SECTION 5.17. Environmental Matters.  The Business and the Purchased Assets are in compliance, in all material respects, with all applicable Environmental Laws and neither Seller nor any Divesting Entities has any material Environmental Liabilities in respect of the Business or the Purchased Assets.

 

 

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ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

As of the date hereof and as of the Closing, Purchaser hereby represents and warrants to Seller as follows:

 

SECTION 6.1. Organization.  Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.  Purchaser is authorized to do business under the Laws of all jurisdictions in which it is required to be so authorized, except as would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.

 

SECTION 6.2. Authority; Binding Effect.  (a)  Purchaser has all requisite corporate power and authority to own and operate its properties and assets, to carry on its business as it is now being conducted and to execute and deliver this Agreement, the Transitional Agreements and any other agreements and documents contemplated hereby, and to perform its obligations hereunder and thereunder.  The execution and delivery by Purchaser of this Agreement, the Transitional Agreements and any other agreements and documents contemplated hereby, and the performance by Purchaser of its obligations hereunder and thereunder, have been duly authorized by all requisite corporate action on the part of Purchaser.

 

(b) This Agreement has been duly executed and delivered by Purchaser and, assuming the valid execution and delivery by Seller, constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Laws affecting creditors’ rights generally or by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or law).  The Transitional Agreements and  the other agreements contemplated hereby will be duly executed and delivered by Purchaser, and assuming the valid execution and delivery by Seller and the Divesting Entities, as the case may be, will constitute a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Laws affecting creditors’ rights generally or by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or law).

 

SECTION 6.3. Non-Contravention.  The execution, delivery and performance by Purchaser of this Agreement, the Transitional Agreements and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, do not and will not (i) violate any provision of the certificate of incorporation, bylaws or other organizational documents of Purchaser, (ii) conflict with, or result in a breach of, constitute a default under or result in the termination, cancellation or acceleration (whether after the giving of notice or the lapse of time or both) of any right or obligation of Purchaser or any of its Affi liates under, or to a loss of any benefit to which Purchaser or any of its Affiliates is entitled under, any contract, agreement, commitment, lease of real estate or personal property or license of intellectual property to which Purchaser or any of its Affiliates is a party or to which its properties or assets are subject, or (iii) assuming compliance with the matters set forth in

 

 

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Sections 5.4 and 6.4, violate or result in a breach of or constitute a default under any Law or other restriction of any Governmental Authority to which Purchaser is subject, except, with respect to clauses (ii) and (iii), for any violations, breaches, defaults, conflicts, losses, Liens, terminations, cancellations or accelerations that would not, individually or in the aggregate, have a material and adverse effect on the ability of Purchaser to consummate the transactions contemplated hereby (a “Purchaser Material Adverse Effect”).

 

SECTION 6.4. Governmental Authorization.  Except as set forth on Schedule 6.4, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, do not require any material consent or approval of, or any material notice to or other filing with, any Governmental Authority.

 

SECTION 6.5. Financial Capability.  Purchaser is a party to a credit facility (the “Credit Facility”) that, with the undrawn borrowing capacity thereunder, together with Purchaser’s cash that is expected to be on hand as of the Closing, will be sufficient to provide funds in an aggregate amount to pay the amounts due Seller from Purchaser at the Closing on the terms and conditions contemplated by this Agreement and to pay Purchaser’s related fees and expenses related to the transactions contemplated by this Agreement.  To Purchaser’s Kn owledge, the Credit Facility is in full force and effect and is a legal, valid and binding obligation of the lenders party thereto enforceable in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Laws affecting creditors’ rights generally or by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or law).  Purchaser is not in default under the Credit Facility.  At the Closing, Purchaser shall have sufficient cash to pay the Purchase Price on the terms and conditions contemplated by this Agreement.

 

SECTION 6.6. Condition of the Business.  Purchaser and its Representatives have made all inspections and investigations of the Business and the Purchased Assets deemed necessary or desirable by Purchaser.  Purchaser acknowledges and agrees that (i) it is purchasing the Purchased Assets based on the results of its inspections and investigations, and not on any representation or warranty of Seller or any of its Affiliates not expressly set forth in this Agreement, the Transitional Agreements and the agreements, documents and certificates delivered in connection herewith or therewith and (ii) except as otherwise set forth in this Ag reement, the Purchased Assets are sold “as is, where is” and it accepts the Purchased Assets in the condition they are in and at the place where they are located on the Closing Date.  Any claims Purchaser may have for breach of representation or warranty shall be based solely on the representations and warranties of Seller or the Divesting Entities expressly set forth in this Agreement, the Transitional Agreements and the agreements, documents and certificates delivered in connection herewith or therewith.  ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM COMMERCIAL CODE, ARE HEREBY WAIVED BY PURCHASER.  Purchaser further acknowledges that neither Seller, its Affiliates, nor any other Person has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding Seller, any of the Dive sting Entities, the Business, the Purchased Assets, or the Assumed Liabilities, including in any confidential memoranda distributed by or on behalf of Seller or any Divesting Entity relating to the Business, the Purchased Assets or the Assumed Liabilities or in any other publication,

 

 

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document or information provided to Purchaser or its Representatives in any “data room” or otherwise in connection with the Business or the sale of the Purchased Assets, not expressly set forth in this Agreement, the Transitional Agreements and the agreements, documents and certificates delivered in connection herewith or therewith.

 

SECTION 6.7. Brokers.  Except as set forth on Schedule 6.7, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser or any of its Affiliates.

 

ARTICLE VII

 

COVENANTS

 

SECTION 7.1. Information and Documents.  (a)  From time to time prior to the Closing, upon reasonable advance notice in writing and to the extent permitted by applicable Law, Seller shall, and shall cause the Divesting Entities to, permit Purchaser and its Representatives to have reasonable access, during normal business hours, to properties, assets, books, records, agreements, documents, data, files and personnel of, and such other information relating to the Business as may reasonably be requested by Purchaser; provided, however, that such access shall not unreasonably interfere with Seller’s or any Divesting Entity’s operation of their respective businesses, including the Business; and provided, further that Seller may restrict the foregoing access to the extent that (i) such access or provision of information would result in a violation of confidentiality obligations to a third party, (ii) disclosure of any such information would result in disclosure of any proprietary information or trade secrets of Seller or any other Person (other than with respect to the Business) or (iii) disclosure of any such information would result in the loss or waiver of any attorney-client privilege.

 

(b) All information (including any offering or summary memorandum) received by Purchaser and given by or on behalf of Seller or any of its Affiliates in connection with this Agreement and the transactions contemplated hereby will be held by Purchaser and its Representatives as “Information,” as defined in, and pursuant to the terms of, the Confidentiality Agreement.

