0000898822-05-000109.txt : 20120628
0000898822-05-000109.hdr.sgml : 20120628
20050302172723
ACCESSION NUMBER: 0000898822-05-000109
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 6
FILED AS OF DATE: 20050302
DATE AS OF CHANGE: 20050302
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: EON LABS INC
CENTRAL INDEX KEY: 0001168061
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 133653818
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-80561
FILM NUMBER: 05655354
BUSINESS ADDRESS:
STREET 1: 787 SEVENTH AVE
CITY: NEW YORK
STATE: NY
ZIP: 10019
BUSINESS PHONE: 2127288116
MAIL ADDRESS:
STREET 1: 227 -15 NORTH CONDUIT AVE
CITY: LAURELTON
STATE: NY
ZIP: 11413
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: NOVARTIS AG
CENTRAL INDEX KEY: 0001114448
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 000000000
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
BUSINESS ADDRESS:
STREET 1: LICHSTRASSE 35
CITY: BASEL SWITZERLAND
STATE: V8
ZIP: CH 4056
MAIL ADDRESS:
STREET 1: LICHSTRASSE 35
CITY: BASEL SWITZERLAND
ZIP: CH 4056
SC 13D
1
ma1sc13d.txt
SCHEDULE 13D - MARCH 1, 2005
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
-----------------
EON LABS, INC.
-----------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
-----------------------------------------------------------------------
(Title of Class of Securities)
29412E100
-----------------------------------------------------------------------
(CUSIP Number of Class of Securities)
George Miller Trevor S.Norwitz, Esq.
Novartis AG Wachtell, Lipton, Rosen & Katz
Lichtstrasse 35 51 West 52 Street
CH-4002, Basel New York , New York 10019
Switzerland (212) 403-1000
41-61-324-1111
-----------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
February 20, 2005
-----------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss.240.13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
-----------------------------------------------------------------------
2
CUSIP No. 29412E100
--------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS:
Novartis Corporation
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
13-1834433
------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a) [ ]
--------------------------------------------------------
(b) [ ]
--------------------------------------------------------
3. SEC USE ONLY:
------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
AF
------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
------------------------------------------------------------
Number of 7. SOLE VOTING POWER
Shares 0
Beneficially ------------------------------------------------------------
Owned by
Each
Reporting
Person With 8. SHARED VOTING POWER
0
------------------------------------------------------------
3
9. SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
60,000,000
------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,000,000 (1)
------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.5%
------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
------------------------------------------------------------
---------------------------
(1) The Reporting Persons may be deemed to have shared dispositive power
over the Santo Shares (as defined in Item 4) pursuant to the Santo Stock
Purchase Agreement (as defined in Item 4). The Reporting Persons hereby disclaim
beneficial ownership of any shares of Common Stock.
4
CUSIP No. 29412E100
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS:
Zodnas Acquisition Corp.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
Not available
------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a) [ ]
-------------------------------------------------------
(b) [ ]
-------------------------------------------------------
3. SEC USE ONLY:
------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
AF
------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
------------------------------------------------------------
Number of 7. SOLE VOTING POWER
Shares 0
Beneficially ------------------------------------------------------------
Owned by
Each 8. SHARED VOTING POWER
Reporting 0
Person With ------------------------------------------------------------
5
9. SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
60,000,000
------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,000,000 (2)
------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
Shares (See Instructions) [ ]
------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.5%
------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
------------------------------------------------------------
---------------------------
(2) The Reporting Persons may be deemed to have shared dispositive power
over the Santo Shares (as defined in Item 4) pursuant to the Santo Stock
Purchase Agreement (as defined in Item 4). The Reporting Persons hereby disclaim
beneficial ownership of any shares of Common Stock.
6
CUSIP No. 29412E100
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS:
Novartis AG
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
98-0363351
------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a) [ ]
-------------------------------------------------------
(b) [ ]
-------------------------------------------------------
3. SEC USE ONLY:
------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
WC
------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 0
Beneficially
Owned by
Each
Reporting 8. Shared Voting Power
Person With 0
------------------------------------------------------------
7
9. SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
60,132,122
------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,132,122(3)
------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.7%
----------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
----------------------------------------------------------------
---------------------------
(3) The Reporting Persons may be deemed to have shared dispositive power
over the Santo Shares (as defined in Item 4) pursuant to the Santo Stock
Purchase Agreement (as defined in Item 4) and Novartis AG may be deemed to have
shared dispositive power over the Hexal Owned Shres (as defined in Item 5)
pursuant to the Hexal Agreement (as defined in Item 5). The Reporting Persons
hereby disclaim beneficial ownership of any shares of Common Stock.
8
ITEM 1. SECURITY AND ISSUER
This Schedule 13D filed by Novartis AG ("Novartis"), Novartis Corporation,
("Novartis Corp"), and Zodnas Acquisition Corp. ("Zodnas" and, together with
Novartis and Novartis Corp, the "Reporting Persons") relates to the Common
Stock, par value $0.01 per share (the "Common Stock"), of Eon Labs, Inc., a
Delaware corporation (the "Company"). The principal executive offices of the
Company are located at 1999 Marcus Avenue, Lake Success, NY 11042.
ITEM 2. IDENTITY AND BACKGROUND
(a), (b), (c) and (f). The name, business address, present principal
occupation or employment and citizenship of the executive officers and members
of the Board of Directors of each of the Reporting Persons is set forth on
Schedule I hereto and is incorporated herein by reference.
(d) and (e). None of the Reporting Persons nor, to the best knowledge of
each of them, any of the persons listed on Schedule I hereto with respect to
each such Reporting Person during the last five years, (i) has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The funds for the transactions described in Item 4 below will be obtained
from cash on hand.
ITEM 4. PURPOSE OF TRANSACTION
(a) and (b). On February 20, 2005, Novartis Corp, Santo Holding
(Deutschland) GmbH ("Santo") and for purposes of Section 12 thereof only,
Novartis, entered into an Agreement for Purchase and Sale of Stock (the "Santo
Stock Purchase Agreement") relating to the purchase by Novartis Corp (or its
designee) of 60,000,000 shares of Common Stock (the "Santo Shares") representing
approximately 67.5% of the outstanding shares of Common Stock. A copy of the
Santo Stock Purchase Agreement is attached as Exhibit 2.1 hereto and
incorporated by reference herein.
Also on February 20, 2005, Novartis Corp, Zodnas, the Company and for
purposes of Section 10.12 only, Novartis, entered into an Agreement and Plan of
Merger (the "Merger Agreement"). The Merger Agreement provides for Zodnas to
commence a tender offer (the "Offer") for any and all shares of the Common Stock
at a price of $31.00 per share in cash (the "Offer Price"). However, although
the Offer is being made for any and all shares of Common Stock, Santo has agreed
to sell the Santo Shares to Novartis Corp (or its designee) pursuant to the
Santo Stock Purchase Agreement at a price per share that is less than the Offer
Price. Therefore, effectively the Offer will be made for all shares of Common
Stock, other than the Santo Shares (the "Public Shares"). The closing of the
Offer is conditioned, among other things, upon the contemporaneous or
immediately subsequent purchase of the Santo Shares under the Santo Stock
Purchase Agreement. The Merger Agreement further provides that if a majority of
the Public Shares are tendered into the Offer, Novartis Corp will cause a merger
of Zodnas with and into the Company, with the Company surviving, where all of
the remaining holders of Common Stock will receive $31.00 per share (the
"Merger"). In the event that less than a majority of the Public Shares are
tendered into the Offer, the Merger Agreement provides that the standstill
provisions in the Confidentiality Agreement, dated as of February 11, 2005 by
and between Novartis Corp and the Company (the "Confidentiality Agreement") will
be amended to provide that Novartis Corp and Zodnas will be permitted to make
acquisitions of shares of Common Stock that are voluntary to the holders of
Common Stock (such as by means of legally permissible open market purchases or
additional tender offers) and may consummate a merger or other business
combination with the Company prior to February 11, 2006, only if: (1) a majority
of the then-
9
outstanding Public Shares approve such transaction; or (2) Novartis
Corp and its subsidiaries own 90% or more the total outstanding shares of
Company Stock, provided that the price per share of Common Stock paid in any
such transaction described in (2) above is at least equal to the Offer Price.
Following the completion of the Offer, Novartis Corp and Zodnas are
required to use their reasonable best efforts to keep the Common Stock quoted
for trading on the NASDAQ National Market as long as the Company is registered
under the Securities Exchange Act of 1934, as amended and satisfies the NASDAQ
National Market's listing standards (other than standards entirely within the
Company's control).
Further, the Merger Agreement provides that from and after the date on
which Zodnas becomes obligated to accept for payment any and all shares of
Common Stock tendered into the Offer, Novartis Corp will be entitled to
designate each member of the Company's Board of Directors, and the Company will
be required to promptly take all actions necessary to cause Novartis Corp's
designees to be so elected. However, if Novartis and Zodnas have purchased in
the Offer a majority of the Public Shares, then until the effective time of the
Merger, Novartis Corp and Merger Sub will permit the members of the special
committee (the "Special Committee") of the Company's Board of Directors (or
their designees) to remain on the Company's Board of Directors.
A copy of the Merger Agreement is attached hereto as Exhibit 2.2 and
incorporated by reference herein and a copy of the Confidentiality Agreement is
attached as Exhibit 2.3 hereto and incorporated by reference herein.
The summaries of each of the Santo Stock Purchase Agreement, the Merger
Agreement and the Confidentiality Agreement are qualified in their entireties by
reference to the full text of the documents attached hereto as Exhibits 2.1, 2.2
and 2.3, respectively.
A copy of the press release relating to the transactions described above is
attached as Exhibit 99.1 hereto and incorporated by reference herein.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) and (b) On February 16 and 17, 2005, Novartis (Deutschland) GmbH
("Novartis Deutschland") and Novartis (as guarantor) entered into a Share and
Partnership Interest Sale and Transfer Agreement (the "Hexal Agreement"), with
Dr. Andreas Strungmann, Ms. Susan Strungmann, Ms. Nicole Strungmann, Mr. Florian
Strungmann, Dr. Thomas Strungmann, Ms. Cornelia Strungmann, Mr. Fabian
Strungmann, Ms. Janina Strungmann, Ms. Fiona Strungmann, Mr. Felix Strungmann,
Hexal Aktiengesellschaft and A+T Vermogensverwaltung GmbH, relating to the
acquisition of shares in A+T Vermogensverwaltung GmbH as well as partnership
interests in A+T Holding GmbH & Co. KG (the "Hexal Business"). In connection
with the purchase of the Hexal Business, Novartis Deutschland will acquire
132,122 shares of Common Stock currently held by the companies comprising the
Hexal Business (the "Hexal Owned Shares"), which represents approximately .1% of
the outstanding shares of Common Stock.
Other than as described in this Item 5 and in Item 4 above, as of the date
hereof, none of the Reporting Persons are the record holder of any shares of
Common Stock or have the right to acquire any Common Stock.
Novartis Corp may be deemed to have shared power to dispose or to direct
the disposition with respect to the Santo Shares and Novartis may be deemed to
have shared power to dispose or to direct the disposition with respect to the
Hexal Owned Shares. Novartis is the beneficial owner of all Common Stock
beneficially owned by Novartis Corp and Novartis Deutschland.
The Reporting Persons hereby disclaim beneficial ownership of any shares of
Common Stock. To the best knowledge of each of the Reporting Persons, none of
the persons listed on Schedule I hereto with respect to such Reporting Person is
the beneficial owner of any shares of Common Stock.
10
(c) Neither the Reporting Persons nor, to the best knowledge of each of the
Reporting Persons, any of the persons listed on Schedule I with respect to each
such Reporting Person has engaged in any transaction in the Common Stock in the
past 60 days other than as described in Item 4 and Item 5 above.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
See Item 4 and Item 5 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
------------- ------------------------------------------------------------------
2.1 Agreement for Purchase and Sale of Stock, by and among Novartis
Corporation, Santo Holding (Deutschland) GmbH and for purposes of
Section 12 only, Novartis AG, dated as of February 20, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
2.2 Agreement and Plan of Merger, by and among Novartis Corporation,
Zodnas Acquisition Corp., Eon Labs, Inc. and for purposes of
Section 10.12 only, Novartis AG, dated as of February 20, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
2.3 Confidentiality Agreement, by and between Novartis Corporation and
Eon Labs, Inc., dated as of February 11, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
99.1 Press Release, dated February 21, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
99.2 Joint Filing Agreement, by and among Novartis AG, Novartis
Corporation and Zodnas Acquisition Corp., dated as of March 2,
2005
------------- ------------------------------------------------------------------
11
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct. Dated: March 2, 2005
NOVARTIS AG
By: /s/ Reto Brandli
------------------------------------------
Name: Reto Brandli
Title: Head Group BP&A
By: /s/ Joerg Walther
------------------------------------------
Name: Joerg Walther
Title: Authorized Signatory
NOVARTIS CORP
By: /s/ Martin Henrich
------------------------------------------
Name: Martin Henrich
Title: Executive Vice President
ZODNAS ACQUISITION CORP
By: /s/ Urs A. Naegelin
------------------------------------------
Name: Urs A. Naegelin
Title: Director
12
Exhibit Index
------------- ------------------------------------------------------------------
2.1 Agreement for Purchase and Sale of Stock, by and among Novartis
Corporation, Santo Holding (Deutschland) GmbH and for purposes of
Section 12 only, Novartis AG, dated as of February 20, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
2.2 Agreement and Plan of Merger, by and among Novartis Corporation,
Zodnas Acquisition Corp., Eon Labs, Inc. and for purposes of
Section 10.12 only, Novartis AG, dated as of February 20, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
2.3 Confidentiality Agreement, by and between Novartis Corporation and
Eon Labs, Inc., dated as of February 11, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
99.1 Press Release, dated February 21, 2005
------------- ------------------------------------------------------------------
------------- ------------------------------------------------------------------
99.2 Joint Filing Agreement, by and among Novartis AG, Novartis
Corporation and Zodnas Acquisition Corp., dated as of March 2,
2005
------------- ------------------------------------------------------------------
13
DIRECTORS AND EXECUTIVE OFFICERS OF
NOVARTIS, NOVARTIS CORP AND ZODNAS
DIRECTORS AND EXECUTIVE OFFICERS OF NOVARTIS
The name, address, citizenship and present principal occupation or
employment of each of the directors and executive officers of Novartis are set
forth below. Unless otherwise indicated below, each occupation set forth
opposite an individual's name refers to employment with Novartis.
NAME, FUNCTION AND BUSINESS ADDRESS CITIZENSHIP PRINCIPAL OCCUPATION
Daniel Vasella Switzerland Chairman of the Board of
Chairman of the Board of Directors, Directors, Chief Executive
Chief Executive Officer Officer
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Hans-Jorg Rudloff Germany Chairman of the Executive
Vice Chairman of the Board of Committee of Barclays
Directors Capital
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Prof. Dr. Helmut Sihler Austria Retired
Vice Chairman of the Board of
Directors
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Birgit Breuel Germany Member of the Supervisory
Director Board of Gruner + Jahr AG,
c/o Novartis AG German
Lichtstrasse 35
CH-4002 Basel, Switzerland
Prof. Dr. Peter Burckhardt Switzerland Head of Medical Service at
Director the University Hospital of
c/o Novartis AG Lausanne
Lichtstrasse 35
CH-4002 Basel, Switzerland
Prof. Srikant Datar, PhD. India Senior Associate Dean for
Director Executive Education at
c/o Novartis AG Harvard Business School
Lichtstrasse 35
CH-4002 Basel, Switzerland
William W. George USA Chairman and Chief
Director Executive Officer of
c/o Novartis AG Medtronic, Inc.,
Lichtstrasse 35 Minneapolis
CH-4002 Basel, Switzerland
Alexandre F. Jetzer Switzerland Consultant
Director
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Pierre Landoldt Switzerland President of the Sandoz
Director Family Foundation
c/o Novartis AG
Lichtstrasse 35
14
CH-4002 Basel, Switzerland
Prof. Dr. Rolf M. Zinkernagel Switzerland Professor and Director of
Director the Institute of
c/o Novartis AG Experimental Immunology at
Lichtstrasse 35 the University of Zurich
CH-4002 Basel,
Switzerland
Prof. Ulrich Lehner, PhD Germany President and Chief
Director Executive Officer of
c/o Novartis AG Henkel KGaA
Lichtstrasse 35
CH-4002 Basel, Switzerland
Dr.-Ing. Wendelin Wiedeking Germany Chairman of Porsche AG
c/o Novartis AG Director
Lichtstrasse 35
CH-4002 Basel, Switzerland
Dr. Raymund Breu Switzerland Chief Financial Officer
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Dr. Urs Barlocher Switzerland Head of Legal and General
c/o Novartis AG Affairs
Lichtstrasse 35
CH-4002 Basel, Switzerland
Jurgen Brokatzky-Geiger Germany Head of Human Resources
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Dr. Paul Choffat Switzerland Head of Novartis Consumer
c/o Novartis AG Health
Lichtstrasse 35
CH-4002 Basel, Switzerland
Thomas Ebeling Germany Head of Pharmaceuticals
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Mark C. Fishman USA Head of Biomedical
c/o Novartis AG Research
Lichtstrasse 35
CH-4002 Basel, Switzerland
Steven Kelmar USA Head of Public Affairs
c/o Novartis AG and Communications
Lichtstrasse 35
CH-4002 Basel, Switzerland
15
DIRECTORS AND EXECUTIVE OFFICERS OF NOVARTIS CORP
The name, address, citizenship and present principal occupation or
employment of each of the directors and executive officers of Novartis Corp are
set forth below. Unless otherwise indicated below, each occupation set forth
opposite an individual's name refers to employment with Novartis Corp.
