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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
IBAH, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
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(Title of Class of Securities)
450731 10 4
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(CUSIP Number)
Cheryl D. Hodges
Omnicare, Inc.
2800 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45203
with copies to:
Morton A. Pierce
Richard D. Pritz
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
March 30, 1998
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(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4) check the following box [_].
NOTE: Six copies of this statement, including exhibits, should be filed with the
Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent.
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).
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SCHEDULE 13D
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CUSIP NO. 450731 10 4 PAGE 2 OF 9 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
OMNICARE, INC.
31-1001351
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY (a) |_|
(b) |_|
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e). |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
0
NUMBER OF ------------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 6,268,131(1)
OWNED BY EACH ------------------------------------------------------------------------------------------
REPORTING PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
6,268,131(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,268,131(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.3% (1).
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14 TYPE OF REPORTING PERSON
CO
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(1) See Items 4 and 5.
Page 2 of 9 Pages
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ITEM 1. SECURITY AND ISSUER.
This Statement relates to the common stock, par value
$0.01 per share (the "Common Shares") and preferred stock, par
value $0.01 per share, on an as-converted basis (the
"Preferred Shares", together with the Common Shares, the
"Shares") of IBAH, Inc., a Delaware corporation ("IBAH"). The
address of the principal executive office of IBAH is Four
Valley Square, 512 Township Line Road, Blue Bell, Pennsylvania
19422.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) and (f). This Schedule 13D is filed by
Omnicare, Inc., a Delaware corporation ("Omnicare"). Omnicare
is a leading independent provider of pharmacy and related
services to long-term care institutions such as nursing homes,
retirement centers and other institutional health care
facilities. Omnicare purchases, repackages and dispenses
pharmaceuticals, both prescription and non-prescription, and
provides computerized medical recordkeeping and third-party
billing for residents in such facilities. Omnicare also
provides consultant pharmacist services, including evaluating
monthly patient drug therapy, monitoring the control,
distribution and administration of drugs within the nursing
facility and assisting in compliance with state and federal
regulations. In addition, Omnicare provides ancillary
services, such as infusion therapy, distributes medical
supplies and offers clinical care plan and financial software
information systems to its client nursing home facilities.
Omnicare also provides comprehensive clinical research
services for the pharmaceutical and biotechnology industries.
Omnicare's executive offices are located at 50 East
RiverCenter Blvd. -- Suite 1530, Covington, Kentucky 41011,
and its telephone number is (606) 655-1180.
Each executive officer and each director of Omnicare
is a citizen of the United States. The name, business address
and present principal occupation of each executive officer and
director are set forth in Annex I to this Schedule 13D which
is incorporated herein by reference.
(d) and (e). During the last five years neither
Omnicare nor, to the best of Omnicare's knowledge, any of its
executive officers or directors has been convicted in any
criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a
result of which Omnicare or such person was or is subject to
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, and which judgment, decree or final
order was not subsequently vacated.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As described in the response to Item 4, the Shares to
which this Schedule 13D relates have not been purchased by
Omnicare. In connection with, and as a condition to, Omnicare
and IBAH entering into an Agreement and Plan of Merger, dated
as of March 30, 1998 (the "Merger Agreement"), (i) certain
securityholders of IBAH (collectively, the "Securityholders"),
together the beneficial owners of approximately 24.3% of the
outstanding Shares (see Item 5), have entered into a Voting
Agreement, dated as of March 30, 1998 (the "Voting
Agreement"), and (ii) Omnicare and IBAH have entered into a
Stock Option Agreement, dated as of March 30, 1998 (the "Stock
Option Agreement"). The
Page 3 of 9 Pages
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Securityholders and the amount of securities held are listed
on Schedule A to the Voting Agreement (see Exhibit 3).
ITEM 4. PURPOSE OF TRANSACTION.
On March 30, 1998, IBAH and Omnicare entered into the
Merger Agreement which provides, among other things, that,
upon the terms and subject to conditions thereof, a wholly
owned subsidiary of Omnicare to be formed solely for purposes
of effecting such merger will merge with and into IBAH (the
"Merger"). IBAH will be the surviving corporation in the
Merger.
In the Merger, each Common Share will be converted
into the right to receive a number (the "Conversion Number")
of shares of Omnicare common stock, par value $1.00 per share
("Omnicare Common Stock"), as set forth below, plus cash in
lieu of receipt of fractional Omnicare Common Stock.
(1) If the Omnicare Market Value (as defined below) is greater
than $43.83, then the Conversion Number is equal to $6.50
divided by the Omnicare Market Value;
(2) If the Omnicare Market Value is greater than $38.77 and
less than or equal to $43.83, then the Conversion Number is
equal to 0.1483;
(3) If the Omnicare Market Value is greater than $34.85 and
less than or equal to $38.77, then the Conversion Number is
equal to $5.75 divided by the Omnicare Market Value;
(4) If the Omnicare Market Value is greater than or equal to
$30.30 and less than or equal to $34.85, then the Conversion
Number is equal to 0.1650;
(5) If the Omnicare Market Value is less than $30.30, then,
subject to certain conditions, the Conversion Number is equal
to $5.00 divided by the Omnicare Market Value.
If the Omnicare Market Value is less than $30.30,
then Omnicare shall have the right, by written notice to IBAH,
to adjust the Conversion Number to 0.1650; provided, however,
that upon the receipt of such notice of adjustment, IBAH shall
have the right, by written notice to Omnicare, to elect to
abandon the Merger and terminate the Merger Agreement by
action of its Board of Directors.
"Omnicare Market Value" means the average of the
closing prices of Omnicare Common Stock on the New York Stock
Exchange, as reported in the Wall Street Journal, for the 15
trading days immediately preceding the second trading day
preceding the closing date of the Merger.
Each Preferred Share outstanding immediately prior to
the effective time of the Merger shall by virtue of the Merger
and without any action on the part of the shareholder thereof,
be converted into the right to receive a number of shares of
Omnicare Common Stock equal to three times the Conversion
Number, subject to certain exceptions.
In connection with the execution of the Merger
Agreement, Omnicare and IBAH entered into the Stock Option
Agreement under which IBAH has
Page 4 of 9 Pages
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granted Omnicare an option to purchase up to 4,685,315 newly
issued Shares at $5.75 per Share if certain events occur.
In addition, the Securityholders have entered into
the Voting Agreement pursuant to which the Securityholders
have agreed, subject to certain exceptions, to vote their
Common Shares owned, Common Shares received upon conversion of
their Preferred Shares, Common Shares received upon the
exercise of warrants to purchase Common Shares (the
"Warrants") and any Common Shares issuable upon the exercise
of options to purchase Common Shares in favor of adoption of
the Merger Agreement and approval of the Merger, to vote such
Shares against any contrary transaction, to grant to Omnicare
an irrevocable proxy to vote such Shares for such purposes and
not to dispose of such Shares. Additionally, IBAH has
represented that all other holders of Preferred Shares have
agreed that they will not consent to or otherwise facilitate
any transaction that is inconsistent with the Merger. The
Preferred Shares held by such holders represented
approximately 4.6% of the outstanding Shares as of March 30,
1998.
The purpose of the Stock Option Agreement and the
Voting Agreement is to facilitate the consummation of the
transactions contemplated by the Merger Agreement. The Stock
Option Agreement and the Voting Agreement may also make it
more difficult and expensive for IBAH to consummate a business
combination with a party other than Omnicare.
Upon consummation of the Merger, the Shares would
cease to be quoted on the Nasdaq National Market and would
become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934.
Except as contemplated by the Merger Agreement, the
Stock Option Agreement and the Voting Agreement or as
otherwise set forth in this Item 4, Omnicare has no present
plans or proposals which relate to or would result in any of
the contingencies listed in subsections (a) through (j) of
Item 4 of Schedule 13D. The descriptions of the Merger
Agreement, the Voting Agreement and the Stock Option Agreement
contained in this Schedule 13D are qualified in their entirety
by reference to the full text of such agreements, which are
filed as exhibits hereto.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) 6,268,131 Shares, representing
approximately 24.3% of the outstanding Shares, are subject to
the Voting Agreement. Each Preferred Share may be converted
into three Common Shares and is entitled to vote on an
as-converted basis. Calculations of percentages of outstanding
Shares in this Schedule 13D treat Preferred Shares as if
converted. As a result of the provisions of the Voting
Agreement, the Securityholders and Omnicare may be deemed to
share voting and dispositive power with respect to the Shares
subject to the Voting Agreement. Pursuant to the Stock Option
Agreement, Omnicare would have the right to acquire 4,685,315
Common Shares (representing approximately 19.9% of the
outstanding Common Shares and approximately 16.6% of the
Common Shares outstanding following the exercise of the option
granted thereunder) under the circumstances set forth therein.
Calculations in this paragraph are based on 23,544,312 Common
Shares and 749,665 Preferred Shares, in each case, outstanding
as of March 30, 1998 as represented in the Merger Agreement by
IBAH.
Page 5 of 9 Pages
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(c) Other than the Merger Agreement, the Stock Option
Agreement and the Voting Agreement and the transactions
contemplated thereby, there have been no transactions in the
Shares by Omnicare, or, to the best knowledge of Omnicare, by
any of the directors or executive officers of Omnicare, during
the past 60 days.
(d) To the best knowledge of Omnicare, the right to
receive and the power to direct the receipt of dividends from,
and the proceeds from the sale of, the Shares subject to the
Voting Agreement are held by the Securityholders.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement, Stock Option
Agreement and Voting Agreement and the transactions
contemplated thereby, there are no contracts, arrangements,
understandings or relationships between Omnicare and any other
person, or, to the best knowledge of Omnicare, among any of
the directors and executive officers of Omnicare and any other
person, with respect to the Shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed as part of this
Schedule 13D:
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Exhibit 1 -- Agreement and Plan of Merger dated as of
March 30, 1998 between Omnicare and IBAH.
Exhibit 2 -- Stock Option Agreement dated as of
March 30, 1998 between Omnicare and
IBAH.
Exhibit 3 -- Voting Agreement dated as of March 30,
1998 between the Securityholders and
Omnicare.
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SIGNATURE
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: April 8, 1998.
OMNICARE, INC.
By: /s/ CHERYL D. HODGES
--------------------------------
Name: Cheryl D. Hodges
Title: Senior Vice President and
Secretary
Page 7 of 9 Pages
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ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the name and present principal occupation
of each director and executive officer of Omnicare. Unless indicated otherwise,
the present principal occupation of each director and executive officer of
Omnicare. is a position with Omnicare. The business address of each such
director and executive officer is c/o Omnicare, Inc., 50 East RiverCenter Blvd.,
Suite 1530, Covington, Kentucky 41011. Directors are indicated by an asterisk
(*).
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NAME PRESENT PRINCIPAL OCCUPATION
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Edward L. Hutton* Chairman of Omnicare and Chairman and Chief Executive Officer of
Chemed Corporation ("Chemed"), Cincinnati, Ohio. Chemed is a
diversified public corporation with interests in plumbing and drain
cleaning services and health care services.
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Joel F. Gemunder* President.
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Patrick E. Keefe* Executive Vice President-Operations.
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Timothy E. Bien Senior Vice President - Professional Services and Purchasing.
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Mary Lou Fox* Senior Vice President-Marketing.
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David W. Froesel, Jr. Senior Vice President and Chief Financial Officer.
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Cheryl D. Hodges* Senior Vice President and Secretary.
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Ronald K. Baur* Vice President.
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Kenneth W. Chesterman* Retired Executive Vice President and a consultant to Omnicare.
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Charles H. Erhart, Jr.* Retired as President of W.R. Grace & Co. ("W.R. Grace"), Boca
Raton, Florida. W.R. Grace is an international specialty chemicals,
construction and packaging company. Director of Chemed.
