EXECUTION VERSION
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AGREEMENT AND PLAN OF MERGER
by and among
XXXX PHARMACEUTICALS, INC.,
TEVA PHARMACEUTICAL INDUSTRIES LTD.
and
BORON ACQUISITION CORP.
Dated as of July 17, 2008
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TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER......................................................2
1.1. The Merger.....................................................2
1.2. Effective Time.................................................2
ARTICLE II THE SURVIVING CORPORATION.......................................2
2.1. Effect of the Merger...........................................2
2.2. Certificate of Incorporation...................................2
2.3. By-Laws........................................................2
2.4. Directors......................................................2
2.5. Officers.......................................................3
ARTICLE III EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES...................................................3
3.1. Effect on Capital Stock........................................3
3.2. Exchange of Share Certificates.................................5
3.3. Appraisal Rights...............................................8
3.4. Adjustments to Prevent Dilution................................8
ARTICLE IV THE CLOSING.....................................................9
4.1. Closing........................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................9
5.1. Representations and Warranties of the Company..................9
5.2. Representations and Warranties of Parent and Merger Sub.......25
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER.........................34
6.1. Covenants of the Company......................................34
6.2. Covenants of Parent...........................................37
6.3. No Control of Other Party's Business..........................38
ARTICLE VII ADDITIONAL AGREEMENTS..........................................39
7.1. Access........................................................39
7.2. Acquisition Proposals.........................................39
7.3. Stockholders Meeting..........................................42
7.4. Filings; Other Actions; Notification..........................42
7.5. Proxy Statement/Prospectus; F-4 Registration Statement........44
7.6. Stock Exchange Listing........................................46
7.7. Stock Exchange Delisting; Deregistration of Stock.............46
7.8. Publicity.....................................................46
7.9. Employee Benefits Matters.....................................46
7.10. Indemnification; Directors' and Officers' Insurance...........48
7.11. Expenses......................................................49
7.12. Takeover Statute..............................................49
7.13. Section 16 Matters............................................49
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7.14. Tax-Free Reorganization.......................................49
7.15. Non-Solicitation; No-Hire.....................................50
7.16. Accountants' Comfort Letters..................................50
7.17. Alternative Structure.........................................50
ARTICLE VIII CONDITIONS.....................................................51
8.1. Conditions to Each Party's Obligation to Effect the Merger....51
8.2. Conditions to Obligations of Parent and Merger Sub............51
8.3. Conditions to Obligation of the Company.......................52
ARTICLE IX TERMINATION....................................................53
9.1. Termination by Mutual Consent.................................53
9.2. Termination by Either Parent or the Company...................53
9.3. Termination by the Company....................................54
9.4. Termination by Parent.........................................54
9.5. Effect of Termination and Abandonment.........................55
ARTICLE X MISCELLANEOUS AND GENERAL......................................56
10.1. Survival......................................................56
10.2. Modification or Amendment.....................................56
10.3. Waiver........................................................56
10.4. Counterparts..................................................56
10.5. GOVERNING LAW AND VENUE.......................................56
10.6. Notices.......................................................57
10.7. Entire Agreement; NO OTHER REPRESENTATIONS....................58
10.8. No Third-Party Beneficiaries..................................58
10.9. Obligations of Parent and of the Company......................59
10.10. Severability..................................................59
10.11. Disclosure Schedules..........................................59
10.12. Interpretation................................................59
10.13. Assignment....................................................59
10.14. Specific Performance..........................................60
EXHIBITS:
Exhibit A Parent Officer Representation Letter
Exhibit B Company Officer Representation Letter
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INDEX OF DEFINED TERMS
Defined Term Section
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368 Reorganization.....................................................5.1(n)(x)
Acquisition Proposal.........................................................7.2
Affected Employees.....................................................7.9(a)(i)
Affiliate.................................................................3.2(d)
Agreement...............................................................Preamble
Antitrust Law.............................................................7.4(f)
Asbestos..................................................................5.1(m)
Asbestos-Containing Material..............................................5.1(m)
Audit Date...........................................................5.1(e)(iii)
Bankruptcy and Equity Exception........................................5.1(c)(i)
Book Entry Shares.........................................................3.1(c)
Business Day.................................................................4.1
By-Laws......................................................................2.3
Certificate...............................................................3.1(c)
Certificate of Incorporation.................................................2.2
Certificate of Merger........................................................1.2
Change of Recommendation.....................................................7.2
Closing......................................................................4.1
Closing Year..........................................................7.9(a)(ii)
Closing Date.................................................................4.1
CMS.......................................................................5.1(k)
Code....................................................................Recitals
Company.................................................................Preamble
Company Advisor...........................................................5.1(w)
Company Awards........................................................3.1(d)(ii)
Company Option.........................................................3.1(d)(i)
Company Balance Sheet.....................................................5.1(g)
Company Common Stock......................................................3.1(b)
Company Compensation and Benefit Plan..................................5.1(j)(i)
Company Disclosure Schedules.................................................5.1
Company Intellectual Property Rights...................................5.1(p)(i)
Company Material Adverse Effect...........................................5.1(a)
Company Reports........................................................5.1(e)(i)
Company Required Statutory Approvals...................................5.1(d)(i)
Company Requisite Vote....................................................5.1(u)
Company Stock Plans.......................................................5.1(b)
Company Stockholders Meeting.................................................7.3
Compensation and Benefit Plan..........................................5.1(j)(i)
Confidentiality Agreement...................................................10.7
Contracts.............................................................5.1(d)(ii)
control...................................................................3.2(d)
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Copyrights.............................................................5.1(p)(i)
DEA.......................................................................5.1(k)
Depository................................................................3.2(a)
DGCL....................................................................Recitals
Dissenting Shares.........................................................3.3(a)
Divestitures..............................................................7.4(f)
EC Merger Regulation...................................................5.1(d)(i)
Effective Time...............................................................1.2
Environmental Law.........................................................5.1(m)
ERISA..................................................................5.1(j)(i)
Exchange Act..............................................................5.1(a)
Exchange Agent............................................................3.2(a)
Exchange Fund.............................................................3.2(a)
Exchange Ratio.........................................................3.1(c)(i)
Executive Bonus Plans.................................................7.9(a)(ii)
F-4 Registration Statement................................................5.1(f)
FDA.......................................................................5.1(k)
First Step Merger...........................................................7.17
Foreign Antitrust Filings..............................................5.1(d)(i)
Governmental Entity....................................................5.1(d)(i)
Hazardous Substance.......................................................5.1(m)
HHS.......................................................................5.1(k)
HSR Act................................................................5.1(d)(i)
Indemnified Parties.........................................................7.10
Intellectual Property Rights...........................................5.1(p)(i)
ISA....................................................................5.2(d)(i)
knowledge.................................................................5.1(a)
Laws......................................................................5.1(k)
Legal Privilege...........................................................7.4(b)
Liens.....................................................................5.1(q)
Litigation Claims.........................................................5.1(i)
Merger..................................................................Recitals
Merger Consideration......................................................3.1(c)
Merger Sub..............................................................Preamble
Merger Sub 2................................................................7.17
Nasdaq.................................................................5.2(d)(i)
NYSE...................................................................5.1(d)(i)
Option Exchange Ratio..................................................3.1(d)(i)
Orange Book...........................................................5.1(p)(ii)
Order.....................................................................8.1(c)
Organizational Documents..................................................5.1(a)
Parent..................................................................Preamble
Parent ADRs............................................................3.1(c)(i)
Parent ADSs............................................................3.1(c)(i)
Parent Award...........................................................3.1(d)(i)
Parent Balance Sheet......................................................5.2(g)
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Parent Disclosure Schedules...............................................5.1(a)
Parent Intellectual Property Rights....................................5.2(l)(i)
Parent Material Adverse Effect............................................5.2(a)
Parent Ordinary Shares.................................................3.1(c)(i)
Parent Reports.........................................................5.2(e)(i)
Parent Required Statutory Approvals....................................5.2(d)(i)
Parent Stock Plans........................................................5.2(b)
Patents................................................................5.1(p)(i)
Permitted Liens...........................................................5.1(q)
Person....................................................................3.2(b)
Proxy Statement..............................................................7.5
Proxy Statement/Prospectus...................................................7.5
Registration Statements...................................................5.1(f)
Representatives..............................................................7.2
S-8 Registration Statement.............................................3.1(d)(i)
SEC....................................................................5.1(e)(i)
Securities Act.........................................................5.1(d)(i)
Significant Subsidiary....................................................5.1(a)
Stock Consideration....................................................3.1(c)(i)
Subsidiary................................................................5.1(a)
Superior Proposal............................................................7.2
Surviving Corporation........................................................1.1
Takeover Statute.......................................................5.1(l)(i)
TASE...................................................................5.2(d)(i)
Tax...................................................................5.1(n)(xi)
Tax Return............................................................5.1(n)(xi)
Taxes.................................................................5.1(n)(xi)
Termination Date..........................................................9.2(a)
Trademarks.............................................................5.1(p)(i)
Transition Period.........................................................7.9(a)
U.S. Company Plan.....................................................5.1(j)(ii)
U.S. GAAP.................................................................5.1(a)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
as of July 17, 2008, by and among Xxxx Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), Teva Pharmaceutical Industries Ltd., an Israeli
corporation ("Parent"), and Boron Acquisition Corp., a Delaware corporation and
a wholly owned direct subsidiary of Parent ("Merger Sub").
W I T N E S S E T H:
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WHEREAS, the Company, Parent and Merger Sub have agreed to enter into a
business combination transaction pursuant to which the Company will merge with
and into Merger Sub, with Merger Sub continuing as the surviving corporation
(the "Merger"), all upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the Delaware General Corporation Law (the
"DGCL");
WHEREAS, the respective Boards of Directors of each of the Company, Parent
and Merger Sub have each unanimously (i) determined that the Merger and other
transactions contemplated hereby are advisable and are fair to and in the best
interests of the Company, Parent and Merger Sub and their respective
stockholders and (ii) approved this Agreement and the transactions contemplated
hereby, in each case, on the terms and subject to the conditions hereof;
WHEREAS, the respective Boards of Directors of each of the Company and
Merger Sub have unanimously determined to recommend to their respective
stockholders the approval and adoption of this Agreement and the transactions
contemplated hereby (including, without limitation, the Merger);
WHEREAS, for U.S. federal income tax purposes, it is intended that (i) the
Merger qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations promulgated thereunder and (ii) this Agreement shall constitute a
plan of reorganization within the meaning of Treasury Regulation Section
1.368-(2)(g); and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and the other transactions contemplated herby and to prescribe certain
conditions to the consummation of the Merger and such other transactions;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound,
hereby agree as follows:
ARTICLE I
THE MERGER
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1.1. The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, at the Effective Time, the
Company shall be merged with and into Merger Sub and the separate corporate
existence of the Company shall thereupon cease. Merger Sub shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation"), and shall succeed to and assume all the rights and
obligations of the Company in accordance with Section 251 of the DGCL.
1.2. Effective Time. On the Closing Date, the parties hereto shall cause
the Merger to be consummated by filing a certificate of merger (the "Certificate
of Merger") with the Secretary of State of the State of Delaware, in such form
as is required by, and executed in accordance with, the relevant provisions of
the DGCL, and the Merger shall become effective upon such filing of the
Certificate of Merger with the Secretary of State of the State of Delaware or at
such later time as the parties may agree and shall specify in the Certificate of
Merger (such time at which the Merger becomes effective, the "Effective Time").
ARTICLE II
THE SURVIVING CORPORATION
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2.1. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
2.2. Certificate of Incorporation. At the Effective Time, the certificate
of incorporation of Merger Sub, as in effect immediately prior to the Effective
Time shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided therein or by Law (the "Certificate of
Incorporation"), except that Article I thereof shall be amended, by the filing
of the Certificate of Merger or other appropriate documents, to read in its
entirety as follows: "The name of the corporation is Xxxx Pharmaceuticals, Inc."
2.3. By-Laws. At the Effective Time, and without any further action on the
part of the Company or Merger Sub, the by-laws of the Company, as in effect
immediately prior to the Effective Time, and including the provisions required
by Section 7.10(d), shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein, in the Certificate of
Incorporation or in accordance with applicable Law.
2.4. Directors. Subject to requirements of applicable Law, the directors of
Merger Sub immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors of the Surviving Corporation until their
successors have been duly elected or appointed and
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qualified or until their earlier death, resignation or removal in accordance
with the Certificate of Incorporation and the By-Laws.
2.5. Officers. Effective as of the Effective Time, the officers of Merger
Sub as of immediately prior to the Effective Time shall be the initial executive
officers of the Surviving Corporation, who shall serve until their successors
have been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the applicable provisions of the
Certificate of Incorporation and the By-Laws.
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
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3.1. Effect on Capital Stock. At the Effective Time, as a result of the
Merger and without any further action on the part of the Company, Parent, Merger
Sub or any holder of any capital stock of the Company, Parent or Merger Sub:
(a) Merger Sub. Each share of common stock, par value $1.00 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into one share of common stock, par value $1.00 per share, of the
Surviving Corporation, which shall constitute the only outstanding shares of
capital stock of the Surviving Corporation as of immediately after the Effective
Time.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share of
common stock, par value $0.01 per share, of the Company (the "Company Common
Stock"), and any other shares of capital stock of the Company, that is owned by
the Company or any Subsidiary of the Company or by Parent, Merger Sub or any
other Subsidiary of Parent shall automatically be cancelled and retired and
shall cease to be outstanding, and no Merger Consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 3.3, each issued
and outstanding share of Company Common Stock (other than Dissenting Shares and
shares of Company Common Stock to be cancelled and retired pursuant to Section
3.1(b)), shall be converted into the right to receive the following
consideration (the "Merger Consideration"):
(i) 0.6272 (as may be adjusted pursuant to Section 3.4, the "Exchange
Ratio") ordinary shares, par value NIS 0.10, of Parent, duly issued and
credited as fully paid (collectively, the "Parent Ordinary Shares") which
will trade in the United States in the form of American Depositary Shares
("Parent ADSs," each Parent ADS representing one Parent Ordinary Share),
evidenced by American Depositary Receipts ("Parent ADRs") (such Parent
ADSs, together with any cash in lieu of fractional Parent ADSs to be paid
pursuant to Section 3.2(f), the "Stock Consideration"); and
(ii) $39.90 in cash.
At the Effective Time, each share of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
be outstanding, and, in the case of shares of Company Common Stock represented
by book-entry ("Book-Entry Shares"),
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the names of the former registered holders shall be removed from the registry of
holders of such shares, and: (A) each holder of a certificate representing any
such shares (other than Book-Entry Shares) of Company Common Stock (a
"Certificate") shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration upon the surrender of such Certificate
(for each share of Company Common Stock previously represented thereby), and (B)
each holder of Book-Entry Shares shall cease to have any rights with respect
thereto except the right to receive the Merger Consideration following such
removal of such holder's name from the registry of holders of such shares (for
each such Book-Entry Share).
(d) Company Options and SARs.
(i) The Company shall take all actions necessary or appropriate to
provide that each option to purchase Company Common Stock (each a "Company
Option") that is outstanding as of the Effective Time and held by any
non-employee member of the Company's Board of Directors, shall, conditional
upon consummation of the Merger, to the extent such Company Options have
not been exercised as of the Effective Time, whether or not exercisable or
vested, be assumed by Parent and converted into an option or stock
appreciation right, as applicable, to acquire Parent Ordinary Shares in the
form of Parent ADSs (a "Parent Award"), to be evidenced by Parent ADRs upon
exercise, in an amount and at an exercise price as determined in accordance
with Section 3.1(d)(ii). Each Company Option so assumed will be subject to,
and exercisable and vested on, the same terms and conditions as under such
Company Option as of the Effective Time, except that: each assumed Company
Option shall (A) constitute an award to acquire that number of Parent ADSs
(rounded down to the nearest number of whole Parent ADSs) equal to the
product of: (x) the number of shares of Company Common Stock subject to
such Company Option immediately prior to the Effective Time, and (y) the
Option Exchange Ratio (defined below) and (B) have an exercise price per
Parent ADS equal to the quotient of (x) the per share exercise price of
such Company Option immediately prior to the Effective Time, divided by (y)
the Option Exchange Ratio. For purposes of this Section 3.1(d)(i), the term
"Option Exchange Ratio" shall mean the sum of: (A) the Exchange Ratio and
(B) the quotient of (I) $39.90, divided by (II) the closing price per
Parent ADS on the Business Day immediately preceding the Effective Time (as
reported by Nasdaq on such Business Day). On or prior to the Effective
Date, Parent shall file an appropriate Registration Statement on Form S-8
with respect to the offering of the Parent ADSs issuable upon exercise of
the Parent Awards (the "S-8 Registration Statement") and, as promptly as
practicable, shall comply with the terms of Section 7.6 so that holders of
Parent Awards may, subject to applicable Law, freely sell the Parent ADSs
issuable upon exercise of the Parent Awards.
(ii) The Company shall take all actions necessary or appropriate to
provide that each Company Option, and each stock appreciation right granted
on Company Common Stock (collectively, "Company Awards"), in any case held
by any current or former employee of the Company or any of its
Subsidiaries, which is outstanding immediately prior to the Effective Time
(whether vested or unvested, exercisable or not exercisable), shall be
canceled by the Company, and the holder thereof shall be entitled to
receive promptly following the Effective Time from Parent or the Surviving
Corporation, as applicable, in consideration for such cancellation, an
amount (less applicable
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withholdings and without interest) equal to the product of (x) the excess,
if any, of (A) $66.50, over (B) the exercise price per share of Company
Common Stock subject to such Company Award, multiplied by (y) the total
number of shares of Common Stock subject to such Company Award. The Company
shall take all commercially reasonable actions that may be necessary (under
the applicable Company Stock Plans and otherwise) to effectuate the
provisions of this Section 3.1(d)(ii).
(iii) Promptly following the date hereof, the Company shall take all
actions that are necessary or appropriate to cause the Company's Employee
Stock Purchase Plan to be modified, terminated and/or suspended so that no
purchase of Company Common Stock shall or may occur from and after the
expiration of the offering period currently in effect under such plan or
the Closing Date (if earlier).
3.2. Exchange of Share Certificates. (a) Exchange Agent. Prior to the
Effective Time, Parent shall designate The Bank of New York, which currently
acts as the depository for the ADSs, or another U.S. bank or trust company
reasonably acceptable to the Company (in such capacity, the "Depository"), to
act as agent (the "Exchange Agent") for the holders of shares of Company Common
Stock to receive the Merger Consideration to which such holders shall become
entitled with respect to such holder's shares of Company Common Stock pursuant
to Sections 3.1(c) and 3.1(d). At or prior to the Effective Time, Parent or
Merger Sub shall deposit or cause the Depository to deposit with the Exchange
Agent, (i) that number of Parent ADRs and Parent Ordinary Shares, as applicable,
and (ii) cash, in each case as are issuable or payable, respectively, pursuant
to this Article III in respect of shares of Company Common Stock for which
Certificates or evidence of Book-Entry Shares have been properly delivered to
the Exchange Agent. The deposit made by Parent or Merger Sub, as the case may
be, pursuant to this Section 3.2(a) is hereinafter referred to as the "Exchange
Fund." The Exchange Agent shall cause the Exchange Fund to be (i) held for the
benefit of the holders of Company Common Stock and (ii) applied promptly to
making the payments provided for in Sections 3.1(c) and 3.1(d). The Exchange
Fund shall not be used for any purpose that is not expressly provided for in
this Agreement; provided that Parent may direct the Exchange Agent to invest the
Exchange Fund in obligations of or guaranteed by the United States of America
and backed by the full faith and credit of the United States of America or in
commercial paper obligations rated A-1 or P-1 or better by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation, respectively; provided further,
that no such investment or losses shall affect the cash consideration payable to
holders of Company Common Stock entitled to receive such consideration or cash
in lieu of fractional Parent ADSs as provided in Section 3.2(f) and Parent shall
promptly provide additional funds to the Exchange Agent for the benefit of such
holders entitled to receive such consideration in the amount of any loss. Any
interest or other income resulting from such investments shall be (A) the
property of Parent and (B) promptly paid to Parent. Parent shall, prior to the
Effective Time, allot Parent Ordinary Shares referred to in Sections 3.1(c) on
the terms and subject to the conditions set forth in this Agreement.
