EXHIBITS
EXHIBIT
10.1
AMONG
ALPHARMA
(LUXEMBOURG) S.ÀR.L.,
ALPHARMA
BERMUDA G.P.,
ALPHARMA
INTERNATIONAL (LUXEMBOURG) S.ÀR.L.,
ALFANOR
7152 AS (UNDER CHANGE OF NAME TO OTNORBIDCO AS),
OTDENHOLDCO
APS
AND
OTDELHOLDCO
INC.
February
6, 2008
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SECTION 9.
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EXHIBITS
Exhibit A
—
Form of Xxxx of Sale
Exhibit B
—
Form of Transition Services Agreement
STOCK AND ASSET PURCHASE AGREEMENT
(this “Agreement”) is
entered into as of February 6, 2008, by and among Alfanor 7152 AS (under change
of name to Otnorbidco AS), a private limited liability company organized under
the laws of Norway with Organization Number 992 106 034 (“Otnorbidco”),
Otdelholdco Inc., a Delaware corporation (“Otdelholdco”),
Otdenholdco ApS, a private limited company organized under the laws of Denmark
with Registration Number 31 08 95 06 (“Otdenholdco”,
collectively, with Otnorbidco and Otdelholdco, the “Buyer”), Alpharma
Inc., a Delaware corporation (“Parent”), Alpharma
(Luxembourg) S.àr.l., a private limited liability company organized under the
laws of Luxembourg, Alpharma Bermuda G.P., an exempt general partnership
organized under the laws of Bermuda (with Parent and Alpharma (Luxembourg)
S.àr.l. (acting through its Swiss finance branch), the “Asset Sellers”), and
Alpharma International (Luxembourg) S.àr.l., a private limited liability company
organized under the laws of Luxembourg (the “Share
Seller”). Buyer, the Asset Sellers and the Share Seller are
referred to collectively herein as the “Parties”.
Parent indirectly owns, and the Share
Seller directly owns, all of the outstanding capital stock of the entities
listed as Target Companies in Section 4(b) of the Disclosure Schedule (the
“Target
Companies”), except as disclosed in Section 4(b) of the Disclosure
Schedule. Parent indirectly owns, and the Target Companies directly
or indirectly own, all of the outstanding capital stock or equity interests (as
the case may be) of the entities listed as Target Subsidiaries in Section 4(b)
of the Disclosure Schedule (the “Target
Subsidiaries”), except as disclosed in Section 4(b) of the Disclosure
Schedule.
This Agreement contemplates a
transaction (the “Transaction”) in
which (i) Otnorbidco will purchase from the Share Seller (and any other
entity which Parent may designate as an additional Share Seller as a result of
the Pre-Closing Restructuring), and the Share Seller (and any other entity which
Parent may designate as an additional Share Seller as a result of the
Pre-Closing Restructuring) will sell to Otnorbidco, all of the outstanding
capital stock of the Target Companies in return for cash and
(ii) Otdelholdco will purchase from Asset Sellers, and Asset Sellers will
sell to Otdelholdco, certain assets of Asset Sellers in return for cash and the
assumption of certain liabilities.
3i Europartners Va LP, 3i Europartners
Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i Pan European Buyouts 2006-08B LP
and 3i Pan European Buyouts 2006-08C LP (collectively, the “Sponsor Funds”) and
Buyer have executed and delivered to the Sellers, in connection with the
execution and delivery of this Agreement, a commitment letter dated as of the
date of this Agreement pursuant to which the Sponsor Funds have issued equity
commitments to Buyer, the proceeds of which will be used to pay a portion of the
Purchase Price and the fees and expenses relating to the transactions
contemplated by this Agreement (such commitment letter is referred to as the
“Equity Financing
Commitments”).
Certain
financial institutions have executed and delivered to Buyer, and Buyer has
delivered to Parent in connection with the execution and delivery of this
Agreement, a commitment letter dated January 23, 2008, as amended by the letter
dated February 6, 2008 (the “Commitment Letter”)
(which includes an executed and effective Interim Loan Agreement, as amended by
the letter dated February 6, 2008 (the “Interim Loan
Agreement”)), pursuant to which such financial institutions have issued
lending commitments to Buyer, the proceeds of which will be used to pay a
portion of the Purchase Price and the fees and expenses relating to the
transactions contemplated by this Agreement (the Commitment Letter, together
with the Interim Loan Agreement and the condition satisfaction letter dated
February 6, 2008, is referred to as the “Debt Financing
Commitments”; the Debt Financing Commitments and the Equity Financing
Commitments are referred to as the “Financing
Commitments”).
NOW, THEREFORE, in consideration of the
premises and the mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the Parties agree
as follows.
“Accounting Firm” has
the meaning set forth in Section 2(g)(iii) below.
“Acquired Assets” has
the meaning set forth in Section 1(A) of the Disclosure Schedule.
“Affiliate” means,
with respect to any Person, another Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person.
“Agreement” has the
meaning set forth in the preface above.
“AH Competitive
Activities” has the meaning set forth in Section 6(e)(ii)
below.
“Alpharma Credit Agreement
Lien” means any security interest, pledge or other Lien in existence
immediately prior to the Closing under the Credit Agreement as amended and
restated as of March 10, 2006, by and among Parent and certain of its
Subsidiaries and Bank of America, N.A., as Administrative Agent, and the lenders
party thereto from time to time, as amended, supplemented or otherwise modified
from time to time, with respect to the Acquired Assets, Target Shares, shares of
the Target Subsidiaries or any assets of the Target Companies or the Target
Subsidiaries.
“Alpharma Global Insurance
Program” means the portfolio of property, casualty and executive
liability insurance policies of Parent and its Subsidiaries with respect to the
operations of Parent and its Subsidiaries which are negotiated and administered
by Parent’s corporate risk management department (including the Global
Liability, Global Property, Global Transit, Surety, Director’s and Officer’s
Liability and other executive management liabilities policies, and the
U.S. Casualty program).
“Allocation” has the
meaning set forth in Section 9(l)(i) below.
“Allocation Schedule”
has the meaning set forth in Section 9(l)(ii) below.
“Alternative
Structuring” has the meaning set forth in Section 5(a) of the Disclosure
Schedule.
“Ancillary Agreements”
means the other agreements and instruments (including any foreign transfer
agreements which shall conform to the provisions hereof except as may be
necessary to comply with applicable Law) executed and delivered in connection
with the transactions contemplated by this Agreement.
“API Competitive
Activities” has the meaning set forth in Section 6(e)(i)
below.
“Asset Sellers” has
the meaning set forth in the preface above.
“Assumed Employees”
shall have the meaning set forth in Section 6(g)(ii) below.
“Assumed Intercompany
Receivables” means the receivables described in Section 1(B) of the
Disclosure Schedule that are owed by the Target Companies or Target Subsidiaries
to the Asset Sellers.
“Assumed Liabilities”
has the meaning set forth in Section 1(C) of the Disclosure
Schedule.
“BRO” has the meaning
set forth in Section 6(k) below.
“Bonus Obligations”
means any cash bonus payment accrued in respect of Employees of the Business
under the short-term incentive plan of Parent for calendar year
2007.
“Business” means
(A) the business of Parent and certain of its Subsidiaries as of the
Closing Date that develops, manufactures and markets active pharmaceutical
ingredients which are sold to third parties that formulate and manufacture
finished dose human pharmaceutical products comprised of such active
pharmaceutical ingredients and (B) the business of the Target Companies and
the Target Subsidiaries as of the Closing Date that develops, manufactures and
markets the finished pharmaceuticals set forth on Section 1(D) of the
Disclosure Schedule.
“Business Contracts”
has the meaning set forth in Section 1(A) of the Disclosure
Schedule.
“Buyer” has the
meaning set forth in the preface above.
“Buyer Entities”
means, as of and from the Closing Date, Buyer and its Affiliates and the Target
Companies and Target Subsidiaries.
“Buyer Indemnitee” has
the meaning set forth in Section 8(b) below.
“Chinese Sub” means
Alpharma (Taizhou) Pharmaceuticals Co., Ltd.
“Closing” has the
meaning set forth in Section 2(e) below.
“Closing Date” has the
meaning set forth in Section 2(e) below.
“Closing Net Cash
Balance” has the meaning set forth in Section 2(g)(i)
below.
“Closing Working
Capital” has the meaning set forth in Section 2(g)(i)
below.
“Code” means the
United States Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder by the United States Department of
Treasury from time to time.
“Collective Bargaining
Agreements” has the meaning set forth in Section 4(p)(i)
below.
“Commitment Letter”
has the meaning set forth in the preface above.
“Confidential Business
Information” has the meaning set forth in Section 6(i)
below.
“Confidentiality
Agreement” has the meaning set forth in Section 5(e)
below.
“Controlling Party”
has the meaning set forth in Section 9(f)(iii) below.
“Debt Financing” means
the debt financing provided to Buyer or its designees pursuant to the Debt
Financing Commitments (or any replacement commitments obtained by Buyer in
compliance with this Agreement).
“Debt Financing
Commitments” has the meaning set forth in the preface above.
“Disclosure Schedule”
has the meaning set forth in Section 3(a) below.
“Early Retirement
Obligations” means the payment obligations in respect of the letter
agreements issued to Employees of the Business and listed in
Section 6(g)(xi)(D) of the Disclosure Schedule.
“Employee Benefit
Plan” means any “employee benefit plan” (as such term is defined in ERISA
Section 3(3)) and any other plan, program, arrangement, practice or
agreement providing for compensation, severance, termination pay, deferred
compensation, retirement, pension, bonus awards, performance awards, retention
or other change in control awards, incentive compensation, stock or
stock-related awards, fringe
benefits, social insurance or other material employee
benefits of any kind, whether written or unwritten or otherwise, funded or
unfunded.
“Employees of the
Business” means (i) all Persons employed on the Closing Date by the
Target Companies and the Target Subsidiaries and (ii) those employees of
Parent and its Subsidiaries who on the Closing Date work in the operation of the
Business, including in all cases, any employees who as of the Closing Date are
on approved leave of absence (including medical leave and short-term or
long-term disability) or vacation; provided that such
Person returns to work within 180 days after the Closing or is otherwise
entitled to reinstatement under any applicable Law upon presenting themselves
for duty to the Business.
“Environmental Claim”
mean any administrative, regulatory or judicial action, suit, order, demand,
claim, proceeding or written notice of noncompliance or violation by or from any
Person alleging liability arising out of, based on or resulting from (a) any
past or present release or threatened release of, or exposure to, any Hazardous
Substances at any location or (b) the failure to comply with any Environmental
Law.
“Environmental Laws”
means any applicable Law or Judgment issued, promulgated or entered into, by or
with any Governmental Entity relating to pollution, the protection of the
environment (including ambient air, surface water, groundwater, soils, land
surface or subsurface strata) or preservation or reclamation of natural
resources, including Laws relating to the use, generation, management, handling,
transport, treatment, disposal, storage, release or threatened release of
hazardous or toxic materials or wastes.
“Environmental
Permits” has the meaning set forth in Section 4(o)(ii)
below.
“Equity Financing”
means the equity financing to be provided to Buyer or its designees pursuant to
the Equity Financing Commitments (or any replacement commitments obtained by
Buyer in compliance with this Agreement).
“Equity Financing
Commitments” has the meaning set forth in the preface above.
“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.
“Estimated Closing Net Cash
Balance” shall have the meaning set forth in
Section 2(b)(ii).
“Estimated Closing Working
Capital” shall have the meaning set forth in
Section 2(b)(iii).
“Exception Products”
has the meaning set forth in Section 6(e)(ii) below.
\
“Exception Product Sales
Cap” has the meaning set forth in Section 6(e)(ii)
below.
“Excluded Assets” has
the meaning set forth in Section 1(E) of the Disclosure Schedule.
“Excluded Liabilities”
has the meaning set forth in Section 1(F) of the Disclosure
Schedule.
“Extended Outside
Date” has the meaning set forth in Section 10(a)(i)(D).
“FDA” means the
United States Food and Drug Administration, and any successor agency or
entity thereto that may be established hereafter.
“FDA Act” means the
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301, et seq., as
amended.
“Financial Statements”
has the meaning set forth in Section 4(f)(i) below.
“Financing” means the
Debt Financing and the Equity Financing.
“Financing
Commitments” has the meaning set forth in the preface above.
“Foreign Merger Control
Laws” has the meaning set forth in Section 3(a)(iv)
below.
“FX Amount” has the
meaning set forth in Section 2(g)(ii) below.
“FX Contracts” has the
meaning set forth in Section 2(g)(ii) below.
“FX Notice of
Disagreement” has the meaning set forth in Section 2(g)(iii)
below.
“FX Statement” has the
meaning set forth in Section 2(g)(ii) below.
“GAAP” means generally
accepted accounting principles in the United States.
“Governmental Entity”
means any domestic or foreign government, court, administrative or regulatory
body or agency or other governmental authority.
“Xxxx-Xxxxx-Xxxxxx
Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“Hazardous Substance”
means any pollutant, contaminant, chemical, petroleum or any fraction thereof,
asbestos or asbestos-containing-material, polychlorinated biphenyls, or toxic,
infectious, biohazardous or otherwise hazardous substance, material or waste,
including all substances, materials or wastes (whether in the form of solid,
liquid, gas or vapor) defined as a “hazardous substance”, a “toxic
substance” or with words of similar import by, or
regulated or giving rise to liability under, any Environmental Law.
“Income Tax” means any
U.S. federal, state or local, or non-U.S. Tax measured by (or imposed on)
net income and any interest, penalty, fine, charge, or addition thereto, whether
disputed or not.
“Income Tax Return”
means any Tax Return relating to Income Taxes.
“Indebtedness” means,
of any Person at any date, without duplication, (a) all indebtedness of
such Person for borrowed money (other than accounts payable for goods and
services incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar instrument, (c) all
liabilities in respect of capital and finance leases and (d) all
obligations of such Person in respect of letters of credit and acceptances for
instruments serving a similar function) issued or created for the account of
such Person.
“Indemnified Party”
has the meaning set forth in Section 8(d)(i)(A) below.
“Indemnifying Party”
has the meaning set forth in Section 8(d)(i)(A) below.
“Initial Outside Date”
has the meaning set forth in Section 10(a)(i)(D).
“Insurance” means all
insurance benefits, including rights and proceeds, resulting from any
liabilities of any of the Asset Sellers or any of the Target Companies or Target
Subsidiaries arising out of any personal injury and/or death or damage to
property relating to or arising in connection with Products developed,
manufactured, marketed, distributed, sold or otherwise provided by, or on behalf
of, any of the Asset Sellers, the Target Companies or the Target Subsidiaries
that Seller has Knowledge of prior to the Closing.
“Insurance Policies”
has the meaning set forth in Section 4(q) below.
“Intellectual
Property” has the meaning set forth in Section 4(k)(iii)
below.
“Intercompany Assumed
Agreement” shall have the meaning set forth in Section 4(t)
below.
“Intercompany
Payables” means obligations owed by an Asset Seller (primarily relating
to the Business) or a Target Company or Target Subsidiary to Parent or any of
its Affiliates, other than an Assumed Intercompany Receivable.
“Intercompany
Receivables” means obligations owed to an Asset Seller (primarily
relating to the Business) or a Target Company or Target Subsidiary by Parent or
any of its Affiliates, other than an Assumed Intercompany
Receivable.
“Interim Loan
Agreement” has the meaning set forth in the preface above.
“Inventory” means all
finished goods, work in process and raw materials of the Business.
“Judgment” means any
judgment, order, decision, writ, injunction, legally binding agreement with a
Governmental Entity, stipulation, decree or similar legal
restraint.
“Knowledge” means,
with respect to Parent, the actual knowledge after reasonable inquiry of Xxxxxx
Xxxxxxxx, Xxxx-Aake Carlsson, Xxxxxxx Xxxxxxxx, Mikkel Lyager-Xxxxx, Xxxxxx X.
Xxxxxxxx III, Xxxxx Xxxxx, Xxxxx Xxxxxxxx, Stig Xxxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxx Xxxxxxx, Xxxxx Xxxxxxxxx and Torben Xxxx Xxxxxxx.
“Law” means any
statute, law, ordinance, rule, regulation, order or other binding directive
issued by any Governmental Entity.
“Leased Real Property”
means all leasehold or subleasehold estates and other rights to use or occupy
any land, buildings, structures, improvements, fixtures, or other interest in
real property that is primarily used in the Business.
“Leases” means all
leases, subleases, licenses and occupancy agreements, including all amendments,
extensions, renewals, guaranties, and other agreements with respect thereto,
pursuant to which an Asset Seller (to the extent primarily used in the Business)
or any of the Target Companies or any of the Target Subsidiaries holds any
material Leased Real Property.
“Lien” means any
mortgage, pledge, lien, security interest, easement, adverse claim, right of
first refusal, or similar encumbrance, restriction or limitation, other than
(i) liens for Taxes not yet due and payable or for Taxes that the taxpayer
is contesting through appropriate proceedings and (ii) restrictions under
the Securities Act and state securities Laws regarding the transfer of
securities.
“Losses” means all
loss, liability, claim, damage or expense, including reasonable legal fees,
costs and expenses, whether or not relating to Third Party Claims, incurred in
the investigation or defense of any of the same.
“Manufacturing
Facilities” means the facilities of the Target Companies or the Target
Subsidiaries located in Copenhagen, Denmark; Oslo, Norway; Budapest, Hungary;
and Taizhou, People’s Republic of China.
“Marketing Material”
has the meaning set forth in Section 6(f) below.
“Material Adverse
Effect” or “Material Adverse
Change” means any effect or change that is or would reasonably be
expected to be materially adverse to the business, assets, results of operations
or financial condition of the Business, taken as a whole; provided that none of
the following shall be deemed to constitute, and none of the following shall be
taken into account in determining whether there has been, a Material
Adverse
Effect or Material Adverse Change: any adverse change or effect
arising from or relating to (1) the economy in general, (2) the
economic, business, financial or regulatory environment generally affecting the
industry in which the Business operates, (3) an act of terrorism or an
outbreak or escalation of hostilities or war (whether declared or not declared)
or any natural disasters or any national or international calamity or crisis,
except to the extent such effect involves the properties or assets of the
Business, (4) changes in applicable Law or GAAP or the enforcement thereof
after the date of this Agreement, (5) the failure of the Business to meet
projections or forecasts, in and of itself (for the avoidance of doubt, any
underlying cause for any such failure shall not be excluded by this
clause (5)), (6) the announcement or pendency of the Transaction or
this Agreement or the performance of and compliance with the terms of this
Agreement, including any loss of employees, any cancellation of or delay in
customer orders or any disruption in supplier, distributor, partner or similar
relationships, (7) any labor strikes, (8) currency fluctuations or (9) any
change or fluctuations in Parent’s share price in and of itself (for the
avoidance of doubt, any underlying cause for any such change or fluctuation
arising from or relating to the business, assets, results of operations or
financial condition of the Business shall not be excluded from this clause (9));
except in the case of clauses (1) and (2) to the extent that such effect has a
materially disproportionate impact on the Business relative to other
participants in the industry in which the Business operates.
“Material Contract”
has the meaning set forth in Section 4(l) below.
“Material Intellectual
Property” has the meaning set forth in Section 4(k)(i)
below.
“Material Technology”
has the meaning set forth in Section 4(k)(ii) below.
“Maximum Working Capital
Amount” has the meaning set forth in Section 2(b)(iii)
below.
“Minimum Working Capital
Amount” has the meaning set forth in Section 2(b)(iv)
below.
“Negative Initial
Adjustment” has the meaning set forth in Section 2(b)(iv)
below.
“Net Cash Balance” has
the meaning set forth in Section 2(g)(v) below.
“Notice of
Disagreement” has the meaning set forth in Section 2(g)(iii)
below.
“Noncontrolling Party”
has the meaning set forth in Section 9(f)(iv) below.
“Non-Income Taxes”
means Taxes other than Income Taxes.
“Otdelholdco” has the
meaning set forth in the preface above.
“Otdenholdco” has the
meaning set forth in the preface above.
“Otnorbidco” has the
meaning set forth in the preface above.
“Owned Real Property”
means all land, together with all buildings, structures, improvements, and
fixtures located thereon, and all easements and other rights and interests
appurtenant thereto, owned by an Asset Seller or any of the Target Companies or
the Target Subsidiaries and primarily used in the Business, other than any
Retained Real Property.
“Parent” has the
meaning set forth in the preface above.
“Party” has the
meaning set forth in the preface above.
“Pension Obligations”
means the unfunded portion of the pension obligations of the Target Companies
and Target Subsidiaries calculated on a projected benefit obligation basis;
provided, that
for the purposes of determining the amount of such liabilities as of any date,
the methods and assumptions used in calculating such amount shall be the same
methods and assumptions employed by Parent in preparing Parent’s audited
financial statements (including the footnotes thereto) as of December 31,
2007.
“Permitted Liens”
means (i) such Liens as are set forth in Section 1(G) of the
Disclosure Schedule (all of which shall be discharged at or prior to Closing),
(ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, Liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course of business and Liens for
Taxes, (iii) other imperfections of title or encumbrances, if any, that,
individually or in the aggregate, do not impair, and are not reasonably likely
to impair, the continued use and operation of the assets to which they relate in
the conduct of the Business as currently conducted, (iv) leases, subleases
and similar agreements set forth on Section 4(j) of the Disclosure Schedule
or that may be entered into consistent with Section 5(d) of the
Disclosure Schedule, (v) easements, covenants, rights-of-way and other
similar restrictions of record and (vi) (A) zoning, building and other
similar restrictions and (B) Liens that have been placed by any developer,
landlord or other third party on property over which Parent or one of its
Subsidiaries has easement rights or on any Leased Real Property and
subordination or similar agreements relating thereto.
“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, any other business entity or a Governmental Entity (or any
department, agency, or political subdivision thereof).
“Positive Initial
Adjustment” has the meaning set forth in Section 2(b)(iii)
below.
“Post-Closing Tax
Period” means all Tax periods beginning on or after the Closing Date and
the portion of any Straddle Period beginning on and including such Closing
Date.
“Pre-Closing
Restructuring” has the meaning set forth in Section 5(a) of the
Disclosure Schedule.
“Pre-Closing Restructuring
Denial” has the meaning set forth in Section 5(a) of the Disclosure
Schedule.
“Pre-Closing Tax
Period” means all Tax periods ending before the Closing Date and the
portion of any Straddle Period ending before and excluding such Closing
Date.
“Preliminary Purchase
Price” has the meaning set forth in Section 2(b) below.
“Products” means the
products of the Business for which a filing or submission has been made to a
Regulatory Authority or an approval or certification has been received from a
Regulatory Authority.
“Property Taxes” has
the meaning set forth in Section 9(d)(i) below.
“Proposed Allocation”
has the meaning set forth in Section 9(l)(ii) below.
“Purchase Price” has
the meaning set forth in Section 2(g)(iv) below.
“Quotaholders
Agreement” has the meaning set forth in Section 5(a) of the Disclosure
Schedule.
“Real Property” means,
collectively, the Leased Real Property and the Owned Real Property.
“Records” has the
meaning set forth in Section 1(A) of the Disclosure Schedule.
“Regulatory Authority”
has the meaning set forth in Section 4(s)(i) below.
“Required Financial
Information” means financial and other information regarding the Business
of the type and in the form customarily included in confidential information
memoranda used to syndicate bank credit facilities similar to the Debt Financing
and customary “know your customer” and similar requirements; provided, however, that
Required Financial Information shall not include any audited financial
information.
“Restricted Assets”
shall have the meaning set forth in Section 2(d).
“Retained Real
Property” means the following facilities used in the Business, which are
owned by Parent or its Affiliates and shall not be transferred to
Buyer: Parent’s Warehouse and Distribution Facility located at 000
Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx 00000, in which Parent’s animal health
division performs certain services for the Business.
“Retention
Arrangements” means those letter agreements issued to Employees of the
Business and listed in Section 6(g)(xi)(A) of the Disclosure
Schedule.
“Retention Threshold”
has the meaning set forth in Section 6(g)(xi)(A) of the Disclosure
Schedule.
“SEC” has the meaning
set forth in Section 3(a) below.
“Securities Act” means
the Securities Act of 1933, as amended.
“Securities Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Seller Employee Benefit
Plan” means each Employee Benefit Plan that (a) any of the Asset Sellers
or the Target Companies or the Target Subsidiaries maintains or which any of the
Asset Sellers or the Target Companies or the Target Subsidiaries participates in
or to which they contribute and (b) covers any Employees of the Business or
their beneficiaries.
“Seller Indemnitee”
has the meaning set forth in Section 8(c) below.
“Seller Name” has the
meaning set forth in Section 6(f) below.
“Sellers” means the
Asset Sellers and the Share Seller, collectively.
“September Financial
Statements” has the meaning set forth in Section 4(f)(i)
below.
“Severance
Obligations” means the unpaid portion of the liabilities of the Target
Companies and Target Subsidiaries under the contracts listed in Section 1(H) of
the Disclosure Schedule.
“Share Seller” has the
meaning set forth in the preface above.
“Sponsor Funds” has
the meaning set forth in the preface above.