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Thomas C. Hutton* Vice President and Director of Chemed.
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Sandra E. Laney* Senior Vice President, Chief Administrative Officer and Director of
Chemed.
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Andrea R. Lindell, DNSc, RN* Dean and Professor in the College of Nursing and Health at the
University of Cincinnati.
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Sheldon Margen, M.D.* Professor Emeritus in the School of Public Health, University
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of California, Berkeley.
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Kevin J. McNamara* President and Director of Chemed.
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John M. Mount* President and Chief Executive Officer of Service America Systems,
Inc., a subsidiary of Chemed.
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D. Walter Robbins, Jr.* Retired Vice Chairman of W.R. Grace and Director of Chemed.
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</TABLE>
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Exhibit 1
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AGREEMENT AND PLAN OF MERGER
among
OMNICARE, INC.
(a Delaware corporation),
IMPALA ACQUISITION CORP.
(a Delaware corporation)
and
IBAH, INC.
(a Delaware corporation)
MARCH 30, 1998
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TABLE OF CONTENTS
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Section Page
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ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II THE PLAN OF MERGER.....................................................................................9
Section 2.1. The Merger..................................................................................9
Section 2.2. Effective Time..............................................................................9
Section 2.3. Effects of the Merger.......................................................................9
Section 2.4. Certificate of Incorporation and Bylaws.....................................................9
Section 2.5. Directors and Officers......................................................................9
Section 2.6. Conversion or Cancellation of IBAH Shares...................................................9
Section 2.7. Exchange of IBAH Shares....................................................................11
Section 2.8. Options and Warrants.......................................................................12
Section 2.9. Adjustments................................................................................13
Section 2.10. Merger Subsidiary Capital Stock...........................................................13
Section 2.11. No Further Transfer of Shares.............................................................13
Section 2.12. Dissenting Shares.........................................................................13
ARTICLE III THE CLOSING..........................................................................................14
Section 3.1. Location, Date.............................................................................14
Section 3.2. Deliveries.................................................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF IBAH................................................................14
Section 4.1. Corporate..................................................................................14
Section 4.2. Authorization..............................................................................14
Section 4.3. Validity of Contemplated Transactions......................................................15
Section 4.4. Capitalization and Stock Ownership.........................................................15
Section 4.5. Board Recommendation.......................................................................16
Section 4.6. Proxy Statement............................................................................16
Section 4.7. IBAH Disclosure Documents; Financial Statements............................................16
Section 4.8. Absence of Undisclosed Liabilities.........................................................17
Section 4.9. Taxes......................................................................................17
Section 4.10. Title to Assets and Related Matters.......................................................18
Section 4.11. Real Property.............................................................................19
Section 4.12. Subsidiaries..............................................................................19
Section 4.13. Legal Proceedings; Compliance with Law; Governmental Permits..............................19
Section 4.14. Contracts and Commitments.................................................................20
Section 4.15. Employee Relations........................................................................20
Section 4.16. ERISA.....................................................................................20
Section 4.17. Patents, Trademarks, etc..................................................................22
Section 4.18. Absence of Certain Changes................................................................22
Section 4.19. Corporate Records.........................................................................24
Section 4.20. Finder's Fees.............................................................................24
Section 4.21. Compliance with Healthcare Laws...........................................................24
Section 4.22. Board Approval............................................................................25
Section 4.23. Pooling of Interests; Reorganization......................................................25
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Section 4.24. Insurance.................................................................................25
ARTICLE V REPRESENTATIONS AND WARRANTIES OF OMNICARE.............................................................25
Section 5.1. Corporate..................................................................................25
Section 5.2. Authorization..............................................................................26
Section 5.3. Validity of Contemplated Transactions......................................................26
Section 5.4. Capitalization and Stock Ownership.........................................................26
Section 5.5. Board Recommendation.......................................................................26
Section 5.6. Proxy Statement............................................................................27
Section 5.7. Omnicare Disclosure Documents; Financial Statements........................................27
Section 5.8. Absence of Undisclosed Liabilities.........................................................27
Section 5.9. Absence of Certain Changes.................................................................28
Section 5.10. Pooling of Interests; Reorganization......................................................28
Section 5.11. Ownership of Merger Subsidiary; No prior Activities.......................................28
Section 5.12. Compliance With Healthcare Laws...........................................................28
ARTICLE VI COVENANTS OF THE OMNICARE PARTIES AND IBAH............................................................29
Section 6.1. Proxy/Registration Statement...............................................................29
Section 6.2. HSR Act Filings............................................................................29
Section 6.3. No Solicitation............................................................................29
Section 6.4. Notification of Certain Matters............................................................31
Section 6.5. Access to Information......................................................................31
Section 6.6. Public Announcements.......................................................................31
Section 6.7. Cooperation................................................................................32
Section 6.8. Reorganization; Pooling....................................................................32
ARTICLE VII COVENANTS OF IBAH....................................................................................32
Section 7.1. Operation of the Business..................................................................32
Section 7.2. IBAH Stockholder Meeting...................................................................34
Section 7.3. Maintenance of the Assets..................................................................34
Section 7.4. Employees and Business Relations...........................................................34
Section 7.5. Rule 145 Affiliates........................................................................34
Section 7.6. Expenses...................................................................................34
Section 7.7. Certain Tax Matters........................................................................34
Section 7.8. Employment Arrangements....................................................................35
Section 7.9. State Anti-Takeover Law....................................................................35
ARTICLE VIII COVENANTS OF OMNICARE...............................................................................35
Section 8.1. Appointment to the Board of Directors of Omnicare..........................................35
Section 8.2. Expenses...................................................................................35
Section 8.3. Indemnification, Directors' and Officers' Insurance........................................35
Section 8.4. Stock Exchange Listing.....................................................................36
Section 8.5. Interim Financial Report...................................................................36
Section 8.6. Registration...............................................................................36
Section 8.7. Employee Benefit Plans.....................................................................36
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES....................................................36
Section 9.1. Legality...................................................................................36
Section 9.2. Registration Statement.....................................................................37
Section 9.3. New York Stock Exchange....................................................................37
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Section 9.4. Pooling....................................................................................37
Section 9.5. Approval by IBAH Stockholders..............................................................37
Section 9.6. Tax Opinions...............................................................................37
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF IBAH............................................................37
Section 10.1. Representations and Warranties............................................................37
Section 10.2. Agreements, Conditions and Covenants......................................................38
Section 10.3. Certificates..............................................................................38
Section 10.4. Material Adverse Effect...................................................................38
Section 10.5. Ancillary Documents.......................................................................38
ARTICLE XI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE OMNICARE PARTIES...........................................38
Section 11.1. Representations and Warranties............................................................38
Section 11.2. Agreements, Conditions and Covenants......................................................38
Section 11.3. Certificates..............................................................................38
Section 11.4. Required Consents.........................................................................39
Section 11.5. Material Adverse Effect...................................................................39
Section 11.6. Ancillary Documents.......................................................................39
Section 11.7. Consent of Holders of IBAH Preferred Shares and IBAH Warrants.............................39
Section 11.8. Employment Agreements.....................................................................39
ARTICLE XII TERMINATION..........................................................................................39
Section 12.1. Grounds for Termination...................................................................39
Section 12.2. Effect of Termination.....................................................................41
ARTICLE XIII GENERAL MATTERS.....................................................................................42
Section 13.1. Survival of Representations and Warranties................................................42
Section 13.2. Contents of Agreement.....................................................................42
Section 13.3. Amendment, Parties in Interest, Assignment, Etc...........................................42
Section 13.4. Interpretation............................................................................42
Section 13.5. Notices...................................................................................43
Section 13.6. Governing Law.............................................................................44
Section 13.7. Counterparts..............................................................................44
Section 13.8. Waivers...................................................................................44
Section 13.9. Modification..............................................................................44
Section 13.10. Enforcement of Agreement.................................................................44
Section 13.11. Waiver of Jury Trial.....................................................................44
Section 13.12. Severability.............................................................................44
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of March 30, 1998 by and
among Omnicare, Inc., a Delaware corporation ("Omnicare"), IBAH Acquisition
Corp., a Delaware corporation (the "Merger Subsidiary," and together with
Omnicare, the "Omnicare Parties"), and IBAH, Inc., a Delaware corporation
("IBAH," and together with the Omnicare Parties, the "Parties"). Certain other
terms are used herein as defined below in Article I or elsewhere in this
Agreement.
Background
This Agreement sets forth the terms and conditions under which the
Merger Subsidiary, which is a Wholly-Owned Subsidiary of Omnicare, will merge
with and into IBAH (the "Merger"). The Parties intend that (a) upon completion
of the Merger, IBAH will be a Wholly-Owned Subsidiary of Omnicare, (b) for
federal income tax purposes, the Merger will qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended,
and (c) for accounting purposes, the Merger will be accounted for as a pooling
of interests under United States generally accepted accounting principles
("GAAP").
Concurrently with the execution of this Agreement, and as an inducement
to Omnicare to enter into this Agreement, (i) certain stockholders of IBAH have
entered into a Voting Agreement, dated as of the date hereof (the "Voting
Agreement"), between IBAH and the respective stockholders named therein
providing, among other things, that such stockholders will vote in favor of the
Merger and (ii) IBAH and Omnicare have entered into the Option Agreement, dated
as of the date hereof (the "Stock Option Agreement"), pursuant to which IBAH has
granted Omnicare an option to purchase IBAH Common Shares under certain
circumstances.
Merger Subsidiary is a Wholly-Owned Subsidiary of Omnicare and has been
formed solely to facilitate the Merger and has conducted and will conduct no
business or activity other than in connection with the Merger.
Witnesseth
NOW, THEREFORE, in consideration of the respective covenants contained
herein and intending to be legally bound hereby, the Parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below
(such terms as well as any other terms defined elsewhere in this Agreement shall
be equally applicable to both the singular and plural forms of the terms
defined).
<PAGE> 6
"Acquisition Proposal" is defined in Section 6.3.
"Affiliates" means, with respect to a particular Party, persons or
entities controlling, controlled by or under common control with that Party, as
well as any executive officers, directors and majority-owned entities of that
Party and of its other Affiliates.
"Agreement" means this Agreement and the Exhibits and Disclosure
Schedules hereto.
"Assets" means, with respect to Omnicare or IBAH, as shown by the
context in which used, all of the assets, properties, goodwill and rights of
every kind and description, real and personal, tangible and intangible, wherever
situated and whether or not reflected in such Party's most recent financial
statements, that are owned or possessed by such Party and its Subsidiaries,
taken as a whole.
"Assumed Option" is defined in Section 2.8(a).
"Benefit Plan" means all employee benefit, health, welfare,
supplemental unemployment benefit, bonus, pension, profit sharing, deferred
compensation, severance, incentive, stock compensation, stock purchase,
retirement, hospitalization insurance, medical, dental, legal, disability,
fringe benefit and similar plans, programs, arrangements or practices,
including, without limitation, each "employee benefit plan" as defined in
Section 3(3) of ERISA.
"Business" means with respect to Omnicare or IBAH, as shown by the
context in which used, the entire business and operations of such Party and its
Subsidiaries, taken as a whole.
"Certificate of Merger" is defined in Section 2.2.
"Certificates" is defined in Section 2.7(a).
"Charter Documents" means an entity's certificate or articles of
incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement, certificate
of limited partnership, joint venture agreement or similar document governing
the entity.
"Closing" is defined in Section 3.1.
"Closing Date" is defined in Section 3.1.
"Code" is defined in Section 4.9(a).
"Confidentiality Agreement" is defined in Section 6.5(b).