NAME, FUNCTION AND BUSINESS ADDRESS CITIZENSHIP PRINCIPAL OCCUPATION
Daniel Vasella Switzerland Chairman of the Board of
Chairman of the Board of Directors Directors and Chief
c/o Novartis AG Executive Officer of
Lichtstrasse 35 Novartis
CH-4002 Basel, Switzerland
Terence Barnett Great Britain Vice Chairman, President
Vice Chairman of the Board of and Chief Executive
Directors Officer
c/o Novartis Corporation
608 Fifth Avenue
New York, NY 10020,
USA
Dr. Raymund Breu Switzerland Chief Financial Officer of
Director Novartis
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Thomas Ebeling Germany Head of Novartis Pharma
Director
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Fred Meyer Switzerland Retired
Director
c/o Omnicom Group, Inc.
437 Madison Avenue
New York, NY 10022, USA
Urs Naegelin Switzerland Executive Vice President
c/o Novartis Corporation and Chief Financial
608 Fifth Avenue Officer
New York, NY 10020, USA
Dr. Paul Choffat Switzerland Division Head Consumer
c/o Novartis AG Health
Lichtstrasse 35
CH-4002 Basel, Switzerland
Dr. Martin Henrich Switzerland Executive Vice President,
c/o Novartis Corporation Regional General Counsel
608 Fifth Avenue and Secretary of Novartis
New York, NY 10020, USA Corp
16
DIRECTORS AND EXECUTIVE OFFICERS OF ZODNAS
The name, address, citizenship and present principal occupation or
employment of each of the directors and executive officers of Zodnas are set
forth below. Unless otherwise indicated below, each occupation set forth
opposite an individual's name refers to employment with Zodnas.
NAME, FUNCTION AND BUSINESS ADDRESS CITIZENSHIP PRINCIPAL OCCUPATION
Terence Barnett Great Vice Chairman, President
Chairman of the Board of Directors Britain and Chief Executive
c/o Novartis Corporation Officer of Novartis Corp
608 Fifth Avenue
New York, NY 10020, USA
Urs Naegelin Switzerland Executive Vice President
Director, Vice President and Chief Financial
c/o Novartis Corporation Officer of Novartis Corp
608 Fifth Avenue
New York, NY 10020, USA
Martin Henrich Switzerland Executive Vice President
Director, Vice President and and Regional General
Assistant Secretary Counsel of Novartis Corp
c/o Novartis Corporation
608 Fifth Avenue
New York, NY 10020, USA
John Sedor USA President and Chief
President Executive Officer of
c/o Sandoz Inc. Sandoz Inc.
506 Carnegie Center, Suite 400
Princeton, NJ 08540, USA
Eric W. Evans USA Vice President and Chief
Vice President and Chief Financial Financial Officer of
Officer Sandoz Inc.
c/o Sandoz Inc.
506 Carnegie Center, Suite 400
Princeton, NJ 08540, USA
Eric Pomerantz USA Vice President and General
Vice President and Secretary Counsel of Sandoz Inc.
c/o Sandoz Inc.
506 Carnegie Center, Suite 400
Princeton, NJ 08540, USA
Wayne P. Merkelson USA Vice President and
Vice President and Assistant Associate General Counsel
Secretary of Novartis Corp
c/o Novartis Corporation
608 Fifth Avenue
New York, NY 10020, USA
17
EX-2
2
ex2pt1.txt
EXHIBIT 2.1 - PURCHASE AGREEMENT
AGREEMENT FOR PURCHASE AND SALE OF STOCK OF
EON LABS, INC.
by and between
NOVARTIS CORPORATION,
as PURCHASER,
SANTO HOLDING (DEUTSCHLAND) GMBH,
as SELLER,
AND, FOR THE PURPOSES OF SECTION 12 ONLY, NOVARTIS AG
Dated as of February 20, 2005
TABLE OF CONTENTS
Page
Index of Defined
Terms........................................................................iii
Recitals.......................................................................1
1. Purchase and Sale of Stock................................................2
2. Purchase Price; Payment...................................................2
2.1 Purchase Price......................................................2
2.2 Payment.............................................................2
2.3 Interest............................................................2
3. Closing; Closing Date.....................................................2
4. Representations and Warranties of Seller..................................2
4.1 Capacity of Seller..................................................3
4.2 Ownership of the Stock..............................................3
4.3 Authorization of Agreement..........................................3
4.4 Non-Contravention...................................................3
4.5 Approvals and Consents..............................................4
4.6 Certain Representations Relating to the Company.....................4
5. Representations and Warranties of Purchaser and Parent....................4
5.1 Capacity of Purchaser...............................................4
5.2 Authorization of Agreement..........................................5
5.3 Non-Contravention...................................................5
5.4 Approvals and Consents..............................................5
6. Additional Covenants of Seller and Purchaser..............................5
6.1 Covenants of Seller Prior to Closing................................5
6.2 Deliveries at Closing...............................................6
7. Best Efforts..............................................................6
8. Conditions to Obligations of Purchaser....................................7
8.1 Representations and Warranties of Seller to be True;
Compliance with Covenants...........................................7
8.2 Hexal Purchase Agreement; Company Merger Agreement..................7
8.3 Consents; No Impediments............................................7
8.4 No Injunction.......................................................8
8.5 Deliveries..........................................................8
9. Conditions to Obligations of Seller.......................................8
9.1 Representations and Warranties of Purchaser and Parent
to be True; Compliance with Covenants...............................8
-i-
9.2 No Injunction.......................................................8
9.3 Deliveries..........................................................8
10. Indemnification...........................................................8
10.1 Exclusion of Statutory Law..........................................8
10.2 Indemnification by Seller...........................................9
11. General Provisions........................................................9
11.1 Termination.........................................................9
11.2 Effect of Termination..............................................10
11.3 Amendment of Agreement.............................................10
11.4 Contents of Agreement; Integration; Parties in Interest;
Assignment, etc....................................................10
11.5 Governing Law; Jurisdiction........................................10
11.6 Severability.......................................................10
11.7 Notices............................................................11
11.8 Counterparts.......................................................11
11.9 Expenses...........................................................12
11.10 No Third Party Beneficiaries.......................................12
11.11 Language...........................................................12
11.12 Assignment.........................................................12
11.13 Headings...........................................................12
12. Obligation of Controlling Shareholder....................................12
-ii-
INDEX
Agreement...............................................................Forepart
Closing........................................................................3
Closing Date...................................................................3
Common Stock............................................................Recitals
Company.................................................................Recitals
Company Merger Agreement................................................Recitals
Company Reports...........................................................4.6(b)
HSR.........................................................................5.4
Hexal Purchase Agreement................................................Recitals
Organizational Documents.....................................................4.4
Parent..................................................................Forepart
Parties.................................................................Forepart
Party...................................................................Forepart
Purchase Price...............................................................2.1
Purchaser...............................................................Forepart
Purchaser Indemnified Parties...............................................10.1
Seller..................................................................Forepart
Shares..................................................................Recitals
-iii-
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT FOR PURCHASE AND SALE OF STOCK (this "Agreement") dated as of
February 20, 2005 is executed by and between:
Novartis Corporation, a company organized under the laws of the State of
New York ("Purchaser") with its principal office located at 608 Fifth
Avenue, New York, NY 10020 USA;
Santo Holding (Deutschland) GmbH, a limited liability company organized
under the laws of Germany, with its principal office located at
Konigstrasse 1A, 70173 Stuttgart (Germany) ("Seller"); and
for the purposes of Section 12 only, Novartis AG, a company organized under
the laws of Switzerland ("Parent") with its principal office located at
Lichtstrasse 35, Basel, Switzerland.
Purchaser, Seller and Parent are sometimes referred to herein individually
as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Seller owns 60,000,000 (sixty million) shares of common stock, par
value $ 0.01 ("Common Stock"), of Eon Labs, Inc., a corporation organized under
the laws of the State of Delaware (the "Company") with its principal office at
199 Marcus Avenue, Lake Success, NY 11042 USA, which represents approximately
67.5% of the issued and outstanding capital stock of the Company; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, all of the shares of Common Stock owned by Seller and all other
rights relating thereto (the "Shares") upon the terms and conditions hereinafter
set forth;
WHEREAS, simultaneously with the execution hereof, an affiliate of
Parent is entering into an Agreement and Plan of Merger with the Company
providing for the purchase by Purchaser (or an affiliate thereof) of the
remaining shares of Common Stock not owned by Seller at a price per share of
Common Stock equal to U.S. $31.00 (thirty one U.S. dollars) on the terms and
subject to the conditions set forth therein (the "Company Merger Agreement");
WHEREAS, simultaneously with the execution hereof, Novartis (Deutschland) GmbH,
Obere Turnstrasse 8-10, D-90327 Nurnberg (Germany) is entering into a Share and
Partnership Interest Sale and Transfer Agreement (Notarial Deed of February
16/17, 2005, Allg. Prot. 2005/1 of the notary public Prof. Dr. Daniel Staehelin,
Basel with Dr. Andreas Strungmann, Mrs. Susan Strungmann, Mrs. Nicole Strungmann
und Mr. Florian Strungmann, all Riedersteinstrasse 36, 83684 Tegernsee, Germany,
Dr. Thomas Strungmann, Mrs. Cornelia Strungmann, Mr. Fabian Strungmann, Mrs.
Janina Strungmann, Mrs. Fiona Strungmann, and Mr. Felix Strungmann, all
Dillisweg 7, 83684 Tegernsee, Germany, relating to the acquisition by Purchaser
of shares in A+T Vermogensverwaltung GmbH as well as partnership interests in
A+T
1
Holding GmbH & Co. KG, on the terms and subject to the conditions set forth
therein (the "Hexal Purchase Agreement");
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants hereinafter set forth, intending to be legally bound, the Parties
agree as follows:
1. PURCHASE AND SALE OF STOCK.
Subject to the terms and conditions of this Agreement, at Closing (as
defined below), (a) Seller shall sell, transfer, assign and deliver the
Shares to Purchaser (or its designee); and (b) Purchaser (or its designee)
shall purchase the Shares from Seller.
2. PURCHASE PRICE; PAYMENT.
2.1 PURCHASE PRICE.
The purchase price for the Shares (the "Purchase Price") shall be Euro
1.300.000.000 (Euro one billion three hundred million).
2.2 PAYMENT.
At Closing, Purchaser (or its designee) shall pay to Seller the
Purchase Price in immediately available Euro by wire transfer to such
account as designated by Seller, which designation shall occur at
least three (3) business days prior to the Closing Date (as defined
below).
2.3 INTEREST.
The Purchase Price shall bear interest per annum as from January 1st ,
2005 until the date of payment based on three months EURIBOR (Euro
Interbank Offering Rate) as of the Closing Date plus one percent. Any
interest shall be due and payable together with the principal amount
to which it relates.
3. CLOSING; CLOSING DATE.
Unless otherwise agreed to by Purchaser and Seller, the closing ("Closing")
of the purchase and sale of the Shares shall take place within 10 (ten)
business days following the date on which all of the conditions to Closing
set forth in Sections 8 and 9 hereto (other than closing deliveries) shall
have been satisfied or waived (such date, the "Closing Date").
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Purchaser and Parent as follows:
2
4.1 CAPACITY OF SELLER.
Seller is a limited liability company duly organized and validly
existing under the laws of Germany, with full power, authority and
capacity to (a) own and hold the Shares; and (b) enter into, deliver
and perform all of its obligations under this Agreement.
4.2 OWNERSHIP OF THE STOCK.
All of the Shares have been duly authorized and validly issued, and
are fully paid up, and are owned by Seller free and clear of any and
all encumbrances or third party rights of any kind. There is no
outstanding obligation on the part of Seller to make any additional
contributions to the share capital of the Company. There are no
outstanding options, warrants or other rights of any kind, including
any right of conversion, pre-emption or right of first refusal
entitling any person to acquire from Seller any Shares. No proxy has
been given, appointed or granted which is still effective with respect
to any of the Shares, and Seller has sole power of disposition with
respect to the Shares. Upon delivery of the certificates for the
Shares at the Closing as provided herein, Seller will transfer to
Purchaser valid title to the Shares, free and clear of any liens,
security interests, pledges or encumbrances of any kind.
4.3 AUTHORIZATION OF AGREEMENT.
Seller has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and the performance of its
obligations hereunder, and this Agreement is a valid and binding
agreement and obligation of Seller enforceable against Seller in
accordance with its terms.
4.4 NON-CONTRAVENTION.
Neither the execution, delivery or performance of this Agreement by
Seller, nor the consummation by it of the transactions contemplated
hereby, shall constitute a violation of or permit the termination of,
or create, or cause the acceleration of the maturity of any debt,
obligation or liability of Seller or result in the creation or
imposition of any security interest, lien, or other encumbrance upon
any of the Shares under: (a) any term or provision of the charter
documents or other similar organizational documents (the
"Organizational Documents" ) of Seller; (b) any loan, note or other
agreements of Seller with third parties; (c) any statute or law
applicable to Seller; or (d) any order, arbitration award, judgment or
decree by which Seller is bound, nor shall it result in a default
under any provision, term or condition of any understanding,
arrangement, agreement or other instrument or commitment or order of
any court to which Seller is a party or by which Seller is bound,
which in any such case would adversely affect the value of the Shares
or the ability of Seller to fulfill its obligations under this
Agreement.
3
4.5 APPROVALS AND CONSENTS.
No approvals or consents of, or applications or notices to, third
persons or entities are necessary for the lawful consummation by
Seller of the transactions contemplated by this Agreement.
4.6 CERTAIN REPRESENTATIONS RELATING TO THE COMPANY.
To Seller's best knowledge (NACH BESTEM WISSEN):
(a) The representations and warranties made by the Company in the Company
Merger Agreement that are qualified by materiality or material adverse
effect (or words of similar effect) are true and correct, and the
representations and warranties made by the Company in the Company Merger
Agreement that are not qualified by materiality or material adverse effect
(or words of similar effect) are true and correct in all material respects.
(b) The Company has filed with the U.S. Securities and Exchange Commission
all reports required to be so filed (the "Company Reports"), and the
Company Reports (including the financial statements included or
incorporated therein) comply in all material respects with the applicable
requirements of the U.S. securities laws and with applicable accounting
standards and, as of their respective dates (or, if amended, as of the date
of such amendment), did not contain any untrue statement of a material fact
or material omission.
(c) The financial statements included or incorporated in the Company
Reports fairly present, in all material respects, the consolidated
financial position and results of operations of the Company and its
subsidiaries as of their respective dates in accordance with U.S. generally
accepted accounting principles consistently applied during the periods
involved (except as may be noted therein).
(d) Since December 31, 2003, except as disclosed in the Company Reports
filed prior to the date hereof, (i) the Company has conducted its business
only in the ordinary course and has not engaged in any material transaction
other than in the ordinary course, and (ii) there has not been any event,
occurrence, discovery or development which would, individually or in the
aggregate, reasonably be expected to result in a material adverse effect on
the business, financial condition or results of operations of the Company.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT.
Each of Purchaser and Parent represents and warrants to Seller as follows:
5.1 CAPACITY OF PURCHASER.
It is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and has
full corporate power and authority to enter into, deliver and perform
all of its obligations under this Agreement.
4
5.2 AUTHORIZATION OF AGREEMENT.
It has taken all necessary corporate action on its part to authorize
the execution and delivery of this Agreement and the performance of
its obligations hereunder, and this Agreement is a valid and binding
agreement and obligation of it, enforceable against it in accordance
with its terms.
5.3 NON-CONTRAVENTION.
Neither the execution, delivery or performance of this Agreement by
it, nor the consummation by Purchaser of the transactions contemplated
hereby, shall constitute a violation of or permit the termination of,
or create, or cause the acceleration of the maturity of any debt,
obligation or liability of it under: (a) its Organizational Documents;
(b) any loan, note or other agreements of it with third parties; (c)
any statute or law applicable to it; or (d) any order, arbitration
award, judgment or decree by which it is bound, nor shall it result in
a default under any provision, term or condition of any understanding,
arrangement, agreement or other instrument or commitment or order of
any court to which it is a party or by which it is bound which in any
such case would adversely affect its ability to fulfill its
obligations under this Agreement.
5.4 APPROVALS AND CONSENTS.
No approvals or consents of, or applications or notices to, third
persons or entities are necessary for the lawful consummation by
Purchaser of the transactions contemplated by this Agreement other
than pursuant to the Hart Scott Rodino Antitrust Improvements Act of
1976, as amended and the regulations promulgated thereunder terminated
(the "HSR Act").
6. ADDITIONAL COVENANTS OF SELLER AND PURCHASER.
Seller covenants and agrees with Purchaser and Parent, until Closing,
as follows:
6.1 COVENANTS OF SELLER PRIOR TO CLOSING.
(a) Seller shall not: (i) sell, assign or otherwise dispose of, or pledge,
subject to lien or otherwise encumber any of the Shares; (ii) grant any
proxies or powers of attorney, deposit any securities of the Company into a
voting trust or enter into a voting agreement with respect to any
securities of the Company, or any interest in any of the Shares, except
with or to Purchaser (or its designee); (iii) take any action that would
make any representation or warranty, contained herein, untrue or incorrect;
or (iv) agree to do any of the foregoing.
(b) Seller shall use its best efforts (NACH BESTEN KRAFTEN BEMUHEN) to
cause the Company to operate diligently in the ordinary course of business,
consistent with past practice, and shall cause the Company to fulfill its
covenants and obligations under the Company Merger Agreement. Without
limiting the foregoing, specifically, Seller shall use best efforts (NACH
BESTEN KRAFTEN BEMUHEN) to cause the Company not to:
5
(i) modify or amend its Organizational Documents in any way that
would or would be reasonably expected to adversely affect the consummation
of the transactions contemplated by this Agreement including the timing
therefor;
(ii) incur any indebtedness for borrowed money that cannot be
repaid or retired within 30 (thirty) days at no penalty;
(iii) (1) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other than
dividends and distributions by any subsidiary of the Company to the
Company; (2) split, combine or reclassify any of its capital stock, or
issue or authorize the issuance of any other securities, including in
respect of, in lieu of or in substitution for shares of its capital stock;
(3) purchase, redeem or otherwise acquire any shares of its capital stock
or any rights, warrants or options to acquire any such shares or other
securities; or (4) take any action to transfer value from the Company to
Seller or its other affiliates;
(iv) extend, modify, terminate, amend or enter into any contract
with any affiliate of the Company, except pursuant to intercompany
transactions in the ordinary course; or
(v) authorize or commit to do or agree to take, whether in
whether in writing or otherwise, any of the foregoing actions.
