STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 5, 2006
(this “Agreement”), among ABBOTT LABORATORIES, an Illinois corporation (“Acquiror”),
and Michael Jaharis, Kathryn Jaharis, Steven Jaharis, Daniel Bell and Steven K.
Aronoff (each a “Seller” and collectively, “Sellers”). Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Merger Agreement.
WHEREAS, Sellers legally and beneficially own all the
issued and outstanding shares of common stock, par value $0.01 per share (the “Shares”),
of Kos Investments, Inc., a Delaware corporation (“Kos Investments”);
WHEREAS, Kos Investments legally and beneficially owns
all of the issued and outstanding capital stock of Kos Holdings, Inc., a
Delaware corporation (“Kos Holdings”);
WHEREAS, Kos Investments, directly or indirectly
through Kos Holdings legally and beneficially owns 8,570,069 shares of common
stock, par value $0.01 per share (the “Company Common Stock”), of Kos
Pharmaceuticals, Inc., a Florida corporation (the “Company”);
WHEREAS, Acquiror, S&G Nutritionals, Inc., a
direct wholly-owned subsidiary of Acquiror (“Merger Sub”), and the
Company are, concurrently with the execution and delivery of this Agreement,
entering into an Agreement and Plan of Merger dated the date hereof (the “Merger
Agreement”);
WHEREAS, Acquiror and certain shareholders of the
Company (collectively, the “Jaharis Family”) are, concurrently with the
execution and delivery of the Merger Agreement, entering into a Shareholders
Agreement dated the date hereof (the “Shareholders Agreement”); and
WHEREAS, as a condition to their willingness to enter
into the Shareholders Agreement, the Jaharis Family has requested that Acquiror
enter into this Agreement with Sellers pursuant to which Acquiror shall purchase
the Shares subject to the terms and conditions hereof (such purchase and sale
of the Shares is referred to in this Agreement as the “Acquisition”),
which Acquisition is intended to be consummated immediately subsequent to the
consummation of the Offer.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants, agreements and representations herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
Purchase and Sale
of Shares; Closing
SECTION 1.01. Purchase and
Sale of the Shares. On the terms and
subject to the conditions of this Agreement, at the Closing, each Seller shall
sell, transfer and deliver to Acquiror, and Acquiror shall purchase from such
Seller, the Shares owned by such Seller free and clear of all Liens for a
purchase price to such Seller (with respect to each such Seller, the “Purchase
Price”), in cash, without interest, equal to the product of (a) the Closing
Payment and (b) the Pro Rata Portion of such Seller.
SECTION 1.02. Closing. Subject to the provisions of Article V, the
closing (the “Closing”) of the Acquisition shall take place at the
offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York,
New York 10019, on the date of payment by Acquiror for shares of Company Common
Stock tendered pursuant to the Offer, or if the conditions set forth in
Article V are not satisfied or waived at such time, as soon as practicable
thereafter. The date on which the
Closing occurs is referred to in this Agreement as the “Closing Date”.
SECTION 1.03. Escrow. Simultaneously with the execution of this
Agreement, (x) Acquiror, each Seller and an escrow agent to be mutually agreed
(the “Escrow Agent”) shall enter into an Escrow Agreement in the form
attached hereto as Exhibit A (the “Escrow Agreement”) and (y) each
Seller shall (and Sellers shall cause Kos Investments and Kos Holdings to)
deposit with the Escrow Agent (collectively, the “Share Certificates”)
(i) certificates representing the Shares owned by Sellers, which certificates
shall be duly endorsed in blank or accompanied by stock powers duly endorsed in
blank in proper form for transfer, with appropriate transfer tax stamps, if
any, affixed, (ii) certificates representing all of the issued and outstanding
capital stock of Kos Holdings and (iii) certificates representing the 5,960,069
shares of Company Common Stock directly or indirectly owned by Kos Investments.
SECTION 1.04. Transactions
To Be Effected at the Closing; Payment of Purchase Price.
(a) At or prior to noon (New
York City time) on the Expiration Date, Sellers shall deliver (or caused to be
delivered) (i) to Acquiror (x) each Seller’s Closing Certificate, (y) the
Resignation Letters and (z) the Payoff Letters and (ii) to Acquiror and the
Escrow Agent, the Closing Payment Certificate.
