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ALPHARMA INC | 3i Europartners Va LP, 3i Europartners Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i Pan European Buyouts 2006-08B LP | 3i Pan European Buyouts 2006-08C LP | Otdelholdco Inc | Target Companies. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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EXHIBIT
10.1
STOCK
AND ASSET PURCHASE AGREEMENT
AMONG
ALPHARMA
INC.,
ALPHARMA
(LUXEMBOURG) S.ÀR.L.,
ALPHARMA
BERMUDA G.P.,
ALPHARMA
INTERNATIONAL (LUXEMBOURG) S.ÀR.L.,
ALFANOR
7152 AS (UNDER CHANGE OF NAME TO OTNORBIDCO AS),
OTDENHOLDCO
APS
AND
OTDELHOLDCO
INC.
February
6, 2008
Page
Page
ii
Page
iii
EXHIBITS
Exhibit
A
— Form of Bill of Sale
Exhibit
B
— Form of Transition Services Agreement
STOCK AND ASSET PURCHASE
AGREEMENT (this “ Agreement
”) is entered into as of February 6, 2008, by and among
Alfanor 7152 AS (under change of name to Otnorbidco AS), a
private limited liability company organized under the laws of
Norway with Organization Number 992 106 034 (“
Otnorbidco
”), Otdelholdco Inc., a Delaware corporation (“
Otdelholdco
”), Otdenholdco ApS, a private limited company
organized under the laws of Denmark with Registration Number
31 08 95 06 (“ Otdenholdco
”, collectively, with Otnorbidco and Otdelholdco, the
“ Buyer
”), Alpharma Inc., a Delaware corporation (“
Parent
”), Alpharma (Luxembourg) S.àr.l., a private
limited liability company organized under the laws of
Luxembourg, Alpharma Bermuda G.P., an exempt general
partnership organized under the laws of Bermuda (with Parent
and Alpharma (Luxembourg) S.àr.l. (acting through its
Swiss finance branch), the “ Asset
Sellers ”), and Alpharma International
(Luxembourg) S.àr.l., a private limited liability
company organized under the laws of Luxembourg (the “
Share
Seller ”). Buyer, the Asset Sellers
and the Share Seller are referred to collectively herein as
the “ Parties
”.
Parent indirectly owns, and
the Share Seller directly owns, all of the outstanding
capital stock of the entities listed as Target Companies in
Section 4(b) of the Disclosure Schedule (the “
Target
Companies ”), except as disclosed in Section
4(b) of the Disclosure Schedule. Parent indirectly
owns, and the Target Companies directly or indirectly own,
all of the outstanding capital stock or equity interests (as
the case may be) of the entities listed as Target
Subsidiaries in Section 4(b) of the Disclosure Schedule (the
“ Target
Subsidiaries ”), except as disclosed in Section
4(b) of the Disclosure Schedule.
This Agreement contemplates
a transaction (the “ Transaction
”) in which (i) Otnorbidco will purchase from the
Share Seller (and any other entity which Parent may designate
as an additional Share Seller as a result of the Pre-Closing
Restructuring), and the Share Seller (and any other entity
which Parent may designate as an additional Share Seller as a
result of the Pre-Closing Restructuring) will sell to
Otnorbidco, all of the outstanding capital stock of the
Target Companies in return for cash and (ii) Otdelholdco
will purchase from Asset Sellers, and Asset Sellers will sell
to Otdelholdco, certain assets of Asset Sellers in return for
cash and the assumption of certain liabilities.
3i Europartners Va LP, 3i
Europartners Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i
Pan European Buyouts 2006-08B LP and 3i Pan European Buyouts
2006-08C LP (collectively, the “ Sponsor
Funds ”) and Buyer have executed and delivered
to the Sellers, in connection with the execution and delivery
of this Agreement, a commitment letter dated as of the date
of this Agreement pursuant to which the Sponsor Funds have
issued equity commitments to Buyer, the proceeds of which
will be used to pay a portion of the Purchase Price and the
fees and expenses relating to the transactions contemplated
by this Agreement (such commitment letter is referred to as
the “ Equity
Financing Commitments ”).
Certain
financial institutions have executed and delivered to Buyer,
and Buyer has delivered to Parent in connection with the
execution and delivery of this Agreement, a commitment letter
dated January 23, 2008, as amended by the letter dated
February 6, 2008 (the “ Commitment
Letter ”) (which includes an executed and
effective Interim Loan Agreement, as amended by the letter
dated February 6, 2008 (the “ Interim Loan
Agreement ”)), pursuant to which such financial
institutions have issued lending commitments to Buyer, the
proceeds of which will be used to pay a portion of the
Purchase Price and the fees and expenses relating to the
transactions contemplated by this Agreement (the Commitment
Letter, together with the Interim Loan Agreement and the
condition satisfaction letter dated February 6, 2008, is
referred to as the “ Debt Financing
Commitments ”; the Debt Financing Commitments and
the Equity Financing Commitments are referred to as the
“ Financing
Commitments ”).
NOW, THEREFORE, in
consideration of the premises and the mutual promises herein
made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree
as follows.
“ Accounting
Firm ” has the meaning set forth in
Section 2(g)(iii) below.
“ Acquired
Assets ” has the meaning set forth in Section
1(A) of the Disclosure Schedule.
“ Affiliate
” means, with respect to any Person, another Person
that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, such Person.
“ Agreement
” has the meaning set forth in the preface
above.
“ AH Competitive
Activities ” has the meaning set forth in
Section 6(e)(ii) below.
“ Alpharma Credit
Agreement Lien ” means any security interest,
pledge or other Lien in existence immediately prior to the
Closing under the Credit Agreement as amended and restated as
of March 10, 2006, by and among Parent and certain of
its Subsidiaries and Bank of America, N.A., as Administrative
Agent, and the lenders party thereto from time to time, as
amended, supplemented or otherwise modified from time to
time, with respect to the Acquired Assets, Target Shares,
shares of the Target Subsidiaries or any assets of the Target
Companies or the Target Subsidiaries.
“ Alpharma Global
Insurance Program ” means the portfolio of
property, casualty and executive liability insurance policies
of Parent and its Subsidiaries with respect to the operations
of Parent and its Subsidiaries which are negotiated and
administered by Parent’s corporate risk management
department (including the Global Liability, Global Property,
Global Transit, Surety, Director’s and Officer’s
Liability and other executive management liabilities
policies, and the U.S. Casualty program).
“
Allocation
” has the meaning set forth in Section 9(l)(i)
below.
“ Allocation
Schedule ” has the meaning set forth in
Section 9(l)(ii) below.
“ Alternative
Structuring ” has the meaning set forth in
Section 5(a) of the Disclosure Schedule .
“ Ancillary
Agreements ” means the other agreements and
instruments (including any foreign transfer agreements which
shall conform to the provisions hereof except as may be
necessary to comply with applicable Law) executed and
delivered in connection with the transactions contemplated by
this Agreement.
“ API Competitive
Activities ” has the meaning set forth in
Section 6(e)(i) below.
“ Asset
Sellers ” has the meaning set forth in the
preface above.
“ Assumed
Employees ” shall have the meaning set forth in
Section 6(g)(ii) below.
“ Assumed
Intercompany Receivables ” means the receivables
described in Section 1(B) of the Disclosure Schedule
that are owed by the Target Companies or Target Subsidiaries
to the Asset Sellers.
“ Assumed
Liabilities ” has the meaning set forth in
Section 1(C) of the Disclosure Schedule.
“ BRO
” has the meaning set forth in Section 6(k)
below.
“
Bonus
Obligations ” means any cash bonus payment
accrued in respect of Employees of the Business under the
short-term incentive plan of Parent for calendar year
2007.
“ Business
” means (A) the business of Parent and certain of
its Subsidiaries as of the Closing Date that develops,
manufactures and markets active pharmaceutical ingredients
which are sold to third parties that formulate and
manufacture finished dose human pharmaceutical products
comprised of such active pharmaceutical ingredients and
(B) the business of the Target Companies and the Target
Subsidiaries as of the Closing Date that develops,
manufactures and markets the finished pharmaceuticals set
forth on Section 1(D) of the Disclosure
Schedule.
“ Business
Contracts ” has the meaning set forth in Section
1(A) of the Disclosure Schedule.
“ Buyer
” has the meaning set forth in the preface
above.
“ Buyer
Entities ” means, as of and from the Closing
Date, Buyer and its Affiliates and the Target Companies and
Target Subsidiaries.
“ Buyer
Indemnitee ” has the meaning set forth in
Section 8(b) below.
“ Chinese
Sub ” means Alpharma (Taizhou) Pharmaceuticals
Co., Ltd.
“ Closing
” has the meaning set forth in Section 2(e)
below.
“ Closing
Date ” has the meaning set forth in
Section 2(e) below.
“ Closing Net
Cash Balance ” has the meaning set forth in
Section 2(g)(i) below.
“ Closing Working
Capital ” has the meaning set forth in
Section 2(g)(i) below.
“ Code
” means the United States Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder
by the United States Department of Treasury from time to
time.
“ Collective
Bargaining Agreements ” has the meaning set
forth in Section 4(p)(i) below.
“ Commitment
Letter ” has the meaning set forth in the
preface above.
“ Confidential
Business Information ” has the meaning set forth
in Section 6(i) below.
“ Confidentiality
Agreement ” has the meaning set forth in
Section 5(e) below.
“ Controlling
Party ” has the meaning set forth in
Section 9(f)(iii) below.
“ Debt
Financing ” means the debt financing provided to
Buyer or its designees pursuant to the Debt Financing
Commitments (or any replacement commitments obtained by Buyer
in compliance with this Agreement).
“ Debt Financing
Commitments ” has the meaning set forth in the
preface above.
“ Disclosure
Schedule ” has the meaning set forth in
Section 3(a) below.