(b) Payment Procedures.
(i) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder
of record of shares of Company Common Stock at the Effective Time (A) a
letter of transmittal specifying that
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delivery of the Certificates shall be effected, and risk of loss and title
to the Certificates and Book-Entry Shares shall pass, only upon delivery of
the Certificates (or effective affidavits of loss in lieu thereof) or
evidence of Book-Entry Shares, as the case may be, to the Exchange Agent,
such letter of transmittal to be in such form and have such other
provisions as Parent and the Company shall reasonably agree and (B)
instructions for use in effecting the surrender of the Certificates (or
effective affidavits of loss in lieu thereof) and evidence of Book-Entry
Shares in exchange for the Merger Consideration (such instructions shall
include instructions for the payment of the Merger Consideration to a
Person other than the Person in whose name the surrendered Certificate or
Book-Entry Share is registered on the transfer books of the Company,
subject to the receipt of appropriate documentation for such transfer).
Upon the proper surrender of a Certificate (or effective affidavit of loss
in lieu thereof) or evidence of Book-Entry Shares to the Exchange Agent,
together with a properly completed letter of transmittal, duly executed,
and such other documents as may reasonably be requested by the Exchange
Agent, the holder of such Certificate or Book-Entry Shares will be entitled
to receive in exchange therefor the applicable Merger Consideration (after
giving effect to any required tax withholdings) that such holder has the
right to receive pursuant to this Article III, and the Certificate or
Book-Entry Shares so surrendered will forthwith be cancelled and retired.
No interest shall be paid, payable or accrued on any amount payable upon
due surrender of the Certificates or Book-Entry Shares. In the event of a
transfer of ownership of shares of Company Common Stock that is not
registered in the transfer records of the Company, the cash and the number
of Parent ADSs to be paid and issued upon due surrender of the Certificate
or Book-Entry Shares may be paid to such a transferee if the Certificate or
evidence of Book-Entry Shares formerly representing such shares of Company
Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer Taxes have been paid or are not
applicable.
(ii) No dividends or other distributions with respect to securities of
Parent constituting part of the Merger Consideration shall be paid to the
holder of any Certificates or Book Entry Shares not surrendered until such
Certificates or Book Entry Shares, as applicable, are surrendered as
provided in this Section 3.2. Following such surrender, in addition to the
Merger Consideration, there shall be paid, without interest, to the Person
in whose name the securities of Parent have been registered, (A) at the
time of surrender, the amount of all dividends or other distributions with
a record date after the Effective Time, which were either previously paid
or payable on the date of such surrender with respect to such securities
and (B) at the appropriate payment date, the amount of dividends or other
distributions payable with respect to such securities with a record date
after the Effective Time and prior to surrender and with a payment date
subsequent to such surrender.
For the purposes of this Agreement, the term "Person" shall mean any individual,
corporation (including, without limitation, any not-for-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity or other entity of
any kind or nature.
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(c) Transfers. After the Effective Time, there shall be no registration of
transfers on the stock transfer books of the Company of shares of Company Common
Stock that were outstanding immediately prior to the Effective Time.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains unclaimed by the holders of Company Common Stock on the first
anniversary after the Effective Time shall be returned to Parent, the Surviving
Corporation or another Affiliate of Parent, as may be designated by Parent or
the Surviving Corporation. Any holders of Company Common Stock who have not
theretofore complied with this Article III shall thereafter look only to Parent
or the Surviving Corporation for payment of the Merger Consideration, without
any interest thereon. Notwithstanding the foregoing, none of Parent, the
Surviving Corporation, the Exchange Agent or any other Person shall be liable to
any former holder of shares of Company Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar Laws. For the purposes of this Agreement, the term
"Affiliate" means, with respect to any Person, (i) each Person that, directly or
indirectly, owns or controls such Person, and (ii) each Person that controls, is
controlled by or is under common control with such Person or any Affiliate of
such Person, provided that, for the purpose of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
(e) Lost, Stolen or Destroyed Certificates. In the event that any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent (and upon such terms and subject
to such conditions as Parent shall reasonably require), (i) the agreement by
such Person to indemnify and hold harmless Parent, the Surviving Corporation and
any of their respective Affiliates from and against any and all claims with
respect to such Certificate and/or (ii) the posting by such Person of a bond in
customary amount as indemnity against any and all such claims, the Exchange
Agent or Parent (as the case may be) will issue, or cause to be issued, in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
upon due surrender of the shares of Company Common Stock represented by such
Certificate pursuant to this Agreement.
(f) Fractional Shares. Notwithstanding any other provision of this
Agreement to the contrary, no fractional Parent ADSs will be issued and any
holder of shares of Company Common Stock entitled to receive a fractional Parent
ADS but for this Section 3.2(f) shall be entitled to receive a cash payment in
lieu thereof, which payment shall represent such holder's proportionate interest
in the net proceeds for the sale by the Exchange Agent on behalf of such holder
of the aggregate fractional Parent ADS that such holder otherwise would be
entitled to receive. Any such sale shall be made by the Exchange Agent within
five (5) Business Days after the date upon which the Certificate (or
affidavit(s) of loss in lieu thereof) that would otherwise result in the
issuance of such fractional Parent ADSs has been received by the Exchange Agent.
(g) Withholding Rights. Each of Parent and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable to
any Person pursuant to this Article III such amounts as it is required to deduct
and withhold with respect to the making of such payment under provision of any
federal, state, local or foreign tax law. If Parent
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or the Surviving Corporation, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Common Stock or Company Awards in respect
of which Parent or the Surviving Corporation, as the case may be, made such
deduction and withholding.
3.3. Appraisal Rights. (a) Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock (including Book-Entry Shares)
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such shares in accordance with Section 262 of the DGCL
(such shares of Company Common Stock with respect to which appraisal rights have
been perfected and not withdrawn in accordance with Section 262 of the DGCL, the
"Dissenting Shares"), shall not be converted into, or represent the right to
receive, the Merger Consideration. Such stockholders shall be entitled to
receive, subject to and net of any applicable withholding of Taxes, payment of
the appraised value of such Dissenting Shares held by them in accordance with
the provisions of Section 262 of the DGCL, except that all Dissenting Shares
held by stockholders who shall have failed to perfect or who shall have
effectively withdrawn or lost their rights to appraisal of such Dissenting
Shares under Section 262 of the DGCL shall thereupon be deemed to have been
converted into, and to have become exchangeable for, as of the Effective Time,
the right to receive the Merger Consideration, without any interest thereon,
upon surrender, in the manner provided in Section 3.2, of such Dissenting
Shares.
(b) The Company shall give Parent prompt notice of, together with copies
of, any demands for appraisal received by the Company, withdrawals of such
demands, and any other instruments served on or otherwise received by the
Company pursuant to the DGCL. Parent shall have the exclusive right to direct
and control all negotiations and proceedings with respect to any and all such
demands for appraisal. Without limiting, and in furtherance of, the foregoing,
the Company shall not, except with the prior written consent of Parent, (i) make
any payment with respect to any such demands for appraisal, (ii) offer to settle
or otherwise settle any such demands or (iii) waive any failure to properly make
or effect any such demand for appraisal or other action required to perfect
appraisal rights in accordance with the DGCL.
3.4. Adjustments to Prevent Dilution. Notwithstanding anything to the
contrary in this Agreement, if, after the date hereof, and prior to the
Effective Time, the issued and outstanding Company Common Shares, or Parent
Ordinary Shares shall have been changed into a different number of shares or a
different class by reason of any stock split, reverse stock split, stock
dividend, reclassification, recapitalization, split-up, combination, exchange of
shares or other similar transaction, or Parent changes the number of Parent
Ordinary Shares represented by a Parent ADS, then the Merger Consideration and
Exchange Ratio and any other similarly dependent items, as the case may be,
shall be equitably adjusted to provide to the holders of Company Common Stock
the same economic effect as contemplated by this Agreement prior to such action,
and as so adjusted shall, from and after the date of such event, be the Merger
Consideration, the Exchange Ratio or other dependent item, as applicable,
subject to further adjustment in accordance with this Section 3.4.
- 8 -
ARTICLE IV
THE CLOSING
-----------
4.1. Closing. The closing (the "Closing") of the transactions contemplated
by this Agreement shall take place (i) at the offices of Xxxxxxx Xxxx &
Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m.
Eastern time on the third Business Day after the last to be satisfied or waived
of the conditions set forth in Article VIII (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the satisfaction
or waiver of those conditions) shall be satisfied or waived (by the party
entitled to the benefit of such condition) in accordance with this Agreement, or
(ii) at such other place and time and/or on such other date as the Company and
Parent may agree in writing (the date on which the Closing occurs, the "Closing
Date"). For purposes of this Agreement, the term "Business Day" means Monday,
Tuesday, Wednesday and Thursday of each week, other than days on which banks are
required or authorized by Law to close in Tel Aviv or New York City.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1. Representations and Warranties of the Company. Except as set forth on
the disclosure schedules delivered to Parent by the Company simultaneously with
the execution and delivery of this Agreement (the "Company Disclosure
Schedules") and except as disclosed in the Company Reports filed prior to the
date of this Agreement (other than disclosures in the "Risk Factors" or "Forward
Looking Statements" sections of any such reports or other forward-looking
statements set forth in such reports), the Company hereby represents and
warrants to Parent and Merger Sub that:
(a) Organization, Good Standing and Qualification. The Company and each of
its Significant Subsidiaries is a corporation duly organized, validly existing
and in good standing under the Laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority to
own and operate its material properties and assets and to carry on its business
as currently conducted in all material respects and is qualified to do business
and is in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its properties and assets or conduct of its business
requires such qualification, except where the failure to be so qualified as a
foreign corporation or be in good standing would not be reasonably likely to
have, either individually or in the aggregate, a Company Material Adverse
Effect. The Company has heretofore made available to Parent complete and correct
copies of the Organizational Documents of the Company and each of Xxxx
Laboratories, Inc., a Delaware corporation, PLIVA d.d., a Croatian corporation,
and Duramed Pharmaceuticals, Inc., a Delaware corporation, in each case as
amended and in effect. Neither the Company nor any of its Subsidiaries owns,
directly or indirectly, any equity interest in any Person that is organized in
Israel, nor does the Company or any of its Subsidiaries own or lease offices in
Israel, have employees working for them in Israel or maintain inventory in
Israel.
As used in this Agreement, the term "Organizational Documents" means, with
respect to any Person, the articles of incorporation, certificate of
incorporation, articles of formation,
- 9 -
certificate of formation, articles of association, memorandum of association,
by-laws, operating agreement, limited liability company agreement or partnership
agreement (or, in each case, any comparable governing instruments) of such
Person.
As used in this Agreement, the term "Subsidiary" means, with respect to any
specified Person, any other Person of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors (or other Persons performing similar
functions) of such other Person is directly or indirectly owned or controlled by
such specified Person or by one or more of its Subsidiaries or by such specified
Person and any one or more of its Subsidiaries.
As used in this Agreement, the term "Significant Subsidiary" means a
"significant subsidiary" within the meaning of Rule 1.02(w) of Regulation S-X
promulgated pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act").
As used in this Agreement, the term "Company Material Adverse Effect" means
a material adverse effect on the financial condition, business, assets or
results of operations of the Company and its Subsidiaries taken as a whole;
provided, however, that any such effect resulting from or arising out of (i) any
change, after the date hereof, in Law or United States generally accepted
accounting principles ("U.S. GAAP") or interpretations thereof, (ii) general
changes in economic or business conditions, or in the securities markets, (iii)
changes in conditions affecting the generic pharmaceutical industry or the
pharmaceutical industry generally, (iv) the execution, announcement and
performance of this Agreement or the consummation of the transactions
contemplated hereby or any actions taken, delayed or omitted to be taken by the
Company pursuant to and in accordance with this Agreement or at the request of
Parent or Merger Sub, (v) any decline in the trading price or trading volume of
Company Common Stock, or (vi) any failure by the Company to meet internal
projections or forecasts or third party revenue or earnings predictions for any
period shall not be considered when determining if a Company Material Adverse
Effect has occurred, except in the case of the preceding clause (i), (ii) or
(iii) for such effects which have a materially disproportionate impact on the
Company and its Subsidiaries taken as a whole as compared to other companies in
the pharmaceutical business; it being understood that any event, change,
development, effect or occurrence giving rise to such decline in the trading
price or trading volume of Company Common Stock as described in the preceding
clause (v), or such failure to meet internal projections or forecasts or third
party predictions as described in the preceding clause (vi), as the case may be,
may be the cause of, and may be deemed to be, a Company Material Adverse Effect.
As used in this Agreement, the term "knowledge" or any similar formulation
of knowledge shall mean actual knowledge of: (i) with respect to the Company,
those individuals set forth in Section 5.1(a)-1 of the Company Disclosure
Schedules; and (ii) with respect to Parent, those persons set forth in Section
5.2(a)-1 of the disclosure schedules delivered to the Company by Parent
simultaneously with the execution and delivery of this Agreement (the "Parent
Disclosure Schedules").
(b) Capital Structure. The authorized capital stock of the Company consists
of (A) 200,000,000 shares of Company Common Stock, of which 108,385,085 shares
were issued and outstanding as of July 15, 2008, and (B) 2,000,000 shares of
preferred stock, par value $1.00 per
- 10 -
share, of the Company, none of which shares are issued and outstanding. All of
the issued and outstanding shares of Company Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable. Each of the
outstanding shares of capital stock or other securities of: (x) each of the
Company's Significant Subsidiaries is duly authorized, validly issued, fully
paid and nonassessable and, to the extent reflected in Section 5.1(b)(i) of the
Company Disclosure Schedules (with such exceptions as noted therein), is owned
by the Company or a direct or indirect wholly owned Subsidiary of the Company
free and clear of any material Lien; and (y) each of the Company's Subsidiaries
(other than the Company's Significant Subsidiaries) is duly authorized, validly
issued, fully paid and, to the knowledge of the Company, nonassessable and, to
the extent reflected in Section 5.1(b)(i) of the Company Disclosure Schedules
(with such exceptions as noted therein), is owned by the Company or a direct or
indirect wholly owned Subsidiary of the Company free and clear of any material
Lien. As of July 15, 2008, there were 10,997,785 shares of Company Common Stock
subject to outstanding Company Awards and 4,129,503 shares of Company Common
Stock reserved for future Company Award grants under the Company 2007 Stock and
Incentive Award Plan, the Xxxx Laboratories 2002 Stock and Incentive Award Plan,
the Xxxx Laboratories 1993 Stock Incentive Plan, the Xxxx Laboratories 1993
Stock Option Plan for Non-Employee Directors, the Xxxx Laboratories 2002 Stock
Option Plan for Non-Employee Directors, the Duramed 1986 Stock Option Plan, the
Duramed 1998 Stock Option Plan, the Duramed 1991 Stock Option Plan for
Non-Employee Directors, the Duramed 1997 Stock Option Plan, the Duramed 1999
Non-Employee Director Stock Plan, and the Duramed 2000 Stock Option Plan
(collectively, the "Company Stock Plans"). Except as set forth in Section 5.1(b)
of the Company Disclosure Schedules and other than Company Awards, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of the Company or any of its Significant Subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire, any securities of the
Company or any of its Significant Subsidiaries, and no securities or obligations
evidencing such rights are authorized, issued or outstanding.
(c) Corporate Authority.
(i) The Company has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate, on the
terms and subject to the conditions of this Agreement, the transactions
contemplated hereby, subject only to receipt of the Company Requisite Vote
(assuming the accuracy of the representations and warranties set forth in
Section 5.2(u)) and the Company Required Statutory Approvals. This
Agreement has been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by each of Parent and Merger Sub,
is a valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
Laws of general applicability relating to or affecting creditors' rights
and to general equity principles (the "Bankruptcy and Equity Exception").
- 11 -
(ii) Subject to Section 7.2, the board of directors of the Company has
authorized and approved this Agreement and the Merger and other
transactions contemplated hereby and has resolved to recommend that the
stockholders of the Company adopt this Agreement and the transactions
contemplated hereby (including, without limitation, the Merger).
(d) Governmental Filings; No Violations.
(i) Other than any reports, filings, registrations, approvals and/or
notices (A) required to be made pursuant to Section 1.2, (B) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the European Commission Council Regulation (EC) 139/2004 (the "EC
Merger Regulation"), the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act and state securities, takeover and
"blue sky" laws, (C) required to be made or given to, filed with or
obtained from Governmental Entities by virtue of the jurisdictions in which
the Company or its Subsidiaries conduct business or own any assets
(collectively, with those filings and approvals set forth in Section
5.2(d)(i) of the Parent Disclosure Schedules, the "Foreign Antitrust
Filings"), (D) set forth on Section 5.2(d)(i) of the Company Disclosure
Schedules, and (E) required to be made with the New York Stock Exchange
(the "NYSE") (items (B) through (D), inclusive, the "Company Required
Statutory Approvals"), no notices, reports, registrations or other filings
are required to be made by the Company with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained
by the Company from, any United States or foreign federal, state, or local
governmental or regulatory authority, agency, commission, body or other
governmental entity including, without limitation, the FDA and the DEA
(each a "Governmental Entity"), in connection with the execution and
delivery of this Agreement and the consummation by the Company of the
transactions contemplated hereby, except for those that the failure to make
or obtain are not, either individually or in the aggregate, reasonably
likely to have a Company Material Adverse Effect or have a material adverse
effect on the ability of the Company to consummate the transactions
contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby will
not constitute or result in (A) a breach or violation of, or a default
under, the Organizational Documents of the Company, (B) a breach or
violation of, or a default under, any Organizational Document of any
Significant Subsidiary of the Company, (C) a breach or violation of, a
default under, the acceleration of any obligations, the loss of any right
or benefit, or the creation of a Lien on the assets of the Company or any
Subsidiary of the Company (with or without notice, lapse of time or both)
pursuant to, any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation not otherwise terminable by the other party
on ninety days or less notice ("Contracts") binding upon the Company or any
Subsidiary of the Company or any Law or governmental or non-governmental
permit or license to which the Company or any of its Subsidiaries is
subject or (D) any change in the rights or obligations of any party under
any of the Contracts, except, in the case of clauses (B), (C) or (D) above,
for any breach, violation, default, acceleration, creation or change that
would not, either individually or in the aggregate, be
- 12 -
reasonably likely to have a Company Material Adverse Effect or have a
material adverse effect on the ability of the Company to consummate the
transactions contemplated by this Agreement.
(e) Company Reports; Financial Statements.
(i) The filings required to be made by the Company since December 31,
2005 under the Securities Act and the Exchange Act have been filed with the
Securities and Exchange Commission (the "SEC"), including all material
forms, registration, proxy and information statements, reports, agreements
(oral or written) and all documents, exhibits, amendments and supplements
appertaining thereto, and complied, as of their respective dates, in all
material respects with all applicable requirements of the statutes and the
rules and regulations thereunder as in effect on the dates so filed
(collectively, including any amendments of any such reports filed with the
SEC by the Company prior to the date hereof, the "Company Reports"). None
of the Company Reports (in the case of Company Reports filed pursuant to
the Securities Act), as of their effective dates, contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein not
misleading. None of the Company Reports (in the case of Company Reports
filed pursuant to the Exchange Act) contained, when filed as finally
amended or subsequently mailed to stockholders, any untrue statement of a
material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ii) The consolidated financial statements of the Company and its
Subsidiaries included in such Company Reports complied as of the effective
or file dates thereof, as applicable, as to form in all material respects
with the applicable rules and regulations of the SEC with respect thereto
as in effect on such dates. Each of the consolidated balance sheets
included in or incorporated by reference into Company Reports (including
the related notes and schedules) presents fairly, in all material respects,
the financial position of the Company and its Subsidiaries as of its date,
and each of the consolidated statements of income and consolidated
statements of cash flows included in or incorporated by reference into
Company Reports (including any related notes and schedules) fairly
presents, in all material respects, the results of operations, retained
earnings and changes in financial position, as the case may be, of the
Company and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to the absence of notes and normal
year-end audit adjustments), in each case in accordance with U.S. GAAP
consistently applied during the periods involved, except as may be noted
therein.