 

(c) No information or access provided to Purchaser or its Representatives pursuant to this Section 7.1, or any other investigation made by or on behalf of Purchaser, will affect any of the representations or warranties of Seller contained in this Agreement, the Transitional Agreements or any agreement or certificate delivered in connection herewith and therewith, or the conditions hereunder to the obligations of Purchaser.  Notwithstanding anything to the contrary set forth in this Agreement, if (a) Seller can demonstrate that prior to the date hereof, Purchaser (i) had actual knowledge of any fact or circumstance and (ii) had actual knowledge that the existence of such fact or circumstance would consti tute a breach of a particular representation or warranty set forth in Article V of this Agreement, and (b) the Closing occurs, then Seller shall have no indemnification obligation under Section 8.1(a)(iv) with respect to Losses arising directly from the existence of such fact or circumstance.

 

 

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SECTION 7.2. Conduct of Business.  From and after the date hereof and until the Closing, except (i) as set forth on Schedule 7.2 or as otherwise expressly contemplated by this Agreement or (ii) as Purchaser shall otherwise consent in writing, Seller agrees that it will conduct the Business, and will cause the Business to be conducted, in the ordinary course consistent with past practice, and will use, and cause the Divesting Entities to use, reasonable commercial efforts to preserve intact the Business and relat ed relationships with customers, suppliers and other third parties.  From and after the date hereof and to the Closing, except (i) as set forth on Schedule 7.2 or as otherwise expressly contemplated by this Agreement or (ii) as Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld), Seller covenants and agrees that, with respect to the Business, it shall and shall cause the Divesting Entities to:

 

(i) not incur, create or assume any Lien, other than Permitted Liens, with respect to any material asset that would constitute a Purchased Asset;

 

(ii) not dispose of any material assets that would constitute Purchased Assets, except the sale of Inventories in the ordinary course of business consistent with past practice;

 

(iii) not amend, modify or terminate any material term of, or waive any material right under, any Assumed Contract (subject to clause (vii) below with respect to any promotional, sales and discount activities);

 

(iv) not enter into any contract, agreement or commitment that would constitute an Assumed Contract if it were in effect on the date hereof (subject to clause (vii) below with respect to any promotional, sales and discount activities);

 

(v) not take any action specified in Sections 5.6(ii) or 5.6(iv) through 5.6(viii);

 

(vi) submit all adverse event reports required to be submitted to any Governmental Authority under any Law;

 

(vii) carry on material promotional, sales and discount activities in respect of the Business in the ordinary course of business consistent with past practice and Schedule 7.2; and

 

(viii) not agree to take any of the foregoing actions that are prohibited.

 

SECTION 7.3. Efforts to Consummate; Certain Governmental Matters.  (a)  Upon the terms and subject to the conditions herein provided, each of the Parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary for it to do under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including all actions and all things necessary for it (i) to comply promptly with all legal requirements that may be imposed on it with respect to this Agreement and the transactions contemplated hereby (which actions sh all include furnishing all information required by applicable Law in connection with approvals of or filings with any Governmental Authority), (ii) to satisfy the conditions precedent to the obligations of such Party, (iii) to obtain any consent, authorization, order or approval of, or any exemption by, any Governmental Authority or other Person required to be obtained or made by Purchaser,

 

 

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Seller or any Divesting Entity in connection with the acquisition of the Purchased Assets, the assumption of Assumed Liabilities or the taking of any other action contemplated by this Agreement, (iv) to prevent any Governmental Order or any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and (v) to effect all registrations, filings and transfers (to the extent transferable) of Governmental Authorizations necessary for the operation of the Business in a manner consistent with the operation of the Business during the one year period immediately prior to the Closing.  Without limiting the generality of the undertakings pursuant to this Section 7.3(a), Seller and Purchaser agree to provide or cause to be provided promptly to each Governmental Authority in the Territory with regulatory jurisdiction over enforcement of any applicable Competition Laws information and documents requested by such Governmental Authority or necessary, proper or advisable to permit consummation of the acquisition of the Purchased Assets, the assumption of Assumed Liabilities and the other transactions contemplated by this Agreement.  Without limiting the generality of the foregoing, within three (3) Business Days after the execution of this Agreement, each of the Parties will file any Notification and Report Forms and related material required to be filed with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the HSR Act and will use commercially reasonable efforts to obtain an early termination of the applicable waiting period, and promptly will make any further filings pursuant thereto that may be necessary, proper or advisable.

 

(b) Subject to appropriate confidentiality protections, each Party will furnish to the other Party such necessary information and reasonable assistance as the other Party may reasonably request in connection with the foregoing and will keep the other Party reasonably informed with respect to any consent, authorization, order, approval, or exemption that is sought or received from any Governmental Authority in connection with this Agreement and the transactions contemplated hereby.

 

SECTION 7.4. Litigation and Regulatory Support.  (a)  Following the Closing, Purchaser and its Affiliates, on the one hand, and Seller and the Divesting Entities and their respective Affiliates, on the other hand, will reasonably cooperate with each other in the defense or settlement of any Liabilities or lawsuits involving the Purchased Assets or Business for which the other Party has responsibility under this Agreement by providing the other Party and such other Party’s legal counsel reasonable access to employees, records, documents, data, equipment, facilities, products, parts, prototypes and other information relating to the Business and the Purchased Assets as such other Party may reasonably request, to the extent maintained or under the possession or control of the requested Party; provided, however, that such access shall not unreasonably interfere with Purchaser’s or its Affiliates’, or Seller or its Affiliates’, as the case may be, respective businesses; and provided, further that either Party may restrict the foregoing access to the extent that (i) such restriction is required by applicable Law, (ii) such access or provision of information would result in a violation of confidentiality obligations to a third party or (iii) disclosure of any such information would result in the loss or waiver of the attorney-client privilege.  The req uesting Party shall reimburse the other Party for reasonable out-of-pocket expenses paid by the other Party to third parties in performing its obligations under this Section 7.4.

 

(b) As promptly as reasonably practicable following the Closing, Purchaser and its Affiliates, on the one hand, and Seller and the Divesting Entities and their respective

 

 

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Affiliates, on the other hand, will reasonably cooperate with each other in the exchange and sharing of the information and documentation described in Exhibit E related to the Purchased Assets or Business in order to permit Purchaser and its Affiliates to conduct the Business in a manner compliant with Law and to permit each of Seller and Purchaser and each of their respective Affiliates to comply with their obligations arising under this Agreement and the Transitional Agreements (or any other agreement contemplated thereby) in a manner compliant with Law (it being understood that either party may redact information that is not related to the Purchased Assets or the Business).