“ Early
Retirement Obligations ” means the payment
obligations in respect of the letter agreements issued to
Employees of the Business and listed in
Section 6(g)(xi)(D) of the Disclosure
Schedule.
“ Employee
Benefit Plan ” means any “employee benefit
plan” (as such term is defined in ERISA
Section 3(3)) and any other plan, program, arrangement,
practice or agreement providing for compensation, severance,
termination pay, deferred compensation, retirement, pension,
bonus awards, performance awards, retention or other change
in control awards, incentive compensation, stock or
stock-related awards, fringe
benefits, social insurance or
other material employee benefits of any kind, whether written
or unwritten or otherwise, funded or unfunded.
“ Employees of
the Business ” means (i) all Persons
employed on the Closing Date by the Target Companies and the
Target Subsidiaries and (ii) those employees of Parent
and its Subsidiaries who on the Closing Date work in the
operation of the Business, including in all cases, any
employees who as of the Closing Date are on approved leave of
absence (including medical leave and short-term or long-term
disability) or vacation; provided
that such Person returns to work within 180 days after
the Closing or is otherwise entitled to reinstatement under
any applicable Law upon presenting themselves for duty to the
Business.
“ Environmental
Claim ” mean any administrative, regulatory or
judicial action, suit, order, demand, claim, proceeding or
written notice of noncompliance or violation by or from any
Person alleging liability arising out of, based on or
resulting from (a) any past or present release or threatened
release of, or exposure to, any Hazardous Substances at any
location or (b) the failure to comply with any Environmental
Law.
“ Environmental
Laws ” means any applicable Law or Judgment
issued, promulgated or entered into, by or with any
Governmental Entity relating to pollution, the protection of
the environment (including ambient air, surface water,
groundwater, soils, land surface or subsurface strata) or
preservation or reclamation of natural resources, including
Laws relating to the use, generation, management, handling,
transport, treatment, disposal, storage, release or
threatened release of hazardous or toxic materials or
wastes.
“ Environmental
Permits ” has the meaning set forth in
Section 4(o)(ii) below.
“ Equity
Financing ” means the equity financing to be
provided to Buyer or its designees pursuant to the Equity
Financing Commitments (or any replacement commitments
obtained by Buyer in compliance with this
Agreement).
“ Equity
Financing Commitments ” has the meaning set
forth in the preface above.
“ ERISA
” means the Employee Retirement Income Security Act of
1974, as amended.
“
Estimated
Closing Net Cash Balance ” shall have the meaning
set forth in Section 2(b)(ii).
“ Estimated
Closing Working Capital ” shall have the meaning
set forth in Section 2(b)(iii).
“ Exception
Products ” has the meaning set forth in
Section 6(e)(ii) below.
\
“ Exception
Product Sales Cap ” has the meaning set forth in
Section 6(e)(ii) below.
“ Excluded
Assets ” has the meaning set forth in Section
1(E) of the Disclosure Schedule.
“ Excluded
Liabilities ” has the meaning set forth in
Section 1(F) of the Disclosure Schedule.
“ Extended
Outside Date ” has the meaning set forth in
Section 10(a)(i)(D).
“
FDA
” means the United States Food and Drug
Administration, and any successor agency or entity thereto
that may be established hereafter.
“ FDA Act
” means the Federal Food, Drug, and Cosmetic Act, 21
U.S.C. Section 301, et seq.
, as amended.
“ Financial
Statements ” has the meaning set forth in
Section 4(f)(i) below.
“ Financing
” means the Debt Financing and the Equity
Financing.
“ Financing
Commitments ” has the meaning set forth in the
preface above.
“ Foreign Merger
Control Laws ” has the meaning set forth in
Section 3(a)(iv) below.
“ FX
Amount ” has the meaning set forth in
Section 2(g)(ii) below.
“ FX
Contracts ” has the meaning set forth in
Section 2(g)(ii) below.
“ FX Notice of
Disagreement ” has the meaning set forth in
Section 2(g)(iii) below.
“ FX
Statement ” has the meaning set forth in
Section 2(g)(ii) below.
“ GAAP
” means generally accepted accounting principles in the
United States.
“ Governmental
Entity ” means any domestic or foreign
government, court, administrative or regulatory body or
agency or other governmental authority.
“ Hart-Scott-Rodino
Act ” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
“ Hazardous
Substance ” means any pollutant, contaminant,
chemical, petroleum or any fraction thereof, asbestos or
asbestos-containing-material, polychlorinated biphenyls, or
toxic, infectious, biohazardous or otherwise hazardous
substance, material or waste, including all substances,
materials or wastes (whether in the form of solid, liquid,
gas or vapor) defined as a “hazardous substance”,
a “toxic
substance” or with words
of similar import by, or regulated or giving rise to liability
under, any Environmental Law.
“ Income
Tax ” means any U.S. federal, state or
local, or non-U.S. Tax measured by (or imposed on) net income
and any interest, penalty, fine, charge, or addition thereto,
whether disputed or not.
“ Income Tax
Return ” means any Tax Return relating to Income
Taxes.
“ Indebtedness
” means, of any Person at any date, without
duplication, (a) all indebtedness of such Person for
borrowed money (other than accounts payable for goods and
services incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any
other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all
liabilities in respect of capital and finance leases and
(d) all obligations of such Person in respect of letters
of credit and acceptances for instruments serving a similar
function) issued or created for the account of such
Person.
“ Indemnified
Party ” has the meaning set forth in
Section 8(d)(i)(A) below.
“ Indemnifying
Party ” has the meaning set forth in
Section 8(d)(i)(A) below.
“ Initial Outside
Date ” has the meaning set forth in Section
10(a)(i)(D).
“ Insurance
” means all insurance benefits, including rights and
proceeds, resulting from any liabilities of any of the Asset
Sellers or any of the Target Companies or Target Subsidiaries
arising out of any personal injury and/or death or damage to
property relating to or arising in connection with Products
developed, manufactured, marketed, distributed, sold or
otherwise provided by, or on behalf of, any of the Asset
Sellers, the Target Companies or the Target Subsidiaries that
Seller has Knowledge of prior to the Closing.
“ Insurance
Policies ” has the meaning set forth in
Section 4(q) below.
“ Intellectual
Property ” has the meaning set forth in
Section 4(k)(iii) below.
“ Intercompany
Assumed Agreement ” shall have the meaning set
forth in Section 4(t) below.
“ Intercompany
Payables ” means obligations owed by an Asset
Seller (primarily relating to the Business) or a Target
Company or Target Subsidiary to Parent or any of its
Affiliates, other than an Assumed Intercompany
Receivable.
“ Intercompany
Receivables ” means obligations owed to an Asset
Seller (primarily relating to the Business) or a Target
Company or Target Subsidiary by Parent or any of its
Affiliates, other than an Assumed Intercompany
Receivable.
“ Interim Loan
Agreement ” has the meaning set forth in the
preface above.
“ Inventory
” means all finished goods, work in process and raw
materials of the Business.
“ Judgment
” means any judgment, order, decision, writ,
injunction, legally binding agreement with a Governmental
Entity, stipulation, decree or similar legal
restraint.
“ Knowledge
” means, with respect to Parent, the actual knowledge
after reasonable inquiry of Donald Buzinkai, Carl-Aake
Carlsson, Jeffrey Campbell, Mikkel Lyager-Olsen, Thomas J.
Spellman III, Peter Watts, Frode Johansen, Stig Jarle
Pettersen, Maria Gobbi, Hans Nielsen, Steen Rasmussen and
Torben Jung Laursen.
“ Law
” means any statute, law, ordinance, rule, regulation,
order or other binding directive issued by any Governmental
Entity.
“ Leased Real
Property ” means all leasehold or subleasehold
estates and other rights to use or occupy any land,
buildings, structures, improvements, fixtures, or other
interest in real property that is primarily used in the
Business.
“ Leases
” means all leases, subleases, licenses and occupancy
agreements, including all amendments, extensions, renewals,
guaranties, and other agreements with respect thereto,
pursuant to which an Asset Seller (to the extent primarily
used in the Business) or any of the Target Companies or any
of the Target Subsidiaries holds any material Leased Real
Property.
“ Lien
” means any mortgage, pledge, lien, security interest,
easement, adverse claim, right of first refusal, or similar
encumbrance, restriction or limitation, other than
(i) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting through appropriate
proceedings and (ii) restrictions under the Securities
Act and state securities Laws regarding the transfer of
securities.
“ Losses
” means all loss, liability, claim, damage or expense,
including reasonable legal fees, costs and expenses, whether
or not relating to Third Party Claims, incurred in the
investigation or defense of any of the same.
“ Manufacturing
Facilities ” means the facilities of the Target
Companies or the Target Subsidiaries located in Copenhagen,
Denmark; Oslo, Norway; Budapest, Hungary; and Taizhou,
People’s Republic of China.
“ Marketing
Material ” has the meaning set forth in
Section 6(f) below.
“ Material
Adverse Effect ” or “ Material
Adverse Change ” means any effect or change that
is or would reasonably be expected to be materially adverse
to the business, assets, results of operations or financial
condition of the Business, taken as a whole; provided
that none of the following shall be deemed to constitute, and
none of the following shall be taken into account in
determining whether there has been, a Material
Adverse
Effect or Material Adverse Change: any adverse
change or effect arising from or relating to (1) the
economy in general, (2) the economic, business, financial
or regulatory environment generally affecting the industry in
which the Business operates, (3) an act of terrorism or
an outbreak or escalation of hostilities or war (whether
declared or not declared) or any natural disasters or any
national or international calamity or crisis, except to the
extent such effect involves the properties or assets of the
Business, (4) changes in applicable Law or GAAP or the
enforcement thereof after the date of this Agreement,
(5) the failure of the Business to meet projections or
forecasts, in and of itself (for the avoidance of doubt, any
underlying cause for any such failure shall not be excluded by
this clause (5)), (6) the announcement or pendency
of the Transaction or this Agreement or the performance of and
compliance with the terms of this Agreement, including any
loss of employees, any cancellation of or delay in customer
orders or any disruption in supplier, distributor, partner or
similar relationships, (7) any labor strikes, (8)
currency fluctuations or (9) any change or fluctuations in
Parent’s share price in and of itself (for the avoidance
of doubt, any underlying cause for any such change or
fluctuation arising from or relating to the business, assets,
results of operations or financial condition of the Business
shall not be excluded from this clause (9)); except in the
case of clauses (1) and (2) to the extent that such effect has
a materially disproportionate impact on the Business relative
to other participants in the industry in which the Business
operates.
