EXHIBIT 10.46
STOCK PURCHASE AGREEMENT dated February 6, 1998 between Cheminor Drugs
Limited, a public limited company registered under the Indian Companies Act
("Cheminor"), and Schein Pharmaceutical, Inc., a Delaware corporation
("Schein").
WHEREAS, Schein, Cheminor and Xx. Xxxxx'x Laboratories Limited, a
public limited company registered under the Indian Companies Act ("Reddy") and
Reddy-Cheminor, Inc., a New Jersey corporation ("Reddy-Cheminor US"), desire to
enter into a broad strategic alliance that would have as its principal goals (i)
the integration of the solid dosage operations of Schein and Cheminor for
product development, synthesis, bulk manufacturing and dosage manufacturing,
marketing, and sales and distribution; and (ii) the manufacture and supply of
bulk drugs by Reddy and Cheminor for Schein; and
WHEREAS, at the closing contemplated by this Agreement Schein,
Cheminor, Reddy and Reddy-Cheminor US are entering into a Strategic Alliance
Agreement in order to give effect to such principal goals (the "Strategic
Alliance Agreement"); and
WHEREAS, in order to promote an identity of interest between Schein
and Cheminor, Cheminor wishes to issue, and Schein wishes to subscribe for,
2,000,000 shares of Cheminor's equity shares of Rs. 10/- each (the "Common
Shares") on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
SUBSCRIPTION
Section I.1 Subscription for Shares. Subject to the terms and conditions
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of this Agreement, at the Closing, as defined herein, Cheminor shall issue and
allot to Schein, and Schein shall subscribe and pay for, the Common Shares, free
and clear of all claims, liens, security interests and other encumbrances
("Liens"), and which are validly issued, fully paid and nonassessable,
representing 12.79% of the issued and subscribed capital of Cheminor at the
Closing. Schein shall subscribe to the Common Shares in reliance on the
representations and warranties of Cheminor contained in this Agreement and upon
subscription Schein shall be duly registered as a member of Cheminor holding
2,000,000 equity shares in the statutory and other records of Cheminor.
Section I.2 Purchase Price, Payment, Use of Proceeds and Retention of
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Purchase Price. The aggregate issue price for all the Common Shares being sold
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shall be U.S.$10,000,000 (the "Purchase Price"). At the Closing, Schein shall
pay the Purchase Price by wire transfer of immediately available funds to an
account designated by Cheminor prior to the Closing; provided such account is in
the name of Cheminor and located in India. The U.S.$10,000,000 received by
Cheminor at the Closing shall be used by Cheminor to pay down certain of its
existing debt; provided, however, that nothing in this Section 1.2 shall be
construed as restricting Cheminor's ability to further incur any indebtedness or
re-borrow any amount so paid down at any time after the Closing, and provided
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further, however, that Cheminor shall retain the Purchase Price in such account
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and shall not use the proceeds thereof to pay down certain of its existing debt
or for any other purpose whatsoever and shall hold such Purchase Price in escrow
for reimbursement to Schein in the event that Cheminor fails to make any Post-
Closing Deliveries (as defined in Section 6.3) to Schein pursuant to Section 6.3
hereof. Following Schein's determination pursuant to Section 6.3 that all the
Post-Closing Deliveries have been made prior to the Post-Closing Deliveries
Deadline (as defined in Section 6.3), then Cheminor shall have the right to use
the Purchase Price to pay down such debt.
Section I.3 Closing.
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(a) The closing (the "Closing") shall take place at the offices of
Proskauer Rose LLP at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local
time, as soon as practicable after the day on which all of the conditions set
forth in Article 5 hereof are satisfied or waived or on such other date and at
such other time and place as Schein and Cheminor shall agree (the "Closing
Date"). At the Closing (except as provided in Section 6.3 hereof), the parties
shall deliver the documents referred to in Article VI hereof.
(b) This Agreement may be terminated at any time prior to the Closing:
(i) by a written agreement between the parties hereto; (ii) by Schein, if any
condition specified in Section 5.1 or 5.3 shall not have been satisfied or
waived in writing by Schein on or before February 10, 1998; or (iii) by
Cheminor, if any condition specified in Section 5.2 or 5.3 shall not have been
satisfied or waived in writing by Cheminor on or before February 10, 1998. This
Agreement may be terminated at any time after the Closing pursuant to Section
6.2 of the Shareholders Agreement
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dated the date hereof by and among Schein, Cheminor and certain shareholders of
Cheminor named therein (the "Shareholders Agreement"). This Agreement and the
Shareholders Agreement shall automatically terminate upon the return of the
Purchase Price pursuant to Section 6.3 hereof. Upon any such termination, no
party shall have any liability or obligation arising out of this Agreement other
than for its willful breach, if any, of Section 4.5 hereof (it being understood,
however, that the parties' obligations under the confidentiality agreement
referred to in Section 4.1 hereof shall survive the termination of this
Agreement, in the absence of a written agreement between the parties thereto to
the contrary and furthermore, it being understood that the obligations of
Cheminor under Section 1.2 and Section 8.3 hereof to retain, under certain
circumstances, the Purchase Price and the Additional Shares Purchase Price,
respectively, and under Section 6.3 and Section 8.6 hereof to return the
Purchase Price and the Additional Shares Purchase Price (as defined in Section
8.3 hereof), respectively, to Schein pursuant thereto, shall survive the
termination of this Agreement following the Closing).
(c) The parties acknowledge that it is imperative the Closing occur as
promptly as practicable and, in any event, not later than February 13, 1998.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CHEMINOR
Section 2. Representations and Warranties of Cheminor. Cheminor
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represents and warrants to Schein as follows:
Section 2.1 Existence and Power of Cheminor and its Subsidiaries.
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(a) Cheminor is a corporation validly existing and in good standing
under the law of the jurisdiction of its incorporation, and has full corporate
power and authority to enter into and perform this Agreement.
(b) Each of the Subsidiaries, as hereinafter defined, is a corporation
validly existing and in good standing under the law of the jurisdiction of its
incorporation. Cheminor and each Subsidiary has the full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its properties as it now does. Each of Cheminor and its Subsidiaries is
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business or the properties owned or leased by it requires
qualification, except where the failure to be so qualified or in good standing
would not have a material adverse effect upon the business, properties,
financial condition or results of operations of Cheminor and its Subsidiaries
taken as a whole (a "Material Adverse Effect").
Section 2.2 Authorization. The execution, delivery and performance of
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this Agreement and the Shareholders Agreement, as hereinafter defined, by
Cheminor have been duly authorized by all necessary corporate action of
Cheminor, and this Agreement constitutes, and, upon execution and delivery of
the Shareholders Agreement, that agreement will constitute, the valid and
binding
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obligations of Cheminor, enforceable against it in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
Section 2.3 Subsidiaries. Except for the entities listed on schedule 2.3
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("Subsidiaries"), Cheminor does not own any equity interest in any other entity.
Except as set forth on schedule 2.3, Cheminor owns, directly or through one or
more wholly-owned subsidiaries, all the outstanding shares of capital stock of
each corporation listed on schedule 2.3, free and clear of all Liens.
Section 2.4 Corporate Records. The copies of the Memorandum of
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Association and Articles of Association of Cheminor that have been delivered to
Schein are complete and correct, and the minute books of Cheminor that have been
exhibited to Schein are complete and correct in all material respects.
Section 2.5 Consents of Third Parties. The execution, delivery and
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performance of this Agreement and the Shareholders Agreement by Cheminor will
not: (a) violate or conflict with the Memorandum of Association and Articles of
Association of Cheminor; (b) conflict with, result in the breach, termination or
acceleration of, or constitute a default under, any lease, mortgage, trust,
indenture, deed, note, license or governmental approval, agreement, commitment
or other instrument to which Cheminor or any of the Subsidiaries is a party or
by which Cheminor or any of the Subsidiaries or any of their respective
properties are bound which would have a Material Adverse Effect on Cheminor and
its Subsidiaries; (c) constitute a violation of any law, regulation, order,
writ, judgment, injunction or decree applicable to Cheminor or any of the
Subsidiaries or any of their respective properties which violation would have a
Material Adverse Effect on Cheminor and its Subsidiaries; or (d) result in the
creation of any material Lien (other than the continued existence of the Liens
listed on schedule 2.5) upon the properties or assets of Cheminor or any of the
Subsidiaries.
Section 2.6 Capitalization.
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Cheminor's authorized share capital is comprised of 20,000,000 equity
shares of Rs. 10/- each, of which 13,634,265 equity shares are issued and
outstanding (the "Shares"), and no equity shares are held in Cheminor's
treasury. Upon receipt of the approvals and consents to be obtained and
evidenced by the Post-Closing Deliveries (as hereinafter defined) all the Common
Shares will be duly authorized for issuance, validly issued, fully paid,
nonassessable and freely transferable, except as transferability may be subject
to the terms of the Shareholders Agreement and applicable law. The Common
Shares will have the same rights and liabilities as the Shares. Except as set
forth on Schedule 2.6, there are no outstanding options or rights of any kind to
acquire any shares of any class of securities or any securities convertible into
any shares of any class of securities of Cheminor or any of the Subsidiaries,
nor are there any obligations to issue any such options, rights or securities.