(b) Pursuant to the Escrow
Agreement, upon receipt by the Escrow Agent of a notice that the Offer has been
consummated and that payment of the Purchase Price has been received by the
Sellers, the Escrow Agent shall release and deliver the Share Certificates to
Acquiror.
(c) The
Acquiror and the Sellers shall give effect to the arrangements negotiated
between them prior to the closing for the payment to Wachovia Bank N.A. of the
aggregate amount of all indebtedness of Kos Investments to Wachovia Bank N.A.
(as reflected
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on the Payoff Closing Certificate)
and the termination and release of any pledge or other security interests in
favor of Wachovia Bank N.A. (or its affiliates) encumbering shares of Company Common Stock held directly
or indirectly by Kos Investments.
ARTICLE II
Representations
and Warranties of Sellers
Except as set forth in the corresponding sections or
subsections of the disclosure letter delivered to Acquiror by Sellers on the
date hereof (the “Disclosure Schedule”) (it being understood that each
item in a particular section of the Disclosure Schedule applies only to such
section and to any other section to which its relevance is readily apparent),
each Seller hereby jointly and severally represents and warrants to Acquiror
that as of the date hereof and as of the Closing Date, except to the extent
such representations and warranties relate to an earlier date (in which case
such representations and warranties are made as of such earlier date):
SECTION 2.01. Execution
and Delivery; Enforceability. Each
Seller has the legal capacity to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Each of the persons executing this Agreement on
behalf of each Seller has full power and authority to execute and deliver this
Agreement on behalf of such Seller and to thereby bind such Seller. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of each Seller. This Agreement has been duly executed and
delivered by each Seller and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and general equity
principles). If a Seller is married and
the Shares set forth below such Seller’s signature to this Agreement constitute
community property under applicable laws, this Agreement has been duly
authorized, executed and delivered by, and constitutes the valid and binding
agreement of, such Seller’s spouse.
SECTION 2.02. No
Conflicts; Consents.
(a) Except as set forth in
Section 2.02(a) of the Disclosure Schedule, the execution, delivery and
performance of this Agreement by each Seller does not and will not (i) conflict
with or violate the articles of incorporation or bylaws of Kos Investments or
Kos Holdings, (ii) assuming that all applicable requirements under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), have
been satisfied, conflict with or violate any federal, state, local or foreign
statute, law, ordinance, rule, regulation, order, judgment, decree or legal
requirement (“Law”) applicable to the Sellers, Kos Investments or Kos
Holdings or by which any of their respective properties are bound or (iii) (A)
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both would become a default), or (B) result in
the loss of a benefit under, or give rise to any right of termination,
cancellation, amendment or acceleration of, or (C) result in the creation of
any Lien on any of the
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Shares or any
other properties or assets of any Seller, Kos Investments or Kos Holdings
under, any Contract to which any Seller, Kos Investments or Kos Holdings is a
party or by which and Seller, Kos Investments or Kos Holdings or any of their
respective properties are bound.
(b) Except pursuant to the
applicable requirements under the HSR Act and the Exchange Act, no consent,
approval, authorization or permit of, action by, filing with or notification
to, any federal, state, local or foreign governmental or regulatory (including
stock exchange) authority, agency, court, commission, or other governmental
body (a “Governmental Entity”) or any other person (including with
respect to individuals, any spouse, and with respect to trusts, any co-trustee
or beneficiary) is required to be obtained or made by Sellers, Kos Investments
or Kos Holdings in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby.
SECTION 2.03. The Shares. Except as set forth in Section 2.03 of
the Disclosure Schedule, each Seller owns and has good and valid title to the
number of Shares set forth below such Seller’s signature to this Agreement,
free and clear of all Liens other than Permitted Liens. Assuming Acquiror has the requisite power and
authority to be the lawful owner of the Shares, upon delivery to Acquiror at
the Closing of certificates representing the Shares owned by Seller, duly
endorsed by Seller for transfer to Acquiror, and upon Seller’s receipt of the
applicable portion of the Closing Payment, good and valid title to such Shares
will pass to Acquiror, free and clear of any Liens, other than those arising
from acts of Acquiror or its Affiliates.
Other than this Agreement, the Shares are not subject to any voting
trust agreement or other Contract, including any Contract restricting or
otherwise relating to the voting, dividend rights or disposition of the Shares,
and no proxies with respect to the Shares have been granted by Sellers.