"Contract" means any written or oral contract, agreement, letter of
intent, agreement in principle, lease, instrument or other commitment that is
binding on any Person or its property under applicable Law.
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"Conversion Number" is defined in Section 2.6(b).
"Copyrights" means registered copyrights, copyright applications and
unregistered copyrights.
"Court Order" means any judgment, decree, injunction, order or ruling
of any federal, state, local or foreign court or governmental or regulatory body
or authority, or any arbitrator that is binding on any Person or its property
under applicable Law.
"Default" means (i) a breach, default or violation, (ii) the occurrence
of an event that with or without the passage of time or the giving of notice, or
both, would constitute a breach, default or violation or (iii) with respect to
any Contract, the occurrence of an event that with or without the passage of
time or the giving of notice, or both, would give rise to a right of
termination, renegotiation or acceleration or a right to receive damages or a
payment of penalties.
"DGCL" means the Delaware General Corporation Law, as amended.
"Disclosure Schedules" means the IBAH Disclosure Schedule.
"Effective Time" is defined in Section 2.2.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"Environmental Condition" means any condition or circumstance,
including the presence of Hazardous Substances, whether created by any IBAH
Company or by any third party, which does or would (i) require assessment,
investigation, abatement, correction, removal or remediation under any
Environmental Law, (ii) give rise to any civil or criminal Liability under any
Environmental Law, (iii) create or constitute a public or private nuisance or
(iv) constitute a violation of or non-compliance with any Environmental Law.
"Environmental Law" means all Laws, Court Orders, principles of common
law, and permits, licenses, registrations, approvals or other authorizations of
any Governmental Authority relating to Hazardous Substances, pollution,
protection of the environment or human health.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" is defined in Section 2.7(a).
"Existing Option" is defined in Section 2.8(a).
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"GAAP" is defined above in the Background.
"Governmental Authority" means any federal, state, local, municipal or
foreign or other government or governmental agency or body.
"Governmental Permit" is defined in Section 4.13(c).
"Hazardous Substances" means any material, waste or substance
(including, without limitation, any product) that may or could pose a hazard to
the environment or human health or safety including, without limitation, (i) any
"hazardous substances" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq. and its
implementing regulations, (ii) any "extremely hazardous substance," "hazardous
chemical" or "toxic chemical" as those terms are defined by the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 et seq. and
its implementing regulations, (iii) any "hazardous waste," as defined under the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901 et seq. and its implementing regulations (iv) any
"pollutant," as defined under the Water Pollution Control Act, 33 U.S.C.
Sections 1251 et seq. and its implementing regulations as any of such Laws in
clauses (i) through (iv) may be amended from time to time, and (v) any material,
substance or waste regulated under any Laws or Court Orders that currently exist
or that may be enacted, promulgated or issued in the future by any Governmental
Authority concerning protection of the environment, pollution, health or safety
or the public welfare.
"Holder" means a recordholder, as of the Effective Time, of an
outstanding certificate or certificates that immediately prior to the Effective
Time represented IBAH Shares.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"IBAH" is defined above in the Preamble.
"IBAH Assets" means the Assets of IBAH.
"IBAH Balance Sheet" is defined in Section 4.7.
"IBAH Balance Sheet Date" is defined in Section 4.7.
"IBAH Benefit Plan" is defined in Section 4.16(a).
"IBAH Business" means the Business of IBAH.
"IBAH Common Shares" is defined in Section 2.6(a).
"IBAH Common Stock" means the common stock, par value $0.01 per share,
of IBAH.
"IBAH Companies" means IBAH and any IBAH Subsidiaries.
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"IBAH Convertible Preferred Stock" is defined in Section 4.4.
"IBAH Disclosure Documents" is defined in Section 4.7.
"IBAH Disclosure Schedule" means the Disclosure Schedule containing
information relating to IBAH pursuant to Article IV and other provisions hereof
that has been provided to the other Parties on the date hereof.
"IBAH's knowledge" or "knowledge of IBAH" with reference to any item
means that which an executive officer or director of IBAH actually knows or
should have known given such person's office and industry standards.
"IBAH Personnel" is defined in Section 4.21(a).
"IBAH Preferred Shares" is defined in Section 2.6(a).
"IBAH Required Consents" is defined in Section 4.3.
"IBAH Shares" is defined in Section 2.6(a).
"IBAH Stockholder Meeting" is defined in Section 7.2.
"IBAH Subsidiary" means any Subsidiary of IBAH.
"IBAH 10-K" is defined in Section 4.10.
"IBAH Warrants" means any warrants to purchase IBAH Common Stock that
are outstanding immediately prior to the Closing.
"IBAH Welfare Plan" is defined in Section 4.16(f).
"Intellectual Property" means any Copyrights, Patents, Trademarks,
technology, licenses, trade secrets, computer software and other intellectual
property.
"Law" means any statute, law, ordinance, regulation, order, rule,
common law principles or consent agreements of any Governmental Authority,
including, without limitation, those covering environmental, energy, safety,
health, transportation, bribery, recordkeeping, zoning, antidiscrimination,
antitrust, wage and hour, and price and wage control matters.
"Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement of
or by any Person.
"Litigation" means any lawsuit, action, arbitration, administrative or
other proceeding, criminal prosecution or governmental investigation or inquiry.
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"Material Adverse Effect" means a fact or event which has had or is
reasonably likely to have a material adverse effect on the Assets, Business,
financial condition or results of operations of Omnicare and its Subsidiaries
taken as a whole or IBAH and its Subsidiaries taken as a whole, as indicated by
the context in which used, and when used with respect to representations,
warranties, conditions, covenants or other provisions hereof means the
individual effect of the situation to which it relates and also the aggregate
effect of all similar situations unless the context indicates otherwise.
"Merger" is defined above in the Background.
"Merger Consideration" is defined in Section 2.6(g).
"Merger Subsidiary" is defined above in the Preamble.
"NYSE" means the New York Stock Exchange.
"Omnicare" is defined above in the Preamble.
"Omnicare Assets" means the Assets of Omnicare.
"Omnicare Balance Sheet" is defined in Section 5.7.
"Omnicare Balance Sheet Date" is defined in Section 5.7.
"Omnicare Business" means the Business of Omnicare.
"Omnicare Common Stock" means the common stock, par value $1.00 per
share, of Omnicare.
"Omnicare Companies" mean Omnicare and any Omnicare Subsidiaries.
"Omnicare Disclosure Documents" is defined in Section 5.7.
"Omnicare's knowledge" or "knowledge of Omnicare" with reference to any
item means that which an executive officer or director of Omnicare actually
knows or should have known given such person's office and industry standards.
"Omnicare Market Value" is defined in Section 2.6(f).
"Omnicare Parties" is defined above in the Preamble.
"Omnicare Shares" means shares of Omnicare Common Stock.
"Omnicare Sub Common Stock" is defined in Section 5.4.
"Omnicare Subsidiary" means any Subsidiary of Omnicare.
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"Omnicare Warrants" means warrants to purchase Omnicare Common Stock.
"Ordinary course" or "ordinary course of business" means the ordinary
course of business.
"Parties" is defined above in the Preamble.
"Party Representatives" is defined in Section 6.5(b).
"Patents" means patents, patent applications, reissue patents, patents
of addition, divisions, renewals, continuations, continuations-in-part,
substitutions, additions and extensions of any of the foregoing.
"Person" means any natural person, corporation, partnership, limited
liability company, proprietorship, association, trust or other legal entity.
"Post-Signing Returns" is defined in Section 7.7.
"Proxy/Registration Statement" is defined in Section 6.1(a).
"Proxy Statement" is defined in Section 6.1(a).
"Registration Statement" is defined in Section 6.1(a).
"Regulation" means any federal, state, local or foreign rule or
regulation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Act Affiliates" is defined in Section 7.5.
"Smith Barney" means Salomon Smith Barney Inc.
"Stock Option Agreement" is defined in the Background section above.
"Subsidiary" means any corporation or other legal entity of which
Omnicare or IBAH, as the case may be (either above or through or together with
any other Subsidiary) owns, directly or indirectly, more than 50% of the stock
or other equity interests the holders of which are generally entitled to vote
for the election of directors or other governing body of such corporation or
other entity.
"Surviving Corporation" is defined in Section 2.1.
"Taxes" is defined in Section 4.9(a).
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"Tax Return" is defined in Section 4.9(a).
"Termination Date" means October 31, 1998.
"Trademarks" means registered trademarks, registered service marks,
trademark and service mark applications and unregistered trademarks and service
marks.
"Transaction Documents" means this Agreement, the Employment
Agreements, the Voting Agreement and the Stock Option Agreement.
"Transactions" means the Merger, the exchange of IBAH Shares for
Omnicare Shares, the assumption by Omnicare of the Existing Options, the
exchange of IBAH Warrants for Omnicare Warrants, and the other transactions
contemplated by the Transaction Documents.
"Voting Agreement" is defined above in the Background.
"Wholly-Owned Subsidiary" means any Subsidiary in which all of the
stock or other equity interests is owned, directly or indirectly, by Omnicare or
IBAH, as the case may be.
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ARTICLE II
THE PLAN OF MERGER
Section 2.1. The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the DGCL, the Merger
Subsidiary shall be merged with and into IBAH. Following the Merger, IBAH shall
continue as the surviving corporation (the "Surviving Corporation") and shall
continue its existence under the Laws of the State of Delaware, and the separate
corporate existence of the Merger Subsidiary shall cease.
Section 2.2. Effective Time. As soon as practicable, but in any event
within one business day after the satisfaction or waiver of all conditions to
the Merger, IBAH and the Merger Subsidiary shall file with the Secretary of
State of the State of Delaware a certificate of merger (the "Certificate of
Merger") in such form as is required by the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is so filed (the "Effective
Time").
Section 2.3. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
Section 2.4. Certificate of Incorporation and Bylaws. The Certificate
of Incorporation of the Merger Subsidiary as in effect immediately prior to the
Effective Time shall be the initial Certificate of Incorporation of the
Surviving Corporation. The bylaws of the Merger Subsidiary as in effect
immediately prior to the Effective Time shall be the initial bylaws of the
Surviving Corporation.
Section 2.5. Directors and Officers. The directors of Merger
Subsidiary as in office as of immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation. The officers of IBAH as in
office as of immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation. Such persons shall hold such positions as
directors and officers until their successors are elected or appointed in
accordance with the Certificate of Incorporation and the bylaws of the Surviving
Corporation.
Section 2.6. Conversion or Cancellation of IBAH Shares.
(a) Each share of IBAH Common Stock (an "IBAH Common Share")
and each share of IBAH Convertible Preferred Stock (an "IBAH Preferred Share,"
and together with an IBAH Common Share, an "IBAH Share") that, immediately prior
to the Effective Time, is held by IBAH as treasury stock shall be canceled, and
no consideration shall be delivered with respect thereto.
(b) Each IBAH Common Share outstanding immediately prior to
the Effective Time shall by virtue of the Merger and without any action on the
part of the Holder thereof, be converted into the right to receive a number (the
"Conversion Number") of Omnicare Shares as set forth below, except as otherwise
provided in Sections 2.6(a), 2.6(e) or 2.7:
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(1) If the Omnicare Market Value is greater than
$43.83, then the Conversion Number is equal to $6.50 divided by the Omnicare
Market Value;
(2) If the Omnicare Market Value is greater than
$38.77 and less than or equal to $43.83, then the Conversion Number is equal to
0.1483;
(3) If the Omnicare Market Value is greater than
$34.85 and less than or equal to $38.77, then the Conversion Number is equal to
$5.75 divided by the Omnicare Market Value;
(4) If the Omnicare Market Value is greater than or
equal to $30.30 and less than or equal to $34.85, then the Conversion Number is
equal to 0.1650;
(5) If the Omnicare Market Value is less than $30.30,
then, subject to Section 2.6(c) below, the Conversion Number is equal to $5.00
divided by the Omnicare Market Value.
