or absence of defects of its products which it has
sold, except as required by the FDA. There are no material claims pending
or, to the knowledge of the Seller, threatened against the Seller with
respect
<PAGE>
-27-
to the quality of or absence of defects in such products nor are there any
facts known to the Seller relating to the quality of or absence of defects
in such products which, if known by a potential claimant or governmental
authority, could reasonably be expected to give rise to a successful claim
or a proceeding by a governmental authority. To the knowledge of the
Seller, no events or conditions exist which could reasonably be expected to
cause the percentage of warranty claims or product returns for products
sold by the Seller to materially exceed historical levels.
(w) Investment Intent. The Notes being issued by the Buyer pursuant
-----------------
to this Agreement are being acquired by Seller for its own account and not with
a view to their distribution within the meaning of Section 2(11) of the
Securities Act.
(x) Brokers or Finders. Except as set forth on Schedule 3.1(x)
------------------
attached hereto, Arenol has incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
3.2. Representations and Warranties of Shire and the Buyer. Each
-----------------------------------------------------
of Shire and the Buyer represents and warrants to the Seller as follows:
(a) Organization; Standing and Power. Shire is a corporation duly
--------------------------------
organized and validly existing under the laws of England and Wales. The
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Authority. Each of Shire and the Buyer has the requisite
---------
corporate power and authority to enter into this Agreement, and to perform
its obligations hereunder. The execution and delivery of this Agreement by
each of Shire and the Buyer and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of Directors, or
a duly authorized committee thereof, of each of Shire and the Buyer. No
other corporate proceedings on the part of Shire or the Buyer are necessary
to authorize the performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of Shire and the Buyer, and constitutes a valid and
binding
<PAGE>
-28-
obligation of each of Shire and the Buyer, enforceable in accordance with
its terms.
(c) Non-Government Approval; Consents. All consents and approvals
---------------------------------
required to be obtained by Shire or the Buyer from non-governmental third
parties ("Shire Third Party Approvals") in order to lawfully and
---------------------------
contractually permit it to perform its obligations under this Agreement and
consummate the transactions contemplated hereby are set forth on Schedule
--------
3.2(c) attached hereto. Other than as set forth on Schedule 3.2(c), no
------ ---------------
notice to, filing with, or authorization, consent or approval of, any
domestic or foreign public body or authority is necessary for the
execution, delivery or performance of this Agreement by Shire or the Buyer
or the consummation of the transactions contemplated hereby ("Shire
-----
Governmental Approvals").
----------------------
(d) Ordinary Shares. The Ordinary Shares issuable pursuant to
---------------
Section 2.2 hereof will, when issued, have been duly authorized for
issuance and, when issued and delivered in accordance with the terms of
this Agreement, will be validly issued, fully paid, non-assessable and
included for trading on the London Stock Exchange.
(e) Brokers or Finders. Neither Shire or the Buyer has incurred any
------------------
obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with
this Agreement.
ARTICLE IV
COVENANTS OF THE SELLER
4.1. Regular Course of Business. Except in connection with the
--------------------------
performance by the Seller of its obligations under this Agreement, until the
Closing, the Seller shall use its best efforts to maintain and preserve its
business organization, assets, employees and business relationships, insofar as
they relate to the Four Salts or the manufacture thereof and shall maintain
operations at the Plant in accordance with the agreements set forth in Schedule
4.1 hereto.
4.2. Certain Prohibited Seller Activities. Until the Closing,
------------------------------------
except as contemplated by this Agreement or as set
<PAGE>
-29-
forth on Schedule 4.2 attached hereto, the Seller shall not, without the prior
------------
written consent of Shire: (a) cease to be a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey; (b)
amend its Articles of Incorporation or By-Laws; (c) violate or fail to comply in
any material respect with any statute, law, ordinance, regulation, rule, order
or other legal requirement of any foreign, federal, state or local government,
authority or any other governmental department or agency, or any judgment,
decree or order of any court or governmental body or agency applicable to its
business or operations; (d) dispose of any property or assets set forth on
Schedule 3.1(l) or create or suffer to exist any Lien on any property or assets
- ---------------
set forth on Schedule 3.1(l); (e) fail to comply in all material respects with
---------------
all of its obligations with respect to all Permits described in Schedule 3.1(m)
---------------
or voluntarily take or omit to take any action which could reasonably be
expected to result in the revocation, nonrenewal, modification, suspension or
termination of any such Permit; (f) dispose of, permit to lapse, modify,
terminate, grant any interest to any person or entity in, or create or suffer to
exist any Lien on or with respect to, any Technical Know-How; (g) take any
action that would cause it to fail to maintain in full force and effect, comply
in all material respects with all of the terms and provisions of or pay all
premiums due on any Insurance Policy; (h) permit the modification or termination
of any Contract other than in accordance with its terms; (i) take (or omit to
take) any action which is reasonably likely to violate, conflict with or result
in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, could constitute a default) under, or
result in the termination, modification of suspension of, or accelerate the
performance under, or result in the creation of any Lien upon any of the
properties, assets or rights of the Seller under, any of the terms, conditions
or provisions of any Contract; (j) merge or consolidate with any other person or
entity or acquire control of or purchase all or substantially all of the assets
of any other person or entity; (k) voluntarily incur or permit the incurrence of
any liability not in the ordinary course of business and not related to the
activities contemplated by the Letter of Intent and in excess of $5,000; (l)
adopt a plan of complete or partial liquidation; (m) supply or agree to supply
any of the Four Salts to any third party; or (n) except as required by the terms
of this Agreement and with notice to Shire, defer to after the Closing any cost
which, in the ordinary course of business, would be paid prior to the Closing.
<PAGE>
-30-
4.3. Notice of Certain Events. The Seller will give notice to
------------------------
Shire, promptly after obtaining knowledge thereof, of (i) any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate in
any respect, (ii) any matter that adversely affects the Seller and/or the Assets
to be sold pursuant to this Agreement, (iii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
4.4. Access. The Seller shall afford the officers, employees and
------
representatives of Shire, and to its counsel and auditors, reasonable access
during normal business hours prior to the Closing to its facilities, properties,
equipment, files, accounts, books and records so that Shire may have full
opportunity to make such investigations as it may desire to make of the affairs
of the Seller.
4.5. Approvals. The Seller shall use all reasonable efforts to
---------
take or cause to be taken all action, and to do or cause to be done all things
reasonably necessary, proper or advisable in order to fulfill and perform its
obligations under this Agreement or otherwise consummate and make effective the
transactions contemplated hereby. The Seller shall take all action necessary
under applicable law, its Articles of Incorporation and By-Laws to convene a
meeting of its stockholders as promptly as practicable to obtain the Seller
Shareholder Approval. The Seller shall use all commercially reasonable efforts
to obtain or cause to be obtained all Seller Governmental Approvals and Seller
Third Party Approvals.
4.6. Agreement Not to Compete. (a) For and in consideration of
------------------------
the benefits to be derived, directly and indirectly, from this Agreement, each
of the Principal Shareholders and the Seller covenants and agrees that for a
period of ten years following the Closing Date (the "Noncompetition Period"), it
---------------------
shall not, and it shall cause Subsidiaries, if any, not to, directly or
indirectly, individually or jointly with others, whether for their own account
or for that of any other person or entity, as principal, investor or otherwise,
(i) own, manage, operate, control or (ii) participate in, or assist any other
person or entity in, the ownership, management, operation or control of any
business or activity anywhere in the world that manufactures, markets,
distributes, supplies or sells any product, raw material or intermediaries
thereof for use in the treatment of ADHD or containing any one or more of the
Four Salts (the "Competitive Business"); provided, however, that ownership of 5%
-------------------- -------- -------
or less of the outstanding voting securities of
<PAGE>
-31-
any Person where such securities are listed on a national securities exchange or
the NASDAQ national market system shall be deemed not to violate this Section
4.6(a).
(b) Each of the Principal Shareholders and the Seller covenants and
agrees that during the Noncompetition Period, they shall not, and shall not
permit any of their Subsidiaries to, solicit, encourage or induce any customer,
supplier, agent, sales representative or employee to discontinue or limit his or
its business relationships with Shire or the Buyer or their respective
Subsidiaries in respect of the Competitive Business, and each of the Principal
Shareholders and the Seller and their Subsidiaries shall not solicit for
employment or hire any employee of Shire, the Buyer or any of their respective
subsidiaries employed in the Competitive Business.
(c) From and after the Closing Date, each of the Principal
Shareholders and the Seller shall, and shall cause their Subsidiaries and their
respective employees, agents, accountants, legal counsel and other
representatives to (i) enforce the provisions of the Confidential Disclosure
Agreement and (ii) hold in strict confidence and make no commercial use of
proprietary information of any kind (including the Technical Know-How)
concerning the Four Salts or the manufacture thereof; provided, however, that
-------- -------
the foregoing obligation of confidence shall not apply to (i) information which
is or becomes publicly available without breach of this Agreement or (ii)
information required to be disclosed under applicable law, rule or regulation of
an appropriate governmental authority; provided that each of the Principal
--------
Shareholders and the Seller shall use their best efforts to the extent
reasonably practicable to give the Buyer notice of any information proposed to
be disclosed under clause (ii) above that explains in reasonable detail the
basis for such disclosure as far in advance of its disclosure as reasonably
practicable and, if so requested by the Buyer, assist the Buyer in seeking an
appropriate protective order or use their reasonable efforts to obtain
assurances that confidential treatment will be accorded such information;
provided, further, that any information disclosed pursuant to clause (ii) above
- -------- -------
shall remain confidential and subject to this Section 4.6(c) to the extent that
it has not been disclosed for public dissemination. On or prior to the Closing
Date, the Seller shall assign or cause to be assigned to the Buyer all rights
under confidentiality agreements with third parties that relate to the Four
Salts or the manufacture thereof.
(d) Each of the Principal Shareholders and the Seller agrees that the
Buyer's remedy at law for any breach of
<PAGE>
-32-
this Section 4.6 is inadequate and that in the event of any such breach or
violation, the Buyer shall be entitled to injunctive relief in addition to any
other remedy at law, in equity or under this Agreement to which the Buyer may be
entitled. Without limiting the generality of the preceding sentence, the parties
acknowledge and agree that it is impossible to measure in monies all of the
damages that would accrue to the Buyer by reason of any breach of this Section
4.6. Each of the Principal Shareholders and the Seller waives in advance any
claim or defense in any action or proceeding that may in the future be commenced
by the Buyer to enforce such provisions, that the Buyer has an adequate remedy
at law, and each of the Principal Shareholders and the Seller agrees not to
claim in any such action that an adequate remedy at law exists.
4.7. Application of Insurance Proceeds. The Seller agrees to apply
---------------------------------
any proceeds received pursuant to any insurance policy to pay for any costs and
expenses incurred for any response, remedial, corrective or other action taken
by it pursuant to any applicable Environmental Law.
4.8. Restriction on Sale or Disposition of Ordinary Shares. The
-----------------------------------------------------
Seller agrees that any Ordinary Shares obtained through conversion of the Notes
shall not be sold, transferred or otherwise disposed of unless Shire is
satisfied that such sale, transfer or other disposition complies with the
registration requirements of the Securities Act or pursuant to a valid exemption
therefrom.
4.9. Payment of WARN Liabilities. To the extent there are any
---------------------------
liabilities arising in connection with the transactions contemplated herein
under the Worker Adjustment and Retraining Notification Act or other similar
law, the Seller agrees to pay such liabilities.
4.10. Replacement of Documents. To the extent any documents are
------------------------
missing or destroyed, the Seller shall use all reasonable efforts to obtain at
its own expense copies or replacements of all documentation necessary for the
production of the Four Salts.
<PAGE>
-33-
ARTICLE V
COVENANTS OF SHIRE AND THE BUYER
5.1. Notice of Certain Events. Each of Shire and the Buyer will
------------------------
give notice to the Seller promptly after obtaining knowledge thereof, of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
5.2. Approvals. Each of Shire and the Buyer shall use all
---------
reasonable efforts to take or cause to be taken all actions, and to do or cause
to be done all things, reasonably necessary, proper or advisable in order to
fulfill and perform its obligations under this Agreement or otherwise consummate
or make effective the transactions contemplated hereby. Each of Shire and the
Buyer shall use all commercially reasonable efforts to obtain all Shire
Governmental Approvals and Shire Third Party Approvals.
5.3. Release of Claims. To the extent not previously released
-----------------
pursuant to the Letter of Intent, upon termination of the Supply Agreement, SRI
agrees to waive all claims that it may have against Seller under the Supply
Agreement and agrees to release the Seller from all claims for damages arising
out of the Seller's failure to perform its obligations under the Supply
Agreement.
ARTICLE VI
CLOSING DATE; CLOSING
6.1. Closing Date; Closing. The closing hereunder (the "Closing")
--------------------- -------
shall take place at the offices of Cahill Gordon & Reindel, 80 Pine Street, New
York, New York 10005, as soon as practicable after each of the conditions set
forth in Article VII shall have been satisfied or waived, or at such other time
and place as the parties hereto shall agree. The date on which the Closing
occurs is referred to herein as the "Closing Date". Upon satisfaction or waiver
------------
of all such conditions: (i) the Seller shall deliver to the Buyer the
instruments of transfer and conveyance required by Section 2.4 to
<PAGE>
-34-
evidence the Buyer's ownership and possession of Assets as well as any and all
certificates and other documents reasonably requested by Shire or the Buyer
evidencing or confirming any and all title, right and interest therein and
thereto; and (ii) the Buyer shall deliver to the Seller the instruments of
assumption required by Section 2.5 to evidence the Buyer's assumption of the
contracts as therein provided and the Loan Notes as provided by Section 2.2.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to the Obligations of Each Party to Effect the
---------------------------------------------------------
Closing. The respective obligations of each of the parties to effect the
- -------
Closing shall be subject to the satisfaction or waiver of each of the following
conditions at or prior to the Closing:
(a) Certain Approvals. All Buyer Governmental Approvals and Shire
-----------------
Governmental Approvals shall have been obtained, satisfied, waived or
expired, as applicable.
(b) No Proceeding or Litigation. No order, injunction, decree or
---------------------------
judgment of any court or governmental body or agency shall be in effect
which materially restrains or prohibits the transactions contemplated
hereby, and no suit, action, investigation, inquiry or proceeding by any
governmental body or agency or legal or administrative proceeding by any
governmental body or agency shall have been instituted, or threatened in
writing, which questions the validity or legality of the transactions
contemplated hereby.
(c) Registration Rights Agreement. Shire and the Seller shall have
-----------------------------
entered into the Registration Rights Agreement in substantially the form
attached hereto as Exhibit 3.
---------
(d) Supply Agreement. The Supply Agreement shall have been
----------------
terminated by SRI and the Seller.
7.2. Additional Conditions to the Obligations of the Seller. The
------------------------------------------------------
obligation of the Seller to effect the Closing is also subject to the
satisfaction or waiver of each of the following conditions at or prior to
Closing:
<PAGE>
-35-
(a) Agreements. Each of Shire and the Buyer shall have performed or
----------
complied in all material respects with each covenant, agreement and
obligation to be performed or complied with by it hereunder on or prior to
the Closing Date.
(b) Representations and Warranties. The representations and
------------------------------
warranties of the Buyer set forth in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as if made
at and as of such time.
(c) Officer's Certificate. The Seller shall have received a
---------------------
certificate, dated the Closing Date, of the President or a Vice President
of the Buyer and of a director of Shire to the effect that the conditions
specified in paragraphs (a) and (b) above and (d) through (f) below have
been fulfilled.
(d) Consents from Third Parties. All Shire Third Party Approvals
---------------------------
shall have been obtained.
7.3. Additional Conditions to the Obligations of Shire and the Buyer.
---------------------------------------------------------------
The obligations of Shire and the Buyer to effect the Closing are also subject
to the satisfaction or waiver of each of the following conditions at or prior to
the Closing:
(a) Agreements. The Seller shall have performed each covenant,
----------
agreement and obligation to be performed or complied with by it hereunder
on or prior to the Closing Date.
(b) Representations and Warranties. The representations and
------------------------------
warranties of the Seller set forth in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as if made
at and as of such time.
(c) Officer's Certificate. Shire shall have received a certificate,
---------------------
dated the date of the Closing, of the President or Vice President of the
Seller to the effect that the conditions specified in paragraphs (a) and
(b) above and in paragraph (e) below have been fulfilled.
(d) Consents from Third Parties. All Seller Third Party Approvals
---------------------------
shall have been obtained.
<PAGE>
-36-
(e) Material Adverse Change. Since the date of this Agreement,
-----------------------
there shall not have occurred a material adverse change in business or
business prospects of the business or operations conducted or to be
conducted at the Plant relating to the Four Salts or the manufacture
thereof.
(f) BI Agreement. The BI Agreement shall be in full force and effect
------------
and each of the Seller and BI shall have performed and not be in breach of
any of their respective obligations thereunder.
(g) ISRA Declarations. The Seller shall obtain from the New Jersey
-----------------
Department of Environmental Protection and Energy either (i) a Declaration
of Non-Applicability of ISRA to this Agreement and to any transactions
contemplated thereby, or (ii) approval of a Negative Declaration or other
action required to comply with ISRA, in each case which is reasonably
acceptable to Shire.
(h) Transfers. The Buyer shall have transferred and assigned to
---------
Shire all warranties, service agreements and repair agreements relating to
the Assets.
ARTICLE VIII
REMEDIES FOR BREACHES BY THE SELLER
OF THIS AGREEMENT
8.1. Investigations; Survival of Representations and Warranties.
----------------------------------------------------------
The representations and warranties of the Seller contained in Section 3.1 shall
not be deemed waived or otherwise affected by any investigation by Shire, the
Buyer or any of their respective officers, directors, employees, consultants or
agents and shall survive the Closing; if Buyer obtains knowledge regarding an
inaccuracy with respect to any representation or warranty, Buyer shall notify
the Seller of such inaccuracy.
8.2. Indemnification. (a) The Seller agrees to indemnify and hold
---------------
harmless the Shire Indemnified Persons against any and all Seller Indemnified
Amounts; provided, however, that the Seller shall not be liable for any single
-------- -------
Seller Indemnified Amount of less than $10,000 (provided that a series of claims
of a substantially similar nature or arising out of the same factual context may
be aggregated and treated as single
<PAGE>
-37-
claim for purposes of such limitation) ("Disregarded Claims") until the
------------------
aggregate of Disregarded Claims exceeds $100,000, in which case the Seller shall
be liable for all single claims of less than $10,000 or in excess of $100,000 in
the aggregate.
(b) If any action, suit, proceeding or claim shall be brought or
asserted against a Shire Indemnified Person by any third party which action,
suit, proceeding or claim, if determined adversely to the interests of a Shire
Indemnified Person, would entitle a Shire Indemnified Person to indemnity
pursuant to this Section 8.2, Shire shall promptly notify the Seller of the same
in writing specifying in detail the basis of such claim and the facts pertaining
thereto, and the Seller shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Buyer and the payment of
all expenses; provided that the Seller shall conduct the defense of any such
--------
action, suit, proceeding or claim so as to the extent possible to prevent the
taking or seizure of any assets or property of Shire or the Buyer or the
imposition of any Lien against the same. A Shire Indemnified Person shall have
the right to employ counsel separate from counsel employed by the Seller in any
such action and to participate in the defense thereof, and the fees and expenses
of such counsel employed by a Shire Indemnified Person shall be at the expense
of such Shire Indemnified Person unless (a) the employment thereof has been
specifically authorized by the Seller in writing or (b) the Seller has failed to
assume the defense and to employ counsel within a reasonable period of time
after receiving notice of such action as provided in this Section 8.2. The
Seller shall not be liable for any settlement of any such action or proceeding
effected without the written consent of the Seller (unless such consent is
unreasonably withheld by the Seller), but if settled with the written consent of
the Seller, or if there shall be a final judgment for plaintiff in any such
action, the Seller agrees to indemnify and hold harmless a Shire Indemnified
Person from and against any Seller Indemnified Amounts by reason of such
settlement or judgment.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Closing:
<PAGE>
-38-
(a) by mutual written consent of Shire and the Seller;
(b) by either Shire or the Seller upon notice thereof given in
writing to the other party if (i) any governmental entity shall have issued
an order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the Closing and
such order, decree or ruling or other action shall have become final and
nonappealable or (ii) the Closing has not occurred on or before December
31, 1999 unless a later date is established by mutual written consent of
Shire and the Seller or unless the failure to consummate the Closing is the
result of a breach of a covenant set forth in this Agreement, a
misrepresentation or breach of any warranty set forth in this Agreement by
the party seeking to terminate this Agreement;
(c) by action of the Board of Directors of Shire and notice thereof
given in writing to the Seller if there has been a breach in any material
respect of any representation, warranty, covenant or agreement on the part
of the Seller set forth in this Agreement; or
(d) by action of the Board of Directors of the Seller and notice
thereof given in writing to Shire if there is a breach in any material
respect of any representation, warranty, covenant or agreement on the part
of Shire or the Buyer set forth in this Agreement.
9.2. Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 9.1, this Agreement shall forthwith become void
and have no effect and, in the case of termination pursuant to Section 9.1 (a)
or (b) only, there shall be no liability or obligation on the part of Shire, the
Seller, the Buyer or any their respective officers or directors. The provisions
of Section 10.9, Section 10.10 and this Section 9.2, will survive any
termination of this Agreement. In addition, the Confidential Disclosure
Agreement, the Supply Agreement and the BI Agreement shall survive any
termination of this Agreement pursuant to the terms hereof.
9.3. Amendment. This Agreement may be amended by the parties
---------
hereto at any time before or after any required approval of matters presented by
the shareholders of the Seller; provided, however, that after any such approval,
-------- -------
there shall be made no amendment that by law requires further approval by such
shareholders without the further approval of such shareholders.
<PAGE>
-39-
This Agreement may be amended by an instrument in writing signed on behalf of
each of the parties hereto.
9.4. Waiver. At any time prior to the Closing, any party may (a)
------
extend the time for the performance of any of the obligations or other acts of
any other party hereto, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) subject to the proviso of Section 9.3, waive compliance
with any of the agreements of any other party or with any conditions to its own
obligations. Except as otherwise required by law, (a) any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by or on behalf of such party by a duly
authorized signatory and (b) the failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.
ARTICLE X
GENERAL PROVISIONS
10.1. Public Statements. Each of Shire and the Buyer, on the one
-----------------
hand, and the Seller, on the other hand, agree that neither they nor their
respective directors, officers, employees or agents shall disclose to any third
party (other than to their professional advisers, shareholders or optionholders
or in proxy materials sent to their shareholders and optionholders in connection
with the Seller Shareholder Approval or publicly issue any press release or
other statement to the press or any third party with respect to this Agreement
or transactions contemplated hereby, except as may be required by law or London
Stock Exchange rule, without the consent of the other parties hereto.
10.2. Notices. All notices and other communications hereunder
-------
shall be in writing (including telex or similar writing) and shall be deemed
given if delivered in person or by messenger, cable, telegram or telex or
facsimile transmission or by a reputable overnight delivery service which
provides for evidence of receipt to the parties at the following addresses or
telecopier numbers (or at such other address or telecopy number for a party as
shall be specified by like notice):
<PAGE>
-40-
(a) if to Shire or the Buyer, to:
Shire Pharmaceuticals Group PLC
East Anton
Andover, Hants SP10 5RG
United Kingdom
Telecopy: 011 44 1 264 334 658
Attention: Rolf Stahel, Chief Executive
with a copy to:
John P. Mitchell, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
USA
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
(b) if to the Seller, to:
Richard Vorisek
59 Morris Avenue
Morristown, New Jersey 07062
and
Robert Jaeder
5 Yardley Road
Mendham, New Jersey 07945
with a copy to to:
Bressler, Amery & Ross, P.C.
P.O. Box 1980
Morristown, New Jersey 07962
Attention: Brian F. Amery, Esq.
10.3. Interpretation. When reference is made in this Agreement to
--------------
a Subsection, Section, Exhibit or Schedule, such reference is to a Subsection or
Section of or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
<PAGE>
-41-
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" and "including" are used in this Agreement, they are deemed to be
followed by the words "without limitation". For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) the terms defined include the plural as well as the singular, (ii) all
accounting terms not otherwise defined herein have the meanings assigned under
United States generally accepted accounting principles, and (iii) the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section, Subsection
or other subdivision.
10.4. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
10.5. Entire Agreement. This Agreement (including the Exhibits and
----------------
Schedules hereto) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
10.6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law of such state.
10.7. Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
10.8. Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any party hereto,
whether by operation of law or otherwise, without the express prior written
consent of each of the other parties hereto. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors.
10.9. Expenses. Unless otherwise stated herein, each party shall
--------
bear its own expenses incurred in connection with the transactions contemplated
by this Agreement.
<PAGE>
-42-
10.10. Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
The parties accordingly agree that the parties will be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York, Borough of Manhattan, or in New York state
court located in the Borough of Manhattan, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (i) consents to submit itself to the personal jurisdiction of any
Federal court located in the State of New York, Borough of Manhattan, or any New
York state court located in the Borough of Manhattan if any dispute arises out
of the Agreement or any of the transactions contemplated by this Agreement, (ii)
agrees that it will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court and (iii) agrees that it
will not bring any action relating to this Agreement in any court other than
such a Federal or state court sitting in the State of New York located in the
Borough of Manhattan.
<PAGE>
-43-
IN WITNESS WHEREOF, Shire, the Buyer, the Seller and the Principal
Shareholders have caused this Agreement to be executed and delivered by their
respective duly authorized officers, all as of the date first above written.
SHIRE PHARMACEUTICALS GROUP PLC
(the undersigned agrees to be bound by this
Agreement with respect only to Article 2, Article
3 and Article 5 hereof)
By:
----------------------------------------------
Name:
Title:
SHIRE SUPPLIES U.S. LLC
By:
----------------------------------------------
Name:
Title:
ARENOL CORPORATION
By:
----------------------------------------------
Name:
Title:
--------------------------------------------------
Richard Vorisek
--------------------------------------------------
Robert Jaeder
<PAGE>
Exhibit 10.27
AMENDMENT AGREEMENT
TO THE
GLOBAL (NOW INCLUDING JAPAN)
CO-DEVELOPMENT, KNOW-HOW AND SUPPLY
AGREEMENT FOR GALANTAMINE
BETWEEN
SHIRE INTERNATIONAL LICENSING BV
AND
JANSSEN PHARMACEUTICA NV
<PAGE>
THIS AGREEMENT is made this 22nd day of July One Thousand nine hundred
and ninety nine by and between Shire International Licensing BV of
Fredericksplem 42, P.O. Box 545, 1000 AM Amsterdam, Netherlands ("Shire") and
Janssen Pharmaceutica NV of Turnhoustseweg 30, B2340 Beerse, Belgium
("Janssen").
WHEREAS Shire and Janssen entered into a Co-Development, Know-How and
Supply Agreement for galantamine on 30 November 1995 ("the Global Agreement").
WHEREAS Janssen concluded an arrangement with A+, Science Invest AB, a
Swedish corporation ("A+") in relation to the development of galantamine for
Obstructive Sleep Apnoea on 29 January 1999 ("the A+ Agreement") and Janssen and
Shire now wish to extend the arrangements in the Global Agreement to the
development of galantamine for use in the treatment of Obstructive Sleep Apnoea.
WHEREAS Janssen and Shire now wish to extend arrangements in the
Global Agreement to the development and exploitation of galantamine in Japan for
Alzheimer's disease and Chronic Fatigue Syndrome.
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
Clause 1 Amendments to the Global Agreement
It is hereby agreed that the Global Agreement be amended as follows:
1.1 In Clause 1 the following definitions shall be amended as follows:
(a) in Clause 1.24 there shall be inserted after the word "Thailand"
the word "Japan;
(b) Clause 1.25 shall be deleted in its entirety and there shall be
inserted in substitution therefor:
"1.25 "Licensed Product(s)" any product containing Galantamine
(whether Natural Galantamine and/or
Synthetic Galantamine) which is used
for, and/or intended to be used for:
(1) the treatment of Alzheimer's
disease and/or related dementia
(2) the treatment of OSA
<PAGE>
-2-
(3) subject to Clause 17 hereof the
treatment of CFS
(4) subject to Clause 18 other
indications as referred to in
that Clause;"
(c) In clause 1.33 in line 6 after the full stop insert the words
"(and following the inclusion in the Global Agreement of CFS
pursuant to clause 17.5 such term shall be deemed to include all
parents licensed to Shire or its Affiliates in the Territory in
respect of the use of Galantamine for CFS)."
(d) In clause 1.39 there shall be deleted the words "Galantamine in
the treatment Alzheimer's disease and related dementias" and
there shall be inserted in substitution therefor the words
"Licensed Product";
(e) In Clause 1.40 there shall be deleted the word "Japan";
(f) In Clause 1 insert the following additional definitions:
1.53 "OSA" Obstructive Sleep Apnoea;
1.54 "OSA Patents" each and every one of the patents,
patent application, supplementary
protection certificate in respect
therefor or additions, extensions,
replacements, divisions or
substitutions therefor licensed to
or owned by Janssen in respect of
the use of Licensed Product for OSA;
1.55 "OSA Know-how" all information (other than Shire
Know-How, Synaptech Know-How,
Development Data and Manufacturing
Intellectual Property rights) from
time to time during this Agreement
in Janssen's possession or under its
control or licensed to it under the
A Agreement which it is free to
disclose relating to the use of
Galantamine for OSA;
<PAGE>
-3-
(g) Upon execution by Synaptech, A, the patentee of the CFS patents,
Shire and Janssen of an agreement or agreements setting forth a
revised mechanism for the allocation of sales of Licensed Product
between Alzheimer's disease, CFS, OSA and (if appropriate) other
indications as that term is understood in Clause 18 of the Global
Agreement agreed pursuant to Clause 2.2 hereof or similar
provisions in agreements between such parties, Clause 8.3.5 shall
be deleted in its entirety and there shall subject to any such
agreements be substituted therefor:
"8.3.5 With regard to an individual sale of Licensed Product in
the Territory by Janssen, or an Affiliate or Business
Partner of Janssen, Janssen shall pay a royalty hereunder
on such sale on the basis that either (i) the Galantamine
will be used for the treatment of Alzheimer's disease and
related dementias or (ii) that it will be used for the
treatment of CFS or (iii) that it will be used for the
treatment of OSA. In no circumstances shall Janssen be
required to pay royalties on an individual Sale of
Galantamine in respect of Alzheimer's disease, CFS or OSA
under the Patents or OSA Patents."
(h) In Clause 4.4 of the Global Agreement there shall be deleted the
words **** and third party suppliers of Galantamine
Raw Material (including without limitation" and delete the
remaining parenthesis.
(i) In Clause 6 of the Global Agreement there shall be inserted the
following:
"6.1.13 Janssen shall pay to Shire on the Net Sales Value of all
Licensed Product sold by Janssen its Affiliates or
Business Partners in Japan:
6.1.13.1 in respect of sales of
Licensed Product for
Alzheimer's disease a royalty
of ****% (**** per cent):
6.1.13.2 in respect of sales of
Licensed Product for CFS a
royalty of ****% (**** per
cent)
6.1.14 Janssen shall pay to Shire on the Net Sales Value of all
Licensed product sold by Janssen, its Affiliates or
Business Partners in the Territory for OSA a royalty of
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-4-
6.1.14.1 ****% (**** per cent) where
there is a Licensed Patent in
the country in which Licensed
product is sold; and
6.1.14.2 ****% (**** per cent) in any
other country.
6.1.15 The royalties payable pursuant to Clause 6.1.13.1,
6.1.13.2 and 6.1.14.1 in any country in the Territory
shall be paid for that country for so long as there is a
Licensed Patent (being a patent for CFS or an OSA Patent
as the case may be in respect of Clauses 6.1.13.2 and
6.1.14 respectively) where the Licensed Product is sold
for the indication referred to or where there is no such
Licensed Patent for a period of **** years from
Commercial Delivery for that indication.
6.1.16 None of the provisions set forth in this Agreement
under which royalties may be reduced shall apply to the
royalties payable pursuant to Clauses 6.1.13 or 6.1.14
except in the case of infringement of the OSA patents
where, provided Janssen uses its reasonable efforts to
prevent or terminate such infringement, the provisions
of Clauses 12.1.1, 12.1.2, 12.1.3, 12.1.4 and the
second sentence of Clause 12.1.5 shall apply and in
relation to which any references to "Secondary Royalty"
shall be read to mean a royalty of ****%";
6.1.17 In addition to the royalties payable under the Global
Agreement by Janssen to Shire, Janssen will in addition
pay to Shire royalties under the sub-license granted
under clause 17.5.4 equal to the royalties payable by
Shire under its Agreement with Snorasson dated March
1992 as amended in June 1996 ("the CFS Agreement")
(j) In Clause 3 of the Global Agreement there shall be inserted the
following:
"3.5 Milestone Payments CFS Japan
Janssen shall pay to Shire in full without any deductions
whatsoever the following non-fundable sums:
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-5-
3.5.1 upon completion of a phase II clinical study in Japan
the results of which permit the conduct of a phase
III clinical study for Licensed Product for use in
CFS the sum of $**** (**** United States Dollars).
3.5.2 within 30 days of the date of submission of the
application for a Product Approval for use of
Licensed Product for CFS in Japan the sum of (Pounds)
**** (**** Pounds sterling) and
3.5.3 within 30 days of the date of grant of the Product
Approval for use of Licensed Product for CFS in Japan
the sum of (Pounds) **** (**** Pounds sterling)."
(k) Clause 10.10 of the Global Agreement shall be deleted in its
entirety and there shall be substituted therefor:
"10.10 in this Clause 10 the term "Licensed Product" shall
include any product containing Galantamine which is used for or
intended for use for the treatment of any indication for which a
Product Approval granted to Shire or Janssen or their respective
Affiliates or Business Partners is for the time being in force."
(l) In Clause 12 there shall be inserted the following:
12.4 Infringement of third party's patent rights
12.4.1 In the event that the use or sale of Licensed
Product for use in OSA is alleged to infringe or
constitutes an infringement of intellectual
property rights of a third party in a country, each
party shall, as soon as it becomes aware of the
same, notify the other thereof in writing, giving
in the same notice full details known to it of the
rights of such third party and the extent of any
alleged infringement. To the extent a third party
patent contains claims in relation to the use of
galantamine in OSA, the parties shall after receipt
of such notice discuss the infringement claim and a
potential course of action in close collaboration
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-6-
with A and in accordance with the provisions of the A
Agreement. Such course of action may include: (a)
modifying the therapeutic and/or prophylactic claims
of the Licensed Product so as to be non-infringing;
(b) obtaining an appropriate license from such third
party; or (c) contesting the claim or suit. Janssen
(and/or A in accordance with the provisions of the A
Agreement) will decide upon the course of action in
the interest of the further commercialization of
galantamine for use in the treatment of OSA.
12.4.2 In the event Shire is being sued or is under threat
of suit in any country of the Excluded Territory,
Shire shall promptly inform Janssen thereof in
accordance with the provisions of Clause 12.4.1
above. In the event Shire and Janssen (in
consultation with A) can not agree within twenty-one
(21) days on an appropriate course of action in such
countries as set forth in Clause 12.4.1, Shire shall
be entitled to discontinue the commercialization of
the Licensed Product for the use in OSA pending a
resolution of the alleged infringement claim.
12.4.3 Janssen shall hold harmless Shire and its Affiliates
with respect to any such alleged infringements in the
Excluded Territory provided Shire (i) complies with
the provisions of Clause 12.4.1 and 12.4.2, (ii)
allows Janssen to conduct the defense of any such
alleged infringement (provided always Shire can
participate in the defense at its own cost), (iii)
Shire does not compromise or settle any alleged
infringement claim without Janssen's prior written
approval not to be unreasonably withheld or delayed
and (iv) Shire complies with the reasonable
instructions of Janssen (and A) in connection with
any such alleged infringement. Janssen's hold
harmless obligation shall not apply in respect of any
period after the sublicensing or assignment
<PAGE>
-7-
of the OSA Agreement to Shire pursuant to Clause 14
hereof.
12.5 Enforcement of OSA Patents
12.5.1 In the event that in any country in the Territory
in which Janssen is marketing Licensed Product,
there if infringement of an OSA Patent by a third
party, the party first becoming aware of such
infringement shall notify the other in writing to
that effect, including with said written notice
evidence establishing a prima facie case of
infringement by such third party.
Janssen shall have the right but not the obligation
to take action to stop such infringement in its own
name, at its own expense and on its own behalf and
by counsel of its own choice. If Janssen elects to
take action against such infringement, it will keep
Shire regularly informed on the status of any such
action. Subject to the provisions of the A
Agreement, Janssen shall be entitled to all damages
awarded or received in settlement of such suit.
12.5.2 In any such suit involving the use of galantamine
in the treatment of OSA Shire shall reasonably
cooperate with Janssen (and A as the case may be)
and in the Excluded Territories Shire shall have
the right, subject to the provisions of the A
Agreement and more in particular the provisions of
Articles 12.2 and 12.3 thereof, to be represented
by its own counsel at its own expense."
(m) In Clause 13.1.2 after the word "Territory" in line 6 thereof
insert the words "or arising from or in connection with the
failure of any Finished Product supplied by Janssen to Shire for
resale and supply by Shire in the Excluded Territory to meet
specification therefor or such Finished Product being defective."
(n) In Clause 13.1.3 add at the end of the Clause "and except to the
extent that any such claims, demands, losses, damages and/or
expenses
<PAGE>
-8-
result from Finished Product supplied by Janssen to Shire being
defective or failing to meet specification."
(o) In Clause 15.5 of the Global Agreement after the letters "CPS"
insert the word and letters "and OSA."
(p) In Clause 19 of the Agreement, Clause 19.1 shall be deleted and
there shall be inserted:
"19.1 Janssen hereby grants to Shire an option for a period of
**** after the **** of the **** in the country for a sum
equal to concerned to the aggregate of acquire the the
following: exclusive rights to market and sell the
Licensed Product in any one of **** for a sum equal to the
aggregate of the following:
19.1.1 in respect of the sales of Licensed Product
for Alzheimer's disease a sum equivalent to
**** times the average annual value of the
Net Sales Value of the Licensed Product sold
in the country selected by Shire calculated
over the **** Quarters following the date of
**** in such country; and
19.1.2 in respect of the sales of Licensed Products
for OSA and/or CPS a sum calculated using the
following formula
Y = M x MCY
where Y = sum payable
M = the appropriate multiplier for either CFS or OSA taken from
column (2) or (3) depending on the time which has elapsed
since the date of first Commercial Delivery until the date of
the exercise of the option
MCY = the annual sales calculated for the appropriate period as
shown in column (4) or (5)
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-9-
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Time elapsed since date Multiplier M Method of Calculating Yearly Sales
of First Commercial
Delivery ("FCD") at
date of exercise of
option by Shire
--------------------------------------------------------------------------------------------
CFS OSA CFS OSA
- ---------------------------------------------------------------------------------------------------------------------
Prior to date of FCD **** **** average of sales made in an agreed estimate of
- --------------------------------------------------- Quarter **** and **** sales in the Quarters ****
Less than **** months Quarters
after FCD **** ****
- ---------------------------------------------------------------------------------------
More than **** months annual sales assessed using an
after FCD but up to agreed estimate of actual
**** months after FCD **** **** sales for Quarters ****
- ---------------------------------------------------------------------------------------------------------------------
More than **** months annual sales calculated using actual sales for the last
after FCD but up to average of actual sales for **** Quarters immediately
**** months after FCD Quarters **** and the preceding the date of
last **** Quarters immediately exercise of the option
**** **** preceding the date of exercise
- ---------------------------------------------------------------------------------------------------------------------
More than **** months annual sales calculated using actual sales for the last
after FCD but up to the average of actual sales **** Quarters immediately
**** months after FCD for Quarters **** and preceding the date of
the last **** Quarters exercise of the option
immediately preceding the date
**** **** of exercise
- ---------------------------------------------------------------------------------------------------------------------
More than **** months annual sales calculated using actual sales for the last
after FCD the average of actual sales **** Quarters immediately
for Quarters **** and the preceding the date of
last **** Quarters immediately exercise of the option
**** **** preceding the date of exercise
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Provided that:
(1) Where reference is made to an estimate in this Clause the
relevant sales shall be recalculated using the actual figures for
the period in question as soon as reasonably practicable
following that period and balancing payment will be made by Shire
or a refund [(subject to the commitment of equivalent sales and
marketing effort by Shire in the aggregate and appropriate to the
efforts to be made judged by reference to the pharmaceutical
industry taken as a whole)] will be made by Janssen of the
difference between such estimate and the calculation made using
actuals.
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-10-
(2) Where a reference is made to sales this shall be construed as a
reference to Net Sales Value.
(3) Sales of Licensed Product for CFS, OSA and Alzheimer's disease
shall be calculated with reference to the mechanism agreed
pursuant to Clause 2.2 of the Amendment by which this Clause was
inserted.
(4) Where a calculation of sales is to be made by reference to the
actual sales of the 4 Quarters immediately preceding the date
upon which the option is exercised the annual sales shall be
established by reference to the average sales in each such
Quarter and there shall be deducted from such sales any sales not
derived in the ordinary course of business and in the event of a
dispute the matter shall be referred to the expert pursuant to
Clause 12.2.
(5) For the avoidance of doubt where at the time of exercise of the
options by Shire the development of Licensed Product for OSA or
CFS has ceased or will cease no payment shall be due under this
Clause in respect of the indication in question.
(6) If the option is exercised during a Quarter, reference will be
made in making any calculation to the last complete Quarter.
(q) In Clause 19.2 at the end of the sentence insert the words
"except in respect of Licensed Product for use in the treatment
of OSA in respect of which the payment shall be a sum equivalent
to 3 times average annual sales calculated as aforesaid. Sales
for each indication shall be calculated with reference to the
mechanism as agreed pursuant to Clause 2.2 of the Amendment by
which this clause was inserted.
(r) In Clause 23, Clause 23.2.2 shall be deleted in its entirety.
(s) In Clause 23.2.4 after the words "Synaptech-Janssen License
Agreement" add the words "(including any extension thereof to
Japan)."
(t) In Clause 26 in line 1 the reference to "Major Countries" shall
be deemed to exclude the USA.
Clause 2 Supplementary Provisions
The following provisions are supplementary to the Global Agreement and
shall form part thereof.
<PAGE>
-11-
2.1 Development
2.1.1 The development of Licensed Product for OSA shall be conducted
by and at the expense of Janssen. The provisions of Clause 4 of
the Global Agreement other than Clauses 4.7, 4.8, 4.9 and 4.10
shall not apply to the developments of Licensed Product for
OSA. Notwithstanding the foregoing Janssen shall keep Shire
informed on the progress of the development of Licensed Product
for OSA on a regular basis and in particular but without
prejudice to the generality of the foregoing Janssen shall
provide Shire at intervals of six months until completion or
cessation of development a report summarizing the work
undertaken or to be undertaken and the results thereof.
2.1.2 With regard to any matter arising from the development of
Licensed Product for OSA which might reasonably be expected to
affect the manufacture, sale, supply, development or licensing
of Licensed Product for Alzheimer's disease or CFS, Janssen
shall inform Shire forthwith on becoming aware thereof in
sufficient detail to enable Shire to obtain a full
understanding thereof.
2.1.3 The development of Licensed Product for use in Alzheimer's
disease in Japan and CFS in the Territory shall be conducted by
and at the expense of Janssen. Janssen shall:
2.1.3.1 as soon as reasonably practicable following the
execution hereof propose to Shire a development plan
for Licensed Product for use in Alzheimer's disease in
Japan for agreement by the DMC;
2.1.3.2 as soon as reasonably practicable after the extension
of the Global Agreement to CFS pursuant to Clause 17
thereof propose to Shire a development plan for
development of Licensed Product for use in CFS in the
Territory for agreement by the DMC.
2.1.4 The provisions of Clause 9 of the Global Agreement to the
extent that they impose on Janssen an obligation to use
reasonable efforts in the development of Licensed Product shall
not apply to the development of Licensed Product for OSA.
<PAGE>
-12-
2.1.5 The provisions of Clause 5 of the Global Agreement shall not
apply in relation to development costs for Licensed Product for
OSA or for Alzheimer's disease or CFS in so far as they relate
to Japan.
2.2 Janssen and Shire each recognises and agrees that a mechanism is
required to ensure that sales of Licensed Product for different
indications for which Licensed Product may be supplied in accordance
with a marketing authorisation are attributed to the indication in
question. It is further recognised and agreed that Janssen has
incorporated within the A+ Agreement a provision by which sales are
allocated in the form attached in the Schedule hereto. Janssen and
Shire each hereby agrees to use its reasonable efforts to obtain the
agreement of the respective patentees and licensors for Alzheimer's
disease and CFS to the variation and amendment of the licenses between
Janssen or Shire and such licensor to reflect the provisions set forth
in the Schedule hereto. Upon such agreements Janssen and Shire
further agree to amend the terms of any sublicence between Janssen and
Shire and the terms of the Global Agreement to reflect the provisions
of such Schedule. Janssen further undertakes to use its reasonable
efforts to ensure that its licence with A+ is varied and amended to
the extent necessary to be identical to the provisions agreed with the
licensors in respect of Alzheimer's disease and CFS.
2.3 Where Shire holds a licence under the patent of a third party relating
to the use of Licensed Product for OSA and (1) Janssen or a court or
other authority having jurisdiction determines that Janssen requires a
licence under any such patent in order to manufacture, use, supply or
sell Licensed Product for OSA and (2) Shire has not licensed such
patent under the terms of the Global Agreement for its principal
indication and (3) Shire is entitled to receive royalties from Janssen
under the Global Agreement for the use of Licensed Product for OSA
then to the extent that Janssen requires an enabling licence under
such patent determined as aforesaid for the use of Licensed Product
for use in the treatment of OSA Shire will use its reasonable
endeavours following full consultation with Janssen to obtain the
consent of the third party licenser of such patent to the grant of an
enabling licence at royalty rates appropriate thereto. For the
avoidance of doubt, nothing in this Clause 2.4 shall in any way
derogate from the obligations of Janssen under the Global Agreement in
respect of any indication other than OSA for which Licensed Product
may be manufactured, used, sold or supplied.
<PAGE>
-13-
2.4 Reasonable Endeavours
Where in Clauses 2.2 and 2.3 above reference is made to the use of
reasonable endeavours by Shire or Janssen it is hereby agreed that such
endeavours shall not include the making of any payment whether of a lump sum
nature or royalties.
2.5 Challenge to Validity
The payment of royalties by Janssen to Shire in respect of the sale or
supply of Licensed Product for use in OSA is conditional upon Shire not
initiating proceedings to invalidate the OSA patent and in the event that it
does so (1) the obligation of Janssen to pay royalties in respect of sales of
Licensed Product and (2) any licenses granted by Janssen to Shire or its
Affiliates in the Excluded Territory under the OSA Patent shall cease and be
suspended until such time as the challenge to the validity is withdrawn or
terminated.
2.6 Ownership and Maintenance of Product Approvals
2.6.1 Notwithstanding the provisions of Clauses 4.4 of the Global
Agreement Shire and Janssen shall appoint one or more
representative(s) from those of their employees employed to
manage applications for and the maintenance of and variation of
Product Approvals for Licensed Product to liaise with regard to
the prosecution for and maintenance of Product Approvals for
each indication to avoid, remove or minimize any potential
conflict between the Product Approvals for each different
indication or for each country in the Territory or Excluded
Territory in accordance with a Standard Operating Procedure to
be agreed. Subject to the above-mentioned Standard Operating
Procedure Shire and Janssen agree that they will not make any
variation or alteration to any Product Approval without first
notifying the other of its intention to make any applications
for any material variation or alteration as aforesaid and
taking account of observations of the other to the extent
reasonably practicable following good faith consultation unless
such alteration or variation has been required by law or
regulation or by a regulatory authority having jurisdiction or
for reasons of health or safety in which event such alteration
or variation shall be made and the party making such alteration
and variation shall consult with the other to the extent
practicable.
2.7 Co-promotion OSA
The marketing, commercialisation and licensing of OSA in the United
Kingdom and Ireland will be organised in accordance with the provisions of
Clause 10 of the Global
<PAGE>
-14-
Agreement as well as with the provisions of the co-promotion agreements to be
entered into between Shire's and Janssen's respective Affiliates.
