1
Exhibit 10.3
STOCK AND NOTE PURCHASE AGREEMENT
by and between
KING PHARMACEUTICALS, INC.
and
AMERICAN HOME PRODUCTS CORPORATION
June 22, 2000
2
TABLE OF CONTENTS
1. Purchase and Sale of Shares and the Note....................... 1
1.1 Sale and Issuance of Shares........................... 1
1.2 Sale and Issuance of the Note......................... 2
2. Representations and Warranties of the Company.................. 2
2.1 Organization, Good Standing and Qualification......... 2
2.2 Authorization......................................... 3
2.3 Valid Issuance of Shares and Listing.................. 3
2.4 Capitalization........................................ 3
2.5 SEC Reports and Certain Changes....................... 5
2.6 Financial Statements and Title to Assets.............. 5
2.7 Contracts............................................. 6
2.8 Compliance and Permits................................ 6
2.9 Compliance with Other Instruments..................... 7
2.10 Governmental Consents................................. 7
2.11 Litigation............................................ 7
2.12 Taxes................................................. 7
2.13 Intellectual Property................................. 8
2.14 Registration.......................................... 8
3. Representations and Warranties of AHPC......................... 8
3.1 Organization, Good Standing and Qualification......... 8
3.2 Authorization......................................... 8
3.3 Governmental Consents................................. 9
3.4 Accredited Investor................................... 9
4. Filings and Authorizations..................................... 9
5. Conditions to Obligation of Each Party to Effect the
Transactions Contemplated by this Agreement ................... 9
6. Conditions of AHPC's Obligations at each Closing............... 10
7. Conditions of the Company's Obligations at Each Closing........ 12
8. Covenants...................................................... 12
8.1 Lock-up............................................... 13
8.2 Lenders' Consent...................................... 13
9. Miscellaneous.................................................. 13
9.1 Survival of Warranties................................ 13
i
3
9.2 Assignment; Successors and Assigns.................... 13
9.3 Governing Law......................................... 13
9.4 Counterparts.......................................... 13
9.5 Titles and Subtitles.................................. 13
9.6 Notices............................................... 14
9.7 Finder's Fees......................................... 14
9.8 Expenses.............................................. 15
9.9 Publicity............................................. 15
9.10 Amendments and Waivers................................ 15
9.11 Severability.......................................... 15
9.12 Entire Agreement...................................... 15
ii
4
STOCK AND NOTE PURCHASE AGREEMENT
THIS STOCK AND NOTE PURCHASE AGREEMENT is made as of the 22nd
day of June, 2000 by and between King Pharmaceuticals, Inc., a Tennessee
corporation having its principal place of business at 000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx (the "Company"), and American Home Products Corporation, a Delaware
corporation having its principal place of business at 0 Xxxxxxx Xxxxx, Xxxxxxx,
Xxx Xxxxxx ("AHPC").
WHEREAS, simultaneously herewith, Wyeth-Ayerst Laboratories, a division
of AHPC ("Wyeth"), and the Company have entered into a Co-Promotion Agreement
(the "Co-Promotion Agreement") pursuant to which the Company's Altace(R) product
will be marketed in the United States and the Commonwealth of Puerto Rico;
WHEREAS, simultaneously herewith, Wyeth and the Company have entered
into an Asset Purchase Agreement (the "Asset Purchase Agreement") pursuant to
which the Company has agreed to acquire Wyeth's Nordette(R), Bicillin(R) and
Wycillin(R) products, subject to certain conditions to closing set forth in the
Asset Purchase Agreement, including but not limited to, AHPC's acceptance of a
promissory note made by the Company in favor of AHPC in the principal amount of
TWENTY-FIVE MILLION DOLLARS ($25 million) in the form of Exhibit A attached
hereto as partial payment of the purchase price set forth in the Asset Purchase
Agreement;
WHEREAS, simultaneously herewith, Wyeth and the Company have entered
into two Manufacturing and Supply Agreements (the "Supply Agreements") pursuant
to which Wyeth has agreed to supply in finished goods form (i) Nordette, and
(ii) Bicillin(R) and Wycillin(R) to the Company; and
WHEREAS, in connection with the transactions set forth above, AHPC has
agreed to purchase shares of common stock of the Company on the terms and
conditions hereof;
NOW THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. Purchase and Sale of Shares and the Note.