(c) If the Omnicare Market Value is less than $30.30, then
Omnicare shall have the right, by written notice to IBAH prior to the Effective
Time, to adjust the Conversion Number to 0.1650; provided, however, that upon
the receipt of such notice of adjustment, IBAH shall have the right, by written
notice to Omnicare (the "Termination Notice"), to elect to abandon the Merger
and terminate this Agreement by action of its Board of Directors, which
termination shall occur at 5:00 p.m., Cincinnati, Ohio time, two business days
after the Termination Notice.
(d) Each IBAH Preferred Share outstanding immediately prior to
the Effective Time shall by virtue of the Merger and without any action on the
part of the Holder thereof, be converted into the right to receive a number of
Omnicare Shares equal to three times the Conversion Number, except as otherwise
provided in Sections 2.6(a), 2.6(e), 2.7 or 2.12.
(e) No fractional Omnicare Shares shall be issued in the
Merger. Each Holder who would otherwise be entitled to receive a fractional
share shall be entitled to receive, in lieu thereof, an amount in cash
determined by multiplying the Omnicare Market Value by the fraction of an
Omnicare Share to which such Holder would otherwise have been entitled.
(f) For purposes of this Section 2.6, the term "Omnicare
Market Value" shall mean the average of the closing prices of the Omnicare
Shares on the New York Stock Exchange, as reported in The Wall Street Journal,
for the 15 trading days immediately preceding the second trading day preceding
the Closing Date.
(g) The consideration to be received by the Holders in respect
of each IBAH Share pursuant to this Section 2.6 is hereinafter referred to as
the "Merger Consideration."
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Section 2.7. Exchange of IBAH Shares.
(a) Prior to the Effective Time, Omnicare shall appoint an
agent (the "Exchange Agent") for the purpose of exchanging certificates that
immediately prior to the Effective Time represented IBAH Shares (the
"Certificates") for the Merger Consideration. Promptly after the Effective Time,
Omnicare will send, or will cause the Exchange Agent to send, to each Holder
(other than IBAH and any Subsidiary of IBAH) a letter of transmittal for use in
such exchange. Omnicare will make available to the Exchange Agent, as needed,
the aggregate Merger Consideration to be paid in respect of the IBAH Shares.
(b) Each Holder, upon surrender to the Exchange Agent of a
Certificate or Certificates together with a properly completed letter of
transmittal covering such Certificates, will be entitled to receive the Merger
Consideration payable in respect of the IBAH Shares formerly represented
thereby, after giving effect to any required withholding Tax. Until so
surrendered, each Certificate shall, after the Effective Time, represent for all
purposes, only the right to receive such Merger Consideration. In no event will
a Holder be entitled to interest on the Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid
to a Person other than the registered holder of the IBAH Shares formerly
represented by the Certificate or Certificates surrendered in exchange for the
Merger Consideration, it shall be a condition to such payment that the
Certificate or Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment shall pay to the Exchange Agent any transfer or other Taxes required as
a result of such payment to a Person other than the registered holder of such
IBAH Shares or establish to the satisfaction of the Exchange Agent that such Tax
has been paid or is not payable.
(d) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to this Section 2.7 that remains unclaimed by the
Holders six months after the Effective Time shall be returned to Omnicare, upon
demand, and any such Person who has not exchanged his Certificate or
Certificates for the Merger Consideration in accordance with this Article II
prior to that time shall thereafter look only to Omnicare for payment of the
Merger Consideration. Notwithstanding the foregoing, Omnicare shall not be
liable to any Person for any amount paid to a public official pursuant to
applicable abandoned property Laws. Any amounts remaining unclaimed under this
Article II two years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to or become property
of any governmental entity) shall, to the extent permitted by applicable Law,
become the property of Omnicare free and clear of any claims or interest of any
Person previously entitled thereto.
(e) No dividends or other distributions with respect to
securities of Omnicare constituting part of the Merger Consideration shall be
paid to the Holder of any unsurrendered Certificates until such Certificates are
surrendered as provided in this Article II. Upon such surrender, there shall be
paid, without interest, to the Person in whose name the Certificates
representing the securities of Omnicare into which such IBAH Shares were
converted are
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registered, all dividends and other distributions payable in respect of such
securities on a date subsequent to, and in respect of a record date after, the
Effective Time, less the amount of withholding Taxes which may be required
thereon.
(f) If 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 Omnicare,
the posting by such person of a bond in such reasonable amount as Omnicare may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificate the consideration provided for, and in
accordance with the procedures set forth, in this Article II and, if applicable,
any unpaid dividends and distributions with respect to securities of Omnicare
constituting part of the Merger Consideration deliverable with respect thereof
and any cash in lieu of fractional shares, in each case pursuant to this
Agreement.
Section 2.8. Options and Warrants.
(a) At the Effective Time, Omnicare shall assume IBAH's rights
and obligations under each of the outstanding stock options previously granted
by IBAH to certain of its employees, directors and consultants that are
outstanding immediately prior to the Effective Time (each such stock option
existing immediately prior to the Effective Time is referred to herein as an
"Existing Option" and each such assumed stock option existing immediately after
the Effective Time is referred to herein as an "Assumed Option"). Under each
Assumed Option, the optionee shall have the right to receive from Omnicare, in
accordance with the terms and subject to the conditions of the Existing Option,
the Merger Consideration that such optionee would have been entitled to receive
had the optionee exercised his or her Existing Option immediately prior to the
Effective Time, but only in accordance with the terms and conditions of the
Existing Option (including payment of the aggregate exercise price thereof).
Except as provided in this Section 2.8(a), the Assumed Option shall not give the
optionee any additional benefits that the holder thereof did not have under the
Existing Option; provided, however, that the terms of such Existing Options
shall govern the vesting thereof, including, if applicable, any vesting of
Existing Options as a result of the Merger. Each Assumed Option shall constitute
a continuation of the Existing Option, substituting Omnicare for IBAH and, in
the case of employees, employment by an Omnicare Company for employment by an
IBAH Company. Notwithstanding the foregoing, the terms of any Assumed Option
shall be such that the substitution of the Assumed Option for the Existing
Option would not constitute a modification of the Existing Option within the
meaning of Section 424(h)(3) of the Code and the Regulations promulgated
thereunder.
(b) If and to the extent required by the terms of the plans
governing the Existing Options or pursuant to the terms of any Existing Option
granted thereunder, IBAH shall use reasonable efforts to obtain the consent of
each holder of outstanding Existing Options to the treatment of the Existing
Options provided in Section 2.8(a).
(c) Each IBAH Warrant that is outstanding immediately prior to
the Effective Time and that does not expire at the Effective Time by the terms
thereof shall, by virtue of the
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Merger and pursuant to the terms of the IBAH Warrant or with the consent of the
majority of the holders thereof, be converted into and exchanged for a Omnicare
Warrant exercisable for the Conversion Number of Omnicare Shares for each share
of IBAH Common Stock for which the IBAH Warrant is exercisable immediately prior
to the Effective Time, at an exercise price per Omnicare Share that has been
adjusted in accordance with the terms of the IBAH Warrant converted hereunder as
a result of the Merger. Except as provided in this Section 2.8(c), the Omnicare
Warrants shall have the terms and conditions of the IBAH Warrants converted
hereunder. At the Effective Time, the Omnicare Parties shall make available to
any holders of IBAH Warrants converted hereunder a new warrant evidencing the
Omnicare Warrant.
Section 2.9. Adjustments. If at any time during the period between the
date of this Agreement and the Effective Time, any change in the outstanding
shares of capital stock of IBAH or Omnicare shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period or any similar event, this Article II shall be appropriately
adjusted.
Section 2.10. Merger Subsidiary Capital Stock. Each share of capital
stock of the Merger Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted, by virtue of the Merger, into one share of
common stock of the Surviving Corporation.
Section 2.11. No Further Transfer of Shares. After the Effective Time,
there shall be no transfers of IBAH Shares that were outstanding immediately
prior to the Effective Time on the stock transfer books of the Surviving
Corporation. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for transfer, they shall be canceled and exchanged for the
respective Merger Consideration as provided in this Article II. At the Effective
Time, the stock ledger of IBAH shall be closed.
Section 2.12. Dissenting Shares. Notwithstanding Section 2.6, the IBAH
Preferred Shares that are issued and outstanding immediately prior to the
Effective Time and that are held by Holders who did not vote in favor of the
Merger and who comply with all of the relevant provisions of Section 262 of the
DGCL (the "Dissenting Shares") shall not be converted into the right to receive
the Merger Consideration, unless and until such Holders shall have waived in
writing or failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal under the DGCL; and any such Holder shall have only such
rights in respect of the Dissenting Shares owned by them as are provided by
Section 262 of the DGCL. If any such Holder shall have waived in writing or
failed to perfect or shall have effectively withdrawn or lost such right, such
Holder's Dissenting Shares shall thereupon be deemed to have been converted into
and to have become exchangeable, as of the Effective Time, for the right to
receive the Merger Consideration without any interest thereon, pursuant to the
terms of Section 2.6. Prior to the Effective Time, IBAH will not, except with
the prior written consent of Omnicare, voluntarily make any payment with respect
to, or settle or offer to settle, any claim made by the stockholders owning the
Dissenting Shares.
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ARTICLE III
THE CLOSING
Section 3.1. Location, Date. The closing for the Transactions (the
"Closing") shall be held at the offices of Dewey Ballantine LLP in New York, New
York at 9:00 a.m. (local time) as promptly as practicable (and in any event
within one business day) after satisfaction or waiver of the conditions to the
consummation of the Transactions set forth in Articles IX, X and XI. The date on
which the Closing occurs is referred to herein as the "Closing Date."
Section 3.2. Deliveries. At the Closing,
(a) the Merger Subsidiary and IBAH shall deliver or cause to
be delivered to the Secretary of State of the State of Delaware a duly executed
Certificate of Merger as required under Section 263 of DGCL and the Parties
shall take all such other and further actions as may be required by the DGCL and
any other applicable Law to make the Merger effective upon the terms and subject
to the conditions hereof; and
(b) the Parties shall also deliver to each other the
respective agreements and other documents and instruments specified with respect
to them in Articles IX, X and XI.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IBAH
IBAH hereby represents and warrants to the Omnicare Parties as follows,
except as otherwise set forth in the IBAH Disclosure Schedule (items disclosed
in one Section of such Schedule shall apply to all other Sections unless the
context indicates otherwise):
Section 4.1. Corporate. Each IBAH Company is a corporation duly
organized, validly existing and in good standing under the Laws under which it
was incorporated. Each IBAH Company is qualified to do business as a foreign
corporation in any jurisdiction where it is required to be so qualified, except
where the failure to so qualify would not have a Material Adverse Effect. The
Charter Documents and bylaws of each IBAH Company (all of which have been
delivered or made available to Omnicare) have been duly adopted and are current,
correct and complete. Each IBAH Company has all necessary corporate power and
authority to own, lease and operate its part of the IBAH Assets and to carry on
its part of the IBAH Business as it is now being conducted.