(c) Seller shall cause Dr. Thomas Strungmann to remain in his current
position as an officer of the Company through the Closing.
(d) Seller shall inform Purchaser and Parent promptly if it learns of any
event, fact or circumstance, including a breach of one or more of its
representations and warranties, that may result in one or more conditions
to Purchaser's and Parent's obligations to effect the Closing not being
satisfied.
6.2 DELIVERIES AT CLOSING.
(a) At the Closing, Seller shall deliver, or cause to be delivered, to
Purchaser (or its designee) the certificates representing the Shares
duly endorsed in the name of Purchaser (or its designee), free and
clear of all options, liens, claims, charges, restrictions and other
encumbrances of any nature whatsoever; and
(b) At the Closing, Purchaser shall, or shall cause one or more of its
affiliates to, deliver the Purchase Price to Seller, as provided in
Section 2.
7. BEST EFFORTS.
Seller and Purchaser each hereby agree that they will cooperate and use
their respective best efforts (NACH BESTEN KRAFTEN BEMUHEN) to fulfill the
conditions precedent to each other party's obligations hereunder, including
securing as promptly as practicable all consents, approvals, waivers and
authorizations required in connection with the purchase and sale of the
Shares.
6
8. CONDITIONS TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser under this Agreement shall be subject to the
satisfaction on or before the Closing Date of each of the following
conditions unless previously waived in writing by Purchaser:
8.1 REPRESENTATIONS AND WARRANTIES OF SELLER TO BE TRUE; COMPLIANCE WITH
COVENANTS.
The representations and warranties of Seller contained in this
Agreement that are qualified as to materiality or material adverse
effect (or words of similar effect) shall be true and accurate at and
as of the Closing Date as if made as of such date, and the
representations and warranties that are not qualified by materiality
or material adverse effect (or words of similar effect) shall be true
and accurate in all material respects as of the Closing Date as if
made as of such date. Seller shall have performed and complied with,
in all material respects, all obligations and covenants required by
this Agreement to be performed or complied with by Seller prior to or
on the Closing Date.
8.2 HEXAL PURCHASE AGREEMENT; COMPANY MERGER AGREEMENT.
The closing of the transactions contemplated by the Hexal Purchase
Agreement shall have been consummated or shall be consummated
contemporaneously with the Closing.
As of the Closing Date, the representations and warranties of the
Company contained in the Company Merger Agreement that are qualified
as to materiality or material adverse effect (or words of similar
effect) shall be true and accurate at and as of the Closing Date as if
made as of such date, and the representations and warranties that are
not qualified by materiality or material adverse effect (or words of
similar effect) shall be true and accurate in all material respects as
of the Closing Date as if made as of such date. The Company shall have
performed and complied with, in all material respects, all obligations
and covenants required by the Company Merger Agreement to be performed
or complied with by the Company prior to or on the Closing Date.
8.3 CONSENTS; NO IMPEDIMENTS.
All consents necessary to consummate the purchase and sale of the
Shares (including, without limitation, expiration of all applicable
waiting periods under the HSR Act) shall have been received in form
and substance reasonably satisfactory to Purchaser and no further
consents or approval shall be required, and no impediments shall
exist, to the consummation of the transactions contemplated by the
Company Merger Agreement. There shall be nothing preventing the
closing of the tender offer provided for in the Company Merger
Agreement from occurring contemporaneously with the Closing.
7
8.4 NO INJUNCTION.
No governmental entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, or non-appealable judgment, decree, injunction or other
order that is in effect on the Closing Date and prohibits the
consummation of the Closing.
8.5 DELIVERIES.
Purchaser shall have received the certificates representing the Shares
and all other documents required hereunder to be submitted by Seller
to Purchaser at the Closing.
9. CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller under this Agreement shall be subject to the
satisfaction on or before the Closing Date of each of the following
conditions unless previously waived in writing by Seller:
9.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT TO BE TRUE;
COMPLIANCE WITH COVENANTS.
The representations and warranties of Purchaser and Parent contained
within this Agreement shall be true and accurate as of the Closing
Date as if made as of such date. Purchaser and Parent shall have
performed and complied with, in all material respects, all obligations
and covenants required by this Agreement to be performed or complied
with by each of them prior to or on the Closing Date.
9.2 NO INJUNCTION.
No governmental entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, or non-appealable judgment, decree, injunction or other
order that is in effect on the Closing Date and prohibits the
consummation of the Closing.
9.3 DELIVERIES.
Seller shall have received the Purchase Price required to be paid by
Purchaser pursuant to Section 2.
10. INDEMNIFICATION.
10.1 EXCLUSION OF STATUTORY LAW.
Seller and the Purchaser hereby expressly exclude the applicability of
Sections 434 to 453 German Civil Code (BURGERLICHES GESETZBUCH, BGB)
as well as any and all statutory warranty claims there under. Seller
and the Purchaser further agree that the representations and
warranties made by Seller in Section 4 hereto,
8
in particular, do not qualify as guarantees (BESCHAFFENHEITSGARANTIEN)
within the meaning of Sections 443, 444 German Civil Code
(BURGERLICHES GESETZBUCH, BGB) and that the consequences of any breach
of the representations and warranties set forth in Section 4 hereto
are exclusively governed by the terms and conditions of this
Agreement.
Furthermore Seller and the Purchaser confirm that the limitations to
the representations and warranties as specified in this Section 10
(and by way of reference in the Hexal Purchase Agreement) or otherwise
in this Agreement shall form an integral part of the representations
and warranties and that the representations and warranties set forth
in Section 4 hereto are only given subject to such provisions and
limitations
10.2 INDEMNIFICATION BY SELLER.
Seller hereby agrees that it shall indemnify, defend and hold harmless
Parent, Purchaser, their affiliates, and their respective directors,
officers, shareholders, partners, employees and representatives and
their heirs, successors and assigns (the "Purchaser Indemnified
Parties") from, against and in respect of any Losses incurred or
suffered by or asserted against any of the Purchaser Indemnified
Parties, directly or indirectly relating to or arising out of (a) any
breach of any representation or warranty made by Seller contained in
this Agreement and (b) any breach of any covenant or agreement of
Seller contained in this Agreement, in each case (a) and (b) to the
same extent, on the same terms and conditions and subject to the same
limitations (including, without limitation, survival periods,
deductibles and caps (expressed as a percentage of the Purchase
Price)) and procedures as Purchaser and its affiliates are indemnified
for such matters in the Hexal Purchase Agreement; provided that in the
event of any Loss, Seller shall be responsible under this Agreement
only for the amount of Loss equal to the total amount of such Loss
multiplied by a fraction, the numerator of which is the number of
Shares and the denominator of which is the total number of shares of
Common Stock outstanding as of immediately prior to the Closing.
11. GENERAL PROVISIONS.
11.1 TERMINATION.
This Agreement may be terminated and the transactions contemplated by
it may be abandoned at any time prior to Closing:
(a) by mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser on or after December 31, 2005 if the
Closing shall not have theretofore occurred; provided, however, that the
terminating party is not in material breach of its obligations hereunder or
under the Hexal Purchase Agreement.
9
11.2 EFFECT OF TERMINATION.
In the event of the termination of this Agreement in accordance with
Section 11.1, this Agreement shall thereafter become void and of no
further effect, and no party hereto shall have any liability to the
other party hereto or their respective affiliates, directors, officers
or employees, except that nothing in this Section 11.2 will relieve
any party from liability for any breach of this Agreement prior to
such termination, for which liability the provisions of Articles 10
and 11 shall remain in effect in accordance with the provisions of
such Articles.
11.3 AMENDMENT OF AGREEMENT.
Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of
an amendment, by each of the parties hereto, or in the case of a
waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by applicable
law.
11.4 CONTENTS OF AGREEMENT; INTEGRATION; PARTIES IN INTEREST; ASSIGNMENT,
ETC.
This Agreement and the documents referred to herein set forth the
entire understanding of the Parties with respect to the subject matter
hereof. Any previous agreements or understandings, representations or
warranties between the Parties, or information exchanged by and
regarding the subject matter hereof, are merged into and superseded by
this Agreement. The terms and conditions of this Agreement shall be
binding upon and inure to the benefit of and, to the extent provided
herein, be enforceable by the respective successors and assigns of the
Parties.
11.5 GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by the laws of the Federal Republic
of Germany. The exclusive place of venue shall be Munich. To the
extent that any of the parties are not businessmen (KAUFLEUTE) this
clause as to the exclusive place of venue shall only apply in the
cases of Section 38 para 3 no. 2 and Section 38 para 2 German Civil
Procedure Code (ZPO).
11.6 SEVERABILITY.
In the event that any portion of this Agreement shall be declared by
any court of competent jurisdiction to be invalid, illegal or
unenforceable, such portion shall be deemed severed from this
Agreement and the remaining parts hereof shall remain in full force
and effect as fully as if those such invalid, illegal or unenforceable
portions had never been a part of this Agreement.
10
11.7 NOTICES.
Any notice that a Party is required or permitted to give pursuant to
this Agreement shall be in writing and shall be effective upon
receipt. Such notices shall be sent by facsimile to the facsimile
numbers specified below, unless notice of a change of facsimile is
given in writing, and shall be confirmed in writing, hand-delivered or
sent by public mail or private delivery service, with evidence of
receipt in each instance, to the addresses specified below unless
notice of a change of address is given in writing:
If to Seller:
Santo Holding (Deutschland) GmbH,
Konigstrasse 1A
D-70173 Stuttgart
Tel. +49 711 292660
Fax +49 711 2260910
with a copy (which shall not constitute notice) to:
Dr. Thomas Strungmann
Dillisweg 7
D-83684 Tegernsee
Tel. +49 8022 26777
Fax. +49 8022 670289
If to Purchaser or Parent:
Novartis AG
General Counsel
Lichtstrasse 35
4056 Basel, Schweiz
Tel.: +41 61 324 24 28
Fax.: +41 61 324 3731
11.8 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be
considered one and the same agreement.
11
11.9 EXPENSES.
Except as provided in Section 11, Purchaser and Seller shall each pay
its own taxes, costs and expenses (without limitation, costs, expenses
and fees of its investment bankers, legal counsel, accountants,
financial advisors, and other consultants and agents) in the
negotiation, preparation and implementation of this Agreement and all
transactions contemplated herein.
11.10 NO THIRD PARTY BENEFICIARIES.
Except as provided for herein, this Agreement shall not convey any
rights on a person not a party hereto.
11.11 LANGUAGE.
This Agreement has been executed only in the English language.
11.12 ASSIGNMENT.
Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Party without the prior written consent of
the other Party; provided, however, that Purchaser shall have the
right to assign this Agreement and any of the rights (but not the
obligations) hereunder to any affiliate thereof.
11.13 HEADINGS.
The heading references herein are for convenience purposes only, do
not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
12. OBLIGATION OF CONTROLLING SHAREHOLDER.
Whenever in this Agreement performance of or compliance with a covenant or
obligation is expressed to be required by Purchaser, Parent shall cause
Purchaser to perform or comply with such covenant or obligation, such that
any failure of Purchaser to perform or comply with any such covenant or
obligation shall be deemed to be a breach of such covenant or obligation by
Parent.
[Signature page follows]
12
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be duly executed as of the day and year first written above.
SANTO HOLDING (DEUTSCHLAND) GMBH
By: /s/ Wolfgang Boorberg
-------------------------------------
Wolfgang Boorberg
(Authorized Signatury)
NOVARTIS CORPORATION
By: /s/ Joerg Walther
-------------------------------------
Joerg Walther
(Authorized Signatury)
NOVARTIS AG
By: /s/ Urs Baerlocher
-------------------------------------
Urs Baerlocher
(Authorized Signatury)
By: /s/ Joerg Walther
-------------------------------------
Joerg Walther
(Authorized Signatury)
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
EX-2
3
ex2pt2.txt
EXHIBIT 2.2 - MERGER AGREEMENT
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
NOVARTIS CORPORATION
ZODNAS ACQUISITION CORP.
an indirect, wholly owned subsidiary of Novartis Corporation
EON LABS, INC.
and for purposes of Section 10.12 only, NOVARTIS AG
Dated as of February 20, 2005
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EXECUTION COPY
TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER .................................................1
ARTICLE I The Offer .....................................................2
1.1 The Offer .....................................................2
1.2 Company Actions ...............................................4
1.3 Directors .....................................................5
ARTICLE II The Merger ....................................................6
2.1 The Merger ....................................................6
2.2 Effective Time ................................................6
2.3 Certificate of Incorporation ..................................6
2.4 By-Laws .......................................................6
2.5 Directors .....................................................6
2.6 Officers ......................................................7
ARTICLE III Effect of the Merger on Capital Stock; Exchange of Certificates 7
3.1 Effect on Capital Stock .......................................7
3.2 Exchange of Share Certificates ................................8
3.3 Dissenters' Rights ...........................................10
3.4 Stockholders' Meeting ........................................10
3.5 Merger Without Meeting of Stockholders .......................11
ARTICLE IV The Closing ..................................................11
4.1 Closing ......................................................11
ARTICLE V Representations and Warranties ...............................11
5.1 Representations and Warranties of the Company ................11
5.2 Representations and Warranties of Novartis and Merger Sub ....16
ARTICLE VI Conduct of Business Pending the Merger .......................18
6.1 Covenants of the Company .....................................18
ARTICLE VII Additional Agreements ........................................19
7.1 Access .......................................................19
7.2 No Solicitation ..............................................20
7.3 Other Actions; Notification ..................................20
7.4 Publicity ....................................................21
7.5 Expenses .....................................................21
7.6 Anti-Takeover Statute ........................................21
7.7 Novartis Vote ................................................21
7.8 Section 16 Matters ...........................................21
7.9 Indemnification; Directors' and Officers' Insurance ..........21
ARTICLE VIII Conditions ...................................................22
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8.1 Conditions to Each Party's Obligation to Effect the Merger ...22
ARTICLE IX Termination ..................................................23
9.1 Termination by Mutual Consent ................................23
9.2 Termination Upon Termination of the Santo Agreement ..........23
9.3 Termination Upon Expiration of Offer Without Requisite
Tender Amount ...........................................23
9.4 Effect of Termination and Abandonment ........................23
ARTICLE X Miscellaneous and General ....................................24
10.1 Survival .....................................................24
10.2 Modification or Amendment ....................................24
10.3 Waiver of Conditions .........................................24
10.4 Counterparts .................................................24
10.5 Governing Law and Venue ......................................24
10.6 Notices ......................................................24
10.7 Entire Agreement; No Other Representations ...................26
10.8 No Third-Party Beneficiaries .................................26
10.9 Severability .................................................26
10.10 Interpretation ...............................................27
10.11 Assignment ...................................................27
10.12 Parent Guarantee .............................................27
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PAGE
INDEX OF DEFINED TERMS
DEFINED TERM SECTION
Affiliate ...............................................................5.1(a)
Agreement .............................................................Preamble
Anti-Takeover Statute ......................................................7.7
By-Laws ....................................................................2.4
Certificate .............................................................3.1(c)
Certificate of Incorporation ...............................................2.3
Certificate of Merger ......................................................2.2
Closing ....................................................................4.1
Closing Date ...............................................................4.1
Company ...............................................................Preamble
Company Common Stock ..................................................Recitals
Company Disclosure Schedule ................................................5.1
Company Material Adverse Effect ........................................ 5.1(a)
Company Option .......................................................3.1(d)(i)
Company Outstanding Shares ..............................................3.2(a)
D&O Insurance .........................................................7.10(ii)
DGCL ....................................................................1.2(a)
Dissenting Shares .......................................................3.3(a)
Effective Time .............................................................2.2
Exchange Act ............................................................1.1(a)
Exchange Fund ...........................................................3.2(a)
Expiration Date .........................................................1.1(b)
Governmental Entity .....................................................3.2(b)
Law .....................................................................1.1(b)
Maximum Annual Premium ................................................7.10(ii)
Merger .......................................................................1
Merger Consideration ....................................................3.1(c)
Merger Sub ............................................................Preamble
Novartis ..............................................................Preamble
Novartis Disclosure Schedule ...............................................5.2
Offer .................................................................Recitals
Offer Documents .........................................................1.1(a)
Offer Price ...........................................................Recitals
Option Cash Payment ..................................................3.1(d)(i)
Organizational Documents .............................................5.1(c)(i)
Paying Agent ............................................................3.2(a)
Person ..................................................................3.2(b)
Proxy Statement .....................................................3.4(a)(ii)
Public Shares .........................................................Recitals
Representatives ............................................................7.1
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DEFINED TERM SECTION
Requisite Tender Amount ....................................................2.1
Santo .................................................................Recitals
Santo Agreement .......................................................Recitals
Santo Shares ..........................................................Recitals
Schedule 14D-9 ..........................................................1.2(a)
SEC .....................................................................1.1(a)
Special Committee .....................................................Recitals
Special Meeting ......................................................3.4(a)(i)
Surviving Corporation ......................................................2.1
Tender Offer Conditions .................................................1.1(a)
Year End ................................................................5.1(g)
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") is made and entered
into as of this 20th day of February 2005, by and among Novartis Corporation, a
New York corporation ("NOVARTIS"), Zodnas Acquisition Corp., an indirect, wholly
owned Subsidiary of Novartis ("MERGER SUB"), Eon Labs, Inc., a Delaware
corporation (the "COMPANY") and, for purposes of Section 10.12 only, Novartis
AG, a Swiss Company ("PARENT").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Parent, Novartis and Merger Sub, have
each unanimously approved the acquisition of the Company on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, contemporaneously with the execution of this Agreement, Novartis
is entering into an Agreement for Purchase and Sale of Stock (the "SANTO
AGREEMENT") by and among Novartis, Santo Holding (Deutschland) GmbH ("SANTO"),
and Novartis AG whereby Novartis is agreeing to purchase, and Santo is agreeing
to sell, all of the 60,000,000 (sixty million) shares of common stock, par value
$0.01 per share of the Company ("COMPANY COMMON STOCK") owned by Santo (the
"SANTO SHARES", such transaction, the "SANTO PURCHASE"), representing
approximately 67.5% of the total amount of outstanding shares of Company Common
Stock, on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to this Agreement, Novartis and Merger Sub have agreed
that (i) Merger Sub will commence a tender offer (the "OFFER") to purchase all
of the outstanding shares of Company Common Stock other than the Santo Shares
(the "PUBLIC SHARES"), at a price per share of U.S. $31.00 (thirty one U.S.
