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BUSINESS TRANSFER AGREEMENT

Stock Transfer Agreement

BUSINESS TRANSFER AGREEMENT | Document Parties: HOSPIRA INC | ORCHID CHEMICALS  PHARMACEUTICALS LTD You are currently viewing:
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HOSPIRA INC | ORCHID CHEMICALS PHARMACEUTICALS LTD

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Title: BUSINESS TRANSFER AGREEMENT
Date: 2/18/2010
Industry: Biotechnology and Drugs     Law Firm: Latham Watkins;Baker McKenzie     Sector: Healthcare

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Exhibit 10.13

 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

 

 

Execution Copy

 

DATED DECEMBER 15, 2009

 

BUSINESS TRANSFER AGREEMENT

 

BY AND AMONG

 

ORCHID CHEMICALS & PHARMACEUTICALS LTD

 

Mr. K. RAGHAVENDRA RAO

 

AND

 

OJAS PHARMACEUTICALS INDIA PRIVATE LIMITED

(TO BE RENAMED HOSPIRA HEALTHCARE INDIA PRIVATE LIMITED)

 

Khaitan & Co.
Advocates, Solicitors, Notaries, Patent & Trademark Attorneys
One Indiabulls Centre, 13th Floor
841 Senapati Bapat Marg

Elphinstone Road
Mumbai 400 013, India
T: +91 22 6636 5000
F: +91 22 6636 5050
Ref: HK/2009

 



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

TABLE OF CONTENTS

 

1

DEFINITIONS AND INTERPRETATION

6

 

1.1

Definitions

6

 

1.2

Additional Defined Terms

15

 

1.3

Interpretation

17

2

AGREEMENT TO SELL AND PURCHASE TRANSFERRED ASSETS OF THE BUSINESS

19

 

2.1

Transfer of the Transferred Assets of the Business

19

 

2.2

Excluded Assets

22

 

2.3

Assumed Liabilities

23

 

2.4

Excluded Liabilities

24

3

PURCHASE PRICE

26

 

3.1

Consideration

26

 

3.2

Adjustment of Cash Consideration

26

 

3.3

Tax Treatment of Allocation of Cash Consideration

29

4

EMPLOYEES AND EMPLOYEE BENEFIT FUNDS

29

 

4.1

Transfer of Employment

29

 

4.2

Prior Service

30

 

4.3

Accrued Vacation

30

 

4.4

Benefit Plans

30

 

4.5

Purchaser Plans

31

 

4.6

Closing Transferred Employee Liability

32

5

CONDITIONS PRECEDENT

32

 

5.1

Conditions to the Obligation of the Purchaser

32

 

5.2

Conditions to the Obligation of the Seller

34

6

PRE-CLOSING COVENANTS

35

 

6.1

Access and Investigation

35

 

6.2

Operation of the Business by the Seller

35

 

6.3

Consents and Filings; Reasonable Efforts

38

 

6.4

Notification

39

 

6.5

Shareholder Approval

40

 

6.6

No Negotiation

40

 

6.7

Intercompany Arrangements

41

 

6.8

Mixed Contracts and Mixed Accounts

41

 

6.9

Satisfaction of Obligations to Lenders

42

 

6.10

Real Property

42

 

6.11

Financial Statements

42

 

6.12

Contact with Customers and Suppliers

43

 

6.13

Replacement of Guarantees

43

 

6.14

Review of Closing Deliveries

43

 

6.15

Vizag Land

44

 

6.16

Additional Fill/Finish Manufacturing

44

 

6.17

Currency Conversion

44

 

6.18

Purchaser Parent Guarantee

44

 

6.19

Formulation/Fill/Finish NCE

44

7

CLOSING

45

 

7.1

Closing

45

 

7.2

Closing Deliveries

45

 

1



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

 

7.3

Escrow Amount

47

 

7.4

Possession

48

8

POST COMPLETION COVENANTS

48

 

8.1

Tax Matters

48

 

8.2

Excluded Liabilities

49

 

8.3

Public Announcements

49

 

8.4

Assistance in Proceedings

50

 

8.5

Privileges

50

 

8.6

Non-competition; Non-solicitation

50

 

8.7

Use of Trademarks

54

 

8.8

Reports and Returns

54

 

8.9

Access to Records

54

 

8.10

Returns of Products

55

 

8.11

Refunds

55

 

8.12

Inquiries

55

 

8.13

Product Complaints

55

 

8.14

Use of Corporate Name

56

 

8.15

Seller Mixed-Use Intellectual Property Licenses

56

 

8.16

Manufacture of Non-Business Products

57

 

8.17

Transition Services

57

 

8.18

Further Action

57

 

8.19 Proposed Transaction Notice and Exercise of Right of First Negotiation Regarding the Business and the Transferred Assets of the Business

59

 

8.20

Offer Notice and Exercise of Right of First Negotiation Regarding the Seller’s Beta-Lactam API Business

60

 

8.21

Pharmaceutical Research and Development Employees

61

9

REPRESENTATIONS AND WARRANTIES OF SELLER

61

 

9.1

Organization and Good Standing

61

 

9.2

Authority and Enforceability

62

 

9.3

No Conflict

62

 

9.4

Financial Statements

63

 

9.5

Books and Records

63

 

9.6

Inventory

64

 

9.7

No Undisclosed Liabilities

64

 

9.8

Absence of Certain Changes and Events

64

 

9.9

Assets

66

 

9.10

Real Property

67

 

9.11

Intellectual Property

69

 

9.12

Software

71

 

9.13

Contracts

72

 

9.14

Indebtedness Contracts

75

 

9.15

Tax Matters

76

 

9.16

Employee Benefit Matters

78

 

9.17

Employment and Labour Matters

80

 

9.18

Environmental, Health and Safety Matters

82

 

9.19

Compliance with Laws, Judgments and Governmental Authorizations

83

 

9.20

Regulatory Compliance

84

 

9.21

Promotional Practices

86

 

 

 

2



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

 

9.22

Information and Disclosure

87

 

9.23

Legal Proceedings

88

 

9.24

Customers and Suppliers

88

 

9.25

Products; Product Warranty

89

 

9.26

Product Liability

89

 

9.27

Insurance

89

 

9.28

Related Party Transactions

90

 

9.29

Brokers or Finders

90

 

9.30

Solvency

91

 

9.31

No Business Assets

91

10

REPRESENTATIONS AND WARRANTIES OF PURCHASER

91

 

10.1

Organization and Good Standing

91

 

10.2

Authority and Enforceability

91

 

10.3

No Conflict

92

 

10.4

Legal Proceedings

92

 

10.5

Brokers or Finders

92

 

10.6

Financing

92

11

INDEMNITY

92

 

11.1

Indemnification by the Seller

92

 

11.2

Indemnification by the Purchaser

93

 

11.3

Claim Procedure

94

 

11.4

Third Party Claims

95

 

11.5

Survival of Representations and Warranties

97

 

11.6

Limitations on Liability

98

 

11.7

Treatment

100

 

11.8

Currency Conversion

100

 

11.9

Exclusive Remedy

100

 

11.10

Knowledge

100

12

TERMINATION

101

 

12.1

Termination Events

101

 

12.2

Effect of Termination

102

 

12.3

Effect of Termination under Clause 12.1.2(e)

102

13

CONFIDENTIALITY

103

 

13.1

General Obligation

103

 

13.2

Exceptions

103

14

GOVERNING LAW AND ARBITRATION

104

 

14.1

Governing Law

104

 

14.2

Arbitration

104

15

MISCELLANEOUS

105

 

15.1

Notices

105

 

15.2

Further Assurances

106

 

15.3

Amendments

106

 

15.4

Waiver and Remedies

107

 

15.5

Assignment and Successors and No Third Party Rights

107

 

15.6

Specific Performance

107

 

15.7

Expenses

108

 

15.8

Entire Agreement

108

 

15.9

Partial Invalidity

108

 

3



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

 

15.10

Schedules and Exhibits

108

 

15.11

Counterparts

108

 

15.12

Performance of Obligations by Affiliates

109

 

15.13

No Joint Venture

109

 

15.14

Mutual Goodwill

109

 

List of Exhibits

 

Exhibit A

API Supply Agreement

Exhibit B

Oral Ceph Contract Manufacturing Agreement

Exhibit C

Fill/Finish NCE Contract Manufacturing Agreement

Exhibit D

Escrow Agreement

Exhibit E

IP Assignment

Exhibit F

[Intentionally Omitted]

Exhibit G

Closing Certificate

Exhibit H

Form of Press Release

Exhibit I

Transition Services Agreement

Exhibit J

Purchaser Parent Guarantee

 

 

List of Schedules

 

 

1.1

Promoter Group

1.1(a)

Leased Business Real Property

1.1(b)

Permitted Encumbrances

1.1(c)

Seller Mixed-Use Intellectual Property

1.1(d)

Key Employees

2.1.6

List of Contracts of the Business

2.2.9

Excluded Assets in India

2.3.6

Scheduled Assumed Liabilities

3.3

Cash Consideration Allocation

5.1.3

Government Authorizations

5.1.4

Registrations

5.1.5

Competition / Investment Law Jurisdictions

5.1.6

Consents

6.8

Mixed Contracts

6.19

Fill/Finish NCE Contract Manufacturing Agreement Principles

8.17

Transition Services Agreement

8.18.4

Governmental Authorizations and Registrations Remaining with Seller

9

Seller Disclosure Schedule

 

4



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

This BUSINESS TRANSFER AGREEMENT (this “ Agreement ”) is made on this 15th day of December 2009:

 

BY AND AMONG:

 

ORCHID CHEMICALS & PHARMACEUTICALS LTD , a company incorporated under the Act and having its registered office at Orchid Towers, No 313, Valluvar Koddam High Road, Nungambakkam, Chennai 600034, India (hereinafter referred to as the “ Seller ”, which expression shall, unless repugnant to the context or meaning thereof, mean and include its successors and permitted assigns) of the FIRST PART;

 

Solely for purposes of Clause 8.6.1 through and including Clause 8.6.4, Mr. K. RAGHAVENDRA RAO , an individual and the founder, managing director and one of the members of Promoter Group of the Seller (hereinafter referred to as the “ KRR ”, which expression shall, unless repugnant to the context or meaning thereof, mean and include his heirs, executors, administrators, successors and permitted assigns);

 

AND

 

OJAS PHARMACEUTICALS INDIA PRIVATE LIMITED (to be renamed Hospira Healthcare India Private Limited) , a company incorporated under the Act and having its registered office at Unit G, Hotel Dreamz Park Office Complex, 571/2, Anna Salai, Teynampet, Chennai — 600018, Tamil Nadu, India (hereinafter referred to as the “ Purchaser ”, which expression shall, unless repugnant to the context or meaning thereof, mean and include its successors and permitted assigns) of the SECOND PART;

 

WHEREAS:

 

In addition to their other activities, the Seller and its Affiliates are engaged in the Business (as hereinafter defined).

 

The Seller desires to sell, assign, transfer, convey and deliver, and/or cause its Affiliates to sell, assign, transfer, convey and deliver, to the Purchaser or one of its Affiliates, and the Purchaser desires to purchase and acquire, or cause its Affiliates to purchase and acquire, from the Seller and its Affiliates the Transferred Assets of the Business as a going concern on a slump sale basis (as defined in Section 2(42C) of the Tax Act) and in connection therewith the Purchaser is willing to assume the Assumed Liabilities, all upon the terms and subject to the conditions set forth in this Agreement.

 

Concurrently with the execution of this Agreement, the shareholders of the Seller listed on Schedule 1.1 , who hold, in the aggregate, 14,912,172 shares of the Seller, which represent approximately 21.17% of the issued and outstanding share capital of Seller (the “ Promoter Group ”), have delivered a letter agreement to the Purchaser and the Seller pursuant to which (a) they consent to, and agree to vote all of their shares of the Seller in favour of, the entering into of this Agreement by the Seller and the transactions contemplated hereby and (b) agree to be bound by the covenant set forth in Clause 6.6 .

 

Concurrently with the execution of this Agreement, Hospira, Inc., a Delaware corporation and the parent company of the Purchaser, has executed and delivered to the Seller the Purchaser Parent Guarantee set forth in Exhibit J .

 

NOW, THEREFORE, in consideration of mutual agreements, covenants, representations and warranties set forth in this Agreement, and for other good and valuable consideration, the sufficiency of which is acknowledged by the Parties, the Parties hereby agree as follows:

 

5



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

1                                          DEFINITIONS AND INTERPRETATION

 

1.1                                  Definitions

 

In this Agreement, (a) capitalized terms defined by inclusion in quotations and/or parenthesis have the meanings so ascribed; and (b) the following terms shall have the following meanings assigned to them herein below:

 

Accounts Receivable” means all accounts, notes and other receivables, including any value added Taxes or similar Taxes levied on such accounts receivable, any unpaid interest accrued on any such accounts receivable and any security or collateral related thereto, all file documentation related to such accounts, notes and other receivables, including invoices, shipping documents, communications and correspondence submitted to or received from customers related to such sales;

 

Act ” means the (Indian) Companies Act, 1956;

 

Affiliate ” in relation to any Party means in case of a natural Person, the Relative of such Person, and in case of a Person other than a natural Person, any Person, which, directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under the Common Control of that Person;

 

Ancillary Agreements ” means, collectively, (a) the Lease Deeds, (b) the IP Assignment, (c) the API Supply Agreement, (d) the Oral Ceph Contract Manufacturing Agreement, (e) the Transition Services Agreement, (f) the Fill/Finish NCE Contract Manufacturing Agreement (if executed), (g) the Escrow Agreement, (h) the Purchaser Parent Guarantee and (i) any other instruments of sale, conveyance, transfer and assignment between the Seller or any of its Affiliates, on the one hand, and the Purchaser or any of its Affiliates, on the other hand, in form and substance reasonably satisfactory to the Purchaser and the Seller, as may be reasonably necessary or advisable under applicable Law to effect the transactions contemplated by this Agreement and the Ancillary Agreements;

 

API” means active pharmaceutical ingredients;

 

API Supply Agreement ” means the API Supply Agreement to be entered into by and between the Purchaser and the Seller at the Closing in the form of Exhibit A ;

 

 

 

[***]

 

 

 

Benchmark Net Working Capital ” means USD 30,000,000 (United States Dollar Thirty Million);

 

Beta-Lactam ” means the class of compounds containing a ß-lactam nucleus in their molecular structure, including penicillins, cephalosporins, penems and aztreonam;

 

6



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

Business ” means the business of researching, evaluating and litigating originator Intellectual Property as permitted under Law for, developing, testing, obtaining regulatory approval for, manufacturing, negotiating third party contracts for, procuring materials for, performing fill and finish services for, marketing, distributing and selling injectable pharmaceutical products for all human and animal prophylactic and therapeutic uses in all formulations and dosage forms and for any and all indications, as such business is conducted anywhere in the world by the Seller and its Affiliates immediately prior to the date of this Agreement, subject to any changes on or prior to the Closing permitted in accordance with Clause 6.2 , but specifically excluding the Other Businesses. It is agreed and understood that the Business does not include any Excluded Assets and Excluded Liabilities;

 

Business Day ” means any day other than a Saturday, a Sunday or any day on which banks in Chennai, Tamil Nadu and Mumbai, Maharashtra in India are required or authorized to be closed;

 

Change of Control ” means the acquisition by a third party of more than 50% (fifty percent) of the outstanding shares of voting capital stock of the Seller.