 

SECTION 7.5. Trade Notification.  Seller and Purchaser shall mutually agree on the method and content of written notifications to customers and suppliers of the sale of the Purchased Assets to Purchaser.  Prior to the Closing, Purchaser may communicate with customers of the Business with the prior consent of Seller in its sole discretion, and at such time and in such manner as may be mutually agreed by Seller and Purchaser.  Seller and Purchaser agree that such written notifications and communications are intended to provide sufficient advance notice to customers of the sale and the plans associated therewith, so as to provide a smooth transition of the Business from Seller and the Divesting Entities to Purchaser.

 

SECTION 7.6. Use of Seller Names and UPCs.  (a)  Seller hereby grants a non-exclusive right and license to Purchaser for a period beginning on the Closing and ending ninety (90) days following the Closing Date (the “Seller Name Use Period”) to use the Seller Names, the Universal Product Codes (“UPCs”) for each of the Products and the National Drug Codes (“NDCs”), if any, for each of the Products to the extent necessary to allow Purchaser and its Affiliates and their designees to market, distribute and sell the Products in the Territory, utilizing the labels and packaging, advertising, marketing, sales and promotional materials, in each case, existing on the Closing Date or used to produce finished goods inventory of Products during the Seller Name Use Period.

 

(b) Promptly upon the expiration of the Seller Name Use Period, Purchaser shall, and shall cause its Affiliates to, destroy and dispose of all labels and all advertising, marketing, sales and promotional materials (except for a reasonable number of samples of such materials which Purchaser may retain for archival purposes only), in each case, in its possession or subject to its control, bearing any Seller Names, UPCs or NDCs.  Notwithstanding the foregoing (including Section 7.6(a)), the expiration of the Seller Name Use Period shall not prohibit or restrict Purchaser and its Affiliates from marketing, distributing and selling the Inventories acquired by Purchaser on the Closing Date, produced during th e Seller Name Use Period or manufactured with packaging ordered by Seller in connection with its obligations under the Transitional Supply Agreement during the Seller Name-Use Period.

 

(c) In no event shall Purchaser use any Seller Names, UPCs or NDCs in any manner or for any purpose different from the use of such Seller Names, UPCs and NDCs by Seller and its Affiliates prior to the Closing Date to market, distribute and sell the Products in the Territory.

 

SECTION 7.7. Further Assurances.  From time to time after the Closing, and for no further consideration, each of the Parties shall, and shall cause its Affiliates to, execute, acknowledge and deliver such assignments, transfers, consents, assumptions and other

 

 

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documents and instruments and take such other commercially reasonable actions as may reasonably be requested to more effectively assign, convey or transfer to or vest in Purchaser and its designated Affiliates the Purchased Assets and the Assumed Liabilities contemplated by this Agreement to be transferred to or assumed by Purchaser (including transferring, at no additional cost to Purchaser, any Purchased Asset contemplated by this Agreement to be transferred to Purchaser at the Closing and that was not so transferred at the Closing); provided, however, that the foregoing obligations with respect to the Registered Intellectual Property set forth on Schedule 5.11 and the Transferred Domain Names set forth on Schedule 5.11 shall terminate twelve (12) months after the Closing Date (in each case, other than with respect matters outside of the reasonable control of Purchaser (including matters arising as the result of any official intellectual property registry or the fault of Seller or its Affiliates)).  Purchaser agrees that, following the Closing, it shall prepare any such additional instruments or documents necessary to assign, convey or transfer the Transferred Intellectual Property and the Transferred Domain Names, and Seller hereby agrees to, and to cause the Divesting Entities to, execute and deliver any such additional instruments or documents, and to take any other actions reasonably requested by Purchaser, to assign, convey or transfer the Transferred Intellectual Property and Transferred Domain Names to Purchaser.

 

SECTION 7.8. Assistance in Collecting Certain Amounts.  From and after the Closing, Purchaser shall use commercially reasonable efforts to assist, cooperate with and consult with Seller and its Affiliates in connection with Seller’s and each Divesting Entity’s collection of all Accounts Receivables and other miscellaneous receivables related to the Products, including those that are not evidenced by instruments or invoices, existing as of the Closing and relating to the Products sold by Seller or such Divesting Entity prior to the Closing, and Purchaser shall remit promptly to Seller any payments or other sums received by Purch aser that are in respect of Accounts Receivable or that otherwise are Excluded Assets or properly for the account of Seller or any Divesting Entity.  If, after the Closing, Seller or any Divesting Entity wishes to make a claim or otherwise take action with respect to any Excluded Asset or any Retained Liability, Purchaser shall, and shall cause its Affiliates to use commercially reasonable efforts to assist and cooperate with Seller or any such Divesting Entity with respect to such actions.  From and after the Closing, Seller shall, and shall cause the Divesting Entities to, use commercially reasonable efforts to assist, cooperate with and consult with Purchaser in connection with Purchaser’s collection of all trade accounts and notes receivable and other miscellaneous receivables related to the Products sold after the Closing, including those that are not evidenced by instruments or invoices, and Seller shall, and shall cause its Affiliates to, remit promptly to Purchaser any payme nts or other sums received by Seller or any of its Affiliates after the Closing and relating to the Products sold after the Closing or amounts that are otherwise Purchased Assets.  If, after the Closing, Purchaser wishes to make a claim or otherwise take action with respect to any Purchased Asset or any Assumed Liability, Seller shall, and shall cause its Affiliates to, use commercially reasonable efforts to assist and cooperate with Purchaser with respect to such actions.  Seller shall reimburse Purchaser for all reasonable out-of-pocket expenses incurred by Purchaser and its Affiliates in complying with this Section 7.8, and Purchaser shall promptly reimburse Seller for all reasonable out-of-pocket expenses incurred by Seller and each Divesting Entity in complying with its obligations under this Section 7.8.

 

SECTION 7.9. Bulk Transfer Laws.  Purchaser acknowledges that Seller and its Affiliates have not taken, and do not intend to take, any action required to comply with

 

 

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any applicable bulk sale or bulk transfer laws or similar laws and hereby waives compliance therewith.

 

SECTION 7.10. Competition; Activities Outside the Territory .