dollars) net to the seller in cash (the "OFFER PRICE") upon the terms and
subject to the conditions set forth in this Agreement and (ii) if Merger Sub
acquires the Requisite Tender Amount (as defined below) pursuant to the Offer,
Merger Sub will merge with and into the Company, with the Company being the
surviving corporation, on the terms and subject to the conditions set forth in
this Agreement (the merger of Merger Sub into the Company being referred to in
this Agreement as the "MERGER");
WHEREAS, the Board of Directors of the Company and a special committee of
the Board of Directors of the Company consisting of independent directors not
affiliated with Santo (the "SPECIAL COMMITTEE") (i) have approved the Offer,
(ii) have determined that the Offer, the Merger (as defined herein) and the
other transactions contemplated hereby are fair to and in the best interests of
the Company and its stockholders other than Santo, (iii) have approved this
Agreement and the transactions contemplated hereby and (iv) are recommending
that the Company's stockholders other than Santo accept the Offer, tender their
shares of Company Common Stock to Merger Sub in the Offer and adopt this
Agreement;
WHEREAS, Novartis, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and to prescribe certain conditions to the Offer and the
Merger;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article IX hereof, within 10 (ten) Business Days following the
date hereof (or such later date as the parties may mutually agree), Merger Sub
will commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (including the rules and regulations promulgated
thereunder, the "EXCHANGE ACT")) an offer to purchase any and all outstanding
Public Shares at the Offer Price, shall file a Schedule TO and all other
necessary documents with the Securities and Exchange Commission (the "SEC") and
make all deliveries, mailings and telephonic notices required by Rule 14d-3
under the Exchange Act, in each case in connection with the Offer (such
documents filed with the SEC and such other deliveries, mailings and notices,
the "OFFER DOCUMENTS") and shall use reasonable best efforts to consummate the
Offer, subject to the terms and conditions thereof. Novartis will cause Merger
Sub to accept for payment or pay for any Public Shares tendered pursuant to the
Offer, subject only to (1) the contemporaneous (or immediately subsequent)
purchase of the Santo Shares pursuant to the Santo Agreement and (2) all of the
requirements of Law for consummating the Offer (the "TENDER OFFER CONDITIONS").
"LAW" shall mean any applicable United States or foreign, federal, state or
local law, statute, ordinance, rule, regulation, judgment, order, injunction,
decree, agency requirement, license or permit of any Governmental Entity.
"GOVERNMENTAL ENTITY" shall mean any United States or foreign federal, state or
local governmental or regulatory authority, agency, commission, body or other
governmental entity. "BUSINESS DAY" shall mean any day that is not a Saturday,
a Sunday or other day on which banks are required or authorized by Law to be
closed in The City of New York.
(b) Without the prior written consent of the Company by action of the
Special Committee, Merger Sub shall not decrease the Offer Price or change the
form of consideration payable in the Offer, decrease the number of Public
Shares sought to be purchased in the Offer, impose additional conditions to the
Offer or amend any other term of the Offer in any manner adverse to the holders
of Public Shares, except as provided in this Agreement. The Offer shall remain
open until the date that is 20 (twenty) business days (as such term is defined
in Rule 14d-1(g)(3) under the Exchange Act) after the commencement of the Offer
(the "EXPIRATION DATE"), unless Novartis shall have extended the period of time
for which the Offer is open pursuant to, and in accordance with, the two
succeeding sentences or as may be required by applicable Law, in which event
the term "Expiration Date" shall mean the latest time and date as the Offer,
as so extended, may expire; PROVIDED, HOWEVER, that Novartis may provide for a
subsequent offering period after the Expiration Date, in accordance with Rule
14d-11 under the Exchange Act (including the obligation that Merger Sub accept
and promptly pay for any Public Shares tendered during such subsequent offering
period). If, at any Expiration Date, any of the Tender
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Offer Conditions are not satisfied or waived by Merger Sub, Merger Sub shall
extend the Offer from time to time, each such extension not to exceed such
number of days that Merger Sub reasonably believes are necessary to cause the
Tender Offer Conditions to be satisfied (but in any event not more than 30
Business Days per extension unless the parties shall otherwise mutually agree),
PROVIDED, that at an Expiration Date, if all of the Tender Offer Conditions
have been satisfied or waived, Merger Sub may extend the Offer for a period of
time not to exceed 10 (ten) Business Days on one occasion in order to obtain
the Requisite Tender Amount (as defined below) of tendered shares (if at least
40% of the Public Shares have been tendered and not withdrawn at that Expiration
Date) and on one occasion in order to satisfy the requirements necessary to
effect a subsequent merger without a meeting of stockholders as contemplated by
Section 3.5 (if the number of Public Shares tendered and not withdrawn at that
Expiration Date together with other Company Common Stock owned by Merger Sub
and Novartis or to be acquired under the Santo Agreement would constitute at
least 80% of the Company Common Stock). Subject to the terms of the Offer and
this Agreement and the satisfaction of all the Tender Offer Conditions as of
any Expiration Date, Novartis will cause Merger Sub to accept for payment and
pay for any and all Public Shares validly tendered and not validly withdrawn
pursuant to the Offer at the earliest time after such Expiration Date,
regardless of the number of Public Shares tendered in the Offer (such date as
Merger Sub shall be obligated to accept for payment any and all Public Shares
validly tendered and not validly withdrawn pursuant to the Offer, the
"ACCEPTANCE DATE"). On the Acceptance Date, the Confidentiality Agreement,
dated as of February 11, 2005, by and between Novartis and the Company (the
"CONFIDENTIALITY AGREEMENT") shall be amended such that the fifth paragraph
thereof shall permit Novartis and Merger Sub to make acquisitions of Public
Shares that are voluntary to the holders of Public Shares (such as by means of
legally permissible open market purchases or tender offers), but shall not
permit Novartis to cause a merger transaction (or other business combination)
to be effected which would cancel Public Shares unless (i) a majority of the
outstanding Public Shares vote in favor of such a transaction or (ii) Novartis
and its Subsidiaries shall, at that time, own at least 90% of the outstanding
Company Common Stock; PROVIDED, that the consideration to be received by the
holders of Public Shares in any such transaction described in (ii) above shall
be at least equal to the Offer Price per Public Share.
(c) Novartis and Merger Sub represent that the Offer Documents will comply
in all material respects with the provisions of applicable federal and state
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, except
that no representation is made by either Novartis or Merger Sub with respect to
information supplied by the Company in writing for inclusion in the Offer
Documents. Each of Novartis and Merger Sub, on the one hand, and the Company, on
the other hand, agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that it shall have become false
or misleading in any material respect and Merger Sub further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to stockholders of the Company, in each case, as
and to the extent required by applicable federal securities laws. The Company
and its counsel shall be given a reasonable opportunity to review and comment on
the Offer Documents in advance of their filing with the SEC or dissemination to
stockholders of the Company. Novartis shall provide to the Company
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and its counsel in writing any comments Novartis, Merger Sub or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly after receipt of such comments.
1.2 COMPANY ACTIONS.
(a) The Company shall, after affording Novartis a reasonable opportunity
to review and comment thereon, file with the SEC and mail to the holders of
Company Common Stock, as promptly as practicable on the date of the filing by
Novartis and Merger Sub of the Offer Documents, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "SCHEDULE 14D-9") reflecting the recommendation of the Company's
Board of Directors and the Special Committee that holders of Public Shares
tender their shares of Company Common Stock into the Offer, and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby
represents, that the Company's Board of Directors and the Special Committee, at
a meeting duly called at which a quorum was present throughout, have (i)
determined by unanimous vote of all its members that each of the transactions
contemplated hereby, including each of the Offer and the Merger, is fair to and
in the best interests of the Company and its stockholders other than Santo,
(ii) approved the Santo Purchase, the Offer and the Merger and this Agreement
in accordance with the Delaware General Corporation Law ("DGCL"), (iii)
recommended acceptance and approval of the Offer and adoption of this Agreement
by the Company's stockholders, and (iv) taken all other action within the Board
of Directors' and the Special Committee's power to render Section 203 of the
DGCL, if applicable, inapplicable to the Santo Purchase, the Offer and the
Merger, PROVIDED, HOWEVER, that Novartis and Merger Sub agree that such
recommendations may be modified or withdrawn after the date hereof if, but only
if, after consultation with its outside counsel, the Special Committee
determines that doing so is required in the proper exercise of its fiduciary
duties. The Company further represents that, prior to the execution hereof,
Merrill Lynch & Co. ("MERRILL LYNCH") has delivered to the Special Committee
its written opinion that, as of the date of this Agreement, the consideration
to be received by the holders of Public Shares pursuant to the Offer and the
Merger is fair to such stockholders from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the recommendations
of the Special Committee described in this Section 1.2(a).
(b) The Company represents that the Schedule 14D-9 shall comply in all
material respects with the provisions of applicable federal and state securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Novartis or Merger Sub in writing for inclusion in the Schedule 14D-9. Each of
the Company, on the one hand, and Novartis and Merger Sub, on the other hand,
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect, and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to stockholders of the Company, in each case, as and
to the extent required by applicable federal securities laws.
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The Company shall provide to Novartis and its counsel in writing any comments
the Company or its counsel may receive from the SEC or its staff with respect
to the Schedule 14D-9 promptly after receipt of such comments.
(c) In connection with the Offer, the Company will promptly furnish Merger
Sub with mailing labels, security position listings, any available non-objecting
beneficial owner lists and any available listing or computer list containing the
names and addresses of the record holders of the Company Common Stock as of the
most recent practicable date and shall furnish Merger Sub with such additional
available information (including, but not limited to, updated lists of holders
of the Company Common Stock and their addresses, mailing labels and lists of
security positions and non-objecting beneficial owner lists) and such other
assistance as Merger Sub or its agents may reasonably request in communicating
the Offer to the Company's record and beneficial stockholders. Subject to the
requirements of applicable Law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Novartis, Merger Sub and their Affiliates, associates, agents and
advisors shall keep such information confidential and use the information
contained in any such labels, listings and files only in connection with the
Offer and the Merger and, should the Offer terminate or if this Agreement shall
be terminated, will destroy all copies of such information then in their
possession, PROVIDED, that Novartis, Merger Sub and their Affiliates,
associates, agents and advisors may keep one copy of such information in the
office of their general counsel solely for the purpose of preserving the record
of the materials received and using the same to defend against any claims or
actions threatened or instituted involving such information. Novartis, Merger
Sub and their Affiliates, associates, agents and advisors may retain all
analyses, compilations, studies or other documents or records prepared by them,
which contain or otherwise reflect or are generated from such information.
1.3 DIRECTORS.
(a) Subject to compliance with applicable Law, from and after the
Acceptance Date, Novartis shall be entitled to designate each member of the
Company's Board of Directors, and the Company shall promptly take all actions
necessary to cause Novartis' designees to be so elected, including, if
necessary, seeking the resignations of one or more existing directors and prior
to the Acceptance Date removing any potential restrictions on the ability of
any Novartis designees to serve on the Company's Board of Directors; PROVIDED,
that if Novartis and the Company shall have purchased in the Offer (including
any subsequent offering period) the Requisite Tender Amount, then until the
Effective Time, Novartis and Merger Sub shall allow the members of the Special
Committee or their designees' who shall be deemed the "Special Committee" for
all purposes of this Agreement, to remain on the Company's Board of Directors
provided, that if both of the members of the Special Committee shall be unable
or unwilling to remain on the Company's Board of Directors and neither shall
have designated a replacement, Novartis shall be permitted to replace such
members with other independent directors who shall be deemed the "Special
Committee" for all purposes of this Agreement; PROVIDED, however, that such
independent directors designated by Novartis shall not have the authority to
reduce the Merger Consideration.
(b) The Company's obligations to appoint Novartis' designees to the
Company's Board of Directors shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1
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thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Novartis will supply to the Company any information with respect to itself and
its nominees, officers, directors and Affiliates required by such Section and
Rule.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, at the Effective Time, Merger
Sub shall be merged with and into the Company, and the separate corporate
existence of Merger Sub shall thereupon cease. The Company shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"SURVIVING CORPORATION"), and the separate corporate existence of the Company
with all of its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except as set forth in this Article II.
The Merger shall have the effects specified in the DGCL.
2.2 EFFECTIVE TIME. As promptly as practicable after the satisfaction or,
if permissible, waiver of the conditions set forth in Article VIII, the parties
hereto shall cause the Merger to be consummated by filing this Agreement or a
certificate of merger (the "CERTIFICATE OF MERGER") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL (the date and time that the
Merger becomes effective in accordance with applicable Law being the "EFFECTIVE
TIME").
2.3 CERTIFICATE OF INCORPORATION. At the Effective Time, and without any
further action on the part of the Company or Merger Sub, subject to Section 7.9,
the certificate of incorporation of Merger Sub, as in effect immediately prior
to the Effective Time, shall be amended in its entirety to read the same as the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein or by applicable Law (the "CERTIFICATE OF
INCORPORATION").
2.4 BY-LAWS. At the Effective Time, and without any further action on the
part of the Company or Merger Sub, subject to Section 7.9, the by-laws of Merger
Sub, as in effect immediately prior to the Effective Time, shall be amended in
its entirety to read the same as the by-laws of the Surviving Corporation (the
"BY-LAWS"), until thereafter amended as provided therein, in the Certificate of
Incorporation or in accordance with applicable Law.
2.5 DIRECTORS. Subject to requirements of applicable Law, the directors of
Merger Sub immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Certificate of
Incorporation and the By-Laws.
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2.6 OFFICERS. The officers of the Company immediately prior to the
Effective Time shall, from and after the Effective Time, be the officers of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Certificate of Incorporation and the By-Laws.
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the
Merger and without any further action on the part of the Company, Novartis,
Merger Sub or any holder of any shares of capital stock of the Company,
Novartis or Merger Sub:
(a) MERGER SUB. Each share of common stock, par value of $0.01 per share,
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one (1) fully paid share of common stock,
par value $0.01 per share, of the Surviving Corporation (which will be owned by
Novartis) and constitute the only outstanding shares of capital stock of the
Surviving Corporation and shall not be affected by the Merger.
(b) CANCELLATION OF TREASURY STOCK AND NOVARTIS-OWNED STOCK. Each share of
Company Common Stock that is owned by the Company directly as treasury stock or
by Parent or any of its Subsidiaries (other than in a representative or
fiduciary capacity) shall automatically be retired and shall cease to be
outstanding, and no cash or other consideration shall be delivered in exchange
therefor. As used in this Agreement, "SUBSIDIARY" when used with respect to any
party hereto, means any entity of which such party (a) owns 50% or more of the
outstanding securities or other ownership interests, or (b) through contract or
otherwise possesses power to appoint at least 50% of the directors of such
entity (or Persons performing similar functions).
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to Section 3.3, each issued
and outstanding share of Company Common Stock (other than shares of Company
Common Stock to be retired in accordance with Section 3.1(b)), shall be
converted into the right to receive the Offer Price in cash, without interest
(the "MERGER CONSIDERATION"). As of the Effective Time, all such shares of
Company Common Stock shall no longer be outstanding and shall automatically be
retired and shall cease to exist, and each holder of a certificate representing
any such shares of Company Common Stock (a "CERTIFICATE") shall cease to have
any rights with respect thereto, except the right to receive, upon the surrender
of such certificates (for each share of Company Common Stock represented
thereby), the Merger Consideration.
(d) STOCK OPTIONS. As of the Effective Time, each outstanding option to
purchase shares of Company Common Stock under any employee stock option or
compensation plan or arrangement of the Company (a "COMPANY OPTION"), whether
or not exercisable or vested, shall by virtue of the Merger and without any
action on the part of any holder of any Company Option be cancelled and the
holder thereof will receive as soon as reasonably practicable following the
Effective Time a cash payment with respect thereto equal to the product of
(a)the excess, if any, of the Merger Consideration over the exercise price per
share of such Company Option and (b) the number of shares of Company Common
Stock issuable upon exercise of such Company Option (the "OPTION CASH PAYMENT").
As of the Effective Time, all Company Options shall no
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longer be outstanding and shall automatically cease to exist, and each holder
of a Company Option shall cease to have any rights with respect thereto, except
the right to receive the Option Cash Payment. Prior to the Acceptance Date the
Company shall take any and all actions necessary to effectuate this Section
3.1(d).
3.2 EXCHANGE OF SHARE CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Novartis shall designate a
paying agent reasonably acceptable to the Company to act as paying agent (the
"PAYING AGENT") for the payment of the Merger Consideration or other payment to
which holders of Company Options shall become entitled pursuant to Section 3.1.
Prior to the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware, Novartis shall deposit with the Paying Agent, for the
benefit of the holders of Certificates and Company Options, cash equal to the
product of (A) the number of shares of Company Common Stock outstanding (and not
to be retired pursuant to Section 3.1(b)) as of immediately prior to the
Effective Time (the "COMPANY OUTSTANDING SHARES") MULTIPLIED BY (B) the Merger
Consideration, plus an amount equal to (Y) the sum of the Option Cash Payments.