Shire acknowledges that under the A+ Agreement, the United Kingdom is
classified as a major market for which Janssen has agreed to undertake certain
reasonable efforts as set forth in Article 7.1. of the A+ Agreement. It is
hereby agreed that such commitment shall be reflected in the respective rights
and obligations of the Affiliates of Shire and Janssen to be set forth in the
co-promotion agreement between such Affiliates to be implemented in a timely
manner in order to facilitate regulatory filing and Commercial Supply of
Licensed Product of OSA and provided Janssen continues with the development of
Licensed Product for OSA.
2.8 Trade Mark
Pursuant to Clause 11 of the Global Agreement Shire and Janssen have
agreed that Licensed Product for use in Alzheimer's disease will be marketed
under the name Reminyl and accordingly Janssen undertakes forthwith following
signature of this Agreement to execute an assignment of the trade mark Reminyl
in the UK and Ireland in a form approved by Shire and Janssen for the purpose.
2.9 Japan
Janssen and Shire agree that the provisions relating to Japan in the
Global Agreement and in particular but without prejudice to the generality of
the foregoing clauses 14.1.3 and 14.1.4 thereof shall be deemed to have been
satisfied by the payment of royalties pursuant to Clause 6.1.13.1 of the Global
Agreement as incorporated by this Agreement. Such provisions shall be of no
force and effect to the extent and for so long as agreements between Synaptech
as the patentee of Licensed Patents in respect of the use of galantamine in
Alzheimer's disease and Janssen remain in full force and effect and in the event
of the termination of such agreements by Synaptech Shire acknowledges that
Janssen has permitted Synaptech to refer to the Product Approval for licensed
Product in Japan for Alzheimer's Disease and related dementias as set forth in
and subject to Clause 6 of the Addendum to the Synaptech-Janssen License
Agreement dated June 29, 1999.
2.10 Development Data
Janssen shall make available to Shire or its Affiliates exclusively
for use in the Excluded Territory:
2.10.1 OSA Know-how reasonably required by Shire for the purpose of
making application for and maintaining Product Approvals for
Licensed Product for use in OSA in Excluded Territories;
<PAGE>
-15-
2.10.2 OSA Know-how reasonably required by Shire for marketing and
pharmacovigilance.
2.11 Improvements
The provisions of Clause 14.3 of the Global Agreement shall be subject
to the following provisions:
2.11.1 when Improvements are disclosed pursuant to Clause 14.3.1 the
party making the disclosures shall provide such details as are
reasonably necessary for the other party to undertake scientific
and commercial assessment thereof and disclosure shall be made
as soon as is practicable but in any event in sufficient time to
enable a proper evaluation thereof by the receiving party prior
to commercial exploitation;
2.11.2 the licenses granted or to be granted pursuant to Clause
14.3.2, 14.3.3, 14.3.5 and 14.3.6 shall be subject to any pre-
existing agreements with third parties at the time of disclosure
and where the consent of a third party is required for the grant
of any such license then the disclosing party shall use its
reasonable endeavours to obtain such license;
2.11.3 any sub-licenses granted pursuant to clause 14.3 shall be
subject to any royalties payable to the patentee which shall be
paid in accordance with the terms of the license held by the
disclosing party.
2.12 Sub-Licenses
Any sub-license granted by Shire pursuant to Clause 17.5.4, or by
Janssen to Shire in respect of the OSA Patents and OSA Know-how relating to the
use of Licensed Product for CFS and OSA respectively shall unless otherwise
agreed by the licensor and Shire and Janssen be identical to the terms of any
head license between Shire or Janssen and the relevant third party licensor and
subject to the payment by the sub-licensee of any royalties reserved therein.
2.13 Other Cholinesterase Inhibitors
It is hereby agreed that Clause 20 shall not for the avoidance of
doubt apply to the development by Janssen of galantamine for the treatment of
OSA.
<PAGE>
-16-
2.14 Termination of licenses
2.14.1 Where (1) each of Janssen's licenses for Alzheimer's disease,
CFS and other indications are terminated by the relevant third
party licensors or (2) or the provisions of Clause 25 of the
Global Agreement apply, then Janssen shall either grant a
sublicense under the A+ Agreement or procure the assignment of
such agreement to Shire subject to Clause 2.12 above and the
payment by Shire of a royalty of ****% to Janssen on the Net
Sales Value of Licensed Product sold by Shire, its Affiliates
or its sublicensees in respect of sales of Licensed Product
for OSA in those countries where Janssen's rights were
terminated as aforesaid. Such royalty shall be due and payable
for a period of **** years following the first commercial sale
by Shire, its Affiliates or sub-licensees in such country or
countries or until expiration of the OSA Patent in such
country or countries, whichever occurs first.
2.14.2 Where the Global Agreement is terminated by Janssen pursuant
to Clause 23.1.1 then the provisions of Clause 24.3 shall
apply to the royalties to be paid pursuant to Clause 6.1.14.
Clause 3 Lump Sum Payments and Royalties
3.1 In consideration of Shire agreeing to amend the Global Agreement to
extend the rights thereunder in respect of the sale of Licensed
Product for use in CFS in Japan in accordance with and subject to the
terms of the Global Agreement and in particular but without limitation
Clause 17 thereof Janssen hereby agrees to pay to Shire within 30 days
of the date of confirmation that the success criteria referred to in
Clause 17.3 of the Global Agreement have been met, the non-refundable
sum of $**** (**** United States Dollars). Shire shall render an
invoice to Janssen for such payment.
3.2 In consideration of Janssen procuring access to certain intellectual
property of **** (and its Affiliates) and **** are procuring certain
sublicenses to Shire as set forth herein. Shire agrees to reimburse
Janssen with one half of each of the following payments:
(i) the sum of US $**** (**** United States Dollars) paid by Janssen
to **** pursuant to Article 3.1 of the agreement referred to in
Clause 3.4(ii) below and accordingly Shire shall pay to Janssen
the sum of US $ **** (**** United States Dollars), 30 days after
the date of this Agreement
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-17-
(ii) the sum of (Pounds)**** (**** pounds) paid by Janssen to ****
pursuant to Clause 3.1.1 of the agreement referred to in Clause
5.1(a) below and accordingly Shire shall pay to Janssen the sum
of (Pounds)**** (**** pounds), 30 days after the date of this
Agreement.
3.3 Janssen shall notify of the payments made by it together with an
invoice therefor. Each of the sums referred to in (i) and (ii) above
are expressed to be inclusive of VAT or similar sales or other taxes.
3.4 With regard to the royalty payments payable by Janssen to **** or ****
as appropriate Janssen shall be entitled to deduct one half of such
royalties in accordance with the following provisions:
(i) **** (****%) of the royalty actually paid by Janssen to ****
under Clause 3.1.2 of the agreement between Shire, Janssen and
**** dated 6 August 1998 (the ****) may be deducted from the
payments to be made by Janssen to Shire pursuant to Clause 6.1
of the Global Agreement;
(ii) **** (****%) of the royalty actually paid by Janssen to ****
under Article 3.2 of the Agreement between Janssen and ****
dated 26 March 1998 and relating to the licensing of certain
patents in the United States, its territories and possessions
for the manufacture of Synthetic Galantamine (the ****) may be
deducted from royalties payable by Janssen to Shire in respect
of Net Sales Value of Licensed Product in the United States, its
territories and possessions pursuant to the Global Agreement.
3.5 The provisions of Clauses 6.2, 6.3, 6.4 and 6.5 and of Clauses 7.8.1
and 8.2 of the Global Agreement shall apply to the royalties and other
payments referred to in this Agreement.
3.6 For the purposes of calculating Standard Cost under the Global
Agreement (subject to any contrary arrangements in relation to the
supply of Licensed Product agreed in the co-promotion agreements
envisaged in Clause 10 of the Global Agreement) there shall be
disregarded for the purposes of such calculation the sums payable by
Janssen to **** and **** respectively under the agreements
referred to in Clause 5.1 above and any royalty payable thereunder by
Janssen to **** and **** respectively to the extent that
the same are deducted from royalties payable by Janssen to Shire
pursuant to the terms of the Global Agreement as supplemental by this
Agreement.
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-18-
Clause 4 ****
4.1 Janssen and Shire each hereby acknowledge that the obligations of
Shire and Janssen under Clause 16.4 of the Global Agreement have been
fully discharged and that save as provided in this Agreement the
Global Agreement shall not apply to the **** Intellectual Property and
for the avoidance of doubt from the date of this Agreement
Manufacturing Intellectual Property as defined in the Global Agreement
shall not be deemed to include any such intellectual property.
Clause 5 **** Sub-Licenses
5.1 Janssen hereby grants to Shire a license to use the parents and other
know-how and intellectual property assigned, transferred or licensed
to it pursuant to each of the following agreements.
(a) the **** Agreement referred to in Clause 3.4.(i) above and
any assignments made subsequent thereto assigning and licensing
certain intellectual property to Janssen and providing for the
payment by Janssen of certain sums in consideration thereof.
(b) the **** Agreement referred to in clause 3.4(ii) above
relating to the licensing of certain patents for the manufacture
of synthetic galantamine.
and a license to use all associated intellectual property of
Janssen which may be required or necessary for the exploitation
of the license for the manufacture and sale of synthetic
galantamine by or on behalf of Shire in accordance with the
following provisions of this Clause 5.
5.2 Each of the license granted by Janssen to Shire pursuant to Clause
5.1 above shall be subject to the term of the respective licenses and
agreements between Janssen and **** and **** respectively and shall be
exclusive, except with respect to **** and shall, subject to the terms
of any such headlicense, extend to the territory referred to therein
and be royalty free (save as to any payments to be made to **** or
****.
5.3 Unless otherwise stated each of the licenses granted by Janssen to
Shire may be exercised upon the happening of one or more of the
following events:
(a) in relation to the Janssen Territory, Shire Territory and
Excluded Territory upon the termination of the Sub-License and
Global Agreement
- ---------
**** Portions of this Exhibit which have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed
with the Commission.
<PAGE>
-19-
otherwise than for breach of the terms thereof by Shire, the
insolvency of Shire or the discontinuation of sale of the
Licensed Product as a result of supply or technical issues agreed
by Shire and Janssen;
(b) in relation to the Excluded Territory (including pursuant to
Clause 19 of the Global Agreement any buy back country to the
extent it becomes an Excluded Territory) and pursuant to the
terms of the Global Agreement where Shire or its Affiliate
notifies Janssen that it is able to obtain supplies of Synthetic
Galantamine at a cost lower than the price at which Janssen has
offered to supply Shire or its Affiliates;
(c) subject to and in accordance with the terms of the Global
Agreement in relation to Japan in the event that the rights under
the Global Agreement granted to Janssen in respect of Japan
terminate;
(d) in relation to the manufacture of a product containing an
analogue of galantamine or equivalent to Licensed Product for
sale or supply in relation to any indications where Shire markets
the same with or without a third party in which event such rights
shall be non-exclusive.
5.4 In lieu of exercising the rights granted by Janssen to Shire pursuant
to Clause 5.1 above Shire may elect following consultation with
Janssen and with its agreement to have Synthetic Galantamine supplied
by Janssen to satisfy its reasonable requirements and at a price
determined in accordance with the Global Agreement.
Clause 6 Entire Agreement
6.1 The terms of this Agreement are supplemental to the Global Agreement
and the Shire-Janssen Sub-License Agreement and any and all
supplemental and ancillary letters thereto and form part of the entire
agreement referred to in Clause 28 thereof and terms used in this
Agreement shall have the meaning ascribed thereto unless the context
otherwise requires.
__________________________________
For and on behalf of
Shire International Licensing BV
__________________________________
For and on behalf of
Janssen Pharmaceutica NV
<PAGE>
SCHEDULE
--------
Provisional terms for the apportionment of galantamine in accordance
with IMS statistics on sales by indication
A. Countries with prescription audits
The following 24 countries represent 85% of the world pharmaceutical
market. In all of these countries IMS prescription audits exist and are
generally reliable:
USA Canada Switzerland
Japan Argentina Portugal
Germany Mexico Austria
France Australia Greece
Italy Belgium Finland
UK Netherlands South Africa
Brazil Sweden Denmark
Spain Taiwan Norway
-- The prescription audit will mention the number of prescription by
indication. The relevant indications are AD, CFS and OSA.
-- Prescriptions that are closely related to the 3 indications AD, CFS
and OSA will be included in the category to which they are closely
related.
-- The remaining prescriptions that are unrelated to one of the 3
indications will be divided proportionally over these 3
indications.
-- The relative proportion of the prescriptions will also be
considered to be the relative proportion of actual sales in the
market.
-- Until an indication is registered no prescriptions will be counted
for such indication.
B. In the remaining countries without (reliable) prescription market the
following mechanism will apply:
-- The split of the sales over the 3 indications will be based on a
weighted average of the countries.
<PAGE>
-2-
-- The weighted average calculated for countries with prescription
will take into account the number of years after launch of an
indication.
<PAGE>
EXHIBIT 10.29
DATED 22ND OCTOBER, 1999
FUISZ INTERNATIONAL LIMITED
(as Seller)
and
FUISZ TECHNOLOGIES LTD.
and
SHIRE HOLDINGS EUROPE LIMITED
(as Purchaser)
__________________________________________________________
SHARE PURCHASE AGREEMENT
RELATING TO
LABORATOIRES MURAT SA, FUISZ PHARMA GMBH & CO. KG
AND ISTORIA FARMACEUTICI SPA
___________________________________________________________
Slaughter and May
35 Basinghall Street
London EC2V 5DB
(RCS/AJYT)
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
1. Interpretation 1
2. Sale and Purchase 11
3. Consideration 12
4. Completion 12
5. Italian Completion 13
6. Conduct of the Istoria Business 15
7. Access to Istoria 15
8. Warranties and Covenants of the Seller and Fuisz Technologies 16
9. Purchaser's Remedies and Seller's Limitations on Liability 20
10. Restrictions on Seller's Business Activities 21
11. Provision of Business Information 22
12. Effect of Completion and Italian Completion 23
13. Remedies and Waivers 23
14. Assignment 24
15. Further Assurance 24
16. Invalidity 24
17. Time of essence 24
18. Entire Agreement 25
19. Notices 25
20. Announcements 27
21. Confidentiality 27
22. Costs and Expenses 28
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
23. Counterparts 28
24. Choice of Governing Law 28
25. Jurisdiction 29
26. Agent for Service 29
SCHEDULES
Page
Schedule 1 (Completion Arrangements) 30
Schedule 2 (Warranties) 36
Schedule 3 (Seller's Limitations on Liability) 58
Schedule 4 (Ownership of the Shares) 65
Schedule 5 (Basic Information about the Companies) 67
Schedule 6 (Properties) 76
Schedule 7 (Intellectual Property) 81
</TABLE>
ATTACHMENTS
Attachment 1 Accounts
Attachment 2 Interim Accounts
Attachment 3 Management Accounts
Attachment 4 Management Presentations
<PAGE>
THIS AGREEMENT is made on 22nd October, 1999
BETWEEN:-
1. FUISZ INTERNATIONAL LIMITED whose principal place of business is at 26
Windsor Place, Dublin 2, Ireland (registered in Ireland) (the "Seller");
2. FUISZ TECHNOLOGIES LTD. whose principal place of business is at 14555 Avion
at Lakeside, Chantilly, Virginia 20151, USA (registered in Delaware)
("Fuisz Technologies"); and
3. SHIRE HOLDINGS EUROPE LIMITED whose registered office is at East Anton,
Andover, Hampshire SP10 5RG, England (registered in England and Wales) (the
"Purchaser").
WHEREAS:-
(A) Particulars of the Companies (as defined in this agreement) are set out in
Schedule 5 (Basic Information about the Companies).
----------
(B) The Seller and Fuisz Technologies have agreed to sell and procure the sale
by the Other Sellers and the Purchaser has agreed to purchase the Murat
Shares (as defined in this agreement) on the terms and subject to the
conditions of this agreement.
(C) The Seller has agreed to sell and procure the sale by the Other Sellers and
the Purchaser has agreed to purchase the Pharma Shares (as defined in this
agreement) on the terms and subject to the conditions of this agreement.
(D) The Seller has agreed to sell and procure the sale by the Other Sellers and
the Purchaser has agreed to purchase the Istoria Shares (as defined in this
agreement) on the terms and subject to the conditions of this agreement.
NOW IT IS HEREBY AGREED as follows:-
1. Interpretation
1.1 In this agreement and the Schedules to it:-
<TABLE>
<S> <C>
"Accounts" means the reviewed financial statements of the Companies, prepared
in accordance with generally accepted accounting principles in the
relevant jurisdiction, for the accounting reference period ended
on the Accounts Date set out as Attachment 1;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Accounts Date" means 31st December, 1998;
"Agreed Form" means in relation to any document such document in the form
initialled for the purposes of identification only by the
Purchaser's Solicitors and the Seller's Solicitors;
"Agreed Rate" means two per cent. above the base rate from time to time of
Barclays Bank PLC;
"Assurance" means any warranty, representation, statement, assurance,
covenant, agreement, undertaking, indemnity or commitment of any
nature whatsoever;
"Beteiligungs" means Fuisz Pharma Beteiligungs GmbH, basic information concerning
which is set out in Schedule 5 (Basic Information about the
----------
Companies);
"Beteiligungs Shares" means all the issued shares in the capital of Beteiligungs;
"Books and Records" has its common law meaning and includes, without limitation, all
notices, correspondence, orders, inquiries, drawings, plans, books
of account and other documents and all computer disks or tapes or
other machine legible programs or other records;
"Business Day" means a day (other than a Saturday or a Sunday) on which banks are
open for business (other than solely for trading and settlement in
euro) in London and New York;
"Business Information" means all information, know-how and records (whether or not
confidential and in whatever form held) including (without
limitation) all formulas, designs, specifications, drawings, data,
manuals and instructions and all customer lists, sales
information, business plans and forecasts, and all technical or
other expertise and all computer software and all accounting and
tax records, correspondence, orders and inquiries and all data and
submissions to relevant governmental bodies;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Companies" means Beteiligungs, Holding, Istoria, Murat and Pharma and
references to a "Company" shall mean any of them;
"Completion" means completion of the sale and purchase of the Murat Shares and
the Pharma Shares under this agreement;
"Completion Date" means, in respect of the Murat Shares and the Pharma Shares, the
date of this agreement;
"Completion Net Cash Assets" means, in respect of all of the Companies on an aggregate basis,
the sum of cash and debtors less creditors and accruals (other
than the Shareholder's Loans) as at the Completion Date or the
Italian Completion Date (in respect of Istoria only) in each case
calculated using the same bases and policies of accounting as used
in the Accounts;
"Confidential Business Information" means Business Information which is confidential or not generally
known;
"Consideration" has the meaning given in clause 3 (Consideration);
--------
"Consideration Price" means US$28,700,000;
"Assignment agreements" means the assignment agreements of even date (and the French
version thereof) in the Agreed Form between Fuisz Technologies and
the Purchaser relating to the trademark 'CEBUTID' and the
trademark 'CEBUTIN';
"Disclosure Letter" means the letter of even date written by the Sellers to the
Purchaser for the purposes of sub-clause 9.2 (Purchaser's Remedies
--------------
and Seller's Limitations on Liability) in the Agreed Form;
"Escrow Letter" means the escrow letter of even date relating to the Italian
Consideration;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Event" includes (without limitation) any transaction, action or omission,
any change in the residence of any person for the purposes of any
Tax, the death of any person, and a failure to take any action
which would avoid an apportionment or deemed distribution of
income and shall also include Completion;
"Exclusive Knoll Supply Agreement" means the exclusive supply agreement dated 24th November, 1997
between Fuisz Holdings and Laboratoires Knoll France;
"FRF" means francs, the lawful currency of France;
"Fuisz Holdings" means Fuisz International Holdings Limited;
"Holding" means Fuisz Technologies Holding GmbH, basic information
concerning which is set out in Schedule 5 (Basic Information about
----------
the Companies);
"Holding Shares" means all the issued shares in the capital of Holding;
"HSE Laws" means all applicable statutes and subordinate legislation and
other laws, codes, industry agreements, guidance notes or codes of
conduct insofar as they are of a mandatory effect and are in force
at the date of this agreement and relate to or apply to HSE
Matters from time to time;
"HSE Matters" means matters relating to occupational health and safety or the
environment;
"HSE Permits" means:
(a) any permit, licence, consent or authorisation; and
(b) any exemption where such exemption is required to be notified
to or registered by a regulatory authority,
necessary in relation to HSE matters or the Properties;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Information Technology" has the meaning given in paragraph 32.1 of Schedule 2 (Warranties);
-------------- ----------
"Intellectual Property" means patents, trade marks and service marks, rights in designs,
trade or business names, copyrights (including, without
limitation, rights in computer software), database rights and
topography rights (whether or not any of these is registered and
including applications for registration of any such thing),
internet domain rights and rights under licences and consents in
relation to any such thing and all rights or forms of protection
of a similar nature or having equivalent or similar effect to any
of these which may subsist anywhere in the world;
"Interim Accounts" means the unaudited accounts of each Company as at or for the six
month period ended 30th June, 1999 set out as Attachment 2;
"Istoria" means Istoria Farmaceutici SpA, basic information concerning which
is set out in Schedule 5 (Basic Information about the Companies);
----------
"Istoria Business" means the business and undertaking of Istoria as carried on
immediately prior to the date of this agreement;
"Istoria Meetings" means the extraordinary and ordinary meetings of the shareholders
of Istoria convened by the Istoria Notice to be held on 17th
November, 1999;
"Istoria Shares" means all the issued shares in the capital of Istoria;
"Istoria Notice" means the notice of an extraordinary and ordinary shareholders'
meeting of Istoria in the Agreed Form;
"Istoria Termination Agreement" means the termination agreement in the Agreed Form between Istoria
and Fuisz Technologies relating to the provision of management
services by Fuisz Technologies;
"Italian Completion" means completion of the sale and purchase of the Istoria Shares
under this agreement;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Italian Completion Date" means the date in which the Italian Completion takes place;
"Italian Consideration" means US$6,365,000 (to be held in accordance with and subject to
the terms of the Escrow Letter);
"Knoll Deed of Assignment" means the agreement dated 16th December, 1997 between Fuisz
Technologies and Knoll AG in respect of the assignment of the
trademark 'CEBUTID' and the trademark 'CEBUTIN';
"Knoll Pledge" means the pledge granted by Fuisz Technologies to Knoll AG on 18th
December, 1997 in respect of the Knoll Deed of Assignment;
"Knoll Supply Agreement" means the supply agreement dated 24th November, 1997 between Fuisz
Holdings and Knoll AG;
"Management Accounts" means the monthly unaudited management accounts of each Company
as at or for the month ended 31st August, 1999 set out as
Attachment 3;
"Management Presentations" means the presentations by the senior management of Murat, Pharma
and Istoria to the Purchaser set out as Attachment 4;
"Marketing Authorisations" means those marketing authorisations relating to medicinal and
pharmaceutical products supplied by or on behalf of the Companies
and which are Required for the Business;
"Material Contract" has the meaning given in paragraph 14.1 of Schedule 2 (Warranties);
----------
"Murat" means Laboratoires Murat SA, basic information concerning which is
set out in Schedule 5 (Basic Information about the Companies);
----------
"Murat Minutes" means minutes of the combined meeting of the shareholders of Murat
to be held pursuant to the Murat Notice, duly signed by the
chairman of the meeting;
"Murat Notice" means the notice of a meeting of the shareholders of Murat in the
Agreed Form;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Murat Pledges" means the pledges over the assets and undertakings of Murat
granted to Banque Regionale de l'Ouest for FRF 1,353,205 on 12th
April, 1994 and FRF 1,200,000 on 11th August, 1995 respectively
and to Union de Banques a Paris for FRF 720,000 on 15th November,
1996, basic information concerning which is set out in Schedule 5
----------
(Basic Information about the Companies);
"Murat Shares" means all the issued shares in the capital of Murat;
"Murat Termination Agreement" means the termination agreement of even date in the Agreed Form
between Murat and Fuisz Holdings relating to the termination of:
(a) the provision of management services by Fuisz Holdings;
(b) the secondment agreement ("contrat de mise a disposition")
relating to Paul Kennedy dated 1st April, 1997; and
(c) the secondment agreement ("contrat de mise a disposition")
relating to Daniel Kirchherr dated 5th August, 1997;
"Other Sellers" means the persons whose names and addresses are set out in
Schedule 4 (Ownership of the Shares), and "Other Seller" shall
mean any of them;
"Pharma" means Fuisz Pharma GmbH & Co. KG, basic information concerning
which is set out in Schedule 5 (Basic Information about the
----------
Companies);
"Pharma Shares" means all the issued shares in the capital of both of Beteiligungs
and Holding;
"Pharma Termination Agreement" means the termination agreement of even date in the Agreed Form
between Pharma and Fuisz Technologies relating to the termination
of the provision of management services by Fuisz Technologies;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Pledge Novation Agreement" means the Novation Agreement of even date in the Agreed Form
between Fuisz Holdings, Knoll AG, Murat and the Purchaser in
respect of, inter alia, the novation of the rights, obligations
and liabilities of Fuisz Holdings under the Knoll Supply Agreement
and the Knoll Pledge;
"Proceedings" means any proceeding, suit or action arising out of or in
connection with this agreement;
"Property" means the property listed in Schedule 6 (Properties);
----------
"Purchaser's Solicitors" means Slaughter and May of 35 Basinghall Street, London EC2V 5DB;
"Required for the Business" has the meaning given in clause 11 (Provision of Business
---------
Information);
"Retained Group" means the Seller, any company controlled by the Seller, any
company controlling the Seller and any company which, together
with the Seller, is under the common control of another company
(except in any such case the Companies other than Istoria prior to
Italian Completion);
"Seller's Solicitors" means Gibson, Dunn & Crutcher LLP of 30/35 Pall Mall, London SW1Y
5LP or Nabarro Nathanson of 50 Stratton Street, London W1X 6NX;
"Service Document" means a claim form, order or judgment issued out of the courts of
England and Wales/document relating to or in connection with any
Proceedings;
"Share Purchase Documents" has the meaning given in sub-clause 18.2 (Entire Agreement);
---------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Shareholder's Loans" means:
(a) US$14,403,242, being the aggregate of the outstanding
indebtedness due from Holding pursuant to a 10 year
interest-bearing loan granted by Fuisz Technologies on 12th
February, 1998; and
(b) US$2,500,000, being the aggregate of a line of credit equal
to US$2,117,011.90 and a loan equal to US$382,988.10, due from
Murat to Fuisz Holdings pursuant to agreements dated 22nd June,
1998;
"Shares" means all the issued shares in the capital of each of the
Companies;
"Supply Novation Agreement" means the novation agreement of even date in the Agreed Form
between Fuisz Holdings, Laboratoires Knoll France and Murat in
respect of the novation of the rights, obligations and liabilities
of Fuisz Holdings under the Exclusive Knoll Supply Agreement;
"Tax Warranties" means those warranties set out in paragraphs 35 to 48 (inclusive)
of Schedule 2 (Warranties);
----------
"Tax/tax" or "Taxation" means and includes all forms of taxation and statutory,
governmental, supra-governmental, state, principal, local
governmental or municipal impositions, duties, contributions and
levies, in each case whether of the United Kingdom or elsewhere
and whenever imposed, and all penalties, charges and interest
relating thereto and without limitation all employment taxes and
any deductions or withholdings in respect of Tax;
"VAT" means any tax imposed by a member state of the European Union
pursuant to the Sixth Council Directive of the European
Communities;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Warranties" means the warranties set out in Schedule 2 (Warranties) given by
----------
the Seller and Fuisz Technologies and any other representations or
warranties made by the Seller and Fuisz Technologies or either of
them in this agreement and "Warranty" shall be construed
accordingly;
"Working Hours" means 9.00 a.m. to 5.00 p.m. on a Business Day; and
"Year 2000 Compliant" has the meaning given in paragraph 32.5 of Schedule 2 (Warranties)
-------------- ----------
and "Year 2000 Compliance" shall be construed accordingly.
</TABLE>
1.2 In this agreement, unless otherwise specified:-
(A) references to clauses, sub-clauses, paragraphs and Schedules are to
clauses, sub-clauses and paragraphs of, and Schedules to, this
agreement;
(B) a reference to any statute or statutory provision shall be construed as
a reference to the same as it may have been, or may from time to time
be, amended, modified or re-enacted;
(C) references to a "company" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(D) references to a "person" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
(E) references to "indemnify" and "indemnifying" any person against any
circumstance include indemnifying and keeping him harmless from all
actions, claims and proceedings from time to time made against that
person and all loss or damage and all reasonable payments, costs or
expenses (including legal expenses) properly made or incurred by that
person in each case as a consequence of or which would not have arisen
but for that circumstance;
(F) references to writing shall include any modes of reproducing words in a
legible and non-transitory form;
(G) references to times of the day are to London time;
(H) headings to clauses and Schedules are for convenience only and do not
affect the interpretation of this agreement;
<PAGE>
(I) the Schedules (and the attachments) form part of this agreement and
shall have the same force and effect as if expressly set out in the
body of this agreement, and any reference to this agreement shall
include the Schedules; and
(J) references to the knowledge, information, belief or awareness of any
person shall be treated as including any knowledge, information, belief
or awareness which the person would have if the person made all due and
careful enquiries of:
(i) in the case of Murat, F. Paul Kennedy, Richard Carl Fuisz and
Vincent Lucet;
(ii) in the case of Beteiligungs, Stephen H. Willard, F. Paul Kennedy
and Andreas Sander;
(iii) in the case of Holding, Stephen H. Willard and F. Paul Kennedy;
(iv) in the case of Istoria, Richard Carl Fuisz, Stephen H. Willard
and Luigi Contin; and
(v) in the case of Pharma, F. Paul Kennedy, Stephen H. Willard and
Andreas Sander.
1.3 Save as otherwise set out in this agreement, where this agreement requires
any of the Other Sellers to perform any act, execute any document or
provide any confirmation, the Seller and Fuisz Technologies agree that they
shall procure that the Other Sellers shall perform such act, execute such
document or provide such confirmation and shall be liable for any failure
by any of the Other Sellers to carry out such actions.
2. Sale and Purchase
2.1 Save as otherwise set out in this agreement, each of the Seller, Fuisz
Technologies and the Other Sellers shall sell or procure the sale of those
Shares set opposite its name in Schedule 4 (Ownership of the Shares) and
----------
the Purchaser shall purchase the Shares with all rights attached or
accruing to them at Completion or Italian Completion, as the case may be.
2.2 The Seller, Fuisz Technologies and the Other Sellers have the right to
transfer legal and beneficial title to the Shares.
2.3 The Shares shall be free from all charges and encumbrances and from all
other rights exercisable by or claims of third parties whatsoever.
2.4 The Purchaser shall be entitled to exercise all rights attached or accruing
to the Shares including, without limitation, the right to receive all
dividends,
<PAGE>
distributions or any return of capital declared, paid or made by the
Companies on or after Completion or Italian Completion (in the case of the
Istoria Shares).
2.5 Each of the Seller and Fuisz Technologies waive and shall procure that the
Other Sellers waive all rights of pre-emption over any of the Shares
conferred upon him by the articles of association (or equivalent
constitutional documents) of the Companies or in any other way and
undertakes to take all steps necessary to ensure that any rights of pre-
emption over any of the Shares are waived.
3. Consideration
The total consideration for the sale of the Shares (the "Consideration")
shall be the payment by the Purchaser to the Seller of an amount equal to
the Consideration Price, less the amount of the Shareholder's Loans which
the Purchaser shall procure the payment of in accordance with sub-clause
----------
4.4 (Completion).
---
4. Completion
4.1 Completion shall take place immediately after signature of this agreement
at the offices of the Purchaser's Solicitors in Paris or such other place
as may be agreed between the Seller and the Purchaser in respect of any
step set out in Schedule 1 (Completion Arrangements).
----------
4.2 At or before Completion the Seller and Fuisz Technologies shall do those
things listed in Part A of Schedule 1 (Completion Arrangements), the Other
------ ----------
Sellers shall do those things listed in Part B of Schedule 1 (Completion
------ ----------
Arrangements) and the Purchaser shall do those things listed in Part C of
------
Schedule 1 (Completion Arrangements). For the avoidance of doubt, the
----------
parties acknowledge that certain agreed steps set out in Schedule 1
----------
(Completion Arrangements) have been performed prior to the date of this
agreement and that such steps do not need to be repeated at Completion.
4.3 The Consideration shall be payable by or on behalf of the Purchaser in
immediately available funds in US dollars at Completion as referred to in
Part C of Schedule 1 (Completion Arrangements) save that the provisions of
------ ----------
Part G of Schedule 1 (Completion Arrangements) shall apply in respect of
------ ----------
the Italian Consideration.
4.4 The Purchaser shall procure that, immediately after Completion, Holding
shall pay to the Seller on behalf of Fuisz Technologies and Murat shall pay
to the Seller on behalf of Fuisz Holdings an amount equal to their
respective share of the Shareholder's Loans and each of Fuisz Technologies
and the Seller (on behalf of Fuisz Holdings) confirms that such payment
shall constitute full settlement of the Shareholder's Loans (and any other
sums payable in relation thereto).
<PAGE>
4.5 Subject to sub-clause 4.6, the Purchaser shall not be obliged at Completion
--------------
to complete this agreement in respect of the Murat Shares and the Pharma
Shares unless the Seller, Fuisz Technologies and the Other Sellers comply
in all material respects with their respective obligations in sub-clause
----------
4.2 and Schedule 1 (Completion Arrangements) in respect of the Murat Shares
--- ----------
and the Pharma Shares so far as they relate to the Seller or any member of
its Retained Group or the Other Sellers individually.
4.6 The Purchaser shall not be obliged to complete the sale and purchase of any
of the Murat Shares or the Pharma Shares unless the sale and purchase of
all the Murat Shares and the Pharma Shares is completed simultaneously
(save that the Purchaser acknowledges that the one Murat Share held by
Kenneth McVey will not be transferred at Completion). Notwithstanding,
where any Murat Share is not transferred to the Purchaser at Completion,
the Seller shall use all reasonable endeavours to procure the transfer of
any outstanding Murat Share to the Purchaser as soon as reasonably
practicable.
4.7 Payment of the Consideration Price in accordance with Schedule 1
----------
(Completion Arrangements) shall constitute payment of the consideration for
the Shares and shall discharge the obligations of the Purchaser under
clause 2 (Sale and Purchase) and the Purchaser shall not be concerned to
--------
see that the Consideration Price is applied in paying the Seller, Fuisz
Technologies or the Other Sellers in accordance with their respective
entitlements (if any).
5. Italian Completion
5.1 Italian Completion shall take place on 17th November, 1999 at the offices
of Istoria at 3/A Riviera Francia, Padua, Italy and only after the Istoria
Meeting has been duly held and the resolutions set out in the Istoria
Notice have been duly passed.
5.2 (A) The Seller and Fuisz Technologies will use all reasonable endeavours
to procure that the Istoria Meeting shall be held on 17th November,
1999.
(B) In particular the Seller and Fuisz Technologies confirm to the
Purchaser that the directors of Istoria will publish the Istoria Notice
in the Italian Gazette on 23rd October, 1999.
5.3 The Seller and Fuisz Technologies undertake to keep the Purchaser informed
as to progress towards the satisfactory holding of the Istoria Meeting and
in particular (but without limitation) to disclose in writing to the
Purchaser anything which will or may prevent or delay the Istoria Meeting
from being duly held by 17th November, 1999 immediately it comes to the
notice of the Seller or Fuisz Technologies.
5.4 At Italian Completion the Seller and Fuisz Technologies shall do or procure
the carrying out of those things listed in Part D and Part G of Schedule 1
------ ------ ----------
<PAGE>
(Completion Arrangements), the Other Sellers shall do those things listed
in Part E of Schedule 1 (Completion Arrangements) and the Purchaser shall
------ ----------
do those things listed in Part F and Part G of Schedule 1 (Completion
------ ------ ----------
Arrangements).
5.5 The Purchaser shall not be obliged to complete the sale and purchase of any
of the Istoria Shares unless the sale and purchase of all of the Istoria
Shares is completed simultaneously (save that the Purchaser acknowledges
that the Istoria Shares held by Danilo Massari and Emiliano Bronislaw may
not be transferred at Italian Completion). Notwithstanding, where any
Istoria Share is not transferred to the Purchaser at Italian Completion,
the Seller shall use all reasonable endeavours to procure the transfer of
any outstanding Istoria Share to the Purchaser as soon as reasonably
practicable.
5.6 Subject to sub-clause 5.5, the Purchaser shall not be obliged to complete
--------------
the purchase of the Istoria Shares unless the Seller and Fuisz Technologies
shall do those things listed in sub-clause 5.4 and Part D and Part G of
-------------- ------ ------
Schedule 1 (Completion Arrangements) and the Other Sellers shall do those
----------
things listed in Part E of Schedule 1 (Completion Arrangements) in so far
------ ----------
as they relate to the Seller, Fuisz Technologies or the Other Sellers
individually and all of the Istoria Shares are included in the sale and
purchase.
5.7 If the Istoria Meeting has not been duly held and the resolutions set out
in the Istoria Notice have not been duly passed on 17th November, 1999,
Italian Completion shall take place at the same time on the date which is
one Business Day after the day on which the Istoria Meeting has been duly
held and the resolutions set out in the Istoria Notice have been duly
passed or at such other time and on such other date as the parties may
agree, but, in any event, no later than 12 midnight on 31st December, 1999.
5.8 If the obligations of the Seller and Fuisz Technologies under sub-clause
----------
5.4 and Part D of Schedule 1 (Completion Arrangements) are not complied
--- ------ ----------
with at the time and on the date on which Italian Completion is to take
place pursuant to sub-clauses 5.1 or 5.7, the Purchaser may:
--------------- ---
(A) defer Italian Completion (so that the provisions of this clause 5 shall
--------
apply to Italian Completion as so deferred); or
(B) proceed to Italian Completion as far as practicable (without limiting
its rights under this agreement); or
(C) terminate this agreement in respect of the sale and purchase of the
Istoria Shares by notice in writing to the Seller.
5.9 If the agreement is terminated in accordance with sub-clause 5.8 (and
--------------
without limiting the Purchaser's right to claim damages):
<PAGE>
(A) the Seller's Solicitors shall pay the Escrow Fund (as defined in the
Escrow Letter) to the Purchaser;
(B) the Seller will reimburse to the Purchaser on demand an amount equal to
all costs and expenses incurred by the Purchaser in respect of the sale
and purchase of the Istoria Shares in accordance with clause 22 (Costs
---------
and expenses); and
(C) all obligations of the Purchaser under this agreement shall end
(except for the provisions of clauses 20 (Announcements) and 21
----------
(Confidentiality)),
but (for the avoidance of doubt) all rights and liabilities of parties
which have accrued before termination shall continue to exist.
5.10 The Seller and Fuisz Technologies shall procure that any loan or loans
between Istoria and any of its shareholders which exist prior to Italian
Completion shall be repaid prior to Italian Completion.
6. Conduct of the Istoria Business
6.1 The Seller and Fuisz Technologies will procure that, between the date of
this agreement and Italian Completion or this agreement in respect of the
sale and purchase of the Istoria Shares being terminated in accordance with
sub-clause 5.8 (Italian Completion), the Istoria Business will be carried
--------------
on in the ordinary and usual course and Istoria will not do anything which
is not of a routine unimportant nature without the consent in writing of
the Purchaser (such consent not to be unreasonably withheld or delayed).
6.2 In particular, but without limitation, the Seller undertakes that Istoria
will not, between the time of this agreement and Italian Completion or this
agreement in respect of the sale and purchase of the Istoria Shares being
terminated in accordance with sub-clause 5.8 (Italian Completion), carry
--------------
out the matters listed in Schedule 8 (Conduct of the Istoria Business
----------
before Italian Completion) without the prior consent in writing of the
Purchaser (such consent not to be unreasonably withheld or delayed).
7. Access to Istoria
As from the date of this agreement until Italian Completion or this
agreement in respect of the sale and purchase of the Istoria Shares being
terminated in accordance with sub-clause 5.8 (Italian Completion), the
--------------
Purchaser and any persons authorised by it, upon reasonable notice and
subject to giving such undertaking as to confidentiality as the Seller or
Fuisz Technologies shall reasonably require, shall be given full access to
the Properties owned or used by Istoria and any other premises from which
the Istoria Business is operated or the Books and Records relating to
Istoria are kept and the employees of the
<PAGE>
Seller and all members of the Retained Group shall be instructed to give
promptly all such information and explanations to the Purchaser or any such
persons in relation to the Istoria Business as the Purchaser or any such
persons may reasonably request.
8. Warranties and Covenants of the Seller and Fuisz Technologies
8.1 The Seller and Fuisz Technologies jointly and severally warrant to the
Purchaser that each of the Warranties is true and accurate at the date of
this agreement.
8.2 The Seller and Fuisz Technologies jointly and severally warrant to the
Purchaser that each of the Warranties in respect of Istoria will continue
to be true and accurate up to and including the Italian Completion Date as
if repeated immediately before Italian Completion by reference to the facts
and circumstances subsisting at the Italian Completion Date and on the
basis that any reference, whether express or implied, in such Warranties or
any word or words given a meaning in sub-clause 1.1 (Interpretation) and
--------------
used in such Warranties (except in the definition of "Disclosure Letter")
to the date of this agreement is substituted by a reference to the Italian
Completion Date.
8.3 Without prejudice to the rights of the Seller and Fuisz Technologies
pursuant to sub-clause 8.2, the Seller and Fuisz Technologies undertake to
---------------
disclose in writing to the Purchaser anything which is or may constitute a
breach of any of the Warranties in respect of Istoria immediately it comes
to its notice both before or at the time of Italian Completion.
8.4 The Seller and Fuisz Technologies undertake (if any claim is made against
either of them in connection with the sale of the Shares to the Purchaser)
not to make any claim against the Companies or any director or any other
person who is an employee of any of the Companies at the time such claim is
asserted on whom either of them may have relied before agreeing to any
terms of this agreement or authorising any statement in the Disclosure
Letter.
8.5 Each of the Warranties shall be construed as a separate and independent
warranty and (except where expressly provided to the contrary) shall not be
limited or restricted by reference to or inference from the terms of any
other Warranty or any other term of this agreement.
8.6 If in respect of or in connection with any breach of any of the Warranties
any amount payable to the Purchaser by the Seller (including, without
limitation, any payment under this clause or otherwise) is subject to
Taxation, such additional amounts shall be paid to the Purchaser by the
Seller so as to ensure that the net amount received by the Purchaser is
equal to the full amount payable to the Purchaser under this agreement.
8.7 The Seller and Fuisz Technologies, covenant that, at any time and from time
to time on or after Completion, they will execute and deliver all such
instruments
<PAGE>
of assumption and acknowledgements or take such other action as the
Purchaser may reasonably request in order to effect the release and
discharge in full of any Assurance given by any Company to any person in
respect of any obligation or liability of the Seller or any member of the
Retained Group and the Seller's assumption of, and the substitution of the
Seller as the primary obligor in respect of, each such Assurance on a non-
recourse basis to the Purchaser and the relevant Company. Pending such
release and discharge, the Seller hereby agrees with the Purchaser (on
behalf of itself and each Company) that it will either assume and pay and
discharge when due, and indemnify each Company against, all such Assurances
or, at the Seller's discretion, pay to the Purchaser an amount equal to the
liability of each Company in respect of each Assurance.
8.8 The Seller covenants to pay to the Purchaser an amount equal to each
Company's losses, costs, damages, liabilities and expenses of any nature
which are a result of:
(A) the arbitration proceedings between Villa Miari De Cumari Srl (in its
capacity as lessor) and Amalia Vita Cappellini (in her capacity as
lessee) in respect of renovations of 3/A Riviera Francia, Padua;
(B) the failure of any Other Seller to transfer any Murat Share or Istoria
Share (whether at Completion, Italian Completion or otherwise) to the
Purchaser such that the Purchaser does not at Completion or Italian
Completion (as the case may be) own all of the Murat Shares or Istoria
Shares (as the case may be), together with all reasonable costs and
expenses incurred by the Purchaser in attempting to procure the
transfer of such Shares;
(C) the actions (including execution of any document) of any director of
any Company who has not resigned as a director of such Company at
Completion or at Italian Completion (as the case may be) in the
exercise or purported exercise of his powers as a director of such
Company;
(D) any act, neglect, default or omission in respect of the Exclusive Knoll
Supply Agreement, the Knoll Deed of Assignment, the Knoll Pledge or the
Knoll Supply Agreement committed by Fuisz Holdings or Fuisz
Technologies on or before Completion;
(E) the proceedings brought by Mr Cicellini in respect of his claim for
unfair dismissal as managing director of Istoria; and
(F) any actions, law suits or proceedings present or pending or threatened
after Italian completion which are based in whole or significant part
on the use (whether prior to or after Italian completion) by Istoria of
the trademarks 'FOLIBEN', 'PROPULM', 'MECLODERM' or 'VERBEX' or any
mark or sign similar thereto in the manner that such marks and signs
have been used by Istoria prior to Italian completion.
<PAGE>
8.9 If any action, claim or demand is brought or alleged against any Company in
respect of which an indemnity is to be sought from the Seller pursuant to
sub-clauses 8.7, 8.8, 8.12 or 8.14, the Company shall promptly notify the
-------------------------- ----
Seller thereof and the Seller shall have the option to assume the defence
thereof in accordance with sub-clause 8.15. If the Seller fails to assume
such defence in accordance with such sub-clause, it will be liable to the
Company for any legal or other expenses subsequently incurred by such
Company in connection with such defence.
8.10 All sums payable by the Seller and Fuisz Technologies to any Company under
sub-clauses 8.7, 8.8, 8.12 or 8.14 shall be paid free and clear of all
-------------------------- ----
deductions or withholdings whatsoever, save only as may be required by law.
If any such deduction or withholding is required by law to be made, the
Seller and Fuisz Technologies shall be obliged to pay to the relevant
Company such sum as will, after such deduction or withholding has been
made, leave such Company with the same amount as it would have been
entitled to receive in the absence of any such requirement to make such
deduction or withholding.
8.11 If any sum payable by the Seller and Fuisz Technologies to any Company
under sub-clauses 8.7, 8.8, 8.12 or 8.14 shall be subject to a liability to
-------------------------- ----
Taxation in the hands of any Company, the Seller and Fuisz Technologies
shall be under the same obligation to make an increased payment in relation
to that liability to Taxation as if the liability were a deduction or
withholding required by law.
8.12 The Seller and Fuisz Technologies covenant with the Purchaser that the
Seller and Fuisz Technologies will pay to any Company an amount equal to
the value of any and all claims which may be made against such Company by
any of the resigning directors, statutory auditors or secretary (including,
for the avoidance of doubt in respect of Murat, Paul Kennedy), because of
their resignation from office or of their employment being terminated and
an amount equal to all costs, charges and expenses incurred by such Company
which are incidental to any such claim.
8.13 The Seller shall procure that Fuisz Holdings, Murat and Knoll AG (or its
relevant subsidiary) shall enter into the Pledge Novation Agreement with
the Purchaser and that Fuisz Holdings and Laboratoires Knoll France shall
enter into the Supply Novation Agreement with the Purchaser respectively at
Completion.
8.14 (A) Subject to paragraph (B) below, the Seller hereby covenants with the
Purchaser to pay to the Purchaser (so far as possible by way of
repayment of the consideration payable under this agreement for the
Shares) an amount equal to any liability to Tax incurred by any of the
Companies as a consequence of or by reference to any Event which
occurred or is deemed for the purposes of any Tax to have occurred on
or before Completion, including any Event occurring or being deemed to
occur on or before Completion which gives rise to a liability to Tax
on deemed (as opposed to actual) income, profits or gains, together
with any costs and
<PAGE>
expenses reasonably and properly incurred by the Purchaser or any of
the Companies in connection with any such liability to Tax or with
making a successful claim therefor under this paragraph (A).
(B) The covenant given in paragraph (A) shall not cover any liability to
Tax to the extent that that liability would not have arisen but for a
voluntary transaction, action or omission carried out or effected by
any Company or the Purchaser after Completion other than in the
ordinary course of its business or for any unreasonable delay or
default by any Company or the Purchaser after Completion in dealing
with the Tax affairs of a Company.