(iii) The management of the Company has (A) implemented (x) disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act)
to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the management of the Company by others
within those entities and (y) a system of internal control over financial
reporting (as defined in Rule 13a-15(f) of the Exchange Act) designed to
provide reasonable assurances regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance
- 13 -
with U.S. GAAP, and (B) disclosed to the Company's outside auditors and the
audit committee of the board of directors of the Company (x) all
significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and
report financial data and (y) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal control over financial reporting. A summary of any of
those disclosures made by management to the Company's auditors and audit
committee since December 31, 2006 has been made available to Parent. Since
December 31, 2007 (the "Audit Date"), there has not been any material
change in the Company's internal control over financial reporting.
(f) Information Supplied. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by reference
in (i) the S-8 Registration Statement and the Registration Statement of Parent
to be filed with the SEC with respect to the offering of Parent ADSs in
connection with the Merger (the "F-4 Registration Statement" and, together with
the S-8 Registration Statement, the "Registration Statements") or any amendment
or supplement thereto will, at the time such Registration Statement or any
amendment or supplement thereto is filed with the SEC or at the time such
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein
not misleading or (ii) the Proxy Statement/Prospectus will, at the date of
mailing to stockholders and at the time of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The Proxy Statement/Prospectus relating to the Company Stockholder
Meeting and any amendments or supplements thereto will, at the date of mailing
to stockholders and at the time of the Company Stockholders Meeting, comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC thereunder as in effect on such dates. No
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Merger Sub or any of their respective representatives for inclusion or
incorporation by reference in the Proxy Statement/Prospectus or any Registration
Statement.
(g) No Undisclosed Liabilities. There are no liabilities or obligations of
the Company or any of its Subsidiaries of any kind whatsoever in existence on
the date hereof, whether accrued, contingent, absolute, determined, determinable
or otherwise, of a nature required to be set forth in the Company's balance
sheet under U.S. GAAP or the notes thereto, other than: (i) liabilities or
obligations set forth in the unaudited consolidated balance sheet of the Company
as of March 31, 2008 included in the Company Reports (the "Company Balance
Sheet"); (ii) liabilities or obligations incurred in the ordinary course of
business consistent with past practices since March 31, 2008; (iii) liabilities
or obligations incurred in connection with the transactions contemplated by this
Agreement; (iv) liabilities and obligations under Contracts in effect as of the
date hereof or entered into hereafter not in violation of the terms of this
Agreement; and (v) liabilities or obligations that are not reasonably likely to
have, either individually or in the aggregate, a Company Material Adverse
Effect.
- 14 -
(h) Absence of Certain Changes. Since the Audit Date and prior to the date
of this Agreement, except as expressly contemplated by this Agreement, the
Company and its Subsidiaries taken as a whole have conducted their business in
all material respects only in, and have not engaged in any material transaction
other than according to, the Company's ordinary course of such business and
there has not been: (i) any change in the financial condition, properties,
assets, business or results of operations of the Company and its Subsidiaries,
or any other change, circumstance or event, that has had or would be reasonably
likely to have a Company Material Adverse Effect; (ii) any declaration, setting
aside or payment of any dividend or other distribution in respect of the capital
stock of the Company or any repurchase, redemption or other acquisition by the
Company or any Subsidiary of any securities of the Company (other than regular
quarterly dividends in the ordinary course of business); (iii) any change by the
Company in accounting principles, practices or methods which is not permitted by
U.S. GAAP; or (iv) any material increase in the compensation payable or that
could become payable by the Company or any of its Significant Subsidiaries to
officers or key employees or any material amendment of any of the Company
Compensation and Benefit Plans that would have a material impact on the
Company's or any of its Significant Subsidiaries' businesses, as applicable,
other than increases or amendments in the ordinary course of business consistent
with past practice.
(i) Litigation. There are no civil, criminal or administrative actions,
suits, claims, hearings, investigations, reviews or proceedings, including
without limitation any challenges to the Company or any of its Subsidiaries'
patents under Paragraph IV of the Drug Price Competition and Patent Term
Restoration Act of 1984, by or before any Governmental Entity (collectively,
"Litigation Claims"), pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries, except for those that would not
be reasonably likely to have, either individually or in the aggregate, a Company
Material Adverse Effect. There are no material SEC inquiries or investigations,
other material governmental inquiries or investigations or material internal
investigations pending, or to the knowledge of the Company, threatened, in each
case regarding any accounting practices of the Company or any of its
Subsidiaries or any malfeasance by any director (or any Person in a similar
position) or executive officer of the Company or any of its Subsidiaries. This
Section 5.1(i) does not relate to employee benefits or ERISA matters, which are
the subject of Section 5.1(j), or employee or labor matters, which are the
subject of Section 5.1(o).
(j) Employee Benefits.
(i) For the purposes of this Agreement: (i) "Compensation and Benefit
Plan" shall mean each "employee benefit plan" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and all other employee compensation and benefits plans, policies,
programs, arrangements or payroll practices, including multiemployer plans
within the meaning of Section 3(37) of ERISA, and each other stock
purchase, stock option, restricted stock, severance, retention, employment,
consulting, change-of-control, collective bargaining, bonus, incentive,
deferred compensation, employee loan, fringe benefit and other benefit
plan, agreement, program, policy, commitment or other arrangement, whether
or not subject to ERISA (including any related funding mechanism now in
effect or required in the future), whether formal or informal, oral or
written, legally binding or not; and (ii) "Company
- 15 -
Compensation and Benefit Plan" shall mean each material Compensation and
Benefit Plan under which any past or present director, officer, employee,
consultant or independent contractor of the Company or any of its
Subsidiaries has any present or future right to benefits or to which
contributions are made or otherwise required to be made, by the Company or
any of its Subsidiaries, together with any trust agreement or insurance
contract forming a part of such Compensation and Benefit Plan. Section
5.1(i)(i) of the Company Disclosure Schedule sets forth a complete and
accurate list of all Company Compensation and Benefit Plans.
(ii) The Company has provided or made available to Parent or its
counsel each and every Company Compensation and Benefit Plan that is
maintained in the United States (a "U.S. Company Plan"). As soon as
practicable after the date of this Agreement (but in no event later than
thirty (30) calendar days after such date), the Company shall make
available to Parent or its counsel each and every other Company
Compensation and Benefit Plan.
(iii) Each U.S. Company Plan has been established and administered in
accordance in all material respects with its terms, and in compliance in
all material respects with the applicable provisions of ERISA, the Code and
any other applicable Law.
(iv) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect, each
Company Compensation and Benefit Plan maintained outside of the United
States has been established and administered in accordance with its terms,
and in compliance with applicable Law.
(v) Each Company Compensation and Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS that it is so qualified and that its
trust is exempt from taxation under Section 501(a) of the Code, and, to the
knowledge of the Company, nothing has occurred, whether by action or
failure to act, that would reasonably be expected to cause the loss of such
qualification. Except as would not reasonably be likely to have, either
individually or in the aggregate, a Material Adverse Effect, there is no
pending or, to the knowledge of the Company, threatened litigation or other
proceeding relating to the Company Compensation and Benefit Plans (other
than routine claims for benefits).
(vi) No Company Compensation and Benefit Plan is subject to Title IV
or Section 302 of ERISA or Section 412 or 4971 of the Code. No Company
Compensation and Benefit Plan is a "multiemployer plan" as defined in
Section 3(37) of ERISA, and to the knowledge of the Company, no events have
occurred and no circumstances exist that have resulted in, or would
reasonably be expected to result in, any material "withdrawal liability"
(within the meaning of Section 4201 of ERISA) being incurred by the Company
or any of its Affiliates that remains unsatisfied.
(vii) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or
in combination with another event) (A) result in any payment becoming due,
or increase the
- 16 -
amount of any compensation or benefits due, to any current or former
employee of the Company and its Subsidiaries or with respect to any U.S.
Company Plan; (B) increase any benefits otherwise payable under any U.S.
Company Plan; or (C) result in the acceleration of the time of payment or
vesting of any such compensation or benefits.
(viii) Each U.S. Company Plan that is a "nonqualified deferred
compensation plan" (as defined in Section 409A(d)(1) of the Code) has been
operated (A) during the period commencing on January 1, 2005 and ending on
December 31, 2006, in good faith compliance with Section 409A of the Code,
IRS Notice 2005-1, the Proposed Treasury Regulations promulgated under
Section 409A of the Code, and (B) since January 1, 2007, in good faith
compliance with Section 409A of the Code and the Final Treasury Regulations
promulgated under Section 409A of the Code (or, to the extent applicable,
IRS Notice 2005-1 or the Proposed Treasury Regulations promulgated under
Section 409A of the Code).
(k) Compliance with Laws.
(i) Since January 1, 2006, the business of the Company and its
Subsidiaries has not been conducted in violation of any United States or
foreign, federal, state or local law, statute, ordinance, rule, regulation,
judgment, order, injunction, decree, arbitration award, agency requirement,
license or permit of any Governmental Entity (collectively, "Laws"),
including, without limitation, the United States Food and Drug
Administration (the "FDA"), the U.S. Drug Enforcement Administration (the
"DEA"), the United States Department of Health and Human Services ("HHS"),
Centers for Medicare and Medicaid Services ("CMS"), the HHS Office of
Inspector General, and other Governmental Entity rules, regulations and
policies, including, without limitation, relating to state or federal
anti-kickback sales and marketing practices, off label promotion,
government health care program price reporting, good clinical practices,
good manufacturing practices, good laboratory practices, advertising and
promotion, pre- and post-marketing adverse drug experience and adverse drug
reaction reporting, and all other pre- and post-marketing reporting
requirements, as applicable, except for violations that would not be
reasonably likely to have, either individually or in the aggregate, a
Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is debarred under the Generic Drug Enforcement Act of 1992 or
employs or uses the services of any individual who is debarred or, to the
Company's knowledge, has engaged in any activity that would reasonably be
expected to lead to debarment. No investigation or review (other than
routine inspections by the FDA or any other Governmental Entity concerned
with the safety, efficacy, reliability, manufacture, investigation, sale or
marketing of pharmaceuticals) by any Governmental Entity with respect to
the Company or any of its Subsidiaries is pending or, to the knowledge of
the Company, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, except for those the outcome of which would
not be reasonably likely to have, either individually or in the aggregate,
a Company Material Adverse Effect. The Company and each of its Subsidiaries
has, or has applied for, all permits, licenses, franchises, variances,
exemptions, orders and other governmental authorizations, consents and
approvals from Governmental Entities necessary to conduct its business as
currently conducted, except for those the absence of which would not be
reasonably likely to have, either individually
- 17 -
or in the aggregate, a Company Material Adverse Effect. Neither the
Company, any of its Subsidiaries nor, to the knowledge of the Company, any
of the agents, employees, vendors or suppliers of the Company or any of its
Subsidiaries have been excluded from participation in any federal health
care program, as defined under 42 U.S.C. ss.1320a-7b(f), for the provision
of items or services for which payment may be made under such federal
health care program, nor been debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded by any state or federal
department or agency.
(ii) The Company and its Subsidiaries and, to the knowledge of the
Company, the directors, officers, agents and employees of the Company and
its Subsidiaries, are in compliance in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
(l) Anti-Takeover Statutes and Agreements.
(i) Assuming the accuracy of the representations and warranties set
forth in Section 5.2(u), no "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover Law (each, including, without
limitation, Section 203 of the DGCL, a "Takeover Statute") or any
anti-takeover provision in any of the Organizational Documents of the
Company is or will be applicable to this Agreement or any of the
transactions contemplated by this Agreement. Without limiting, and in
furtherance of, the foregoing, the Company and its board of directors have
taken all actions necessary to cause this Agreement and the transactions
contemplated hereby (including, without limitation, the Merger) to be
exempt from provisions of Section 203 of the DGCL.
(ii) Neither the Company nor any of its Subsidiaries is a party to, or
is otherwise bound under, any rights agreement, stockholder rights plan (or
similar plan commonly referred to as a "poison pill").
(m) Environmental Matters. Except for such matters that would not, either
individually or in the aggregate, be reasonably likely to cause a Company
Material Adverse Effect: (i) the operations of the Company and its Subsidiaries
are and since January 1, 2006, have been in compliance with all applicable
Environmental Laws; (ii) each of the Company and its Subsidiaries possesses and
maintains in effect all environmental permits, licenses, authorizations and
approvals required of it to operate as it currently operates under applicable
Environmental Laws with respect to the properties and business of the Company
and its Subsidiaries; (iii) neither the Company nor any of its Subsidiaries have
received any written environmental claim, notice or request for information
concerning any violation or alleged violation by the Company or any of its
Subsidiaries of any applicable Environmental Law, nor, to the Company's
knowledge, is there any existing factual or legal basis that could reasonably be
expected to result in any such claim; (iv) to the Company's knowledge, there has
been no release or threat of release of any Hazardous Substances which could
reasonably be expected to result in liability to the Company or any of its
Subsidiaries at any of its or any of its Subsidiaries' current properties, as
currently operated, or at any former properties or at any other property arising
from its or any of its Subsidiaries' current or former operations; (v) there are
no writs, injunctions, decrees, orders or judgments outstanding, or any actions,
suits or proceedings pending against the Company or any of its Subsidiaries
relating to compliance by the Company or any of its
- 18 -
Subsidiaries with any environmental permits, licenses, authorizations and
approvals required under applicable Environmental Laws or liability of the
Company or any of its Subsidiaries under any applicable Environmental Law; and
(vi) no Lien has been placed upon any of the Company's or the Subsidiaries'
properties (whether owned, leased or managed) under any Environmental Law.
Notwithstanding any other provision of this Agreement to the contrary
(including, but not limited to, Section 5.1(k)), the representations and
warranties of the Company in this Section 5.1(m) constitute the sole
representations and warranties of the Company with respect to any Environmental
Law or Hazardous Substance.
As used herein: (i) "Environmental Law" means any Law (including common
law) relating to: (a) pollution; (b) the protection of the environment
(including air, water, soil, subsurface strata and natural resources) or human
health and safety as affected by exposure to Hazardous Substances in the
workplace or the environment; and (c) the regulation of the use, storage,
handling, transportation, treatment, release, remediation or disposal of
Hazardous Substances; (ii) "Hazardous Substance" means any chemical, material or
substance that is defined or regulated as such by any Environmental Law,
including without limitation, petroleum, petroleum products, and Asbestos and
Asbestos-Containing Materials in quantities regulated by any applicable
Environmental Law; (iii) "Asbestos" includes chrysotile, amosite and
crocidolite; tremolite asbestos, anthophyllite asbestos, actinolite asbestos,
asbestos winchite, asbestos richterite, and any of these minerals that have been
chemically treated and/or altered and any asbestiform variety, type or component
thereof; and (iv) "Asbestos-Containing Material" means any material containing
Asbestos, including, without limitation, any Asbestos-containing products,
automotive or industrial parts or components, equipment, improvements to real
property and any other material that contains Asbestos in any chemical or
physical form.
(n) Tax Matters. Except for such matters that would not, either
individually or in the aggregate, be reasonably likely to cause a Company
Material Adverse Effect:
(i) The Company and each of its Subsidiaries (A) have duly and timely
filed (taking into account any extension of time within which to file) all
Tax Returns required to be filed by any of them as of the date hereof and
all such filed Tax Returns are complete and accurate in all material
respects; (B) have timely paid all Taxes that are shown as due on such
filed Tax Returns and any other Taxes that the Company or any of its
Subsidiaries are otherwise obligated to pay, except with respect to Taxes
that are being contested in good faith; (C) with respect to all Tax Returns
filed by or with respect to any of them, have not waived any statute of
limitations with respect to Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency; (D) as of the date hereof, do
not have any deficiency, audit, examination, investigation or other
proceeding in respect of Taxes pending or threatened in writing; and (E)
have provided adequate reserves in accordance with U.S. GAAP in the most
recent consolidated financial statements of the Company and its
Subsidiaries, as disclosed in the Company Reports, for any material Taxes
of the Company or any of its Subsidiaries that have not been paid, whether
or not shown as being due on any Tax Returns.
- 19 -
(ii) Neither the Company nor any Subsidiary is a party to, is bound by
or has an obligation under any Tax sharing agreement, Tax indemnification
agreement, Tax allocation agreement or similar Contract or arrangement
(including any agreement, Contract or arrangement providing for the sharing
or ceding of credits or losses) other than customary provisions contained
in credit or other commercial lending agreements, employment agreements, or
arrangements with lessors, customers and vendors.
(iii) None of the Company and its Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from,
taxable income for any taxable period (or portion thereof) ending after the
Closing Date as a result of any: (A) change in method of accounting for a
taxable period ending on or prior to the Closing Date under Code Section
481(c) (or any corresponding or similar provision of state, local or
foreign income Tax law); (B) "closing agreement" as described in Code
Section 7121 (or any corresponding or similar provision of state, local or
foreign income Tax law) executed on or prior to the Closing Date; or (C)
intercompany transaction (as defined in Treasury regulations section
1502-13) made on or prior to the Closing Date.
(iv) Each of the Company and its Subsidiaries has withheld and paid to
the appropriate Taxing authority all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any current or former
employee, independent contractor, creditor, stockholder or other third
party and has complied in all material respects with all applicable laws,
rules and regulations relating to the payment and withholding of such
Taxes.
(v) In the past five years, neither the Company nor any of its
Subsidiaries has been a member of an affiliated group filing a
consolidated, combined or unitary U.S. federal, state, local or foreign
income Tax Return (other than a group whose common parent was the Company).
(vi) Neither the Company nor any of its Subsidiaries has any liability
for the Taxes of any Person (other than the Company and its Subsidiaries)
under Treasury regulation section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(vii) Neither the Company nor any of its Subsidiaries has any requests
for rulings in respect of Taxes pending between the Company or any
Subsidiary and any Tax authority.
(viii) Neither the Company nor any of its Subsidiaries has during the
last five years distributed stock of another Person, or has had its stock
distributed by another Person, in a transaction that was purported or
intended to be governed in whole or in part by Section 355 or Section 361
of the Code.
(ix) Neither the Company nor any of the Subsidiaries has at any time,
participated in a "listed transaction" or "reportable transaction" each as
defined in Section 6011 of the Code and the regulations thereunder. No IRS
Form 8886 has been filed by the Company or any Subsidiary.
- 20 -
(x) Neither the Company nor any of its Affiliates has taken or agreed
to take any action, or is aware of any fact or circumstance, that would
prevent the Merger from qualifying as a reorganization within the meaning
of Section 368 of the Code (a "368 Reorganization").
(xi) As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the term "Taxes,") includes all federal, state, local
and foreign income, profits, franchise, gross receipts, environmental,
customs duty, capital stock, severances, stamp, payroll, sales, employment,
unemployment, disability, use, property, withholding, excise, production,
value added, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties
and additions, and (ii) the term "Tax Return" includes all returns and
reports (including elections, declarations, disclosures, schedules,
estimates and information returns, as well as attachments thereto and
amendments thereof) required to be supplied to a Tax authority relating to
Taxes.
(o) Labor Matters.
(i) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect, (i)
the Company and its Subsidiaries have (A) been in compliance with all
applicable Laws relating to employment of labor, including all applicable
Laws relating to wages, hours, collective bargaining, employment
discrimination, civil rights, occupational safety and health, workers'
compensation, pay equity, classification of employees, and the collection
and payment of withholding and/or social security Taxes, and Laws that
could require overtime to be paid to any current or former employee of the
Company and its Subsidiaries and (B) met all requirements required by Law
or regulation relating to the employment of foreign citizens, including all
requirements of I-9, and to the knowledge of the Company, neither the
Company nor any of its Subsidiaries currently employs, or has ever
employed, any Person who was not permitted to work in the jurisdiction in
which such Person was employed. No employee has, to the knowledge of the
Company, threatened to bring a material claim for unpaid compensation or
employee benefits, including overtime amounts.
(ii) Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
its United States employees and, to the knowledge of the Company, there are
not any activities and proceedings of any labor union to organize any such
employees.
