AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT

Exhibit 10.1
 
Execution Version October 1 2007

AMENDMENT TO THE

SHARE PURCHASE AGREEMENT
dated 12/13 May 2007 by and between

MERCK GENERICS HOLDING GMBH
MERCK S.A.
MERCK INTERNATIONALE BETEILIGUNGEN GMBH
as Sellers

MERCK KGAA
as Sellers’ Guarantor and Sellers’ Representative

and

MYLAN LABORATORIES INC.
as Purchaser

for the acquisition of

all shares in
Merck dura GmbH,
Merck Generics Group B.V.,
EMD, Inc.,
Merck Generics Belgium B.V.B.A., and
Merck Genericos S.L.

1 October 2007

Skadden, Arps, Slate Meagher & Flom LLP
An der Welle 5
60322 Frankfurt am Main
Germany

Table of Contents

Table of Contents					i
Index of Defined Terms and Abbreviations				iii
List of Exhibits and Schedules					v
AMENDMENT TO SHARE PURCHASE AGREEMENT					1
PREAMBLE					1
1. Definitions and Rules of Construction					1
		1.1 Certain Defined Terms			1
		1.2 Headings			2
		1.3 German Terms			2
		1.4 General Rules of Construction			2
2. Additional Target Companies, Sellers and Transferees					2
		2.1 The Additional Target Companies			2
		2.2 The Additional Sellers			3
		2.3 The Additional Purchasers and Transferees			3
3. Transferee Designations					4
		3.1 Dura, MGG, Merck Belgium and Merck Genericos			4
		3.2 EMD			4
		3.3 Additional Assumption of Liabilities			5
		3.4 No Rights of Designated Transferees			6
4. Sale and Transfer of additional Target Companies and the Companies					6
		4.1 Additional Actions before or on Closing			6
		4.2 Sale and Transfer of the Companies			7
		4.3 Scope of Sale with respect to the Companies			7
5. IP Transfers and Continuing Pre-Sale Reorganization					8
		5.1 EpiPen			8
		5.2 Duranifin and Enadura			8
		5.3 Continuance of Pre-Sale Reorganization			9
		5.4 Agreements with Sellers’ Affiliates			10
6. Settlement of Intercompany Balances					10
		6.1 Conversion to Intercompany Balances			10
		6.2 Settlement between Sellers’ Representative and Purchaser			11
7. Closing Date, Order of Closing Actions and other Transfer Actions					12
		7.1 Closing Date			12
		7.2 Pre-Closing Actions			12
		7.3 Closing Actions			13
		7.4 Closing Confirmation			15

		7.5 Director Resignations			15
		7.6 Prasfarma			15
8. Purchase Price and Effective Date					16
		8.1 No Effect on Purchase Price			16
		8.2 Effective Date			16
		8.3 Exchange Rates			17
9. Indemnification and Costs					17
		9.1 Indemnification			17
10. Miscellaneous					19
		10.1 Notices			19
		10.2 Severability			19
		10.3 Exhibits			19
		10.4 Amendments			19
		10.5 Governing Law			19
		10.6 Arbitration			19

Index of Defined Terms and Abbreviations

Additional Seller			3
Additional Target Companies			3
Affiliate Intercompany Balances			11
Alphapharm			2
Alphapharm Note			6
Alphapharm Transfer			6
Alphapharm Transfer Form			6
Amendment			1
Companies			1
Designated Transferees			3
Dura IP Transfer Agreement			8
Effective Date			17
EpiPen Sale Agreement			8
French Tax Code			7
Genericos Transfer Deed			4
Genius Belgium Transfer Deed			4
Genius GmbH			2
Genius GmbH Note			6
Genius GmbH SPA			6
Genius GmbH Transfer			6
Genpharm Note			6
Intercompany Settlement			12
Merck			1
Merck Affiliate Loan			11
Merck Affiliate Obligation			11
Merck Belgium Shares			8
Merck France			3
Merck France Note			7
Merck France Transfer			7
Merck France Transfer Order			7
Merck Intercompany Balances			10
Merck Non-US Intercompany Balance			11
Merck US Intercompany Balance			11
Mylan Australia			3
Mylan Canada			3

