EXHIBIT 2.1
STOCK PURCHASE OPTION AGREEMENT
THIS STOCK PURCHASE OPTION AGREEMENT is made as of February 4, 2004 (the
"Agreement"), by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇",
collectively referred to in this Agreement with ▇▇▇▇▇▇▇, as "▇▇▇▇▇▇"), and
PERRIGO COMPANY ("Optionee").
RECITALS
WHEREAS, ▇▇▇▇▇▇▇ is the Chief Executive Officer and Chairman of the Board
of Lannett Company, Inc. (the "Company").
WHEREAS, ▇▇▇▇▇▇▇ owns 13,242,379 shares of common stock, $.001 par value
per share, of the Company ("Common Stock") ("William's Certificated Shares") and
26,250 shares of Common Stock through his Individual Retirement Account (the
"▇▇▇ Shares", which together with William's Certificated Shares, shall be
referred to in this Agreement collectively as "William's Shares"), in each case
subject to adjustment as provided in Section 6.11 below.
WHEREAS, ▇▇▇▇▇▇▇ owns options to purchase 37,500 shares of Common Stock
(the "In-the-Money Options") and options to purchase 25,000 shares of Common
Stock (the "Out-of-the-Money Options", which together with the
In-the-Money-Option, shall be referred to in this Agreement collectively as
"William's Stock Options"), in each case subject to adjustment as provided in
Section 6.11 below.
WHEREAS, ▇▇▇▇▇▇ owns 250,500 shares of Common Stock ("Audrey's Shares",
which together with William's Shares and the shares of Common Stock issuable
upon exercise of William's Stock Options, shall be referred to in this Agreement
collectively as the "▇▇▇▇▇▇ Common Stock").
WHEREAS, ▇▇▇▇▇▇ desires to grant to Optionee the option to purchase the
▇▇▇▇▇▇ Common Stock, and Optionee desires to obtain the option to purchase from
▇▇▇▇▇▇ the ▇▇▇▇▇▇ Common Stock, on the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the following mutual covenants and
agreements, the parties agree as follows:
1
OPTION TO PURCHASE ▇▇▇▇▇▇ COMMON STOCK
1.1 OPTION TO PURCHASE ▇▇▇▇▇▇ COMMON STOCK. Subject to the terms and
conditions of this Agreement, and in reliance on the representations and
warranties contained in this Agreement, ▇▇▇▇▇▇ grants to Optionee the sole and
exclusive option (the "Option"), irrevocable until 5 p.m. EDT on August 6, 2004
(the "Option Expiration Date"), to purchase the ▇▇▇▇▇▇ Common Stock.
1.2 OPTION FEE. The purchase price for the Option (the "Option Fee") is
$180,000, payable by wire transfer of immediately available funds to a U.S.
account specified in writing by ▇▇▇▇▇▇ on the next business day following
execution of this Agreement. In the event that Optionee exercises the Option as
provided for in this Agreement, the Option Fee shall be credited and applied to
the Purchase Price.
1.3 EXERCISE OF THE OPTION. Optionee may exercise the Option by
irrevocable written notice to ▇▇▇▇▇▇ of its intention to exercise the Option at
any time prior to the Option Expiration Date (the "Option Notice").
Notwithstanding the foregoing, Optionee may not exercise the Option until such
time as all waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") shall have expired or been waived. Optionee may
cancel this option at any time for any reason upon written notice to ▇▇▇▇▇▇.
1.4 PURCHASE PRICE. Optionee shall have the sole and exclusive option to
purchase the ▇▇▇▇▇▇ Common Stock until after the Option Expiration Date for
$197,339,000 (the "Purchase Price"), payable as follows: $179,339,000 at the
Closing (as defined in Section 2.1)(the "Closing Payment") and $18,000,000 (the
"Escrow Amount") shall be deposited with a mutually acceptable third party
escrow agent until the earlier of (i) the completion of the transaction(s)
contemplated in Section 4.4 hereof, or (ii) 180 days after the Closing. The
Escrow Amount will be held in an interest bearing escrow account pursuant to a
mutually acceptable escrow agreement as security for ▇▇▇▇▇▇'▇ indemnification
obligations pursuant to this Agreement.