(iii) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect,
neither the Company nor any of its Subsidiaries is the subject of any
proceeding asserting that the Company or any of its Subsidiaries has
committed an unfair labor practice or any other violation of law relating
to employee matters, nor since January 1, 2006 has there been any labor
strike, dispute, walk-out, work stoppage, slow-down or lockout involving
the Company or any of its Subsidiaries. No notices, reports, registrations
or other filings are required to be made by the Company or any of its
Subsidiaries with, nor are any consents, registrations,
- 21 -
approvals, permits or authorizations required to be obtained by the Company
or any of its Subsidiaries from, any works council, labor union or similar
entity or governing body in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby,
except for those notices, reports, registrations or other filings, the
failure of which to make, obtain or file would not be reasonably likely to
have, either individually or in the aggregate, a Company Material Adverse
Effect.
(p) Intellectual Property. Except as set forth in Section 5.1(p) of the
Company Disclosure Schedules:
(i) The Company and each of its Subsidiaries owns or is licensed or
otherwise possesses sufficient rights to use and enforce all Intellectual
Property Rights material to the operations of its business as currently
conducted (all such Intellectual Property Rights, together with all
Intellectual Property Rights to which the Company or any of its
Subsidiaries has been granted any license or other rights, collectively
"Company Intellectual Property Rights"). "Intellectual Property Rights"
shall mean: patents, patent applications of any kind (including, without
limitation, divisions, continuations, continuations in part and renewal
applications), inventions, discoveries and invention disclosures (whether
or not patented), and any renewals, extensions, re-examinations,
supplementary protection certificates or reissues thereof, in any
jurisdiction (collectively, "Patents"); rights in registered and
unregistered trademarks, trade names, service marks, brand names,
certification marks, trade dress, logos, domain names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction
to register, the foregoing, including any extension, modification or
renewal of any such registration or application (collectively,
"Trademarks"); know-how, nonpublic information, trade secrets and
confidential or proprietary information; published and unpublished writings
and other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof (collectively,
"Copyrights"); any and all other intellectual property or proprietary
rights relating to any of the foregoing.
(ii) Except for such matters that would not be reasonably likely to
have, either individually or in the aggregate, a Company Material Adverse
Effect, (A) the use or practice of any Intellectual Property Rights by the
Company or its Subsidiaries, or the conduct of their business as currently
conducted, does not conflict with, infringe upon, misuse, violate or
constitute a misappropriation of any right, title, interest or goodwill in
or to any, Intellectual Property Right of any other Person and (B) except
with respect to ANDAs filed in the United States under paragraph IV of the
Xxxxx-Xxxxxx Act or with respect to applications for approval of generic
pharmaceutical products filed under comparable laws or regulations in
territories outside the United States, neither the Company nor any of its
Subsidiaries has received written notice of any claim that, or otherwise
has any knowledge that, any Company Intellectual Property Right is invalid
or unenforceable, or conflicts with the asserted Intellectual Property
Right of any other Person, or is being infringed upon, misused, violated or
misappropriated by any other Person. To the knowledge of the Company, no
court has ruled or otherwise held that any of the Patents owned by the
Company or any of its Subsidiaries that is listed in the U.S.
- 22 -
Food and Drug Administration's book of "Approved Drug Products with
Therapeutic Equivalence Evaluations" (the "Orange Book") that claims or
covers any drug product sold by the Company or any of its Subsidiaries is
(A) invalid or unenforceable or (B) not infringed by any generic
pharmaceutical product that is the subject of any ANDA filed in the United
States or with respect to applications for approval of generic
pharmaceutical products filed under comparable laws or regulations in
territories outside the United States.
(iii) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect, no
Company Intellectual Property Right will terminate or cease to be a valid
right of the Company by reason of the execution and delivery of this
Agreement by the Company, the performance of the Company of its obligations
hereunder, or the consummation by the Company of the transactions
contemplated by this Agreement.
(iv) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect,
neither the Company nor any of its Subsidiaries has entered into any
consents, judgments, orders, indemnifications, forbearances to xxx,
settlement agreements, licenses or other arrangements in connection with
the resolution of any disputes or Litigation Claims which (A) restrict the
Company's or any of its Subsidiaries' right to use any Company Intellectual
Property Rights, or (B) restrict the Company's or any of its Subsidiaries'
businesses in any manner in order to accommodate any Person's Intellectual
Property Right.
(v) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Company Material Adverse Effect, to the
Company's knowledge, no Person conflicts with, infringes upon, violates or
otherwise misappropriates any Company Intellectual Property Right, and, as
of the date hereof, except as set forth on Section 5.1(p)(v) of the Company
Disclosure Schedules, there are no such actions, suits or proceedings
pending, or to the Company's knowledge, threatened, by the Company or any
of its Subsidiaries.
(q) Title to Properties. The Company and each of its Subsidiaries has good
and valid title to all of its material properties and assets, free and clear of
all mortgages, liens, pledges, charges, security interests, encumbrances or
other adverse claims of any kind in respect of such property or asset
(collectively, "Liens"), except for Permitted Liens or other imperfections of
title, if any, that, individually or in the aggregate, are not reasonably likely
to have a Company Material Adverse Effect. All leases pursuant to which the
Company and each of its Subsidiaries leases from others real or personal
property are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
of the Company or any of its Subsidiaries or, to the knowledge of the Company,
any other party (or any event which with notice or lapse of time, or both, would
constitute such a default) that, either individually or in the aggregate, would
be reasonably likely to have a Company Material Adverse Effect.
- 23 -
Notwithstanding any other provision of this Agreement to the contrary, the
representations and warranties in this Section 5.1(q) shall not apply with
respect to title to Intellectual Property Rights, which is exclusively addressed
in Section 5.1(p).
As used in this Agreement, the term "Permitted Liens" means (i) statutory
Liens for current Taxes or other governmental charges not yet due and payable or
the amount or validity of which is being contested in good faith by an
appropriate action, suit, hearing, claim, investigation, arbitration or
proceeding and are adequately reserved as shown on the Company Balance Sheet;
(ii) mechanics', carriers', workers', repairers' and similar statutory Liens
arising or incurred in the ordinary course of business for amounts which are not
delinquent or which are being contested by appropriate proceedings; (iii) public
roads and highways; (iv) Liens arising under worker's compensation, unemployment
insurance, social security, retirement and similar legislation; (v) Liens on
goods in transit incurred pursuant to documentary letters of credit; and (vi)
purchase money Liens and Liens securing rental payments under capital lease
arrangements.
(r) Contracts. Neither the Company nor any of its Subsidiaries is in breach
or default under any of its Contracts or has received written notice or claims
of such a breach or default, nor, to the knowledge of the Company, is any other
party to any such contracts in breach or default thereunder, except in each case
in such a manner as, either individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect. Each Contract to which the
Company or any of its Subsidiaries is a party or by which it is bound that has
not expired or terminated by its terms is valid and in full force and effect,
binding upon the Company or such Subsidiary in accordance with its terms, and,
to the knowledge of the Company, binding upon the other parties thereto in
accordance with its terms, except where the failure to be valid and in full
force and effect or not binding, either individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. Neither the Company
nor any of its Subsidiaries is party to or bound by any Contract that contains
covenants materially limiting the freedom, ability or right of any Affiliate of
the Company (other than its Subsidiaries), to (i) engage in any line of
business, (ii) offer, sell, supply or distribute any product or service, (iii)
compete with any Person or in any geographic area or (iv) otherwise operate or
expand such Affiliate's business.
(s) Product Liability. No product liability claims have been asserted in
writing against the Company or any of its Subsidiaries or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries relating
to any of their products or product candidates developed, tested, manufactured,
marketed, distributed or sold by the Company or any of its Subsidiaries, except
for claims that, either individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect. There is no judgment, order or
decree outstanding against the Company or any of its Subsidiaries relating to
product liability claims or assessments except for judgments, orders or decrees
that, either individually or in the aggregate, are not reasonably likely to have
a Company Material Adverse Effect.
(t) Insurance. The Company maintains for itself and its Subsidiaries
insurance policies covering the assets, business, equipment, properties,
operations, employees, directors and officers, and product warranty and
liability claims, and such other forms of insurance in such amounts, with such
deductibles and against such risks and losses as, in its judgment, are
reasonable for the business and assets of the Company and its Subsidiaries. All
of such insurance
- 24 -
policies are in full force and effect (except for those policies that have
expired by their terms), and neither the Company nor any Subsidiary is in
material default with respect to its obligations under any of such insurance
policies, except where the failure to be in full force and effect, and except
for such defaults that, either individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect.
(u) Vote Required. Assuming the accuracy of the representations and
warranties set forth in Section 5.2(u), the affirmative vote of the holders of a
majority of the shares of Company Common Stock outstanding on the record date
for such vote and entitled to vote thereon (the "Company Requisite Vote") is the
only vote of the holders of any class or series of capital stock of the Company
that is or will be necessary for the adoption of this Agreement by the Company
and the transactions contemplated hereby (including, without limitation, the
Merger) or for the Company to consummate such transactions.
(v) Transactions with Affiliates. The Company has no knowledge that any
current officer, director or Affiliate of the Company is a party to any material
agreement, contract, commitment or transaction with the Company or its
Subsidiaries or has any material interest in any material property used by the
Company or its Subsidiaries or is a Person that is a party to any Contract that
would be required to be disclosed under Item 404 of Regulation S-K of the
Securities Act.
(w) Brokers and Finders. Except for Banc of America Securities LLC (the
"Company Advisor"), neither the Company nor any of its Affiliates has incurred
any liability for any brokerage fees, commissions or finders fees to any broker
or finder employed or engaged thereby in connection with the Merger or the other
transactions contemplated in this Agreement. The Company has made available to
Parent a true and complete copy of its engagement letter (including all
amendments thereto) with the Company Advisor, which engagement letter (as so
amended) sets forth the fees of the Company Advisor payable by the Company and
its Affiliates in connection with the transactions contemplated by this
Agreement.
(x) Opinion of Financial Advisor. The Company's board of directors has
received an opinion from the Company Advisor, dated the date of this Agreement,
to the effect that, as of such date, the Merger Consideration is fair from a
financial point of view to the holders of the Company Common Stock.
(y) No Other Representations or Warranties. Except for the representations
and warranties contained in this Section 5.1, neither the Company nor any other
Person makes any other express or implied representation or warranty on behalf
of the Company or any of its Subsidiaries.
5.2. Representations and Warranties of Parent and Merger Sub. Except as set
forth in the Parent Disclosure Schedules and except as disclosed in the Parent
Reports filed prior to the date of this Agreement (other than disclosures in the
"Risk Factors" or "Forward Looking Statements" sections of any such reports and
other forward-looking statements set forth in such reports), Parent and Merger
Sub hereby represent and warrant to Company that:
- 25 -
(a) Organization, Good Standing and Qualification. Each of Parent and
Merger Sub and each of the Parent's Significant Subsidiaries is duly organized,
validly existing and in good standing under the Laws of its respective
jurisdiction of organization. Each of Parent, Merger Sub and the Parent's
Significant Subsidiaries has all requisite corporate or similar power and
authority to own and operate its material properties and assets and to carry on
its business as currently conducted in all material respects and is qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the ownership or operation of its properties and assets or
conduct of its business requires such qualification, except where the failure to
be so qualified or be in good standing would not be reasonably likely to have,
either individually or in the aggregate, a Parent Material Adverse Effect.
Parent has made available to the Company a complete and correct copy of the
Organizational Documents of Parent, the Parent's Significant Subsidiaries and
Merger Sub, each as amended and in effect. The Organizational Documents of
Parent, each of the Parent's Significant Subsidiaries and Merger Sub so made
available to the Company are in full force and effect.
As used in this Agreement, the term "Parent Material Adverse Effect" means
a material adverse effect on the financial condition, business, assets or
results of operations of Parent and its Subsidiaries taken as a whole; provided,
however, that any such effect resulting from or arising out of (i) any change,
after the date hereof, in Law or U.S. GAAP or interpretations thereof, (ii)
general changes in economic or business conditions, or in the securities
markets, (iii) changes in conditions affecting the generic pharmaceutical
industry or the pharmaceutical industry generally, (iv) the execution,
announcement and performance of this Agreement or the consummation of the
transactions contemplated hereby or any actions taken, delayed or omitted to be
taken by Parent or Merger Sub pursuant to and in accordance with this Agreement
or at the request of the Company, (v) any decline in the trading price or
trading volume of the Parent Ordinary Shares or Parent ADSs, or (vi) any failure
by Parent to meet internal projections or forecasts or third party revenue or
earnings predictions for any period shall not be considered when determining if
a Parent Material Adverse Effect has occurred, except in the case of the
preceding clause (i), (ii) or (iii) for such effects have a materially
disproportionate impact on Parent and its Subsidiaries taken as a whole as
compared to other companies in the pharmaceutical business; it being understood
that any event, change, development, effect or occurrence giving rise to such
decline in the trading price or trading volume of Parent Ordinary Shares or
Parent ADSs as described in the preceding clause (v), or such failure to meet
internal projections or forecasts or third party predictions as described in the
preceding clause (vi), as the case may be, may be the cause of, and may be
deemed to be, a Parent Material Adverse Effect.
(b) Capital Structure. The authorized share capital of Parent consists of
1,499,575,693 ordinary shares, 424,247 class "A" ordinary shares and 60 deferred
shares, of which 813,403,119 Parent Ordinary Shares, including 616,617,983
Parent Ordinary Shares represented by 616,617,983 outstanding Parent ADSs, were
outstanding as of the close of business on July 15, 2008. One Parent ADS
represents one Parent Ordinary Share. All of the issued and outstanding Parent
Ordinary Shares and Parent ADSs have been, and all Parent ADSs representing
Parent Ordinary Shares which are to be issued pursuant to the Merger have been
duly authorized and will be, when issued in accordance with the terms of this
Agreement, validly issued, fully paid and nonassessable and are not subject to
any preemptive or similar right. Each of the outstanding shares of capital
stock, ownership interests or other securities of each of the Parent's
Significant Subsidiaries and Merger Sub is duly authorized, validly issued,
fully paid
- 26 -
and, to the knowledge of Parent, nonassessable and is owned by Parent or a
direct or indirect wholly owned Subsidiary of Parent, free and clear of any
Lien, except for Liens that are not reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect. Except
pursuant to Parent's stock plans (collectively, the "Parent Stock Plans"), as
set forth in Section 5.2(b) of the Parent Disclosure Schedules, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock,
ownership interests or other securities of Parent or any of its Significant
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire,
any securities of Parent or any of its Significant Subsidiaries, and no
securities or obligations evidencing such rights authorized, issued or
outstanding.
(c) Corporate Authority.
(i) Each of Parent and Merger Sub has all requisite corporate power
and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement and to
consummate, on the terms and subject to the conditions of the Agreement,
the transactions contemplated hereby, subject only to receipt of the
approval of Parent as the sole stockholder of Merger Sub and the Parent
Required Statutory Approvals. This Agreement has been duly executed and
delivered by Parent and Merger Sub and, assuming due authorization,
execution and delivery by the Company, is a valid and legally binding
agreement of Parent and Merger Sub, enforceable against each of Parent and
Merger Sub in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(ii) The Boards of Directors of Parent and Merger Sub have authorized
and approved this Agreement and the transactions contemplated hereby
(including, without limitation, the Merger). Immediately following the
execution of this Agreement, Parent, as the sole stockholder of Merger Sub,
will adopt this Agreement and the transactions contemplated hereby
(including, without limitation, the Merger).
(d) Governmental Filings; No Violations.
(i) Other than any reports, filings, registrations, approvals and/or
notices (A) required to be made pursuant to Section 1.2 and (B) required to
be made under the HSR Act, the EC Merger Regulation, the Securities Act,
the Exchange Act and state securities and "blue sky" laws (including,
without limitation, the filing of a Registration Statement on Form F-6 with
respect to the Parent ADRs to be issued in connection with the Merger), (C)
required to be made with the Israeli Securities Authority ("ISA"), (D)
required to be made with the Tel Aviv Stock Exchange Ltd. ("TASE"), (E)
required to be made with the Nasdaq Global Select Market System of The
Nasdaq Stock Market, Inc. ("Nasdaq") and (F) required to be made or given
to, filed with or obtained from Governmental Entities by virtue of the
jurisdictions in which the Parent or its Subsidiaries conduct business or
own any assets (items (B) through (F), inclusive, the "Parent Required
Statutory Approvals"), no notices, reports, registrations or other filings
are required to be made by Parent or Merger Sub with, nor are any consents,
registrations,
- 27 -
approvals, permits or authorizations required to be obtained by Parent or
Merger Sub from, any Governmental Entity, in connection with the execution
and delivery by Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby, except for those that the failure to make
or obtain would not be reasonably likely to have, either individually or in
the aggregate, a Parent Material Adverse Effect or have a material adverse
effect on the ability of Parent or Merger Sub to consummate the
transactions contemplated hereby.
(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the consummation by Parent and Merger Sub
of the Merger and the other transactions contemplated hereby will not,
constitute or result in (A) breach or violation of, or a default under, the
Organizational Documents of Parent or Merger Sub, (B) breach or violation
of, or a default under, the Organizational Documents of any Significant
Subsidiary of Parent, (C) a breach or violation of, or a default under, the
acceleration of any obligations, the loss of any right or benefit or the
creation of a Lien on the assets of Parent Merger Sub or any of Parent's
Subsidiaries (with or without notice, lapse of time or both) pursuant to
any Contracts binding upon Parent, Merger Sub or any of Parent's
Subsidiaries or any Law or governmental or non-governmental permit or
license to which Parent, Merger Sub or any of Parent's Subsidiaries is
subject or (D) any change in the rights or obligations of any party under
any of the Contracts, except, in the case of clauses (B), (C) or (D) above,
for any breach, violation, default, acceleration, creation or change that
would not, either individually or in the aggregate, be reasonably likely to
have a Parent Material Adverse Effect or have a material adverse effect on
the ability of Parent or Merger Sub to consummate the transactions
contemplated hereby.
(e) Parent Reports; Financial Statements.
(i) The filings required to be made by Parent since December 31, 2005
under the Securities Act and the Exchange Act have been filed with the SEC,
including all material forms, information statements, reports, agreements
(oral or written) and all documents, exhibits, amendments and supplements
appertaining thereto, and complied, as of their respective dates, in all
material respects with all applicable requirements of the appropriate
statutes and the rules and regulations thereunder as in effect on the dates
so filed (collectively, including any amendments of any such reports filed
with or furnished to the SEC by Parent prior to the date hereof, the
"Parent Reports"). None of the Parent Reports (in the case of Parent
Reports filed or furnished pursuant to the Securities Act), as of their
effective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements made therein not misleading. None of the Parent
Reports (in the case of Parent Reports filed or furnished pursuant to the
Exchange Act) contained, when filed as finally amended or subsequently
mailed to stockholders, any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(ii) The consolidated financial statements of the Parent and its
Subsidiaries included in such Parent Reports complied as of the effective
or file dates thereof, as applicable, as to form in all material respects
with the applicable rules and regulations of
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the SEC with respect thereto as in effect on such date. Each of the
consolidated balance sheets included in or incorporated by reference into
the Parent Reports (including the related notes and schedules) presents
fairly, in all material respects, the financial position of the Parent and
its Subsidiaries as of its date, and each of the consolidated statements of
income and of consolidated statements of cash flows included in or
incorporated by reference into the Parent Reports (including any related
notes and schedules) fairly presents, in all material respects, the results
of operations, retained earnings and changes in financial position, as the
case may be, of the Parent and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to the absence of
notes and normal year-end audit adjustments), in each case in accordance
with U.S. GAAP consistently applied during the periods involved, except as
may be noted therein. The management of Parent has implemented disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act)
to ensure that material information relating to Parent, including its
Subsidiaries, is made known to the management of Parent by others within
those entities; and Parent has designed such internal control over
financial reporting, or caused such internal control over financial
reporting to be designed under its supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Parent qualifies as a
"foreign private issuer" as defined in Rule 3b-4 under the Exchange Act.