Mylan France			3
Mylan Holding			2
Mylan Luxembourg 2			1
New Belgium Shares			8
New Transfers			6
Non-US Affiliate Intercompany Balances			11
Outside Date			19
Parties			2
Prasfarma Expense Cap			16
Pre-Closing Actions			13
Purchaser			1
Seller 1			1
Seller 2			1
Seller 3			1
Sellers			1
Sellers’ Guarantor			1
Sellers’ Representative			1
Share Purchase Agreement			1
Shareholder Loans			10
Specified Terms			6
Subsidiary Loans			10
Transitional Prasfarma Solution			16
US Affiliate Intercompany Balances			11

List of Exhibits

Exhibit 3.1.2(a)		Dura Transfer Deed
Exhibit 3.1.2(b)		MGG Transfer Deed
Exhibit 3.1.2(c)		Merck Belgian Transfer Deed
Exhibit 3.1.2(d)		Genericos Transfer Deed
Exhibit 4.1.1(a)(i)		Genius GmbH SPA
Exhibit 4.1.1(a)(ii)		Genius GmbH Note
Exhibit 4.1.1(b)(i)		Alphapharm Transfer Deed
Exhibit 4.1.1(b)(ii)		Alphapharm Note
Exhibit 4.1.1(c)(i)		Merck France Transfer Order
Exhibit 4.1.1(c)(ii)		Merck France Notess
Exhibit 5.1		EpiPen Sale Agreement
Exhibit 5.2		Dura IP Transfer Agreement
Exhibit 5.3		Assets
Exhibit 5.4		Agreements with Sellers’ Affiliates
Exhibit 6.2.4		Intercompany Payment Agreements
Exhibit 7.3.1(g)		Brand License Agreement
Exhibit 7.3.1(h)		Transitional Services Agreement
Exhibit 7.3		Closing Confirmation

 v 

AMENDMENT TO SHARE PURCHASE AGREEMENT

This Amendment (this “ Amendment ”) to the Share Purchase Agreement dated 12/13 May 2007 (roll of deeds no. 100 of 2007 of the notary Dr. Burkhardt Meister, Frankfurt am Main) by and between the Parties set forth below (the “ Share Purchase Agreement ”) is made as of 1 October 2007 by and between

1.

Merck Generics Holding GmbH, a limited liability company organized under the laws of Germany and registered with the commercial register ( Handelsregister ) of the municipal court ( Amtsgericht ) of Darmstadt, Germany, under HRB 7759,

- “ Seller 1 ” -

2.

Merck S.A., a stock corporation organized under the laws of France and registered with the commercial register ( registre de commerce et des sociétés ) of Lyon under no. 777335340 RCS Lyon,

- “ Seller 2 ” -

3.

Merck Internationale Beteiligungen GmbH, a limited liability company organized under the laws of Germany and registered with the commercial register of the municipal court of Darmstadt, Germany, under HRB 8239,

- “ Seller 3 ” -

- Seller 1, Seller 2 and Seller 3
jointly the “ Sellers ” -

4.

Merck KGaA, a partnership limited by shares organized under the laws of Germany and registered with the commercial register of the municipal court of Darmstadt, Germany, under HRB 6164,

- “ Merck ”, and also referred to as
“ Sellers’ Guarantor ” and “ Sellers’ Representative ” -

5.

Mylan Laboratories Inc., a corporation organized under the laws of the Commonwealth of Pennsylvania with business address at 1500 Corporate Drive, Canonsburg, Pennsylvania 15317, U.S.A.,

- “ Purchaser ” -

6.