The deposit made by Novartis, pursuant to this Section 3.2(a) is hereinafter
referred to as the "EXCHANGE FUND." The Paying Agent shall cause the Exchange
Fund to be (i) held for the benefit of the holders of Company Common Stock and
holders of Company Options and (ii) applied promptly to making the payments
provided for in Section 3.1. The Exchange Fund shall not be used for any purpose
that is not expressly provided for in this Agreement. If the Paying Agent
invests the Exchange Fund, the Paying Agent shall only invest the Exchange Fund
in obligations of or guaranteed by the United States of America and backed by
the full faith and credit of the United States of America or in commercial paper
obligations rated A-1 or P-1 or better by Moody's Investors Services, Inc. or
Standard & Poor's Corporation, respectively.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, Novartis shall cause the Paying Agent to mail to each holder of
record of a Certificate (i) a letter of transmittal specifying that delivery of
the Certificates shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates (or
affidavits of loss in lieu thereof) to the Paying Agent, such letter of
transmittal to be in customary form and have such other provisions as Novartis
may reasonably specify and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for the Merger Consideration (such instructions
shall include instructions for the payment of the Merger Consideration to a
Person other than the Person in whose name the surrendered Certificate is
registered on the transfer books of the Company, subject to the receipt of
appropriate documentation for such transfer). Upon surrender to the Paying Agent
of a Certificate (or evidence of loss in lieu thereof) for cancellation together
with such letter of transmittal, duly completed and validly executed, and such
other documents as may reasonably be requested by the Paying Agent, the holder
of such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration that such holder is entitled to receive pursuant to this Article
III, and the Certificate so surrendered shall forthwith be cancelled; PROVIDED
that in no event will a holder of a Certificate be entitled to receive the
Merger Consideration if Merger Consideration was already paid with respect to
the shares of Company Common Stock underlying such Certificate in connection
with an affidavit of loss. No interest will be paid or accrued on any amount
payable upon due surrender of the Certificates. In the event of a transfer of
ownership of Company Common Stock that is not
8
registered in the transfer records of the Company, payment may be issued to such
a transferee if the Certificate formerly representing such Company Common Stock
is presented to the Paying Agent, accompanied by all documents required to
evidence and effect such transfer, and the Person requesting such issuance pays
any transfer or other taxes required by reason of such payment to a Person other
than the registered holder of such Certificate or establishes to the
satisfaction of Novartis and the Company that such tax has been paid or is not
applicable.
For the purposes of this Agreement, the term "PERSON" shall mean any
individual, corporation (including not-for-profit corporations), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.
(c) TRANSFERS. After the Effective Time, there shall be no registration of
transfers on the stock transfer books of the Company of Company Common Stock
that were outstanding immediately prior to the Effective Time.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
relating to the Merger Consideration that remains unclaimed by the stockholders
of the Company or holders of Company Options 180 (one hundred and eighty) days
after the Effective Time shall be returned to Novartis or the Surviving
Corporation. Any stockholders of the Company or holders of Company Options who
have not theretofore complied with this Article III shall thereafter look only
to Novartis for payment of the Merger Consideration upon due surrender of their
Certificates (or affidavits of loss in lieu thereof), without any interest
thereon. Notwithstanding the foregoing, none of Novartis, Merger Sub, the
Surviving Corporation, the Paying Agent or any other Person shall be liable to
any former holder of Company Common Stock or holder of Company Options for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar Laws.
(e) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Novartis, the posting by such Person of
a bond reasonably satisfactory to Novartis as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration upon due surrender of the Company Common Stock represented by such
Certificate pursuant to this Agreement.
(f) WITHHOLDING RIGHTS. Each of Novartis, Merger Sub, the Paying Agent and
the Surviving Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to this Article III such
amounts as it is required to deduct and withhold with respect to the making of
such payment under provision of any federal, state, local or foreign tax law. If
Novartis, Merger Sub, the Paying Agent or the Surviving Corporation, as the case
may be, so withholds amounts, such amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Company Common Stock in
respect of which Novartis, Paying Agent or the Surviving Corporation, as the
case may be, made such deduction and withholding.
9
3.3 DISSENTERS' RIGHTS.
(a) Notwithstanding anything in any other Section of this Agreement to the
contrary, Company Common Stock, outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such shares in accordance
with Section 262 of the DGCL (the "DISSENTING SHARES") shall not be converted
into, or represent the right to receive, the Merger Consideration, unless such
holder fails to perfect or withdraws or otherwise loses his right to appraisal.
At the Effective Time, all Dissenting Shares shall no longer be outstanding and
shall automatically be cancelled and shall cease to exist, and each holder of
Dissenting Shares shall cease to have any rights with respect thereto, except
the right to receive, subject to and net of any applicable withholding of Taxes,
payment of the appraised value of such Dissenting Shares held by them in
accordance with the provisions of Section 262 of the DGCL. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall waive,
withdraw or lose the right to appraisal under Section 262 of the DGCL or a court
of competent jurisdiction shall determine that such holder is not entitled to
the relief provided by Section 262 of the DGCL, then the right of such holder to
receive, subject to and net of any applicable withholding of Taxes, payment of
the appraised value of such Dissenting Shares held by them in accordance with
the provisions of Section 262 of the DGCL shall cease and such Dissenting Shares
shall thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 3.2, of the Certificate or Certificates that formerly
evidenced such Dissenting Shares.
(b) The Company shall give Novartis prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands and any other
instruments served on or otherwise received by the Company pursuant to the DGCL,
and Novartis shall have the right to participate in and control all negotiations
and proceedings with respect to demands for appraisal under the DGCL. The
Company shall not, except with the prior written consent of Novartis, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
3.4 STOCKHOLDERS' MEETING.
(a) If required by applicable Law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable Law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
the Acceptance Date for the purpose of considering and taking action upon
this Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement or
information statement relating to this Agreement and any other required
filings, and use its reasonable efforts (x) to obtain and furnish the
information required to be included by the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Novartis, to respond
promptly to any comments made by the SEC with respect to the preliminary
proxy statement and cause a definitive proxy or information statement (the
10
"PROXY STATEMENT") and any other required documents to be mailed to its
stockholders and (y) to obtain the necessary approvals of the Merger and
this Agreement and the transactions contemplated hereby by its
stockholders; and
(iii) subject to the proviso in the second sentence of Section 1.2(a),
include, if required, in the Proxy Statement the recommendation of the
Company's Board of Directors and the Special Committee that the
stockholders of the Company adopt this Agreement.
3.5 MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding Section 3.4,
but subject to Article VIII hereof, in the event that Novartis, Merger Sub or
any other Subsidiary of Novartis shall acquire at least 90% of the outstanding
Company Common Stock following the purchase of the Santo Shares and the
completion of the Offer, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment of and payment for Company Common
Stock by Merger Sub pursuant to the Offer without a meeting of stockholders of
the Company, in accordance with Section 253 of the DGCL.
ARTICLE IV
THE CLOSING
4.1 CLOSING. The closing of the Merger (the "CLOSING") shall take place
(i) at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street,
New York, New York 10019 at 10:00 a.m. Eastern time on the second Business Day
after the last to be satisfied or waived of the conditions set forth in Article
VIII (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions)
shall be satisfied or waived (by the party entitled to the benefit of such
condition) in accordance with this Agreement or (ii) at such other place and
time and/or on such other date as the Company and Novartis may agree in writing
(the "CLOSING DATE").
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in
the section of the disclosure schedules delivered to Novartis by the Company on
or prior to the date of this Agreement (the "COMPANY DISCLOSURE SCHEDULE") that
corresponds with the applicable subsection of Section 5.1, the Company hereby
represents and warrants to Novartis and Merger Sub that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company and
each of its Subsidiaries is a corporation duly organized, validly existing and
in good standing under the Laws of its respective jurisdiction of organization.
Each of the Company and each of its Subsidiaries has all requisite corporate or
similar power and authority to own and operate its properties and assets and to
carry on its business as currently conducted and is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
11
ownership or operation of its properties and assets or conduct of its business
requires such qualification, except where the failure to be so qualified or be
in good standing that would not be reasonably likely, either individually or in
the aggregate, to have Company Material Adverse Effect. The Company has
heretofore made available to Novartis complete and correct copies of the
Company's and each of its Subsidiaries' certificate of incorporation and by laws
(or comparable governing instruments). The certificate of incorporation and by
laws or comparable governing instruments ("ORGANIZATIONAL DOCUMENTS") of each of
the Company and its Subsidiaries so made available are in full force and effect.
As used in this Agreement, the term "AFFILIATE" shall mean, with respect to
any Person, any other Person directly or indirectly controlling, controlled by,
or under common control with, such Person; PROVIDED, that, for the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
As used in this Agreement, the term "COMPANY MATERIAL ADVERSE EFFECT" means
a material adverse effect on the condition (financial or otherwise), business,
assets, liabilities or results of operations of the Company and its
Subsidiaries, taken as a whole, other than (i) any effect resulting from events,
facts or circumstances relating to the economy in general, including market
fluctuations and changes in interest rates, or to the Company's industry in
general and not specifically relating to the Company or any of its Subsidiaries,
other than any such effects that disproportionately impact the Company and its
Subsidiaries (ii) any effect resulting from changes in legal or regulatory
conditions that affect in general the business in which the Company and its
Subsidiaries are engaged, other than any such effects that disproportionately
impact the Company and its Subsidiaries or (iii) the impact of this Agreement,
the announcement or performance of this Agreement and the transactions
contemplated hereby (including the impact of this Agreement on relationships
with customers, suppliers, distributors or employees).
(b) CAPITAL STRUCTURE. The authorized capital stock of the Company consists
105,000,000 (one hundred and five million) shares, consisting of (i) 100,000,000
(one hundred million) shares of Company Common Stock, of which 88,832,664 shares
are outstanding as of the date hereof, and (ii) 5,000,000 (five million) shares
of preferred stock, par value $0.01 per share ("PREFERRED STOCK"), none of which
are outstanding as of the date hereof. Each of the outstanding shares of capital
stock or other securities of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and is owned by the
Company or a direct or indirect wholly owned Subsidiary of the Company, free and
clear of any lien, pledge, claim, option, charge, security interest, limitation,
encumbrance and restriction of any kind (including any restriction on the right
to vote, sell or otherwise dispose of such capital stock of other ownership
interests). Other than with respect to the Subsidiaries listed on Section 5.1(b)
of the Company Disclosure Schedule, the Company does not directly or indirectly
own any securities or other beneficial ownership interests in any other entity
(including through joint ventures or partnership arrangements), or have any
investment in any other Person. Other than options to purchase up to 4,737,980
shares of Company Common Shares at an average price of $12.69 per share pursuant
to the Company's 2001 Stock Option Plan and the Company's 2003 Stock Incentive
Plan, there are no preemptive or other outstanding rights, options, warrants,
12
conversion rights, stock appreciation rights, redemption rights, repurchase
rights, agreements, arrangements or commitments of any kind to which the Company
or any of its Subsidiaries is a party, or by which the Company or any of its
Subsidiaries are bound, obligating the Company or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, any shares of
capital stock or other securities of the Company or any of its Subsidiaries or
any securities or obligations convertible or exchangeable into or exercisable
for, or giving any Person a right to subscribe for or acquire, any securities of
the Company or any of its Subsidiaries, and no securities or obligations
evidencing such rights are authorized, issued or outstanding. Neither the
Company nor any of its Subsidiaries is a party to or aware of any voting or
other shareholders agreement with respect to its securities or the securities of
any of its Subsidiaries. Other than as set forth in Section 5.1(b) of the
Company Disclosure Schedule, there are not any outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire or to file any registration statement with respect to any
shares of capital stock of the Company or any of its Subsidiaries. Following the
consummation of the Merger, there will not be outstanding any rights, warrants,
options or other securities entitling the holder thereof to purchase, acquire or
otherwise receive any shares of the capital stock of the Company or any of its
Subsidiaries (or any other securities exercisable for or convertible into such
shares). Neither the Company nor any of its Subsidiaries has outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company or any Subsidiary of the
Company on any matter or any agreements with respect to the voting of any
Company Common Stock.
(c) CORPORATE AUTHORITY.
(i) The Company has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate, on the
terms and subject to the conditions of this Agreement, the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company, and no other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect
to the Merger, the adoption of this Agreement by the affirmative vote of
the holders of a majority of the then outstanding shares of Common Stock
entitled to vote thereon, to the extent required by applicable Law).
Assuming due authorization, execution and delivery by each of Novartis and
Merger Sub, this Agreement is a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms.
(ii) Each of the Company's Board of Directors and the Special
Committee has unanimously approved this Agreement and the Merger and other
transactions contemplated hereby and has approved the Santo Purchase, the
Offer and has recommended that the stockholders of the Company tender their
Public Shares into the Offer and adopt this Agreement.
(d) NO CONFLICTS. Neither the execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby nor compliance
13
by the Company with any of the provisions hereof or thereof will constitute or
result in (A) a breach, conflict or violation of, or a default under, the
Organizational Documents of the Company or any of its Subsidiaries, or (B) a
breach, conflict or violation of, a default under, the acceleration of any
obligations, the loss of any right or benefit, or the creation of a lien,
pledge, security interest or other encumbrance on any assets of the Company or
any Subsidiary of the Company (with or without notice, lapse of time or both)
pursuant to, any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation binding upon the Company or any Subsidiary of
the Company or any Law or governmental or non-governmental permit or license to
which the Company or any of its Subsidiaries is subject or (C) any change in the
rights or obligations of any party under contracts binding on the Company,
except, in the case of clause (B) or (C) above, for such breaches, conflicts,
violations, defaults, accelerations, creations or changes that would not be
reasonably likely, either individually or in the aggregate, to have a Company
Material Adverse Effect or prevent, impair or materially delay the ability of
the Company to consummate the transactions contemplated by this Agreement.
(e) THE COMPANY REPORTS; FINANCIAL STATEMENTS.
(i) The Company and its Subsidiaries have filed with the SEC all
registration statements, prospectuses, forms, reports, schedules,
statements and other documents required to be filed by them since May 24,
2002 under the Exchange Act or the Securities Act of 1933, as amended (the
"SECURITIES ACT") (collectively, the "COMPANY REPORTS"). The Company
Reports, including any financial statements or schedules included in the
Company Reports, at the time filed (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and the
dates of mailing, respectively, and, in the case of any Company Report
amended or superseded by a filing prior to the date of this Agreement,
then on the date of such amending or superseding filing) (i) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and (ii) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the
case may be. The financial statements of the Company and its Subsidiaries
included in the Company Reports (i) have been prepared from, and are in
accordance with, the books and records of the Company and its Subsidiaries,
(ii) at the time filed (and, in the case of registration statements and
proxy statements, on the dates of effectiveness and the dates of mailing,
respectively, and, in the case of any Company Report amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
amending or superseding filing) complied as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, (iii) were prepared
in accordance with United States generally accepted accounting principles
("U.S. GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto, or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and (iv)
fairly present in all material respects (subject, in the case of unaudited
statements, to normal, recurring audit adjustments) the consolidated
financial position of the Company and its consolidated Subsidiaries as at
the dates thereof and the consolidated results of their operations and cash
flows (and changes in financial position, if any) for the periods then
ended.
14
(ii) With respect to each Annual Report on Form 10-K and each
Quarterly Report on Form 10-Q included in the Company Reports filed since
January 1, 2003, the financial statements and other financial information
included in such reports fairly present (subject, in the case of unaudited
statements, to normal, recurring audit adjustments) in all material
respects the financial condition and results of operations of the Company
as of, and for, the periods presented in the Company Report. Since August
29, 2002, the Company's principal executive officer and its principal
financial officer have disclosed, based on their most recent evaluation,
to the Company's auditors and the audit committee of the Company's Board
of Directors (i) all significant deficiencies and material weaknesses in
the design or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the Company's ability to record,
process, summarize and report financial information and (ii) any fraud,
whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls over financial
reporting and the Company has provided to Novartis copies of any written
materials relating to the foregoing. The Company has established and
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, is made known to the
Company's principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which
the periodic reports required under the Exchange Act are being prepared;
and, to the knowledge of the Company, such disclosure controls and
procedures are effective in timely alerting the Company's principal
executive officer and its principal financial officer to material
information required to be included in the Company's periodic reports
required under the Exchange Act. There are no outstanding loans made by the
Company or any of its Subsidiaries to any executive officer (as defined in
Rule 3b-7 under the Exchange Act) or director of the Company. Since the
enactment of the Sarbanes-Oxley Act of 2002, neither the Company nor any of
its Subsidiaries has made any loans to any executive officer (as defined in
Rule 3b-7 under the Exchange Act) or director of the Company or any of its
Subsidiaries.
(f) NO UNDISCLOSED MATERIAL LIABILITIES. Except: (i) liabilities disclosed
and provided for on the balance sheets included in the Company Reports, (ii)
liabilities or obligations incurred in the ordinary course of business
consistent with past practices since September 30, 2004; or (iii) liabilities or
obligations that would not be reasonably likely, either individually or in the
aggregate to have Company Material Adverse Effect, there are no liabilities or
obligations of the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined or otherwise.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 2004 ("YEAR END"),
except as disclosed in the Company Reports filed on or after Year End and prior
to the date of the Agreement or as set forth on Section 5.1(g) of the Company
Disclosure Schedule, the Company and its Subsidiaries have conducted their
business only in, and have not engaged in any material transaction, entered into
any material agreement or made any material commitment other than according to,
the Company's ordinary and usual course of such business, and (i) there has not
been any Company Material Adverse Effect and (ii) neither the Company nor any of
its Subsidiaries has taken any action referred to in Section 6.1 except as
permitted hereby.
15
(h) LITIGATION. There are no civil, criminal or administrative actions,
suits, claims, hearings, investigations, reviews, inquiries or proceedings
pending, or to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, except for those that would not be reasonably likely,
either individually or in the aggregate, to have a Company Material Adverse
Effect or to prevent, impair or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement. Except as disclosed
in the Company Reports filed prior to the date of this Agreement, neither the
Company nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree which, individually or in the aggregate, would be
reasonably likely to have Company Material Adverse Effect or to prevent, impair
or materially delay the consummation of the transactions contemplated hereby.
