EXHIBIT 2.1
TRANSLATION FROM FRENCH FOR INFORMATION ONLY
SHARE PURCHASE AGREEMENT
DATED DECEMBER 3, 2001
AMONG THE UNDERSIGNED
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual born in Paris on October 27, 1944, residing at
▇▇, ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, widow (VEUVE) of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇, an individual born in
Hanoi (Vietnam) on April 15, 1918, residing at ▇, ▇▇▇ ▇▇ ▇'▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇
hereinafter together called the "Sellers"
ON THE ONE HAND,
AND
Cephalon , Inc. , an American company organized in the State of Delaware, with
its principal place of business located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, herein represented by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.,
Ph.D., Chairman and Chief Executive Officer, thereunto duly authorized by a
resolution of Cephalon's Board of Directors, dated 1st November 2001, a copy of
which is attached hereto as SCHEDULE A
hereinafter called the "Purchaser"
ON THE OTHER HAND
Hereinafter together called the Parties
and individually a Party.
WHEREAS
A. Financiere ▇▇▇▇▇ (hereinafter called the "Company") is a corporation
(SOCIETE ANONYME) with its registered office located at ▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇ and which is registered with the Registry of
Commerce and Companies (REGISTRE DU COMMERCE ET DES SOCIETES) of Paris
under number 340 102 391.
B. The share capital of the Company is forty thousand euros ([EURO]
40,000) divided into two thousand five hundred (2,500) shares, par
value sixteen euros ([EURO] 16) per share (hereinafter
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called the "Financiere ▇▇▇▇▇ Shares"). On the date of this Agreement
(hereinafter called this "Agreement"), the Sellers own 2,495 Financiere
▇▇▇▇▇ Shares in the proportions set out in SCHEDULE B to this
Agreement.
C. The Company is a holding company.
D. Organisation de Synthese Mondiale Orsymonde (hereinafter called
"Orsymonde") is a corporation (SOCIETE ANONYME) with its registered
office located at ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇ and which is
registered with the Registry of Commerce and Companies (REGISTRE DU
COMMERCE ET DES SOCIETES) of Paris under number 582 079 711.
E. The share capital of Orsymonde is one million eight hundred thirty six
thousand euros ([EURO] 1,836,000) divided into twelve thousand (12,000)
shares, par value one hundred and fifty three euros ([EURO] 153) per
share (hereinafter called the "Orsymonde Shares"). On the date of this
Agreement, the Sellers own 2,553 Orsymonde shares in the proportions
set out in SCHEDULE E to this Agreement.
F. The Company directly and indirectly owns the subsidiaries in France and
abroad, including Orsymonde (hereinafter called the "Subsidiaries") a
description of which, including the percentage of the share capital of
the Subsidiaries directly and indirectly held by the Company and/or the
Subsidiaries, is set out SCHEDULE F to this Agreement (the Company and
the Subsidiaries are hereinafter together called the "Companies").
G. The business of the Subsidiaries consists mainly of the manufacture,
purchase, and sale of chemical and pharmaceutical products.
H. The business of the Purchaser's group consists of the manufacture,
purchase, and sale of pharmaceutical products, including, in
particular, a product covered by a license granted by one of the
Subsidiaries, the French corporation (SOCIETE ANONYME) Laboratoire ▇.
▇▇▇▇▇.
I. Prior to the date of this Agreement, (i) the Companies have delivered
to the Purchaser their accounts (balance sheet, income statement and
notes to the accounts (including, for the French companies, off-balance
sheet commitments )) as of December 31, 1998, December 31, 1999, and
December 31, 2000 (hereinafter together called the "1998, 1999, and
2000 Company Accounts"), and (ii) the Company has delivered to the
Purchaser its consolidated accounts (balance sheet, income statement
and notes to the accounts (including off-balance sheet commitments)) as
of December 31, 1998, December 31, 1999, and December 31, 2000
(hereinafter called the "1998, 1999, and 2000 Consolidated Accounts").
J. The Company has made available to the Purchaser the following documents
on the dates hereinbelow set forth:
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- on November 6, 2001, the working papers supporting preparation
of the 1998, 1999, and 2000 Company Accounts;
- on November 13, 2001, the working papers supporting
preparation of the Interim Accounts, as defined hereinafter;
- on November 15, 2001, the working papers supporting
preparation of the 1998, 1999, and 2000 Consolidated Accounts;
- on November 15, 2001, the interim accounts (balance sheet,
income statement and notes to the accounts, including
off-balance sheet items and cash flow statements) of the
Company for the periods from January 1 to September 30, 2000
(hereinafter called the "2000 Interim Accounts"), and from
January 1 to September 30, 2001 (hereinafter called the "2001
Interim Accounts") (the 2000 Interim Accounts and the 2001
Interim Accounts are hereinafter together called the "Interim
Accounts"), prepared by the Company with the assistance of an
accounting firm agreed by the Parties, using the same methods
as those applied for the preparation of the 1998, 1999, and
2000 Consolidated Accounts, such methods to be in accordance
with the accounting principles issued in the NOUVEAU PLAN
COMPTABLE FRANCAIS ["New French Accounting Methods"] and
consistent with the recommendations of the ORDRE DES EXPERTS
COMPTABLES FRANCAIS [French Professional Accountants' Council]
and the CONSEIL NATIONAL DE LA COMPTABILITE [French National
Accounting Standards Board];
- on the day hereof, the 1998, 1999, and 2000 Consolidated
Accounts prepared by the Company with the assistance of an
accounting firm agreed by the Parties in accordance with
accounting principles generally accepted in France and
including disclosures relating to the reconciliation between
French generally accepted accounting principles and US
generally accepted accounting principles, I.E., (i) balance
sheet, income statement, cash flow statements and statements
of changes in shareholders' equity, such items complying with
French accounting principles, and presented according to an
American format, (ii) notes to the accounts prepared in
accordance with French generally accepted accounting
principles, (iii) reconciliation statements of net financial
condition and net income in accordance with French generally
accepted accounting principles showing the adjustments
required for conversion into U.S. generally accepted
accounting principles, (iv) statements of comprehensive
income, prepared in accordance with generally accepted
accounting principles in the United States (hereinafter called
the "1998, 1999, and 2000 US GAAP Consolidated Accounts").
K. The Sellers have agreed to deliver to the firm of
PriceWaterhouseCoopers (hereinafter called "PWC"), no later than
December 10, 2001, the Interim Accounts prepared by the Company with
the assistance of an accounting firm agreed by the Parties in
accordance with French generally accepted accounting principles and
including additional disclosures relating to the reconciliation between
French generally accepted accounting principles and
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U.S. generally accepted accounting principles, I.E., (i) balance sheet,
income statement, cash flow statements, and statements of changes in
shareholders' equity, such items complying with French accounting
principles, and presented in according to an American format, (ii)
notes to the accounts presented in accordance with French generally
accepted accounting principles, (iii) reconciliation statements of net
financial condition and net income in accordance with French generally
accepted accounting principles showing the adjustments required for
conversion into U.S. generally accepted accounting principles, (iv)
statements of comprehensive income, prepared in accordance with
generally accepted accounting principles in the United States
(hereinafter called the "US GAAP Interim Accounts").