SECTION 2.04. Organization,
Standing and Power. Each of Kos
Investments and Kos Holdings is duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite corporate power and
authority to own the Assets. Sellers
have delivered to Acquiror true and complete copies of the certificate of
incorporation and by-laws of Kos Investments and Kos Holdings, in each case as
amended through the date of this Agreement.
SECTION 2.05. Assets.
(a) Kos Investments owns and has
good and valid title to (i) 960,069 shares of Company Common Stock and (ii) all
of the issued and outstanding capital stock of Kos Holdings, in each case, free
and clear of all Liens other than as set forth in Section 2.05(a) of the
Disclosure Schedule.
(b) Kos Holdings owns and has
good and valid title to 7,610,000 shares of Company Common Stock, free and
clear of all Liens other than as set forth in Section 2.05(b) of the
Disclosure Schedule.
(c) Except for (i) 960,069
shares of Company Common Stock owned by Kos Investments, (ii) the shares
of Kos Holdings owned by Kos Investments and (iii) 7,610,000
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shares of
Company Common Stock owned by Kos Holdings (collectively, the “Assets”),
neither Kos Investments nor Kos Holdings (A) owns, directly or indirectly,
any capital stock, partnership interest, limited liability company interest,
joint venture interest or any other equity in any person or any other asset or
(B) has since January 1, 1999, directly or indirectly owned any other asset, in
each case except as set forth in Section 2.05(c) of the Disclosure
Schedule. Other than the Merger
Agreement, the Shareholders Agreement and the other agreement set forth in
Section 2.05(c) of the Disclosure Schedule, the Assets are not subject to
any voting trust agreement or other Contract, including any Contract
restricting or otherwise relating to the voting, dividend rights or disposition
of the Assets, and no proxies have been granted in respect of the Assets.
SECTION 2.06. Capitalization
of Kos Investments and Kos Holdings.
(a) The authorized capital stock
of Kos Investments consists of 50,000 shares of common stock, par value $0.01
per share, of which only 27,200 shares, constituting the Shares, are
issued and outstanding. All of the
Shares were validly issued, fully paid and nonassessable and were issued free
of preemptive rights and in accordance with all applicable Laws.
(b) Except as set forth in
clause (a) of this Section 2.06 or as set forth in Section 2.06(b) of the
Disclosure Schedules, (i) there are not outstanding or authorized any (A)
shares of capital stock or other voting securities of Kos Investments, (B)
securities of Kos Investments convertible into or exchangeable for shares of
capital stock or voting securities of Kos Investments or (C) options or other
rights to acquire from Kos Investments, or any obligation of Kos Investments to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Kos Investments; and
(ii) there are no other options, calls, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock or other voting securities of Kos Investments to which Kos
Investments or any Seller is a party.
(c) The authorized capital stock
of Kos Holdings consists of 50,000 shares of common stock, par value $0.01
per share, of which only 10,000 shares are issued and outstanding. All of the shares of Kos Holdings were
validly issued, fully paid and nonassessable, were issued free of preemptive
rights and are owned beneficially and of record by Kos Investments.
(d) Except as set forth in
clause (c) of this Section 2.06, (i) there are not outstanding or authorized
any (A) shares of capital stock or other voting securities of Kos Holdings, (B)
securities of Kos Holdings convertible into or exchangeable for shares of
capital stock or voting securities of Kos Holdings or (C) options or other
rights to acquire from Kos Holdings, or any obligation of Kos Holdings to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Kos Holdings; and (ii)
there are no other options, calls, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock or other voting securities of Kos Holdings to which Kos Holdings,
Kos Investments or any Seller is a party.
