EXECUTION COPY
EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
among
JOHNSON & JOHNSON,
PFIZER INC.
and
CHATTEM, INC.
DATED AS OF OCTOBER 5, 2006
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND TERMS
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Section 1.1
Definitions..........................................................................................1
Section 1.2 Other
Definitional
Provisions.......................................................................10
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase
and Sale of
Assets.........................................................................11
Section 2.2
Consents............................................................................................12
Section 2.3 Excluded
Assets.....................................................................................13
Section 2.4 Assumption
of Certain
Obligations...................................................................14
Section 2.5 Retained
Liabilities................................................................................14
Section 2.6 Purchase
Price......................................................................................15
Section 2.7 Purchase
Price
Adjustment...........................................................................15
Section 2.8 Allocation
of the Purchase
Price....................................................................17
Section 2.9 Transfer
Taxes; Proration of Property
Taxes.........................................................17
ARTICLE III
CLOSING
Section 3.1
Closing.............................................................................................18
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1 Conditions
to the Obligations of Purchaser and Parent Divesting
Entities............................18
Section 4.2 Conditions
to the Obligations of
Purchaser..........................................................19
Section 4.3 Conditions
to the Obligations of
Sellers............................................................19
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT DIVESTING ENTITIES
Section 5.1
Organization........................................................................................19
Section 5.2 Authority;
Binding
Effect...........................................................................20
Section 5.3
Non-Contravention...................................................................................20
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Section 5.4
Governmental
Authorization..........................................................................21
Section 5.5 Financial
Information...............................................................................21
Section 5.6 Absence of
Material
Changes.........................................................................21
Section 5.7 No
Litigation.......................................................................................21
Section 5.8 Compliance
with
Laws................................................................................21
Section 5.9 Product
Registrations...............................................................................22
Section 5.10 Material
Contracts.................................................................................22
Section 5.11
Intellectual
Property..............................................................................22
Section 5.12
Assets.............................................................................................23
Section 5.13 Product
Recalls....................................................................................24
Section 5.14
Relationships with Customers and
Suppliers.........................................................24
Section 5.15
Brokers............................................................................................24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 6.1
Organization........................................................................................24
Section 6.2 Authority;
Binding
Effect...........................................................................24
Section 6.3
Non-Contravention...................................................................................25
Section 6.4
Governmental
Authorization..........................................................................25
Section 6.5 Financial
Capability................................................................................25
Section 6.6 Condition
of the
Business...........................................................................25
Section 6.7
Brokers.............................................................................................26
Section 6.8 Board
Approval......................................................................................26
ARTICLE VII
COVENANTS
Section 7.1
Information and
Documents...........................................................................27
Section 7.2 Conduct of
Business.................................................................................27
Section 7.3 Efforts to
Consummate; Certain Governmental
Matters.................................................28
Section 7.4 Bulk
Transfer
Laws..................................................................................29
Section 7.5
Transitional
Services...............................................................................29
Section 7.6
Intellectual Property
Licenses......................................................................29
Section 7.7
Manufacturing and Supply
Agreements.................................................................29
Section 7.8 Litigation
Support; Election to Control Non-Indemnified
Claims......................................29
Section 7.9 Trade
Notification..................................................................................31
Section 7.10 Use of
Names.......................................................................................31
Section 7.11 Further
Assurances.................................................................................31
Section 7.12
Assistance in Collecting Certain
Amounts...........................................................32
Section 7.13
Competition........................................................................................32
Section 7.14 Certain
Trademarks Outside of the
Territory........................................................32
Section 7.15
Insurance..........................................................................................32
Section 7.16 Financial
Statements...............................................................................33
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ARTICLE VIII
INDEMNIFICATION
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Section 8.1
Indemnification by
J&J..............................................................................33
Section 8.2
Indemnification by
Purchaser........................................................................33
Section 8.3 Notice of
Claims....................................................................................34
Section 8.4 Third
Party
Claims..................................................................................34
Section 8.5
Expiration..........................................................................................35
Section 8.6 Certain
Limitations.................................................................................35
Section 8.7 Losses Net
of Insurance,
Etc........................................................................35
Section 8.8 Sole
Remedy/Waiver..................................................................................35
Section 8.9 No
Consequential
Damages............................................................................36
ARTICLE IX
TERMINATION
Section 9.1
Termination.........................................................................................36
Section 9.2 Effect of
Termination...............................................................................37
ARTICLE X
MISCELLANEOUS
Section 10.1
Notices............................................................................................37
Section 10.2
Amendment;
Waiver..................................................................................39
Section 10.3
Assignment.........................................................................................39
Section 10.4
Concerning Parent Divesting
Entities...............................................................39
Section 10.5 Entire
Agreement...................................................................................40
Section 10.6
Fulfillment of
Obligations.........................................................................40
Section 10.7 Parties
in
Interest................................................................................40
Section 10.8 Public
Disclosure..................................................................................40
Section 10.9
Confidentiality; Return of
Information.............................................................40
Section 10.10
Expenses..........................................................................................41
Section 10.11
Schedules.........................................................................................41
Section 10.12
Governing Law; Jurisdiction; No Jury
Trial........................................................41
Section 10.13 Specific
Performance..............................................................................42
Section 10.14
Counterparts......................................................................................42
Section 10.15
Headings..........................................................................................42
Section 10.16
Severability......................................................................................42
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SCHEDULES
1(a)
J&J Products
1(b)
Pfizer Products
1.1(a)(i)
Knowledge of J&J
1.1(a)(ii)
Knowledge of Pfizer
1.1(b)
Licensed Patent Rights
1.1(c)
Territory
1.1(d)
Transferred Domain Names
1.1(e)
Transferred Intellectual Property Licenses
1.1(f)
Transferred Patent Rights
1.1(g)
Transferred Trademark Rights
2.1(a)
Assumed Contracts
2.1(d)
Transferred Manufacturing Equipment
2.3(g)
Excluded Trademarks
2.4(e)
Assumed Litigation Liabilities
5.3
Non-Contravention
5.4
Governmental Authorizations (Divesting Entities)
5.5(a)
J&J Financial Information
5.5(b)
Pfizer Financial Information
5.6
Absence of Material Changes
5.7
Litigation
5.8
Compliance with Laws
5.9
Product Registrations
5.10
Material Contracts
5.11
Intellectual Property
5.12(a)
J&J Purchased Assets
5.12(b)
Pfizer Purchased Assets
5.13
Product Recalls
5.14
Relationships with Customers and Suppliers
6.4
Governmental Authorizations (Purchaser)
6.6.