“Statement” has the
meaning set forth in Section 2(g)(i) below.
“Straddle Period” has
the meaning set forth in Section 9(d) below.
“Subsidiary” means,
with respect to any Person, any corporation, limited liability company,
partnership, association, or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without
regard to
the occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof and for this purpose,
a Person or Persons own a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of such business entity’s gains or losses or shall be or control any
managing director or general partner of such business entity (other than a
corporation). The term “Subsidiary” shall
include all Subsidiaries of such Subsidiary.
“Target Companies” has
the meaning set forth in the preface above.
“Target Company Benefit
Plan” shall have the meaning set forth in Section 4(n)(i)
below.
“Target Company Severance
Plans” shall have the meaning set forth in Section 6(g)(v)
below.
“Target Shares” means
the shares of capital stock of the Target Companies.
“Target Subsidiaries”
has the meaning set forth in the preface above.
“Tax” or “Taxes” means any
U.S. federal, state or local, or non-U.S. tax, including taxes with
respect to income, profits, gains, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Section 59A), capital duty, customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
duties resulting from liability assessments by a Taxing Authority or other tax,
including any interest, penalty, or addition thereto.
“Tax Indemnified
Party” has the meaning set forth in Section 9(f)(i)
below.
“Tax Indemnifying
Party” has the meaning set forth in Section 9(f)(i)
below.
“Tax Proceeding” has
the meaning set forth in Section 9(f)(i) below.
“Tax Return” means any
return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
“Taxing Authority”
means any Governmental Entity exercising any authority to impose, regulate or
administer the imposition of Taxes.
“Technology” has the
meaning set forth in Section 4(k)(iv) below.
“Termination Fee” has
the meaning set forth in Section 1(I) of the Disclosure Schedule.
“Third Party Claim”
has the meaning set forth in Section 8(d)(i)(A) below.
“TOGC” means the
transfer by any Asset Seller of assets within Article 5(8) of European
Union Directive 77/388 which is as a consequence of the relevant national Law
not subject to VAT.
“Transaction” has the
meaning set forth in the preface above.
“Transfer Taxes” has
the meaning set forth in Section 9(k) below, and for the avoidance of doubt
does not include VAT.
“Transferred
Employees” means those Employees of the Business who, as of the Closing
Date, remain or become employees of the Buyer Entities whether by operation of
Law or by acceptance of the Buyer Entities’ offer of employment pursuant to
Section 6(g).
“Transition Services
Agreement” shall have the meaning set forth in
Section 5(j).
“United States” or
“U.S.” means
the United States of America and its territories and possessions.
“VAT” means value
added Tax applied by any jurisdiction pursuant to European Union Directives
67/227 and 77/388, as amended or any similar value-added Tax imposed by a
jurisdiction outside the European Union.
“Working Capital” has
the meaning set forth in Section 2(g)(v) below.
“Working Capital
Principles” has the meaning set forth in Section 2(g)(v)
below.
“Working Capital
Schedule” has the meaning set forth in Section 2(g)(v)
below.
(a) Basic
Transaction. On
and subject to the terms and conditions of this Agreement, for the consideration
specified below in Section 2(b), (i) Otnorbidco agrees to purchase from the
Share Seller (and any other entity which Parent may designate as an
additional Share Seller as a result of the Pre-Closing
Restructuring), and the Share Seller agrees to sell to Otnorbidco (and Parent
agrees to cause any other entity that is designated by Parent as an additional
Share Seller as a result of the Pre-Closing Restructuring to sell), all of the
Target Shares free and clear of all Liens, (ii) Otnorbidco agrees to
purchase from the Asset Sellers, and the Asset Sellers agree to sell to
Otnorbidco, the Assumed Intercompany Receivables free and clear of all Liens
(other than Permitted Liens), (iii) Otdelholdco agrees to purchase from the
Asset Sellers, and the Asset Sellers agree to sell to Otdelholdco, the Acquired
Assets (other than the Acquired Intercompany Receivables) free and clear of all
Liens (other than Permitted Liens), and (iv) Buyer agrees to assume and
become responsible for all of the Assumed Liabilities at the Closing, without
recourse to Parent or its Subsidiaries (other than the Target Companies or
Target Subsidiaries), except as otherwise expressly set forth in this Agreement,
and thereafter to pay, perform and discharge when due, the Assumed
Liabilities.
(b) Preliminary Purchase
Price. Buyer agrees to pay to the Asset Sellers and the
Share Seller (and any other entity which Parent may designate as an additional
Share Seller as a result of the Pre-Closing Restructuring), at the Closing, by
delivery of cash payable by wire transfer or delivery of other immediately
available funds, an amount equal to:
(i) $395,000,000,
(ii) plus,
if the estimate of the Net Cash Balance as of the close of business on the last
business day prior to the Closing Date prepared by Parent and delivered to Buyer
at least three business days prior to the Closing Date (the “Estimated Closing Net Cash
Balance”) is positive, an amount equal to the Estimated Closing Net Cash
Balance, or minus, if the Estimated Closing Net Cash Balance is negative, an
amount equal to the Estimated Closing Net Cash Balance,
(iii) plus,
if the estimate of the Working Capital as of the close of business on the last
business day prior to the Closing Date prepared by Parent and delivered to Buyer
at least three business days prior to the Closing Date (the “Estimated Closing Working
Capital”) exceeds $41,600,000 (the
“Maximum Working
Capital Amount”), the amount by which the Estimated Closing Working
Capital exceeds the Maximum Working Capital Amount (such amount, if any, the
“Positive Initial
Adjustment”),
(iv) minus,
if the Estimated Closing Working Capital is less than $39,600,000 (the
“Minimum Working
Capital Amount”), the amount by which the Minimum Working Capital Amount
exceeds the Estimated Closing Working Capital (such amount, if any, the “Negative Initial
Adjustment”),
(such
amount as adjusted, the “Preliminary Purchase
Price”) allocated among the Target Shares and the Acquired Assets in
accordance with the Allocation (set forth in Section 9(l) below) if the
Allocation is completed on or prior to the Closing Date. If the Allocation is
not completed on the Closing Date, the Preliminary Purchase Price shall be paid
in such amounts and to such accounts as the Asset Sellers and the Share Seller
(and
any other entity which Parent may designate as an
additional Share Seller as a result of the Pre-Closing Restructuring) shall
direct. The Preliminary Purchase Price shall be subject to
post-Closing adjustment as set forth below in Section 2(g).
(c) Pre-Closing
Transfers. Upon the terms and subject to the conditions
set forth in this Agreement, prior to the Closing, Parent shall, and shall cause
its Subsidiaries (including the Target Companies and Target Subsidiaries) to,
make such contributions, transfers, assignments and acceptances, such that, upon
the consummation of such contributions, transfers, assignments and acceptances,
Parent or its designees shall own the Excluded Assets and shall be responsible
for the Excluded Liabilities, without further recourse to any Target Company or
Target Subsidiary, other than as contemplated by
Section 6(a). In furtherance of the foregoing, (i) Parent
shall retain, and neither Buyer nor any Target Company or Target Subsidiary
shall acquire, and no Target Company or Target Subsidiary shall retain, any
interest in the Excluded Assets and (ii) Parent shall retain, and neither
Buyer nor any Target Company or Target Subsidiary shall assume, and no Target
Company or Target Subsidiary shall retain, any Excluded Liability, in each case,
other than as contemplated by Section 6(a).
(d) Restricted
Assets. Notwithstanding any other provision in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign or transfer any interest in any asset, claim, right or benefit the
assignment or transfer of which is otherwise contemplated by this Agreement if
such assignment or transfer (or attempt to make such an assignment or transfer)
without the consent or approval of a third party would constitute a breach or
other contravention of the rights of such third party, or affect adversely the
rights of any Party or their Affiliates thereunder (such assets being
collectively referred to herein as “Restricted Assets”);
and any assignment or transfer of a Restricted Asset shall be made subject to
such consent or approval being obtained. If any such consent or
approval is not obtained prior to the Closing, (i) Parent shall continue,
upon request of Buyer, to use its reasonable best efforts to cooperate with
Buyer in attempting to obtain any such consent or approval and (ii) to the
extent practicable, the Buyer and Parent agree to negotiate in good faith with
respect to alternative arrangements (such as a license, sublease or operating
agreement) until such time as such consent or approval has been obtained which
result in Buyer or its Affiliates receiving all the benefits and bearing all the
costs, liabilities and burdens with respect to any such Restricted Asset; provided that Buyer
shall pay or satisfy all the reasonable and documented out-of-pocket costs,
expenses, obligations and liabilities incurred by Parent or its Affiliates in
connection with any such alternative arrangements; provided further that
Parent shall have no obligation to pay money or make any concessions to obtain
consents. Nothing in this Section 2(d) shall be deemed a waiver by
Buyer to receive an effective assignment of the Acquired Assets upon the receipt
of any such consent or approval nor shall any of the Restricted Assets be deemed
Excluded Assets for any other purposes hereunder.
(e) The
Closing. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall take
place at the offices of Cravath, Swaine & Xxxxx LLP in New York, New
York commencing at 10:00 a.m. local time on the fifth business day following the
satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as Buyer and Parent may mutually
determine (the “Closing
Date”). The Closing shall be deemed to occur and be effective
in each relevant jurisdiction as of the close of business on the last business
day prior to the Closing Date in each such jurisdiction and Buyer will be deemed
to have acquired all the Acquired Assets and Target Shares and assumed all the
Assumed Liabilities as of such time.
(f) Deliveries at
Closing. At the Closing, (i) Parent will deliver to
Buyer the certificates referred to in Section 7(a) below, (ii) Buyer
will deliver to Parent the certificates referred to in Section 7(b) below,
(iii) Parent will deliver to Buyer stock certificates representing all of
the Target Shares, endorsed in blank or accompanied by duly executed assignment
documents or a certified true copy of the shareholders register evidencing the
registered transfer of the Target Shares and such other documents as may be
required to evidence the transfer of the Target Shares by applicable Law,
(iv) Parent or Parent’s Subsidiaries shall execute, acknowledge (if
appropriate), and deliver to Buyer (A) assignments in reasonable form,
including a Xxxx of Sale in the form attached hereto as Exhibit A and
(B) such other documents as Buyer and its counsel may reasonably request to
demonstrate satisfaction of the conditions and compliance with the covenants set
forth in this Agreement, including the sale, transfer, delivery and assumption
of the Target Shares, the Acquired Assets and the Assumed Liabilities to or by
Buyer or its designees; (v) Parent shall deliver to Buyer the written
resignation of each member of the Board of Directors, Board of Managers or the
equivalent governing body, as applicable, of each of the Target Companies and
the Target Subsidiaries; (vi) Buyer will execute, acknowledge (if
appropriate), and deliver to Parent (A) a Xxxx of Sale in the form attached
hereto as Exhibit A and (B) such other documents as Parent and its
counsel may reasonably request to demonstrate satisfaction of the conditions and
compliance with the covenants set forth in this Agreement, including the sale,
transfer, delivery and assumption of the Target Shares, the Acquired Assets and
the Assumed Liabilities to or by Buyer or its designees; and (vii) Buyer
will deliver to Parent the consideration specified in Section 2(b)
above.
(g) Post-Closing Purchase Price
Adjustment. (i) Within 60 days after the
Closing Date, Buyer shall prepare and deliver to Seller a statement (the “Statement”) setting
forth (A) an unaudited balance sheet of the Business as of the close of Business
on the last business day prior to the Closing Date, (B) the Working Capital as
of the close of business on the last business day prior to the Closing Date (the
“Closing Working
Capital”) and (C) the Net Cash Balance of the Business as of the close of
business on the last business day prior to the Closing Date (the “Closing Net Cash
Balance”).
(ii) Parent
shall use reasonable best efforts to close out all foreign exchange contracts
held by any Target Company or Target Subsidiary prior to the Closing
Date. In the event Parent is unable to cause any such contracts to be
closed out prior to the Closing Date, on the Closing Date Parent shall deliver
to Buyer a list of the foreign exchange contracts held by any Target Company or
Target Subsidiary as of the close of business on the business day prior to the
Closing Date as part of the treasury activities of Parent and its Subsidiaries
(the
“FX
Contracts”). Buyer and its Subsidiaries shall maintain the FX
Contracts for their duration, including paying any notional amounts due or
receiving any notional amounts from the counterparty under the FX Contracts and
closing out the positions as required pursuant to the terms of the FX
Contracts. Within 60 days following the Closing Date, and only after
all positions under the FX Contracts are closed, the Buyer shall deliver to
Parent a statement showing all notional amounts paid and received under each of
the FX Contracts (including amounts paid or received when the contract is
closed) (the “FX Statement”) and the aggregate amount of the net gain or loss
reflected by such notional amounts paid and received (the “FX
Amount”).
(iii) During
the 30 day period following Parent’s receipt of the Statement, Parent and its
accountants shall be permitted to review the working papers of Buyer and its
accountants relating to the Statement; provided that Parent
and its advisors, including its accountants, shall have executed all release
letters reasonably requested by Buyer’s accountants in connection
therewith. During the 30 day period following Parent’s receipt of the
FX Statement, Parent shall be permitted to review the books and records of Buyer
and its Subsidiaries relating to the FX Statement. The Statement
shall become final and binding upon the Parties on the 30th day following
delivery thereof to Parent, unless Parent gives written notice of its
disagreement with the Statement (the “Notice of
Disagreement”) to Buyer prior to such date. Any Notice of
Disagreement shall be signed by Parent and shall (A) specify in reasonable
detail the nature of any disagreement so asserted, (B) only include
disagreements based on mathematical errors or based on the Closing Working
Capital or Closing Net Cash Balance not being calculated in accordance with this
Section 2(g) and (C) specify what Parent reasonably believes is the
correct amount of the Closing Working Capital and Closing Net Cash Balance based
on the disagreements set forth in the Notice of Disagreement, including a
reasonably detailed description of the adjustments applied to the Statement in
calculating such amount. The FX Statement shall become final and
binding upon the Parties on the 30th day following delivery thereof to Parent,
unless Parent gives written notice of its disagreement with the FX Statement
(the “FX Notice of
Disagreement”) to Buyer prior to such date. Any FX Notice of
Disagreement shall be signed by Parent and shall (A) specify in reasonable
detail the nature of any disagreement so asserted, (B) only include
disagreements based on mathematical errors or based on the FX Amount being
incorrectly calculated and (C) specify what Parent reasonably believes is
the correct FX Amount based on the disagreements set forth in the FX Notice of
Disagreement, including a reasonably detailed description of the adjustments
applied to the FX Statement in calculating such amount. If the Notice
of Disagreement or the FX Notice of Disagreement, as applicable, is received in
a timely manner, then the Statement or the FX Statement, as applicable (as
revised in accordance with this sentence), shall become final and binding upon
Buyer and Parent on the earlier of (A) the date Buyer and Parent resolve in
writing any differences they have with respect to the matters specified in the
Notice of Disagreement or the FX Notice of Disagreement, as applicable, or (B)
the date any disputed matters are finally resolved in writing by the Accounting
Firm. During the 30 day periods following
the
delivery of the Notice of Disagreement and the FX Notice of Disagreement, Buyer
and Parent shall seek in good faith to resolve in writing any differences that
they may have with respect to the matters specified in the Notice of
Disagreement or the FX Notice of Disagreement, as applicable. During
the 30 day period following delivery of the Notice of Disagreement, Buyer and
its accountants shall have access to the working papers of Parent prepared in
connection with the Notice of Disagreement; provided that Buyer
and its advisors, including its accountants, shall have executed all release
letters reasonably requested by Parent’s accountants in connection
therewith. At the end of such 30 day periods, Buyer and Parent shall
submit to an independent accounting firm (the “Accounting Firm”) for
resolution any matters that remain in dispute and which were properly included
in the Notice of Disagreement and the FX Notice of Disagreement, in the form of
a written brief. The Accounting Firm shall be KPMG or, if such firm is unable or
unwilling to act, such other internationally recognized independent public
accounting firm as shall be agreed upon by Parent and Buyer in
writing. Buyer and Parent shall jointly instruct the Accounting Firm
that it (i) shall review only the matters that were properly included in the
Notice of Disagreement and the FX Notice of Disagreement and which remain
unresolved, (ii) shall make its determination in accordance with the
requirements of this Section 2(g) and (iii) shall render its decision
within 30 days from the submission of such matters. Judgment may be
entered upon the determination of the Accounting Firm in any court having
jurisdiction over the Party against which such determination is to be enforced.
The fees, costs and expenses of the Accounting Firm incurred pursuant to this
Section 2(g) shall be borne 50% by Parent and 50% by Buyer.
The fees,
costs and expenses of Parent incurred in connection with its review of the
Statement, its preparation and certification of any Notice of Disagreement, its
review of the FX Statement, its preparation and certification of any FX Notice
of Disagreement and its preparation of any written brief submitted to the
Accounting Firm shall be borne by Parent, and the fees, costs and expenses of
Buyer incurred in connection with its preparation of the FX Statement, its
review of any FX Notice of Disagreement, its preparation of the Statement, its
review of any Notice of Disagreement and its preparation of any written brief
submitted to the Accounting Firm shall be borne by Buyer.
(iv) The
Preliminary Purchase Price shall be adjusted as follows:
(A) if the Closing Working
Capital exceeds the Maximum Working Capital Amount, the Preliminary Purchase
Price shall be increased by the sum of (I) the amount by which the Closing
Working Capital exceeds the Maximum Working Capital Amount minus (II) the
Positive Initial Adjustment (if any) plus (III) the Negative Initial Adjustment
(if any), or decreased by the absolute value of such sum if such sum is a
negative amount,
(B) if the Closing Working
Capital is less than the Minimum Working Capital Amount, the Preliminary
Purchase Price shall be decreased by the sum of (I) the amount by which the
Minimum Working Capital Amount exceeds the Closing Working Capital minus (II)
the Negative Initial Adjustment (if any) plus (III) the Positive Initial
Adjustment (if any), or increased by the absolute value of such sum if such sum
is a negative amount,
(C) if the Closing Working
Capital is between the Minimum Working Capital Amount and the Maximum Working
Capital Amount, the Preliminary Purchase Price shall be increased by the amount
of the Negative Initial Adjustment (if any) or decreased by the amount of the
Positive Adjustment (if any),
(D) if the Closing Net Cash
Balance exceeds the Estimated Closing Net Cash Balance, the Preliminary Purchase
Price shall be increased by such excess,
(E) if the Estimated Closing
Net Cash Balance exceeds the Closing Net Cash Balance, the Preliminary Purchase
Price shall be decreased by such excess, and
(F) the Preliminary Purchase
Price shall be increased by the FX Amount if a net gain or decreased by the FX
Amount if a net loss,
(the
Preliminary Purchase Price as so adjusted shall hereinafter be referred to as
the “Purchase
Price”). If the Preliminary Purchase Price is less than the
Purchase Price, Buyer shall, and if the Preliminary Purchase Price is more than
the Purchase Price, Parent shall, within 10 business days after the Statement
becomes final and binding on the Parties, make payment by wire transfer of
immediately available funds of the amount of such difference, together with
interest thereon at a rate equal to the rate of interest from time to time
announced publicly by Citibank, N.A., as its prime rate, calculated on the basis
of the actual number of days elapsed divided by 365, from (and including) the
Closing Date through (but not including) the date of payment. The
difference between the Purchase Price and the Preliminary Purchase Price shall
be allocated among the Target Shares and the Acquired Assets in accordance with
the Allocation (set forth in Section 9(l) below) if the Allocation is
completed at the time such difference is paid. If the purchase price
adjustment contemplated by this Section 2(g) has to be paid by Buyer and
the Allocation is not completed at the time such purchase price adjustment is
paid, the difference between the Purchase Price and the Preliminary Purchase
Price shall be paid in such amounts and to such accounts as Sellers shall
direct.
(v) “Working Capital”
means, as of any date, the sum of net accounts receivable, inventories, prepaid
expenses and other current assets, accounts payable and accrued expenses of the
Business as adjusted in accordance with Section 2(g)(v) of the Disclosure
Schedule, in each case, as of the close of business on such date; provided, that
“Working Capital” shall not include any
item
included in the Net Cash Balance, any gains or losses under an FX Contract, any
refund, credit, or other asset relating to any Income Tax or any accrual with
respect to Income Taxes for any Pre-Closing Tax Period, deferred tax assets or
liabilities, accrued amounts for prepaid insurance, any amount payable or
receivable pursuant to Intercompany Receivables, Intercompany Payables or
Assumed Intercompany Receivables, or any liabilities under the Retention
Arrangements or in respect of Severance Obligations, Bonus Obligations, Early
Retirement Obligations or Pension Obligations. The term “Net Cash Balance”
means, as of any date, (i) all cash and cash equivalents minus
(ii) any outstanding short term debt and long term debt (which shall not
include trade payables or capital or finance lease obligations related to the
Business, or any amounts payable or receivable pursuant to Intercompany
Receivables, Intercompany Payables, Assumed Intercompany Receivables or any
Intercompany Assumed Agreement) minus (iii) any accrued liabilities with respect
to the Bonus Obligations to the extent the Bonus Obligations are not paid prior
to Closing minus (iv) liabilities in respect of the Severance Obligations, the
Pension Obligations and the Early Retirement Obligations, in each case as of the
close of business on such date. Working Capital and Net
Cash Balance shall be calculated in accordance with GAAP but subject to the
methods, procedures, adjustments and practices, consistently applied, as the
corresponding line items of the working capital and net cash balance statement
as of September 30, 2007 set forth in Section 2(g)(v) of the
Disclosure Schedule (the “Working Capital
Schedule”), which shows the calculation of Working Capital and Net Cash
Balance based on the unaudited September 30, 2007 balance sheet included as
part of the September Financial Statements (except as otherwise provided in
Section 2(g)(v) of the Disclosure Schedule), whether or not such methods,
procedures, adjustments and practices are in accordance with GAAP (it being
understood that, in the event of any inconsistency between GAAP and the methods,
procedures, adjustments and practices pursuant to which the Working Capital
Schedule is prepared, the latter shall prevail). The foregoing
principles are referred to in this Agreement as the “Working Capital
Principles”. The scope of the disputes to be resolved by the
Accounting Firm shall be limited to whether there were mathematical errors in
the Statement or the FX Statement and whether the calculation of the Closing
Working Capital and Closing Net Cash Balance was done in accordance with the
Working Capital Principles and the FX Amount was calculated in accordance with
this Section 2(g), and the Accounting Firm is not to make any other
determination, including any determination as to whether GAAP was followed in
calculating the Maximum Working Capital Amount, the Minimum Working Capital
Amount, the FX Amount, the Estimated Closing Working Capital, the Estimated
Closing Net Cash Balance, the Working Capital Schedule, the Financial Statements
or the FX Statement or as to whether the Maximum Working Capital Amount or
Minimum Working Capital Amount was correctly determined, or conduct any review
of or make any adjustments to the methods or assumptions used to calculate the
Pension Obligations. Any item included in, or any omission from, the
line items of the Working Capital Schedule that is based upon errors of fact or
mathematical errors or that is not in accordance with GAAP
shall be
retained for purposes of calculating the Closing Working Capital and the Closing
Net Cash Balance, except as provided in Section 2(g)(v) of the Disclosure
Schedule.
(vi) Following
the Closing, Buyer shall not take any action with respect to the accounting
books and records of the Business on which the Statement and the FX Statement is
to be based that would obstruct, prevent or otherwise affect the results of the
procedures set forth in this Section 2(g) (including the amount of the
Closing Working Capital, Closing Net Cash Balance, the FX Amount or any other
amount included Statement or the FX Statement or the preparation or review of
the Statement or the FX Statement). From and after the Closing Date
through the resolution of any adjustment to the Preliminary Purchase Price
contemplated by this Section 2(g), Buyer shall (i) assist, and shall
cause its Subsidiaries (including the Target Companies and the Target
Subsidiaries) to assist, Parent, its accountants, advisors and other
representatives in its review of the Statement and the FX Statement and
(ii) afford to Parent, its accountants, advisors and other representatives,
reasonable access during normal business hours to the personnel, properties,
books and records of the Business to the extent relevant to the review of the
Statement and the FX Statement or the adjustment to the Preliminary Purchase
Price contemplated by this Section 2(g).
(a) Parent’s Representations and
Warranties. Except (a) as set forth in the disclosure
schedule delivered by Parent to Buyer on the date hereof (the “Disclosure Schedule”)
(each section of which qualifies the correspondingly numbered representation,
warranty or covenant and such other representations, warranties or covenants to
the extent it is reasonably apparent on the face of such disclosure that a
matter is relevant to the information called for by such other representation,
warranty or covenant) or (b) as disclosed in the reports, schedules, forms,
statements and other documents filed or furnished by Parent with or to the
United States Securities and Exchange Commission (the “SEC”) since January
1, 2007 and publicly available prior to the date of this Agreement, Parent
hereby represents and warrants to Buyer as of the date of this Agreement and as
of the Closing Date (except to the extent a representation or warranty is
expressly made as of an earlier date, in which case such representation or
warranty shall be deemed made as of that earlier date) as follows:
(i) Organization of Parent and
Certain of its Subsidiaries. Each Asset Seller and Share
Seller is duly organized, validly existing, and in good standing under the Laws
of the jurisdiction of its incorporation (or other formation).