(f) Information Supplied. None of the information supplied or to be
supplied by Parent specifically for inclusion or incorporation by reference in
(i) any Registration Statement or any amendment or supplement thereto will, at
the time such Registration Statement or any amendment or supplement thereto is
filed with the SEC or at the time such Registration Statement becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein not misleading or (ii) the Proxy
Statement/Prospectus will, at the date of mailing to stockholders and at the
time of the Company Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. When filed, the
Registration Statements will comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations of the SEC
thereunder as in effect on such dates. No representation or warranty is made by
Parent with respect to statements made or incorporated by reference therein
based on information supplied by the Company or any of their respective
representatives for inclusion or incorporation by reference in the Proxy
Statement/Prospectus or any Registration Statement.
(g) No Undisclosed Liabilities. There are no liabilities or obligations of
Parent or any of its Subsidiaries of any kind whatsoever in existence on the
date hereof, whether accrued, contingent, absolute, determined, determinable or
otherwise, of a nature required to be set forth in Parent's balance sheet under
U.S. GAAP or the notes thereto, other than: (i) liabilities or obligations set
forth in the unaudited consolidated balance sheet of Parent as of March 31, 2008
included in the Parent Reports (the "Parent Balance Sheet"); (ii) liabilities or
obligations incurred in the ordinary course of business consistent with past
practices since March 31, 2008; (iii) liabilities or obligations incurred in
connection with the transactions contemplated by this
- 29 -
Agreement and (iv) liabilities and obligations under Contracts in effect as of
the date hereof not in violation of the terms of this Agreement; and (v)
liabilities or obligations that are not reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect.
(h) Absence of Certain Changes. Since the Audit Date and prior to the date
of this Agreement, except as expressly contemplated by this Agreement, Parent
and its Subsidiaries taken as a whole have conducted their business in all
material respects only in, and have not engaged in any material transaction
other than according to, the ordinary course of such business and there has not
been (i) any change in the financial condition, properties, assets, business or
results of operations of Parent and its Subsidiaries, or any other change,
circumstance or event, that has had or would be reasonably likely to have a
Parent Material Adverse Effect; (ii) any declaration, setting aside or payment
of any dividend or other distribution in respect of the capital stock of Parent
or any repurchase, redemption or other acquisition by Parent or any Subsidiary
of any securities of Parent (other than regular quarterly dividends in the
ordinary course of business); or (iii) any change by Parent in accounting
principles, practices or methods which is not permitted by U.S. GAAP.
(i) Litigation. As of the date of this Agreement, there are no Litigation
Claims pending or, to the knowledge of Parent, threatened against Parent or any
of its Subsidiaries, except for those that would not be reasonably likely to
have, either individually or in the aggregate, a Parent Material Adverse Effect.
There are no material SEC inquiries or investigations, other material
governmental inquiries or investigations or material internal investigations
pending, or to the knowledge of Parent, threatened, in each case regarding any
accounting practices of Parent or any of its Subsidiaries or any malfeasance by
any director (or any Person in a similar capacity) or executive officer of
Parent or any of its Subsidiaries, except for those that would not be reasonably
likely to have, either individually or in the aggregate, a Parent Material
Adverse Effect.
(j) Compliance with Laws.
(i) Since January 1, 2006, the business of Parent and its Subsidiaries
has not been conducted in violation of any Laws, including without
limitation, the FDA, the DEA, the HHS, the CMS, the HHS Office of Inspector
General, and other Governmental Entity rules, regulations and policies,
including without limitation relating to state or federal anti-kickback
sales and marketing practices, off-label promotion, government health care
program price reporting, good clinical practices, good manufacturing
practices, good laboratory practices, advertising and promotion, pre- and
post-marketing adverse drug experience and adverse drug reaction reporting,
and all other pre- and post-marketing reporting requirements, as
applicable, except for violations that would not be reasonably likely to
have, either individually or in the aggregate, a Parent Material Adverse
Effect. Neither Parent nor any of its Subsidiaries is debarred under the
Generic Drug Enforcement Act of 1992 or employs or uses the services of any
individual who is debarred or, to Parent's knowledge, has engaged in any
activity that would reasonably be expected to lead to debarment. No
investigation or review (other than routine inspections by the FDA or any
other Governmental Entity concerned with the safety, efficacy, reliability,
manufacture, investigation, sale or marketing of pharmaceuticals) by any
- 30 -
Governmental Entity with respect to Parent or any of its Subsidiaries is
pending or, to the knowledge of Parent, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for
those the outcome of which would not be reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect. Parent
and each of its Subsidiaries has all permits, licenses, franchises,
variances, exemptions, orders and other governmental authorizations,
consents and approvals from Governmental Entities necessary to conduct its
business as currently conducted, except for those the absence of which
would not be reasonably likely to have, either individually or in the
aggregate, a Parent Material Adverse Effect. Neither Parent, any of its
Subsidiaries nor, to the knowledge of Parent, any of the agents, employees,
vendors or suppliers of Parent or any of its Subsidiaries have been
excluded from participation in any federal health care program, as defined
under 42 U.S.C. ss.1320a-7b(f), for the provision of items or services for
which payment may be made under such federal health care program, nor been
debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded by any state or federal department or agency.
(ii) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect, each
Parent Compensation and Benefit Plan has been established and administered
in accordance with its terms, and in compliance with applicable Law. For
purposes of this Section 5.2(j)(ii), the term "Parent Compensation and
Benefit Plan" shall mean each material Compensation and Benefit Plan under
which any past or present director, officer, employee, consultant or
independent contractor of the Parent or any of its Subsidiaries has any
present or future right to benefits or to which contributions are made or
otherwise required to be made, by the Parent or any of its Subsidiaries,
together with any trust agreement or insurance contract forming a part of
such Compensation and Benefit Plan.
(k) Tax Matters. Except for such matters that would not, either
individually or in the aggregate, be reasonably likely to cause a Parent
Material Adverse Effect, Parent and each of its Subsidiaries (i) have duly and
timely filed (taking into account any extension of time within which to file)
all Tax Returns required to be filed by any of them as of the date hereof and
all such filed Tax Returns are complete and accurate in all material respects;
(ii) have timely paid all Taxes that are shown as due on such filed Tax Returns
and any other Taxes that Parent or any of its Subsidiaries are otherwise
obligated to pay, except with respect to Taxes that are being contested in good
faith; (iii) with respect to all Tax Returns filed by or with respect to any of
them have not waived any statute of limitations with respect to Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency; (iv) as
of the date hereof, do not have any deficiency, audit, examination,
investigation or other proceeding in respect of Taxes pending or threatened in
writing (v) have provided adequate reserves in accordance with U.S. GAAP in the
most recent consolidated financial statements of the Parent and its
Subsidiaries, as disclosed in the Parent Reports, for any material Taxes of
Parent or any of its Subsidiaries that have not been paid, whether or not shown
as being due on any Tax Return. Neither Parent nor any of its Affiliates has
taken or agreed to take any action or is aware of any facts or circumstances
that would prevent the Merger from qualifying as a 368 Reorganization. Parent is
not a passive foreign investment company as defined under Sections 1291 and 1298
of the Code.
- 31 -
(l) Intellectual Property. Except as set forth in Section 5.2(l) of the
Parent Disclosure Schedules:
(i) Parent and each of its Subsidiaries owns or is licensed or
otherwise possesses sufficient rights to use and enforce all Intellectual
Property Rights material to the operations of its business as currently
conducted (all such Intellectual Property Rights, together with all
Intellectual Property Rights to which Parent or any of its Subsidiaries has
been granted any license or other rights, collectively "Parent Intellectual
Property Rights").
(ii) Except for such matters that would not be reasonably likely to
have, either individually or in the aggregate, a Parent Material Adverse
Effect, (A) the use or practice of any Intellectual Property Rights by
Parent or its Subsidiaries, or the conduct of their business as currently
conducted, does not conflict with, infringe upon, misuse, violate or
constitute a misappropriation of any right, title, interest or goodwill in
or to any, Intellectual Property Right of any other Person and (B) except
with respect to ANDAs filed in the United States under paragraph IV of the
Xxxxx-Xxxxxx Act or with respect to applications for approval of generic
pharmaceutical products filed under comparable laws or regulations in
territories outside the United States, neither Parent nor any of its
Subsidiaries has received written notice of any claim that, or otherwise
has any knowledge that, any Parent Intellectual Property Right is invalid
or unenforceable, or conflicts with the asserted Intellectual Property
Right of any other Person, or is being infringed upon, misused, violated or
misappropriated by any other Person. To the knowledge of Parent, no court
has ruled or otherwise held that any of the Patents owned by the Parent or
any of its Subsidiaries that is listed in the Orange Book that claims or
covers any drug product sold by Parent or any of its Subsidiaries is (A)
invalid or unenforceable or (B) not infringed by any generic pharmaceutical
product that is the subject of any ANDA filed in the United States or with
respect to applications for approval of generic pharmaceutical products
filed under comparable laws or regulations in territories outside the
United States.
(iii) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect, no
Parent Intellectual Property Right will terminate or cease to be a valid
right of the Parent by reason of the execution and delivery of this
Agreement by Parent, the performance of Parent of its obligations
hereunder, or the consummation by Parent of the transactions contemplated
by this Agreement.
(iv) Except for such matters that would not be reasonably likely to
have, either individually or in the aggregate, a Parent Material Adverse
Effect, neither Parent nor any of its Subsidiaries has entered into any
consents, judgments, orders, indemnifications, forbearances to xxx,
settlement agreements, licenses or other arrangements in connection with
the resolution of any disputes or Litigation Claims which (A) restrict
Parent's or any of its Subsidiaries' right to use any Parent Intellectual
Property Rights, or (B) restrict the Parent's or any of its Subsidiaries'
businesses in any manner in order to accommodate any Person's Intellectual
Property Right.
- 32 -
(v) Except as would not be reasonably likely to have, either
individually or in the aggregate, a Parent Material Adverse Effect, to the
Parent's knowledge, no Person materially conflicts with, infringes upon,
violates or otherwise misappropriates any material Parent Intellectual
Property Right, and, to Parent's knowledge, there are no such actions,
suits or proceedings threatened or pending by Parent or any of its
Subsidiaries.
(m) Title to Properties. Parent and each of its Subsidiaries has good and
valid title to all of its material properties and assets, free and clear of all
Liens, except for Permitted Liens or other imperfections of title, if any, that,
either individually or in the aggregate, are not reasonably likely to have a
Parent Material Adverse Effect. All leases pursuant to which Parent and each of
its Subsidiaries leases from others real or personal property are valid and
effective in accordance with their respective terms, and there is not, under any
of such leases, any existing default or event of default of Parent or any of its
Subsidiaries or, to the knowledge of Parent, any other party (or any event which
with notice or lapse of time, or both, would constitute such a default) that,
either individually or in the aggregate, are reasonably likely to have a Parent
Material Adverse Effect.
Notwithstanding any other provision of this Agreement to the contrary, the
representations and warranties in this Section 5.2(m) shall not apply with
respect to title to Intellectual Property Rights, which is exclusively addressed
in Section 5.2(l).
(n) Contracts. None of Parent and nor any of its Subsidiaries is in breach
or default of any of its Contracts that are material to Parent and its
Subsidiaries, taken as a whole, and has not received written notice or claims of
such a breach or default, nor, to the knowledge of Parent, is any other party to
any such contracts in breach or default thereunder, except in each case in such
a manner as, either individually or in the aggregate, is not reasonably likely
to have a Parent Material Adverse Effect. Each Contract to which Parent or any
of its Subsidiaries is a party or by which it is bound, which is material to
Parent and its Subsidiaries, taken as a whole, and that has not expired or
terminated by its terms is valid and in full force and effect, binding upon
Parent or such Subsidiary in accordance with its terms, and, to the knowledge of
Parent, binding upon the other parties thereto in accordance with its terms,
except where the failure to be valid and in full force and effect or not
binding, either individually or in the aggregate, is not reasonably likely to
have a Parent Material Adverse Effect.
(o) Product Liability. As the date hereof, no product liability claims have
been asserted in writing against Parent or any of its Subsidiaries or, to the
knowledge of Parent, threatened against Parent or any of its Subsidiaries
relating to any of their products or product candidates developed, tested,
manufactured, marketed, distributed or sold by Parent or any of its
Subsidiaries, except for claims that, either individually or in the aggregate,
are not reasonably likely to have a Parent Material Adverse Effect. There is no
judgment, order or decree outstanding against Parent or any of its Subsidiaries
relating to product liability claims or assessments, except for judgments,
orders or decrees that, either individually or in the aggregate, are not
reasonably likely to have a Parent Material Adverse Effect.
(p) Brokers and Finders. Except for Xxxxxx Brothers Inc., the fees,
commissions and expenses of which will be paid by Parent, neither Parent, Merger
Sub nor any of their respective Affiliates has incurred any liability for any
brokerage fees, commissions or finders
- 33 -
fees to any broker or finder employed or engaged thereby in connection with the
Merger or the other transactions contemplated in this Agreement for which the
Company (other than the Surviving Corporation from and after the Effective Time)
would be liable.
(q) Financial Capability. Parent has the financial capacity to perform and
to cause Merger Sub and the Surviving Corporation to perform their respective
obligations under this Agreement, and Parent has currently available cash or
cash equivalents that, together with committed bank lines of credit, are
sufficient to permit Parent to fund the cash portion of the Merger Consideration
set forth in Article III and any other amounts payable by Parent, Merger Sub or
the Surviving Corporation as provided in this Agreement.
(r) Operations of Merger Sub. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated by this Agreement, has engaged in
no other business activities and has conducted and will conduct its operations
prior to the Effective Time only as contemplated by this Agreement. All
outstanding shares of capital stock of Merger Sub are owned directly or
indirectly by Parent.
(s) No Vote Required. No vote of holders of Parent Ordinary Shares or
Parent ADSs is required in connection with Parent's or Merger Sub's execution
and delivery of this Agreement or their respective consummation of the
transactions contemplated hereby.
(t) No Other Representations or Warranties. Except for the representations
and warranties contained in this Section 5.2, neither Parent nor any other
Person makes any other express or implied representation or warranty on behalf
of Parent or any of its Subsidiaries.
(u) Interested Stockholder. Neither Parent nor any of its Subsidiaries is
or has been at any time during the past three years an "interested stockholder"
(as such term is defined in Section 203 of the DGCL) of the Company.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
6.1. Covenants of the Company. The Company covenants and agrees as to
itself and its Subsidiaries that, from and after the date hereof and continuing
until the Effective Time, except (i) as contemplated or permitted by this
Agreement, (ii) as described in Section 6.1 of the Company Disclosure Schedules,
(iii) as required by applicable Law or (iv) with the prior written consent of
Parent (which consent shall not be unreasonably withheld, conditioned or
delayed):
(a) the Company shall conduct its business only in the ordinary course and,
to the extent consistent therewith, it and its Subsidiaries shall use their
respective commercially reasonable efforts to (i) preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, employees and business
associates, (ii) maintain and keep material properties and assets in good repair
and condition, (iii) maintain in effect all material governmental permits
pursuant to which such party or any of its Subsidiaries currently operates and
(iv) take such actions as are reasonable to prosecute, maintain and enforce all
Company Intellectual Property Rights in all material respects;
- 34 -
(b) the Company shall not (i) amend any of its Organizational Documents or
amend in any material respect any of the Organizational Documents of any of its
Subsidiaries; (ii) split, combine or reclassify its outstanding shares of
capital stock; (iii) declare, set aside or pay any dividend payable in cash,
stock or property in respect of any capital stock (other than dividends from its
direct or indirect wholly-owned Subsidiaries to it or a wholly-owned Subsidiary
(for purposes of this clause (b), "wholly-owned Subsidiary" shall include any
Subsidiary in which the Company owns, directly or indirectly, at least 90% of
the outstanding voting securities)) or (iv) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock or permit any of
its Subsidiaries to purchase or otherwise acquire, any shares of its capital
stock or any securities convertible into or exchangeable or exercisable for any
shares of its capital stock (other than for the purpose of funding or providing
benefits under Company Compensation and Benefit Plans as in effect on the date
hereof, including for purposes of Company Stock Plans);
(c) except as otherwise provided in Section 6.1(h) below, neither the
Company nor any of its Subsidiaries shall issue, sell, pledge, dispose of or
encumber any shares of, or securities convertible into or exchangeable or
exercisable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of its capital stock of any class or any other property
or assets (other than shares of Company Common Stock issuable pursuant to
options or stock appreciation rights (whether or not vested) under the Company
Stock Plans as in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall, other than in
the ordinary course of business (including out-bound licenses consistent with
past practices) and other than transactions or one or more series of
transactions, whether or not related, not in excess of $25,000,000 in the
aggregate, transfer, lease, license, sell, mortgage, pledge, dispose of or
encumber any other property or assets (including capital stock of any of its
Subsidiaries);
(e) neither the Company nor any of its Subsidiaries shall, other than in
the ordinary course of business (including in-bound licenses consistent with
past practices), by any means, make any acquisition of, or investment in, assets
or stock (whether by way of merger, consolidation, tender offer, share exchange
or other activity) in any transaction or any series of transactions (whether or
not related) for an aggregate purchase price or prices, including the assumption
of any debt, in excess of $25,000,000 in the aggregate in any calendar year;
(f) neither the Company nor any of its Subsidiaries shall, other than in
the ordinary course of business, in each case in a manner that is material and
adverse to the Company and its Subsidiaries taken as a whole, (i) modify, amend,
or terminate any Contract that is material to the Company and its Subsidiaries
taken as a whole, (ii) waive, release, relinquish or assign any such Contract
(or any of the material rights of the Company, or any of its Subsidiaries
thereunder), right or claim, or (iii) cancel or forgive any material
indebtedness owed to the Company or any of its Subsidiaries;
(g) neither the Company nor any of its Subsidiaries shall (i) adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
recapitalization or other similar reorganization, or (ii) accelerate or delay
collection of notes or material accounts receivable in advance of or beyond
their regular due dates, other than in the ordinary course of business;
- 35 -
(h) neither the Company nor any of its Subsidiaries shall terminate,
establish, adopt, enter into, make any new grants or awards under, amend or
otherwise modify any Company Compensation and Benefit Plans or increase the
salary, wage, bonus or other compensation of any employees, except for (i)
increases to any employee who does not hold the title of Senior Director or
above of the Company or any of its Subsidiaries occurring in the ordinary course
of business (which shall include periodic performance reviews, related
compensation and benefit increases, the grant of annual bonuses and annual
equity awards in the form of options or stock appreciation rights in each case
with an exercise price equal to or in excess of fair market value of the
securities issuable upon exercise thereof, the payment of annual bonuses, and
any of the foregoing that normally result from the promotion of any officers and
employees), (ii) annual reestablishment of Company Compensation and Benefit
Plans and the provision of individual compensation or benefit plans and
agreements for newly hired or appointed officers and employees of such party and
its Subsidiaries (which shall include the ability to renew employment agreements
in the ordinary course of business), (iii) actions necessary to satisfy existing
contractual obligations under Company Compensation and Benefit Plans or
agreements existing as of the date hereof, or (iv) actions otherwise required
pursuant to this Agreement or applicable Law or U.S. GAAP; provided that nothing
in Section 6.1 shall prevent the Company or any of its Subsidiaries from hiring
or terminating any officers or employees in the ordinary course of business;
(i) the Company shall, and shall cause its Subsidiaries to, maintain with
financially responsible insurance companies (or through self insurance)
insurance in such amounts and against such risks and losses as are consistent
with the insurance maintained by such party and its Subsidiaries in the ordinary
course of business consistent with past practice;
(j) except in the ordinary course of business or as may be required by
applicable Law and except to the extent required by U.S. GAAP as advised by such
party's regular independent accountants, neither the Company nor any of its
Subsidiaries shall change any accounting principle, practice or method in any
material respect in a manner that is inconsistent with past practice;
(k) the Company and each of its Subsidiaries shall (i) file all material
Tax Returns required to be filed with any taxing authority in accordance with
all applicable laws, (ii) timely pay all taxes due and payable as shown in such
Tax Returns that are so filed, (iii) promptly notify Parent of any action, suit,
proceeding, investigation, audit or claim initiated or pending against or with
respect to the Company or any of its Subsidiaries in respect of any Tax where
there is a reasonable possibility of a determination or decision that would
reasonably be likely to have a Company Material Adverse Effect on the Tax
liabilities or other Tax attributes of the Company or its Subsidiaries;
(l) neither the Company nor any of its Subsidiaries shall make any material
Tax election or settle or compromise any material Tax liability;
(m) neither the Company nor any of its Subsidiaries shall enter into any
Contract that purports to limit or prohibit in any respect the Company or any of
its Affiliates (A) from competing with any other Person, (B) from acquiring any
product or other asset or any services from any other Person, (C) from
developing, selling, supplying, distributing, offering, supporting
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or servicing any product or any technology or other asset to or for any other
Person or (D) from transacting business or dealing in any other manner with any
other Person, except such a Contract (i) entered into in the ordinary course of
business (including licenses entered into consistent with past practice) and
(ii) that does not bind any Affiliates of the Company (other than its
Subsidiaries) in a material and adverse manner;
(n) except as set forth in Section 6.1(n) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries shall consent to a
settlement of, or the entry of any judgment arising from, any Litigation Claim
(or related Litigation Claims in the aggregate) if such settlement or judgment
(i) requires from the Company or any of its Subsidiaries a payment in an amount
in excess of $10,000,000 in any calendar year or (ii) limits or prohibits in any
respect the Company or any of its Subsidiaries (A) from competing with any other
Person, (B) from acquiring any product or other asset or any services from any
other Person, (C) from developing, selling, supplying, distributing, offering,
supporting or servicing any product or any technology or other asset to or for
any other Person or (D) from transacting business or dealing in any other manner
with any other Person;
(o) neither the Company nor any of its Subsidiaries shall incur, assume or
guarantee any indebtedness, except for indebtedness (i) under that certain
Credit Agreement, dated as of June 19, 2008, among Xxxx Laboratories, Inc., a
Delaware corporation and a Subsidiary of the Company, the Company, as a
guarantor along with certain Subsidiaries of the Company, each lender from time
to time party thereto, and Bank of America, N.A., as Administrative Agent (as
such Credit Agreement is in effect as of the date hereof) and (ii) under that
certain Credit Agreement, dated as of July 21, 2006, among Xxxx Laboratories,
Inc., and the Company, and certain Subsidiaries from time to time party thereto,
as guarantors, Bank of America, N.A., as Administrative Agent and L/C issuer,
and the other lenders party hereto (as such Credit Agreement is in effect as of
the date hereof);
(p) neither the Company nor any of its Subsidiaries shall mortgage or
pledge any of its material assets (tangible or intangible), or create, assume or
suffer to exist any material Liens thereupon;
(q) the Company shall not, and shall not permit any of its Subsidiaries to,
take any action that would, or would reasonably be expected to, (i) result in
any of the conditions to the Merger set forth in Article VIII not being
satisfied or (ii) have a material adverse effect on the ability of such party to
consummate the transactions contemplated by this Agreement; or
(r) neither the Company nor any of its Subsidiaries will authorize or enter
into an agreement to do anything prohibited by the foregoing.