Purchaser Product Registrations
7.2
Conduct of Business
7.10
Specified Excluded Trademarks
7.14
Certain Trademarks Outside of the Territory
EXHIBITS
EXHIBIT A
Divesting Entities Closing Deliveries
EXHIBIT B
Purchaser Closing Deliveries
EXHIBIT C
Form of Transitional Services Agreement
EXHIBIT D
Form of Manufacturing and Supply Agreement
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<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase
Agreement is made and entered into as of
the 5th day of October 2006, among Johnson & Johnson, a New
Jersey corporation
("J&J"), Pfizer Inc., a Delaware corporation ("Pfizer"), and Chattem,
Inc., a Tennessee corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, J&J, directly or indirectly through its
Subsidiaries
(such term, and each other capitalized term used but not defined in
these
Recitals, having the meaning set forth in Article I of this
Agreement),
manufactures, distributes, markets and sells the products set forth
on Schedule
1(a) (the "J&J Products");
WHEREAS, Pfizer, directly or indirectly through its
Subsidiaries, manufactures, distributes, markets and sells the
products set
forth on Schedule 1(b) (the "Pfizer Products");
WHEREAS, Pfizer and J&J have entered into that certain
Stock
and Asset Purchase Agreement, dated as of June 25, 2006 (the
"Pfizer/J&J
Purchase Agreement"), pursuant to which Pfizer and certain of its
Subsidiaries
have agreed to sell to J&J, and J&J has agreed to purchase,
the assets and stock
described therein, including the Pfizer Purchased Assets;
WHEREAS, upon consummation of the transactions contemplated by
the Pfizer/J&J Purchase Agreement (the "Pfizer/J&J
Closing"), J&J, directly or
indirectly through its Subsidiaries, will acquire the Pfizer
Purchased Assets;
and
WHEREAS, the parties hereto desire that, at the Closing,
Sellers shall sell to Purchaser, and Purchaser, directly or
indirectly through
its Subsidiaries, shall purchase from Sellers, all of the Purchased
Assets and
assume all of the Assumed Liabilities, upon the terms and
conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained
herein, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1
Definitions. As used
in this Agreement,
the
following terms shall
have the meanings set forth or as referenced below:
"Accounts Receivable" shall mean all accounts receivable,
notes receivable and other indebtedness due and owed by any third
party to any
Parent Divesting Entity or any of its Affiliates arising or held in
connection
with the sale of any of the Products prior to the Closing Date.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under
common
control with, such Person at any time during the period for which
the
determination of affiliation is being made. For purposes of this
definition,
"control" shall be presumed to exist if one of the following
conditions is met:
(i) in the case of corporate entities, direct or indirect ownership
of at least
50% of the stock or shares having the right to vote for the
election of
directors or (ii) in the case of noncorporate entities, direct or
indirect
ownership of at least 50% of the equity interest with the power to
direct the
management and policies of such non-corporate entities.
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"Agreement" shall mean this Agreement, as the same may be
amended or supplemented from time to time in accordance with the
terms hereof.
"Allocation" shall have the meaning set forth in Section
2.8(a).
"Ancillary Agreements" shall mean, collectively, the J&J
Ancillary Agreements and the Pfizer Ancillary Agreements.
"Assumed Contracts" shall have the meaning set forth in
Section 2.1(a).
"Assumed Liabilities" shall have the meaning set forth in
Section 2.4.
"Business" shall mean the J&J Business and the Pfizer
Business, collectively.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York City are authorized or
obligated by
law or executive order to close.
"Cash Equivalents" shall mean cash, checks, money orders,
marketable securities, short-term instruments and other cash
equivalents, funds
in time and demand deposits or similar accounts, and any evidence
of
indebtedness issued or guaranteed by any Governmental
Authority.
"Closing" shall mean the consummation of the transactions
contemplated by this Agreement pursuant to the terms of this
Agreement.
"Closing Date" shall have the meaning set forth in Section
3.1(a).
"Commitment Letter" shall have the meaning set forth in
Section 6.5.
"Competition Laws" shall mean statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other
Laws of any
jurisdiction that are designed or intended to prohibit, restrict or
regulate
actions that may have the purpose or effect of creating a monopoly,
lessening
competition or restraining trade.
"Confidentiality Agreement" shall mean that certain letter
agreement dated August 4, 2006, between Purchaser and J&J.
"Disputed
Item" shall have the meaning set forth in Section
2.7(b).
"Divesting Entities" shall mean, collectively, the J&J
Divesting Entities and the Pfizer Divesting Entities.
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"Divesting Subsidiaries" shall mean, collectively, the J&J
Divesting Subsidiaries and the Pfizer Divesting Subsidiaries.
"Encumbrances" shall mean Liens, defects or irregularities in
title, easements, rights-of-way, covenants, restrictions and other
matters
typically raised as exceptions in a commitment to issue a title
insurance
policy.
"Environmental Law" shall mean any applicable Law relating
directly or indirectly to (i) the protection of the environment
(including air,
water vapor, surface water, groundwater, drinking water supply,
surface or
subsurface land), (ii) occupational health and safety or (iii) the
exposure to,
or the use, storage, recycling, treatment, generation,
transportation,
processing, handling, labeling, recycling, Release or disposal of,
Hazardous
Materials.