Mylan Luxembourg 2 S.á.r.L, a limited liability company organized under the laws of Luxembourg with business address at 8-10 rue Mathias Hard, L-1717 Luxembourg, Luxembourg,

- “ Mylan Luxembourg 2 ” -

7.

Mylan Delaware Holding Inc., a corporation organized under the laws of Delaware, U.S.A., with registered address at 1500 Corporate Drive, Canonsburg, PA 15317, U.S.A.

- “ Mylan Holding” -

- Sellers, Sellers’ Guarantor, Purchaser, Mylan Luxembourg 2
and Mylan Holding are also referred to as “ Parties ”

PREAMBLE

WHEREAS , the Purchaser, the Sellers and Sellers’ Guarantor have executed on 12/13 May 2007 the Share Purchase Agreement for the sale and purchase of the generics business, as further specified in the Share Purchase Agreement, operated by Sellers’ Representative through various direct and indirect subsidiaries;

WHEREAS , the Share Purchase Agreement provides for a direct or indirect acquisition of all shares in Merck Dura GmbH, Merck Generics Group B.V., EMD, Inc., Merck Generics Belgium B.V.B.A. and Merck Genericos S.L. (together, the “ Companies ”) and indirectly the respective Subsidiaries of the Companies;

WHEREAS , Section 3.1.5 ( Structure of Transaction ) of the Share Purchase Agreement provides that at the election of Purchaser, subject to certain terms and conditions, (i) any one or more Affiliates of Purchaser may be substituted for Purchaser in the transaction and (ii) Purchaser or any such substituted purchaser or purchasers may directly acquire Interests in any Subsidiary, either in lieu of or in addition to acquisitions of the Shares in the Companies;

WHEREAS , Purchaser has proposed to Sellers and Sellers’ Representative certain changes to the acquisition structure, which Sellers and Sellers’ Representative have considered in good faith and find generally acceptable;

WHEREAS , (i) Purchaser shall fully indemnify Sellers and Sellers’ Affiliates for all Taxes to the extent any changes in acquisition structure contemplated by this Amendment increase the Tax costs to Sellers and Sellers’ Affiliates above the amount of costs that would have been incurred in connection with the sales and transfers set forth in Section 3.1 of the Share Purchase Agreement as of the Signing Date and (ii) all incremental costs and expenses (including reasonable out of pocket expenses for counsel) incurred by Sellers or Sellers’ Affiliates in connection with the implementation of any substitution or change in the acquisition structure contemplated by this Amendment or any alternative structure considered previously by Purchaser and proposed in writing (including by way of email) to Sellers or Sellers’ Affiliate shall be reimbursed, and all risks related to the acquisition structure changes shall be assumed, by Purchaser; and

WHEREAS , the Parties wish to agree on (i) certain changes to the acquisition structure proposed by Purchaser subject to the terms and conditions set forth in this Amendment; (ii) the additional actions in connection with such changes to the acquisition structure; and (iii) certain other provisions.

NOW THEREFORE , the Parties agree as follows:

1.
DEFINITIONS AND RULES OF CONSTRUCTION

1.1		Certain Defined Terms
		Capitalized terms used but not defined herein shall have the meaning ascribed to them

		in the Share Purchase Agreement.
1.2		Headings
		The headings in this Amendment are inserted for convenience only and shall not affect the interpretation of this Amendment.
1.3		German Terms
		If any provision in this Amendment contains an English term after which either in the same provision or elsewhere in this Amendment a term or terms in German have been added in parentheses and/or italics, then it shall be solely such German term and not the English term that is decisive for the interpretation of the respective provision.
1.4		General Rules of Construction
		The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation” and shall not be construed to express limitation in any way. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (i) any definition of, or reference to, any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein”, “hereof”, “hereby” and “hereunder”, and words of similar import, shall be construed to refer to this Amendment in its entirety and not to any particular provision hereof, (v) the words “immediately” and “promptly” shall mean without undue delay ( ohne schuldhaftes Zögern ), and (vi) all references herein to Sections, Exhibits and Disclosure Schedules shall be construed to refer to Sections of, and Exhibits and Disclosure Schedules to, this Amendment unless indicated otherwise in this Amendment.