L. With the Sellers' agreement, the Purchaser has appointed PWC (i) to
audit the 1998, 1999, and 2001 US GAAP Consolidated Accounts and (ii)
to perform a review of the US GAAP Interim Accounts, in accordance with
generally accepted auditing and review standards in the United States,
as well as the applicable rules and regulations of the U.S. Securities
and Exchange Commission (Regulation S-X).
M. The Sellers wish to sell and the Purchaser wishes to purchase (i) 2,560
Orsymonde Shares from ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (ii) 1,260 Financiere
▇▇▇▇▇ Shares from ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and 1,240 Financiere ▇▇▇▇▇ Shares
from ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ , I.E., all of the Financiere ▇▇▇▇▇ Shares. The
2,560 Orsymonde Shares and the Financiere ▇▇▇▇▇ Shares are hereinafter
collectively referred to as the "Shares").
N. The Purchaser has indicated to the Sellers:
- that it has available to it cash-flow in the amount of three
hundred million U.S. dollars ($ 300,000,000); and
- that it was in advanced negotiations to obtain, on a timely
basis, an additional one hundred fifty million U.S. dollars ($
150,000,000), representing the balance of the Price (as
defined in Article 2 hereinbelow). The Purchaser has delivered
to the Sellers, prior to the date of this Agreement, a comfort
letter (lettre de confort) issued by Credit Suisse First
Boston (Cayman Islands Branch) pursuant to which such
financial institution has confirmed that a bridge loan
(financement relais) of one hundred million U.S. dollars ($
100,000,000) is available, if the Purchaser is unable to raise
the above-described additional funds by the Closing Date (as
set forth in Article 4 hereinbelow)
O. Attached as Schedule O to this Agreement are documents provided by PWC
(two letters dated December 2, 2001, and a letter dated November 9,
2001) in which such firm advises the Purchaser of the progress of its
work as of the date of this Agreement, as set forth in paragraph L
hereinabove, and the date for delivery of its opinions, as set forth in
Article 4(f)(i) and (ii) hereinbelow. It is understood and agreed, to
the extent necessary, that all of the Company's obligations in
connection with the above-described letter have been undertaken only
for purposes PWC's assignment in connection with such letter.
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NOW, THEREFORE, THE PARTIES HAVE AGREED TO THE FOLLOWING:
1. SALE AND PURCHASE
(a) On the Closing Date, subject to the terms and conditions set forth
hereafter, the Sellers shall sell and the Purchaser shall purchase all,
but not part only, of the Financiere ▇▇▇▇▇ Shares and at least 2,556
Orsymonde Shares, together with all rights now or hereafter attached
thereto, in accordance with the terms and conditions of this Agreement.
(b) Each Seller agrees to cause the other Seller to sell his/her Financiere
▇▇▇▇▇ Shares and, as regards ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, his Orsymonde Shares,
their obligations being joint and several.
(c) On the Closing Date the Sellers shall have used their best efforts to
ensure that:
(i) ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ owns the four (4) Orsymonde Shares
presently owned by the individuals listed in Schedule1(c) to
this Agreement (hereinafter called the "Orsymonde Minority
Shares"), so that they can be sold by ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to
the Purchaser on the Closing Date, and
(ii) the three (3) shares of Laboratoire L ▇▇▇▇▇, presently owned
by the individual whose name is shown in SCHEDULE 1(C) of this
Agreement (hereinafter called the "Laboratoire ▇. ▇▇▇▇▇
Minority Shares") be owned by Orsymonde or ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
on the Closing Date, in which case he agrees to sell them to
the Purchaser for their par value on such Closing Date, it
being understood that the price at which Orsymonde acquires
the Laboratoire ▇. ▇▇▇▇▇ Minority Shares shall not exceed
their par value for each such share.
(the Orsymonde Minority Shares and the Laboratoire ▇. ▇▇▇▇▇ Minority
Shares are hereinafter together called the "Minority Shares" and individually a
"Minority Share").
2. PRICE
(a) The total price for the Shares (hereinafter called the "Price") shall
be four hundred fifty million US dollars ($450,000,000).
(b) The total Price shall be divided between the Sellers as follows:
(i) two hundred seventy-four million four hundred sixteen thousand
U.S. dollars ($274,416,000) to ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, divided as
follows:
- one hundred seventy-eight million four hundred
sixteen thousand U.S. dollars ($178,416,000) for his
1,260 Financiere ▇▇▇▇▇ Shares;
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- ninety-six million U.S. dollars ($96,000,000) for his
2,650 Orsymonde Shares; and
(ii) one hundred seventy-five million five hundred eighty-four
thousand U.S. dollars ($175,584,000) to ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, for
her 1,240 Financiere ▇▇▇▇▇ Shares.
(c) On the Closing Date the part of the Price paid to ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
shall be reduced by thirty-seven thousand five hundred US dollars
(US$37,500) per Minority Share not sold to the Purchaser or not owned
by Orsymonde (as the case may be) as provided in Article 1(c) hereof on
the Closing Date.
(d) If, on the Closing Date, the Minority Shares are not sold to the
Purchaser or are not owned by Orsymonde (as the case may be) as
provided in Article 1(c) hereof, ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall continue to
use his best efforts (by negotiating for a period of eighteen months
from the Closing Date) to make possible the sale of the Minority Shares
to the Purchaser, or any Associated Company (as defined in Article 7(a)
hereinbelow), for a maximum price per share of thirty-seven thousand
five hundred U.S. dollars ($37,500). All expenses relating to such
negotiation shall remain ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ responsibility
exclusively.
If, between the Closing Date and the end of the above-described
eighteen month period, the Purchaser, or any Associated Company, should
acquire, or cause to be acquired, one or more of the Minority Shares at
a price per share which is less than the one hereinabove provided,
I.E., thirty-seven thousand five hundred U.S. dollars ($37,500), the
Purchaser, within eight (8) business days following such acquisition,
shall pay to ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ any such difference.
To the extent the owners of the Minority Shares are willing to sell
them during the above-described eighteen month period, the Purchaser
hereby agrees as of the date hereof, both on its own behalf and on
behalf of any Associated Company, to acquire, or cause to be acquired,
any Minority Share for a maximum price per share of thirty-seven
thousand five hundred U.S. dollars ($37,500).
To make it possible for the Sellers to ensure the completion of such an
acquisition, the Purchaser agrees, both on its own behalf and on behalf
of the Companies:
- to deliver immediately a copy of any legal act or document
evidencing the acquisition of Minority Shares, together with a
certificate from the Purchaser certifying the price paid for
such acquisition as well as a copy certified true and correct
of the legal act, document, or form relating thereto, recorded
with the tax office having jurisdiction thereover;
- to allow the Sellers (or their advisors), upon request, to
review the share transfer and shareholder records of Orsymonde
and/or Laboratoire ▇. ▇▇▇▇▇.