1.5 ADDITIONAL CONSIDERATION. In addition to the Purchase Price, Optionee
shall pay ▇▇▇▇▇▇ an aggregate additional amount ("Additional Consideration") of
twenty percent (20%) of the net sales of [CONFIDENTIAL TREATMENT -- INFORMATION
FILED SEPARATELY WITH THE COMMISSION] sold by the Company (or its affiliate) to
the extent that such net sales exceed $40,000,000 during the period beginning on
the date of the approval by the [CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION] and ending upon the earlier of (i) the date any
[CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] and
(ii) the five year anniversary date of the Closing. For purposes of this
Agreement, "net sales" shall mean net cash received from the sale of such
product, after all normal chargebacks, rebates, allowances, returns and credits.
Any Additional Consideration shall be paid to ▇▇▇▇▇▇ quarterly in arrears,
within forty-five (45) calendar days after the end of each calendar quarter
based upon a statement certified by an officer of Optionee as correctly stating
gross sales and all amounts deducted to derive at net sales for such quarter.
Within 90 days after the end of each calendar year, an independent public
accounting firm mutually selected by Optionee and ▇▇▇▇▇▇ shall review each such
statement rendered during the prior calendar year and provide its written report
to Optionee and ▇▇▇▇▇▇ as to whether the calculation of net sales reflected in
each such statement is reasonably accurate (based on appropriate testing of
procedures and data). To the extent any payment to ▇▇▇▇▇▇ made pursuant to any
such statement is less than that which should have been made to ▇▇▇▇▇▇, Optionee
shall pay ▇▇▇▇▇▇ the shortfall together with interest, from the date the
deficiency should have been paid until it is paid, at a rate equal to 300 basis
points in excess of the prime rate as announced from time to time in The Wall
Street Journal. Optionee shall pay the expenses of such accounting firm and
shall provide it with access, at reasonable times during normal business hours,
to all books and records necessary for it to confirm the reasonable accuracy
(based on appropriate testing of procedures and data) of the calculations of net
sales.
2
CLOSING DATE; DELIVERY
2.1 CLOSING; CLOSING DATE. The closing of the purchase and sale of the
▇▇▇▇▇▇ Common Stock shall be consummated on the date set forth in the Option
Notice or such other later date as Optionee shall specify, but in any event no
later than ten (10) business days after the date of the Option Notice (the
"Closing"). Unless otherwise mutually agreed to in writing by the parties,
▇▇▇▇▇▇ shall exercise concurrently with the Closing, at his sole cost and
expense, all of the In-the-Money-Options and cause such shares of Common Stock
issuable upon such exercise to be delivered to Optionee at the Closing. Unless
otherwise mutually agreed to in writing by the parties, ▇▇▇▇▇▇ shall cause
concurrently with the Closing, at his sole cost and expense, all of the
Out-of-the-Money Options to be canceled effective as of the Closing or, in
Optionee's sole and absolute discretion, exercise concurrently with the Closing,
at Optionee's sole cost and expense, all or some of the Out-of-the-Money-Options
(to the extent they are exercisable) and cause such shares of Common Stock
issuable upon such exercise to be delivered to Optionee at the Closing.
2.2 DELIVERY. At the Closing, subject to the terms and conditions of this
Agreement, ▇▇▇▇▇▇ will (or will cause the custodian of ▇▇▇▇▇▇▇'▇ ▇▇▇ to) sell,
assign and deliver to Optionee the ▇▇▇▇▇▇ Common Stock by delivery of original
certificate(s) representing all of the ▇▇▇▇▇▇ Common Stock duly endorsed in
blank, signature guaranteed, for transfer or accompanied by duly executed stock
powers endorsed in blank, signature guaranteed, and if applicable, by electronic
transmission through the Deposits and Withdrawal at Custodian (DWAC) system to
brokers designated by Optionee, in each case together with any required transfer
or documentary stamps attached, free and clear of all Encumbrances (as defined
in Section 3.3) against payment of the Closing Payment. The Closing Payment
shall be paid by wire transfer of immediately available funds to an United
States account specified in
2
writing by ▇▇▇▇▇▇, unless Optionee and ▇▇▇▇▇▇ agree upon other means of payment.
Any documentary, transfer or other taxes imposed by reason of the transfer of
▇▇▇▇▇▇ Common Stock provided by this Agreement and any related deficiency,
interest or penalty will be borne solely by ▇▇▇▇▇▇.