 

Closing ” means the closing of the purchase and sale of the Transferred Assets of the Business and the assignment and assumption of the Assumed Liabilities, each as contemplated by this Agreement and the Ancillary Agreements;

 

Closing Net Working Capital ” means the difference between: (a) the sum of the current assets of the Business listed in Clause 3.2.2 minus (b) the sum of the current liabilities of the Business listed in Clause 3.2.2 in each case, (a) and (b), as of the close of business on the date immediately prior to the Closing Date and as determined in accordance with GAAP applied on a basis consistent with the Financial Statements;

 

Competition/Investment Law ” means any Law that is designed or intended to prohibit, restrict or regulate: (a) foreign investment; or (b) antitrust, monopolization, restraint of trade or competition, including the HSR Act;

 

Consent ” means any license, permission, approval, clearance, franchise, permit, notice, consent, authorization, waiver, grant, concession, agreement, certificate, exemption, order or registration from any Government Authority or any other third party;

 

Contract ” means any contract, agreement, lease, license, commitment, understanding, franchise, warranty, guaranty, mortgage, note, indenture, bond, debenture, letter of credit, option, pledge, security agreement, warrant, right or other instrument or consensual obligation, whether written or oral;

 

“Controlling ”, “ Controlled by ” or “ Control ”, with respect to any Person, means (i) the ownership of 50% (fifty percent) or more of the equity shares or other voting securities of such entity; or (ii) possession of the power to direct the management and policies of such entity; or (iii) the power to nominate for appointment the majority of the directors, managers, partners or other individuals exercising similar authority with respect to such Person by virtue of ownership of voting securities or management or contract or in any other manner whatsoever, directly or indirectly, including through one or more other entities; and the term “ Common Control ” shall be construed accordingly;

 

7


 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

Corporate Name ” means the trademarks, trade names or corporate logos “Orchid Chemicals & Pharmaceuticals Ltd.,” “Orchid Healthcare (A Division of Orchid Chemicals & Pharmaceuticals Ltd.),” “Orgenus Pharma, Inc. (Subsidiary of Orchid Pharmaceuticals, Inc.)”, “Orchid Europe Limited,” “Orchid Pharmaceuticals SA (Proprietary) Limited,” “Orchid Pharma Japan KK,” “Health Orchid,” “Orchidpharma.com” and the “flower logo” and any variants and derivatives of any of the foregoing, including any applicable domain names, in each case used prior to the Closing in connection with the Business;

 

Dollars ”, “ USD ” or “ $ ” means United States Dollars or the lawful currency of the United States;

 

Effective Date ” means the date of execution of this Agreement;

 

Employee Plan ” means any bonus, incentive compensation, performance award, deferred compensation, cash allowance, employee state tax contribution, pension, deposit link insurance, profit sharing, retirement, provident, superannuation, gratuity, stock purchase, stock option, stock ownership, stock appreciation right, phantom stock, leave of absence, layoff, severance, retrenchment, redundancy, retention, vacation, holiday, annual leave, day or dependent care, legal services, cafeteria, life, health, accident, disability, fringe benefit, loans, club memberships, company accommodation (owned or leased), company product purchase plan, house rent or other housing allowance, conveyance, car, driver or other transport allowance, education assistance or allowance (including scholarships and grants), transfer and new employee joining relocation plan, field work daily allowances, medical allowance or insurance, maternity benefits, lunch coupons or other comparable allowance, leave travel allowance, reimbursement, sales or other performance incentives or allowances, company sponsored health plans or other welfare benefit or employee benefit plan, practice, policy, scheme, allowance or arrangement, whether written or oral, of the Seller or any of its Affiliates;

 

Encumbrance ” means any charge, claim, mortgage, servitude, easement, right of way, community or other marital property interest, adverse ownership claim, title defect, covenant, equitable interest, license, lease, sub-lease or other possessory interest, lien, Tax lien, option, pledge, security interest, preference, priority, right of first refusal, option, restriction, obligation or other encumbrance of any kind or nature whatsoever (whether absolute or contingent);

 

Environmental Law ” means any Law relating to the environment (including ambient air, surface water, ground water, land surface, and subsurface strata), natural resources, pollutants, contaminants, wastes, chemicals or public health and safety, including any Law pertaining to: (a) treatment, storage, disposal, generation and transportation of Hazardous Materials; (b) air, water, land and noise pollution; (c) groundwater, surface water, or soil contamination; (d) the release or threatened release into the environment of Hazardous Materials, including intentional or accidental emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (e) the manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of Hazardous Materials; (f) underground and aboveground tanks and other storage tanks or vessels, abandoned, disposed or discarded barrels, containers and other closed receptacles; (g) public health and safety; (h) the registration, evaluation, authorization, or restriction of Hazardous Materials; or (i) the protection of wild life, plants, habitat, marine sanctuaries and wetlands, including all endangered and threatened species;

 

8



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

Escrow Agent ” means Standard Chartered Bank, or such other bank or trust mutually agreed in writing by the Parties.

 

Escrow Agreement ” means the Escrow Agreement to be entered into by and among the Seller, the Purchaser and the Escrow Agent at the Closing in the form of Exhibit D ;

 

Excluded Countries ” means Myanmar, Yemen, Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan, Georgia, and Ukraine;

 

Finished API ” means API used in the manufacture of the products of the Business that (a) has passed all quality inspection tests such that a document certifying that the API conforms to the specifications therefor has been or could be signed and dated by a duly authorized representative of the Seller and (b) has been or may be released for transfer to the manufacturing facility included in the Leased Business Real Property located in Irungattukottai, India.

 

Fill/Finish NCE Contract Manufacturing Agreement ” means the Fill/Finish NCE Contract Manufacturing Agreement for [***] developed by [***], utilizing the Transferred Assets of the Business referred to in Clause 6.19;

 

GAAP ” means generally accepted accounting principles for financial reporting in India as in effect as of the date of this Agreement;

 

Governmental Authority ” means any (a) nation, region, state, county, city, town, village, district or other jurisdiction; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department or other entity and any court or other tribunal); (d) multinational organization; or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature;

 

Governmental Authorization ” means, other than the Registrations, all filings and applications with any Governmental Authority, and all Consents, registrations, re-registrations, and declarations issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law;

 

Hazardous Material ” means any raw material, intermediate product, byproduct, pollutant, contaminant, chemical, solvent, waste or any other substance or material (whether solids, liquids or gases) that is infectious, carcinogenic, persistent, ignitable, corrosive, reactive, explosive, poisonous, toxic or otherwise hazardous or that is listed, defined, designated or classified, or otherwise regulated under any Environmental Law, including any admixture or solution thereof, and including petroleum and all byproducts and derivatives thereof or synthetic substitutes therefor, asbestos or asbestos-containing materials in any form or condition, radioactive materials, urea-formaldehyde, lead and lead-based paints, polychlorinated biphenyls and any other material or substance that is or that may present a threat to human health or the environment;

 

Hedging Obligations ” means, with respect to any Person, all Liability of such Person under any agreement, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or

 

9



 

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other, similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing;

 

Hospira Agreements ” means, collectively, (i) the In License Distribution Agreement, dated September 23, 2005, between Mayne Pharma Pty Ltd. and the Seller, (ii) the Manufacture, Supply and Distribution Agreement, dated December 21, 2007, between Hospira UK Limited and the Seller, (iii) the Manufacture and Supply Agreement, dated December 11, 2008, between Hospira Inc. and the Seller and (iv) the Manufacture and Supply Agreement, dated September 16, 2009, between Hospira Inc. and the Seller, in each case as amended;

 

HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 of the United States;

 

Indebtedness ” of any Person means, without duplication: (a) all indebtedness of such Person, whether or not contingent, for borrowed money; (b) all obligations of such Person evidenced by credit agreements, notes, mortgages, bonds, letters of credit, Hedging Obligations, debentures or other similar instruments or debt securities and warrants or other rights to acquire any such instruments or securities, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses (including capital lease obligations); and (c) all indebtedness of others referred to in clauses (a) and (b) hereof guaranteed, directly or indirectly, in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable for the indebtedness referred to in clauses (a) and (b) of any other Person: (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness; (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss; (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered); (iv) to grant an Encumbrance on existing or future property owned or acquired by such Person (including Contracts), whether or not the obligation secured thereby has been assumed or (v) otherwise to assure a creditor against loss. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor;

 

India ” means the Republic of India and shall include special economic zones, ports and airports within the geographical area of the Republic of India;

 

Intellectual Property ” means all of the following anywhere in the world and all legal rights, title or interest in, under or in respect of the following arising under Law, whether or not filed, perfected, registered or recorded and whether now or later existing, filed, issued or acquired, including all renewals: (a) all national, regional and international patents, patent applications, patent disclosures, utility models, utility model applications, petty patents, design patents and

 

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[***] Indicates that text has been omitted which is the subject of a confidential treatment request. This text has been separately filed with the SEC.

 

certificates of inventions, and all related re-issues, re-examinations, divisions, revisions, restorations, renewals, extensions, provisionals, continuations and continuations in part; (b) all copyrights, copyright registrations and copyright applications, copyrightable works and all other corresponding rights; (c) all mask works, mask work registrations and mask work applications and all other corresponding rights; (d) all Trademarks; (e) all inventions (whether patentable, patented or unpatentable and whether or not reduced to practice, any said patents, including any extensions, reissues, reexaminations, renewals, divisions, continuations, continuations-in-part, or design patents); (f) know-how, including technical know-how, process know-how, technology, technical data, trade secrets, confidential business information, manufacturing and production processes and techniques, regulatory requirements and information, clinical data and protocols, research and development information (including all research and development data, experimental and project plans and pipeline product information), storing and shipping information, financial, marketing and business data, pricing and cost information, business and marketing plans, advertising and promotional materials, customer, distributor, third party manufacturer and supplier lists and information, correspondence, records, and other documentation, and other proprietary documentation and information of every kind; (g) all databases, data collections and data exclusivity; (h) all other proprietary rights; and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium); including the right to sue for past, present or future infringement, misappropriation or dilution of any of the foregoing;

 

Judgment ” means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority or arbitrator;

 

Key Employees ” means those Business Employees listed in Schedule 1.1(d) .

 

Knowledge ” means, with respect to the Seller, the information that any Key Employee is actually aware of following a reasonable investigation concerning the existence of the relevant fact or matter;

 

Law ” means any federal, national, regional, state, local, county, city, municipal, town, village, district, foreign or other constitution, law, statute, treaty, rule, regulation, ordinance, order, code, binding case law or principle of common law or any condition or term imposed pursuant to any Governmental Approvals;

 

Leased Business Real Property ” means the parcels of Real Property that are leased by the Seller as tenant, all of which are set forth on Schedule 1.1(a) ;

 

Liability ” means liabilities, debts or other obligations of any kind or nature, whether known or unknown, absolute, accrued, contingent, liquidated, unliquidated or otherwise, due or to become due or otherwise, and whether or not required to be reflected on a balance sheet prepared in accordance with GAAP;

 

Loss ” means any loss, Proceeding, Judgment, damage, fine, penalty, expense (including reasonable attorneys’ or other professional fees and expenses and court costs), injury, diminution of value, Liability, Tax, Encumbrance or other cost or expense;

 

Material Adverse Effect ” means any event, change, circumstance, effect or other matter that has, or could reasonably be expected to have, either individually or in the aggregate with all

 

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other events, changes, circumstances, effects or other matters, with or without notice, lapse of time or both, a material adverse effect on: (a) the business, assets, Liabilities, properties, condition (financial or otherwise), operating results or operations or prospects of the Business taken as a whole; or (b) the ability of the Seller or any of its respective Affiliates to perform its material obligations under this Agreement, the Ancillary Agreements or to consummate timely the transactions contemplated by this Agreement or the Ancillary Agreements; providedhoweverthat a “Material Adverse Effect” shall exclude any event, circumstance, change or other matter that generally affects Persons engaged in the business of developing, manufacturing, marketing or selling generic injectable pharmaceutical products, except to the extent such event, circumstance, change or other matter has a materially disproportionate effect on the Business, taken as a whole, relative to other businesses engaged in the generic injectable pharmaceutical business;

 

NCE’s” and/or “NBE’s ” means a pharmaceutical product containing (a) a new, novel and innovator chemical compound (“ NCE” ) or (b) a new, novel and innovator biological substance derived from a living organism or a DNA or RNA mechanism (“ NBE ”), in each case, (a) and (b), (i) in any therapeutic class and for all human and animal prophylactic and therapeutic uses in all formulations and dosage forms and for any and all indications, (ii) which have not been developed as of the Closing Date and which could not be commercialized in the United States without first filing a New Drug Application (“ NDA ”) or a new therapeutic Biologic License Application (“ BLA ”), as the case may be, and obtaining the approval of the FDA to such NDA or BLA, as the case may be, and (iii) which upon obtaining such approval of the FDA to such NDA or BLA, as the case may be, has been granted, or could reasonably be expected to be granted, at least 3 (three) years of data or market exclusivity from the appropriate Governmental Authority.