 

(a) Purchaser acknowledges and agrees that Seller and its Affiliates shall be entitled to manufacture, package, test, develop, distribute, market, use, sell or otherwise deal with any products that such Person owns or has a license to prior to the Closing or that it may acquire, license or develop at any time after the Closing and that compete, directly or indirectly, with any of the Products; provided that, subject to Section 7.10(b), Seller and its Affiliates may not use any Purchased Assets after the Closing (except as contemplated by the Transitional Agreements).

 

(b) Purchaser understands and acknowledges that Seller and its Affiliates own certain trademarks and similar rights and certain other assets in various jurisdictions outside the Territory which are similar and/or identical to the Transferred Trademark Rights, and that Seller and its Affiliates are actively engaged the business of manufacturing, marketing, distributing and selling products similar and/or identical to the Products in various markets outside the Territory.  Purchaser acknowledges and agrees that (i) nothing contained herein shall be deemed to in any manner limit Seller and its Affiliates from using such trademarks and similar rights or other assets outside the Territory or from conducting such business outside the Territory, and (ii) that Purchaser is not acquiring hereunder any right, title or interest in or to any such trademarks or similar rights or other assets of Seller and its Affiliates outside the Territory or any such business of Seller and its Affiliates outside the Territory.  Seller understands and acknowledges that Purchaser may from time to time manufacture the Products in jurisdictions outside the Territory for marketing, distributing and selling within the Territory and that such manufacture shall not infringe any of the rights of Seller and its Affiliates within such jurisdictions outside the Territory.

 

SECTION 7.11. Insurance.  As of the Closing Date, the coverage under all insurance policies related to the Business shall continue in force only for the benefit of Seller and its Affiliates and not for the benefit of Purchaser or any of its Representatives.  Purchaser agrees to arrange for its own insurance policies (which may include self-insurance) with respect to the Purchased Assets and the Business covering all periods and agrees not to seek, through any means, to obtain payment from any insurance policies of Seller or any of its Affiliates that may provide coverage for claims relating in any way to the Purchased Assets and the Business prior to the Closing.

 

SECTION 7.12. Licensed Know-How License.  Effective as of the Closing, Seller hereby grants to Purchaser a perpetual, irrevocable, transferable, assignable, sublicensable, nonexclusive, fully paid-up, royalty-free right and license to use the Licensed Know-How for the conduct of the Business as conducted by Seller and the Divesting Entities in the six (6) months prior to the date hereof and through the Closing, and the development, research, production, manufacture, distribution, use, sale, offer for sale, importation and other exploitation of the Products in the Territory and of modifications thereto and product extensions.

 

 

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ARTICLE VIII

 

INDEMNIFICATION

 

SECTION 8.1. Indemnification by Seller.   (a)  Subject to the provisions of this Article VIII, Seller agrees to defend, indemnify and hold harmless Purchaser and its Affiliates and their respective directors, officers, partners, members, agents, employees, successors and assigns, from and against any and all claims, actions, causes of action, judgments, awards and Liabilities, losses, costs (including reasonable attorney’s fees and other out-of-pocket costs incurred in investigating, preparing and defending the foregoing), and damages (collectively, the “L osses”) to the extent arising from or relating to (i) any Excluded Asset or Retained Liability (including any Permitted Liens pursuant to clauses (ii), (iv) and (v) of the definition thereof related thereto that survive the Closing), (ii) any Pre-Closing Products Liabilities, (iii) any breach by Seller or any Divesting Entity of any of its covenants or agreements contained in this Agreement, or (iv) any breach of any warranty or representation of Seller or any Divesting Entity contained in this Agreement and any certificate delivered in connection herewith.

 

(b)       Purchaser shall take, and shall cause its Affiliates to take, all commercially reasonable steps to mitigate any Loss upon becoming aware of any event that would reasonably be expected to, or does, give rise to a claim by Purchaser for indemnification pursuant to Section 8.1(a); provided, that the foregoing shall not be deemed to limit the ability of Purchaser and its Affiliates to incur reasonable costs and expenses in connection therewith.

 

SECTION 8.2. Indemnification by Purchaser.

 

(a) Subject to the provisions of this Article VIII, Purchaser agrees to defend, indemnify and hold harmless Seller and its Affiliates and their respective directors, officers, partners, members, agents, employees, successors and assigns, from and against any and all Losses to the extent arising from or relating to (i) any Assumed Liability, (ii) any breach by Purchaser of any of its covenants or agreements contained in this Agreement or (iii) any breach of any warranty or representation of Purchaser contained in this Agreement and any certificate delivered in connection herewith.

 

(b) Seller and each Divesting Entity shall take, and shall cause their respective Affiliates to take, all commercially reasonable steps to mitigate any Loss upon becoming aware of any event that would reasonably be expected to, or does, give rise to a claim by Seller for indemnification pursuant to Section 8.2(a); provided, that the foregoing shall not be deemed to limit the ability of Seller and its Affiliates to incur reasonable costs and expenses in connection therewith.

 

SECTION 8.3. Notice of Claims.  If any of the Persons to be indemnified under this Article VIII (the “Indemnified Party”) has suffered or incurred any Loss, the Indemnified Party shall so notify the Party from whom indemnification is sought (the “Indemnifying Party”) promptly in writing describing such Loss with reasonable specificity (including, to the extent then known or estimable, the anticipated amount of such Loss and the method of calculation).  If any claim, action, suit or proceeding (in equity or at law) is instituted

 

 

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by a third party with respect to which the Indemnified Party intends to claim any Loss under this Article VIII, the Indemnified Party shall promptly notify (the “Third Party Claim Notice”) the Indemnifying Party of such claim, action, suit or proceeding.  A failure by the Indemnified Party to give notice of any claim, action, suit or proceeding in a timely manner pursuant to this Section 8.3 or with the specificity set forth in this Section 8.3 shall not limit the obligation of the Indemnifying Party under this Article VIII, except (i) to the extent such Indemnifying Party is actually and materially prejudiced thereby or (ii) as provided in Section 8.5.