8.15 If any Company or the Purchaser notifies the Seller and Fuisz Technologies
of a claim pursuant to sub-clause 8.9 ("Third Party Claim"), the Seller,
--------------
Fuisz Technologies and the Purchaser shall consult with each other
regarding the conduct of the Third Party Claim and the Seller and Fuisz
Technologies shall within 30 days of receipt of notice of the Third Party
Claim elect in writing either to conduct the Third Party Claim or to leave
conduct or defence to the Purchaser. Whether or not the Seller and Fuisz
Technologies elect to conduct the Third Party Claim, the Purchaser shall
and shall procure that the relevant Company shall take such lawful and
reasonable action as the Seller and Fuisz Technologies shall reasonably
require to avoid, dispute, resist, appeal, compromise, settle, contest or
raise a counter-claim in relation to the Third Party Claim and in
particular the Purchaser shall not and shall procure that no Company shall
make any admission of liability, compromise or settle any Third Party Claim
without the prior written consent of the Seller and Fuisz Technologies.
8.16 The Seller and Fuisz Technologies shall indemnify the Purchaser against and
in respect of all reasonable costs and expenses and all charges,
liabilities and damages for which the Purchaser or the relevant Company
become liable in respect of any action which is required to be taken by the
Purchaser or any Company under sub-clause 8.15.
---------------
8.17 A party having conduct of a Third Party Claim shall keep the other fully
informed of the progress and the defence of any Third Party Claim and shall
consult with and have due regard for the other's reasonable
representations.
8.18 In relation to any Third Party Claim, without prejudice to the validity of
the Third Party Claim, the Purchaser shall allow and shall procure that any
relevant Company shall allow the Seller and its professional advisers to
investigate the matter or circumstance alleged to give rise to the Third
Party Claim and the Purchaser shall give and shall procure that any
relevant Company shall give such assistance as the Seller or its
professional advisors may reasonably request, including upon reasonable
notice and in normal business hours access to and copies of any documents
or other information in possession of the Purchaser or any relevant Company
and to those employees having responsibility for the matter giving rise to
the third Party Claim.
<PAGE>
9. Purchaser's Remedies and Seller's Limitations on Liability
9.1 Subject to sub-clause 9.2 and to the limitations set out in Schedule 3
-------------- ----------
(Seller's Limitations on Liability), the Purchaser shall be entitled to
claim after Completion or Italian Completion (as the case may be) that any
of the Warranties has or had been breached, save where the Purchaser knew
on or before Completion or Italian Completion (as the case may be) that the
Warranty in question had been breached.
9.2 The Purchaser shall not be entitled to claim that any fact causes any of
the Warranties to be breached if it has been fairly disclosed to the
Purchaser in the Disclosure Letter.
9.3 No liability shall attach to the Seller in respect of claims under the
Warranties if and to the extent that the limitations referred to in sub-
---
clause 9.1 and set out in Schedule 3 (Seller's Limitations on Liability)
---------- ----------
apply.
9.4 If, following Completion or Italian Completion (as the case may be), the
Purchaser becomes aware (whether it does so by reason of any disclosure
made pursuant to clause 8 (Warranties and Covenants of the Seller and Fuisz
--------
Technologies) or not) that there has been any breach of the Warranties or
any other term of this agreement the Purchaser shall not be entitled to
terminate or rescind this agreement but shall be entitled to claim damages
or exercise any other right, power or remedy under this agreement or as
otherwise provided by law.
9.5 For the avoidance of doubt, any disclosure pursuant to sub-clause 8.3
--------------
(Warranties and Covenants of the Seller and Fuisz Technologies) shall not
affect any liability of the Seller and Fuisz Technologies in damages for
breach of warranty. The parties acknowledge that the Purchaser's only
remedy for breach of any Warranty shall be damages for breach of contract
and the Purchaser shall not be able to sue in tort in respect of such
breach. The Purchaser shall in respect of claims under the Warranties take
reasonable steps to mitigate its loss suffered by it, but the parties
acknowledge that any duty of the Purchaser to mitigate its loss (whether
pursuant to common law or otherwise) shall not apply in respect of any
liability of the Seller pursuant to sub-clauses 8.7, 8.8, 8.12 or 8.14.
9.6 If the Seller defaults in the payment when due of any sum payable under
this agreement (whether determined by agreement or pursuant to an order of
a court or otherwise), the liability of the Seller shall be increased to
include interest on such sum from the date when such payment is due until
the date of actual payment (as well after as before judgment) at the Agreed
Rate. Such interest shall accrue from day to day and shall be compounded
annually.
<PAGE>
10. Restrictions on Seller's Business Activities
10.1 The Seller undertakes to procure that each member of the Retained Group
will not, either alone or in conjunction with or on behalf of any other
person, do any of the following things:-
(A) neither pending nor within 18 months after the Completion Date or the
Italian Completion Date (as the case may be), be engaged or (except as
the holder of shares in a listed company which confer not more than one
per cent. of the votes which could normally be cast at a general
meeting of the company) directly or indirectly interested in carrying
on any business in:
(i) France;
(ii) Germany;
(iii) Italy; and
(iv) any other country in which any Company distributes
pharmaceutical products,
which competes with the business of the relevant Company as it is
carried on at the date of Completion or Italian Completion (as the
case may be) in that jurisdiction;
(B) except to the extent required by legal process or applicable law or
regulation, disclose to any other person or (in any way which may be
detrimental to the business of any of the Companies as carried on at
the Completion Date or the Italian Completion Date (as the case may
be)) use any information which is Confidential Business Information
for so long as that information remains Confidential Business
Information;
(C) without limitation to the provisions of this clause, in relation to a
business which is competitive with the business of any of the
Companies as carried on at the Completion Date or the Italian
Completion Date (as the case may be), use any trade or business name
or distinctive mark, style or logo used by or in the business of the
relevant Company (other than the word "Fuisz") at any time during the
one year before Completion or Italian Completion (as the case may be)
or anything intended or likely to be confused with it;
(D) within two years after Completion or Italian Completion (as the case
may be), solicit the custom, in relation to goods or services sold to
any person by any of the Companies in the course of its business
during the two years before the Completion Date or the Italian
Completion Date (as the case may be), of that person in respect of
similar goods or services;
<PAGE>
(E) within one year after Completion or Italian Completion (as the case may
be), solicit or entice away from the employment of any of the Companies
any person at present an employee of such Company;
(F) provide Biovail Corporation International or any of its subsidiaries
with any information relating to any of the Companies which would
permit Biovail Corporation International or any of its subsidiaries to
compete more effectively against any of the Companies; nor
(G) assist any other person to do any of the foregoing things.
10.2 Nothing in sub-clause 10.1 shall prevent Biovail Corporation International
---------------
or any of its subsidiaries as at the Completion Date or the Italian
Completion Date (as the case may be) from selling products in any country
currently sold by them in that country nor, as from 12 months after the
Completion Date or the Italian Completion Date (as the case may be),
products currently in development by or for Biovail Corporation
International or any of its subsidiaries as at the date of this agreement.
10.3 Each undertaking contained in this clause shall be construed as a separate
undertaking and if one or more of the undertakings is held to be against
the public interest or unlawful or in any way an unreasonable restraint of
trade, the remaining undertakings shall continue to bind the Seller.
11. Provision of Business Information
11.1 During the period of three years after Completion or Italian Completion and
without prejudice to any of the Warranties:-
(A) if any Business Information Required for the Business of any Company is
not in the possession of the Purchaser or readily discoverable by the
Purchaser but is in the possession or under the control of the Seller,
Fuisz Technologies or any member of the Retained Group, the Seller or
Fuisz Technologies, as the case may be, shall procure that such
Business Information is provided to the Purchaser promptly on request;
(B) if any Books or Records of the Seller contain Business Information
which should be provided to the Purchaser, the Seller shall procure
that copies of such Books or Records are given to the Purchaser
promptly on request.
(C) if any of the Seller, Fuisz Technologies or the Purchaser discovers
that the Seller, Fuisz Technologies or any member of the Retained Group
owns any Intellectual Property which relates exclusively or
predominately to any business carried on by any Company in the period
of two years prior to Completion or Italian Completion (as the case may
be), it shall promptly notify the other in writing and thereafter, at
the request of the Purchaser, the Seller or Fuisz Technologies, as the
case may be, shall
<PAGE>
procure the assignment at no consideration of such Intellectual
Property to the Purchaser or to such undertaking as the Purchaser may
direct on terms reasonably satisfactory to the Purchaser; and
(D) subject to paragraph (C) above, the Seller and Fuisz Technologies agree
to procure the grant to the Purchaser and every related company of the
Purchaser by the Seller, Fuisz Technologies or the members of the
Retained Group, as the case may be, with effect from Completion or
Italian Completion (as the case may be), of a non-exclusive, royalty-
free, perpetual, irrevocable, transferable, world-wide licence (with
the ability to sub-licence) to use any Intellectual Property owned by
the Seller, Fuisz Technologies or any member of the Retained Group
immediately prior to Completion or Italian Completion (as the case may
be) and Required for the Business of any Company now or during the two
years prior to Completion or Italian Completion (as the case may be),
in the manner in which such Intellectual Property is or has been used
by such Company.
11.2 For the purposes of this clause and this agreement generally, "Required for
the Business" means any Intellectual Property or Business Information which
is or has in the one year prior to Completion or Italian Completion (as the
case may be) been used in the business of such Company or if it will be
needed by that Company to carry on the business of such Company in the same
manner as it is presently carried on or to fulfil any of the present
contracts of that Company in relation to the business of such Company or to
comply with any law applicable in relation to the business of that Company
or if it is vested in the Seller and its retention by the Seller after
Completion or Italian Completion (as the case may be) of this agreement
would be damaging or detrimental to the business of such Company (and the
use of such Intellectual Property or Business Information to compete, where
permitted, against any of the Companies shall not be deemed to be damaging
or detrimental to the business of such Company).
12. Effect of Completion and Italian Completion
Any provision of this agreement and any other documents referred to in it
which is capable of being performed after but which has not been performed
at or before Completion or Italian Completion (as the case may be) and all
Warranties and covenants and other undertakings contained in or entered
into pursuant to this agreement shall remain in full force and effect
notwithstanding Completion or Italian Completion (as the case may be).
13. Remedies and Waivers
13.1 No delay or omission by any party to this agreement in exercising any
right, power or remedy provided by law or under this agreement or any other
documents referred to in it shall:-
(A) affect that right, power or remedy; or
<PAGE>
(B) operate as a waiver thereof.
13.2 The single or partial exercise of any right, power or remedy provided by
law or under this agreement shall not preclude any other or further
exercise of it or the exercise of any other right, power or remedy.
13.3 The rights, powers and remedies provided in this agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law.
14. Assignment
The Purchaser may at any time assign all or any part of the benefit of, or
its rights or benefits under, this agreement and any agreements referred to
in clause 18 (Entire Agreement) (including, without limitation, the
---------
Warranties together with any causes of action arising in connection with
any of them) to any person controlling, controlled by or under common
control with the Purchaser.
15. Further Assurance
Each of the Seller, Fuisz Technologies and the Other Sellers shall from
time to time at the cost of the Seller, on being reasonably required to do
so by the Purchaser, now or at any time in the future, do or procure the
doing of all such acts and/or execute or procure the execution of all
documents in a form satisfactory to the Purchaser which the Purchaser may
reasonably consider necessary for giving full effect to this agreement and
securing to the Purchaser the full benefit of the rights, powers and
remedies conferred upon the Purchaser in this agreement.
16. Invalidity
If at any time any provision of this agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:-
(A) the legality, validity or enforceability in that jurisdiction of any
other provision of this agreement; or
(B) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this agreement.
17. Time of essence
For the purposes of clause 5 (Italian Completion), time is of the essence
--------
of this agreement in relation to Istoria.
<PAGE>
18. Entire Agreement
18.1 For the purpose of this clause, "Pre-contractual Statement" means a
draft, agreement, undertaking, representation, warranty, promise,
assurance or arrangement of any nature whatsoever, whether or not in
writing, relating to the subject matter of the Share Purchase Documents
or any of them made or given by a party to any of the Share Purchase
Documents or any other person at any time prior to the date of this
agreement.
18.2 This agreement, the Disclosure Letter, the Deed of Assignment and any
other documents entered into pursuant to this agreement (the "Share
Purchase Documents") constitute the whole and only agreement between the
parties relating to the sale and purchase of the Shares.
18.3 Except to the extent repeated in any of the Share Purchase Documents, the
Share Purchase Documents supersede and extinguish any Pre-contractual
Statement.
18.4 Each party acknowledges that in entering into the Share Purchase
Documents it is not relying upon any Pre-contractual Statement which is
not expressly set out in them.
18.5 None of the parties shall have any right of action (except in the case of
fraud) against any other party to this agreement arising out of or in
connection with any Pre-contractual Statement except to the extent that
such Pre-contractual Statement is repeated in the Share Purchase
Documents.
18.6 This agreement may only be varied in writing signed by each of the
parties.
19. Notices
19.1 A notice under this agreement shall only be effective if it is in
writing. Faxes are permitted.
19.2 Notices under this agreement shall be sent to a party at its address or
number and for the attention of the individual set out below:
<TABLE>
<CAPTION>
Party and title of individual Address Facsimile no.
----------------------------- ------- -------------
<S> <C> <C>
Purchaser East Anton
Andover +44 1264 332 879
FAO Company Secretary Hampshire SP10 5RG
with a copy to:
Shire Pharmaceuticals East Anton +44 1264 332 879
Andover
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Group plc Hampshire SP10 5RG
England
FAO Company Secretary
Seller 26 Windsor Place +353 1 676 1023
Dublin 2
Ireland
FAO General Counsel
with a copy to:
Fuisz Technologies 14555 Avion at Lakeside +1 703 995 2223
Chantilly
VA 20151
USA
FAO General Counsel
</TABLE>
Provided that a party may change its notice details on giving notice to the
other party of the change in accordance with this clause. That notice
shall only be effective on the day falling five clear Business Days after
the notification has been received or such later date as may be specified
in the notice.
19.3 Any notice given under this agreement shall, in the absence of earlier
receipt, be deemed to have been duly given as follows:
(A) if delivered personally, on delivery;
(B) if sent by first class post within the same country, two clear Business
Days after the date of posting;
(C) if sent by airmail to another country, seven clear Business Days after
the date of posting;
(D) if sent by reputable international courier, two clear Business Days
after being delivered to the courier with the cost of such courier
borne by the sender; and
(E) if sent by facsimile, when despatched.
19.4 Any notice given under this agreement outside Working Hours in the place to
which it is addressed shall be deemed not to have been given until the
start of the next period of Working Hours in such place.
<PAGE>
19.5 The provisions of this clause shall not apply in relation to the service of
Service Documents.
20. Announcements
20.1 No announcement concerning the sale of the Shares or any ancillary matter
shall be made by any party without the prior written approval of the
others, such approval not to be unreasonably withheld or delayed. This
sub-clause does not apply in the circumstances described in sub-clause
----------
20.2.
----
20.2 Any party may, after notice to each other party, make an announcement
concerning the sale of the Shares or any ancillary matter if required by:-
(A) law;
(B) existing contractual obligations; or
(C) any securities exchange or regulatory body to which such party is
subject or submits, wherever situated, including (but without
limitation) the London Stock Exchange Limited or the Panel on Takeovers
and Mergers, whether or not the requirement has the force of law.
20.3 The restrictions contained in this clause shall apply without limit in
time.
21. Confidentiality
21.1 Each party shall treat as confidential all information obtained as a result
of entering into or performing this agreement which relates to:-
(A) the provisions of this agreement;
(B) the negotiations relating to this agreement;
(C) the subject matter of this agreement; or
(D) the other party.
21.2 Notwithstanding the other provisions of this clause, any party may disclose
confidential information:
(A) if and to the extent required by law or for the purpose of any judicial
proceedings;
(B) if and to the extent required by existing contractual obligations;
(C) if and to the extent required by any securities exchange or regulatory
body to which such party is subject or submits, wherever situated,
<PAGE>
including (but without limitation) the London Stock Exchange Limited or
the Panel on Takeovers and Mergers, whether or not the requirement has
the force of law.
(D) if and to the extent required to vest the full benefit of this
agreement in that party;
(E) to its professional advisers, auditors and bankers;
(F) if and to the extent the information has come into the public domain
through no fault of that party; or
(G) if and to the extent the other party has given prior written consent to
the disclosure, such consent not to be unreasonably withheld or
delayed.
Any information to be disclosed pursuant to paragraphs (A), (B), (C) or (D)
-------------- --- --- ---
shall be disclosed only after notice to the other party.
21.3 The restrictions contained in this clause shall apply without limit in
time.
22. Costs and Expenses
Each party shall pay its own costs and expenses in relation to the
negotiations leading up to the sale and purchase of the Shares and the
preparation, execution and carrying into effect of this agreement and all
other documents entered into pursuant to it (save that the Seller shall pay
any such costs and expenses of the Other Sellers) and the Seller confirms
that no material expense of whatever nature relating to the sale and
purchase of the Shares has been or is to be borne by any of the Companies.
23. Counterparts
23.1 This agreement may be executed in any number of counterparts, and by the
parties in separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
23.2 Each counterpart shall constitute an original of this agreement, but all
the counterparts shall together constitute but one and the same instrument.
24. Choice of Governing Law
This agreement is to be governed by and construed in accordance with
English law.
<PAGE>
25. Jurisdiction
The courts of England are to have jurisdiction to settle any dispute
arising out of or in connection with this agreement. Any Proceedings may
therefore be brought in the English courts. This jurisdiction agreement is
irrevocable and is for the exclusive benefit of the Purchaser. Nothing
contained in this clause shall limit the right of the Purchaser to take
Proceedings against the Seller in any court in the United States or in the
courts of the United States and England at the same time. Only the courts
of the United States and England shall have jurisdiction to settle any such
dispute.
26. Agent for Service
26.1 The Seller and Fuisz Technologies irrevocably appoint Law Debenture
Corporate Services Limited of Princes House, 45 Gresham Street, London EC2V
7LY to be their agent for the receipt of service of process in England.
Each party agrees that any Service Document may be effectively served on
them in connection with Proceedings in England and Wales by service on
their agent.
26.2 Any Service Document shall be deemed to have been duly served if marked for
the attention of Law Debenture Corporate Services Limited at Princes House,
45 Gresham Street, London EC2V 7LY or such other address within England and
Wales as may be notified to the party wishing to serve the Document and:-
(A) left at the specified address; or
(B) sent to the specified address by first class post.
In the case of (A), the Service Document will be deemed to have been duly
served when it is left. In the case of (B), the Service Document shall be
deemed to have been duly served two clear Business Days after the date of
posting.
26.3 If any agent at any time ceases for any reason to act as such, the Seller
and Fuisz Technologies shall appoint a replacement agent having an address
for service in England or Wales and shall notify the Purchaser of the name
and address of the replacement agent. Failing such appointment and
notification, the Purchaser shall be entitled by notice to the Seller and
Fuisz Technologies to appoint a replacement agent to act on their behalf.
The provisions of this clause applying to service on an agent apply equally
to service on a replacement agent.
26.4 A copy of any Service Document served on an agent shall be sent by post to
the Seller and Fuisz Technologies. Failure or delay in so doing shall not
prejudice the effectiveness of service of the Service Document.
<PAGE>
Schedule 1
(Completion Arrangements)
Part A
Seller's and Fuisz Technologies' Obligations
- --------------------------------------------
At Completion the Seller and/or Fuisz Technologies shall:-
1. deliver to the Purchaser or the Purchaser's Solicitors:-
(A) in the case of Murat, a copy of the (i) share transfer form ("ordre de
mouvement de titres") in favour of the Purchaser relating to the Murat
Shares, (ii) share transfer register ("registre de mouvement de
titres") and shareholders' accounts ("comptes d'actionnaires") of Murat
evidencing that the Seller, Fuisz Technologies and the Other Sellers
are the owners of the Murat Shares and (iii) minutes of the meeting of
the board of directors of Murat approving the Purchaser (and such other
persons as the Purchaser shall nominate) as the new shareholders of
Murat;
(B) the Assignment Agreements in the Agreed Form duly executed by Fuisz
Technologies and the Purchaser;
(C) the Pledge Novation Agreement duly executed by Fuisz Holdings and Knoll
AG;
(D) the Supply Novation Agreement duly executed by Fuisz Holdings,
Laboratoires Knoll France and Murat;
(E) the Escrow Letter duly executed by the Seller;
(F) the Murat Termination Agreement duly executed by Fuisz Holdings and
Murat; and
(G) the Pharma Termination Agreement duly executed by Fuisz Technologies
and Pharma;
2. in the case of Beteiligungs and Holding, enter into a share transfer
agreement in the Agreed Form with the Purchaser under which the Seller
transfers all shares in Beteiligungs and Holding to the Purchaser in due
notarial form (subject to satisfaction of the condition precedent provided
for in such transfer agreement);
3. deliver to the Purchaser (or to any person whom the Purchaser may nominate
as agent for Murat) such of the following as the Purchaser may require:-
<PAGE>
(A) the statutory books (which shall be written up to but not including the
Completion Date) and/or extract from the relevant commercial register,
the certificate of incorporation (and any certificate of incorporation
on change of name) and current constitutional documents of Murat);
(B) a US legal opinion in the Agreed Form from Stephen H. Willard, Esq. in
respect of the capacity of Fuisz Technologies to enter into and perform
this agreement;
(C) an Irish legal opinion in the Agreed Form from Arthur Cox in respect of
the capacity of the Seller to enter into and perform this agreement;
(D) letters of non-crystallisation in respect of the Murat Pledges;
(E) a copy of the minutes of a duly held meeting of the directors of the
Seller authorising the execution by the Seller of this agreement, the
Escrow Letter and the Disclosure Letter (such copy minutes being
certified as correct by the secretary of the Seller);
(F) a copy of the minutes of a duly held meeting of the directors of Fuisz
Technologies authorising the execution by Fuisz Technologies of this
agreement, the Disclosure Letter, the Assignment Agreements and the
Pharma Termination Agreement (such copy minutes being certified as
correct by the secretary of Fuisz Technologies);
(G) a copy of the minutes of a duly held meeting of the directors of Fuisz
Holdings authorising the execution by Fuisz Holdings of the Pledge
Novation Agreement, the Supply Novation Agreement and the Murat
Termination Agreement (such copy minutes being certified as correct by
the secretary of Fuisz Holdings);
4. procure the present directors and secretary (if any) of each Company (other
than Istoria) (other than any director or secretary whom the Purchaser may
wish should continue in office) to resign their offices as such and to
relinquish any rights which they may have under any contract of employment
with the relevant Company or under any statutory provision including any
right to damages for wrongful dismissal, redundancy payment or compensation
for loss of office or unfair dismissal, such resignations to be tendered at
the board or shareholders' meetings referred to in paragraph 5; and
-----------
5. at or prior to Completion, procure a board meeting (to the extent
applicable or required by applicable law) of Murat to be held at which:-
(A) it shall be resolved that each of the transfers relating to the Shares
shall be approved for registration and (subject only to the transfer
being duly stamped) the transferee registered as the holder of the
Shares concerned in the register of members;
<PAGE>
(B) each of the persons nominated by the Purchaser shall be appointed
directors, general manager, chairman and or managing director of the
board and/or secretary (if any), as the Purchaser shall direct, such
appointments to take effect on the Completion Date, in accordance with
applicable legislation;
(C) the resignations of the directors referred to in paragraph 3 above
-----------
shall be tendered and accepted so as to take effect at the close of the
meeting and each of the persons tendering his resignation shall deliver
to Murat an acknowledgement executed as a deed (or otherwise as
required in accordance with applicable law) that he has no claim
against Murat for breach of contract, compensation for loss of office,
redundancy or unfair dismissal or on any other account whatsoever and
that no agreement or arrangement is outstanding under which has or
could have any obligation to him;
(D) all existing instructions to banks shall be revoked and new
instructions shall be given to such banks in such form as the Purchaser
may direct;
(E) the directors shall resolve to convene a combined shareholders' meeting
pursuant to the Murat Notice in order to ratify the appointment of the
new directors, to replace a director, to change the name of Murat and
to amend the memorandum and articles of association of Murat
("Statuts") in accordance with any instructions given by the Purchaser;
and
procure that minutes of each duly held board meeting, certified as correct
by the chairman of Murat and the resignations and acknowledgements,
referred to are delivered to the Purchaser's Solicitors; and
Part B
Other Sellers' Obligations
- --------------------------
Save as otherwise set out in this agreement, at Completion the Other Sellers
shall deliver to the Purchaser or the Purchaser's Solicitors duly executed
transfers in respect of the Shares in favour of the Purchaser or such person as
the Purchaser may nominate and share certificates for the Shares in the name of
the relevant transferors and any power of attorney under which any transfer is
executed on behalf of any Seller or nominee.
Part C
Purchaser's Obligations
- -----------------------
At Completion the Purchaser shall:
<PAGE>
1. deliver to the Seller or the Seller's Solicitors a copy of the minutes of a
duly held meeting of the directors of the Purchaser authorising the
execution by the Purchaser of this agreement, the Pledge Novation
Agreement, the Supply Novation Agreement, the Escrow Letter and any local
share transfer agreements (such copy minutes being certified as correct by
the secretary of the Purchaser);
2. deliver to the Seller or the Seller's Solicitors (or any other person that
the Seller shall nominate) a counterpart of the Pledge Novation Agreement,
the Supply Novation Agreement, the Escrow Letter, the Assignment Agreements
and any local share transfer agreements, duly executed by the Purchaser;
and
3. pay to the Seller's Solicitors by way of telegraphic transfer the
Consideration payable in respect of the Shares, subject to the provisions
of Part G of this Schedule.
------ --------
Immediately following Completion, the Purchaser shall procure that Holding shall
pay to the Seller on behalf of Fuisz Technologies and Murat shall pay the Seller
on behalf of Fuisz Holdings an amount equal to their respective share of the
Shareholder's Loans.
Part D
Seller's and Fuisz Technologies' Obligations
- --------------------------------------------
At Italian Completion the Seller and/or Fuisz Technologies shall:-
- ------------------------------------------------------------------
1. deliver to the Purchaser or the Purchaser's Solicitors:-
(A) duly executed transfers in respect of the Istoria Shares in favour of
the Purchaser or such person as the Purchaser may nominate and share
certificates for the Shares in the name of the relevant transferors and
any power of attorney under which any transfer is executed on behalf of
the Seller, any Other Seller or nominee;
(B) the Istoria Termination Agreement duly executed by the Seller and
Istoria;
2. deliver to the Purchaser (or to any person whom the Purchaser may nominate
as agent for Istoria) such of the following as the Purchaser may require:-
(A) the statutory books (which shall be written up to but not including the
Italian Completion Date) and/or extract from the relevant commercial
register, the certificate of incorporation (and any certificate of
incorporation on change of name) and current constitutional documents
of Istoria;
(B) a copy of the minutes of a duly held meeting of the directors of the
Seller authorising the execution by the Seller of the Istoria
Termination
<PAGE>
Agreement (such copy minutes being certified as correct by the secretary
of the Seller);
3. procure the present directors and secretary (if any) of Istoria to resign
their offices as such and to relinquish any rights which they may have
under any contract of employment with Istoria or under any statutory
provision including any right to damages for wrongful dismissal, redundancy
payment or compensation for loss of office or unfair dismissal, such
resignations to be tendered at the shareholders' meetings referred to in
paragraph 4;
-----------
4. procure that at the Istoria Meetings to be held on 17th November, 1999:-
(A) the resignations of the directors and secretary referred to in
paragraph 3 above shall be tendered and accepted so as to take effect
-----------
at the close of the meeting unless otherwise requested by the Purchaser
and each of the persons tendering his resignation shall deliver to
Istoria an acknowledgement executed in accordance with applicable law
that he has no claim against Istoria for breach of contract,
compensation for loss of office, redundancy or unfair dismissal or on
any other account whatsoever and that no agreement or arrangement is
outstanding under which Istoria has or could have any obligation to
him;
(B) those existing instructions to banks concerning the resigning directors
only shall be revoked and new instructions shall be given to such banks
in such form as the Purchaser may direct;
(C) each of the persons nominated by the Purchaser shall be appointed
directors such appointments to take effect on the Italian Completion
Date and the shareholders resolve to hold a meeting of the board of
directors in order to appoint the chairman and/or managing director of
the board of directors either at or following Italian Completion; and
(D) the Memorandum and Articles of Association of Istoria ("Statuto") be
amended such that the situation of the registered office and name of
Istoria shall be changed to such address and name as the Purchaser may
nominate; and
procure that minutes of the duly held shareholders meeting and board
meeting, certified as correct by the secretary of any director of Istoria
are delivered to the Purchaser's Solicitors to the extent possible in
accordance with applicable law.
Part E
Other Sellers' Obligations
- --------------------------
Save as otherwise set out in this agreement, at Italian Completion the Other
Sellers shall deliver to the Purchaser or the Purchaser's Solicitors duly
executed transfers in
<PAGE>
respect of the Istoria Shares in favour of the Purchaser or such person as the
Purchaser may nominate and share certificates for the Istoria Shares in the name
of the relevant transferors and any power of attorney under which any transfer
is executed on behalf of any Other Seller or nominee.
Part F
Purchaser's Obligations
- -----------------------
At Italian Completion the Purchaser shall:-
1. deliver to the Seller or the Seller's Solicitors a copy of the minutes of a
duly held meeting of the directors of the Purchaser authorising the
execution by the Purchaser of the Istoria local share transfer agreement
(such copy minutes being certified as correct by the secretary of the
Purchaser);
2. deliver to the Seller or the Seller's Solicitors (or any other person that
the Seller shall nominate) a counterpart of the Istoria local share
transfer agreements, duly executed by the Purchaser.
Part G
Italian Consideration and the Escrow Letter
- -------------------------------------------
1. Immediately following Completion and until Italian Completion, the Seller's
Solicitors shall hold an amount equal to the Italian Consideration on the
terms of the Escrow Letter.
2. At Italian Completion, the Seller and the Purchaser shall procure that
their respective authorised signatory (as defined in the Escrow Letter)
shall each sign a notice in writing to the Escrow Agent (as defined in the
Escrow Letter) instructing the Seller's Solicitors in its capacity as
Escrow Agent to release to the Seller an amount equal to the Italian
Consideration together with accrued interest thereon.
<PAGE>
Schedule 2
(Warranties)
The Seller and Fuisz Technologies warrant to the Purchaser as follows:-
1. Ownership of the Shares
Each of the Seller, Fuisz Technologies and the Other Sellers is the sole
beneficial owner of the Shares set opposite his name in Schedule 4
----------
(Ownership of the Shares), and such shares in aggregate constitute the
entire issued share capital of the Companies.
2. Capacity of the Seller, Fuisz Technologies and the Other Sellers
2.1 The Seller, Fuisz Technologies and the Other Sellers have the requisite
power and authority to enter into and perform this agreement.
2.2 This agreement constitutes and the other documents executed by the Seller
which are to be delivered at Completion will, when executed, constitute
binding obligations of the Seller in accordance with their respective
terms.
2.3 The execution and delivery of, and the performance by the Seller and Fuisz
Technologies of their respective obligations under, this agreement will
not:-
(A) result in a breach of any provision of the memorandum or articles of
association (or the equivalent constitutional documents) of the Seller,
Fuisz Technologies or of any of the Companies; or
(B) result in a breach of, or constitute a default under, any instrument to
which the Seller, Fuisz Technologies or any Company is a party or by
which the Seller, Fuisz Technologies or any Company is bound; or
(C) result in a breach of any order, judgment or decree of any court or
governmental agency to which the Seller, Fuisz Technologies or any
Company is a party or by which the Seller, Fuisz Technologies or any
Company is bound; or
(D) require the consent of its shareholders, or the shareholders of any
Company or of any other person.
3. Arrangements between each Company and the Seller
Other than the Shareholder's Loans, no indebtedness (actual or contingent)
and no contract or arrangement (other than at arm's length) is outstanding
between any Company and the Seller or any member of the Retained Group or
any of the other Companies or any person who is a director of or connected
with the Seller or with any such member.
<PAGE>
4. Other Interests of the Seller
Neither the Seller nor any director of or, to the knowledge of the Seller
and Fuisz Technologies, any person connected with the Seller has any
interest, direct or indirect, in any business which competes or is likely
to compete with any business now carried on by any of the Companies or
intends to acquire any such interest.
5. Corporate Structure, etc.
5.1 The Shares comprise the whole of the issued and allotted share capital of
the Companies and all of them are fully paid up.
5.2 There is no agreement or commitment outstanding which calls for the
allotment, issue or transfer of, or accords to any person the right to call
for the allotment or issue of, any shares (including the Shares) or
debentures in or securities of any of the Companies.
5.3 None of the Companies has subsidiaries nor has any participating or other
interest in the share capital of any other body corporate.
5.4 No Company acts or carries on business in partnership with any other person
or is a member (otherwise than through the holding of share capital) of any
corporate or unincorporated body, undertaking or association (other than a
trade association) or holds or is liable on any share or security which is
not fully paid up or which carries any liability.
5.5 No Company has any branch, agency, place of business or permanent
establishment outside:
(A) France (in the case of Murat);
(B) Germany (in the case of Beteiligungs, Holding or Pharma); or
(C) Italy (in the case of Istoria).
6. Options, Mortgages and Other Encumbrances
6.1 There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting the
Shares or any of them and there is no agreement or commitment to give or
create any and no claim has been made by any person to be entitled to any.
6.2 Save for the Knoll Pledge and the Murat Pledges, no option, right to
acquire, mortgage, charge, pledge, lien (other than a lien arising by
operation of law in the ordinary course of trading) or other form of
security or encumbrance or equity on, over or affecting the whole or any
part of the undertaking or assets of
<PAGE>
any of the Companies is outstanding and there is no agreement or commitment
to give or create any and no claim has been made by any person to be
entitled to any.
7. Accuracy and Adequacy of Information
7.1 The Management Presentations represent a fair view of the business of the
relevant Company, save that any projections contained within the Management
Presentations have been prepared in good faith and reasonably and fairly
represent the opinions of the directors of the relevant Company as to their
content.
7.2 The information given in Schedule 5 (Basic Information about the Company)
----------
is true and accurate in all respects.
7.3 The copies of the constitutional documents (including commercial register
excerpts) of each of the Companies which have been supplied to the
Purchaser or the Purchaser's Solicitors are complete and accurate in all
material respects, have attached to them copies of all resolutions and
other documents required by law to be so attached and fully set out the
rights and restrictions attaching to each class of share capital of the
Company to which they relate.
7.4 The statutory books (including all registers and minute books) of each of
the Companies have been properly kept and contain an accurate and complete
record of the matters which should be dealt with in those books and no
notice or allegation that any of them is incorrect or should be rectified
has been received.
7.5 All documents which should have been delivered by each Company to the
relevant company registry or court have been properly so delivered.
8. Accounts
8.1 The Accounts:-
(A) were prepared in accordance with accountancy practices generally
accepted in:
(i) France (in the case of Murat);
(ii) Germany (in the case of Beteiligungs, Holding and Pharma); or
(iii) Italy (in the case of Istoria),
at the time they were prepared;
<PAGE>
(B) are complete and accurate in all material respects and in particular
include a provision reasonably regarded as adequate for bad and
doubtful debts, for old depreciated and unsaleable stock and for
Taxation on profits (whether of an income or capital nature) relating
to any period ending on or before the date to which they are
respectively made up;
(C) show a true and fair view of the state of affairs of the Company or its
equivalent in the jurisdiction in which it was incorporated at the
accounting reference date to which the Accounts relate; and
(D) are not affected by any unusual or non-recurring items except to the
extent stated therein.
8.2 The accounting records of each Company have been kept on a proper and
consistent basis (no change in the methods or bases of valuation or
accountancy treatment having been made for at least two years prior to the
Accounts Date or since, are up-to-date and contain complete and accurate
details of the business activities of the relevant Company and of all
matters required by local law to be entered in them.
9. Interim Accounts
The Interim Accounts:
(A) have been prepared on a basis consistent with the interim accounts
prepared in the last three years, and in accordance with the same
accounting principles, standards and practices applied in the
preparation of the Accounts with all reasonable care and attention;
(B) reflect with reasonable accuracy the accounting records of the
relevant Company; and
(C) reasonably and fairly represent the state of affairs, and profit (or
loss) of the relevant Company as at and for the period in respect of
which they have been prepared.
10. Management Accounts
The Management Accounts:
(A) have been prepared on a basis consistent with the management accounts
prepared in the last three years, and in accordance with the same
accounting principles, standards and practices applied in the
preparation of the Accounts with all reasonable care and attention;
(B) reflect with reasonable accuracy the accounting records of the
relevant Company; and
<PAGE>
(C) reasonably and fairly represent the state of affairs, and profit (or
loss) of the relevant Company as at and for the period in respect of
which they have been prepared.
11. Events Since the Accounts Date
11.1 Since the Accounts Date:-
(A) there has been no material adverse change in the financial
position or prospects of any of the Companies;
(B) the business of each of the Companies has been carried on in the
ordinary and usual course and in the same manner (including nature and
scope) and no unusual or onerous contract differing from the routine
contracts necessitated by the nature of its trade has been entered into
by any Company;
(C) no asset of a value in excess of US$25,000 has been acquired or
disposed of on capital account or has been agreed to be acquired or
disposed of and no contract involving expenditure by it on capital
account has been entered into by any of the Companies;
(D) there has been no unusual increase or decrease in the level of the
stock of any of the Companies;
(E) no debts or other receivables and no trading stock, goods, plant,
machinery or equipment of any Company have been factored or sold or
agreed to be sold, apart from the sale of trading stock to trade
customers or the public on that Company's standard terms of business in
the routine course of trading;
(F) no Company has offered price reductions or discounts or allowances on
sales of trading stocks or services or provided them at less than cost
to an extent which may materially affect its profitability;
(G) no resolution of any Company has been passed;
(H) no change in the accounting reference period of any Company has
been made;
(I) no Company has declared, authorised, made or paid to its members any
dividend, capital repayment, hidden profit distribution or other
distribution;
(J) no Company has allotted or issued or agreed to issue or granted an
option or other right to acquire any share capital; and
<PAGE>
(K) no Company has redeemed or purchased or offered or agreed to redeem or
purchase any of its share capital.
11.2 All book debts shown in the Accounts have been realised for an aggregate
sum not being less than that shown in the Accounts and no indication has
been received that any debt now owing to any Company is bad or doubtful.
12. Work in Progress and Stock-in-Trade
12.1 All work in progress represented in the Accounts has been valued on a basis
excluding profit and including adequate provision for losses which are or
could reasonably be anticipated.
12.2 All stock-in-trade represented in the Accounts was valued at the lower of
cost or net realisable value. None of the stock-in-trade of any Company is
obsolete or slow moving or out of date or demand or likely to realise less
than its book value.
12.3 The amounts of raw materials, work in progress, finished goods and
packaging and promotional material held or ordered by each Company are
appropriate and normal for its present level of business.
13. Completion Net Cash Assets
The Completion Net Cash Assets are, in respect of Murat, Beteiligungs,
Holding and Pharma, not less than US$864,000 and, in respect of Istoria,
not less than US$708,000. For the purpose of calculating the amount of the
Completion Net Cash Assets for this warranty, the relevant exchange rate
shall be the US dollar: euro spot exchange rate on the Completion Date.
14. Contracts and Commitments
14.1 The Disclosure Letter lists every current Material Contract entered into by
or on behalf of each Company. For the purposes of this warranty 14.1,
"Material Contract" means any contract for the distribution, sale, licence
or supply of a medicinal or pharmaceutical product which accounts for 5% or
more of the profit or turnover of any Company.
14.2 No Company is under any obligation, nor is it a party to any contract,
which cannot readily be fulfilled or performed by it on time and without
unusual expenditure of money or effort.
14.3 No Company is a party to or has any liability (present or future) under any
guarantee or indemnity or letter of credit or any leasing, hiring, hire
purchase, credit sale or conditional sale agreement or has entered into any
other contract or commitment involving, or likely to involve, obligations
or expenditure of an unusual or exceptional nature or magnitude.
<PAGE>
14.4 No Company is a party to any contract or arrangement which restricts its
freedom to carry on its business in any part of the world in such manner as
it may think fit, or to any agency, distributorship or management
agreement.
14.5 No Company is and the Seller is not aware of any breach of, or any
invalidity, or grounds for determination, rescission, avoidance or
repudiation of, any contract to which any Company is a party or of any
allegation of such a thing.
14.6 Except for any guarantee or warranty implied by law or contained in its
standard terms of business (a copy of which is attached to the Disclosure
Letter), no Company has given any guarantee, indemnity, warranty, or made
any representation, in respect of services supplied or contracted to be
supplied by it or accepted any liability or obligation that would apply
after any such services had been supplied by it.
14.7 No Company is a party to any joint venture agreement or arrangement or any
agreement or arrangement under which it is to participate with any other in
any business.
14.8 No Company is a party to any contract which falls within any of the cases
specified below:-
(A) the contract is of a value which has material consequences in terms of
expenditure or revenue expectations or it relates to matters not within
the ordinary business of that member or it constitutes a commercial
transaction or arrangement deviant from the usual pattern for that
member; or
(B) the contract is of three years or greater duration, or if it is less
than of three years' duration, it is of a length which significantly
exceeds what is normal in the circumstances; or
(C) the contract can be terminated in the event of any change in the
underlying ownership or control of that Company or would be materially
and adversely affected by such change;
and for this purpose "contract" includes any understanding, arrangement or
commitment however described.
15. Insider Contracts
There is not, and there has not at any time during the last two years been,
any contract or arrangement to which any Company is, or was, a party and in
which the Seller or any director of the Company or any person connected
with any such director is, or has been, interested, either directly or
indirectly, and no Company is a party to, nor have its profits or financial
position during that period been affected by, any contract or arrangement
which was not of an
<PAGE>
entirely arm's length nature; in particular, without limitation, no Company
has transferred any assets to another such member except at market value.
16. Powers of Attorney
No Company has given any power of attorney or other authority (express,
implied or ostensible) which is still outstanding or effective to any
agent, broker or person to enter into any contract or commitment on its
behalf.
17. Grants and Allowances
No Company has applied for or received any grant, allowance, aid or subsidy
from any supranational, national or local authority or government agency
during the last six years
18. Terms of Trade
18.1 During the three years preceding the date of this agreement there has been
no substantial change (apart from normal price changes) in the bases or
terms on which any person has entered into contracts with any Company and
no change of that kind has been notified to any Company in writing.
18.2 No substantial customer or supplier of any Company has during the 12 months
preceding the date of this agreement ceased or indicated an intention to
cease trading with or supplying to that Company or, so far as the Seller or
Fuisz Technologies is aware, is likely to reduce substantially its trading
with or supplies to that Company and there is no contract to which any
Company is a party which by reason of the sale of the Shares gives any
other contracting party the right to terminate any contract of, or to
impose any obligation (whether to make payment or otherwise) on, any
Company and so far as the Seller is aware (without making due and careful
enquiries) the attitude or actions of customers, suppliers, employees and
other persons with regard to the Companies will not be prejudicially
affected by the execution of this agreement or Completion.
19. Substantial Dependence
Neither in the financial period ending on the Accounts Date nor in the
period since the Accounts Date has any person (together with other persons
connected with him) purchased from or sold to any Company more than 10 per
cent. of the aggregate amount of all sales or purchases made by that
Company during such period, and there is no person (together with other
persons connected with him) on whom any Company is substantially dependent
or the cessation of transactions with whom would substantially affect the
business of such a member.
<PAGE>
20. Licences
All licences, consents and other permissions and approvals required for or
in connection with the carrying on of the business now being carried on by
each Company are described in the Disclosure Letter and are in full force
and effect and all reports, returns and information required by law or as a
condition of any licence, consent, permit or approval to be made or given
to any person or authority in connection with the business of any Company
have been made or given to the appropriate person or authority and there is
no circumstance which indicates that any licence, consent, permission or
approval is likely to be revoked or which may confer a right of revocation.
21. Bank Accounts and Borrowings
21.1 Full details of all bank accounts maintained or used by each Company
(including, in each case, the name and address of the bank with whom the
account is kept and the number and nature of the account) and of all direct
debit or standing order or similar authorities applicable to any of the
accounts. Since the date of the most recent statement for each Company no
payment out of any of the accounts has been made, except for routine
payments in the ordinary course of trading, and the present balances are
not substantially different from those shown in the statement. Amounts
represented by cheques, warrants, mandates or other payment instructions
issued or given by any Company which at the date of this agreement remain
outstanding or unpaid or unperformed do not exceed in the aggregate
US$100,000 (or its equivalent in euros) and will be duly paid by the
relevant Company.
21.2 Full details of all overdraft, loan and other financial facilities
available to each Company and the amounts outstanding under them are set
out in the Disclosure Letter and the Seller has not and no Company has done
anything whereby the continuance of any of those facilities might be
affected or prejudiced.
21.3 The total amount borrowed by each Company from its bankers does not exceed
its financial facilities and the total amount borrowed from whatsoever
source does not exceed any limitation on its borrowing contained in that
company's articles of association (or the equivalent documents) or to which
it is otherwise subject.
21.4 No event which is or, with the passing of any time or the giving of any
notice, certificate, declaration or demand, would become an event of
default under or any breach of any of the terms of any loan capital,
borrowing, debenture or financial facility of any Company or would entitle
any third party to call for repayment prior to normal maturity has occurred
or been alleged.
<PAGE>
22. Insolvency
22.1 No order has been made and no resolution has been passed for the winding up
of any Company or the Seller or for a provisional liquidator to be
appointed in respect of any Company or the Seller and no petition has been
presented and no meeting has been convened for the purpose of winding up
any Company or the Seller.
22.2 No distress or execution or other similar proceeding has been levied or
enforced upon or sued out against all or part of the assets of any Company
or the Seller.
22.3 No receiver has been appointed in respect of any Company or the Seller or
all or any of its assets.
22.4 None of the Companies nor the Seller is insolvent, or unable to pay its
debts or has stopped paying its debts as they fall due.
22.5 No voluntary assignment, arrangement or compromise with or for the benefit
of its creditors generally has been proposed in respect of Company or the
Seller.
22.6 No event analogous to any of the foregoing has occurred in or outside the
principal jurisdiction in which any Company operates.
22.7 No unsatisfied judgment is outstanding against any Company or the Seller.
22.8 No loan capital, borrowed money or interest is overdue for payment, and no
other obligation or indebtedness is outstanding which is substantially
overdue for performance or payment.
23. Product Liability
23.1 No Company has distributed, sold or provided any product or service which
does not in any material respect comply with all applicable laws,
regulations or standards or which is defective or dangerous or not in
accordance with any representation or warranty, express or implied, given
in respect of it.
23.2 All products distributed, sold or provided by or on behalf of each of the
Companies comply, and have complied, with their applicable specification
and Marketing Authorisation.
23.3 No Company has received a prohibition notice, a notice to warn or a
suspension notice under any consumer protection legislation.
24. Regulatory and Compliance
24.1 All Marketing Authorisations relating to the Companies are listed in the
Disclosure Letter.
<PAGE>
24.2 All Marketing Authorisations are in force and not invalid to the extent
required by applicable laws and regulations.
24.3 So far as the Seller or Fuisz Technologies is aware , there is no material
pending or threatened compulsory regulatory action against any Company and
neither the Seller, Fuisz Technologies nor any Company has received any
notice from a governmental authority claiming that any product
manufactured, distributed, sold or supplied by or on behalf of any Company
or related promotional activity is in any way not in full compliance with
the requirements of such authority.
25. Litigation
No Company is engaged in any litigation, arbitration or mediation,
administrative, Tax or criminal proceedings, whether as claimant,
plaintiff, defendant or otherwise, and no litigation, arbitration or
mediation, administrative, Tax or criminal proceedings by or against any
Company is pending, threatened or expected and so far as the Seller or
Fuisz Technologies is aware (having made due and careful inquiry), there is
no fact or circumstance likely to give rise to any such litigation,
arbitration or mediation, administrative, Tax or criminal proceedings or to
any proceedings against any director or employee (past or present) of any
Company in respect of any act or default for which such Company might be
vicariously liable.