"Environmental Liabilities" shall mean all Liabilities and
Losses arising under Environmental Laws, including Liabilities and
Losses
resulting from (i) failure to comply with any requirement of, or
any liability
imposed under, any Environmental Law, (ii) failure to obtain or
comply with any
required Environmental Permit, (iii) any Release of Hazardous
Materials or
Remedial Action or (iv) harm or injury to any real property, to any
Person, to
public health or to any natural resource as a result of exposure to
Hazardous
Materials.
"Environmental Permit" shall mean a permit, license,
certificate, approval or authorization issued by a Governmental
Authority
pursuant to an Environmental Law.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Excluded Assets" shall have the meaning set forth in Section
2.3.
"Excluded Trademarks" shall mean the trademarks set forth on
Schedule 2.3(g) and all rights in respect thereof.
"Final Inventories" shall have the meaning set forth in
Section 2.7(c).
"Formulae" shall mean the percentages and specifications of
ingredients used to manufacture the Products, whether currently
sold,
manufactured or in development.
"GAAP" shall mean accounting principles and practices
generally accepted in the United States of America, consistently
applied.
"Governmental Antitrust Authority" shall have the meaning set
forth in Section 7.3(a).
"Governmental Authority" shall mean any supranational,
national, federal, state or local judicial, legislative, executive
or regulatory
authority.
"Governmental Authorizations" shall mean all licenses,
permits, certificates and other authorizations and approvals
required to carry
on the J&J Business or the Pfizer Business under the applicable
Laws of any
Governmental Authority.
3
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"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by
or with any
Governmental Authority.
"Hazardous Materials" shall mean all materials, pollutants or
contaminants regulated pursuant to Environmental Law, including
oils, petroleum,
petroleum products, asbestos and asbestos-containing materials.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Income Taxes" shall mean all Taxes based upon, measured by,
or calculated with respect to (i) gross or net income or gross or
net receipts
or profits (including any capital gains, minimum Taxes and any
Taxes on items of
tax preference, but not including sales, use, real or personal
property transfer
or other similar Taxes), (ii) multiple bases (including corporate
franchise,
doing business or occupation Taxes) if one or more of the bases
upon which such
Tax may be based upon, measured by, or calculated with respect to,
is described
in clause (i) above, and (iii) withholding Taxes measured by, or
calculated with
respect to, any payments or distributions (other than wages).
"Indemnified Party" shall have the meaning set forth in
Section 8.3.
"Indemnifying Party" shall have the meaning set forth in
Section 8.3.
"Independent Accountant" shall have the meaning set forth in
Section 2.7(c).
"Intellectual Property Schedules" shall mean, collectively,
Schedule 1.1(b), Schedule 1.1(d), Schedule 1.1(e), Schedule 1.1(f)
and Schedule
1.1(g).
"Inventories" shall mean all finished goods inventory of the
Products.
"Inventories Statement" shall have the meaning set forth in
Section 2.7(a).
"Inventories Target" shall have the meaning set forth in
Section 2.7(d).
"J&J" shall have the meaning set forth in the heading of
this
Agreement.
"J&J Ancillary Agreements" shall mean, collectively, the
J&J
Manufacturing and Supply Agreement, the J&J Quality Agreement
and the J&J
Transitional Services Agreement.
"J&J Business" shall mean the business of manufacturing,
marketing, distributing and selling the J&J Products as
currently conducted by
J&J and its Subsidiaries in the Territory.
"J&J Divesting Entities" shall mean, collectively, J&J and
the
J&J Divesting Subsidiaries.
"J&J Divesting Subsidiaries" shall mean, collectively, all
Subsidiaries of J&J that have any right, title or interest in,
to or under any
J&J Purchased Assets, provided, however, that, from and after
the Pfizer/J&J
Closing, "J&J Divesting Subsidiaries" shall mean, collectively,
all Subsidiaries
of J&J that have any right, title or interest in, to or under
any Purchased
Assets.
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"J&J Financial Information" shall mean the financial data
set
forth on Schedule 5.5(a).
"J&J Manufacturing and Supply Agreement" shall have the
meaning set forth in Section 7.7.
"J&J Names" shall mean "Johnson & Johnson", "J&J",
"Johnson's", "Johnson & Johnson Consumer Companies, Inc.",
"JJCCI", "McNeil-PPC,
Inc.", "McNeil" and "Personal Products Company".
"J&J Products" shall have the meaning set forth in the
Recitals to this Agreement.
"J&J Purchased Assets" shall mean the Purchased Assets that
relate to the J&J Products or the J&J Business.
"J&J Quality Agreement" shall mean the Quality Agreement
referred to in the J&J Manufacturing and Supply Agreement.
"J&J Transitional Services Agreement" shall have the
meaning
set forth in Section 7.5.
"Knowledge of J&J" shall mean the actual knowledge of any
of
the individuals listed on Schedule 1.1(a)(i).
"Knowledge of Pfizer" shall mean the actual knowledge of any
of the individuals listed on Schedule 1.1(a)(ii).
"Laws" shall include any federal, state, foreign or local law,
common law, statute, ordinance, rule, regulation, code or
Governmental Order.
"Liabilities" shall mean any and all debts, liabilities and
obligations, whether accrued or fixed, known or unknown, absolute
or contingent,
matured or unmatured or determined or determinable.
"Licensed Know-How" shall mean, collectively, inventions,
discoveries, trade secrets, know-how and ideas, rights in research
and
development, commercially practiced processes and inventions,
whether patentable
or not, design rights, copyrights and registrations or applications
for
registration of copyrights and any renewals or extensions thereof,
in each case
that (i) are used in the Business and (ii) are not Transferred
Know-How.
"Licensed Patent Rights" shall mean the patent applications
set forth on Schedule 1.1(b), together with any extensions,
reexaminations,
reissues, divisions, continuations and continuations-in-parts of
such patent
applications.
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"Liens" shall mean any lien, security interest, mortgage,
charge or similar encumbrance.
"Losses" shall have the meaning set forth in Section 8.1(a).
