AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
EXHIBIT 2.1
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) is made and entered
into as of September 28, 2009 (the “Effective Date”) by and among Valeant Pharmaceuticals
International, a Delaware corporation (“Parent”), and Xxxxxx Xxxxxxx in his capacity as the
Stockholder Representative on behalf of the Company Securityholders. This Amendment amends that
certain Agreement and Plan of Merger made and entered into as of December 9, 2008 by and among
Parent, Descartes Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent, Dow Pharmaceutical Sciences, Inc., a Delaware corporation (the “Company”), and Xxxxxx
Xxxxxxx in his capacity as the Stockholder Representative (the “Agreement”). All capitalized terms
that are used in this Amendment and not defined herein shall have the respective meanings ascribed
thereto in the Agreement.
RECITALS
A. Pursuant to Section 10.13(a) of the Agreement, the Stockholder Representative has been
appointed attorney in fact for the Company Securitityholders with full power of substitution, to
act in the name, place and stead of the Company Securityholders for purposes of executing any
documents and taking any actions that the Stockholder Representative may, in its sole discretion,
determine to be necessary, desirable or appropriate in all matters relating to or arising out of
the Agreement, including in connection with any claim for indemnification, compensation or
reimbursement under Article 9 of the Agreement or under the Escrow Agreement or with respect to
Milestone Payments, the IDP-111 Royalty Amount and the IDP-111 Deferral Amount.
B. Pursuant to Section 10.13(b) of the Agreement, the Stockholder Representative has been
granted by the Company Stockholders and the holders of Company Stock Options full authority to
execute, deliver, acknowledge, certify and file with respect to the Indemnity Escrow Fund,
Milestone Payments, the IDP-111 Royalty Amount, the IDP-111 Deferral Amount or otherwise on behalf
of the Company Securityholders (in the name of any or all of the Company Securityholders or
otherwise) any and all documents that the Stockholder Representative may, in its sole discretion,
determine to be necessary, desirable or appropriate, in such forms and containing such provisions
as the Stockholder Representative may, in its sole discretion, determine to be appropriate, in
performing its duties as contemplated by the Agreement, the Escrow Agreement and any other contract
or document executed in connection with the transactions thereby.
C. Parent and the Stockholder Representative deem it advisable to amend the Agreement to
provide for the matters hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements, covenants and other premises set
forth herein, the mutual benefits to be gained by the performance thereof, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted,
the parties hereto hereby agree as follows:
AGREEMENT
1. Buyout Payment.
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(a) Parent hereby agrees to pay the Company Securityholders ONE HUNDRED FIFTEEN MILLION U.S.
DOLLARS (U.S.$115,000,000) (the “Cash Payment”). Within five (5) Business Days of the Effective
Date, Parent will deposit with the Paying Agent a one-time payment, in immediately available funds,
in an amount equal to the Cash Payment, subject to Section 2(b) below.
(b) Parent hereby agrees to release the Indemnity Escrow Fund to the Company Securityholders.
Within five (5) Business Days of the Effective Date, the Parent and the Stockholder Representative
will jointly execute and deliver to the Escrow Agent a written notice instructing the Escrow Agent
to release to the Paying Agent the Indemnity Escrow Fund, consisting of THIRTY-FIVE MILLION U.S.
DOLLARS (U.S.$35,000,000) plus any interest accrued or income otherwise earned thereon as of the
Effective Date (collectively with the Cash Payment, the “Buyout Payment”).
2. Withholding.
(a) Paying Agent, on behalf of Parent, shall be entitled to deduct and withhold from the
Buyout Payment to any Company Securityholder such amounts as it is required to deduct and withhold
with respect to the making of such payment under applicable Law.
(b) Parent may withhold from the amount of the Buyout Payment it deposits with or releases to
Paying Agent, as applicable, pursuant to Section 1 above, such portion of the Buyout Payment as is
payable to holders of cancelled Company Stock Options with respect to whom Parent or any of its
Affiliates is obligated to collect withholding taxes, provided that, following the collection of
such applicable witholding taxes, Parent (or its Affiliates, as applicable) shall distribute to
such holders of cancelled Company Stock Options the amounts remaining after such taxes are
collected.
3. No Further Obligations.
(a) Notwithstanding anything to the contrary in the Agreement or any other agreement or
document delivered pursuant thereto or in connection therewith (collectively, the “Related
Agreements”), as of the Effective Date, no party to the Agreement shall have any further
obligations to observe, perform or abide by, any restriction, covenant, obligation, representation,
warranty or other provision contained in the Agreement or the Related Agreements, including but not
limited to obligations for payment or indemnification, except for (i) covenants and obligations
pursuant to Sections 2.3(c) and 6.5 of the Agreement, (ii) the Retention Bonus Plan (as defined
below), (iii) the Employment and Noncompetition Agreements, (iv) [**]. (v) [**], (vi) the Retention
Escrow Agreement, (vii) and the Paying Agent Agreement.
(b) As of the Effective Date, Parent agrees that any and all outstanding Notices of Claim are
hereby withdrawn and terminated and no Parent Indemnitee shall have any right to submit a Notice of
Claim for indemnification.