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(e) If, at the end of the above-described eighteen month period, all of the
Minority Shares have not been sold to the Purchaser or any Associated
Company for a maximum price per share of thirty-seven five hundred U.S.
dollars ($37,500):
- the amount of thirty-seven thousand five hundred U.S. dollars
($37,500) described in paragraph (c) hereinabove, per
non-transferred Minority Share, shall remain finally with the
Purchaser; and
- the Sellers agree to pay a new amount equal to thirty-seven
thousand five hundred U.S. dollars ($37,500) per
non-transferred Minority Share to the Purchaser as a penalty,
to be charged against the Escrowed Amount (as defined in
paragraph (f) hereinbelow).
(f) On the Closing Date the Purchaser shall pay into an escrow account
established with OBC Odier Bungener Courvoisier Bank (hereinafter
called "OBC") a part of the Price due ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, I.E., an amount
of forty five million U.S. Dollars ($45,000,000) in cash (hereinafter
called the "Escrowed Amount"). The Escrowed Amount shall secure the
payment by each of the Sellers of all amounts which may be due to the
Purchaser under this Agreement or the indemnification clause of the
Representations and Warranty Agreement of even date herewith
(hereinafter called the "Representations and Warranties Agreement").
Such escrow shall be created pursuant to an Escrow Agreement
(hereinafter called the "Escrow Agreement") which shall be made with
the above-described banking firm in substantially the form annexed
hereto as SCHEDULE 2(F). Even though the Escrowed Amount is being paid
with respect to the portion of the price to which ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ is
entitled, the Sellers expressly acknowledge that there shall be no
limitation on the Purchaser's right to demand from ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
the payment due by him and secured by the Escrowed Amount.
3. CONDITION PRECEDENT
(a) The obligations of the Parties under this Agreement are
subject to the satisfaction of the condition precedent of
obtaining any necessary authorization, express or implied,
required from French, European, or American governmental
authorities, including the clearance of the antitrust
authorities, if such clearance is necessary. Unless waived by
the Parties, if this condition precedent is not met by
December 24, 2001, at the latest, this Agreement shall be null
and void, without any obligation to pay any indemnity by any
Party to the others.
(b) In addition the Purchaser shall have the right to terminate
this Agreement, if it does not obtain, by December 24, 2001,
at the latest, the financing in the amount of one hundred
fifty million dollars ($150,000,000) described in paragraph N
of the preamble. However, notwithstanding any clause to the
contrary, and as an essential and determining condition of the
Sellers' agreement, if the Purchaser exercises its right to
terminate this Agreement, , the Purchaser shall pay to the
Sellers, no later
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than December 31, 2001, the amount of five million U.S.
dollars ($5,000,000) in compensation, among other things, for
freezing their Shares and the resulting inability to sell such
Shares to a third party from the date of this Agreement. It is
specifically provided hereby, for the sake of good order, that
the payment of such amount by the Purchaser will constitute
final and complete indemnification of the Sellers and will be
the only indemnification to which the Sellers shall be
entitled for, among other things, reimbursement of any
expenses of any kind they may have incurred for the
negotiation, signature and performance of this Agreement, in
particular the indemnification set forth in Article 4(h) of
this Agreement.
(c) Each of the Parties agrees to take the necessary steps in a timely
manner to ensure that the foregoing conditions precedent are promptly
met.
4. CLOSING
(a) The Closing, defined as the performance by the Sellers and the
Purchaser of their obligations set forth in this Article, shall take
place at the offices of Dechert in Paris on December 28, 2001,
(hereinafter called the "Closing Date"), subject to meeting (or waiver,
as the case may be of) the condition precedent set forth in Article
3(a) hereinabove.
(b) On the Closing Date, subject to the proper performance of the
Purchaser's obligations set forth in paragraphs (d) and (e)
hereinbelow, the Sellers shall deliver to the Purchaser the following
documents:
(i) share transfer forms (ORDRES DE MOUVEMENT) relating to the
Shares (subject to the Orsymonde Minority Shares as set forth
in Articles 1 and 2 hereinabove) duly executed in favor of the
Purchaser, or any other person designated thereby pursuant to
Article 7(c) hereof, together with two signed copies of the
simplified share purchase agreement (hereinafter called the
"Simplified Agreement") relating to the sale of the Shares
(subject to the Orsymonde Minority Shares), made on the
Closing Date between the Sellers and the Purchaser (or any
person designated thereby) for purposes of recording with the
French tax authorities;
(ii) a certified copy of the resolutions of the board of directors
of the Company approving the Purchaser (or any other person
that the Purchaser may substitute for it pursuant to Article
7(c) hereof) as a shareholder of the Company and, for the
purpose of serving as director, any other person or company
designated by it shown in the list attached to this Agreement
as SCHEDULE (B)(II);
(iii) the shareholders' accounts of the Company and of Orsymonde
together with the Share Transfer Registers in both cases up to
date, to record the transfers made pursuant to the share
transfer forms referred to in Article 4(b)(i) hereof;
8
(iv) the minute books of board and shareholders' meetings of the
Company and of Orsymonde in both cases up to date together
with the attendance book in respect of board meetings and the
relevant attendance sheets and proxies in respect of
shareholders' meetings, and all corporate documents relating
to the Companies that are not kept at the Company's and
Orsymonde's registered offices, including the resolutions
adopted at the shareholders' meetings of the Company and
Orsymonde ratifying the capital increases which took place on
May 3, 2001;
(v) unconditional letters of resignation of any of the Directors
(ADMINISTRATEURS) and Officers (MANDATAIRES SOCIAUX) (also
acting as officers - responsible pharmacists, if applicable),
the list of whom is attached to this Agreement as SCHEDULE
4(B)(V);
(vi) if possible, unconditional letters of resignation of the
Statutory Auditors (COMMISSAIRES AUX COMPTES) of the Companies
and their alternates, the list of whom is attached to this
Agreement as SCHEDULE 4(B)(VI);
(vii) a certificate signed by all the Sellers confirming the
accuracy on the Closing Date of the Representations and
Warranties contained in the Representations and Warranties
Agreement, subject to (1) the Exceptions (as such term is
defined in Article 3.10 of the Representations and Warranties
Agreement) including those affecting materially and negatively
the business and/or financial condition of the Companies, (2)
matters not affecting materially and adversely the business
and/or financial condition of the Companies, (3) economic
and/or financial matters of general applicability, including
those materially and adversely affecting the Companies'
business and/or financial condition, or (4) events under the
control of any company of the Cephalon group, including those
affecting materially and adversely the Companies' business
and/or financial condition, which may occur between the date
of this Agreement and the Closing Date. Between the signature
of this Agreement and the Closing Date, the Sellers shall
promptly advise the Purchaser of any event (excluding general
economic and/or financial events) materially and adversely
affecting the business and/or financial condition of the
Companies. It is expressly understood and agreed that the
certificate required hereunder may be provided only if the
Sellers believe, in good faith after making due inquiries,
that it is true and correct;
(viii) a certificate signed by the Sellers confirming that there has
not been, between the date of this Agreement and the Closing
Date, any event having a material and adverse effect on the
Companies' business and/or financial condition, subject to (1)
the Exceptions (as such term is defined in Article 3.10 of the
Representations and Warranties Agreement), including those
affecting materially and adversely the business and/or
financial condition of the Companies, (2) economic and/or
financial matters of general applicability,
9
including those materially and adversely affecting the
Companies' business and/or financial condition, or (3) events
under the control of any company of the Cephalon group,
including those having a material adverse effect on the
Companies' business and/or financial condition, which may
occur between the date of this Agreement and the Closing Date.