Section 4.2. Authorization. IBAH has the requisite corporate power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform the Transactions to be performed by it. Such execution,
delivery and performance by IBAH have been duly authorized by all necessary
corporate action, other than that the consummation of the Merger is subject to
the approval of the holders of a majority of the outstanding IBAH Shares, voting
as a single class and the consent of the holders of a majority of the
outstanding IBAH Preferred Shares to the conversion of the IBAH Preferred Shares
into the right to receive
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Omnicare Shares as contemplated by Article II hereof, which are the only
consents or approvals of holders of IBAH Shares required for the consummation of
the Transactions. IBAH has received such consents from the holders of all
outstanding IBAH Preferred Shares. IBAH has received all necessary consents from
holders of IBAH Warrants to effect the transactions contemplated by Section
2.8(c) hereof (together with the consent contemplated by the prior sentence, the
"Preferred and Warrant Consent"). IBAH has delivered to Omnicare a true and
complete copy of the Preferred and Warrant Consent. Each Transaction Document
executed and delivered by IBAH as of the date hereof has been duly executed and
delivered by IBAH and constitutes a valid and binding obligation of IBAH,
enforceable against IBAH in accordance with its terms. Any Transaction Document
executed and delivered by IBAH after the date hereof will be duly executed and
delivered by IBAH and will constitute a valid and binding obligation of IBAH,
enforceable against IBAH in accordance with its terms.
Section 4.3. Validity of Contemplated Transactions. Except for
compliance with (i) the HSR Act, (ii) the Securities Act and the Exchange Act
and (iii) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware and for any items specified in the IBAH Disclosure
Schedule (the "IBAH Required Consents"), neither the execution and delivery by
IBAH of the respective Transaction Documents to which it is or will be a party,
nor the performance of the Transactions to be performed by it, will require any
filing, consent or approval under or constitute a Default, or result in a loss
of material benefit under, (a) any Law or Court Order to which any IBAH Company
is subject, (b) the Charter Documents or bylaws of any IBAH Company, (c) any
customer Contract (other than letters of intent and agreements in principle) or
any other Contract involving an amount in excess of $2,500,000 to which any IBAH
Company is a party or by which any of the IBAH Assets may be subject or (d) any
other Contracts to which any IBAH Company is a party or by which any of the IBAH
Assets may be subject, except in the case of (b) and (d) for Defaults which
would not have a Material Adverse Effect.
Section 4.4. Capitalization and Stock Ownership. The total authorized
capital stock of IBAH consists of (a) 50,000,000 shares of IBAH Common Stock,
and (b) 2,000,000 shares of Preferred Stock, par value $0.01 per share, of which
999,554 shares have been designated Series A Convertible Preferred Stock (the
"IBAH Convertible Preferred Stock"). Of such authorized capital stock, the only
issued and outstanding shares on the date hereof are 23,544,312 IBAH Common
Shares and 749,665 IBAH Preferred Shares. Except as listed in the IBAH
Disclosure Schedule, there are no existing options, warrants, calls, commitments
or other rights of any character (including conversion or preemptive rights)
relating to the acquisition of any issued or unissued capital stock or other
securities of IBAH. The IBAH Disclosure Schedule sets forth, as of the date
hereof, as to each option or warrant, the holder, date of grant, exercise price
and number of shares subject thereto. All of the issued and outstanding IBAH
Shares are validly issued, fully paid and non-assessable. Following the
Effective Time, no options, warrants, calls, commitments or other rights of any
character (including conversion or preemptive rights) will entitle any Person to
acquire any securities of the Surviving Corporation or any subsidiary thereof,
except with respect to Wholly-Owned Subsidiaries of IBAH that have preemptive
rights.
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Section 4.5. Board Recommendation. By a vote of the directors present
at a meeting of IBAH's Board of Directors (which meeting was duly called and
held and at which a quorum was present), the Board of Directors of IBAH
unanimously (a) approved and adopted this Agreement, including the Merger and
the other Transactions, and determined that the Merger is fair to the
stockholders of IBAH, and (b) resolved to recommend approval and adoption of
this Agreement, including the Merger and the other Transactions, by the
stockholders of IBAH. Smith Barney has delivered to IBAH's Board of Directors
its opinion dated the date of this Agreement to the effect that on such date the
Merger Consideration is fair to the holders of IBAH Common Shares from a
financial point of view. A complete and correct copy of such opinion has been
delivered to Omnicare.
Section 4.6. Proxy Statement. None of the information supplied or to
be supplied by or on behalf of any IBAH Company specifically for inclusion or
incorporation by reference in the Registration Statement will (except to the
extent revised or superseded by amendments or supplements contemplated hereby),
at the time the Registration Statement becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by or on behalf
of any IBAH Company specifically for inclusion or incorporation by reference in
the Proxy Statement will (except to the extent revised or superseded by
amendments or supplements contemplated hereby), at the date it (or any such
amendment or supplement) is mailed to the stockholders of IBAH and at the time
of the IBAH Stockholder Meeting, 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 therein, in light of the circumstances under which
they are made, not misleading. The Registration Statement and the Proxy
Statement (except for information relating solely to any Omnicare Company) will
comply in all material respects with the requirements of the Securities Act and
the Exchange Act and the Regulations promulgated thereunder.
Section 4.7. IBAH Disclosure Documents; Financial Statements. IBAH has
filed all required forms, reports, statements, schedules and other documents
with the SEC since January 1, 1995, including its (a) Annual Reports on Form
10-K for the fiscal years ended December 31, 1996 and 1997, (b) all proxy
statements relating to IBAH's meetings of stockholders (whether annual or
special) held since January 1, 1995, and (c) all other reports or registration
statements filed by IBAH with the SEC since January 1, 1995 (collectively, the
"IBAH Disclosure Documents"). Each of such IBAH Disclosure Documents, at the
time it was filed, complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, and with the forms and
Regulations of the SEC promulgated thereunder, and did not contain at the time
filed 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
therein, in light of the circumstances under which they are made, not
misleading. The financial statements, including all related notes and schedules,
contained in the IBAH Disclosure Documents (or incorporated by reference
therein) fairly present the consolidated financial position of IBAH as at the
respective dates thereof and the consolidated results of operations and cash
flows of IBAH for the periods indicated in accordance with GAAP applied on a
consistent basis throughout the periods
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involved (except for changes in accounting principles disclosed in the notes
thereto) and subject in the case of interim financial statements to normal
year-end adjustments and the absence of notes. For purposes of this Agreement,
the balance sheet of IBAH as of December 31, 1997 is referred to as the "IBAH
Balance Sheet" and the date thereof is referred to as the "IBAH Balance Sheet
Date."
Section 4.8. Absence of Undisclosed Liabilities. None of the IBAH
Companies has any Liabilities except (a) to the extent reflected in the IBAH
Balance Sheet, (b) those Liabilities described in this Agreement or set forth on
Section 4.8 of the IBAH Disclosure Schedule, (c) those Liabilities incurred in
the ordinary course of business since the IBAH Balance Sheet Date which would
not have a Material Adverse Effect and (d) those Liabilities not required under
GAAP to be reflected in the IBAH Balance Sheet which would not have a Material
Adverse Effect.
Section 4.9. Taxes.
(a) Definitions:
"Code" means the Internal Revenue Code of 1986, as amended.
All citations to provisions of the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments thereto and any substitute
or successor provisions thereto.
"Taxes" means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions, levies
and liabilities, including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, gains, franchise, withholding, payroll, recapture,
employment, excise, unemployment, insurance, social security, business license,
occupation, business organization, stamp, environmental and property taxes,
together with all interest, penalties and additions imposed with respect to such
amounts. For purposes of this Agreement, "Taxes" also includes any obligations
under any agreements or arrangements with any Person with respect to the
liability for, or sharing of, Taxes (including pursuant to Treas. Reg. Section
1.1502-6 or comparable provisions of state, local or foreign Tax Law) and
including any liability for Taxes as a transferee or successor, by Contract or
otherwise.
"Tax Return" means any report, return, election, notice,
estimate, declaration, information statement and other forms and documents
(including all schedules, exhibits and other attachments thereto) relating to
and filed or required to be filed with a taxing authority in connection with any
Taxes (including, without limitation, estimated Taxes).
(b) Except as set forth in the IBAH Disclosure Schedule, IBAH
and each of its Subsidiaries (i) have timely filed (or, in the case of Tax
Returns not yet due, will timely file) with the appropriate governmental
agencies all material Tax Returns required to be filed on or before the
Effective Time and all such Tax Returns filed were true, correct and complete in
all material respects, and (ii) have paid (or, in the case of Taxes not yet due,
will pay), all Taxes shown on such Tax Returns.
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(c) Except as set forth in the IBAH Disclosure Schedule, each
IBAH Company has (i) timely paid or caused to be paid all material Taxes and all
Taxes shown on Tax Returns that are or were due, except to the extent that a
sufficient reserve for Taxes has been reflected on the IBAH Balance Sheet and
(ii) provided a sufficient reserve on the IBAH Balance Sheet for the payment of
all Taxes not yet due and payable.
(d) Except as set forth in the IBAH Disclosure Schedule, no
deficiency in respect of any Taxes which has been assessed against an IBAH
Company remains unpaid, except for Taxes being contested in good faith, and IBAH
has no knowledge of any unassessed Tax deficiencies or of any audits or
investigations pending or threatened against an IBAH Company with respect to any
Taxes.
(e) Except as set forth in the IBAH Disclosure Schedule, no
IBAH Company has extended or waived the application of any applicable statute of
limitations of any jurisdiction regarding the assessment or collection of any
Tax or any Tax Return.
(f) Except as set forth in the IBAH Disclosure Schedule, there
are no liens for Taxes upon any assets of any IBAH Company except for liens for
current Taxes not yet due.
(g) Except as set forth in the IBAH Disclosure Schedule, each
IBAH Company has (i) complied with all material provisions of the Code relating
to the withholding and payment of Taxes and (ii) has timely made all deposits
required by applicable Law to be made with respect to employees' withholding and
other payroll, employment or other withholding or related Taxes.
(h) Except as set forth in the IBAH Disclosure Schedule, no
IBAH Company is a party to any contract, agreement, plan or arrangement that,
individually or in the aggregate, or when taken together with any payment that
may be made under this Agreement or any agreements contemplated hereby, could
give rise to the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. IBAH is not, and has not been within the past five
years, a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
(i) Except as set forth in the IBAH Disclosure Schedule, no
IBAH Company is a party to any agreement relating to the allocating or sharing
of the payment of, or liability for, Taxes for any period (or portion thereof).
(j) To IBAH's knowledge, except for the group of which IBAH is
presently the ultimate parent, no IBAH Company has ever been a member of an
affiliated group of corporations (within the meaning of Section 1504 of the
Code).
(k) No IBAH Company has distributed the stock of any
corporation in a transaction satisfying the requirements of Section 355 of the
Code since April 16, 1997.
Section 4.10. Title to Assets and Related Matters. Each IBAH Company
has good and marketable title to its part of the IBAH Assets, free from any
Encumbrances except (a) those Encumbrances specified on Section 4.10 of the IBAH
Disclosure Schedule or any Encumbrance
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in favor of any IBAH Company, (b) items described in any notes to the
consolidated financial statements of IBAH contained in IBAH's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 (the "IBAH 10-K") included
in the IBAH Disclosure Documents, (c) minor matters that would not have a
Material Adverse Effect, (d) constitutional and statutory liens arising from the
obligation to pay for the provision of materials or services not yet in Default
and Taxes not yet due and (e) IBAH Assets transferred among the IBAH Companies.
Section 4.11. Real Property. Section 4.11 of the IBAH Disclosure
Schedule describes all material real estate leased by any IBAH Company as of the
date hereof and used in the operation of the IBAH Business as well as any other
material real estate that is in the possession of or leased by any IBAH Company
(as tenant or landlord) as of the date hereof. As of the date hereof, none of
the IBAH Companies owns any real property.