"Material Adverse Effect" shall mean any change, effect,
event, circumstance, occurrence or state of facts that, either
alone or in
combination, is or would reasonably be expected to be materially
adverse to (i)
the business, results of operations or financial condition of the
Business or
the Purchased Assets, taken as a whole, or (ii) the ability of any
Parent
Divesting Entity to consummate the transactions contemplated by
this Agreement,
provided that none of the following changes, effects, events,
circumstances,
occurrences or states of facts shall be deemed, either alone or in
combination
with any other event specified in clauses (a) through (h) below, to
constitute a
Material Adverse Effect, or be taken into account in determining
whether there
has been or would reasonably be expected to be a Material Adverse
Effect: (a)
changes or effects in the general economic conditions or the
securities,
syndicated loan, credit or financial markets; (b) changes in GAAP;
(c) changes
or effects, including legal, tax or regulatory changes, that
generally affect
the industry in which the Business operates and that do not
disproportionately
affect the Business relative to other participants in such
industry; (d) changes
or effects that arise out of or are attributable to the
commencement,
occurrence, continuation or intensification of any war, sabotage,
armed
hostilities or acts of terrorism; (e) earthquakes, hurricanes or
other natural
disasters; (f) any failure by the Business to meet internal
projections or
forecasts for any period (it being understood that the facts or
occurrences
giving rise or contributing to any such failure may be deemed to
constitute, or
be taken into account in determining whether there has been or
would reasonably
be expected to be, a Material Adverse Effect); (g) changes or
effects that arise
out of or are attributable to the public announcement that Pfizer
would pursue
strategic options for its Consumer Healthcare business or the
negotiation,
execution, public announcement or performance of the Pfizer/J&J
Purchase
Agreement or this Agreement, including the impact thereof on
relationships,
contractual or otherwise, with customers, suppliers, distributors,
partners or
employees (provided that the exception in this clause (g) shall not
apply to the
use of the term Material Adverse Effect in Sections 5.3 and 5.4);
and (h) any
matter disclosed in the Schedules to this Agreement where an
adverse effect is
reasonably apparent from the face of such disclosure.
"Material Assumed Contract" shall have the meaning set forth
in Section 5.10.
"Material Business Partners" shall have the meaning set forth
in Section 5.14.
"Material Transferred Intellectual Property" shall have the
meaning set forth in Section 5.11.
"Material Transferred Intellectual Property License" shall
have the meaning set forth in Section 5.11.
"Names" shall mean, collectively, the J&J Names and the
Pfizer
Names.
"Nonassigned Asset" shall have the meaning set forth in
Section 2.2(b).
"Parent Divesting Entities" shall mean J&J and Pfizer,
together.
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<PAGE>
"Permitted Encumbrances" shall mean (i) all Liens approved in
writing by Purchaser as Permitted Encumbrances, (ii) statutory
Liens arising out
of operation of Law with respect to a Liability incurred in the
ordinary course
of business and which is not delinquent, (iii) Encumbrances, other
than Liens
securing indebtedness for borrowed money, that, individually and in
the
aggregate, do not and would not reasonably be expected to
materially detract
from the value or impair the use of the property subject thereto or
make such
property unmarketable, (iv) Liens for Taxes not yet subject to
penalties for
nonpayment or which are being actively contested by appropriate
proceedings, and
(v) mechanics', materialmens', carriers', workmens',
warehousemens',
repairmens', landlords' or other like Liens and security
obligations that are
incurred in the ordinary course of business and are not
delinquent.
"Person" shall mean an individual, a limited liability
company, joint venture, a corporation, a partnership, an
association, a trust, a
division or operating group of any of the foregoing or other entity
or
organization.
"Pfizer" shall have the meaning set forth in the heading of
this Agreement.
"Pfizer Ancillary Agreements" shall mean, collectively, the
Pfizer Transitional Services Agreement, the Pfizer Manufacturing
and Supply
Agreement and the Pfizer Quality Agreement.
"Pfizer Business" shall mean the business of manufacturing,
marketing, distributing and selling the Pfizer Products as
currently conducted
by Pfizer and its Subsidiaries in the Territory.
"Pfizer Divesting Entities" shall mean, collectively, Pfizer
and Pfizer Divesting Subsidiaries.
"Pfizer Divesting Subsidiaries" shall mean, collectively, all
Subsidiaries of Pfizer that have any right, title or interest in,
to or under
any Pfizer Purchased Assets; provided, however, that from and after
the
Pfizer/J&J Closing, no Subsidiary of Pfizer shall be deemed to
have any right,
title or interest in, to or under any Pfizer Purchased Assets.
"Pfizer Financial Information" shall mean the financial data
set forth on Schedule 5.5(b).
"Pfizer/J&J Closing" shall have the meaning set forth in
the
Recitals to this Agreement.
"Pfizer/J&J Purchase Agreement" shall have the meaning set
forth in the Recitals to this Agreement.
"Pfizer Manufacturing and Supply Agreement" shall have the
meaning set forth in Section 7.7.
"Pfizer Names"
shall mean "Pfizer, Inc.", "Pfizer",
"Warner-Lambert", "Parke Davis", "Pharmacia" and
"Upjohn".
7
<PAGE>
"Pfizer Products" shall have the meaning set forth in the
Recitals to this Agreement.
"Pfizer Purchased Assets" shall mean the Purchased Assets that
relate to the Pfizer Products or the Pfizer Business.
"Pfizer Quality Agreement" shall mean the Quality Agreement
referred to in the Pfizer Manufacturing and Supply Agreement.
"Pfizer Transitional Services Agreement" shall have the
meaning set forth in Section 7.5.
"Proceeding" shall have the meaning set forth in Section
10.12(b).
"Product Registrations" shall have the meaning set forth in
Section 5.9(a).
"Products" shall mean, collectively, the J&J Products and
the
Pfizer Products.
"Proposed Allocation" shall have the meaning set forth in
Section 2.8(b).