4. Release of Parent. This Amendment, together with the Buyout Payment, shall be and hereby is in
full satisfaction of any and all past, present and future payment obligations of the Parent under
the Agreement, including but not limited to any and all Milestone Payments under Section 2.10, and
IDP-111 Royalty Payments under Section 2.11. The Parent and its Affiliates, and the successors and
past, present and future assigns, directors, officers, employees, agents, attorneys and
representatives of Parent and each of its Affiliates of Parent hereby are fully and forever
released and absolutely, irrevocably and unconditionally discharged from any and all claims for
payment for any reason under the Agreement, except for any breach of any Parent representation,
warranty, agreement or obligation made solely under this Amendment and not under the Agreement by
Parent.
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5. Release of Company Securityholders. The Amendment shall be and hereby is in full satisfaction
of any and all past, present and future indemnification obligations of the Company Securityholders
under the Agreement, including but not limited to any all indemnification obligations under Article
9. The Company Securityholders, each other affiliate of a Company Securityholder, and the
successors and past, present and future assigns, directors, officers, employees, agents, attorneys
and representatives of each Company Securityholder and each other affiliate of a Company
Securityholder, hereby are fully and forever released and absolutely, irrevocably and
unconditionally discharged from any and all claims for indemnification under the Agreement, except
for any breach of any representation, warranty, agreement or obligation made solely under this
Amendment and not under the Agreement by any Company Securityholder or the Stockholder
Representative.
6. Civil Code §1542. Each of Parent and its Affiliates (each, a “Releasor”) (a) represents,
warrants and acknowledges that such Releasor has been fully advised by its attorney of the contents
of Section 1542 of the Civil Code of the State of California, and (b) hereby expressly waives the
benefits thereof and any rights such Releasor may have thereunder. Section 1542 of the Civil Code
of the State of California provides as follows:
“A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”
Each Releasor also hereby waives the benefits of, and any rights such Releasor may have under,
any statute or common law principle of similar effect in any jurisdiction.
7. Representation and Covenant of Stockholder Representative. The Stockholder Representative
hereby represents and warrants that, as of the Effective Date, (i) Exhibit A is a true and complete
copy of the 2008 Employee Retention Bonus Plan of the Company (“Retention Bonus Plan”), with a
Retention Pool (as defined in the Retention Bonus Plan) of $[**] (the “Maximum Aggregate Payment
Amount”); and (ii) Exhibit B sets forth a true and complete list of any and all Retention Bonuses
paid or payable to a Participant (each as defined in the Retention Bonus Plan) under the Retention
Bonus Plan, plus (A) an amount equal to $50,000 to be disbursed out of the Retention Escrow Amount
as additional consideration to Xxxxxx Xxxxxxx for his services as Stockholder Representative, as
approved by the Company Stockholders, (B) an amount equal to $40,000 to be disbursed out of the
Retention Escrow Amount as additional consideration to Xxxxxxx X. Xxxxxxxx, and (C) such amount as
shall be directed by the Stockholder Representative to pay the fees and costs of legal counsel for
the Company Securityholders and the costs and fees of the Paying Agent. The Stockholder
Representative further covenants that after the Effective Date, he shall not modify the Retention
Bonus Plan or take any other action, in either case that results in any obligation to pay Retention
Bonuses, fees and any other amounts related to or arising from the Retention Bonus Plan that, when
taken together with the obligations related to or arising from the Retention Bonus Plan as of the
Effective Date, would exceed the Maximum Aggregate Payment Amount.
8. Authority of Parent. The Parent has the requisite power and authority to enter into this
Amendment, to perform its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Amendment by the Parent and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary corporate action on the
part of the Parent. This Amendment has been duly executed and delivered by the Parent and,
assuming due authorization, execution and delivery by the Stockholder Representative, constitutes
the valid and binding obligation of the Parent.
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9. Authority of Stockholder Representative. The execution and delivery of this Amendment by the
Stockholder Representative and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the Company Stockholders. This Amendment
has been duly executed and delivered by the Stockholder Representative and, assuming due
authorization, execution and delivery by the Parent, constitutes the valid and binding obligation
of the Stockholder Representative.
10. Counterparts. This Amendment may be executed in one or more counterparts (including by
facsimile or portable document format (.PDF)), all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been signed by each of the
parties and delivered to the other party, it being understood that all parties need not sign the
same counterpart.
11. No Other Amendment. Except as modified by this Amendment, the Agreement shall remain in full
force and effect in all respects without any modification.
12. Severability. In the event that any provision of this Amendment or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable,
the remainder of this Amendment will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or unenforceable
provision of this Amendment with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such void or unenforceable provision.
13. Titles. All titles used in this Amendment are used for convenience only, do not form a part of
this Amendment and shall not affect in any way the meaning or interpretation of this Amendment
14. Governing Law. This Amendment shall be governed by and construed in accordance with the laws
of the State of Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
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IN WITNESS WHEREOF, Parent and the Stockholder Representative have executed, or caused this
Amendment to be executed, all as of the date first written above.
| PARENT: VALEANT PHARMACEUTICALS INTERNATIONAL |
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| By: | /s/ J. Xxxxxxx Xxxxxxx | |||
| Name: | J. Xxxxxxx Xxxxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| STOCKHOLDER REPRESENTATIVE: XXXXXX XXXXXXX In his Capacity as the Stockholder Representative on behalf of the Company Securityholders |
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| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxx Xxxxxxx | |||
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