3
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to Optionee, on the date hereof and on the
Closing Date, as follows:
3.1 AUTHORIZATION; ENFORCEABILITY. ▇▇▇▇▇▇ has the requisite power and
right to enter into this Agreement and to carry out and perform his obligations
under this Agreement. This Agreement has been, and the other agreements,
instruments and certificates to be executed and delivered by ▇▇▇▇▇▇ will be when
executed and delivered by ▇▇▇▇▇▇ at the Closing, duly executed and delivered by
▇▇▇▇▇▇, and, upon due execution and delivery by Optionee, this Agreement is, and
such other agreements, instruments and certificates will be when executed and
delivered at the Closing, the legal, valid and binding obligations of ▇▇▇▇▇▇,
enforceable against him in accordance with their respective terms.
3.2 NO CONFLICT WITH OTHER INSTRUMENTS; CONSENTS. The execution, delivery
and performance of this Agreement by ▇▇▇▇▇▇ will not result in any violation of,
be in conflict with, or constitute a default under, with or without the passage
of time or the giving of notice: (a) any obligation or duty of ▇▇▇▇▇▇ to the
Company or any other person, (b) any provision of any judgment, decree or order
to which ▇▇▇▇▇▇ is a party or by which he or any of his assets is bound; (c) any
contract, obligation or commitment to which ▇▇▇▇▇▇ is a party or by which he or
any of his assets is bound; or (d) assuming compliance with the HSR Act and
applicable securities law, any applicable law, including, without limitation,
any statute, rule, order, decree, treaty or governmental regulation. Except as
required by the HSR Act and applicable securities laws, ▇▇▇▇▇▇ has previously
obtained all authorizations, consents or approvals from, and made all required
filings with, all persons or governmental authorities required to enter into or
consummate the transactions contemplated by this Agreement.
3.3 TITLE. ▇▇▇▇▇▇▇ is the sole record, legal and beneficial owner of
William's Certificated Shares and William's Stock Options. ▇▇▇▇▇▇▇ through his
Individual Retirement Account is the sole beneficial owner of the ▇▇▇ Shares.
▇▇▇▇▇▇ is the sole beneficial owner of Audrey's Shares. ▇▇▇▇▇▇ (directly or
indirectly through ▇▇▇▇▇▇▇'▇ ▇▇▇) owns the ▇▇▇▇▇▇ Common Stock and William's
Stock Options free and clear of all Encumbrances, and there are no outstanding
options, calls, puts, subscriptions, preemptive rights, rights of first refusal
or other agreements or commitments, other than this Agreement, obligating ▇▇▇▇▇▇
to sell or transfer the ▇▇▇▇▇▇ Common Stock or William's Stock Options to any
person or granting an option or right to any person to purchase or acquire from
▇▇▇▇▇▇ the ▇▇▇▇▇▇ Common Stock or William's Stock Options. The ▇▇▇▇▇▇ Common
Stock and William's Stock Options constitute all of the shares of capital stock,
or securities convertible into or exercisable for, shares of capital stock owned
directly or indirectly by ▇▇▇▇▇▇ or any child or relative of ▇▇▇▇▇▇ who has the
same home as ▇▇▇▇▇▇. At the Closing, Optionee will acquire good and marketable
title to and complete ownership of the ▇▇▇▇▇▇ Common Stock, free and clear of
all Encumbrances, upon the delivery of the certificate(s) evidencing the ▇▇▇▇▇▇
Common Stock to Optionee, either duly endorsed for transfer or accompanied by
duly executed stock powers transferring such certificates, or by delivery of
such shares by electronic transmission through the DWAC system to brokers
designated by Optionee. Any certificate(s) evidencing the ▇▇▇▇▇▇ Common Stock
were not issued directly or indirectly in respect of any certificates issued in
replacement of any lost, damaged, mutilated or destroyed certificates evidencing
any common stock of capital stock of the Company or any of its predecessors.