"Purchase Price" shall have the meaning set forth in Section
2.6(a).
"Purchased Assets" shall have the meaning set forth in Section
2.1.
"Purchaser" shall have the meaning set forth in the heading of
this Agreement.
"Purchaser Material Adverse Effect" shall have the meaning set
forth in Section 6.3.
"Registration Information" shall mean copies of the Product
Registrations, together with copies of correspondence between
Parent Divesting
Entities or any of their respective Affiliates and the applicable
Governmental
Authority, current approved packaging and any other existing files
and dossiers,
in each case relating to the Product Registrations and/or to the
underlying data
or information used to support, maintain or obtain marketing
authorization of
the underlying product.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, injecting, depositing, disposing, discharging,
dispersal,
escaping, dumping, migrating or leaching into or through the
environment,
including surface water, soil or groundwater (including the
abandonment or
discarding of barrels, containers, and other receptacles containing
Hazardous
Materials), or as otherwise defined under Environmental Laws.
"Remedial Action" shall mean action to clean up soil,
sediments, surface water or groundwater in response to a Release of
Hazardous
Materials, including associated action taken to investigate,
monitor, assess and
evaluate the extent and severity of any such Release; action taken
to remediate
any such Release; post-remediation monitoring of any such Release;
and
preparation of all reports, studies, analyses or other documents
relating to the
above. "Remedial Action" also shall refer to any judicial,
administrative or
other proceeding relating to any of the above, including the
negotiation and
execution of judicial or administrative consent decrees; responding
to
information requests by any Governmental Authority; or defending
claims brought
by any Governmental Authority or any other Person, whether such
claims are
equitable or legal in nature, relating to the cleanup of the
environment,
including soil, surface water, groundwater, and sediments in
response to a
Release of Hazardous Materials and associated actions.
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"Resolution Period" shall have the meaning set forth in
Section 2.7(c).
"Retained Liabilities" shall have the meaning set forth in
Section 2.5.
"SEC" shall have the meaning set forth in Section 7.16.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Sellers" shall mean J&J and each Subsidiary of J&J that
will
be selling, conveying, assigning and transferring any of the
Purchased Assets
pursuant to Section 2.1.
"Specified Excluded Trademarks" shall mean the Excluded
Trademarks set forth on Schedule 7.10.
"Subsidiary" shall mean an entity as to which a Parent
Divesting Entity or Purchaser or any other relevant entity, as the
case may be,
owns directly or indirectly 50% or more of the voting power or
other similar
interests. Any Person which comes within this definition as of the
date of this
Agreement but thereafter fails to meet such definition shall from
and after such
time not be deemed to be a Subsidiary of a Parent Divesting Entity
or Purchaser
or any other relevant entity, as the case may be. Similarly, any
Person which
does not come within such definition as of the date of this
Agreement but which
thereafter meets such definition shall from and after such time be
deemed to be
a Subsidiary of a Parent Divesting Entity or Purchaser or any other
relevant
entity, as the case may be.
"Taxes" shall mean all taxes, charges, duties, fees, levies or
other assessments, including income, excise, property, sales or
use, value
added, profits, license, withholding (with respect to compensation
or
otherwise), payroll, employment, net worth, capital gains,
transfer, stamp,
social security, environmental, occupation and franchise taxes,
imposed by any
Taxing Authority, and including any interest, penalties and
additions
attributable thereto, and all amounts payable pursuant to an
agreement or
arrangement with respect to taxes.
"Tax Return" shall mean any return, report, declaration,
information return, statement or other document filed or required
to be filed
with any Taxing Authority in connection with the determination,
assessment or
collection of any Tax or the administration of any Laws relating to
any Tax.
"Taxing Authority" means any governmental or regulatory
authority, body or instrumentality exercising any authority to
impose, regulate
or administer the imposition of Taxes.
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"Territory" shall mean, with respect to each Product, (i) the
United States of America and its territories and possessions and
(ii) such other
territories as are set forth next to such Product on Schedule
1.1(c).
"Third Party Claim" shall have the meaning set forth in
Section 8.4(a).
"Third Party Claim Notice" shall have the meaning set forth in
Section 8.3.
"Transfer Taxes" means any federal, state, county, local,
foreign and other sales, use, transfer, value added, conveyance,
documentary
transfer, stamp duty, recording or other similar tax, fee or charge
imposed in
connection with the transactions contemplated by this Agreement or
the recording
of any sale, transfer or assignment of property (or any interest
therein)
effected pursuant to this Agreement.
"Transferred Intellectual Property" shall mean, collectively,
(i) the Transferred Patent Rights, (ii) the Transferred Trademark
Rights, (iii)
the Formulae, (iv) the Transferred Intellectual Property Licenses,
(v) rights in
domain name registrations set forth on Schedule 1.1(d) and (vi) the
Transferred
Know-How.
"Transferred Intellectual Property Licenses" shall mean,
collectively, all licenses and agreements set forth on Schedule
1.1(e).
"Transferred Know-How" shall mean inventions, discoveries,
trade secrets, know-how and ideas, rights in research and
development,
commercially practiced processes and inventions, whether patentable
or not,
design rights, copyrights and registrations or applications for
registration of
copyrights and any renewals or extensions thereof, in each case
used solely in
the Business.
"Transferred Patent Rights" shall mean the patent applications
set forth on Schedule 1.1(f), together with any extensions,
reexaminations,
reissues, divisions, continuations, and continuations-in-parts of
such patent
applications.
"Transferred Trademark Rights" shall mean the registered and
unregistered trademarks, service marks, brand names, certification
marks and
trade dress set forth on Schedule 1.1(g), together with all
goodwill associated
with the foregoing.
"Use Period" shall have the meaning set forth in Section 7.10.
Section 1.2 Other Definitional Provisions. (a)The words
"hereof", "herein", "hereto" and "hereunder" and words of similar
import, when
used in this Agreement, shall refer to this Agreement as a whole
and not to any
particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States of
America dollars.