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SECTION 2.07. Taxes. Except as set forth in Section 2.07 of the
Disclosure Schedules, since July 1, 1997 (i) all Tax Returns required to be
filed by or with respect to Kos Investments and Kos Holdings have been timely
filed and such Tax Returns are true, correct and complete in all material
respects, (ii) all Taxes of Kos Investments and Kos Holdings that are due and
payable have been paid, (iii) since July 1, 1997, neither Kos Investments nor
Kos Holdings has received written notice of any Proceeding against or audit of,
or with respect to, any Taxes of Kos Investments or Kos Holdings that has not
been finally resolved, (iv) there are no liens for Taxes (other than statutory
liens for Taxes not yet due and payable) upon any of the assets of Kos
Investments or Kos Holdings, (v) since July 1, 1997, neither Kos
Investments nor Kos Holdings has been a “distributing corporation” or a “controlled
corporation” in a distribution intended to qualify under Section 355(a) of the
Code or otherwise as part of a “plan (or series of related transactions)”
(within the meaning of Section 355(e) of the Code) of which the Merger is also
a part, (vi) neither Kos Investments nor Kos Holdings is a party to or is bound
by any Tax sharing, allocation or indemnification agreement or arrangement
(other than solely between Kos Investments and Kos Holdings), (vii) for any
period beginning on or after July 1, 1997, neither Kos Investments nor Kos
Holdings (A) has been a member of a group filing a consolidated, combined or
unitary Tax Return (other than a group consisting solely of Kos Investments and
Kos Holdings or (B) has any liability for the Taxes of any person under
Treasury regulation section 1.1502-6 (or any similar provision of state, local
or foreign Law), (viii) Kos Investments is an S corporation as defined in
Section 1361 of the Code and has been since July 1, 1997, Kos Holdings is
a qualified subchapter S subsidiary as defined in Section 1361(b)(3)(B) of the
Code and has been since July 1, 1997, (ix) neither Kos Investments nor Kos
Holdings has been a party to a transaction that, as of the date of this
Agreement, constitutes a “reportable transaction” for purposes of Section 6011
of the Code and applicable Treasury regulations thereunder (or a similar
provision of state Law), (x) Kos Investments and Kos Holdings have properly and
timely withheld all Taxes required to be withheld, and properly remitted to the
applicable Taxing Authorities all Taxes required to be remitted for, with
respect to amounts paid or owed to any employee, independent contractor,
stockholder or other party , and (xi) neither Kos Investments nor Kos Holdings
will be required to include in a taxable period ending after the Closing
Date taxable income attributable to income that
accrued in a prior taxable period (or portion of a taxable period) but was not
recognized for tax purposes in any prior taxable period as a result of (A) a
disposition by Kos Investments, nor Kos Holdings made by on or before the
Closing Date that was accounted for as an “open transaction”, (B) a prepaid amount
received on or prior to the Closing Date, (C) the installment method of
accounting, (D) the completed contract method of accounting, (E) the long-term
contract method of accounting, (F) the cash method of accounting or Section 481
of the Code or (G) any comparable provisions of state, local, or foreign tax
law.
SECTION 2.08. Accounts;
Safe Deposit Boxes; Powers of Attorney; Officers and Directors. Section 2.08 of the Disclosure Schedule sets
forth (i) a true and correct list of all bank and savings accounts, certificates
of deposit and safe deposit boxes of Kos Investments and Kos Holdings and those
persons authorized to sign thereon, (ii) a true and correct list of all
powers of attorney granted by Kos Investments or Kos Holdings and those persons
authorized to act thereunder and (iii) a true and correct list of all
officers and directors of Kos Investments and Kos Holdings.
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SECTION 2.09. Brokers;
Schedule of Fees and Expenses.
Except as set forth in Section 2.09 of the Disclosure Schedule, no
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the Acquisition and the other
transactions contemplated by the Merger Agreement based upon arrangements made
by or on behalf of or with respect to Kos Investments or Kos Holdings.
SECTION 2.10. Private
Offering. None of the Sellers, Kos
Investments, Kos Holdings, their affiliates and their representatives has
issued, sold or offered any security of Kos Investments or Kos Holdings to any
person under circumstances that would cause the sale of the Shares, as
contemplated by this Agreement, to be subject to the registration requirements
of the Securities Act. None of the
Sellers, Kos Investments, Kos Holdings, their affiliates and their representatives
will offer the Shares or any part thereof or any similar securities for
issuance or sale to, or solicit any offer to acquire any of the same from,
anyone so as to make the issuance and sale of the Shares subject to the
registration requirements of Section 5 of the Securities Act. Assuming the representations of Acquiror
contained in Section 3.04 are true and correct, the sale and delivery of
the Shares hereunder are exempt from the registration and prospectus delivery
requirements of the Securities Act.