 

NPNC ” means non-penicillin, non-cephalosporin;

 

Occupational Safety and Health Law ” means any Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions;

 

“Oral Ceph Contract Manufacturing Agreement ” means the Oral Ceph Contract Manufacturing Agreement for the manufacture of the Seller’s oral cephalosporin formulation products utilizing the Transferred Assets of the Business, to be entered into by and between the Purchaser and the Seller at the Closing in the form of Exhibit B ;

 

Ordinary Course of Business ” means the usual, regular and ordinary course of business of the Business, consistent with Seller’s past custom and practice, but only to the extent consistent with applicable Law; provided that a series of related transactions which taken together is not in the Ordinary Course of Business shall not be deemed to be in the Ordinary Course of Business;

 

Other Businesses ” means all businesses conducted as of the Effective Date by the Seller and its Affiliates (other than the Business), including (i) the business of researching, developing, testing, manufacturing, selling, marketing and distributing API, (ii) the business of researching, developing, testing, manufacturing, selling, marketing and distributing oral pharmaceutical products anywhere in the world, (iii) the business of performing drug discovery, research,

 

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development work and/or manufacturing for Seller’s own requirements or a third party’s requirements with respect to NCE’s and/or NBE’s, and (iv) the business of (1) purchasing generic injectable pharmaceutical products from one or more third parties for resale in the Excluded Countries and India pursuant to a supply agreement or toll manufacturing agreement and (2) selling, marketing or distributing such generic injectable pharmaceutical products in the Excluded Countries and India;

 

Owned Business Real Property ” means any Real Property in which the Seller or any Affiliate of the Seller has a freehold title (or equivalent) interest;

 

Parties ” means collectively the Seller, the Purchaser and, solely for the purposes of Clause 8.6.1 through and including Clause 8.6.4 , KRR, and “ Party ” means each of them individually;

 

Permitted Encumbrances ” means (a) Encumbrances for Taxes not yet due and payable, or being contested in good faith, and for which appropriate reserves have been established in the Balance Sheet or since the date of the Balance Sheet, have been incurred in the Ordinary Course of Business, (b) Encumbrances in respect of property or assets imposed by Law that were incurred in the Ordinary Course of Business, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar liens, (c) with respect to the Real Property, (i) reciprocal easement agreements, utility easements and other customary encumbrances on title, and (ii) zoning, ordinances, building codes, regulations and enactments of any Governmental Authority having jurisdiction over the Real Property;  provided , that such matters described in clauses (i) and (ii) do not, individually or in the aggregate, materially impair the present use of the Real Property in the operation of the Business or the value of the Real Property, affected thereby and (d) Encumbrances set forth on Schedule 1.1(b) .

 

Person ” means any natural person, firm, corporation, limited company, private limited company, limited liability company, Governmental Authority, joint venture, general or limited partnership, trust, association or other entity (whether or not having separate legal personality);

 

Pip-Tazo Litigation ” means the Proceeding in the matter of Wyeth Pharmaceuticals Plaintiff, U.S. Food and Drug Administration et al., Defendant; and Orchid Chemicals & Pharmaceuticals Ltd., and Apotex Corp., Interventors , Case No. 1:09-cv-1810 filed in the United States District Court of the District of Columbia pursuant to which Wyeth Pharmaceuticals is seeking an order to withdraw or suspend the approval of the ANDAs granted to the Seller for a generic form of Wyeth’s piperacillin-tazobactam injections or to modify such ANDA and any appeals with respect to such remedies;

 

Proceeding ” means any action, arbitration, audit, examination, investigation, hearing, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, and whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator;

 

Planning and Zoning Laws ” means all Laws intended to control or regulate the construction, demolition, alteration or use of land or buildings or to preserve or protect national heritage;

 

Prime Rate ” means a rate per annum equal to Twelve Month LIBOR plus two percent (2%), as set by the British Bankers Association;

 

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Product Laws ” means any Laws related to the manufacture, research, sales, marketing, development or distribution of the products of the Business, including the Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945, the Standard Weights and Measures Act, 1976 and Bureau of Indian Standards Act, 1986 (or similar Laws in other countries);

 

Real Property ” means all land and all buildings and other structures, facilities or Improvements located thereon, capital work in progress and all easements, licenses, rights and appurtenances relating to the foregoing;

 

Registrations ” means the authorizations, approvals, licenses, permits, certificates, or exemptions issued by any Governmental Authority (including investigational new drug applications (INDs), new drug applications (NDAs), supplemental new drug applications, abbreviated new drug applications (ANDAs), pre-market approval applications, 510(k) notifications, pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals and authorizations, the European Union Conformity Marketing (CE Marks) issued by the European Notified Body, pricing and reimbursement approvals, labeling approvals or their foreign equivalent) held by the Seller or its Affiliates immediately prior to the Closing that are (i) specific to Persons engaged in the business of developing, manufacturing, marketing or selling generic injectable pharmaceutical products and (ii) required for the research, development, clinical testing, manufacture, sale, marketing, distribution, storing, transportation, importation, exportation or use of the products of the Business as currently conducted;

 

Relative ” shall bear the meaning assigned to the term in the Act;

 

Related Party ” in relation to a Person includes: (i) any company under the same management (as defined by Section 370(1B) of the Act) of such Person; (ii) any Controlling shareholder of such Person, (iii) any director of such Person, (iv) any officer of such Person, (v) any Person in which any Controlling shareholder, director or officer of such Person has any interest, other than a passive shareholding of less than 5% in a publicly listed company, (vi) any firm or unlisted company in which such Person, is a partner, Controlling shareholder or director, and (vii) any other Affiliate of such Person or of a Controlling shareholder or director of such Affiliate;

 

Rupees ”, “ Rs ” or “ INR ” means Indian rupees, the lawful currency of India;

 

Seller Mixed-Use Intellectual Property ” means all Intellectual Property that is not included in the Purchased Intellectual Property and that is used in connection with, or related to, both the Business and the Other Businesses and is owned by or licensed to the Seller or its Affiliates at the Closing, in each case as is set forth on Schedule 1.1(c) ;

 

SEZ ” means the special economic zone in Visakhapatnam, India;

 

Software ” means all computer software (including source and object code) and other applications on all hardware (including the distributed control system), firmware, development tools, algorithms, files, records, technical drawings and related documentation, data and manuals, together with proof of ownership;

 

Tax ” means: (a) any and all taxes, duties, imposts, levies, premiums, impositions, transfer charges, cess, surcharge, charges in the nature of tax and any fine, cost, penalty or interest

 

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connected therewith, including corporate tax, income tax, dividend distribution tax, interest tax, withholding taxes, capital gains tax, value added tax, gift tax, wealth tax, sales tax, service tax, stamp duty, registration fees, foreign travel tax, octroi, turnover tax, excise duty, customs duty, import duty, development cess, rates, property tax or other tax of whatever kind (including any fee, assessment or other charges in the nature of or in lieu of any tax) that is imposed by any Governmental Authority; (b) any interest, fines, penalties or additions resulting from, attributable to, or incurred in connection with any items described in this paragraph or any related contest or dispute; and (c) any items described in this paragraph that are attributable to another Person but that the Seller is liable to pay and/or withhold by Law, by Contract or otherwise, whether or not disputed;

 

Tax Act ” means the (Indian) Income Tax Act, 1961;

 

Tax Return ” means any report, return, declaration, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, and including any amendment thereof;

 

Trademarks ” means all trade dress and trade names, logos, trademarks and service marks and related registrations and applications, including any intent to use applications, supplemental registrations and any renewals or extensions, all other indicia of commercial source or origin and all goodwill associated with any of the foregoing; and

 

Transfer Taxes ” means any and all Taxes relating to or arising on the transfer of the Transferred Assets of the Business, including stamp duty, registration charges, notarial fees and all applicable indirect Taxes and related amounts (including any penalties, interest and additions to Transfer Taxes).

 

1.2                                  Additional Defined Terms

 

For purposes of this Agreement, the following terms have the meanings specified in the indicated Clause of this Agreement:

 

Defined Term

 

Clause

Accounting Firm

 

3.2.4

Acquired Business

 

8.6.5

Acquired Competing Business

 

8.6.5

Additional Due Diligence

 

6.1.1

Agreement

 

Preamble

API Exclusivity Period

 

8.20.1

[                 *                 *             *            ]

 

[***]

[                 *                 *               *                 ]

 

[***]

[                 *                 *             *            ]

 

[***]

Assumed Liabilities

 

2.3

Balance Sheet

 

9.4.1(a)

Beta-Lactam API Business

 

8.20.1

Business Balance Sheet

 

9.4.1(c)

 

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Business Employees

 

9.17.1

Business Employee Plan

 

9.16.1

Cash Consideration

 

3.1

Certain Nations

 

9.21.4

Claim Notice

 

11.3.1

Closing Date

 

7.1

Closing Net Working Capital Statement

 

3.2.2

Competing Acquiring Persons

 

8.6.1

Confidential Information

 

13.1

Controlling Party

 

11.4.3

Deductible

 

11.6.1

Deeds

 

7.2.1(c)

Dispute

 

14.2.1

Dispute Notice

 

14.2.1

Escrow Amount

 

7.3

Estimated Net Working Capital

 

3.2.1

Excluded Assets

 

2.2

Excluded Liabilities

 

2.4

Exclusivity Period

 

8.19.1

Field of Use

 

8.15.1

Final Statement of Closing Net Working Capital

 

3.2.5

Financial Statements

 

9.4.1

Goodwill

 

2.1.18

Gratuity Fund

 

4.4.1(c)

Improvements

 

9.10.6

Indebtedness Contracts

 

9.14.1

Indemnified Party

 

11.3.1

Indemnifying Party

 

11.3.1

Interim Balance Sheet

 

9.4.1(b)

Interim Business Balance Sheet

 

9.4.1(d)

Inventory

 

2.1.1

IP Assignment

 

7.2.1(b)

KRR

 

Preamble

Lease Deeds

 

7.2.1(c)

Material Contracts

 

9.13.1

Material Purchased Software

 

9.12.1

Mixed Account

 

6.8.2

Mixed Contract

 

6.8.1

NOC

 

9.10.11

Non-controlling Party

 

11.4.3

Objection

 

3.2.3

Objection Notice

 

11.3.2(b)

Owned Intellectual Property

 

9.11.1

Promoter Group

 

Recital C

Proposed Beta-Lactam API Transaction

 

8.20.1

Proposed Beta-Lactam API Purchase Consideration

 

8.20.1

 

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Proposed Beta-Lactam API Transaction Notice

 

8.20.1

Proposed Transaction

 

8.19.1

Proposed Transaction Notice

 

8.19.1

Provident Fund

 

4.4.1(a)

Purchase Price

 

3.1

Purchased Intellectual Property

 

2.1.9

Purchased Software

 

2.1.11

Purchaser

 

Preamble

Purchaser Competing Activities

 

8.6.2

Purchaser Indemnified Parties

 

11.1

Purchaser Restricted Period

 

8.6.5

Real Property Permits

 

9.10.8

Registered Owned Intellectual Property

 

9.11.6

Release

 

5.1.10

Representatives

 

13.1

Research and Development Employees

 

8.21

Response

 

3.2.4

Restricted Period

 

8.6.1

Returns

 

8.10.1

Seller

 

Preamble

Seller Competing Activities

 

8.6.6

Seller Disclosure Schedule

 

9

Seller Indemnified Parties

 

11.2

Special Claims

 

11.4.2

Subsequent Monthly Financial Statements

 

6.11.1

Superannuation Fund

 

4.4.1(b)

Third Party Claim

 

11.4.1

Transferred Assets of the Business

 

2.1

Transferred Employee

 

4.1.4

Transferred Employment Liabilities

 

4.6.1

Transition Services Agreement

 

8.17

Vaccine Business

 

8.6.1

Vizag Lease

 

6.15

 

1.3                                  Interpretation

 

1.3.1                         The terms referred to in this Agreement shall, unless defined otherwise or inconsistent with the context or meaning thereof, bear the meaning ascribed to them under the relevant statute/legislation.

 

1.3.2                         Reference to statutory provisions shall be construed as meaning and including references also to any amendment or re-enactment (whether before or after the date of this Agreement) for the time being in force and to all statutory instruments or orders made pursuant to such statutory provisions.

 

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1.3.3                         Any reference to a Contract or other document as of a given date means the Contract or other document as amended, supplemented and modified from time to time through such date.

 

1.3.4                         Any reference to a document in “ Agreed Form ” is to a document in a form agreed between the Parties initialed for the purpose of identification by or on behalf of each of them (in each case with such amendments as may be agreed by or on behalf of the Parties).

 

1.3.5                         Words denoting the singular shall include the plural and words denoting any gender shall include all genders.

 

1.3.6                         Headings, subheadings, titles, subtitles to clauses, subclauses and paragraphs are for information only and shall not form part of the operative provisions of this Agreement or the annexure hereto and shall be ignored in construing the same.

 

1.3.7                         The terms “ hereof ,” “ herein ,” and “ herewith ” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto) and not to any particular provision of this Agreement, Clause, Schedule and Exhibit references are to the Clauses, Schedules and Exhibits to this Agreement unless otherwise specified.

 

1.3.8                         Unless otherwise specified in a particular case, reference to days, months and years are to calendar days, calendar months and calendar years, respectively.

 

1.3.9                         Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day if the last day of such period is not a Business Day; and whenever any payment is to be made or action to be taken under this Agreement is required to be made or taken on a day other than a Business Day, such payment shall be made or action taken on the next Business Day.

 

1.3.10                   Words “ directly or indirectly ” mean directly or indirectly through one or more intermediary persons or through contractual or other legal arrangements, and “ direct or indirect ” have the correlative meanings.

 

1.3.11                   Any reference to “ writing ” shall include printing, typing, lithography and other means of reproducing words in visible form but shall exclude text messages via mobile phones.

 

1.3.12                   The words “ include ” and “ including ” are to be construed without limitation unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive.

 

1.3.13                   Any use of “ material adverse effect ” without the use of initial capital letters is an intentional use of such words by the Parties.

 

1.3.14                   No provisions shall be interpreted in favour of, or against, any Party by reason of the extent to which such Party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof.

 

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1.3.15                   If there is any conflict or inconsistency between a term in the body of this Agreement and a term in any of the schedules or any Ancillary Agreement, the term in the body of this Agreement shall take precedence. References herein to this Agreement or any Ancillary Agreement shall be deemed to refer to this Agreement or such Ancillary Agreement as of the date of such agreement and as it may be amended thereafter, unless otherwise specified.

 

1.3.16                   Wherever used herein, the words “ Seller ” and “ Purchaser ” include their respective Affiliates whenever the context requires or to the extent applicable.