“ Material
Contract ” has the meaning set forth in
Section 4(l) below.
“ Material
Intellectual Property ” has the meaning set
forth in Section 4(k)(i) below.
“ Material
Technology ” has the meaning set forth in
Section 4(k)(ii) below.
“ Maximum Working
Capital Amount ” has the meaning set forth in
Section 2(b)(iii) below.
“ Minimum Working
Capital Amount ” has the meaning set forth in
Section 2(b)(iv) below.
“ Negative
Initial Adjustment ” has the meaning set forth
in Section 2(b)(iv) below.
“ Net Cash
Balance ” has the meaning set forth in
Section 2(g)(v) below.
“ Notice of
Disagreement ” has the meaning set forth in
Section 2(g)(iii) below.
“ Noncontrolling
Party ” has the meaning set forth in
Section 9(f)(iv) below.
“ Non-Income
Taxes ” means Taxes other than Income
Taxes.
“ Otdelholdco
” has the meaning set forth in the preface
above.
“ Otdenholdco
” has the meaning set forth in the preface
above.
“ Otnorbidco
” has the meaning set forth in the preface
above.
“ Owned Real
Property ” means all land, together with all
buildings, structures, improvements, and fixtures located
thereon, and all easements and other rights and interests
appurtenant thereto, owned by an Asset Seller or any of the
Target Companies or the Target Subsidiaries and primarily
used in the Business, other than any Retained Real
Property.
“ Parent
” has the meaning set forth in the preface
above.
“ Party
” has the meaning set forth in the preface
above.
“ Pension
Obligations ” means the unfunded portion of the
pension obligations of the Target Companies and Target
Subsidiaries calculated on a projected benefit obligation
basis; provided
, that for the purposes of determining the amount of such
liabilities as of any date, the methods and assumptions used
in calculating such amount shall be the same methods and
assumptions employed by Parent in preparing Parent’s
audited financial statements (including the footnotes
thereto) as of December 31, 2007.
“ Permitted
Liens ” means (i) such Liens as are set
forth in Section 1(G) of the Disclosure Schedule (all of
which shall be discharged at or prior to Closing),
(ii) mechanics’, carriers’, workmen’s,
repairmen’s or other like Liens arising or incurred in
the ordinary course of business, Liens arising under original
purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course
of business and Liens for Taxes, (iii) other
imperfections of title or encumbrances, if any, that,
individually or in the aggregate, do not impair, and are not
reasonably likely to impair, the continued use and operation
of the assets to which they relate in the conduct of the
Business as currently conducted, (iv) leases, subleases
and similar agreements set forth on Section 4(j) of the
Disclosure Schedule or that may be entered into
consistent with Section 5(d) of the Disclosure Schedule,
(v) easements, covenants, rights-of-way and other
similar restrictions of record and (vi) (A) zoning,
building and other similar restrictions and (B) Liens
that have been placed by any developer, landlord or other
third party on property over which Parent or one of its
Subsidiaries has easement rights or on any Leased Real
Property and subordination or similar agreements relating
thereto.
“ Person
” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated
organization, any other business entity or a Governmental
Entity (or any department, agency, or political subdivision
thereof).
“ Positive
Initial Adjustment ” has the meaning set forth
in Section 2(b)(iii) below.
“ Post-Closing
Tax Period ” means all Tax periods beginning on
or after the Closing Date and the portion of any Straddle
Period beginning on and including such Closing
Date.
“ Pre-Closing
Restructuring ” has the meaning set forth in
Section 5(a) of the Disclosure Schedule .
“ Pre-Closing
Restructuring Denial ” has the meaning set forth
in Section 5(a) of the Disclosure Schedule .
“ Pre-Closing Tax
Period ” means all Tax periods ending before the
Closing Date and the portion of any Straddle Period ending
before and excluding such Closing Date.
“ Preliminary
Purchase Price ” has the meaning set forth in
Section 2(b) below.
“ Products
” means the products of the Business for which a filing
or submission has been made to a Regulatory Authority or an
approval or certification has been received from a Regulatory
Authority.
“ Property
Taxes ” has the meaning set forth in
Section 9(d)(i) below.
“ Proposed
Allocation ” has the meaning set forth in
Section 9(l)(ii) below.
“ Purchase
Price ” has the meaning set forth in
Section 2(g)(iv) below.
“ Quotaholders
Agreement ” has the meaning set forth in Section
5(a) of the Disclosure Schedule .
“ Real
Property ” means, collectively, the Leased Real
Property and the Owned Real Property.
“ Records
” has the meaning set forth in Section 1(A) of the
Disclosure Schedule.
“ Regulatory
Authority ” has the meaning set forth in
Section 4(s)(i) below.
“ Required
Financial Information ” means financial and
other information regarding the Business of the type and in
the form customarily included in confidential information
memoranda used to syndicate bank credit facilities similar to
the Debt Financing and customary “know your
customer” and similar requirements; provided
, however
, that Required Financial Information shall not include any
audited financial information.
“ Restricted
Assets ” shall have the meaning set forth in
Section 2(d).
“ Retained Real
Property ” means the following facilities used
in the Business, which are owned by Parent or its Affiliates
and shall not be transferred to
Buyer: Parent’s Warehouse and Distribution
Facility located at 400 State Street, Chicago Heights,
Illinois 60411, in which Parent’s animal health
division performs certain services for the
Business.
“ Retention
Arrangements ” means those letter agreements
issued to Employees of the Business and listed in Section
6(g)(xi)(A) of the Disclosure Schedule.
“ Retention
Threshold ” has the meaning set forth in Section
6(g)(xi)(A) of the Disclosure Schedule.
“ SEC
” has the meaning set forth in Section 3(a)
below.
“ Securities
Act ” means the Securities Act of 1933, as
amended.
“ Securities
Exchange Act ” means the Securities Exchange Act
of 1934, as amended.
“ Seller Employee
Benefit Plan ” means each Employee Benefit Plan
that (a) any of the Asset Sellers or the Target Companies or
the Target Subsidiaries maintains or which any of the Asset
Sellers or the Target Companies or the Target Subsidiaries
participates in or to which they contribute and (b) covers
any Employees of the Business or their
beneficiaries.
“ Seller
Indemnitee ” has the meaning set forth in
Section 8(c) below.
“ Seller
Name ” has the meaning set forth in
Section 6(f) below.
“ Sellers
” means the Asset Sellers and the Share Seller,
collectively.
“ September
Financial Statements ” has the meaning set forth
in Section 4(f)(i) below.
“ Severance
Obligations ” means the unpaid portion of the
liabilities of the Target Companies and Target Subsidiaries
under the contracts listed in Section 1(H) of the Disclosure
Schedule.
“ Share
Seller ” has the meaning set forth in the
preface above.
“ Sponsor
Funds ” has the meaning set forth in the preface
above.
“ Statement
” has the meaning set forth in Section 2(g)(i)
below.
“ Straddle
Period ” has the meaning set forth in
Section 9(d) below.
“ Subsidiary
” means, with respect to any Person, any corporation,
limited liability company, partnership, association, or other
business entity of which (i) if a corporation, a
majority of the total voting power of shares of stock
entitled (without
regard
to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a
combination thereof or (ii) if a limited liability
company, partnership, association, or other business entity
(other than a corporation), a majority of the partnership or
other similar ownership interests thereof is at the time owned
or controlled, directly or indirectly, by that Person or one
or more Subsidiaries of that Person or a combination thereof
and for this purpose, a Person or Persons own a majority
ownership interest in such a business entity (other than a
corporation) if such Person or Persons shall be allocated a
majority of such business entity’s gains or losses or
shall be or control any managing director or general partner
of such business entity (other than a
corporation). The term “ Subsidiary
” shall include all Subsidiaries of such
Subsidiary.
“ Target
Companies ” has the meaning set forth in the
preface above.
“ Target Company
Benefit Plan ” shall have the meaning set forth
in Section 4(n)(i) below.
“ Target Company
Severance Plans ” shall have the meaning set
forth in Section 6(g)(v) below.
“ Target
Shares ” means the shares of capital stock of
the Target Companies.
“ Target
Subsidiaries ” has the meaning set forth in the
preface above.
“ Tax
” or “ Taxes
” means any U.S. federal, state or local, or
non-U.S. tax, including taxes with respect to income,
profits, gains, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code
Section 59A), capital duty, customs duties, capital
stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, duties resulting
from liability assessments by a Taxing Authority or other
tax, including any interest, penalty, or addition
thereto.
“ Tax Indemnified
Party ” has the meaning set forth in
Section 9(f)(i) below.
“ Tax
Indemnifying Party ” has the meaning set forth
in Section 9(f)(i) below.
“ Tax
Proceeding ” has the meaning set forth in
Section 9(f)(i) below.
“ Tax
Return ” means any return, declaration, report,
claim for refund, or information return or statement relating
to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
“ Taxing
Authority ” means any Governmental Entity
exercising any authority to impose, regulate or administer
the imposition of Taxes.
“ Technology
” has the meaning set forth in Section 4(k)(iv)
below.
“ Termination
Fee ” has the meaning set forth in Section 1(I)
of the Disclosure Schedule .