"Encumbrance" means any claim, lien, pledge, option, right of first refusal,
buy-sell agreement, defect in title, charge, security interest, conditional
sales agreement, title retention agreement, restriction on transfer, voting
agreements, voting trusts, proxies, preemptive rights (whether statutory or
contractual), shareholder or similar agreements, adverse claims (as defined in
Section 8-302(2) of the Uniform Commercial Code) or other restrictions or
encumbrances of any nature or kind (except state and federal securities laws
restrictions pertaining to the transfer of the ▇▇▇▇▇▇ Common Stock), whether
voluntarily incurred or arising by operation of law, including any agreement to
give any of the foregoing in the future.
3.4 DISCLOSURE DOCUMENTS.
3
(a) The Company has filed all forms, reports, registration
statements, proxy statements, schedules and documents required to be filed by it
with the Securities and Exchange Commission (the "SEC") in the past three years.
As filed with the SEC, (i) the annual reports of Company on Form 10-KSB for the
fiscal years ended June 30, 2003, 2002, 2001, (ii) the quarterly report of
Company on Form 10-Q for the period ended September 30, 2003, (iii) all proxy
statements relating to Company's meetings of stockholders (whether annual or
special) held in the past three years, and (iv) all other reports filed by
Company with the SEC in the past three years (the forms, reports and other
documents referred to in clauses (i) through (iv) being referred to herein as
the "Company SEC Reports") have been filed with the SEC. As of their respective
dates, the Company SEC Reports (x) have complied in all material respects with
all requirements under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act"), (y) were true and correct
in all material respects, and (z) contained no untrue statement of material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of circumstances
under which they were made, not misleading.
(b) The financial statements of Company included in the Company SEC
Reports complied in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto, have
been prepared in accordance with United States generally accepted accounting
principles ("GAAP")(except, in the case of interim financial statements, as
permitted by Forms 10-Q or 8-K of the SEC) consistently applied during the
periods involved and fairly presented, in all material respects, the financial
position of Company as of the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of interim financial
statements, to normal year-end adjustments and lack of footnote disclosures. The
books and records of Company have been, and are being, maintained in accordance
with all applicable legal requirements.
3.5 LITIGATION, VALIDITY OF AGREEMENT. There is no action, suit,
proceeding or, to the best of ▇▇▇▇▇▇'▇ knowledge, any claim or investigation
pending or currently threatened against the Company, nor, to the best of
▇▇▇▇▇▇'▇ knowledge, is there any basis therefor, which might result, either
individually or in the aggregate, in any material adverse change in the ▇▇▇▇▇▇
Common Stock or the assets, condition, affairs or prospects of the Company,
financial or otherwise.
3.6 NO BROKERS. If any broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement as a result of any actions of
▇▇▇▇▇▇, the Company or their respective representatives, such brokerage,
finder's or other fee or commission shall be the obligation of ▇▇▇▇▇▇ and shall
be promptly paid and discharged by ▇▇▇▇▇▇ as and when due.
The representations and warranties of ▇▇▇▇▇▇ set forth in this Section 3
will terminate upon the earlier to occur of (i) the date that is 90 days after
Optionee initiates a tender offer, merger or other business combination
involving the Company as provided in Section 4.4 of this Agreement, (ii) the
date that any such tender offer, merger or other business combination involving
the Company is consummated, or (iii) the date that is 180 days after the date of
the Closing; provided, however, that the representations and warranties
contained in Section 3.3 (title) shall survive forever.
4
REPRESENTATIONS AND WARRANTIES OF OPTIONEE
Optionee represents and warrants to ▇▇▇▇▇▇, on the date hereof and on the
Closing Date, as follows:
4.1 LEGAL POWER. All corporate action on the part of Optionee, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement has been taken. Optionee has the requisite
corporate power to enter into this Agreement, to carry out and perform its
obligations under the terms of this Agreement and, at the Closing, will have the
requisite corporate power to purchase the shares of ▇▇▇▇▇▇ Common Stock to be
purchased at such Closing.
4.2 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement as a result of any actions of
Optionee or its representatives.