26. Delinquent and Wrongful Acts
26.1 No Company has committed nor is it liable for any criminal, illegal,
unlawful or unauthorised act or breach of any obligation or duty whether
imposed by or pursuant to statute, contract or otherwise, and no claim that
it has or is remains outstanding against that Company.
26.2 So far as the Seller is aware , no Company has received notification that
any investigation or inquiry is being or has been conducted by any
governmental or other body in respect of the affairs of the Company and the
Seller is not aware of any circumstances which would give rise to such
investigation or inquiry.
27. Ownership and Condition of Assets
27.1 All assets used by any Company in the course of its business of the
distribution of pharmaceutical products or which are necessary for the
continuation of that business as it is now carried on are both legally and
beneficially owned by that Company free from any third party rights and all
such assets are included in the Accounts.
27.2 Each of the assets included in the Accounts or acquired by the Company
since the Accounts Date is owned both legally and beneficially by the
Company free from any third party rights, and each of those assets capable
of possession is in the possession of the Company.
<PAGE>
27.3 All vehicles and office equipment used by any Company in connection with
its business is in good repair and condition, reasonable wear and tear
excepted, regularly maintained and capable of being properly used in
connection with the business of that Company and none is dangerous or in
need of renewal or replacement.
27.4 No Company has agreed to acquire any asset on terms that the property in it
does not pass until full payment is made.
28. Property
28.1 The Properties together constitute the only property owned, used or
occupied by the Companies or in respect of which any Company has any
estate, interest, right or liability. Each of the Properties is used and
occupied for the purpose of the business of the relevant Company.
28.2 None of the Companies is a party to any outstanding dispute, claim or
proceeding relating to the Properties.
28.3 The Companies are in physical possession and actual occupation of the
Properties on an exclusive basis. No person has or will have any right to
possession, occupation or use of any Property other than the relevant
Company.
28.4 Other than the Murat Pledges, there are no mortgages or charges, legal or
equitable, fixed or floating, over the Properties and no person has or
claims to have any lien on any of the Properties or the documents of title.
28.5 None of the Companies is a party to any agreements for sale, agreements for
lease, options, rights of pre-emption or of extraordinary maintenance,
repair or restructuring or similar matters affecting the Properties.
28.6 No enforcement notice, stop notice, breach of condition notice or
revocation, modification or discontinuance order affecting the Properties
and which is still subsisting has been served on any of the Companies and
there is no notice which is still outstanding that any use, extraordinary
maintenance, repair or restructuring or development of the Properties has
been carried out in breach of any required permissions and consents or of
applicable planning legislation.
28.7 No notice of any breach of any statute, order or regulation relating to the
Properties, or the employment of persons or the use of any fixtures,
machinery or chattels in it has been served on any of the Companies and
there are no outstanding requirements of any competent authority which have
been notified to the Seller or any Company. The Properties comply with the
current requirements of the relevant insurers.
<PAGE>
28.8 Neither the Seller nor any Company are aware of any disrepair at the
Relevant Properties which would require the expenditure of any substantial
sum of money by any Company.
28.9 All electrical and fire or smoke extinguishing or defection
installations/apparatus in the Relevant Properties have been
inspected/tested within the last twelve months and there are no matters
outstanding as a result of such inspection.
29. Insurances
29.1 Details of the insurance policies in respect of which any Company has an
interest are set out in the Disclosure Letter, all such policies are in
full force and effect and are not void or voidable, no claims are
outstanding and neither the Seller nor any Company has received notice of
an event having occurred which might give rise to any claim.
29.2 Neither the Seller nor any Company is aware of any claims whether current,
pending or threatened which may give rise to a claim under any insurance
policy.
30. Environmental
30.1 All HSE Permits have been obtained and are in full force and effect and no
HSE Permits will expire or require renewal within five years of the date of
this agreement. No material expenditure (whether of an operating or
capital nature) is required in order to comply with HSE Permits.
30.2 No circumstances exist which could result in and the sale of Shares under
this agreement will not result in (a) the variation, limitation or
revocation of any HSE Permit or (b) any HSE Permit not being extended,
renewed or granted.
30.3 None of the Properties is polluted or contaminated or has been used for any
purpose which has or is reasonably likely to have resulted in pollution or
contamination. No pollution or contamination from any Property has migrated
to or otherwise affected any other property.
30.4 The Company is not and has not been involved in any litigation proceedings,
claim or complaint by any person under HSE Laws or in relation to HSE
Matters, none is threatened and, so far as the Seller is aware (having made
due and careful inquiry), none is likely to arise. At no time has any
Company received any notice or communication or information alleging any
liability in relation to HSE Matters or that any works are required or
stating or suggesting that there is or might be any pollution,
contamination or nuisance at or from the Relevant Properties.
<PAGE>
30.5 All audits and other assessments, reviews and reports in the possession or
control of the Seller or any Company relating to HSE Matters have been
disclosed.
30.6 All information provided to the Purchaser or its advisers by or on behalf
of the Seller in relation to HSE Matters on or prior to the date of this
agreement is complete and accurate.
31. Intellectual Property
31.1 Details of all rights in registered Intellectual Property owned by any
Company are set out in Part A of Schedule 7 (Intellectual Property). Such
------ ----------
rights are valid and enforceable and are owned legally and beneficially by
the relevant Company, free from all options, charges and encumbrances and
all renewal fees and steps required for their maintenance or protection
have been paid or taken.
31.2 Details of all business names, trade names, unregistered trade marks and
other signs used in the business of the Companies are set out in Part B of
------
Schedule 7 (Intellectual Property). Other than the registered trade marks
---------
set out in Part A of Schedule 7 (Intellectual Property) and the names and
----------------------
marks set out in Part B of Schedule 7 (Intellectual Property) no Company
------- ---------
uses or otherwise carries on its business or trades under any name other
than its corporate name.
31.3 Details of all licences granted to or by any Company in respect of any
Intellectual Property and/or Business Information are set out in Part C of
------
Schedule 7 (Intellectual Property) and none of the parties thereto are in
----------
material breach of any such licence.
31.4 The Intellectual Property and Business Information owned by and licensed to
the Companies is all the Intellectual Property and Business Information
that is necessary to carry on the business of each Company in the same
manner that it is presently carried on.
31.5 Except as listed in Part C of Schedule 7 (Intellectual Property), no
------ ----------
Company has granted or is obliged to grant any licence, sub-licence or
assignment in respect of any Intellectual Property owned or used by that
Company or has disclosed or is obliged to disclose any Confidential
Business Information of that Company to any person.
31.6 No Company has nor any party with which such Company has contracted is in
breach of any licence, sub-licence or assignment granted to or by it in
respect of any Intellectual Property owned or otherwise Required for the
Business of that Company or of any agreement under which any Business
Information was or is to be made available to it.
31.7 The processes and methods employed, products or services supplied or
provided and the businesses conducted by or on behalf of any Company within
the last
<PAGE>
six years do not, and/or at the time of being employed, provided or
conducted did not, infringe the rights of any other person in any
Intellectual Property or Business Information.
31.8 There is no, nor has there been at any time within the last six years any,
unauthorised use or infringement or any action which may result in a
potential infringement by any person of any of the Intellectual Property or
Confidential Business Information owned or otherwise Required for the
Business of any Company.
32. Information Technology
32.1 Details of the Information Technology owned or used by each Company and all
agreements or arrangements relating to the maintenance and support
(including escrow agreements relating to the deposit of source codes),
security, disaster recovery management and utilisation (including
facilities management and computer bureau services agreements) of the
Information Technology owned or used by each Company are set out in Part D
------
of Schedule 7 (Intellectual Property). For the purposes of this paragraph
---------- ---------
32, "Information Technology" means computer hardware, software, networks
--
and/or other information technology and any aspect or asset of a business
which relies on computer hardware, software, networks and/or other
information technology (whether embedded or otherwise).
32.2 All Information Technology used by or required to carry on the business of
each Company and fulfil its existing contracts and commitments is either
owned by or validly leased or licensed to that Company.
32.3 There are no material defects relating to the Information Technology owned
or used by any Company and the Information Technology owned or used by
each Company has the capacity and performance necessary to fulfil the
present and foreseeable requirements of such Company.
32.4 The Information Technology owned or used by each Company is fully Year 2000
Compliant and will not cease to be so prior to, during or after the year
2000. The process of achieving Year 2000 Compliance for each item of
Information Technology owned or used by each Company has not and will not
have a detrimental effect on the performance or functionality of such
Information Technology. For the purposes of this paragraph 33, "Year 2000
------------
Compliant" means that neither performance nor functionality is or will be
affected by dates prior to, during or after the year 2000 and in particular
(but without limitation):-
(A) no value for current date causes or will cause any interruption in
operation;
<PAGE>
(B) date-based functionality behaves and will behave consistently for dates
prior to, during and after the year 2000;
(C) in all interfaces and data storage, the century in any date is and will
be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
(D) the year 2000 is and will be recognised as a leap year.
32.5 So far as the Seller and Fuisz Technologies are aware, all Information
Technology owned or used by any customers or suppliers of any Company or
any third parties which any Company is dealing with is Year 2000 Compliant
and will not cease to be so prior to, during or after the year 2000. So
far as the Seller and Fuisz Technologies are aware, the process of
achieving Year 2000 Compliance for each item of Information Technology
owned or used by each such third party has not and will not have a
detrimental effect on the manner in which such items communicate with each
other or with any other Information Technology.
33. Employment
33.1 A list of the names, jobs, labour classifications, employment seniority,
accrued severance pay and short details of the terms of employment of every
employee of each Company and the years of continuous service for redundancy
purposes of that employee are set out in the Disclosure Letter.
33.2 Full particulars of the terms of all agency, consultancy agreements and
analogous arrangements with each Company are contained in the Disclosure
Letter.
33.3 Full details of any benefit received by any employee or agent otherwise
than in cash, and of any benefit received by any employee in cash which is
related to sales, profits or performance, or which is otherwise variable
(other than normal overtime), are set out in the Disclosure Letter.
33.4 Any contract of employment with any director, statutory auditor or
consultant to which any Company is a party can be terminated by the
employing company without damages or compensation (other than that payable
by statute) by giving at any time only the minimum period of notice
applicable to that contract.
33.5 No director of any Company is under notice of dismissal and no amount due
to or in respect of any director is in arrears and unpaid other than his
salary for the month current at the date of this agreement.
33.6 Since the Accounts Date, no change has been made in the emoluments or other
terms of engagement of any director, employee or agent of any Company, and
no such change is required within six months from the date of this
agreement.
<PAGE>
33.7 No Company is paying, or is under any liability (actual or contingent) to
pay or secure (other than by payment of employers' contributions under
national insurance or social security legislation), to or for the benefit
of any person any pension or other benefit on retirement, death or
disability or on the attainment of a specified age or on the completion of
a specified number of years of service.
33.8 No Company has outstanding undischarged liability to pay to any
governmental or regulatory authority in any jurisdiction any contribution,
Taxation or other impost arising in connection with the former or current
employment or engagement of personnel by such Company.
33.9 Each Company has at all relevant times complied with all its obligations
under statute or collective bargaining agreements and otherwise concerning
the health and safety at work of its employees or former employees, and
there are no claims capable of arising or threatened or pending by any
former or current employee or third party in respect of any accident or
injury which are not fully covered by insurance.
33.10 All individual or collective dismissals or dismissal procedures to which
any of the Companies had recourse has been implemented in full compliance
with applicable laws and collective bargaining agreements and there are no
outstanding payments to be made thereunder or claims capable of arising or
threatened or pending in connection therewith.
34. The Accounts and Tax
34.1 No Company has any liability in respect of Taxation (whether actual or
contingent) which is not disclosed or properly provided for in the
Accounts and, in particular, has no outstanding liability for:-
(A) Taxation in any part of the world assessable or payable by reference
to profits, gains, income or distributions earned, received or paid or
arising or deemed to arise on or at any time prior to the Accounts
Date or in respect of any period ending on or before the Accounts
Date; or
(B) for purchase, value added, sales or other similar or indirect tax
in any part of the world referable to transactions effected or events
occurring on or before the Accounts Date,
that is not properly provided for in the Accounts.
34.2 The amount of the provision for deferred Taxation in respect of each
Company contained in the Accounts was, at the Accounts Date, adequate and
fully in accordance with accountancy practices generally accepted in:
(A) France (in the case of Murat);
<PAGE>
(B) Germany (in the case of Beteiligungs, Holding or Pharma); or
(C) Italy (in the case of Istoria),
and commonly adopted by companies carrying on businesses similar to those
carried on by that Company in that jurisdiction.
34.3 All refunds in respect of Tax received before the Accounts Date or
accounted for as a receivable in the Accounts have been duly received or,
so far as the Seller and Fuisz Technologies are aware, will be honoured in
full in accordance with applicable tax laws.
35. Tax Events Since the Accounts Date
Since the Accounts Date:-
(A) no Company has declared, made or paid any distribution for tax
purposes;
(B) no accounting period of any Company has ended;
(C) there has been no disposal of any asset (including trading stock) or
supply of any service or business facility of any kind (including a
loan of money or the letting, hiring or licensing of any property
whether tangible or intangible) in circumstances where the
consideration actually received or receivable for such disposal or
supply was less than the consideration which could be deemed to have
been received for Tax purposes;
(D) no event has occurred which will give rise to a Tax liability on any
Company calculated by reference to deemed (as opposed to actual)
income, profits or gains or which will result in any Company becoming
liable to pay or bear a Tax liability directly or primarily chargeable
against or attributable to another person, firm or company;
(E) no disposal has taken place or other event occurred which will or may
have the effect of crystallising a liability to Taxation which should
have been included in the provision for deferred Taxation contained in
the Accounts if such disposal or other event had been planned or
predicted at the Accounts Date;
(F) no Company has made any payment or incurred any obligation to make a
payment which will not be deductible in computing trading profits for
the purposes of any corporate Taxation (including IRAP ("Imposta
regionale Sulle attavita produttive") in the case of Istoria) or as a
management expense of an investment company, save for payments made on
or obligations incurred at a rate no greater than in the corresponding
part of the accounting period ending on the Accounts Date;
<PAGE>
(G) no Company has been a party to any transaction for which any Tax
clearance provided for by statute has been or could have been
obtained;
(H) no Company has paid or become liable to pay or acted (directly or
through an agent or other representative) in such manner as to incur a
liability (or potential liability) to pay any interest or penalty in
connection with any tax or otherwise paid any Tax after its due date
for payment or become liable to pay any Tax the due date for payment
of which has passed or become prospectively liable to pay any Tax the
due date for payment of which will arise in the 30 days after the date
of this agreement.
36. Tax Returns, Disputes, Records and Claims, etc.
36.1 Each Company has made or caused to be made all proper returns required to
be made, and has supplied or caused to be supplied all information
required to be supplied, to any revenue authority.
36.2 There is no dispute or disagreement outstanding nor is any contemplated by
the Seller or Fuisz Technologies at the date of this agreement with any
revenue authority regarding liability or potential liability to any Tax or
duty (including in each case penalties or interest) recoverable from any
Company or regarding the availability of any relief from Tax or duty to
any Company and there are no circumstances (including, without limitation,
any questionnaires for the determination of estimated income, Tax Police
Minutes, requests for payment or assessments) which make it likely that
any such dispute or disagreement will commence.
36.3 No ongoing assessment, inspection or verification concerning Tax has been
started, or completed since the Accounts Date, by the competent
authorities in the relevant Tax jurisdiction of any of the Companies.
36.4 Each Company has sufficient records relating to past events, including any
elections made, to calculate the tax liability or relief which would arise
on any disposal or on the realisation of any asset owned at the Accounts
Date by that Company or acquired by that Company since that date but
before Completion.
36.5 Each Company has duly submitted all claims and disclaimers or withdrawals
of claims which have been assumed to have been made for the purposes of
the provision for Tax in the Accounts.
36.6 The amount of tax chargeable on any Company during any accounting period
starting within the past six years and ending on or before the Accounts
Date has not, to any material extent, depended on any concession,
agreement or other formal or informal arrangement with any revenue
authority, including.
<PAGE>
36.7 No Company has received any notice from any revenue authority, including
the Inland Revenue, which required or will or may require such member to
withhold tax from any payment made since the Accounts Date or which will be
made after the date of this agreement.
37. Value Added Tax
37.1 Murat is registered for the purposes of VAT and has made, given, obtained
and kept full, complete, correct and up-to-date records, invoices and other
documents appropriate or required for those purposes and is not in arrears
with any payment or returns due and has not been required to give any
security in respect thereof.
37.2 In respect of Istoria for the last five years:
(A) the Company has correctly issued invoices and/or other documents
for all transactions subject to VAT (including self invoices);
(B) the Company has duly and in timely fashion recorded all invoices
issued as well as received;
(C) the Company has duly and in timely fashion calculated and paid VAT due
on a monthly, quarterly or annual basis (as required);
(D) the Company has applied the correct VAT rate for all transactions
carried out during such period;
(E) the Company has duly and in timely fashion filed annual VAT returns and
paid all VAT required and produced the necessary guarantee requested by
the Italian tax authorities;
(F) the Company has requested and/or obtained all applicable VAT refunds
(if any);
(G) in the case of VAT exempt transactions, if any, the Company has
correctly calculated the deductible percentage of VAT on purchases; and
(H) in the case of any exports, the Company has correctly calculated the
plafond.
37.3 Each of the Companies has, to the extent required by law, all available
original vouchers, certificates, invoices, credit notes or other
documentation necessary to justify the deductions made for VAT contained in
invoices from suppliers or service providers for goods or services received
("Vorsteuerabzug") and for any exemption from VAT for deliveries made or
services performed, in particular for deliveries of goods to countries
outside the European Union.
<PAGE>
37.4 Each of the Companies has fulfilled its legal obligations in respect of
withholding VAT on consideration due to foreign suppliers or service
providers for deliveries involving manufacturing work ("Werklieferungem")
or other services received and has duly accounted for an amount equal to
such withholdings to the relevant Tax authorities.
37.5 Each of the Companies has kept records as required by law for the purposes
of VAT and is able to produce such records to the relevant Tax authorities
in accordance with applicable law.
38. Duties, etc.
All value added tax, import duty and other taxes or charges payable to the
relevant c customs department upon the importation of goods and all excise
duties payable to customs department in respect of any assets (including
trading stock) imported, owned or used by any Company have been paid in
full.
39. Tax on Disposal of Assets
On a disposal of all its assets by any Company for:-
(A) in the case of each asset owned by such Company at the Accounts Date, a
consideration equal to the value attributed to that asset in preparing
the Accounts; or
(B) in the case of each asset acquired since the Accounts Date, a
consideration equal to the consideration given for the acquisition,
then either:-
(i) in respect of any asset falling within (A) above, the liability
---
to Tax (if any) which would be incurred by the Company in respect
of that asset would not exceed the amount taken into account in
respect of that asset in computing the maximum liability to
deferred Taxation as stated in the Accounts; or
(ii) in respect of any asset within (B) above, no tax liability would
---
be incurred by the Company in respect of that asset.
40. Non-Deductible Revenue Outgoings
No Company is under any obligation to make any future payment exceeding
US$5,000 which will be prevented (whether on the grounds of being a
distribution or for any other reason, other than that it is capital in
nature) from being deductible for Tax purposes.
<PAGE>
41. Deductions and Withholdings
Each Company has made all deductions in respect, or on account, of any Tax
from any payments made by it which it is obliged by law to make and has
accounted in full to the appropriate authority for all amounts so deducted.
42. Intra-Group Transactions
No Company has, at any time during the last six years, acquired any asset,
provided any services or sold any goods from any other company which was,
at the time of the acquisition, a member of the same group of companies as
that member for the purposes of any Tax.
43. Non-Arm's Length Transactions
No Company is a party to any transaction or arrangement under which it may
be required to pay for any asset or services or facilities of any kind an
amount which is in excess of the market value of that asset or services or
facilities or will receive any payment for any asset or services or
facilities of any kind that it has supplied or provided or is liable to
supply or provide which is less than the market value of that asset or
services or facilities.
44. Documentation
The Companies have kept, in accordance with applicable law, all corporate
or other types of books, including any registers and fiscal and/or
accounting documentation, required to be kept in accordance with such
applicable law.
45. Tax Amnesty
No Company has filed any amnesty in respect of Tax for any corporate income
Tax and/or VAT purposes.
46. Tax Residence
Each Company is resident for Tax purposes only in:
(A) France (in the case of Murat);
(B) Germany (in the case of Beteiligungs, Holding and Pharma); and
(C) Italy (in the case of Istoria),
and no Tax authorities in any other jurisdiction or country seek to, or
have during the last six years sought to, charge Tax on any profits or
gains of any Company.
<PAGE>
Schedule 3
(Seller's Limitations on Liability)
1. Limitation on quantum and general
1.1 The Purchaser shall not be entitled in any event to damages or other
payment in respect of any claim or claims under any of the Warranties in
respect of any individual claim (or series of related claims with respect
to related facts or circumstances):
(A) unless and until the amount of that claim (or related claims, when
aggregated) exceeds US$50,000 but, once the amount of that claim (or
such related claims) has exceeded such sum, the Seller's and Fuisz
Technologies liability shall arise in respect of the full amount of
that claim (or such related claims) and not merely in respect of the
excess over such sum; and
(B) unless and until the amount of all claims made in respect of the
Warranties exceeds US$500,000 but, once the amount of all such claims
has exceeded such sum, the Seller's and Fuisz Technologies liability
shall arise in respect of the full amount of all such claims and not
merely in respect of the excess over such sum.
1.2 The provisions of paragraph 1.1 of this Schedule shall not apply in respect
-------------
of any claim under the Warranties to the extent that such claim relates to
those matters set out in paragraph 10(A)(ii) of this Schedule.
-------------------
1.3 The total aggregate liability of the Seller and Fuisz Technologies under
the Warranties and sub-clauses 8.8 (A), (D), (E) and (F) and 8.14 shall not
----------------------------------------------
in any event exceed an amount equal to US$39,500,000.
1.4 The total aggregate liability of the Seller and Fuisz Technologies under
sub-clauses 8.8(B) and (C) shall not in any event exceed an amount equal to
US$3,954,000.
1.5 Each provision of this Schedule shall be read and construed without
prejudice to each of the other provisions of this Schedule.
2. Time limits for bringing claims
No claim shall be brought against the Seller or Fuisz Technologies in
respect of any of the Warranties unless the Purchaser shall have given to
the Seller and Fuisz Technologies written notice of such claim specifying
(in reasonable detail) the matter which gives rise to the claim, the nature
of the claim and Purchaser's best estimates of the amount thereof:
(A) subject to sub-paragraphs (B) and (C), on or before 30th April,
------------------ ---
2001;
<PAGE>
(B) on or before the sixth anniversary of the Completion Date in respect of
any claims under the Tax Warranties or in respect of sub-clause 8.14;
---------------
or
(C) on or before 30th June, 2000 in respect of any claims under paragraph
---------
32 of Schedule 2 (Warranties).
-- ----------
3. Changes in Taxation
The Seller and Fuisz Technologies shall not be liable under sub-clause 8.14
---------------
or in respect of any breach of the Tax Warranties to the extent that such
claim arises or the liability in respect thereof is increased from that
which would exist under current legislation as at the date of Completion as
a result of (i) any increase in rates of Taxation, or (ii) any change in
legislation, relating to Taxation, or (iii) any change in published Revenue
practice in each case occurring after the date of Completion and which
affects matters occurring prior thereto.
4. Voluntary Acts of Purchaser
The Seller and Fuisz Technologies shall not be liable for any such claims
under the Warranties or under sub-clause 8.14 as may arise after the date
---------------
hereof to the extent that such claim would not have arisen but for a
voluntary act or transaction carried out after the date hereof otherwise
than in the ordinary course of business by the Purchaser or any Company and
which the Purchaser knows or ought reasonably to have known at the
Completion Date would give rise to a claim under the Warranties.
5. Third Party Recovery
5.1 Where the Purchaser or any Company is entitled to recover from some third
party any sum in respect of any matter giving rise to a claim for breach of
the Warranties or under sub-clause 8.14 in relation to any Company and such
---------------
recovery may be made without financial detriment to the Purchaser (or if
the Seller and Fuisz Technologies shall indemnify the Purchaser for the
reasonable and proper costs incurred by the Purchaser) (excluding any
increase in any insurance premium as a result of such claim being made),
the Purchaser shall procure that such Company shall undertake reasonably
appropriate steps to enforce such recovery and in the event that such a
claim is successful, any recovery made shall abate the claim against the
Seller and Fuisz Technologies by the amount so recovered less any
reasonable and proper costs incurred by the Purchaser and not recovered
from the Seller or Fuisz Technologies and any tax incurred in connection
with the recovery from the third party.
5.2 If in relation to any Company the Seller or Fuisz Technologies has paid to
the Purchaser any amount in respect of a claim for breach of the Warranties
and the Purchaser or such Company subsequently receives or recovers from a
third party a sum which is referable to such claim or obtains a relief or
credit for Tax purposes or any other benefit which would not have arisen
but for the
<PAGE>
circumstances giving rise to the claim or the settlement by the Seller or
Fuisz Technologies, the Purchaser shall promptly repay to the Seller such
portion of the amount of any cash benefit thereby received or recovered or
of any reduction in liability to Tax realised therefrom (after deducting
any costs and expenses incurred by the Purchaser or that Company in
receiving or recovering the same and any Taxation relating thereto) up to
the amount which has been paid by the Seller to the Purchaser or that
Company in respect of such claim.
6. No Double Recovery
The Purchaser shall not be entitled to recover damages in respect of any
claim for a breach of the Warranties or under sub-clause 8.14 or otherwise
---------------
obtain reimbursement or restitution more than once in respect of any one
breach of the Warranties to the extent that such breach or claim relates to
the same loss and reimbursement in full is received by the Purchaser in
respect of each head of damage (where such breach or claim also constitutes
a breach of any of the other Warranties).
7. Notification of Claims
Without prejudice to paragraph 1 of this Schedule 3 the Purchaser
----------- ----------
undertakes that it will following Completion without unreasonable delay
upon becoming aware of any such claim or matter or thing notify the Seller
and Fuisz Technologies in writing of any claim or any matter or thing which
comes to its attention and which it believes is likely to give rise to a
claim for breach of the Warranties.
8. Reduction of Consideration
Any amount recovered by the Purchaser from the Seller or Fuisz Technologies
in respect of a breach of the Warranties or a claim under sub-clause 8.14
---------------
shall be treated as a reduction in the consideration for the Shares
received by the Seller.
9. Further Limitation
The Seller and Fuisz Technologies shall have no liability under this
agreement:
9.1 to the extent that the liability or of the matter giving rise to the
claim in question was specifically provided for or specifically taken
into account in calculating a general provision or reserve in the
Accounts;
9.2 to the extent any Company is insured against any loss or damage
suffered by such Company forming the basis of the claim in question
under the terms of any insurance policy of the Company for the time
being in force and recovery is made under such insurance (and the
Purchaser undertakes to procure that such Company shall promptly make
a claim under the terms of any such insurance policy);
<PAGE>
9.3 to the extent that the claim in question arises, or is increased as a
result of the passing of, or change in, after the date of this
agreement, any law, regulation or rule of any government, governmental
department, agency or regulatory body (including any stock exchange)
or any judgment delivered after the date of this agreement with
retrospective effect;
9.4 arising as a result of a change after the date of this agreement in
the methods which have been used by any Company in valuing assets or
liabilities or any other change in the accounting policy or practice
(not being a change required to be made so as to conform to generally
accepted accounting principles or statements of accounting practice
applicable to the relevant Company) or any change to the length of any
accounting period or to the accounting reference date of any Company.
10. Taxation claims
The Seller and Fuisz Technologies shall have no liability in respect of any
claim under sub-clause 8.14 or the Tax Warranties to the extent that:
---------------
(A) the liability arises in consequence of or by reference to an Event
which has occurred since the Accounts Date in the ordinary course of
the business of a Company (provided that such Event has been duly
reported and recorded under the applicable accounting standards and tax
laws), which shall not include:-
(i) any distribution;
(ii) the disposal of any asset (including trading stock) or the supply
of any service or business facility of any kind (including a loan
of money or the letting, hiring or licensing of any tangible or
intangible property) in circumstances where and to the extent
that the consideration actually received (if any) for such
disposal or supply is less than the consideration deemed to have
been received for the purposes of any Tax; or
(iii) the acquisition of any asset (including trading stock) or the
receipt of any service or business facility of any kind in
circumstances where the consideration actually given for the
acquisition or receipt is more than the consideration deemed to
have been given for the purposes of any Tax: or
(iv) a Company ceasing, or being deemed to cease, to be a member of
any group of companies or associated with any other company for
the purposes of any Tax; or
(v) any Event or the earning of any income, profits or gains which
results in a Company becoming liable to pay or bear a liability
to
<PAGE>
Tax chargeable directly or primarily against or attributable
directly or primarily to another person (not being another
Company); or
(vi) any other Event which gives rise to a liability to Tax on deemed
(as opposed to actual) income, profits or gains; or
(B) any payment or reimbursement of the Tax which was the subject of the
Claim is made by any person other than the Seller after the date of the
Agreement; or
(C) it arises from the failure or omission by a Company or the Purchaser
after Completion to make any claim, election, surrender or disclaimer
or give any notice or consent or do any other thing under the
provisions of any enactment or regulation relating to Taxation, the
making, giving or doing of which was taken into account in computing
the provision for Tax in the Accounts;
(D) such Tax results from the winding up of a Company or the winding up or
cessation after Completion of any trade or business carried on by a
Company; or
(E) any loss, relief, allowance, exemption, set-off, deduction, credit or
other relief in respect of Tax (a "Relief") which arises as a result
solely of an Event occurring or in respect of a period ending before
the Accounts Date is available to a Company to set against or otherwise
mitigate the liability giving rise to such claim or would have been
available but for its utilisation against any other liability for Tax
for which no such claim could be made.
11. Over-Provisions and Reliefs
11.1 If the auditors for the time being of a Company shall certify (at the
request and expense of the Seller) that any provision for Tax in the
Accounts is an over-provision, then the amount of such over-provision shall
be dealt with in accordance with paragraph 11.3 of this Schedule.
--------------
11.2 If the auditors for the time being of a Company shall certify (at the
request and expense of the Seller) that:
(A) any liability to Tax which has resulted in a payment having been
made or becoming due from the Seller under this agreement; or
(B) the circumstances which result in a liability to Tax in respect of
which the Seller is liable under this agreement;
will give rise to a Relief for a Company or the Purchaser which would not
otherwise have arisen, then the amount by which a liability to Tax of a
Company
<PAGE>
or the Purchaser is reduced by virtue of that Relief (and the Purchaser
shall not prevent or avoid any such reduction arising if no detriment to
itself or a Company would thereby result) shall be dealt with in accordance
with paragraph 11.3 of this Schedule.
--------------
11.3 Where it is provided that any amount is to be dealt with in accordance with
this paragraph 11.3 of this Schedule:
--------------
(A) that amount shall first be set off against any payment then due from
the Seller;
(B) to the extent that there is an excess, a refund shall be made to the
Seller of any previous payment or payments made by the Seller under
this agreement; and
(C) to the extent that the excess referred to in this paragraph is not
exhausted under sub-paragraph (B), the remainder of that excess shall
be carried forward and set off against any future payment or payments
which become due from the Seller under this agreement.
12. Conduct of Claims
12.1 If the Purchaser or a Company becomes aware of any circumstances which do
or are likely to give rise to a claim under sub-clause 8.14 or the Tax
---------------
Warranties the Purchaser shall give notice in writing thereof within
fourteen days to the Seller.
12.2 If the Seller shall indemnify each Company and the Purchaser to their
reasonable satisfaction against any Tax and reasonable costs and expenses
which may be incurred, the Purchaser shall and shall procure that each
Company shall take such lawful and reasonable action as the Seller shall
reasonably and promptly by written notice require to avoid, dispute,
resist, appeal, compromise or contest any liability for Tax of a Company
which may give rise to such a claim against the Seller;
PROVIDED THAT the Purchaser shall not be obliged to procure that any
Company take any action under this paragraph which involves contesting a
liability to Tax before any court or other appellate body (other than the
Tax authority demanding the Tax in question) unless the Seller furnishes
the Purchaser with the written opinion of an independent Tax adviser of at
least ten years' standing and reasonably acceptable to the Purchaser to the
effect that the appeal is in all the circumstances reasonable.
13. Tax Returns
13.1 The Seller or its duly authorised agents shall prepare the Tax returns of
each Company for all accounting periods ending on or before the Accounts
Date, to the extent that the same shall not have been prepared before
Completion.
<PAGE>
13.2 The Purchaser shall procure that the returns mentioned in paragraph 13.1
--------------
are authorised, signed and submitted to the appropriate Tax authority, so
long as those returns are full, true and accurate in all material respects.
13.3 The Purchaser hereby agrees with the Seller that it will not, and will
procure that none of the Companies will, without the prior written consent
of the Seller, disclaim any relief, allowance or credit claimed by each
Company prior to the Accounts Date.
14. Purchaser's indemnity
The Purchaser covenants to pay to the Seller (on behalf of Fuisz Holdings
and Fuisz Technologies) an amount equal to Fuisz Holdings' and Fuisz
Technologies' losses, costs, damages, liabilities and expenses of any
nature which are a result of any act, neglect, default or omission in
respect of the Exclusive Knoll Supply Agreement, the Knoll Deed of
Assignment, the Knoll Pledge or the Knoll Supply Agreement committed by the
Purchaser or Murat after Completion.
<PAGE>
Schedule 4
(Ownership of the Shares)
Name and address of, and numbers of Shares beneficially owned by, each of the
Seller, Fuisz Technologies and the Other Sellers
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) (3)
Full name Registered Number of
--------- address Shares owned
---------- ------------
Fuisz International 26 Windsor Place 9,994 Murat Shares
Limited Dublin 2 50,000 Beteiligungs Shares
Ireland 50,000 Holding Shares
1,556,780 Istoria Shares
Fuisz Technologies Ltd. 14555 Avion at Lakeside 1 Murat Share
Lakeside
Virginia 25101
USA
The Other Sellers
-------------
Patrick Scrivens 14555 Avion at Lakeside, 1 Murat Share
Virginia 25101 USA
Richard Fuisz 14555 Avion at Lakeside, 1 Murat Share
Virginia 25101 USA
Kenneth McVey Old Government House, Anne's 1 Murat Share
Place, St. Peter Port, Guernsey
GY1 4AZ, Channel Islands
Paul Kennedy 14555 Avion at Lakeside, 1 Murat Share
Virginia 25101 USA
Stephen Willard 14555 Avion at Lakeside, 1 Murat Share
Virginia 25101 USA
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiori Emiliano Bronislaw Via Marco Polo, 12 1,250 Istoria Shares
Padua
Italy
Danilo Casadei Massari 2,500 Istoria Shares
</TABLE>
<PAGE>
Schedule 5
(Basic Information about the Companies)
<TABLE>
<C> <S> <C> <C>
1. Name : Laboratoires Murat SA
2. Registered number : B378270441
3. Date of incorporation : 20th November, 1992
4. Place of incorporation : Nanterre, France
5. Address of registered office : 160 rue de Paris, 92100 Boulogne Billancourt
6. Class of company : Societe Anonyme
7. Issued share capital : FRF 1,000,000 divided into 10,000 shares of
FRF 100 each
8. Shareholder's Loan : US$382,988.10 pursuant to a loan granted by Fuisz Holdings on
22nd June, 1998
US$2,117,011.90 pursuant to a line of credit granted by Fuisz
Holdings on 22nd June, 1998
9. Charges : Pledge dated 12th April, 1994 in favour of Banque Regionale de
l'Ouest for an amount of FRF 1,353,205
Pledge dated 11th August, 1995 in favour of Banque Regionale de
l'Ouest for an amount of FRF 1,200,000
Pledge dated 15th November, 1996 in favour of Union de Banques a
Paris for an amount of FRF 720,000
10. Directors:
Full name Business address Nationality
--------- ---------------- -----------
F. Paul Kennedy (Chairman) 14555 Avion at Lakeside British
Virginia 25101, USA
Kenneth W. McVey Old Government House, Anne's British
Place, St. Peter Port, Guernsey
GY1 4AZ, Channel Islands
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> C>
Richard Carl Fuisz 14555 Avion at Lakeside American
Virginia 25101, USA
Patrick Dennis Scrivens 14555 Avion at Lakeside American
Virginia 25101, USA
11. Accounting reference date : 31st December
12. Auditors : PricewaterhouseCoopers
Gilles Guffet (substitute auditors)
13. Tax residence : France
14. Business activities : Distribution of pharmaceutical and medical products
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
1. Name : Fuisz Pharma GmbH & Co. KG
2, Registered number : HRA 902
3. Date of incorporation : 12th December, 1997
4. Place of incorporation : Germany
5. Address of registered office : Schillerstrasse 8, 88471 Laupheim, Germany
6. Class of company : GmbH & Co. KG (limited partnership)
7. Authorised share capital : DM 100,000
8. Issued share capital : DM 100,000
9. Managing Directors
of Beteiligungs:
Full name Usual residential address Nationality
--------- ------------------------- -----------
Andreas Sander Schillerstrasse 8,88471 German
Laupheim, Germany
Stephen H. Willard 14555 Avion at Lakeside, American
Virginia 25101, USA
F. Paul Kennedy 14555 Avion at Lakeside, British
Virginia 25101, USA
10. Accounting reference date : 31st December
11. Auditors : PricewaterhouseCoopers
12. Tax residence : Germany
13. Business activities : Distribution of pharmaceutical and medical
products
</TABLE>
- ----------------------------------
/./ Mr Kennedy has resigned, but his resignation has not been notified to the
Commercial Register.
<PAGE>
<TABLE>
<C> <S> <C> <C>
1. Name : Fuisz Technologies Holding GmbH
2. Registered number : HRB 1352
3. Date of incorporation : 22nd January, 1998
4. Place of incorporation : Germany
5. Address of registered office : Schillerstrasse 8, 88471 Laupheim, Germany
6. Class of company : GmbH
7. Authorised share capital : DM 50,000
8. Issued share capital : DM 50,000
9. Shareholder's Loan : US$14,403,252 pursuant to an 8% unsecured loan granted for a
period of 10 years granted on 12th February, 1998
10. Managing Directors:
Full name Business address Nationality
--------- ---------------- -----------
Stephen H. Willard 14555 Avion at Lakeside, American
Virginia 25101, USA
F. Paul Kennedy 14555 Avion at Lakeside, British
Virginia 25101, USA
11. Accounting reference date : 31st December
12. Auditors : PricewaterhouseCoopers
13. Tax residence : Germany
14. Business activities : Holding of shares in a pharmaceutical company
</TABLE>
- -------------------------------
/./ Mr Kennedy has resigned, but his resignation has not been notified to the
Commercial Register.
<PAGE>
<TABLE>
<C> <S> <C> <C>
1. Name : Fuisz Pharma Beteiligungs GmbH
2. Registered number : HRB 1350
3. Date of incorporation : 22nd January, 1998
4. Place of incorporation : Germany
5. Address of registered office : Schillerstrasse 8, 88471 Laupheim, Germany
6. Class of company : GmbH
7. Authorised share capital : DM 50,000
8. Issued share capital : DM 50,000
9. Managing Directors:
Full name Business address Nationality
--------- ---------------- -----------
Stephen H. Willard 14555 Avion at Lakeside Virginia American
25101 USA
F. Paul Kennedy/./ 14555 Avion at Lakeside Virginia British
25101 USA
Andreas Sander Schillerstrasse 8,88471 Germany
Laupheim, Germany
10. Accounting reference date : 31st December
11. Auditors : PricewaterhouseCoopers
12. Tax residence : Germany
13. Business activities : Holding of shares in a pharmaceutical company
</TABLE>
- -----------------------------
/./ Mr Kennedy has resigned, but his resignation has not been notified to the
Commercial Register.
<PAGE>
<TABLE>
<C> <S> <C> <C>
1. Name : Istoria Farmaceutici SpA
2. Registered number : 42351
3. Date of incorporation : 25th May, 1993
4. Place of incorporation : Padua, Italy
5. Address of registered office : No 3/A Riviera Francia, Padua, Italy
6. Class of company : SpA
7. Authorised share capital : Lit 1,560,530,000 divided into 1,560,530 shares of Lit 1,000
each
8. Issued share capital : Lit 1,560,530,000 divided into 1,560,530 shares of Lit 1,000
each
9. Directors:
Full name Business address Nationality
--------- ---------------- -----------
Richard Carl Fuisz 14555 Avion at Lakeside American
(Chairman) Virginia 25101 USA
Patrick Dennis Scrivens 14555 Avion at Lakeside American
Virginia 25101 USA
Stephen H. Willard 14555 Avion at Lakeside American
Virginia 25101 USA
10. Accounting reference date : 31st December
11. Statutory Auditors : Elio Rigato (Chairman)
Luigi Beghetto
Alberto Franchi
Paolo Morandin (Deputy)
Antonio Orzani (Deputy)
12. Tax residence : Italy
13. Business activities : Distribution of pharmaceutical products
</TABLE>
<PAGE>
Schedule 6
(Properties)
1. Murat
Lease agreement between SCI Paris-Boulogne and Murat dated 10th June 1994
<TABLE>
<CAPTION>
<S> <C>
Nature of Lease: Commercial lease
Parties: 1. SCI Paris-Boulogne (lessor); and
2. Murat (lessee)
Date of contract: 10th June 1994
Date of 1st July, 1994
commencement of contract:
Address and 1st floor of a building located 160 rue de Paris, 92100 Boulogne
description of (approximately 127 square metres)
premises:
Duration: 9 years (i.e. until 30th June 2003)
Early Termination: 1. By the lessee at the expiry of each
three-year period subject to giving 6
months' prior notice to the lessor.
2. By the lessor in case of non payment
of the rent or non performance of the
lease provisions by the lessee, one
month after formal reminder has been
given by the lessor to the lessee.
Annual rent: FRF 250,000 (VAT and charges exclusive)
Payment dates: The annual rent shall be quarterly paid in
advance
Rate review: The rate will be reviewed each 1st July
based on the national construction cost
index.
Deposit given: FRF 62,500
Authorised Use: Offices
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Charges and FRF 7,500 per quarter
maintenance costs:
Gross repairs: Usual terms, no specific requirements
Insurance: Borne by the lessee
Taxes: All taxes relating to the premises and to
the lessee's activities, including the
land tax shall be borne by the lessee.
Assignability/change The agreement may not be assigned other
than to the lessee's purchaser of its on
of control: going business subject to the lessor being
a party to the transfer of business
agreement and to the lessee remaining
jointly responsible for the payment of the
rent. No change of control clause.
Sub-lease: The sub-lease of the totality of the
premises if forbidden. However the lessee
is entitled to sublease part of the
premises to any other company subject to
the fact that at the termination date, the
totality of the premises shall be given
back, i.e. the sub-lessee will not have
any right to behave in the premises.
Governing This lease is governed by the French
law/jurisdiction decree n/o /53-60 dated 30th September,
1953
</TABLE>
Supplemental agreement dated 30th June, 1996 to the lease dated 10th June
1994 between SCI Paris-Boulogne and Murat.
According to this supplemental agreement, the lessee expressly waives its right
to terminate the lease until the end of the 1st three year period ending 31st
June, 2000.
In compensation of this waiving and as from 1st July, 1996, the amount of the
annual rent will be of FRF 190,000.
Other provisions of the lease dated 10th June, 1994 remain unchanged.
<PAGE>
2. Pharma
(1) Office Lease Laupheim
This lease is based on the Administration and Distribution Agreement
between Pharma and Dr. Rentschler Arzneimittel GmbH & Co.
<TABLE>
<CAPTION>
<S> <C>
Nature of Lease: Commercial lease
Parties: Dr. Rentschler Arzneimittel GmbH & Co. as lessor
Pharma as lessee
Date of contract: February 12, 1998
Date of March 12, 1998
commencement
of contract:
Address and Schillerstrasse 8, 88471 Laupheim, Germany
description of
premises:
Duration: Initial term of 18 months; renewal option for a further term of six
months exercised by Pharma
Early Termination: extraordinary termination rights for both parties in specific cases
Annual rent: 3% plus VAT on gross sales; consideration also covers other services
under the Administration and Distribution Agreement.
Payment dates: Monthly following invoice
Rate review: Not applicable
Authorised Use: All business purposes of Pharma
Charges and Not applicable
maintenance costs:
Gross repairs: Borne by lessor unless damaged by lessee
Insurance: Not provided for
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Taxes: Not provided for
Assignability/Change Not provided for
of control:
Sub-lease: Not provided for
Governing German Civil Code (BGB); German Code of Civil Procedure (ZPO).
law/Jurisdiction
</TABLE>
(2) Office Lease Cologne
Pursuant to oral information provided by Mr. Sander, an office of
approximately 10 sqm was rented by Pharma in Wredestrasse 15-19, 50672
Cologne for October 1999 at a rent of DM 900,-- plus VAT from Online Office
as lessor. Pharma has a renewal option for a further month which Mr.
Sander considers to exercise.
<PAGE>
<TABLE>
<C> <S>
3. Istoria
Sublease agreement dated 24th August, 1994 between Villa Miari De Cumani
S.r.l. and Istoria.
Nature of Sub-lease: Commercial sub-lease
Parties: 1. Villa Miari De Cumani S.r.l. ("lessor")
2. Istoria ("lessee")
Date of contract: 24th August, 1994
Date of 1st October, 1994
commencement
of contract:
Address and 3/A Riviera Francia, Padua, Italy
description of
premises:
Duration: Six years (may be extended to 31st December, 2004)
Early Termination of The lessor may terminate for non-payment of the rent
the Sub-lease:
Annual rent: Lit 120,000,000 (VAT exclusive)
Payment dates: Quarterly (on the fifth day of each Quarter)
Rate review: Annually, on the basis of 75% of the variations of the ISTAT index
for the previous year
Authorised Use: Office space and warehouses
Rights of first The lessor has granted a right of first refusal to acquire the
refusal: Property
Governing law/ Italian law
jurisdiction:
</TABLE>
<PAGE>
Schedule 7
(Intellectual Property)
Part A
1. Patents
A. The patents which Pharma owns are set forth on Annex 7A-1-1. Dr. Rentschler
GmbH & Co. Medizin KG is the former name of Pharma.
B. The patent which Istoria owns is set forth on Annex 7A-1-2.
2. Registered Trade and Service Marks
A. The trademarks which are owned by Murat are set forth on Annex 7A3-1. In
addition to such trademarks, Murat uses the trademarks CEBUTID and CEBUTIN,
which are owned by Fuisz Technologies. There is no written licence agreement
between Murat and Fuisz Technologies for the use of the trademarks CEBUTID
and CEBUTIN. Information regarding those trademarks is set forth in Annex
7A3-I(A).
B. The trademarks which are owned by Pharma are set forth on Annex 7A3-2.
C. The trademarks which are owned by Istoria are set forth on Annex 7A3-3. In
addition, Istoria has purchased the right to use certain trademarks in Italy
in connection with its purchase of certain products. Those trademarks are
set forth on Annex 7A3-3(A).
Part B
3. Unregistered Trade and Service Marks
The logo on the Murat letterhead, a copy of which is set forth on Annex 7-7, is
not registered as a trademark.
<PAGE>
Part C
4. Licences and User Agreements
A. Details regarding license agreements to which Pharma is a party are set
forth on Annex 7C-1.
B. Details regarding license agreements to which Istoria is a party are set
forth on Annex 7C-2.
Part D
5. Information Technology
A. Details regarding the Information Technology owned or used by Murat are set
forth on Annex 7D-1.
B. Details regarding the Information Technology owned or used by Pharma are set
forth on Annex 7D-2.
C. Details regarding the Information Technology owned or used by Istoria is set
forth on Annex 7D-3.
<PAGE>
Schedule 8
(Conduct of Istoria Business before Italian Completion)
Except in accordance with clause 6 (Conduct of Istoria Business), the Seller and
--------
Fuisz Technologies will not:
(A) Istoria Business
(i) Dispose of or agree to dispose of, or grant or agree to grant any
option in respect of, any material part of the assets of the Istoria
Business or any interest in them except in the ordinary and unusual
course of business on normal arm's length terms.