SECTION 2.11. Information. None of the information relating to Kos
Investments, Kos Holdings or the Sellers provided by or on behalf of the
Sellers for inclusion in the Offer Documents, the Schedule 14D-9 or any Proxy
Statement will, at the respective times such documents are filed with the SEC
or are first published, sent or given to shareholders of the Company, contain
any untrue statement of material fact or omit to state any 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.
SECTION 2.12. Reliance. Sellers understand and acknowledge that
Acquiror is entering into the Merger Agreement and the Shareholders Agreement
in reliance upon the Sellers’ execution and delivery of this Agreement.
ARTICLE III
Representations
and Warranties Relating to Acquiror
Acquiror represents and
warrants to Sellers that:
SECTION 3.01. Organization,
Standing and Power. Acquiror is a
corporation duly organized, validly existing and in good standing or active
status under the laws of the jurisdiction in which it is incorporated and has
all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted. Acquiror is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary.
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SECTION 3.02. Authority;
Execution and Delivery; Enforceability.
Acquiror has all requisite power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Acquiror of
this Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action of Acquiror, and no
other corporate proceedings on the part of Acquiror are necessary to authorize
this Agreement, to perform its obligations hereunder, or to consummate the
transactions contemplated hereby.
Neither the approval or adoption of this Agreement nor the consummation
of the transactions contemplated hereby requires any approval of the
shareholders of Acquiror. This Agreement
has been duly executed and delivered by Acquiror and constitutes its valid and
binding obligation, enforceable against it in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and general
equity principles).
SECTION 3.03. No
Conflicts; Consents.
(a) The execution, delivery and
performance of this Agreement by Acquiror does not and will not (i) conflict with
or violate the articles of incorporation or bylaws of Acquiror, (ii) assuming
that all applicable requirements under the HSR Act and the Exchange Act
have been satisfied, conflict with or violate any Law applicable to Acquiror or
by which any of its properties are bound or (iii) (A) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both would become a default), or (B) result in the loss of a benefit
under, or give rise to any right of termination, cancellation, amendment or
acceleration of, or (C) result in the creation of any Lien on any of the
properties or assets of Acquiror under, any Contract to which Acquiror or its
subsidiaries is a party or by which Acquiror or its subsidiaries or any of
their respective properties are bound.
(b) Except pursuant to
applicable requirements under the HSR Act and the Exchange Act, no consent,
approval, authorization or permit of, action by, filing with or notification
to, any Governmental Entity is required to be obtained or made by Acquiror in
connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.
SECTION 3.04. Securities
Act. Acquiror is an Accredited
Investor, as defined in Regulation 501 under the Securities Act. The Shares purchased by Acquiror pursuant to
this Agreement are being acquired for investment only and not with a view to
any public distribution thereof, and Acquiror shall not offer to sell or
otherwise dispose of the Shares so acquired by it in violation of any of the
registration requirements of the Securities Act.
SECTION 3.05. Available
Funds. Acquiror has sufficient funds
to (i) consummate the Acquisition, (ii) pay the applicable Purchase Price
to each Seller and (iii) pay any and all fees and expenses incurred by
Acquiror in connection with the Acquisition or the financing thereof.
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SECTION 3.06. No Other
Representations. Acquiror is not
relying on any statement or representation made by or on behalf of Sellers with
respect to its acquisition of the Shares other than the representations made in
this Agreement.
ARTICLE IV
Covenants and
Agreements
SECTION 4.01. Covenants
Relating to Conduct of Business.