 

SECTION 8.4. Third Party Claims.  (a)  The Indemnifying Party under this Article VIII shall have the right, but not the obligation, exercisable by written notice to the Indemnified Party within thirty (30) days of receipt of a Third Party Claim Notice from the Indemnified Party with respect thereto, to assume the conduct and control, at the expense of the Indemnifying Party and through counsel of its choosing that is reasonably acceptable to the Indemnified Party, the defense of any third party claim, action, suit or proceeding (a “Third Party Claim”), a nd the Indemnifying Party may compromise or settle any such Third Party Claim it has elected to assume and control the defense of; provided, that the Indemnifying Party shall give the Indemnified Party reasonable advance written notice of any proposed compromise or settlement and shall not, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld), consent to or enter into any compromise or settlement that commits the Indemnified Party to take, or to forbear to take, any action, provides for other equitable relief, contains any admission as to wrongdoing by the Indemnified Party, or does not provide for a full and complete written release by the applicable third party of the Indemnified Party.  No Indemnified Party may compromise or settle any Third Party Claim for which it is seeking indemnification hereunder without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld).  No Indemnifying Party may consent to the entry of any judgment that does not relate solely to monetary damages for which the Indemnifying Party is responsible arising from any such Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld).  The Indemnifying Party shall permit the Indemnified Party to participate in, but not control, the defense of any such Third Party Claim through counsel chosen by the Indemnified Party; provided, that the fees and expenses of such counsel shall be borne by the Indemnified Party.  If the Indemnifying Party elects not to control or conduct the defense of a Third Party Claim, the Indemnifying Party nevertheless shall have the right to participate in the defense of any Third Party Claim and, at its own expense, to employ counsel of its own choosing for such purpose.  Notwithstandi ng the foregoing, with respect to any Third Party Claim that the Indemnifying Party is defending, the Indemnified Party shall have the right to retain one additional separate counsel reasonably acceptable to the Indemnifying Party to represent it and the Indemnifying Party shall pay the reasonable fees and expenses of such separate counsel if there are conflicts existing under applicable standards of professional conduct with respect to any material issues between the Indemnified Party and the Indemnifying Party that make it reasonable for separate counsel to represent the Indemnified Party and the Indemnifying Party.

 

(b) The Parties shall reasonably cooperate in the defense of any Third Party Claim, with such cooperation to include (i) the retention of and the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim and (ii) reasonable access to employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder.

 

 

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SECTION 8.5. Expiration.  If the Closing shall have occurred, all covenants, agreements, warranties and representations made herein or in any certificate or other document delivered pursuant hereto shall survive the Closing.  Notwithstanding the foregoing:

 

(i) all indemnification obligations under Section 8.1(a)(ii) shall terminate and expire on, and no action or proceeding seeking indemnification with respect thereto, shall be commenced after the date that is eighteen (18) months after the Closing Date, unless prior to such date a claim for indemnification with respect thereto shall have been made, with reasonable specificity, by written notice given in accordance with Section 8.3; and

 

(ii) all representations and warranties, and all indemnification obligations under Section 8.1(a)(iv)and Section 8.2(a)(iii) with respect to any such representations or warranties (other than representations and warranties set forth in Sections 5.1, 5.2, 5.14, 5.15, 5.17, 6.1, 6.2 or 6.7, which shall, along with the indemnification rights relating thereto, not be subject to the limitations set forth in this sentence) shall terminate and expire on, and no action or proceeding seeking damages or other relief for breach of any thereof or for any misrepresentation or inaccuracy with respect thereto, shall be commenced after the date that is twelve (12) months after the Closing Date (or, with respect to the representa tions and warranties set forth in the first sentence of Section 5.11(c) as that sentence shall pertain to the Transferred Trademark Rights, thirty-six (36) months after the Closing Date), unless prior to such date a claim for indemnification with respect thereto shall have been made, with reasonable specificity, by written notice given in accordance with Section 8.3.

 

SECTION 8.6. Certain Limitations.  Notwithstanding the other provisions of this Article VIII, Seller shall not have any indemnification obligations for Losses under Section 8.1(a)(iv), (i) for any individual item where the Loss relating thereto is less than fifty thousand U.S. dollars ($50,000) and (ii) in respect of each individual item where the Loss relating thereto is equal to or greater than fifty thousand U.S. dollars ($50,000), unless the aggregate amount of all such Losses exceeds seven hundred sixty thousand U.S. dollars ($760,000) (the “Seller Deductible” ;), in which event Seller shall be required to pay the amount of such Losses that exceeds the Seller Deductible, but only up to a maximum amount equal to ten million U.S. dollars ($10,000,000) (the “Seller Cap”); provided, that (i) the Seller Deductible shall not apply to any breach of any representation or warranty set forth in Sections 5.1, 5.2, 5.14, 5.15 or 5.17, and (ii) the Seller Cap shall not apply to any breach of any representation or warranty set forth in Sections 5.1, 5.2, 5.11(c) (the first sentence as the same shall pertain to the Transferred Trademark Rights), 5.14, 5.15 or 5.17, but in no event shall Seller have any indemnification obligations for Losses under Section 8.1(a)(ii) or Section 8.1(a)(iv) in an aggregate amount in excess of the Purchase Price.  Notwithstanding the other provisions of this Article VIII, Purchaser shall not have any indemnification obligations for Losses under Section 8.2(a)(iii), (i) for any individual item where the Loss relating thereto is less than fifty thousand U.S. dollars ($50,000) and (ii) in respect of each individual item where the Loss relating thereto is equal to or greater than fifty thousand U.S. dollars ($50,000), unless the aggregate amount of all such Losses exceeds seven hundred sixty thousand U.S. dollars ($760,000) (the “Purchaser Deductible”), in which event Purchaser shall be required to pay the amount of such Losses that exceeds the Purchaser Deductible, but only up to a maximum amount equal to ten million U.S. dollars ($10,000,000) (the “Purchaser Cap”); provided, that the Purchaser Deductible and the Purchaser Cap shall not apply to any breach of any representation or warranty se t forth in Sections 6.1, 6.2

 

 

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or 6.7, but in no event shall Purchaser have any indemnification obligations for Losses under Section 8.2(a)(iii) in an aggregate amount in excess of the Purchase Price.  Notwithstanding anything in this Agreement to the contrary, for purposes of Article VIII (in determining the amount of any such Loss or the existence of any breach, misrepresentation or inaccuracy with respect to any representation or warranty of Seller or any Divesting Entity), any qualification as to materiality or Material Adverse Effect set forth in any representation or warranty shall be disregarded.

 

SECTION 8.7. Losses Net of Insurance, Etc.  The amount of any Loss for which indemnification is provided under Section 8.1 or 8.2 shall be net of (i) any amounts actually recovered by the Indemnified Party pursuant to any indemnification by or indemnification agreement with any third party and (ii) any insurance proceeds actually received as an offset against such Loss (provided that the amount of offset shall be reduced by any retrospective adjustments, premium increases and the like resulting from such receipt).  If the amount to be netted hereunder from any payment required under Section 8.1 or 8.2 is determined after payment by the Indemnifying Party of any amount otherwise required to be paid to an Indemnified Party pursuant to this Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article VIII had such determination been made at the time of such payment.