(ii) Authorization of
Transaction. Parent and each of its Subsidiaries has full
power and authority (including full corporate or other entity power and
authority) to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement
and each of the Ancillary Agreements and all other agreements contemplated
hereby and
thereby have been duly authorized by Parent and its
Subsidiaries that are party thereto. The board of directors of Parent
has adopted a resolution approving this Agreement and the transactions
contemplated hereby. Each of the Asset Sellers and the Share Seller
has duly executed and delivered this Agreement and, prior to the Closing, each
of Parent’s Subsidiaries will have duly executed and delivered each Ancillary
Agreement to which it is, or is specified to be, a party, and, assuming their
due execution and delivery by Buyer or its Affiliates, as applicable, this
Agreement constitutes each of the Asset Sellers’ and the Share Seller’s, and
each Ancillary Agreement to which any of them is, or is specified to be, a party
will, after execution and delivery by Parent and/or each such Subsidiary,
constitute Parent’s and/or such Subsidiary’s, legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law.
(iii) Brokers’
Fees. Except for Banc of America Securities LLC, whose fees
and commissions will be paid by Parent, neither Parent nor any of Parent’s
Subsidiaries has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement or the Ancillary Agreements.
(iv) Noncontravention. The
Sellers are not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any Governmental Entity in connection
with the transactions contemplated by this Agreement or the Ancillary
Agreements, other than (A) compliance with and filings under the
Xxxx-Xxxxx-Xxxxxx Act and compliance with and filings and approvals under
applicable foreign merger control or competition Laws (the “Foreign Merger Control
Laws”), (B) compliance with and filings under the Securities
Exchange Act and the rules and regulations promulgated thereunder,
(C) compliance with and filings or notices required by the rules and
regulations of the New York Stock Exchange, (D) compliance with and filings with
the relevant Chinese authorities in respect of the equity transfer of the
Chinese Sub, (E) those that may be required solely by reason of Buyer’s (as
opposed to any third party’s) participation in the Transaction and the other
transactions contemplated by this Agreement and by the Ancillary Agreements,
(F) the filing of the relevant instruments in the requisite jurisdictions
in order to effect guarantees in respect of, or to create or perfect Liens
granted to secure, the Indebtedness and other obligations incurred as a result
of the consummation of the Debt Financing and (G) those the failure of
which to be obtained or made would not, individually and in the aggregate, have
or reasonably be expected to have a material adverse effect on the ability of
Parent to perform its obligations under this Agreement or prevent or materially
delay the consummation of the Transaction and the other transactions
contemplated by this Agreement. Neither the execution and delivery of
this Agreement and the Ancillary Agreements, nor the consummation of the
transactions contemplated hereby or thereby, will (i) subject to the
governmental filings or other matters referred to in the immediately preceding
sentence, violate
(A) any Judgment or Law applicable to the Sellers or (B)
any provision of the charter or bylaws, or other governing documents, of any
Seller or (ii) conflict with, result in a breach of, constitute a default
under (with or without notice or lapse of time or both), result in the
acceleration of or the loss of any benefit under, require any third party
consent under, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement, contract,
lease, license, instrument, or other arrangement to which any of the Sellers is
a party, other than, in the case of clauses (i)(A) and (ii) above, any such
instances that would not have or reasonably be expected to have a material
adverse effect on the ability of Sellers to perform their obligations under this
Agreement or prevent or materially delay the consummation of the Transactions
and the other transactions contemplated by this Agreement.
(v) Target
Shares. Except for the Alpharma Credit Agreement Lien (which
shall be released as of the Closing Date), each of the Target Shares is held of
record and owned beneficially by the Share Seller (and any other entity which
Parent may designate as an additional Share Seller as a result of the
Pre-Closing Restructuring) free and clear of any Liens and all capital stock of
the Target Subsidiaries is held of record and owned beneficially by the Target
Companies or Target Subsidiaries free and clear of any Liens. Upon
delivery of any payment for the Target Shares at Closing, Buyer will acquire
good and valid title to all of the Target Shares, free and clear of any Liens
(other than those Liens created by Buyer). Except for the Alpharma
Credit Agreement Lien, neither Parent nor any of its Subsidiaries is a party to
any option, warrant, purchase right, or other contract or commitment (other than
this Agreement) that could require Parent or any of its Subsidiaries to sell,
transfer, or otherwise dispose of any capital stock or equity interests (as the
case may be) of the Target Companies or Target Subsidiaries. Neither
Parent nor any of its Subsidiaries is a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any capital stock
of the Target Companies or Target Subsidiaries.
(vi) Litigation. As
of the date of this Agreement, there are not any (a) outstanding Judgments
applicable to the Sellers, (b) suits, actions or other proceedings pending or,
to the Knowledge of Parent, threatened against the Sellers or (c) investigations
by any Governmental Entity that are, to the Knowledge of Parent, pending or
threatened against the Sellers that, individually or in the aggregate, are
reasonably likely to have a material adverse effect on the ability of the
Sellers to perform their obligations under this Agreement or prevent or
materially delay the consummation of the Transaction and the other transactions
contemplated by this Agreement.
(b) Buyer’s Representations and
Warranties. Buyer
hereby represents and warrants to Sellers as of the date of this Agreement and
as of the Closing Date (except to the extent a representation or warranty is
expressly made as of an earlier date, in which case such representation or
warranty shall be deemed made as of that earlier date) as follows:
(i) Organization of
Buyer. Buyer is a corporation (or other entity) duly
organized, validly existing, and in good standing under the Laws of the
jurisdiction of its incorporation (or other formation).
(ii) Authorization of
Transaction. Buyer has full power and authority (including
full corporate or other entity power and authority) to execute and deliver this
Agreement and each of the Ancillary Agreements to which it is a party and to
perform its obligations hereunder and thereunder and to consummate the
Financing. Buyer has duly executed and delivered this Agreement and,
prior to the Closing, will have duly executed and delivered each Ancillary
Agreement to which it is, or is specified to be, a party, and, assuming their
due execution and delivery by Sellers, this Agreement constitutes, and each
Ancillary Agreement to which it is, or is specified to be, a party will, after
execution and delivery by Buyer, constitute, its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
Law. The execution, delivery and performance of this Agreement and
each of the Ancillary Agreements and all other agreements contemplated hereby or
thereby, including the Financing have been duly authorized by
Buyer.
(iii) Non-contravention. Neither
the execution and delivery of this Agreement and the Ancillary Agreements to
which it is a party, nor the consummation of the transactions contemplated
hereby or thereby, including the Financing, will (A) violate any Law or
Judgment to which Buyer is subject (subject to the governmental filings and
other matters referred to in the immediately following sentence) or any
provision of its charter, bylaws, or other governing documents or
(B) conflict with, result in a breach of, constitute a default under (with
or without notice or lapse of time or both), result in the acceleration of or
the loss of any benefit under, require any third party consent under, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Buyer is a party or by which it is bound or to which any of
its assets is subject, except for such instances which would not, individually
or in the aggregate, have or reasonably be expected to have a material adverse
effect on the ability of Buyer to perform its obligations under this Agreement
or prevent or materially delay the consummation of the Transaction and the other
transactions contemplated by this Agreement, including the
Financing. Buyer need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any Governmental Entity in
connection
with the transactions contemplated by this Agreement or
any Ancillary Agreement, including the Financing or the other transactions
contemplated hereby and thereby, other than (A) compliance with and filings
under the Xxxx-Xxxxx-Xxxxxx Act and compliance with and filings and approvals
under Foreign Merger Control Laws, (B) the filing of the relevant
instruments in the requisite jurisdictions in order to effect guarantees in
respect of, or to create or perfect Liens granted to secure, the Indebtedness
and other obligations incurred as a result of the consummation of the Debt
Financing and (C) those the failure of which to be obtained or made would
not, individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the ability of Buyer to perform its obligations under
this Agreement or prevent or materially delay the consummation of the
Transaction and the other transactions contemplated by this Agreement, including
the Financing.
(iv) Litigation. As
of the date of this Agreement, there are not any (a) outstanding Judgments
applicable to Buyer or any of its Affiliates, (b) suits, actions or other
proceedings pending or, to the knowledge of Buyer, threatened against Buyer or
any of its Affiliates or (c) investigations by any Governmental Entity that
are, to the knowledge of Buyer, pending or threatened against Buyer or any of
its Affiliates that would, individually or in the aggregate, have or reasonably
be expected to have a material adverse effect on the ability of Buyer to perform
its obligations under this Agreement or prevent or materially delay the
consummation of the Transaction and the other transactions contemplated by this
Agreement, including the Financing.
(v) Securities
Act. The Target Shares are being acquired for investment only
and not with a view to any public distribution thereof, and Buyer shall not
offer to sell or otherwise dispose of the Target Shares so acquired by it in
violation of any of the registration requirements of the Securities
Act.
(vi) Financing. Complete
and correct executed copies of the Financing Commitments have been delivered to
Parent on or prior to the date of this Agreement. Buyer has delivered
to Parent all written agreements, arrangements or understandings related to the
Financing (a) in the case of any such agreements, arrangements or understandings
entered into on or prior to the date of this Agreement, on or prior to the date
of this Agreement and (b) in the case of any such agreements, arrangements
or understandings entered into after the date of this Agreement, within three
business days after the entry thereof; provided that Buyer
may redact from any such documents, and omit from any such descriptions, the fee
amounts payable to their Financing sources. There are no conditions
or other contingencies to the funding of the Financing (including in any oral
agreements) other than those contained in the Financing Commitments (or in
replacement commitments obtained by Buyer in compliance with
Section 5(c)). Except to the extent permitted by
Section 5(c), none of the Financing Commitments (or any of the replacement
commitments obtained by Buyer in compliance with Section 5(c)) has been
amended, supplemented or otherwise modified and the commitments contained in the
Financing Commitments (or the
commitments contained in replacement commitments
obtained by Buyer in compliance with Section 5(c)) have not been reduced,
terminated, withdrawn or rescinded in any respect. The Financing
Commitments (or replacement commitments obtained by Buyer in compliance with
Section 5(c)) are in full force and effect and are the legal, valid and
binding obligations of Buyer and, to Buyer’s knowledge, the applicable
counterparties thereto. No event has occurred which, with or without
notice, lapse of time or both, would constitute a default or breach on the part
of Buyer under any term or condition of the Financing Commitments (or the
replacement commitments obtained by Buyer in compliance with Section 5(c))
that would constitute the failure of any of the conditions to the Financing
Commitments or would reasonably be expected to impair or delay the funding of
the Financing Commitments. Buyer has fully paid any commitment fees
or other fees incurred in connection with the Financing that have become due and
payable as of the date of this Agreement and will have fully paid all such fees
due and payable as of the Closing Date on or prior to the Closing
Date. The Financing, when funded in accordance with the Financing
Commitments (or replacement commitments obtained by Buyer in compliance with
Section 5(c)), will provide funds at the Closing sufficient to consummate
the Transaction and the other transactions contemplated by this Agreement and to
pay the related fees and expenses associated therewith. As of the
date of this Agreement, Buyer has no reason to believe that any of the
conditions or other contingencies to the Financing will not be satisfied upon
the satisfaction or (to the extent permitted by applicable Law) waiver of the
conditions set forth in Section 7 or that the Financing will not be
available to Buyer at the Closing.
(vii) Activities of
Buyer. Buyer was formed solely for the purpose of engaging in
the transactions contemplated by this Agreement, has not engaged in any business
activities or conducted any operations (other than in connection with the
transactions contemplated by this Agreement) and, prior to the Closing, will not
have incurred liabilities or obligations of any nature (other than in connection
with the transactions contemplated by this Agreement).
(viii) No Knowledge of
Misrepresentation or Omission. As of the date of this Agreement,
none of Buyer, its employees, agents or representatives has actual knowledge
that any representation or warranty of Parent in this Agreement is not true and
correct or there are any errors in or omissions from the Disclosure
Schedule.
(ix) No Other Representations and
Warranties. Except for the representations and warranties
contained in Sections 3(a) and 4 or in any certificate delivered by Parent
pursuant to this Agreement, Buyer acknowledges that none of Sellers nor any
Person on behalf of Parent makes or has made any other express or implied
representation or warranty with respect to the Transaction or the other
transactions contemplated by this Agreement, with respect to Sellers or the
Business or with respect to any other information provided or made available to
Buyer in connection with the transactions contemplated by this Agreement
(including in any “data rooms” or management
presentations). None of Parent or its
Affiliates shall have or be subject to any liability or indemnification
obligation to Buyer or any other Person resulting from the distribution to
Buyer, or Buyer’s use of, any such information. Buyer acknowledges
that, should the Closing occur, Buyer shall acquire the Target Shares and the
Acquired Assets without any representation or warranty (including as to
merchantability or fitness for any particular purpose), express or implied, at
law or in equity, in an “as is” condition and on a “where is” basis, except as
otherwise expressly represented or warranted in Sections 3(a) or 4 or in
any certificate delivered by Parent pursuant to this Agreement.
(x) Brokers’
Fees. Except for Xxxxxxx Xxxxx International, whose fees and
commissions will be paid by Buyer, Buyer and its Affiliates have no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement or the Ancillary
Agreements.
SECTION 4. Representations and
Warranties Concerning the Business and the Target Companies and Target
Subsidiaries. Except
(a) as set forth in the Disclosure Schedule (each section of which qualifies the
correspondingly numbered representation, warranty or covenant and such other
representations, warranties or covenants to the extent it is reasonably apparent
on the face of such disclosure that a matter is relevant to the information
called for by such other representation, warranty or covenant) or (b) as
disclosed in the reports, schedules, forms, statements and other documents filed
or furnished by Parent with or to the SEC since January 1, 2007 and publicly
available prior to the date of this Agreement, Parent hereby represents and
warrants to Buyer as of the date of this Agreement and as of the Closing Date
(except to the extent a representation or warranty is expressly made as of an
earlier date, in which case such representation or warranty shall be deemed made
as of that earlier date) as follows:
(a) Organization, Qualification,
and Corporate Power. Each
of the Target Companies and the Target Subsidiaries are corporations duly
organized, validly existing, and, to the extent applicable in such jurisdiction,
in good standing under the Laws of the jurisdiction of their
incorporation. Each of the Target Companies and the Target
Subsidiaries are duly authorized to conduct business and are in good standing
(or of similar status to the extent such status exists in such company’s
jurisdiction of formation) under the Laws of each jurisdiction where such
qualification is required. Each of the Target Companies and the
Target Subsidiaries have full corporate power and authority to carry on the
business in which they are engaged and to own, lease and use the properties
owned and used by them.
(b) Capitalization. (i) Section 4(b)
of the Disclosure Schedule sets forth for each of the Target Companies and
Target Subsidiaries (A) its name and jurisdiction of incorporation and
(B) the entity which owns the capital stock of or equity interests (as the
case may be) in each such Target Company or Target Subsidiary.
(ii) All
of the issued and outstanding Target Shares of the Target Companies have been
duly authorized, are validly issued, fully paid, and non-assessable (or of
similar status to the extent such status exists in such company’s jurisdiction
of formation), and are held of record and owned beneficially by the Share Seller
(and such other entity which Parent may designate as an additional Share Seller
as a result of the Pre-Closing Restructuring) as set forth in Section 4(b)
of the Disclosure Schedule and were not issued in contravention of any
preemptive rights, rights of first refusal or first offer or similar rights or
applicable foreign, federal or state securities laws. All of the
issued and outstanding shares of capital stock of the Target Subsidiaries have
been duly authorized, are validly issued, fully paid, and non-assessable (or of
similar status to the extent such status exists in such company’s jurisdiction
of formation), and are held of record and owned beneficially by the Target
Companies or Target Subsidiaries as set forth in Section 4(b) of the
Disclosure Schedule. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require any of the Target
Companies or Target Subsidiaries to issue, sell, or otherwise cause to become
outstanding any of its capital stock or to make any further capital
contribution. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting stock of the Target
Companies or Target Subsidiaries. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any of the Target Companies or Target Subsidiaries. None
of the Target Companies or the Target Subsidiaries owns any material amount of
shares of capital stock of, or other equity interests (or any other securities
convertible into or exchangeable for such shares or interests) in any other
Person.
(c) Non-contravention. Neither
the execution and delivery of this Agreement and the Ancillary Agreements, nor
the consummation of the transactions contemplated hereby or thereby, will
(i) subject to the governmental filings or other matters referred to in the
immediately following sentence, violate (A) any Judgment or Law applicable to
any of the Target Companies or the Target Subsidiaries or (B) any provision of
the charter or bylaws, or other governing documents, of such Person
(ii) conflict with, result in a breach of, constitute a default under (with
or without notice or lapse of time or both), result in the acceleration of or
the loss of any benefit under, require any third party consent under, or create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any material agreement, contract, lease, license, instrument,
or other arrangement to which any of the Target Companies or Target Subsidiaries
is a party or by which any of the assets or properties of the Business is
subject or (iii) result in the imposition or creation of any Lien, other
than Permitted Liens, upon or with respect to the Target Shares or the Acquired
Assets or any of the assets or properties of the Target Companies or Target
Subsidiaries, other than, in the case of clauses (i)(A), (ii) and (iii) above,
any such instances that would not, individually and in the aggregate, have a
Material Adverse Effect. The Target Companies and the Target
Subsidiaries are not required to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any Governmental Entity in
connection with the transactions contemplated by this Agreement or the Ancillary
Agreements, other than (A) compliance with and
filings under the Xxxx-Xxxxx-Xxxxxx Act and compliance with and filings and
approvals under the Foreign Merger Control Laws, (B) compliance with and
filings under the Securities Exchange Act and the rules and regulations
promulgated thereunder, (C) compliance with and filings or notices required
by the rules and regulations of the New York Stock Exchange, (D) compliance with
and filings with the relevant Chinese authorities in respect of the equity
transfer of the Chinese Sub, (E) those that may be required solely by reason of
Buyer’s (as opposed to any third party’s) participation in the Transaction and
the other transactions contemplated by this Agreement and by the Ancillary
Agreements, (F) the filing of the relevant instruments in the requisite
jurisdictions in order to effect guarantees in respect of, or to create or
perfect Liens granted to secure, the Indebtedness and other obligations incurred
as a result of the consummation of the Debt Financing and (G) those the
failure of which to be obtained or made would not, individually and in the
aggregate, have a Material Adverse Effect.
(d) Title to Tangible
Assets. The Target Companies and the Target Subsidiaries
have good and valid title to, or a valid leasehold interest in, the material
tangible assets used primarily in the conduct of the Business. The
Asset Sellers have good and valid title to, or a valid leasehold
interest in, the material tangible Acquired Assets.
(e) Sufficiency of
Assets. The Acquired Assets, the assets and properties
that will be owned by the Target Companies and Target Subsidiaries immediately
following the Closing, the assets and properties of which any Target Company or
Target Subsidiary will be a lessee, sublessee or licensee immediately following
the Closing and the assets and properties which Buyer and its Affiliates,
including the Target Companies and Target Subsidiaries, will have the right to
use pursuant to the Transition Services Agreement, comprise all the assets and
properties (tangible or intangible) primarily employed by the
Business. Such assets and properties will be sufficient for the
conduct of the Business immediately following the Closing in substantially the
same manner as currently conducted.
(f) Financial
Statements; No
Undisclosed Liabilities. (i) Section 4(f)(i)
of the Disclosure Schedule includes copies of the following financial statements
(collectively the “Financial
Statements”): (A) an unaudited consolidated balance sheet of the
Business, as of December 31, 2006, (B) an unaudited statement of
operations and cash flow for the fiscal year ended December 31, 2006, with
respect to the Business, (C) an unaudited consolidated balance sheet of the
Business as of September 30, 2007, and (D) an unaudited statement of
operations and cash flow for the nine months ended September 30, 2007, with
respect to the Business (such Financial Statements referred to in clauses (C)
and (D) above, the “September Financial
Statements”). The Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP on the basis of the same
accounting principles, policies, methods and procedures consistently applied
throughout the periods covered thereby and present fairly in all material
respects the financial condition of the Business as of such dates and the
results of operations of the Business for such periods; provided, however, that the
September
Financial Statements are subject to normal and
recurring year-end adjustments and lack footnotes and other presentation
items.
(ii) None
of the Target Companies or Target Subsidiaries is party to any material
“off-balance-sheet arrangements” (as defined in Item 303(a) of Regulation S-K
under the Securities Act) attributable to the Business.
(iii) None
of the Asset Sellers (to the extent such liabilities primarily relate to the
Business) or any of the Target Companies or the Target Subsidiaries has any
liabilities, whether accrued, contingent, absolute, determined, determinable or
otherwise except (A) to the extent such liabilities are accrued or reserved
against in the Financial Statements, or reflected in the footnotes thereto,
(B) liabilities that were incurred in the ordinary course of business since
the date of such Financial Statements, (C) liabilities that are for Taxes,
(D) liabilities that would not, individually and in the aggregate, have a
Material Adverse Effect or (E) liabilities that are Excluded
Liabilities.
(g) Events Subsequent to
September 30,
2007. Since September 30, 2007, to the date of this
Agreement, the Business has been conducted in the ordinary course and there has
not been any Material Adverse Change. Without limiting the generality
of the foregoing, since September 30, 2007 to the date of this
Agreement:
(i) none
of the Target Companies or any of the Target Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock or equity interests (as the case
may be), or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital stock or
any stock appreciation, phantom stock, profit participation, registered capital
or similar rights;
(ii) none
of the Target Companies or any of the Target Subsidiaries has declared, set
aside, or paid any dividend or made any distribution with respect to its capital
stock or equity interests (as the case may be) (whether in cash or in kind)
(other than dividends or distributions paid or payable to Parent or any of its
other Subsidiaries pursuant to cash sweeps done in the ordinary course of
business or to another Target Company or Target Subsidiary) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(iii) none
of the Asset Sellers (to the extent such change relates to the Business) or any
of the Target Companies or the Target Subsidiaries has made any material change
in any accounting principles, practice, policy, method or procedure except as
may be appropriate to conform to GAAP;
(iv) none
of the Asset Sellers (to the extent such litigation relates to the Business) or
any of the Target Companies or the Target Subsidiaries has settled or
compromised any material litigation or claim against it, other than settlements
or compromises of litigation in the ordinary course of business;
(v) none
of the Asset Sellers (to the extent such acquisition or license relates to the
Business) or any of the Target Companies or the Target Subsidiaries has acquired
or licensed (whether by merger, consolidation or acquisition of stock or assets
or otherwise) any corporation, partnership or other business organization or
division thereof or any material assets thereof or equity interests therein,
other than purchases of Inventory and other assets in the ordinary course of
business;
(vi) other
than in the ordinary course of business or as required under the terms of any
applicable Collective Bargaining Agreement or as required under applicable Law,
none of the Asset Sellers or the Target Companies or any of the Target
Subsidiaries has (A) made any changes to the Target Company Benefit Plans or
entered into or adopted any new Target Company Benefit Plans; (B) entered into
any collective bargaining or other labor agreement covering any Employees of the
Target Companies or Target Subsidiaries; (C) altered, amended, or created any
obligations with respect to compensation, severance, change in control payments
or any other payments or benefits to executive-level Employees of the Target
Companies or Target Subsidiaries; or (D) except, with respect to non-officers of
the Target Companies or Target Subsidiaries hired or terminated in the ordinary
course of business, hired any new Employees of the Target Companies or Target
Subsidiaries (other than hires to replace any existing Employees that may have
retired, resigned or otherwise ceased to be employed by the Target Companies or
Target Subsidiaries other than through a breach of this clause (D)) or
fired any existing Employees of a Target Company or a Target
Subsidiary;
(vii) none
of the Target Companies or any of the Target Subsidiaries has filed any amended
Tax Returns, filed any Tax Returns inconsistent with prior practices, made any
changes in the tax reporting or payment policy, changed tax residence or changed
any tax election or tax claim, except, in each case, in the ordinary course of
business;
(viii) none
of the Asset Sellers (to the extent related to the Business) or any of the
Target Companies or any of the Target Subsidiaries has incurred, assumed or
guaranteed any Indebtedness other than Intercompany Payables, Intercompany
Receivables, or Assumed Intercompany Receivables or other than in the ordinary
course of business;
(ix) none
of the Asset Sellers (to the extent related to the Business) or the Target
Companies or any of the Target Subsidiaries has created or incurred any Lien on
any material asset, other than Permitted Liens; and
(x) none
of the Asset Sellers (to the extent related to the Business) or the
Target Companies or any of the Target Subsidiaries has agreed or committed to do
any of the foregoing, or any action or omission that would reasonably be
expected to result in any of the foregoing.