1.1 Sale and Issuance of Shares.
Subject to the terms and conditions of this Agreement, the Company
agrees to sell and issue to AHPC at the First Closing (as defined below)
1,928,021 shares of the Company's Common Stock (as defined below) (the "Shares")
which is equal to $75,000,000 (SEVENTY-FIVE MILLION DOLLARS) divided by $38.90
per share and AHPC agrees to pay $75,000,000 (SEVENTY-FIVE MILLION DOLLARS)
1
5
(the "Purchase Price") to the Company at the First Closing.
1.2 Sale and Issuance of the Note.
Subject to the terms and conditions of this Agreement and the Asset
Purchase Agreement, at the Second Closing (as defined below) the Company agrees
to issue and AHPC agrees to purchase the Note in the principal amount of
$25,000,000 (TWENTY-FIVE MILLION DOLLARS).
1.3 Closings.
(a) The closing for the purchase and sale of the Shares shall take
place at the offices of AHPC, 0 Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000,
simultaneously with the execution of this Agreement upon the satisfaction or
waiver of the conditions set forth in Articles 5, 6 and 7 hereof or at such
other time and place as the Company and AHPC mutually agree upon in writing
(which shall be designated as the "First Closing").
(b) The closing for the issuance and sale of the Note shall take place
simultaneously with and at the location of the closing of the transactions
contemplated by Asset Purchase Agreement (the "Second Closing" with each of the
First Closing and Second Closing being referred to herein individually as a
"Closing").
(c) At the First Closing, among other things, the Company shall deliver
to AHPC a certificate representing the Shares. In consideration of such
delivery, AHPC shall make payment for the Shares by delivery to the Company of
the Purchase Price in immediately available funds by wire transfer of funds to
the Company's designated bank account.
(d) At the Second Closing, among other things, the Company shall
deliver to AHPC the fully-executed Note as partial payment of the purchase price
to be paid under the Asset Purchase Agreement.
2. Representations and Warranties of the Company.
The Company hereby represents and warrants to AHPC that:
2.1 Organization, Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Tennessee and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure so to qualify
would have a material adverse effect on the business, operations, properties,
assets, prospects or condition
2
6
(financial or otherwise) of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). Except as disclosed in the Form 10-K (as defined
herein), the Company has no subsidiaries.
2.2 Authorization.
The Company has all requisite corporate power and authority (i) to
execute, deliver and perform its obligations under this Agreement, (ii) to
execute, deliver and perform its obligations under the Co-Promotion Agreement,
the Asset Purchase Agreement, (subject to the Company's lenders' consent which
shall be obtained prior to the Second Closing) the Note and the Supply
Agreements (together, the "Related Agreements"), (ii) to issue the Shares and
the Note in the manner and for the purpose contemplated by this Agreement, and
(iii) to execute, deliver and perform its obligations under all other agreements
and instruments executed and delivered by it pursuant to or in connection with
this Agreement and the Related Agreements. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, and the Related
Agreements and the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance (or reservation for issuance) and
delivery of the Shares, and the Note (when issued) has been taken or will be
taken prior to the First Closing or the Second Closing, as the case may be, and
this Agreement and each of the Related Agreements constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms, except (x) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (y) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
2.3 Valid Issuance of Shares and Listing.
The Shares, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and such Shares will be issued in
compliance with all applicable federal and state securities laws and will be
listed on the New York Stock Exchange and upon issuance be eligible for trading,
subject to the restrictions set forth in Section 8.1 hereof.
2.4 Capitalization.
(a) The authorized capital stock of the Company consists of one hundred
fifty million (150,000,000) shares of common stock, no par value per share (the
"Common Stock") and fifteen million (15,000,000) shares of preferred stock, no
par value (the
3
7
"Preferred Stock"). As of June 22, 2000: (i) ninety million, thirty-nine
thousand, seven hundred eleven (90,039,711) shares of Common Stock were issued
and outstanding; (ii) seven million, two hundred thousand (7,200,000) shares of
Common Stock were reserved for issuance upon the exercise of outstanding
employee stock options or other rights to purchase or receive the Common Stock
granted under the Company's 1997 Incentive and Nonqualified Stock Option Plan
(the "1997 Plan"); (iii) six hundred seventy-five thousand (675,000) shares of
Common Stock were reserved for issuance upon the exercise of outstanding stock
options or other rights to receive the Common Stock granted under the Company's
1998 Non-employee Director Stock Option Plan (the "1998 Plan" and together with
the 1997 Plan, the "Company Stock Option Plans"); (iv) no shares of Common Stock
were held by the Company in the Company's treasury; and (v) no shares of
Preferred Stock were issued or outstanding.