4
4.3 ORGANIZATION, GOOD STANDING, QUALIFICATION. Optionee is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite corporate power and
authority to carry on their business as now conducted and as proposed to be
conducted. Optionee is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
4.4 AGREEMENT TO MAKE TENDER OR ENTER INTO MERGER. Optionee represents
that, if it exercises its right under the Option to purchase the ▇▇▇▇▇▇ Common
Stock, it will make a tender offer (to the extent permitted by law), or
alternatively use its commercially reasonable efforts to enter into a merger
agreement or other business combination with the Company, within ninety (90)
days after the Closing for the remainder of the outstanding shares of common
stock of the Company at a total price per share which is no less than the higher
of (i) the average closing price of such shares as publicly reported by the
American Stock Exchange over the 10 trading days ending one trading day prior to
the date on which there is a public announcement (whether by the filing of a
Form 4, the issuance of a press release or otherwise) of the grant of the
Option, and (ii) the total price per share paid to ▇▇▇▇▇▇, including any
Additional Consideration.
4.5 DUE EXECUTION. This Agreement has been duly authorized, executed and
delivered by Optionee and, upon due execution and delivery by ▇▇▇▇▇▇, this
Agreement will be a valid and binding agreement of Optionee.
4.6 NO CONFLICT WITH OTHER INSTRUMENTS; CONSENTS. The execution, delivery
and performance of this Agreement by Optionee will not result in any violation
of, be in conflict with, or constitute a default under, with or without the
passage of time or the giving of notice: (a) any obligation or duty of Optionee
to any other person, (b) any provision of any judgment, decree or order to which
Optionee is a party or by which it or any of its assets is bound; (c) any
contract, obligation or commitment to which Optionee is a party or by which it
or any of its assets is bound; or (d) assuming compliance with the HSR Act and
the applicable securities laws, any applicable law, including, without
limitation, any statute, rule, order, decree, treaty or governmental regulation.
Except as required by the HSR Act and the applicable securities laws, Optionee
has previously obtained all authorizations, consents or approvals from, and made
all required filings with, all persons or governmental authorities required to
enter into or consummate the transactions contemplated by this Agreement.
5
OBLIGATIONS OF ▇▇▇▇▇▇
5.1 INDEMNIFICATION.
(a) ▇▇▇▇▇▇ agrees to indemnify, defend and hold Optionee harmless from and
against any and all losses, claims, damages, expenses (including, without
limitation, reasonable accounting and attorneys' fees and expenses) or
liabilities, joint or several, (collectively, "Losses") arising out of or
relating to (i) a breach of any of his representations, warranties or covenants
contained in this Agreement or any other agreement, instrument and certificate
entered into or delivered in connection with this Agreement or the Closing, (ii)
any untrue statement or alleged untrue statement of a material fact, or the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading,
contained in any public announcement or filing with the SEC by ▇▇▇▇▇▇ in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement, or (iii) any violation or alleged violation by
▇▇▇▇▇▇ of the Securities Act of 1933, as amended (the "Securities Act"), the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement; provided however, that the foregoing indemnity
agreement contained in this Section 5.1(a) shall not apply to amounts paid in
settlement of any Loss if such settlement is effected without the consent of
▇▇▇▇▇▇, which consent shall not be unreasonably withheld, nor shall ▇▇▇▇▇▇ be
liable in any such case for any Loss to the extent that it arises out of or is
based upon a violation of law that occurs in reliance upon and in conformity
with written information furnished by Optionee or its agents expressly for use
in connection with any such press release or other filing with the SEC or the
negligent or willful misconduct or omission, fraudulent misrepresentations or
violation of law by Optionee or its agents. In any event, except in the case of
willful misconduct or fraudulent
5
misrepresentations, the liability of ▇▇▇▇▇▇ under this indemnity provision for
breaches of representations or warranties shall be limited to an amount equal to
the Escrow Amount; provided, however, that the liability for any breaches of any
covenants or any breaches of the representations and warranties contained in
Section 3.3 (Title) shall be limited to the Purchase Price, plus any Additional
Consideration. If ▇▇▇▇▇▇ undertakes the defense of any claim made under clauses
(ii) or (iii), and if a final, unappealable judgment, order or arbitration award
is entered by a court of competent jurisdiction dismissing such claim with
prejudice and without any liability of ▇▇▇▇▇▇, Optionee will reimburse ▇▇▇▇▇▇
for its reasonably out-of-pocket expenses to the extent they related to such
defense. If Optionee undertakes the defense of any claim made under clauses (ii)
or (iii), and if a final, unappealable judgment, order or arbitration award is
entered by a court of competent jurisdiction dismissing such claim with
prejudice and without any liability of ▇▇▇▇▇▇, Optionee will not seek
reimbursement or indemnification from ▇▇▇▇▇▇ for any costs or expenses related
to such defense.