 

SECTION 8.8. Sole Remedy/Waiver.  Each Party acknowledges and agrees that the remedies provided for in this Agreement shall be its sole and exclusive remedy with respect to the subject matter of this Agreement.  In furtherance of the foregoing, each of the Parties hereby waives, to the fullest extent permitted by applicable Law, any and all other rights, claims and causes of action (including rights of contribution, if any, and rights to specific performance or other injunctive relief) known or unknown, foreseen or unforeseen, which exist or may arise in the future, that it may have against Seller or any of its Affiliates, or Pur chaser or any of its Affiliates, as the case may be, arising under this Agreement and under or based upon any applicable Law, except that nothing herein shall limit the liability of either Party for fraud or intentional misrepresentation.

 

SECTION 8.9. Indemnity Payments.  In the event that either Party agrees to or is determined to have an obligation to reimburse the other Party for Losses as provided in this Article VIII, the Indemnifying Party shall promptly pay such amount to the Indemnified Party in U.S. dollars via wire transfer of immediately available funds to the accounts specified in writing by the Indemnified Party.

 

SECTION 8.10. No Punitive or Exemplary Damages.  EXCEPT AS SET FORTH IN THE PROVISO HERETO, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER PARTY OR ANY AFFILIATE OF THE OTHER PARTY FOR LOST REVENUES OR PROFITS (OR MULTIPLES OF SUCH ITEMS) OR INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR PUNITIVE, EXEMPLARY, TREBLE OR OTHER DAMAGES BASED ON STATUTORY MULTIPLIERS THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH HEREOF OR ANY LIABILITY RETAINED OR ASSUMED

 

 

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HEREUNDER; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT BE CONSTRUED TO PRECLUDE RECOVERY IN RESPECT OF ANY LOSS (I) DIRECTLY INCURRED OR SUFFERED FROM THIRD PARTY CLAIMS OR (II) RESULTING FROM FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE INDEMNIFYING PARTY.

 

ARTICLE IX

 

TERMINATION

 

SECTION 9.1. Termination.  This Agreement may be terminated at any time prior to the Closing:

 

(i) by written agreement of Purchaser and Seller;

 

(ii) by either Purchaser or Seller, by giving written notice of such termination to the other Party, if the Closing shall not have occurred on or prior to ninety (90) days after the signing date (unless the failure to consummate the Closing by such date shall be due to the failure of the Party seeking to terminate this Agreement to have fulfilled any of its obligations under this Agreement);

 

(iii) by either Party provided such Party is not then in breach of any of its respective obligations hereunder, if: (A) there has been a material misrepresentation or material breach by the other Party of a representation or warranty contained herein and such material misrepresentation or material breach is not cured within fifteen (15) Business Days after written notice thereof from such Party detailing the nature of such misrepresentation or breach; or (B) the other Party has committed a material breach of any covenant imposed upon it hereunder and fails to cure such breach within fifteen (15) Business Days after written notice thereof from such Party detailing the nature of such breach;

 

(iv) by either Purchaser or Seller, by giving of written notice of such termination to the other Party, if any Governmental Authority of competent jurisdiction shall have issued a Governmental Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such Governmental Order or other action shall have become final and nonappealable; provided, that no Party may rely upon this Section 9.1(iv) to terminate this Agreement if such Party shall have failed to use its commercially reasonable efforts to prevent the entry of such Governmental Order or the taking of such other action; or

 

(v) by either Purchaser or Seller, by giving notice of such termination to the other Party, if the condition in the first sentence of Section 4.1(ii) has become incapable of being fulfilled; provided, that no Party may rely upon this Section 9.1(v) to terminate this Agreement if such Party shall have failed to use its commercially reasonable efforts to obtain such Governmental Authorization or such expiration or termination of applicable waiting periods with respect to merger control pursuant to applicable Competition Laws.

 

SECTION 9.2. Effect of Termination.  (a)  In the event of the termination of this Agreement in accordance with Section 9.1, this Agreement shall thereafter become void and

 

 

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have no effect, and neither Party shall have any liability to the other Party or to such other Party’s Affiliates, or their respective Representatives, except for the obligations of the Parties contained in this Section 9.2 and in Sections 7.1(b) (“Information and Documents”), 10.1 (“Notices”), 10.6 (“Parties in Interest”), 10.7 (“Public Disclosure”), 10.8 (“Confidentiality; Return of Information”), 10.9 (“Expenses”), 10.11 (“Governing Law; Jurisdiction; No Jury Trial”) and 10.12 (“Arbitration; Mediation”) and Article VIII (“Indemnification”), and except that nothing herein will relieve either Party from Liability for any breach of this Agreement prior to such termination.

 

(b) In the event this Agreement shall be terminated and at such time a Party is in material breach of or default under any term or provision hereof, such termination shall be without prejudice to, and shall not affect, any and all rights to damages that the other Party may have hereunder.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.1. Notices.  All notices or other communications hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the party for whom it is intended, delivered by registered or certified mail, return receipt requested, or by a national overnight courier service, or sent by facsimile (provided, that notice by facsimile is promptly confirmed by telephone confirmation thereof and receipt is confirmed by the sending facsimile machine), to the Person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such Person:

 

to Seller and any Divesting Entity:

 

McNEIL-PPC, Inc.

7050 Camp Hill Road

Fort Washington, PA 19034

Telephone:  (215) 273-8280

Facsimile:  (215) 273-4071

Attn:    Frank Knapp, Director, Business Development

 

with a copy to:

 

Johnson & Johnson

Office of General Counsel

One Johnson & Johnson Plaza

New Brunswick, NJ 08933

Telephone:  (732) 524-6163

Facsimile:  (732) 524-2788

Attn: General Counsel, Consumer Group

 

to Purchaser:

 

 

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Prestige Brands Holdings, Inc.

90 North Broadway

Irvington, NY  10533

Telephone:   (914) 524-6878

Facsimile:    (914) 524-7488

Attn:       Eric S. Klee, Esq.

General Counsel and Secretary

with a copy to:

 

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

Suite 800 – Baker Donelson Center

211 Commerce Street

Nashville, TN 37201

Telephone:    (615) 726-5763

Facsimile:    (615) 744-5763

Attn:    Gary M. Brown, Esq.

 

All notices and other communications under this Agreement shall be deemed to have been delivered and received: (i) when delivered by hand, if personally delivered, (ii) one (1) Business Day after being delivered to a national overnight courier service, (iii) if sent by the United States Postal Service (whether actually received or not), at the close of business on the third Business Day next following the mailing date if placed in the mail, postage prepaid, certified or registered with return receipt requested, addressed to the appropriate Party or Parties, at the address of such Party or Parties set forth above, and (iv) if sent by facsimile, upon  confirmation of receipt by the sending facsimile machine.