It is expressly understood and agreed that the certificate
required hereunder may be provided only if the Sellers
believe, in good faith after making due inquiries, that it is
true and correct;
(ix) the Escrow Agreement duly signed;
(x) a certified excerpt from the minutes of the meeting of the
workers' committee of Laboratoire ▇. ▇▇▇▇▇ certifying that it
was duly consulted and informed concerning the planned sale of
the Shares prior to the signature of this Agreement;
(xi) certificates issued, respectively, by Bank OBC, ▇▇▇▇▇▇, and
Laboratoires Maphar, each indicating that the signatory
thereof has been informed of the proposed change of control in
favor of the Purchaser, and that it will not exercise its
rights, as far as OBC may be concerned, under the acceleration
clauses and, as far as ▇▇▇▇▇▇ and Maphar may be concerned, the
termination clauses provided in the agreements listed in
SCHEDULE 4(B)(XI) hereof;
(xii) a certificate or certificates signed, respectively, by BNP and
Natexis stating that the loan taken out by Laboratoire ▇.
▇▇▇▇▇ on 26 June 1992 in the amount of FRF 42,000,000 has been
repaid in full at the Closing Date, and that Laboratoire ▇.
▇▇▇▇▇ has met its obligations under such loan agreement;
(xiii) a certificate signed by Natexis Bail stating that the
signatory thereof has been advised that Laboratoire ▇. ▇▇▇▇▇
has entered into the loans listed in SCHEDULE 4 (b)(xiii)
hereof and that it will not, as a result thereof, exercise its
rights under the termination clause provided in the agreement
listed in SCHEDULE 4(b)(xiii) to the Agreement;
(xiv) a firm offer by which ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ undertakes to sell the
land and rights relating thereto (including the vacation
facility) located in Marseillan to Laboratoire ▇. ▇▇▇▇▇;
(xv) a transfer deed by which the ownership of the trademarks
Idrocol, Troizel and Troisel 3L is transferred by ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇ to Laboratoire ▇. ▇▇▇▇▇;
(c) The Sellers shall cause to be held, prior to or on the Closing Date (at
their convenience and as required by applicable law), any required
board and/or shareholders' meetings of the Companies to effect the
appointment of such persons as the Purchaser may designate as Directors
(ADMINISTRATEURS), Officers (MANDATAIRES SOCIAUX), and Statutory
Auditors
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(COMMISSAIRES AUX COMPTES) of the Companies, the list of whom is
attached to this Agreement as SCHEDULE 4(C).
(d) On the Closing Date, subject to the due performance by the Sellers of
their obligations set forth hereinabove, the Purchaser shall pay:
(i) to each of the Sellers by bank transfer to the bank accounts
for which information shall have been provided eight (8) days
prior to the Closing Date, its part of the Price reduced by
(a) for ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, the Escrowed Amount and (b) for ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, thirty-seven thousand five hundred U.S.
dollars ($37,500) per Minority Share not transferred on the
Closing Date, and each Seller shall give to the Purchaser a
receipt for that part of the Price received by him/her;
(ii) to the escrow account, the Escrowed Amount as provided in the
Escrow Agreement.
(e) On the Closing Date, subject to the due performance by the Sellers of
their obligations set forth hereinabove, the Purchaser shall deliver to
the Sellers:
(i) a certificate confirming, as of the Closing Date, the accuracy
of the Beneficiary's Representations and Warranties set forth
in the Representations and Warranties Agreement;
(ii) two signed copies of the Simplified Agreement;
(iii) a duly signed copy of the Escrow Agreement.
(f) On the Closing Date PWC, acting at the Purchaser's request, will
deliver to the Purchaser and the Sellers:
(i) an opinion in which, pursuant to its audit assignment
performed at the Purchaser's request and covering the 1998,
1999, and 2000 US GAAP Consolidated Accounts and prepared in
compliance with the applicable rules and regulations of the
U.S. Securities and Exchange Commission (Regulation S-X) and
conducted in accordance with United States generally accepted
auditing standards, in which it certifies without
qualification such 1998, 1999, and 2000 US GAAP Consolidated
Accounts, in compliance with applicable rules and regulations
of the U.S. Securities and Exchange Commission (Regulation
S-X) and in accordance with United States generally accepted
auditing standards;
(ii) an opinion in which, pursuant to its review assignment
performed at the Purchaser's request and covering the US GAAP
Interim Accounts prepared in compliance with the applicable
rules and regulations of the U.S. Securities and Exchange
Commission (Regulation S-X) and conducted in accordance with
United States generally accepted auditing standards, it gives
an unqualified review
11
report on the 2001 US GAAP Interim Accounts in accordance with
the rules and regulations of the U.S. Securities and Exchange
Commission (Regulation S-X) and generally accepted auditing
standards in the United States.
The Sellers agree, on their own behalf and on the Company's behalf, to
continue to co-operate fully with PWC in connection with its
assignments of auditing the 1998, 1999, and 2000 US GAAP Consolidated
Accounts and reviewing the 2001 US GAAP Interim Accounts. Thus, the
Sellers shall cause PWC to continue to have access, until the Closing
Date, to the offices, records, and personnel of the Companies so as to
allow PWC to perform its audit and review assignments.
The Purchaser agrees to pay the fees of PWC within the time period
agreed with it and not to impede PWC's performance of its review work
and to co-operate fully with PWC, so that it is able to complete its
audit and review assignments within the agreed time periods, I.E.,
prior to the Closing Date.
It is expressly understood and agreed by the Parties that the failure
of PWC to deliver one or more of the opinions described in paragraphs
(i) and (ii) hereinabove shall not be deemed to be a failure to meet
the condition precedent described in this Article, if such failure
results from failure of the Purchaser to comply with its obligations
under the foregoing paragraph.
For the avoidance of doubt, it is understood and agreed that the
delivery of the opinions described in this Article, prepared to satisfy
the rules and regulations of the U.S. Securities and Exchange
Commission (Regulation S-X) is an essential and determining condition
of the Purchaser's agreements. However, the Parties' obligations under
this Agreement, shall not be affected by the contents of the financial
documents described in this Article or any adjustments which may be
made in connection with PWC's review, as set forth in paragraph L of
the Recitals hereto.
(g) If the Closing does not occur by December 28, 2001, at the latest for
any reason other than one relating to the failure of the Purchaser to
meet its obligations under this Agreement, the Purchaser may terminate
this Agreement without there being any obligation by any Party to pay
any indemnity to any other.