(ii) Dispose of or agree to dispose of any assets of the Istoria Business
having a book value in excess, individually, of US$2,000 or
collectively US$10,000 or any interest in those assets of the
Istoria Business.
(iii) Discontinue or cease to operate all or a material part of the
Istoria Business.
(iv) Do, or allow to be done, any act or thing which may immediately in
the future, adversely affect the goodwill of the Istoria Business.
(B) Contracts
Enter into any contract (which includes, amongst other things, any
agreement, arrangement or commitment) relating to or affecting a material
part of the Istoria Business or any materially unusual or abnormal or
onerous contract or any contract the term of which will extend more than 12
months beyond the Completion Date or vary materially the terms of any of
the Contracts.
(C) Capital expenditure
Make any capital commitment including, for this purpose, the acquisition of
any capital asset under a finance lease.
(D) Encumbrances
Create, grant or issue, or agree to create, grant or issue, any mortgages,
charges (other than liens arising by operation of law), debentures or other
securities over any of the assets of the Istoria Business.
<PAGE>
(E) Insurances
Fail to take any action required to maintain any of its insurances relating
to the Istoria Business or its assets in force or knowingly do anything to
make any such policy of insurance void or voidable.
(F) Employees
(i) Take any steps to terminate the contract of employment of any
employee, consultant or agent before Italian Completion nor give or
make or permit to be given or made to any employee, consultant or
agent any notice, communication, statement or representation which
concerns the sale and purchase of the Istoria Business or which may
concern or affect his employment after Italian Completion.
(ii) Engage any person to make any material variation to the terms and
conditions of employment of the employees or contracts of service of
any consultant or agent or any of them other than salary increases in
the ordinary course and at normal market rates.
(G) Intellectual Property
Enter into any licence, sub-licence, assignment or other agreement in
respect of or affecting any of the Intellectual Property of Istoria.
(H) Properties
(i) Enter into any agreement, tenancy or licence in respect of or
affecting any of the Properties owned or used by Istoria.
(ii) Dispose of or agree to dispose of, or grant or agree to grant any
option in respect of, any Property owned or used by Istoria or any
interest therein.
(iii) Grant or agree to grant any rights over or create any restriction,
covenant or encumbrance affecting any Property owned or used by
Istoria.
(I) Miscellaneous
(i) Declare, authorise, make or pay a dividend (in cash or in specie) or
other distribution of a similar nature.
(ii) Create, allot, issue or grant any option over or other right to
subscribe or purchase any Istoria Share.
<PAGE>
(iii) Borrow any money or incur any other indebtedness or agree to do so
(other than pursuant to its existing overdraft or receivables
facilities, subject to the limits of such facilities as at the
Completion Date) or grant or make any loan to any third party or
agree to do so.
<PAGE>
IN WITNESS WHEREOF, this agreement was executed by the parties applying their
hand hereto on the date first mentioned on page 1 above:
Signed by )
for and on behalf of )
FUISZ INTERNATIONAL LIMITED ) ------------------------------
Signed by )
for and on behalf of )
FUISZ TECHNOLOGIES LTD. ) ------------------------------
Signed by )
for and on behalf of )
SHIRE HOLDINGS EUROPE )
LIMITED ) ------------------------------
<PAGE>
Exhibit 10.30
MBP DRAFT
11/12/99
U.S. $250,000,000
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of November __, 1999
(amending and restating the Credit Agreement,
dated as of June 24, 1998)
among
SHIRE PHARMACEUTICALS GROUP, plc,
as the Parent,
SHIRE PARTNERS
SHIRE LABORATORIES INC.
SHIRE RICHWOOD INC.
SHIRE SUPPLIES U.S. LLC
ROBERTS PHARMACEUTICAL CORPORATION,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Administrative Agent and Syndication Agent for the Lenders.
ARRANGED BY
DLJ CAPITAL FUNDING, INC.
<PAGE>
TABLE OF CONTENTS
-----------------
Section Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms .......................................................3
1.2. Use of Defined Terms ...............................................24
1.3. Cross-References ...................................................24
1.4. Accounting and Financial Determinations ............................25
1.5. Use of the Term "Borrower" .........................................25
ARTICLE II COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
2.1. Commitments ........................................................25
2.1.1. Term Loan Commitment ...............................................25
2.1.2. Revolving Loan Commitment ..........................................26
2.1.3. Letter of Credit Commitment ........................................27
2.1.4. Lenders Not Permitted or Required To Make Loans ....................27
2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit ........27
2.2. Reduction of the Commitment Amounts ................................28
2.2.1. Optional ...........................................................28
2.2.2. Mandatory ..........................................................28
2.3. Borrowing Procedures and Funding Maintenance .......................28
2.4. Continuation and Conversion Elections ..............................29
2.5. Funding ............................................................29
2.6. Issuance Procedures ................................................29
2.6.1. Other Lenders' Participation .......................................30
2.6.2. Disbursements; Conversion to Revolving Loans .......................30
2.6.3. Reimbursement ......................................................30
2.6.4. Deemed Disbursements ...............................................31
2.6.5. Nature of Reimbursement Obligations ................................31
2.7. Registered Notes ...................................................32
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application ............................33
3.1.1. Repayments and Prepayments .........................................33
3.1.2. Application ........................................................35
3.2. Interest Provisions ................................................35
3.2.1. Rates ..............................................................35
3.2.2. Post-Maturity Rates ................................................36
3.2.3. Payment Dates ......................................................36
3.3. Fees ...............................................................37
3.3.1. Commitment Fee .....................................................37
i
<PAGE>
3.3.2. Administrative Agent Fee ..........................................37
3.3.3. Letter of Credit Fee ..............................................37
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful ........................................37
4.2. Deposits Unavailable ..............................................38
4.3. Increased LIBO Rate Loan Costs, etc ...............................38
4.4. Funding Losses ....................................................38
4.5. Increased Capital Costs ...........................................39
4.6. Taxes .............................................................39
4.7. Payments, Computations, etc .......................................40
4.8. Sharing of Payments ...............................................41
4.9. Setoff ............................................................42
ARTICLE V CONDITIONS TO RESTATEMENT EFFECTIVENESS AND CREDIT
EXTENSIONS
5.1. Effectiveness and Initial Credit Extension ........................42
5.1.1. Resolutions, etc. .................................................42
5.1.2. Delivery of Notes .................................................43
5.1.3. Consummation of Transaction .......................................43
5.1.4. Restatement Effective Date Certificate ............................43
5.1.5. Payment of Outstanding Indebtedness, etc ..........................43
5.1.6. Guaranties ........................................................43
5.1.7. Pledge Agreements .................................................44
5.1.8. Security Agreements ...............................................45
5.1.9. [Intentionally Omitted] ...........................................46
5.1.10. Mortgages .........................................................46
5.1.11. Financial Information, etc ........................................47
5.1.12. Litigation ........................................................47
5.1.13. Material Adverse Effect ...........................................47
5.1.14. Insurance .........................................................47
5.1.15. Solvency Certificate ..............................................48
5.1.16. [Intentionally Omitted] ...........................................48
5.1.17. Perfection Certificate ............................................48
5.1.18. Agent for Service of Process ......................................48
5.1.19. [Intentionally Omitted] ...........................................48
5.1.20. Opinions of Counsel ...............................................48
5.1.21. Closing Fees, Expenses, etc .......................................48
5.1.22. Satisfactory Legal Form ...........................................48
5.1.23. UCC Filing Service ................................................49
5.1.24. Syndication .......................................................49
5.2. All Credit Extensions .............................................49
5.2.1. Compliance with Warranties, No Default, etc .......................49
ii
<PAGE>
5.2.2. Credit Extension Request ..........................................50
5.3. Conditions Precedent to Borrowing of Revolving Loans and
Issuance of Letters of Credit .....................................50
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc .................................................50
6.2. Due Authorization, Non-Contravention, etc .........................50
6.3. Government Approval, Regulation, etc ..............................51
6.4. Validity, etc .....................................................51
6.5. Financial Information .............................................51
6.6. No Material Adverse Effect ........................................52
6.7. Litigation, Labor Controversies, etc ..............................52
6.8. Subsidiaries ......................................................52
6.9. Ownership of Properties ...........................................52
6.10. Taxes .............................................................52
6.11. Pension and Welfare Plans .........................................52
6.12. Environmental Warranties ..........................................53
6.13. Regulations U and X ..............................................54
6.14. Accuracy of Information ...........................................54
6.15. Solvency ..........................................................54
6.16. Year 2000 .........................................................55
ARTICLE VII COVENANTS
7.1. Affirmative Covenants .............................................55
7.1.1. Financial Information, Reports, Notices, etc ......................55
7.1.2. Compliance with Laws, etc .........................................57
7.1.3. Maintenance of Properties .........................................57
7.1.4. Insurance .........................................................57
7.1.5. Books and Records .................................................57
7.1.6. Environmental Covenant ............................................58
7.1.7. Future Subsidiaries ...............................................58
7.1.8. Future Leased Property and Future Acquisitions of Real Property;
Future Acquisition of Other Property ..............................59
7.1.9. Use of Proceeds, etc ..............................................60
7.1.10. Undertaking .......................................................60
7.2. Negative Covenants ................................................61
7.2.1. Business Activities ...............................................61
7.2.2. Indebtedness ......................................................61
7.2.3. Liens .............................................................62
7.2.4. Financial Covenants ...............................................63
7.2.5. Investments .......................................................64
7.2.6. Restricted Payments, etc ..........................................64
7.2.7. Capital Expenditures, etc. ........................................65
iii
<PAGE>
7.2.8. Consolidation, Merger, etc ........................................65
7.2.9. Asset Dispositions, etc ...........................................66
7.2.10. Transactions with Affiliates ......................................67
7.2.11. Negative Pledges, Restrictive Agreements, etc .....................67
7.2.12. Sale and Leaseback ................................................68
7.2.13. Limitation on Certain Liens on Intellectual Property Licenses .....68
ARTICLE VIII EVENTS OF DEFAULT
8.1. Listing of Events of Default ......................................68
8.1.1. Non-Payment of Obligations ........................................68
8.1.2. Breach of Warranty ................................................68
8.1.3. Non-Performance of Certain Covenants and Obligations ..............69
8.1.4. Non-Performance of Other Covenants and Obligations ................69
8.1.5. Default on Other Indebtedness .....................................69
8.1.6. Judgments .........................................................69
8.1.7. Pension Plans .....................................................69
8.1.8. Change in Control .................................................69
8.1.9. Bankruptcy, Insolvency, etc .......................................69
8.1.10. Impairment of Security, etc .......................................70
8.2. Action if Bankruptcy ..............................................70
8.3. Action if Other Event of Default ..................................71
ARTICLE IX THE AGENTS
9.1. Actions ...........................................................71
9.2. Funding Reliance, etc .............................................72
9.3. Exculpation .......................................................72
9.4. Successor .........................................................72
9.5. Credit Extensions by each Agent ...................................73
9.6. Credit Decisions ..................................................73
9.7. Copies, etc .......................................................73
ARTICLE X MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc ..........................................74
10.2. Notices ...........................................................75
10.3. Payment of Costs and Expenses .....................................75
10.4. Indemnification ...................................................76
10.5. Survival ..........................................................77
10.6. Severability ......................................................77
10.7. Headings ..........................................................77
10.8. Execution in Counterparts, Effectiveness, etc .....................77
10.9. Governing Law; Entire Agreement ...................................78
10.10. Successors and Assigns ............................................78
10.11. Sale and Transfer of Loans and Notes; Participation in Loans
and Notes .........................................................78
iv
<PAGE>
10.11.1. Assignments .......................................................78
10.11.2. Participations ....................................................79
10.12. Confidentiality ...................................................80
10.13. Other Transactions ................................................81
10.14. Forum Selection and Consent to Jurisdiction .......................81
10.15. Waiver of Jury Trial ..............................................82
10.16. Release of Liens ..................................................83
v
<PAGE>
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative Information
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Restatement Effective Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Form of Parent Guaranty
EXHIBIT F-2 - Form of Subsidiary Guaranty
EXHIBIT G-1 - Form of Parent Pledge Agreement
EXHIBIT G-2 - Form of Borrowers Pledge Agreement
EXHIBIT G-3 - Form of Subsidiary Pledge Agreement
EXHIBIT H-1 - Form of Parent Security Agreement
EXHIBIT H-2 - Form of Borrowers Security Agreement
EXHIBIT H-3 - Form of Subsidiary Security Agreement
EXHIBIT I - Form of Opinion of Counsel to the Obligors
EXHIBIT J - Form of Lender Assignment Agreement
EXHIBIT K - Form of Solvency Certificate
EXHIBIT L - Form of Perfection Certificate
vi
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November __, 1999,
amending and restating the Existing Credit Agreement (as defined below), is
among SHIRE PHARMACEUTICALS GROUP, plc, a public limited company organized under
the laws of England and Wales (the "Parent"), SHIRE PARTNERS, a Delaware general
------
partnership ("Shire Partners"), SHIRE LABORATORIES INC., a Delaware corporation
--------------
("Shire Laboratories"), SHIRE RICHWOOD INC., a Kentucky corporation ("Shire
------------------ -----
Richwood"), SHIRE SUPPLIES U.S. LLC, a Delaware limited liability company
- --------
("Shire Supplies"), and ROBERTS PHARMACEUTICAL CORPORATION, a New Jersey
- ----------------
corporation ("Roberts"; Shire Partners, Shire Laboratories, Shire Richwood,
-------
Shire Supplies and Roberts are each individually referred to as a "Borrower" and
--------
collectively referred to as the "Borrowers"), the various financial institutions
---------
as are or may become parties hereto (collectively, the "Lenders"), DLJ CAPITAL
-------
FUNDING, INC. ("DLJ"), as administrative agent (the "Administrative Agent"),
--- --------------------
syndication agent (the "Syndication Agent"), lead arranger (the "Lead Arranger")
----------------- -------------
and sole book runner (the "Sole Book Runner") for the Lenders (the
----------------
Administrative Agent and the Syndication Agent are collectively referred to
herein as the "Agents" and each as an "Agent").
------ -----
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of June 24, 1998 (as
heretofore amended, supplemented, amended and restated or otherwise modified and
in effect prior to the Restatement Effective Date (such capitalized term, and
other capitalized terms being used herein, to have the meanings provided in
Section 1.1, the "Existing Credit Agreement"), among Roberts, the various
- ----------- -------------------------
financial institutions (the "Existing Lenders") parties thereto on the
----------------
Restatement Effective Date, DLJ, as syndication agent, First Union National
Bank, as administrative agent, and Summit Bank, as documentation agent, the
Existing Lenders provided to Roberts, on the terms and conditions set forth
therein, term loans (the "Existing Term Loans") made on the Closing Date in an
-------------------
original principal amount of $125,000,000;
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of July 26, 1999 (the "Merger Agreement"), by and among the Parent, Roberts and
----------------
Ruby Acquisition Sub Inc., a New Jersey corporation ("Acquisition Sub") and a
---------------
newly-formed, direct, wholly-owned Subsidiary of the Parent, Acquisition Sub
will merge (the "Merger") with and into Roberts, with Roberts continuing as the
------
corporation surviving such Merger;
WHEREAS, pursuant to the terms of the Merger Agreement, upon the
effectiveness of the Merger, each issued and outstanding share of Capital Stock
of Roberts, together with the associated Right (as defined in the Rights
Agreement), will be converted into the right to receive from the Parent ordinary
shares of the Parent or American Depository Shares of the Parent (each
<PAGE>
of which represents three ordinary shares of the Parent and is represented by
American Depositary Receipts of the Parent), at an exchange ratio determined in
accordance with the Merger Agreement (the Merger and the other transactions
referred to in this recital are collectively referred to herein as the
-------
"Transaction");
- ------------
WHEREAS, the Borrowers have requested that the Existing Credit Agreement be
amended and restated in its entirety to become effective and binding on the
Borrowers pursuant to the terms of this Agreement, with the intent that the
terms of this Agreement shall supersede the terms of the Existing Credit
Agreement;
WHEREAS, in connection with amending and restating the Existing Credit
Agreement and at the time of the effectiveness of such amendment and
restatement, Credit Extensions from this Agreement shall be used, in part, to
repay the entire outstanding amount of the Existing Term Loans on the
Restatement Effective Date with proceeds of new Term Loans, and each of the
Borrowers desires to obtain, pursuant to this Agreement, the following financing
facilities from the Lenders:
(a) a Term Loan Commitment pursuant to which Borrowings of Term
Loans will be made to the Borrowers on the Restatement Effective Date in a
maximum aggregate principal amount not to exceed $125,000,000;
(b) a Revolving Loan Commitment (to include availability for
Revolving Loans and Letters of Credit) pursuant to which Borrowings of
Revolving Loans will be made to the Borrowers from time to time on and
subsequent to the Restatement Effective Date but prior to the Revolving
Loan Commitment Termination Date, in a maximum aggregate principal amount
(together with all Letter of Credit Outstandings) not to exceed
$125,000,000; and
(c) a Letter of Credit Commitment pursuant to which the Issuer will
issue Letters of Credit for the account of the Borrowers from time to time
on and subsequent to the Restatement Effective Date but prior to the
Revolving Loan Commitment Termination Date, in a maximum aggregate Stated
Amount at any one time outstanding not to exceed $25,000,000 (provided,
that the aggregate outstanding principal amount of all Revolving Loans and
Letter of Credit Outstandings shall not at any time exceed the then
existing Revolving Loan Commitment Amount); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to so amend and restate
---------
the Existing Credit Agreement and to extend such Commitments and make such Loans
available thereunder and described herein to the Borrowers and issue (or
participate in) Letters of Credit for the account of the Borrowers;
2
<PAGE>
NOW, THEREFORE, the parties hereto agree to amend and restate the Existing
Credit Agreement, and the Existing Credit Agreement is hereby amended and
restated, as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not
-------------
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition Sub" is defined in the second recital.
--------------- --------------
"Administrative Agent" is defined in the preamble.
-------------------- --------
"Affiliate" of any Person means any other Person which, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person. A Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (i) to vote 5% or more of
the Capital Stock (on a fully diluted basis) of such Person having ordinary
voting power for the election of directors or managing general partners, or
(ii)to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
"Agent" and "Agents" are defined in the preamble.
----- ------ --------
"Agreement" means, on any date, this Amended and Restated Credit Agreement
---------
as originally in effect on the Restatement Effective Date and as thereafter from
time to time amended, supplemented, amended and restated, or otherwise modified
and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
-------------------
Loans, a fluctuating rate of interest per annum equal to the higher of (i) the
rate of interest most recently announced by the Administrative Agent as its
prime rate, and (ii) the Federal Funds Rate most recently determined by the
Administrative Agent plus 1/2 of 1%. The Alternate Base Rate is not
necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit. Changes in the
rate of interest on that portion of any Loans maintained as Base Rate Loans will
take effect simultaneously with each change in the Alternate Base Rate. The
Administrative Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.
"Applicable Commitment Fee" means a fee which shall accrue at the
-------------------------
applicable rate per annum set forth below under the column entitled "Applicable
Commitment Fee" and opposite the
3
<PAGE>
level of the then current ratings published by S&P and Moody's for the
Indebtedness of the Borrowers evidenced by the Notes issued under this
Agreement:
Applicable
Rating Commitment Fee
------ --------------
BBB- and Baa3 and higher .300%
BB+ and Ba1 .375%
below BB+ and Ba1 .500%
The rating in effect at any date is that in effect at the close of business on
such date. Changes in the Applicable Commitment Fee will take effect
simultaneously with each announced change in the determination rating for the
Indebtedness of the Borrowers evidenced by the Notes issued under this
Agreement. If, at any time of determining the Applicable Commitment Fee, the
credit rating assigned by S&P differs from the credit rating assigned by
Moody's, the lower credit rating shall be used to determine the Applicable
Commitment Fee. The Administrative Agent will give notice promptly to the
Borrowers and the Lenders of changes in the Applicable Commitment Fee.
"Applicable Margin" means, with respect to the unpaid principal amount of
-----------------
each Loan maintained as a Base Rate Loan or LIBO Rate Loan, the applicable
percentage per annum set forth below under the column for such type of Loan
entitled "Applicable Margin for Base Rate Loans" or "Applicable Margin for LIBO
Rate Loans", respectively, and opposite the level of the then current ratings
published by S&P and Moody's for the Indebtedness of the Borrowers evidenced by
the Notes issued under this Agreement:
Applicable Applicable
Margin for Base Margin for LIBO
Rating Rate Loans Rate Loans
------ ---------- ----------
BBB- / Baa3 and higher 0.50% 1.50%
BB+ / Ba1 0.75% 1.75%
BB and Ba2 1.00% 2.00%
lower than BB or Ba2 1.50% 2.50%
The rating in effect at any date is that in effect at the close of business on
such date. Changes in the Applicable Margin will take effect simultaneously
with each announced change in the determination rating for the Indebtedness of
the Borrowers evidenced by the Notes issued under this Agreement. If, at any
time of determining the Applicable Margin, the credit rating assigned by S&P
differs from the credit rating assigned by Moody's, then the Applicable Margin
will be determined as follows:
4
<PAGE>
(a) If the Indebtedness of the Borrowers evidenced by the Notes
issued under this Agreement is rated (i) BB+ or higher by S&P or (ii) Ba1
or higher by Moody's, then the higher credit rating will be used to
determine the Applicable Margin; provided, however, that (A) if the credit
-------- -------
rating assigned by S&P differs from the credit rating assigned by Moody's
by two levels, then the Applicable Margin will be determined by reference
to the credit rating which is one level below the higher credit rating and
(B) if the credit rating assigned by S&P differs from the credit rating
assigned by Moody's by three levels, then the Applicable Margin will be
determined by reference to the credit rating which is two levels below the
higher credit rating.
(b) If the Indebtedness of the Borrowers evidenced by the Notes
issued under this Agreement is rated (i) below BB+ by S&P and (ii) below
Ba1 by Moody's, then the lower credit rating will be used to determine the
Applicable Margin.
The Administrative Agent will give notice promptly to the Borrowers and the
Lenders of changes in the Applicable Margin.
"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------
"Assumed Indebtedness" means Indebtedness of a Person which is (i) in
--------------------
existence at the time such Person becomes a Subsidiary of a Borrower or (ii)
assumed in connection with an Investment in or acquisition of such Person, and
has not been incurred or created by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of a
Borrower.
"Authorized Officer" means, relative to any Obligor, those of its officers
------------------
whose signatures and incumbency shall have been certified to the Agents and the
Lenders pursuant to Section 5.1.1.
-------------
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
--------------
determined by reference to the Alternate Base Rate.
"Borrower" and"Borrowers" are defined in the preamble.
-------- --------- --------
"Borrowers Pledge Agreement" means the Pledge Agreement executed and
--------------------------
delivered by an Authorized Officer of each of the Borrowers pursuant to Section
-------
5.1.7, substantially in the form of Exhibit G-2 hereto, as amended,
- ----- -----------
supplemented, amended and restated or otherwise modified from time to time.
"Borrowers Security Agreement" means the Security Agreement executed and
----------------------------
delivered by an Authorized Officer of each of the Borrowers pursuant to Section
-------
5.1.8, substantially in the
- -----
5
<PAGE>
form of Exhibit H-2 hereto, as amended, supplemented, amended and restated or
-----------
otherwise modified from time to time.
"Borrowing" means the borrowing of the Loans of the same type made to the
---------
same Borrower and, in the case of LIBO Rate Loans, having the same Interest
Period, made by all Lenders on the same Business Day and pursuant to the same
Borrowing Request in accordance with Section 2.1.
-----------
"Borrowing Request" means a loan request and certificate duly executed by
-----------------
an Authorized Officer of the applicable Borrower, substantially in the form of
Exhibit B-1 hereto.
- -----------
"Business Day" means (i) any day which is neither a Saturday or Sunday nor
------------
a legal holiday on which banks are authorized or required to be closed in New
York, New York, and (ii) with respect to Borrowings of, Interest Periods with
respect to, payments of principal and interest in respect of, and conversions of
Base Rate Loans into, LIBO Rate Loans, any day on which dealings in Dollars are
carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any applicable
--------------------
period, the sum (without duplication) of (i) the aggregate amount of all
expenditures of such Person and its Subsidiaries determined on a consolidated
basis for tangible fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures, and (ii) the
aggregate amount of all Capitalized Lease Liabilities incurred during such
period.
"Capital Stock" means with respect to any Person, (i) any and all shares,
-------------
interests, participations or other equivalents of or interests in (however
designated) corporate or capital stock, including shares of preferred or
preference stock of such Person, (ii) all partnership interests (whether general
or limited) in such Person, (iii) all membership interests or limited liability
company or partnership interests in such Person, and (iv) all other equity or
ownership interests in such Person of any other type.
"Capitalized Lease Liabilities" means with respect to any Person for any
-----------------------------
applicable period, all monetary obligations of such Person and its Subsidiaries
determined on a consolidated basis under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
--------------------------
6
<PAGE>
(a) any evidence of Indebtedness, maturing not more than two years
after such time, issued or guaranteed or insured by the United States
Government or any agency thereof;
(b) bonds and other obligations of a corporation (other than an
Affiliate of any Obligor) organized under the laws of any state of the
United States or of the District of Columbia, maturing not more than two
years from the date of issue, and rated AAA by S&P or Aaa by Moody's;
(c) commercial paper, maturing not more than nine months from the
date of issue, which is issued by (i) a corporation (other than an
Affiliate of any Obligor) organized under the laws of any state of the
United States or of the District of Columbia and rated at least A-1 by S&P
or P-1 by Moody's, or (ii) any Lender (or its holding company);
(d) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either (i) a
commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not
less than $500,000,000, or (ii) any Lender;
(e) money market funds having no restrictions on liquidation rights
and whose sole investments are comprised of investments permitted under
clauses (a) through (c); or
----------- ---
(f) in the case of the Parent or any Subsidiary of the Parent
organized in a jurisdiction outside the United States: (i) direct
obligations of the sovereign nation (or any agency thereof) in which the
Parent or such Subsidiary is organized and is conducting business or in
obligations fully and unconditionally guaranteed by such sovereign nation
(or any agency thereof) or (ii) investments of the type and maturity
described in clauses (a) through (e) above of foreign obligors, which
----------- ---
investments or obligors have ratings described in such clauses or
equivalent ratings from comparable foreign ratings agencies.
"Casualty Event" means, with respect to any Person, the damage, destruction
--------------
or condemnation, as the case may be, of any property of such Person.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
------
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
-------
Liability Information System List.
"Change in Control" means (i) the failure of the Parent to own, directly or
-----------------
indirectly, free and clear of all Liens or other encumbrances (other than as
permitted under the Loan
7
<PAGE>
Documents), all right, title and interest in 100% of the outstanding shares of
voting Capital Stock of each of its direct and indirect Subsidiaries (other than
a nominal number of qualifying shares) or (ii) the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Act of 1934, as amended) of
greater than 30% of the outstanding shares of voting Capital Stock of the Parent
on a fully diluted basis.
"Closing Date" means the date the Existing Term Loans were made, which
------------
occurred on June 24, 1998.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"Commitment" means, as the context may require, a Lender's Revolving Loan
----------
Commitment, Term Loan Commitment or Letter of Credit Commitment.
"Commitment Amount" means, as the context may require, the Revolving Loan
-----------------
Commitment Amount, the Term Loan Commitment Amount or the Letter of Credit
Commitment Amount.
"Commitment Termination Date" means, as the context may require, the
---------------------------
Revolving Loan Commitment Termination Date or the Term Loan Commitment
Termination Date.
"Commitment Termination Event" means (i) the occurrence of any Event of
----------------------------
Default described in clauses (a) through (d) of Section 8.1.9, or (ii) the
----------- --- -------------
occurrence and continuance of any other Event of Default and either (x) the
declaration of the Loans to be due and payable pursuant to Section 8.3, or (y)
-----------
in the absence of such declaration, the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the Parent that the
Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and executed by
----------------------
the chief financial Authorized Officer of the Parent, substantially in the form
of Exhibit E hereto.
"Contingent Liability" means any agreement, undertaking or arrangement by
--------------------
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of Capital Stock of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
8
<PAGE>
"Continuation/Conversion Notice" means a notice of continuation or
------------------------------
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower, substantially in the form of Exhibit C hereto.
---------
"Controlled Group" means all members of a controlled group of corporations
----------------
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Parent or any
Subsidiary, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"Copyright Security Agreement" means any Copyright Security Agreement
----------------------------
executed and delivered by an Obligor in substantially the form of Exhibit C to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Credit Extension" means, as the context may require,
----------------
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any previously issued Letter of Credit, by the
Issuer.
"Credit Extension Request" means, as the context may require, any Borrowing
------------------------
Request or Issuance Request.
"Debt" means the outstanding principal amount of all Indebtedness of the
----
Parent and its Subsidiaries of the nature referred to in clauses (a), (b), (c),
----------- --- ---
and (f) of the definition of "Indebtedness" plus (without duplication) the
--- ------------
aggregate amount of all Contingent Liabilities.
"Default" means any Event of Default or any condition, occurrence or event
-------
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
------------ --------------
"Disbursement Date" is defined in Section 2.6.2.
----------------- -------------
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
-------------------
Schedule I, as it may be amended, supplemented or otherwise modified from time
- ----------
to time by the Borrowers with the written consent of the Administrative Agent
and the Required Lenders.
"DLJ" is defined in the preamble.
--- --------
"Dollar" and the sign "$" mean lawful money of the United States.
------ -
9
<PAGE>
"Domestic Office" means, relative to any Lender, the office of such Lender
---------------
designated as such as set forth opposite its name on Schedule II hereto under
-----------
the applicable column heading or as set forth in the Lender Assignment Agreement
or such other office of a Lender (or any successor or assign of such Lender)
within the United States as may be designated from time to time by notice from
such Lender, as the case may be, to each other Person party hereto.
"EBITDA" means, with respect to the Parent and its Subsidiaries, for any
------
applicable period, the sum (without duplication), determined on a consolidated
basis, of
(a) Net Income,
plus
- ----
(b) the amount deducted in determining Net Income representing non-
cash charges or expenses, including depreciation and amortization
(excluding any non-cash charges representing an accrual of or reserve for
cash charges to be paid within the next twenty-four months),
plus
- ----
(c) the amount deducted in determining Net Income representing
income taxes (whether paid or deferred),
plus
- ----
(d) the amount deducted in determining Net Income representing
Interest Expense and fees and expenses incurred in connection with the
Transaction, including (without duplication) all non-recurring
restructuring or consolidation charges incurred in connection with the
Transaction to be recorded in the fourth Fiscal Quarter of the 1999 Fiscal
Year in an amount not to exceed $125,000,000,
minus
- -----
(e) an amount equal to the amount of all non-cash credits included
in determining Net Income.
"Environmental Laws" means all applicable federal, state or local statutes,
------------------
laws, ordinances, codes, rules and regulations (including consent decrees and
administrative orders) relating to the protection of the environment.
10
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Existing Credit Agreement" is defined in the first recital.
------------------------- -------------
"Existing Lenders" is defined in the first recital.
---------------- -------------
"Existing Term Loans" is defined in the first recital.
------------------- -------------
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
------------------
annum equal for each day during such period to (i) the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or (ii) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated November __, 1999,
----------
among the Parent and DLJ, which sets forth certain fees to be paid in connection
with this Agreement.
"Fiscal Quarter" means any fiscal quarter of any Fiscal Year.
--------------
"Fiscal Month" means any fiscal month of any Fiscal Year.
------------
"Fiscal Year" means any twelve-month period ending on December 31 of any
-----------
calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
------------
or any successor thereto.
"GAAP" is defined in Section 1.4.
---- -----------
"Guaranties" means, collectively, the Parent Guaranty and the Subsidiary
----------
Guaranty and each other guaranty delivered from time to time pursuant to the
terms of this Agreement.
"Guarantor" means, on the Restatement Effective Date, the Parent and each
---------
direct or indirect
11
<PAGE>
Subsidiary of the Parent that is not a Borrower and, thereafter, each direct or
indirect Subsidiary of the Parent that is required, pursuant to clause (a) of
----------
Section 7.1.7, to execute and deliver a Guaranty or a supplement to the
- -------------
Guaranty.
"Hazardous Material" means (i) any "hazardous substance", as defined by
------------------
CERCLA, (ii) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended, (iii) any petroleum product, or (iv) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other applicable Environmental Law.
"Hedging Obligations" means, with respect to any Person, all liabilities of
-------------------
such Person under interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(i) which is of a "going concern" or similar nature, (ii) which relates to the
limited scope of examination of matters relevant to such financial statement, or
(iii) which relates to the treatment or classification of any item in such
financial statement and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause such Obligor to be
in default of any of its obligations under Section 7.2.4.
-------------
"including" means including without limiting the generality of any
---------
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
---------------
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication
------------
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
12
<PAGE>
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of such
Person as of the date at which Indebtedness is to be determined, except for
deferred income and franchise taxes;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent such Person is liable for such
Indebtedness.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Interest Coverage Ratio" means, at the end of any Fiscal Quarter, the
-----------------------
ratio computed for the period consisting of such Fiscal Quarter and each of the
three immediately prior Fiscal Quarters of:
(a) EBITDA for all such Fiscal Quarters;
to
- --
(b) the cash portion of Interest Expense for all such Fiscal
Quarters;
provided, however, that for purposes of calculating the Interest Coverage Ratio,
EBITDA in respect of the Transaction shall be computed (on a good faith basis by
the chief financial
13
<PAGE>
Authorized Officer of the Parent) on a pro forma basis for such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.
"Interest Expense" means, for any applicable period, the aggregate
----------------
consolidated interest expense of the Parent and its Subsidiaries for such
applicable period, as determined in accordance with GAAP, including the portion
of any payments made in respect of Capitalized Lease Liabilities allocable to
interest expense.
"Interest Period" means, relative to any LIBO Rate Loan, the period
---------------
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
----------- ---
and ending on (but excluding) the day which numerically corresponds to such date
one, two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in each case as the
applicable Borrower may select in its relevant notice pursuant to Section 2.3 or
-----------
2.4; provided, however, that
- --- --------- -------
(a) no more than ten Interest Periods shall be in effect at any one
time;
(b) if any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the following
Business Day (unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day); and
(c) no Interest Period for any Loan may extend beyond the Stated
Maturity Date.
"Investment" means, relative to any Person, (i) any loan or advance made by
----------
such Person to any other Person (excluding (x) commission, travel and similar
advances to officers and employees made in the ordinary course of business or
(y) ordinary trade debt (in the nature of open accounts payable) extended in the
ordinary course of business on customary terms), (ii) any Contingent Liability
of such Person, and (iii) any ownership or similar interest held by such Person
in any other Person. The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon, whether by means of dividend, distribution or otherwise (and without
adjustment by reason of the financial condition of such other Person), and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to the
fair market value of such property.
"Issuance Request" means a Letter of Credit request and certificate duly
----------------
executed by an Authorized Officer of the applicable Borrower, in substantially
the form of Exhibit B-2 hereto.
-----------
14
<PAGE>
"Issuer" means the Administrative Agent, in its capacity as Issuer of
------
Letters of Credit and any other Lender as may be designated by the Borrowers
(and consented to by the Administrative Agent and such Lender, such consent by
the Administrative Agent not to be unreasonably withheld) in its capacity as
Issuer of Letters of Credit.
"Lead Arranger" means DLJ Capital Funding, Inc.
-------------
"Lender Assignment Agreement" means a Lender Assignment Agreement
---------------------------
substantially in the form of Exhibit J hereto.
---------
"Lenders" is defined in the preamble.
------- --------
"Letter of Credit" is defined in Section 2.1.3.
---------------- -------------
"Letter of Credit Commitment" means, with respect to the Issuer, the
---------------------------
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.3 and,
-------------
with respect to each of the other Lenders that has a Revolving Loan Commitment,
the obligation of each such Lender to participate in such Letters of Credit
pursuant to Section 2.6.1.
-------------
"Letter of Credit Commitment Amount" means, on any date, a maximum amount
----------------------------------
of $25,000,000, as such amount may be reduced from time to time pursuant to
Section 2.2.
- -----------
"Letter of Credit Outstandings" means, on any date, an amount equal to the
-----------------------------
sum of
(a) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit (whether or not the conditions
to drawing thereunder could be satisfied on such date),
plus
- ----
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations in respect of such Letters of Credit.
"Leverage Ratio" means, at the end of any Fiscal Quarter, the ratio of
--------------
(a) total Debt less unrestricted cash and Cash Equivalent
Investments of the Parent and its Subsidiaries on a consolidated basis
outstanding at such time;
to
- --
(b) EBITDA for the period of four consecutive Fiscal Quarters most
recently ended on or prior to such date (provided, that, for purposes of
--------
calculating EBITDA of the
15
<PAGE>
Parent and its Subsidiaries for any period, the actual EBITDA of any
Subsidiary created or acquired at any time during such period shall be
included on a pro forma basis as if such Subsidiary were created or
--- -----
acquired on the first date of such period);
provided, however, that for purposes of calculating the Leverage Ratio, EBITDA
- -------- -------
in respect of the Transaction shall be computed (on a good faith basis by the
chief financial Authorized Officer of the Parent) on a pro forma basis for such
Fiscal Quarter and each of the three immediately preceding Fiscal Quarters.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
---------
rate of interest per annum determined by the Administrative Agent to be the
arithmetic mean (rounded upward to the next 1/100 of 1%) of the rates of
interest per annum at which dollar deposits in the approximate amount of the
amount of the Loan to be made or continued as, or converted into, a LIBO Rate
Loan by the Administrative Agent and having a maturity comparable to such
Interest Period would be offered to the Administrative Agent in the London
interbank market at its request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
--------------
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
----------------------------
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, the rate of interest per annum (rounded upwards to the next 1/100 of 1%)
determined by the Administrative Agent as follows:
LIBO Rate = LIBO Rate
-------------------------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserved Adjusted) for any Interest Period for LIBO Rate
Loans will be adjusted automatically as to all LIBO Rate Loans then outstanding
as of the effective date of any change in the LIBOR Reserve Percentage.
"LIBOR Office" means, relative to any Lender, the office of such Lender
------------
designated as such as set forth opposite its name on Schedule II hereto under
-----------
the applicable column heading or as set forth in the Lender Assignment Agreement
or such other office of a Lender (or any successor or assign of such Lender) as
designated from time to time by notice from such Lender to the Borrower and the
Administrative Agent, whether or not outside the United States, which shall be
making or maintaining LIBO Rate Loans of such Lender hereunder.
16
<PAGE>
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
------------------------
Rate Loans, the percentage (expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day (to the extent applicable to any Lender)
under regulations issued from time to time by the F.R.S. Board for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the F.R.S. Board).
"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means, as the context may require, a Revolving Loan or a Term Loan,
----
of any type.
"Loan Document" means this Agreement, the Notes, the Letters of Credit,
-------------
each Rate Protection Agreement under which the counterparty to such agreement is
(or at the time such Rate Protection Agreement was entered into, was) a Lender
or an Affiliate of a Lender relating to Hedging Obligations of any Borrower or
any of their respective Subsidiaries, each Borrowing Request, each Issuance
Request, the Fee Letter, each Pledge Agreement, each Guaranty, each Mortgage
(upon execution and delivery thereof), each Security Agreement and each other
agreement, document or instrument delivered in connection with this Agreement or
any other Loan Document, whether or not specifically mentioned herein or
therein.
"Material Adverse Effect" means (a) a material adverse effect on the
-----------------------
financial condition, operations, assets, business, properties or prospects of
the Parent and its Subsidiaries, taken as a whole, (b) a material impairment of
the ability of the Parent, any Borrower or any other Obligor to perform its
respective material obligations under the Loan Documents to which it is or will
be a party, or (c) an impairment of the validity or enforceability of, or a
material impairment of the rights, remedies or benefits available to the Issuer,
the Agents, the Lead Arranger or the Lenders under this Agreement or any other
Loan Document.
"Merger" is defined in the second recital.
------ --------------
"Merger Agreement" is defined in the second recital.
---------------- --------------
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
-------
"Mortgage" means, collectively, each mortgage or deed of trust or leasehold
--------
mortgage executed and delivered pursuant to Section 5.1.10 or Section 7.1.8, in
-------------- -------------
form and substance reasonably satisfactory to the Agents, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time.
17
<PAGE>
"Net Casualty Proceeds" means, with respect to any Casualty Event, the
---------------------
gross amount of all insurance proceeds or condemnation awards received by the
Person suffering such Casualty Event as a result of such Casualty Event.
"Net Debt Proceeds" means, with respect to the incurrence, sale or issuance
-----------------
by the Parent or any of its Subsidiaries of any Debt (other than Debt permitted
by Section 7.2.2), the excess of:
------------- ------
(a) the gross cash proceeds received by such Person from such
incurrence, sale or issuance,
over
- ----
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements and all other reasonable fees, expenses
and charges, in each case actually incurred in connection with such
incurrence, sale or issuance, including any reasonable up-front fees and
expenses incurred in connection with any required Hedging Obligation;
provided such Hedging Obligation relates solely to the new Debt incurred
--------
pursuant to such incurrence, sale or issuance.
"Net Disposition Proceeds" means, with respect to any sale, transfer or
------------------------
other disposition of any assets of the Parent or any of its Subsidiaries (other
than any inventory sold in the ordinary course of such Person's business or as
permitted pursuant to clause (a) of Section 7.2.9), the excess of:
---------- ------------- ------
(a) the gross cash proceeds, including Net Casualty Proceeds,
received by such Person from any such sale, transfer or other disposition
and any cash payments received in respect of promissory notes or other non-
cash consideration delivered to such Person in respect thereof,
over
- ----
(b) the sum (without duplication) of (i) all reasonable and
customary fees and expenses with respect to legal, investment banking,
brokerage and accounting and other professional fees, sales commissions and
disbursements and all other reasonable fees, expenses and charges, in each
case actually incurred in connection with such sale, transfer or other
disposition, (ii) all taxes and other governmental costs and expenses
actually paid or estimated by the Parent or any of its Subsidiaries (in
good faith) to be payable in cash in connection with such sale, transfer or
other disposition (including any costs and expenses actually paid or
incurred relating to compliance with Environmental Laws), and (iii)
payments made by the Parent or any of its Subsidiaries to retire
Indebtedness (other
18
<PAGE>
than the Loans) of such Person where payment of such Indebtedness is
required in connection with such sale, transfer or other disposition;
provided, however, that if, after the payment of all taxes with respect to such
- -------- -------
sale, transfer or other disposition, the amount of estimated taxes, if any,
pursuant to clause (b)(ii) above exceeded the tax amount actually paid in cash
--------------
in respect of such sale, transfer or other disposition, the aggregate amount of
such excess shall be immediately payable, pursuant to clause (b) of Section
---------- -------
3.1.1, as Net Disposition Proceeds.
- -----
"Net Equity Proceeds" means, with respect to the sale or issuance by the
-------------------
Parent or any of its Subsidiaries to any Person of any of its Capital Stock or
any warrants or options with respect to its Capital Stock or the exercise of any
such warrants or options after the Restatement Effective Date (other than
pursuant to any subscription agreement, incentive plan or similar arrangement
with any officer, employee or director of the Parent or any of its Subsidiaries)
the excess of:
------
(a) the gross cash proceeds received from such sale, exercise or
issuance,
over
----
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements and all other reasonable fees, expenses
and charges, in each case actually incurred in connection with such sale or
issuance.
"Net Income" means, for any period, the aggregate of all amounts which, in
----------
accordance with GAAP, would be included as net income of the Parent and its
Subsidiaries for such period on a consolidated basis, including extraordinary
gains or losses.
"Net Worth" means the consolidated net worth of the Parent and its
---------
Subsidiaries, determined in accordance with GAAP.
"Non-U.S. Subsidiary" means any Subsidiary of the Parent other than a U.S.
-------------------
Subsidiary.
"Note" means, as the context may require, a Revolving Note or a Term Note.
----
"Obligations" means all obligations (monetary or otherwise) of the Parent,
-----------
the Borrowers and each other Obligor arising under or in connection with this
Agreement, any Rate Projection Agreement, the Notes, each Letter of Credit and
each other Loan Document.
"Obligor" means the Parent, each Borrower, any Guarantor or any other
-------
Person (other than any Agent, the Lead Arranger or any Lender) obligated under,
or otherwise a party to, any Loan Document.
19
<PAGE>
"Organic Document" means, relative to any Obligor, its certificate or
----------------
articles of incorporation or association, by-laws, certificate of partnership,
partnership agreement, certificate of formation, limited liability company
agreement and all other documents of a comparable nature and all shareholder
agreements, voting trusts and similar arrangements applicable to any of such
Obligor's partnership interests, limited liability company interests, or
authorized shares of Capital Stock or other ownership interests.
"Parent" is defined in the preamble.
------
"Parent Guaranty" means the Guaranty executed and delivered by the Parent
---------------
pursuant to Section 5.1.6, substantially in the form of Exhibit F-1 hereto, as
------------- -----------
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Parent Pledge Agreement" means the Pledge Agreement executed and delivered
-----------------------
by an Authorized Officer of the Parent pursuant to Section 5.1.7, substantially
-------------
in the form of Exhibit G-1 hereto, as amended, supplemented, amended and
-----------
restated or otherwise modified from time to time.
"Parent Security Agreement" means the Security Agreement executed and
-------------------------
delivered by the Parent pursuant to Section 5.1.8 or clause (a) of Section
------------- ---------- -------
7.1.7, substantially in the form of Exhibit H-1 hereto, in each case as amended,
-----------
supplemented, amended and restated or otherwise modified from time to time.
"Participant" is defined in Section 10.11.2.
----------- ---------------
"Patent Security Agreement" means any Patent Security Agreement executed
-------------------------
and delivered by an Obligor in substantially the form of Exhibit A to any
Security Agreement, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multi-
employer plan as defined in section 4001(a)(3) of ERISA), and to which any
Borrower or any of its Subsidiaries or any corporation, trade or business that
is, along with any Borrower or any of its Subsidiaries, a member of a Controlled
Group, may have liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
20
<PAGE>
"Percentage" means, relative to any Lender, the applicable percentage
----------
relating to the Commitment or the Loans, as the case may be, set forth opposite
its name on Schedule II hereto or set forth in the Lender Assignment Agreement,
-----------
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 10.11.
-------------
"Perfection Certificate" means the Perfection Certificate executed and
----------------------
delivered by an Authorized Officer of the Parent pursuant to Section 5.1.17,
--------------
substantially in the form of Exhibit L hereto, as amended, supplemented, amended
---------
and restated or otherwise modified from time to time.
"Permitted Liens" is defined in Section 7.2.3.
--------------- -------------
"Person" means any natural person, corporation, partnership, limited
------
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Pledge Agreement" means, as the context may require, the Parent Pledge
----------------
Agreement, the Borrowers Pledge Agreement and/or the Subsidiary Pledge
Agreement.
"Pro Forma Balance Sheet" is defined in clause (b) of Section 5.1.11.
----------------------- ---------- --------------
"Quarterly Payment Date" means the last day of each March, June, September
----------------------
and December, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing with March 31, 2000.
"Rate Protection Agreement" means, collectively, any interest rate swap,
-------------------------
cap, collar or similar agreement entered into by the Parent or any of its
Subsidiaries in respect of the Loans pursuant to the terms of this Agreement
under which the counterparty to such agreement is (or at the time such Rate
Protection Agreement was entered into, was) a Lender or an Affiliate of a
Lender.
"Register" is defined in clause (b)(i) of Section 2.6.
-------- ------------- -----------
"Reimbursement Obligation" is defined in Section 2.6.3.
------------------------ -------------
"Related Fund" means, with respect to any Lender which is a fund that
------------
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release" means a "release", as such term is defined in CERCLA.
-------
21
<PAGE>
"Required Lenders" means, at any time, (i) prior to the date of the making
----------------
of the initial Credit Extensions hereunder, Lenders having at least 51% of the
sum of the Commitments, and (ii) on and after the date of the initial Credit
Extension, Lenders holding at least 51% of the Total Exposure Amount.
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
-- ---
time.
"Restatement Effective Date" means the date when all of the conditions set
--------------------------
forth in Section 5.1 shall have been satisfied.