“ Third Party
Claim ” has the meaning set forth in
Section 8(d)(i)(A) below.
“ TOGC
” means the transfer by any Asset Seller of assets
within Article 5(8) of European Union Directive 77/388
which is as a consequence of the relevant national Law not
subject to VAT.
“ Transaction
” has the meaning set forth in the preface
above.
“ Transfer
Taxes ” has the meaning set forth in
Section 9(k) below, and for the avoidance of doubt does
not include VAT.
“ Transferred
Employees ” means those Employees of the
Business who, as of the Closing Date, remain or become
employees of the Buyer Entities whether by operation of Law
or by acceptance of the Buyer Entities’ offer of
employment pursuant to Section 6(g).
“ Transition
Services Agreement ” shall have the meaning set
forth in Section 5(j).
“ United
States ” or “ U.S.
” means the United States of America and its
territories and possessions.
“ VAT
” means value added Tax applied by any jurisdiction
pursuant to European Union Directives 67/227 and 77/388, as
amended or any similar value-added Tax imposed by a
jurisdiction outside the European Union.
“
Working
Capital ” has the meaning set forth in
Section 2(g)(v) below.
“ Working Capital
Principles ” has the meaning set forth in
Section 2(g)(v) below.
“ Working Capital
Schedule ” has the meaning set forth in
Section 2(g)(v) below.
(a) Basic
Transaction .
On and subject to the terms and conditions of this
Agreement, for the consideration specified below in
Section 2(b), (i) Otnorbidco agrees to purchase from the Share
Seller (and any other entity which Parent may designate as
an
additional Share Seller as a
result of the Pre-Closing Restructuring), and the Share Seller
agrees to sell to Otnorbidco (and Parent agrees to cause any
other entity that is designated by Parent as an additional
Share Seller as a result of the Pre-Closing Restructuring to
sell), all of the Target Shares free and clear of all Liens,
(ii) Otnorbidco agrees to purchase from the Asset
Sellers, and the Asset Sellers agree to sell to Otnorbidco,
the Assumed Intercompany Receivables free and clear of all
Liens (other than Permitted Liens), (iii) Otdelholdco agrees
to purchase from the Asset Sellers, and the Asset Sellers
agree to sell to Otdelholdco, the Acquired Assets (other than
the Acquired Intercompany Receivables) free and clear of all
Liens (other than Permitted Liens), and (iv) Buyer agrees
to assume and become responsible for all of the Assumed
Liabilities at the Closing, without recourse to Parent or its
Subsidiaries (other than the Target Companies or Target
Subsidiaries), except as otherwise expressly set forth in this
Agreement, and thereafter to pay, perform and discharge when
due, the Assumed Liabilities.
(b) Preliminary Purchase
Price. Buyer agrees to pay to the Asset
Sellers and the Share Seller (and any other entity which Parent may
designate as an additional Share Seller as a result of the
Pre-Closing Restructuring), at the Closing, by delivery of cash
payable by wire transfer or delivery of other immediately available
funds, an amount equal to:
(i) $395,000,000,
(ii) plus,
if the estimate of the Net Cash Balance as of the close of
business on the last business day prior to the Closing Date
prepared by Parent and delivered to Buyer at least
three business days prior to the Closing Date (the
“ Estimated
Closing Net Cash Balance ”) is positive, an
amount equal to the Estimated Closing Net Cash Balance, or
minus, if the Estimated Closing Net Cash Balance is negative,
an amount equal to the Estimated Closing Net Cash
Balance,
(iii) plus,
if the estimate of the Working Capital as of the close of
business on the last business day prior to the Closing Date
prepared by Parent and delivered to Buyer at least
three business days prior to the Closing Date (the
“ Estimated
Closing Working Capital ”) exceeds $41,600,000
(the “ Maximum Working
Capital Amount ”), the amount by which the
Estimated Closing Working Capital exceeds the Maximum Working
Capital Amount (such amount, if any, the “ Positive Initial
Adjustment ”),
(iv) minus,
if the Estimated Closing Working Capital is less than
$39,600,000
(the “ Minimum Working
Capital Amount ”), the amount by which the
Minimum Working Capital Amount exceeds the Estimated Closing
Working Capital (such amount, if any, the “ Negative Initial
Adjustment ”),
(such
amount as adjusted, the “ Preliminary
Purchase Price ”) allocated among the Target
Shares and the Acquired Assets in accordance with the
Allocation (set forth in Section 9(l) below) if the
Allocation is completed on or prior to the Closing Date. If
the Allocation is not completed on the Closing Date, the
Preliminary Purchase Price shall be paid in such amounts and
to such accounts as the Asset Sellers and the Share Seller
(and
any other entity which Parent may
designate as an additional Share Seller as a result of the
Pre-Closing Restructuring) shall direct. The
Preliminary Purchase Price shall be subject to post-Closing
adjustment as set forth below in Section 2(g).
(c) Pre-Closing
Transfers. Upon the terms and subject to
the conditions set forth in this Agreement, prior to the Closing,
Parent shall, and shall cause its Subsidiaries (including the
Target Companies and Target Subsidiaries) to, make such
contributions, transfers, assignments and acceptances, such that,
upon the consummation of such contributions, transfers, assignments
and acceptances, Parent or its designees shall own the Excluded
Assets and shall be responsible for the Excluded Liabilities,
without further recourse to any Target Company or Target
Subsidiary, other than as contemplated by
Section 6(a). In furtherance of the foregoing,
(i) Parent shall retain, and neither Buyer nor any Target
Company or Target Subsidiary shall acquire, and no Target Company
or Target Subsidiary shall retain, any interest in the Excluded
Assets and (ii) Parent shall retain, and neither Buyer nor any
Target Company or Target Subsidiary shall assume, and no Target
Company or Target Subsidiary shall retain, any Excluded Liability,
in each case, other than as contemplated by
Section 6(a).
(d) Restricted
Assets. Notwithstanding any other provision
in this Agreement to the contrary, this Agreement shall not
constitute an agreement to assign or transfer any interest in any
asset, claim, right or benefit the assignment or transfer of which
is otherwise contemplated by this Agreement if such assignment or
transfer (or attempt to make such an assignment or transfer)
without the consent or approval of a third party would constitute a
breach or other contravention of the rights of such third party, or
affect adversely the rights of any Party or their Affiliates
thereunder (such assets being collectively referred to herein as
“ Restricted
Assets ”); and any assignment or transfer of a
Restricted Asset shall be made subject to such consent or approval
being obtained. If any such consent or approval is not
obtained prior to the Closing, (i) Parent shall continue, upon
request of Buyer, to use its reasonable best efforts to cooperate
with Buyer in attempting to obtain any such consent or approval and
(ii) to the extent practicable, the Buyer and Parent agree to
negotiate in good faith with respect to alternative arrangements
(such as a license, sublease or operating agreement) until such
time as such consent or approval has been obtained which result in
Buyer or its Affiliates receiving all the benefits and bearing all
the costs, liabilities and burdens with respect to any such
Restricted Asset; provided that
Buyer shall pay or satisfy all the reasonable and documented
out-of-pocket costs, expenses, obligations and liabilities incurred
by Parent or its Affiliates in connection with any such alternative
arrangements; provided
further that Parent shall have no obligation to pay money or
make any concessions to obtain consents. Nothing in this
Section 2(d) shall be deemed a waiver by Buyer to receive an
effective assignment of the Acquired Assets upon the receipt of any
such consent or approval nor shall any of the Restricted Assets be
deemed Excluded Assets for any other purposes
hereunder.
(e) The Closing.
The closing of the transactions contemplated by
this Agreement (the “ Closing
”) shall take place at the offices of Cravath, Swaine
& Moore LLP in New York, New York commencing at 10:00 a.m.
local time on the fifth business day following the satisfaction or
waiver of all conditions to the obligations of the
Parties
to consummate the transactions
contemplated hereby (other than conditions with respect to
actions the respective Parties will take at the Closing
itself) or such other date as Buyer and Parent may mutually
determine (the “ Closing
Date ”). The Closing shall be deemed
to occur and be effective in each relevant jurisdiction as of
the close of business on the last business day prior to the
Closing Date in each such jurisdiction and Buyer will be
deemed to have acquired all the Acquired Assets and Target
Shares and assumed all the Assumed Liabilities as of such
time.
(f) Deliveries at
Closing. At the Closing, (i) Parent
will deliver to Buyer the certificates referred to in
Section 7(a) below, (ii) Buyer will deliver to Parent the
certificates referred to in Section 7(b) below,
(iii) Parent will deliver to Buyer stock certificates
representing all of the Target Shares, endorsed in blank or
accompanied by duly executed assignment documents or a certified
true copy of the shareholders register evidencing the registered
transfer of the Target Shares and such other documents as may be
required to evidence the transfer of the Target Shares by
applicable Law, (iv) Parent or Parent’s Subsidiaries
shall execute, acknowledge (if appropriate), and deliver to Buyer
(A) assignments in reasonable form, including a Bill of Sale
in the form attached hereto as Exhibit A and (B) such
other documents as Buyer and its counsel may reasonably request to
demonstrate satisfaction of the conditions and compliance with the
covenants set forth in this Agreement, including the sale,
transfer, delivery and assumption of the Target Shares, the
Acquired Assets and the Assumed Liabilities to or by Buyer or its
designees; (v) Parent shall deliver to Buyer the written
resignation of each member of the Board of Directors, Board of
Managers or the equivalent governing body, as applicable, of each
of the Target Companies and the Target Subsidiaries;
(vi) Buyer will execute, acknowledge (if appropriate), and
deliver to Parent (A) a Bill of Sale in the form attached
hereto as Exhibit A and (B) such other documents as
Parent and its counsel may reasonably request to demonstrate
satisfaction of the conditions and compliance with the covenants
set forth in this Agreement, including the sale, transfer, delivery
and assumption of the Target Shares, the Acquired Assets and the
Assumed Liabilities to or by Buyer or its designees; and
(vii) Buyer will deliver to Parent the consideration specified
in Section 2(b) above.