(h) In the event the Closing fails to take place by reason of the failure
of the Sellers (on the one hand) or the Purchaser (on the other hand)
to satisfy any of the obligations set forth in this Agreement between
the date of this Agreement and the Closing Date (excluding the failure
to close related to one of the conditions set forth in Article 3 of
this Agreement), the non-defaulting Party may terminate this Agreement
and shall be entitled to obtain from the defaulting Party, in addition
to any other remedies to which it may be entitled by French courts, the
immediate reimbursement of all reasonable costs and expenses (including
fees of counsel and other advisors) incurred in connection with the
negotiation, signature and performance of this Agreement. For the
avoidance of doubt it is provided that the non-delivery by PWC of the
opinions described in Articles 4(f)(i) to 4(f)(ii)
12
hereinabove for reasons attributable to it shall not give rise to
reimbursement of fees and expenses hereinabove provided.
(i) The Parties agree to co-operate with each other so that the formalities
required to create a tax consolidation group consisting of the
Companies and any French subsidiary of the Purchaser which may control
the Company following the Closing shall be completed by December 31,
2001, so that a new tax consolidation group is in place by January 1,
2002.
5. SELLERS' OTHER OBLIGATIONS
(a) As from the date of this Agreement and up to and including the Closing
Date, the Sellers shall procure that the businesses of the Companies
shall be carried on in the ordinary course and in a prudent and
appropriate manner and consistent with the Companies' past practices.
The Sellers shall comply with, and shall cause the Companies to comply
with, the following commitments:
(i) not to change the normal terms and conditions of payment of
amounts which may be due to them and, especially, not to offer
incentives to third parties (other than normal discounts
offered to customers) for the purpose of accelerating
collection of the Companies' accounts receivable;
(ii) not to accept, with respect to accounts payable, payment terms
and conditions which vary from those customarily offered, or
postponing the payment of any accounts payable past the due
date hereof;
(iii) not to offer terms or discounts or take any other action which
results in customers increasing their inventory levels of the
Companies' products beyond what is customary with respect to
such products;
(iv) to comply with all applicable laws and regulations and, in
particular, but without limiting to the generality of the
foregoing, the requirements of all applicable employment laws
relating to the subject matter of this Agreement;
(v) without the prior written consent of the Purchaser, not amend
their articles of association (STATUTS), undertake any merger,
spin-off or other form of reorganisation, nor propose, declare
or pay any dividend or grant any mortgage, pledge or security,
or take any other step which may encumber or otherwise affect
the free disposition of their respective assets;
(vi) without the prior written consent of the Purchaser and except
for cost-of-living increases or increases which are mandatory
under applicable labor law or any relevant collective
bargaining agreement, or any other applicable labor agreement,
not to increase or undertake to increase the compensation
payable or other benefits due to any employees or of any
manager or officer (MANDATAIRE SOCIAL) (whether or not having
employee status) of the Companies
13
(such as bonuses, profit sharing, pension or retirement
benefits, or other similar benefits), nor hire or dismiss any
senior corporate managers (CADRES SUPERIEURS) or executive
employees (CADRES DIRIGEANTS), or increase the number of other
employees or personnel (temporary, under contract with
third-parties, or other);
(vii) without the prior written consent of the Purchaser, not to
enter into any contracts containing unusual or unduly onerous
terms, or which are outside the normal course of business of
the Companies;
(viii) not to terminate, or enter into, any business relationship ;
(ix) not to undertake any capital or non-routine expenditure, save
where such expenditure is essential to preserve the value of
an asset of the Companies or their business; and
(x) not to undertake or pursue any negotiation with a third-party
concerning a potential sale of the Financiere ▇▇▇▇▇ Shares or
the Orsymonde Shares, or any other acquisition of an interest
in the Companies.
(b) Notwithstanding paragraph (a) hereinabove the Companies may undertake
the transactions described hereinabove if
(i) they are necessary in the normal course of their businesses,
prudent and appropriate for their operations and consistent
with past practices, so long as the Purchaser is given prior
notice thereof; or
(ii) they appear in SCHEDULE 5(B) of the Agreement, such Schedule
to contain a list, among other things, of certain assets to be
sold by the Sellers, or acquired by the Companies from the
Sellers before the Closing Date, as well as the related sale
price thereof. The transfer of title to such assets shall be
for the price set forth in such SCHEDULE 5(B); or
(iii) they are contemplated by this Agreement and/or the
Representations and Warranties Agreement.
(c) Between the date of this Agreement and the Closing Date the Sellers
shall lend assistance to the Purchaser, and use their best efforts, to
make it possible for Cephalon Group's senior managers (CADRES
SUPERIEURS) to meet with the Companies' senior managers, advisors, or
statutory auditors for the purpose of preparing for the transition and
facilitate management of the Companies after completion of the
transaction contemplated by this Agreement.
(d) From the date of this Agreement until the Closing Date the Sellers
agree to use their best efforts, in co-operation with the Purchaser, to
obtain the consent of (i) other parties to
14
contracts with Laboratoire ▇. ▇▇▇▇▇, the list of which is set out in
SCHEDULE 5(D)(I), to the transaction contemplated by this Agreement,
and (ii) other parties which are parties to contracts with Laboratoire
▇. ▇▇▇▇▇ which are listed in SCHEDULE 5(D)(II) of the Agreement, to
change the territories set forth in such agreements and exclude the
territories listed in SCHEDULE 5(D)(II) hereof.
(e) The Purchaser has had a Phase I environmental audit performed by the
firm Duke Engineering on the Company's sites located at Mitry Mory,
Maisons Alfort, ▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇▇, and ▇▇▇▇▇▇, which has disclosed
potential problems, listed in paragraph (f) hereinbelow, along with a
description of the sites involved.
(f) From the date of this Agreement to the Closing Date the Sellers agree
to continue to allow the environmental consulting firm chosen by the
Purchasers, Duke Engineering, and any subcontractor it may use, to
complete a Phase II environmental audit already begun and, if
necessary, undertake detailed risk assessments for the risks relating
to the following problems and facilities:
- the problem of fuel contamination identified at the office
facility located at 20 ▇▇▇ ▇▇▇▇▇▇▇ Martigny in Maisons Alfort
site;
- the problem of potential contamination following a fire at the
research center located at ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ Cadiot in
Maisons Alfort;
- the problem of possible pollution related to the coffee
business of the preceding users at the facility located at 5,
avenue ▇▇▇▇▇▇▇ Martigny in Maisons-Alfort. For such facility,
the Phase II audit will not occur until the completion of an
historical study of the site;
- the required removal of asbestos at the Mitry Mory facility;
- the problem of possible contamination relating to the
accidental methyl chloride spill and the storage of products
hazardous to the environment and the past existence of PCB
transformers at the Mitry Mory site, ZI of Mitry Compans, rue
Gay Lussac.
For this purpose, such consultants shall continue to have access to the
documents and resources (electricity and water) they reasonably deem
necessary to conduct their audit and to the above-described sites,
after receiving agreement from the Companies involved, to undertake any
sampling and analysis which they deem reasonably necessary.