(b) All outstanding shares of capital stock of the Company are, and all
Shares will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. Except as set forth in this
Section 2.4 and except for changes resulting from the issuance of shares of
Common Stock pursuant to the Company Stock Option Plans or shares of Common
Stock issuable upon exercise of the rights distributed pursuant to the Rights
Agreement, dated as of June 25, 1998, between the Company and Union Planters
Bank, N.A. (the "Rights Agreement") to the holders of Common Stock pursuant to
the Rights Agreement or as expressly permitted by this Agreement, (i) there are
not issued, reserved for issuance or outstanding (A) any shares of capital stock
or other voting securities of the Company, (B) any securities of the Company or
any Company subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of or ownership interests in the
Company or any Company subsidiary, (C) any warrants, calls, options or other
rights to acquire from the Company or any Company subsidiary, and any obligation
of the Company or any Company subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of or other
ownership interests in, the Company or any Company subsidiary, (ii) there are no
outstanding obligations of the Company or any Company subsidiary to repurchase,
redeem or otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities, and (iii) except as
contemplated in this Agreement, the Company is not presently under any
obligation, has not agreed or committed, and has not granted rights, to register
under the Securities Act or the Exchange Act, or otherwise file any registration
statement under any such statute covering, any of its currently outstanding
capital stock or other securities or any of its capital stock or other
securities that may be subsequently issued.
4
8
(c) As of the date hereof, neither the Company nor any Company
subsidiary is a party to any agreement granting any preemptive or antidilutive
rights with respect to any securities of the Company or any Company subsidiary
that are outstanding as of the date hereof, or with respect to any securities of
the Company or any Company subsidiary that may be subsequently issued upon the
conversion or exercise of any instrument outstanding as of the date hereof.
2.5 SEC Reports and Certain Changes.
(a) The Company has heretofore filed with the U.S. Securities and
Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), all reports and other documents required to be
filed, including an Annual Report on Form 10-K for the year ended December 31,
1999 (the "Form 10-K"). As of their respective filing dates, none of such
reports or other documents required to be filed with the SEC under the rules and
regulations of the SEC ("SEC Filings") at the time they were filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading. Since
December 31, 1999, the Company has timely filed with the SEC all SEC Filings and
all such SEC Filings complied with all applicable requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and the Exchange Act, as
applicable and the rules thereunder.
(b) Since December 31, 1999, and except as set forth in SEC Filings or
otherwise previously disclosed to AHPC in writing, there has been no change in
the business, assets, liabilities, financial condition or operating results of
the Company from that reflected in the Form 10-K, except changes in the ordinary
course of business that have not, individually or in the aggregate, resulted in
and are not reasonably expected to result in a Material Adverse Effect.
2.6 Financial Statements and Title to Assets
The audited consolidated financial statements of the Company included
or incorporated by reference in the Form 10-K and the unaudited interim
financial statements contained in the quarterly reports on Form 10-Q each have
been prepared in accordance with the published rules and regulations of the SEC
and with U.S. generally accepted accounting principles applied on a consistent
basis throughout the periods indicated therein and with each other, except as
may be indicated therein or in the notes thereto, and fairly present in all
material respects the financial condition of the Company as of the respective
dates thereof and the results of its operations and statements of cash
5
9
flows for the respective periods then ended, subject, in the case of unaudited
interim financial statements, to usual year-end adjustments. Except as reflected
in such financial statements, the Company has no material liabilities, absolute
or contingent, other than ordinary course liabilities incurred since the date of
the last such financial statements in connection with the conduct of the
business of the Company. Except as otherwise set forth in the SEC Filings, the
Company has good and marketable title to all material property and assets
reflected in the financial statements to the Form 10-K (or as described in the
SEC Filings).
2.7 Contracts.
With respect to each of the agreements filed as an exhibit to the SEC
Filings which remain in full force and effect and all of the agreements that
would have been required to be filed as an exhibit to the SEC Filings if any
such agreements had been entered into as of the date of filing of any such SEC
Filing ("Material Contracts"), the Company is not, and has no actual knowledge
that any other party is, in default under or in respect of any Material
Contract, the result of which default would have a Material Adverse Effect.