6.2. Covenants of Parent. Parent covenants and agrees as to itself and its
Subsidiaries (as applicable) that, from and after the date hereof and continuing
until the Effective Time, except (i) as expressly contemplated or permitted by
this Agreement, (ii) as described in Section 6.2 of the Parent Disclosure
Schedules, (iii) as required by applicable Law or (iv) with the prior written
consent of the Company (which consent shall not be unreasonably withheld,
conditioned or delayed):
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(a) each of Parent and its Subsidiaries shall conduct its business only in
the ordinary course and, to the extent consistent therewith, it and its
Subsidiaries shall use their respective reasonable best efforts to (i) preserve
its business organization intact and maintain its existing relations and
goodwill with customers, suppliers, distributors, creditors, lessors, employees
and business associates, (ii) maintain and keep material properties and assets
in good repair and condition, (iii) maintain in effect all material governmental
permits pursuant to which it currently operates and (iv) maintain and enforce
all Parent Intellectual Property Rights;
(b) Parent shall not (i) amend its Memorandum or Articles of Association or
the comparable governing instruments of any of its Subsidiaries except for such
amendments that would not prevent or materially impair the consummation of the
transactions contemplated by this Agreement or (ii) split, combine or reclassify
its outstanding shares of capital stock without adjusting the Merger
Consideration pursuant to Section 3.4.
(c) Parent shall not and shall cause its Significant Subsidiaries not to,
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, recapitalization or other similar reorganization;
(d) neither Parent nor any of its Subsidiaries will declare, set aside or
pay any dividend payable in cash, stock or property in respect of any capital
stock, other than (i) dividends from direct or indirect wholly owned
Subsidiaries of Parent or any of its Subsidiaries to Parent or any of its other
wholly owned Subsidiaries, or (ii) regular quarterly dividends declared and paid
in the ordinary course of business, with such increases or decreases, from time
to time, in amounts that are consistent with past practice;
(e) Parent shall not, and shall not permit any of its Subsidiaries to, take
any action that would, or would reasonably be expected to, (i) result in any of
the conditions to the Merger set forth in Article VIII not being satisfied or
(ii) have a material adverse effect on the ability of such party to consummate
the transactions contemplated by this Agreement;
(f) Parent shall not take any action to cause the Parent Ordinary Shares to
cease to be admitted to trading on the TASE or the Parent ADSs evidenced by
Parent ADRs to cease to be eligible for quotation on Nasdaq; or
(g) neither Parent nor any of its Subsidiaries will authorize or enter into
an agreement to do anything prohibited by the foregoing.
6.3. No Control of Other Party's Business. Nothing contained in this
Agreement shall give Parent, directly or indirectly, the right to control or
direct the Company's or its Subsidiaries' operations prior to the Effective
Time, and nothing contained in this Agreement shall give the Company, directly
or indirectly, the right to control or direct Parent's or its Subsidiaries'
operations prior to the Effective Time. Prior to the Effective Time, each of the
Company and Parent shall exercise, consistent with the terms and conditions of
this Agreement, complete control and supervision over its and its Subsidiaries'
respective operations.
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ARTICLE VII
ADDITIONAL AGREEMENTS
---------------------
7.1. Access. The Company and Parent agree that upon reasonable notice, and
except as may otherwise be required or restricted by (i) applicable Law or (ii)
any binding agreement entered into prior to date of this Agreement, each shall
(and shall cause its Subsidiaries to) afford the other's officers, employees,
counsel, accountants and other authorized representatives reasonable access,
during normal business hours throughout the period prior to the Effective Time,
to its officers, properties, books and records and, during such period, each
shall (and each shall cause its Subsidiaries to) furnish promptly to the other
all information concerning its business, properties, personnel and Litigation
Claims as may reasonably be requested but only to the extent such access does
not unreasonably interfere with the business or operations of such party;
provided that no investigation pursuant to this Section 7.1 shall affect or be
deemed to modify any representation or warranty made by the Company, Parent or
Merger Sub in this Agreement. Neither the Company or Parent nor any of its
respective Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of its clients, jeopardize the attorney-client privilege thereof or
contravene any Law, rule, regulation, order, judgment, decree or binding
agreement entered into prior to the date of this Agreement; provided that such
party shall use its reasonable best efforts to obtain contractual waivers and
consents and implement requisite procedures to enable the provision of access
and disclosure without such violations, prejudices or contraventions. All
requests for information made pursuant to this Section 7.1 shall be directed to
an executive officer of Parent or the Company, as applicable, or its financial
advisors or such other Person as may be designated by either of its executive
officers. All such information disclosed pursuant to this Section 7.1 shall be
subject to the terms of the Confidentiality Agreement.
7.2. Acquisition Proposals. The Company shall not, nor shall it give
permission to or authorize any of its Subsidiaries, or any officer, director,
employee, agent or representative (including accountants, attorneys and
investment bankers) of the Company or any of its Subsidiaries (collectively, the
"Representatives") to, directly or indirectly, initiate, solicit, knowingly
encourage or otherwise knowingly facilitate (including by way of furnishing
confidential information) any inquiries or the making of any proposal or offer,
with respect to (i) any merger, reorganization, share exchange, business
combination, recapitalization, consolidation, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries, (ii) any
sale, lease, exchange, transfer or purchase of the assets or equity securities
of the Company or any of its Subsidiaries, in each case comprising 20% or more
in value of the Company and its Subsidiaries, taken as a whole, in a single
transaction or series of related transactions or (iii) any purchase or sale of,
or tender offer or exchange offer for, 20% or more of the outstanding shares of
Company Common Stock (any such proposal or offer (other than a proposal or offer
by Parent) being hereinafter referred to as an "Acquisition Proposal"). The
Company shall not, nor shall it give permission to or authorize any of its
Subsidiaries or any Representatives of the Company or any of its Subsidiaries
to, directly or indirectly, (a) engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions (other
than discussions that only refer to this Section 7.2 and the Company's agreement
not to engage in further discussions) with, any Person relating to an
Acquisition Proposal, or otherwise knowingly facilitate any effort or attempt to
make or implement or accept
- 39 -
an Acquisition Proposal, (b) withdraw or modify, or propose to withdraw or
modify, its approval or recommendation of this Agreement or the transactions
contemplated hereby, including the Merger, (c) approve, recommend, endorse or
resolve to approve, recommend or endorse an Acquisition Proposal or (d) enter
into any letter of intent or similar document contemplating, or enter into any
agreement (other than a confidentiality agreement entered into in accordance
with clause (A) below) with respect to, an Acquisition Proposal; provided
however that: at any time prior to obtaining the Company Requisite Vote the
board of directors may withhold, withdraw, qualify or modify its recommendation
or declaration of advisability of the Merger or this Agreement for any reason
(any such action, a "Change of Recommendation") if (i) the Company's board of
directors shall have determined in good faith, after consultation with outside
counsel to the Company, that failure to take such action would reasonably be
expected to be inconsistent with its fiduciary obligations under applicable Law
and (ii) the Company has provided Parent with at least three (3) Business Days'
prior written notice of such Change of Recommendation; provided, further, that
nothing contained in this Agreement shall prevent the board of directors of the
Company or its Representatives from (A) furnishing information to a third party
in response to an unsolicited bona fide written Acquisition Proposal by such
third party pursuant to a confidentiality agreement containing terms and
conditions that are no less favorable to the Company than those set forth in the
Confidentiality Agreement (except for such changes specifically necessary in
order for the Company to be able to comply with its obligations under this
Agreement and it being understood that the Company may enter into a
confidentiality agreement without a standstill provision or with a standstill
provision less favorable to the Company if it waives or similarly modifies the
standstill provision in the Confidentiality Agreement), (B) engaging in
discussions or negotiations with such third party, (C) following receipt of a
bona fide unsolicited written Acquisition Proposal, taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) or Rule 14D-9 under the
Exchange Act provided that neither the Company nor its board of directors shall
make or effect a Change in Recommendation in connection with such Acquisition
Proposal unless permitted by the first proviso of this sentence (it being
understood that any "stop, look and listen" communication by the Company or the
board of directors pursuant to Rule 14d-9(f) under the Exchange Act shall not be
considered a Change of Recommendation); (D) following receipt of a bona fide
unsolicited written Acquisition Proposal, recommending such an Acquisition
Proposal to its stockholders or adopting an agreement relating to such
Acquisition Proposal, (E) taking any non-appealable, final action ordered to be
taken by the Company by any court of competent jurisdiction and/or (F) making
any disclosure or filing, in its reasonable judgment based upon the advice of
outside counsel, that is required by Law in the event that, in each case
referred to in the foregoing clauses (A), (B) and (D); (1) the Company Requisite
Vote shall not have been obtained, (2) the board of directors of the Company
shall have concluded in good faith that such bona fide unsolicited written
Acquisition Proposal, is in the case of clause (A), (B) or (D), a Superior
Proposal or, in the case of clauses (A) or (B) is reasonably expected to result
in a Superior Proposal, and (3) the Company's board of directors determines in
good faith, based upon the advice of outside counsel, that failure to take such
action would reasonably be expected to be inconsistent with its fiduciary duties
to the Company's stockholders under applicable Law. At least three (3) Business
Days prior to taking any of the actions referred to in (D) above, the Company
shall provide written notice to Parent advising Parent that it intends to take
such action and which written notice shall specify the material terms and
conditions of such Acquisition Proposal or Superior Proposal. For a period of
not less than three (3) Business Days after receipt
- 40 -
by Parent from the Company of such notice, the Company shall, if so requested in
writing by Parent, negotiate in good faith with Parent to make such adjustments
to the terms and conditions of this Agreement such that such other Acquisition
Proposal (if determined by the Company's board of directors to be a Superior
Proposal in accordance with this Section 7.2) would no longer constitute a
Superior Proposal.
The Company will promptly (and in any event within one day) notify Parent
in writing, of the existence of any proposal, discussion, negotiation or inquiry
received by the Company with respect to any Acquisition Proposal, and the
Company will immediately communicate to Parent the terms of any proposal,
discussion, negotiation or inquiry which it may receive and the identity of the
Person making such proposal or inquiry or engaging in such discussion or
negotiation. The Company will promptly provide to Parent any material non-public
information concerning the Company that it delivers to any other Person that was
not previously provided to Parent. The Company shall keep Parent reasonably
informed of the status and material terms of any such Acquisition Proposal
(including modifications or proposed modifications thereto).
Without prejudice to any actions permitted to be taken by the Company
pursuant to the first paragraph of this Section 7.2, the Company agrees that it
will, and will use its reasonable best efforts to cause its Representatives to,
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal. In addition, the Company shall promptly request
that each Person who has heretofore executed a confidentiality agreement in
connection with such Person's consideration of an Acquisition Proposal return or
destroy all confidential information heretofore furnished to such Person by or
on behalf of the Company in accordance with such confidentiality agreement. The
Company agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken by the Company in this Section 7.2.
Notwithstanding anything to the contrary contained in this Section 7.2 or
elsewhere in this Agreement, prior to the Effective Time, the Company may, in
connection with a possible Acquisition Proposal, refer any third party to this
Section 7.2 and Section 9.5(b) and make a copy of this Section 7.2 and Section
9.5(b) available to a third party.
"Superior Proposal" means an unsolicited bona fide written Acquisition
Proposal to acquire, directly or indirectly fifty percent (50%) or more of the
Company Common Stock then outstanding or a majority of the assets of the Company
and its Subsidiaries, taken as a whole, in a single transaction or a series of
related transactions, and otherwise on terms which the Company's board of
directors determines in good faith (after consultation with its outside legal
counsel and financial advisor), taking into account, among other things, all
legal, financial, regulatory, and other aspects of the proposal, and the third
party making the proposal, and the likelihood and timing of the completion of
the transaction or transactions (compared to the transaction contemplated by
this Agreement) if consummated, to be more favorable to the Company's
stockholders than the Merger and any revised terms thereof proposed by Parent.
Without limiting the foregoing, it is agreed that any breach or violation
of the provisions of this Section 7.2 by the Company or any of its Subsidiaries
or Affiliates or its or their respective directors (or persons in similar
positions), officers or employees, whether or not such
- 41 -
Person is purporting to act on behalf of the Company or otherwise, shall be
deemed to be a breach of this Section 7.2 by the Company.
7.3. Stockholders Meeting. The Company shall take, in accordance with
applicable Law and its Organizational Documents, all action necessary to convene
a meeting of holders of shares of Company Common Stock (the "Company
Stockholders Meeting") as promptly as reasonably practicable after the Proxy
Statement/Prospectus is mailed to its stockholders to consider and vote upon the
approval of this Agreement and the transactions contemplated hereby (including,
without limitation, the Merger). Except as otherwise expressly permitted by
Section 7.2 the Company's board of directors shall recommend such approval and
take all lawful action to solicit such approval. Notwithstanding any change or
withdrawal by the Company's board of directors of such recommendation or of its
declaration of advisability of the Merger and adoption of this Agreement
(including any Change of Recommendation), unless this Agreement is terminated in
accordance with its terms, this Agreement and the transactions contemplated
hereby (including, without limitation, the Merger) shall be submitted to the
Company's stockholders at a meeting of holders of shares of Company Common Stock
in accordance with this Section 7.3 to consider and vote upon the approval of
this Agreement and the transactions contemplated hereby (including, without
limitation, the Merger).
7.4. Filings; Other Actions; Notification. (a) Each party hereto shall file
or cause to be filed with (i) the Federal Trade Commission and the Department of
Justice any notifications required to be filed under the HSR Act and with the
European Commission any notifications required to be filed under the EC Merger
Regulation and (ii) the appropriate Governmental Entity each of the Foreign
Antitrust Filings, in each case in accordance with the applicable rules and
regulations promulgated under the relevant Law, with respect to the transactions
contemplated hereby. Each party hereto will use reasonable best efforts to make
the filing under the HSR Act, and to make filings under the EC Merger Regulation
and any additional Foreign Antitrust Filings, as promptly as reasonably
practicable after the date hereof. Each party hereto will use reasonable best
efforts to respond on a timely basis to any requests for additional information
made by any such agency. The fees associated with all such filings shall be
borne equally by Parent and the Company.
(b) The Company and Parent shall cooperate with each other and use (and
shall cause their respective Subsidiaries to use) reasonable best efforts to
take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement and applicable
Laws to consummate and make effective the Merger and the other transactions
contemplated hereby as soon as practicable, including without limitation (i)
preparing and filing as soon as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as soon as
practicable all Company Required Statutory Approvals or Parent Required
Statutory Approvals, as the case may be, and all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party in order to consummate the Merger or any of the other
transactions contemplated hereby, including with or from any works counsel,
labor union or similar entity or governing body, and (ii) in the case of the
Company and its Subsidiaries and in connection with any contemplated
Divestiture, if any, providing to any third party who has entered into a
confidentiality agreement containing terms and conditions that are no less
favorable to the Company than those set forth in the Confidentiality Agreement,
such information concerning,
- 42 -
and access to, the Company and its business, properties or assets as may
reasonably be requested by Parent. Subject to applicable Laws relating to the
exchange of information and the preservation of any applicable attorney-client
privilege, work-product doctrine, self-audit privilege or other similar
privilege (collectively, "Legal Privilege"), Parent and the Company shall use
reasonable best efforts to collaborate in reviewing and commenting on in
advance, and to consult the other on, information relating to Parent or the
Company, as the case may be, and any of their respective Subsidiaries, that
appears in any filing made with, or written materials submitted to, any third
party and/or any Governmental Entity in connection with the Merger and the other
transactions contemplated hereby. In connection with such collaboration, each of
the Company and Parent shall act reasonably and as promptly as practicable.
Parent and the Company will communicate with any governmental antitrust
authority in respect of the transactions contemplated by this Agreement (other
than communications that are not material or relate only to administrative
matters) only after having consulted with the other's advisors in advance and
taken into account any reasonable comments and requests of the other party and
their advisors. Where permitted by the governmental antitrust authority, Parent
and Company will allow the other's advisers to attend all meetings with any
governmental antitrust authority or participate in any telephone calls or other
such communications (other than meetings, telephone calls or communications that
are not material or relate only to administrative matters).
(c) Subject to applicable Laws and the preservation of any applicable Legal
Privilege, the Company and Parent each shall, upon request by the other, use
commercially reasonable efforts to furnish the other with all information
concerning itself, its Subsidiaries, directors, officers and stockholders and
such other matters as may be reasonably necessary or advisable in connection
with any Divestiture, the Proxy Statement/Prospectus or any other statement,
filing, notice or application made by or on behalf of the Company, Parent or any
of their respective Subsidiaries to any third party and/or any Governmental
Entity in connection with the Merger and the other transactions contemplated
hereby.
(d) Subject to any confidentiality obligations and the preservation of any
Legal Privilege, the Company and Parent each shall use reasonable best efforts
to keep the other apprised of the status of matters relating to completion of
the transactions contemplated hereby, including promptly furnishing the other
with copies of notices or other communications received by Parent or the
Company, as the case may be, or any of its Subsidiaries, from any third party
and/or any Governmental Entity with respect to the Merger and the other
transactions contemplated hereby.