There will be as of the Closing, no restrictions of any kind on the transfer of
the Common Shares except those imposed by applicable law, the Shareholders
Agreement and the Reserve Bank of India as a condition to its consent to the
purchase of the Common Shares by Schein. There are no
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contracts or other understandings (whether formal or informal, written or oral,
firm or contingent) that require or may require Cheminor to repurchase any of
its shares of capital stock.
Section 2.7 Financial Statements. The audited unconsolidated balance
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sheets of Cheminor and the Subsidiaries as of March 31, 1997, March 31, 1996 and
March 31, 1995, the unaudited unconsolidated balance sheets of Cheminor and the
Subsidiaries as of September 30, 1997 (the "Interim Balance Sheet Date"), the
audited unconsolidated statements of income and cash flow of Cheminor and the
Subsidiaries for the years ended March 31, 1997, March 31, 1996 and March 31,
1995, and the unaudited unconsolidated statements of income of Cheminor for each
of the six months ended September 30, 1997 and September 30, 1996 present fairly
in all material respects the unconsolidated financial condition and results of
operations of Cheminor and the Subsidiaries as of those dates and for the
periods then ended in accordance with generally accepted accounting principles
(in India) consistently applied ("GAAP"). Cheminor and the Subsidiaries do not
have any debts, liabilities or obligations, whether accrued, absolute,
contingent or otherwise, required to be disclosed on a balance sheet as of the
date of this Agreement prepared in accordance with GAAP, other than debts,
liabilities and obligations that are (a) less than $500,000 individually, (b)
reserved or otherwise reflected in the financial statements referred to in this
Section 2.7 or (c) incurred by Cheminor in the ordinary course since the Interim
Balance Sheet Date.
Section 2.8 Absence of Certain Changes. Except for the transactions
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contemplated by this Agreement, since the Interim Balance Sheet Date Cheminor
and the Subsidiaries have operated their business (the "Business") in the
ordinary course and there has not been any change in the business, financial
condition or results of operations of the Business that has had a Material
Adverse Effect.
Section 2.9 Taxes. Except as set forth on Schedule 2.9, Cheminor and the
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Subsidiaries have (a) filed with the appropriate governmental taxing authorities
all tax returns required to be filed by or with respect to Cheminor and the
Subsidiaries, except where the failure to have filed such tax returns would not
have a Material Adverse Effect, and such tax returns are correct and complete in
all material respects, and (b) paid in full or made adequate provision for the
payment of all taxes shown to be due on such tax returns. Except as set forth
on Schedule 2.9, neither Cheminor nor any of the Subsidiaries has received any
notice of deficiency from any governmental taxing authority with respect to any
material liabilities for taxes of Cheminor or any of the Subsidiaries that have
not been fully paid or finally settled. For the purpose of this Section 2.9
"material" shall mean any liability for taxes in excess of $250,000.
Section 2.10 Defaults. Neither Cheminor nor any of the Subsidiaries is
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in default in any material respect of any payment obligation under any loan or
credit agreement to which Cheminor or any Subsidiary is a party.
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Section 2.11 Litigation. There is no judicial or administrative action,
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proceeding or investigation pending or, to the best of the knowledge of Cheminor
and the Subsidiaries, threatened that questions the validity of this Agreement
or the Shareholders Agreement or any action taken or to be taken by Cheminor
pursuant to this Agreement or the Shareholders Agreement. There is no
litigation, proceeding or governmental investigation pending or, to the best of
the knowledge of Cheminor and the Subsidiaries, threatened, or any order,
injunction or decree outstanding, against Cheminor or any of the Subsidiaries
that, if adversely determined, would have a material adverse effect upon
Cheminor's ability to perform its obligations under this Agreement or the
Shareholders Agreement.
Section 2.12 Permits and Licenses. Except as set forth on schedule 2.12,
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Cheminor and the Subsidiaries have obtained and currently maintain in full force
and effect all material permits, licenses, franchises and other authorizations
necessary for the conduct of the Business as currently conducted except where
the failure to obtain or maintain such permits, licenses, franchises or other
authorizations would not have a Material Adverse Effect on Cheminor and the
Subsidiaries.
Section 2.13 Related Party Transactions.
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(a) Except as set forth on schedule 2.13(a), to the best of its
knowledge, except for transactions between Cheminor, on the one hand, and Reddy,
Xx. Xxxxx'x Research Foundation, or any of Cheminor's majority-owned
Subsidiaries, on the other hand, no Principal Shareholder, officer or director
of Cheminor or any of the Subsidiaries has any material interest (other than as
a non-controlling holder of securities of Cheminor), either directly or
indirectly, in any business entity that presently (a) provides any services or
designs, produces and/or sells any products, intermediates or product lines or
engages in any activity that is the same as, similar to or competitive with any
activity or business in which Cheminor or any of the Subsidiaries is now
engaged; (b) is a supplier of, customer of, creditor of or has an existing
contractual relationship with Cheminor or any of the Subsidiaries on terms that
are less favorable to Cheminor than those Cheminor could obtain form an
unrelated third party on an arms'-length basis; or (c) has any direct or
indirect interest in any asset or property used by Cheminor or any of the
Subsidiaries or any property, real or personal, tangible or intangible, that is
necessary or desirable for the conduct of the business of Cheminor or any of the
Subsidiaries.
(b) Schedule 2.13(b)(i) - (ii) sets forth, with respect to the 12
month period ended December 31, 1997, (i) the dollar amount of product
transactions between Cheminor and Reddy and the costs associated therewith, and
(ii) the dollar amount and types of services rendered to or by Reddy. Except as
set forth on Schedule 2.13(b), during such 12 month period, the aggregate fair
market value of any and all transactions between Cheminor or any of its
Subsidiaries, on the one hand, and Xx. Xxxxx'x Research Foundation, on the other
hand, did not exceed $500,000.
Section 2.14 Consents, Authorizations, etc. Except as set forth on
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schedule 2.14, no consent, authorization, approval, permit or order of or filing
with any governmental authority or agency, or regulatory authority is required
for Cheminor to execute, deliver and perform this Agreement and the Shareholders
Agreement or, in order for Cheminor to offer, issue and deliver the Common
Shares to Schein in accordance with this Agreement.
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Section 2.15 Business. Attached hereto as schedule 2.15 is a true,
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correct and complete copy of Cheminor's most recent annual report. Cheminor's
material lines of business are identified in such report.
Section 2.16 Title to and Sufficiency of Assets. Except as provided on
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schedule 2.16, all of the equipment and tangible property used in the business
of Cheminor and the Subsidiaries is free and clear of material Liens which
impair or prevent the use of said equipment and tangible property for its
intended purpose. The said equipment and tangible property of Cheminor and the
Subsidiaries are in good operating condition and repair (subject to normal wear
and tear consistent with the age of the tangible property and equipment) and are
sufficient for all material operations of Cheminor and the Subsidiaries as
currently conducted.
Section 2.17 Insurance. Set forth on schedule 2.17 is a list of all
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policies of insurance in effect relating to the operation and conduct of the
Business.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SCHEIN
Section 3. Representations and Warranties of Schein. Schein represents
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and warrants to Cheminor as follows:
Section 3.1 Existence and Power. Schein is a corporation validly
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existing and in good standing under the laws of the state of Delaware and has
the full corporate power and authority to enter into and perform this Agreement.
Section 3.2 Authorization. The execution, delivery and performance of
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this Agreement and the Shareholders Agreement by Schein have been duly
authorized by all necessary corporate action of Schein, and this Agreement
constitutes, and, upon execution and delivery of the Shareholders Agreement,
that agreement will constitute, the valid and binding obligations of Schein,
enforceable against it in accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
Section 3.3 Consents of Third Parties. Except for conflicts, breaches,
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terminations, accelerations, defaults and violations specified in clauses (b)
and (c) that could not reasonably be expected to have a material adverse effect
on Schein's ability to perform its obligations under this Agreement or the
Shareholders Agreement, the execution, delivery and performance of this
Agreement and the Shareholders Agreement by Schein will not: (a) violate or
conflict with the certificate of incorporation or by-laws of Schein; (b)
conflict with, or result in the breach, termination or acceleration of, or
constitute a default under, any lease, agreement, commitment or other instrument
to which Schein is a party or by which it or its properties are bound; or (c)
constitute a violation of any law, regulation, order, writ, judgment, injunction
or decree applicable to Schein or any of its properties or require any
governmental consent or approval.
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Section 3.4 Litigation. There is no judicial or administrative action,
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proceeding or investigation pending or, to the best of the knowledge of Schein,
threatened that questions the validity of this Agreement or the Shareholders
Agreement or any action taken or to be taken by Schein in connection with this
Agreement or the Shareholders Agreement. There is no litigation, proceeding or
governmental investigation pending or, to the best of the knowledge of Schein,
threatened, or any order, injunction or decree outstanding, against Schein that,
if adversely determined, would have a material adverse effect upon Schein's
ability to perform its obligations under this Agreement or the Shareholders
Agreement.