 

2                                          AGREEMENT TO SELL AND PURCHASE TRANSFERRED ASSETS OF THE BUSINESS

 

2.1                                  Transfer of the Transferred Assets of the Business

 

Subject to the terms and conditions of this Agreement, at the Closing, the Seller shall sell, convey, assign, transfer and deliver, or cause its Affiliates to sell, convey, assign, transfer and deliver to, the Purchaser or one or more of its Affiliates, free and clear of all Encumbrances (other than Permitted Encumbrances), and the Purchaser or one or more of its Affiliates shall purchase and acquire: (a) the Leased Business Real Property; and (b) all of the assets, rights and properties of the Seller and its Affiliates, located anywhere in the world (except for (i) those held by the Affiliates of the Seller in the Excluded Countries, (ii) other than as set forth in Clause 2.1.7 , those held by the Affiliates of the Seller in the United States, the United Kingdom, South Africa, China and Japan and (iii) the contracts, assets and properties related to the Business in India which are expressly listed in Schedule 2.2.9 ), whether tangible or intangible, real, personal or mixed, related to the Business (except as otherwise expressly set forth below or otherwise in this Agreement or the Ancillary Agreements) ((a) and (b), collectively, the “ Transferred Assets of the Business ”), including the following:

 

2.1.1                         (a) all inventories used in, held for use in, or related to the Business, wherever located, including all semi-finished and finished goods, work in process, raw materials, samples, packaging materials and all other materials and supplies to be used in the production of finished goods and (b) any Finished API (the “ Inventory ”);

 

2.1.2                         except as expressly set forth in Clause 2.2.3 , all third party Accounts Receivable of the Business,

 

 

[***]

 

 

 

2.1.3                         all rights in and to products under research and development as part of, or contemplated to be a part of, the Business;

 

2.1.4                         except as expressly set forth in Clause 2.2.2 , all furniture, fixtures, office equipment, laboratory equipment, all other moveable assets, properties, resources, facilities, utilities and services, including machinery, equipment, systems, implements, apparatus, instruments, mechanical and spare parts, tools, tooling, dyes, production supplies, storage tanks, pipes and fittings, utilities, vehicles, utensils, communication facilities and capital work-in-progress, training materials and equipment, supplies, owned and leased

 

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motor vehicles, mobile phones and personal digital assistants used by the Transferred Employees, and other tangible property of any kind located at the Leased Business Real Property;

 

2.1.5                         all furniture, fixtures, office equipment, laboratory equipment, all other moveable assets, properties, resources, facilities, utilities and services, including machinery, equipment, systems, implements, apparatus, instruments, mechanical and spare parts, tools, tooling, dyes, production supplies, storage tanks, pipes and fittings, utilities, vehicles, utensils. communication facilities and capital work-in-progress, training materials and equipment, supplies, owned and leased motor vehicles, mobile phones and personal digital assistants used by the Transferred Employees, and other tangible property of any kind, in each case that are not located at the Leased Business Real Property and are primarily related to the Business;

 

2.1.6                         subject to Clause 6.8 , and except as set forth in Clause 2.2 , all rights under all Contracts to the extent used in the Business, including those listed on Schedule 2.1.6 ;

 

2.1.7                         except as otherwise expressly provided in Clause 2.2.8 and Schedule 2.2.9 , the Registrations to the extent used in, or related to, the Business (including the Registrations held by the Affiliates of Seller in the United States, the United Kingdom, South Africa and, if applicable, Japan and China to the extent used in, or related to, the Business) supported by and including: (a) the original documents and all related data, records, and correspondence under the possession of the Seller or its Affiliates (or that are accessible to the Seller or its Affiliates using commercially reasonable efforts) evidencing the Registrations issued to the Seller or its Affiliates by a Governmental Authority in any country of the world, in each case to the extent assignable with or without the Consent of the issuing Governmental Authority; and (b) all related Registration applications, clinical research and trial agreements, data results and records of clinical trials and marketing research, design history files, technical files, drawings, manufacturing, packaging and labeling specifications, validation documentation, packaging specifications, quality control standards and other documentation, research tools, laboratory notebooks, files and correspondence with regulatory agencies and quality reports, and all relevant pricing information and correspondence with Governmental Authorities with respect to such pricing matters;

 

2.1.8                         subject to Clause 8.14 , all product labeling, advertising, marketing and promotional materials and all other printed or written materials used primarily in connection with, or related primarily to, the Business;

 

2.1.9                         subject to Clause 8.14 , all Intellectual Property that is used primarily in connection with, or related primarily to, the Business and is owned by or licensed to the Seller or its Affiliates at the Closing (collectively, the “ Purchased Intellectual Property ”), and all other intangible rights in the Business;

 

2.1.10                   the rights granted to Purchaser and its Affiliates to the Seller Mixed-Use Intellectual Property pursuant to Clause 8.15 ;

 

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2.1.11                   all Software owned, created, acquired, licensed to or used primarily in the Business by the Seller or its Affiliates at any time prior to and through the Closing (the “ Purchased Software ”);

 

2.1.12                   all Governmental Authorizations primarily related to the Business or any Transferred Asset of the Business or required for the ownership or use of any Transferred Asset of the Business or the operation of the Business;

 

2.1.13                   all books, records, files, studies, manuals, reports and other materials (in any form or medium) used in or related to the Business, including all catalogues, price lists, mailing lists, distribution lists, client and customer lists, referral sources, supplier and vendor lists, purchase orders, sales and purchase invoices, correspondence, clinical data and protocols, production data, purchasing materials and records, research and development files, records, data books, Intellectual Property disclosures and records, manufacturing and quality control records and procedures, product shipping or storing requirements, service and warranty records, equipment logs, operating guides and manuals, product specifications, product processes, engineering specifications, financial and accounting records, litigation files, personnel and employee benefits records to the extent transferable under applicable Law, and copies of all other personnel records of the Transferred Employees to the extent the Seller is legally permitted to provide copies of such records to the Purchaser (provided that (i) if foregoing is related to both the Business and the Other Businesses, the Seller shall be entitled to maintain copies of such materials or (ii) if the foregoing is solely related to the Business, the Seller may request to maintain copies of such materials, such request not to be unreasonably denied by the Purchaser);

 

2.1.14                   all claims, rights, credits, causes of actions, defenses and rights of set-off of any kind (including the right to sue for past, present or future infringement, misappropriation or dilution of any Purchased Intellectual Property or, to the extent related to the Business, the Seller Mixed-Use Intellectual Property), in each case to the extent arising from, or related to, the Business or any of the Transferred Assets of the Business or Assumed Liabilities, in each case, whether accruing before or after the Closing, and including all attorney work-product protections, attorney-client privileges and other legal protections and privileges to which the Seller or its Affiliates may be entitled in connection with the Business or any of the Transferred Assets of the Business or Assumed Liabilities that are not excluded under Clause 2.2.14 or Clause 2.2.15 ;

 

2.1.15                   all claims or benefits in, to or under any express or implied warranties from suppliers of goods or services relating to Inventory sold or delivered to the Seller or any of its Affiliates prior to the Closing;

 

2.1.16                   copies of Tax Returns; provided , however , that the Seller may redact any information to the extent used in, or related to, the Excluded Assets or the Other Businesses from Tax Returns conveyed pursuant to this Clause 2.1.16 ; provided , further , that such redaction shall not impair any information related to the Business contained in such Tax Returns;

 

2.1.17                   all rights relating to deposits and prepaid expenses of the Business, claims for refunds and rights of offset of the Business that are not excluded under Clause 2.2.14 or Clause 2.2.15;

 

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2.1.18                   the goodwill of the Seller and its Affiliates associated with the Business and the Transferred Assets of the Business (the “ Goodwill ”); and

 

2.1.19                   all rights of the Purchaser and its Affiliates arising under this Agreement, the Ancillary Agreements or from the consummation of the transactions contemplated hereby or thereby.

 

Notwithstanding the foregoing, the transfer of the Transferred Assets of the Business as a going concern on a slump sale basis pursuant to this Agreement does not include the assumption of any Liability related to the Transferred Assets of the Business and/or the Business unless the Purchaser or one or more of its Affiliates expressly assumes that Liability pursuant to Clause 2.3 .

 

2.2                                  Excluded Assets

 

Notwithstanding anything to the contrary in Clause 2.1 or elsewhere in this Agreement, the following assets of the Seller (collectively, the “ Excluded Assets ”) are excluded from the Transferred Assets of the Business, and are to be retained by the Seller as of the Closing:

 

2.2.1                         all cash, cash equivalents and liquid investments of the Seller and its Affiliates;

 

2.2.2                         all furniture, fixtures, office equipment, laboratory equipment, all other moveable assets, properties, resources, facilities, utilities and services, including machinery, equipment, systems, implements, apparatus, instruments, mechanical and spare parts, tools, tooling, dyes, production supplies, storage tanks, pipes and fittings, utilities, vehicles, utensils, communication facilities and capital work-in-progress, training materials and equipment, supplies, owned and leased motor vehicles, mobile phones and personal digital assistants, and other tangible property of any kind which are located at the Leased Business Real Property and could be used solely for research and development of oral pharmaceutical products;

 

2.2.3                        

 

 

 

[***]

 

 

 

 

 

2.2.4                         all intercompany Accounts Receivable;

 

2.2.5                         the Corporate Name;

 

2.2.6                         except for the Leased Business Real Property, any Real Property owned or leased or subleased by the Seller or its Affiliates, as tenant;

 

2.2.7                         all raw materials and work in process used for the manufacture of Finished API for use in the manufacture of generic injectable pharmaceutical products;

 

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2.2.8                         any Registrations solely related to the selling, marketing or distribution of the products of the Business in the Excluded Countries;

 

2.2.9                         those Contracts, assets, rights and properties related to the selling, marketing or distribution of the products of the Business in India expressly set forth on Schedule 2.2.9 ;

 

2.2.10                   other than as set forth in Clause 2.1.7 , those assets and properties held by the Affiliates of the Seller in the United States, the United Kingdom, South Africa, China and Japan;

 

2.2.11                   original copies of all minute books, records, stock ledgers, Tax records and other materials that the Seller is required by Law to retain;

 

2.2.12                   the shares of the share capital stock of the Seller or any of its Affiliates held in treasury;

 

2.2.13                   all certificates for insurance, binders for insurance policies and insurance, and claims and rights thereunder and proceeds thereof;

 

2.2.14                   all claims for refund of Taxes and other governmental charges of whatever nature arising out of the Seller’s operation of the Business or ownership of the Transferred Assets of the Business prior to the Closing;

 

2.2.15                   all rights, title and interest of the Seller and its Affiliates to assets used in connection with the Other Businesses, except to the extent that such assets are included in the Transferred Assets of the Business;

 

2.2.16                   all intercompany Contracts between the Seller and any of its Affiliates or between one Affiliate of the Seller and another Affiliate of the Seller;

 

2.2.17                   all claims, rights, credits, causes of actions, defenses and rights of set-off of any kind, in each case to the extent arising from, or related to, the Excluded Assets or the Excluded Liabilities before or after the Closing, and including all attorney work-product protections, attorney-client privileges and other legal protections and privileges to which the Seller or its Affiliates may be entitled in connection with the Excluded Assets or the Excluded Liabilities; and

 

2.2.18                   all rights of the Seller and its Affiliates arising under this Agreement, the Ancillary Agreements or from the consummation of the transactions contemplated hereby or thereby.

 

2.3                                  Assumed Liabilities

 

Subject to the terms and conditions of this Agreement, at the Closing, the Purchaser shall assume and pay or perform when due only the following Liabilities to the extent relating to the Business (collectively, the “ Assumed Liabilities ”):

 

2.3.1                         all trade accounts payable to third party creditors of the Business for goods and services purchased, ordered or received by the Business and which are reflected in line items on the Interim Business Balance Sheet or incurred by the Seller in the Ordinary Course of Business and in accordance with the provisions of this Agreement, including Clause 6.2 ,

 

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between the date of the Interim Business Balance Sheet and the Closing (other than trade accounts payable to any shareholder or any Affiliates of the Seller), in each case that are not delinquent as of the Closing;

 

2.3.2                         all Liabilities of the Seller or its Affiliates arising after the Closing under the Contracts included in the Transferred Assets of the Business or that are entered into by the Seller after the date of this Agreement in accordance with Clause 6.2 ;

 

2.3.3                         all Liabilities assumed by the Purchaser under Clause 6.8 relating to Mixed Contracts and Mixed Accounts;

 

2.3.4                         the Transferred Employment Liabilities;

 

2.3.5                         all Liabilities arising out of, relating to or incurred in connection with the operation of the Business or the ownership of the Transferred Assets of the Business after the Closing;

 

2.3.6                         all Liabilities described on Schedule 2.3.6 ;

 

2.3.7                         Liabilities arising from product liability, warranty or similar claims by any Person in connection with any finished product of the Business manufactured after the Closing; and

 

2.3.8                         all Liabilities arising out of, relating to, or incurred in connection with the Pip-Tazo Litigation before, on or after the Closing (other than any attorney fees and other costs and expenses of the Seller arising on or before the Closing).