Section 4.12. Subsidiaries. Except as set forth on Section 4.12 of the
IBAH Disclosure Schedule and except for its subsidiaries set forth on exhibit
21.1 of the IBAH 10-K, as of the date hereof none of the IBAH Companies owns,
directly or indirectly, any interest or investment (whether equity or debt) in
any corporation, partnership, limited liability company, business trust, joint
venture or other legal entity. IBAH (or another IBAH Company) owns all of the
issued and outstanding shares of capital stock of each IBAH Subsidiary, free and
clear of any Encumbrances, other than as set forth in Section 4.12 of the IBAH
Disclosure Schedule or Encumbrances in favor of any IBAH Company. Except with
respect to Wholly-Owned Subsidiaries of IBAH that have preemptive rights, there
are no existing options, warrants, calls, commitments or other rights of any
character (including conversion or preemptive rights) relating to the
acquisition or voting of any issued or unissued capital stock or other
securities of any IBAH Subsidiary. All of the shares of capital stock of each
IBAH Subsidiary are duly and validly authorized and issued, fully paid and
non-assessable.
Section 4.13. Legal Proceedings; Compliance with Law; Governmental
Permits.
(a) Except as set forth on Section 4.13 of the IBAH Disclosure
Schedule or in the IBAH 10-K, there is no Litigation that is pending or, to
IBAH's knowledge, threatened against any IBAH Company that would have a Material
Adverse Effect. IBAH is and has been in compliance with all applicable Laws,
except where the failure to be in compliance would not have a Material Adverse
Effect. There has been no Default under any Laws applicable to any IBAH Company,
including Environmental Laws, except for any Defaults that would not have a
Material Adverse Effect. There has been no Default with respect to any Court
Order applicable to any IBAH Company. Except as set forth on Section 4.13 of the
IBAH Disclosure Schedule, no IBAH Company has received any written notice and,
to the knowledge of any IBAH Company, no other communication has been received
to the effect that it is not in compliance with any applicable Laws, and IBAH
has no reason to believe that any presently existing circumstances are likely to
result in violations of any applicable Laws, except to the extent that such
failures to comply or violations would not have a Material Adverse Effect.
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(b) Without limiting the generality of Section 4.13(a), there
is no Environmental Condition at any property presently or formerly owned or
leased by an IBAH Company which is reasonably likely to have a Material Adverse
Effect.
(c) The IBAH Companies have all material consents, permits,
franchises, licenses, concessions, registrations, certificates of occupancy,
approvals and other authorizations of Governmental Authorities (collectively,
the "Governmental Permits") required in connection with the operation of their
respective businesses as now being conducted, all of which are in full force and
effect, except where the failure to obtain any such Governmental Permit or of
any such Governmental Permit to be in full force and effect, would not have a
Material Adverse Effect. Each IBAH Company has complied, in all material
respects, with all of its Governmental Permits, except where the failure to so
comply would not have a Material Adverse Effect.
Section 4.14. Contracts and Commitments. Section 4.14 of the IBAH
Disclosure Schedule sets forth a complete and accurate list of:
(a) To IBAH's knowledge, customer Contracts (excluding letters
of intent and agreements in principle) involving any IBAH Company in amounts in
excess of $2,500,000; provided that the cumulative effect of all such Contracts
over $2.5 million not disclosed will not have a Material Adverse Effect.
(b) Other than Contracts listed as Exhibits to the IBAH 10-K,
(i) all employment, consulting (other than physician investigators), management,
severance or agency Contracts (y) with any executive officers or directors of
IBAH, or (z) allowing the other party to terminate and receive payment based on
the execution of this Agreement and consummation of the Transactions, and (ii)
any employment agreements with any Person in the United States to whom any IBAH
Company makes annual salary payments in excess of $150,000 and all employee
country managers outside the United States.
(c) All Contracts limiting the freedom of any IBAH Company to
compete in any line of business, or with any Person, or in any geographic area
or market.
Each Contract to which any IBAH Company is a party (i) is
legal, valid, binding and enforceable against IBAH or the applicable Subsidiary,
and to IBAH's knowledge, against each other party thereto, and is in full force
and effect and (ii) neither IBAH nor the applicable Subsidiary, nor to IBAH's
knowledge, any other party, is in Default under any such Contract, other than in
the case of (i) and (ii) above where the failure to be so would not have a
Material Adverse Effect.
Section 4.15. Employee Relations. No IBAH Company is (a) a party to,
involved in or, to IBAH's knowledge, threatened by, any labor dispute or unfair
labor practice charge, or (b) currently negotiating any collective bargaining
agreement, and no IBAH Company has experienced any work stoppage during the last
three years.
Section 4.16. ERISA.
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(a) The IBAH Disclosure Schedule contains a complete list of
all Benefit Plans sponsored or maintained by any IBAH Company or under which any
IBAH Company may be obligated for its employees, directors or independent
contractors ("IBAH Benefit Plans"). IBAH has delivered or made available to
Omnicare (i) accurate and complete copies of all IBAH Benefit Plan documents and
of any summary plan descriptions, summary annual reports and insurance contracts
relating thereto, (ii) accurate and complete detailed summaries of all unwritten
IBAH Benefit Plans, (iii) accurate and complete copies of the most recent
financial statements and actuarial reports with respect to all IBAH Benefit
Plans for which financial statements or actuarial reports are required or have
been prepared and (iv) accurate and complete copies of all annual reports for
all IBAH Benefit Plans (for which annual reports are required) prepared within
the last two years.
(b) All IBAH Benefit Plans conform in all material respects
to, and are being administered and operated in material compliance with, the
requirements of ERISA, the Code and all other applicable Laws, including
applicable Laws of foreign jurisdictions. There have not been any "prohibited
transactions," as such term is defined in Section 4975 of the Code or Section
406 of ERISA involving any of the IBAH Benefit Plans, that could subject any
IBAH Company to any material penalty or tax imposed under the Code or ERISA.
(c) Except as set forth on Section 4.16(c) of the IBAH
Disclosure Schedule, any IBAH Benefit Plan that is intended to be qualified
under Section 401(a) of the Code and exempt from tax under Section 501(a) of the
Code has been determined by the Internal Revenue Service to be so qualified, and
such determination remains in effect and has not been revoked. Nothing has
occurred since the date of any such determination that is reasonably likely to
affect adversely such qualification or exemption, or result in the imposition of
excise taxes or income taxes on unrelated business income under the Code or
ERISA with respect to any IBAH Benefit Plan.
(d) Except as set forth on Section 4.16(d) of the IBAH
Disclosure Schedule, (i) no IBAH Company has a current or contingent obligation
to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA)
and (ii) no IBAH Company, nor any entity that has been treated as a single
employer with any IBAH Company under Sections 414(b), (c), (m) or (o) of the
Code, has any liability, contingent or otherwise, under Title IV of ERISA or
Section 412 of the Code.
(e) There are no pending or, to the knowledge of IBAH,
threatened claims by or on behalf of any IBAH Benefit Plans, or by or on behalf
of any individual participants or beneficiaries of any IBAH Benefit Plans,
alleging any breach of fiduciary duty on the part of any IBAH Company or any of
the officers, directors or employees of any IBAH Company under ERISA or any
other applicable Regulations, or claiming benefit payments other than those made
in the ordinary operation of such plans, or alleging any violation of any other
applicable Laws. To IBAH's knowledge, the IBAH Benefit Plans are not the subject
of any investigation, audit or action by the Internal Revenue Service, the
Department of Labor or the Pension Benefit Guaranty Corporation ("PBGC"). Each
IBAH Company has made all required contributions under the
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IBAH Benefit Plans including the payment of any premiums payable to the PBGC and
other insurance premiums.
(f) With respect to any IBAH Benefit Plan that is an employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) (an "IBAH
Welfare Plan"), (i) each IBAH Welfare Plan for which contributions are claimed
as deductions under any provision of the Code is in material compliance with all
applicable requirements pertaining to such deduction, (ii) with respect to any
welfare benefit fund (within the meaning of Section 419 of the Code) related to
an IBAH Welfare Plan, there is no disqualified benefit (within the meaning of
Section 4976(b) of the Code) that would result in the imposition of a tax under
Section 4976(a) of the Code, and (iii) any IBAH Benefit Plan that is a group
health plan (within the meaning of Section 4980B(g)(2) of the Code) complies,
and in each and every case has complied, with all of the material requirements
of Section 4980B of the Code, ERISA, Title XXII of the Public Health Service Act
and the applicable provisions of the Social Security Act.
(g) Except as set forth on the IBAH Disclosure Schedule or for
any IBAH Benefit Plan listed as an exhibit to the IBAH 10-K, the execution of
this Agreement and the performance of the Transactions will not (either alone or
in combination with the occurrence of any additional or subsequent events)
constitute an event under any IBAH Benefit Plan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any current or former employee, director or consultant
of any IBAH Company.
Section 4.17. Patents, Trademarks, etc. None of the IBAH Companies uses
in the operation of the IBAH Business any material registered Patents,
Trademarks or Copyrights, except for those described in Section 4.17 of the IBAH
Disclosure Schedule or Trademarks which are names of IBAH Companies. To IBAH's
knowledge, no IBAH Company infringes upon or unlawfully or wrongfully uses any
Intellectual Property (other than computer software) owned or claimed by another
Person and no Person infringes on or wrongfully uses any Intellectual Property
(other than computer software) owned or claimed by IBAH, except for those
situations that would not have a Material Adverse Effect. The IBAH Companies own
or have valid rights to use all Intellectual Property used in the conduct of
their business except where the failure to have valid rights to use such
Intellectual Property will not have a Material Adverse Effect, free and clear of
all Encumbrances, other than Encumbrances which would not have a Material
Adverse Effect.
Section 4.18. Absence of Certain Changes. Since the IBAH Balance Sheet
Date, the IBAH Companies have conducted the IBAH Business in the ordinary
course, and except as described in the IBAH Disclosure Schedule, as of the date
hereof, there has not been:
(a) any Material Adverse Effect on the IBAH Business or in the
aggregate Liabilities of the IBAH Companies;
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(b) any distribution or payment declared or made in respect of
IBAH's capital stock by way of dividends, purchase or redemption of shares or
otherwise, except redemptions pursuant to the IBAH Employee Stock Purchase Plan
pursuant to the terms thereof;
(c) any increase in the compensation payable or to become
payable to any current director, officer or employee of any IBAH Company, except
for merit and seniority increases for employees made in the ordinary course of
business, nor any material change in any existing employment, severance,
consulting arrangements or any IBAH Benefit Plan;
(d) any sale, assignment or transfer of any IBAH Assets, or
any additions to or transactions involving any IBAH Assets, other than those
made in the ordinary course of business or those solely involving the IBAH
Companies;
(e) other than in the ordinary course of business, any waiver
or release of any material claim or right or cancellation of any material debt
held by any IBAH Company;
(f) any change in practice with respect to Taxes, or any
election, change of any election, or revocation of any election with respect to
Taxes, or any settlement or compromise of any dispute involving a Tax liability;
(g) (i) any creation, assumption or maintenance of any
long-term debt or any short-term debt for borrowed money other than under
existing notes payable, lines of credit or other credit facility or in the
ordinary course of business or with respect to its Wholly-Owned Subsidiaries;
(ii) any assumption, granting of guarantees, endorsements or otherwise becoming
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person except its Wholly-Owned Subsidiaries; or (iii)
any loans, advances or capital contributions to, or investments in, any other
Person except its Wholly-Owned Subsidiaries;
(h) any material agreement, commitment or contract, except
agreements, commitments or contracts for the purchase, sale or lease of goods or
services in the ordinary course of business;
(i) other than in the ordinary course of business, any
authorization, recommendation, proposal or announcement of an intention to
authorize, recommend or propose, or enter into any Contract with respect to, any
(i) plan of liquidation or dissolution, (ii) acquisition of a material amount of
assets or securities, (iii) disposition or Encumbrance of a material amount of
assets or securities, (iv) merger or consolidation or (v) material change in its
capitalization;
(j) any change in accounting or Tax procedure or practice; or
(k) any compromise, settlement or modification to any material
claim or litigation.