 

SECTION 10.2. Amendment; Waiver.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed (i) in the case of an amendment, by Purchaser and Seller and (ii) in the case of a waiver, by the Party against whom the waiver is to be effective.  No failure or delay by either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

SECTION 10.3. Assignment.  Neither Party to this Agreement may assign any of its rights or obligations under this Agreement, including by sale of stock or operation of Law in connection with a merger or sale of substantially all the assets, without the prior written consent of the other Party, except that (i) Seller may, without such consent, assign its rights or obligations to an Affiliate, (ii) Purchaser may, without such consent, assign its rights to acquire the Purchased Assets hereunder, in whole or in part, to one or more of its Affiliates; and (iii) Purchaser may assign this Agreement to its lender(s) as collateral; provided, however, that no such assignment by a Party shall relieve such Party of any of its obligations hereunder.

 

SECTION 10.4. Entire Agreement.  This Agreement and the Transitional Agreements contain the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, except for (i) the Confidentiality Agreement, which shall remain in full force and

 

 

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effect for the term provided for therein; provided, however, that effective upon the Closing, the obligations of Purchaser and its Affiliates under the Confidentiality Agreement shall terminate (subject to paragraph 7 of the Confidentiality Agreement) with respect to the Business, and (ii) any written agreement of the Parties that expressly provides that it is not superseded by this Agreement.

 

SECTION 10.5. Fulfillment of Obligations.  Any obligation of a Party to the other Party under this Agreement, which obligation is performed, satisfied or fulfilled by an Affiliate of such Party, shall be deemed to have been performed, satisfied or fulfilled by such Party.

 

SECTION 10.6. Parties in Interest.  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.  Nothing in this Agreement, express or implied, is intended to confer upon any Person other than Purchaser, Seller and the Divesting Entities, or their successors or permitted assigns, any rights or remedies under or by reason of this Agreement.

 

SECTION 10.7. Public Disclosure.  Notwithstanding anything herein to the contrary, each Party hereby agrees with the other Party that, except as may be required to comply with the requirements of any applicable Laws or the rules and regulations of any stock exchange upon which the securities of such Party are listed, if any, no press release or similar public announcement or communication shall, if prior to the Closing, be made by it or caused to be made by it concerning the execution or performance of this Agreement unless it shall have consulted the other Party in advance with respect thereto and such other Party consents to such release , announcement or communication.

 

SECTION 10.8. Confidentiality; Return of Information.

 

(a) Seller shall keep confidential, and shall cause its Affiliates and their respective Representatives to keep confidential, (i) all information that is known by it to be confidential information regarding Purchaser, any of its Affiliates or any of its or their respective businesses, products, processes or financings, in each case provided to it in connection with this Agreement and the transactions contemplated hereby, and (ii) after the Closing, all confidential information relating to the Purchased Assets or the Assumed Liabilities, except (A) as required by Law, (B) to the extent necessary to arbitrate, defend or prosecute any indemnification claim or any litigation or dispute, including in connection with a ny claim of Seller or any Divesting Entity hereunder against Purchaser, or (C) for information that becomes generally available to the public other than as a result of a breach of this Section 10.8(a), or is furnished to Seller after the Closing by a third party that, to the Knowledge of Seller, is under no obligation of confidentiality to Purchaser with respect to such Information.  The covenants of Seller set forth in the immediately preceding sentence shall terminate three (3) years after the Closing Date.

 

(b) If for any reason whatsoever the transactions contemplated by this Agreement are not consummated, (i) Purchaser shall promptly return to Seller all books and records furnished by Seller or any of its Affiliates or their respective Representatives (including all copies, summaries and abstracts, if any, thereof) in accordance with the terms of the Confidentiality Agreement and (ii) Seller shall promptly return to Purchaser all books and

 

 

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records furnished by Purchaser or any of its Affiliates, agents, employees or representatives (including all copies, summaries and abstracts, if any, thereof).

 

SECTION 10.9. Expenses.  Except as otherwise expressly provided in this Agreement or otherwise agreed between the parties, whether or not the transactions contemplated by this Agreement are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Party incurring such expenses.

 

SECTION 10.10. Schedules.  The disclosure of any matter in any Schedule to this Agreement shall be deemed to be a disclosure for the purposes of the Section or subsection of this Agreement to which it corresponds in number and each other Section and subsection of this Agreement to the extent such disclosure is reasonably apparent on the face thereof to be relevant to such other Section or subsection.  The disclosure of any matter in any Schedule to this Agreement shall expressly not be deemed to constitute an admission by any Party, or to otherwise imply, that any such matter is material for the purposes of this Agreement, could reasonably be expected to have a Material Adverse Effect or is required to be disclosed under this Agreement.

 

SECTION 10.11. Governing Law; Jurisdiction; No Jury Trial.  (a)  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles or rules of such state, to the extent such principles or rules are not mandatorily applicable by statute and would permit or require the application of the laws of another jurisdiction.

 

(b) The Parties consent to the exclusive jurisdiction of the Federal and State courts located in the State of New York for the resolution of all disputes or controversies between the Parties which, pursuant to applicable Law, are not subject to the provisions of Section 10.12.  Each of the Parties (i) consents to the exclusive jurisdiction of each such court in any suit, action or proceeding relating to or arising out of this Agreement or the transactions contemplated herein; (ii) waives any objection that it may have to the laying of venue in any such suit, action or proceeding in any such court; and (iii) agrees that service of any court paper may be made in such manner as may be provided under applicable Laws or court rules governing service of process. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, AND AGREE TO CAUSE THEIR RESPECTIVE AFFILIATES TO WAIVE, THE RIGHT TO TRIAL BY JURY IN ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY RELATED AGREEMENTS OR ANY TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 10.12. Arbitration; Mediation.

 

(a) Any controversy or claim arising out of or relating to this Agreement or any related agreements, including any such controversy or claim involving an Affiliate of any Party (a “Dispute”), shall first be submitted to mediation according to the Commercial Mediation Procedures of the American Arbitration Association (“AAA”) (see www.adr.org).  Such mediation shall be attended on behalf of each Party for at least one session by a senior business person with authority to resolve the Dispute.  Any period of limitations that would otherwise

 

 

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expire between the initiation of a mediation and its conclusion shall be extended until twenty (20) days after the conclusion of the mediation.  In no event will mediation delay commencement of the arbitration for more than forty-five (45) days absent agreement of the Parties or interfere with the availability of emergency or equitable relief.