(g) Post-Closing Purchase
Price Adjustment. (i) Within
60 days after the Closing Date, Buyer shall prepare and
deliver to Seller a statement (the “ Statement
”) setting forth (A) an unaudited balance sheet of the
Business as of the close of Business on the last business day prior
to the Closing Date, (B) the Working Capital as of the close of
business on the last business day prior to the Closing Date (the
“ Closing Working
Capital ”) and (C) the Net Cash Balance of the
Business as of the close of business on the last business day prior
to the Closing Date (the “ Closing Net Cash
Balance ”).
(ii) Parent
shall use reasonable best efforts to close out all foreign
exchange contracts held by any Target Company or Target
Subsidiary prior to the Closing Date. In the event
Parent is unable to cause any such contracts to be closed out
prior to the Closing Date, on the Closing Date Parent shall
deliver to Buyer a list of the foreign exchange contracts held
by any Target Company or Target Subsidiary as of the close of
business on the business day prior to the Closing Date as part
of the treasury activities of Parent and its Subsidiaries
(the
“FX
Contracts”). Buyer and its Subsidiaries shall
maintain the FX Contracts for their duration, including paying
any notional amounts due or receiving any notional amounts
from the counterparty under the FX Contracts and closing out
the positions as required pursuant to the terms of the FX
Contracts. Within 60 days following the Closing
Date, and only after all positions under the FX Contracts are
closed, the Buyer shall deliver to Parent a statement showing
all notional amounts paid and received under each of the FX
Contracts (including amounts paid or received when the
contract is closed) (the “FX Statement”) and the
aggregate amount of the net gain or loss reflected by such
notional amounts paid and received (the “FX
Amount”).
(iii) During
the 30 day period following Parent’s receipt of the
Statement, Parent and its accountants shall be permitted to
review the working papers of Buyer and its accountants
relating to the Statement; provided
that Parent and its advisors, including its accountants, shall
have executed all release letters reasonably requested by
Buyer’s accountants in connection
therewith. During the 30 day period following
Parent’s receipt of the FX Statement, Parent shall be
permitted to review the books and records of Buyer and its
Subsidiaries relating to the FX Statement. The
Statement shall become final and binding upon the Parties on
the 30th day following delivery thereof to Parent, unless
Parent gives written notice of its disagreement with the
Statement (the “ Notice of
Disagreement ”) to Buyer prior to such
date. Any Notice of Disagreement shall be signed by
Parent and shall (A) specify in reasonable detail the
nature of any disagreement so asserted, (B) only include
disagreements based on mathematical errors or based on the
Closing Working Capital or Closing Net Cash Balance not being
calculated in accordance with this Section 2(g) and
(C) specify what Parent reasonably believes is the
correct amount of the Closing Working Capital and Closing Net
Cash Balance based on the disagreements set forth in the
Notice of Disagreement, including a reasonably detailed
description of the adjustments applied to the Statement in
calculating such amount. The FX Statement shall
become final and binding upon the Parties on the 30th day
following delivery thereof to Parent, unless Parent gives
written notice of its disagreement with the FX Statement (the
“ FX Notice of
Disagreement ”) to Buyer prior to such
date. Any FX Notice of Disagreement shall be signed
by Parent and shall (A) specify in reasonable detail the
nature of any disagreement so asserted, (B) only include
disagreements based on mathematical errors or based on the FX
Amount being incorrectly calculated and (C) specify what
Parent reasonably believes is the correct FX Amount based on
the disagreements set forth in the FX Notice of Disagreement,
including a reasonably detailed description of the adjustments
applied to the FX Statement in calculating such
amount. If the Notice of Disagreement or the FX
Notice of Disagreement, as applicable, is received in a timely
manner, then the Statement or the FX Statement, as applicable
(as revised in accordance with this sentence), shall become
final and binding upon Buyer and Parent on the earlier of (A)
the date Buyer and Parent resolve in writing any differences
they have with respect to the matters specified in the Notice
of Disagreement or the FX Notice of Disagreement, as
applicable, or (B) the date any disputed matters are finally
resolved in writing by the Accounting Firm. During
the 30 day periods following
the
delivery of the Notice of Disagreement and the FX Notice of
Disagreement, Buyer and Parent shall seek in good faith to
resolve in writing any differences that they may have with
respect to the matters specified in the Notice of Disagreement
or the FX Notice of Disagreement, as
applicable. During the 30 day period following
delivery of the Notice of Disagreement, Buyer and its
accountants shall have access to the working papers of Parent
prepared in connection with the Notice of Disagreement;
provided
that Buyer and its advisors, including its accountants, shall
have executed all release letters reasonably requested by
Parent’s accountants in connection
therewith. At the end of such 30 day periods, Buyer
and Parent shall submit to an independent accounting firm (the
“ Accounting
Firm ”) for resolution any matters that remain in
dispute and which were properly included in the Notice of
Disagreement and the FX Notice of Disagreement, in the form of
a written brief. The Accounting Firm shall be KPMG or, if such
firm is unable or unwilling to act, such other internationally
recognized independent public accounting firm as shall be
agreed upon by Parent and Buyer in writing. Buyer
and Parent shall jointly instruct the Accounting Firm that it
(i) shall review only the matters that were properly included
in the Notice of Disagreement and the FX Notice of
Disagreement and which remain unresolved, (ii) shall make its
determination in accordance with the requirements of this
Section 2(g) and (iii) shall render its decision
within 30 days from the submission of such
matters. Judgment may be entered upon the
determination of the Accounting Firm in any court having
jurisdiction over the Party against which such determination
is to be enforced. The fees, costs and expenses of the
Accounting Firm incurred pursuant to this Section 2(g)
shall be borne 50% by Parent and 50% by Buyer.
The
fees, costs and expenses of Parent incurred in connection with
its review of the Statement, its preparation and certification
of any Notice of Disagreement, its review of the FX Statement,
its preparation and certification of any FX Notice of
Disagreement and its preparation of any written brief
submitted to the Accounting Firm shall be borne by Parent, and
the fees, costs and expenses of Buyer incurred in connection
with its preparation of the FX Statement, its review of any FX
Notice of Disagreement, its preparation of the Statement, its
review of any Notice of Disagreement and its preparation of
any written brief submitted to the Accounting Firm shall be
borne by Buyer.
(iv) The
Preliminary Purchase Price shall be adjusted as
follows:
(A) if the
Closing Working Capital exceeds the Maximum Working Capital
Amount, the Preliminary Purchase Price shall be increased by
the sum of (I) the amount by which the Closing Working
Capital exceeds the Maximum Working Capital Amount minus (II)
the Positive Initial Adjustment (if any) plus (III) the
Negative Initial Adjustment (if any), or decreased by the
absolute value of such sum if such sum is a negative
amount,
(B) if the
Closing Working Capital is less than the Minimum Working
Capital Amount, the Preliminary Purchase Price shall be
decreased by the sum of (I) the amount by which the Minimum
Working Capital Amount exceeds the Closing Working Capital
minus (II) the Negative Initial Adjustment (if any) plus
(III) the Positive Initial Adjustment (if any), or increased
by the absolute value of such sum if such sum is a negative
amount,
(C) if the
Closing Working Capital is between the Minimum Working
Capital Amount and the Maximum Working Capital Amount, the
Preliminary Purchase Price shall be increased by the amount
of the Negative Initial Adjustment (if any) or decreased by
the amount of the Positive Adjustment (if any),
(D) if the
Closing Net Cash Balance exceeds the Estimated Closing Net
Cash Balance, the Preliminary Purchase Price shall be
increased by such excess,
(E) if the
Estimated Closing Net Cash Balance exceeds the Closing Net
Cash Balance, the Preliminary Purchase Price shall be
decreased by such excess, and
(F) the
Preliminary Purchase Price shall be increased by the FX
Amount if a net gain or decreased by the FX Amount if a net
loss,
(the
Preliminary Purchase Price as so adjusted shall hereinafter be
referred to as the “ Purchase
Price ”). If the Preliminary Purchase
Price is less than the Purchase Price, Buyer shall, and if the
Preliminary Purchase Price is more than the Purchase Price,
Parent shall, within 10 business days after the Statement
becomes final and binding on the Parties, make payment by wire
transfer of immediately available funds of the amount of such
difference, together with interest thereon at a rate equal to
the rate of interest from time to time announced publicly by
Citibank, N.A., as its prime rate, calculated on the basis of
the actual number of days elapsed divided by 365, from (and
including) the Closing Date through (but not including) the
date of payment. The difference between the
Purchase Price and the Preliminary Purchase Price shall be
allocated among the Target Shares and the Acquired Assets in
accordance with the Allocation (set forth in Section 9(l)
below) if the Allocation is completed at the time such
difference is paid. If the purchase price
adjustment contemplated by this Section 2(g) has to be
paid by Buyer and the Allocation is not completed at the time
such purchase price adjustment is paid, the difference between
the Purchase Price and the Preliminary Purchase Price shall be
paid in such amounts and to such accounts as Sellers shall
direct.