(d) The term "including" shall mean "including, without
limitation."
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(e) When a reference is made in this Agreement to an Article, a
Section, an Exhibit or Schedule, such reference shall be to an
Article of, a
Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise
indicated.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Assets. Upon the terms and
subject to the conditions set forth herein, at the Closing, J&J
shall, and shall
cause its Subsidiaries to, sell, convey, assign and transfer to
Purchaser, and
Purchaser shall purchase, acquire and accept from J&J and its
Subsidiaries, free
and clear of all Liens, other than Permitted Encumbrances, all the
right, title
and interest of J&J and its Subsidiaries in, to or under the
assets set forth
below (collectively, the "Purchased Assets"):
(a) the contracts, agreements and commitments that are set
forth on Schedule 2.1(a) (the "Assumed Contracts");
(b) the Inventories;
(c) the Transferred Intellectual Property;
(d) the manufacturing equipment set forth on Schedule 2.1(d),
together with warranties in favor of any Parent Divesting Entity or
any of its
Affiliates relating thereto;
(e) Registration Information (including in relation to pending
applications and applications that are in the process of being
prepared by any
Parent Divesting Entity or any of its Affiliates for Product
Registrations), to
the extent transferable;
(f) Governmental Authorizations relating solely to the
Business, to the extent transferable;
(g) all customer and vendor lists to the extent relating to
the Business, all files and documents (including credit information
and
historical sales information) to the extent relating to customers
and vendors of
the Business, all records, files and documents pertaining to
customer
complaints, product recalls, claims or litigation, in each case, to
the extent
relating to the Business and all other business and financial
records, files,
books and documents (whether in hard copy or computer format, but
excluding any
personnel records) to the extent relating to the Business,
including copies of
all documents made available to Purchaser in the online data room
established in
connection with the transactions contemplated by this Agreement;
provided,
however, that Sellers may retain, subject to Section 10.9, a copy
of (i) all
financial records of Sellers and their Affiliates, (ii) any other
books and
records to the extent necessary for tax, accounting, litigation or
other valid
business purpose and (iii) any correspondence to, with or from any
Person; and
(h) all market research, advertising, marketing, sales and
promotional materials, other product literature and marketing and
promotional
plans, in each case, relating solely to the Business.
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Section 2.2 Consents. (a)Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an
agreement to
assign or transfer any Transferred Intellectual Property License,
Assumed
Contract or other Purchased Asset that is not assignable or
transferable without
the consent of any Person, other than any Parent Divesting Entity,
Purchaser or
any of their respective Affiliates, to the extent that such consent
shall not
have been given prior to the Closing, provided, however, that each
Parent
Divesting Entity shall use, both prior to and after the Closing,
commercially
reasonable efforts to obtain, and Purchaser shall use its
commercially
reasonable efforts to assist and cooperate with Parent Divesting
Entities in
connection therewith, all necessary consents to the assignment and
transfer
thereof, it being understood that (i) none of Parent Divesting
Entities,
Purchaser or any of their respective Subsidiaries shall be required
to pay money
to any third party, commence any litigation or offer or grant any
accommodation
(financial or otherwise) to any third party and (ii) to the extent
the foregoing
shall require any action by any Parent Divesting Entity that would,
or would
continue to, affect the Business after the Closing, such action
shall require
the prior written consent of Purchaser (which consent shall not be
unreasonably
withheld). Upon obtaining the requisite third party consents
thereto, such
Transferred Intellectual Property Licenses, Assumed Contracts and
other
Purchased Assets shall be transferred and assigned to Purchaser
hereunder.
(b) With respect to any Transferred Intellectual Property
License, Assumed Contract or other Purchased Asset that is not
transferred or
assigned to Purchaser at the Closing by reason of Section 2.2(a)
(each, a
"Nonassigned Asset"), after the Closing and until any requisite
consent is
obtained and the foregoing is transferred and assigned to
Purchaser, Parent
Divesting Entities shall (and shall cause their respective
Affiliates to)
provide to Purchaser substantially comparable benefits thereof and
shall
enforce, at the request of and for the account of Purchaser, any
rights of the
Divesting Entities arising thereunder against any Person, including
the right to
elect to terminate in accordance with the terms thereof upon the
advice of
Purchaser. To the extent that Purchaser is provided with benefits
of any
Nonassigned Asset, Purchaser shall perform, at the direction of the
applicable
Divesting Entity, the obligations of such Divesting Entity
thereunder.
Notwithstanding anything to the contrary set forth herein, to the
extent that
any Assumed Liability relates to any Nonassigned Asset, such
Assumed Liability
shall be deemed to be a Retained Liability unless such Nonassigned
Asset is
transferred and assigned to Purchaser, or unless Purchaser (but
solely to the
extent that) obtains the benefit of such Nonassigned Asset under
this Section
2.2(b).
(c) Purchaser acknowledges that certain consents to the
transactions contemplated by this Agreement, including the
acquisition by J&J or
its Subsidiaries of rights, title and interest in, to or under the
Pfizer
Assets, may be required from parties to the Transferred
Intellectual Property
Licenses, Assumed Contracts, licenses and other rights and that
such consents
have not been and may not be obtained. Purchaser agrees that the
Divesting
Entities shall not have any liability whatsoever arising out of or
relating to
the failure to obtain any consents that may have been or may be
required in
connection with the transactions contemplated by this Agreement,
including the
acquisition by J&J or its Subsidiaries of rights, title and
interest in, to or
under the Pfizer Assets, or because of the default under or
acceleration or
termination of any Transferred Intellectual Property License,
Assumed Contract,
license or other right solely as a result thereof. Purchaser
further agrees that
no representation, warranty or covenant of any Parent Divesting
Entity contained
herein shall be breached or deemed breached, and no condition to
Purchaser's
obligations to close the transactions contemplated by this
Agreement shall be
deemed not satisfied, solely as a result of (i) the failure to
obtain any such
consent or any such default, acceleration or termination or (ii)
any lawsuit,
action, claim, proceeding or investigation commenced or threatened
by or on
behalf of any Person to the extent arising out of or relating to
the failure to
obtain any such consent or any such default, acceleration or
termination.