2.8 Compliance and Permits.
(a) Except as disclosed in the SEC Filings, the Company has complied
with, and is not in default under or in violation of its Second Amended and
Restated Charter, By-laws or any and all laws, ordinances and regulations or
other governmental restrictions, orders, judgments or decrees applicable to the
Company, where any such default or violation would have a Material Adverse
Effect. Except as disclosed in the SEC Filings, the Company has not received
written notice of any possible or actual violation of any applicable law,
ordinance, regulation, or order, the result of which violation would be
reasonably expected to have a Material Adverse Effect. Neither the execution and
delivery of this Agreement or any of the Related Agreements nor the consummation
of the transactions contemplated hereby or thereby will violate, conflict with
or result in a breach or result in the acceleration or termination of, or the
creation in any third party of the right to accelerate, terminate, modify or
cancel, any material indenture, contract, lease, sublease, loan agreement, note
or other material obligation or liability to which the Company is a party or is
bound or to which any of its assets are subject which would result in a Material
Adverse Effect.
(b) Except as disclosed in SEC Filings, the Company has, and is not in
default in any material respect under, all governmental franchises, permits,
licenses, and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which would be reasonably expected to
have a
6
10
Material Adverse Effect.
2.9 Compliance with Other Instruments.
The execution, delivery and performance of this Agreement or any of the
Related Agreements and the transactions contemplated hereby and thereby will not
result in any violation of or constitute, with or without the passage of time
and the giving of notice, either a default under any provision of its Second
Amended and Restated Charter or By-laws of the Company or any material provision
of any material indenture, agreement or other instrument by which the Company or
any of its properties or assets is bound, or result in the creation or
imposition of any lien, or encumbrance upon any of the material properties or
assets of the Company.
2.10 Governmental Consents.
Except for any notification required filed or supplied pursuant to the
Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended and the rules
promulgated thereunder (the "HSR Act"), no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of the Company in connection with the Company's valid execution,
delivery and performance of this Agreement or any of the Related Agreements. The
filings under state securities laws, if any, will be effected by the Company at
its cost within the applicable stipulated statutory period.
2.11 Litigation.
There is no action, suit, proceeding or investigation pending or, to
the knowledge of the Company, currently threatened against the Company which
questions the validity of this Agreement or any of the Related Agreements, or
the right of the Company to enter into such instruments or to consummate the
transactions contemplated hereby or thereby. Except as disclosed in SEC Filings,
there is no action, suit, proceeding or investigation pending or, to the
knowledge of the Company, currently threatened against the Company, which singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have or would reasonably be expected to have a Material Adverse
Effect.
2.12 Taxes.
The Company has filed all federal, state and other tax returns which
are required to be filed and has heretofore paid all taxes which have become due
and payable, except where the failure to file or pay would not be reasonably
expected to have a Material Adverse Effect.
7
11
2.13 Intellectual Property.
Except as disclosed in the SEC Filings, to the knowledge of the
Company, the Company owns, or possesses adequate rights to use, all of their
patents, patent rights, trade secrets, know-how, proprietary techniques,
including processes and substances, trademarks, service marks, trade names and
copyrights described or referred to in the SEC Filings or owned or used by it or
which is necessary for the conduct of its business as presently conducted,
except where the failure to own or possess such patents, patent rights, trade
secrets, know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trade names and copyrights would not have a Material
Adverse Effect. Except as disclosed in the SEC Filings, the Company has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any patents, patent rights, trade secrets, know-how,
proprietary techniques, including processes and substances, trademarks, service
marks, trade names and copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would be reasonably
expected to have a Material Adverse Effect.
2.14 Registration.
The Shares have been registered under the Securities Act on Form S-3 in
a shelf registration filed with the SEC on January 21, 2000, subject to
completion on or prior to the consummation of the sale transaction contemplated
hereunder at Closing. At Closing, the Shares shall be freely tradable under
applicable securities laws or stock exchange rules by AHPC, subject only to the
restrictions set forth in Section 8.1 of this Agreement; provided that AHPC has
not taken any action with any third party (other than the Company) which would
further restrict its ability to dispose of such Common Stock by contract or
otherwise.
3. Representations and Warranties of AHPC.
AHPC hereby represents and warrants that:
3.1 Organization, Good Standing and Qualification.
AHPC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to carry on its business as now conducted and as proposed to
be conducted.
3.2 Authorization.
All corporate action on the part of AHPC, its officers and directors
necessary for the authorization, execution and delivery
8
12
of this Agreement, each of the Related Agreements, the performance of all
obligations of AHPC hereunder and thereunder has been taken or will be taken
prior to each Closing, and this Agreement, and the Related Agreements,
constitute valid and legally binding obligations of AHPC enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting the enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
3.3 Governmental Consents.
Other than matters contemplated by this Agreement, and the Related
Agreements and any notifications required to be filed or supplied pursuant to
the HSR Act, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of AHPC in connection with
AHPC's valid execution, delivery and performance of this Agreement, the Related
Agreements or the issuance of the Shares which are to be purchased by AHPC
hereunder.