Section 3.5 Investment. Schein will be purchasing the Common Shares for
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investment purposes and not with a view to the resale or distribution of the
Common Shares in violation of applicable securities laws.
Section 3.6 Investigation. Schein is knowledgeable about the industry
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in which Cheminor and the Subsidiaries operate and is experienced in the
acquisition and management of businesses.
Section 3.7 Financial Ability. Schein has all the funds necessary to
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pay the Purchase Price and the related fees and expenses, and has the financial
capacity to perform all its other obligations under this Agreement.
Section 3.8 Absence of Certain Changes. Except for the transactions
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contemplated by this Agreement, since September 30, 1997, Schein has operated
its business in the ordinary course and there has not been any change in the
business, financial condition or results of operations of its business that has
had a material adverse effect upon the business, properties, financial condition
or results of operations of Schein.
ARTICLE IV
CERTAIN COVENANTS
Section 4.1 Access to Information. Prior to the Closing, each party
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hereto may make such additional investigation of the business and properties of
the other party hereto and its subsidiaries as each party may wish, and, upon
reasonable notice, either party shall give the other party and its counsel,
accountants and other representatives reasonable access, during normal business
hours throughout the period prior to the Closing, to the property, books,
commitments, agreements, records, files and personnel of it and its subsidiaries
and each party hereto shall furnish the other party hereto during that period
copies of documents and information concerning it and its subsidiaries as the
other party hereto may reasonably request, subject to applicable law. Each
party hereto shall, and shall cause its counsel, accountants and other agents
and representatives to, hold all such information and documents in accordance
with and subject to the terms of the confidentiality agreement previously
executed by Schein and Cheminor with respect to this transaction.
Section 4.2 Certain Notifications. Prior to the Closing, each party
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hereto shall, and Cheminor shall cause such of its Subsidiaries to, promptly
notify the other party hereto of, and
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furnish the other party hereto any information the other party hereto may
reasonably request with respect to the occurrence of, any event or the existence
of any facts that would result in any of such party's representations and
warranties not being true if those representations and warranties were made any
time prior to or as of the Closing.
Section 4.3 Governmental Filings. As promptly as practicable after the
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execution of this Agreement, each party shall, in cooperation with the others,
make or cause to be made the required filing or filings in connection with the
transactions contemplated by this Agreement and, as promptly as practicable from
time to time thereafter, each party shall make or cause to be made all such
further filings and submissions, and take or cause to be taken such further
action, as may reasonably be required in connection therewith.
Section 4.4 Notices. Each party shall promptly notify each of the other
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parties of, and furnish them any information they may reasonably request with
respect to, the occurrence of any event or the existence of any facts that would
result in any of that party's representations and warranties not being true if
those representations and warranties were made at any time prior to or as of the
Closing.
Section 4.5 Other Pre-Closing Action. Each party shall use reasonable
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efforts to cause the fulfillment at or prior to the Closing of all the
conditions to its obligations to consummate the sale and purchase of the Common
Shares under this Agreement.
Section 4.6 Expenses. Each of Cheminor and Schein shall bear its own
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expenses in connection with this Agreement and all obligations to be performed
by it or them under this Agreement.
Section 4.7 Publicity. Without otherwise limiting any party's rights
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under this Agreement or otherwise, before the Closing (or, if earlier, the
termination of this Agreement), Schein and Cheminor shall consult with and
obtain the consent of the other before issuing any press release or making any
similar public disclosure concerning this Agreement or the transactions referred
to in this Agreement or its Exhibits, unless, in the reasonable judgment of the
party issuing the release or making the disclosure, the release or disclosure is
required as a matter of law (in which case it or they shall consult as set forth
above before issuing the release or making the disclosure).
Section 4.8 Transfer Taxes. Cheminor shall pay all sales, stock transfer
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and other similar taxes and fees in respect of the sale of the Common Shares
under this Agreement.
Section 4.9 Other Transactions. From the date of this Agreement until
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the Closing (or, if earlier, its termination), neither Cheminor nor Schein
shall, nor shall they permit their respective officers, directors or other
agents (collectively, the "Agents"), directly or indirectly, to (a) take any
action to solicit, initiate, encourage, accept or agree to any Strategic
Proposal (as defined below), (b) engage in negotiations with any person or
entity that, to the best of its, his or her knowledge, may be considering
making, or has made, a Strategic Proposal or (c) except as contemplated by
Section 4.7, disclose any non-public information relating to Cheminor or Schein
or afford access to the assets, books or records of Cheminor to any person or
entity that, to the best of its knowledge, may
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be considering making, or has made, a Strategic Proposal. As used in this
Section 4.9, the term "Strategic Proposal" means any offer or proposal for, or
any indication of interest in, any transaction involving the products,
obligations, or rights which are the subject of the Strategic Alliance
Agreement. Each of Cheminor and Schein shall, and shall cause its Agents to,
terminate all pending negotiations with respect to any Strategic Proposal by any
person or entity, other than in connection with the transactions contemplated by
this Agreement.
Section 4.10 Supplements to Disclosures. For purposes of determining the
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satisfaction of the condition set forth in Section 5.1(a), the schedules
delivered by Cheminor shall be deemed to include only the information contained
in those schedules on the date of this Agreement or as those schedules may be
amended or supplemented in writing by Cheminor with Schein's consent not later
than five days prior to the Closing. For purposes of determining the liability
of Cheminor for misrepresentation or breach of warranty under this Agreement,
the schedules delivered by Cheminor shall be deemed to include the information
contained in those schedules on the date of this Agreement and such other
information as may be set forth in any written amendment or supplement delivered
by Cheminor to Schein prior to the Closing, and, if the Closing shall have
occurred, Schein shall be deemed to have consented to any such written amendment
or supplement delivered by Cheminor to Schein prior to the Closing.
Section 4.11 Further Assurances. From time to time after the Closing and
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the Additional Shares Closing (as defined in Section 8.3), in addition to the
obligations of Cheminor pursuant to Section 6.3 and Section 8.6 hereof, each
party shall take such action and execute and deliver such documents as the other
parties may reasonably request to carry out the transactions contemplated by
this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions to Obligation of Schein. The obligation of Schein
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to consummate the purchase under this Agreement is subject to the fulfillment,
prior to or at the Closing, of each of the following conditions (any or all of
which may be waived by Schein in writing):
(a) the representations and warranties of Cheminor to Schein shall be
true and correct in all material respects at and as of the time of the Closing
with the same effect as though made again at and as of that time;
(b) the obligations and covenants required by this Agreement to be
performed or complied with by Cheminor prior to or at the Closing shall have
been performed and complied with in all material respects by it;
(c) Cheminor shall have furnished Schein with (i) a certificate (dated
the date of the Closing) substantially in the form set forth in Exhibit
5.1(c)(i) hereto and (ii) a certificate (dated the date of the delivery thereof)
substantially in the form set forth in Exhibit 5.1(c)(ii) hereto;
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(d) Schein shall have been furnished with opinions (dated the date of
the Closing) substantially in the forms set forth in Exhibit 5.1(d);
(e) Cheminor shall have delivered share certificates representing
the Common Shares;
(f) Cheminor and the Subsidiaries taken as a whole shall have suffered
no material adverse change in their business, properties, financial condition or
results of operations between the date of this Agreement and the Closing;
(g) all applicable filings and notices with any U.S. or Indian
governmental or other regulatory authority shall have been made and all consents
and approvals listed on schedule 2.14 shall have been obtained and remain in
full force and effect;
(h) Cheminor's authorized capital stock shall be comprised of
20,000,000 Shares, of which 13,634,265 Shares shall be the only issued and
outstanding shares, and no equity shares shall be held in Cheminor's treasury.
Except as set forth on schedule 2.6(a) or as otherwise provided in the
Shareholders Agreement, there shall be no outstanding options or rights of any
kind to acquire any shares of any class of securities or any securities
convertible into any shares of any class of securities of Cheminor or any of the
Subsidiaries, nor shall there be any obligations to issue any such options,
rights or securities;
(i) Cheminor shall have executed and delivered the Shareholders
Agreement and the Strategic Alliance Agreement; and
(j) Schein shall have completed, to its satisfaction, as determined
in its sole discretion, its due diligence investigation of Cheminor and the
Subsidiaries.
Section 5.2 Conditions to Obligations of Cheminor. The obligation of
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Cheminor to consummate the sale under this Agreement is subject to the
fulfillment, prior to or at the Closing, of each of the following conditions
(any or all of which may be waived in writing by Cheminor):
(a) the representations and warranties of Schein to Cheminor shall be
true and correct in all material respects at and as of the time of the Closing
with the same effect as though made again at and as of that time;
(b) the obligations and covenants required by this Agreement to be
performed or complied with by Schein prior to or at the Closing shall have been
performed and complied with in all material respects by Schein;
(c) Schein shall have furnished Cheminor with a certificate (dated
the date of the Closing) substantially in the form set forth in Exhibit 5.2(c);
(d) Cheminor shall have been furnished with an opinion of counsel for
Schein (dated the date of the Closing) substantially in the form of Exhibit
5.2(d);
11
(e) Schein shall have executed and delivered the Shareholders
Agreement and the Strategic Alliance Agreement;
(f) Cheminor shall have completed, to its satisfaction, as determined
in its sole discretion, its due diligence investigation of Schein;
(g) Schein shall have suffered no material adverse change in its
business, properties, financial condition or results of operations between the
date of this Agreement and the Closing; and
(h) all applicable filings and notices with any U.S. or Indian
governmental or other regulatory authority shall have been made and all consents
and approvals listed on Schedule 2.14 shall have been obtained and remain in
full force and effect.