2.
ADDITIONAL TARGET COMPANIES, SELLERS AND TRANSFEREES

2.1

The Additional Target Companies

	2.1.1		Genius GmbH . Allgemeine Beteiligungsgesellschaft Genius Deutschland mbH (“ Genius GmbH ”), is a limited liability organized under the laws of Germany registered with the municipal court of Darmstadt, Germany, under HRB 86194.
	2.1.2		Alphapharm . Alphapharm Pty. Ltd. (“ Alphapharm ”), is a proprietary

			company limited by shares organized under the laws of New South Wales, Australia, and registration number ACN 002 359 739.
	2.1.3		Merck France . Merck Generics France Holding S.A.S. (“ Merck France ”) is a French société par actions simplifiée organized under the laws of France having its registered office at 37 rue Saint-Romain, Lyon (69008), France, and registered with the Lyon Trade and Companies Register under the number 399 293 323;
	2.1.4		Definitions . Genius GmbH, Alphapharm and Merck France shall hereinafter also be referred to as the “ Additional Target Companies ”.

2.2		The Additional Sellers
		MGG shall also be referred to as the “ Additional Seller ”.
2.3		The Additional Purchasers and Transferees

	2.3.1		Mylan Holding . Mylan Delaware Holding Inc. is a corporation organized under the laws of Delaware, U.S.A., with registered address at 1500 Corporate Drive, Canonsburg, PA 15317, U.S.A., and a wholly owned subsidiary of Purchaser.
	2.3.2		Mylan Australia . Mylan Australia Pty. Ltd (“ Mylan Australia ”) is a proprietary company limited by shares organized under the laws of Victoria, Australia, with business address at c/o Hall & Wilcox, Level 30 Bourke Place, 600 Bourke Street, Melbourne VIC 3000, Australia, with registration number ACN 126 990 029, and a wholly owned subsidiary of Purchaser.
	2.3.3		Mylan Canada . Mylan Canada, ULC (“ Mylan Canada ”) is an unlimited liability company organized under the laws of Alberta, Canada, with business address at 3400, 105 — 6th Avenue SW, Calgary, Alberta, T2P3Y7 C, Canada, and a wholly owned subsidiary of Purchaser.
	2.3.4		Mylan France. Mylan France S.A.S. (“ Mylan France ”) is a French société par actions simplifiée with a share capital of EUR 37,000 organized under the laws of France having its registered office at 8 avenue Hoche, 75008 Paris, France, and registered with the Commercial and Company Registry of Paris under number 499 944 734, and a wholly owned subsidiary of Purchaser.
	2.3.5		Mylan Luxembourg 2. Mylan Luxembourg 2 is a limited liability company organized under the laws of Luxembourg with business address at 8-10 rue Mathias Hard, L-1717 Luxembourg, Luxembourg., and a wholly owned subsidiary of Purchaser.
	2.3.6		Definitions . Mylan Luxembourg 2 and Mylan Holding shall also be referred to as the “ Designated Transferees ”.

2.3.7

Purchaser hereby represents and warrants to Sellers in the form of an independent guarantee ( selbständiges Garantieversprechen ) that the statements made in this Section 2.3 are correct on the date hereof.