Nothing in this Section 2.2(c) shall limit obligations of Parent
Divesting
Entities under Section 2.2(a) or 2.2(b).
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<PAGE>
Section 2.3 Excluded Assets. Purchaser acknowledges and agrees
that it is not acquiring any rights, title or interest in, to or
under any of
the following assets (collectively, the "Excluded Assets"):
(a) any Cash Equivalents;
(b) any Accounts Receivable;
(c) all losses, loss carryforwards and rights to receive
refunds, credits and loss carry forwards with respect to any and
all Taxes of
the Sellers that constitute Retained Liabilities pursuant to
Section 2.5(g);
(d) (i) the corporate books and records of the Divesting
Entities to the extent not related to the Business, including those
portions of
the Tax Returns and other corporate books and records that do not
relate to the
Business, (ii) all personnel records, (iii) any attorney work
product,
attorney-client communications and other items protected by
attorney-client
privilege, in each case, to the extent relating to any Excluded
Asset or any
Retained Liability and (iv) any documents that were received from
third parties
in connection with their proposed acquisition of the Purchased
Assets or the
Products or that were prepared by a Parent Divesting Entity or any
of its
Affiliates in connection therewith;
(e) any current and prior insurance policies and all rights of
any nature with respect thereto, including all insurance recoveries
thereunder
and rights to assert claims with respect to any such insurance
recoveries;
(f) the "Pfizer",
"Warner-Lambert", "Parke Davis",
"Pharmacia", "Johnson & Johnson", "McNeil-PPC" and "Personal
Products Company"
names and logos;
(g) the Excluded Trademarks;
(h) any real estate owned or leased by any Parent Divesting
Entity or any of its Affiliates;
(i) any manufacturing equipment used in the manufacture of the
Products, other than the manufacturing equipment referred to in
Section 2.1(d);
(j) any rights, claims and credits of any Parent Divesting
Entity or any of its Affiliates relating to any Excluded Asset or
any Retained
Liability, including any guarantees, warranties, indemnities and
similar rights
in favor of any Parent Divesting Entity or any of its Affiliates
relating to any
Excluded Asset or any Retained Liability; and
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<PAGE>
(k) any assets, properties or rights of any Parent Divesting
Entity or any of its Affiliates other than the Purchased
Assets.
Section 2.4 Assumption of Certain Obligations. Upon the terms
and subject to the conditions set forth herein, Purchaser agrees,
effective at
the Closing, to assume and to satisfy and discharge only the
following
Liabilities of the Divesting Entities, in each case other than the
Retained
Liabilities (all of the foregoing Liabilities being collectively
referred to as
the "Assumed Liabilities"):
(a) all Liabilities arising out of or relating to lawsuits and
claims, regardless of when commenced or made and irrespective of
the legal
theory asserted, arising from the design, manufacture, testing,
advertising,
marketing, distribution or sale of the Products, whether prior to
or after the
Closing, including all lawsuits and claims relating to warranty
obligations and
alleged intellectual property infringement;
(b) all Liabilities arising out of or relating to any Assumed
Contract, whether prior to or after the Closing;
(c) all Liabilities to suppliers or other third parties for
materials and services, to the extent relating to the Business,
ordered in the
ordinary course of business prior to the Closing, but scheduled to
be delivered
or provided thereafter;
(d) all Liabilities to customers under purchase orders for the
Products that have not yet been shipped at the Closing;
(e) all Liabilities arising out of or relating to the lawsuits
and claims set forth on Schedule 2.4(e);
(f) all other Liabilities to the extent relating to any
Product, including (i) all Liabilities for any rebates in respect
of any Product
(but only to the extent such Liabilities do not exceed $100,000 in
the aggregate
for all Products), (ii) all Liabilities for any recall or post-sale
warning in
respect of any Product and (iii) all Liabilities with respect to
promotional
activities for the Products undertaken in the ordinary course of
business; and
(g) all other Liabilities (including Environmental Liabilities
and Liabilities related to Taxes) arising out of or relating to the
Products,
the Business or the Purchased Assets, including the use, ownership,
possession,
operation, occupancy, sale or lease of the Purchased Assets, but
only to the
extent such Liabilities are attributable to any action, omission,
performance,
non-performance, event, condition or circumstance after the
Closing.
Section 2.5 Retained Liabilities. Notwithstanding anything to
the contrary set forth in Section 2.4, the J&J Divesting
Entities shall retain
and be solely responsible for, and Purchaser shall not assume or in
any way
become liable for, the following Liabilities relating to the
Business (the
"Retained Liabilities"):
(a) all Environmental Liabilities, other than Liabilities
referred to in Section 2.4(g);
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<PAGE>
(b) all Liabilities to suppliers or other third parties for
materials and services incurred prior to or at the Closing, other
than
Liabilities referred to in Section 2.4(c);
(c) all Liabilities arising out of or relating to the return
of any Product sold prior to the Closing Date (provided that
Purchaser agrees
that it shall not initiate or encourage any such returns outside
what is
customary in the trade without J&J's prior written
consent);
(d) all Liabilities to the extent related to the Excluded
Assets;
(e) all Liabilities of any J&J Divesting Entity to any
other
J&J Divesting Entity;
(f) all Liabilities with respect to any current or former
employee of J&J or any of its Affiliates;
(g) all Liabilities related to (i) Income Taxes and other
Taxes related to the Business, other than Liabilities referred to
in Section
2.4(g), and (ii) except to the extent provided under Section
2.9(a), Transfer
Taxes attributable to the transfer of the Purchased Assets pursuant
to this
Agreement; and
(h) except to the extent specifically assumed by Purchaser
pursuant to clauses (a) through (f) of Section 2.4, all other
Liabilities
(including Liabilities for any rebates in respect of Products in
excess of
$100,000 in the aggregate, but excluding Environmental Liabilities,
which are
the subject of clause (a) above, and Liabilities related to Taxes,
which are the
subject of clause (g) above) arising out of or relating to the
Products, the
Business or the Purchased Assets, including the use, ownership,
possession,
operation, occupancy, sale or lease of the Purchased Assets, but
only to the
extent such Liabilities are attributable to any action, omission,
performance,
non-performance, event, condition or circumstance prior to or at
the Closing.