Sellers covenant and agree that, during the period from the date hereof
until the Closing or earlier termination of this Agreement, neither Kos
Investments nor Kos Holdings shall (and Sellers shall cause neither of Kos
Investments nor Kos Holdings to) (i) acquire any additional assets or (ii)
carry on any business or conduct any operations other than (A) those actions
incidental to holding the Assets that are consistent with past practice and (B)
performing its obligations under, and consummating the transactions
contemplated by, this Agreement (including engaging counsel and other advisors
the fees of which will be paid by Sellers) and repaying or causing to be repaid
the following indebtedness: (a) a $75,000,000 line of credit between Kos
Investments and Wachovia Bank N.A. (on which approximately $60,000,000 is
outstanding as of the date hereof) and (b) a $25,000,000 Promissory Note dated
August 2, 2006 between Kos Investments and Mary Jaharis. Without limiting the generality of the
foregoing, between the date of this Agreement and the Closing, Sellers covenant
and agree that none of Sellers shall, and Sellers shall cause Kos Investments
or Kos Holdings to not, without the prior written consent of Acquiror:
(a) amend or otherwise change
the articles of incorporation or bylaws or any similar governing instruments of
Kos Investments or Kos Holdings;
(b) issue, deliver, sell,
pledge, dispose of or encumber (whether by merger or otherwise by operation of
law) any shares of capital stock, voting securities, or other equity interests,
or any options, warrants, convertible securities or other rights of any kind to
acquire or receive any shares of capital stock, voting securities, or other
equity interests, of Kos Investments or Kos Holdings;
(c) adjust, recapitalize,
reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire
any shares of capital stock of Kos Investments or Kos Holdings;
(d) in the case of Kos
Investments and Kos Holdings only (i) enter into any business or (ii) make any
capital contribution or investment in any other person;
(e) (i) grant any proxies or
enter into a voting trust or other agreement or arrangement with respect to the
voting of any of the Assets or (ii) Transfer, grant a Lien on, or enter into
any Contract, option or other arrangement or understanding with respect to any
Transfer (whether by actual disposition or effective economic disposition) of
any of the Assets or any rights thereto or therein;
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Agreement, and in any
document delivered in connection herewith, or by Acquiror shall survive until
the applicable Indemnification Expiration Dates.
ARTICLE VIII
General Provisions
SECTION 8.01. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
if to Acquiror:
Abbott
Laboratories
200 Abbott Park Road
Abbott Park, Illinois 60064
Attention: President, Pharmaceutical
Products Division
Facsimile: 847-937-6683
with a copies (which shall not constitute
notice) to:
Abbott
Laboratories
100 Abbott Park Road
Abbott Park, Illinois 60064
Attention: Senior Vice President,
General Counsel and Secretary
Facsimile: 847-938-6277
Covington & Burling LLP
1330 Avenue of the Americas
New York, NY 10019
Attention: Scott E. Smith
Facsimile: 646-441-9056
if to the Sellers:
Oikos Ventures LLC
c/o Steven K. Aronoff P.C.
499 Park Avenue, 6th Floor
New York, New York 10022
Attention: Steven K. Aronoff
Facsimile: 212-779-7605
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Kramer
Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Attention: Thomas D. Balliett
Facsimile: 212-715-8100
with
additional copies (which shall not constitute notice) to:
Milbank
1 Chase Manhattan Plaza
New York, NY 10005
Attention: Bruce Kayle
Facsimile: 212-822-5897
Cravath, Swaine &
Moore LLP (only prior to closing of the Merger)
825 Eighth Avenue
New York, NY 10019
Attention: Sarkis Jebejian
Facsimile: 212-474-3700
Holland & Knight LLP
(only prior to closing of the Merger)
195 Broadway, 24th Floor
New York, NY 10007
Attention: Steven Sonberg
Facsimile: 212-385-9010
SECTION 8.02. Definitions. For purposes of this Agreement:
An “Affiliate” or “affiliate” of any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person. For purposes of this
definition, the term “control” (including the correlative terms “controlling”,
“controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of this Agreement, the Company
is not an Affiliate of Sellers, Kos Investments or Kos Holdings.
“Business Day” means any day on which banks are
not required or authorized by law to close in New York, New York.
“Closing Payment” means (A) product of (x) the
number of shares of Company Common Stock legally and beneficially owned by Kos
Investments directly or indirectly through Kos Holdings by (y) $78.00, minus
(B) any known Tax liabilities for the Preclosing Period (determined in
accordance with Section 7.03(b)) and other existing non-Tax
liabilities of Kos
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Investments and Kos Holdings as of the Closing as set
forth in the Closing Payment Certificate which will not be paid and discharged
at Closing (which shall exclude, for the avoidance of doubt, obligations of Kos
Investments and Kos Holdings under this Agreement or the Merger Agreement but
shall include Sellers’ best estimate of Taxes allocable to the Preclosing
Period under Section 7.03(b)).