3.
TRANSFEREE DESIGNATIONS

3.1

Dura, MGG, Merck Belgium and Merck Genericos

	3.1.1		Designation . Pursuant to Section 21.5 of the Share Purchase Agreement, Purchaser hereby assigns to Mylan Luxembourg 2 its rights as purchaser under the Share Purchase Agreement to receive the Dura Share, the Merck Belgium Shares, the Merck Genericos Shares and the MGG Shares and the right to receive the portion of (i) the excess of the Final Purchase Price over the Preliminary Purchase Price pursuant to Section 4.2.2 of the Share Purchase Agreement, if any, and (ii) the excess of the Adjustment Purchase Price over the Final Purchase Price pursuant to Section 4.3 of the Share Purchase Agreement, if any, in each case allocated to such Share(s) pursuant to Exhibit 4.1.4 of the Share Purchase Agreement. As a result thereof, subject to the satisfaction or waiver of the Closing Conditions and the terms of the Share Purchase Agreement and this Amendment, at the Closing Date (i) Seller 1 shall transfer the Dura Share and the MGG Shares to Mylan Luxembourg 2, and (ii) Seller 3 shall transfer the Merck Belgium Shares and the Merck Genericos Shares to Mylan Luxembourg 2, in each case instead of to Purchaser, but otherwise in accordance with Section 3.1.2 of the Share Purchase Agreement and Section 3.1.2 hereof. By consummating the respective transfers on the Closing Date to Mylan Luxembourg 2, Seller 1 and Seller 3 shall have fulfilled their obligations towards Purchaser under the Share Purchase Agreement to transfer the respective Shares on Closing to Purchaser.
	3.1.2		Transfer Deeds . As a result of the transferee designations set forth in Section 3.1.1, the Dura Transfer Deed shall substantially be in the form set forth in Exhibit 3.1.2(a) , the MGG Transfer Deed shall be substantially in the form set forth in Exhibit 3.1.2(b) , the Merck Belgium Transfer Deed shall be substantially the form set forth in Exhibit 3.1.2(c) , and the Genericos Transfer Deed shall be substantially the form set forth in Exhibit 3.1.2(d) .

3.2		EMD
		Pursuant to Section 21.5 of the Share Purchase Agreement, Purchaser hereby assigns to Mylan Holding its rights as purchaser under the Share Purchase Agreement to receive the EMD Shares and the right to receive (i) the excess of the Final Purchase Price over the Preliminary Purchase Price pursuant to Section 4.2.2 of the Share Purchase Agreement, if any, and (ii) the excess of the Adjustment Purchase Price over the Final

		Purchase Price pursuant to Section 4.3 of the Share Purchase Agreement, if any, in each case allocated to such Share(s) pursuant to Exhibit 4.1.4 of the Share Purchase Agreement. As a result thereof, subject to the satisfaction or waiver of the Closing Conditions and the terms of the Share Purchase Agreement and this Amendment, Seller 2 shall transfer on the Closing Date the EMD Shares to Mylan Holding instead of to Purchaser, but otherwise in accordance with Section 3.1.2 of the Share Purchase Agreement. By consummating the respective transfer on the Closing Date to Mylan Holding, Seller 2 shall have fulfilled its obligations towards Purchaser under the Share Purchase Agreement to transfer the EMD Shares on Closing to Purchaser.
3.3		Additional Assumption of Liabilities