 

2.4                                  Excluded Liabilities

 

Notwithstanding any other provision of this Agreement or any other writing to the contrary, and regardless of any information disclosed to the Purchaser, the Purchaser does not assume and has no responsibility for any Liabilities of the Seller or any of its Affiliates (whether or not related to the Business) other than the Assumed Liabilities specifically listed in Clause 2.3 (such unassumed Liabilities, the “ Excluded Liabilities ”). Without limiting the preceding sentence, the following is a non-exclusive list of Excluded Liabilities that the Purchaser does not assume and that the Seller and its Affiliates shall remain bound by and liable for, and shall pay, discharge or perform when due:

 

2.4.1                         all Liabilities arising out of or relating to any Excluded Asset;

 

2.4.2                         all Liabilities under any Contract not assumed by the Purchaser under Clause 2.1.6 , including any Liability arising out of or relating to the Seller’s or its Affiliates’ credit facilities, the Indebtedness Contracts or any security interest related thereto;

 

2.4.3                         except for Liabilities arising from warranties provided by the Purchaser or arising as a result of any mishandling of product of the Business after such product has been accepted for delivery by the Purchaser, all Liabilities arising from product liability, warranty or similar claims by any Person in connection with any finished product of the Business manufactured on or prior to the Closing;

 

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2.4.4                         all Liabilities arising out of or relating to Indebtedness incurred by the Seller or its Affiliates;

 

2.4.5                         except as provided in Clause 8.1.1 and except for any apportionment provided for in this Agreement, all Liabilities for Taxes arising as a result of the operation of the Business or ownership of the Transferred Assets of the Business on or prior to the Closing, including any Taxes that arise as a result of the sale of the Transferred Assets of the Business pursuant to this Agreement and any deferred Taxes of any nature;

 

2.4.6                         all Liabilities arising from or under any Environmental Law or Occupational Safety and Health Law based upon the operation of, relating to, or arising out of acts, omissions or events occurring in connection with, the Business on or prior to the Closing or the Seller’s or its Affiliates’ leasing, ownership, occupation or operation of any Real Property;

 

2.4.7                         all Liabilities arising under claims by or with respect to employees of the Seller or its Affiliates (whether current employees or related to the former employment by the Seller or its Affiliates) relating in any way to wages, salaries, remuneration, compensation, allowances, bonuses, ex-gratia payments, reimbursements, service benefits, benefits (including workers’ compensation and unemployment benefits) and all other entitlements and all Tax deductions and other contributions relating to the foregoing, termination or continuation of its employment, or lack or delay of any notice relating to its employment, in all cases relating to the period on or prior to the Closing, except to the extent of any Transferred Employment Liabilities which are being deducted from the Cash Consideration under Clause 3.1 hereof;

 

2.4.8                         all Liabilities arising under any claim by or with respect to any employees of the Seller or its Affiliates for any severance, redundancy, retrenchment or similar termination payments or benefits (including payments for or in respect to the resignation of a Business Employee on or prior to the Closing) that may become payable to any employees of the Seller or its Affiliates in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, in all cases relating to the period on or prior to the Closing;

 

2.4.9                         all Liabilities arising under or in connection with the Employee Plans (including the Business Employee Plans), or any termination, continuation, amendment or other acts or omissions in connection with the Employee Plans (including the Business Employee Plans), in all cases relating to the period on or prior to the Closing, except to the extent of any Transferred Employment Liabilities which are being deducted from the Cash Consideration under Clause 3.1 hereof;

 

2.4.10                   all Liabilities arising under claims by or with respect to any officer, director, employee or agent of the Seller and its Affiliates for indemnification, reimbursement or advancement of amounts during their term of office, directorship, employment or agency with the Seller or its Affiliates, except to the extent of any Transferred Employment Liabilities which are being deducted from the Cash Consideration under Clause 3.1 hereof;

 

2.4.11                   all Liabilities arising from any failure to comply with any fraudulent transfer Law in connection with this Agreement or any Ancillary Agreement (whether compliance would

 

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have been required by the Seller, the Purchaser or some or all of them, by applicable Law);

 

2.4.12                   all Liabilities relating to any negotiations, agreements or other transactions, if any, by the Seller and its Affiliates with any third party that relate to the acquisition of the Seller and its Affiliates or any of its respective assets or businesses or any termination of related negotiations or arrangements;

 

2.4.13                   all professional, financial advisory, broker, finder or other fees of any kind incurred by the Seller and its Affiliates;

 

2.4.14                   other than any Liability assumed by the Purchaser pursuant to Clause 2.3.6 , all Liabilities of the Seller and its Affiliates arising out of or incurred in connection with this Agreement, any Ancillary Agreements, the transactions contemplated hereby or thereby, or any other document executed in connection with the transactions contemplated hereby or thereby, including disclosures to or negotiations with creditors or shareholders by Seller and its Affiliates, solicitations of proxies or written Consents from any Persons, or other legal obligations of the Seller and its Affiliates;

 

2.4.15                   all Liabilities of the Seller and its Affiliates arising out of acts, omissions or events, or relating to, or occurring in connection with, the Other Businesses;

 

2.4.16                   all Liabilities of the Seller and its Affiliates with respect to the corporate services or activities of the Seller and its Affiliates used by or made available to the Business; and

 

2.4.17                   all other Liabilities arising out of acts, omissions or events, or relating to, or occurring in connection with, the operation of the Business or the Transferred Assets of the Business or otherwise on or prior to the completion of the Closing, except as expressly provided for under Clause 2.3 hereof.

 

3                                          PURCHASE PRICE

 

3.1                                  Consideration

 

The cash consideration for the Transferred Assets of the Business, exclusive of all applicable Transfer Taxes resulting from the transfer of the Transferred Assets of the Business, is USD 400,000,000 (United States Dollar Four Hundred Million) (the “ Cash Consideration ”), subject to adjustment in accordance with Clause 3.2 . At the Closing, the Purchaser shall assume the Assumed Liabilities. The Cash Consideration as adjusted pursuant to  Clause 3.2 , Clause 6.15 , Clause  8.10 and Clause 11.7 , and the Assumed Liabilities are collectively referred to herein as the “ Purchase Price .”

 

3.2                                  Adjustment of Cash Consideration

 

3.2.1                         At least 5 (five) Business Days but no more than 10 (ten) days prior to the Closing Date, the Seller shall provide to the Purchaser a certificate setting forth a good faith estimate as of the close of business on the day immediately prior to the Closing Date of the Closing Net Working Capital (the “ Estimated Net Working Capital ”) showing the Seller’s calculation in reasonable detail, which calculation of the Estimated Net Working Capital shall be in accordance with GAAP applied on a basis consistent with the Financial

 

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Statements and shall include only those Accounts Receivable included in Clause 2.1.2 that have remained outstanding as of the Closing Date for less than 180 (one hundred eighty days).  If the Estimated Net Working Capital is greater than the Benchmark Net Working Capital, the difference between the Estimated Net Working Capital and the Benchmark Net Working Capital shall be added to the Cash Consideration paid at the Closing.  If the Benchmark Net Working Capital is greater than the Estimated Net Working Capital, the difference between the Benchmark Net Working Capital and the Estimated Net Working Capital shall be deducted from the Cash Consideration paid at the Closing.

 

3.2.2                         Not earlier than 185 (one hundred eighty five) days and no later than 210 (two hundred ten) days after the Closing Date, the Purchaser shall prepare, in cooperation with the Seller and its representatives, and shall deliver to the Seller a calculation of the Closing Net Working Capital together with reasonably supporting documentation (the “ Closing Net Working Capital Statement ”). The Closing Net Working Capital Statement shall be prepared on a combined basis in accordance with GAAP applied on a basis consistent with the Financial Statements.  The Closing Net Working Capital Statement shall include only:

 

(a) as current assets: (i) except for any [        *        *        *        ] all other third party Accounts Receivable which are collected by the Purchaser within 180 (one hundred eighty) days following the Closing Date (it being agreed and understood that the Purchaser shall deliver to the Seller the amount of any proceeds from any such other third party Accounts Receivable that are collected by the Purchaser after 180 (one hundred eighty) days following the Closing Date and not in the calculation contained in the Final Statement of Closing Net Working Capital), (ii) Inventory and (iii) deposits and prepaid expenses of the Business (other than for Taxes or under insurance policies); and

 

(b) as current liabilities, trade accounts payable (other than trade accounts payable to any shareholder or any Affiliates of the Seller) that are not delinquent as of the Closing.

 

3.2.3                         The Seller shall complete its review of the Closing Net Working Capital Statement within 30 (thirty) days of the Seller’s receipt thereof. In connection with such review, the Seller and its accountants shall be provided with full access to the working papers and other records of the Purchaser and its accountants used in the preparation of the Closing Net Working Capital Statement; providedhowever , that the Seller and its accountants have signed any customary release letters requested in connection therewith. If the Seller determines that the Closing Net Working Capital Statement has not been prepared on a basis consistent with the requirements of Clause 3.2.2 , the Seller may, on or before the last day of such 30 (thirty) day period, inform the Purchaser in writing (the “ Objection ”), setting forth a description containing reasonable detail of the basis of the Seller’s objection, the adjustments to the Closing Net Working Capital Statement which the Seller believes should be made, and the Seller’s calculation of the Closing Net Working Capital. The Seller shall be deemed to have accepted any items not specifically disputed in the Objection. Failure by the Seller to deliver an Objection in accordance with this Clause 3.2.3 to the Purchaser shall constitute acceptance and approval by the Seller of the Purchaser’s calculation of the Closing Net Working Capital.

 

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3.2.4         If the Purchaser receives an Objection from the Seller, it shall have 30 (thirty) days following receipt to review and respond in writing to such Objection (the “ Response ”). During the 20 (twenty) days immediately following a delivery of the Purchaser’s Response, the Seller and the Purchaser shall seek in good faith to resolve in writing any differences which they may have with respect to any matter specified in the Seller’s Objection. If the Seller and the Purchaser are unable to resolve all of such differences within such 20 (twenty) day period, either or both Parties may refer the remaining differences to KPMG LLP or another internationally or nationally recognized firm of independent public accountants as to which the Seller and the Purchaser mutually agree in writing (the “ Accounting Firm ”) for review and resolution of all matters which remain in dispute and which were indicated in the Seller’s Objection. The Accounting Firm shall act as an expert in accounting and not as an arbitrator and shall determine on a basis consistent with the requirements set forth in Clause 3.2.2 , and only with respect to the specific remaining accounting related differences so submitted, whether and to what extent, if any, the Closing Net Working Capital Statement requires any adjustments. The Seller and the Purchaser shall request the Accounting Firm to use its reasonable best efforts to render its determination within 30 (thirty) days. The Accounting Firm’s determination shall be conclusive and binding upon the Seller and the Purchaser. Subject to the execution of a confidentiality agreement by the Accounting Firm on terms and conditions reasonably acceptable to the Parties, the Seller and the Purchaser shall make available to the Accounting Firm all relevant personnel, books and records, any working papers (including those of the Parties’ respective accountants) and supporting documentation relating to the Closing Net Working Capital Statement and all other items and support reasonably requested by the Accounting Firm. The fees and expenses of the Accounting Firm shall be shared equally between the Seller and the Purchaser.

 

3.2.5         The “ Final Statement of Closing Net Working Capital ” shall be the calculation of the Closing Net Working Capital contained: (a) in the Closing Net Working Capital Statement in the event that, (i) no Objection is delivered by the Seller to the Purchaser within the 30 (thirty) day period specified in Clause 3.2.3 , or (ii) the Seller and the Purchaser so agree, (b) in the Closing Net Working Capital Statement, as adjusted in accordance with the Seller’s Objection, in the event that (i) the Purchaser does not deliver a Response to the Seller’s Objection during the 30 (thirty) day period specified in Clause 3.2.4 following receipt by the Purchaser of the Seller Objection, or (ii) the Seller and the Purchaser so agree, or (c) in the Closing Net Working Capital Statement, as adjusted pursuant to the mutual agreement of the Purchaser and the Seller, or as adjusted by the Accounting Firm, together with any other modifications to the Closing Net Working Capital Statement mutually agreed upon by the Purchaser and the Seller.

 

3.2.6         If the calculation of the amount of the Closing Net Working Capital contained in the Final Statement of Closing Net Working Capital is less than the Estimated Net Working Capital, the Seller shall pay to the Purchaser an amount in cash in Rupees equal to the amount of such deficiency plus interest on the amount paid computed at the Prime Rate for the period from the Closing Date to the date of such payment. If, by contrast, the calculation of the Closing Net Working Capital contained in the Final Statement of Closing Net Working Capital is greater than the Estimated Net Working Capital, the Purchaser shall pay to the Seller an amount in cash in Rupees equal to the amount of such deficiency plus interest on the amount paid computed at the Prime Rate for the

 

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period from the Closing Date to the date of such payment. All payments made pursuant to this Clause 3.2.6 shall be made to the applicable Party by means of a wire transfer of immediately available funds in Rupees within 3 (three) Business Days after the ultimate determination of the Final Statement of Closing Net Working Capital as provided in this Clause 3.2 .

 

3.2.7         The Parties agree to treat any amounts payable pursuant to this Section 3.2 as an adjustment to the Cash Consideration.

 

3.3            Tax Treatment of Allocation of Cash Consideration

 

The Seller and the Purchaser shall sign and submit all necessary forms to report the transactions contemplated by this Agreement for federal, national, regional, state, local, county, city, municipal, town, village, district, foreign or other income Tax purposes consistent with the allocation of the Cash Consideration delivered by the Purchaser to the Seller between the Effective Date and the Closing (which allocation shall be attached as Schedule 3.3 ), any allocation schedule set forth in an Ancillary Agreement and any adjustments to such amounts or allocation schedules following the Closing (including as required by Clause 3.2 ) and shall not take a position for Tax purposes inconsistent therewith. The Parties shall treat the transactions contemplated by this Agreement in all filings with Governmental Authorities for all Tax purposes (including consumption Taxes) consistent with the amount of the Cash Consideration to be paid to the Seller in accordance with Clause 7.2.2 , any allocation schedule set forth in an Ancillary Agreement and this Clause 3.3 .

 

4               EMPLOYEES AND EMPLOYEE BENEFIT FUNDS

 

4.1            Transfer of Employment

 

4.1.1         Prior to and on the Closing Date, as periodically requested by the Purchaser, the Seller shall provide an updated list of the Business Employees and contract labourers set forth on Clause 9.17.1(a)  of the Seller Disclosure Schedule. The list of Business Employees and contract labourers set forth on Clause 9.17.1(a)  of the Seller Disclosure Schedule shall be updated prior to the Closing Date to additionally include or delete any Persons as may be mutually agreed in writing by the Seller and the Purchaser.

 

4.1.2         No later than thirty (30) days prior to the estimated date for the Closing, the Purchaser shall make an offer of employment effective as of the Closing Date to each Business Employee, on terms and conditions that are no less favourable on an aggregate basis to those paid or provided to each such Business Employee prior to the Closing.

 

4.1.3         The Seller shall use all commercially reasonable efforts to cause all Business Employees to accept employment with the Purchaser. Subject to applicable Law, the Purchaser shall have reasonable access to the facilities and personnel records (to the extent available) (including employee name, date of birth, hire date, compensation (base, bonus, incentives and allowances), employment and compensation history, participation status in benefit plans, dependents covered, beneficiaries, performance appraisals, disciplinary actions, grievances and medical records occupational health and safety records and any other employee specific information as would be needed to administer

 

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payroll, employee benefits, polices and other programs) of the Seller. Access shall be provided by the Seller as may be reasonably requested by the Purchaser.

 

4.1.4         At the Closing, the Purchaser shall provide the Seller with a list of the Business Employees to whom it has made an offer of employment who has accepted such offer of employment effective as of the Closing Date (each such Business Employee, a “ Transferred Employee ” and collectively, the “ Transferred Employees ”). On the Closing Date the Seller shall notify the Transferred Employees of the termination of their employment with the Seller, such termination effective immediately prior to the Closing.