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Section 4.19. Corporate Records. The minute books of IBAH contain
accurate, complete and current copies of all Charter Documents and of all
minutes of meetings, resolutions and other proceedings of its Board of Directors
and stockholders. The stock record books of IBAH are also complete, correct and
current.
Section 4.20. Finder's Fees. Except for Smith Barney, the arrangements
with which have been disclosed to Omnicare, no Person is or will be entitled to
any commission, finder's or other payment in connection with the Transactions
based on arrangements made by or on behalf of IBAH. A true and complete copy of
each document reflecting such arrangements with Smith Barney has been delivered
to Omnicare.
Section 4.21. Compliance with Healthcare Laws
(a) As used herein, "IBAH Healthcare Laws" shall mean any Laws
to which any IBAH Company is subject with respect to drug or medical device
investigation or development regulation or other applicable healthcare
regulatory matters, including, without limitation, the Federal Food, Drug and
Cosmetic Act, 21 U.S.C. Section 301 et seq.; the Controlled Substances Act, 21
U.S.C. Section 801 et seq.; 18 U.S.C. Section 287 (commonly referred to as the
"Civil False Claims Act"), and implementing regulations related thereto. To
IBAH's knowledge, there are no presently existing circumstances which could be
reasonably likely to result in violations of any such IBAH Healthcare Laws,
except where such violations would not have a Material Adverse Effect. To the
knowledge of IBAH, no IBAH Company has been materially sanctioned as not being
in compliance with any IBAH Healthcare Laws except where such sanctions would
not have a Material Adverse Effect. No IBAH Company has received any written
notice and, to the knowledge of any IBAH Company, no other communication has
been received to the effect that it or any activity conducted by it is not in
compliance with any applicable IBAH Healthcare Laws except where the failure to
comply would not have a Material Adverse Effect. As used herein, "IBAH
Personnel" shall mean the respective officers, directors and employees of the
IBAH Companies.
(b) No IBAH Company receives or to IBAH's knowledge has
received payment either directly or indirectly from Medicare, Medicaid, the
Civilian Health and Medical Program of the Uniformed Services or the Federal
Employees Health Benefits Act.
(c) No IBAH Company has made, and, to the knowledge of any
IBAH Company, no IBAH Personnel have made, directly or indirectly, any bribes,
kickbacks, or other illegal payments or illegal political contributions, illegal
payments from corporate funds to governmental officials in their individual
capacities, or illegal payments from corporate funds to obtain or retain
business either within the United States or abroad.
(d) No IBAH Company nor, to IBAH's knowledge, any of their
IBAH Personnel have been debarred by the U.S. Food and Drug Administration (the
"FDA") or by an analogous foreign governmental entity pursuant to the Generic
Drug Enforcement Act ("Drug Enforcement Act") or an analogous foreign law or
regulation; and to IBAH's knowledge, no IBAH Company or any of its IBAH
Personnel are under investigation by the FDA or by an analogous foreign
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governmental entity for a debarment action pursuant to the Drug Enforcement Act
or an analogous foreign law or regulation.
(e) No IBAH Personnel of any IBAH Company are engaged as
practicing physicians, nurses or pharmacists (billing patients for professional
services directly and not through any IBAH Company) on behalf of any IBAH
Company.
Section 4.22. Board Approval. The IBAH Board of Directors has approved
this Agreement and the Transactions and such approval constitutes approval of
the Merger and the other Transactions contemplated hereby, including approval of
the Voting Agreement, the Stock Option Agreement and the other Transaction
Documents, by the IBAH Board of Directors as contemplated by the DGCL.
Section 4.23. Pooling of Interests; Reorganization. No IBAH Company
has or, as of the Closing Date, will have (a) taken any action or failed to take
any action which action or failure would jeopardize the treatment of the Merger
as a pooling of interests for accounting purposes or (b) taken any action or
failed to take any action which action or failure would result in the failure of
the Merger to qualify as a reorganization within the meaning of Code Section
368(a). IBAH has no knowledge of any fact or circumstance that is reasonably
likely to prevent the Merger from qualifying as a pooling of interests for
accounting purposes or a reorganization within the meaning of Code Section
368(a).
Section 4.24. Insurance. IBAH carries insurance covering it and its
Subsidiaries' assets, business, operations, employees, officers and directors of
the type and in the amounts listed in Section 4.24 of the IBAH Disclosure
Schedules. All such insurance policies are in full force and effect and all
premiums have been paid to the extent they are due. To IBAH's knowledge, no
claims have been made by any Person alleging liability in respect of drug trials
on human beings by any IBAH Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OMNICARE
Omnicare hereby represents and warrants to IBAH as follows:
Section 5.1. Corporate. Each Omnicare Company is a corporation duly
organized, validly existing and in good standing under the Laws under which it
was incorporated. Each Omnicare Company is qualified to do business as a foreign
corporation in any jurisdiction where it is required to be so qualified, except
where the failure to so qualify would not have a Material Adverse Effect. The
Charter Documents and bylaws of Omnicare (which have been delivered to IBAH) and
of each Omnicare Company (which have been delivered or made available upon
request to IBAH) have been duly adopted and are current, correct and complete.
Each Omnicare Company has all necessary corporate power and authority to own,
lease and operate its part of the Omnicare Assets and to carry on its part of
the Omnicare Business as it is now being conducted.
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Section 5.2. Authorization. Each Omnicare Party has the requisite
corporate power and authority to execute and deliver the Transaction Documents
to which it is a party and to perform the Transactions to be performed by it.
Such execution, delivery and performance by each Omnicare Party have been duly
authorized by all necessary corporate action. Each Transaction Document executed
and delivered by any Omnicare Party as of the date hereof has been duly executed
and delivered by such Omnicare Party and constitutes a valid and binding
obligation of each Omnicare Party, enforceable against each Omnicare Party in
accordance with its terms. Any Transaction Document executed and delivered by
any Omnicare Party after the date hereof will be duly executed and delivered by
such Omnicare Party and will constitute a valid and binding obligation of such
Omnicare Party, enforceable against such Omnicare Party in accordance with its
terms.
Section 5.3. Validity of Contemplated Transactions. Except for
compliance with the (i) HSR Act, (ii) the Securities Act and the Exchange Act
and (iii) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware, neither the execution and delivery by any Omnicare Party
of the respective Transaction Documents to which it is or will be a party, nor
the performance of the Transactions to be performed by it, will require any
filing, consent or approval under or constitute a Default, or result in a loss
of material benefit under, (a) any Law or Court Order to which any Omnicare
Company is subject, (b) the Charter Documents or bylaws of any Omnicare Company
or (c) any Contract or other document to which any Omnicare Company is a party
or by which any of the Omnicare Assets may be subject, except in the case of (b)
and (c) for Defaults which would not have a Material Adverse Effect.
Section 5.4. Capitalization and Stock Ownership. The total authorized
capital stock of Omnicare consists of (a) 110,000,000 shares of Omnicare Common
Stock, and (b) 1,000,000 shares of Omnicare preferred stock, no par value. Of
such authorized capital stock, the only issued and outstanding shares as of
March 27, 1998 are 82,730,691 shares of Omnicare Common Stock. As of March 27,
1998, there are no existing options, warrants, calls, commitments or other
rights of any character (including conversion or preemptive rights) relating to
the acquisition of any issued or unissued capital stock or other securities of
Omnicare, other than options, warrants and other rights to purchase an aggregate
of 11,628,603 shares of Omnicare Common Stock. All of the issued and outstanding
Omnicare Shares are validly issued, fully paid and non-assessable. The total
authorized capital stock of the Merger Subsidiary consists of 1,000 shares of
common stock, par value $.01 per share (the "Omnicare Sub Common Stock"). Of
such authorized capital stock, the only issued and outstanding shares on the
date hereof are held by Omnicare. All of the issued and outstanding shares of
Omnicare Sub Common Stock are validly issued, fully paid and non-assessable. The
shares of Omnicare Common Stock to be issued in connection with the Merger and
this Agreement, when issued in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable.
Section 5.5. Board Recommendation. By a vote of the directors present
at a meeting of Omnicare's Board of Directors (which meeting was duly called and
held and at which a quorum was present), the Board of Directors of Omnicare
unanimously approved and adopted this
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Agreement, including the Merger and the other Transactions, and determined that
the Merger is fair to Omnicare.
Section 5.6. Proxy Statement. None of the information supplied or to
be supplied by or on behalf of any Omnicare Company specifically for inclusion
or incorporation by reference in the Registration Statement will (except to the
extent revised or superseded by amendments or supplements contemplated hereby),
at the time the Registration Statement becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by or on behalf
of any Omnicare Company specifically for inclusion or incorporation by reference
in the Proxy Statement will (except to the extent revised or superseded by
amendments or supplements contemplated hereby), at the date it (or any such
amendment of supplement) is mailed to the stockholders of IBAH and at the time
of the IBAH Stockholder Meeting, 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 therein, in light of the circumstances under which
they are made, not misleading. The Registration Statement and the Proxy
Statement (except for information relating solely to any IBAH Company) will
comply in all material respects with the requirements of the Securities Act and
the Exchange Act and the Regulations promulgated thereunder.
Section 5.7. Omnicare Disclosure Documents; Financial Statements.
Omnicare has filed all required forms, reports, statements, schedules and other
documents with the SEC since January 1, 1995 (collectively, the "Omnicare
Disclosure Documents"). Each of such Omnicare Disclosure Documents, at the time
it was filed, complied in all material respects with all applicable requirements
of the Securities Act and the Exchange Act, and with the forms and Regulations
of the SEC promulgated thereunder, and did not contain at the time filed 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 therein, in
light of the circumstances under which they are made, not misleading. The
financial statements, including all related notes and schedules, contained in
the Omnicare Disclosure Documents (or incorporated by reference therein) fairly
present the consolidated financial position of Omnicare as at the respective
dates thereof and the consolidated results of operations and cash flows of
Omnicare for the periods indicated in accordance with GAAP applied on a
consistent basis throughout the periods involved (except for changes in
accounting principles disclosed in the notes thereto) and subject in the case of
interim financial statements to normal year-end adjustments and the absence of
notes. For purposes of this Agreement, the balance sheet of Omnicare as of
December 31, 1997 is referred to as the "Omnicare Balance Sheet" and the date
thereof is referred to as the "Omnicare Balance Sheet Date."
Section 5.8. Absence of Undisclosed Liabilities. None of the Omnicare
Companies has any Liabilities except (a) to the extent reflected in the Omnicare
Balance Sheet, (b) those Liabilities described in this Agreement, (c) those
Liabilities incurred in the ordinary course of business since the Omnicare
Balance Sheet Date which would not have a Material Adverse
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Effect and (d) those Liabilities not required under GAAP to be reflected in the
Omnicare Balance Sheet which would not have a Material Adverse Effect.
Section 5.9. Absence of Certain Changes. Since the Omnicare Balance
Sheet Date, there has not been any Material Adverse Effect on the Omnicare
Business.
Section 5.10. Pooling of Interests; Reorganization. No Omnicare
Company has or, as of the Closing Date, will have (a) taken any action or failed
to take any action which action or failure would jeopardize the treatment of the
Merger as a pooling of interests for accounting purposes or (b) taken any action
or failed to take any action which action or failure would result in the failure
of the Merger to qualify as a reorganization within the meaning of Code Section
368(a). Omnicare has no knowledge of any fact or circumstance that is reasonably
likely to prevent the Merger from qualifying as a pooling of interests for
accounting purposes or a reorganization within the meaning of Code Section
368(a).