Section 5.3 Conditions to Obligations of Each Party. The obligations of
---------------------------------------
each party to consummate the purchase and sale under this Agreement are subject
to the fulfillment, prior to or at the Closing, of the following condition
(which may be waived by all the parties) that there shall not be in effect any
injunction or restraining order issued by a court of competent jurisdiction in
any action or proceeding against the consummation of the sale and purchase of
the Common Shares under this Agreement.
ARTICLE VI
DOCUMENTS TO BE DELIVERED AT THE CLOSING
Section 6.1 Documents to be Delivered by Cheminor. At the Closing
-------------------------------------
(except with respect to paragraphs (b)(ii), (f), (g), (i), (j), (k), (l) and (m)
below as provided in Section 6.3 hereof), Cheminor shall deliver, or cause to be
delivered, to Schein the following:
(a) a duly certified copy of the resolution of the Board of Directors
of Cheminor authorizing the execution, delivery and performance of this
Agreement by Cheminor and authorizing an officer of Cheminor, to execute this
Agreement for and on behalf of Cheminor, and a certificate of the Company
Secretary of Cheminor, dated the date of the Closing, that such resolutions were
duly adopted and are in full force and effect;
(b) (i) the certificate referred to in Section 5.1(c)(i),and (ii)
the certificate referred to in Section 5.1(c)(ii);
(c) the opinion of counsel referred to in Section 5.1(d);
(d) the Shareholders Agreement and the Strategic Alliance
Agreement duly executed by Cheminor;
12
(e) a duly certified copy of the resolution of the general meeting of
Cheminor pursuant to Section 81(1A) of the Indian Companies Act authorizing
Cheminor to issue and allot 2,000,000 Common Shares to Schein;
(f) duly stamped share certificates representing 2,000,000 Common
Shares;
(g) certificate of the Company Secretary of Cheminor that Schein
is a duly registered member of Cheminor;
(h) certificate of the Company Secretary of Cheminor certifying that
requirements under the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 and under the listing
agreements between Cheminor and the stock exchanges have been duly complied
with;
(i) certificate from the statutory auditors of Cheminor that the issue
of Common Shares to Schein has been made in accordance with the requirements of
the Securities and Exchange Board of India Guidelines on Preferential Issues;
(j) a duly certified copy of the approval of the Reserve Bank of India
under the Foreign Exchange Regulation Act for the issue and allotment of Common
Shares to Schein and for the export of the share certificates;
(k) evidence that all documents required to be filed with the
concerned Registrar of Companies have been duly filed in accordance with the
Indian Companies Act;
(l) duly certified copies of the approvals from the stock exchanges on
which Cheminor is listed for listing of the Common Shares issued to Schein;
(m) a duly certified copy of the resolution of the Board of Directors
of Cheminor authorizing Cheminor to allot the 2,000,000 Common Shares to Schein;
and
(n) any other document that Schein may reasonably request.
Section 6.2 Documents to be Delivered by Schein. At the Closing, Schein
-----------------------------------
shall deliver, or cause to be delivered, to Cheminor the following:
(a) evidence of the payment to Cheminor referred to in Section 1.2;
(b) a copy of the resolutions of the board of directors of Schein
authorizing the execution, delivery and performance of this Agreement by Schein,
and a certificate of its secretary or assistant secretary, dated the date of the
Closing, that such resolutions were duly adopted and are in full force and
effect;
(c) the certificate referred to in Section 5.2(c);
13
(d) the opinion referred to in Section 5.2(d);
(e) the Shareholders Agreement and the Strategic Alliance
Agreement duly executed by Schein; and
(f) any other document that Cheminor may reasonably request.
Section 6.3 Actions to be Taken by Cheminor Post-Closing; Return of
-------------------------------------------------------
Purchase Price. As soon as practicable following the Closing, Cheminor shall
--------------
use its best efforts to deliver or cause to be delivered to Schein all of the
certificates, approvals, evidence, documents and similar instruments required to
be delivered pursuant to paragraphs (b)(ii), (f), (g), (i), (j), (k), (l) and
(m) of Section 6.1 hereof (the "Post-Closing Deliveries"). In the event that
Cheminor shall fail to deliver to Schein all of the Post-Closing Deliveries on
or prior to the date which is thirty (30) days following the Closing (the APost-
Closing Deliveries Deadline@), which determination shall be made by Schein in
its sole discretion by written notice thereof to Cheminor, then Cheminor shall
be obligated within ten (10) days following the Post-Closing Deliveries Deadline
to return the Purchase Price to Schein by wire transfer of immediately available
funds to an account designated by Schein.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
Section 7.1 Indemnification by Cheminor.
----------------------------
(a) Subject to the limitations set forth in this Section 7, Cheminor
shall indemnify and hold Schein harmless from and against all losses,
liabilities, damages and expenses (including attorney's fees) (collectively,
ALosses@) resulting from a breach by Cheminor of the representations and
warranties set forth in Sections 2.1(a), 2.2, 2.5(a), 2.6, 2.11 and 2.14 of this
Agreement.
(b) Subject to the limitations set forth in this Section 7, Cheminor
shall indemnify and hold Schein harmless from and against all Losses resulting
from a breach by Cheminor of the representations and warranties set forth in
Sections 2.1(b), 2.3, 2.4, 2.5(b, c and d), 2.7, 2.8, 2.9, 2.10, 2.12, 2.13,
2.15, 2.16 and 2.17 of this Agreement.
Section 7.2 Indemnification by Schein.
--------------------------
(a) Subject to the limitations set forth in this Section 7, Schein
shall indemnify and hold Cheminor harmless from and against all losses,
liabilities, damages and expenses (including attorney's fees) resulting from a
breach by Schein of the representations and warranties set forth in Sections
3.1, 3.2, 3.3(a), 3.4 and 3.5 of this Agreement.
14
(b) Subject to the limitations set forth in this Section 7, Schein
shall indemnify and hold Cheminor harmless from and against all losses,
liabilities, damages and expenses (including attorney's fees) resulting from a
breach by Schein of the representations and warranties set forth in Sections
3.3(b), 3.3(c), 3.6, 3.7 and 3.8 of this Agreement.
Section 7.3 Specific Limitations on Liability.
---------------------------------
(a) Cheminor's liability to Schein for breach of any representation or
warranty identified in Section 7.1(a) shall not exceed the difference between
(i) the consideration paid by Schein at Closing (including the Additional
Closing) for the Shares and the Additional Shares and (ii) the value of the
Shares and the Additional Shares (as reflected on the Bombay Stock Exchange) on
the date the facts giving rise to such breach are a matter of public disclosure
by Cheminor or otherwise publicly known. In the event that Schein shall make a
claim for indemnification under this Article VII for breach of any
representation or warranty identified in Section 7.1(a) which also constitutes
the basis for a claim for indemnification under this Article VII made by Schein
for breach of any representation or warranty identified in Section 7.1(b), then
the limitation of Cheminor's liability under Section 7.1(a) and not Section
7.1(b) shall apply to Schein's claim for indemnification for breach of such
representation or warranty identified in Section 7.1(b).
(b) Cheminor's liability to Schein for breach of any representation
and warranty referred to in Section 7.1(b) (but not any representations or
warranties referred to in Section 7.1(a)) shall not exceed the difference
between (i) the value (as reflected on the Bombay Stock Exchange) of the Shares
and the Additional Shares on the date of the Closing and (ii) the value of such
Shares and the Additional Shares (as reflected on the Bombay Stock Exchange) on
the date the facts giving rise to such breach are a matter of public disclosure
by Cheminor or otherwise publicly known.
(c) Notwithstanding anything to the contrary set forth in Sections
7.3(a)-(b) above, in the event Schein shall make a claim for indemnification
under this Section 7, or otherwise under this Agreement or the Shareholders
Agreement, Cheminor shall have the option to purchase all of the Shares owned by
Schein for an amount equal to the consideration paid by Schein to Cheminor for
such Shares. If Cheminor elects to purchase the Shares and pays Schein the
amount provided herein, Schein shall have no further claim against Cheminor for
any liability, damage or expense of any kind or nature whatsoever arising out of
this Agreement or the Shareholders Agreement.
(d) Notwithstanding anything to the contrary contained in this Section
7, Cheminor shall have no liability to Schein under Section 7.1(a) if the value
of the Shares and the Additional Shares (as reflected on the Bombay Stock
Exchange) on the date the facts giving rise to such breach are a matter of
public disclosure by Cheminor or otherwise publicly known, shall be greater than
the consideration paid by Schein.