(h) Legal
Compliance. The Asset Sellers (to the extent related to
the Business) and each of the Target Companies and the Target Subsidiaries have,
since January 1, 2006 (or its date of formation, if later), complied in all
material respects with all applicable Laws. The Asset Sellers (to the
extent related to the Business) and each of the Target Companies and the Target
Subsidiaries have all permits, approvals, registrations, licenses, grants,
easements, authorizations, exemptions, orders and consents with respect to the
Business as it is now being conducted, each of which is valid and in full force
and effect, in each case, except for instances where the failure to do so would
not, individually and in the aggregate, have a Material Adverse
Effect. None of the Asset Sellers (to the extent related to the
Business), the Target Companies or the Target Subsidiaries has received any
written notice or other written communication relating to any alleged violation
of any applicable Law from any Governmental Entity, or of any investigation with
respect thereto, except for violations, if any, that, individually and in the
aggregate, would not have a Material Adverse Effect. None of the
Asset Sellers (to the extent related to the Business), the Target Companies or
the Target Subsidiaries has violated any applicable export control, money
laundering or anti-terrorism Law or taken any action that could reasonably be
expected, individually or in the aggregate, to cause any of the Asset Sellers
(to the extent related to the Business), the Target Companies or the Target
Subsidiaries to be in violation of the U.S. Foreign Corrupt Practices Act of
1977, as amended, any act enforced by the Office of Foreign Asset Control of the
U.S. Department of Treasury or any applicable Law of similar effect. This
representation does not relate to Tax matters, intellectual property matters,
employee benefit matters, environmental matters, labor matters or regulatory
matters relating to the Business, which are covered by Sections 4(i), (k),
(n), (o), (p) and (s), respectively.
(i) Tax Matters. (i) As
of the date of this Agreement, each Target Company and Target Subsidiary has
timely filed all material Income Tax Returns that it was required to file with
respect to the Business, all such Tax Returns are true, correct and complete in
all material respects, and all Income Taxes shown to be payable on such Income
Tax Returns and all assessments of Income Tax made against any Target Company or
Target Subsidiary have been paid when due, except for amounts which are being or
have been contested by appropriate proceedings.
(ii) As
of the date of this Agreement, none of the Asset Sellers or any of the Target
Companies or Target Subsidiaries has waived any statute of limitations in
respect of Income Taxes or agreed to any extension of time with respect to an
Income Tax assessment or deficiency.
(iii) Except
for Nippon Alpharma Co., Ltd, each Target Company and Target Subsidiary has
filed an election, in effect as of the Closing Date, pursuant to Treasury
Regulation §301.7701-3 to be disregarded as an entity separate from its owner
for U.S. Federal Income Tax purposes and each such election will be in effect
prior to and as of the Closing Date.
(iv) Each
of the Target Companies and Target Subsidiaries has complied in all material
respects with all material laws relating to the payment and withholding of
Taxes.
(v) Within
the five-year period ending on the date of this Agreement, no claim has been
made in writing addressed to any Target Company or Target Subsidiary by any
Taxing Authority in a jurisdiction where any such entity does not file Income
Tax Returns that any such entity is or may be subject to Income Tax in such
jurisdiction.
(vi) As
of the date of this Agreement, there are no pending actions, suits, audits or
proceedings for the assessment or collection of Taxes with respect to any Target
Company or any of the Target Subsidiaries, and no Taxing Authority has proposed
or asserted any material deficiency for any material Taxes against any of the
Target Companies or any of the Target Subsidiaries.
(vii) There
are no Liens with respect to any Taxes upon any of the Acquired Assets, and
there are no Liens with respect to any Taxes on any of the assets of the Target
Companies and Target Subsidiaries (other than Permitted Liens).
(viii) Notwithstanding
any provision in this Section 4 to the contrary, no representations and
warranties by Parent (other than those in this Section 4(i)) shall apply to
any Tax matters.
(j) Real Property. (i) Section 4(j)(i)
of the Disclosure Schedule sets forth a schedule, as of the date of this
Agreement, of each material parcel of Owned Real Property (or each group of
parcels comprising one operating unit), including with respect to each such
property, the name of the owner of such property, the address and
use. With respect to each material parcel of Owned Real
Property:
(A) The Asset Sellers or the
applicable Target Company or Target Subsidiary thereof listed in
Section 4(j)(i) of the Disclosure Schedule has good and valid fee simple
title, free and clear of all Liens, except Permitted Liens and the Alpharma
Credit Agreement Lien, subject to Parent’s obligations under Section 5(h)
hereof to cause the Alpharma Credit Agreement Lien to be released as of the
Closing Date with respect to all of the Owned Real Property;
(B) as
of the date of this Agreement, except as set forth in Section 4(j)(i) of
the Disclosure Schedule, none of the Asset Sellers or any of the Target
Companies or Target Subsidiaries has leased or otherwise granted to any Person
the right to use or occupy such Owned Real Property or any portion
thereof;
(C) to the Knowledge of
Parent, there are no unrecorded outstanding options, rights of first offer or
rights of first refusal to purchase such Owned Real Property or any portion
thereof or interest therein; and
(D) as of the date of this
Agreement, there are no pending or, to the Knowledge of Parent, threatened
condemnation proceedings before any Governmental Entity.
(ii) Section 4(j)(ii)
of the Disclosure Schedule sets forth a schedule, as of the date of this
Agreement, of each material parcel of Leased Real Property (or each group of
parcels comprising one operating unit), including a true and complete list of
all Leases for each such parcel of Leased Real Property. Parent has
made available to Buyer a true and complete copy of each such Lease
document. With respect to each of the Leases: (A) such Lease is
a legal, valid and binding obligation of the applicable Asset Seller, Target
Company or Target Subsidiary party thereto; and (B) the Asset Sellers or
the applicable Target Company or Target Subsidiary party thereto listed on
Section 4(j)(ii) of the Disclosure Schedule is not in breach or default
under such Lease, and to Parent’s Knowledge, no event has occurred or
circumstance exists which, with the delivery of notice, the passage of time or
both, would constitute such a breach or default, in each case, except for
breaches or defaults which would not, individually and in the aggregate, have
Material Adverse Effect. None of the Asset Sellers or any of the
Target Companies or Target Subsidiaries has subleased or otherwise granted to
any Person the right to possess, lease, use or occupy such Leased Real Property
or any portion thereof.
(k) Intellectual
Property. (i) Section 4(k)(i) of the
Disclosure Schedule sets forth a complete and correct list, as of the date of
this Agreement, of all material formally registered Intellectual Property owned
by or licensed to Parent or its Subsidiaries and used or held for use in the
Business. The Intellectual Property set forth in Section 4(k)(i)
of the Disclosure Schedule is referred to as the “Material Intellectual
Property”. Section 4(k)(i) of the Disclosure Schedule
sets forth a list, as of the date of this Agreement, of all jurisdictions in
which such Material Intellectual Property is registered or registrations have
been applied for and all registration and application numbers. Parent or one of its
Subsidiaries is the sole and exclusive owner of, or has the right to use, the
trademarks that are part of the Material Intellectual Property in connection
with the goods and services recited in the applicable registrations relating
thereto. Parent or one of its Subsidiaries is the sole and exclusive
owner of, or has the right to reproduce, display, perform, modify, enhance,
distribute, prepare derivative works of and sublicense, without payment to any
other person, the copyrights that are part of the Material Intellectual
Property. The consummation of the Transaction and the other transactions
contemplated by this Agreement does not conflict with, alter or impair any such
rights. Parent or one of its Subsidiaries is the sole and exclusive
owner of, or has the right to use, the patents that are part of the Material
Intellectual Property. The Material Intellectual Property and the
Material Technology, together with any Intellectual Property or Technology that
the Target Companies and the Target Subsidiaries have a right to use under valid
licenses, constitutes all of the Intellectual Property or Technology that is
used or held for use in the conduct of the Business as it is currently
conducted.
(ii) To
the Knowledge of Parent, none of the Target Companies or Target Subsidiaries has
pledged any rights it may have to any Material Technology other than Permitted
Liens or the Alpharma Credit Agreement Lien. None of the Asset
Sellers, any Target Company or any Target Subsidiary has granted any license
relating to any material Technology that is owned by or licensed to Parent or
its Subsidiaries and used or held for use in the Business (the “Material Technology”)
or Material Intellectual Property, or the marketing or
distribution thereof, except for non-exclusive licenses to end-users in the
ordinary course of business. To the Knowledge of Parent, the
Intellectual Property and Material Technology used or held for use in the
Business does not infringe or violate in any material respect the rights of any
Person. No material claims are pending or, to the Knowledge of
Parent, threatened, against Parent or one of its Subsidiaries by any person with
respect to the ownership, validity, enforceability or effectiveness of any
Intellectual Property used or held for use in the Business and, since
January 1, 2006 (or its date of formation, if later), none of the Asset
Sellers, any Target Company or any Target Subsidiary has received any written
communication alleging that the Business violated in any material respect any
material rights relating to Intellectual Property of any person. As
of the date of this Agreement, to the Knowledge of Parent, no Person is
infringing or misappropriating any of the Material Intellectual
Property. All Material Technology has been maintained in confidence
in accordance with protection procedures customarily used in the industry to
protect rights of like importance.
(iii) “Intellectual
Property” means all intellectual property and other similar proprietary
rights in any jurisdiction, whether registered or unregistered, including such
rights in and to: any patent (including all reissues, divisions, continuations,
continuations-in-part and extensions thereof), patent application, patent right;
any trademark, trademark registration, trademark application, servicemark, trade
name, business name, brand name; any copyright, copyright registration, design,
design registration, database rights; any software; any internet domain names;
or any right to any of the foregoing.
(iv)
“Technology” means all
trade secrets, confidential information, inventions whether patentable or not,
formulae, processes, procedures, research records, records of inventions, test
information, data, technology and know-how; data exclusivity; product and
regulatory files including new drug applications/submissions or other
applications related to the approval to manufacture and/or sell a pharmaceutical
product whether abbreviated, abridged or full; market surveys and marketing
information.
(l) Contracts. Section 4(l)
of the Disclosure Schedule lists as of the date of this Agreement, all contracts
and other agreements to which an Asset Seller (to the extent primarily related
to the Business) or any of the Target Companies or the Target Subsidiaries is a
party:
(i) the
performance of which is reasonably expected to involve annual consideration in
excess of $2,000,000 (excluding sales orders and purchase orders issued in the
ordinary course of business);
(ii) with
respect to a joint venture, partnership, limited liability or other similar
agreement;
(iii) with
Parent or any of its Affiliates (other than the Target Companies and the Target
Subsidiaries), including any contract or other agreement pursuant to which any
Target Company or Target Subsidiary is expressly jointly and severally liable
for the obligations of Parent or any of its Affiliates;
(iv) non-compete
or similar agreements which limit or purport to limit the ability of the Target
Companies or the Target Subsidiaries to compete in any line of business or with
any other Person or in any geographic area or during any period of
time;
(v) with
respect to employment or retention agreements (other than any employment
agreement that is required by applicable Law) that are not terminable at will or
without material costs;
(vi) relating
to the incurrence of Indebtedness with outstanding obligations or commitments in
excess of $1,000,000, other than Intercompany Payables, Intercompany Receivables
and Assumed Intercompany Receivables;
(vii) relating
to the acquisition or disposition of any Person, business or other material
assets, in each case entered into outside the ordinary course of business, and
pursuant to which any Target Company or Target Subsidiary has any continuing
obligations; and
(viii) under
which (A) any Person has directly or indirectly guaranteed any liabilities or
obligations of the Asset Sellers (to the extent primarily related to the
Business), the Target Companies or the Target Subsidiaries or (B) the Asset
Sellers (to the extent primarily related to the Business), the Target Companies
or the Target Subsidiaries have directly or indirectly guaranteed liabilities or
obligations of any other Person.
Each such Contract described in clauses
(i) through (viii) is referred to herein as a “Material
Contract”. Each of the Material Contracts is valid and binding
on the Asset Sellers, the Target Companies or the Target Subsidiaries party
thereto. There is no breach or default under any Material Contract by
any of the Asset Sellers or any of the Target Companies or the Target
Subsidiaries or, to the Knowledge of Parent, by any other party, and no event
has occurred that with the lapse of time or the giving of notice or both would
constitute a breach or default thereunder by any of the Asset Sellers or any of
the Target Companies or the Target Subsidiaries or, to the Knowledge of Parent,
by any other party, other than breaches or defaults that would not, individually
and in the aggregate, have a Material Adverse Effect. Parent has made
available to Buyer a correct and complete copy of each written Material Contract
(as amended to the date of this Agreement) listed in Section 4(l) of the
Disclosure Schedule; provided, that
information in such Contracts has been redacted to the extent necessary to
enable compliance with Laws relating to antitrust or the safeguarding of data
privacy.
(m) Litigation. None
of the Asset Sellers (to the extent related to the Business) or any of the
Target Companies or the Target Subsidiaries is subject to (i) any
outstanding
Judgment or (ii) any pending or, to the Knowledge of Parent, threatened,
action, suit, claim, proceeding, hearing, or investigation, in each case, except
for those that would not, individually and in the aggregate, have a Material
Adverse Effect. As of the date of this Agreement, there are no
settlement agreements or similar written contracts with any Governmental Entity
and no outstanding orders entered or issued by any Governmental Entity against
the Asset Sellers (to the extent related to the Business), Target Companies or
Target Subsidiaries. This representation does not relate to Tax
matters, employee benefit matters, environmental matters, labor matters or
regulatory matters relating to the Business, which are covered by
Sections 4(i), (n), (o), (p) and (s), respectively.
(n) Employee
Benefits. (i) Section 4(n)(i)
of the Disclosure Schedule lists each material Employee Benefit Plan that any of
the Target Companies or the Target Subsidiaries maintains or which any of the
Target Companies or the Target Subsidiaries participate in or to which they
contribute (each such plan, a “Target Company Benefit
Plan”) and each Target Company Benefit Plan sponsored or maintained by
any of the Target Companies or the Target Subsidiaries is separately
identified.
(ii) Where
applicable, with respect to each of the Target Company Benefit Plans, true and
complete copies of (A) all plan documents (including all amendments and
modifications thereof) or, if none, a summary thereof, and all related trust
agreements, insurance contracts and other funding arrangements; and (B) the
most recent actuarial report, if applicable has been made available to
Buyer.
(iii) Each
Target Company Benefit Plan (and each related trust, insurance contract, or
fund) has been maintained, funded, operated and administered in all material
respects in accordance with the terms of such Target Company Benefit Plan and
complies in form and operation in all material respects in accordance with the
applicable requirements of applicable Law.
(iv) Except
as would not, indirectly or in the aggregate, have a Material Adverse Effect,
each Target Company Benefit Plan for which approval from a Taxing Authority is
necessary or appropriate under applicable Law has received such approval and no
event has occurred or circumstance exists that could reasonably be expected to
give rise to the loss of such approval.
(v) All
contributions (including all employer contributions and employee salary
reduction contributions) and premiums or other payments that are required to be
made by the Closing Date to each Target Company Benefit Plan have been
made.
(vi) With
respect to each Target Company Benefit Plan, no action, suit, proceeding,
hearing, or investigation (other than routine claims for benefits payable in the
ordinary course of business) involving any such Target Company Benefit Plan is
pending, or to the Knowledge of Parent, threatened.
(vii) Except
as set forth in Section 4(n)(vii) of the Disclosure Schedule, with respect
to any Target Company Benefit Plan subject to funding
requirements, the fair market value of the assets of such plan equals or exceeds
the actuarial present value of all accrued benefits under such plan (whether or
not vested, each as determined under the assumptions and valuation method of the
latest actuarial valuation of such plan).
(viii) There
has been no amendment to, announcement by Parent or any of the Target Companies
or the Target Subsidiaries relating to, or change in employee participation or
coverage under, any Target Company Benefit Plan which would increase materially
the expense of maintaining such plan above the level of the expense incurred
therefor for the fiscal year ended December 31, 2007. Neither the execution or
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will, pursuant to the terms of any Target Company Benefit Plan, (A)
entitle any of the Employees of the Business to severance pay, unemployment
compensation or any other payment or any increase in severance pay, unemployment
compensation or any other payment upon any termination of employment after the
date hereof, (B) accelerate the time of payment or vesting or increase the
amount of compensation due any such employee, (C) result in any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or result in any other material obligation
pursuant to, any of the Target Company Benefit Plan, (D) limit or restrict the
right of Parent, any of the Target Companies or the Target Subsidiaries or,
after the consummation of the transactions contemplated hereby, Buyer, to merge,
amend or terminate any of the Target Company Benefit Plan, subject to terms of
this Agreement.
(o) Environmental
Matters. (i) The Asset Sellers (to the extent
primarily related to the Business) and the Target Companies and the Target
Subsidiaries have complied and are in compliance with Environmental Laws, except
for such noncompliance that would not, individually and in the aggregate, have a
Material Adverse Effect.
(ii) The
Asset Sellers, the Target Companies and the Target Subsidiaries have obtained
and are in compliance in all material respects with all material permits,
licenses, registrations and other authorizations required for the operation of
the Business as currently conducted pursuant to any Environmental Laws (“Environmental
Permits”), and all such Environmental Permits are valid and in full force
and effect.
(iii) There
are no Environmental Claims pending or, to the Knowledge of Parent threatened,
against any of the Asset Sellers (to the extent primarily related to the
Business) or the Target Companies or the Target Subsidiaries, except for such
Environmental Claims that would not, individually and in the aggregate, have a
Material Adverse Effect. None of the Asset Sellers (to the extent
primarily related to the Business) or any of the Target Companies or the Target
Subsidiaries is subject to any material outstanding Judgment relating to
Environmental Laws.
This representation does not relate to any product
liability matters which are covered by Section 4(r).
(iv) None
of the Asset Sellers, the Target Companies or the Target Subsidiaries has
released any Hazardous Substance at, on, under or from any Real Property or any
other location, and to the Knowledge of Parent, there has been no release by any
other person of any Hazardous Substance at, on, under or from any Real Property,
in each case except as would not, individually and in the aggregate, have a
Material Adverse Effect on the Business.
(v) Parent
has provided to Buyer all material environmental site assessments, audits,
investigations and studies prepared in the last five years and in the
possession, custody or control of Parent, the Asset Sellers, the Target
Companies or any of the Target Subsidiaries relating to the Owned Real
Property.
(p) Labor Matters. (i) Section 4(p)(i)
of the Disclosure Schedule contains a complete and accurate list of each
collective bargaining, worker’s counsel or other labor union contract or
arrangement to which any of the Target Companies or the Target Subsidiaries is a
party (the “Collective
Bargaining Agreements”). No other union or labor organization
is currently certified and, to the Knowledge of Parent, there is no activity or
proceeding of any union or labor organization to organize any Employees of the
Target Companies or Target Subsidiaries.
(ii) Each of the Asset
Sellers, the Target Companies and the Target Subsidiaries has complied in all
material respects with the terms of the Collective Bargaining Agreements and all
applicable Laws pertaining to the employment or termination of employment of
current or former employees of the Target Companies and Target Subsidiaries,
including all such Laws relating to labor relations, equal employment
opportunities, fair employment practices, prohibited discrimination or
distinction, wages, hours, safety and health, workers’ compensation and the
collection and payment of withholding and/or social security
Taxes. None of the Target Companies or any of Target Subsidiaries
has, currently or within the past year, experienced any strikes.
(q) Insurance.Section 4(q)
of the Disclosure Schedule contains a complete and accurate list as of the date
of this Agreement of each currently effective material insurance policy covering
the Asset Sellers (to the extent material to the Business) or any of the Target
Companies or the Target Subsidiaries or any of their properties or assets
(collectively, the “Insurance Policies”),
including the underwriter of such policies, the type of coverage, the limits of
coverage thereunder and any deductible and/or retention amount. All
premiums due under the Insurance Policies have been paid when due since
January 1, 2006. All of the Insurance Policies are in full force
and effect and Parent has not received any written notice of termination or
non-renewal of any of the Insurance Policies, in each case other than any
denials of claims or reservation of rights by any insurer.
(r) Product
Liability. No
Person has made (or to the Knowledge of Parent, threatened to make) any claim
against any of the Asset Sellers or any of the Target Companies or the Target
Subsidiaries since January 1, 2006 (or its date of formation, if later)
arising out of any personal injury and/or death or damage to property
proximately caused by the use of the Products developed, manufactured, marketed,
distributed, sold or otherwise provided by, or on behalf of, any of the Asset
Sellers or any of the Target Companies or the Target Subsidiaries, except for
claims which would not, individually and in the aggregate, have a Material
Adverse Effect. Sellers have made appropriate notifications under the
Insurance Policies with respect to each such claim made against any of the Asset
Sellers or any of the Target Companies and the Target Subsidiaries since
January 1, 2006.
(s) Regulatory
Matters. (i) The
Asset Sellers and each of the Target Companies and the Target Subsidiaries are
in compliance with all applicable Laws of the United States and each
foreign jurisdiction, including of the rules and regulations of the FDA and any
governmental agency of any other country having jurisdiction of the
Manufacturing Facilities or the manufacture, sale, labeling, storing, testing
and distribution of the Products, as applicable (each, a “Regulatory
Authority”), with respect to the manufacture, sale, labeling, storing,
testing and distribution of the Products, except for such instances of
noncompliance that would not, individually and in the aggregate, have a Material
Adverse Effect. Each of the Target Companies and the Target
Subsidiaries have all material permits, approvals, registrations and licenses
related to the Manufacturing Facilities from the Regulatory Authorities to
conduct the Business as currently conducted.
(ii) Since
January 1, 2003 (or its date of formation, if later), none of the Asset
Sellers or any of the Target Companies or the Target Subsidiaries is in receipt
of notice of, has been or is subject to, any adverse inspection, compelled or
voluntary recall, investigation, penalty for corrective or remedial action or
corrective action plan, in each case relating to the Products or the
Manufacturing Facilities by the Regulatory Authorities, including compliance
with current good manufacturing practices as regulated and/or required by the
Regulatory Authorities, except for such instances which would not, individually
and in the aggregate, have a Material Adverse Effect.
(iii) As
of the date of this Agreement, there are no pending actions, suits, proceedings,
hearings, investigations, charges, claims, demands, notices or complaints by the
Regulatory Authorities relating to the Manufacturing Facilities or the
Products.
(iv) None
of the Asset Sellers or any of the Target Companies or the Target Subsidiaries
has received, since January 1, 2003 (or its date of formation, if
later), any written notification, that remains unresolved, from any Regulatory
Authorities indicating that any Product is misbranded or adulterated as defined
in the FDA Act and the rules and regulations promulgated thereunder or any
similar Law, except for such instances which would not, individually and in the
aggregate, have a Material Adverse Effect. The Asset Sellers and the
Target
Companies and the Target Subsidiaries have properly
handled and stored all Products included in the Inventory in compliance in all
material respects with all applicable Laws and none of the Products included in
the Inventory are misbranded or adulterated as defined in the FDA Act and the
rules and regulations promulgated thereunder or any similar Law, except for such
instances which would not, individually and in the aggregate, have a Material
Adverse Effect.
(v) This
representation does not relate to Tax matters, employee benefit matters,
environmental matters or labor matters, which are covered by Sections 4(i),
(n), (o) and (p), respectively.
(t) Certain Business
Relationships with the Asset Sellers, the Target Companies and the
Target Subsidiaries. Except as otherwise contemplated in
this Agreement or the Ancillary Agreements and the agreements set forth on
Section 4(t) of the Disclosure Schedule (the “Intercompany Assumed
Agreements”) which Buyer acknowledges shall continue in force after
Closing, no material business arrangement or agreement exists between a Target
Company or Target Subsidiary, on the one hand, and Parent or any of its
Affiliates (other than a Target Company or Target Subsidiary), on the other
hand, that will continue in effect subsequent to Closing.
(u) Customers and
Suppliers. (i) Section 4(u)(i) of the
Disclosure Schedule sets forth a complete and correct list of the top twenty
customers of the Business (based on the aggregate purchase price of products
provided) for the year ended December 31, 2007. As of the date of
this Agreement, no such customer has canceled or otherwise terminated, or to the
Knowledge of Parent, has indicated an intent to cancel or otherwise terminate
its relationship with the Business or to materially decrease the volume of
business, or substantially amend the terms on which it conducts with the
Business.
(ii) Section
4(u)(ii) of the Disclosure Schedule sets forth a complete and correct list of
the top ten suppliers of raw materials and packaging materials to the Business
(based on the aggregate purchase price of raw materials and packaging materials;
for the avoidance of doubt, excluding any purchases of utilities or products
purchased from contract manufacturers) for the year ended December 31,
2007. As of the date of this Agreement, no such supplier has canceled
or otherwise terminated, or to the Knowledge of Parent, has indicated an intent
to cancel or otherwise terminate its relationship with the Business or to
materially decrease the volume of business, or substantially amend the terms on
which it conducts with the Business.
SECTION 5. Pre-Closing
Covenants. Parent
and Buyer agree as follows with respect to the period between the execution of
this Agreement and the Closing.
(a) General. Each
of Parent and Buyer will use reasonable best efforts, including taking the
actions set forth on Section 5(a) of the Disclosure Schedule, to take all
actions and to do all things necessary, proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction,
but not waiver, of the Closing conditions set forth
in Section 7 below) and as soon as practicable after the date
hereof.