3.4 Accredited Investor.
AHPC is an "accredited investor" as such term is defined in Rule 501(d)
of the Securities Act and is purchasing the Note for its own account for
investment purposes.
4. Filings and Authorizations.
The Company and AHPC have filed or supplied, or caused to be filed or
supplied, all notifications and information required to be filed or supplied
pursuant to the HSR Act in connection with the transactions contemplated by this
Agreement. The Company and AHPC, as promptly as practicable, (a) will make, or
cause to be made, all such other filings and submissions under laws, rules and
regulations applicable to them as may be required for them to consummate the
transactions contemplated hereby in accordance with the terms of this Agreement,
and (b) will use reasonable efforts to obtain, or cause to be obtained, all
authorizations, approvals, consents and waivers from all governmental
authorities necessary to be obtained by them in order for them to consummate
such transactions.
5. Conditions to Obligation of Each Party to Effect the Transactions
Contemplated by this Agreement.
The obligation of each party to effect the transactions contemplated by
this Agreement shall be subject to the
9
13
fulfillment at or prior to the date of each of the First Closing and the Second
Closing of the following conditions:
(a) all governmental and other consents and approvals, if any,
necessary to permit the consummation of the transactions contemplated by this
Agreement shall have been obtained and any waiting period (and any extension
thereof) applicable to the consummation of the Agreement under the HSR Act shall
have expired or been terminated; and
(b) no stop order or other order enjoining the sale of the Shares or
the Note to be purchased and sold at the First Closing and the Second Closing,
respectively, shall have been issued and no proceedings for such purpose shall
be pending or, to the knowledge of the Company, threatened by the SEC or any
commissioner of corporations or similar officer of any state having jurisdiction
over this transaction and no preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission nor any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority shall be in effect that would restrain or otherwise prevent the
consummation of the transactions contemplated by the Agreement.
6. Conditions of AHPC's Obligations at each Closing.
(a) The obligations of AHPC under subsection 1.1 of this Agreement are
subject to the fulfillment on or before each Closing of the following applicable
conditions, the waiver of which shall not be effective without the consent of
AHPC thereto:
(i) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all
material respects on and as of each Closing with the same effect as
though such representations and warranties had been made on and as of
the date of such Closing (except for representations and warranties
that speak as of a specific time, which need only be true and correct
in all material respects as of such date or time).
(ii) Performance. The Company shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be
performed or complied with by it on or before each Closing, and all
corporate or other proceedings in connection with the transactions
contemplated at each such Closing and all documents incident thereto
shall be reasonably satisfactory in form and in substance to AHPC.
(iii) Compliance Certificate. An officer of the
10
14
Company shall have delivered to AHPC a certificate certifying that (a)
the conditions specified in Sections 6(a)(i) and 6(a)(ii) have been
fulfilled.
(iv) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at each
Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to AHPC and they shall have received
all such counterpart original and certified or other copies of such
documents as they may reasonably request.
(v) Related Agreements. Prior to or at the First Closing, the
Company and AHPC shall have entered into the Related Agreements (other
than the Note which shall be issued and delivered at the Second
Closing).
(vi) Certificate. At each Closing, the Company shall have
furnished to AHPC a certificate, signed by an authorized officer of the
Company, certifying: (i) the due organization and good standing of the
Company; (ii) the corporate resolutions of the Company authorizing the
transactions contemplated by this Agreement; and (iii) the incumbency
of officers of the Company executing this Agreement and the other
instruments or certificates delivered at each Closing.
(vii) Share Certificates. At the First Closing, the Company
shall have furnished to AHPC a certificate or certificates representing
the Shares (free and clear of all liens, claims and other encumbrances
except as otherwise provided herein) to be purchased and sold at such
Closing, accompanied by the requisite stock transfer tax stamps or
funds for the purchase thereof;
(viii) Opinions of counsel. At the First Closing and at the
Second Closing, the Company shall have furnished to AHPC two separate
opinions of Baker, Donelson, Bearman & Xxxxxxxx in the forms attached
hereto as Exhibit B to be delivered at the First Closing and Exhibit C
to be delivered at the Second Closing; and
(ix) Delivery of the Note. At the Second Closing, among other
things, the Company shall deliver the fully executed Note in the
principal amount of $25 million dollars; and
(x) Other Documentation. The Company shall have furnished to
AHPC such other instruments and documents, in form and substance
reasonably acceptable to AHPC, as may be necessary to effect each
Closing.