(i) ANTI-TAKEOVER STATUTES. The Company has taken all action necessary to
exempt the purchase of the Santo Purchase, the Offer, the Merger, this Agreement
and the transactions contemplated hereby or thereby from the provisions of
Section 203 of the DGCL, if applicable, and such action is effective at the date
of this Agreement.
(j) BROKERS AND FINDERS. Except for Merrill Lynch, neither the Company nor
any of its Subsidiaries nor any of their respective officers, directors or
employees has retained any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the Offer, the
Merger, or the other transactions contemplated hereby or thereby. Prior to the
date hereof, the Company has provided Novartis with a true and complete copy of
the engagement letter between the Company and Merrill Lynch whose fee will be
paid by the Company.
(k) OPINION OF FINANCIAL ADVISOR. The Company has received an opinion of
Merrill Lynch, dated as of the date hereof, to the effect that, as of such date,
the consideration to be received by the holders of Public Shares pursuant to the
Offer and the Merger is fair to such stockholders from a financial point of
view.
5.2 REPRESENTATIONS AND WARRANTIES OF NOVARTIS AND MERGER SUB. Except as
set forth in the section of the disclosure schedules delivered to the Company by
Novartis on or prior to the date of this Agreement (the "NOVARTIS DISCLOSURE
SCHEDULE") that corresponds with the applicable subsection of Section 5.2,
Novartis and Merger Sub each represents and warrants to the Company that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of Parent,
Novartis and Merger Sub is a company duly organized, validly existing and in
good standing under the Laws of its respective jurisdiction of organization.
Each of Parent, Novartis and Merger Sub has all requisite corporate power to own
and operate its material properties and assets and to carry on its business as
currently conducted in all material respects and is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its properties and assets or conduct of its business
requires such qualification, except where the failure to be so qualified as a
foreign corporation or be in good standing would not be reasonably likely to
prevent, impair or materially delay the consummation of the transactions
contemplated by this Agreement.
16
(b) CORPORATE AUTHORITY.
(i) Each of Parent, Novartis and Merger Sub has all requisite
corporate power and authority and has taken all corporate action necessary
in order to execute, deliver and perform its obligations under this
Agreement and to consummate on the terms and subject to the conditions of
this Agreement, the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by Parent, Novartis and Merger
Sub, and no other corporate proceedings on the part of Parent, Novartis or
Merger Sub are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby. Assuming due
authorization, execution and delivery by the Company, this Agreement is a
valid and legally binding agreement of Parent, Novartis and Merger Sub,
enforceable against each of Parent, Novartis and Merger Sub in accordance
with its terms.
(ii) The Boards of Directors of Novartis and Merger Sub have approved
and adopted this Agreement and the Merger and other transactions set forth
herein.
(c) NO CONFLICTS. Neither the execution, delivery and performance of this
Agreement by Parent, Novartis and Merger Sub and the consummation by Parent,
Novartis and Merger Sub of the transactions contemplated hereby nor compliance
by Parent, Novartis and Merger Sub with any of the provisions hereof will
constitute or result in (A) a breach or violation of, or a default under the
Organizational Documents of Parent, Novartis, Merger Sub or of any of Parent's
Subsidiaries, (B) a breach or violation of, or a default under, the acceleration
of any obligations, the loss of any right or benefit or the creation of a lien,
pledge, security interest or other encumbrance on the assets of Parent,
Novartis, Merger Sub or any of Parent's Subsidiaries (with or without notice,
lapse of time or both) pursuant to any contracts binding upon Parent, Novartis,
Merger Sub or any of Parent's Subsidiaries or any Law or governmental or
non-governmental permit or license to which Parent, Novartis, Merger Sub or any
of Parent's Subsidiaries is subject, except, in the case of clause (B) above,
for such breaches, violations, defaults accelerations, creations or changes that
would not, individually or in the aggregate, be reasonably likely to prevent,
impair or materially delay the ability of Parent, Novartis or Merger Sub to
consummate the transactions contemplated hereby.
(d) REQUIRED FUNDS. Novartis has, and will provide to Merger Sub at the
expiration of the Offer and at the Closing, funds on hand necessary to
consummate the transactions contemplated by this Agreement and to pay all
related fees and expenses.
(e) CONSENTS AND APPROVALS. Neither the execution and delivery of this
Agreement by Novartis or Merger Sub nor the consummation of the transactions
contemplated by this Agreement will result in a violation of Law by Novartis or
Merger Sub. The execution and delivery of this Agreement by Novartis or Merger
Sub and the consummation of the transactions contemplated by this Agreement will
not require any material action or consent or approval of, or review by, or
registration or filing by Novartis or Merger Sub with any Governmental Entity
except for antitrust filings under the HSR Act and the laws of the European
Community, under the rules of the Exchange Act and under Delaware law.
17
(f) OWNERSHIP OF COMMON STOCK. None of Novartis or any of its Affiliates
(i) beneficially owns a Significant Amount of the shares of Company Common
Stock, directly or indirectly, (ii) has the right to acquire a Significant
Amount of shares of Company Common Stock pursuant to any agreement, arrangement
or understanding, or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise; (iii) has the right to vote a Significant
Amount of such stock pursuant to any agreement, arrangement or understanding; or
(iv) has any agreement, arrangement or understanding for the purposes of
acquiring, holding, voting or disposing of a Significant Amount such stock with
any other Person. As used in this Agreement, "SIGNIFICANT AMOUNT" means 5% or
more of the outstanding shares of Company Common Stock.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 COVENANTS OF THE COMPANY. The Company covenants and agrees as to
itself and its Subsidiaries (as applicable) that, from the date hereof and
continuing until the Effective Time, except as expressly contemplated or
permitted by this Agreement:
(a) the Company shall conduct its business only in the ordinary and usual
course, consistent with past practice, and it and its Subsidiaries shall use
their respective commercially reasonable efforts to (i) preserve their current
business organizations intact and maintain their existing relations and goodwill
with material customers, suppliers, distributors, creditors, lessors, licensors,
licensees, agents, employees, business associates and others having material
business dealings with them to the end that the Company's and its Subsidiaries'
goodwill and ongoing businesses shall not be impaired in any material respect at
the Effective Time; (ii) maintain and keep their properties and assets in good
repair and condition; and (iii) maintain in effect all governmental permits
pursuant to which the Company or any of its Subsidiaries currently operates;
(b) neither the Company nor any of its Subsidiaries shall (i) amend or
modify its Organizational Documents in any way that would or would be reasonably
expected to adversely affect the consummation of the transactions contemplated
by this Agreement, including the Offer and the Merger, including the timing
therefor; (ii) split, combine or reclassify its outstanding shares of capital
stock; (iii) declare, set aside or pay any dividend payable in cash, stock or
property in respect of any capital stock (other than dividends from its direct
or indirect wholly-owned Subsidiaries to it or a wholly owned Subsidiary in the
ordinary course of business); (iv) repurchase, redeem or otherwise acquire any
shares of its capital stock or any securities convertible into or exchangeable
or exercisable for any shares of its capital stock or permit any of its
Subsidiaries to purchase or otherwise acquire any shares of its capital stock or
any securities convertible into or exchangeable or exercisable for any shares of
its capital stock; or (v) make any other change in its capital structure;
(c) except as provided for herein or as required under agreements already
in existence, there shall not be any material increase in the compensation
payable or that could become payable by the Company or any of its Subsidiaries
to directors, officers or key employees or any material amendment of any of the
Company's employee compensation and
18
employee benefit plans other than increases to employees that are not officers
made in the ordinary course of business consistent with past practice;
(d) neither the Company nor any Subsidiary shall (i) directly or
indirectly, sell, transfer, lease, pledge, mortgage, encumber or otherwise
dispose of any material portion of its property or assets (including stock or
other ownership interests of its Subsidiaries) or (ii) acquire a material amount
of assets or capital stock of any other Person, other than in the ordinary
course of business, consistent with past practice;
(e) neither the Company nor any of its Subsidiaries shall make any change
in accounting principles, practices or methods which is not required by U.S.
GAAP;
(f) neither the Company nor any of its Subsidiaries shall issue, sell,
pledge, dispose of or encumber any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock of any class or
any other property or assets, other than Company Common Stock issuable pursuant
to options or restricted share units (whether or not vested) outstanding on the
date hereof;
(g) neither the Company nor any of its Subsidiaries shall extend, modify,
terminate, amend or enter into any contract with any Affiliate of the Company,
except pursuant to intercompany transactions in the ordinary course of business,
consistent with past practice; or
(h) neither the Company nor any of its Subsidiaries shall incur any
indebtedness for borrowed money that cannot be repaid or retired within 30 days
at no penalty; and
(i) neither the Company nor any of its Subsidiaries will authorize or
enter into an agreement to do anything prohibited by this Section 6.1.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 ACCESS. The Company agrees that upon reasonable notice, and except as
may otherwise be prohibited by applicable Law, it shall (and shall cause its
Subsidiaries to) afford Novartis' officers, directors, employees, counsel,
accountants and other authorized representatives ("REPRESENTATIVES") reasonable
access, during normal business hours throughout the period prior to the
Effective Time, to its executive officers, to its properties, books, contracts
and records, and, during such period, the Company shall (and shall cause its
Subsidiaries to) furnish promptly to Novartis all information concerning its
business, properties and personnel as may reasonably be requested; PROVIDED that
no investigation pursuant to this Section shall affect or be deemed to modify
any representation or warranty made by the Company, Novartis or Merger Sub in
this Agreement. The Company shall furnish promptly to Novartis a copy of each
report, schedule, registration statement and other document filed by it or its
Subsidiaries during such period pursuant to the requirements of federal or state
securities Laws.
19
7.2 NO SOLICITATION. From and after the date hereof, the Company shall
not, and shall not authorize or permit any of its Subsidiaries or any of its or
their Representatives to, directly or indirectly, solicit, initiate or encourage
any inquiries or the making of any proposal with respect to any merger,
liquidation, recapitalization, consolidation or other business combination
involving the Company or its Subsidiaries or acquisition of any capital stock or
any material portion of the assets of the Company or its Subsidiaries, or any
combination of the foregoing (other than Novartis, Merger Sub or their
respective directors, officers, employees, agents and representatives);
PROVIDED, HOWEVER, that at any time prior to the Acceptance Date the Company may
furnish information, hold discussions and take related actions in respect of any
such proposal received that was not solicited or knowingly encouraged by the
Company if, but only if, after consultation with its outside counsel, the
Special Committee determines that doing so is required in the proper exercise
of its fiduciary duties.
7.3 OTHER ACTIONS; NOTIFICATION.
(a) The Company and Novartis shall cooperate with each other and use (and
the Company shall its Subsidiaries to use and Novartis shall cause its
Affiliates to use) their respective reasonable best efforts to take or cause to
be taken all actions, and do or cause to be done all things, necessary, proper
or advisable on its part under this Agreement and applicable Law to consummate
and make effective the Offer and the Merger and the other transactions
contemplated hereby as soon as practicable.
(b) Each of the Company and Novartis shall as promptly as practicable,
following the execution and delivery of this Agreement, file with the United
States Federal Trade Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form, if any, required for the
consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR ACT"), and file such other filings and
notifications as are required under Law in foreign jurisdictions governing
merger control and/or foreign investment control and provide any supplemental
information requested in connection therewith pursuant to the HSR Act or any
other such other Law. Any such notification and report form, filings and
supplemental information shall be in substantial compliance with the
requirements of the HSR Act or any other such other Law. Each of the Company and
Novartis shall furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation of any
filing or submission that is necessary under the HSR Act or any other such Law.
(c) Subject to any confidentiality obligations, the Company and Novartis
each shall keep the other apprised of the status of matters relating to
completion of the transactions contemplated hereby, furnishing the other with
copies of filings with and notices or other communications received by Novartis
or its Affiliates or the Company or any of its Subsidiaries, as the case may be,
from any third party and/or any Governmental Entity with respect to the Offer
and the Merger and the other transactions contemplated hereby.
(d) Each party hereby agrees to perform any further acts and to execute
and deliver any documents which may be reasonably necessary to carry out the
provisions of this Agreement.
20
7.4 PUBLICITY. The Company and Novartis each shall consult with the other
prior to issuing any press releases or otherwise making public announcements
with respect to the Offer or the Merger and the other transactions contemplated
hereby and prior to making any filings with any third party and/or any
Governmental Entity with respect thereto, except as may be required by Law or by
obligations pursuant to any listing agreement with or rules of any national
securities exchange or national market system on which such party's securities
are listed or traded.
7.5 EXPENSES. Whether or not the Offer or the Merger is consummated, all
costs and expenses incurred in connection with the Offer and the Merger and the
other transactions contemplated hereby shall be paid by the party incurring such
expense, except that each of the Company and Novartis shall bear and pay
one-half of the costs and expenses incurred in connection with the filing,
printing and mailing of the Proxy Statement (including any SEC filing fees).
7.6 ANTI-TAKEOVER STATUTE. If any Anti-Takeover Statute is or may become
applicable to the Santo Purchase Offer, the Merger or the other transactions
contemplated hereby, each of Novartis, the Company and Merger Sub and their
respective Board of Directors (or with respect to Company, the Special
Committee, if appropriate) shall grant all such approvals and take all such
actions as are necessary so that such transactions may be consummated as
promptly as practicable hereafter on the terms contemplated hereby and otherwise
act to eliminate or minimize the effects of such statute or regulation on such
transactions. "ANTI-TAKEOVER STATUTE" shall mean any restrictive provision of
any applicable "fair price," "moratorium," "control share acquisition,"
"interested stockholder" or other similar anti-takeover Law, including Section
203 of the DGCL.
7.7 NOVARTIS VOTE. Novartis shall vote (or consent with respect to) or
cause to be voted (or a consent to be given with respect to) any Company Common
Stock and any shares of capital stock of Merger Sub beneficially owned by it or
any of its Affiliates or with respect to which it or any of such Affiliates has
the power (by agreement, proxy or otherwise) to cause to be voted (or to provide
a consent), in favor of the adoption of this Agreement at any meeting of
stockholders of the Company or Merger Sub, respectively, at which this Agreement
shall be submitted for approval and at all adjournments or postponements thereof
(or, if applicable, by any action of stockholders of either the Company or
Merger Sub by consent in lieu of a meeting).
7.8 SECTION 16 MATTERS. Prior to the Acceptance Date, the Board of
Directors of the Company shall take all such steps as may be required and
permitted to cause the transactions contemplated by this Agreement, including
any dispositions of Company Common Stock (including derivative securities with
respect to such Company Common Stock) by each individual who is or will be
subject to the reporting requirements of Section 16(a) of the Exchange Act with
respect to the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act.
7.9 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) The indemnification and exculpation provisions of the certificate of
incorporation and by-laws of the Company as in effect on the date hereof shall
be included in the Certificate of
21
Incorporation and the By-Laws and shall not be amended, repealed or otherwise
modified for a period of six years from the Acceptance Date in any manner that
would adversely affect the rights thereunder of all present and former
directors, officers or employees of the Company.
(b) The Surviving Corporation shall maintain the Company's and its
Subsidiaries' existing directors' and officers' liability insurance ("D&O
INSURANCE") (including for acts or omissions occurring in connection with this
Agreement and the consummation of the transactions contemplated hereby) covering
each person who was covered under such policies as of the date of this Agreement
(each an "INDEMNIFIED PERSON") by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof for a period of
six years after the Acceptance Date; PROVIDED, HOWEVER, that in no event shall
the Surviving Corporation be required to expend in any one year an amount in
excess of 200% of the current annual premium paid by the Company for such
insurance (such 200% amount, the "MAXIMUM ANNUAL PREMIUM"); PROVIDED, FURTHER,
that if the annual premiums of such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy with the greatest
coverage available for a cost not exceeding the Maximum Annual Premium. In
addition, the Company may, after consultation with Novartis, and will at
Novartis' request, purchase a six-year "tail" prepaid policy prior to the
Effective Time on terms and conditions no less advantageous to the Indemnified
Parties than the existing directors' and officers' liability insurance
maintained by the Company; PROVIDED, that the amount paid by the Company shall
not exceed six times the Maximum Annual Premium. If such "tail" prepaid policies
have been obtained by the Company prior to the Closing, the Surviving
Corporation shall, and Novartis shall cause the Surviving Corporation to,
maintain such policies in full force and effect, and continue to honor the
respective obligations thereunder, and all other obligations under this
Section 7.9(b) shall terminate.
(c) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to the benefit of the Company, the Surviving
Corporation and each Indemnified Person, shall be binding on all successors and
assigns of the Surviving Corporation and shall be enforceable by each
Indemnified Person.
7.10 NASDAQ LISTING. Novartis and Merger Sub shall use their reasonable
best efforts, following the Acceptance Date and until the earlier of (i) the
Effective Time and (ii) February 11, 2006, to keep the Company's Common Stock
quoted for trading on the NASDAQ National Market, as long as the Company is
required to be registered under the Exchange Act and satisfies the NASDAQ
National Market listing standards (other than standards entirely within the
Company's control).
ARTICLE VIII
CONDITIONS
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or, to the extent permitted by applicable Law, waiver at or prior
to the Effective Time of each of the following conditions:
22
(a) The completion of the Offer on the terms and subject to the conditions
set forth herein and a majority of the Public Shares having been purchased in
the Offer (the "REQUISITE TENDER AMOUNT"). This condition set forth in this
Section 8.1(a) shall be waivable only with the approval of the Special
Committee. Notwithstanding the foregoing, if the Offer can not be completed (on
the terms and subject to the conditions set forth herein) as a result of the
failure to satisfy a requirement of Law in connection therewith, but the Merger
is capable of consummation in compliance with the requirements of Law, then the
parties shall, subject to Section 8.1(b), proceed with the consummation of the
Merger, subject in such circumstances to the additional condition that the
Merger be approved at the Special Meeting by a majority of the Public Shares;
PROVIDED that if the Merger is not approved by a majority of the Public Shares
at such Special Meeting, this Agreement shall automatically terminate and the
date of such Special Meeting shall be deemed to be the Acceptance Date for
purposes of the last sentence of Section 1.1(b).