(b) Notices and
Consents. Parent
shall, and shall cause each of the Target Companies and the Target Subsidiaries
to, give any notices to third parties, and shall, and shall cause each of the
Target Companies and the Target Subsidiaries to, use reasonable best efforts to
obtain any third party consents referred to in Section 4(c) of the
Disclosure Schedule; provided that Parent
shall have no obligation to pay money or make any concessions to obtain such
consents. Buyer acknowledges that certain consents and waivers with
respect to the transactions contemplated by this Agreement may be required from
parties to the Business Contracts and that such consents and waivers may not be
obtained prior to Closing. Buyer acknowledges that, subject to
compliance with Section 2(d) and this Section 5, Parent and its Affiliates
shall not have any liability whatsoever to Buyer arising out of or relating to
the failure to obtain any consents or waivers that may be required in connection
with the transactions contemplated by this Agreement or because of the
termination of any Business Contract as a result thereof. Buyer
acknowledges that no representation, warranty or, subject to compliance with
Section 2(d) and this Section 5, covenant of the Sellers contained herein shall
be breached or deemed breached, and no condition shall be deemed not satisfied,
as a result of (i) the failure to obtain any such consent or waiver,
(ii) any such termination or (iii) any lawsuit, action, proceeding or
investigation commenced or threatened by or on behalf of any Person arising out
of or relating to the failure to obtain any such consent or any such
termination. Subject to the terms and conditions herein, Parent and
Buyer agree to use their reasonable best efforts to take, or cause to be taken,
all actions necessary to expeditiously consummate the transactions contemplated
by this Agreement, including using reasonable best efforts to make all necessary
domestic and foreign government filings, including filings under the
Xxxx-Xxxxx-Xxxxxx Act and any Foreign Merger Control Law, respond to government
requests for information, and obtain all necessary governmental, judicial or
regulatory actions or non-actions, orders, waivers, consents, clearances,
extensions and approvals.
(c) Financing. (i) Buyer
shall, and shall cause its Affiliates to, use reasonable best efforts to take,
or cause to be taken, all appropriate action, do, or cause to be done, all
things necessary, proper or advisable under applicable Laws, and to execute and
deliver, or cause to be executed and delivered, such instruments and documents
as may be required, to arrange the Financing as promptly as reasonably
practicable on the terms and subject only to the conditions contained in the
Financing Commitments (or any replacement commitments obtained by Buyer in
compliance with this paragraph (c)), including, in the case of the Debt
Financing, to (A) negotiate and enter into definitive agreements with respect to
the Debt Financing on the terms and subject only to the conditions contained in
the Debt Financing Commitments (or any replacement commitments obtained by Buyer
in compliance with this paragraph (c)) or on other terms acceptable to
Buyer so long as such definitive agreements (1) do not contain any additional or
modified conditions or other contingencies to the funding of the Debt Financing
that are more favorable in any respect to the Debt Financing sources than those
contained in the Debt Financing Commitments (or any replacement commitments
obtained by Buyer in compliance with this paragraph (c)) and (2) are in a
form that is
otherwise not reasonably likely to impair or delay
the funding of the Debt Financing or the Closing, (B) satisfy, and cause its
Affiliates to satisfy, on a timely basis all conditions applicable to Buyer or
its Affiliates contained in the Debt Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)) and
(C) consummate the Debt Financing contemplated by the Debt Financing Commitments
(or any replacement commitments obtained by Buyer in compliance with this
paragraph (c)) at the Closing, including using its reasonable best efforts
to cause the financial institutions providing the Debt Financing to fund the
Debt Financing (including by taking specific or other equitable enforcement
action to cause such financial institutions to fund the Debt Financing, subject
to the satisfaction of the conditions precedent to the initial funding of the
Debt Financing Commitments). Buyer shall, and shall cause its
Affiliates to, refrain from taking, directly or indirectly, any action that is
reasonably likely to result in the failure of any of the conditions contained in
the Financing Commitments (or replacement commitments obtained by Buyer in
compliance with this paragraph (c)) or in any definitive agreement related
to the Financing.
(ii) Buyer
shall not agree to or permit any amendment, supplement or other modification of,
or waive any of its rights under, any Financing Commitments (or replacement
commitments obtained by Buyer in compliance with this paragraph (c)) or the
definitive agreements relating to the Financing without Parent’s prior written
consent, except that Buyer may amend, supplement or otherwise modify the Debt
Financing Commitments (or replacement commitments obtained by Buyer in
compliance with this paragraph (c)) if such amendment, supplement or other
modification (1) does not contain additional or modified conditions or other
contingencies to the funding of the Debt Financing that are more favorable in
any respect to the Debt Financing sources than those contained in Debt Financing
Commitments and (2) is otherwise not reasonably likely to impair or delay the
funding of the Debt Financing or the Closing (it being understood that, subject
to the requirements of this clause (ii), such amendment, supplement or
other modification of the Debt Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)) may
provide for the assignment of a portion of the Debt Financing Commitment (or
replacement commitments obtained by Buyer in compliance with this
paragraph (c)) to additional agents or arrangers and grant such Persons
approval rights with respect to certain matters as are customarily granted to
additional agents or arrangers). Notwithstanding anything to the
contrary in this Agreement, Buyer shall not amend the Interim Loan Agreement in
the manner set forth in Section (A) of the side letter relating thereto dated as
of the date of this Agreement, unless Buyer delivers to Parent in connection
therewith a condition satisfaction letter executed by the lenders under the Debt
Financing in form and substance similar to the condition satisfaction letter
delivered to Parent on the date of this Agreement in respect of the Interim Loan
Agreement and providing that all opinions, pledge agreements, corporate
documents, instruments or other documents related to the additional conditions
precedent in such amendment are in agreed form.
(iii) If
any portion of the Debt Financing becomes unavailable on the terms and
conditions contained in the Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)), Buyer
shall
promptly notify Parent, and Buyer shall use its
reasonable best efforts to obtain, as promptly as practicable following the
occurrence of such event, replacement commitments on terms that will enable
Buyer to consummate the transactions contemplated by this Agreement and that are
not less favorable in the aggregate (as determined by Buyer in its reasonable
judgment) to Buyer and Parent than those contained in the Financing Commitments;
provided that
such replacement commitments shall not (A) be subject to any additional or
modified conditions or other contingencies to the funding of the Financing that
are more favorable in any respect to the Financing sources than those contained
in the Financing Commitments or (B) otherwise be reasonably likely to impair or
delay the funding of the Financing or the Closing. Buyer shall
deliver to Parent complete and correct copies of all amendments, supplements,
other modifications or agreements pursuant to which any amended, supplemented,
modified or replacement commitments shall provide Buyer with any portion of the
Financing; provided that Buyer
may redact from any such copies the fee amounts payable to their Financing
sources.
(iv) Parent
shall, and shall cause its Subsidiaries to, and shall use its reasonable best
efforts to cause its and its Subsidiaries’ accountants, legal counsel and other
advisors to, provide such reasonable cooperation in connection with the
arrangement of the Debt Financing as may be reasonably requested by Buyer,
including (A) participation in a reasonable number of meetings, drafting
sessions, “road show” presentations and due diligence sessions, (B) using
reasonable best efforts to furnish Buyer and its Debt Financing sources with the
Required Financial Information and such other information reasonably requested
by Buyer in connection with the Debt Financing, (C) assisting Buyer and its
Debt Financing sources in the preparation of materials for rating agency
presentations, (D) reasonably cooperating with the marketing efforts of Buyer
and its Debt Financing sources, (E) reasonably facilitating the pledging of
collateral and execution and delivery of definitive agreements relating to the
Financing and (F) using reasonable best efforts to obtain accountants’ “comfort
letters”, legal opinions, surveys and title insurance as reasonably requested by
Buyer; provided
that (I) none of Parent nor any of its Subsidiaries shall be required to pay any
commitment or other fee or incur any other liability in connection with the Debt
Financing, (II) such requested cooperation shall not unreasonably interfere with
the ongoing operations of Parent and its Subsidiaries and (III) Parent and its
Subsidiaries shall not be required to take any action that would be prohibited
by applicable Law, including financial assistance restrictions applicable to any
Target Company or Target Subsidiary. Buyer shall, promptly upon
request by Parent, reimburse Parent for all reasonable and documented
out-of-pocket costs incurred by Parent or any of its Subsidiaries in connection
with such cooperation. Buyer and its Affiliates shall, on a joint and
several basis, indemnify and hold harmless Parent and its Affiliates from and
against any Losses suffered or incurred by them in connection with providing
cooperation in respect of the Debt Financing pursuant to this Section 5(c) and
any information utilized in connection therewith. Parent shall have
the right to consent to the use of its and its Subsidiaries’ logos in connection
with the Debt Financing.
(v) Buyer
shall keep Parent reasonably informed on a timely basis of the status of the
Financing and any material developments relating to the Financing.
(vi) Buyer
acknowledges that the information being provided to it in connection with the
Financing is subject to the terms of Section 5(e).
(d) Operation of
Business. Except as disclosed on Section 5(d) of the
Disclosure Schedule, as otherwise expressly permitted by the terms of this
Agreement or with the prior written consent of Buyer (which consent shall not be
unreasonably withheld or delayed), from the date of this Agreement through the
Closing Date, Parent shall (to the extent primarily related to the Business) use
its reasonable best efforts to, and to cause each of the other Asset Sellers (to
the extent primarily related to the Business) and each of the Target Companies
and the Target Subsidiaries to use their reasonable best efforts to,
(i) conduct their respective businesses only in the ordinary course of
business consistent with past practice, (ii) (A) preserve their
respective business organizations substantially intact, (B) maintain their
respective present relationships with customers, suppliers, distributors,
employees and other Persons with which they have significant business relations
and (C) maintain and keep properties and assets material to the Business in
working order, except for any defects which would not materially impair the use
or, with respect to the Real Property, occupancy of such properties or assets in
the operation of the Business. Without limiting the generality of the
foregoing, except as disclosed on Section 5(d) of the Disclosure Schedule
or otherwise expressly contemplated or permitted by the terms of this Agreement,
from the date of this Agreement through the Closing Date, Parent shall not (to
the extent primarily related to the Business), and shall cause each of the other
Asset Sellers (to the extent primarily related to the Business) and each of the
Target Companies and the Target Subsidiaries not to, without the prior written
consent of Buyer (which consent shall not be unreasonably withheld or
delayed):
(i) pledge,
sell, lease, transfer, license, assign or otherwise make subject to a Lien
(other than the Alpharma Credit Agreement Lien or any Permitted Liens), any
material assets, tangible or intangible, other than the sale of Inventory in the
ordinary course of business;
(ii) enter
into or materially amend, terminate or cancel any Material Contract calling for
future payments on receipts of greater than $2,000,000 in any year, other than
supply agreements with customers for the supply of products from the Target
Companies or the Target Subsidiaries entered into in the ordinary course of
business;
(iii) terminate
or cancel any Material Contract outside the ordinary course of
business;
(iv) make
or commit to make any capital expenditures outside the ordinary course of
business or delay any capital expenditures in each case, in excess of $500,000
individually or $1,000,000 in the aggregate, except to the extent that such
capital expenditure is disclosed in Section 5(d)(iv) of the Disclosure
Schedule;
(v) make
any material change in its selling, distribution or pricing practices, including
by accelerating the delivery of products, other than in the ordinary course of
business;
(vi) make
any material capital investment in, or any material loan to, any other Person
other than (A) advances in the ordinary course of business, (B) loans,
advances, investments or capital contributions to or in a Target Company or
Target Subsidiary, provided that no
disposal of any existing shares in or increase in the capital of Alpharma Fine
Chemicals, Kft. (Hungary) may be made, or (C) loans or advances that are
Intercompany Receivables;
(vii) transfer,
assign, or grant any license or sublicense of any material rights under or with
respect to any Material Intellectual Property or Material
Technology;
(viii) issue,
sell, or otherwise dispose of any of the capital stock or equity interests (as
the case may be) of the Target Companies or any of the Target Subsidiaries, or
grant any options, warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of the capital stock or equity
interests (as the case may be) of the Target Companies or any of the Target
Subsidiaries, any stock appreciation, phantom stock, profit participation or
similar rights of the Target Companies or any of the Target
Subsidiaries;
(ix) declare,
set aside, or pay any dividend or make any distribution with respect to the
capital stock or equity interests (as the case may be) of the Target Companies
or any of the Target Subsidiaries (whether in cash or in kind) (other than
dividends or distributions paid or payable to Parent or any of its other
Subsidiaries pursuant to cash sweeps done in the ordinary course of business or
to another Target Company or Target Subsidiary) or redeem, purchase, or
otherwise acquire any of the capital stock of the Target Companies or any of the
Target Subsidiaries;
(x) make
any loan to, or enter into any other transaction with, any of the directors,
officers, and employees of the Business outside the ordinary course of
business;
(xi) create,
incur, assume or guarantee any Indebtedness by the Target Companies or any of
the Target Subsidiaries other than Intercompany Payables, Intercompany
Receivables, or Assumed Intercompany Receivables or other than in the ordinary
course of business;
(xii) make
any material change in any accounting principles, practice, policy or procedure,
except as may be required to conform to changes in GAAP;
(xiii) acquire
or license (whether by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization or
division thereof or any material assets thereof or equity interests
therein, other than purchases of Inventory and other
assets in the ordinary course of business;
(xiv) forgive,
cancel or compromise any Indebtedness outside the ordinary course of
business;
(xv) settle
or compromise any material litigation or claim relating to the
Business;
(xvi) purchase
any material Real Property, enter into any leases of material Real Property, or
materially amend any leases of material Real Property;
(xvii) other
than in the ordinary course of business or to the extent required under the
terms of any applicable Collective Bargaining Agreement or as required under
applicable Law, (A) make any changes to the Target Company Benefit Plans or
enter into or adopt any new Target Company Benefit Plans; (B) enter into
any collective bargaining or other labor agreement covering any Employees of the
Target Companies or Target Subsidiaries; (C) alter, amend, or create any
obligations with respect to compensation, severance, change in control payments
or any other payments or benefits to executive-level Employees of the Target
Companies or Target Subsidiaries; or (D) except, with respect to
non-officers of the Target Companies or Target Subsidiaries hired or terminated
in the ordinary course of business, hire any new Employees of the Target
Companies or Target Subsidiaries (other than hires to replace any existing
Employee that retires, resigns or otherwise ceases to be employed by a Target
Company or a Target Subsidiary other than through a violation of this clause
(D)) or fire any existing Employees of the Target Companies or Target
Subsidiaries;
(xviii) make
or change any material election in respect of Taxes, adopt or change any
accounting method in respect of Taxes, enter into any closing agreement, settle
any material claim or assessment in respect of Taxes, or consent to any
extension or waiver of any statute of limitation applicable to any material
claim or assessment in respect of Taxes, in each case, if such action would be
outside the ordinary course of business and would result in an increased Tax
liability of Buyer or any of its Affiliates in respect of a Post-Closing Tax
Period; or
(xix) agree
or commit to do any of the foregoing;
provided that,
notwithstanding the foregoing, nothing herein will prohibit or prevent the Asset
Sellers or any of the Target Companies and the Target Subsidiaries from
(i) repaying, collecting or otherwise extinguishing any Intercompany
Receivables, Assumed Intercompany Receivables or Intercompany Payables,
(ii) declaring, setting aside, or paying any cash dividend,
(iii) making any distribution of cash, (iv) redeeming or purchasing,
or otherwise acquiring, any of its capital stock for cash, (v) repaying any
of its Indebtedness or (vi) engaging in any transaction referred to in
Section 5(d) of the Disclosure Schedule.
(e) Full Access; Pre-Closing
Confidentiality. The Asset Sellers will permit, and the
Share Seller (and any other entity which Parent may designate as an additional
Share Seller as a result of the Pre-Closing Restructuring) will cause each of
the Target Companies and the Target Subsidiaries to permit, representatives of
Buyer (including legal counsel, prospective financing sources and accountants)
to have reasonable access, upon reasonable notice during normal business hours,
to all premises, properties, personnel, books, records (including Tax records
(other than any Income Tax records of Parent)), contracts, work papers (subject
to the receipt of consent from Sellers’ auditors) and documents of or pertaining
to the Asset Sellers (to the extent related to the Business) and each of the
Target Companies and the Target Subsidiaries; provided, however, that (i)
such access shall not permit any representatives of Buyer to conduct any
environmental testing or sampling, (ii) such access does not unreasonably
disrupt the normal operations of the Sellers, the Target Companies and the
Target Subsidiaries and (iii) Parent shall not be obligated to afford to
Buyer or any of its representatives (including legal counsel, prospective
financing sources and accountants) any access to any Contract or information the
disclosure of which (A) is restricted by confidentiality obligations or
applicable Law, including, without limitation, Laws relating to antitrust or
(B) would jeopardize the legal privilege accorded to such Contract or
information, provided that promptly after execution of this Agreement the
Sellers shall provide Buyer written notice of the nature and substance of any
such information or Contracts that are withheld (to the greatest extent
possible under such confidentiality obligations or applicable Law or as would
not, in the judgment of Parent, jeopardize any such legal privilege) and the
basis for such withholding. Buyer will, and will cause its
representatives (including legal counsel, prospective financing sources and
accountants), to treat and hold any information received from the Sellers or any
of the Target Companies or the Target Subsidiaries in the course of the reviews
contemplated by this Section 5(e) in accordance with the Confidentiality
Agreement, dated October 16, 2007, between Parent and Buyer (the “Confidentiality
Agreement”) which Confidentiality Agreement shall remain in full force
and effect in accordance with its terms; provided, that the
obligations of Buyer with respect to confidential information relating solely to
the Business shall terminate on the Closing Date. For three (3) years
from the date of this Agreement, Parent shall, and shall cause the Asset Sellers
to, retain all books and records that are related to the Business in accordance
with Parent’s record retention policies as in effect at such
time. During the three-year period beginning on the date of this
Agreement, Parent shall not dispose, or permit the Asset Sellers to dispose, any
books and records not required to be retained under such policies without giving
60 days’ written notice to Buyer offering to deliver the same to Buyer at
Buyer’s expense.
(f) Release of Guarantees and
Letters of Credit. (i) Other than as
contemplated by the following sentence, at or prior to the Closing, Buyer shall
use its reasonable best efforts to cause (i) to be unconditionally released or
extinguished in full all guarantees or sureties (whether or not of Indebtedness)
set forth on Section 4(c) of the Disclosure Schedule or entered into after the
date of this Agreement not in violation of Section 5(d), together with any
ancillary obligations thereto, issued by Parent or any of its Affiliates (other
than the Target Companies or Target Subsidiaries) on behalf of the Business or
any Target Company or any Target Subsidiary, without further recourse to Parent
or its applicable Affiliate and (ii) Parent and its Affiliates (other than
the Target
Companies or Target Subsidiaries) to be
unconditionally released in full from any liability or obligation in respect of
any letter of credit issued for the account of the Business or in connection
with any liability or obligation of the Business, without further recourse to
Parent or its applicable Affiliate. Buyer and its Affiliates shall, on a joint
and several basis, indemnify and hold harmless Parent and its Affiliates from
and against any Losses suffered or incurred by them in connection with any of
the foregoing guarantees, sureties, liabilities or obligations from and after
the Closing Date.
(ii) At
or prior to the Closing, Parent shall use its reasonable best efforts to cause
(i) to be unconditionally released or extinguished in full all guarantees or
sureties (whether or not of Indebtedness), together with any ancillary
obligations thereto, issued by any Target Company or Target Subsidiaries on
behalf of Parent or any of its Affiliates (other than guarantees or sureties
issued on behalf of another Target Company or Target Subsidiary or in respect of
the Business), without further recourse to the applicable Target Company and
Target Subsidiaries and (ii) the Target Companies and Target Subsidiaries to be
unconditionally released in full from any liability or obligation in respect of
any letter of credit issued for the account of Parent or any of its Affiliates
(other than letters of credit issued for the account of the Business or in
connection with any liability or obligation of the Business), without further
recourse to the applicable Target Company or Target
Subsidiary. Parent and its Affiliates shall, on a joint and several
basis, indemnify and hold harmless Buyer and its Affiliates from and against any
Losses suffered or incurred by them in connection with any of the foregoing
guarantees, sureties, liabilities or obligations from and after the Closing
Date.
(g) Repayment of Indebtedness;
Intercompany Accounts. (i) Prior to the
Closing, Parent (i) shall assume, extinguish, repay or contribute as equity, or
shall cause to be assumed, extinguished, repaid or contributed as equity, all
Indebtedness and ancillary obligations thereto (including all interest accrued
thereon and all fees or charges associated therewith) owed by any Target Company
or any Target Subsidiary to any Person (including Parent and its Affiliates),
other than Indebtedness owed to another Target Company or Target Subsidiary,
Indebtedness that is an Assumed Intercompany Receivable, that is incurred
pursuant to an Intercompany Assumed Agreement or letters of credit issued for
the account of the Business or in connection with any liability or obligation of
the Business and (ii) shall, and shall cause its Affiliates to, repay in full
all Indebtedness and ancillary obligations thereto (including all interest
accrued thereon and all fees or charges associated therewith) it or they owe to
any Target Company or Target Subsidiary, other than Indebtedness and ancillary
obligations thereto owed by one Target Company or Target Subsidiary to another
Target Company or Target Subsidiary or Indebtedness that is incurred pursuant to
an Intercompany Assumed Agreement.
(ii) Prior
to the Closing, Parent shall, and shall cause its Affiliates (including the
Target Companies and Target Subsidiaries) to, settle or extinguish all
Intercompany Receivables and Intercompany Payables that were incurred on or
prior to the Closing and that arose from trade transactions between Parent or
its Affiliates (other than the Target Companies and Target Subsidiaries), on the
one
hand, and the Target Companies or Target
Subsidiaries, on the other hand; provided, that all
amounts owing pursuant to any Intercompany Assumed Agreement as of the Closing
and all Assumed Intercompany Receivables shall remain outstanding.
(h) Alpharma Credit Agreement
Lien. Parent shall cause the Alpharma Credit Agreement
Lien to be released as of or prior to the Closing Date with respect to the
Acquired Assets, the Target Shares and the assets of the Target Companies and
the Target Subsidiaries.
(i) Capitalization of
Intercompany Loan. Prior to the Closing Date, Alpharma
Bermuda G.P. shall assign to Alpharma International (Luxembourg) S.àr.l. a
portion of the Assumed Intercompany Receivables held by it, and Alpharma
International (Luxembourg) S.àr.l. shall capitalize such assigned portion of the
Assumed Intercompany Receivables prior to Closing as a contribution to the
capital of Alpharma AS, with the amount of such assigned and capitalized portion
of the Assumed Intercompany Receivables (including accrued interest) to be not
less than an amount such that, after giving effect to such capitalization,
Alpharma AS shall have a positive enterprise value net of debt, as determined in
Parent’s reasonable judgment; provided, that Parent
shall not be required to assign or capitalize any amount in excess of the amount
of the Assumed Intercompany Receivables held by Alpharma Bermuda G.P. at the
time of such assignment. The amount of such assigned and capitalized
portion of the Assumed Intercompany Receivables shall be determined between the
date of this Agreement and the Closing Date by Buyer, subject to and consistent
with the foregoing sentence, after reasonable consultation with
Parent.
(j) Transition Services
Agreement. From the date of this Agreement until the
Closing, Buyer and Parent shall cooperate and use reasonable best efforts to
develop reasonably detailed service specifications with respect to the services
to be provided pursuant to the Transition Services Agreement in the form
attached hereto as Exhibit B (the “Transition Services
Agreement”) following input from the information technology
representatives of both Parties. Prior to Closing, Parent shall
provide Buyer with an allocation of the price for each “Service” as defined in
the Transition Services Agreement.
SECTION 6. Post-Closing
Covenants. Parent
and Buyer agree as follows with respect to the period following the
Closing.
(a) General. In
case at any time after the Closing any further action is necessary or desirable
to carry out the purposes of this Agreement, each of Parent and Buyer will take
such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request (for no
further consideration) to more effectively consummate the purchase and sale of
Target Shares and Acquired Assets and the assumption of the Assumed Liabilities,
including (i) transferring back to Parent any Excluded Asset or Excluded
Liability and (ii) transferring to the applicable Target Company or Target
Subsidiary any Acquired Asset or Assumed Liability (or any asset or liability
that would be an Acquired Asset or
Acquired Liability if the Target Companies or Target
Subsidiaries were Asset Sellers) contemplated hereby to be transferred at the
Closing which was not so transferred at the Closing. In furtherance
of the foregoing, in the event that Parent is unable to make such transfers or
assignments contemplated by Section 2(c) prior to Closing, after the
Closing Date Buyer shall take all actions (or shall cause its Affiliates to take
all actions) reasonably requested by Parent to give effect to
Section 2(c).
(b) Closing
Date. On the Closing Date, Buyer shall cause each Target
Company and each Target Subsidiary to conduct its business in the ordinary
course in substantially the same manner as currently conducted and on the
Closing Date shall not permit any Target Company or Target Subsidiary to effect
any extraordinary transactions (other than any such transactions expressly
required by applicable Law or by this Agreement) that could result in Tax
liability to any Target Company or Target Subsidiary in excess of Tax liability
associated with the conduct of its business in the ordinary course.