(g) Promptly following the date of this Agreement and, in any event, prior
to the Closing Date, the Purchaser will deliver one or more report(s)
of its environmental consultants to the Sellers which will indicate:
15
(i) the type of pollution and/or fuel contamination found in the
soil, offices, or facilities of the office facility located at
20 ▇▇▇ ▇▇▇▇▇▇▇ Martigny in Maisons Alfort; and
(ii) the type of pollution and/or contamination related to the fire
at the Maisons Alfort research center; and
(iii) the type of pollution and/or contamination related to the
coffee business of the preceding users at the facility located
at 5, avenue ▇▇▇▇▇▇▇ Martigny in Maisons-Alfort
(iv) the type of pollution and/or contamination related to methyl
chloride, to storage of products hazardous to the environment
and/or the past existence of PCB transformers found in the
soil, offices, or facilities at Mitry Mory; and
(v) the type of pollution and/or contamination related to the
presence of asbestos at the Mitry Mory facility and taking
account of the contemplated asbestos removal; and
(vi) if applicable, the solutions proposed to remediate such
problems, with an estimate of the costs on a site-by-site
basis (each report being hereinafter called an "Environmental
Report").
The Sellers shall have forty (40) days from the delivery of each
Environmental Report to express in writing their objections with
respect to such Environmental Report. The Sellers shall then be given
access to the facilities to make any analysis and take any samples
necessary and shall have access to any document used by the Purchaser's
consultants during their audit. Should the Sellers send objections to
the Purchaser, the Parties shall have thirty (30) days from receipt of
such objections by the Purchaser to negotiate a solution.
If they succeed, the Sellers agree to assume the cost, through a
reduction of the Price, of the decontamination work involved, as
determined by mutual agreement of the Parties, provided, however, that
any amount assumed by the Sellers under this Article is understood to
mean amounts excluding taxes (MONTANTS HORS TAXES), (i) net of the tax
savings realized by the entity paying such costs to the extent such
decontamination costs qualify as an accounting charge deductible from
the taxable income of the Company involved, and (ii) exceeding any
amount taken into consideration in the Closing Accounts (as defined in
Article 6.1(a) hereinbelow) with respect to problems related to fuel
and asbestos described in paragraphs (g)(i) and (v) hereinabove
(hereinafter called the "Environmental Amount"). In the event the
above-described costs should constitute depreciable fixed assets, the
Parties agree to determine in good faith the amount of the tax saving
realized in this respect.
16
If they fail to agree, the Parties shall contact the office of the
DIRECTION REGIONALE DE L'INDUSTRIE, DE LA RECHERCHE ET DE
L'ENVIRONNEMENT (hereinafter called the "DRIRE" [French environmental
protection agency] having jurisdiction and communicate to such
authority and/or any expert expressly appointed by such authority the
nature of the pollution problems found at the sites involved and
request that it confirm the decontamination work required to be
undertaken with respect thereto.
If the DRIRE (or any expert appointed thereby) should refuse to take a
position on the nature of the decontamination work required to be
undertaken, such analysis shall be made by an expert appointed by the
Presiding Judge of the [TRIBUNAL DE COMMERCE - Commercial Court] of
Paris on the motion of the first of the Parties to act.
The Sellers agree to assume the cost, through a reduction of the Price,
of the decontamination work required by the DRIRE and/or any expert
appointed on the terms and conditions hereinabove set forth, in the
amount of the cost of such work as determined hereinabove on the basis
of the estimate which will be prepared (at the Parties' request) by a
decontamination firm chosen by the Parties, or recommended by the
DRIRE, or, in the absence thereof, by such expert, applying the
methodology nationally recognized in the area of managing contaminated
soil and facilities. It is agreed that the cost of preparing such
estimate shall be shared by the Parties in such a way that such costs
borne by the Sellers are proportional to the relationship between (i)
the disputed amounts identified by the Sellers in their Objections and
finally confirmed by such firm or such expert and (ii) the total of the
disputed amounts identified by the Sellers in their Objections. It is
further understood that any amount borne by the Sellers, through a
reduction of the price, under this Article shall be exclusive of taxes
(HORS TAXES), net of the tax savings realized by the entity paying such
costs to the extent such decontamination costs qualify as an accounting
charge immediately deductible from the taxable income of the Company
involved for the fiscal period in which it should be incurred.
Likewise, should such costs constitute depreciable fixed assets, the
Parties agree to determine in good faith the amount of the tax saving
realized in this respect.
(h) Subject to completion of the Closing, each Seller commits itself not to
develop, exercise, be associated with, involved in, or interested in
any activities in the European Union relating to products in the same
therapeutic categories as those currently manufactured or sold by the
Companies, or which are under development as of the Closing Date,
whether alone or in collaboration with others, for a period of five (5)
years from the date of this Agreement. In addition, the Sellers hereby
agree not to engage, directly or indirectly, in any business
relationship with any of the current legal representatives or employees
of the Companies for a period of five (5) years from the Closing Date,
except for the persons listed in SCHEDULE 5(H) of this Agreement. It is
understood and agreed, to the extent necessary that this
non-competition provision shall not apply to passive investments in
publicly traded companies the business of which could fall within the
scope of this paragraph, undertaken through the purchase of shares in
mutual investment funds (SICAV or OPCVM), or by third parties managing
the Sellers' assets.
17
(i) According to the Sellers, Laboratoire ▇. ▇▇▇▇▇ has the right to use the
names "▇▇▇▇▇", "▇. ▇▇▇▇▇" and "▇▇▇▇▇ ▇▇▇▇▇" as a company name, trade
name or, if applicable, as a trademark, in connection with all
activities within their respective corporate purpose in perpetuity,
with no payment other than those due to any governmental authority
having jurisdiction under applicable company and/or, as the case may
be, trademark law, or any advisor consulted in this connection. The
Purchaser agrees not to use such names otherwise than as they are
presently used in connection with the Companies' business activities.
(j) The Sellers agree to deliver the 2001 US GAAP Interim Accounts to PWC
no later than December 10, 2001.
6. FINANCIAL MATTERS
6.1 Shareholders' Equity on the Closing Date
(a) The Purchaser shall cause consolidated accounts (including a balance
sheet, income statement, and notes to the consolidated accounts,
including off-balance sheet items) of the Company to be prepared by the
Company as of the Closing Date (hereinafter called the "Closing
Accounts") as soon as possible after the Closing Date, using the same
methods as those applied in the preparation of the 1998, 1999, and 2000
Consolidated Accounts (it being understood that the amounts included in
reserves for amortization of goodwill, shall be taken into
consideration in the amount shown for fiscal year 2000, I.E., thirteen
million five hundred ninety-four francs (FRF 13,594,999)), such
accounting methods to comply with the accounting principles issued in
the NOUVEAU PLAN COMPTABLE FRANCAIS and consistent with the
recommendations of the ORDRE DES EXPERTS COMPTABLES FRANCAIS and the
CONSEIL NATIONAL DE LA COMPTABILITE.