(b) No court or Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, Law, ordinance,
rule, regulation, judgment, decree, injunction or other order that is in effect
or taken any other action enjoining, restraining or otherwise prohibiting the
consummation of the Merger or has the effect of making the purchase of Company
Common Stock illegal.
ARTICLE IX
TERMINATION
9.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Offer and the Merger contemplated hereby may be abandoned at any time prior
to the Effective Time, by mutual written consent of the Company and Novartis.
9.2 TERMINATION UPON TERMINATION OF THE SANTO AGREEMENT. This Agreement
shall automatically terminate and the Offer, if outstanding, shall be abandoned,
upon the termination of the Santo Agreement if at the time of such termination,
no Santo Shares shall have been purchased by Novartis or its Affiliates.
9.3 TERMINATION UPON COMPLETION OF OFFER WITHOUT REQUISITE TENDER AMOUNT.
This Agreement shall terminate if, following the completion of the Offer and the
acceptance for payment or payment for any Public Shares tendered pursuant to the
Offer, Novartis or its Affiliates shall not have purchased the Requisite Tender
Amount. For the avoidance of doubt, such termination shall be without prejudice
to the Company's obligations set forth in Section 1.3.
9.4 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Offer and the Merger pursuant to this
Article IX, this Agreement (other than as set forth in Section 10.1) shall
become void and of no effect with no liability on the part of any party hereto
or its Subsidiaries or Affiliates (or of any of their respective directors,
officers, employees, agents, legal and financial advisors or other
representatives); PROVIDED, HOWEVER, that except as otherwise provided herein,
no such termination shall relieve any party hereto of any liability resulting
from any breach of this Agreement.
23
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1 SURVIVAL. This Article X and the agreements of the Company, Novartis
and Merger Sub contained in Sections 7.5 (Expenses) and 7.9 (Indemnification;
Directors' and Officers' Insurance) shall survive the consummation of the
Merger. This Article X, the agreements of the Company, Novartis and Merger Sub
contained in Sections 7.5 (Expenses), Section 7.11 (Nasdaq Listing) and 9.4
(Effect of Termination and Abandonment) and, if such termination occurs on or
after the Acceptance Date, Section 1.3 (Directors) shall survive the termination
of this Agreement. Subject to Section 9.4, all other representations,
warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
10.2 MODIFICATION OR AMENDMENT. Subject to the provisions of applicable
Law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties, PROVIDED, that any modifications
or amendments of provisions that are for the benefit of the Company may only be
effected with the approval of the Special Committee.
10.3 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law, PROVIDED, that any conditions that are for the benefit of the
Company may only be waived with the approval of the Special Committee.
10.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
10.5 GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without regard
to the principles of conflicts of Law thereof. The parties hereto (for the
avoidance of doubt, other than Parent) hereby agree and consent to be subject to
the exclusive jurisdiction of the federal and state courts in the State of
Delaware in any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby. Each party hereto (for the avoidance of
doubt, other than Parent) hereby irrevocably waives, to the fullest extent
permitted by Law, (i) any objection that it may now or hereafter have to laying
venue of any suit, action or proceeding brought in such courts, and (ii) any
claim that any suit, action or proceeding brought in such courts has been
brought in an inconvenient forum.
10.6 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile (upon receipt of electronic confirmation of successful transmission):
24
if to Novartis or Merger Sub,
Novartis Corporation
608 Fifth Avenue
New York, New York 10020
Attention: Executive Vice President and Regional General Counsel
Telephone: (212) 307-1122
Facsimile: (212) 830-2416
with a copy to (which shall not constitute notice)
Novartis AG
WSJ-200.195
4002 Basel
Switzerland
Attention: Head of Legal and General Affairs
Telephone: 011-41-61-324-11-11
Facsimile: 011 41 61 324 3731
and to
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Andrew R. Brownstein
Trevor S. Norwitz
Telephone: (212) 403-1000
Facsimile: (212) 403-2000
if to the Company,
Eon Labs, Inc.
1999 Marcus Avenue
Lake Success, NY 11042
Attention: Bernhard Hampl, Ph.D.
Telephone: (516) 478-9700
Facsimile: (516) 478-9810
with a copy to (which shall not constitute notice)
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attention: Steven A. Seidman
25
David K. Boston
Telephone: (212) 728-8763
Facsimile: (212) 728-9763
and to the members of the Special Committee
Douglas M. Karp
c/o Tailwind Capital Partners LLC
390 Park Avenue
New York, New York 10022
Telephone: (212) 271-3886
Facsimile: (212) 271-3646
and
Mark Patterson
c/o MatlinPatterson Global Advisers LLC
520 Madison Avenue
New York, New York 10022
Telephone: (212) 651-9555
Facsimile: (212) 651-9556
with a copy to (which shall not constitute notice)
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Robert E. Spatt
Patrick J. Naughton
Telephone: (212) 455-2000
Facsimile: (212) 455-2502
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10.7 ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This Agreement (including
any annexes, schedules and exhibits hereto), the Company Disclosure Schedule,
the Novartis Disclosure Schedule and the Confidentiality Agreement constitute
the entire agreement by and among the parties hereto and supersede all other
prior agreements, understandings, representations and warranties, both written
and oral, among the parties, with respect to the subject matter hereof.
10.8 NO THIRD-PARTY BENEFICIARIES. Other than with respect to the matters
set forth in Section 7.9 (Indemnification; Directors' and Officers' Insurance),
this Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
10.9 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the
26
other provisions hereof. Upon any determination that any term or other provision
of this Agreement, or the application thereof to any Person or any circumstance,
is invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
10.10 INTERPRETATION. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section, such reference shall
be to a Section of this Agreement unless otherwise indicated. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The parties hereto each
acknowledge that each party has participated in the drafting of and been
represented by counsel in connection with this Agreement and the transactions
contemplated hereby. Accordingly, any rule of Law or any legal decision that
would require interpretation of any claimed ambiguities in any portions of this
Agreement against the party that drafted it has no application and is expressly
waived.
10.11 ASSIGNMENT. This Agreement shall not be assignable by operation of
Law or otherwise; PROVIDED, HOWEVER, that Novartis may designate, by written
notice to the Company, another Subsidiary of Novartis to be a constituent
corporation in lieu of Merger Sub, whereupon all references herein to Merger Sub
shall be deemed references to such other Subsidiary, except that all
representations and warranties made herein with respect to Merger Sub as of the
date of this Agreement shall be deemed representations and warranties made with
respect to such other Subsidiary as of the date of such designation.
10.12 PARENT GUARANTEE. Whenever in this Agreement performance of or
compliance with a covenant or obligation is expressed to be required by Novartis
or Merger Sub, Parent shall cause Novartis or Merger Sub to perform or comply
with such covenant or obligation, such that any failure of Novartis or Merger
Sub to perform or comply with any such covenant or obligation shall be deemed to
be a breach of such covenant or obligation by Parent.
27
IN WITNESS WHEREOF, this Agreement has been duly executed, acknowledged and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
EON LABS, INC.
By: /s/ Bernard Hampl, Ph.D.
____________________________________
Name: Bernard Hampl, Ph.D.
Title: Chief Executive Officer
NOVARTIS CORPORATION
By: /s/ Terry Barnett
________________________________________
Name: Terry Barnett
Title: President + CEO
ZODNAS ACQUISITION CORP.
By: /s/ Wayne P. Merkelson
________________________________________
Name: Wayne P. Merkelson
Title: VP + Asst. Secretary
NOVARTIS AG, for purposes of Section 10.12
only
By: /s/ Urs Baerlocher
________________________________________
Name: Urs Baerlocher
Title: General Counsel
By: /s/ Joerg Walther
________________________________________
Name: Joerg Walther
Title: Authorized Signatory
EX-2
4
ex2pt3.txt
EXHIBIT 2.3 - CONFIDENTIALITY AGREEMENT
EON LABS, INC.
1999 Marcus Avenue
Lake Success, NY 11042
February 11, 2005
Novartis Corporation
608 Fifth Avenue
New York, NY 10020
CONFIDENTIALITY AGREEMENT
Ladies and Gentlemen:
In order to allow you to evaluate a possible negotiated (except as
permitted by this letter agreement) transaction (the "PROPOSED TRANSACTION")
with Eon Labs, Inc. (the "COMPANY"), you have requested, following your
execution and delivery to us of this letter agreement, certain information about
the properties, employees, finances, businesses and operations of the Company.
All information about the Company and its subsidiaries, whether oral, written or
electronic, furnished by us or our Representatives (as defined below), whether
furnished before or after the date hereof, is referred to in this letter
agreement as "EVALUATION MATERIAL". Evaluation Material also includes all notes,
analyses, compilations, studies, interpretations or other documents prepared by
or for you or your Representatives which contain, reflect or are based upon, in
whole or in part, the information furnished to you or your Representatives
pursuant hereto. Evaluation Material does not include, however, information
which (a) is or becomes publicly available other than as a result of a
disclosure by you or your Representatives in violation of this letter agreement,
(b) was available to you on a nonconfidential basis prior to its disclosure by
us or our Representatives, (c) becomes available to you on a nonconfidential
basis from a person (other than us or our Representatives) who to your knowledge
after inquiry is not prohibited from disclosing such information to you by a
legal, contractual or fiduciary obligation to us, or (d) was independently
developed by you without your reference to the Evaluation Material. As used in
this letter agreement, the term "REPRESENTATIVE" means, as to any person, such
person's affiliates and its and its affiliates' directors, officers, employees,
agents, advisors (including, without limitation, financial advisors, counsel and
accountants) and other representatives and financing sources. As used in this
letter agreement, the term "PERSON" shall be broadly interpreted to include,
without limitation, any corporation, company, partnership or other legal or
business entity or any individual. As used in this letter agreement, "LAW" means
any applicable law, regulation (including, without limitation, any rule or
regulation of any organized securities exchange, market or automated quotation
system on which any of a person's securities are listed or quoted) or valid
legal process.
Subject to the immediately succeeding paragraph, unless otherwise
agreed in writing by us, (a) you agree, except as required by Law in connection
with a tender offer
permitted by this letter agreement, to keep confidential and not to disclose or
reveal, directly or indirectly, any Evaluation Material to any person other than
those of your Representatives (i) who are actively and directly participating in
your evaluation of the Proposed Transaction or who otherwise need to know the
Evaluation Material for the purpose of evaluating the Proposed Transaction and
(ii) whom you will cause to observe the terms of this letter agreement, (b) you
agree not to use Evaluation Material for any purpose other than in connection
with your evaluation of the Proposed Transaction or the consummation of the
Proposed Transaction and (c) you and we mutually agree, except as required by
Law, not to disclose to the public or to any person (other than those of our
respective Representatives who are actively and directly participating in the
evaluation of the Proposed Transaction or who otherwise need to know for the
purpose of evaluating the Proposed Transaction and whom you and we,
respectively, will cause to observe the terms of this letter agreement) any
information about the Proposed Transaction, or the terms or conditions or any
other facts relating thereto, including, without limitation, the fact that
discussions are taking place with respect thereto or the status thereof, the
existence of this letter agreement, or the fact that Evaluation Material has
been made available to you or your Representatives; PROVIDED, HOWEVER, that any
disclosure prohibited by this paragraph may be made under the circumstances
described in the following paragraph to the extent you comply with the covenants
in such paragraph. Each party acknowledges that it shall be responsible for any
breach of the terms of this letter agreement by it or its Representatives.
In the event that you or any of your Representatives are requested or
required in a judicial or regulatory proceeding or otherwise required by Law as
permitted above to disclose any Evaluation Material, you agree to provide the
Company with prompt notice of such request or requirement in order to enable the
Company to seek an appropriate protective order or other remedy, to consult with
you with respect to the Company taking steps to resist or narrow the scope of
such request or requirement or to waive compliance, in whole or in part, with
the terms of this letter agreement. You also agree, to the extent legally
permissible, (i) to provide the Company with a list of any Evaluation Material
you or any of your Representatives intend to disclose in compliance with this
paragraph (and, if applicable, the text of the disclosure language itself) in
advance of any such disclosure, and (ii) to cooperate with the Company to the
extent it may seek to limit such disclosure. In the event that such protective
order or other remedy is not obtained, or the Company waives compliance, in
whole or in part, with the terms of this letter agreement, you or your
Representative will use reasonable best efforts to disclose only that portion of
the Evaluation Material that is legally required to be disclosed and to ensure
that all Evaluation Material so disclosed will be accorded confidential
treatment.
In addition, if you determine that you do not wish to proceed with the
Proposed Transaction, you will promptly advise us of that decision. In that case
or upon the written request of the Company, you will (and will cause your
Representatives to), at your election, promptly deliver to the Company or
destroy (provided that any such destruction shall be certified by a duly
authorized Representative of yours) all Evaluation Material (including all
copies thereof), including, without limitation, expunging to the extent
practicable all Evaluation Material from any computer, word processor or other
device in your possession, except that one copy of all such Evaluation Material
may be kept in your legal department for compliance purposes.
2
You agree that until the date that is twelve (12) months from the date
hereof (the "RESTRICTED PERIOD"), without the prior approval of a majority of
the members of the Company's Board of Directors and a majority of the members of
the special committee of the Company's Board of Directors formed in connection
herewith ("SPECIAL COMMITTEE"), you and your affiliates will not, and you will
cause your Representatives (in their capacity as such) not to (and you and they
will not join or form a group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (a "13D GROUP"), act in concert or
participate with any other persons to), directly or indirectly: (a) acquire or
offer to acquire, seek, propose or agree to acquire, by means of a purchase,
tender or exchange offer, business combination, merger or in any other manner,
beneficial ownership (whether direct or indirect) of the Company or any of its
subsidiaries, any of the assets of the Company or any of its subsidiaries, or
any securities of the Company or any of its subsidiaries (including, without
limitation, rights or options to acquire such ownership), other than, (i) shares
of common stock of the Company (the "COMMON STOCK") owned by Santo Holding
(Deutschland) GmbH as of the date hereof (the "SANTO SHARES") constituting at
least a majority of the outstanding Common Stock or an option with respect to
such majority, (ii) as permitted by this letter agreement upon the occurrence of
a Significant Event (as defined below), or (iii) as required pursuant to the
immediately following paragraph; (b) unless you or your affiliates shall have
previously purchased a sufficient amount of Santo Shares to constitute a
majority of the outstanding Common Stock (a "CONTROL BLOCK") (in which event the
restrictions in this clause (b) shall cease to be applicable) and subject to
your continuing obligations pursuant to the immediately following paragraph,
seek to influence, advise or direct the vote of any holder of securities of the
Company (including by making or participating in any "solicitation" of "proxies"
as such terms are used in the rules of the Securities and Exchange Commission)
or seek to change or control the Board of Directors of the Company or change the
governing instruments of the Company or, seek or propose to influence, advise,
change or control the management or policies or affairs of the Company, or (c)
except (i) in connection with the transactions required pursuant to the
immediately following paragraph following your or your affiliates' purchase of a
Control Block, (ii) in connection with a transaction to be approved by a
majority of the Company's Board of Directors and a majority of the Special
Committee following your or your affiliates' entering into any agreement with
respect to the acquisition of a Control Block (including, for the avoidance of
doubt, an option agreement with respect thereto) or (iii) as permitted by this
letter agreement upon the occurrence of a Significant Event (which in any such
event shall cause the restrictions in this clause (c) to cease to be
applicable), make any publicly announced proposals, or take any action which
could require the Company to make any public disclosure regarding a proposal,
with respect to an extraordinary transaction involving the Company or a
substantial portion of its securities or assets.
You agree that if you or your affiliates acquire a Control Block
during the Restricted Period, you or your affiliates will, prior to the
expiration of the Restricted Period, propose and use reasonable best efforts to
take all legally permissible actions to consummate a tender offer (with no
conditions other than legal and regulatory requirements) to acquire all of the
Common Stock owned by the public stockholders of the Company (the "PUBLIC
SHARES"), at a price per share of Common Stock equal to the dollar equivalent
value of the amount of Euro paid per Santo Share calculated as of the date of
the agreement to acquire the Santo Shares; PROVIDED, that, if a majority of the
Public Shares are tendered into the tender offer, you or your affiliates will
propose and use reasonable best efforts to take all legally permissible actions
to
3
consummate a merger in which all remaining Common Stock outstanding would be
acquired at the tender offer price.
If the Company enters into, or resolves or otherwise determines to
enter, into any merger, sale or other business combination transaction, or makes
a recommendation in favor of a tender offer for a competing transaction,
pursuant to which the outstanding Common Stock would be converted into cash or
securities of another person or 13D Group (other than you and your affiliates)
or 50% or more of the then outstanding Common Stock (other than you and your
affiliates) would be owned by persons other than current holders of Common
Stock, or which would result in all or a substantial portion of the Company's
assets being sold to any person or 13D Group (a "SIGNIFICANT EVENT"), nothing
herein shall prevent you or any of your affiliates from making, and if you or
any of your affiliates shall have acquired a Control Block, consummating, a
competing proposal for the Company.
For a period of two years from the date hereof, you agree that you and
your affiliates will not, directly or indirectly, employ or solicit to employ
any management-level employees of the Company; provided that nothing herein
shall prohibit you or your affiliates from (i) hiring or seeking to hire any
individual who has received notice of termination from the Company prior to the
first time such individual had any communication with you or your
Representatives relating to employment or (ii) hiring any individual who
contacts you on his or her own initiative and without any direct or indirect
solicitation by you. The foregoing prohibitions on solicitations of employees
shall not be deemed violated by virtue of general mass solicitations of
employment by you not specifically directed toward employees of the Company.