(c) Section 338(g)
Elections. Buyer shall not make an election under
Section 338(g) of the Code for any Target Company or Target
Subsidiary.
(d) Post-Closing
Cooperation. (i) Buyer, on the one hand, and
Parent, on the other hand, shall cooperate with each other, and shall cause
their Affiliates and their officers, employees, agents, auditors and
representatives to cooperate with each other, after the Closing to facilitate
the orderly transition of the Business to Buyer after the Closing and to
minimize any disruption to the Business that might result from the transactions
contemplated by this Agreement. After the Closing, upon reasonable
written notice, Buyer, on the one hand, and Parent, on the other hand, shall
furnish or cause to be furnished to the other and the other’s Affiliates and
their officers, employees, counsel, auditors and representatives access, during
normal business hours, to such information and assistance relating to the
Business (to the extent within the control of such Party) as is reasonably
necessary for financial reporting, accounting and Tax matters.
(ii) Buyer,
on the one hand, and Parent, on the other hand, shall reimburse the other for
reasonable and documented out-of-pocket costs and expenses incurred in assisting
the other pursuant to this Section 6(d). Neither Party shall be
required by this Section 6(d) to take any action that would unreasonably
interfere with the conduct of its business or unreasonably disrupt its normal
operations (or, in the case of Buyer, those of the Business).
(e) Non-Competition;
Non-Solicitation. (i) For
a period of three years from and after the Closing Date (or, solely in the case
of the active pharmaceutical ingredients bacitracin and bacitracin zinc, five
years), neither Parent nor any of its Subsidiaries or Affiliates (in their
capacity as such) will, directly or indirectly, manufacture or sell the active
pharmaceutical ingredients set forth on Section 6(e)(i) of the Disclosure
Schedule primarily for incorporation into finished dose human pharmaceutical
products (the “API
Competitive Activities”); provided, however, that it
shall not be a violation of this Section 6(e)(i) for Parent or any of its
Affiliates or Subsidiaries to (A) own or acquire any equity securities (or
securities convertible into
equity securities) of any Person which invests in,
manages or operates a business that engages in API Competitive Activities, in
each case, provided that such
equity securities (or securities convertible into equity securities) represent
less than 5% of the outstanding capital stock of such Person, (B) own or
acquire all or a majority of the stock or assets of any Person that derives
10% or
less of its annual consolidated revenues from API Competitive Activities,
(C) develop, manufacture or sell active pharmaceutical ingredients
primarily intended for incorporation into finished dose non-human pharmaceutical
products, (D) operate Parent’s animal health division or any other business
consisting of the research, development, manufacture, distribution or sale of
animal health products or (E) consummate any of the transactions contemplated by
this Agreement, any Ancillary Agreement and any Intercompany Assumed Agreement
and comply with the terms of this Agreement, each Ancillary Agreement and each
Intercompany Assumed Agreement. Subject to Section 11(d), nothing in
this Section 6(e)(i) shall prevent any sale of all or substantially all of the
assets or the business of Parent’s animal health division by Parent and its
Affiliates to any Person; provided such
purchaser shall be subject to the provisions of this Section
6(e)(i).
(ii) For
a period of three years from and after the Closing Date (or, solely in the case
of the active pharmaceutical ingredients bacitracin and bacitracin zinc, five
years), neither Buyer nor any of its Subsidiaries or Affiliates (in their
capacity as such) will, directly or indirectly, manufacture or sell active
pharmaceutical ingredients that are set forth on Section 6(e)(ii) of the
Disclosure Schedule primarily intended for incorporation into the finished dose
animal pharmaceutical products (the “AH Competitive
Activities”); provided, however, that it
shall not be a violation of this Section 6(e)(ii) for Buyer or any of its
Affiliates to (A) own or acquire any equity securities (or securities
convertible into equity securities) of any Person which invests in, manages or
operates a business that engages in AH Competitive Activities, in each case,
provided that
such equity securities (or securities convertible into equity securities)
represent less than 5% of the outstanding capital stock of such Person,
(B) own or acquire all or a majority of the stock or assets of any Person
that derives 10% or less of its annual consolidated revenues from AH Competitive
Activities, (C) develop, manufacture or sell active pharmaceutical
ingredients primarily intended for incorporation into finished dose human
pharmaceutical products, (D) operate the Business in the manner it is
conducted as of the date of this Agreement, (E) consummate any of the
transactions contemplated by this Agreement, any Ancillary Agreement and any
Intercompany Assumed Agreement and comply with the terms of this Agreement, each
Ancillary Agreement and each Intercompany Assumed Agreement or (F) manufacture
or sell any of the Products listed on Section 6(e)(ii)(F) of the Disclosure
Schedule in human grade (the “Exception Products”);
provided that
none of Buyer nor its Subsidiaries or Affiliates may knowingly manufacture the
Exception Products for or sell the Exception Products to customers who intend to
incorporate the Exception Products into finished dose non-human pharmaceutical
products, except for annual sales of the Exception Products in any fiscal year
in an aggregate amount no greater than an amount equal to 105% of the average of
the aggregate yearly sales of the Exception Products by the Business for the
2006 and 2007 fiscal years (the “Exception Product Sales
Cap”); provided however that for the
fiscal year commencing on January 1, 2009 the Exception Product Sales Cap shall
increase by 5%, and shall increase by an
additional 5% for each fiscal year thereafter. Prior
to the Closing Date, Parent shall deliver to Buyer a list of the customers who
incorporated the Exception Products into finished dose non-human pharmaceutical
products, together with a statement setting out total sales by the Business in
each of 2006 and 2007 of the Exception Products that were used in connection
with finished dose non-human pharmaceutical products. Subject to
Section 11(d), nothing in this Section 6(e)(ii) shall prevent any sale of all or
substantially all of the assets or the business of the Business by the Buyer
Entities to any Person; provided such
purchaser shall be subject to the provisions of this Section
6(e)(ii).
(iii) For
a period of twelve (12) months following the Closing Date, none of Parent nor
any of its Subsidiaries shall induce, solicit or encourage any Person who is at
such time a Transferred Employee to leave or curtail his or her employment with
the Buyer Entities; provided, however, that it
shall not be a violation of this Section 6(e)(iii) for Parent or any of its
Subsidiaries to engage in general advertising or employee search activities
targeted to a broad pool of potential applicants for a position (and not
specifically targeting employees of the Buyer Entities).
(iv) Except
as otherwise specifically required by this Agreement, from the date of this
Agreement until twelve (12) months following the Closing Date, the Buyer
Entities shall not induce, solicit or encourage any Person who is an employee of
Parent or its Affiliates, other than the Transferred Employees, to leave or
curtail his or her employment with Parent or its Affiliates; provided, however, that it
shall not be a violation of this Section 6(e)(iv) for any of the Buyer
Entities to engage in general advertising or employee search activities targeted
to a broad pool of potential applicants for a position (and not specifically
targeting employees of Parent or its Subsidiaries).
(f) Use of Name and
Trademarks. Buyer
shall promptly, and in any event within twelve (12) months after the Closing
Date, revise product literature and labeling to (a) delete all references
to the Seller Name and (b) delete all references to Parent’s or any of its
Affiliates’ customer service address or phone number; provided, however, that
(i) for a period no longer than twelve (12) months after the Closing Date,
Buyer and its Affiliates shall have the right to use, solely in connection with
the operation of the Business, printed purchase orders, sales invoices,
marketing materials, stationary, printed forms, other documents and office
supplies, in each case, on hand on the Closing Date, containing the Seller Name
thereon, and (ii) for the shorter of twenty-four (24) months after the
Closing Date or such time as the use of packaging materials, stocks and shipping
supplies is necessary to comply with applicable marketing authorizations, Buyer
and its Affiliates shall have the right to use, solely in connection with the
operation of the Business, packaging materials, stocks and shipping supplies
(collectively, together with the materials described in clause (i) above,
the “Marketing
Material”), in each case, on hand on the Closing Date, containing the
Seller Name thereon. Buyer shall promptly, and in any event within
one-hundred-eighty (180) days after the Closing Date, amend the certificate of
incorporation, approval certificate, business license or other relevant
corporate documentation of the Target Companies and Target Subsidiaries (as the
case may be) to delete any references to the Seller Name in the names of the
Target Companies and Target Subsidiaries. In no event shall Buyer use
the Seller Name (or any name confusingly similar thereto), or any of Parent’s or
its Affiliates’ addresses, phone
numbers or the Marketing Materials after the Closing
in any manner or for any purpose different from the use of the Seller Name,
addresses, phone numbers or Marketing Materials by the Business during the
180-day period preceding the Closing Date. With respect to the
Inventory being transferred as part of the Acquired Assets and any Inventories
of the Target Companies and Target Subsidiaries as of the Closing Date, Buyer
may continue to sell such Inventory, notwithstanding that it bears the Seller
Name, for a reasonable time after the Closing Date, not to exceed twenty-four
(24) months. “Seller Name” means
“Alpharma”, any variations and derivatives thereof and any other logos or
trademarks of Parent or its Affiliates not included in the Intellectual Property
that is owned by the Target Companies or Target Subsidiaries and primarily used
in or related to the Business. Buyer shall use its reasonable best
efforts to cause any marketing authorizations of the Business to be revised to
remove any references to the Seller Name as soon as practicable but in no event
less than twenty-four (24) months after the Closing Date. After the
Closing, none of Parent nor any of the Subsidiaries shall, directly or
indirectly, use or do business, or allow any of its Affiliates to use or do
business under the names and marks “A.L. Laboratories”
and Apothekernes Laboratorium” (or any other name confusingly similar to such
names and marks).
(g) Employee Benefits
Matters.(i) From
and after the date hereof until the Closing, Buyer shall reasonably consult with
Parent before distributing any communications to any Employees of the Business
relating to employee benefits or post-Closing terms of
employment. From after the date hereof, Sellers shall reasonably
consult with Buyer before distributing any communications to any Employees of
the Business regarding or relating to the transactions contemplated hereby, and
shall incorporate Buyer’s reasonable comments in such
communications. Parent shall reasonably consult with Buyer before any
negotiations or consultation process with works councils that are required to
accomplish the transfer of any Employees of the Business to the Buyer
Entities.
(ii) Prior
to the Closing and effective on the Closing Date, Buyer or its Affiliates will
offer employment to each of the Employees set forth on Section 6(g)(ii) of
the Disclosure Schedule (the “Assumed Employees”)
at the same wage or salary levels, as applicable, and with employee benefits
that are no less favorable in the aggregate than the employee benefits of such
Assumed Employees as of the date hereof. The Buyer Entities shall
bear 100% of the costs relating to, and shall indemnify and hold harmless Parent
and its Subsidiaries from and against, any claims made by any Assumed Employee
for any statutory or common law severance or other separation benefits, any
contractual or other severance or separation benefits and any other legally
mandated payment obligations (including any compensation payable during a
mandatory termination notice period and any payments pursuant to a Judgment of a
court having jurisdiction over the Parties), in each case, arising out of or in
connection with the failure of the Buyer Entities to make an offer of employment
to or continue the employment of any Assumed Employee in accordance with this
Agreement.
(iii) For
a period of two years immediately after the Closing Date, the Buyer Entities
shall provide to Transferred Employees the same base salary or
wage rates, as applicable, and employee benefits
under plans, programs and arrangements (other than equity-based plans) which, in
the aggregate, will provide benefits to the Transferred Employees which are no
less favorable in the aggregate to the benefits provided by Parent and its
Subsidiaries immediately prior to the Closing Date (excluding any equity-based
compensation or benefits). Notwithstanding the foregoing, nothing
contemplated by this Agreement shall be construed as requiring either Buyer, its
Affiliates or the Target Companies and the Target Subsidiaries to be obligated
to continue the employment of any Transferred Employees for any period after the
Closing Date.
(iv) Notwithstanding
Section 6(g)(iii) above, effective from and after the Closing Date,
(1) with respect to non-U.S. Transferred Employees, the Buyer Entities
shall provide to such Transferred Employees the same terms and conditions of
employment (including Employee Benefit Plans, programs, social insurance
contribution or arrangements) to the extent required by applicable Law in any
non-U.S. jurisdiction such that Parent and Parent’s Subsidiaries shall
avoid any liability that would otherwise result from a failure to maintain the
same terms and conditions (including Employee Benefit Plans, programs or
arrangements), and (2) with respect to Transferred Employees covered by
Collective Bargaining Agreements, the Buyer Entities shall remain bound by or,
as applicable, assume such Collective Bargaining Agreements and provide to such
Transferred Employees the same terms and conditions of employment (including
Employee Benefit Plans, programs or arrangements) to the extent required by the
applicable Collective Bargaining Agreements or by applicable Law.
(v) For
the two-year period immediately following the Closing Date, the Buyer Entities
shall provide severance or similar termination benefits to each Transferred
Employee who is covered by the Retention Arrangements, Alpharma Severance Plan
included in Section 6(g)(v) of the Disclosure Schedule or any severance plan
maintained by any of the Target Companies (the “Target Company Severance
Plans”) immediately prior to the Closing Date and whose employment is
terminated by the Buyer Entities within such two-year period for reasons other
than for “cause” (as defined in the Alpharma Severance Plan) at least as
favorable to the Transferred Employees as those contained in the Retention
Arrangements, the Alpharma Severance Plan or the Target Company Severance
Plans.
(vi) Effective
from and after the Closing Date, the Buyer Entities shall (A) recognize,
for all purposes (other than benefit accrual under a defined benefit pension
plan other than any Target Company Benefit Plan) under all Employee Benefit
Plans, programs and arrangements established or maintained by the Buyer Entities
for the benefit of the Transferred Employees, service with the Asset Sellers,
the Target Companies and the Target Subsidiaries prior to the Closing Date to
the extent such service was recognized under the corresponding Seller Employee
Benefit Plan covering such Transferred Employees including, for purposes of
eligibility, vesting and benefit levels and accruals, and (B) waive any
pre-existing condition, exclusion, actively-at-work requirement or waiting
period under all employee health and other welfare benefit plans established or
maintained by the Buyer Entities for the benefit of
the Transferred Employees, except to the extent such pre-existing condition,
exclusion, requirement or waiting period would have applied to such individual
under the corresponding Seller Employee Benefit Plan and (C) provide full
credit for any co-payments, deductibles or similar payments made or incurred
prior to the Closing Date for the plan year in which the Closing
occurs.
(vii) Effective
from and after the Closing Date, the Buyer Entities shall assume, honor, and
perform all obligations and liabilities in respect of any Transferred Employee
for (A) all accrued but unused flex time, vacation days and sick days to which
any Transferred Employee is entitled as of the Closing Date under the Seller
Employee Benefit Plans and (B) claims for hospital, medical, dental or
other health benefits, expenses or other reimbursements relating to any medical
service, product or confinement provided to or in respect of any Transferred
Employee (or his or her eligible dependents) incurred on or after the Closing
Date or prior to the Closing Date to the extent accrued on the
Statement.
(viii) As
a result of Buyer’s acquisition of the outstanding stock or equity interests (as
the case may be) of the Target Companies and the Target Subsidiaries, the Buyer
Entities shall retain and be liable for all of the Seller Employee Benefit Plans
sponsored by the Target Companies and the Target Subsidiaries, including the
defined benefit pension plans and defined contribution plans set forth on
Section 6(g)(viii) of the Disclosure Schedule. Buyer shall
assume any liabilities with respect to (i) any early retirement pension
plans for the benefit of Employees of the Business and former employees of the
Business in Norway and Denmark and (ii) any severance plans or arrangements
for the benefit of any Employees of the Business or any former employees of the
Business in Norway and Denmark.
(ix) For
the two-year period immediately following the Closing Date, the Buyer Entities
shall maintain the defined contribution plans sponsored by the Target Companies
and the Target Subsidiaries, and shall provide to each of the Transferred
Employees who participates in any such plan immediately prior to the Closing
Date with a level of benefits pursuant to such plan that is no less favorable
than the level of benefits provided under such plan immediately prior to the
Closing Date.
(x) Effective
as of the Closing Date, Seller shall cause all U.S. Transferred Employees
to be 100% vested in their benefits under the Alpharma Inc. Pension Plan; the
A.L. Pharma Supplemental Pension Plan; the Alpharma Inc. Savings Plan and the
Alpharma Inc. Prior Supplemental Savings Plan, the Alpharma Inc. 2005
Supplemental Savings Plan and the Alpharma Inc. 2007 Supplemental Savings Plan
and shall permit distributions in accordance with the terms of such
plans. No assets or liabilities from the Alpharma Inc. Pension Plan
or the A.L. Pharma Supplemental Pension Plan shall be transferred to the Buyer
Entities or to any pension plan maintained by Buyer or one of its Subsidiaries,
and Seller shall remain responsible for any and all liabilities to Employees of
the Business in
respect of the Alpharma Inc. Pension Plan or the A.L.
Pharma Supplemental Pension Plan. As of the Closing Date, Seller
shall contribute, to the extent not already contributed prior thereto, an
aggregate cash amount to the Alpharma Inc. Savings Plan on behalf of the
Transferred Employees equal to the “employer matching contributions” payable for
the calendar year in which the Closing occurs under the Alpharma Inc. Savings
Plan with respect to the elective deferred contributions actually made by the
Transferred Employees to such plans prior to the Closing Date.
(xi) Effective
from and after the Closing Date, the Buyer Entities shall assume, honor, and
perform all obligations and liabilities under (A) the Retention Arrangements
listed on Section 6(g)(xi)(A) of the Disclosure Schedule; provided that Parent
shall reimburse Buyer to the extent that amounts paid pursuant to the Retention
Arrangements exceed the Retention Threshold; provided further, that Parent
shall not be obligated to reimburse Buyer under any Retention Arrangement to the
extent any Buyer Entity amends any such Retention Arrangement, (B) the Bonus
Obligations (to the extent such obligations have not been paid as of the Closing
Date), (C) the Pension Obligations, (D) the Early Retirement Obligations listed
on Section 6(g)(xi)(D) of the Disclosure Schedule and (E) the Severance
Obligations.
(xii) The
provisions of this Section 6(g) are solely contractual commitments between the
parties to this Agreement that may be waived or amended at any time by the
parties hereto without regard to the impact of such waiver or amendment on any
employee, former employee or other third party. The provisions of
this Section 6(g) are solely for the benefit of the parties to this Agreement,
and no employee or former employee or any other individual associated therewith
shall be regarded for any purpose as a third party beneficiary of this
Agreement, and nothing herein shall be construed as an amendment to any Employee
Benefit Plan or Collective Bargaining Agreement for any purpose. For
the avoidance of doubt, nothing herein is or shall be deemed a guarantee of
continued employment with respect to any Employee of the Business.
(h) Insurance. (A) From
and after the Closing Date for a period of not less than five (5) years, Buyer
will maintain product liability insurance policies with insurance companies that
have a current Best’s or Standard & Poor’s rating of not less than “A-” and
a current policyholder’s surplus of not less than $1,000,000,000 (or the
equivalent if a non-U.S. insurer). Such insurance policies will
designate Parent as an additional insured. Furthermore, the policies
shall provide for a waiver of subrogation in favor of Parent. The
limits of liability, deductibles or retentions of such product liability
insurance will be similar in all material respects to the limits of liability,
deductibles or retentions maintained by companies of a similar financial size
and a similar business purpose as that conducted by the Business after giving
effect to the transactions contemplated hereby.
(B) From
and after the Closing Date, Parent will maintain the interest and rights of the
Target Companies and Target Subsidiaries up to the Closing Date as
additional
insureds as their interests may appear or beneficiaries or in any other capacity
under the “claims made” or “occurrence reported” policies within the Alpharma
Global Insurance Program in respect of claims made or occurrences reported
during the period prior to the Closing Date. Any Insurance proceeds
received by Seller after the Closing under such policies and programs in respect
of the Target Companies and the Target Subsidiaries with respect to liabilities
that Parent has Knowledge of prior to the Closing that would be Assumed
Liabilities if the Target Companies and Target Subsidiaries were Asset Sellers
shall be for the benefit of Buyer and its Subsidiaries; provided that
liabilities or expenses resulting from deductibles, self-insurance retentions,
or other amounts, including allocated and unallocated loss expenses, as defined
in the policies governing such benefits, shall be borne by Buyer and its
Subsidiaries; provided
further that 50% of any liabilities resulting from product liability
claims made between the date of this Agreement and the Closing Date under
Parent’s U.S. product liabilities policy that would be reimbursable under the
terms of such policy except for the deductible on such policy shall be borne by
Parent, provided
however
that the aggregate amount of such liabilities to be borne by Parent for all
claims under this proviso will be limited to $2,500,000 in
aggregate.
(i) Confidentiality. Except
to the extent disclosure is required by applicable Law, Parent shall keep
confidential, and shall cause its Subsidiaries to keep confidential, all
information relating to the Business (“Confidential Business
Information”), except with respect to Confidential Business Information
(A) that is available to the public prior to the Closing Date, or
thereafter becomes available to the public other than as a result of a breach of
this Section 6(i) or (B) that becomes available to Parent or its
Subsidiaries after the Closing Date on a non-confidential basis from a source
other than Buyer or its Subsidiaries; provided that such
source was not known by the recipient to be bound by a confidentiality
obligation to Buyer with respect to such information. Notwithstanding
the foregoing sentence, Parent shall be permitted disclose Confidential Business
Information to the extent such information is related to a business other than
the Business. The covenant set forth in this Section 6(i) shall
terminate on the first anniversary after the Closing Date.
(j) Transition Services
Agreement. At the Closing, Buyer and Parent shall enter
into, execute and deliver the Transition Services Agreement.
(k) Closure of Beijing
Representative Office. From and after the Closing Date,
Buyer and Parent and each of their Affiliates shall cooperate in closing
the Beijing Representative Office of Alpharma AS (“BRO”). At
Buyer's request, Parent shall permit its or its Subsidiary’s employee or agent
to be the representative officer of the BRO for the sole purpose of winding down
the office, in which event Buyer shall incur no employment related liability for
such designated employee or agent, who shall remain at all times the employee or
agent of Parent or its Subsidiary.
(l) Patent
Licenses. Effective as of the Closing, the Buyer Entities hereby
grant to Sellers and their Affiliates a perpetual, transferable, nonexclusive,
worldwide,
paid-up, royalty-free license to the Non-Exclusive
Patents as defined in Section 4(k)(i) of the Disclosure Schedule.
(a) Conditions to Buyer’s
Obligation. Buyer’s obligation to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the
representations and warranties set forth in Section 3(a) and Section 4
shall be true and correct as of the Closing Date (except to the extent expressly
made as of an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date), except to the extent that
the facts or matters as to which such representations and warranties are not so
true and correct as of the Closing Date (without giving effect to any
qualifications and limitations as to “materiality,” “Material Adverse Effect”
and “Material Adverse Change” set forth therein) would not, individually or in
the aggregate, have a Material Adverse Effect;
(ii) Sellers
shall have performed and complied with all of their covenants hereunder in all
material respects through the Closing required by this Agreement to be performed
or complied with by Sellers by the time of Closing;
(iii) there
shall not be any Judgment in effect preventing consummation of any of the
transactions contemplated by this Agreement and no action, suit, claim or
proceeding shall be pending that would reasonably be expected to prohibit or
enjoin the consummation of the transactions contemplated by this
Agreement;
(iv) Parent
shall have delivered a waiver of the non-competition and non-solicitation
provisions in respect of Parent set out in the Agreement between Alpharma AS and
Xxxx-Aake Carlsson dated November 9, 2007; provided that such
waiver shall only be required to be delivered pursuant to this clause (iv) to
the extent necessary to allow Xxxx-Aake Carlsson to continue to be employed by
the Business following the Closing;
(v) Parent
shall have delivered to Buyer a certificate executed by an authorized officer of
Parent to the effect that each of the conditions specified above in
Sections 7(a)(i) and (ii) is satisfied in all respects;
(vi) all
applicable waiting periods (and any extensions thereof) or required approvals,
authorizations or consents under the Xxxx-Xxxxx-Xxxxxx Act or any material
Foreign Merger Control Law shall have expired, been obtained or otherwise been
terminated, as applicable;
(vii) Parent
shall have delivered to Buyer certificates complying with the Code and Treasury
Regulations, in form and substance reasonably satisfactory to Buyer, duly
executed and acknowledged, certifying that none of the Acquired Assets is a
U.S. real property interest; if no such certificate is received by the
Closing, there shall be withholding to the extent
required by Section 1445 of the Code (and the amount of any such
withholding shall be treated as part of the Purchase Price);
(viii) since
the date of this Agreement, there shall not have occurred a Material Adverse
Effect; and
(ix) completion
of the Pre-Closing Restructuring, unless Buyer waives such condition and the
Parties agree to proceed with the Alternative Structuring.
Buyer may waive any condition specified
in this Section 7(a) if it executes a writing so stating at or prior to the
Closing.