Section 2.6 Purchase Price. (a)In consideration of the sale
and transfer of the Purchased Assets, Purchaser agrees to pay to
the Sellers
$410,000,000 (the "Purchase Price"), exclusive of any Transfer
Taxes, and to
assume, satisfy and discharge the Assumed Liabilities. The Purchase
Price shall
be paid in immediately available funds, by wire transfer in
accordance with
written instructions given by J&J to Purchaser not less than
two Business Days
prior to the Closing. The Purchase Price shall be subject to the
adjustment
provisions of Section 2.7 and shall be allocated as described in
Section 2.8.
(b) Prior to the Closing, any loss or damage to the Purchased
Assets from fire, casualty or otherwise shall be the sole
responsibility of the
Divesting Entities.
Section 2.7 Purchase Price Adjustment. (a)Within 90 days after
the Closing Date, J&J shall deliver to Purchaser an unaudited
statement of the
Inventories as of the Closing Date, determined in accordance with
the
methodologies used to determine the Inventories Target, whether or
not doing so
is in accordance with GAAP (the "Inventories Statement"). Any
Inventory that (i)
exceeds a six-month supply, as measured on the basis of sales by
SKU, (ii) has
an expiration date within 18 months of the Closing Date, (iii) is
for promotions
that have terminated, (iv) consists of discontinued Products or
SKUs or (v) is
not of a good and merchantable quality shall be disregarded for
purposes of
preparing the Inventories Statement. Purchaser shall provide
J&J, and any Person
designated by J&J, with access to its properties and the books
and records of
the Business constituting Purchased Assets as may reasonably be
requested by J&J
to prepare the Inventories Statement. On or promptly after the
Closing Date, J&J
shall conduct a physical count of the Inventories as of the Closing
Date in
connection with the preparation of the Inventories Statement. It is
understood
and agreed that Purchaser and its auditors shall be permitted to
attend such
physical count conducted by J&J.
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<PAGE>
(b) During the 60-day period following Purchaser's receipt of
the Inventories Statement, Purchaser and its auditors shall be
permitted to
review the working papers of J&J and its auditors relating to
the Inventories
Statement. Purchaser may dispute the amounts or items reflected on
or omitted
from the Inventories Statement (each, a "Disputed Item"), but only
on the basis
that the Inventories Statement does not reflect, or has not been
prepared in a
manner consistent with, the provisions of this Agreement or
otherwise contains a
mathematical or factual error; provided, however, that Purchaser
shall notify
J&J in writing of each Disputed Item, and specify the amounts
thereof in dispute
and the specific basis therefor, within 60 days after receipt of
the Inventories
Statement. The failure by Purchaser to provide a notice of Disputed
Items to J&J
within such 60-day period with respect to any items reflected on
the Inventories
Statement shall constitute Purchaser's acceptance of all such items
reflected on
the Inventories Statement.
(c) If a notice of Disputed Items shall be timely delivered
pursuant to Section 2.7(b), J&J and Purchaser shall, during the
20 Business Days
following the date of such delivery (the "Resolution Period"),
negotiate to
resolve the Disputed Items. If during the Resolution Period the
parties are
unable to reach agreement, J&J and Purchaser shall refer all
unresolved Disputed
Items to Ernst & Young LLP, or any other independent accounting
firm as J&J and
Purchaser shall mutually agree upon (the "Independent Accountant").
Such
reference shall be made within 10 days of termination of the
Resolution Period,
whereupon the Independent Accountant shall make a determination
with respect to
each unresolved Disputed Item within 30 days after the reference,
which
determination shall be made in accordance with this Section 2.7.
The Independent
Accountant shall deliver to J&J and Purchaser, within such
30-day period, a
report setting forth its adjustments, if any, to the Inventories
Statement and
the calculations supporting such adjustments. Such report shall be
final,
binding on the parties and conclusive. J&J and Purchaser shall
each pay one-half
of all the costs incurred in connection with the engagement of the
Independent
Accountant. As used herein, "Final Inventories" shall mean (i) if
no notice of
Disputed Items is delivered by Purchaser within the period provided
in Section
2.7(b), Inventories as shown on the Inventories Statement as
prepared by J&J or
(ii) if such a notice of Disputed Items is delivered by Purchaser,
either (x)
Inventories as agreed to in writing by J&J and Purchaser or (y)
Inventories as
shown in the Independent Accountant's calculation delivered
pursuant to this
Section 2.7(c). The parties acknowledge that they have discussed
their past
contacts, if any, with the Independent Accountant, and that neither
party shall
have the right to object to the Independent Accountant's service in
such role by
reason of non-disclosure of past contacts, conflicts of interest,
or any other
reason. The scope of the disputes to be resolved by the Independent
Accountant
shall be limited to the unresolved Disputed Items, and the
Independent
Accountant is not to make any other determination. Any
determinations by the
Independent Accountant, and any work or analyses performed by the
Independent
Accountant, in connection with its resolution of any dispute under
this Section
2.7 shall not be admissible in evidence in any suit, action or
proceeding
between the parties, other than to the extent necessary to enforce
payment
obligations under this Section 2.7(c).
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<PAGE>
(d) If the Final Inventories are less than $6,022,611 (the
"Inventories Target") then J&J shall, within 10 days after the
determination of
the Final Inventories, pay to Purchaser, by wire transfer of
immediately
available funds in accordance with written instructions given to
J&J by
Purchaser, the amount of such shortfall, together with interest on
such amount
from the Closing Date to the date of such payment at a rate equal
to the prime