-----------
"Restatement Effective Date Certificate" means a certificate of an
--------------------------------------
Authorized Officer of the Parent substantially in the form of Exhibit D hereto,
---------
delivered pursuant to Section 5.1.4.
-------------
"Revolving Loan" is defined in clause (a)(i) of Section 2.1.2.
-------------- -------------- -------------
"Revolving Loan Commitment" is defined in clause (a)(i) of Section 2.1.2.
------------------------- ------------- -------------
"Revolving Loan Commitment Amount" means, on any date, $125,000,000, as
--------------------------------
such amount may be increased from time to time pursuant to clause (b) of Section
---------- -------
2.1.2 or reduced from time to time pursuant to Section 2.2.
- ----- -----------
"Revolving Loan Commitment Termination Date" means the earliest of (i)
------------------------------------------
January 31, 2000, if the Term Loans have not been made on or prior to such date,
(ii) the fifth anniversary of the Restatement Effective Date, (iii) the date on
which the Revolving Loan Commitment Amount is terminated in full or reduced to
zero pursuant to Section 2.2, and (iv) the date on which any Commitment
-----------
Termination Event occurs.
"Revolving Note" means a promissory note of any Borrower payable to any
--------------
Lender, substantially in the form of Exhibit A-1 hereto (as such promissory note
-----------
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of such Borrower to such Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"Rights Agreement" means the Rights Agreement, dated as of December 16,
----------------
1996, between Roberts and Continental Stock Transfer & Trust Company.
"Roberts" is defined in the preamble.
------- --------
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
---
Inc. or any successor thereto.
22
<PAGE>
"Secured Parties" means, collectively, the Lenders, the Agents and all
---------------
Affiliates of the Lenders which may be party to any Loan Document (including any
Rate Protection Agreement).
"Security Agreement" means, as the context may require, the Parent Security
------------------
Agreement, the Borrowers Security Agreement, and/or the Subsidiary Security
Agreement.
"Shire Laboratories" is defined in the preamble.
------------------ --------
"Shire Partners" is defined in the preamble.
-------------- --------
"Shire Richwood" is defined in the preamble.
-------------- --------
"Shire Supplies" is defined in the preamble.
-------------- --------
"Sole Book Runner" is defined in the preamble.
---------------- --------
"Solvency Certificate" means a certificate of the chief financial
--------------------
Authorized Officer of the Parent substantially in the form of Exhibit K hereto,
---------
delivered pursuant to Section 5.1.15.
--------------
"Solvent" means, with respect to any Person on a particular date, that on
-------
such date (i) the fair value of the property of such Person is greater than the
total amount of liabilities, including Contingent Liabilities, of such Person,
(ii) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, and
(iv) such Person is not engaged in business or a transaction, and such person is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
Contingent Liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"Stated Amount" of each Letter of Credit means the total amount available
-------------
to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.6.
------------------ -----------
"Stated Maturity Date" means, with respect to all Loans, the fifth
--------------------
anniversary of the Restatement Effective Date or, in the case such day is not a
Business Day, the first Business Day following such day.
23
<PAGE>
"Subsidiary" means, with respect to any Person, any corporation,
----------
partnership, limited liability company or other business entity of which more
than 50% of the outstanding Capital Stock (or other ownership interest) having
ordinary voting power to elect a majority of the board of directors, managers or
other voting members of the governing body of such entity (irrespective of
whether at the time Capital Stock or other ownership interest of any other class
or classes of such entity shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned by such Person,
by such Person and one or more other Subsidiaries of such Person, or by one or
more other Subsidiaries of such Person.
"Subsidiary Guaranty" means the Guaranty executed and delivered by each
-------------------
Guarantor (other than the Parent) pursuant to Section 5.1.6, substantially in
-------------
the form of Exhibit F-2 hereto, as amended, supplemented, amended and restated
-----------
or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means the Pledge Agreement executed and
---------------------------
delivered by each Guarantor (other than the Parent) pursuant to clause (c) of
----------
Section 5.1.7 or clause (b) of Section 7.1.7, substantially in the form of
- ------------- ----------- -------------
Exhibit G-3 hereto, in each case as amended, supplemented, amended and restated
- -----------
or otherwise modified from time to time.
"Subsidiary Security Agreement" means the Security Agreement executed and
-----------------------------
delivered by each Guarantor (other than the Parent) pursuant to Section 5.1.8
-------------
or clause (a) of Section 7.1.7, substantially in the form of Exhibit H-3 hereto,
---------- ------------- -----------
in each case as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Syndication Agent" is defined in the preamble.
----------------- --------
"Taxes" is defined in Section 4.6.
----- -----------
"Term Loan" is defined in of Section 2.1.1.
--------- -------------
"Term Loan Commitment" is defined in Section 2.1.1.
-------------------- -------------
"Term Loan Commitment Amount" means $125,000,000.
---------------------------
"Term Loan Commitment Termination Date" means the earliest of (i) January
-------------------------------------
31, 2000, if the Term Loans have not been made on or prior to such date, (ii)
the Restatement Effective Date (immediately after the making of the Term Loans
on such date), and (iii) the date on which any Commitment Termination Event
occurs.
"Term Note" means a promissory note of any Borrower payable to the order of
---------
any Lender, in the form of Exhibit A-2 hereto (as such promissory note may be
-----------
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower
24
<PAGE>
to such Lender resulting from outstanding Term Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Total Exposure Amount" means, on any date of determination, the then
---------------------
outstanding principal amount of all Term Loans and the then effective Revolving
Loan Commitment Amount or, in the event that the Revolving Loan Commitment shall
have expired or been terminated, the sum of the aggregate principal amount of
all Revolving Loans outstanding at such time and Letter of Credit Outstandings
at such time.
"Trademark Security Agreement" means any Trademark Security Agreement
----------------------------
executed and delivered by an Obligor in substantially the form of Exhibit B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Transaction" is defined in the third recital.
----------- -------------
"type" means, relative to any Loan, the portion thereof, if any, being
----
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
---
the State of New York.
"United States" or "U.S." means the United States of America, its fifty
------------- ----
States and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary of the Parent organized under the
---------------
laws of the United States or any state, possession or commonwealth thereof.
"Waiver" means any agreement in favor of the Administrative Agent for the
------
benefit of the Lenders waiving a "landlord's" (or similar) Lien which is
superior to the Administrative Agent's, in form and substance reasonably
satisfactory to the Administrative Agent.
"Welfare Plan" means a "welfare plan", as such term is defined in section
------------
3(1) of ERISA (other than a multi-employer plan as defined in Section 4001
(a)(3) of ERISA).
"wholly-owned Subsidiary" means, with respect to any Person, any Subsidiary
-----------------------
of such Person all of the Capital Stock (including all rights and options to
purchase such Capital Stock) of which, other than directors' qualifying shares,
are owned, beneficially and of record, by such Person and/or one or more wholly-
owned Subsidiaries of such Person.
SECTION I.2. Use of Defined Terms. Unless otherwise defined or the
--------------------
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion
25
<PAGE>
Notice, Loan Document, notice and other communication delivered from time to
time in connection with this Agreement or any other Loan Document.
SECTION I.3. Cross-References. Unless otherwise specified, references in
----------------
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION I.4. Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
--------------
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") as in
----
effect in the United States on September 30, 1999.
SECTION I.5. Use of the Term "Borrower". Whenever the term "the
--------------------------
Borrowers" is used in this Agreement, such term shall be interpreted and
construed as a collective reference to Shire Partners, Shire Laboratories, Shire
Richwood, Shire Supplies and Roberts and their respective successors and
assigns, in their respective capacities as joint and several borrowers under
this Agreement. Each of Shire Partners, Shire Laboratories, Shire Richwood,
Shire Supplies and Roberts hereby agrees that it shall be liable, on a joint and
several basis, for all obligations and liabilities, of whatsoever nature or
kind, of "the Borrowers" under this Agreement. Whenever the terms "each
Borrower", "either Borrower", "the relevant Borrower", "any Borrower" and
similar terms denoting the existence of multiple borrowers in respect of the
Loans hereunder are used in this Agreement, such terms shall be interpreted and
construed as individual references to each of Shire Partners, Shire
Laboratories, Shire Richwood, Shire Supplies and Roberts and their respective
successors and assigns, in their respective capacities as joint and several
borrowers under this Agreement.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION II.1. Commitments. On the terms and subject to the conditions of
-----------
this Agreement (including Sections 2.1.4, 2.1.5 and Article V),
-------------- ----- ---------
(a) each Lender severally agrees to make Loans pursuant to the
Commitments, as described in this Section 2.1; and
-----------
26
<PAGE>
(b) each Issuer severally agrees that it will issue Letters of
Credit pursuant to Section 2.1.3, and each other Lender that has a
-------------
Revolving Loan Commitment severally agrees that it will purchase
participation interests in such Letters of Credit pursuant to Section
-------
2.6.1.
SECTION II.1.1. Term Loan Commitment. Subject to compliance by the
--------------------
Borrowers with the terms of Sections 2.1.4, 5.1 and 5.2, on (but solely on) the
-------------- --- ---
Restatement Effective Date (which shall be a Business Day), each Lender that has
a Percentage in excess of zero of the Term Loan Commitment will make loans
(relative to such Lender, its "Term Loans") to the Borrowers equal to such
----------
Lender's Percentage of the aggregate amount of the Borrowing or Borrowings of
Term Loans requested by any Borrower to be made on the Restatement Effective
Date (with the commitment of each such Lender described in this Section 2.1.1
-------------
herein referred to as its "Term Loan Commitment"). No amounts paid or prepaid
--------------------
with respect to Term Loans may be reborrowed.
SECTION II.1.2. Revolving Loan Commitment.
-------------------------
(a) Subject to compliance by the Borrowers with the terms of Section
-------
2.1.4, 5.1 and 5.2, from time to time on any Business Day occurring
----- --- ---
concurrently with (or after) the making of the Term Loans but prior to the
Revolving Loan Commitment Termination Date, each Lender that has a
Percentage of the Revolving Loan Commitment in excess of zero will make
loans (relative to such Lender, its "Revolving Loans") to the Borrowers
---------------
equal to such Lender's Percentage of the aggregate amount of the Borrowing
or Borrowings of Revolving Loans requested by any Borrower to be made on
such day. The Commitment of each Lender described in this clause (a) is
------ ---
herein referred to as its "Revolving Loan Commitment." On the terms and
-------------------------
subject to the conditions hereof, the Borrowers may from time to time
borrow, prepay and reborrow Revolving Loans.
(b) At any time after the Restatement Effective Date but prior to
the Revolving Loan Commitment Termination Date, and so long as no Default
has occurred and is continuing, the Borrowers may notify the Agents that
the Borrowers are requesting that, on the terms and subject to the
conditions contained in this Agreement, the Lenders and/or other lenders
not then a party to this Agreement provide up to an aggregate amount of
$50,000,000 in additional Revolving Loan Commitments. Upon receipt of such
notice, the Syndication Agent shall use its best commercially reasonable
efforts to arrange for the Lenders or other financial institutions to
provide such additional Revolving Loan Commitments; provided that the
--------
Syndication Agent will first offer each of the Lenders that then has a
Percentage of the Revolving Loan Commitment a pro rata portion of any such
additional Revolving Loan Commitment. Alternatively, any Lender may commit
to provide the full amount of the requested additional Revolving Loan
Commitment and then offer portions of such additional Revolving Loan
Commitment to the other Lenders or other financial institutions, subject to
the proviso to the immediately preceding sentence.
27
<PAGE>
Nothing contained in this clause (b) or otherwise in this Agreement is
----------
intended to commit any Lender or any Agent to provide any portion of any
such additional Revolving Loan Commitments. If and to the extent that any
Lenders and/or other lenders agree, in their sole discretion, to provide
any such additional Revolving Loan Commitments, (i) the Revolving Loan
Commitment Amount shall be increased by the amount of the additional
Revolving Loan Commitments agreed to be so provided, (ii) the Percentages
of the respective Lenders in respect of the Revolving Loan Commitment shall
be proportionally adjusted, (iii) at such time and in such manner as the
Borrowers and the Syndication Agent shall agree (it being understood that
the Borrowers and the Agents will use their best commercially reasonable
efforts to avoid the prepayment or assignment of any LIBO Rate Loan on a
day other than the last day of the Interest Period applicable thereto), the
Lenders shall assign and assume outstanding Revolving Loans and
participations in outstanding Letters of Credit so as to cause the amounts
of such Revolving Loans and participations in Letters of Credit held by
each Lender to conform to the respective Percentages of the Revolving Loan
Commitment of the Lenders and (iv) the Borrowers shall execute and deliver
any additional Notes or other amendments or modifications to this Agreement
or any other Loan Document as the Agents may reasonably request.
SECTION II.1.3. Letter of Credit Commitment. Subject to compliance by the
---------------------------
Borrower with the terms of Section 2.1.4, 5.1 and 5.2, from time to time on any
------------- --- ---
Business Day occurring concurrently with (or after) the Restatement Effective
Date but prior to the Revolving Loan Commitment Termination Date, the Issuer
will
(a) issue one or more standby or commercial letters of credit (each
referred to as a "Letter of Credit") for the account of any Borrower in the
----------------
Stated Amount requested by any Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby or
commercial Letter of Credit previously issued hereunder to a date not later
than the earlier of (x) the fifth anniversary of the Restatement Effective
Date and (y) one year from the date of such extension.
SECTION II.1.4. Lenders Not Permitted or Required To Make Loans. No Lender
-----------------------------------------------
shall be permitted or required to, and no Borrower shall request any Lender to,
make
(a) any Term Loan if, after giving effect thereto, the aggregate
original principal amount of the Term Loans of such Lender would exceed
such Lender's Percentage of the Term Loan Commitment Amount; or
(b) any Revolving Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all the Revolving Loans of such
Lender, together with such Lender's
28
<PAGE>
Percentage of the aggregate amount of all Letter of Credit Outstandings,
would exceed such Lender's Percentage of the Revolving Loan Commitment
Amount.
SECTION II.1.5. Issuer Not Permitted or Required to Issue Letters of
----------------------------------------------------
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
- ------
if, after giving effect thereto, (a) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount or (b)
the sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Revolving Loans then outstanding would exceed
the Revolving Loan Commitment Amount.
SECTION II.2. Reduction of the Commitment Amounts. The Commitment Amounts
-----------------------------------
are subject to reductions from time to time pursuant to this Section 2.2.
SECTION II.2.1. Optional. The Borrowers may, from time to time on any
--------
Business Day occurring after the time of the initial Credit Extension hereunder,
voluntarily reduce the Revolving Loan Commitment Amount; provided, however, that
-------- -------
all such reductions shall require at least one Business Day's prior notice to
the Administrative Agent and shall be permanent, and any partial reduction of
any Commitment Amount shall be in an aggregate amount of $1,000,000 or any
larger integral multiple of $500,000. Any such reduction of the Revolving Loan
Commitment Amount which reduces the Revolving Loan Commitment Amount below the
Letter of Credit Commitment Amount shall result in an automatic reduction of the
Letter of Credit Commitment Amount, to an aggregate amount equal to the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of the Issuer.
SECTION II.2.2. Mandatory. Following the prepayment in full of the Term
---------
Loans, the Revolving Loan Commitment Amount shall, without any further action,
automatically and permanently be reduced on the date the Term Loans would
otherwise have been required to be prepaid on account of any Net Disposition
Proceeds, Net Debt Proceeds, Net Equity Proceeds or Casualty Proceeds, in an
amount equal to the amount by which the Term Loans would otherwise have been
required to be prepaid if Term Loans had been outstanding. Any such reduction
of the Revolving Loan Commitment Amount which reduces the Revolving Loan
Commitment Amount below the Letter of Credit Commitment Amount shall result in
an automatic reduction of the Letter of Credit Commitment Amount to an aggregate
amount equal to the Revolving Loan Commitment Amount, as so reduced, without any
further action on the part of the Issuer.
SECTION II.3. Borrowing Procedures and Funding Maintenance. By delivering
--------------------------------------------
a Borrowing Request to the Administrative Agent on or before 12:00 noon, New
York time, on a Business Day, the Borrower may from time to time irrevocably
request, on not less than one Business Day's notice (in the case of Base Rate
Loans) or two Business Days' notice (in the case of LIBO Rate Loans) but no more
than ten Business Days' notice (in the case of any Loans), that a Borrowing be
made in an aggregate amount of $500,000 or any larger integral multiple of
$100,000, or in the unused amount of the applicable Commitment. No Borrowing
Request shall
29
<PAGE>
be required, and the minimum aggregate amounts specified under this Section 2.3
-----------
shall not apply, in the case of Revolving Loans deemed made under Section 2.6.2
-------------
in respect of unreimbursed Disbursements. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day, specified in such Borrowing
Request. On or before 11:00 a.m., New York time, on such Business Day each
Lender shall deposit with the Administrative Agent same day funds in an amount
equal to such Lender's Percentage of the requested Borrowing. Such deposit will
be made to an account which the Administrative Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, the Administrative Agent shall make such funds immediately available to
the Borrower requesting such Loan by wire transfer to the accounts such Borrower
shall have specified in its Borrowing Request. No Lender's obligation to make
any Loan shall be affected by any other Lender's failure to make any Loan.
SECTION II.4. Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one (in the case of a conversion of LIBO
Rate Loans to Base Rate Loans) and two (in the case of a continuation of LIBO
Rate Loans or a conversion of Base Rate Loans into LIBO Rate Loans) nor more
than (in each case) ten Business Days' notice that all, or any portion in an
aggregate minimum amount of $500,000 and an integral multiple of $100,000, be,
in the case of Base Rate Loans, converted into LIBO Rate Loans or, in the case
of LIBO Rate Loans, be converted into a Base Rate Loan or continued as a LIBO
Rate Loan (in the absence of delivery of a Continuation/ Conversion Notice with
respect to any LIBO Rate Loan at least two Business Days before the last day of
the then current Interest Period with respect thereto, such LIBO Rate Loan
shall, on such last day, automatically convert to a Base Rate Loan); provided,
--------
however, that (x) each such conversion or continuation shall be pro rated among
- -------
the applicable outstanding Loans of the relevant Lenders, and (y) no portion of
the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION II.5. Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan, so long as such
action does not result in increased costs to the Borrower; provided, however,
-------- -------
that such LIBO Rate Loan shall nonetheless be deemed to have been made and to be
held by such Lender, and the obligation of the Borrower to repay such LIBO Rate
Loan shall nevertheless be to such Lender for the account of such foreign
branch, Affiliate or international banking facility. In addition, the Borrower
hereby consents and agrees that, for purposes of any determination to be made
for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed
----------- --- --- ---
that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar
deposits in its LIBOR Office's interbank Eurodollar market.
30
<PAGE>
SECTION II.6. Issuance Procedures. By delivering to the Administrative
-------------------
Agent an Issuance Request on or before 10:00 a.m., New York time, on a Business
Day, any Borrower may from time to time irrevocably request on not less than
three nor more than ten Business Days' notice, in the case of an initial
issuance of a Letter of Credit and not less than three Business Days' prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit, that the Issuer issue, or extend the Stated Expiry
Date of, as the case may be, an irrevocable Letter of Credit in such form as may
be requested by the Borrower and approved by the Issuer, solely for the purposes
described in Section 7.1.9. Each Letter of Credit (including any Letter of
-------------
Credit which has had its Stated Expiry Date extended) shall by its terms be
stated to expire on a date (its "Stated Expiry Date") no later than the earlier
------------------
to occur of (i) the Revolving Loan Commitment Termination Date or (ii) (unless
otherwise agreed to by the Issuer, in its sole discretion) one year from the
date of its issuance or the extension of its Stated Expiry Date. The Issuer
will make available to the beneficiary thereof the original of the Letter of
Credit which it issues hereunder.
SECTION II.6.1. Other Lenders' Participation. Upon the issuance of each
----------------------------
Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender (other than such Issuer) that has a Revolving Loan
Commitment shall be deemed to have irrevocably purchased from such Issuer, to
the extent of its Percentage in respect of the Revolving Loan Commitments, and
such Issuer shall be deemed to have irrevocably granted and sold to such Lender,
a participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation with respect thereto), and such
Lender shall, to the extent of its Percentage in respect of the Revolving Loan
Commitments, be responsible for reimbursing promptly (and in any event within
one Business Day) the Issuer for Reimbursement Obligations in accordance with
Section 2.6.3. In addition, such Lender shall, to the extent of its Percentage
- -------------
in respect of the Revolving Loan Commitments, be entitled to receive a ratable
portion of the Letter of Credit fees payable pursuant to Section 3.3.3 with
-------------
respect to each Letter of Credit (other than the issuance fees payable to an
Issuer of such Letter of Credit pursuant to the last sentence of Section 3.3.3)
-------------
and of interest payable pursuant to Section 3.2 with respect to any
-----------
Reimbursement Obligation. To the extent that any Lender has reimbursed the
Issuer for a Disbursement, such Lender shall be entitled to receive its ratable
portion of any amounts subsequently received (from the Borrowers or otherwise)
in respect of such Disbursement.
SECTION II.6.2. Disbursements; Conversion to Revolving Loans. The Issuer
--------------------------------------------
will notify the Parent, the Borrowers and the Administrative Agent promptly of
the presentment for payment of any Letter of Credit issued by the Issuer,
together with notice of the date (the "Disbursement Date") such payment shall be
-----------------
made (each such payment, a "Disbursement"). Subject to the terms and provisions
------------
of such Letter of Credit and this Agreement, the Issuer shall make such payment
to the beneficiary (or its designee) of such Letter of Credit. The amount of
each Disbursement shall (unless an Event of Default of the type described in
Section 8.1.9 shall have occurred and be continuing, in which case the
- -------------
procedures specified in Section 2.6.4 shall apply) be deemed to be a request by
-------------
the applicable Borrower to the Administrative Agent for a Borrowing of Revolving
31
<PAGE>
Loans pursuant to Section 2.3 in the amount of such Disbursement, and, following
-----------
the giving of notice thereof by the Administrative Agent to the Lenders, each
Lender with a Revolving Loan Commitment (other than the Issuer) will deliver to
such Issuer on the first Business Day following the Disbursement Date
immediately available funds in an amount equal to such Lender's Percentage of
such Borrowing.
SECTION II.6.3. Reimbursement. The obligation (a "Reimbursement
------------- -------------
Obligation") of the Borrowers under Section 2.6.2 to reimburse the Issuer with
-------------
respect to each Disbursement (including interest thereon), not converted into a
Revolving Loan pursuant to Section 2.6.2, and each Lender's (to the extent it
-------------
has a Revolving Loan Commitment) obligation under Section 2.6.2 to fund its
-------------
Percentage of any Disbursement converted into a Revolving Loan, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrowers or such
Lender, as the case may be, may have or have had against the Issuer or any
Lender, including any defense based upon the failure of any Disbursement to
conform to the terms of the applicable Letter of Credit (if, in such Issuer's
good faith opinion, such Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
Letter of Credit; provided, however, that after paying in full its Reimbursement
-------- -------
Obligation hereunder, nothing herein shall adversely affect the right of the
Borrowers or such Lender, as the case may be, to commence any proceeding against
the Issuer for any wrongful Disbursement made by the Issuer under a Letter of
Credit as a result of acts or omissions constituting gross negligence or wilful
misconduct on the part of such Issuer.
SECTION II.6.4. Deemed Disbursements. Upon the occurrence and during the
--------------------
continuation of an Event of Default under Section 8.1.9 or, with notice from the
-------------
Administrative Agent acting at the direction of the Required Lenders, upon the
occurrence and during the continuation of any other Event of Default, (i) an
amount equal to that portion of all Letters of Credit Outstandings attributable
to the then aggregate amount which is undrawn and available under all Letters of
Credit issued and outstanding shall, without demand upon or notice to the
Borrowers or any other Person, be deemed to have been paid or disbursed by the
Issuer under such Letters of Credit (notwithstanding that such amount may not in
fact have been paid or disbursed), and (ii) the Borrowers shall be immediately
obligated to reimburse the Issuer for the amount deemed to have been so paid or
disbursed by such Issuer. Amounts payable by the Borrowers pursuant to this
Section shall be deposited in cash in immediately available funds with the
Administrative Agent and held as collateral security for the Reimbursement
Obligations. At such time as the Events of Default giving rise to the deemed
disbursements under this Section have been cured or waived, the Administrative
Agent shall return to the Borrowers all amounts then on deposit with the
Administrative Agent pursuant to this Section, together with accrued interest at
the Federal Funds Rate, which have not been applied to the satisfaction of the
Reimbursement Obligations.
32
<PAGE>
SECTION II.6.5. Nature of Reimbursement Obligations. The Borrowers and, to
-----------------------------------
the extent set forth in Section 2.6.1, each Lender with a Revolving Loan
-------------
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. No Issuer (except to the extent of
its own gross negligence or wilful misconduct) shall be responsible for (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter
of Credit or any document submitted by any party in connection with the
application for an issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged, (ii) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or the proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason, (iii) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit, (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, or (v) any loss or delay in the
transmission or otherwise of any document or draft required in order to make a
Disbursement under a Letter of Credit. None of the foregoing shall affect,
impair or prevent the vesting of any of the rights or powers granted to any
Issuer or any Lender with a Revolving Loan Commitment hereunder. In furtherance
and not in limitation or derogation of any of the foregoing, any action taken or
omitted to be taken by an Issuer in good faith (and not constituting gross
negligence or wilful misconduct) shall be binding upon the Borrowers, each
Obligor and each such Lender, and shall not put such Issuer under any resulting
liability to the Borrowers, any Obligor or any Lender, as the case may be.
SECTION II.7. Registered Notes.
----------------
(a) Each Lender may maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder. In the case of a Lender that does not
request, pursuant to clause (b)(ii) below, execution and delivery of a Note
--------------
evidencing the Loans made by such Lender to the Borrowers, such account or
accounts shall, to the extent not inconsistent with the notations made by
the Administrative Agent in the Register, be conclusive and binding on the
Borrowers absent manifest error; provided, however, that the failure of any
-------- -------
Lender to maintain such account or accounts shall not limit or otherwise
affect any Loan Obligations of the Borrowers or any other Obligor.
(b)(i) The Borrowers hereby designate the Administrative Agent to
serve as the Borrowers' agent, solely for the purpose of this clause (b),
----------
to maintain a register (the "Register") on which the Administrative Agent
--------
will record each Lender's Commitment, the Loans made by each Lender and
each repayment in respect of the principal amount of the Loans of each
Lender and annexed to which the Administrative Agent shall retain a copy of
each Lender Assignment Agreement delivered to the Administrative Agent
pursuant to Section 10.11.1. Failure to make any recordation, or any error
---------------
in such
33
<PAGE>
recordation, shall not affect the Borrowers' obligation in respect of such
Loans. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrowers, the Administrative Agent and the Lenders
shall treat each Person in whose name a Loan (and as provided in clause
------
(ii) the Note evidencing such Loan, if any) is registered as the owner
----
thereof for all purposes of this Agreement, notwithstanding notice or any
provision herein to the contrary. A Lender's Commitment and the Loans made
pursuant thereto may be assigned or otherwise transferred in whole or in
part only by registration of such assignment or transfer in the Register.
Any assignment or transfer of a Lender's Commitment or the Loans made
pursuant thereto shall be registered in the Register only upon delivery to
the Administrative Agent of a Lender Assignment Agreement duly executed by
the Assignor thereof. No assignment or transfer of a Lender's Commitment or
the Loans made pursuant thereto shall be effective unless such assignment
or transfer shall have been recorded in the Register by the Administrative
Agent as provided in this Section.
(ii) The Borrowers agree that, upon the request to the Administrative
Agent by any Lender, the Borrowers will execute and deliver to such Lender,
as applicable, a Note evidencing the Loans made by such Lender. The
Borrowers hereby irrevocably authorize each Lender to make (or cause to be
made) appropriate notations on the grid attached to such Lender's Notes
(or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of the outstanding principal amount of, and
----- ----
the interest rate and Interest Period applicable to the Loans evidenced
thereby. Such notations shall, to the extent not inconsistent with the
notations made by the Administrative Agent in the Register, be conclusive
and binding on the Borrowers absent manifest error; provided, however, that
-------- -------
the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrowers or any other Obligor.
The Loans evidenced by any such Note and interest thereon shall at all
times (including after assignment pursuant to Section 10.11.1) be
---------------
represented by one or more Notes payable to the order of the payee named
therein and its registered assigns. Subject to the provisions of Section
-------
10.11.1, a Note and the obligation evidenced thereby may be assigned or
-------
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby
in the Register (and each Note shall expressly so provide). Any assignment
or transfer of all or part of an obligation evidenced by a Note shall be
registered in the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such obligation, accompanied
by a Lender Assignment Agreement duly executed by the assignor thereof, and
thereupon, if requested by the assignee, one or more new Notes shall be
issued to the designated assignee and the old Note shall be returned by
the Administrative Agent to the Borrowers marked "exchanged." No
assignment of a Note and the obligation evidenced thereby shall be
effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
34
<PAGE>
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION III.1. Repayments and Prepayments; Application.
---------------------------------------
SECTION III.1.1. Repayments and Prepayments. Each Borrower shall repay in
--------------------------
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, payments and prepayments of Loans shall or may be made
as set forth below.
(a) From time to time on any Business Day, a Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided, however, that
-------- -------
(i) any such prepayment shall be made pro rata among Loans
--- ----
of the same type and, if applicable, having the same Interest
Period among all Lenders that have made such Loans;
(ii) each Borrower shall comply with Section 4.4 in the
-----------
event that any LIBO Rate Loan is prepaid on any day other than
the last day of the Interest Period for such Loan;
(iii) all such voluntary prepayments shall require at least
one Business Day's notice, in the case of Base Rate Loans, two
Business Days' notice in the case of LIBO Rate Loans, but no more
than ten Business Days' notice in the case of any Loans, in each
case in writing to the Administrative Agent; and
(iv) all such voluntary prepayments shall be in an aggregate
minimum amount of $500,000 or any larger integral multiple of
$100,000 or in the aggregate principal amount of all Loans of the
type then outstanding.
(b) No later than one Business Day following the receipt of any Net
Disposition Proceeds or Net Debt Proceeds by the Parent or any of its
Subsidiaries (including the Borrowers), the Parent shall deliver to the
Administrative Agent a calculation of the amount of such Net Disposition
Proceeds or Net Debt Proceeds, as the case may be, and, to the extent the
amount of such Net Disposition Proceeds equal or exceeds $20,000,000 during
any Fiscal Year, or the amount of such Net Debt Proceeds exceeds $5,000,000
in any single transaction or series of related transactions, make or cause
to be made a mandatory prepayment of the Loans in an amount equal to 100%
of such Net Disposition Proceeds or Net Debt Proceeds, as the case may be,
to be applied as set forth in Section
-------
35
<PAGE>
3.1.2; provided, that no such mandatory prepayment on account of such Net
----- --------
Disposition Proceeds shall be required under this clause (b) if (i) the
----------
Parent notifies the Agents no later than 30 days following the receipt of
any Net Disposition Proceeds of its or the Borrowers' good faith intention
to apply such Net Disposition Proceeds to the acquisition of replacement
assets useful in the business of the Borrowers and their Subsidiaries and
(ii) the Borrowers or their Subsidiaries in fact so uses such Net
Disposition Proceeds within 360 days following the receipt of such Net
Disposition Proceeds, with the amount of such Net Disposition Proceeds
unused after such 360-day period being applied to prepay the Loans as set
forth in Section 3.1.2.
-------------
(c) Concurrently with the consummation of any transaction giving
rise to any Net Equity Proceeds, the Parent shall deliver to the
Administrative Agent a calculation of the amount of such Net Equity
Proceeds, and no later than one Business Day following the delivery of such
calculation, to the extent that the amount of such Net Equity Proceeds
exceeds $5,000,000 in any single transaction or series of related
transactions over the term of this Agreement, make or cause to be made a
mandatory prepayment of the Loans in an amount equal to 50% of such Net
Equity Proceeds to be applied as set forth in Section 3.1.2; provided,
------------- --------
however, that no such prepayment shall be required to be made beyond the
-------
extent that the amount of Debt as reduced by giving effect to such
prepayment would result, on a pro forma basis, in a Leverage Ratio of
2.00:1.00 or less as of the end of the immediately preceding Fiscal
Quarter.
(d) On each date when any reduction in the Revolving Loan Commitment
Amount shall become effective, including pursuant to Section 2.2, the
-----------
Parent or a Borrower, as the case may be, shall make a mandatory prepayment
of Revolving Loans and (if necessary) deposit with the Administrative Agent
cash collateral for Letter of Credit Outstandings, in an aggregate amount
equal to the excess, if any, of the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and (ii) the aggregate amount of
all Letter of Credit Outstandings over the Revolving Loan Commitment Amount
as so reduced.
(e) Immediately upon any acceleration of the Stated Maturity Date of
any Loans or Obligations pursuant to Section 8.2 or Section 8.3, the
----------- -----------
Borrowers shall repay all Loans and Obligations, unless, pursuant to
Section 8.3, only a portion of all Loans and Obligations are so accelerated
-----------
(in which case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No prepayment of
-----------
principal of any Revolving Loans pursuant to clause (a) of this Section 3.1.1
---------- -------------
shall cause a reduction in the Revolving Loan Commitment Amount.
36
<PAGE>
SECTION III.1.2. Application.
-----------
(a) Subject to clause (b) below, each prepayment or repayment of the
----------
principal of the Loans shall be applied, to the extent of such prepayment
or repayment, first, to the principal amount thereof being maintained as
-----
Base Rate Loans, and second, to the principal amount thereof being
------
maintained as LIBO Rate Loans; provided, that prepayments or repayments of
--------
LIBO Rate Loans not made on the last day of the applicable Interest Period
with respect thereto, shall be prepaid or repaid subject to the provisions
of Section 4.4 (together with a payment of all accrued interest).
-----------
(b) Each prepayment of Loans made pursuant to clauses (b) and (c) of
----------- ---
Section 3.1.1 shall be applied, to the extent of such prepayment, on a pro
------------- ---
rata basis, first, to the outstanding principal amount of Term Loans, until
---- -----
all Term Loans have been paid in full, and second, to a permanent reduction
------
in the Revolving Loan Commitment Amount.
SECTION III.2. Interest Provisions. Interest on the outstanding principal
-------------------
amount of the Loans shall accrue and be payable in accordance with this Section
-------
3.2.
- ---
SECTION III.2.1. Rates.
-----
(a) Each Base Rate Loan shall accrue interest on the unpaid
principal amount thereof for each day from and including the day upon which
such Loan was made or converted to a Base Rate Loan to but excluding the
date such Loan is repaid or converted to a LIBO Rate Loan at a rate per
annum equal to the sum of the Alternate Base Rate for such day plus the
Applicable Margin for such Loan on such day.
(b) Each LIBO Rate Loan shall accrue interest on the unpaid
principal amount thereof for each day during each Interest Period
applicable thereto at a rate per annum equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin for
such Loan on such day.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION III.2.2. Post-Maturity Rates. After the date any principal amount
-------------------
of any Loan shall have become due and payable (whether on the applicable Stated
Maturity Date, upon acceleration or otherwise), or any other monetary Obligation
(other than overdue Reimbursement Obligations which shall bear interest as
provided in Section 2.6.2) of any Borrower shall have become due and payable,
-------------
such Borrower shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per annum equal to
the rate that would otherwise be applicable to Base Rate Loans pursuant to
Section 3.2.1 plus 2%.
- -------------
37
<PAGE>
SECTION III.2.3. Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:
(a) on the Stated Maturity Date;
(b) in the case of a LIBO Rate Loan, on the date of any payment or
prepayment, in whole or in part, of principal outstanding on such Loan, to
the extent of the unpaid interest accrued through such date on the
principal so paid or prepaid;
(c) with respect to Base Rate Loans, on the last day of each
calendar month (or, if any such day is not a Business Day, the next
succeeding Business Day) occurring after the Restatement Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the third month anniversary of such Interest Period);
(e) with respect to the principal amount of any Base Rate Loans
converted into LIBO Rate Loans on a day when interest would not otherwise
have been payable pursuant to clause (c), on the date of such conversion;
----------
and
(f) on that portion of any Loans the Stated Maturity Date of which
is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon
----------- -----------
such acceleration.
Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION III.3. Fees. The Borrowers agree to pay the fees set forth in this
----
Section 3.3. All such fees shall be non-refundable.
- -----------
SECTION III.3.1. Commitment Fee. Each Borrower agrees to pay to the
--------------
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for each day during the period (including any portion thereof when
any of the Lenders' Revolving Loan Commitments are suspended by reason of any
Borrower's inability to satisfy any condition of Article V) commencing on the
---------
Restatement Effective Date and continuing to but excluding the Revolving Loan
Commitment Termination Date, a commitment fee on such Lender's Percentage of the
unused portion, whether or not then available, of the Revolving Loan Commitment
Amount (net of Letter of Credit Outstandings) for such day at a rate per annum
equal to the Applicable Commitment Fee for such day. Such commitment fees shall
be payable by the Borrowers in
38
<PAGE>
arrears on each Quarterly Payment Date, commencing with the first such day
following the Restatement Effective Date, and on the Revolving Loan Commitment
Termination Date. Any term or provision hereof to the contrary notwithstanding,
commitment fees payable for any period prior to the Restatement Effective Date
shall be payable in accordance with the Fee Letter.
SECTION III.3.2. Administrative Agent Fee. The Borrower agrees to pay an
------------------------
annual administration fee to the Administrative Agent, for its own account, in
the amount set forth in the Fee Letter, payable in advance on the Restatement
Effective Date and annually thereafter.
SECTION III.3.3. Letter of Credit Fee. Each Borrower agrees to pay to the
--------------------
Administrative Agent, for the pro rata account of the Issuer and each other
--- ----
Lender that has a Revolving Loan Commitment, a Letter of Credit fee for each day
on which there shall be any Letters of Credit outstanding on the aggregate
undrawn amount of all Letters of Credit outstanding on such day, at a rate per
annum equal to the Applicable Margin for such day for Revolving Loans that are
maintained as LIBO Rate Loans. Each Borrower further agrees to pay to the
Issuer for its own account an issuance fee in an amount equal to .125%
multiplied by the Stated Amount of each such Letter of Credit. All such fees
- ---------- --
shall be payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Commitment Termination Date.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION IV.1. LIBO Rate Lending Unlawful. If any Lender shall determine
--------------------------
(which determination shall, upon notice thereof to the Parent and the Lenders,
be conclusive and binding on the Parent) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate
Loan of a certain type, the obligations of all Lenders to make, continue,
maintain or convert into any such Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify the Administrative Agent
that the circumstances causing such suspension no longer exist, and all LIBO
Rate Loans of such type shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION IV.2. Deposits Unavailable. If the Administrative Agent shall have
--------------------
reasonably determined that (i) Dollar deposits in the relevant amount and for
the relevant Interest Period are not available to the Administrative Agent in
its relevant market, or (ii) by reason of circumstances affecting the
Administrative Agent's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Loans of such
type, then, upon notice from the Administrative Agent to the Parent and the
Lenders, the obligations of all Lenders under
39
<PAGE>
Section 2.3 and Section 2.4 to make or continue any Loans as, or to convert any
- ----------- -----------
Loans into, LIBO Rate Loans of such type shall forthwith be suspended until the
Administrative Agent shall notify the Parent and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION IV.3. Increased LIBO Rate Loan Costs, etc. Each Borrower agrees to
------------------------------------
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans (except for any increased capital costs and Taxes
which are governed by Sections 4.5 and 4.6, respectively) that arise in
------------ ---
connection with any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the date hereof of, any law
or regulation, directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other governmental
authority. Such Lender shall promptly notify the Administrative Agent and the
Parent in writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required fully
to compensate such Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION IV.4. Funding Losses. In the event any Lender shall incur any loss
--------------
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of (i) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Section 3.1 or
-----------
otherwise, (ii) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor, or (iii) any Loans not being continued as, or
converted into, LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor, then, upon the written notice of such Lender to the Parent
(with a copy to the Administrative Agent), the Borrower shall pay, within five
days of its receipt thereof, directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION IV.5. Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in good faith but in its discretion)
that the rate of return on its or such
40
<PAGE>
controlling Person's capital as a consequence of its Commitments, participation
in Letters of Credit or the Loans made by such Lender is reduced to a level
below that which such Lender or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such case upon notice
from time to time by such Lender to the Parent, the Borrowers shall immediately
pay directly to such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of return. A
statement of such Lender as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrowers. In determining such amount,
such Lender may use any method of averaging and attribution that it (in its sole
and absolute discretion) shall deem applicable.
SECTION IV.6. Taxes. (a) All payments by a Borrower of principal of, and
-----
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future withholding
taxes of any nature whatsoever imposed by any taxing authority, but excluding
franchise taxes and taxes imposed on or measured by any Lender's net income or
receipts (such non-excluded items being called "Taxes"). In the event that any
-----
withholding or deduction from any payment to be made by a Borrower hereunder is
required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrowers shall be obligated to (i) pay directly to the
relevant authority the full amount required to be so withheld or deducted, (ii)
promptly forward to the Administrative Agent an official receipt or other
documentation satisfactory to the Administrative Agent evidencing such payment
to such authority, and (iii) pay to the Administrative Agent for the account of
the Lenders such additional amount or amounts as is necessary to ensure that the
net amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any Agent or any Lender
with respect to any payment received by any such Agent or such Lender hereunder,
such Agent or such Lender may pay such Taxes and the Borrowers shall promptly
pay such additional amounts (including any penalties, interest or expenses) as
is necessary in order that the net amount received by such person after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such person would have received had not such Taxes been
asserted.
(b) If the Borrowers fail to pay any Taxes when due to the appropriate
taxing authority or fail to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, the Borrowers shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 4.6, a distribution hereunder by the
-----------
Administrative Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Borrowers.
(c) Upon the request of the Parent, each Lender that is organized under a
jurisdiction other than the United States, shall, prior to the due date of any
payments under the Notes, execute and deliver to the Parent and the
Administrative Agent, one or more (as the Parent or the Administrative Agent may
reasonably request) United States Internal Revenue Service Form
41
<PAGE>
1001, 4224 or W-8 or successor applicable form, as the case may be, and copies
of replacements of any such forms on or before the date that any such forms
expire or after the occurrence of any event requiring a change in the most
recent form previously delivered by it hereunder. Each Person that shall become
a Lender shall, upon the effectiveness of the related transfer, be required to
provide all of the forms required pursuant to this Section 4.6.
-----------
(d) If any Lender (a "Subject Lender") makes demand upon the Parent for
--------------
amounts in respect of Taxes pursuant to this Section 4.6, the Parent may, within
-----------
90 days of receipt by the Parent of such demand, give notice (a "Replacement
-----------
Notice") in writing to the Agents and such Subject Lender of its intention to
- ------
replace such Subject Lender with a financial institution (a "Replacement
-----------
Lender") designated in such Replacement Notice. If the Agents shall, in the
- ------
exercise of their reasonable discretion and within 30 days of their receipt of
such Replacement Notice, notify the Parent and such Subject Lender in writing
that the designated financial institution is satisfactory to the Agents (such
consent not being required where the Replacement Lender is already a Lender),
then such Subject Lender shall, subject to the payment of any amounts due
pursuant to Section 4.4, assign, in accordance with Section 10.11.1, all of its
----------- ---------------
Commitments, Loans, Notes and other rights and obligations under this Agreement
and all other Loan Documents to such designated financial institution; provided,
--------
however, that (i) such assignment shall be without recourse, representation or
- -------
warranty and shall be on terms and conditions reasonably satisfactory to such
Subject Lender and such designated financial institution and (ii) the purchase
price paid by such designated financial institution shall be in the amount of
such Subject Lender's Loans, together with all accrued and unpaid interest and
fees in respect thereof, plus all other amounts owing to such Subject Lender
hereunder. Upon the effective date of an assignment described above, the
Borrowers shall, subject to Section 2.6, issue a replacement Note or Notes, as
-----------
the case may be, to such designated financial institution or Replacement Lender,
as applicable, and such institution shall become a "Lender" for all purposes
under this Agreement and the other Loan Documents.
SECTION IV.7. Payments, Computations, etc. Unless otherwise expressly
----------------------------
provided, all payments by or on behalf of each Borrower pursuant to this
Agreement, the Notes or any other Loan Document shall be made by such Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
--- ----
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 11:00 a.m., New York time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Parent. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Lender its share, if any, of such payments received by
the Administrative Agent for the account of such Lender, and to the extent of
such payments made to the Administrative Agent, the Borrowers shall have no
further obligation to such Lender with respect thereto. All interest and fees
shall be computed on the basis of the actual number of days (including the first
day but excluding the last day) occurring during the period for which such
interest or fee is
42
<PAGE>
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan, 365 days or, if appropriate, 366 days). Whenever any payment to be
made shall otherwise be due on a day which is not a Business Day, such payment
shall (except as otherwise required by clause (c) of the definition of the term
"Interest Period") be made on the next succeeding Business Day and such
---------------
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION IV.8. Sharing of Payments. If any Lender shall obtain any payment
-------------------
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
--------
4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or therewith
- --- --- --- --- ----
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participation in Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
to
- --
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Each Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
-----------
as if such Lender were the direct creditor of such Borrower in the amount of
such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION IV.9. Setoff. Each Lender shall, upon the occurrence of any
------
Default described in clauses (a) through (d) of Section 8.1.9 or, with the
----------- --- -------------
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) each Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of such
Borrower then or thereafter maintained
43
<PAGE>
with or otherwise held by such Lender; provided, however, that any such
-------- -------
appropriation and application shall be subject to the provisions of Section 4.8.
-----------
Each Lender agrees promptly to notify the Parent and the Administrative Agent
after any such setoff and application made by such Lender; provided, however,
-------- -------
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
ARTICLE V
CONDITIONS TO RESTATEMENT EFFECTIVENESS
AND CREDIT EXTENSIONS
SECTION V.1. Effectiveness and Initial Credit Extension. This Agreement
------------------------------------------
is a valid and binding agreement among the parties; provided, that the
--------
restatement of the Existing Credit Agreement by this Agreement shall not become
effective unless and until, and the obligations of the Lenders to fund Term
Loans on the Restatement Effective Date shall be subject to, the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 5.1. The obligation of each Lender and, if applicable, the Issuer, to
- -----------
make any subsequent Credit Extension shall be subject to the satisfaction of
each of the conditions precedent set forth in Sections 5.2 and 5.3.
------------ ---
SECTION V.1.1. Resolutions, etc. The Agents shall have received from each
-----------------
Obligor (a) in the case of each Obligor which is a U.S. Person, a copy of a good
standing certificate dated a date reasonably close to the Restatement Effective
Date, for each such Person and (b) a certificate, dated the Restatement
Effective Date and with counterparts for each Lender, duly executed and
delivered by such Person's Secretary or Assistant Secretary as to (i)
resolutions of such Person's Board of Directors then in full force and effect
authorizing the execution, delivery and performance of this Agreement, the Notes
and each other Loan Document to be executed by such Person and the transactions
contemplated hereby and thereby, (ii) the incumbency and signatures of those of
such Person's officers authorized to act with respect to this Agreement, the
Notes and each other Loan Document executed by such Person, and (iii) the full
force and validity of each Organic Document of such Person and copies thereof,
upon which certificates each Agent and each Lender may conclusively rely until
it shall have received a further certificate of the Secretary or Assistant
Secretary of any such Person canceling or amending such prior certificate of
such Person.
SECTION V.1.2. Delivery of Notes. The Administrative Agent shall have
-----------------
received, for the account of each Lender, the Notes duly executed and delivered
by the Borrowers.
44
<PAGE>
SECTION V.1.3. Consummation of Transaction. The Agents shall have received
---------------------------
evidence satisfactory to each of them substantially contemporaneously with the
funding of the Term Loans on the Restatement Effective Date that all action
necessary to consummate the Transaction (including with respect to the Merger,
the filing of the Certificate of Merger with the Secretary of State of New
Jersey) shall have been taken or completed in accordance with law, including
(with respect to the Merger) NJSA 14A: 10-4.1(2) of the New Jersey General
Corporation Law or such analogous provisions of the laws of such other
applicable jurisdictions.