The Purchaser has already decided to appoint PWC, to which it will
deliver the Closing Accounts upon completion thereof, to audit the
Closing Accounts. PWC shall submit the conclusions of its audit in a
report (hereinafter called the "First PWC Report"), which will be
delivered by the Purchaser to the Sellers, with the Closing Accounts,
no later than ninety (90) days from the Closing Date. It is understood
and agreed that PWC's fees and expenses shall be borne exclusively by
the Purchaser.
The Sellers shall have forty (40) days from the date on which the
Closing Accounts and the First PWC Report are delivered to them to set
forth in writing any objections, in a statement of objections
(hereinafter called the "Objections Notice"), to the contents of such
Closing Accounts and First PWC Report and, especially, the substance
and amount of the shareholders' equity (including minority interests)
set forth in the Closing Accounts (hereinafter called the "Closing
Shareholders' Equity"), provided, however, that the Purchaser shall
cause the accountants who prepared the Closing Accounts and PWC to
co-operate with the Sellers and their respective advisors in connection
with the procedure set forth in this Article and, especially, to
disclose the documents prepared for the purpose of preparing the
Closing Accounts.
18
(b) Should the Sellers send the Purchaser an Objection Notice, the Parties
shall have thirty (30) days from receipt of the Objection Notice by the
Purchaser to negotiate a resolution of their disagreement.
In the event of failure, the points in dispute shall be submitted to
the firm of Deloitte & Touche or, if such firm is unable to accept such
assignment, to the firm of Mazars et ▇▇▇▇▇▇▇ (hereinafter called the
"Firm"), at the behest of either Party. The Firm shall have forty (40)
days from the time it is contacted by the Party acting first to
determine the contents of the Closing Accounts and, especially, to
determine the amount of the Closing Shareholders' Equity and the Price
Reduction (as such terms are hereinabove defined), if any.
The Firm's conclusions, which shall only deal with the points as to
which the Sellers and Purchaser have not reached agreement, shall be
final and binding on the Parties, except in the case of manifest
technical error.
The Firm's fees and expenses shall be borne by the Purchaser, on the
one hand, and the Sellers, on the other hand, so that the portion of
such fees and expenses borne by the Sellers shall be proportional to
the relationship between (i) the disputed amounts identified by the
Sellers in the Objection Notice and finally determined by the Firm and
(ii) the total of the disputed amounts identified in the Objection
Notice by the Sellers. Such division shall be made by the Firm, whose
determination shall be final and binding on the parties, except in the
case of manifest technical error.
(c) Should the Closing Shareholders' Equity be less than shareholders'
equity (including minority interests and other items of shareholders'
equity) as of December 31, 2000, as set forth in the 1998, 1999, and
2000 Consolidated Accounts, I.E., four hundred seventy-nine million
fifty-eight thousand French Francs (FRF 479,058,000) (i) increased by
the Company's consolidated net income for the fiscal year 2001 (of a
guaranteed minimum of ninety-one million four hundred six thousand
French Francs (FRF 91,406,000)) taking into consideration the
Purchaser's agreement to order eight (8) tons of the active ingredient
of Modafinil during the period between January 1, 2000, and the Closing
Date, and (ii) reduced by dividends paid by the Company and Orsymonde
to their shareholders who are individuals during the 2001 fiscal year
(of an amount of seventy-two million French Francs (FRF 72,000,000)),
the Parties agree to reduce the Price in the amount of such difference
(hereinafter called the "Price Reduction").
(d) The Price Reduction shall be paid by the Sellers to the Purchaser no
later than eight (8) business days from (i) the date on which the
Parties reach agreement on the amount of the Price Reduction, or (ii)
in the event of disagreement, the date of receipt by the Sellers of the
Firm's determination.
For purposes of effecting payment, the amount of the Price Reduction
shall be converted into U.S. dollars on the basis of the five-day
average of the mid-range rates published in
19
the "U.S. Currency Trading, Dollar Exchange Rates" table of the
European editions of THE WALL STREET JOURNAL preceding the Closing
Date.
6.2 Cash-Flow, Borrowings, and Financial Obligations as of September 30,
2001
(a) On the Closing Date the 2001 Interim Accounts shall be available to the
Purchaser, which it may review and correct. The Purchaser has already
appointed PWC, to which it will deliver the 2001 Interim Accounts, to
audit such 2001 Interim Accounts. The 2001 Interim Accounts, following
review and correction, if any, by PWC, shall be hereinafter called the
"Corrected 2001 Interim Accounts". PWC shall submit the conclusions of
its assignment in a report (hereinafter called the "Second PWC
Report"), which shall be delivered by the Purchaser to the Sellers,
with the Corrected 2001 Interim Accounts, no later than ninety (90)
days from the Closing Date. It is understood and agreed that PWC's fees
and expenses shall be borne exclusively by the Purchaser.
The Sellers shall have forty (40) days from the date on which the
Corrected 2001 Interim Accounts and the Second PWC Report are delivered
to them to set forth in writing any objections, in a statement of
objections (hereinafter called the "Objections"), to the contents of
such Corrected 2001 Interim Accounts and Second PWC Report and,
especially (i) the substance and amount of the Cash-Flow (I.E., the
amount of Cash Flow and Investment Securities set forth in the
Corrected 2001 Interim Accounts), as set forth in the Corrected 2001
Interim Accounts (hereinafter called the "Interim Cash-Flow"), and/or
(ii) the substance and amount of the borrowings from, and obligations
to, lending institutions and miscellaneous borrowings and financial
obligations, as set forth in the Corrected 2001 Interim Accounts
(hereinafter called "Interim Financial Obligations").
(b) Should the Sellers send Objections to the Purchaser, the Parties shall
have thirty (30) days from receipt of the Objections by the Purchaser
to negotiate a resolution of their disagreement.
In the event of failure, the points in dispute shall be submitted to
the Firm at the behest of either Party. The Firm shall have forty (40)
days from the time it is contacted by the Party acting first to
determine the contents of the 2001 Interim Accounts and, especially, to
determine the amount of (i) the Interim Cash Flow and/or the Interim
Financial Obligations and (ii) the Difference in Cash-Flow and/or the
Difference in Obligations and the Price Differential (as such terms are
hereinbelow defined), if any.
The Firm's conclusions, which shall only deal with the points as to
which the Sellers and Purchaser have not reached agreement, shall be
final and binding on the Parties, except in the case of manifest
technical error.
The Firm's fees and expenses shall be borne by the Purchaser, on the
one hand, and the Sellers, on the other hand, so that the portion of
such fees and expenses borne by the Sellers shall be proportional to
the relationship between (i) the disputed amounts identified by the
Sellers in the Objections and finally determined by the Firm and (ii)
the
20
total of the disputed amounts identified in the Objections by the
Sellers. Such division shall be made by the Firm, whose determination
shall be final and binding on the parties, except in the case of
manifest technical error.