(v) “
Working
Capital ” means, as of any date, the sum of net
accounts receivable, inventories, prepaid expenses and other
current assets, accounts payable and accrued expenses of the
Business as adjusted in accordance with Section 2(g)(v) of the
Disclosure Schedule, in each case, as of the close of business
on such date; provided
, that “Working Capital” shall not include
any
item
included in the Net Cash Balance, any gains or losses under an
FX Contract, any refund, credit, or other asset relating to
any Income Tax or any accrual with respect to Income Taxes for
any Pre-Closing Tax Period, deferred tax assets or
liabilities, accrued amounts for prepaid insurance, any amount
payable or receivable pursuant to Intercompany Receivables,
Intercompany Payables or Assumed Intercompany Receivables, or
any liabilities under the Retention Arrangements or in respect
of Severance Obligations, Bonus Obligations, Early Retirement
Obligations or Pension Obligations. The term “
Net
Cash Balance ” means, as of any date,
(i) all cash and cash equivalents minus (ii) any
outstanding short term debt and long term debt (which shall
not include trade payables or capital or finance lease
obligations related to the Business, or any amounts payable or
receivable pursuant to Intercompany Receivables, Intercompany
Payables, Assumed Intercompany Receivables or any Intercompany
Assumed Agreement) minus (iii) any accrued liabilities with
respect to the Bonus Obligations to the extent the Bonus
Obligations are not paid prior to Closing minus (iv)
liabilities in respect of the Severance Obligations, the
Pension Obligations and the Early Retirement Obligations, in
each case as of the close of business on such date.
Working Capital and Net Cash Balance shall be calculated in
accordance with GAAP but subject to the methods, procedures,
adjustments and practices, consistently applied, as the
corresponding line items of the working capital and net cash
balance statement as of September 30, 2007 set forth in
Section 2(g)(v) of the Disclosure Schedule (the “
Working Capital
Schedule ”), which shows the calculation of
Working Capital and Net Cash Balance based on the unaudited
September 30, 2007 balance sheet included as part of the
September Financial Statements (except as otherwise provided
in Section 2(g)(v) of the Disclosure Schedule), whether
or not such methods, procedures, adjustments and practices are
in accordance with GAAP (it being understood that, in the
event of any inconsistency between GAAP and the methods,
procedures, adjustments and practices pursuant to which the
Working Capital Schedule is prepared, the latter shall
prevail). The foregoing principles are referred to
in this Agreement as the “ Working Capital
Principles ”. The scope of the
disputes to be resolved by the Accounting Firm shall be
limited to whether there were mathematical errors in the
Statement or the FX Statement and whether the calculation of
the Closing Working Capital and Closing Net Cash Balance was
done in accordance with the Working Capital Principles and the
FX Amount was calculated in accordance with this
Section 2(g), and the Accounting Firm is not to make any
other determination, including any determination as to whether
GAAP was followed in calculating the Maximum Working Capital
Amount, the Minimum Working Capital Amount, the FX Amount, the
Estimated Closing Working Capital, the Estimated Closing Net
Cash Balance, the Working Capital Schedule, the Financial
Statements or the FX Statement or as to whether the Maximum
Working Capital Amount or Minimum Working Capital Amount was
correctly determined, or conduct any review of or make any
adjustments to the methods or assumptions used to calculate
the Pension Obligations. Any item included in, or
any omission from, the line items of the Working Capital
Schedule that is based upon errors of fact or mathematical
errors or that is not in accordance with GAAP
shall
be retained for purposes of calculating the Closing Working
Capital and the Closing Net Cash Balance, except as provided
in Section 2(g)(v) of the Disclosure
Schedule.
(vi) Following
the Closing, Buyer shall not take any action with respect to
the accounting books and records of the Business on which the
Statement and the FX Statement is to be based that would
obstruct, prevent or otherwise affect the results of the
procedures set forth in this Section 2(g) (including the
amount of the Closing Working Capital, Closing Net Cash
Balance, the FX Amount or any other amount included Statement
or the FX Statement or the preparation or review of the
Statement or the FX Statement). From and after the
Closing Date through the resolution of any adjustment to the
Preliminary Purchase Price contemplated by this
Section 2(g), Buyer shall (i) assist, and shall
cause its Subsidiaries (including the Target Companies and the
Target Subsidiaries) to assist, Parent, its accountants,
advisors and other representatives in its review of the
Statement and the FX Statement and (ii) afford to Parent,
its accountants, advisors and other representatives,
reasonable access during normal business hours to the
personnel, properties, books and records of the Business to
the extent relevant to the review of the Statement and the FX
Statement or the adjustment to the Preliminary Purchase Price
contemplated by this Section 2(g).
(a) Parent’s
Representations and Warranties. Except (a)
as set forth in the disclosure schedule delivered by Parent to
Buyer on the date hereof (the “ Disclosure
Schedule ”) (each section of which qualifies the
correspondingly numbered representation, warranty or covenant and
such other representations, warranties or covenants to the extent
it is reasonably apparent on the face of such disclosure that a
matter is relevant to the information called for by such other
representation, warranty or covenant) or (b) as disclosed in the
reports, schedules, forms, statements and other documents filed or
furnished by Parent with or to the United States Securities and
Exchange Commission (the “ SEC ”)
since January 1, 2007 and publicly available prior to the date of
this Agreement, Parent hereby represents and warrants to Buyer as
of the date of this Agreement and as of the Closing Date (except to
the extent a representation or warranty is expressly made as of an
earlier date, in which case such representation or warranty shall
be deemed made as of that earlier date) as follows:
(i)
Organization of
Parent and Certain of its Subsidiaries.
Each Asset Seller and Share Seller is duly
organized, validly existing, and in good standing under the
Laws of the jurisdiction of its incorporation (or other
formation).
(ii)
Authorization of
Transaction. Parent and each of its
Subsidiaries has full power and authority (including full
corporate or other entity power and authority) to execute and
deliver this Agreement and each of the Ancillary Agreements to
which it is a party and to perform its obligations hereunder
and thereunder. The execution, delivery and
performance of this Agreement and each of the Ancillary
Agreements and all other agreements contemplated hereby
and
thereby have been duly authorized
by Parent and its Subsidiaries that are party
thereto. The board of directors of Parent has
adopted a resolution approving this Agreement and the
transactions contemplated hereby. Each of the Asset
Sellers and the Share Seller has duly executed and delivered
this Agreement and, prior to the Closing, each of
Parent’s Subsidiaries will have duly executed and
delivered each Ancillary Agreement to which it is, or is
specified to be, a party, and, assuming their due execution
and delivery by Buyer or its Affiliates, as applicable, this
Agreement constitutes each of the Asset Sellers’ and the
Share Seller’s, and each Ancillary Agreement to which
any of them is, or is specified to be, a party will, after
execution and delivery by Parent and/or each such Subsidiary,
constitute Parent’s and/or such Subsidiary’s,
legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting
creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(iii)
Brokers’
Fees. Except for Banc of America Securities
LLC, whose fees and commissions will be paid by Parent,
neither Parent nor any of Parent’s Subsidiaries has any
liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions
contemplated by this Agreement or the Ancillary
Agreements.
(iv)
Noncontravention.
The Sellers are not required to give any notice
to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Entity in connection
with the transactions contemplated by this Agreement or the
Ancillary Agreements, other than (A) compliance with and
filings under the Hart-Scott-Rodino Act and compliance with
and filings and approvals under applicable foreign merger
control or competition Laws (the “ Foreign Merger
Control Laws ”), (B) compliance with and
filings under the Securities Exchange Act and the rules and
regulations promulgated thereunder, (C) compliance with
and filings or notices required by the rules and regulations
of the New York Stock Exchange, (D) compliance with and
filings with the relevant Chinese authorities in respect of
the equity transfer of the Chinese Sub, (E) those that may be
required solely by reason of Buyer’s (as opposed to any
third party’s) participation in the Transaction and the
other transactions contemplated by this Agreement and by the
Ancillary Agreements, (F) the filing of the relevant
instruments in the requisite jurisdictions in order to effect
guarantees in respect of, or to create or perfect Liens
granted to secure, the Indebtedness and other obligations
incurred as a result of the consummation of the Debt Financing
and (G) those the failure of which to be obtained or made
would not, individually and in the aggregate, have or
reasonably be expected to have a material adverse effect on
the ability of Parent to perform its obligations under this
Agreement or prevent or materially delay the consummation of
the Transaction and the other transactions contemplated by
this Agreement. Neither the execution and delivery
of this Agreement and the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby or
thereby, will (i) subject to the governmental filings or
other matters referred to in the immediately preceding
sentence, violate
(A) any Judgment or Law applicable
to the Sellers or (B) any provision of the charter or bylaws,
or other governing documents, of any Seller or
(ii) conflict with, result in a breach of, constitute a
default under (with or without notice or lapse of time or
both), result in the acceleration of or the loss of any
benefit under, require any third party consent under, or
create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material
agreement, contract, lease, license, instrument, or other
arrangement to which any of the Sellers is a party, other
than, in the case of clauses (i)(A) and (ii) above, any such
instances that would not have or reasonably be expected to
have a material adverse effect on the ability of Sellers to
perform their obligations under this Agreement or prevent or
materially delay the consummation of the Transactions and the
other transactions contemplated by this
Agreement.
(v)
Target
Shares. Except for the Alpharma Credit
Agreement Lien (which shall be released as of the Closing
Date), each of the Target Shares is held of record and owned
beneficially by the Share Seller (and any other entity which
Parent may designate as an additional Share Seller as a result
of the Pre-Closing Restructuring) free and clear of any Liens
and all capital stock of the Target Subsidiaries is held of
record and owned beneficially by the Target Companies or
Target Subsidiaries free and clear of any
Liens. Upon delivery of any payment for the Target
Shares at Closing, Buyer will acquire good and valid title to
all of the Target Shares, free and clear of any Liens (other
than those Liens created by Buyer). Except for the
Alpharma Credit Agreement Lien, neither Parent nor any of its
Subsidiaries is a party to any option, warrant, purchase
right, or other contract or commitment (other than this
Agreement) that could require Parent or any of its
Subsidiaries to sell, transfer, or otherwise dispose of any
capital stock or equity interests (as the case may be) of the
Target Companies or Target Subsidiaries. Neither
Parent nor any of its Subsidiaries is a party to any voting
trust, proxy, or other agreement or understanding with respect
to the voting of any capital stock of the Target Companies or
Target Subsidiaries.