(b) Conditions to Sellers’
Obligation. Sellers’
obligation to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following
conditions:
(i) the
representations and warranties set forth in Section 3(b) above shall be
true and correct as of the Closing Date immediately before the Closing (except
to the extent expressly made as of an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date), except to the extent that the facts or matters as to which such
representations and warranties are not so true and correct as of the Closing
Date (without giving effect to any qualifications and limitations as to
“materiality” or “material adverse effect” set forth therein) would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the ability of Buyer to perform its obligations under
this Agreement or prevent or materially impede, interfere with, hinder or delay
the consummation of the Transaction and the other transactions contemplated by
this Agreement, including the Financing;
(ii) Buyer
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing required by this Agreement to be performed
or complied with by Buyer by the time of Closing;
(iii) there
shall not be any Judgment in effect preventing consummation of any of the
transactions contemplated by this Agreement and no action, suit, claim or
proceeding shall be pending that would reasonably be expected to prohibit or
enjoin the consummation of the transactions contemplated by this
Agreement;
(iv) Buyer
shall have delivered to Parent a certificate executed by an authorized officer
of Buyer to the effect that each of the conditions specified above in
Sections 7(b)(i) and (ii) is satisfied in all respects; and
(v) all
applicable waiting periods (and any extensions thereof) or required approvals,
authorizations or consents under the Xxxx-Xxxxx-Xxxxxx Act or any material
Foreign Merger Control Law shall have expired, been obtained or otherwise been
terminated, as applicable.
Sellers may waive any condition
specified in this Section 7(b) if Parent executes a writing so stating at
or prior to the Closing.
(c) Frustration of Closing
Conditions. Neither Buyer, on the one hand, nor Sellers,
on the other hand, may rely on the failure of any condition set forth in this
Section 7 to be satisfied if such failure was caused by such Party’s
failure to act in good faith or to comply with its obligations under this
Agreement, including using its reasonable best efforts to cause the Closing to
occur and to arrange the Financing as required by
Section 5(c).
(a) Survival. All
of the representations and warranties in Sections 3 and 4 of this Agreement
(other than Section 4(i)) and the covenants contained in Section 5 shall survive
the Closing and continue in full force and effect for a period of 18 months
thereafter; provided, that all of
the representations and warranties of Parent or Buyer, as the case may be,
contained in Sections 3(a)(ii), 3(a)(iii), 3(b)(ii), 3(b)(x), 4(b) and 4(o)
shall survive the Closing and continue in full force and effect for a period of
three years thereafter. The representations and warranties in Section
4(i) shall not survive the Closing. The covenants contained herein
(other than those contained in Section 5) shall survive indefinitely except as
otherwise specified herein.
(b) Indemnification by
Parent. Subject to Section 8(e) below, in the event
of any breach or inaccuracy of any of the representations, warranties or
covenants made by Parent or any Seller (other than a breach or inaccuracy of a
representation, warranty or covenant in respect of Taxes, which shall be subject
exclusively to Section 9(b) below) contained herein, provided that Buyer
makes a written claim for indemnification against Parent pursuant to
Section 8(d) below within the applicable survival period, Parent shall
indemnify Buyer, its Affiliates (including, after the Closing Date, the Target
Companies and the Target Subsidiaries) and each of their stockholders, members,
partners, directors, officers, employees, agents and representatives (the “Buyer Indemnitees”)
from and against any Losses any of them has suffered through and after the date
of the claim for indemnification by Buyer caused by or arising from Parent’s or
such Seller’s breach or inaccuracy. In addition, Parent agrees to
indemnify the Buyer Indemnitees from and against any Losses any of them shall
suffer caused by or arising from any liability that is an Excluded
Liability.
(c) Indemnification by
Buyer. In
the event of any breach of inaccuracy of any of the representations, warranties
and covenants made by Buyer contained herein, provided that Parent
makes a written claim for indemnification against Buyer pursuant to
Section 8(d) below, Buyer shall indemnify Parent, its Affiliates and each
of their stockholders, members, partners, directors, officers, employees, agents
and representatives (the “Seller Indemnitees”)
from and against any Losses any of them has suffered through and after the date
of the claim for indemnification by Parent caused by or arising from Buyer’s
breach or inaccuracy. Buyer agrees to indemnify the Seller
Indemnitees from and against any Losses any of them shall suffer caused by or
arising
from any liability that is an Assumed Liability or
any liability that would be an Assumed Liability if the Target Companies or
Target Subsidiaries were Asset Sellers.
(d) Procedures. (i) Third Party
Claims. (A) In order for a Person (the “Indemnified Party”)
to be entitled to any indemnification provided for under Section 8(b) or
(c) in respect of, arising out of or involving a claim made by any Person
against the Indemnified Party (a “Third Party Claim”),
such Indemnified Party must notify the Person from whom it is requesting
indemnification (the “Indemnifying Party”)
in writing (and in reasonable detail) of the Third Party Claim promptly
following receipt by such Indemnified Party of notice of the Third Party Claim;
provided, however, that failure
to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Party shall
not be liable for any expenses incurred during the period in which the
Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly following
the Indemnified Party’s receipt thereof, copies of all material notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim.
(B) If
a Third Party Claim is made against an Indemnified Party, the Indemnifying Party
shall be entitled to participate in the defense thereof and, if it so chooses,
to assume the defense thereof with counsel selected by the Indemnifying Party;
provided that
such counsel is not reasonably objected to by the Indemnified
Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the
Indemnifying Party assumes such defense, the Indemnified Party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such
defense. The Indemnifying Party shall be liable for the fees, costs
and expenses of counsel employed by the Indemnified Party for any period during
which the Indemnifying Party has not assumed the defense thereof (other than
during any period in which the Indemnified Party shall have failed to give
notice of the Third Party Claim as provided above). If both the
Indemnifying Party and the Indemnified Party are parties to or subjects of a
Third Party Claim and the Indemnified Party shall have been advised by counsel
that there are one or more legal or equitable defenses available to it that are
different from or in addition to those available to the Indemnifying Party, and,
in the reasonable opinion of the Indemnified Party, counsel for the Indemnifying
Party could not adequately represent the interests of the Indemnified Party
because such interests could be in conflict with those of the Indemnifying
Party, then the Indemnified Party shall be entitled to retain its own counsel,
at the expense of the Indemnifying Party; provided that in any
case the Indemnifying Party shall not be obligated to pay the expenses of more
than one separate counsel for all Indemnified Parties, taken
together. Each Party shall cooperate in the defense or prosecution of
any Third Party Claim and the Party controlling the defense thereof shall keep
the other party reasonably advised of the status of such
defense. Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to the Indemnifying
Party of records and information that are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the Indemnifying Party
assumes the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the Indemnifying Party’s prior written
consent. If the Indemnifying Party assumes the defense of a Third
Party Claim, the Indemnified Party shall agree to any settlement, compromise or
discharge of a Third Party Claim that the Indemnifying Party may recommend and
that by its terms obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third Party Claim and which unconditionally
and irrevocably releases the Indemnified Party completely in connection with
such Third Party Claim. All claims under Section 8(b) and (c)
other than Third Party Claims shall be governed by
Section 8(d)(ii).
(ii) Other
Claims. If any Indemnified Party should have a claim against
any Indemnifying Party under Section 8(b) and (c) that does not involve a
Third Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall promptly deliver notice of such
claim to the Indemnifying Party after obtaining knowledge of such
claim. The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party under Section 8(b) and (c),
except to the extent that the Indemnifying Party shall have been actually
prejudiced by such failure. If the Indemnifying Party does not notify
the Indemnified Party within 60 calendar days following its receipt of such
notice that the Indemnifying Party disputes its liability to the Indemnified
Party under Section 8(b) and (c), such claim specified by the Indemnified
Party in such notice shall be conclusively deemed a liability of the
Indemnifying Party under Section 8(b) and (c) and the Indemnifying Party
shall pay the amount of such liability to the Indemnified Party on demand or, in
the case of any notice in which the amount of the claim (or any portion thereof)
is estimated, on such later date when the amount of such claim (or such portion
thereof) becomes finally determined.
(e) Limitations on
Indemnification. (i) Notwithstanding
anything to the contrary herein, Parent shall not be required to indemnify any
Buyer Indemnitee for any Losses arising from any breach or inaccuracy of any
representations or warranties contained in Sections 3(a) and 4 unless and
until the aggregate amount of all such claims is at least equal to $4,100,000
(and Parent shall only be required to indemnify Buyer for such claims in excess
of such amount). Parent’s aggregate amount of liability under
Section 8(b) for breaches and inaccuracies of any representations or
warranties contained in Sections 3(a) and 4 is limited to an amount equal
to $60,000,000. Parent shall not have any liability under
Section 8(b) for any individual item where the Loss relating thereto is
less than $75,000.
(ii) Notwithstanding
anything to the contrary herein, Parent shall not be obligated to indemnify
Buyer against any Losses arising from or relating to any claim or liability to
the extent such claim or liability or the Losses therefrom as and to the extent
such liabilities are reflected in the Statement or the FX
Statement.
(f) Calculation of
Losses. (i) The amount of any Loss for which
indemnification is provided under this Section 8 and under Section 9
shall be net of any amounts actually recovered by the Indemnified Party under
insurance policies with respect to such Loss less the aggregate cost and expense
of pursuing any such insurance claims.
(ii) The
amount of any Loss for which indemnification is provided under this
Section 8 and under Section 9 shall be reduced to take account of
any net Tax benefit realized by the Indemnified Party arising from the
incurrence or payment of any such Loss and shall be increased by the amount of
the Income Tax, if any, attributable to the receipt of such indemnity payment
subject to the Parties’ compliance with Section 8(h). Tax benefits
are to be determined using the assumptions that each Party pays federal, state,
local and foreign Tax at the highest applicable corporate Tax rate and can fully
utilize any available Tax benefits.
(iii) Except
as otherwise provided in this Section 8(f), in any case where the
Indemnified Party subsequently recovers from third parties any amount in respect
of a matter with respect to which an Indemnifying Party has indemnified it
pursuant to Section 8 or Section 9, such Indemnified Party shall
promptly pay over to the Indemnifying Party the amount so recovered (after
deducting therefrom the full amount of the expenses incurred by it in procuring
such recovery), but not in excess of any amount previously so paid by the
Indemnifying Party to or on behalf of the Indemnified Party in respect of such
matter.
(g) Exclusive
Remedy; No Consequential Damages; Mitigation. (i) Subject
to Section 11(k), the Parties acknowledge and agree that, after the
Closing, the foregoing indemnification provisions in this Section 8 and,
with respect to Taxes, the provisions of Section 9, shall be the exclusive
remedy of the Parties with respect to claims relating to this Agreement, the
transactions contemplated by the Agreement, and the Business and its assets and
liabilities (other than for fraud). Without limiting the generality
of the foregoing, Buyer acknowledges and agrees that it shall not have any
remedy after the Closing for any breach of the representations and warranties in
Sections 3(a) and 4 above, with respect to which Buyer fails to make a
written claim for indemnification within the applicable survival period set
forth in Section 8(a) above (other than for fraud). In
furtherance of the foregoing, each of Buyer and Parent, for itself and its
Affiliates (including the Target Companies and Target Subsidiaries), waives,
from and after the Closing, to the fullest extent permitted under applicable
Law, any and all rights, claims and causes of action (other than claims of, or
causes of action arising from, fraud) for damages it may have against the other
or its Affiliates arising under this Agreement, any document or certificate
delivered in connection herewith, any applicable Law (including the United
States Comprehensive Environmental Response, Compensation, and Liability Act and
any other Environmental Law), common law or otherwise, except pursuant to the
indemnification provisions set forth in this Section 8.
(ii) None
of Buyer, any Target Company, any Target Subsidiary, any Asset Seller or any of
their respective Subsidiaries shall be liable or otherwise responsible to any
other Person for consequential, incidental, special or punitive damages arising
out of, or relating to, this Agreement or the transactions contemplated by this
Agreement, the performance or breach of this Agreement or any liability or
obligation retained or assumed under this Agreement, other than any such
consequential, incidental, special or punitive damages that are the subject of a
Third Party Claim for which indemnification is available hereunder.
(iii) Buyer
and Parent shall cooperate with each other with respect to resolving any claim
or liability with respect to which one Party is obligated to indemnify the other
Party hereunder, including by using its reasonable best efforts to mitigate or
resolve any such claim or liability. In the event that Buyer or
Parent shall fail to use such reasonable best efforts to mitigate or resolve any
claim or liability, then notwithstanding anything else to the contrary contained
herein, the other Party shall not be required to indemnify any Person for any
loss, liability, claim, damage or expense that could reasonably be expected to
have been avoided if Buyer or Parent, as the case may be, had made such
efforts.
(iv) The
rights to indemnification under this Section 8 shall not be adversely affected
or deemed waived by reason of the fact that Buyer, its employees, agents or
representatives became aware after the date of this Agreement that any
representation or warranty is or might be breached or inaccurate; provided that the
forgoing limitation on indemnification shall not apply to the knowledge of
Buyer, its employees, agents and representatives of any breach or inaccuracy of
any representation or warranty as of the date of this Agreement.
(h) Tax Treatment of Indemnity
Payments. Any indemnity payment under this Agreement shall
be treated as an adjustment to the Purchase Price for Tax purposes unless there
is no reasonable basis for doing so under the applicable Tax Law.
(i) No Duplicative
Payments. Notwithstanding anything to the contrary in this
Agreement, it is intended that the provisions of this Agreement will not result
in a duplicative payment of any amount required to be paid under this Agreement,
and this Agreement shall be construed accordingly.
(a) Tax Sharing
Agreements. Any Tax sharing agreement between Sellers and
their Subsidiaries (other than the Target Companies and the Target Subsidiaries)
on the one hand and any of the Target Companies or the Target Subsidiaries on
the other hand shall be terminated as of the Closing Date.
(b) Tax Indemnification by
Parent. (i) From and after the Closing, Parent
shall indemnify the Buyer Indemnitees against and hold them harmless from any
Losses to the extent attributable to:
(A) except
as provided in Section 9(c), any Income Taxes imposed on the Target
Companies or the Target Subsidiaries, or imposed with respect to the Acquired
Assets, for any Pre-Closing Tax Period,
(B) except
as provided in Section 9(c), any Non-Income Taxes imposed on the Target
Companies or the Target Subsidiaries or imposed with respect to the Acquired
Assets, for any Pre-Closing Tax Period, but only to the extent the aggregate
amount of such Non-Income Taxes is in excess of the aggregate reserves for
Non-Income Tax liabilities included in the Statement,
(C) any
Taxes that may be imposed on any Target Company or any Target Subsidiary as a
result of being a member of a consolidated, combined, unitary or similar group
of corporations or other taxpayers at any time on or prior to the Closing Date
other than a group consisting solely of Target Companies and/or Target
Subsidiaries,
(D) any
Taxes for any Pre-Closing Tax Period of any Person (other than any Target
Company or Target Subsidiary) imposed on any Target Company or Target Subsidiary
as a transferee or successor, by contract or pursuant to any law,
(E) all
liability from any breach of Sellers’ covenants in this Section 9 relating to
Taxes,
(F) any
Transfer Taxes for which Parent is liable under Section 9(k),
(G) any
non-U.S. Taxes (other than Transfer Taxes and VAT) of any Seller, Target Company
or Target Subsidiary arising solely on the Closing Date solely by reason of the
transfers of the Target Shares and the Acquired Assets contemplated by this
Agreement,
(H) any
reasonable legal and accounting expenses related thereto, and
(I) any
liability resulting from any obligation of a Target Company or Target Subsidiary
under any stock purchase, asset purchase, merger or other similar
agreement entered into before the date hereof to indemnify any other Person
(other than a Target Company or Target Subsidiary) for any Taxes attributable to
a Pre-Closing Tax Period, provided that after
the Closing Date such Target Company or such Target Subsidiary has not waived
any defense it may have against any such obligation without the prior consent of
Parent.
(ii) Any
amount payable under subparagraphs 9(b)(i)(A) and 9(b)(i)(C) above shall be
reduced by any Tax benefit attributable to any net operating losses (or similar
Tax attributes) or any Tax credit of any Target Company or any Target
Subsidiary to which Buyer succeeded. Such
Tax benefit is to be determined using the assumptions that each Party pays
federal, state, local or foreign Tax at the highest applicable corporate Tax
rate and can fully utilize any available Tax benefits.
(iii) Notwithstanding
the foregoing, Parent shall not indemnify any Buyer Indemnitee for any Tax in
respect of any Pre-Closing Tax Period that is (A) an Assumed Liability or (B)
recoverable by any Buyer Indemnitee in a Post-Closing Tax Period (including, for
the avoidance of doubt, Taxes attributable to timing differences).
(c) Tax Indemnification by
Buyer. From and after the Closing, Buyer, the Target
Companies and the Target Subsidiaries shall, jointly and severally, indemnify
the Seller Indemnitees and hold them harmless from (i) any Taxes imposed on
any Seller Indemnitee (as they relate to the Business), the Target Companies, or
the Target Subsidiaries, or imposed with respect to the Acquired Assets, for any
Post-Closing Tax Period, (ii) any Transfer Taxes for which Buyer is liable
under Section 9(k), (iii) any breach by Buyer or any of its Affiliates
of any covenant contained in Section 6(b) or 6(c), (iv) all liability from
any breach of Buyer’s covenants in this Section 9 relating to Taxes, and (v) any
reasonable legal and accounting expenses related thereto.
(d) Straddle Periods. In
the case of any taxable period that includes (but does not end on) the Closing
Date (a “Straddle
Period”):
(i) real,
personal and intangible property Taxes (“Property Taxes”) of
the Target Companies, or the Target Subsidiaries, or imposed with respect to the
Acquired Assets, for the Pre-Closing Tax Period shall be allocated to the
Pre-Closing Tax Period on a pro rata basis (based on the
number of days during such taxable period elapsed prior to the Closing
Date). If at the time of Closing, the tax rate or the assessed
valuation for the year in which the Closing occurs has not yet been fixed,
Property Taxes shall be prorated based upon the tax rate and the assessed
valuation established for the previous tax year; and
(ii) the
Taxes (other than Property Taxes) of the Target Companies, or the Target
Subsidiaries, or imposed with respect to the Acquired Assets, for the
Pre-Closing Tax Period shall be computed as if such taxable period ended as of
the close of business on the day immediately preceding the Closing
Date.
(e) Tax Returns; Tax
Payments. (i) Parent shall be responsible for
the preparation and filing (taking into account any extensions received from the
relevant Taxing Authorities) of all Tax Returns required by Law to (A) be
filed by Parent or any of its Subsidiaries, or (B) be filed by any of the
Target Companies or Target Subsidiaries prior to the Closing Date.
(ii) Buyer,
the Target Companies and the Target Subsidiaries shall be responsible for the
preparation and filing (or causing to be filed) of all other Tax Returns related
to Target Companies or the Target Subsidiaries. Buyer, the
Target
Companies and the Target Subsidiaries shall not, without the prior consent of
Parent, engage any outside service provider in connection with any Tax Return of
any Target Company or any Target Subsidiary for any tax year that ends before
the Closing Date to be filed after the Closing Date, and Buyer, the Target
Companies and the Target Subsidiaries shall not, without the prior consent of
Parent, engage Ernst & Young for purposes of preparing any Tax Return of any
Target Company or any Target Subsidiary that relates to a Straddle
Period. In the case of a Tax Return (A) for a Straddle Period or (B)
for a Pre-Closing Tax Period filed after the Closing Date, Buyer shall prepare
such Tax Return on a basis consistent with past practice and submit such Tax
Return to Parent at least forty-five (45) calendar days prior to the due date
for filing such Tax Return (it being understood that (A) this clause shall not
limit Buyer’s right to reorganize the business arrangements of the Target
Companies or the Target Subsidiaries with effect after the Closing Date,
including the implementation of (or amendments to) any transfer pricing
arrangements involving the Target Companies or Target Subsidiaries, and (B)
Buyer shall, for purposes of preparing and filing the 2007 Norwegian Income Tax
Return of Alpharma AS, cause Alpharma AS to opt out of “installment sale”
treatment in respect of any transaction that occurred in 2007 and that would
otherwise qualify for such treatment and shall cause Alpharma AS to apply any of
its net operating losses against any gain realized from such transaction). If
Parent objects to any item on such Tax Return, it shall, within thirty (30) days
after delivery of such Tax Return, notify Buyer in writing that it so objects.
If a notice of objection is duly delivered, Buyer and Parent shall negotiate in
good faith and use their reasonable best efforts to resolve such items and, if
they are unable to do so within ten (10) calendar days, the disputed items shall
be resolved (within a reasonable time, taking into account the deadline for
filing such Tax Return) by an accounting firm mutually selected by Buyer and
Parent the cost of which shall be borne 50% by Parent and 50% by Buyer. Upon
resolution of all disputed items, the relevant Tax Return shall be adjusted to
reflect such resolution and shall be binding upon the Parties without further
adjustment.
(iii) All
Taxes due and payable with respect to such Tax Returns will be paid by filer,
subject to reimbursement by the other Party pursuant to Sections 9(b), 9(c)
and 9(d).
(iv) Buyer
and Parent further agree, upon reasonable request, to use reasonable efforts to
obtain any certificate or other document from any Governmental Entity or any
other Person as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).
(f) Tax Proceedings. (i) If
any Taxing Authority shall notify any Person entitled to indemnification under
this Section 9 (the “Tax Indemnified
Party”) of any Tax audit or proceeding, proposed Tax assessment or other
Tax matter (a “Tax
Proceeding”) which may give rise to a claim for indemnification against
any other Party (the “Tax Indemnifying
Party”) under this Section 9, then the Tax Indemnified Party shall
promptly
(and in any event within 10 business days after
receiving notice of the Tax Proceeding, with an expedited time frame where
necessary to comply with governmental deadlines in connection with such Tax
Proceeding) notify the Tax Indemnifying Party thereof in writing; provided, however, that failure
to timely give such notification shall not affect the indemnification provided
under this Agreement except to the extent the Indemnifying Party has been
prejudiced as a result of such failure (except that the Tax Indemnifying Party
shall not be liable for any expenses incurred during the period in which the
Indemnified Party failed to give such notice). Any such notice shall
describe in reasonable detail the type of Tax involved in the Tax Proceeding,
the tax year(s) at issue and the basis for the Tax claim against the Tax
Indemnifying Party, and shall include a copy of any materials received from the
applicable Taxing Authority in connection therewith.
(ii) In
the case of any Tax Proceeding:
(A) the
Controlling Party shall be entitled to appoint as lead counsel any legal counsel
of its choice and shall control the conduct of the Tax Proceeding;
(B) the
Controlling Party shall provide the Noncontrolling Party with a timely and
reasonably detailed account of each stage of the Tax Proceeding and a copy of
the portions of all documents relating to the Tax Proceeding that are relevant
to any Tax for which the Noncontrolling Party may be required to indemnify or
may otherwise be liable;
(C) the
Controlling Party shall consult with the Noncontrolling Party before taking any
significant action in connection with the Tax Proceeding that might adversely
affect the Noncontrolling Party;
(D) the
Controlling Party shall consult with the Noncontrolling Party and offer the
Noncontrolling Party a reasonable opportunity to comment before submitting any
written materials prepared or furnished in connection with the Tax Proceeding
(including, to the extent practicable, any documents furnished to the applicable
Taxing Authority in connection with any discovery request) to the extent such
materials concern matters in the Tax Proceeding that could adversely affect the
Noncontrolling Party;
(E) the
Controlling Party shall defend the Tax Proceeding diligently and in good
faith;
(F) the
Noncontrolling Party shall reasonably facilitate to the extent requested by the
Controlling Party, and shall not impede, the Tax Proceeding;
(G) the
Controlling Party and the Noncontrolling Party shall cooperate reasonably and in
good faith in connection with any Tax Proceeding; and
(H) the
Controlling Party shall not settle, compromise or abandon any such Tax
Proceeding without obtaining the prior written consent, which consent shall not
be unreasonably withheld, delayed or conditioned, of the Noncontrolling Party if
such settlement, compromise or abandonment would have an unindemnified adverse
impact on the Noncontrolling Party. If the Noncontrolling Party
reasonably withholds such consent pursuant to the preceding sentence, the
Parties shall negotiate in good faith to resolve their differences and, failing
that, shall submit the matter to binding arbitration with a mutually acceptable
arbitrator (with expedited time frames where necessary to comply with
governmental deadlines in connection with such Tax Proceeding) to resolve the
Parties’ dispute in connection with the Tax Proceeding.
(iii) For
purposes of this Section 9(f) and subject to subparagraph (v) below,
“Controlling
Party” means:
(A) Parent
for any Tax Proceeding relating to any Pre-Closing Tax Period other than a
Straddle Period;
(B) Parent
for any Tax Proceeding concerning any consolidated, combined, unitary or group
Tax Return that includes solely Parent or any of its Subsidiaries (except for a
consolidated, combined, unitary or group Tax Return that includes Buyer or any
of its Subsidiaries); and
(C) Buyer
for any Tax Proceeding relating to a Straddle Period with respect to Buyer or
the applicable Subsidiary (including any Target Company or Target Subsidiary),
or any Post-Closing Tax Period with respect to Buyer or the applicable
Subsidiary (including any Target Company or Target Subsidiary) (other than a Tax
Proceeding of which Parent is the Controlling Party pursuant to the preceding
clause (B)).