(c) Should:
(i) the Interim Cash-Flow be less than seventy-five million four
hundred sixty-four thousand francs (FRF 75,464,000), the
Parties agree to reduce the Price by the amount of such
difference (hereinafter called the "Cash-Flow Difference");
and/or
(ii) the Interim Financial Obligations be greater than sixty-two
million eight hundred ninety-two thousand francs (FRF
62,892,000), the Parties agree to reduce the Price by the
amount of such difference (hereinafter called the "Difference
in Obligations").
The amount of the Cash-Flow Difference and the Difference in
Obligations shall hereinafter be called the "Price Differential".
(d) The Price Differential shall be paid by the Sellers to the Purchaser no
later than eight (8) business days from (i) the date on which the
Parties reach agreement on the amount of the Price Differential, or
(ii) in the event of disagreement, the date of receipt by the Sellers
of the Firm's determination.
For purposes of effecting payment, the amount of the Price Differential
shall be converted into U.S. dollars on the basis of the mid-range
exchange rates published in the "US Currency Trading Dollar Exchange
Rates" table of the European editions of THE WALL STREET JOURNAL
preceding the Closing Date.
6.3 For the avoidance of doubt, it is understood and agreed that:
(a) Any new accounting entry (such as the creation or increase of a
reserve) related to a risk disclosed as an Exception shall be
eliminated for purposes of preparing the Closing Accounts (subject to
the Environmental Amount, which will not be eliminated);
(b) any fees paid by the Companies for preparation of the Interim Accounts
shall also be eliminated for purposes of preparing the Closing
Accounts; and
(c) an event or fact giving rise to a Price Reduction cannot give rise to a
Price Differential and VICE VERSA.
7. ASSIGNMENT - SUBSTITUTION
(a) This Agreement is personal to the Parties and may not be assigned by
any of them save that the Purchaser may assign its rights under this
Agreement to an Associated Company, as long as such assignment covers
all of this Agreement and the Shares, and the Purchaser
21
remains jointly liable for the Associated Company's performance of its
obligations under this Agreement. For purposes of this Article 7 the
term "Associated Company" shall mean any company which, directly or
indirectly, controls or is controlled by or is under the control with
the Purchaser, and the term "control" shall mean the ability to
exercise, or to procure the exercise, directly or indirectly, of at
least fifty per cent (50 %) of the voting rights of a company.
(b) In the event of the death or permanent mental incapacity of one or more
of the Sellers, this Agreement shall be binding on his/her/their heirs
and successors or, as the case may be, legal guardian or trustee.
(c) The Purchaser may, prior to the Closing Date, substitute for itself an
Associated Company, provided that it give notice to the Sellers thereof
not less than eight (8) days prior to the Closing. Such substitution
shall automatically cause the substitution of the Associated Company to
the terms and conditions of the Representations and Warranties
Agreement and the Escrow Agreement.
8. EXPENSES
Except as otherwise expressly provided in this Agreement and/or the
Representations and Warranties Agreement, each of the parties shall
bear all the costs and expenses incurred by it in connection with this
Agreement and its negotiation, signature and performance, including,
but not limited to, the fees and disbursements of any professional
advisor, attorney, accountant or any other person whose services may
have been used by the said Party in relation hereto.
9. CONFIDENTIALITY
(a) Subject to the provisions of this Agreement, the Sellers and the
Purchaser undertake to hold in confidence and not to disclose to third
parties (except to their professional advisors and, in the case of the
Purchaser, to any of its Associated Companies and, in the case of the
Sellers, the managers and advisors of the Companies), without the prior
written consent of the other Party, the terms and conditions of the
transactions contemplated hereby.
(b) All announcements or communications with governmental or administrative
bodies, employee representatives or others, by or on behalf of the
Parties, or on their behalf, relating to the transactions contemplated
hereby, shall be made on terms agreed by the Parties, save that (i) the
Purchaser shall be entitled to make such announcement as is required to
comply with the regulations of any securities exchange on which the
shares of the Purchaser or any Associated Company of the Purchaser may
be traded and that (ii) the Sellers shall have the right to make
statements and announcements required to the employee representation
bodies of the Companies or French governmental or administrative
bodies, after taking into consideration the reasonable comments of the
other Party.
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(c) If, for any reason, the transactions contemplated hereby are not
completed, the obligations of the Parties pursuant to this Article 9
will remain in force and effect for five (5) years from the date of
this Agreement.
(d) It is understood and agreed that, for the sake of good order, this
confidentiality obligation shall not apply to the rights of the Parties
to make disclosure of, or use, the contents of this Agreement to
defend, or establish, their rights in connection with a legal
proceeding, including, but not limited to, any proceeding before an
administrative court or agency, or arbitration panel.
10. NOTICES
(a) Any notice hereunder shall be validly given, if sent by registered
letter (with return receipt requested), by express delivery service
with return receipt requested, or by personal delivery against
handwritten receipt of such notice to the following addresses, or to
such other address as may have been communicated by either of the
Parties to the other at least five (5) business days prior to such
notice:
for notices to the Sellers:
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇▇▇▇ Chevreau
Bureau d'Etudes Juridiques Peyre
▇▇▇, ▇▇▇ ▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
for notices to the Purchaser:
Cephalon Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
to the attention of its General Counsel
with a copy to:
Dechert
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
To the attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices shall be deemed received by the Party involved (i) three (3)
days after the first attempt to deliver the registered letter with
return receipt requested, or express delivery
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service and (ii) the day of handwritten acknowledgement of receipt in
the event of personal delivery.
(b) The Sellers irrevocably confer on ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, who accepts, the
authority to accept notices on behalf of all of them. Any notice given
to ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as provided in paragraph (a) hereinabove shall be
deemed to be valid notice to all the Sellers.
11. GOVERNING LAW AND JURISDICTION
(a) This Agreement shall be governed by and construed in accordance with
French law.
(b) Any dispute arising in relation to this Agreement, its interpretation
or performance (including, without limitation, its validity,
performance or interpretation) shall be submitted to the Commercial
Court (TRIBUNAL DE COMMERCE) of Paris, including any demands for
provisional or emergency remedies.
12. WAIVERS
The failure by any party hereto promptly to avail itself, in whole or
in part, of any right, power or privilege to which such party is
entitled pursuant to the terms of this Agreement shall not constitute a
waiver of such right, power or privilege, which may be exercised at any
time. To be valid, waiver by any party hereto of any such right, power
or privilege must be in writing and notified to the other Parties as
provided herein.
13. HEADINGS
The descriptive words or phrases at the head of the Articles are
inserted only as a convenience and for reference purposes and are not
intended in any way to define, limit, or describe the scope or intent
of the Articles which they precede.
14. ENTIRE AGREEMENT
(a) This Agreement constitutes the entire the agreement among the
Parties with regard to the subject matter hereof and
supersedes and replaces any previous agreement or agreements
whether oral or written with regard thereto.
(b) Each of the Schedules forms an integral part of this
Agreement.
SIGNED in Paris by the parties on the day and year first above written.
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CEPHALON , INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., Ph.D.
Title: Chairman & Chief Executive Officer
▇▇.▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, widow (VEUVE) of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
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