(b) Optionee agrees to indemnify, defend and hold ▇▇▇▇▇▇ harmless from and
against any and all Losses arising out of or relating to (i) a breach of any of
its representations, warranties or covenants contained in this Agreement or any
other agreement, instrument and certificate entered into or delivered in
connection with this Agreement or the Closing, (ii) any untrue statement or
alleged untrue statement of a material fact, or the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, contained in any public announcement
or filing with the SEC by Optionee in connection with entering into or
consummating this Agreement or any tender offer, merger or other business
combination involving the Company as provided in Section 4.4 of this Agreement,
(iii) any violation or alleged violation by Optionee of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement, or (iv) any action, suit or proceeding against
▇▇▇▇▇▇ by reason of the fact that ▇▇▇▇▇▇▇ is or was an officer and/or director
of the Company if ▇▇▇▇▇▇▇ acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company except
that no indemnification shall be made in respect of any issue or matter as to
which ▇▇▇▇▇▇ shall have been adjudged to be liable to the Company or such other
person bringing such action, suit or proceeding; provided however, that the
foregoing indemnity agreement contained in this Section 5.1(b) shall not apply
to amounts paid in settlement of any Loss if such settlement is effected without
the consent of Optionee, which consent shall not be unreasonably withheld, nor
shall Optionee be liable in any such case for any Loss to the extent that it
arises out of or is based upon a violation of law that occurs in reliance upon
and in conformity with written information furnished by ▇▇▇▇▇▇ or its agents
expressly for use in connection with any such press release or other filing with
the SEC or the negligent or willful misconduct or omission, fraudulent
misrepresentations or violation of law by ▇▇▇▇▇▇ or its agent. In any event,
except in the case of willful misconduct or fraudulent misrepresentations, the
liability of Optionee under this indemnity provision for breaches of
representations or warranties shall be limited to an amount equal to the Escrow
Amount.
5.2 DOCUMENTS. ▇▇▇▇▇▇ agrees that he shall permit Optionee or its counsel
or other representatives to inspect and copy such documents and records as may
reasonably be requested by them relating to the ▇▇▇▇▇▇ Common Stock, after
reasonable advance notice, during normal business hours and without undue
interference with the operation of the Company's business.
5.3 STANDSTILL. Prior to the Option Expiration Date and except pursuant to
the terms of this Agreement, ▇▇▇▇▇▇ shall not sell, pledge or otherwise
transfer, directly or indirectly, any of the ▇▇▇▇▇▇ Common Stock or William's
Stock Options nor grant any options or rights to the ▇▇▇▇▇▇ Common Stock or the
William's Stock Options, to any third party nor shall Faber, directly or
indirectly, solicit or entertain offers from any third party to enter into any
such transaction.
5.4. BOARD APPROVAL. Subject to William's fiduciary duties as a director
of the Company, ▇▇▇▇▇▇▇ shall recommend that the Board of Directors of the
Company approve the transactions contemplated by this Agreement for purposes of
Section 203 of the Delaware General Corporation Law on or before the Option
Expiration Date and approve the tender offer, merger or other business
combination contemplated by Section 4.4 as soon as reasonable practicable if
Optionee exercises its right under the Option to purchase the ▇▇▇▇▇▇ Common
Stock, but in any event within 20 days after such exercise.
6
5.5 HSR ACT FILING. Upon notice from Optionee, the parties will, as soon
as practicable after such date, but in any event within three business days,
file a Notification and Report Form and related material required to be filed in
connection with the transactions contemplated by this Agreement with the Federal
Trade Commission and the Antitrust Division of the Department of Justice under
the HSR Act. If and only if directed by Optionee, the parties will use their
commercially reasonable efforts to obtain a waiver from the applicable waiting
period. The parties will use their commercially reasonable efforts to respond as
promptly as practicable to all inquiries received from the above-referenced
federal agencies for additional information or documentation, and will make any
further filings pursuant thereto that may be necessary in connection therewith.
The parties agree to make available to each other such information as may be
reasonably necessary to complete any filing or supply any additional information
requested by the above-referenced federal agencies under the HSR Act.
6
MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the substantive laws of the State of Delaware and the United
States of America, without regard to choice of law rules thereof.