(vi)
Litigation
. As of the date of this Agreement, there are not
any (a) outstanding Judgments applicable to the Sellers, (b)
suits, actions or other proceedings pending or, to the
Knowledge of Parent, threatened against the Sellers or (c)
investigations by any Governmental Entity that are, to the
Knowledge of Parent, pending or threatened against the Sellers
that, individually or in the aggregate, are reasonably likely
to have a material adverse effect on the ability of the
Sellers to perform their obligations under this Agreement or
prevent or materially delay the consummation of the
Transaction and the other transactions contemplated by this
Agreement.
(b) Buyer’s
Representations and Warranties .
Buyer hereby represents and warrants to Sellers as of the
date of this Agreement and as of the Closing Date (except to the
extent a representation or warranty is expressly made as of an
earlier date, in which case such representation or warranty shall
be deemed made as of that earlier date) as follows:
(i)
Organization of
Buyer. Buyer is a corporation (or other
entity) duly organized, validly existing, and in good standing
under the Laws of the jurisdiction of its incorporation (or
other formation).
(ii)
Authorization of
Transaction. Buyer has full power and
authority (including full corporate or other entity power and
authority) to execute and deliver this Agreement and each of
the Ancillary Agreements to which it is a party and to perform
its obligations hereunder and thereunder and to consummate the
Financing. Buyer has duly executed and delivered
this Agreement and, prior to the Closing, will have duly
executed and delivered each Ancillary Agreement to which it
is, or is specified to be, a party, and, assuming their due
execution and delivery by Sellers, this Agreement constitutes,
and each Ancillary Agreement to which it is, or is specified
to be, a party will, after execution and delivery by Buyer,
constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium or other Laws affecting creditors’ rights
generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or
at Law. The execution, delivery and performance of
this Agreement and each of the Ancillary Agreements and all
other agreements contemplated hereby or thereby, including the
Financing have been duly authorized by Buyer.
(iii)
Non-contravention.
Neither the execution and delivery of this
Agreement and the Ancillary Agreements to which it is a party,
nor the consummation of the transactions contemplated hereby
or thereby, including the Financing, will (A) violate any
Law or Judgment to which Buyer is subject (subject to the
governmental filings and other matters referred to in the
immediately following sentence) or any provision of its
charter, bylaws, or other governing documents or
(B) conflict with, result in a breach of, constitute a
default under (with or without notice or lapse of time or
both), result in the acceleration of or the loss of any
benefit under, require any third party consent under, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which
Buyer is a party or by which it is bound or to which any of
its assets is subject, except for such instances which would
not, individually or in the aggregate, have or reasonably be
expected to have a material adverse effect on the ability of
Buyer to perform its obligations under this Agreement or
prevent or materially delay the consummation of the
Transaction and the other transactions contemplated by this
Agreement, including the Financing. Buyer need not
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Entity
in connection
with the transactions contemplated
by this Agreement or any Ancillary Agreement, including the
Financing or the other transactions contemplated hereby and
thereby, other than (A) compliance with and filings under
the Hart-Scott-Rodino Act and compliance with and filings and
approvals under Foreign Merger Control Laws, (B) the
filing of the relevant instruments in the requisite
jurisdictions in order to effect guarantees in respect of, or
to create or perfect Liens granted to secure, the Indebtedness
and other obligations incurred as a result of the consummation
of the Debt Financing and (C) those the failure of which
to be obtained or made would not, individually or in the
aggregate, have or reasonably be expected to have a material
adverse effect on the ability of Buyer to perform its
obligations under this Agreement or prevent or materially
delay the consummation of the Transaction and the other
transactions contemplated by this Agreement, including the
Financing.
(iv)
Litigation.
As of the date of this Agreement, there are not
any (a) outstanding Judgments applicable to Buyer or any of
its Affiliates, (b) suits, actions or other proceedings
pending or, to the knowledge of Buyer, threatened against
Buyer or any of its Affiliates or (c) investigations by
any Governmental Entity that are, to the knowledge of Buyer,
pending or threatened against Buyer or any of its Affiliates
that would, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on
the ability of Buyer to perform its obligations under this
Agreement or prevent or materially delay the consummation of
the Transaction and the other transactions contemplated by
this Agreement, including the Financing.
(v)
Securities
Act. The Target Shares are being acquired
for investment only and not with a view to any public
distribution thereof, and Buyer shall not offer to sell or
otherwise dispose of the Target Shares so acquired by it in
violation of any of the registration requirements of the
Securities Act.
(vi)
Financing.
Complete and correct executed copies of the
Financing Commitments have been delivered to Parent on or
prior to the date of this Agreement. Buyer has
delivered to Parent all written agreements, arrangements or
understandings related to the Financing (a) in the case of any
such agreements, arrangements or understandings entered into
on or prior to the date of this Agreement, on or prior to the
date of this Agreement and (b) in the case of any such
agreements, arrangements or understandings entered into after
the date of this Agreement, within three business days after
the entry thereof; provided
that Buyer may redact from any such documents, and omit from
any such descriptions, the fee amounts payable to their
Financing sources. There are no conditions or other
contingencies to the funding of the Financing (including in
any oral agreements) other than those contained in the
Financing Commitments (or in replacement commitments obtained
by Buyer in compliance with
Section 5(c)). Except to the extent permitted
by Section 5(c), none of the Financing Commitments (or
any of the replacement commitments obtained by Buyer in
compliance with Section 5(c)) has been amended,
supplemented or otherwise modified and the commitments
contained in the Financing Commitments (or the
commitments contained in
replacement commitments obtained by Buyer in compliance with
Section 5(c)) have not been reduced, terminated,
withdrawn or rescinded in any respect. The
Financing Commitments (or replacement commitments obtained by
Buyer in compliance with Section 5(c)) are in full force
and effect and are the legal, valid and binding obligations of
Buyer and, to Buyer’s knowledge, the applicable
counterparties thereto. No event has occurred
which, with or without notice, lapse of time or both, would
constitute a default or breach on the part of Buyer under any
term or condition of the Financing Commitments (or the
replacement commitments obtained by Buyer in compliance with
Section 5(c)) that would constitute the failure of any of
the conditions to the Financing Commitments or would
reasonably be expected to impair or delay the funding of the
Financing Commitments. Buyer has fully paid any
commitment fees or other fees incurred in connection with the
Financing that have become due and payable as of the date of
this Agreement and will have fully paid all such fees due and
payable as of the Closing Date on or prior to the Closing
Date. The Financing, when funded in accordance with
the Financing Commitments (or replacement commitments obtained
by Buyer in compliance with Section 5(c)), will provide
funds at the Closing sufficient to consummate the Transaction
and the other transactions contemplated by this Agreement and
to pay the related fees and expenses associated
therewith. As of the date of this Agreement, Buyer
has no reason to believe that any of the conditions or other
contingencies to the Financing will not be satisfied upon the
satisfaction or (to the extent permitted by applicable Law)
waiver of the conditions set forth in Section 7 or that
the Financing will not be available to Buyer at the
Closing.
(vii)
Activities of
Buyer. Buyer was formed solely for the
purpose of engaging in the transactions contemplated by this
Agreement, has not engaged in any business activities or
conducted any operations (other than in connection with the
transactions contemplated by this Agreement) and, prior to the
Closing, will not have incurred liabilities or obligations of
any nature (other than in connection with the transactions
contemplated by this Agreement).
(viii)
No
Knowledge of Misrepresentation or Omission. As of
the date of this Agreement, none of Buyer, its employees,
agents or representatives has actual knowledge that any
representation or warranty of Parent in this Agreement is not
true and correct or there are any errors in or omissions from
the Disclosure Schedule.
(ix)
No
Other Representations and Warranties.
Except for the representations and warranties
contained in Sections 3(a) and 4 or in any certificate
delivered by Parent pursuant to this Agreement, Buyer
acknowledges that none of Sellers nor any Person on behalf of
Parent makes or has made any other express or implied
representation or warranty with respect to the Transaction or
the other transactions contemplated by this Agreement, with
respect to Sellers or the Business or with respect to any
other information provided or made available to Buyer in
connection with the transactions contemplated by this
Agreement (including in any “data rooms” or
management
presentations). None of
Parent or its Affiliates shall have or be subject to any
liability or indemnification obligation to Buyer or any other
Person resulting from the distribution to Buyer, or
Buyer’s use of, any such information. Buyer
acknowledges that, should the Closing occur, Buyer shall
acquire the Target Shares and the Acquired Assets without any
representation or warranty (including as to merchantability or
fitness for any particular purpose), express or implied, at
law or in equity, in an “as is” condition and on a
“where is” basis, except as otherwise expressly
represented or warranted in Sections 3(a) or 4 or in any
certificate delivered by Parent pursuant to this
Agreement.
(x)
Brokers’
Fees. Except for Merrill Lynch
International, whose fees and commissions will be paid by
Buyer, Buyer and its Affiliates have no liability or
obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement or the Ancillary Agreements.
SECTION 4. Representations and
Warranties Concerning the Business and the Target Companies and
Target Subsidiaries .
Except (a) as set forth in the Disclosure Schedule (each
section of which qualifies the correspondingly numbered
representation, warranty or covenant and such other
representations, warranties or covenants to the extent it is
reasonably apparent on the face of such disclosure that a matter is
relevant to the information called for by such other
representation, warranty or covenant) or (b) as disclosed in the
reports, schedules, forms, statements and other documents filed or
furnished by Parent with or to the SEC since January 1, 2007 and
publicly available prior to the date of this Agreement, Parent
hereby represents and warrants to Buyer as of the date of this
Agreement and as of the Closing Date (except to the extent a
representation or warranty is expressly made as of an earlier date,
in which case such representation or warranty shall be deemed made
as of that earlier date) as follows:
(a) Organization,
Qualification, and Corporate Power .