 

4.2            Prior Service

 

To the extent required by applicable Law, the Transferred Employees shall be deemed to have been in the employment of the Purchaser from the date of their commencement of employment with the Seller.

 

4.3            Accrued Vacation

 

The Seller shall pay out to each Transferred Employee on the Closing Date, at the Purchaser’s election, all or part of the accrued and unused vacation entitlement and any personal and sickness days accrued by such Transferred Employee as of the Closing Date; provided , however , that if any Transferred Employee elects not to accept any such amounts, then the Purchaser shall credit each Transferred Employee with the accrued and unused vacation entitlement and any personal and sick days accrued by such Transferred Employee as of the Closing Date and the amount of such Liability shall be included as a Transferred Employment Liability.

 

4.4            Benefit Plans

 

4.4.1         The Seller has established the following funds to provide for the payment of retirement benefits and gratuity benefits to the Business Employees:

 

4.4.1(a)            a contributory provident fund, in accordance with applicable Laws to provide for the payment of provident fund benefits to the Business Employees and other employees (the “ Provident Fund ”);

 

4.4.1(b)            a superannuation fund pursuant to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 to provide for the payment of superannuation benefits to its Business Employees and other employees who are covered under such scheme (the “ Superannuation Fund ”); and

 

4.4.1(c)            a gratuity fund pursuant to the Payment of Gratuity Act, 1972, for the payment of gratuity benefits to its Business Employees and other employees (the “ Gratuity Fund ”).

 

4.4.2         Prior to the Closing Date, the Seller shall make all contributions required to be made to any Business Employee Plan by applicable Law and the terms of such Business Employee Plan, and shall pay all premiums due or payable with respect to all Business Employee Plans so as to ensure that all the Business Employee Plans are fully funded as of the

 

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Closing and no payment, contribution or premium is required to be paid with respect to the said Business Employee Plans for the period prior to the Closing.

 

4.4.3         The Seller and its Affiliates shall provide the statutory auditor of the Seller with all reasonable documentation and information requested by the statutory auditor in the preparation of the certificate required pursuant to Clause 7.2.1(k) . The Purchaser or any representative or professional advisor of the Purchaser may, at the Purchaser’s sole cost and expense and during normal working hours, examine the work papers and the methodology employed by the statutory auditor of the Seller with respect to the preparation of such certificate.

 

4.4.4         The Seller and its Affiliates shall provide the actuary selected by the Purchaser with all reasonable documentation and information requested by such actuary in the preparation of the actuarial valuation report required pursuant to Clause 7.2.1(l).

 

4.5            Purchaser Plans

 

4.5.1         The Purchaser shall, as soon as reasonably practicable after the Closing Date, at its own cost, establish its own provident fund. The Purchaser shall also, as soon as reasonably practicable following the Closing Date, at its own cost, obtain a new policy from an insurer determined by the Purchaser or its Affiliates for extending superannuation benefits to the Transferred Employees for the period on and from the Closing Date. Until the establishment of such funds, on and following the Closing Date:

 

4.5.1(a)            the Purchaser shall pay or cause to be paid all contributions due and payable on and following the Closing Date in respect of the Provident Fund for the Transferred Employees in accordance with the terms of the Provident Fund until the same are transferred to the provident fund of the Purchaser, provided the same is not prohibited by Law;

 

4.5.1(b)            if the Purchaser is prohibited by Law from making contributions as set forth in Clause 4.5.1 , the Seller shall, prior to the Closing Date, advance an amount equal to the contributions payable to the Provident Fund in respect of the Transferred Employees, for a period of 4 (four) months following the Closing Date, as if the Seller continued to employ the Transferred Employees for such period, provided the same is not prohibited by Law. The Purchaser shall reimburse the Seller in respect of such advances within a period of 14 (fourteen) days from the date of the Seller making such advances; and

 

4.5.1(c)            the Purchaser shall, as soon as practicable following the Closing Date, at its own cost, obtain a new policy from an insurer selected by the Purchaser or its Affiliates for extending superannuation benefits to the Transferred Employees for the period on and from the Closing Date.

 

4.5.2         Upon the establishment of the funds as provided in Clause 4.5.1 , the Seller shall take all steps as may be necessary to transfer the balances, including interest under each of the Business Employee Plans in respect of the Transferred Employees (which accumulations are held by the trustees of each of the Business Employee Plans) to the funds to be

 

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established by the Purchaser. The Seller shall provide to the Purchaser all necessary documentation and other information providing the amounts transferred under each such fund for each Transferred Employee.

 

4.6            Closing Transferred Employee Liability

 

4.6.1         At Closing, the Purchaser shall assume and pay or perform when due the Liabilities related to (a) the leave travel assistance, medical reimbursement and accrued bonus, solely as they relate to the Transferred Employees, in the amount for each such Liability included in the certificate of statutory auditor or the actuarial valuation report, as applicable, to be delivered to the Purchaser pursuant to Clause 7.2.1(l)  and (b) to the extent any Transferred Employee does not accept encashment for accrued and unused vacation entitlement and any personal and sick days accrued by such Transferred Employee as of the Closing Date, accrued and unused vacation entitlement and any personal and sick days accrued by such Transferred Employee as of the Closing Date (collectively, (a) and (b), the “ Transferred Employment Liabilities ”). The Seller hereby agrees and acknowledges that the Purchaser shall have the right to deduct and offset at the Closing the amount of the Transferred Employment Liabilities from the Cash Consideration.

 

5               CONDITIONS PRECEDENT

 

5.1            Conditions to the Obligation of the Purchaser

 

The obligations of the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing Date, of each of the following conditions (any of which may be waived in writing by the Purchaser, in whole or in part):

 

5.1.1         Accuracy of Representations and Warranties . Each of the representations and warranties of Seller contained in Clause 9 that are qualified by materiality shall be true and correct in all respects, and the representations and warranties contained in Clause 9 that are not so qualified shall be true and correct in all material respects, in each case as of the Effective Date and as if made as of the Closing Date;

 

5.1.2         Performance of Covenants . All of the covenants and obligations that the Seller or its Affiliates is required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

5.1.3         Governmental Authorizations . Each of the Governmental Authorizations listed in Schedule 5.1.3 must have been obtained and must be in full force and effect;

 

5.1.4         Registrations . All of the Registrations listed on Schedule 5.1.4 must have been either: (a) transferred to the Purchaser or its nominee in accordance with applicable Law on their existing terms and conditions; or (b) issued to the Purchaser or its nominee in a form identical to that upon which they had been issued to the Seller.

 

5.1.5         Consent Under Competition / Investment Laws . All applicable waiting periods (and any extensions thereof) under the HSR Act and under the applicable Competition/Investment Laws of the jurisdictions set forth on Schedule 5.1.5 (in accordance with the provisions

 

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of Clause 6.3.2 ) must have expired or terminated, and, to the extent the Parties are required to make a filing under the Competition / Investment Laws of India in accordance with the provisions of Clause 6.3.3 , all applicable waiting periods (and any extensions thereof) under such Competition / Investment Laws must have expired or otherwise been terminated;

 

5.1.6         Consents . Each of the Consents listed in Schedule 5.1.6 must have been obtained and must be in full force and effect;

 

5.1.7         Shareholder Approval . The Seller shall have secured the approval of the shareholders of the Seller pursuant to Section 293(1)(a) of the Act and all other applicable Laws to effect the transactions contemplated by this Agreement and any applicable Ancillary Agreements to which it is a party (with the notice to the shareholders of the Seller seeking such approval being in an Agreed Form) and such approvals must be in full force and effect;

 

5.1.8         No Action . There must not be in effect, published, introduced or otherwise formally proposed any Law or Judgment, and there must not have been commenced or threatened any Proceeding, that in any case could: (a) prevent, make illegal or restrain the consummation of, or otherwise materially alter, any of the transactions contemplated by this Agreement or any Ancillary Agreement; or (b) cause any of the transactions contemplated by this Agreement or any Ancillary Agreement to be rescinded following consummation of the same; or, as to any Law, prevent, make illegal, restrict, impair or otherwise materially alter the Purchaser’s ability to operate the Business or own the Transferred Assets of the Business following the Closing substantially as the Business has been operated and the assets had been owned prior to the Closing;

 

5.1.9         No Material Adverse Effect . Since the date of this Agreement, there must not have been any Material Adverse Effect;

 

5.1.10       Lender Releases and Consents . Each Person that holds an Encumbrance (other than Permitted Encumbrances) with respect to any Transferred Asset of the Business must have delivered to the Purchaser a release letter in form and substance satisfactory to the Purchaser, providing for the full release of any such Encumbrance (each, a “ Release ”) and such Releases must be in full force and effect. Each Person that is a party to an Indebtedness Contract that contains a provision pursuant to which the consummation of the transaction contemplated by this Agreement and the Ancillary Agreement would result in a default or an event of default under such Indebtedness Contract without the prior consent of such Person must have delivered to the Purchaser a Consent in form and substance reasonably satisfactory to the Purchaser, providing for the Consent of such Person to the transactions contemplated by this Agreement and the Ancillary Agreement, and such Consents must be in full force and effect;

 

5.1.11       Consent of [      *      *      *      ] . The Seller shall have secured the consent of (a) at least [          *             *          *      ] of the [      *      *      *      ] and (b) all of the [   *   *   *   ] in each case, to the termination of their [   *   *   *   ] with the Seller and their [   *   *   *   ] by the Purchaser on the terms and conditions in accordance with Clause [***] of this Agreement;

 

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5.1.12       Transaction Documents . The Seller must have delivered or caused to be delivered each other document that Clause 7.2.1 requires it to deliver, each in form and substance satisfactory to the Purchaser and each such document must be in full force and effect.

 

5.2            Conditions to the Obligation of the Seller

 

The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing Date, of each of the following conditions (any of which may be waived in writing by the Seller, in whole or in part):

 

5.2.1         Accuracy of Representations and Warranties . Each of the representations and warranties of the Purchaser contained in Clause 10 that are qualified by materiality shall be true and correct in all respects, and the representations and warranties contained in Clause 10 that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as if made as of the Closing Date;

 

5.2.2         Performance of Covenants . All of the covenants and obligations that the Purchaser are required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

5.2.3         Consent under Competition / Investment Laws . All applicable waiting periods (and any extensions thereof) under the HSR Act and under the applicable Competition/Investment Laws of the jurisdictions set forth on Schedule 5.1.5 (in accordance with the provisions of Clause 6.3.2 ) must have expired or terminated, and, to the extent the Parties are required to make a filing under the Competition / Investment Laws of India in accordance with the provisions of Clause 6.3.3 , all applicable waiting periods (and any extensions thereof) under such Competition/Investment Laws must have expired or otherwise been terminated;

 

5.2.4         No Action . There must not be in effect any Law or Judgment that would prohibit or make illegal the consummation of any of the transactions contemplated by this Agreement;

 

5.2.5         Shareholder Approval .  The Seller shall have secured the approval of the shareholders of the Seller pursuant to Section 293(1)(a) of the Act and all other applicable Laws to effect the transactions contemplated by this Agreement and any applicable Ancillary Agreements to which it is a party (with the notice to the shareholders of the Seller seeking such approval being in an Agreed Form) and such approvals must be in full force and effect; and

 

5.2.6         Transaction Documents . The Purchaser must have delivered or caused to be delivered to the Seller each document that Clause 7.2.2 requires it to deliver, each in form and substance satisfactory to the Seller and each such document must be in full force and effect.

 

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6               PRE-CLOSING COVENANTS

 

6.1            Access and Investigation

 

6.1.1         Between the Effective Date and the Closing Date, the Seller shall subject to any applicable Law and the terms of any Contract, afford the Purchaser and its directors, employees, agents, prospective financing sources, third party consultants and other advisors and representatives, access, during regular business hours and upon reasonable agreed-upon times, to Seller’s personnel and any properties related to any Business, the Contracts, the Inventory, books and records and all other information and materials pertaining to the Business, provided that such access shall not unreasonably interfere with the Seller’s business and operations, shall be subject to the requirements of all applicable Competition/Investment Laws, and shall, at all times, be subject to any other applicable legal requirements imposed by applicable Law.

 

6.1.2         other than for matters related to Competition/Investment Laws which are provided for in Clause 6.3.4 , until the Closing, the Seller shall allow the Purchaser and its directors, officers, employees, agents, prospective financing sources, third party consultants and other advisors and representatives, to the extent permitted by Law, to: (a) attend with the Seller any meeting between the Seller and any Governmental Authority on a matter regarding the Business, the Transferred Assets of the Business or the transactions contemplated by this Agreement and the Ancillary Agreements; and (b) consult with the Seller with respect to any matters discussed at any such meeting; and the Seller shall provide the Purchaser with at least 3 (three) Business Days notice prior to any such meeting. All requests and inquiries from any Governmental Authority prior to the Closing shall be dealt with by the Seller and the Purchaser in consultation with each other and the Seller and the Purchaser shall promptly co-operate with and provide all necessary information and assistance reasonably required by such Governmental Authority upon being requested to do so by the other.

 

6.2            Operation of the Business by the Seller

 

6.2.1         Affirmative Covenants . Until the Closing, except as expressly consented to by the Purchaser in writing, the Seller shall, and shall cause each of its Affiliates to:

 

6.2.1(a)                    conduct the Business only in the Ordinary Course of Business and in compliance in all respects with all applicable Laws;

 

6.2.1(b)                    use commercially reasonable efforts to preserve and protect the Business and the Transferred Assets of the Business and its present relationships with customers, suppliers, distributors and other Persons with which the Seller or its Affiliates have significant business relations in order to preserve and not impair the Goodwill of the Business;

 

6.2.1(c)                    manufacture, test, certify and release Finished API only in the Ordinary Course of Business; and

 

6.2.1(d)                    perform its obligations under all Contracts applicable to the Business or the Transferred Assets of the Business to which they are a party, by

 

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which it or any of the Transferred Assets of the Business are bound or affected or pursuant to which the Seller is an obligor or beneficiary, and comply with all Laws, Judgments, Registrations and Governmental Authorizations applicable to the Business or the Transferred Assets of the Business.