Subject to the terms and conditions that may be contained in any final
definitive agreement regarding the Proposed Transaction and without prejudice
thereto, you acknowledge that none of the Company or its Representatives and
none of the respective officers, directors, employees, agents or controlling
persons of our Representatives makes any express or implied representation or
warranty as to the completeness of the Evaluation Material, and you agree that
none of such persons shall have any liability to you or any of your
Representatives relating to or arising from your or their use of any Evaluation
Material or for any errors therein or omissions therefrom. You also agree that
you are not entitled to rely on the completeness of any Evaluation Material and
that you shall be entitled to rely solely on such representations and warranties
as may be made to you in any definitive agreement relating to the Proposed
Transaction, subject to the terms and conditions of such agreement.
You further acknowledge that you are aware and that your
Representatives have been advised that the United States securities laws
prohibit any person having non-public material information about a company from
purchasing or selling securities of that company or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person may purchase or sell such securities.
Each party hereto agrees that no contract or agreement providing for
any transaction involving the Proposed Transaction and no transaction or
business combination related thereto shall be deemed to exist between the
parties hereto or to be approved by any of the parties hereto or any of their
respective Boards of Directors for any purpose unless and until a final
definitive agreement regarding the Proposed Transaction has been executed and
delivered
4
by the parties hereto, and that neither party hereto, nor any of its
Representatives, is under any legal obligation or has any liability to the other
party of any nature whatsoever with respect to the Proposed Transaction by
virtue of this letter agreement or otherwise (other than with respect to the
confidentiality and other matters set forth herein, including your obligation
with respect to the tender offer and subsequent merger described in the fifth
and sixth paragraphs of this letter agreement, on the terms and subject to the
conditions set forth therein).
It is understood and agreed that money damages would be an
insufficient remedy for any breach of this letter agreement by either party or
its Representatives and that without prejudice to the rights and remedies
otherwise available to it, a party shall be entitled to equitable relief by way
of injunction, specific performance or otherwise if the other party or any of
its Representatives breaches or threatens to breach any of the provisions of
this letter agreement.
The parties hereby irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America located in the State of Delaware for any
actions, suits or proceedings arising out of or relating to this letter
agreement and the transactions contemplated hereby (and the parties agree not to
commence any action, suit or proceeding relating thereto except in such courts),
and further agree that service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth above shall be
effective service of process for any action, suit or proceeding brought against
the parties in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this agreement or the transactions contemplated
hereby, in the courts of the State of Delaware or the United States of America
located in the State of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
It is further understood and agreed that no failure or delay by either
party in exercising any right, power or privilege under this letter agreement
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
right, power or privilege under this letter agreement.
If any provision of this letter agreement is found to violate any
statute, regulation, rule, order or decree of any governmental authority, court,
agency or exchange, such invalidity shall not be deemed to affect any other
provision hereof or the validity of the remainder of this letter agreement, and
such invalid provision shall be deemed deleted herefrom to the minimum extent
necessary to cure such violation.
The obligations of the parties under this letter agreement shall
terminate on the third anniversary of the date hereof.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
This letter agreement contains the entire agreement between you and us
with respect to the matters set forth herein, and no modification of this letter
agreement or waiver of
5
the terms and conditions hereof shall be binding upon you or us, unless approved
in writing by each of you and us (with any such action by us requiring the
approval of the Special Committee).
6
Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this letter agreement
enclosed herewith.
EON LABS, INC.
By /s/ BERNARD HAMPL
--------------------------------
Name: Bernhard Hampl
Title: Chief Executive Officer
Accepted and agreed as of
the date first written above:
NOVARTIS CORPORATION
By /S/ MARTIN HENRICH
----------------------------------
Name: Martin Henrich
Title: Executive Vice President
EX-99
5
feb21scto.txt
EXHIBIT 99.1 - PRESS RELEASE
[NOVARTIS LOGO]
Novartis International AG
Novartis Global Communications
CH-4002 Basel
Switzerland
http://www.novartis.com
John Gilardi Kurt Leidner
Novartis Global Media Relations Sandoz Communications +41 61 324 3018
(direct) +43 1 260 68 9611 (direct)
+41 61 324 2200 (main) +43 1 260 680 (main)
john.gilardi@group.novartis.com kurt.leidner@gx.novartis.com
---------------------- ---------------------------- ----------------------------
MEDIA RELEASE COMMUNIQUE AUX MEDIAS MEDIENMITTEILUNG
---------------------- ---------------------------- ----------------------------
NOVARTIS TO ACQUIRE HEXAL AG AND EON LABS, CREATING THE WORLD LEADER IN GENERICS
o Transformational merger of Hexal and Eon Labs with Sandoz strengthens market
positions globally, achieving top positions in key markets, particularly US
and Germany
o Significantly broadened product portfolio
o One of the largest pipelines in industry covering most generic opportunities
o Best-in-class development teams with proven record of being first to market
o Leadership in high-value delivery technologies and biogenerics
o Hexal and 67.7% of Eon Labs acquired for EUR 5.65 billion
o Tender offer for remaining Eon Labs shares to be launched for USD 31.00 per
share
o Cost synergies of USD 200 million per year expected within three years after
closing, 50% of which to be realized within 18 months
o Transactions to be accretive to earnings within 12 months of closing
BASEL, FEBRUARY 21, 2005 - Novartis announced today the strategic
acquisition of two leading generic drug companies that will be integrated into
its Sandoz division, creating the world leader in the generic drug industry.
Definitive agreements have been signed to acquire 100% of HEXAL AG, the
privately-held No. 2 generics company in Germany with a strong European
presence, and a 67.7% stake (65.4%
fully diluted) in EON LABS, INC. (NASDAQ:
ELAB), a fast-growing US generics company that has a strategic partnership with
Hexal AG, for a total of EUR 5.65 billion in cash. In addition, pursuant to a
merger agreement unanimously approved by the Eon Board of Directors and the
Special Committee of independent directors of the Eon Board, Novartis will
launch a tender offer to acquire the remaining 31.9 million fully diluted shares
(34.6%) in Eon Labs for USD 31.00 per share.
The acquisitions bring together three premier generics companies that
combine Sandoz's global geographic presence and expertise in anti-infectives,
Hexal's leadership in Germany and strong track record of successful product
development, and Eon Labs' strong position in the US for "difficult-to-make"
generics. 2/5
Sandoz, after the closing of these transactions, will be the global leader
in generics with combined pro forma 2004 sales of USD 5.1 billion, a portfolio
of over 600 active ingredients in more than 5,000 dosage forms and more than
20,000 employees.
Annual cost synergies totaling USD 200 million are anticipated within three
years after closing, with 50% in the first 18 months. Synergies will be driven
mainly by savings in production, especially in sourcing, lower processing costs
and reduced Cost of Goods Sold (COGS) through vertical integration; Marketing &
Sales through consolidation of back-office operations and distribution;
Development through the streamlining of the project portfolio and less need for
in-licensed products; and General & Administrative expenses due to the
consolidation of administration and management structures. The strong growth
outlook for Sandoz, which will create jobs, is expected to partially compensate
for necessary reductions in the workforce.
"Generic drugs are crucial to meeting the health-care needs of patients in
industrialized and developing countries as cost pressures continue to mount due
to the ever-increasing demand of an aging population. As such, generic medicines
are a critical complement to innovative medicines, freeing up resources and also
providing an indirect stimulus to continued innovation. The acquisitions of
Hexal AG and Eon Labs will significantly strengthen our geographic presence and
product portfolio, our development and registration capabilities, and increase
our scale to rapidly bring a broad array of generic products to patients. These
acquisitions expand our medicine-based business portfolio, providing synergies
with our branded medicines in dealing with large purchasers and in
manufacturing. They underscore our commitment to being the industry leader in
offering innovative prescription medicines, high-quality generics and
self-medication products," said Dr. Daniel Vasella, Chairman and CEO of
Novartis.
Dr. Andreas Rummelt, CEO of Sandoz, commented, "The combination of Sandoz
with Hexal and Eon Labs offers an outstanding opportunity to capitalize on the
unique strengths of each company. Together, we will create a highly competitive
leader with a comprehensive global presence and the expertise necessary for
success in the rapidly changing generics market."
COMBINATION CREATES A FAST-GROWING WORLD LEADER IN GENERICS
The enlarged company will provide considerable scale and breadth. The new
company will be No. 1 or No. 2 in major markets, particularly in the US and
Germany, and will have a strong foothold in Asia (India, China and Japan) as
well as Latin America.
Hexal is one of the fastest-growing European generics companies and
provides a leading position in Germany, the second-largest generics market in
the world. The acquisition will propel Sandoz into a leading position in most
other European markets. In the past three years, Hexal has launched 121
products, including highly successful versions of the cholesterol-lowering drug
simvastatin (Zocor(R)), and is preparing to launch the pain treatment fentanyl
(Duragesic(R)) based on its proprietary transdermal patch drug-delivery
technology.
In the US, the world's largest generics market, Novartis is acquiring
control of Eon Labs, one of the fastest-growing generic pharmaceutical
companies. Over the past three years alone, Eon Labs has produced 15
first-to-market launches and has positioned itself as the market share leader
for nearly half of the products in its portfolio, which includes 67 molecules in
147 dosage strengths. Eon Labs currently has 27 ANDAs (Abbreviated New Drug
Applications) pending before the US Food and Drug Administration (FDA) covering
approximately USD 14.3 billion in annual branded prescription drug sales.
The combined pipeline covers nearly all of the major molecules predicted to
lose patent protection during the next few years, representing an estimated USD
69 billion in US product sales between 2005 and 2009. In addition, Sandoz will
have strong development and regulatory capabilities with high productivity and a
goal of delivering more than 100 registration files annually. The larger scale
will further increase penetration of the physician and pharmacist markets, which
is particularly important as the new company plans 70 launches in the US and
Germany alone in 2005.
Through this acquisition, Sandoz will also significantly strengthen its
technology base, particularly in the application of transdermal patches,
inhalation products, sustained-release implants and multi-particulate drug
delivery dosage forms. Sandoz will also expand its strong capabilities in
biopharmaceuticals. In addition, Sandoz will reinforce its vertical integration
in active pharmaceutical ingredient manufacturing, which is often critical to
gaining first-tomarket status and offering high-quality generics products at a
competitive price.
"This agreement with Novartis has been reached to secure the future of
Hexal and its employees. We have reviewed all options in the interests of the
employees and the family - an initial public offering (IPO), merger or sale. We
decided that this option not only allows for what we have created to continue,
but more importantly to keep developing with the capabilities and resources of
an industry-leading company. This merger provides the best possible fit in the
industry in terms of product, geography, technology and employee skills that
will form the basis for the most competitive generics company. The combined
company will be well-positioned for dynamic growth," said Dr. Thomas Strungmann,
a co-founder and co-CEO of Hexal AG along with his twin brother, Dr. Andreas
Strungmann.
TERMS OF THE TRANSACTIONS WITH HEXAL AG AND EON LABS
Novartis will undertake a series of transactions to acquire Hexal AG and
control of Eon Labs, which will be funded by Group cash reserves:
o Two separate definitive agreements to pay a total of EUR 5.65
billion in cash to acquire 100% of privately-held Hexal AG, which
was founded in 1986 by the
Strungmanns and is wholly owned by the
brothers and their families, and to acquire 60 million shares of
Eon Labs (67.7% of Eon Labs's share capital and 65.4% on a
fully-diluted basis) from Santo Holding (Deutschland) AG, which is
also owned by the Strungmanns and their families.
o A definitive agreement by which Novartis will offer to acquire
the remaining approximately 31.9 million fully diluted shares
(treasury method) of Eon Labs for USD 31.00 per share in cash.
The agreement, which has been unanimously approved by the Eon
Labs Board of Directors and by a Special Committee consisting of
directors not affiliated with the Strungmanns, provides that an
affiliate of Novartis will commence a tender offer and will,
subject to legal requirements, purchase any and all shares
tendered, if the acquisition of the Santo Holdings stake is
consummated. The offer price represents a 25% premium over the
unaffected price of approximately USD 24.75 (before media
speculation about a possible takeover of Hexal and Eon Labs) and
a premium of 9% over the price paid to Santo Holding for its
majority stake in Eon Labs. The agreement also provides that if a
majority of the public shares are tendered, Novartis will effect
a merger to acquire all remaining shares at the offer price.
The transactions, which are subject to regulatory approvals in a number of
countries (including the US and Europe), are expected to close in the second
half of 2005.
HIGHLY EXPERIENCED MANAGEMENT TEAM
Following the closing, the new Sandoz management team, under the leadership
of Dr. Andreas Rummelt as CEO, will include top management from all three
companies. In the new company, Dr. Andreas Strungmann will be responsible for
the regional operations in Europe, Africa and also for Asia-Pacific on an
ad-interim basis. Dr. Thomas Strungmann will continue in the position of head of
regional operations in Germany, the Americas and Middle East. Both will join the
Sandoz Executive Committee. Other members of the Executive Committee will
include Kevin Plummer as Chief Financial Officer, Dr. Gerhard Schaefer as head
of Product Development and Markus Delfosse as head of Technical Operations. The
Anti-Infectives business unit will be headed by Ernst Meijnders and
Biopharmaceuticals by Dr. Patrick Vink. Dr. Bernhard Hampl, currently CEO of Eon
Labs, has been designated as new head of the US operations of Sandoz and will
report to Thomas Strungmann.
ABOUT NOVARTIS
Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer
health. In 2004, the Group's businesses achieved sales of USD 28.2 billion and a
net income of USD 5.8 billion. The Group invested approximately USD 4.2 billion
in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ
about 81,400 people and operate in over 140 countries around the world. Further
information is available at www.novartis.com.
Sandoz, a Novartis Company, is a world leader in generic pharmaceuticals
and develops, manufactures and markets these medicines as well as pharmaceutical
and biotechnological active ingredients. Decades of experience and know-how make
Sandoz a
renowned partner in pharmaceuticals, biogenerics and industrial
products. Altogether, Sandoz employs around 13,000 people in over 110 countries
and posted sales of USD 3.0 billion in 2004.
ABOUT HEXAL
Headquartered in Holzkirchen, Germany, Hexal is a privately-held generics
manufacturer holding the No. 2 position in generics in Germany, the second
largest generics market, and a significant presence in other key markets.
Sustaining recent annual percentage sales growth rates in the high teens, Hexal
achieved sales of USD 1.65 billion in 2004. Altogether, Hexal employs
approximately 7,000 people in over 40 countries.
ABOUT EON LABS
Eon Labs, one of the largest suppliers of generic pharmaceuticals in the
US, is committed to providing high quality, affordable products. Eon Labs, which
has a strategic partnership with Hexal AG, produces a broad range of
pharmaceuticals in a wide variety of therapeutic categories. Eon Labs reported
record 2004 sales of USD 431 million, an increase of 31% from 2003, and employs
approximately 500 people. Drs. Andreas and Thomas Strungmann and their families
hold a 67.7% stake in Eon Labs through a holding company.
NOTE TO INVESTORS
Novartis will conduct a conference call with financial analysts to discuss
this news release on February 21, 2005, at 9:00 a.m. Central European Time. A
simultaneous webcast of the call for interested investors and others may be
accessed by visiting the Novartis website at www.novartis.com.
Disclaimer
This document contains "forward-looking statements" within the meaning of
the US Private Securities Litigation Reform Act. Forward-looking statements are
statements that are not historical facts and are generally identified by the
words "expects", "anticipates", "believes", "intends", "estimates" "will", or
similar expressions, or by express or implied discussions regarding strategies,
plans and expectations (including synergies). These statements include, but are
not limited to, financial projections and estimates and their underlying
assumptions, statements regarding the benefits of the business transactions
described herein, including future financial and operating results. Such
statements reflect the current plans, expectations, objectives, intentions or
views of management with respect to future events, are based on the current
beliefs and expectations of management and are subject to significant risks,
uncertainties and assumptions. Management's expectations could be affected by,
among other things, competition in general, the general economic environment and
other risks such as, but not limited to, those referred to in Novartis AG's Form
20-F on file with the U.S. Securities and Exchange Commission. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may differ materially from those set
forth or implied by the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from those set forth in the forward-looking statements: the ability
to obtain governmental approvals for the transaction on the proposed terms and
schedule; the risk that the businesses will not be integrated successfully; the
risk that the cost savings and any other synergies from the transaction may not
be fully realized or may take longer to realize than expected; disruption from
the transaction making it more difficult to maintain relationships with
customers, employees or suppliers; social and political conditions such as war,
political unrest and terrorism or natural disasters; general economic conditions
and normal business uncertainty and competition and its effect on pricing,
spending, third-party relationships and revenues. These forward-looking
statements speak only as of the date of this press release and no undertaking
has been made to update or revise them if there are changes in expectations or
if any events, conditions or circumstances on which any such forward looking
statement is based.
Securityholders of Eon are urged to read the tender offer statement
relating to the tender offer when such document becomes available. The tender
offer statement will contain important information. Securityholders will be able
to obtain a free copy of the tender offer statement and other filed documents
when they become available at the SEC's internet site (http://www.sec.gov).
# # #
CONTACTS
JOHN GILARDI
Novartis Global Media Relations
+41 61 324 3018 (direct)
+41 61 324 2200 (main)
john.gilardi@group.novartis.com
KURT LEIDNER
Sandoz Communications
+43 1 260 68 9611 (direct)
+43 1 260 680 (main)
kurt.leidner@gx.novartis.com
EX-99
6
ex99pt2.txt
99.2 - JOINT FILING AGREEMENT
Exhibit 99.2
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree that this Statement on Schedule 13D
with respect to the beneficial ownership of shares of Common Stock of Eon Labs,
Inc. is filed jointly, on behalf of each of them. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument.
Dated: March 2, 2005
NOVARTIS AG
By: /s/ Reto Brandli
---------------------------------------
Name: Reto Brandli
Title: Head Group BP&A
By: /s/ Joerg Walther
--------------------------------------
Name: Joerg Walther
Title: Authorized Signatory
NOVARTIS CORPORATION
By: /s/ Martin Henrich
---------------------------------------
Name: Martin Henrich
Title: Executive Vice President
ZODNAS ACQUISITION CORP.
By: /s/ Urs A. Naegelin
---------------------------------------
Name: Urs A. Naegelin
Title: Director