(e) Subject to the provisions of Sections 7.2, 7.4(b) and 7.4(f), in the
event that any administrative or judicial action or proceeding is instituted (or
threatened to be instituted) by a Governmental Entity or private party
challenging any transaction contemplated by this Agreement, or any other
agreement contemplated hereby, each of Parent, Merger Sub and the Company shall
cooperate in all respects with each other and use reasonable best efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement.
- 43 -
(f) In furtherance and not in limitation of the covenants of the parties
contained in paragraphs (a)-(e) of this Section 7.4, if any objections are
asserted with respect to the transactions contemplated hereby under any
Antitrust Law (as defined below) or if any suit is instituted (or threatened to
be instituted) by the Federal Trade Commission, the Department of Justice or any
other applicable Governmental Entity challenging any of the transactions
contemplated hereby as violative of any Antitrust Law or which would otherwise
prohibit or materially impair or materially delay the consummation of the
transactions contemplated hereby, each of Parent, Merger Sub and the Company
shall take all actions necessary to resolve any such objections or suits (or
threatened suits) so as to permit consummation of the transactions contemplated
by this Agreement to close as soon as reasonably practicable and in any event no
later than the Termination Date (as extended), including, without limitation,
selling, holding separate or otherwise disposing of or conducting its business
in a manner which would resolve such objections or suits or agreeing to sell,
hold separate, divest or otherwise dispose of or conduct its business in a
manner which would resolve such objections or suits or permitting the sale,
holding separate, divestiture or other disposition of, any of its assets or the
assets of its Subsidiaries or the conducting of its business in a manner which
would resolve such objections or suits (or threatened suits) (collectively,
"Divestitures"); provided, that, any obligation to make or agree to make a
Divestiture by the Company or any of its Subsidiaries may, at the Company's
option, be conditioned upon and effective as of the Effective Time and shall not
affect the other terms or conditions hereunder. Without limitation to the terms
of Sections 7.4(b) and (c), to the extent not prohibited by applicable Law,
Parent shall keep the Company apprised of material communications regarding
proposed remedies to any objections that may be expressed by the FTC, the
Justice Department or comparable foreign Governmental Entities and will consult
with the Company and give due consideration to its views with respect to any
possible Divestiture plans; provided, however, that following the date hereof,
Parent shall have the sole and exclusive right, to propose, negotiate, offer to
commit and effect, by consent decree, hold separate order or otherwise, the
Divestiture of such assets of Parent, the Company, or their respective
Subsidiaries or otherwise offer to take or offer to commit (and if such offer is
accepted, commit to and effect) to take any action as may be required to resolve
such objections or suits. Notwithstanding anything in this Agreement to the
contrary, in no event shall any of Parent, Merger Sub, the Company or their
respective Affiliates be required to make or agree to make a Divestiture or to
take or agree to take any action, that, individually or together with any other
such actions, would reasonably be expected to have a material adverse effect on
the financial condition, business, assets or results of operations of the
Company and its Subsidiaries, taken as a whole, or an effect of similar
magnitude (in terms of absolute effect and not proportion) on Parent and its
Subsidiaries. "Antitrust Law" means the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, the
EC Merger Regulation and all other federal, state and foreign, if any, Laws that
are designed or intended to control mergers and acquisitions or to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or acquisition.
7.5. Proxy Statement/Prospectus; F-4 Registration Statement. (a) As
promptly as practicable after the execution and delivery of this Agreement,
Parent and the Company shall cooperate in preparing and shall cause to be filed
with the SEC mutually acceptable proxy materials relating to the Company
Stockholders Meeting (together with all amendments thereof or supplements
thereto, the "Proxy Statement"), and Parent shall prepare and file with the SEC
- 44 -
the F-4 Registration Statement (together with the prospectus contained in the
F-4 Registration Statement and the Proxy Statement, the "Proxy
Statement/Prospectus"), in which the Proxy Statement/Prospectus shall be
included, covering the Parent ADSs to be issued in the Merger. Each of Parent
and the Company shall use all reasonable efforts to cause the Proxy Statement to
be cleared by the SEC, and the F-4 Registration Statement to become effective
under the Securities Act, as soon as practicable after the date of such filing
and to keep the F-4 Registration Statement effective as long as is necessary to
consummate the Merger. Prior to the effective date of the F-4 Registration
Statement, Parent shall take all actions reasonably required under any
applicable federal securities laws or applicable laws of any state in connection
with the issuance of ADSs in the Merger. The Proxy Statement/Prospectus shall
include, among other things, (i) the recommendation of the board of directors of
the Company that the Company's stockholders vote in favor of approval and
adoption of this Agreement and the transactions contemplated hereby (including,
without limitation, the Merger), except to the extent the board of directors of
the Company shall have effected a Change of Recommendation as expressly
permitted by Section 7.2, and (ii) the opinion of the Company Advisor referred
to in Section 5.1(x). Each of Parent and the Company shall use all commercially
reasonable efforts to cause the Proxy Statement/Prospectus to be mailed to the
holders of Company Common Stock as promptly as practicable after the F-4
Registration Statement becomes effective and, after the Proxy
Statement/Prospectus shall have been so mailed, promptly circulate amended,
supplemental or supplemented proxy materials and, if required in connection
therewith, resolicit proxies. Parent and the Company shall promptly provide to
each other (A) notice of any oral comments to the Proxy Statement/Prospectus or
the F-4 Registration Statement received from the SEC and (B) copies of any
written comments to the Proxy Statement/Prospectus and the F-4 Registration
Statement received from the SEC, and in each case shall consult with each other
in connection with the preparation of written responses and to such comments.
(b) Parent shall make, and the Company shall cooperate in, all necessary
filings with respect to the Merger and the transactions contemplated thereby
under the Securities Act and all applicable Israeli securities laws and
regulation and United States state securities and "blue sky" laws. Each party
shall advise the other, promptly after receipt of notice thereof, of the time of
the effectiveness of the F-4 Registration Statement, the filing of any
supplement or amendment thereto, the issuance of any stop order relating
thereto, the suspension of the qualification of Parent ADSs issuable in
connection with the Merger for offering or sale in any jurisdiction, or of any
SEC request for an amendment to the Proxy Statement/Prospectus or the F-4
Registration Statement, SEC comments thereon and each party's responses thereto
or SEC requests for additional information. No amendment or supplement to the
Proxy Statement/Prospectus or the F-4 Registration Statement shall be filed
without the approval of the Company and Parent, which approval shall not be
unreasonably withheld or delayed. If, at any time prior to the Effective Time,
Parent or the Company should discover any information relating to either party,
or any of their respective Affiliates, directors or officers, that should be set
forth in an amendment or supplement to the F-4 Registration Statement or the
Proxy Statement/Prospectus, so that the documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party that discovers such information shall promptly
notify the other party hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by Law, disseminated to the stockholders of Parent and the
Company.
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7.6. Stock Exchange Listing. Parent shall use best efforts to cause the
Parent ADSs to be issued in connection with the Merger and the Parent ADSs to be
reserved for issuance upon exercise of the assumed the Company Stock Options to
be approved for quotation on Nasdaq, subject to official notice of issuance.
7.7. Stock Exchange Delisting; Deregistration of Stock. Prior to the
Closing Date, the Company shall cooperate with Parent and cause to be taken all
actions, and do or cause to be done all things, reasonably necessary, proper or
advisable on the Company's part under applicable Laws and rules and policies of
the NYSE and the other exchanges on which the Company Common Stock is listed to
enable the delisting by the Surviving Corporation of the Company Common Stock
from the NYSE and the other exchanges on which the Company Common Stock is
listed and the deregistration of the Company Common Stock under the Exchange Act
as promptly as practicable after the Effective Time.
7.8. Publicity. The initial press release relating to this Agreement or the
transactions contemplated hereby (including, without limitation, the Merger)
shall be a joint press release of the Company and Parent and thereafter the
Company and Parent each shall consult with the other prior to issuing any press
releases or otherwise making public announcements with respect to this Agreement
or the transactions contemplated hereby (including, without limitation, the
Merger) and prior to making any filings with any third party and/or any
Governmental Entity with respect thereto, except as may be required by
applicable Law or by obligations pursuant to any listing agreement with or rules
of any securities exchange or securities market on which securities of the
Company or Parent are listed or traded.
7.9. Employee Benefits Matters.
(a) Parent agrees that, during the period commencing at the Effective Time
and ending on the first anniversary of the Effective Time (the "Transition
Period"), Parent shall, or shall cause the Company and its Subsidiaries to:
(i) maintain each Company Compensation and Benefit Plan that provides
current and former directors and employees of the Company and its
Subsidiaries who are receiving benefits under the Company Compensation and
Benefit Plans as of immediately prior to the Effective Time (the "Affected
Employees") with retirement (e.g., defined contribution and excess
savings), welfare, vacation and other fringe benefits, as applicable, with
each such plan to provide such benefits, at such costs, as are no less
favorable than each such plan provides immediately prior to the Effective
Time;
(ii) maintain (A) (subject to increases in the ordinary course of
business) all annual base salary and wage rates of each Affected Employee
at no less than the levels in effect immediately prior to the Effective
Time, and (B) all Company Compensation and Benefit Plans that provide each
Affected Employee with annual cash bonus opportunities (including target
bonus amounts that are payable subject to the satisfaction of performance
criteria that are comparable to those criteria in effect immediately prior
to the Effective Time) that are no less favorable than those in effect
immediately prior to the Effective Time; provided, however, that in full
satisfaction of Parent's obligations
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of under this Section 7.9(a)(ii)(B) in respect of any annual bonus
opportunity due, in respect of the year in which the Effective Time occurs
(the "Closing Year"), to any Affected Employee who, immediately prior to
the Effective Time, participates in either the Company Executive Officer
Incentive Plan or the Company Management Incentive Plans (together, the
"Executive Bonus Plans"), each such Affected Employee shall receive such
payment(s) as are required to be paid in respect of the Closing Year by the
Company to such Affected Employee pursuant to Section 7 of the applicable
Executive Bonus Plan; such that, for the avoidance of doubt, no such
Affected Employee shall receive a duplicative annual bonus payment in
respect of the Closing Year; and
(iii) maintain, without any amendment that may be adverse to any
Affected Employee (other than as required by applicable Law), the Xxxx
Pharmaceuticals Severance Package Pay Plan for U.S. Senior Executives, the
Xxxx Pharmaceuticals Long-Term International Assignment Policy and the
PLIVA Severance Pay Plan (non-exempt and exempt levels through senior
director and I-V), and to honor the terms of such plans in the event that
any Affected Employee's employment is terminated in circumstances that give
rise to the provision of benefits under such plans.
(b) Parent agrees that, during the period commencing at the Effective Time
and ending on the second anniversary of the Effective Time, Parent shall, or
shall cause the Company and its Subsidiaries to maintain, without any amendment
that may be adverse to any Affected Employee (other than as required by
applicable Law), the Xxxx Pharmaceuticals, Inc. Severance Pay Plan for U.S.
Employees and to honor the terms of such plan in the event that any Affected
Employee's employment is terminated in circumstances that give rise to the
provision of benefits under such plan.
(c) From and after the Effective Time, Parent shall cause service by
Affected Employees to be taken into account for purposes of eligibility to
participate, eligibility to commence benefits, vesting and benefit accruals
(other than any defined benefit pension plan in the United States or otherwise
required under applicable Law) under the Parent Compensation and Benefit Plans
in which such employees participate (except to the extent such treatment would
result in duplicative accrual of benefits for the same period of service).
Parent shall make all amendments to any Parent Compensation and Benefit Plans as
may be required to provide for the foregoing and for the provisions of Section
7.9(d) below.
(d) From and after the Effective Time, Parent shall, with respect to
Affected Employees entitled to participate in any Parent Compensation and
Benefit Plans subject to United States law, (i) cause to be waived any
pre-existing condition limitations and any waiting period limitations under
welfare benefit plans, policies or practices of Parent or its Subsidiaries in
which employees of the Company or its Subsidiaries participate and (ii) cause to
be credited any deductibles, co-payment amounts and out-of-pocket expenses
incurred by such employees and their beneficiaries and dependents during the
portion of the calendar year prior to participation in the Parent Compensation
and Benefit Plans.
(e) At all times from and after the Effective Time, Parent shall, or shall
cause the Company and its Subsidiaries to, honor all its obligations and
commitments, and those of the Company and any of its Subsidiaries under all
employment, compensation, benefit and severance
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agreements, plans, policies and arrangements set forth on Section 7.9(e) of the
Company Disclosure Schedules.
(f) Not less than one (1) Business Day, nor more than three (3) Business
Days, prior to the Closing Date, the Company shall deliver to Parent a true,
accurate and complete list, as of the date of such delivery and for each holder,
of the number of shares of Company Common Stock subject to Company Options or
other rights to purchase or receive Company Common Stock, together with the
dates of grant and the exercise prices thereof.
(g) Nothing contained in this Section 7.9, express or implied: (i) is
intended to confer upon any current or former employee any right to employment
or continued employment for any period of time by reason of this Agreement, or
any right to a particular term or condition of employment; or (ii) is intended
to confer upon any Person (including for the avoidance of doubt any Affected
Employee) any right as a third-party beneficiary of this Agreement.
7.10. Indemnification; Directors' and Officers' Insurance. (a) From and
after the Effective Time, Parent shall indemnify and hold harmless, to the
fullest extent permitted under applicable Law (and Parent also shall advance
reasonable and documented attorneys' fees and expenses as incurred to the
fullest extent permitted under applicable Law, provided that the Person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Person is not entitled to indemnification), each
present and former director, officer and employee of the Company and its
Subsidiaries, including any person who becomes an officer, director or employee
prior to the Effective Time (collectively, the "Indemnified Parties") against
any costs or expenses (including attorneys' fees and expenses), judgments,
fines, losses, claims, settlements, damages or liabilities incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time, including
the transactions contemplated hereby.
(b) Prior to the Effective Time, Parent shall cause the Surviving
Corporation to purchase directors' and officers' liability insurance coverage
for the Company's directors and officers for a period of six (6) years after the
Effective Time which provides runoff coverage in an amount at least equal to
that currently provided by the Company for its directors and officers and on
terms otherwise comparable in all material respects to that currently provided
by the Company (as disclosed to Parent prior to the date hereof).
(c) The Certificate of Incorporation and the By-Laws of the Surviving
Corporation shall include provisions for exculpation of director, officer and
employee liability and indemnification on the same basis as set forth in the
Company's certificate of incorporation and by-laws (respectively) in effect on
the date hereof. For six (6) years after the Effective Time, Parent shall cause
the Surviving Corporation to maintain in effect the provisions in its by-laws
providing for indemnification of Indemnified Parties, with respect to facts and
circumstances occurring at or prior to the Effective Time, to the fullest extent
permitted from time to time under the DGCL, which provisions shall not be
amended except as required by applicable Law or except to make changes permitted
by applicable Law that would increase the scope of the Indemnified Parties'
indemnification rights thereunder.
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(d) The rights of each Indemnified Party under this Section 7.10 shall be
in addition to any right such Person might have under the Organizational
Documents of the Company or any of its Subsidiaries or under applicable Law
(including the DGCL) or under any agreement of any Indemnified Party with the
Company or any of its Subsidiaries. The provisions of this Section 7.10 are
intended to be for the benefit of, and shall be enforceable by, each of the
Indemnified Parties and their respective heirs and representatives.
(e) If Parent, the Surviving Corporation, or any of their respective
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, honor the indemnification and other obligations
set forth in this Section 7.10.
(f) The Indemnified Parties are express third-party beneficiaries of
Parent's obligations under this Section 7.10.
7.11. Expenses. Subject to Sections 9.5(b) and (c) and 7.4(a), whether or
not the Merger is consummated, all costs and expenses incurred in connection
with the Merger and the other transactions contemplated hereby shall be paid by
the party incurring such expense, except that each of the Company and Parent
shall bear and pay one half of the costs and expenses incurred in connection
with the filing, printing and mailing of the Proxy Statement/Prospectus
(including any SEC filing fees).
7.12. Takeover Statute. If any Takeover Statute is or may become applicable
to the Merger or the other transactions contemplated hereby, each of Parent, the
Company and Merger Sub and their respective board of directors, shall grant such
approvals and take such actions as are necessary so that such transactions may
be consummated as promptly as practicable hereafter on the terms contemplated
hereby and otherwise act to eliminate or minimize the effects of such statute or
regulation on such transactions.
7.13. Section 16 Matters. Prior to the Effective Time, the Company shall
take all such steps as may be required and permitted to cause the transactions
contemplated by this Agreement, including any dispositions of shares of Company
Common Stock or acquisitions of Parent ADSs (including derivative securities
with respect to such shares of Company Common Stock or Parent ADSs) by each
individual who is or will be subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to the Company to be exempt under Rule
16b-3 promulgated under the Exchange Act.
7.14. Tax-Free Reorganization.
(a) Prior to the Effective Time, each of Parent and the Company shall use
all reasonable best efforts to cause the Merger to qualify as a 368
Reorganization, and shall not take any action reasonably likely to cause
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the Merger not so to qualify. Parent shall not take, or cause the Surviving
Corporation to take, any action after the Effective Time reasonably likely to
cause the Merger not to qualify as a 368 Reorganization. Parent shall cause the
Surviving Corporation to comply with the reporting requirements of U.S. Treasury
Regulation Section 1.367(a) 3(c)(6).
(b) Each of Parent and the Company shall use its commercially reasonable
efforts to obtain the opinions referred to in Section 8.2(c) and 8.3(e),
respectively.
7.15. Non-Solicitation; No-Hire. Prior to the earlier of the Effective Time
and the termination of this Agreement, Parent will not, and will cause its
Subsidiaries not to, directly or indirectly solicit for employment or hire or
employ or seek to entice away from the Company or any of its Subsidiaries any
employee of the Company or any of its Subsidiaries; provided, however, that this
section shall not prohibit any advertisement or general solicitation (including
through the use of executive recruiters) that is not specifically targeted at
employees of the Company and its Subsidiaries, or prevent Parent from offering
employment to or employing, persons who respond to such advertisements or such
general solicitations.
7.16. Accountants' Comfort Letters. (a) Parent shall use all commercially
reasonable efforts to cause to be delivered to the Company two letters from
Parent's independent public accountants, one dated approximately the date on
which the F-4 Registration Statement covering the Parent ADSs to be issued in
the Merger shall become effective and one dated the Closing Date, each addressed
to the Company and Parent, in form reasonably satisfactory to the Company and
customary in scope for comfort letters delivered by independent public
accountants in connection with similar Registration Statements.
(b) The Company shall use all commercially reasonable efforts to cause to
be delivered to Parent two letters from the Company's independent public
accountants, one dated approximately the date on which the F-4 Registration
Statement covering the Parent ADSs to be issued in the Merger shall become
effective and one dated the Closing Date, each addressed to Parent and the
Company, in form reasonably satisfactory to Parent and customary in scope for
comfort letters delivered by independent public accountants in connection with
similar Registration Statements.
7.17. Alternative Structure. If Parent and the Company mutually determine
that it is prudent to do so, the parties agree to cooperate in good faith to
make changes to the terms hereof to restructure the transaction as a merger of
Merger Sub with and into the Company pursuant to which the separate corporate
existence of Merger Sub shall thereupon cease and the Company shall be the
surviving corporation (the "First Step Merger"), immediately followed by a
merger of the Company, as the surviving corporation in the First Step Merger,
with and into a subsidiary directly wholly owned by Parent ("Merger Sub 2")
pursuant to which the separate corporate existence of the Company shall
thereupon cease with Merger Sub 2 being the surviving corporation, or the
substantial equivalent thereof.
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ARTICLE VIII
CONDITIONS
----------
8.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(a) Stockholder Approval. The Company Requisite Vote shall have been
obtained.
(b) HSR; EC Merger Regulation; Canada Competition Bureau; Other Regulatory
Consents. The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been earlier terminated, and all required
approvals by the European Commission and the Competition Bureau of Canada
applicable to the Merger under the applicable competition law or regulation,
including without limitation the EC Merger Regulation and the Canada Competition
Act, shall have been obtained or any applicable waiting period thereunder shall
have been terminated or shall have expired, and those other consents pursuant to
the other Foreign Antitrust Filings the failure of which to obtain would, either
individually or in the aggregate, have or would reasonably be expected to have,
a material adverse effect on the financial condition, business, assets or
results of operations of the Company and its Subsidiaries, taken as a whole, or
an effect of similar magnitude (in terms of absolute effect and not proportion)
on Parent and its Subsidiaries shall have been obtained.