SECTION V.1.4. Restatement Effective Date Certificate. The Agents shall
--------------------------------------
have received, with counterparts for each Lender, (i) the Borrowing Request and
(ii) the Restatement Effective Date Certificate, substantially in the form of
Exhibit D hereto, dated the Restatement Effective Date and duly executed and
- ---------
delivered by the chief financial or accounting Authorized Officer of the Parent
and each Borrower, in which certificate the Parent and each Borrower shall agree
and acknowledge that the statements made therein shall be deemed to be true and
correct representations and warranties of the Parent and the Borrowers made as
of such date under this Agreement, and, at the time such certificate is
delivered, such statements shall in fact be true and correct.
SECTION V.1.5. Payment of Outstanding Indebtedness, etc. All Indebtedness
-----------------------------------------
identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
-------------
Schedule, together with all interest, all prepayment premiums and other amounts
due and payable with respect thereto, shall have been paid in full (including,
to the extent necessary, from proceeds of the Loans); and all Liens securing
payment of any such Indebtedness shall have been released and the Agents shall
have received all Uniform Commercial Code Form UCC-3 termination statements or
other instruments as may be suitable or appropriate in connection therewith (or
arrangements satisfactory to the Agents shall have been entered into relating to
such release promptly following the making of the Loans).
SECTION V.1.6. Guaranties. The Agents shall have received, with
----------
counterparts for each Lender,
(a) the Parent Guaranty, dated as of the date hereof, duly executed
by an Authorized Officer of the Parent; and
(b) the Subsidiary Guaranty, dated as of the date hereof, duly
executed by an Authorized Officer of each Guarantor (other than the Parent)
in existence on the Restatement Effective Date.
45
<PAGE>
SECTION V.1.7. Pledge Agreements. The Agents shall have received executed
-----------------
counterparts of
(a) the Parent Pledge Agreement, dated as of the date hereof, duly
executed by an Authorized Officer of the Parent, together with (i) the
certificates evidencing all of the issued and outstanding shares of Capital
Stock of each of its direct Subsidiaries (including the Borrowers) which
shall be pledged pursuant to the Parent Pledge Agreement, which
certificates shall in each case be accompanied by undated stock powers duly
executed in blank or, if any securities pledged pursuant to the Parent
Pledge Agreement are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Administrative Agent for the benefit of the Secured Parties in accordance
with all laws applicable to the perfection of the pledge of such shares,
and (ii) all Pledged Notes (as defined in the Parent Pledge Agreement), if
any, evidencing Indebtedness payable to the Parent, duly endorsed to the
order of the Administrative Agent, together with instruments under all laws
applicable to the perfection of the pledge of such Pledged Notes executed
by each payee of a Pledged Note to be filed in such jurisdictions as the
Administrative Agent may reasonably request;
(b) the Borrowers Pledge Agreement, dated as of the date hereof,
duly executed by each Borrower (after giving effect to the Merger),
together with (i) the certificates evidencing all of the issued and
outstanding shares of Capital Stock of all the direct Subsidiaries of each
Borrower which shall be pledged pursuant to the Borrowers Pledge Agreement,
which certificates shall in each case be accompanied by undated stock
powers duly executed in blank or, if any securities pledged pursuant to the
Borrowers Pledge Agreement are uncertificated securities, confirmation and
evidence satisfactory to the Administrative Agent that the security
interest in such uncertificated securities has been transferred to and
perfected by the Administrative Agent for the benefit of the Secured
Parties in accordance with Articles 8 and 9 of the U.C.C. and all laws
otherwise applicable to the perfection of the pledge of such shares, and
(ii) all Pledged Notes (as defined in the Borrowers Pledge Agreement), if
any, evidencing Indebtedness payable by any Borrower, duly endorsed to the
order of the Administrative Agent, together with Uniform Commercial Code
Financing Statements (or similar instruments) in respect of such Pledged
Notes executed by each payee of a Pledged Note to be filed in such
jurisdictions as the Administrative Agent may reasonably request; and
(c) the Subsidiary Pledge Agreement (or, in the case of any Non-U.S.
Subsidiary, a pledge or charge substantially to the effect set forth in the
Subsidiary Pledge Agreement), dated as of the date hereof, duly executed by
each Subsidiary of the Parent or the Borrowers (after giving effect to the
Merger) which in turn has any Subsidiaries, together with (i) the
certificates evidencing all of the issued and outstanding shares of Capital
Stock of each such indirect Subsidiary of the Parent or the Borrowers which
shall
46
<PAGE>
be pledged pursuant to such Subsidiary Pledge Agreement, which certificates
shall in each case be accompanied by undated stock powers duly executed in
blank or, if any securities pledged pursuant to the Subsidiary Pledge
Agreement are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Administrative Agent for the benefit of the Secured Parties in accordance
with Articles 8 and 9 of the U.C.C. and all laws otherwise applicable to
the perfection of the pledge of such shares, and (ii) all Pledged Notes (as
defined in the Subsidiary Pledge Agreement), if any, evidencing
Indebtedness payable to each such indirect Subsidiary of the Parent or the
Borrowers, duly endorsed to the order of the Administrative Agent, together
with Uniform Commercial Code Financing Statements (or similar instruments
under all laws applicable to the perfection of the pledge of such Pledged
Notes) executed by each payee of a Pledged Note to be filed in such
jurisdictions as the Administrative Agent may reasonably request;
provided, however, that no Borrower nor any of their respective Subsidiaries
- -------- -------
shall be required to pledge in excess of 65% of the outstanding Capital Stock of
any Non-U.S. Subsidiary of any Borrower if such Borrower has delivered evidence
satisfactory to the Agents that to do so would result in material adverse tax
consequences to the Parent, any Borrower or any of their respective Subsidiaries
(after giving effect to the utilization of any available tax credits).
In addition, the Administrative Agent and its counsel shall be satisfied that
(i) the Lien granted to the Administrative Agent, for the benefit of the Secured
Parties in the collateral described in this Section is a first priority (or
local equivalent thereof) security interest; and (ii no Lien exists on any of
the collateral described above other than the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan
Document and Permitted Liens.
SECTION V.1.8. Security Agreements. The Agents shall have received executed
-------------------
counterparts of the Parent Security Agreement, the Borrowers Security Agreement
and the Subsidiary Security Agreement (or, in the case of any Non-U.S.
Subsidiary, a pledge or charge substantially to the effect set forth in the
Subsidiary Security Agreement), each dated as of the date hereof, duly executed
by the Obligors party thereto, together with
(a) executed copies of Uniform Commercial Code financing statements
(Form UCC-1), naming the applicable Obligor as the debtors and the
Administrative Agent as the secured party, or other similar instruments or
documents, to be filed under the Uniform Commercial Code (or other
applicable recording statutes) of all jurisdictions as may be necessary or,
in the opinion of the Agents, desirable to perfect the security interest of
the Administrative Agent pursuant to the Security Agreements (provided,
--------
that the execution and delivery of applicable security documentation in
respect of, and the perfection of security interests in, certain
intellectual property and other collateral owned as of the Restatement
Effective Date by the Parent, the Borrowers or their respective
Subsidiaries
47
<PAGE>
(other than Roberts and its respective Subsidiaries and the Subsidiaries of
the Parent organized under the laws of England and Wales) shall be
completed in accordance with Section 7.1.10);
--------------
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements (or similar instruments), if any, necessary to
release all Liens (other than Liens permitted to exist under the Loan
Documents) and other rights of any Person
(i) in any collateral described in the Security Agreements
previously granted by any Person, and
(ii) securing any of the Indebtedness identified in Item 7.2.2(b)
-------------
("Indebtedness to be Paid") of the Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements (or similar instruments) as the Agents may reasonably request
from such Obligors;
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Agents, dated a date reasonably near to the
Restatement Effective Date, listing all effective financing statements
which name the applicable Obligor (under their present names and any
previous names) as the debtors and which are filed in the jurisdictions in
which filings were made pursuant to clause (a) above, together with copies
----------
of such financing statements (none of which shall cover any collateral
described in the Security Agreements); and
(d) forms and any other documents required to effect the required
registration of any Security Agreement with any relevant governmental
authority, together with the appropriate registration fee.
SECTION V.1.9. [Intentionally Omitted].
SECTION V.1.10. Mortgages. The Agent shall have received counterparts of
---------
each Mortgage relating to each property listed on Item 5.10 ("Real Property") of
---------
the Disclosure Schedule and designated as being the property to which a Mortgage
relates, each dated as of the date hereof, duly executed by Roberts and Roberts
Pharmaceutical Canada, Inc., a wholly-owned Subsidiary of Roberts incorporated
under the laws of Ontario, respectively, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of such Mortgage as may be
necessary or, in the reasonable opinion of the Agent, desirable effectively
to create a valid, perfected first priority Lien against the properties
purported to be covered thereby;
48
<PAGE>
(b) mortgagee's title insurance policies in favor of the Agent and the
Lenders in amounts and in form and substance and issued by insurers,
reasonably satisfactory to the Agent, with respect to the property
purported to be covered by such Mortgage, insuring that title to such
property is marketable and that the interests created by such Mortgage
constitute valid first Liens thereon free and clear of all defects and
encumbrances other than as approved by the Agent; and
(c) such other approvals, opinions, or documents as the Agent may
reasonably request.
SECTION V.1.11. Financial Information, etc. The Agents shall have received,
---------------------------
with counterparts for each Lender,
(a) (i) the audited consolidated income and cash flow statements and
balance sheets of the Parent and its Subsidiaries for each of the Fiscal
Years ended and as of June 30, 1996, December 31, 1997 and December 31,
1998, (ii) the unaudited consolidated income and cash flow statements and
balance sheet of the Parent and its Subsidiaries for the three Fiscal
Quarters ended and as of September 30, 1999, and (iii) the most recently
available monthly income statement and balance sheet of the Parent and its
Subsidiaries for each Fiscal Month ended since the end of the third Fiscal
Quarter of 1999; and
(b) a pro forma opening consolidated balance sheet of the Parent and
--- -----
its Subsidiaries as of the Restatement Effective Date (the "Pro Forma
---------
Balance Sheet"), certified by the chief financial Authorized Officer of the
-------------
Parent, giving effect to the consummation of the Transaction contemplated
by this Agreement and reflecting the proposed legal and capital structure
of the Parent, which legal and capital structure shall be satisfactory in
all respects to the Agents.
SECTION V.1.12. Litigation. Except as disclosed on Item 6.7 ("Litigation")
----------
of the Disclosure Schedule, there shall exist no pending or, to the knowledge of
the Parent, overtly threatened material litigation, proceedings or
investigations which (x) would contest the consummation of the Transactions or
(y) would be likely to be expected to have a Material Adverse Effect.
SECTION V.1.13. Material Adverse Effect. Since December 31, 1998, there
-----------------------
shall not have been any event, circumstance or condition which would be likely
to be expected (in the good faith determination of the Syndication Agent after
consultation with the Parent) to have a Material Adverse Effect.
49
<PAGE>
SECTION V.1.14. Insurance. The Agents shall have received satisfactory
---------
evidence of the existence of insurance in compliance with Section 7.1.4
-------------
(including all endorsements included therein), and the Administrative Agent
shall be named additional insured or loss payee, on behalf of the Lenders, in
respect of all proceeds payable in respect of such insurance, pursuant to
documentation reasonably satisfactory to the Agents.
SECTION V.1.15. Solvency Certificate. The Agents shall have received, with
--------------------
copies for each Lender, a Solvency Certificate in substantially the form of
Exhibit L attached hereto, duly executed by the chief financial Authorized
- ---------
Officer of the Parent, dated the date of the initial Credit Extension and
expressly permitting the Agents and the Lenders to rely thereon.
SECTION V.1.16. [Intentionally Omitted].
SECTION V.1.17. Perfection Certificate. The Agents shall have received a
----------------------
Perfection Certificate, dated as of the Restatement Effective Date, duly
executed and delivered by an Authorized Officer of the Parent.
SECTION V.1.18. Agent for Service of Process. The Agents shall have
----------------------------
received evidence, satisfactory to each of them, that each Borrower has
appointed the Person so specified in Section 10.14, and that such Person has
-------------
accepted the appointment and agreed to forward forthwith to each Borrower all
legal process addressed to such Borrower and received by it.
SECTION V.1.19. [Intentionally Omitted].
SECTION V.1.20. Opinions of Counsel. The Agents shall have received
-------------------
opinions, dated the Restatement Effective Date and addressed to the Agents and
all Lenders from
(a) Cahill Gordon & Reindel, New York counsel to certain Obligors, in
form and substance satisfactory to the Agents;
(b) Anthony A. Rascio, Esq., corporate counsel to Roberts, and
Giordano, Halleran & Ciesla, P.C., special New Jersey counsel to Roberts
and its U.S. Subsidiaries, in form and substance satisfactory to the
Agents;
(c) Kevin Anderson, corporate counsel to Shire Richwood and special
Kentucky counsel to the Obligors, in form and substance satisfactory to the
Agents; and
(d) Slaughter and May, special U.K. counsel to the Obligors, in form
and substance satisfactory to the Agents.
SECTION V.1.21. Closing Fees, Expenses, etc. The Agents and the Lead
---------------------------
Arranger shall have received, each for its own respective account, or, in the
case of the Administrative Agent,
50
<PAGE>
for the account of each Lender, as the case may be, all fees, costs and expenses
due and payable pursuant to the Fee Letter and Sections 3.3 and 10.3, if then
------------ ----
invoiced.
SECTION V.1.22. Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of the Parent, the Borrowers or any of
their respective Subsidiaries or any other Obligors shall be reasonably
satisfactory in form and substance to the Agents and their counsel; the Agents
and their counsel shall have received all information, approvals, opinions,
documents or instruments as the Agents or their counsel may reasonably request.
SECTION V.1.23. UCC Filing Service. All Uniform Commercial Code (Form
------------------
UCC-1) financing statements or other similar financing statements required
pursuant to the Loan Documents, other than as required to be provided pursuant
to Section 5.3 (collectively, the "Filing Statements") shall have been delivered
----------- -----------------
to CT Corporation System or another similar filing service company reasonably
acceptable to the Administrative Agent (the "Filing Agent"). The Filing Agent
------------
shall have acknowledged in writing reasonably satisfactory to the Administrative
Agent and its counsel (i) the Filing Agent's receipt of all such Filing
Statements, (ii) that such Filing Statements have either been submitted for
filing in the appropriate filing offices therefor or will be submitted for
filing in such appropriate offices within ten days of the Restatement Effective
Date and (iii) that the Filing Agent will notify the Administrative Agent and
its counsel of the result of such submissions within 30 days of the Restatement
Effective Date.
SECTION V.1.24. Syndication. The Syndication Agent shall have completed to
-----------
its satisfaction the syndication of the Loans and Commitments and achieved its
desired hold level of the Loans and Commitments.
SECTION V.2. All Credit Extensions. The obligation of each Lender and, if
---------------------
applicable, the Issuer, to make any Credit Extension (including its initial
Credit Extension) shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 5.2.
-----------
SECTION V.2.1. Compliance with Warranties, No Default, etc. Both before and
-------------------------------------------
after giving effect to any Credit Extension the following statements shall be
true and correct:
(a) the representations and warranties set forth in Article VI and in
----------
each other Loan Document shall, in each case, be true and correct in all
material respects with the same effect as if then made (unless stated to
relate solely to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date);
(b) no material adverse development shall have occurred in any
litigation, action, proceeding, labor controversy, arbitration or
governmental investigation disclosed pursuant to Section 6.7;
-----------
51
<PAGE>
(c) the sum of the (A) aggregate outstanding principal amount of all
Revolving Loans and (B) the aggregate amount of all Letter of Credit
Outstandings does not exceed the then existing Revolving Loan Commitment
Amount; and
(d) no Default shall have then occurred and be continuing.
SECTION V.2.2. Credit Extension Request. The Agents shall have received a
------------------------
Borrowing Request if Loans are being requested, or an Issuance Request if a
Letter of Credit is being requested or extended. Each of the delivery of a
Borrowing Request or Issuance Request and the acceptance by the Borrowers of
proceeds of any Credit Extension shall constitute a representation and warranty
by the Borrowers that on the date of such Credit Extension (both immediately
before and after giving effect thereto and the application of the proceeds
thereof) the statements made in Section 5.2.1 are true and correct.
-------------
SECTION V.3. Conditions Precedent to Borrowing of Revolving Loans and
--------------------------------------------------------
Issuance of Letters of Credit. The obligation of each Lender and, if
- -----------------------------
applicable, the Issuer, to make any Revolving Loan or issue any Letter of Credit
shall be subject to the satisfaction of the undertaking of the Parent set forth
in Section 7.1.10.
--------------
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Agents to enter into
this Agreement and to make Credit Extensions hereunder, the Parent and each of
the Borrowers represent and warrant unto the Agents, the Issuer and each Lender
as set forth in this Article VI.
----------
SECTION VI.1. Organization, etc. The Parent, each Borrower and each of
------------------
their respective Subsidiaries is a corporation, partnership, public limited
company, limited liability company or other legal entity, as the case may be,
validly organized and existing and, if applicable, in good standing under the
laws of jurisdiction of its incorporation or organization, is duly qualified to
do business and, if applicable, is in good standing as a foreign corporation or
organization in each jurisdiction where the nature of its business requires such
qualification, except where the failure to be so qualified would not be likely
to be expected to have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement, the
Notes and each other Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it, except where the failure to hold such governmental licenses,
permits and approvals would not be likely to be expected to have a Material
Adverse Effect.
52
<PAGE>
SECTION VI.2. Due Authorization, Non-Contravention, etc. The execution,
------------------------------------------
delivery and performance by the Parent and each Borrower of this Agreement, the
Notes and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each other Obligor of each Loan Document
executed or to be executed by it and each such other Obligor's participation in
the consummation of the Transaction are within the Parent's, each Borrower's and
each such Obligor's corporate or other organic powers, have been duly authorized
by all necessary corporate or similar action, and do not
(a) contravene the Parent's, such Borrower's or any such Obligor's
Organic Documents;
(b) contravene any material contractual restriction, law or
governmental regulation or court decree or order binding on or affecting
the Borrower or any such Obligor; or
(c) result in, or require the creation or imposition of, any Lien
(other than Liens permitted under the Loan Documents) on any of the
Parent's, such Borrower's or any other Obligor's properties.
SECTION VI.3. Government Approval, Regulation, etc. No material
-------------------------------------
authorization or approval or other action by, and no material notice to or
filing with, any governmental authority or regulatory body or other Person
(other than those that have been, or on or immediately after the Restatement
Effective Date, or pursuant to Section 7.1.10, will be, duly obtained or made
--------------
and which are, or on or immediately after the Restatement Effective Date, or
pursuant to Section 7.1.10, will be, in full force and effect) is required for
--------------
the due execution, delivery or performance by the Parent, any Borrower or any
other Obligor of this Agreement, the Notes or any other Loan Document to which
it is a party, or for the Parent's, each Borrower's and each such other
Obligor's participation in the consummation of the Transaction, except as have
been duly obtained or made and are in full force and effect. Neither the Parent
nor any Borrower nor any of the Borrowers' Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION VI.4. Validity, etc. This Agreement constitutes, and the Notes and
--------------
each other Loan Document executed by the Parent and each Borrower will, on the
due execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Parent and such Borrower enforceable in accordance with their
respective terms; and each Loan Document executed pursuant hereto by each other
Obligor will, on the due execution and delivery thereof by such Obligor, be the
legal, valid and binding obligation of such Obligor enforceable in accordance
53
<PAGE>
with its terms, in each case subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general principles of
equity.
SECTION VI.5. Financial Information. Each of the financial statements
---------------------
delivered pursuant to of Section 5.1.11 has been prepared in accordance with
--------------
GAAP consistently applied, and present fairly the consolidated financial
condition of the corporations or organizations covered thereby as at the date
thereof or the results of their operations for the periods then ended, subject
in the case of interim financial statements to the lack of footnotes and to
normal year end audit adjustments.
SECTION VI.6. No Material Adverse Effect. Since December 31, 1998, there
--------------------------
has been no event, circumstance or condition which would be likely to be
expected to have a Material Adverse Effect.
SECTION VI.7. Litigation, Labor Controversies, etc. There is no pending
-------------------------------------
or, to the knowledge of the Parent or any Borrower, overtly threatened
litigation, action, proceeding, or labor controversy affecting the Parent or any
Borrower or any of their respective Subsidiaries, or any of their respective
properties, businesses, assets or revenues which would be likely to be expected
to have a Material Adverse Effect, except as disclosed in Item 6.7
--------
("Litigation") of the Disclosure Schedule.
SECTION VI.8. Subsidiaries. The Parent and the Borrowers have no
------------
Subsidiaries, except those Subsidiaries (i) which are identified in Item 6.8
--------
("Existing Subsidiaries") of the Disclosure Schedule, or (ii) which are
permitted to be acquired in accordance with Section 7.2.5.
-------------
SECTION VI.9. Ownership of Properties. The Parent and the Borrower and
-----------------------
each of its Subsidiaries own good and marketable title to all of its properties
and assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights), free
and clear of all Liens, charges or claims (including infringement claims with
respect to patents, trademarks, copyrights and the like) other than any Lien,
charge or claim which is permitted under Section 7.2.3.
-------------
SECTION VI.10. Taxes. Each of the Parent, the Borrowers and each of their
-----
respective Subsidiaries have filed all material tax returns and reports required
by law to have been filed by it and have paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION VI.11. Pension and Welfare Plans. Except as disclosed in Item 6.11
------------------------- ---------
("Employee Benefit Plans") of the Disclosure Schedule, during the twelve-
consecutive-month period prior to the date of the execution and delivery of this
Agreement, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any
54
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Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by any Borrower or any member
of the Controlled Group of any liability, fine or penalty which would be likely
to be expected to have a Material Adverse Effect. Except as disclosed in Item
----
6.11 ("Employee Benefit Plans") of the Disclosure Schedule, as of the date
- ----
hereof, no Borrower nor any member of the Controlled Group has any contingent
liability with respect to any post-retirement medical benefits under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Subtitle B of Title I of ERISA or other applicable continuation of coverage
laws.
SECTION VI.12. Environmental Warranties. Except as set forth in Item 6.12
------------------------ ---------
("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Parent, any Borrower or any of their respective
Subsidiaries have been, and continue to be, while owned or leased by the
Parent, such Borrower or such Subsidiaries in material compliance with all
Environmental Laws;
(b) there have been no past, and there are no pending or, to the
knowledge of the Parent or any Borrower, threatened (i) claims,
complaints, notices or requests for information received by the Parent or
any Borrower or any of their respective Subsidiaries with respect to any
alleged material violation of any Environmental Law, or (ii complaints,
notices or inquiries to the Parent or any Borrower or any of their
respective Subsidiaries regarding potential material liability under any
Environmental Law;
(c) to the knowledge of the Parent or any Borrower, there have been
no Releases of Hazardous Materials at, on or under any property now owned
or leased or previously owned or leased through the date last owned or
leased by the Parent or any Borrower or any of their respective
Subsidiaries that, singly or in the aggregate, have resulted, or would
reasonably be expected to result, in liability to the Parent, any Borrower
or any of their respective Subsidiaries in excess of $1,000,000;
(d) the Parent, the Borrowers and their respective Subsidiaries have
been issued and are in material compliance with all material permits,
certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary for their businesses;
(e) no property now owned or leased or, to the knowledge of the
Parent or any Borrower, previously owned or leased through the date last
owned or leased by the Parent or any Borrower or any of their respective
Subsidiaries is listed or proposed for listing (with respect to owned
property only) on (x) the National Priorities List pursuant to
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CERCLA, or (y) on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now owned or
leased or previously owned or leased through the date last owned or leased
by the Parent or any Borrower or any of their respective Subsidiaries that,
singly or in the aggregate, have resulted, or would reasonably be expected
to result, in liability to the Parent, any Borrower or any of their
respective Subsidiaries in excess of $1,000,000;
(g) to the knowledge of the Parent or any Borrower, neither the
Parent nor any Borrower nor any of their respective Subsidiaries has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for listing
on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations in respect of any Environmental
Law;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now owned or leased or previously owned or leased
through the date last owned or leased by the Parent, any Borrower or any of
their respective Subsidiaries that, singly or in the aggregate, have
resulted, or would reasonably be expected to result, in liability to the
Parent, any Borrower or any of their respective Subsidiaries in excess of
$1,000,000; and
(i) to the knowledge of the Parent or any Borrower, no conditions
exist at, on or under any property now or previously owned or leased or
previously owned or leased through the date last owned or leased by the
Parent, any Borrower or any of their respective Subsidiaries which, with
the passage of time, or the giving of notice or both, would give rise to
liability under any Environmental Law.
SECTION VI.13. Regulations U and X. No Obligor is engaged in the business
--------------------
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any Credit Extension will be used for a purpose which violates,
or would be inconsistent with, F.R.S. Board Regulation U or X. Terms for which
meanings are provided in F.R.S. Board Regulation U or X or any regulations
substituted therefor, as from time to time in effect, are used in this Section
with such meanings.
SECTION VI.14. Accuracy of Information. All factual information heretofore
-----------------------
or contemporaneously furnished by or on behalf of the Parent and the Borrowers
in writing to the Agents, the Lead Arranger, the Issuer or any Lender for
purposes of or in connection with this Agreement or any transaction contemplated
hereby or with respect to the Acquisition is, and all other such factual
information hereafter furnished by or on behalf of the Parent and the Borrowers
56
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to the Agents, the Lead Arranger, the Issuer or any Lender will be, true and
accurate in every material respect on the date as of which such information is
dated or certified, and such information is not, or shall not be, as the case
may be, incomplete by omitting to state any material fact necessary to make such
information in light of the circumstances when made not materially misleading.
SECTION VI.15. Solvency. The Transaction (including the incurrence of the
--------
initial Credit Extension hereunder, the incurrence by the Borrowers of the
Indebtedness represented by the Notes, the execution and delivery of the
Guaranties by the Obligors parties thereto and the application of the proceeds
of the Credit Extensions), will not involve or result in any fraudulent transfer
or fraudulent conveyance under the provisions of Section 548 of the Bankruptcy
Code (11 U.S.C. (S)101 et seq., as from time to time hereafter amended, and any
-- ---
successor or similar statute) or any applicable state law respecting fraudulent
transfers or fraudulent conveyances. After giving effect to the Transaction and
the making of the initial Credit Extension, each Borrower, the Parent and each
of the Guarantors is Solvent.
SECTION VI.16. Year 2000. Any reprogramming required to permit the proper
---------
functioning, in and following the year 2000, of (i) the Obligors' computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Obligors' systems interface) and the
testing of all such systems and equipment, as so reprogrammed, has been
completed in all material respects. The cost to the Obligors of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Obligors (including, without limitation, reprogramming errors and
the failure of other systems or equipment) would not reasonably be expect to
result in any Default or Event of Default or cause a Material Adverse Effect.
ARTICLE VII
COVENANTS
SECTION VII.1. Affirmative Covenants. The Parent and each of the Borrowers
---------------------
agree with the Agents, the Issuer and each Lender that, until all Commitments
have terminated and all Obligations have been paid and performed in full, the
Borrower will perform the obligations set forth in this Section 7.1.
-----------
SECTION VII.1.1. Financial Information, Reports, Notices, etc. The Parent
---------------------------------------------
and each Borrower will furnish, or will cause to be furnished, to each Lender
and the Agents copies of the following financial statements, reports, notices
and information:
(a) as soon as available and in any event within 50 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Parent, consolidated balance
57
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sheets of the Parent and its Subsidiaries as of the end of such Fiscal
Quarter and consolidated statements of earnings and cash flow of the Parent
and its Subsidiaries for such Fiscal Quarter and for the period commencing
at the end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, certified by the chief financial or chief accounting
Authorized Officer of the Parent;
(b) as soon as available and in any event within 105 days after the
end of each Fiscal Year of the Parent, a copy of the annual audit report
for such Fiscal Year for the Parent and its Subsidiaries, including therein
consolidated balance sheets of the Parent and its Subsidiaries as of the
end of such Fiscal Year and consolidated statements of earnings and cash
flow of the Parent and its Subsidiaries for such Fiscal Year, in each case
certified (without any Impermissible Qualification) in a manner acceptable
to the Agents and the Required Lenders by Arthur Andersen or other
independent public accountants reasonably acceptable to the Agents and the
Required Lenders, together with a report from such accountants containing a
computation of, and showing compliance with, each of the financial ratios
and restrictions contained in Section 7.2.4 and to the effect that, in
-------------
making the examination necessary for the signing of such annual report by
such accountants, they have not become aware of any Default that has
occurred and is continuing, or, if they have become aware of such Default,
describing such Default and the steps, if any, being taken to cure it;
(c) together with the delivery of the financial information required
pursuant to clause (a) or clause (b), a Compliance Certificate, executed by
---------- -----------
the chief financial or chief accounting Authorized Officer of the Parent
showing (in reasonable detail and with appropriate calculations and
computations in all respects satisfactory to the Agents) compliance with
the financial covenants set forth in Section 7.2.4;
-------------
(d) as soon as possible and in any event within three Business Days
after the Borrower has knowledge (or could reasonably be expected to have
knowledge) of the occurrence of any Default, a statement of the chief
financial Authorized Officer of the Parent setting forth details of such
Default and the action which the Parent has taken and proposes to take with
respect thereto;
(e) as soon as possible and in any event within three Business Days
after (x) the occurrence of any adverse development with respect to any
litigation, action, proceeding, or labor controversy described in Section
-------
6.7 or (y) the commencement of any labor controversy, litigation, action,
---
proceeding of the type described in Section 6.7, notice thereof and copies
-----------
of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies of all
reports which the Parent sends to any of its security holders, and all
reports and registration statements
58
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which the Parent or any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
(g) promptly upon becoming aware of the institution of any steps by
any Borrower or any other Person to terminate any Pension Plan, or the
failure to make a required contribution to any Pension Plan if such failure
is sufficient to give rise to a Lien under section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could reasonably
be expected to result in the requirement that such Borrower furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which could reasonably be
expected to result in the incurrence by such Borrower of any material
liability, fine or penalty, or any material increase in the contingent
liability of such Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating thereto;
(h) promptly when available and in any event within 60 days following
the last day of each Fiscal Year of the Parent, financial projections for
the Parent and its Subsidiaries, on a consolidated basis (including an
operating budget), for the current Fiscal Year, prepared in reasonable
detail by the chief accounting, financial or operating officer of the
Parent;
(i) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any
Lender through the Administrative Agent may from time to time reasonably
request.
SECTION VII.1.2. Compliance with Laws, etc. The Parent and each Borrower
--------------------------
will, and will cause each of their respective Subsidiaries to, comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include (without limitation) (i) the maintenance and preservation
of its existence and qualification as a foreign corporation, partnership, public
limited company, limited liability company or other legal entity, as the case
may be, except where the failure to so qualify would not be likely to be
expected to have a Material Adverse Effect, and (ii) the payment, before the
same become delinquent, of all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION VII.1.3. Maintenance of Properties. The Parent and each Borrower
-------------------------
will, and will cause each of their respective Subsidiaries to, maintain,
preserve, protect and keep its properties necessary and useful in the conduct of
its business in good repair, working order and condition (subject to normal wear
and tear), and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times unless the Parent or such Borrower determines in good faith that
the continued maintenance of any of its properties is no longer economically
desirable, except when the failure
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to maintain, preserve, protect and keep its properties would not be likely to be
expected to have a Material Adverse Effect.
SECTION VII.1.4. Insurance. The Parent and each Borrower will, and will
---------
cause each of their respective Subsidiaries to, maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
properties and business against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon written request of the Agents, furnish to each Lender at reasonable
intervals a certificate of an Authorized Officer of the Parent setting forth the
nature and extent of all insurance maintained by the Parent, the Borrowers and
their respective Subsidiaries in accordance with this Section.
SECTION VII.1.5. Books and Records. The Parent and each Borrower will, and
-----------------
will cause each of their respective Subsidiaries to, keep books and records
which accurately reflect in all material respects all of its business affairs
and transactions and permit the Agents, the Issuer and each Lender or any of
their respective representatives, at reasonable times and intervals, during
normal business hours to visit all of its offices, to discuss its financial
matters with its officers (and, in order to obtain additional information
concerning financial matters not satisfactorily disclosed in the course of
discussions with the Borrower, the Agents or their respective representatives,
on behalf of the Lenders, may discuss such matters with the Parent's or such
Borrower's independent public accountant (and the Parent and such Borrower
hereby authorize such independent public accountant to discuss the Parent's or
such Borrower's financial matters with the Agents or their respective
representatives whether or not any representative of the Parent or such Borrower
is present, and if no Default or Event of Default has occurred and is
continuing, only if a representative of the Parent or such Borrower is present))
and to examine (and, at the expense of the Parent or such Borrower, photocopy
extracts from) any of its books or other corporate records. The Parent and each
Borrower shall pay any fees of such independent public accountant incurred in
connection with any Agent's or any Lender's exercise of its rights pursuant to
this Section. The Agents and the Lenders agree that they shall use reasonable
efforts to minimize interference with the businesses of the Parent, the Borrower
or any of their respective Subsidiaries.
SECTION VII.1.6. Environmental Covenant. The Parent and each Borrower will,
----------------------
and will cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all applicable Environmental Laws, including compliance
with all necessary permits, approvals, certificates, licenses and other
authorizations thereunder, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) promptly notify the Agents and provide copies upon receipt of all
written claims, complaints, notices or inquiries relating to the condition
of its facilities and
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properties or compliance with Environmental Laws which would reasonably be
expected to result in costs or liability under any Environmental Law which
would result in a Material Adverse Effect; and
(c) provide such information and certifications which the Agents may
reasonably request from time to time to evidence compliance with this
Section 7.1.6.
-------------
SECTION VII.1.7. Future Subsidiaries. Upon any Person becoming, after the
-------------------
Restatement Effective Date, a Subsidiary of the Parent or any Borrower, or upon
the Parent, any Borrower or any Subsidiary acquiring additional Capital Stock of
any existing Subsidiary, the Parent shall notify the Agents of such acquisition,
and
(a) the Parent or such Borrower, as the case may be, shall promptly
cause such Subsidiary to execute and deliver to the Agents, with
counterparts for each Lender, a supplement to the Subsidiary Guaranty and a
Subsidiary Security Agreement (and, if such Subsidiary owns any real
property with a fair market value in excess of $500,000, a Mortgage),
together with acknowledgment copies of Uniform Commercial Code financing
statements (Form UCC-1) executed and delivered by the Subsidiary naming the
Subsidiary as the debtor and the Administrative Agent as the secured party,
or other similar instruments or documents, filed under the Uniform
Commercial Code and any other applicable recording statutes, in the case of
real property, of all jurisdictions as may be necessary or, in the
reasonable opinion of the Agents, desirable to perfect the security
interest of the Administrative Agent pursuant to the Subsidiary Security
Agreement or a Mortgage, as the case may be (other than the perfection of
security interests in motor vehicles owned as of the date such entity
becomes a Subsidiary); and
(b) the Parent or such Borrower, as the case may be, shall promptly
deliver, or cause to be delivered, to the Administrative Agent under a
Pledge Agreement certificates (if any) representing all of the issued and
outstanding shares of Capital Stock of such Subsidiary owned by the Parent,
such Borrower or any Subsidiary of the Parent or such Borrower, as the case
may be, along with undated stock powers for such certificates, executed in
blank, or, if any securities subject thereto are uncertificated securities,
confirmation and evidence satisfactory to the Agents that appropriate book
entries have been made in the relevant books or records of a financial
intermediary or the issuer of such securities, as the case may be, or other
appropriate steps shall have been taken under applicable law resulting in
the perfection of the security interest granted in favor of the
Administrative Agent pursuant to the terms of a Pledge Agreement;
together, in each case, with such opinions, in form and substance and from
counsel reasonably satisfactory to the Agents, as the Agents may reasonably
require; provided, however, that notwithstanding the foregoing, no Borrower nor
-------- -------
any Subsidiary of any Borrower will be required to deliver in pledge pursuant to
a Pledge Agreement in excess of 65% of the outstanding Capital
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Stock of any Non-U.S. Subsidiary of any Borrower if such Borrower has delivered
evidence satisfactory to the Agents that to do so would result in material
adverse tax consequences to the Parent, any Borrower and their respective
Subsidiaries (after giving effect to the utilization of any available tax
credits).
SECTION VII.1.8. Future Leased Property and Future Acquisitions of Real
------------------------------------------------------
Property; Future Acquisition of Other Property. (a) Prior to entering into any
- ----------------------------------------------
new lease of real property or renewing any existing lease of real property
following the Restatement Effective Date, the Parent and each Borrower shall,
and shall cause each of their respective U.S. Subsidiaries to, use all
commercially reasonable efforts to deliver to the Administrative Agent a Waiver
executed by the lessor of any real property that is to be leased by any such
Person for a term in excess of one year in any state which by statute grants
such lessor a "landlord's" (or similar) Lien which is superior to the
Administrative Agent's, to the extent the value of any personal property of the
Parent, any Borrower or any of their respective U.S. Subsidiaries to be held at
such leased property exceeds (or it is anticipated that the value of such
personal property will, at any point in time during the term of such leasehold
term, exceed) $500,000.
(b) In the event that the Parent, any Borrower or any of their
respective U.S. Subsidiaries shall acquire any real property having a value
as determined in good faith by the Agents in excess of $500,000 in the
aggregate, the Parent, such Borrower or the applicable U.S. Subsidiary
shall, promptly after such acquisition, execute a Mortgage and provide the
Agents with
(i) evidence of the completion (or satisfactory arrangements
for the completion) of all recordings and filings of such Mortgage as
may be necessary or, in the reasonable opinion of the Agents,
desirable effectively to create a valid, perfected first priority
Lien, subject to Liens permitted by Section 7.2.3, against the
-------------
properties purported to be covered thereby;
(ii) mortgagee's title insurance policies in favor of the
Administrative Agent and the Lenders in amounts and in form and
substance and issued by insurers, reasonably satisfactory to the
Agents, with respect to the property purported to be covered by such
Mortgage, insuring that title to such property is marketable and that
the interests created by the Mortgage constitute valid first Liens
thereon free and clear of all defects and encumbrances other than as
permitted under Section 7.2.3 or as approved by the Agents, and such
-------------
policies shall also include a revolving credit endorsement and such
other endorsements as the Agents shall request and shall be
accompanied by evidence of the payment in full of all premiums
thereon; and
(iii) such other approvals, opinions, or documents as the Agents
may reasonably request; and
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(c) In accordance with the terms and provisions of this Agreement
and the other Loan Documents, provide the Agents with evidence of all
recordings and filings as may be necessary or, in the reasonable opinion of
the Agents, desirable to create a valid, perfected first priority Lien,
subject to the Liens permitted by Section 7.2.3, against all property
-------------
acquired after the Restatement Effective Date (excluding motor vehicles,
leases of motor vehicles and leases of real property).
SECTION VII.1.9. Use of Proceeds, etc. The Parent and each Borrower shall:
---------------------
(a) apply the proceeds of the Loans
(i) in the case of Term Loans, to refinance the Existing Term
Loans outstanding under the Existing Credit Agreement; and
(ii) in the case of Revolving Loans, for working capital and
general corporate purposes of the Borrowers and the other Subsidiaries
of the Parent; and
(b) use Letters of Credit only for purposes of supporting working
capital and general corporate purposes of the Borrowers and other
Subsidiaries of the Parent.
SECTION VII.1.10. Undertaking. Within [30] days after the Restatement
-----------
Effective Date, the Parent shall cause to be delivered to the Agents instruments
or documents, in appropriate form for filing with any relevant governmental
authority, including the United States Patent and Trademark Office, sufficient
to create and perfect, and effect the required registration of, a security
interest in all intellectual property and other collateral owned as of the
Restatement Effective Date by the Parent, the Borrowers or their respective
Subsidiaries (other than Roberts and its respective Subsidiaries and the
Subsidiaries of the Parent organized under the laws of England and Wales) to the
extent the granting of a security interest in such collateral is not prohibited
by the Organic Documents of the applicable Obligor or laws relating to the
granting of a security interest applicable in the jurisdiction of such Obligor's
incorporation or organization, together, in each case, with such opinions,
substantially to the effect set forth in the opinion of U.K. counsel delivered
pursuant to clause (d) of Section 5.1.20, in form and substance and from
---------- --------------
counsel reasonably satisfactory to the Agents. In addition, the Parent shall use
commercially reasonable efforts (which shall not require any material
expenditure of cash or the making of material concessions under the relevant
license) to obtain an assignment of a security interest in favor of the
Administrative Agent in all material licenses relating to intellectual property
owned as of the Restatement Effective Date by the Parent, the Borrowers or their
respective Subsidiaries.
SECTION VII.2. Negative Covenants. The Parent and each of the Borrowers
------------------
agree with each of the Agents and each Lender that, until all Commitments have
terminated and all
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Obligations have been paid and performed in full, the Parent and each of the
Borrowers will perform the obligations set forth in this Section 7.2.
-----------
SECTION VII.2.1. Business Activities. Neither the Parent nor any Borrower
-------------------
will, nor will the Parent or any Borrower permit any of their respective
Subsidiaries to, engage in any business activity, except (a) business activities
of the type in which the Parent and the Borrowers and their respective
Subsidiaries are engaged on the date hereof (after giving effect to the
Transaction) and such activities as may be incidental or related thereto and (b)
other pharmaceutical activities.
SECTION VII.2.2. Indebtedness. Neither the Parent nor any Borrower will,
------------
nor will the Parent or any Borrower permit any of their respective Subsidiaries
to, create, incur, assume or suffer to exist or otherwise become or be liable in
respect of any Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations;
(b) until the Restatement Effective Date, Indebtedness identified in
Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule;
-------------
(c) Indebtedness existing as of the Restatement Effective Date which
is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
-------------
Schedule;
(d) Hedging Obligations of the Parent, any Borrower or any of their
respective Subsidiaries in respect of the Credit Extensions;
(e) Indebtedness in an aggregate principal amount not to exceed
$20,000,000 at any time outstanding which is incurred by the Parent, any
Borrower or any of their respective Subsidiaries (i) to a vendor of any
assets permitted to be acquired pursuant to Section 7.2.7 to finance its
-------------
acquisition of such assets or (ii) in respect of Capitalized Lease
Liabilities (but only to the extent otherwise permitted by Section 7.2.7);
-------------
(f) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services, but excluding
Indebtedness incurred through the borrowing of money or Contingent
Liabilities);
(g) unsecured Indebtedness of any Borrower owing to any of its
Subsidiaries or any other Borrower, or of any Subsidiary of the Parent
owing to the Parent or any other Subsidiary of the Parent or of the Parent
owing to any Subsidiary of the Parent, which Indebtedness is evidenced by
one or more promissory notes in form and substance
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satisfactory to the Agents which have been executed and delivered to (and
indorsed to the order of) the Administrative Agent in pledge pursuant to a
Pledge Agreement;
(h) Assumed Indebtedness of the Parent, the Borrowers and their
respective Subsidiaries incurred as a result of an Investment permitted by
clause (e) of Section 7.2.5; and
---------- -------------
(i) other Indebtedness of the Parent, the Borrowers and their
respective Subsidiaries in an aggregate amount at any time outstanding not
to exceed $50,000,000;
provided, however, that no Indebtedness otherwise permitted by clauses (g), (h)
- -------- ------- ----------- -
or (i) shall be permitted if, after giving effect to the incurrence thereof, any
---
Default shall have occurred and be continuing.
SECTION VII.2.3. Liens. Neither the Parent nor any Borrower will, nor will
-----
the Parent or any Borrower permit any of their respective Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, except for the
following ("Permitted Liens"):
---------------
(a) Liens securing payment of the Obligations or any Hedging
Obligations in respect of the Loans owed to any Lender or any Affiliate of
any Lender, granted pursuant to any Loan Document;
(b) until the Restatement Effective Date, Liens securing payment of
Indebtedness of the type permitted and described in clause (b) of Section
---------- -------
7.2.2;
-----
(c) Liens created prior to the Restatement Effective Date securing
payment of Indebtedness of the type permitted and described in clause (c)
----------
of Section 7.2.2;
-------------
(d) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (e) of Section 7.2.2 and covering only
---------- -------------
those assets acquired with the proceeds of such Indebtedness;
(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on the books of such Person;
(f) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on the books of such Person and Liens
65
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relating to retention of title clauses in manufacturing, supply and sales
contracts entered into in the ordinary course of business;
(g) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(h) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;
(i) Liens with respect to easements, rights-of-way, restrictions and
other similar encumbrances which, individually or in the aggregate, do not
materially interfere with the occupation, use and enjoyment by any Borrower
or any of its Subsidiaries of the properties encumbered thereby in the
ordinary course of their business; and
(j) other Liens which, individually or in the aggregate, secure not
more than $10,000,000 of any Indebtedness at any time outstanding.
SECTION VII.2.4. Financial Covenants.
-------------------
(a) Minimum Net Worth. The Parent and the Borrowers will not permit
-----------------
Net Worth as of the end of any Fiscal Quarter to be less than an aggregate
amount equal to the sum of (i) $500,000,000, plus (ii) an amount equal to
----
50% of cumulative positive Net Income from the Restatement Effective Date
to the end of the Fiscal Quarter most recently ended on or prior to such
date of determination, plus (iii) 100% of Net Equity Proceeds of any
----
issuances by the Parent or any of its Subsidiaries of any Capital Stock and
any equity contributions to any of them after the Restatement Effective
Date.
(b) Leverage Ratio. The Parent and the Borrowers will not permit
--------------
the Leverage Ratio as of the end of any Fiscal Quarter to be greater than
2.5:1.0.
(c) Interest Coverage Ratio. The Parent and the Borrowers will not
-----------------------
permit the Interest Coverage Ratio as of the end of any Fiscal Quarter to
be less than 5.0:1.0.
SECTION VII.2.5. Investments. Neither the Parent nor any Borrower will,
-----------
nor will the Parent or any Borrower permit any of their respective Subsidiaries
to, make, incur, assume or suffer to exist any Investment in any other Person,
except:
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(a) Investments existing on the Restatement Effective Date and
identified in Item 7.2.5(a) ("Ongoing Investments") of the Disclosure
-------------
Schedule;
(b) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 7.2.7 and Investments permitted as
-------------
Indebtedness pursuant to Section 7.2.2;
-------------
(c) Cash Equivalent Investments;
(d) Investments by the Parent or a Borrower in any of their
respective Subsidiaries which have executed a Subsidiary Guaranty, or by
any such Subsidiary in any of its Subsidiaries or in the Parent or a
Borrower; and
(e) other Investments (including Assumed Indebtedness) made by the
Parent, any Borrower or any of their respective Subsidiaries, which
Investments, unless (i) the Leverage Ratio at the end of the last Fiscal
Quarter immediately preceding such Investment, giving pro forma effect to
--- -----
the consummation of such Investment, is less than 2.0:1.0 or (ii) the then
current ratings published by S&P and Moody's for the Indebtedness of the
Borrowers evidenced by the Notes issued under this Agreement is BBB- and
Baa3 or higher, shall not exceed $75,000,000 in any single transaction or
series of related transactions;
provided, however, that (i) any Investment which when made complies with the
- -------- -------
requirements of the definition of the term "Cash Equivalent Investment" may
--------------------------
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements, and (ii) no Investment otherwise
permitted by clauses (d) or (e) shall be permitted to be made if, immediately
----------- ---
before or after giving effect thereto, any Default shall have occurred and be
continuing or would result therefrom.