11
15
7. Conditions of the Company's Obligations at Each Closing.
(a) The obligations of the Company to AHPC under this Agreement are
subject to the fulfillment on or before each Closing of the following applicable
conditions by AHPC:
(i) Representations and Warranties. The representations and
warranties of AHPC contained in Section 3 shall be true in all material
respects on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of such Closing
(except for representations and warranties that speak as of a specific
time, which need only be true and correct in all material respects as
of such date or time);
(ii) Performance. AHPC shall have performed and complied in
all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before each Closing, and all corporate or
other proceedings in connection with the transactions contemplated at
each such Closing and all documents incident thereto shall be
reasonably satisfactory in form and in substance to the Company;
(iii) Compliance Certificate. An officer of AHPC shall have
delivered to the Company a certificate certifying that the conditions
specified in Sections 7.1(a)(i) and 7.1(a)(ii) have been fulfilled;
(iv) Payment of Purchase Price. At the First Closing, AHPC
shall have delivered the purchase price required to be paid at such
Closing;
(v) Related Agreements. At the First Closing, the Company and
AHPC shall have entered into each of the Related Agreements (other than
the Note which shall be accepted at the Second Closing) each of even
date herewith;
(vi) Acceptance of the Note. At the Second Closing, AHPC shall
accept the fully-executed Note as partial payment of the consideration
required under the Asset Purchase Agreement; and
(vii) Other Documentation. AHPC shall have furnished to the
Company such other instruments and documents, in form and substance
reasonably acceptable to the Company, as may be necessary to effect
each Closing.
8. Covenants.
12
16
8.1 Lock-up.
AHPC hereby agrees during the time period commencing on the Closing
until thirty (30) days following the Closing, that without the prior written
consent of the Company (which may be withheld in the Company's sole discretion),
it shall not, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of any of the Shares.
8.2 Lenders' Consent.
The Company shall use its best efforts to promptly seek and obtain any
required consents from the Companys' lenders permitting the issuance of the Note
at the Second Closing.
9. Miscellaneous.
9.1 Survival of Warranties.
The warranties, representations and covenants of the Company and AHPC
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and Closing.
9.2 Assignment; Successors and Assigns.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the parties hereto without the prior written
consent of the other party. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
9.3 Governing Law.
This Agreement shall be governed by and construed under the laws of the
State of New York, without regard to the conflicts of laws of such state.
9.4 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.5 Titles and Subtitles.
13
17
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
9.6 Notices.
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing by personal delivery to the party to be
notified or by Federal Express or other reliable overnight package delivery
service or registered or certified mail, postage prepaid and addressed to the
party to be notified at the following addresses, or at such other address as
such party may designate by five (5) days' advance written notice to the other
parties (with notice deemed given upon receipt):
If to the Company:
King Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to:
King Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Executive Vice President
and General Counsel
Facsimile: (000) 000-0000
If to AHPC:
American Home Products Corporation
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Senior Vice President
and General Counsel
Facsimile: (000) 000-0000
9.7 Finder's Fees.
Each party represents that it neither is nor will be obligated for any
finders' fee or commission in connection with this transaction. Each party
agrees to indemnify and to hold harmless the other from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the indemnifying party or any of its
14
18
officers, partners, employees, or representatives is responsible.
9.8 Expenses.
Irrespective of whether the Closing is effected, each party shall pay
all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement. Notwithstanding the
foregoing, the Company shall pay any and all stamp, transfer and other similar
taxes payable or determined to be payable in connection with the execution and
delivery of this Agreement or any securities purchased hereunder, and shall save
and hold AHPC harmless from and against any and all liabilities with respect to
or resulting from any delay in paying, or omission to pay, such taxes.
9.9 Publicity.
Except for information which is required to be disclosed by applicable
law, neither party hereto shall issue any press releases or public statements
with regard to this Agreement or the Related Agreements without first seeking
the approval of the other party, which shall not be unreasonably withheld or
delayed.
9.10 Amendments and Waivers.
Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and AHPC. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each holder of any securities
purchased under this Agreement at the time outstanding, each future holder of
all such securities, and the Company.
9.11 Severability.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
9.12 Entire Agreement.
This Agreement and the documents referred to herein constitute the
entire agreement among the parties and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
[The remainder of this page intentionally left blank.]
15
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
KING PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: President and Chief Operating
Officer
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
16