“Closing Payment Certificate” means the
certificate to be delivered by Sellers to Acquiror setting forth (A) the
number of shares of Company Common Stock legally and beneficially owned by Kos
Investments directly or indirectly through Kos Holdings, (B) the known tax
liabilities of Kos Investments and Kos Holdings and (C) any other known
liabilities of Kos Investments and Kos Holdings, in each case as of the Closing
Date and, in the case of clauses (B) and (C), which will not be paid and
discharged at Closing; provided that prior to delivery of the Closing
Payment Certificate, Sellers shall be required to (i) consult with Acquiror as
to the information set forth of such certificate and (ii) obtain Acquiror’s
reasonable consent to the inclusion of such information on such certificate.
“Code” means the Internal Revenue Code of 1986,
as amended.
“Contract” means, whether written or oral, any
loan agreement, indenture, letter of credit (including related letter of credit
application and reimbursement obligation), mortgage, security agreement, pledge
agreement, deed of trust, bond, note, guarantee, surety obligation, warrantee,
license, franchise, permit, power of attorney, purchase order, lease, and other
agreement, contract, instrument, obligation, offer, commitment, arrangement and
understanding.
“GAAP” means the generally accepted accounting
principles in the United States, set forth in the Financial Accounting
Standards Board (FASB) Statements of Financial Accounting Standards and
Interpretations, FASB Emerging Issues Task Force consensuses, Accounting Principles Board (APB) Opinions,
and rules and interpretative releases of the SEC, including SEC Staff
Accounting Bulletins and other such statements by such other entity as may be
approved by a significant segment of the accounting profession in the United
States, in each case, as applicable as of the time for the relevant financial
statements referred to herein.
“Liens” means any security interests, liens,
claims, pledges, agreements, limitations in voting rights, changes or other
encumbrances of any nature whatsoever.
“person” means any individual, firm,
corporation, partnership, company, limited liability company, trust, joint
venture, association, Governmental Entity or other entity.
“Permitted Liens” means (i) Liens for
Taxes, assessments and other lienable services and other governmental charges
which are not yet due and payable; and (ii) Liens arising out of this Agreement
and the Merger Agreement.
“Pro Rata Portion” means, with respect to any
Seller, the quotient of (x) the number of Shares held by such Seller on the
Closing Date and (y) the total number of Shares held by all Sellers on the
Closing Date.
25
“SEC” means the United States Securities and
Exchange Commission.
“Securities Act” means the U.S. Securities Act
of 1933, as amended and the rules and regulations promulgated thereunder.
A “subsidiary”
of any person means another person of which such first person, (i) owns directly or indirectly an
amount of the voting securities, other voting ownership or voting partnership
interests sufficient to elect at least a majority of such other person’s board
of directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests), (ii) in the case of
partnerships, serves as a general partner, or (iii) in the case of a limited
liability company, serves as a managing member. For purposes of this Agreement,
the Company is not a subsidiary of Kos Investments or Kos Holdings.
“Tax Return” means any return, report, claim
for refund, information return or statement filed or required to be filed with
any governmental authority with respect to Taxes, including any schedule or
attachment thereto or amendment thereof.
“Taxes” means any taxes of any kind, including
those on or measured by or referred to as income, gross receipts, capital, sales,
use, ad valorem, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added, alternative
minimum, assessment, property or windfall profits taxes, customs, duties or
similar fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any governmental authority, domestic or foreign.
“Taxing Authority” means any domestic, foreign,
federal, national, state, county or municipal or other local government, any
subdivision, agency, commission or authority thereof, or any quasi-governmental
body exercising tax regulatory authority.
SECTION 8.03. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.
SECTION 8.04. Entire
Agreement; Third Parties; Assignment.
This Agreement, taken together with the Disclosure Schedule, (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and thereof and (b) except as provided in
Section 7.01 and 7.02 are not intended to confer upon any person other
than the parties any rights or remedies.
This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of each of the other parties, except that
Acquiror may assign all or any of its rights and obligations hereunder to any
direct or indirect wholly-owned Subsidiary of Acquiror; provided, however,
that no such assignment shall relieve Acquiror of its obligations hereunder.
26
SECTION 8.05. Governing
Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware (without giving effect to choice of law principles thereof). Each of the parties hereto agrees that this
Agreement (a) involves at least $100,000.00, and (b) has been entered into by
the parties hereto in express reliance upon 6 Del. C. § 2708.