 

6.2.2         Negative Covenants . Without limitation of the covenants contained in Clause 6.2.1 , until the Closing, except as expressly permitted by this Agreement or as otherwise expressly consented to by the Purchaser in writing (it being agreed and understood that actions taken by the Seller or its Affiliates that are specifically consented to in writing by the Purchaser pursuant to this Clause 6.2.2 shall not constitute breaches of representations and warranties under this Agreement), the Seller shall not and shall not cause or permit any of its Affiliates to:

 

6.2.2(a)                    take any action to change accounting policies or procedures (including procedures with respect to revenue recognition), change any material assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case required to conform to GAAP or applicable Laws;

 

6.2.2(b)                    enter into, amend or assume any Contract related to, impacting or otherwise affecting the Business, any of the Transferred Assets of the Business or Assumed Liabilities or the Seller’s performance of its obligations under this Agreement or any of the Ancillary Agreements, including Contracts for insurance, other than in the Ordinary Course of Business;

 

6.2.2(c)                    transfer, assign, sell, pledge, mortgage, dispose, lease, or encumber any assets, tangible or intangible included in the Transferred Assets of the Business, including any Leased Business Real Property, or suffer to exist any Encumbrance thereon other than Encumbrances in existence on the Effective Date, other than sales of products of the Business in the Ordinary Course of Business;

 

6.2.2(d)                    with respect to the Purchased Intellectual Property and with respect to any rights to the Purchased Intellectual Property granted under any Contract, (i) transfer, assign or license to any Person any rights to such Purchased Intellectual Property; (ii) abandon, permit to lapse or otherwise dispose of any Purchased Intellectual Property; (iii) grant any Encumbrance on any Purchased Intellectual Property; or (iv) make any material changes in or to the Purchased Intellectual Property that reasonably could be expected to impair such Purchased Intellectual Property or the Seller’s or its Affiliates rights with respect thereto;

 

6.2.2(e)                    terminate the employment of any Key Employee except in accordance with the terms of such Key Employee’s employment Contract or pursuant to applicable Law;

 

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6.2.2(f)                     increase the total number of Business Employees by more than 5% (five percent) of the total number included on Clause 9.17.1(a)  of the Seller Disclosure Schedule provided that any increase in the number of Business Employees effected at the specific request of the Purchaser or effected upon the written mutual agreement of the Seller and the Purchaser shall not be considered to be a part of such increase;

 

6.2.2(g)                    amend the terms and conditions of employment (including remuneration, pension entitlements and other benefits) of any Key Employees (other than increases in the Ordinary Course of Business which the Seller shall notify the Purchaser of as soon as reasonably possible thereafter);

 

6.2.2(h)                    except for merit increases or bonus payments made in the Ordinary Course of Business, grant (or commit to grant) any increase in the compensation (including incentive or bonus compensation) of any employee engaged in the Business, or institute, adopt or amend (or commit to institute, adopt or amend) any Business Employee Plan;

 

6.2.2(i)                     act or omit to act in a manner that would impair or otherwise adversely affect in a material respect the Business, any of the Transferred Assets of the Business or Assumed Liabilities or the Seller’s performance of their obligations under this Agreement or any of the Ancillary Agreements;

 

6.2.2(j)                     encourage customers of the Business to return products outside of the Ordinary Course of Business;

 

6.2.2(k)                    make sales of products of the Business to customers or distributors other than in the Ordinary Course of Business;

 

6.2.2(l)                     fail to pay accounts payable and other obligations of the Business other than those disputed in good faith;

 

6.2.2(m)                   accelerate the collection of Accounts Receivable or modify the payment terms of any Accounts Receivable;

 

6.2.2(n)                    adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or the reorganization of the Seller or its Affiliates;

 

6.2.2(o)                    change the location of any collateral under any Indebtedness Contract identified in Clause 9.14.1 of the Seller Disclosure Schedule, other than inventories and supplies of raw materials in the Ordinary Course of Business;

 

6.2.2(p)                    enter into any guarantee, indemnity or other agreement to secure any obligation of a third party or create any Encumbrance over any of the Transferred Assets of the Business;

 

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6.2.2(q)                    agree to settle, compromise or otherwise resolve in whole or in part any actual, potential or threatened claims or Proceedings in connection with or involving the Business or Transferred Assets of the Business; or

 

6.2.2(r)                     agree, whether in writing or otherwise, to do any of the foregoing or take, or commit to take, any action that would result in the occurrence of any of the foregoing.

 

6.3            Consents and Filings; Reasonable Efforts

 

6.3.1         The Seller shall use and shall cause its Affiliates to use commercially reasonable efforts: (i) to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement; (ii) to take promptly, or cause to be taken, all actions to assign and transfer to the Purchaser (other than assistance in preparing new applications for), Governmental Authorizations and Registrations used in or related to the Business or any Transferred Asset of the Business or required for the ownership or use of any Transferred Asset of the Business or the operation of the Business; and (iii) as promptly as practicable after the date of this Agreement, to obtain all Governmental Authorizations and Registrations from, give all notices to, and make all filings with, all Governmental Authorities, and to obtain all other Consents, Releases, substitutions or amendments from, and give all other notices to, all other Persons, that are necessary or advisable in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement, including those listed in Clause 9.3(a)(ii) , Clause 9.3(b) , Clause 9.12.8 and Clause 9.19.2 of the Seller Disclosure Schedule, Schedule 5.1.4 and Schedule 5.1.6 , provided , however , that, subject to Clause 6.3.5 , any costs, fees, expenses or other charges relating to obtaining such Consents or making such filings shall be borne by the Seller. The Seller shall not knowingly enter into any acquisition or other agreement, make any announcements with respect to any transaction or take any other action that could reasonably be expected to have the effect of materially delaying, impairing or impeding the receipt of any Consents of any Governmental Authorities or other Persons.

 

6.3.2         As soon as reasonably practicable following the Effective Date, the Seller and the Purchaser shall (a) each file a Notification and Report Form and related material with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the HSR Act, (b) (i) complete Schedule 5.1.5 to include all jurisdictions in which, based on the applicable Competition/Investment Laws, a filing under such Competition/Investment Laws is required in connection with the transactions contemplated by this Agreement and (ii) make all necessary filings under the applicable Competition/Investment Laws of the jurisdictions set forth on Schedule 5.1.5, and (c) use their commercially respective reasonable endeavors to obtain early termination of the applicable waiting period and shall make all further filings pursuant thereto that may be necessary, proper or advisable. The foregoing shall not be deemed to require the Purchaser or any of its Affiliates to enter into any agreement, consent decree or other commitment requiring the Purchaser or any of its Affiliates to divest (including through the granting of any license rights) or hold separate any businesses, assets or properties of the Business, the Purchaser or any of its

 

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Affiliates; provided , however , that the Purchaser shall be required to accept a remedy (other than a remedy to divest (including through the granting of any license rights) or hold separate any businesses, assets or properties of the Business, the Purchaser or any of its Affiliates) required by the United States Federal Trade Commission or the Antitrust Division of the United States Department of Justice provided that, in the reasonable determination of the Purchaser, such remedy could not have a material adverse effect on the business, assets, properties, liabilities, condition (financial or otherwise), operating results, operations or prospects of the Business, the Purchaser or any of its Affiliates, and neither the Seller nor any of its Affiliates shall, without prior written consent of Purchaser, take or commit to take any such actions with respect to the Business, the Purchaser or its Affiliates.

 

6.3.3         If, prior to the Closing Date, there is a requirement under the Competition/Investment Laws of India for any Party or the Parties to make a filing with respect to the transactions contemplated by this Agreement, then as soon as reasonably practicable following the effective date of such requirement pursuant to the Competition/Investment Laws of India, the Seller and the Purchaser, as applicable, shall each file or shall jointly file, as required, all necessary documentation with the applicable Governmental Authorities under such Competition/Investment Laws, and the Parties shall use their respective commercially reasonable efforts to obtain early termination of any applicable waiting period and shall make all further filings pursuant thereto that may be necessary, proper or advisable.

 

6.3.4         Subject to appropriate confidentiality protections, each Party shall: (i) promptly notify the other Party of any written communication to that Party from any Governmental Authority and, subject to Law, permit the other Party to review in advance any proposed written communication to any such Governmental Authority and shall consult with counsel for the other Party, consider in good faith the views of the other and, if appropriate, incorporate the other Party’s reasonable comments, and (ii) furnish the other Party with copies of all correspondence, filings and written communications with any Governmental Authority with respect to this Agreement or the transactions contemplated hereby; provided , however that if Seller or Purchaser believes that any such communication to or from a Governmental Authority contains (or in the case of a meeting is likely to involve discussion of) commercially sensitive information that it is unwilling to provide to the other Party, it shall be sufficient for Seller or Purchaser, as the case may be, to provide a copy of such communication (or an opportunity to attend such meeting) to the other Party’s outside counsel.

 

6.3.5         All filing fees under the HSR Act, other applicable Competition/Investment Laws or other applicable Laws shall be borne solely by the Purchaser. Subject to Clause 6.3.1 , each Party shall bear its own costs (including the cost of any advisers appointed by it) incurred in connection with the clearances or any notification to Governmental Authorities.

 

6.4            Notification

 

Until the Closing, the Seller shall give prompt written notice to the Purchaser of (a) the occurrence, or non-occurrence, of any event, the occurrence or non-occurrence of which would reasonably be expected to cause any representation or warranty of the Seller contained in this

 

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Agreement to be untrue or inaccurate, in each case at any time from and after the Effective Date until the Closing; (b) any failure to comply with or satisfy any covenant or agreement to be complied with or satisfied by the Seller or any of its Affiliates under this Agreement; and (c) the failure of any condition precedent to the Purchaser’s obligations under this Agreement. No notification pursuant to this Clause 6.4 shall be deemed to amend or supplement the Seller Disclosure Schedule, prevent or cure any misrepresentation, breach of warranty or breach of covenant, or limit or otherwise affect any rights or remedies available to the Purchaser, including pursuant to Clause 11 or Clause 12 .

 

6.5            Shareholder Approval

 

6.5.1         The Seller, acting through its board of directors, shall, in accordance with Section 293(1)(a) of the Act and all other applicable Laws and the articles of association and memorandum of association of the Seller:

 

6.5.1(a)                    as soon as reasonably practicable, duly set a record date for, call and give notice of the meeting of the shareholders (or a postal ballot as permitted under applicable Law) of the Seller for the purpose of considering and taking action with respect to the transactions contemplated by this Agreement and any Ancillary Agreements to which it is a party; and

 

6.5.1(b)                    as soon as reasonably practicable following the record date, (i) cause the ballot to be dispatched to the shareholders of the Seller in an Agreed Form; and (ii) take all other action reasonably necessary or advisable to secure the approval of the shareholders of the Seller required by applicable Law to effect the transactions contemplated by this Agreement and any Ancillary Agreements to which it is a party.

 

6.6            No Negotiation

 

6.6.1         Until the Closing, the Seller shall not, and the Seller shall cause its Affiliates, directors, officers, employees, agents, consultants and other advisors and representatives not to, directly or indirectly: (a) solicit, initiate, encourage, knowingly facilitate, or entertain any inquiry or the making of any proposal or offer; (b) enter into, continue or otherwise participate in any discussions or negotiations; (c) furnish to any Person any non-public information or grant any Person access to their properties, assets, books, Contracts, personnel or records; or; (d) approve or recommend, or propose to approve or recommend, or execute or enter into, any letter of intent, agreement in principal, merger agreement, acquisition agreement, option agreement or other Contract or propose, whether publicly or to any director or shareholder, or agree to do any of the foregoing for the purpose of encouraging or facilitating any proposal, offer, discussions or negotiations; in each case regarding any business combination transaction involving the Seller or its Affiliates in any other transaction that would result in a Person other than the Purchaser or its Affiliates acquiring all or any part of the Business, whether by merger, business transfer agreements, purchase of assets, purchase of stock, tender offer, lease, license or otherwise. Each of the Seller and the Seller’s Affiliates shall immediately cease and cause to be terminated any such negotiations, discussion or Contracts (other than with the Purchaser) that are the subject of clauses (a), (b) or (d)

 

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above and shall immediately cease providing and secure the return of any non-public information and terminate any access of the type referenced in clause (c) above. If any of the Seller or any of its Affiliates, directors, officers, employees, agents, consultants or other advisors and representatives receive, prior to the Closing, any offer, proposal or request, directly or indirectly, of the type referenced in clause (a), (b) or (d) above or any request for disclosure or access as referenced in clause (c) above, the Seller and its Affiliates shall immediately suspend or cause to be suspended any discussions with such offeror or Person with regard to such offers, proposals or requests and notify the Purchaser thereof, including, unless prohibited by applicable Law, information as to the identity of the offeror or Person making any such offer or proposal and the specific terms of such offer or proposal, as the case may be, and such other information related thereto as the Purchaser may reasonably request.  It is agreed and understood that the terms of this Clause 6.6.1 shall not prevent the Seller from: (i) issuing or selling any shares of capital stock of the Seller to third parties in one or more transactions provided that such issuances or sales do not result in a Change of Control of the Seller or (ii) selling or divesting assets of the Other Businesses, in each case of (i) or (ii) for the purposes of raising funds for the Seller from third parties.

 

6.6.2         Until the Closing, neither the Purchaser nor any of its Affiliates shall enter into any agreements which could reasonably be expected to adversely affect the Purchaser’s ability to consummate the transactions contemplated by this Agreement.

 

6.7            Intercompany Arrangements

 

Prior to the Closing, the Seller shall, and shall cause its Affiliates to, terminate all agreements or arrangements, written or unwritten, of any kind (other than this Agreement and any Ancillary Agreements), between the Seller and any of its Affiliates with respect to the Business, such termination to have effect as of immediately prior to the Closing.

 

6.8            Mixed Contracts and Mixed Accounts

 

6.8.1         Except as may otherwise be agreed by the Parties in writing, any Contract (other than (a) Contracts related exclusively to the Business; (b) licenses of Seller Mixed Use Intellectual Property; or (c) Contracts that expressly constitute Excluded Assets) that inures to the benefit or burden of the Business and the Other Businesses (a “ Mixed Contract ”), including those Contracts set forth on Schedule 6.8 , shall, to the extent commercially reasonable, be separated as of or as soon as practicable after the Closing, so that each of the Purchaser and the Seller shall be entitled to the rights and benefits and shall assume the related portion of any Liabilities inuring to their respective businesses for the period after the Closing. If any Mixed Contract cannot be so separated, the Purchaser and the Seller shall, and shall cause each of their respective Affiliates to, take such other commercially reasonable efforts to cause: (i) the rights and benefits associated with that portion of each Mixed Contract that relates to the Business to be enjoyed by the Purchaser; (ii) the Liabilities associated with that portion of each Mixed Contract that relates to the operation of the Business following the Closing to be borne by the Purchaser; (iii) the rights and benefits associated with that portion of each Mixed Contract that relates to the Other Businesses to be enjoyed by the Seller; (iv) the Liabilities associated with that

 

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portion of each Mixed Contract that relates to the Seller’s Other Businesses to be borne by the Seller; and (v) the Liabilities associated with that portion of each Mixed Contract that relates to the operation of the Business prior to the Closing to be borne by the Seller. The Seller shall provide the Purchaser with a copy of each Mixed Contract (it being understood that the Parties shall use commercially reasonable efforts to comply, where practicable, with any applicable confidentiality provisions contained in such Mixed Contracts), and the Parties shall cooperate with each other to effect such separation. The costs of such separation shall be borne by the Parties in proportion to the rights and benefits inuring to each of them under the Mixed Contract; provided ; however , that the Purchaser shall have no Liability with respect to any cost, expense, charge, fee, penalty or other amount related to such separation unless the Purchaser consents in writing to such payment.