(c) Injunction. No court or Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, Law,
ordinance, rule, regulation, judgment, decree, injunction or other order that is
in effect and enjoins or otherwise prohibits consummation of the Merger and the
transactions contemplated hereby (collectively, an "Order").
(d) F-4 Registration Statement. The F-4 Registration Statement shall have
been declared effective by the SEC and no stop order suspending the
effectiveness of the F-4 Registration Statement shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the SEC,
and all Israeli, United States state securities and "blue sky" authorizations
necessary to carry out the transactions contemplated hereby shall have been
obtained and be in effect.
8.2. Conditions to Obligations of Parent and Merger Sub. The obligations of
Parent and Merger Sub to effect the Merger are also subject to the satisfaction
or waiver by Parent at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and warranties of
the Company set forth in this Agreement shall be true and correct as of the
Closing Date as though made on and as of the Closing Date (except to the extent
any such representation or warranty expressly speaks as of an earlier date,
which representations and warranties shall be true and correct as of such date
in the same manner as specified above), except for failures to be true and
correct that either individually or in the aggregate would not reasonably be
likely to have a Company Material Adverse Effect; provided that for purposes of
determining whether the
- 51 -
condition in this Section 8.2(a) is satisfied, references to "Company Material
Adverse Effect" (other than in Section 5.1(h)(i)) and any other materiality
qualification contained in such representations and warranties shall be ignored,
and Parent shall have received a certificate to such effect signed on behalf of
the Company by the Chief Executive Officer and the Chief Financial Officer of
the Company.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects at or prior to the Closing Date all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date, and Parent shall have received a certificate to such effect
signed on behalf of the Company by the Chief Executive Officer and the Chief
Financial Officer of the Company.
(c) Tax Opinion. Parent shall have received the opinion of Xxxxxxx Xxxx &
Xxxxxxxxx LLP, counsel to Parent, to the effect that the Merger will be treated
for United States federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, that the Company, Parent and Merger Sub
will each be a party to that reorganization within the meaning of Section 368(b)
of the Code and that Parent will be treated as a corporation under Section
367(a)(1) of the Code. In rendering such opinion, such counsel shall be entitled
to rely upon representations of officers of Parent and the Company substantially
in the form of Exhibits A and B hereto. Counsel's opinion shall not address the
tax consequences applicable to any stockholder of the Company who, immediately
after the Merger, will be a "five percent transferee shareholder" with respect
to Parent within the meaning of U.S. Treasury Regulation Section
1.367(a)-3(c)(5).
(d) No Material Adverse Change. Since the date hereof, a Company Material
Adverse Effect shall not have occurred and no change or other event shall have
occurred that, either individually or in the aggregate, would reasonably be
likely to have a Company Material Adverse Effect.
8.3. Conditions to Obligation of the Company. The obligation of the Company
to effect the Merger is also subject to the satisfaction or waiver by the
Company at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Parent and Merger Sub set forth in this Agreement shall be true and correct as
of the Closing Date as though made on and as of the Closing Date (except to the
extent any such representation or warranty expressly speaks as of an earlier
date, which representations and warranties shall be true and correct as of such
date in the same manner as specified above), except for failures to be true and
correct that either individually or in the aggregate would not reasonably be
likely to have a Parent Material Adverse Effect; provided that for purposes of
determining whether the condition in this Section 8.3(a) is satisfied,
references to "Parent Material Adverse Effect" (other than in Section 5.2(h)(i))
and any other materiality qualification contained in such representations and
warranties shall be ignored, and the Company shall have received a certificate
to such effect signed on behalf of Parent by an executive officer of Parent.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and
Merger Sub shall have performed in all material respects all obligations
required to be performed
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by it under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate to such effect signed on behalf of Parent by
an executive officer of Parent.
(c) No Material Adverse Change. Since the date hereof, a Parent Material
Adverse Effect shall not have occurred and no change or other event shall have
occurred that, either individually or in the aggregate, would reasonably be
likely to have a Parent Material Adverse Effect.
(d) Stock Exchange Listing. The Parent ADSs to be issued in connection with
the Merger and the Parent ADSs reserved for issuance upon exercise of the
assumed Company Options shall have been approved for quotation on Nasdaq,
subject to official notice of issuance.
(e) Tax Opinion. The Company shall have received the opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel to the Company, to the effect that the Merger
will be treated for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, that the
Company, Parent and Merger Sub will each be a party to that reorganization
within the meaning of Section 368(b) of the Code and that Parent will be treated
as a corporation under Section 367(a)(1) of the Code. In rendering such opinion,
such counsel shall be entitled to rely upon representations of officers of
Parent and the Company substantially in the form of Exhibits A and B hereto.
Counsel's opinion shall not address the tax consequences applicable to any
stockholder of the Company who, immediately after the Merger, will be a "five
percent transferee shareholder" with respect to Parent within the meaning of
U.S. Treasury Regulation Section 1.367(a)-3(c)(5).
ARTICLE IX
TERMINATION
-----------
9.1. Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after receipt of the Company Requisite Vote, by mutual written consent
of the Company and Parent by action of their respective Boards of Directors.
9.2. Termination by Either Parent or the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either Parent or the Company if:
(a) the Merger shall not have been consummated by March 31, 2009, whether
such date is before or after the date of receipt of the Company Requisite Vote
(the "Termination Date"); provided that the Termination Date shall be
automatically extended for three months if, on the Termination Date any of the
conditions set forth in Sections 8.1(b) shall not have been satisfied or waived
but (i) each of the other conditions to the consummation of the Merger set forth
in Article VIII has been satisfied or waived or remains capable of satisfaction,
and (ii) any approvals required by Section 8.1(b) that have not yet been
obtained are being pursued diligently and in good faith; provided that the right
to terminate this Agreement pursuant to this clause (a) shall not be available
to any party that has breached its obligations under this Agreement in any
manner that shall have proximately caused the occurrence of the failure of the
Merger to be
- 53 -
consummated, including its obligations required by Section 7.4, on or before the
Termination Date;
(b) the Company Requisite Vote shall not have been obtained at the Company
Stockholders Meeting or at any adjournment or postponement thereof; or
(c) any Order permanently restraining, enjoining or otherwise prohibiting
consummation of the Merger shall become final and non-appealable; provided that
the right to terminate this Agreement pursuant to this clause (c) shall not be
available to any party that has not used its reasonable best efforts to have
such Order removed, repealed or overturned or that breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately resulted in the issuance or imposition of such Order.
9.3. Termination by the Company. This Agreement may be terminated and the
Merger may be abandoned by action of the board of directors of the Company at
any time prior to (a) receipt of the Company Requisite Vote, if the board of
directors of the Company shall take any action contemplated by clause (D) of
Section 7.2; provided, however, that (i) the Company complies with Section 7.2
and (ii) the termination pursuant to this Section 9.3(a) shall not be effective
unless the Company shall at or prior to the time of such termination make the
payment required by Section 9.5(b), or (b) the Effective Time, whether before or
after receipt of the Company Requisite Vote, if there has been a breach by
Parent or Merger Sub of any representation, warranty, covenant or agreement
contained in this Agreement such that the condition in Section 8.3(a) or Section
8.3(b), as the case may be, would not be satisfied and that is not curable or,
if curable, is not cured by the earlier of (A) twenty (20) days after written
notice of such breach is given by the Company to Parent or (B) the Termination
Date; provided that Company shall not have the right to terminate this Agreement
pursuant to this Section 9.3(b) if Company is then in material breach of any of
its covenants or agreements contained in this Agreement.
9.4. Termination by Parent. This Agreement may be terminated and the Merger
may be abandoned by action of the board of directors of Parent at any time prior
to the Effective Time if: (a) the board of directors of the Company takes any
action contemplated by clause (D) of Section 7.2; (b) the board of directors of
the Company shall have effected a Change of Recommendation; (c) the Company or
its board of directors approves or recommends that the Company's stockholders
tender their shares of Company Common Stock in any tender or exchange offer or
the Company or its board of directors fails to send to the Company's
stockholders, within ten Business Days after the commencement of any such tender
or exchange offer, a statement that the Company and its board of directors
recommends that the Company's stockholders reject, and do not tender their
shares of Company Common Stock in, such tender or exchange offer; (d) prior to
consummating or engaging in any "business combination" (within the meaning of
Section 203 of the DGCL) or other transaction with or involving the Company or
any of its Affiliates as a result of, or pursuant to which, any Person becomes
or would become an "interested stockholder" (within the meaning of Section 203
of the DGCL), the board of directors of the Company approves such business
combination or other transaction such that such Person would not be deemed to be
an "interested stockholder" under Section 203 of the DGCL; (e) the Company or
any of its Affiliates publicly announces the Company's intention to take any of
the actions described in the foregoing clauses (a), (b), (c) or (d); or (f)
there has been a breach
- 54 -
by the Company of any representation, warranty, covenant or agreement contained
in this Agreement such that the condition in Section 8.2(a) or Section 8.2(b),
as the case may be, would not be satisfied and that is not curable or, if
curable, is not cured by the earlier of (i) twenty (20) days after written
notice of such breach is given by Parent to the Company or (ii) the Termination
Date; provided that Parent shall not have the right to terminate this Agreement
pursuant to this Section 9.4(f) if Parent is then in material breach of any of
its covenants or agreements contained in this Agreement.
9.5. Effect of Termination and Abandonment. (a) In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article IX,
this Agreement (other than as set forth in Section 10.1) shall become void and
of no effect with no liability on the part of any party hereto (or of any of its
directors, officers, employees, Affiliates, agents, legal and financial advisors
or other representatives); provided, however, that no such termination shall
relieve any party hereto of any liability or damages resulting from any material
and intentional breach of this Agreement, or any fraud, by such party.
(b) In the event that this Agreement is terminated (i) by Parent or the
Company pursuant to Section 9.2(a), provided that at the time of such
termination (A) the Company Requisite Vote had not been obtained and (B) an
Acquisition Proposal or other public announcement of any intention with respect
to an Acquisition Proposal shall have been made (and such Acquisition Proposal
has not been withdrawn), (ii) by Parent or the Company pursuant to Section
9.2(b) or by Parent pursuant to Section 9.4(f), provided that, in each case, at
the time of such termination an Acquisition Proposal or other public
announcement of any intention with respect to an Acquisition Proposal shall have
been made (and such Acquisition Proposal has not been withdrawn), (iii) by the
Company pursuant to Section 9.3(a), or (iv) by Parent pursuant to Section
9.4(a), (b), (c), (d) or (e), then the Company shall pay to Parent a termination
fee (as liquidated damages) in the amount of $200,000,000 as follows: (x) in the
case of any termination described in clauses (i) or (ii) above, if within twelve
(12) months after the date of such termination the Company enters into a
definitive agreement with respect to, or consummates, a transaction contemplated
by an Acquisition Proposal, promptly, but in no event later than two (2)
Business Days after the date of the earlier of such entering into a definitive
agreement or such consummation, as applicable; (y) in the case of any
termination described in clause (iii) above, at or prior to the time of such
termination; and (z) in the case of any termination described in clause (iv)
above, promptly, but in no event later than two (2) Business Days after the date
of such termination. Any such payment shall be made by wire transfer of
immediately available funds to an account designated in writing by Parent to the
Company. For purposes of this Section 9.5(b) "Acquisition Proposal" shall be
defined by replacing all references to "20%" in the definition of Acquisition
Proposal with "35%".
(c) The parties acknowledge that the agreement contained in Section 9.5(b)
is an integral part of the transactions contemplated by this Agreement, and
that, without such agreement Parent would not have entered into this Agreement;
accordingly, if the Company fails to timely pay any amounts due by it pursuant
to Section 9.5(b), it shall also pay interest from the date such payment was due
on the amounts owed at the prime rate in effect from time to time and quoted in
The Wall Street Journal during such period. The payment of the amounts specified
in Section 9.5(b) and this Section 9.5(c) shall be the sole and exclusive remedy
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available to Parent with respect to the facts and circumstances giving rise to
such payment obligation.
ARTICLE X
MISCELLANEOUS AND GENERAL
-------------------------
10.1. Survival. This Article X and the agreements of the Company, Parent
and Merger Sub contained in Sections 7.7 (Stock Exchange De-listing;
Deregistration of Stock), 7.9 (Employee Benefits Matters), 7.10
(Indemnification; Directors' and Officers' Insurance) and 7.11 (Expenses) and
those other covenants and agreements contained herein that by their terms apply,
or that are to be performed in whole or in part, after the Effective Time shall
survive the consummation of the Merger. This Article X, the agreements of the
Company, Parent and Merger Sub contained in Section 7.11 (Expenses), Section 9.5
(Effect of Termination and Abandonment) and the Confidentiality Agreement shall
survive the termination of this Agreement. All other representations,
warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
10.2. Modification or Amendment. Subject to applicable Law, at any time
prior to the Effective Time, this Agreement may be amended or modified only by a
written agreement duly executed and delivered by Parent and the Company;
provided, however, that, after approval of this Agreement and the Merger by the
stockholders of the Company pursuant to the DGCL, no amendment may be made
hereto which would by Law or the rules of the NYSE require further approval by
the stockholders of the Company without such further approval by such
stockholders.
10.3. Waiver. At any time prior to the Effective Time, any party hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the other party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto, and (c) waive compliance by the other party with any of the
agreements or conditions contained herein; provided, however, that after the
approval of this Agreement and the Merger by the stockholders of the Company,
there may not be, without further approval of such stockholders, any extension
or waiver of this Agreement or any portion thereof which, by Law or in
accordance with the rules of the NYSE, requires further approval by such
stockholders. Any such extension or waiver shall be valid only if set forth in
an instrument in writing signed by the party or parties to be bound thereby, but
such extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
10.4. Counterparts. This Agreement may be executed by the parties hereto in
one or more counterparts or duplicate originals, each of which when so executed
and delivered shall be deemed an original, but all of which together shall
constitute one and the same instrument, and all signatures need not appear on
any one counterpart. Any facsimile copies hereof or signature hereon shall, for
all purposes, be deemed originals.
10.5. GOVERNING LAW AND VENUE.
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(a) This Agreement and the transactions contemplated by this Agreement, and
all disputes between the parties under or related to this Agreement or the facts
and circumstances leading to its execution, whether in contract, tort or
otherwise, shall be governed by and construed in accordance with the Laws of the
State of Delaware, applicable to contracts executed in and to be performed
entirely within that State and without reference to conflict of laws principles.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal Court of the United States of America sitting
in Delaware, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated by this
Agreement or thereby, and each of the parties hereby irrevocably and
unconditionally (i) agrees not to commence any such action or proceeding except
in such courts, (ii) agrees that any claim in respect of any such action or
proceeding may be heard and determined in such court, (iii) waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any such action or proceeding in
any such court, and (iv) waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in any
other place of competent jurisdiction by suit on the judgment or in any other
manner provided by Law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.6. Nothing
in this Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by Law.
10.6. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile (upon receipt of electronic or telephonic confirmation of successful
transmission):
if to Parent or Merger Sub,
Teva Pharmaceutical Industries Ltd.
0 Xxxxx Xxxxxx
Xxxxxx Xxxxx 00000
Attention: Chief Executive Officer
Facsimile: 011 972 3 924 6026
Boron Acquisition Corp.
c/o Teva Pharmaceuticals USA, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000 0000
with copies (which shall not constitute notice) to:
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Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company,
Xxxx Pharmaceutical, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10.7. Entire Agreement; NO OTHER REPRESENTATIONS. This Agreement (including
any exhibits hereto), the Company Disclosure Schedules, the Parent Disclosure
Schedules and the Confidentiality Agreement, dated May 6, 2008, between Parent
and the Company (as may be amended from time to time, the "Confidentiality
Agreement"), constitute the entire agreement by and among the parties hereto,
and supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT, MERGER SUB NOR THE
COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS, FINANCIAL AND LEGAL ADVISORS
OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY
OR DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION
OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
10.8. No Third-Party Beneficiaries. Other than with respect to the matters
set forth in Section 7.10 (Indemnification; Directors' and Officers' Insurance),
this Agreement is not
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intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
10.9. Obligations of Parent and of the Company. Except as otherwise
specifically provided herein, whenever this Agreement requires a Subsidiary of
Parent to take any action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause such Subsidiary to take such action.
Whenever this Agreement requires a Subsidiary of the Company to take any action,
such requirement shall be deemed to include an undertaking on the part of the
Company to cause such Subsidiary to take such action and, after the Effective
Time, on the part of the Surviving Corporation to cause such Subsidiary to take
such action.
10.10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party.
10.11. Disclosure Schedules. Any information disclosed in any section of
the Company Disclosure Schedules or the Parent Disclosure Schedules shall be
deemed to be disclosed on any other section of the Company Disclosure Schedules
or the Parent Disclosure Schedules, respectively, where it is reasonably
apparent that the disclosure contained in such section of the Company Disclosure
Schedules or the Parent Disclosure Schedules is relevant to such other sections.
The Company Disclosure Schedules and the Parent Disclosure Schedules,
respectively, and the information and disclosures contained therein are intended
only to qualify and limit the representations, warranties and covenants of the
Company or Parent and Merger Sub, as the case may be, contained in this
Agreement and shall not be deemed to expand in any way the scope or effect of
any of such representations, warranties or covenants. No reference to or
disclosure of any item or other matter in the Company Disclosure Schedules or
the Parent Disclosure Schedules shall be construed to establish a standard of
materiality.
10.12. Interpretation. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
10.13. Assignment. This Agreement shall not be assignable by operation of
Law or otherwise; provided, however, that Parent may designate, prior to the
mailing of the Proxy Statement/Prospectus, by written notice to the Company,
another wholly owned direct or indirect Subsidiary in lieu of Merger Sub to be a
constituent corporation in the Merger, so long as such
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designation would not reasonably be expected to (a) impose any material delay in
the obtaining of, or significantly increase the risk of not obtaining any Parent
Required Statutory Approval or Company Required Statutory Approval or the
expiration or termination of any applicable waiting period, (b) significantly
increase the risk of any Governmental Entity entering an order prohibiting the
consummation of the Merger, (c) significantly increase the risk of not being
able to remove any such order on appeal or otherwise or (d) materially delay the
consummation of the Merger; provided, further, that each of Parent and Merger
Sub may (in its sole discretion), without the consent of any other party hereto,
assign this Agreement and its rights and obligations hereunder to one or more of
its Affiliates; provided, further, however, that, in the event of any such
assignment pursuant to the immediately preceding proviso, Parent or Merger Sub
(as the case may be) shall remain fully liable for, and shall not be released
from, any of its obligations under this Agreement. If the requirements of the
previous sentence are met and Parent wishes to designate another wholly owned
direct or indirect Subsidiary in lieu of Merger Sub to be a constituent
corporation of the Merger, then all references herein to Merger Sub shall be
deemed to be references to such other Subsidiary, except that all
representations and warranties made herein with respect to Merger Sub as of the
date hereof shall be deemed representations and warranties made with respect to
such other Subsidiary as of the date of such designation.
10.14. Specific Performance. The parties hereby acknowledge and agree that
the failure of any party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to
consummate the Merger, will cause irreparable injury to the other parties, for
which damages, even if available, will not be a complete and adequate remedy.
Accordingly, the parties hereto agree that each shall be entitled to seek
injunctive relief by any court of competent jurisdiction to compel performance
of such party's obligations hereunder, in addition to any other rights or
remedies available hereunder or at law or in equity.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed, acknowledged and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
XXXX PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: EVP, General Counsel and Secretary
TEVA PHARMACEUTICAL INDUSTRIES LTD.
By: /s/ Xxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxx Xxxxx
Title: President and Chief Executive Officer
By: /s/ Xx. Xxxxxx Xxxxxxx
---------------------------------------------
Name: Xx. Xxxxxx Xxxxxxx
Title: Vice President
[Agreement and Plan of Merger]
BORON ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President, General
Counsel and Secretary