SECTION 8.06. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 8.07. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 8.08. Specific
Performance; Jurisdiction.
Notwithstanding any other provision of this Agreement, the parties
hereto agree that irreparable damage would occur, damages would be difficult to
determine and would be an insufficient remedy and no other adequate remedy
would exist at law or in equity, in each case in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached (or any party hereto threatens such a
breach). It is accordingly agreed that
in the event of a breach or threatened breach of this Agreement, the other
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the Court of Chancery of the State of Delaware or, if
under applicable law exclusive jurisdiction over such matter is vested in the
federal courts, any court of the United States located in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. Each party hereto
irrevocably waives any defenses based on adequacy of any other remedy, whether
at law or in equity, that might be asserted as a bar to the remedy of specific
performance of any of the terms or provisions hereof or injunctive relief in
any action brought therefor by any other party hereto. In addition, each of the parties hereto (i)
irrevocably submits itself to the personal jurisdiction of the Court of
Chancery of the State of Delaware or any court of the United States located in
the State of Delaware in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than the Court of Chancery of
the State of Delaware or, if under applicable law exclusive jurisdiction over
such matter is vested in the federal courts, any court of the United States
located in the State of Delaware and (iv) consents to service being made
through the notice procedures set forth in Section 8.01. Each of the parties hereby agrees that
service of any process, summons, notice or document by U.S. registered mail to
the respective addresses set forth in Section 8.01 shall be effective service
of process for any Proceeding in connection with this Agreement or the
transactions contemplated hereby.
27
SECTION 8.09. Interpretation. When a reference is made in this Agreement to
an Article, Section, Exhibit or Schedule, such reference shall be to an Article
of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes”, “including”
or “such as” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall.” The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
The word “or” shall not be exclusive.
The word “extent” in the phrase “to the extent” shall mean the degree to
which a subject or other thing extends, and such phrase shall not mean simply “if”. The phrase “date hereof” or “date of this
Agreement” shall be deemed to refer to November 5, 2006. Whenever used in this
Agreement, any noun or pronoun shall be deemed to include the plural as well as
the singular and to cover all genders.
This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted. References to “this Agreement” shall
include the Disclosure Schedule. All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein. Any Contract,
instrument or Law defined or referred to herein or in any Contract or instrument
that is referred to herein means such Contract, instrument or Law as from time
to time amended, modified or supplemented, including (in the case of Contracts
or instruments) by waiver or consent and (in the case of Law) by succession of
comparable successor Law and references to all attachments thereto and
instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
SECTION 8.10. Waiver of
Jury Trial. Each of the parties to
this Agreement irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated by this Agreement.
SECTION 8.11. Disclosure
Schedule. The parties acknowledge
and agree that (i) the Disclosure Schedule may include certain items and
information solely for informational purposes for the convenience of Acquiror
and (ii) the disclosure by Sellers of any matter in the Disclosure Schedule
shall not be deemed to constitute an acknowledgment by Sellers that the matter
is required to be disclosed by the terms of this Agreement or that the matter
is material.
SECTION 8.12. Legends. Each Seller shall cause the Shares to bear a
legend, stating that they are subject to the terms of this Agreement.
[Remainder of Page Left Blank Intentionally]
28
IN WITNESS WHEREOF,
Acquiror and Sellers have duly executed this Agreement, all as of the date
first written above.
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ABBOTT LABORATORIES,
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By:
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/s/ William Dempsey
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Name:
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William Dempsey
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Title:
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Senior President, Pharmaceutical Operations
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MICHAEL JAHARIS,
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By:
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/s/ Michael Jaharis
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Name:
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Michael Jaharis
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Title:
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Shares:
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19,800
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KATHRYN JAHARIS,
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By:
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/s/ Kathryn Jaharis
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Name:
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Kathryn Jaharis
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Title:
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Shares:
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2,600
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STEVEN JAHARIS,
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By:
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/s/ Steven Jaharis
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Name:
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Steven Jaharis
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Title:
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Shares:
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2,500
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DANIEL BELL,
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By:
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/s/ Daniel Bell
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Name:
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Daniel Bell
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Title:
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Shares:
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2,000
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STEVEN K. ARONOFF,
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By:
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/s/ Steven K. Aronoff
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Name:
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Steven K. Aronoff
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Title:
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Shares:
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300
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