6.2 PUBLIC STATEMENTS. Neither ▇▇▇▇▇▇, the Company nor Optionee nor any of
their representatives will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the other parties, provided that such persons may make any
announcement it believes in good faith after consultation with legal counsel is
required by law or the rules of NASDAQ or the American Stock Exchange; provided,
further, that ▇▇▇▇▇▇ may file a Form 4 in accordance with the Exchange Act and
any other filings he is required to file under any securities laws and that the
parties shall mutually agree upon the form, substance and timing of issuance of
a mutually acceptable press release to coincide approximately with the filing of
such Form 4 by ▇▇▇▇▇▇.
6.3 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the rights
or obligations under this Agreement may be assigned by any party without the
prior written consent of the other parties; provided, however, that Optionee may
assign or delegate all or part of its rights and obligations under this
Agreement to one or more direct or indirect subsidiaries or affiliates;
provided, further, that any such assignment or delegation shall not relieve
Optionee of its obligations under this Agreement. This Agreement will be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns, and no other person will have any right, benefit or
obligation under this Agreement as a third party beneficiary or otherwise.
6.4 ENTIRE AGREEMENT. This Agreement (and any exhibits and appendices)
sets forth all of the covenants, promises, agreements, warranties,
representations, conditions, and understandings between ▇▇▇▇▇▇ and Optionee.
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between ▇▇▇▇▇▇ and
Optionee other than as set forth in this Agreement. The Agreement is intended to
define the full extent of the legally enforceable undertakings of ▇▇▇▇▇▇ and
Optionee and no promise or representation, whether written or oral, which is not
set forth explicitly herein or therein is intended by either party to be legally
binding or representation, written or oral, other than those explicitly set
forth in this Agreement.
6.5 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given and received
(a) upon personal delivery, (b) on the fifth day following mailing by registered
or certified mail return receipt requested postage prepaid, addressed to ▇▇▇▇▇▇
or Optionee at their respective addresses listed below (or at such other address
for a party as shall be specified by like notice; provided, that notices of a
change of address shall be effective only upon receipt thereof), (c) upon
confirmed transmission by facsimile (with telephonic notice), or (d) upon
confirmed delivery by overnight commercial courier service:
If to ▇▇▇▇▇▇, address to: ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a simultaneous copy to:
7
▇▇▇▇▇ ▇▇▇▇▇ Heuer & ▇▇▇▇▇, P.C.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Optionee, address to: Perrigo Company
Attention: Folsom ▇▇▇▇
Executive Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a simultaneous copy to:
▇▇▇▇▇▇▇ Company
Attention: General Counsel
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6.6 REPLACEMENT OF OPTION. Upon receipt by ▇▇▇▇▇▇ of evidence reasonably
satisfactory to him of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, ▇▇▇▇▇▇ will execute and deliver a new Agreement of like
tenor and date.
6.7 EXPENSES. Except as otherwise expressly provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses; provided, however,
that Optionee shall pay all of the filing fees required pursuant to the HSR Act.
6.8 INTERPRETATION. When a reference is made in this Agreement 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 descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement. The masculine, feminine or neuter gender and
the singular or plural shall each be construed to include the other whenever the
context indicates.
6.9 FURTHER ASSURANCES. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
6.10. SPECIFIC PERFORMANCE. The parties recognize and agree that if for
any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to other
remedies, the other party shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this Agreement. In the
event that any action should be brought in equity to enforce the provisions of
the Agreement, neither party will allege, and each party hereby waives the
defense, that there is adequate remedy at law.
6.11 ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event of any
change in the Company's common stock by reason of stock dividends, splitups,
mergers, recapitalizations, combinations,
8
exchange of shares or the like, the type and number of shares or securities
subject to the Option shall be adjusted appropriately to restore to Optionee its
rights under this Agreement; provided, however, that the Purchase Price shall
remain unchanged.
6.12 COUNTERPARTS; FACSIMILE. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile transmission, and a facsimile of this
Agreement or of a signature of a party will be effective as an original.
[SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, this Stock Purchase Option Agreement is executed and
delivered by the parties as of the date first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ COMPANY
By: /s/ Folsom ▇▇▇▇
-----------------------------
Name: Folsom ▇▇▇▇
Title: Executive Vice President