(e) Notwithstanding anything to the contrary contained in this Section
7, Cheminor shall have no liability to Schein under Section 7.1(b) if the value
of the Shares and the Additional Shares (as reflected on the Bombay Stock
Exchange) on the date the facts giving rise to
15
such breach are a matter of public disclosure or otherwise publicly known, shall
be greater than the value of the Shares and any Additional Shares (as reflected
on the Bombay Stock Exchange) as of the Closing and the Additional Closing, as
the case maybe.
(f) Notwithstanding anything to the contrary contained in this Section
7, Schein's liability to Cheminor under both Section 7.2(a) and Section 7.2(b)
shall be limited to $1,000,000 in the aggregate; provided, however, that such
limitation shall not apply to the failure of Schein to purchase the Additional
Shares pursuant to the terms of Article VIII.
(g) Except as described on Schedule 7.3(g) hereto, if any senior
executive officer of Schein shall have actual personal knowledge at the time of
the Closing that Cheminor is in breach of any of Cheminor's representations or
warranties in Article II of this Agreement, then Cheminor shall not have any
liability to Schein under this Section 7 with respect to such breach. If any
senior executive officer of Cheminor shall have actual personal knowledge at the
time of the Closing that Schein is in breach of any of Schein's representations
or warranties in Article III of this Agreement, then Schein shall not have any
liability to Cheminor under this Section 7 with respect to such breach.
Section 7.4 General Limitations of Liability and Related Matters.
----------------------------------------------------
Except as specifically set forth in this Agreement, no party to this Agreement
has made, or shall have liability for, any representation, warranty or
agreement, express or implied, in connection with the purchase and sale of the
Common Shares contemplated by this Agreement, including any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding Cheminor or the Business.
Section 7.5 Time and Manner of Certain Claims. The representations and
---------------------------------
warranties referred to in Section 7.1(a) and Section 7.2(a) of this Agreement
shall survive the Closing indefinitely. The representations and warranties
referred to in Section 7.1(b) and Section 7.2(b) of this Agreement shall survive
the Closing for a period of one (1) year. A party hereto shall have no
liability to the other under this Agreement for breach of warranty or
misrepresentation (other than for a breach of warranty or misrepresentation
under Section 7.1(a) or section 7.2(a)) unless a claim therefor is asserted by
another party in a written notice delivered prior to the first (1st) anniversary
of the Closing. Any notice of any such claim shall set forth in the
representations and warranties with respect to which the claim is made, the
material facts giving rise to and the alleged basis for the claim and an
estimate of its damages. Neither Schein nor Cheminor shall institute a legal
proceeding (other than by assertion of a counterclaim) in respect of any such
claim unless (x) there shall have elapsed at least 90 days and not more than 365
days since it shall have given such notice, and (y) the party from whom
indemnification is sought has not, during such 90-day period, taken such action,
if any, as puts the party seeking indemnification in substantially the same
position it would have been in had the representation and warranty to which such
claim relates been true and correct.
Section 7.6 Defense of Claims by Third Parties. If any third party
----------------------------------
claim is made against a party that, if sustained, would give rise to a liability
of another party under this Agreement, the party against whom the claim is made
shall promptly cause notice of the claim to be delivered to the other party and
shall afford the other party and its counsel, at the other party's sole expense,
the
16
opportunity to defend or settle the claim. The failure to provide the notice
referred to above shall not relieve the indemnifying party of liability under
this Agreement, except to the extent the indemnifying party has actually been
prejudiced by such failure. If any claim is compromised or settled without the
consent of the indemnifying party, no liability shall be imposed upon the
indemnifying party by reason of the claim.
ARTICLE VIII
SALE AND PURCHASE OF ADDITIONAL SHARES
Section 8.1 Sale and Purchase. Schein has the right to require
-----------------
Cheminor to issue to it and Cheminor has the right to require Schein to
subscribe and pay for up to an additional 1,000,000 Common Shares (the
"Additional Shares") at a purchase price of U.S.$5 per share (the "Put and
Call"). Notwithstanding the foregoing, Cheminor can terminate the Put and Call
before August 31, 1998 upon thirty days written notice to Schein (a "Cheminor
Termination"). Notwithstanding a Cheminor Termination, Schein shall have the
right to require Cheminor to sell the Additional Shares during the thirty-day
period after Schein receives notice of the Cheminor Termination.
Section 8.2 Manner of Exercising the Sale and Purchase. If Schein or
------------------------------------------
Cheminor wishes to exercise its respective rights under this Article, it must
provide notice (the "Put and Call Notice") to the other party hereto in the
manner provided for in Section 9.5 of this Agreement prior to August 31, 1998
or, if earlier, the end of the 30-day period referred to in the last sentence of
Section 8.1 hereof in the case of Schein's rights pursuant thereto.
Section 8.3 Closing of the Purchase of the Additional Shares. The
------------------------------------------------
closing of the purchase of the Additional Shares (the "Additional Shares
Closing") shall occur on the date specified in the Put and Call Notice (which
specified date shall not be more than 30 days after the date the Put and Call
Notice is deemed received pursuant to Section 9.5 hereof) or, if such conditions
are not satisfied by such date, as of the first business day after the
conditions to the Additional Shares Closing, as provided in Sections 8.4 or 8.5,
as applicable, have been satisfied. At the Additional Shares Closing, Schein
shall pay Cheminor an amount equal to the product of the number of Additional
Shares that Schein is purchasing multiplied by U.S. $5.00 (the "Additional
Shares Purchase Price") by wire transfer of immediately available funds to an
account designated by Cheminor prior to the Additional Shares Closing; provided
such account is in the name of Cheminor and located in India. Cheminor shall
retain the Additional Shares Purchase Price in such account and shall not use
the proceeds thereof for any purpose whatsoever and shall hold the Additional
Shares Purchase Price in escrow for reimbursement to Schein in the event that
Cheminor shall fail to make any Additional Shares Post-Closing Deliveries to
Schein pursuant to Section 8.6 hereof. Following Schein's determination
pursuant to Section 8.6 hereof that all Additional Shares Post-Closing
Deliveries have been made prior to the Additional Shares Post-Closing Deliveries
Deadline (as defined in Section 8.6), then Cheminor shall have the right to use
the Additional Shares Purchase Price for any lawful corporate purpose.
17
Section 8.4 Conditions to Schein's Obligation to Purchase the
-------------------------------------------------
Additional Shares. Upon receipt of a Put and Call Notice from Cheminor, the
-----------------
obligation of Schein to purchase the Additional Shares at the Additional Shares
Closing is subject to the fulfilment, prior to or at the Additional Shares
Closing (except with respect to the paragraphs (b)(ii), (f), (g), (i), (j), (k),
(l) and (m)of Section 6.1 hereof required to be delivered following the
Additional Share Closing as provided in Section 8.6 hereof). of each of the
following conditions (any or all of which (other than paragraph (b)) may be
waived by Schein):
(a) the representations and warranties of Cheminor to Schein shall be
true and correct in all material respects at and as of the time of the
Additional Shares Closing with the same effect as though made again at and as of
that time and Cheminor shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement, the Shareholders Agreement and the Strategic Alliance Agreement to be
performed, satisfied or complied with by Cheminor at or prior to the Additional
Shares Closing; provided, however, that unless notice of a default under this
Agreement, the Shareholders Agreement or the Strategic Alliance Agreement has
been delivered by Schein to Cheminor prior to the delivery by Cheminor of a Put
and Call Notice, such notice of default and the underlying default related
thereto shall not be a basis for Schein to avoid its obligations under this
Article VIII. Schein shall have received a certificate, executed by the chief
executive officer of Cheminor, dated as of the date of the Additional Shares
Closing, to the foregoing effect and as to such other material matters as may be
reasonably requested by Schein.
(b) Any necessary governmental and regulatory approvals for the
issuance of the Additional Shares shall have been obtained.
(c) Schein shall have been furnished with an opinion of counsel for
Cheminor (dated the date of the Additional Share Closing) substantially in the
form of Exhibit 5.1(d).
(d) Schein shall have been furnished with all of the items set forth
in Section 6.1 hereto except paragraphs (b)(ii), (d), (f), (g), (i), (j), (k),
(l) and (m) thereof and except that all references to 2,000,000 Common Shares
shall refer to the number of Common Shares being purchased pursuant to the Put
and Call.
(e) Prior to August 31, 1998, Cheminor shall have submitted to the
Food and Drug Administration (the "FDA") and within 60 days after the last such
submission the FDA shall have accepted for filing at least ***** abbreviated new
drug applications ("ANDAs") for ***** of the drugs listed on Schedule 8.1
attached hereto.
Section 8.5 Conditions to Cheminor's Obligation to Sell the Additional
----------------------------------------------------------
Shares. Upon receipt of an Additional Share Notice from Schein, the obligation
------
of Cheminor to sell the Additional Shares at the Additional Shares Closing is
subject to the fulfilment, prior to or at the Additional Shares Closing of each
of the following conditions (any or all (other than paragraph (b)) of which may
be waived by Cheminor):
* redacted pursuant to confidential treatment request.