 

(b) Any Dispute that cannot be resolved by mediation within forty-five (45) days of notice by one Party to the other of the existence of a Dispute (unless the Parties agree in writing to extend that period) shall be resolved by arbitration in accordance with the Commercial Arbitration Rules of the AAA (“AAA Rules”; see www.adr.org) and the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The arbitration shall be conducted in New York City, New York, by one arbitrator appointed in accordance with the AAA Rules.

 

(c) The arbitrator shall follow the ICDR Guidelines for Arbitrators Concerning Exchanges of Information in managing and ruling on requests for discovery.  The arbitrator, by accepting appointment, undertakes to exert her or his best efforts to conduct the process so as to issue an award within eight (8) months of her or his appointment, but failure to meet that timetable shall not affect the validity of the award.

 

(d) The arbitrator shall decide the Dispute in accordance with the substantive law of New York.  The award of the arbitrator may be entered in any court of competent jurisdiction.

 

SECTION 10.13. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that both Parties need not sign the same counterpart.

 

SECTION 10.14. Headings.  The heading references herein and the table of contents hereto are for convenience purposes only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

SECTION 10.15. Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any term or other provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid, illegal or unenforceable, (a) a suitable and equitable provision shall be substituted therefore in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity, illegality or unenforceability, nor shall such invalidity, illegality or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

[Remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the Parties have executed or caused this Agreement to be executed as of the date first written above.

 

 

 

	MCNEIL-PPC, INC.
	By:	/s/ Robert W. McMahon
		Name:  Robert W. McMahon
		Title:  Vice President, Finance

 

 

	PRESTIGE BRANDS HOLDINGS, INC.
	By:	/s/ Matthew M. Mannelly
		Name:  Matthew M. Mannelly
		Title:  Chief Executive Officer

[Signature Page to Asset Purchase Agreement]

 

 

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[Disclosure Schedules intentionally omitted from filing pursuant to Item 601(b)(2) of Regulation S-K.  The Company agrees to furnish a supplemental copy of any omitted schedule to the Commission upon request.]

 

 

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[Exhibits intentionally omitted from filing due to immateriality.]

 

 

 

 

 

 

 

 

Exhibit 99.1

Prestige Announces Agreement to Acquire the Dramamine Brand from McNeil-PPC, Inc.

 

IRVINGTON, N.Y., December 16, 2010 – Prestige Brands Holdings, Inc. (“Prestige Brands” or “Prestige”) (NYSE: PBH), a leading marketer of branded consumer products, today announced that it has entered into a definitive agreement to acquire the assets associated with the Dramamine® business in the U.S. (“Dramamine”) from McNeil-PPC, Inc. for $76 million in cash.  The transaction is expected to generate tax attributes with a present value of approximately $14 million, which would imply an effective purchase price of approximately $62 million.  The transaction is subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and is expected to close prior to the end of January 2011.

Dramamine is the #1 brand in the OTC-motion sickness category in the U.S. with an estimated market share of approximately 32%.  Dramamine products are used for the prevention and treatment of nausea, vomiting and dizziness symptoms associated with motion sickness.  The addition of this leading  brand further strengthens Prestige's presence in the OTC arena.

“Strategic acquisitions in the OTC market are core to our shareholder value creation strategy.  Dramamine represents a continuation of our strategy to acquire OTC brands that are broadly recognized by consumers, are important to retailers, and have strong positions in their categories. We are strengthening Prestige’s portfolio of leading brands in attractive OTC categories with the addition of Dramamine,” said Matthew Mannelly, Prestige Brands Chief Executive Officer.

“The Company expects to quickly and smoothly integrate Dramamine into the Prestige portfolio and drive growth through enhanced brand support.  Prestige has made a significant commitment to invest behind our key brands in the portfolio and intends to extend this investment philosophy to Dramamine when the acquisition is completed,” continued Mannelly.

To fund the Dramamine transaction, Prestige will use cash on hand and funds made available through the bank and bond financing recently completed to fund Blacksmith Brands and other acquisitions.  For the Blacksmith transaction, Prestige had originally anticipated using an all bank debt structure.  However, due to favorable market conditions and this additional acquisition opportunity, the Company elected to pursue an expanded and more flexible bank and bond financing at a modestly higher cost.

The acquisition is expected to be accretive to earnings per share in FY2012. Prestige intends to provide an update on the Blacksmith Brands integration as well as the Dramamine acquisition at its next earnings call scheduled for February 3, 2011.

Sawaya Segalas & Co., LLC is acting as exclusive financial advisor to Prestige with respect to the transaction.

 

 

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About Prestige Brands

Prestige Brands markets and distributes brand name over-the-counter healthcare and household cleaning products sold throughout the U.S., Canada, and in certain international markets.  Key brands include Chloraseptic® sore throat remedies, Clear Eyes® eye care products, Compound W® wart removal treatments, The Doctor’s® NightGuard® dental protector, Little Remedies® and PediaCare® lines of pediatric over-the-counter products, Efferdent® and Effergrip® denture care products, Luden’s® cough drops, NasalCrom® allergy treatment, and Comet® and Spic and Span® household cleaners.

Forward-looking Statements

 

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would” and similar expressions are intended to identify forward-looking statements as defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements, which include the tax-effected purchase price for the Dramamine acquisition, Prestige's revenues to be generated from OTC products, the value of Dramamine inventory to be acquired in the acquisition, the expected effects of the Dramamine acquisition on 2012 earnings, and the ability to successfully integrate the Dramamine business into Prestige’s OTC portfolio, involve a variety of risks and uncertainties that could cause actual results to differ materially from those projected therein.  These risks and uncertainties include, but are not limited to: general economic and business conditions, changes in or failure to comply with existing regulations or the inability to comply with new government regulations on a timely basis, our ability to complete the acquisition of Dramamine, the ability to meet debt service requirements, adverse changes in federal and state laws relating to the over-the-counter health care industry, availability and terms of capital, ability to attract and retain qualified personnel, ability to successfully integrate newly acquired companies and brands, including Blacksmith Brands and Dramamine, changes in estimates and judgments associated with critical accounting policies, business disruption due to natural disasters or acts of terrorism, an d various other matters described in our Annual Report on Form 10-K and from time to time in our other filings with the Securities and Exchange Commission, press releases, and other communications, many of which are beyond management’s control.

 

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events.  Prestige expressly disclaims any obligation or undertaking to release publicly any updates or changes in its expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based.

Contact:  Dean Siegal, Prestige Brands Holdings, Inc.

914-524-6819