 

6.8.2         Except as may otherwise be agreed by the Parties, the Parties shall not assign any Accounts Receivable or payable relating to both the Business and the Other Businesses (a “ Mixed Account ”). In the event of any such Mixed Account, the Purchaser and the Seller shall take such reasonable and permissible actions to cause: (i) the Transferred Assets of the Business associated with that portion of each Mixed Account that relates to the Business to be enjoyed by the Purchaser; (ii) the Assumed Liabilities related with that portion of each Mixed Account that relates to the Business to be borne by the Purchaser; (iii) the assets associated with that portion of each Mixed Account that relates to the Excluded Assets to be enjoyed by the Seller; and (iv) the Liabilities (other than Assumed Liabilities) related with that portion of each Mixed Account that relates to the Excluded Assets to be borne by the Seller.

 

6.9            Satisfaction of Obligations to Lenders

 

The Seller shall satisfy or cause to be satisfied all requirements of its lenders pursuant to the Indebtedness Contracts and shall take all actions necessary to obtain all Releases and Consents required pursuant to Clause 5.1.10 .

 

6.10          Real Property

 

Except as set forth in Clause 8.1 , prior to the Closing, at the Seller’s sole cost and expense, the Seller shall take such steps as are necessary to pay in full all Taxes and outgoings due and payable in respect of the Leased Business Real Property to the extent the related lease so requires the Seller, including property Taxes, electricity and water charges prior to the Closing Date, subject to appropriate proration to the extent such payments relate to the period after the Closing.  The Purchaser agrees to cooperate with the Seller in reimbursing the Seller for any amounts paid by the Seller to the extent relating to the period after the Closing.

 

6.11          Financial Statements

 

6.11.1       Until the Closing, on or before the tenth (10 th ) day of each month, the Seller shall deliver to the Purchaser: (a) unaudited unconsolidated financial statements of the Seller; and (b) unaudited carve-out financial statements of the Business for the Seller and its Affiliates engaged in the Business as at and for the monthly period ending on the last day of the preceding month (the “ Subsequent Monthly Financial Statements ”), which shall include a balance sheet and profit and loss account. At the time that the Subsequent Monthly Financial Statements are delivered to the Purchaser, the Seller shall by such delivery be deemed to have made the representations and warranties to

 

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the Purchaser with respect to such Subsequent Monthly Financial Statements as set forth in Clause 9.4 .

 

6.11.2       From the Effective Date, the Seller shall cooperate in good faith with the Purchaser with respect to the Purchaser’s preparation of: (a) any audited balance sheets for the Business in accordance with generally accepted accounting principles for financial reporting in the United States and the related statements of income, changes in equity and cash flows that may be required by the Purchaser to satisfy the reporting requirements of the United States Securities and Exchange Commission following the Closing (including the Purchaser’s 2010 audited financial statements); and (b) an unaudited opening balance sheet as of the Closing Date in accordance with GAAP.

 

6.12          Contact with Customers and Suppliers

 

Until the Closing, the Purchaser and the Seller shall cooperate in communicating with any Business Employees, customers, suppliers, licensors, licensees, partners or distributors of the Business concerning the transactions contemplated hereby, including the Purchaser’s intentions concerning the operation of the Business following the Closing. Until the Closing, the Purchaser and their representatives shall contact or communicate with the Business Employees, customers, suppliers, licensors, licensees, partners or distributors of the Business in connection with the transactions contemplated hereby only with the prior written consent of the Seller, which shall not be unreasonably withheld or delayed and may be conditioned upon a designee of the Seller being present at any meeting or conference. Nothing in this Clause 6.12 shall prohibit the Purchaser and their representatives from contacting the customers, suppliers, licensors, licensees, partners or distributors of the Business in the ordinary course of the Purchaser’s businesses for the purpose of selling products of the Purchaser’s businesses or for any other purpose unrelated to the Business or the transactions contemplated by this Agreement, so long as the Purchaser does not use the Seller’s Confidential Information in making such contacts.

 

6.13          Replacement of Guarantees

 

The Purchaser and the Seller shall cooperate with each other with a view to entering into arrangements effective as of the Closing whereby the Purchaser or one of its Affiliates would be substituted for the Seller or its Affiliates in any guarantees, letters of comfort, indemnities or similar arrangements entered into by the Seller or its Affiliates in respect of the Business (but only to the extent such guarantees, letters of comfort, indemnities or arrangements constitute Assumed Liabilities). If the Purchaser or its Affiliates cannot enter into the arrangements referred to above, the Seller or its Affiliates shall not terminate such guaranty arrangements without the Purchaser’s consent; provided , however , that the Purchaser shall enter into a separate guaranty with the Seller to guarantee the performance of the obligations of the relevant Person pursuant to the Contract underlying such guaranty arrangements.

 

6.14          Review of Closing Deliveries

 

Prior to the Seller submitting to any Person for review and comment any draft of a closing delivery that Clause 7.2 requires the Seller to obtain from such Person in order to deliver at the Closing, the Seller shall: (a) provide the Purchaser an opportunity to review and comment on such document, from a form and substance viewpoint; (b) include in such document all

 

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comments reasonably proposed by the Purchaser; and (c) not finalize the form of such document prior to receiving the Purchaser’s approval, which approval shall not be unreasonably withheld or delayed.

 

6.15          Vizag Land

 

Prior to the Closing, the Seller shall use its best efforts to assign to the Purchaser, effective as of the Closing, all of the rights of the Seller in that certain lease agreement with Ramky Pharma City (India) Limited dated 20 February 2009 with respect to the approximately 27 (twenty-seven) acres of land located inside the SEZ (the “ Vizag Lease ”).  If, prior to or on the Closing Date, the Seller has not been able to assign all of the rights of the Seller in the Vizag Lease effective as of the Closing Date, then the Cash Consideration payable by the Purchaser as of the Closing Date shall be reduced by [                *                *                *                ];  provided , however , that if the Seller assigns all of its rights in the Vizag Lease to the Purchaser within 1 (one) month following the Closing Date, the withheld amount of [                *                *                *                ] shall be paid by the Purchaser to the Seller on the date such assignment of the Vizag Lease occurs.  If all of the rights of the Seller in the Vizag Lease are assigned to the Purchaser effective as of the Closing Date or during the 1 (one) month period thereafter pursuant to the proviso in the immediately preceding sentence, then the Real Property leased pursuant to the Vizag Lease shall be deemed Leased Business Real Property for all purposes under this Agreement.

 

6.16          Additional Fill/Finish Manufacturing

 

Following the Closing, the Purchaser shall consider in good faith and not unreasonably deny any requests made by the Seller for the Purchaser to provide fill/finish services for one injectable penem dosage form of NCE developed by the Seller or contracted by the Seller for manufacture of such NCE’s for an innovator company.

 

6.17          Currency Conversion

 

The Purchaser hereby agrees and acknowledges that it shall not convert the Cash Consideration into Indian Rupees more than 3 (three) Business Days (or as otherwise mutually agreed in writing by the Seller and the Purchaser) prior to the estimated Closing Date.

 

6.18          Purchaser Parent Guarantee

 

Concurrently with the execution of this Agreement, Hospira, Inc., a Delaware corporation and the parent company of the Purchaser, has executed and delivered to the Seller the Purchaser Parent Guarantee set forth in Exhibit J

 

6.19          Formulation/Fill/Finish NCE

 

Schedule 6.19 sets forth the general principles for the Fill/Finish NCE Contract Manufacturing Agreement to be negotiated in good faith by the Seller and the Purchaser between the Effective Date and the Closing Date on terms and conditions to be mutually agreed by the Parties.  If the Seller and the Purchaser mutually agree upon and execute the Fill/Finish NCE Contract Manufacturing Agreement prior to the Closing, such Fill/Finish NCE Contract Manufacturing Agreement shall be attached as Exhibit C to this Agreement .

 

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7               CLOSING

 

7.1            Closing

 

On the terms and subject to the conditions of this Agreement, the Closing shall take place at the offices of Khaitan & Co., Mumbai, India or at the offices of the Seller in Chennai, as may be mutually agreed in writing, on the earlier of (i) the 5 th  (fifth) Business Day following the day on which the last to be fulfilled or waived of the conditions set forth in Clause 5 shall be fulfilled or waived in accordance with this Agreement, (ii) if each of the conditions set forth in Clause 5 shall be fulfilled or waived in accordance with this Agreement prior to such date, on March 31, 2010 or (iii) at such other time, date or place as the Parties may mutually agree in writing (“ Closing Date ”). The parties shall use reasonable efforts to schedule the Closing Date for the last day of a calendar month. Unless the Parties otherwise agree in writing, the Closing shall be deemed to have occurred at 00:01 a.m. local time in India on the Closing Date.

 

7.2            Closing Deliveries

 

7.2.1         At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser:

 

7.2.1(a)                    copies of the resolutions of the board of directors and shareholders of the Seller, authorizing and approving the transactions contemplated by this Agreement and the Ancillary Agreements certified by the company secretary or a director of the Seller to be true and complete and in full force and effect and unmodified as of the Closing;

 

7.2.1(b)                    a deed of assignments in respect of all Purchased Intellectual Property in the form of Exhibit E (collectively, the “ IP Assignment ”) duly stamped executed by the Seller or its Affiliates and the originals of all prior deeds of assignment and other documents pursuant to which the Seller or its Affiliate has derived its title to the Purchased Intellectual Property;

 

7.2.1(c)                    for each parcel of Leased Business Real Property, a lease deed and any novations, assignments and Consents as may be necessary to transfer the right, title and interest in the Leased Business Real Property in favour of the Purchaser in form and substance reasonably acceptable to the Purchaser (the “ Lease Deeds ”) duly stamped and executed by the Seller and the applicable third party to the applicable rental or lease Contract;

 

7.2.1(d)                    for each Contract listed on Schedule 5.1.6 , such documents, including novations and Consents, as may be necessary to transfer the rights and obligations of the Seller under such Contracts;

 

7.2.1(e)                    the Escrow Agreement duly stamped and executed by the Seller and the Escrow Agent;

 

7.2.1(f)                     the Transition Services Agreement duly stamped and executed by the Seller;

 

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7.2.1(g)                    the Oral Ceph Contract Manufacturing Agreement duly stamped and executed by the Seller;

 

7.2.1(h)                    the API Supply Agreement duly stamped and executed by the Seller;

 

7.2.1(i)                     a receipt from the Seller in a form reasonably satisfactory to the Purchaser for the amount of the Cash Consideration less the sum of (i) the Escrow Amount plus (ii) any withholding required under applicable Law;

 

7.2.1(j)                     a “consent and no objection certificate” for the Seller from the concerned Assessing Officer of Income Tax pursuant to Section 281 of the Tax Act for the sale of the Business and the Transferred Assets of the Business, as contemplated hereunder;

 

7.2.1(k)                    a certificate executed by the statutory auditor of the Seller in Agreed Form certifying that: (i) all contributions required to be made in respect of the Transferred Employees to any Business Employee Plan by applicable Law and the terms of such Business Employee Plan for all periods up to the Closing Date have been timely made or paid in full; and (ii) specifying the balances that would be required to be transferred to the Purchaser or in respect of which the applicable insurance policy would need to be assigned or for which the Purchaser would be required to obtain an insurance policy;

 

7.2.1(l)                     an actuarial valuation report of gratuity Liability for the Seller with respect to the Business Employees of the Seller prepared by an actuary selected by the Purchaser;

 

7.2.1(m)                   the Lender Releases and Consents required pursuant to Clause 5.1.10 ;

 

7.2.1(n)                    a certificate in the form of Exhibit G , dated as of the Closing Date, executed by the Seller confirming the satisfaction of the conditions specified in Clause 5.1.1 — 5.1.12 (insofar as Clause 5.1.8 relates to Proceedings involving the Seller or its Affiliates);

 

7.2.1(o)                    the Fill/Finish NCE Contract Manufacturing Agreement duly stamped and executed by the Seller (if executed by the Seller and the Purchaser prior to the Closing Date) ; and

 

7.2.1(p)                    such other documents, instruments and agreements as the Purchaser reasonably requests for the purpose of consummating the transactions contemplated by this Agreement.

 

7.2.2         At the Closing, the Purchaser shall deliver or cause to be delivered to the Seller or, in the case of Clause 7.2.2(b)  the Escrow Agent:

 

7.2.2(a)                    the Indian Rupee equivalent of the Cash Consideration converted by the Purchaser in accordance with Clause 6.17 (as adjusted pursuant to Clause 3.2.1 ), less (i) the Escrow Amount, (ii) an amount equal to the

 

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Transferred Employment Liabilities, (iii) if applicable, [                *                 *                *                ] pursuant to Clause 6.15 and (iv) any Taxes required to be withheld under applicable Law, by wire transfer to an account or accounts of the Seller designated in writing by the Seller;

 

7.2.2(b)                    the Indian Rupee equivalent of [                *                *                *                ] converted by the Purchaser in accordance with Clause 6.17 corresponding to the Escrow Amount, to the Escrow Agent by wire transfer to an account specified by the Escrow Agent;

 

7.2.2(c)                    the Escrow Agreement executed by the Purchaser and the Escrow Agent;

 

7.2.2(d)                    the IP Assignments, if any, that require execution by the Purchaser;

 

7.2.2(e)                    the Lease Deeds executed by the Purchaser;

 

7.2.2(f)                     the Transition Services Agreement executed by Purchaser;

 

7.2.2(g)                    the Oral Ceph Contract Manufacturing Agreement executed by the Purchaser;

 

7.2.2(h)


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