18
(a) the representations and warranties of Schein to Cheminor shall be
true and correct in all material respects at and as of the time of the
Additional Shares Closing with the same effect as though made again at and as of
that time and Schein shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement and the Shareholders Agreement and the Strategic Alliance Agreement to
be performed, satisfied or complied with by Schein at or prior to the Additional
Shares Closing; provided, however, that unless notice of a default under this
Agreement, the Shareholders Agreement or the Strategic Alliance Agreement has
been delivered by Cheminor to Schein prior to the delivery by Schein of a Put
and Call Notice, such notice of default and the underlying default related
thereto shall not be a basis for Cheminor to avoid its obligations under this
Article VIII. Cheminor shall have received a certificate, executed by the chief
executive officer of Schein, dated as of the date of the Additional Shares
Closing, to the foregoing effect and as to such other material matters as may be
reasonably requested by Cheminor.
(b) Any necessary governmental and regulatory approvals for the
issuance of the Additional Shares shall have been obtained.
(c) Cheminor shall have been furnished with an opinion of counsel for
Schein (dated the date of the Additional Share Closing) substantially in the
form of Exhibit 5.2(d).
(d) Cheminor shall have been furnished with evidence of the payment to
Cheminor of the Additional Shares Purchase Price, and all of the items set forth
in Section 6.2 hereof except paragraph (e) and paragraph (a) thereof.
Section 8.6 Actions to be Taken by Cheminor Post-Additional Shares
------------------------------------------------------
Closing; Return of Additional Shares Purchase Price. As soon as practicable
---------------------------------------------------
following the Additional Shares Closing, Cheminor shall use its best efforts to
deliver or cause to be delivered to Schein all of the certificates, approvals,
evidence, documents and similar instruments set forth in paragraphs (b)(ii),
(f), (g), (i), (j), (k), (l) and (m) of Section 6.1 hereof and required to be
delivered to Schein by operation of paragraph (d) of Section 8.4 hereof (the
"Additional Shares Post-Closing Deliveries"). In the event that Cheminor shall
fail to deliver to Schein all of the Additional Shares Post-Closing Deliveries
on or prior to the date which is thirty (30) days following the Additional
Shares Closing (the "Additional Shares Post-Closing Deliveries Deadline"), which
determination shall be made by Schein in its sole discretion by written notice
thereof to Cheminor, then Cheminor shall be obligated within ten (10) days
following the Additional Shares Post-Closing Deadline to return the Additional
Shares Purchase Price to Schein by wire transfer of immediately available funds
to an account designated by Schein.
19
ARTICLE IX
MISCELLANEOUS
Section 9.1 Finders. Each party represents and warrants to the others
-------
that it has not employed or utilized the services of any broker or finder in
connection with this Agreement or the transactions contemplated by this
Agreement.
Section 9.2 Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of India.
Section 9.3 Schedules; Headings. Any matter disclosed on any schedule to
-------------------
this Agreement that provides fair and reasonable notice of that matter shall be
deemed to have been disclosed on all other schedules to this Agreement, to the
extent it should have been disclosed on such other schedules. The Section
headings of this Agreement and titles given to schedules to this Agreement are
for reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
Section 9.4 Definitions. As used in this Agreement, (a) the term "to the
-----------
best of its knowledge" or any similar term means to the best of the actual
knowledge of the person or entity (which, in the case of an entity, means the
actual knowledge of any of its senior executive officers), (b) the term
"business day" means any day other than a Saturday, Sunday or legal holiday in
New York, New York and (c) the term "Affiliate" of any party, shall mean any
person or entity in control of, controlled by, or under common control with,
such party..
Section 9.5 Notices. All notices and other communications under this
-------
Agreement shall be in writing and may be given by any of the following methods:
(a) personal delivery; (b) facsimile transmission; (c) registered or certified
mail, postage prepaid, return receipt requested; or (d) overnight delivery
service. Notices shall be sent to the appropriate party at its address or
facsimile number given below (or at such other address or facsimile number for
such party as shall be specified by notice given under this Section 9.5):
If to Cheminor:
Cheminor Drugs Limited
0-0-00 Xxxxxxxx
Xxxxxxxxx - 000 000
Xxxxx
Attention: Managing Director
Telefax: 011 91 40 294 804
with copy to:
20
Reddy-Cheminor, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
X.X.X.
Attention: President
Telefax: (000) 000-0000
If to Schein, to:
Schein Pharmaceutical, Inc.
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: General Counsel
Telefax: 000-000-0000
All such notices and communications shall be deemed received upon (a) actual
receipt by the addressee, (b) actual delivery to the appropriate address or (c)
in the case of a facsimile transmission, upon transmission by the sender and
issuance by the transmitting machine of a confirmation slip confirming that the
number of pages constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received.
Section 9.6 Separability. The invalidity or unenforceability of any
------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
Section 9.7 Waiver. Any party may waive compliance by any other party
------
with any provision of this Agreement. No waiver of any provision shall be
construed as a waiver of any other provision. Any waiver must be in writing and
signed by the waiving party.
Section 9.8 Assignments. Neither Schein nor Cheminor may assign its
-----------
rights under this Agreement at any time after the Strategic Alliance Agreement
is terminated. Prior thereto, (i) Schein may assign its rights under this
Agreement only to an Affiliate of Schein, to ***** *********** ** *** ** ***
**********, or to any successor to substantially all of the business of Schein
(whether by merger, consolidation, purchase of assets or the like) (each, a
ASchein Permitted Assignee@) and (ii) Cheminor may assign its rights under this
Agreement only to an Affiliate of Cheminor or to any successor to substantially
all of the business of Cheminor (whether by merger, consolidation, purchase of
assets or the like) (each a ACheminor Permitted Assignee@); provided that each
such assigning party shall also assign its rights under the Strategic Alliance
Agreement and the Shareholders Agreement to such assignee and each such assignee
shall agree in writing to be bound by this Agreement, the Strategic Alliance
Agreement and the Shareholders Agreement, and provided further that each such
successor is not, at the time of such assignment, a Competitor of Cheminor in
the case of an assignment by Schein or a Competitor of Schein in the case of an
assignment by
* redacted pursuant to confidential treatment request.
21
Cheminor. No assignment by a party of its rights under this Agreement shall
relieve it of any of its obligations to the other parties hereto.
Notwithstanding anything to the contrary contained herein, Schein and Cheminor
may assign their respective rights under this Agreement and the Shareholders
Agreement to any of their respective Affiliates without also assigning their
respective rights under the Strategic Alliance Agreement; provided, however,
-------- -------
that any further assignment by such an Affiliate other than to an Affiliate of
Schein or Cheminor shall also require the assignment of Schein's or Cheminor's
rights, as the case may be, under the Strategic Alliance Agreement. The term
"Competitor" means any person or entity whose annual revenues from the sale of
generic dosage form and/or bulk pharmaceuticals constitute, together with those
of his/her or its Affiliates, in the aggregate at least fifty percent (50%) of
such person's or entity's total annual revenues. Any assignment effected in
violation of this Section 9.8 shall be null, void and of no effect.
Section 9.9 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
Section 9.10 Entire Agreement. This Agreement (with its schedules and
----------------
Exhibits) contains, and is intended as, a complete statement of all the terms of
the arrangements among the parties with respect to the subject matter hereof,
supersedes any previous agreements and understandings among the parties with
respect to such subject matter, cannot be changed or terminated orally and any
amendment or modification must be in writing and signed by all the parties to
this Agreement.
IN WITNESS WHEREOF, the Agreement has been executed as of the date first
above written.
CHEMINOR DRUGS LIMITED
By:___________________________
Authorized Officer
SCHEIN PHARMACEUTICAL, INC.
By:___________________________
Authorized Officer
22
Schedule 7.3(g) to
Stock Purchase Agreement
------------------------
*** ******** ** ******* ****** ** *** ********** *** ********* ** ********
****** ********* ******** **** ******** *** **** **** ******** ** ****** ***
******** ** ******* ** *** ******* *** *** ********** ******** *** ***********
** *** ********* ***** *** ******* ******** ** *** ********* ***** ******* ***
** *** *********.
* redacted pursuant to confidential treatment request.
23
Schedule 2.3
------------
******** *** ** ****** ******** ** **** ***** ********* ***************
**** ****** ************** **** ******** *** ******** *********** **** ********
********** ********* ******** ** ***** ***** ******** ** ** ******** ********
**** *** ** *************** **** **** ** ***** ******** ************* *** **
******** *********** **** ******** ** ******* ******* *** ************* *** **
************** **** ****** ** ***** ********
* redacted pursuant to confidential treatment request.
Schedule 2.5
------------
******** *****
--------------
** ******* ***** *** ********* ************ *** ************* **** **
***** **** * ************* ** *** ********* ********* ********** ******* **** **
****** **** ***** ** *********
** ******* ***** **** * ******* ****** ** ******* ***** ****** **
****** *** ******* ******* ***** ** *********
** ******* ** *** ******** ******* ***** ******* ********** ****
*********** ********** **** * ******** ****** ** ******* ******* *** *********
********** ** *********
* redacted pursuant to confidential treatment.