Each of the Target Companies and the Target Subsidiaries are
corporations duly organized, validly existing, and, to the extent
applicable in such jurisdiction, in good standing under the Laws of
the jurisdiction of their incorporation. Each of the
Target Companies and the Target Subsidiaries are duly authorized to
conduct business and are in good standing (or of similar status to
the extent such status exists in such company’s jurisdiction
of formation) under the Laws of each jurisdiction where such
qualification is required. Each of the Target Companies
and the Target Subsidiaries have full corporate power and authority
to carry on the business in which they are engaged and to own,
lease and use the properties owned and used by them.
(b) Capitalization.
(i) Section 4(b) of the Disclosure
Schedule sets forth for each of the Target Companies and Target
Subsidiaries (A) its name and jurisdiction of incorporation
and (B) the entity which owns the capital stock of or equity
interests (as the case may be) in each such Target Company or
Target Subsidiary.
(ii) All
of the issued and outstanding Target Shares of the Target
Companies have been duly authorized, are validly issued, fully
paid, and non-assessable (or of similar status to the extent
such status exists in such company’s jurisdiction of
formation), and are held of record and owned beneficially by
the Share Seller (and such other entity which Parent may
designate as an additional Share Seller as a result of the
Pre-Closing Restructuring) as set forth in Section 4(b)
of the Disclosure Schedule and were not issued in
contravention of any preemptive rights, rights of first
refusal or first offer or similar rights or applicable
foreign, federal or state securities laws. All of
the issued and outstanding shares of capital stock of the
Target Subsidiaries have been duly authorized, are validly
issued, fully paid, and non-assessable (or of similar status
to the extent such status exists in such company’s
jurisdiction of formation), and are held of record and owned
beneficially by the Target Companies or Target Subsidiaries as
set forth in Section 4(b) of the Disclosure
Schedule. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or
commitments that could require any of the Target Companies or
Target Subsidiaries to issue, sell, or otherwise cause to
become outstanding any of its capital stock or to make any
further capital contribution. There are no voting
trusts, proxies, or other agreements or understandings with
respect to the voting stock of the Target Companies or Target
Subsidiaries. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar
rights with respect to any of the Target Companies or Target
Subsidiaries. None of the Target Companies or the
Target Subsidiaries owns any material amount of shares of
capital stock of, or other equity interests (or any other
securities convertible into or exchangeable for such shares or
interests) in any other Person.
(c) Non-contravention
.
Neither the execution and delivery of this Agreement
and the Ancillary Agreements, nor the consummation of the
transactions contemplated hereby or thereby, will (i) subject
to the governmental filings or other matters referred to in the
immediately following sentence, violate (A) any Judgment or Law
applicable to any of the Target Companies or the Target
Subsidiaries or (B) any provision of the charter or bylaws, or
other governing documents, of such Person (ii) conflict with,
result in a breach of, constitute a default under (with or without
notice or lapse of time or both), result in the acceleration of or
the loss of any benefit under, require any third party consent
under, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material
agreement, contract, lease, license, instrument, or other
arrangement to which any of the Target Companies or Target
Subsidiaries is a party or by which any of the assets or properties
of the Business is subject or (iii) result in the imposition
or creation of any Lien, other than Permitted Liens, upon or with
respect to the Target Shares or the Acquired Assets or any of the
assets or properties of the Target Companies or Target
Subsidiaries, other than, in the case of clauses (i)(A), (ii) and
(iii) above, any such instances that would not, individually and in
the aggregate, have a Material Adverse Effect. The
Target Companies and the Target Subsidiaries are not required to
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Entity in
connection with the transactions contemplated by this Agreement or
the Ancillary
Agreements, other than
(A) compliance with and filings under the
Hart-Scott-Rodino Act and compliance with and filings and
approvals under the Foreign Merger Control Laws,
(B) compliance with and filings under the Securities
Exchange Act and the rules and regulations promulgated
thereunder, (C) compliance with and filings or notices
required by the rules and regulations of the New York Stock
Exchange, (D) compliance with and filings with the relevant
Chinese authorities in respect of the equity transfer of the
Chinese Sub, (E) those that may be required solely by reason
of Buyer’s (as opposed to any third party’s)
participation in the Transaction and the other transactions
contemplated by this Agreement and by the Ancillary
Agreements, (F) the filing of the relevant instruments in
the requisite jurisdictions in order to effect guarantees in
respect of, or to create or perfect Liens granted to secure,
the Indebtedness and other obligations incurred as a result of
the consummation of the Debt Financing and (G) those the
failure of which to be obtained or made would not,
individually and in the aggregate, have a Material Adverse
Effect.
(d) Title to Tangible
Assets. The Target Companies and the Target
Subsidiaries have good and valid title to, or a valid leasehold
interest in, the material tangible assets used primarily in the
conduct of the Business. The Asset Sellers have
good and valid title to, or a valid leasehold interest
in, the material tangible Acquired Assets.
(e) Sufficiency of
Assets. The Acquired Assets, the assets and
properties that will be owned by the Target Companies and Target
Subsidiaries immediately following the Closing, the assets and
properties of which any Target Company or Target Subsidiary will be
a lessee, sublessee or licensee immediately following the Closing
and the assets and properties which Buyer and its Affiliates,
including the Target Companies and Target Subsidiaries, will have
the right to use pursuant to the Transition Services Agreement,
comprise all the assets and properties (tangible or intangible)
primarily employed by the Business. Such assets and
properties will be sufficient for the conduct of the Business
immediately following the Closing in substantially the same manner
as currently conducted.
(f) Financial
Statements ; No Undisclosed
Liabilities .
(i) Section 4(f)(i) of the Disclosure
Schedule includes copies of the following financial statements
(collectively the “ Financial
Statements ”): (A) an unaudited consolidated
balance sheet of the Business, as of December 31, 2006,
(B) an unaudited statement of operations and cash flow for the
fiscal year ended December 31, 2006, with respect to the
Business, (C) an unaudited consolidated balance sheet of the
Business as of September 30, 2007, and (D) an unaudited
statement of operations and cash flow for the nine months ended
September 30, 2007, with respect to the Business (such
Financial Statements referred to in clauses (C) and (D) above, the
“ September Financial
Statements ”). The Financial Statements
(including the notes thereto) have been prepared in accordance with
GAAP on the basis of the same accounting principles, policies,
methods and procedures consistently applied throughout the periods
covered thereby and present fairly in all material respects the
financial condition of the Business as of such dates and the
results of operations of the Business for such periods;
provided
, however , that
the September
Financial Statements are
subject to normal and recurring year-end adjustments and lack
footnotes and other presentation items.
(ii) None
of the Target Companies or Target Subsidiaries is party to any
material “off-balance-sheet arrangements” (as
defined in Item 303(a) of Regulation S-K under the Securities
Act) attributable to the Business.
(iii) None
of the Asset Sellers (to the extent such liabilities primarily
relate to the Business) or any of the Target Companies or the
Target Subsidiaries has any liabilities, whether accrued,
contingent, absolute, determined, determinable or otherwise
except (A) to the extent such liabilities are accrued or
reserved against in the Financial Statements, or reflected in
the footnotes thereto, (B) liabilities that were incurred
in the ordinary course of business since the date of such
Financial Statements, (C) liabilities that are for Taxes,
(D) liabilities that would not, individually and in the
aggregate, have a Material Adverse Effect or
(E) liabilities that are Excluded
Liabilities.
(g) Events Subsequent
to September 30,
2007. Since September 30, 2007, to the
date of this Agreement, the Business has been conducted in the
ordinary course and there has not been any Material Adverse
Change. Without limiting the generality of the
foregoing, since September 30, 2007 to the date of this
Agreement:
(i) none
of the Target Companies or any of the Target Subsidiaries has
issued, sold, or otherwise disposed of any of its capital
stock or equity interests (as the case may be), or granted any
options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its
capital stock or any stock appreciation, phantom stock, profit
participation, registered capital or similar
rights;
(ii) none
of the Target Companies or any of the Target Subsidiaries has
declared, set aside, or paid any dividend or made any
distribution with respect to its capital stock or equity
interests (as the case may be) (whether in cash or in kind)
(other than dividends or distributions paid or payable to
Parent or any of its other Subsidiaries pursuant to cash
sweeps done in the ordinary course of business or to another
Target Company or Target Subsidiary) or redeemed, purchased,
or otherwise acquired any of its capital stock;
(iii) none
of the Asset Sellers (to the extent such change relates to the
Business) or any of the Target Companies or the Target
Subsidiaries has made any material change in any accounting
principles, practice, policy, method or procedure except as
may be appropriate to conform to GAAP;
(iv) none
of the Asset Sellers (to the extent such litigation relates to
the Business) or any of the Target Companies or the Target
Subsidiaries has settled or compromised any material
litigation or claim against it, other than settlements or
compromises of litigation in the ordinary course of
business;
(v) none
of the Asset Sellers (to the extent such acquisition or
license relates to the Business) or any of the Target
Companies or the Target Subsidiaries has acquired or licensed
(whether by merger, consolidation or acquisition of stock or
assets or otherwise) any corporation, partnership or other
business organization or division thereof or any material
assets thereof or equity interests therein, other than
purchases of Inventory and other assets in the ordinary course
of business;
(vi) other
than in the ordinary course of business or as required under
the terms of any applicable Collective Bargaining Agreement or
as required under applicable Law, none of the Asset Sellers or
the Target Companies or any of the Target Subsidiaries has (A)
made any changes to the Target Company Benefit Plans or
entered into or adopted any new Target Company Benefit Plans;
(B) entered into any collective bargaining or other labor
agreement covering any Employees of the Target Companies or
Target Subsidiaries; (C) altered, amended, or created any
obligations with respect to compensation, severance, change in
control payments or any other payments or benefits to
executive-level Employees of the Target Companies or Target
Subsidiaries; or (D) except, with respect to non-officers of
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