	3.3.1		Additional Assumption of Liabilities . Each Designated Transferee hereby also assumes the liabilities of Purchaser to pay the Purchase Price and the Preliminary Purchase Price, respectively, to Sellers by means of an additional assumption of liabilities ( Schuldbeitritt ) with respect to the portion of the Purchase Price and the Preliminary Purchase Price, respectively, allocated to the Shares to be transferred to the respective Designated Transferee under Sections 3.1 and 3.2. As a result of such additional assumption of liabilities ( Schuldbeitritt ), Sellers shall have independent claims against the Designated Transferees to pay the portion of the Purchase Price and the Preliminary Purchase Price, respectively, allocated to the Shares transferred to them. For the avoidance of doubt, such claims shall be in addition to, and not in replacement of, the obligations of Purchaser under the Share Purchase Agreement, which shall remain unaffected (joint and several liability) ( gesamtschuldnerische Haftung ).
	3.3.2		Role of Designated Transferees . The Designated Transferees shall not be a “Purchaser” within the meaning of the Share Purchase Agreement, and the Designated Transferees (i) shall have no rights against Sellers as purchaser ( Käufer ) in connection with the sale and transfer of the Shares other than the assigned rights of Purchaser to receive, and become owners, of the Shares ( dinglicher Empfänger ) and to receive the adjustments in connection with the Purchase Price as specified in more detail in Sections 3.1 and 3.2. and (ii) as a result of the additional assumption of liabilities will also be obligated towards Sellers to pay the respective portion of the Purchase Price and the Preliminary Purchase Price, respectively.
	3.3.3		Payments by Designated Transferees . Sellers and Sellers’ Representative will accept payments made by the Designated Transferees on the outstanding Purchase Price and the Preliminary Purchase Price, respectively, in satisfaction of Sellers’ respective claim to receive the Purchase Price and the Preliminary Purchase Price, respectively, from Purchaser and the Designated Transferees as joint and several debtors.

3.4		No Rights of Designated Transferees
		Except for the rights and obligations expressly set forth in this Amendment and the transfer documents for the respective Shares (the “ Specified Terms ”), the Designated Transferees shall have no other rights against or obligations to Sellers or Sellers’ Representative under or in connection with the sale and transfer of the Shares, and all rights and obligations between the Parties in connection with these sales and transfers of the Shares, other than the Specified Terms, shall be exclusively governed by the Share Purchase Agreement and shall exist exclusively between Purchaser on the one side and Sellers and Sellers’ Representative on the other side as if the transfers of the Shares were entered into and consummated between Purchaser and the respective Seller as originally contemplated by the Share Purchase Agreement. Purchaser shall procure that the Designated Transferees will act accordingly and not seek any rights or claims against Sellers or Sellers’ Representative under or in connection with these sales and transfers other than the Specified Terms.

4.
SALE AND TRANSFER OF ADDITIONAL TARGET COMPANIES AND THE COMPANIES

4.1

Additional Actions before or on Closing

4.1.1

New Transfer Actions . Pursuant to Section 3.1.5 of the Share Purchase Agreement, and subject to the terms and Conditions of this Amendment, in particular Sections 4.1.2 and 7.3.2, the Parties hereby agree to implement the following transfers, on or before the Closing Date or as otherwise indicated, respectively, by (i) taking the specific actions stated in Section 7 to be taken by the relevant Party and (ii) in the order specified in Section 7 (the “ New Transfers ”):

	(a)		Sellers shall cause MGG to sell and transfer to Mylan Canada (i) the shares in Genius GmbH and (ii) the promissory note issued by Genius GmbH to MGG for the acquisition of Genpharm, Inc., a corporation organized under the laws of Ontario, Canada (the “ Genpharm Note ”) pursuant to a share and note purchase and transfer agreement in the form attached as Exhibit 4.1. 1(a)(i)(i) (the “ Genius GmbH SPA ”) in exchange for a promissory note (the “ Genius GmbH Note ”) in the form as attached as Exhibit 4.1. 1(a)(ii) (the “ Genius GmbH Transfer ”);
	(b)		Sellers shall cause MGG to sell and transfer the shares in Alphapharm to Mylan Australia pursuant to a share transfer form in the form attached as Exhibit 4.1. 1(b)(i) (the “ Alphapharm Transfer Form ”) in exchange for a promissory note (the “ Alphapharm Note ”) in the form as attached as Exhibit 4.1.1(ii) (the “ Alphapharm Transfer ”); and

(c)

Purchaser expressly confirms its intent that the Merck France Transfer falls within the scope of Section 223 B c. of the Code General des Impôts (the “ French Tax Code” ). In particular, if the Purchaser, or one of its Affiliates (other than Mylan France), were to hold the Shares in Merck France as a result of the transactions contemplated hereby, Purchaser expressly confirms its inten