SECTION VII.2.6. Restricted Payments, etc. On and at all times after the
-------------------------
Restatement Effective Date:
(a) neither the Parent nor any Borrower will, nor will the Parent or
any Borrower permit any of their respective Subsidiaries to, declare, pay
or make any payment, dividend or distribution (in cash, property or
obligations) on any shares of any class of Capital Stock (now or hereafter
outstanding) of the Parent or any Borrower or in respect of any warrants,
options or other rights with respect to any shares of any class of Capital
Stock (now or hereafter outstanding) of the Parent or any Borrower (other
than dividends or distributions payable in its Capital Stock or warrants to
purchase its Capital Stock or splits or reclassifications of its Capital
Stock into additional or other shares of its Capital Stock) or apply, or
permit any of their respective Subsidiaries to apply, any funds, property
or assets to the purchase, redemption, sinking fund or other retirement of,
or agree or permit any of their respective Subsidiaries to purchase or
redeem, any shares of
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any class of Capital Stock (now or hereafter outstanding) of the Parent or
any Borrower or warrants, options or other rights with respect to any
shares of any class of Capital Stock (now or hereafter outstanding) of the
Parent or any Borrower; collectively, "Restricted Payments"); provided,
------------------- --------
that at any time after the Restatement Effective Date, the Parent or any
Borrower may pay cash dividends not otherwise permitted hereunder so long
as (i) the amount so paid under this clause (a) does not exceed 10% of Net
----------
Income per annum for the most recently ended Fiscal Year, (ii) immediately
before and after giving effect to such Restricted Payment the then current
ratings published by S&P and Moody's for the Indebtedness of the Borrowers
evidenced by the Notes issued under this Agreement is BBB- and Baa3 or
higher and (iii) immediately before and after giving effect to such
Restricted Payment, no Default shall have occurred and be continuing or
would result therefrom;
(b) neither the Parent nor any Borrower will, nor will the Parent or
any Borrower permit any of their respective Subsidiaries to, (i) make any
payment or prepayment of principal of, or make any payment of interest on,
any Indebtedness which is subordinated in right of payment to the prior
payment of the Loans or other Obligations on any day other than the stated,
scheduled date for such payment or prepayment set forth in the documents
and instruments memorializing such subordinated Indebtedness, or which
would violate the terms of this Agreement or the subordination provisions
of such subordinated Indebtedness, or (ii) redeem, purchase or defease, any
such subordinated Indebtedness; and
(c) neither the Parent nor any Borrower will, nor will the Parent or
any Borrower permit any of their respective Subsidiaries to, make any
deposit for any of the foregoing purposes.
SECTION VII.2.7. Capital Expenditures, etc. Neither the Parent nor any
--------------------------
Borrower will, nor will the Parent or any Borrower permit any of their
respective Subsidiaries to, make or commit to make Capital Expenditures in any
Fiscal Year in excess of the sum of (x) $20,000,000 plus (y) 50% of the
----
difference between (i) $20,000,000 and (ii) the aggregate amount of Capital
Expenditures actually made in the immediately preceding Fiscal Year plus (z) an
----
amount equal to 5% of net revenues attributable to an Investment permitted
pursuant to clause (e) of Section 7.2.5.
---------- -------------
SECTION VII.2.8. Consolidation, Merger, etc. Neither the Parent nor any
---------------------------
Borrower will, nor will the Parent or any Borrower permit any of their
respective Subsidiaries to, liquidate or dissolve, consolidate with, or merge
into or with, any other corporation or entity, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or of any division
thereof), except
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(a)(i) any Subsidiary may liquidate or dissolve voluntarily into, and
may merge with and into the Parent or any Borrower (so long as the Parent
or such Borrower is the surviving corporation or entity of such combination
or merger) or any other Subsidiary, and the assets or stock of any such
Subsidiary may be purchased or otherwise acquired by the Parent or any
Borrower or any other Subsidiary and (ii) any Borrower may liquidate or
dissolve voluntarily into, and may merge with and into any other Borrower
(so long as a Borrower is the surviving corporation or entity of such
combination or merger), and the assets or stock of any such Borrower may be
purchased or otherwise acquired by any other Borrower; provided that,
--------
notwithstanding the above, (A) no Borrower may liquidate or dissolve into,
or merge with and into the Parent or any Subsidiary which is a Guarantor,
(B) a Subsidiary may only liquidate or dissolve into, or merge with and
into, another Subsidiary of the Parent or any Borrower, and a Borrower may
only liquidate or dissolve into, or merge with and into another Borrower,
if, after giving effect to such combination or merger, the Parent or such
Borrower, as the case may be, continues to own (directly or indirectly),
and the Administrative Agent continues to have pledged to it pursuant to a
Pledge Agreement, a percentage of the issued and outstanding shares of
Capital Stock (on a fully diluted basis) of the Subsidiary or Borrower
surviving such combination or merger that is equal to or in excess of the
percentage of the issued and outstanding shares of Capital Stock (on a
fully diluted basis) of the Subsidiary or Borrower that does not survive
such combination or merger that was (immediately prior to the combination
or merger) owned by the Parent or such Borrower, as the case may be, or
pledged to the Administrative Agent and (C) if such Subsidiary is a
Guarantor, the surviving corporation or entity must be a Guarantor; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Parent or any Borrower or any of
their respective Subsidiaries may purchase all or substantially all of the
assets of any Person (or any division thereof) not then a Subsidiary, or
acquire such Person by merger, if permitted (without duplication) pursuant
to Section 7.2.7 to be made as a Capital Expenditure, or if permitted
-------------
(without duplication) by Section 7.2.5 to be made as an Investment.
-------------
SECTION VII.2.9. Asset Dispositions, etc. Neither the Parent nor any
------------------------
Borrower will, nor will the Parent or any Borrower permit any of their
respective Subsidiaries to, sell, transfer, lease, contribute or otherwise
convey, or grant options, warrants or other rights with respect to, any of its
assets, whether now owned or hereafter acquired (including accounts receivable
and Capital Stock of Subsidiaries) to any Person, unless:
(a) such sale, transfer, lease, contribution or conveyance is in the
ordinary course of its business (and does not constitute a sale, transfer,
lease, contribution or other conveyance of all or a substantial part of the
Parent's, any Borrower's and any of their respective Subsidiaries' assets)
or is of obsolete or worn-out property or is permitted by clause (a) or (b)
---------- ---
of Section 7.2.8;
-------------
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(b) such sale, transfer, lease, contribution or conveyance consists
of a transfer or re-transfer of licenses, patents, trademarks, copyrights
or know-how to third Persons pursuant to licensing or operating agreement
entered into the ordinary course of its business and is permitted by the
applicable Security Agreement; or
(c) (i) such sale, transfer, lease, contribution or conveyance of
such assets is for fair market value and the consideration consists of no
less than 80% in cash, (ii)(A) the Leverage Ratio at the end of the last
Fiscal Quarter immediately preceding such sale, transfer, lease,
contribution or conveyance of such assets, giving pro forma effect to the
--- -----
consummation of such sale, transfer, lease, contribution or conveyance of
such assets, is less than 1.5:1.0 or (B) the then current ratings published
by S&P and Moody's for the Indebtedness of the Borrowers evidenced by the
Notes issued under this Agreement is BBB- and Baa3 or higher; provided,
--------
however, that in the event the requirements of clauses (ii)(A) or (ii)(B)
------- --------------- -------
of this clause (b) cannot be satisfied, the Net Disposition Proceeds
----------
received from such assets, together with the Net Disposition Proceeds of
all other assets sold, transferred, leased, contributed or conveyed
pursuant to this clause (c) since the Restatement Effective Date, shall not
----------
exceed (individually or in the aggregate) $20,000,000 in any Fiscal Year,
and (iii) the Net Disposition Proceeds generated from such sale, transfer,
lease, contribution or conveyance are applied as Net Disposition Proceeds
to prepay the Loans pursuant to the terms of clause (b) of Section 3.1.1.
---------- -------------
SECTION VII.2.10. Transactions with Affiliates. Neither the Parent nor any
----------------------------
Borrower will, nor will the Parent or any Borrower permit any of their
respective Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of its other Affiliates unless such arrangement
or contract is fair and equitable to such Borrower or such Subsidiary, as the
case may be, and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of such Borrower or such
Subsidiary with a Person which is not one of its Affiliates, except for
arrangements or contracts existing on the Restatement Effective Date and any
amendment or modification thereto so long as such amendment or modification is
on terms no less favorable to the Lenders than the terms of the existing
arrangements or contracts.
SECTION VII.2.11. Negative Pledges, Restrictive Agreements, etc. Neither
----------------------------------------------
the Parent nor any Borrower will, nor will the Parent or any Borrower permit any
of their respective Subsidiaries to, enter into any agreement (excluding this
Agreement, any other Loan Document and any agreement governing any Indebtedness
permitted by clauses (b) and (c) of Section 7.2.2 as in effect on the
----------- --- -------------
Restatement Effective Date or by clause (e) of Section 7.2.2 as to the assets
---------- -------------
financed with the proceeds of such Indebtedness) prohibiting (i) the creation or
assumption of any Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired, or the ability of the Parent, any Borrower or any
other Obligor to amend or otherwise modify this Agreement or any other Loan
Document, or (ii) the ability of any Subsidiary of the Parent or any Borrower to
make any payments, directly or indirectly, to the Parent or any Borrower by
way of
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dividends, advances, repayments of loans or advances, reimbursements of
management and other intercompany charges, expenses and accruals or other
returns on investments, or any other agreement or arrangement which restricts
the ability of any such Subsidiary to make any payment, directly or indirectly,
to the Parent or any Borrower.
SECTION VII.2.12. Sale and Leaseback. Neither the Parent nor any Borrower
------------------
will, nor will the Parent or any Borrower permit any of their respective
Subsidiaries to, enter into any agreement or arrangement with any other Person
providing for the leasing by the Parent, any Borrower or any of their respective
Subsidiaries of real or personal property having a fair market value of more
than $20,000,000 in the aggregate at any time outstanding which has been or is
to be sold or transferred by the Parent, any Borrower or any of its Subsidiaries
to such other Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of the Parent, any Borrower or any of their respective Subsidiaries.
SECTION VII.2.13. Limitation on Certain Liens on Intellectual Property
----------------------------------------------------
Licenses. Neither the Parent nor any Borrower will, nor will the Parent or any
- --------
Borrower permit any of their respective Subsidiaries to, create, incur, assume
or suffer to exist by means of assignment or otherwise any Lien in respect of
Indebtedness to encumber any Intellectual Property Collateral (as defined in
each Security Agreement) owned by the Parent, any Borrower or any of their
respective Subsidiaries which is either subject to the terms of a Security
Agreement or not subject to the terms of a Security Agreement.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION VIII.1. Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Section 8.1 shall constitute an "Event of
----------- --------
Default".
- -------
SECTION VIII.1.1. Non-Payment of Obligations. (a) Any Borrower shall
--------------------------
default in the payment or prepayment of any principal of any Loan or any
Reimbursement Obligation or any deposit of cash for collateral purposes pursuant
to Section 2.6.4, as the case may be, or (b) any Borrower or any other Obligor
-------------
shall default (and such default shall continue unremedied for a period of three
days) in the payment when due of any interest or fee with respect to the Loans
or Commitments or of any other monetary Obligation.
SECTION VIII.1.2. Breach of Warranty. Any representation or warranty of any
------------------
Borrower or any other Obligor made hereunder or deemed to be made in any other
Loan Document executed by it or any other writing or certificate furnished by or
on behalf of any Borrower or any other Obligor to the Agents, the Issuer, the
Lead Arranger or any Lender for the
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purposes of or in connection with this Agreement or any such other Loan Document
(including any certificates delivered pursuant to Article V) is or shall be
---------
incorrect when made in any material respect.
SECTION VIII.1.3. Non-Performance of Certain Covenants and Obligations. Any
----------------------------------------------------
Borrower shall default in the due performance and observance of any of its
obligations under (i) Section 7.1.1 (other than clauses (a), (b) or (c)
------------- ----------- --- ---
thereof), Section 7.1.9 or Section 7.2 or (ii) clauses (a), (b) or (c) of
------------- ----------- ----------- --- ---
Section 7.1.1 and such default shall continue unremedied for a period of five
- -------------
days.
SECTION VIII.1.4. Non-Performance of Other Covenants and Obligations. Any
--------------------------------------------------
Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of 30
days after notice thereof shall have been given to such Borrower by the
Administrative Agent or any Lender.
SECTION VIII.1.5. Default on Other Indebtedness. A default shall occur in
-----------------------------
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Parent or any of its Subsidiaries (including
-------------
any Borrower) or any other Obligor having a principal amount, individually or in
the aggregate, in excess of $5,000,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause such Indebtedness to become
due and payable prior to its expressed maturity.
SECTION VIII.1.6. Judgments. Any judgment or order for the payment of money
---------
in excess of $5,000,000 shall be rendered against the Parent or any of its
Subsidiaries (including any Borrower) or any other Obligor and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order, or (i) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION VIII.1.7. Pension Plans. Any of the following events shall occur
-------------
with respect to any Pension Plan (i) the institution of any steps by the Parent,
any member of its Controlled Group or any other Person to terminate a Pension
Plan if, as a result of such termination, the Parent or any such member could
reasonably be expected to be required to make a contribution to such Pension
Plan, or could reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $5,000,000, or (ii) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA.
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SECTION VIII.1.8. Change in Control. Any Change in Control shall occur.
-----------------
SECTION VIII.1.9. Bankruptcy, Insolvency, etc. The Parent, any Borrower or
----------------------------
any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Parent, any
Borrower or any such Obligor or any property of any thereof, or make a
general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Parent, any Borrower or any such
Obligor or for a substantial part of the property of any thereof, and such
trustee, receiver, sequestrator or other custodian shall not be discharged
within 60 days, provided that the Parent, each Borrower and each such
Obligor hereby expressly authorize the Agents, the Issuer and each Lender
to appear in any court conducting any relevant proceeding during such 60-
day period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Parent, any Borrower or any such Obligor,
and, if any such case or proceeding is not commenced by the Parent, any
Borrower or such Obligor, such case or proceeding shall be consented to or
acquiesced in by such Person or shall result in the entry of an order for
relief or shall remain for 60 days undismissed, provided that the Parent,
each Borrower and each such Obligor hereby expressly authorize the Agents,
the Issuer and each Lender to appear in any court conducting any such case
or proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION VIII.1.10. Impairment of Security, etc. (i) Any Loan Document, or
----------------------------
any Lien granted thereunder, shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; (ii) the
Parent, any Borrower, any other Obligor or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding nature
or enforceability; or (iii) any Lien securing any Obligation shall, in whole or
in part, cease to be a perfected first priority Lien, subject only to those
exceptions expressly permitted by such Loan Document.
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SECTION VIII.2. Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
- ----------- --- -------------
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without notice or demand and the Borrowers shall automatically and
immediately be obligated to deposit with the Administrative Agent cash
collateral in an amount equal to all Letter of Credit Outstandings.
SECTION VIII.3. Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (d) of Section
----------- --- -------
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
- -----
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Parent declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable, require the Borrowers to
provide cash collateral to be deposited with the Administrative Agent in an
amount equal to the undrawn amount of all Letters of Credit outstanding and/or
declare the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which shall
be so declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate and the Borrowers shall deposit with the
Administrative Agent cash collateral in an amount equal to all Letters of Credit
Outstandings.
ARTICLE IX
THE AGENTS
SECTION IX.1. Actions. Each Lender hereby appoints DLJ as its Syndication
-------
Agent and as its Administrative Agent under and for purposes of this Agreement,
the Notes and each other Loan Document. Each Lender authorizes the Agents to
act on behalf of such Lender under this Agreement, the Notes and each other Loan
Document and, in the absence of other written instructions from the Required
Lenders received from time to time by the Agents (with respect to which each of
the Agents agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such powers hereunder
and thereunder as are specifically delegated to or required of the Agents by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agents, pro rata according to
such Lender's Percentage, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, any of
the Agents in any way relating to or arising out of this Agreement, the Notes
and any other Loan Document, including reasonable attorneys' fees, and as
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to which any Agent is not reimbursed by the Borrowers; provided, however, that
-------- -------
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted solely
from such Agent's gross negligence or wilful misconduct. The Agents shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document, unless each Agent is indemnified hereunder to
its satisfaction. If any indemnity in favor of any of the Agents shall be or
become, in such Agent's determination, inadequate, such Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
SECTION IX.2. Funding Reliance, etc. Unless the Administrative Agent shall
----------------------
have been notified by telephone, confirmed in writing, by any Lender by 5:00
p.m., New York time, on the day prior to a Borrowing or disbursement with
respect to a Letter of Credit pursuant to Section 2.6.2 that such Lender will
-------------
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and the Borrowers
agree to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrowers to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing.
SECTION IX.3. Exculpation. Neither the Agents nor any of their respective
-----------
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by any Borrower or any Obligor of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by any Agent or the
Issuer shall not obligate it to make any further inquiry or to take any action.
The Agents and the Issuer shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement or
writing which the Agent or the Issuer believes to be genuine and to have been
presented by a proper Person.
SECTION IX.4. Successor. The Syndication Agent may resign as such upon one
---------
Business Days' notice to the Parent and the Administrative Agent. The
Administrative Agent may
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<PAGE>
resign as such at any time upon at least 30 days' prior notice to the Parent and
all Lenders. If the Administrative Agent at any time shall resign, the Required
Lenders may, with the prior consent of the Parent (which consent shall not be
unreasonably withheld or delayed), appoint another Lender as a successor
Administrative Agent which shall thereupon become the Administrative Agent
hereunder. If no successor Administrative Agent shall have been so appointed,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from the
retiring Administrative Agent such documents of transfer and assignment as such
successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as an Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was an Agent under this
Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
------------ ------------
benefit.
SECTION IX.5. Credit Extensions by each Agent. Each Agent and the Issuer
-------------------------------
shall have the same rights and powers with respect to (x) (i) in the case of the
Agents, the Credit Extensions made by it or any of its Affiliates and (ii) in
the case of the Issuer, the Loans made by it or any of its Affiliates, and (y)
the Notes held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were not an Agent or the Issuer. Each Agent, the
Issuer and each of their respective Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with any Borrower or any
Subsidiary or Affiliate of any Borrower as if such Agent or Issuer were not an
Agent or Issuer hereunder.
SECTION IX.6. Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of the Agents, the Lead Arranger, the Issuer and each other
Lender, and based on such Lender's review of the financial information of the
Parent, this Agreement, the other Loan Documents (the terms and provisions of
which being satisfactory to such Lender) and such other documents, information
and investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of the Agents, the Lead Arranger, the Issuer and each other
Lender, and based on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own credit decisions as
to exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.
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SECTION IX.7. Copies, etc. The Administrative Agent shall give prompt
------------
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by any Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by such Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from any Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION X.1. Waivers, Amendments, etc. The provisions of this Agreement
-------------------------
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrowers and the Required Lenders; provided, however, that no such
-------- -------
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this Section 10.1, or clause (a) of Section 10.10, change
------------ ---------- -------------
the definition of "Required Lenders", increase any Commitment Amount or
----------------
Percentage of any Lender, reduce any fees described in Article III payable
-----------
to any Lender, release any Guarantor from its obligations under its
Guaranty or release all or substantially all of the collateral security
(except as otherwise specifically provided in Section 10.16, the Guaranty,
-------------
a Security Agreement or Pledge Agreement) or extend any Commitment
Termination Date shall be made without the consent of each Lender;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment of principal of or interest on or fees payable in respect of any
Loan, or reduce the principal amount of or rate of interest on any Loan or
any Reimbursement Obligation, shall be made without the consent of the
holder of that Note evidencing such Loan or, in the case of a Reimbursement
Obligation, the Issuer owed, and those Lenders participating in, such
Reimbursement Obligation;
(d) affect adversely the interests, rights or obligations of any
Agent, Issuer or Lead Arranger (in its capacity as Agent, Issuer or Lead
Arranger), unless consented to by such Agent, Issuer or Lead Arranger, as
the case may be;
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(e) amend, modify or waive clause (d) of Section 3.1.1 or have the
---------- -------------
effect (either immediately or at some later time) of enabling any Borrower
to satisfy a condition precedent to the making of a Revolving Loan or the
issuance of a Letter of Credit without the consent of Lenders holding at
least 51% of the Revolving Loan Commitments; or
(f) amend, modify or waive the provisions of clause (a)(i) of Section
------------- -------
3.1.1 or clause (b) of Section 3.1.2 without the consent of the holders of
----- ---------- -------------
at least 51% of the aggregate outstanding amount of the Loans outstanding.
No failure or delay on the part of any Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on any Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Agent, the Issuer,
any Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION X.2. Notices. All notices and other communications provided to
-------
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth opposite its name on the signature
pages hereto or on Schedule II hereto under the applicable column heading or as
-----------
set forth in the Lender Assignment Agreement or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be deemed
given when received; any notice, if transmitted by facsimile, shall be deemed
given when transmitted.
SECTION X.3. Payment of Costs and Expenses. The Borrowers hereby agree to
-----------------------------
pay on demand all expenses of each of the Agents (including the reasonable fees
and out-of-pocket expenses of counsel (including local counsel, if necessary) to
the Agents) in connection with
(a) the syndication by the Syndication Agent of the Loans, the
negotiation, preparation, execution and delivery of this Agreement and of
each other Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications to this
Agreement or any other Loan Document as may from time to time hereafter be
required, whether or not the transactions contemplated hereby are
consummated;
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(b) the filing, recording, refiling or rerecording of each Mortgage,
each Pledge Agreement and each Security Agreement and/or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof or of the Mortgage,
the Pledge Agreement or the Security Agreement; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrowers further agree to pay, and to save the Agents, the Issuer or the
Letters of Credit and the Lenders harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery of
this Agreement, the Credit Extensions made hereunder, the issuance of the Notes
or Letters of Credit or any other Loan Documents. The Borrowers agree to
reimburse each Agent, the Issuer and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses)
incurred by such Agent, the Issuer or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION X.4. Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Parent and each Borrower indemnifies, exonerates and holds each Agent, the
Issuer, the Lead Arranger and each Lender and each of their respective partners,
trustees, officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
-------------------
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
-----------------------
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of any Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to make any Credit
---------
Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Parent, any Borrower or any of
their respective Subsidiaries
79
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of all or any portion of the stock or assets of any Person, whether or not
such Agent, such Issuer, such Lead Arranger or such Lender is party
thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Parent, any Borrower or
any of their respective Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Parent, any Borrower or any of their
respective Subsidiaries of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by, or
within the control of, the Parent, such Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. Each Obligor and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Agent, any Issuer, any Lead Arranger or any Lender
under CERCLA or any state equivalent, or any similar law now existing or
hereafter enacted, except to the extent arising out of the gross negligence or
wilful misconduct of any Indemnified Party. It is expressly understood and
agreed that to the extent that any of such Persons is strictly liable under any
Environmental Laws, such Obligor's obligation to such Person under this
indemnity shall likewise be without regard to fault on the part of such Obligor,
to the extent permitted under applicable law, with respect to the violation or
condition which results in liability of such Person. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, such Obligor
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
SECTION X.5. Survival. The obligations of the Borrowers under Sections
-------- --------
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
- --- --- --- --- ---- ----
Section 4.6, Section 4.8, Section 9.1 and Section 10.12, shall in each case
- ----------- ----------- ----------- -------------
survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments. The representations and
warranties made by each Borrower and each other Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document. All Liens in respect of the
Collateral securing the payment of all Obligations shall be promptly released
(of record and otherwise) following the payment in full of all Obligations
(other than such obligations which survive such payment as set forth in this
Section 10.5).
- ------------
SECTION X.6. Severability. Any provision of this Agreement or any other
------------
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without
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invalidating the remaining provisions of this Agreement or such Loan Document or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION X.7. Headings. The various headings of this Agreement and of each
--------
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION X.8. Execution in Counterparts, Effectiveness, etc. This
----------------------------------------------
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
when counterparts hereof executed on behalf of the Parent, each Borrower and
each Lender (or notice thereof satisfactory to the Agents) shall have been
received by the Agents and notice thereof shall have been given by the
Administrative Agent to the Parent, each Borrower and each Lender.
SECTION X.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
-------------------------------
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the
Notes and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION X.10. Successors and Assigns. This Agreement shall be binding upon
----------------------
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
-------- -------
(a) except as provided in clause (a)(ii) of Section 7.2.8, no Borrower
-------------- -------------
may assign or transfer its rights or obligations hereunder without the
prior written consent of the Agents and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
-------------
SECTION X.11. Sale and Transfer of Loans and Notes; Participation in Loans
------------------------------------------------------------
and Notes. Each Lender may assign, or sell participation in, its Loans and
- ---------
Commitments to one or more other Persons in accordance with this Section 10.11.
-------------
SECTION X.11.1. Assignments. Any Lender may (i) at any time assign and
-----------
delegate to one or more commercial banks or other financial institutions or
funds which are regularly engaged in making, purchasing or investing in loans or
securities, and (ii) assign and delegate to any of its Affiliates or Related
Funds or to any other Lender (each Person described in either of the
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foregoing clauses as being the Person to whom such assignment and delegation is
to be made, being hereinafter referred to as an "Assignee Lender"), all or any
---------------
fraction of such Lender's total Loans, participations in Letters of Credit and
Letter of Credit Outstandings with respect thereto and Commitments (which
assignment and delegation shall be, as among Revolving Loan Commitments,
Revolving Loans and participations in Letters of Credit, of a constant, and not
a varying, percentage) in a minimum aggregate amount of $2,500,000 or the then
remaining amount of a Lender's Loans and Commitments; provided, however, that
-------- -------
(x) any such assignment or delegation of the type described in clause (i) above
----------
shall require the prior written consent (which consent shall not be unreasonably
withheld) of the Borrowers and the Agents, and any such assignment or delegation
of the type described in clause (ii) above shall require the prior written
-----------
consent (which consent shall not be unreasonably withheld) of the Borrowers and
the Agents (other than any assignment or delegation by the Syndication Agent);
provided, further, however, that the consent of the Borrowers shall not be
- -------- ------- -------
required if a Default or an Event of Default has occurred and is continuing on
the date of such assignment and delegation, (y) any such Assignee Lender will
comply, if applicable, with the provisions contained in the last sentence of
Section 4.6 and (z) the Borrowers, each other Obligor and the Agents shall be
- -----------
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender until
(a) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrowers and the Lead
Arranger by such Lender and such Assignee Lender,
(b) such Assignee Lender shall have executed and delivered to the
Borrowers and the Agents a Lender Assignment Agreement, accepted by the
Lead Arrangers, and
(c) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received an executed Lender Assignment Agreement, the
Borrowers shall execute and deliver to the Administrative Agent (for delivery to
the relevant Assignee Lender) new Notes evidencing such Assignee Lender's
assigned Loans and, if the assignor Lender has retained Loans hereunder,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender hereunder (such Notes to be in exchange for, but not in payment of, those
Notes then held by such assignor Lender). Each such Note shall be dated the
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date of the predecessor Notes. The assignor Lender shall mark the predecessor
Notes "exchanged" and deliver them to the Borrowers. Accrued interest on that
part of the predecessor Notes evidenced by the new Notes, and accrued fees,
shall be paid as provided in the Lender Assignment Agreement. Accrued interest
on that part of the predecessor Notes evidenced by the replacement Notes shall
be paid to the assignor Lender. Accrued interest and accrued fees shall be paid
at the same time or times provided in the predecessor Notes and in this
Agreement. Such assignor Lender or such Assignee Lender must also pay a
processing fee to the Administrative Agent upon delivery of any Lender
Assignment Agreement in the amount of $500. Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be null and
---------------
void. Nothing contained in this Section 10.11.1 shall prevent or prohibit any
---------------
Lender from pledging its rights (but not its obligations to make Loans or
participate in Letters of Credit of Letter of Credit Outstandings) under this
Agreement and/or its Loans and/or its Notes hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve Bank.
SECTION X.11.2. Participations. Any Lender may at any time sell to one or
--------------
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
-----------
the Loans, Commitments, participations in Letters of Credit and Letters of
Credit Outstandings or other interests of such Lender hereunder; provided,
--------
however, that
- -------
(a) no participation or sub-participation contemplated in this
Section 10.11.2 shall relieve such Lender from its obligations hereunder or
---------------
under any other Loan Document,
(b) such Lender shall remain solely responsible for the performance
of obligations,
(c) the Borrowers and each other Obligor and the Agents shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and each of the
other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, agree to (i) any
reduction in the interest rate or in the amount of fees that such
Participant is otherwise entitled to, (ii) a decrease in the principal
amount, or an extension of the Stated Maturity Date, of any Loan in which
such Participant has purchased a participating interest or (iii) release
all or substantially all of the collateral security under the Loan
Documents or any Guarantor from its obligations under its Guaranty, in each
case except as otherwise specifically provided in a Loan Document, and
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(e) the Borrowers shall not be required to pay any amount under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than the amount
------------ --- --- --- ---- ----
which it would have been required to pay had no participating interest been
sold.
Each Borrower acknowledges and agrees, subject to clause (e) above, that each
----------
Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3, 10.4
------------ --- --- --- --- --- ---- ----
and 10.12, shall be considered a Lender.
-----
SECTION X.12. Confidentiality. The Agents, the Issuer, the Lead Arranger
---------------
and the Lenders shall hold all non-public information (which has been identified
as such by the Parent) obtained pursuant to the requirements of this Agreement
or obtained by them based on a review of the books and records of the Parent,
any Borrower or any of their respective Subsidiaries in accordance with their
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors in connection with this Agreement, or any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 10.12) or as reasonably required by any bona fide
------------- ---- ----
transferee, participant or assignee or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided, however, that
- -------- -------
(a) unless specifically prohibited by applicable law or court order,
each Agent, the Issuer, the Lead Arranger and each Lender shall promptly
notify the Parent of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Agent, the Issuer, the Lead
Arranger and such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section 10.12, each
-------------
Agent, the Issuer, the Lead Arranger and each Lender shall notify the
Parent thereof and shall require any such bona fide transferee, participant
and assignee or other Person (other than any governmental agency or
representative thereof) receiving a disclosure of non-public information to
agree in writing
(i) to be bound by this Section 10.12; and
-------------
(ii) to require such Person to require any other Person to whom
such Person discloses such non-public information to be similarly
bound by this Section 10.12; and
-------------
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(c) except as may be required by an order of a court of competent
jurisdiction and to the extent set forth therein, no Lender shall be
obligated or required to return (without keeping copies thereof) any
materials furnished by the Parent, any Borrower or any Subsidiary.
Each Agent, the Issuer, the Lead Arranger and each Lender agrees that it
will use any non-public information that the Parent, any Borrower or any of
their respective Subsidiaries may have furnished or may hereafter furnish to
such Agent, the Issuer, the Lead Arranger or such Lender in connection with this
Agreement only for purposes related to the transactions contemplated by this
Agreement and by the other Loan Documents.
SECTION X.13. Other Transactions. Nothing contained herein shall preclude
------------------
the Agents, the Lead Arranger, the Issuer or any other Lender from engaging in
any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Parent or any of its Affiliates in which the
Parent or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION X.14. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
-------------------------------------------
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LEAD ARRANGER, THE
ISSUER, THE LENDERS, THE PARENT, OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, AND SHALL BE BROUGHT TO THE
EXTENT REQUIRED BY APPLICABLE LAW, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE PARENT AND EACH BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE PARENT AND EACH BORROWER FURTHER IRREVOCABLY CONSENT
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AND EXPRESSLY AND IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM AS ITS DOMICILE AND ADDRESS FOR SERVICE OF
PROCESS FOR PURPOSES OF ANY ACTION AS TO WHICH IT HAS SUBMITTED
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TO JURISDICTION AS SET FORTH IN THIS SECTION 10.14, AND AGREES THAT SERVICE UPON
-------------
SUCH AUTHORIZED AGENT SHALL BE DEEMED IN EVERY RESPECT SERVICE OF PROCESS UPON
THE PARENT OR BORROWER OR ITS SUCCESSORS AND ASSIGNS, AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, SHALL BE TAKEN AND HELD TO BE VALID PERSONAL
SERVICE UPON IT. THE PARENT AND EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE PARENT OR ANY BORROWER
HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM
ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR
ITS PROPERTY, THE PARENT OR SUCH BORROWER HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION X.15. Waiver of Jury Trial. THE AGENTS, THE LEAD ARRANGER, THE
--------------------
ISSUER, THE LENDERS, THE PARENT AND THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LEAD
ARRANGER, THE ISSUER, THE LENDERS, THE PARENT OR THE BORROWERS. THE PARENT AND
EACH BORROWER ACKNOWLEDGE AND AGREE THAT THEY HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH THE PARENT OR ANY BORROWER IS A PARTY) AND THAT THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE AGENTS, THE LEAD ARRANGER, THE ISSUER AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION X.16. Release of Liens. Notwithstanding the provisions of clause
---------------- ------
(b) of Section 10.1, the Administrative Agent may consent to the release of the
- --- ------------
Liens granted by any Security Agreement on any property or other assets having a
value not exceeding $250,000 in the aggregate which have been sold, transferred
or otherwise disposed of in a transaction permitted by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
SHIRE PHARMACEUTICALS GROUP plc
By:
-----------------------------------
Title:
Address:
------------------------------
--------------------------------------
Facsimile No.:
------------------------
Attention:
----------------------------
SHIRE PARTNERS
By:
-----------------------------------
its General Partner
By:
-----------------------------------
Title:
Address:
------------------------------
--------------------------------------
Facsimile No.:
------------------------
Attention:
----------------------------
S-1
<PAGE>
SHIRE LABORATORIES INC.
By:
-----------------------------------
Title:
Address:
------------------------------
--------------------------------------
Facsimile No.:
------------------------
Attention:
----------------------------
SHIRE RICHWOOD INC.
By:
-----------------------------------
Title:
Address:
------------------------------
--------------------------------------
Facsimile No.:
------------------------
Attention:
----------------------------
S-2
<PAGE>
SHIRE SUPPLIES U.S. LLC
By:
-----------------------------------
Title:
Address:
------------------------------
--------------------------------------
Facsimile No.:
------------------------
Attention:
----------------------------
ROBERTS PHARMACEUTICAL CORPORATION
By:
-----------------------------------
Title:
Address: Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Facsimile No.: (732) 389-1014
Attention: Peter Rogalin
S-3
<PAGE>
DLJ CAPITAL FUNDING, INC.,
as Administrative Agent, Syndication
Agent and Lead Arranger
By:
-----------------------------------
Title:
Address: 277 Park Avenue
9th Floor
New York, NY 10172
Facsimile No.: (212) 892-5286
Attention: Stephen P. Hickey
S-4
<PAGE>
LENDERS:
DLJ CAPITAL FUNDING, INC.
By:
-----------------------------------
Title:
S-5
<PAGE>
SCHEDULE I
DISCLOSURE SCHEDULE
[To Be Prepared by Parent]
<PAGE>
Exhibit 99.1
[Letterhead of Paine Webber]
July 22, 1999
Confidential
- ------------
Board of Directors
Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, New Jersey 07724
Ladies and Gentlemen:
Roberts Pharmaceutical Corporation (the "Company") and Shire
Pharmaceuticals Group plc (the "Acquiring Company") propose to enter into an
agreement (the "Agreement") pursuant to which the Company will be merged with a
wholly-owned subsidiary of the Acquiring Company in a transaction (the "Merger")
in which each share of the Company's common stock, par value $0.01 per share
(the "Shares"), will be converted into the right to receive 1.1374 (the
"Exchange Ratio") American Depositary Receipts of the Acquiring Company (the
"ADRs") or, at the option of the holder, Ordinary Shares, nominal value 5 pence
per share, of the Acquiring Company (the "Merger Consideration"). One ADR is
equal to three Ordinary Shares of the Acquiring Company. The Exchange Ratio is
subject to adjustment between 1.0427 and 1.2802 in the event of certain changes
in the price of the ADRs as set forth in the draft Agreement dated July 21,
1999. In connection with the Merger, the parties also propose to enter into an
agreement (the "Option Agreement") pursuant to which the Company will grant the
Acquiring Company an option to acquire 6,345,926 Shares which, if issued, would
represent approximately 19.9% of the total number of currently outstanding
Shares. In addition, certain shareholders of the Company holding in the
aggregate approximately 25% of the Shares propose to enter into agreements with
the Acquiring Company (the "Shareholder Agreements") pursuant to which such
shareholders will agree to vote for the approval of the Merger.
You have asked us whether or not, in our opinion, the proposed Merger
Consideration to be received by the shareholders of the Company pursuant to the
Merger is fair to such shareholders from a financial point of view.
<PAGE>
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed the Company's Annual Reports, Forms 10-K and related
financial information for the three fiscal years ended December 31,
1998; the Company's Form 10-Q and the related unaudited financial
information for the three months ended March 31, 1999; and certain
unaudited financial information of the Company for the six months
ended June 30, 1999;
(2) Reviewed the Acquiring Company's Annual Reports, Forms 20-F and
related financial information for the two fiscal years ended December
31, 1998, and certain unaudited financial information of the Acquiring
Company for the three months ended March 31, 1999;
(3) Reviewed certain information, including financial forecasts, relating
to the business, earnings, cash flow, assets and prospects of the
Company and the Acquiring Company, furnished to us by the Company or
which were otherwise publicly available;
(4) Conducted discussions with members of senior management of the Company
and the Acquiring Company concerning their respective businesses and
prospects;
(5) Reviewed the historical market prices and trading activity for the
Shares and the ADRs and compared them with that of certain publicly
traded companies which we deemed to be relevant;
(6) Compared the financial position and results of operations of the
Company and the Acquiring Company with that of certain companies which
we deemed to be relevant;
(7) Compared the proposed financial terms of the transactions contemplated
by the Agreement with the financial terms of certain other mergers and
acquisitions which we deemed to be relevant;
(8) Reviewed a draft of the Agreement dated July 21, 1999;
(9) Reviewed a draft of the Option Agreement dated July 21, 1999;
(10) Reviewed drafts of the Shareholder Agreements dated July 21, 1999;
and,
(11) Reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as we
deemed necessary, including our assessment of general economic, market
and monetary conditions.
-2-
<PAGE>
In preparing our opinion, we have relied on the accuracy and completeness
of all information publicly available, supplied or otherwise communicated to us
by the Company and the Acquiring Company, and we have not assumed any
responsibility to independently verify such information. With respect to the
financial forecasts examined by us, we have assumed that they were reasonably
prepared on bases reflecting the best currently available estimates and good
faith judgment of the management of the Company as to the future performance of
the Company. We have also relied upon assurances of the management of the
Company and the Acquiring Company, respectively, that they are unaware of any
facts that would make the information or financial forecasts provided to us
incomplete or misleading. We have not been engaged to make, and have not made,
any independent evaluation or appraisal of the assets or liabilities (contingent
or otherwise) of the Company or the Acquiring Company nor have we been furnished
with any such evaluations or appraisals. We have also assumed with your
consent, that (i) the Merger will be accounted for under the pooling-of-
interests method of accounting under U.S. generally accepted accounting
principles, (ii) the Merger will be a tax free reorganization and (iii) any
material liabilities (contingent or otherwise, known or unknown) of the Company
and the Acquiring Company are as set forth in the consolidated financial
statements of the Company and the Acquiring Company, respectively.
This opinion is directed to the Board of Directors of the Company and does
not constitute a recommendation to any shareholder of the Company as to how any
such shareholder should vote on the Merger. This opinion does not address the
relative merits of the Merger and any other transactions or business strategies
discussed by the Board of Directors of the Company as alternatives to the Merger
or the decision of the Board of Directors of the Company to proceed with the
Merger. We were not requested to, and did not, solicit third party indications
of interest in acquiring all or any portion of the Company.
No opinion is expressed herein as to the price at which the securities to
be issued in the Merger to the shareholders of the Company may trade at any
time. Our opinion is based on economic, monetary and market conditions existing
on the date hereof.
In the ordinary course of business, PaineWebber Incorporated may trade in
the securities of the Company and the Acquiring Company for our own account and
for the accounts of our customers and, accordingly, may at any time hold long or
short positions in such securities.
PaineWebber Incorporated is currently acting as financial advisor to the
Company in connection with the Merger and will be receiving a fee in connection
with the rendering of this opinion and upon consummation of the Merger.
-3-
<PAGE>
On the basis of, and subject to the foregoing, we are of the opinion that
the proposed Merger Consideration to be received by the shareholders of the
Company pursuant to the Merger, taken as a whole, is fair to such shareholders
from a financial point of view.
This opinion has been prepared for the information of the Board of
Directors of the Company in connection with the Merger and shall not be
reproduced, summarized, described or referred to, provided to any person or
otherwise made public or used for any other purpose without the prior written
consent of PaineWebber Incorporated, provided, however, that this letter may be
reproduced in full in the Proxy Statement related to the Merger.
Very truly yours,
PAINEWEBBER INCORPORATED
/s/ PAINEWEBBER INCORPORATED
----------------------------
-4-
<PAGE>
Exhibit 99.2
[LETTERHEAD OF BEAR, STEARNS & CO. INC.]
July 23, 1999
Shire Pharmaceuticals Group plc
East Anton Andover
Hampshire
SP10 5RG
United Kingdom
Attention: Board of Directors
Gentlemen:
We understand that Shire Pharmaceuticals Group plc ("Shire") and Roberts
Pharmaceutical Corporation ("Roberts") are considering a transaction pursuant to
which a newly-formed wholly-owned subsidiary of Shire ("Acquisition Sub") would
be merged with and into Roberts in a stock-for-stock exchange (the "Merger").
Pursuant to the Merger, each outstanding share of common stock of Roberts would
be converted into the right to receive 3.4122 shares (the "Exchange Ratio") of
Shire Ordinary Shares of common stock (the "Merger Consideration"). We
understand that, unless the holders (the "Holders") of Roberts common stock
otherwise elect, Shire will provide Holders with one-third of a Shire American
Depository Share ("Shire ADS") for each Shire Ordinary Share such Holder would
be entitled to receive pursuant to the Exchange Ratio. The Exchange Ratio shall
be subject to adjustment as follows: i) if the Shire ADS price (which shall be
determined based on the average of the last reported sale price per Shire ADS on
the NASDAQ National Market over the fifteen consecutive trading days ending on
the third trading day immediately preceding the consummation of the Merger) is
less than $21.09, the Exchange Ratio will be fixed at 3.8407; ii) if the Shire
ADS price is between $21.09 and $23.73, the Exchange Ratio will be determined by
dividing $27.00 by one-third of the Shire ADS price; iii) if the Shire ADS price
is between $23.73 and $29.01, the Exchange Ratio will be fixed at 3.4122; iv) if
the Shire ADS price is between $29.01 and $31.65, the Exchange Ratio will be
determined by dividing $33.00 by one-third of the Shire ADS price; and v) if the
Shire ADS price is greater than $31.65, the Exchange Ratio will be fixed at
3.1280. If Roberts terminates the Merger for certain reasons, Shire will be
entitled to (i) receive a termination fee of $30 million from Roberts, and (ii)
exercise an option to purchase up to 6,345,926 newly-issued shares of Roberts
common stock at a price of $30.00 per share in accordance with the terms of an
Option Agreement (the "Option Agreement") to be entered
<PAGE>
Shire Pharmeceuticals Group plc
July 23, 1999
Page 2
into by Shire and Roberts. If Shire terminates the Merger for certain reasons,
Roberts shall be entitled to receive a termination fee of $30 million from
Shire.
You have provided us with a draft of the Agreement and Plan of Merger (the
"Agreement") and a draft of the Option Agreement both dated July 23, 1999. We
understand that in conjunction with the Merger, Shire will be adopting U.S.
Generally Accepted Accounting Principles ("U.S. GAAP") as its primary accounting
standard. We further understand that the Merger will be accounted for under
U.S. GAAP as a pooling of interest.
You have asked us to render our opinion as to whether the "Exchange Ratio" is
fair, from a financial point of view, to Shire.
In the course of our analyses for rendering this opinion, we have:
1. reviewed a July 23, 1999 draft of the Agreement and a July 23, 1999
draft of the Option Agreement;
2. reviewed Roberts' Annual Reports to Shareholders and Annual Reports on
Form 10-K for the fiscal years ended December 31, 1997 and 1998, and
its Quarterly Report on Form 10-Q for the period ended March 31, 1999;
3. reviewed certain operating and financial information, including
projections, provided to us by Roberts' management relating to
Roberts' business and prospects;
4. met with certain members of Roberts' senior management to discuss its
operations, historical financial statements and future prospects;
5. reviewed Shire's Transition Report and Accounts on Form 20-F for the
six months ended December 31, 1997, its Annual Report and Accounts on
Form 20-F for the fiscal year ended December 31, 1998, and its interim
results for the three months ended March 31, 1999;
6. reviewed certain operating and financial information, including Wall
Street equity research analyst projections that were adjusted by the
senior management of Shire (the "Adjusted Shire Analyst Projections"),
relating to Shire's business and prospects;
7. met with certain members of Shire's senior management to discuss its
operations, historical financial statements and future prospects;
8. reviewed analyses provided to us by Shire's management relating to the
anticipated financial performance of Roberts subsequent to the Merger;
<PAGE>
Shire Pharmeceuticals Group plc
July 23, 1999
Page 3
9. reviewed certain estimates of cost savings and other combination
benefits expected to result from the Merger, prepared and provided to
us by the senior management of Shire;
10. reviewed the historical prices and trading volumes of the common stock
of Shire and Roberts;
11. reviewed publicly available financial data, stock market performance
data and valuation parameters of companies which we deemed generally
comparable to Shire and Roberts;
12. reviewed the terms of recent acquisitions of companies which we deemed
generally comparable to Roberts; and
13. conducted such other studies, analyses, inquiries and investigations
as we deemed appropriate.
In the course of our review, we have relied upon and assumed, without
independent verification, the accuracy and completeness of the financial and
other information, including without limitation the Adjusted Shire Analyst
Projections and the projections (in the case of Roberts), provided to us by
Shire and Roberts. With respect to Shire's and Roberts' projected financial
results and potential synergies that could be achieved upon consummation of the
Merger, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the senior
managements of Shire and Roberts as to the expected future performance of Shire
and Roberts, respectively. We have not assumed any responsibility for the
independent verification of any such information or of the projections provided
to us and we have further relied upon the assurances of the senior managements
of Shire and Roberts that they are unaware of any facts that would make the
information or projections provided to us incomplete or misleading. In arriving
at our opinion, we have not performed or obtained any independent appraisal of
the assets or liabilities of Shire and Roberts, nor have we been furnished with
any such appraisals. Our opinion is necessarily based on economic, market and
other conditions, and the information made available to us, as of the date
hereof. We have assumed that the Merger (i) will qualify as a tax-free
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended and (ii) will be accounted for as a pooling of
interests under U.S. GAAP.
We do not express any opinion as to the price or range of prices at which the
Ordinary Shares or ADSs of Shire may trade subsequent to the consummation of the
Merger.
We have acted as a financial advisor to Shire in connection with the Merger and
will receive a fee for such services.
<PAGE>
Shire Pharmeceuticals Group plc
July 23, 1999
Page 4
Bear Stearns acted as lead managing underwriter on Shire's public offering of
Shire ADS's in March 1998. In the ordinary course of business, Bear Stearns may
actively trade the equity securities of Shire and Roberts for its own account
and for the account of its customers and, accordingly, may at any time hold a
long or short position in such securities.
It is understood that this letter is intended for the benefit and use of the
Board of Directors of Shire and does not constitute a recommendation to the
Board of Directors of Shire or any holders of Shire's Ordinary Shares as to how
to vote in connection with the Merger. This opinion does not address Shire's
underlying business decision to pursue the Merger. This letter is not to be
used for any other purpose, or reproduced, disseminated, quoted or referred to
at any time, in whole or in part, without our prior written consent; provided,
however, that this letter may be included in its entirety in any proxy statement
/ prospectus to be distributed to holders of Shire Ordinary Shares or ADSs or
Roberts Common Stock in connection with the Merger.
Based on and subject to the foregoing, it is our opinion that the Exchange Ratio
is fair, from a financial point of view, to Shire.
Very truly yours,
BEAR, STEARNS & CO. INC.
By: /s/ Steven R. Drank
------------------------
Senior Managing Director
<PAGE>
Exhibit 99.7
CONSENT OF NOMINEE FOR DIRECTOR
Shire Pharmaceuticals Group plc
East Anton Andover
Hampshire SP10 5RG
United Kingdom
ATTN: Dr. James Cavanaugh
Chairman of the Board of Directors
I hereby consent to be named in a Registration Statement on Form F-4
(including the Prospectus-Proxy Statement) as a nominee for director of Shire
Pharmaceuticals Group plc (the "Company") and to all references to me in the
Prospectus-Proxy Statement. This consent is being given with respect to the
Company's Registration Statement on Form F-4 to be filed thereto regarding
the registration of ordinary shares of the Company to be issued in connection
with the merger with Roberts Pharmaceutical Corporation.
Signed this 16 day of November, 1999.
/s/ Robert A. Vukovich
---------------------------
Robert A. Vukovich