(iv) For
purposes of this Section 9(f), “Noncontrolling Party”
means:
(A) Parent
in the case of a Tax Proceeding with respect to which Buyer is the Controlling
Party; and
(B) Buyer
in the case of a Tax Proceeding with respect to which Parent is the Controlling
Party.
(v) Notwithstanding
the foregoing, the Tax Indemnifying Party may elect to control any Tax
Proceeding which might result in a claim for indemnification being sought from
it and may participate in the Tax Proceeding regardless of whether it chooses to
control such Tax Proceeding.
(vi) Notwithstanding
any other provision of this Agreement to the contrary, neither Buyer, any
Affiliate of Buyer, nor any other Person shall have any right to receive or
obtain any information relating to, or have any rights with respect to, any
consolidated, combined, unitary or group Taxes or Tax Returns of Parent or
any of its Subsidiaries (other than information and
rights relating solely to items of the Target Companies, the Target Subsidiaries
and the Acquired Assets). Furthermore, any rights of Buyer with
respect to any consolidated, combined, unitary or group Taxes or Tax Returns of
Parent or any of its Subsidiaries shall apply only to the extent that Buyer
might be adversely affected, it being understood that any claim or issue that
would increase Tax for which Parent is responsible and liable hereunder and
decrease Tax for which Buyer is responsible and liable hereunder would not
adversely affect Buyer.
(g) Tax Refunds and
Credits. (i) Any
Income Tax refunds that are received by Buyer or any Target Company or any
Target Subsidiary or any other Affiliate, and any amounts credited against
Income Tax to which Buyer or any Target Company or any Target Subsidiary or any
other Affiliate becomes entitled, that relate to a Pre-Closing Tax Period of any
Target Company or any Target Subsidiary shall be for the account of Parent, and
Buyer shall pay over to Parent any such refund or the amount of any such credit
within fifteen (15) days after receipt or entitlement thereto.
(ii) Any
Non-Income Tax refunds that are received by Buyer or any Target Company or any
Target Subsidiary or any other Affiliate, and any amounts credited against
Non-Income Tax to which Buyer or any Target Company or any Target Subsidiary or
any other Affiliate becomes entitled, that relate to a Pre-Closing Tax Period of
any Target Company or any Target Subsidiary shall be for the account of Parent,
and Buyer shall pay over to Parent any such refund or the amount of any such
credit within fifteen (15) days after receipt or entitlement thereto, to
the extent such refund or credit is attributable to Non-Income Taxes paid by
Parent or any of its Affiliates or for which Buyer was indemnified pursuant to
Section 9(b)(i)(B) above.
(iii) To
the extent requested by Parent, and at Parent’s expense, Buyer shall reasonably
cooperate with Parent in applying for and obtaining any available Tax refunds
with respect to Pre-Closing Tax Periods, provided however, none of
Buyer, any Target Company or any Target Subsidiary shall be required to take any
action or position, that would materially adversely affect any of Buyer or any
of its Affiliates or any Target Company or any Target Subsidiary.
(h) Cooperation. Buyer,
on the one hand, and Parent (on behalf of its Affiliates), on the other hand,
agree, in each case to the extent reasonably requested by the other Party and at
no cost to the other Party, to
(i) furnish to the other
Party in a timely manner information and documents for purposes of preparing any
original or amended Tax Returns to which Section 9(d)(ii) applies and
contesting or defending any Tax Proceeding;
(ii) cooperate
in good faith in any Tax Proceeding;
(iii) retain
and provide on demand books, records, documentation or other information
relating to any Tax Return until the later of (A) the expiration of the
applicable statute of limitations (giving effect to
any extension, waiver, or mitigation thereof) and (B) in the event any
claim is made under this Agreement for which such information is relevant, until
a final determination, as defined under Section 1313(a) of the Code or
similar provision of non-U.S. law, with respect to such claim; and
(iv) take
such action as such other Party may deem appropriate in connection therewith,
including cooperation with respect to the preparation of financial statements as
they relate to Taxes and related matters.
(i) VAT. (i) Subject
to Section 9(i)(ii), the consideration specified for all supplies made or
deemed to be made under or in connection with this Agreement shall be exclusive
of VAT. Parent and Buyer shall procure that any of their respective
Affiliates receiving the supply in question shall pay to the Person making that
supply (in addition to the specified consideration) all VAT for which the Person
making the supply is required by any Taxing Authority to charge in relation to
that supply. All VAT payable under this Agreement shall be paid two
business days before that Person has to account for the same and the
supplier shall provide a VAT invoice.
(ii) The
Parties intend that any sale of the Acquired Assets within the European Union
will be treated by the relevant Taxing Authority as a TOGC and the Parties shall
use their reasonable efforts to procure that any such sale is so
treated. This obligation shall not require Parent to make any appeal
to any tribunal or court of law against any determination of any Taxing
Authority that the sale does not amount to a TOGC, unless Buyer shall by such
date as shall reasonably allow Parent to make such appeal or challenge within
any applicable time limit give written notice to Parent that it requires such
appeal or challenge to be made and shall first agree to indemnify Parent against
all irrecoverable costs and expenses that Parent may incur by taking any such
action.
(iii) Parent
and Buyer shall procure that the Person retaining at the Closing the VAT records
relating to a Business that is sold shall preserve such records for such periods
as may be required by the relevant Law and during such periods shall permit the
other Party or its agents at all reasonable times and subject to reasonable
written notice to inspect and take copies of such records at the cost of the
Person requesting such inspection and/or copies.
(iv) If
it is finally determined by the relevant Taxing Authority that any sale of the
Acquired Assets under this Agreement does not constitute a TOGC, then Buyer
shall procure that VAT chargeable shall be paid by the relevant Affiliate to
Parent two business days before Parent has to account for the same and against
production of a valid VAT invoice and any VAT records provided by Parent to
Buyer or Buyer’s Affiliate shall be returned to Parent. Buyer shall
indemnify or procure that such Affiliate shall indemnify Parent on an after Tax
basis against any penalty and interest charges incurred by Parent to any Taxing
Authority in relation to such VAT.
(j) Coordination; Exclusive Tax
Remedy. The rights and obligations of the Parties with
respect to indemnification for any and all Tax matters shall be governed solely
by the provisions of this Section 9.
(k) Transfer
Taxes. (i) All recoverable and non-recoverable
transfer, documentary, sales, use, stamp, registration, and other such Taxes,
and all conveyance fees, recording charges and other fees and charges (including
any penalties and interest) (such Taxes, fees and charges, together with any
penalties or interest, “Transfer Taxes”)
incurred in connection with the transfer of the Target Shares and the Acquired
Assets contemplated by this Agreement, as well as the cost of the filing of all
necessary Tax Returns and other documentation with respect to all such Taxes,
fees and charges, shall be borne 50% by Buyer and 50% by Parent, and Parent and
Buyer shall each file all necessary Tax Returns and other documentation required
to be filed by it with respect to all such Taxes, fees and charges, and, if
required by applicable Law, the Parties will, and will cause their Affiliates
to, join in the execution of any such Tax Returns and other
documentation.
(ii) If
there is any available sales Tax exemption in relation to any Acquired Assets,
Buyer shall timely deliver to the relevant Asset Seller the relevant sales Tax
exemption certificate.
(l) Allocation of Purchase
Price. (i) Buyer and Sellers shall use their
reasonable best efforts to agree on an allocation of the Purchase Price (the
“Allocation”)
prior to the Closing Date. The Allocation shall allocate for all
purposes (including Tax and financial accounting purposes) the Purchase Price
(including liabilities and other capitalized costs) among the Acquired Assets
and the Target Shares.
(ii) At
least 30 calendar days prior to the Closing Date, Sellers shall deliver a draft
of the Allocation (the “Proposed Allocation”)
to Buyer for its consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Except as provided in subparagraphs (iii),
(iv) and (v) of this Section 9(l), at the close of business on the 30th day
after delivery of the Proposed Allocation, the Proposed Allocation shall become
binding upon Buyer and Sellers, shall be set forth in an allocation schedule
which shall be deemed to be part of this Agreement (the “Allocation
Schedule”), and shall be the Allocation.
(iii) Buyer
shall raise any objection to the Proposed Allocation in writing within 30
calendar days of the delivery of the Proposed Allocation. Buyer and
Sellers shall negotiate in good faith to resolve any differences until the
Closing Date. If Buyer and Sellers reach written agreement amending
the Proposed Allocation prior to the Closing Date, the Proposed Allocation, as
so amended, shall become binding upon Buyer and Sellers, shall be set forth in
the Allocation Schedule, and shall be the Allocation.
(iv) If
Buyer and Sellers cannot agree on the Allocation before the Closing Date, they
shall continue to negotiate in good faith to resolve any differences until the
date on which the purchase price adjustment contemplated by Section 2(g)
above is payable. If Buyer and Sellers
reach written agreement amending the Proposed Allocation prior to that date, the
Proposed Allocation, as so amended, shall become binding upon Buyer and Sellers,
shall be set forth in the Allocation Schedule, and shall be the
Allocation.
(v) If
Buyer and Sellers cannot agree on the Allocation before the date on which the
purchase price adjustment contemplated by Section 2(g) above is payable,
then each Party shall use its own allocation, as each such Party shall deem
appropriate.
(vi) The
Allocation shall be amended (in a manner agreed by Buyer and Sellers consistent
with the methodology previously used) to reflect any adjustments to the
Preliminary Purchase Price and the Purchase Price under this
Agreement.
(vii) Except
as provided in subparagraph (v) above, each of Sellers, Buyer and their
respective Affiliates shall report, act and file Tax Returns (including Internal
Revenue Service Form 8594) in all respects and for all purposes consistent with
the Allocation.
(m) Certain Danish Income Tax
Matters. Parent and Buyer acknowledge that, on March 20,
2008, Alpharma ApS will be required to make an advance payment in respect of its
2008 Danish Income Taxes. In the event that the Closing will occur
after the date such advance will be due, Parent shall pay the full amount of
such advance to the Danish Taxing Authorities, and Buyer and Parent agree that
the Preliminary Purchase Price shall be increased by an amount equal to Buyer’s
share of such advance (which share shall be determined on a per diem basis with respect
to the period starting January 1, 2008 and ending on June 30,
2008). In the event that the Closing will occur prior to the date
such advance will be due, Buyer shall pay the full amount of such advance to the
Danish Taxing Authorities, and Parent shall pay to Buyer an amount equal to
Parent’s share of such advance (which share shall be determined on a per diem basis with respect
to the period starting January 1, 2008 and ending on June 30, 2008) within (10)
days after Buyer’s payment of such advance.
(a) Termination of
Agreement. (i) Notwithstanding any other
provision in this Agreement to the contrary, this Agreement may be terminated
and the Transaction and the other transactions contemplated by this Agreement
abandoned at any time prior to the Closing:
(A) by
mutual written consent of Buyer and Parent;
(B) by
Parent if any of the conditions set forth in Section 7(b) shall have become
incapable of fulfillment, and shall not have been waived by Parent;
(C) by
Buyer if any of the conditions set forth in Section 7(a) shall have become
incapable of fulfillment, and shall not have been waived by Buyer;
(D) by
Buyer or Parent, if the Closing does not occur on or prior to April 21, 2008
(the “Initial Outside
Date”); provided, that if the
Closing does not occur by such date, solely due to the failure to have obtained
any approvals of any Governmental Entities that are required to complete the
Pre-Closing Restructuring, but all other conditions to Closing shall have been
fulfilled or shall be capable of being fulfilled as of such date, then such date
shall be extended for an additional 90-day period (the “Extended Outside
Date”); or
(E) by
Buyer or Parent, if a final, nonappealable Judgment shall have been entered by
any Governmental Entity preventing the consummation of the Pre-Closing
Restructuring;
provided, however, that the
Party seeking termination pursuant to clause (B), (C) or (D) is not then in
material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
(ii) If
this Agreement is terminated by Buyer or Parent pursuant to this
Section 10(a), written notice thereof shall forthwith be given to the other
Party and the transactions contemplated by this Agreement shall be terminated,
without further action by any Party. If the transactions contemplated
by this Agreement are terminated as provided herein:
(A) Buyer
shall return all documents and other material received from Parent, its
Affiliates or their advisors or representatives relating to the transactions
contemplated by this Agreement, whether so obtained before or after the
execution of this Agreement, to Parent; provided that Buyer
or its representatives may retain documents and other material as a result of
customary electronic back-up procedures or as required by Law, subject to clause
(B) below; and
(B) all
confidential information received by Buyer with respect to the Business shall be
treated in accordance with the Confidentiality Agreement, which shall remain in
full force and effect notwithstanding the termination of this
Agreement.
(b) Effect of Termination;
Termination Fee. (i) If this Agreement is
terminated pursuant to Section 10(a), this Agreement shall become null and
void and of no further force and effect, except for the provisions of (A)
Sections 3(a)(iii) and 3(b)(x) relating to brokers and finders,
(B) Section 5(e) relating to the obligation of Buyer to keep
confidential certain information and data obtained by it,
(C) Section 10(a) and this Section 10(b) and
(D) Section 11. Nothing in this Section 10(b) shall be
deemed to release any Party from any liability for any breach by such Party of
the terms and
provisions of this Agreement or to impair the right
of any Party to compel specific performance by any other Party of its
obligations under this Agreement.
(ii) If
(A) this Agreement is terminated by Buyer or Parent pursuant to
Section 10(a)(i)(D) solely as a result of the failure to have obtained any
approvals of any Governmental Entities that are required to complete the
Pre-Closing Restructuring prior to the Extended Outside Date; (B) Buyer has not
entered into the Quotaholders Agreement prior to the Extended Outside Date; and
(C) there has not been a Pre-Closing Restructuring Denial, then Buyer shall pay,
by wire transfer of immediately available funds, the Termination Fee to Parent
as promptly as reasonably practicable (and, in any event, within five business
days) following such termination.
(iii) Buyer
and Parent acknowledge and agree that (A) the agreements contained in this
Section 10(b) are an integral part of the transactions contemplated by this
Agreement, (B) without these agreements, neither Buyer nor Parent would have
entered into this Agreement and (C) the damages resulting from termination of
this Agreement under circumstances where a Termination Fee is payable are
uncertain and incapable of accurate calculation and the amounts payable pursuant
to paragraph (ii) of this Section 10(b) are reasonable forecasts of
the actual damages which may be incurred and constitute liquidated damages and
not a penalty.
(iv) If
Buyer fails to pay the Termination Fee due pursuant to paragraph (ii) of
this Section 10(b) when due, and, in order to obtain such payment, Parent
commences a suit, action or other proceeding that results in a Judgment against
Buyer for the Termination Fee, Buyer shall pay to Parent its costs and expenses
(including attorneys’ fees and expenses) in connection with such suit, action or
other proceeding, together with interest on the Termination Fee from (and
including) the date such payment was required to be made through (but not
including) the date of payment at the prime rate of Citibank, N.A. in effect on
the date such payment was required to be made.
(a) Press Releases and Public
Announcements. Parent and Buyer shall not issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided, however, that any
Party may make any public disclosure it believes in good faith is required by
applicable Law or any listing or trading agreement concerning its publicly
traded securities (in which case the disclosing Party will use its reasonable
best efforts to advise the other Parties prior to making the disclosure) and any
Party may issue a press release upon entering into this Agreement after
reasonable consultation with the other Parties.
(b) No Third Party
Beneficiaries. Other than as explicitly set forth herein,
including in Sections 8(b) and 8(c), this Agreement shall not confer any rights
or
remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
(c) Entire
Agreement. This Agreement, the Ancillary Agreements, the
Confidentiality Agreement, the Disclosure Schedule, the Equity Financing
Commitments and exhibits hereto and thereto constitutes the entire agreement
among the Parties and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof.
(d) Succession and
Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any
of his, her, or its rights, interests, or obligations hereunder without the
prior written approval of Buyer and Parent; provided, however, that Buyer
may assign its rights under this Agreement to any lender providing the Debt
Financing to Buyer and any individual Buyer may assign its rights to another
individual Buyer, but no assignment pursuant to this proviso shall relieve Buyer
of its obligations under this Agreement. For the avoidance of doubt,
no lender shall be entitled to make a claim under this Agreement or enforce any
provision of this Agreement as a result of an assignment pursuant to the
foregoing sentence other than in connection with the exercise of lender
subrogation or other enforcement rights following an event of default under the
definitive Debt Financing agreements. The Buyer Entities shall be
entitled to assign their rights under Section 6(e)(i) to any purchaser which
acquires all or substantially all the assets or business of the Business and
Sellers and their Affiliates shall be entitled to enforce Section 6(e)(ii)
against any such purchaser. The Sellers and their Affiliates shall be
entitled to assign their rights under Section 6(e)(ii) to any purchaser which
acquires all or substantially all the assets or business of the animal health
business of Parent and its Affiliates and the Buyer Entities shall be entitled
to enforce Section 6(e)(i) against any such purchaser.
(e) Counterparts. This
Agreement may be executed in one or more counterparts (including by means of
facsimile, PDF or other electronic transmission), each of which shall be deemed
an original but all of which together will constitute one and the same
instrument.
(f) Headings. The
section headings contained in this Agreement in any Exhibit, Annex or Schedule
to this Agreement and in the table of contents hereto are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) Notices. All
notices, requests, demands, claims, and other communications hereunder shall be
in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) when delivered
personally to the recipient, (ii) one business day after being sent to the
recipient by reputable overnight courier service (charges prepaid),
(iii) one business day after being sent to the recipient by facsimile
transmission or electronic mail, or (iv) four business days after
being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid, and addressed to the intended recipient as set
forth below:
If to
Sellers (or any of them):
Alpharma
Inc.
000 Xxxxx
00 Xxxx
Xxxxxxxxxxx,
Xxx Xxxxxx XXX 00000
Attention:
Executive Vice President and Chief Financial Officer
Facsimile:
(000) 000-0000
with a
copy to:
Alpharma
Inc.
000 Xxxxx
00 Xxxx
Xxxxxxxxxxx,
Xxx Xxxxxx XXX 00000
Attention:
Executive Vice President and Chief Legal Officer
Facsimile:
(000) 000-0000
and a
copy to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx,
III, Esq.
Xxxxxx X. Xxxxxx,
Esq.
Facsimile:
(000) 000-0000
If to
Buyer:
3i Nordic
plc (UK) Xxxxxxx Xxxxxxx
Xxx
0000
XX-00000
Xxxxxxxxx, Xxxxxx
Attention:
Xxxxx Xxxxx
Facsimile:
(00-0) 000 000 00
with a
copy to:
Linklaters
Advokatbyrå Aktiebolag
Xxxxxxxxxxxxxx
00
Xxx
0000
000 00
Xxxxxxxxx, Xxxxxx
Attention:
Xxxxx Xxxxxxxx
Facsimile:
(00-0) 000 0000
Any Party may change the address to
which notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Parties notice in the manner herein set
forth.
(h) Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic Laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of
the Laws of any jurisdiction other than the State of New York.
(i) Consent to
Jurisdiction. (i) Each Party irrevocably
submits to the exclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District Court for the
Southern District of New York, and any appellate court from any thereof, in any
suit, action or other proceeding arising out of or relating to this Agreement or
any transaction contemplated by this Agreement, or for recognition or
enforcement of any Judgment, and each Party irrevocably and unconditionally
agrees that all claims in respect of any such suit, action or other proceeding
may be heard and determined in such court. The Parties agree that a
final judgment in any such suit, action or other proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the Judgment or in any
other manner provided by applicable Law.
(ii) Each
Party irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Law, any objection which it may now or hereafter have to the laying
of venue of any suit, action or other proceeding arising out of or relating to
this Agreement or any transaction contemplated by this Agreement in any court
referred to in the first sentence of paragraph (i) of this
Section 11(i). Each Party irrevocably and unconditionally
waives, to the fullest extent permitted by applicable Law, the defense of an
inconvenient forum to the maintenance of any suit, action or other proceeding
arising out of or relating to this Agreement or any transaction contemplated by
this Agreement in any court referred to in the first sentence of
paragraph (i) of this Section 11(i).
(iii) Each
Party consents, to the fullest extent permitted by applicable Law, to service of
any process, summons, notice or document in the manner provided for notices in
Section 11(g). Nothing in this Agreement will affect the right
of any Party to serve process in any other manner permitted by applicable
Law.
(iv) This
Section 11(i) shall not apply to any dispute under Section 2(g) that
is required to be decided by the Accounting Firm.
(j) Waiver of Jury
Trial. Each Party hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect
to any litigation, directly or indirectly, arising out of or relating to this
Agreement or any transaction contemplated by this Agreement. Each
Party (i) certifies that no representative, agent or attorney of any other
Party has represented, expressly or otherwise, that such other Party would not,
in the event of litigation, seek to enforce the foregoing waiver and
(ii) acknowledges that it and the other Parties have been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications in this Section 11(j).
(k) Enforcement. The
Parties agree that irreparable damage would occur and that the Parties would not
have any adequate remedy at Law if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, this being in
addition to any other remedy to which any Party is entitled at Law or in
equity.
(l) Amendments and
Waivers. No amendment or modification of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
Buyer and Sellers. No waiver by any Party of any provision of this
Agreement or any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be valid unless the same shall be
in writing and signed by the Party making such waiver, nor shall such waiver be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(m) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If any provision of this Agreement shall be adjudged to
be excessively broad as to duration, geographical scope, activity or subject,
the Parties intend that such provision shall be deemed modified to the minimum
degree necessary to make such provision valid and enforceable under applicable
Law and that such modified provision shall thereafter be enforced to the further
extent possible.
(n) Expenses. Except
as otherwise expressly provided herein, Buyer and Sellers each will bear their
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby.
(o) Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference in this Agreement to any federal,
state, local, or foreign Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. When a reference is made in this Agreement to a party or
to an Article, Section, Annex, Exhibit or Schedule, such reference shall be to a
party to, an Article or Section of, or an Annex, Exhibit or Schedule to, this
Agreement, unless otherwise indicated. All terms defined in this
Agreement shall have their defined meanings when used in any Annex, Exhibit or
Schedule to this Agreement or any certificate or other document made or
delivered pursuant hereto, unless otherwise defined therein. Whenever
the words “include”, “includes”, “including” or “such as” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall.” The words
“hereof”,
“herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The word “or” when used in this Agreement is not
exclusive. The word “extent” in the phrase “to the extent” shall mean
the degree to which a subject or other thing extends, and such phrase shall not
mean simply “if”. Whenever used in this Agreement, any noun or
pronoun shall be deemed to include the plural as well as the singular and to
cover all genders. Any agreement, instrument or statute defined or
referred to herein means such agreement, instrument or statute as from time to
time amended, supplemented or modified, including (x) (in the case of
agreements or instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and (y) all attachments thereto
and instruments incorporated therein. The words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. References to “Buyer” in
this Agreement shall refer to each of the Persons included in the definition
of “Buyer” in the preface of this Agreement and all obligations of
Buyer in this Agreement shall be the joint and several obligation of each such
Person. References to a Person are also to its permitted successors and
assigns. When a reference is made in this Agreement to the Business,
such reference shall also be a reference to the Target Companies and Target
Subsidiaries if the context so requires. Except as otherwise
expressly provided herein, all references to “dollars” or “$” will be deemed
references to the lawful money of the United States of America.
(p) Incorporation of Exhibits,
Annexes, and Schedules. The Exhibits, Annexes, and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
* * * *
*
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first above written.
|
ALPHARMA
INC.,
|
|||
|
|
by:
|
/s/ Xxxxxx X. Xxxxxxxx | |
| Name | |||
| Title | |||
|
ALPHARMA
(LUXEMBOURG) S.ÀR.L.,
|
|||
|
|
by:
|
/s/ Xxxxxx X. Xxxxxxxx | |
| Name: | |||
| Title: | |||
|
ALPHARMA
BERMUDA G.P.,
|
|||
|
|
by:
|
/s/ Xxxxxx X. Xxxxxxxx | |
| Name: | |||
| Title: | |||
|
ALPHARMA
INTERNATIONAL (LUXEMBOURG) S.ÀR.L.,
|
|||
|
|
by:
|
/s/ Xxxxxx X. Xxxxxxxx | |
| Name: | |||
| Title: | |||
|
ALFANOR
7152 AS (UNDER CHANGE OF
NAME
TO OTNORBIDCO AS),
|
|||
|
|
by:
|
/s/ Xxxxxx Xxxxxx | |
| Name: Xxxxxx Xxxxxx | |||
| Title: Attorney-In-Fact | |||
|
OTDENHOLDCO
APS,
|
|||
|
|
by:
|
/s/ Xxxxxx Xxxxxx | |
| Name: Xxxxxx Xxxxxx | |||
| Title: Attorney-In-Fact | |||
|
OTDELHOLDCO
INC.,
|
|||
|
|
by:
|
/s/ Xxxxxx Xxxxxx | |
| Name: Xxxxxx Xxxxxx | |||
| Title: Attorney-In-Fact | |||