Schedule 2.6
------------
***** ******** **** ****** ** ***** ******** ***** ******* ** **** ****
** *** *******
* redacted pursuant to confidential treatment request.
Schedule 2.9
------------
*** ****** *******
* redacted pursuant to confidential treatment request.
Schedule 2.12
-------------
*****
* redacted pursuant to confidential treatment request.
Supplemental Schedule 2.13 (a)
------------------------------
******** ********* **** ********* ************ ****** ******** ******
********* ** ******** **** ** ******** ** *** ******* ************ *** ***
******* ******** ***********
* redacted pursuant to confidential treatment request.
Schedule 2.13(b)(i)-(ii)
------------------------
************ **** *** ******* ************ *******
****** *** ****** **** ****** ** ********
**************************************************
***
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** ******** ***** ********
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** ************* ********* ************ ***********
********* **** ***
******* ** ***********
**********************
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** ************* *****
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** ******** ********* *****
** ************* ******** *****
** ********* * ********* *******
** ***** * *********** *****
** ******* ******** ****
** ***** * ************ ******** ****
** ******** * ********** ******** *****
** ***** ******* *****
*******
*******
* redacted pursuant to confidential treatment request.
Schedule 2.13 (b)
-----------------
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************ ** *** ***** *** *** ******* ******** ********** ** *** ***** *****
***** ** *** ********* ****** * **** ****** ***** ** ********* ****** *** ***
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******* ******** ********** *** *** ******* ** ******** *** *** ********* ***
****** ******* ** *********** ********** *** **** ****** *** ********** **
************** **** ** *** ******* ******** ***********
* redacted pursuant to confidential treatment request.
Schedule 2.14
-------------
********** ******** ********* *** *******
-----------------------------------------
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******* **** ** ****** ** ****** ***** ************* ***** ******** **** **
****** **** ************ ** ******* ** *** ******* ****** ********** ***********
******** **** *** ***** **** ** ******
** ************ *** ******* ** *** ****** ****** **** *** **********
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** *** ************ ***********
** ****** **** *** ********* ** ********* ** ********** **** *** ******
********* *** ***** **** ***** ***** ******* ** **** ** *** ************
***********
* redacted pursuant to confidential treatment request.
Schedule 2.15
-------------
********** ****** ****** *** *** ****** **** ****** ***** *** **** **
*********
* redacted pursuant to confidential treatment request.
Schedule 2.16
-------------
*****
* redacted pursuant to confidential treatment request.
Schedule 2.17
-------------
****** *** ******** **** *** ********** ******** ******** *** ***
******** ** ********* ** ****** ******** ** *** ********* *** ******* ** ***
*********
* redacted pursuant to confidential treatement request.
Schedule 8.1
------------
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**** ** ****** *** ***** *** ***** ***** **** ** *** ***** ** *** **********
*********** ************** ********** ************** ********** ***
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********** ********** ** ***** *********** ** *** **** *** ******* ***********
**** *** **** ****** ****** **** *** ** ******** ** ****** *** *****
* redacted pursuant to confidential treatment request.
OFFICER'S CERTIFICATE
OF
CHEMINOR DRUGS LIMITED
The undersigned,__________, an authorized officer of Cheminor Drugs Limited, a
public limited company registered under the Indian Companies Act (the
"Corporation") hereby certifies as follows:
1. Attached hereto as Exhibit A are true, correct and complete copies of
the Memorandum of Association and Articles of Association of the
Corporation.
2. Attached hereto as Exhibit B is a true, correct and complete copy of the
resolutions adopted by the board of directors of the Corporation
on___________, and such resolutions have not been amended, modified or
rescinded and remain in full force and effect on the date hereof; such
resolutions constitute all of the resolutions of the Corporation's board
of directors concerning (i) that certain Stock Purchase Agreement, dated
February __, 1998 between the Corporation and Schein Pharmaceutical,
Inc., a Delaware corporation (the "Stock Purchase Agreement"), (ii) the
Strategic Alliance Agreement (as defined in the Stock Purchase
Agreement) and (iii) the Shareholders Agreement ((as defined in the
Stock Purchase Agreement), and together with the Stock Purchase
Agreement and the Strategic Alliance Agreement, the "Agreements"), and
the transactions contemplated be each of the Agreements; the adoption of
such resolutions constitutes all of the corporate action of the
Corporation necessary to authorize the Agreements and the transactions
contemplated by each of the Agreements.
3. The representations and warranties of the Corporation contained in the
Agreements are true and correct as of the date hereof in all material
respects.
4. The Corporation has duly complied in all material respects with all
obligations, covenants and agreements contained in the Agreements
required to be performed and complied with by it.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
__________, 1998.
By:____________________________
Name:
Title:
EXHIBIT 5.1(c)(ii)
------------------
OFFICER'S CERTIFICATE
OF
CHEMINOR DRUGS LIMITED
The undersigned,__________, an authorized officer of Cheminor Drugs
Limited, a public limited company registered under the Indian Companies Act (the
"Corporation") hereby certifies as follows:
The Corporation's equity shares being purchased by Schein pursuant to
that certain Stock Purchase Agreement, dated February _____, 1998 between the
Corporation and Schein Pharmaceutical, Inc., a Delaware corporation (the "Stock
Purchase Agreement") have been duly issued and all legal requirements to such
issuance have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
February _____,1998.
By: ____________________________
Name:
Title:
EXHIBIT 5.2(c)
--------------
OFFICER'S CERTIFICATE
OF
SCHEIN PHARMACEUTICAL, INC.
The undersigned,__________, an authorized officer of Schein Pharmaceutical,
Inc., a Delaware corporation (the "Corporation") hereby certifies as follows:
1. Attached hereto as Exhibit A are true, correct and complete copies of
the Certificate of Incorporation and By-laws of the Corporation.
2. Attached hereto as Exhibit B is a true, correct and complete copy of the
resolutions adopted by the board of directors of the Corporation
on_______________, and such resolutions have not been amended, modified
or rescinded and remain in full force and effect on the date hereof,
such resolutions constitute all of the resolutions of the Corporation's
board of directors concerning (i) that certain Stock Purchase Agreement,
dated January __, 1998 between the Corporation and Cheminor Drugs
Limited, a public limited company registered under the Indian Companies
Act (the "Stock Purchase Agreement"), (ii) the Strategic Alliance
Agreement (as defined in the Stock Purchase Agreement) and (iii) the
Shareholders Agreement ((as defined in the Stock Purchase Agreement),
and together with the Stock Purchase Agreement and the Strategic
Alliance Agreement, the "Agreements"), and the transactions contemplated
be each of the Agreements; the adoption of such resolutions constitutes
all of the corporate action of the Corporation necessary to authorize
the Agreements and the transactions contemplated by each of the
Agreements.
3. Attached hereto as Exhibit C is a true, correct and complete copy of a
certificate of good standing for the Corporation.
4. The representations and warranties of the Corporation contained in the
Agreements are true and correct as of the date hereof in all material
respects.
5. The Corporation has duly complied in all material respects with all
obligations, covenants and agreements contained in the Agreements
required to be performed and complied with by it.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
__________, 1998.
By:____________________________
Name:
Title:
EXHIBIT 5.2(d)
--------------
FORM OF LEGAL OPINION OF PROSKAUER
----------------------------------
ROSE LLP PURSUANT TO SECTION 5.2(d)
-----------------------------------
OF THE STOCK PURCHASE AGREEMENT
-------------------------------
February __, 1998
Cheminor Drugs Limited
0-0-00, Xxxxxxxx
Xxxxxxxxx, 000 000
Xxxxx
Re: Schein Pharmaceutical, Inc.
---------------------------
Gentlemen:
We have acted as counsel to Schein Pharmaceutical, Inc., a Delaware
corporation ("SPI"), in connection with the transactions contemplated by the
Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of February
__, 1998, by and between SPI and Cheminor Drugs Limited, an Indian corporation
("Cheminor"), the Shareholders Agreement among SPI, Cheminor, and certain
stockholders of Cheminor (the "Shareholders Agreement"), and the Strategic
Alliance Agreement among SPI, Cheminor, Xx. Xxxxx'x Laboratories Limited, an
Indian corporation, and Reddy-Cheminor, Inc., a New Jersey corporation (the
Stock Purchase Agreement, the Shareholders Agreement and the Strategic Alliance
Agreement are collectively referred to herein as the "Agreements"). This opinion
is being delivered to you pursuant to Section 5.2(d) of the Stock Purchase
Agreement. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Stock Purchase Agreement.
We have examined the Agreements and such certificates of public
officials, such certificates of officers of SPI (including the attached
Certificate of Fact of the Vice President and General Counsel of SPI (the
"Certificate of Fact")), the originals (or copies thereof) of such corporate
documents and records of SPI, and such other documents and instruments as we
have deemed necessary or appropriate for purposes of this opinion. In this
connection, we have assumed the legal capacity of natural persons, the
genuineness of signatures on, and the authenticity of, all documents so
examined, the conformity to originals of all documents submitted to us as
copies, and that all corporate records or other information made available to us
by SPI, and on which we have relied, are complete in all respects. As to the
accuracy of matters
Cheminor Drugs Limited
February __, 1998
Page 2
of fact, we have relied solely upon the above-mentioned certificates and upon
the representations and warranties contained in the Agreements and other
documents delivered pursuant thereto and have assumed that certificates of
public officials dated prior to the date hereof remain accurate as of the date
hereof, and such factual matters were not independently investigated,
established or verified by us.
Based on and subject to the foregoing and subject to the qualifications
below, we are of the opinion that:
(i) SPI is a corporation validly existing and in good standing under the
laws of the State of Delaware.
(ii) SPI has all necessary corporate power and authority to execute and
deliver the Agreements and to perform its obligations thereunder. The
execution, delivery and performance of the Agreements have been authorized
by all necessary corporate action on the part of SPI.
(iii) The execution and delivery by SPI of, and the performance by SPI
of its obligations under, the Agreements do not conflict with or violate (a)
SPI's certificate of incorporation or by-laws, (b) any material provision of
the Delaware General Corporation Law ("DGCL") or any material United
States federal law or regulation applicable to SPI, or (c) to our knowledge,
any existing obligation of SPI under any order, writ, judgment or decree of
any court or governmental authority applicable to SPI.
(iv) Except as contemplated by the Agreements, no approval,
authorization or consent of, or filing with, any United States federal
governmental authority or any state of Delaware governmental authority
pursuant to the DGCL, is required of SPI in connection with the execution
and delivery by SPI of, and the performance at the Closing of SPI's
obligations under, the Agreements, except that we express no opinion about
any approvals, authorizations, consents or filings that might be required of
SPI solely as a result of the involvement, legal or regulatory status of,
the nature of the business conducted by, or facts pertaining to, Cheminor,
Xx. Xxxxx'x Laboratories Limited, and Reddy-Cheminor, Inc.
The foregoing opinions are subject to the following qualification:
No opinion is expressed with respect to any laws, rules, regulations,
filings, approvals, authorizations, consents, orders, writs, decrees or
judgments or other matters
Cheminor Drugs Limited
February __, 1998
Page 3
administered or promulgated by, or subject to the jurisdiction of, the United
States Food and Drug Administration or similar federal, state or foreign
governmental authorities.
We have further assumed with your permission, without any inquiry,
investigation or verification, the following matters:
(i) That the factual matters (including representations and
warranties) contained in the Agreements and the Certificate of Fact are true
and correct as set forth therein; and
(ii) That any certificate, representation or document upon which
we have relied and which was given or dated earlier than the date of this
letter (including the Certificate of Fact) continues to remain accurate,
insofar as relevant to the opinions contained herein, from such earlier date
through and including the date hereof.
Our opinions hereunder are based solely upon the laws, rulings,
administrative interpretations and regulations in effect on the date hereof and
are subject to modification to the extent that such laws, rulings,
interpretations and regulations are changed in the future. By delivery of this
letter, we have assumed no obligation to update our opinions for changes in such
laws, rulings, interpretations and regulations or for events occurring
subsequent to the date hereof.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated herein.
This opinion is limited to the DGCL and the federal laws of the United
States of America, and we express no opinion with respect to any other laws.
Whenever any opinion herein with respect to the existence or absence of
facts is qualified by the phrase "to our knowledge," such phrase indicates only
that, during the course of our representation of SPI, no information has come to
our attention that would give us actual knowledge of the existence or absence of
any such facts. We have not undertaken any independent investigation to
determine the existence or absence of any such facts, and no inference as to our
knowledge of the existence of such facts should be drawn from the fact of our
representation of SPI.
Cheminor Drugs Limited
February __, 1998
Page 4
This opinion is solely for the information of the addressees hereof and
is not to be quoted in whole or in part or otherwise referred to (except in a
list of closing documents), nor is it to be filed with any governmental agency
or other person without our prior written consent. Other than the addressees
hereof, no one is entitled to rely on this opinion without our prior written
consent.
Very truly yours,
DRAFT
--------
05021998
FORM OF LEGAL OPINION OF XXXXXXXX XXXXXX & CO.
----------------------------------------------
PURSUANT TO SECTION 5.2(d)
--------------------------
OF THE STOCK PURCHASE AGREEMENT
-------------------------------
February __, 1998
To: Cheminor Drugs Limited
0-0-00, Xxxxxxxx
Xxxxxxxxx - 000 000
Xxxxx
Ladies and Gentlemen,
1. We have acted as special Indian legal counsel to Schein Pharmaceutical,
Inc., a Corporation incorporated under the laws of Delaware, U. S. A.
(hereinafter referred to as "Schein") in connection with the
transactions contemplated by the Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of _____, 1998 by and between Schein and
Cheminor Drugs Limited, an Indian Corporation ("Cheminor"), the
Shareholders Agreement among Schein, Cheminor and certain stockholders
of Cheminor (the "Shareholders Agreement") and the Strategic Alliance
Agreement among Schein, Cheminor, Xx. Xxxxx'x Laboratories Limited, and
Indian corporation and Reddy-Cheminor Inc., a New Jersey corporation
(the "Strategic Alliance Agreement") (collectively referred to as the
"Agreements").
2. This opinion is being rendered pursuant to Section 5.2(d) of the Stock
Purchase Agreement (this "Opinion").
3. Except as otherwise defined herein, expressions defined in the Stock
Purchase Agreement shall have the same meanings when used in this
Opinion as therein.
4. For the purpose of this Opinion we have received and examined executed
copies of the documents listed in Schedule I to this Opinion
(hereinafter referred to as the "Documents").
5. In considering the Documents we have:
(i) assumed the genuineness of all signatures and the authenticity
of all documents, the conformity with the originals of all
documents submitted to us as copies, and the correctness of all
facts and information stated and given in such documents (which
have not been independently verified by us);
(ii) assumed the due authorization, execution and delivery of each of
the Documents by parties thereto;
(iii) assumed the binding nature of the obligations of all parties
under any applicable law other than the laws of India; and
(iv) confined and given this Opinion on the basis of Indian law in
force, and as interpreted by the Indian Courts, as of the date
hereof and we have not made any investigation of the laws of any
jurisdiction outside India.
6. Based upon and subject to the foregoing and subject to the
qualifications set out in paragraph 7 below, we are of the Opinion, with
respect to Schein's obligations under Indian law, that:
(i) if required to be enforced in India, the courts in India would
consider the Stock Purchase Agreement and the Shareholders
Agreement binding and enforceable obligations of Schein, except
that we express no opinion with respect to the obligations of
Schein under Articles III and IV of the Shareholders Agreement;
(ii) except as set forth in the Agreements, no consent,
authorization, approval, permission, license, order, payment of
fee, registration, filing, recording with or enrollment with any
governmental authority or agency or regulatory authority is
required to be obtained, done, fulfilled or performed in India
by Schein in order (a) to enable Schein to lawfully execute and
deliver, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in the Agreements,
(b) to ensure that the obligations expressed to be assumed by
Schein in the Agreements are legal, valid and binding and (c) to
make the admissible in evidence in India;
(iii) the execution and delivery by Schein of the Agreements do not,
and the performance by Schein of its obligations expressed to be
assumed thereunder will not violate or conflict with any law,
regulation, rule, order, writ, judgment, injunction, government
policy or decree applicable to Schein or any of its
Subsidiaries;
(iv) except for a stamp tax imposed by the State of Andhra Pradesh,
no stamp, registration or similar tax or duty is required to be
paid in India or in relation to the Documents or any order or
judgment obtained in relation thereto in order to ensure the
legality, validity, enforceability or admissibility in evidence
of the Agreements or any such judgment obtained in relation
thereto, provided that if proceedings are instituted to enforce
any such judgment or order so obtained Indian Court fees may be
payable
on institution of proceedings for obtaining the same from the
Courts in India; and
(v) under the present laws of India, Schein is not obliged to file,
record or enrol the Agreements with any Court or other
Authority.
7. This Opinion is subject to the following qualifications:
(i) enforcement maybe limited by laws of general application
affecting the rights of creditors;
(ii) equitable remedies such as specific performance and injunction
are at the discretion of the court;
(iii) any judgment or order obtained in a foreign court would be
recognized by the courts in Indian and would be enforceable in
India subject to the provisions of Section 13 of the Indian Code
of Civil Procedure;
(iv) stamp duty is payable in India on each Agreement within three
months of the same first being brought into India to ensure the
admissibility in evidence of the Agreement; and
(v) claims may become barred under the Indian Limitation Act.
8. We express no opinion as to, and disclaim any undertaking or obligation
in this Opinion in respect of, changes or circumstances or changes in
applicable laws or regulations which occur after the date hereof.
9. This Opinion is provided to you solely for your information, and may not
be used by any other person or entity or for any other purpose without,
in each instance, our prior written consent.
Yours sincerely,
___________________