Section 5.11. Ownership of Merger Subsidiary; No prior Activities. The
Merger Subsidiary is a Wholly-Owned Subsidiary of Omnicare created solely for
the purpose of effecting the Merger. As of the date hereof and the Effective
Time, except for Liabilities incurred in connection with its incorporation or
organization and the Transactions and except for this Agreement and the other
Transaction Documents, the Merger Subsidiary has not and will not have incurred,
directly or indirectly, through any Subsidiary or Affiliate of Omnicare, any
material Liabilities, engaged in any material business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any Person.
Section 5.12. Compliance With Healthcare Laws.
(a) As used herein, "Omnicare Healthcare Laws" shall mean any
Laws to which any Omnicare Company is subject with respect to drug or medical
device investigation or development regulation or other applicable healthcare
regulatory matters, including, without limitation, the Controlled Substances
Act, 21 U.S.C. Section 801 et seq.; 18 U.S.C. Section 287 (commonly referred to
as the "Civil False Claims Act"); Section 1128Bb(b) of the Social Security Act
and 42 U.S.C. Section 1320a-7b(b) (commonly referred to as the "Federal
Anti-Kickback Statute"); Section 1877 of the Social Security Act and 42 U.S.C.
Section 1395nn (commonly referred to as the "Stark Statute"); the Animal Welfare
Act, 7 U.S.C. Section 2131 et. seq., and implementing regulations related
thereto. To Omnicare's knowledge, there are no presently existing circumstances
which could be reasonably likely to result in violations of any such Omnicare
Healthcare Laws, except where such violations would not have a Material Adverse
Effect. To the knowledge of Omnicare, no Omnicare Company has been sanctioned as
not being in compliance with any Omnicare Healthcare Laws except where such
sanctions would not have a Material Adverse Effect. Except as disclosed in
Omnicare's Annual Report on Form 10-K for the year ended December 31, 1997, no
Omnicare Company has received any written notice and, to the knowledge of any
Omnicare Company, no other communication has been received to the effect that it
or any activity conducted by it is not in compliance with any applicable
Omnicare Healthcare Laws except where the failure to comply would not have a
Material Adverse Effect.
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(b) Except as disclosed in Omnicare's Annual Report on Form
10-K for the year ended December 31, 1997, to Omnicare's knowledge, no Omnicare
Company is presently the subject of an investigation by a Governmental Authority
for a violation of any applicable Omnicare Healthcare Laws, except for such
violations that would not have a Material Adverse Effect.
ARTICLE VI
COVENANTS OF THE OMNICARE PARTIES AND IBAH
Section 6.1. Proxy/Registration Statement. Omnicare and IBAH will
prepare and file with the SEC as soon as reasonably practicable after the date
hereof a proxy statement to be filed under the Exchange Act by IBAH and to be
distributed by IBAH in connection with the IBAH Stockholder Meeting (the "Proxy
Statement" and, together with the Registration Statement, the
"Proxy/Registration Statement"). Such filing will be a confidential filing
unless Omnicare shall specify otherwise. No later than promptly following the
clearance by the SEC of the Proxy Statement, Omnicare will file a Registration
Statement on Form S-4 under the Securities Act in connection with the Merger for
purposes of registering the Omnicare Shares and the Omnicare Warrants (and the
shares of Omnicare Common Stock issuable upon exercise of the Omnicare Warrants)
to be issued in the Merger pursuant to Article II hereof (the "Registration
Statement") and IBAH shall cooperate with Omnicare to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
practicable after such filing. Omnicare and IBAH shall also take such action as
may be reasonably required to cause the Omnicare Shares and the Omnicare
Warrants issuable pursuant to the Merger (and the shares of Omnicare Common
Stock issuable upon exercise of the Omnicare Warrants) to be registered or to
obtain an exemption from registration under applicable state "blue sky" or
securities Laws. Each Party will furnish to the other Party all information
concerning itself and its Subsidiaries as the other Party or its counsel may
reasonably request and that is required or customary for inclusion in the
Proxy/Registration Statement.
Section 6.2. HSR Act Filings. Each Party shall prepare and cause to be
filed with appropriate governmental authorities, as soon as reasonably
practicable after the date hereof, any required Notification and Report Form for
Certain Mergers and Acquisitions or responses thereto as required by the HSR Act
and any necessary supplements and amendments thereto. Each Party shall use
commercially reasonably efforts to cooperate in promptly preparing and filing
such Notification and Report Form and seeking the prompt expiration of the
applicable waiting period.
Section 6.3. No Solicitation. From and after the date hereof, IBAH,
without the prior written consent of Omnicare, will not, and will not authorize
or permit any of its Subsidiaries or its Party Representatives to, directly or
indirectly, solicit, initiate or encourage (including by way of furnishing
information) or take any other action to facilitate knowingly any inquiries or
the making of any proposal which constitutes or may reasonably be expected to
lead to an Acquisition Proposal (as defined below) from any Person, or engage in
any discussion or negotiations relating thereto or accept any Acquisition
Proposal; provided, however, that
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notwithstanding any other provision hereof, IBAH may (a) at any time prior to
the time IBAH's stockholders shall have voted to approve this Agreement, engage
in discussions or negotiations with a third party who (without any solicitation,
initiation, encouragement, discussion or negotiation, directly or indirectly, by
or with any IBAH Company or its Party Representatives after the date hereof)
seeks to initiate such discussions or negotiations and may furnish such third
party information concerning IBAH and its Business and Assets if, and only to
the extent that, (i)(x) the third party has first made an Acquisition Proposal
that is (as determined in good faith by the IBAH Board of Directors after
consultation with its financial advisor) financially superior to the
Transactions and has demonstrated that the funds necessary for the Acquisition
Proposal are reasonably likely to be available and the Acquisition Proposal is
reasonably capable of consummation in accordance with its terms (as determined
in good faith in each case by IBAH's Board of Directors after consultation with
its financial advisors) and (y) IBAH's Board of Directors shall conclude in good
faith, after considering applicable provisions of applicable Law, on the basis
of advice of its counsel, that such action is necessary for the Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable Law and (ii) prior to furnishing such information to or entering into
discussions or negotiations with such Person, IBAH (x) provides prompt notice to
Omnicare to the effect that it is furnishing information to or entering into
discussions or negotiations with such Person and (y) receives from such Person
an executed confidentiality agreement in reasonably customary form on terms not
in the aggregate materially more favorable to such Person than the terms
contained in the Confidentiality Agreement, (b) comply with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer,
and/or (c) provided IBAH terminates this Agreement pursuant to Section 12.1(g),
accept an Acquisition Proposal from a third party. IBAH shall immediately cease
and terminate any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any Persons conducted heretofore by IBAH or its
Party Representatives with respect to the foregoing. IBAH shall not release any
third party from, or waive any provision of, any standstill agreement to which
it is a party or any confidentiality agreement between it and another Person who
has made an Acquisition Proposal, unless such Person has made an Acquisition
Proposal meeting the criteria set forth in clause (a)(i)(x) above and IBAH's
Board of Directors shall conclude in good faith, after considering applicable
provisions of applicable Law, on the basis of advice of its counsel, that such
action is necessary for the Board of Directors to act in a manner consistent
with its fiduciary duties under applicable Law. IBAH shall immediately notify
Omnicare orally (with a prompt written confirmation) of any such inquiries,
offers or proposals (including the terms and conditions of any such proposal and
the identity of the Person making it and shall provide copies of any such
written inquiries, offers or proposals), shall keep Omnicare informed of the
status and details of any such inquiry, offer or proposal (and agrees that any
material modification of the terms of an inquiry or proposal shall constitute a
new inquiry or proposal), and shall give Omnicare five days' advance notice of
any agreement to be entered into with, or any information to be supplied to, any
Person making such inquiry, offer or proposal (no such agreement, other than a
confidentiality agreement as set forth in this Section, to be executed or agreed
prior to the termination of this Agreement in accordance with its terms). As
used herein, "Acquisition Proposal" shall mean a bona fide proposal or offer
(other than by Omnicare) for a tender or exchange offer, merger, consolidation
or other business combination involving IBAH or any Subsidiary thereof, or any
proposal to acquire in any manner a substantial equity interest in, or a
substantial amount of the assets of, IBAH or any such Subsidiary.
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Section 6.4. Notification of Certain Matters. Each of Omnicare and
IBAH shall give prompt notice to the other of the following:
(a) the occurrence or nonoccurrence of any event whose
occurrence or nonoccurrence would be likely to cause either (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time, or (ii) directly or indirectly, any Material Adverse Effect;
(b) any material failure of such Party, or any officer,
director, employee or agent of any thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; and
(c) any facts relating to such Party which would make it
necessary or advisable to amend the Proxy Statement or the Registration
Statement in order to make the statements therein not misleading or to comply
with applicable Law; provided, however, that the delivery of any notice pursuant
to this Section 6.4 shall not limit or otherwise affect the remedies available
hereunder to the Party receiving such notice.
Section 6.5. Access to Information.
(a) From the date hereof to the Effective Time, Omnicare and
IBAH shall, and shall cause its respective Subsidiaries, and its and their
officers, directors, employees, auditors, counsel and agents to afford the
officers, employees, auditors, counsel, financial advisors and agents of the
other Party complete access at all reasonable times to such Party's and its
Subsidiaries' officers, employees, auditors, counsel, agents, properties,
offices and other facilities and to all of their respective books and records,
and shall furnish the other with all financial, operating and other data and
information as such other Party may reasonably request.
(b) All information so received from the other Party shall be
deemed received pursuant to the confidentiality agreement, dated as of December
17, 1997, heretofore executed and delivered by Omnicare and IBAH (the
"Confidentiality Agreement"), and each such Party shall, and shall cause its
Subsidiaries and each of its and their respective officers, directors,
employees, auditors, counsel, financial advisors and agents ("Party
Representatives"), to comply with the provisions of the Confidentiality
Agreement with respect to such information. The provisions of the
Confidentiality Agreement are hereby incorporated herein by reference with the
same effect as if fully set forth herein.
Section 6.6. Public Announcements. Omnicare and IBAH (a) shall use all
reasonable efforts to develop a joint communications plan and each Party shall
use all reasonable efforts to ensure that all press releases and other public
statements with respect to the Transactions shall be consistent with such joint
communications plan or, to the extent inconsistent therewith, shall have
received the prior written approval of the other and (b) before issuing any
press release or otherwise making any public statements with respect to the
Transactions, will consult with each other as to its form and substance and
shall not issue any such press release or make any such
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public statement prior to such consultation, except for each of (a) and (b)
above as may be required by Law (it being agreed that the Parties hereto are
entitled to disclose all requisite information concerning the Transactions in
any filings required with the SEC or pursuant to the HSR Act) or the rules and
regulations of the Nasdaq National Market promulgated by the National
Association of Securities Dealers, Inc. or the NYSE, as applicable.
Section 6.7. Cooperation. Upon the terms and subject to the conditions
hereof, each of the Parties shall use its commercially reasonable efforts to
take or cause to be taken all actions and to do or cause to be done all things
necessary, proper or advisable to consummate as promptly as practicable the
Transactions and shall use its commercially reasonable efforts to obtain all
IBAH Required Consents, and to effect all necessary filings, under the
Securities Act, the Exchange Act and the HSR Act. Without limiting the
generality of the foregoing, each Party shall use all commercially reasonable
efforts to take, or cause to be taken, all other actions and to do, or cause to
be done, all other things necessary, proper or advisable to fulfill the
conditions under Articles IX, X and XI to the extent that the fulfillment
thereof is within a Party's control.
Section 6.8. Reorganization; Pooling. From and after the date hereof
and until the Effective Time, neither Omnicare nor IBAH nor any of their
respective Subsidiaries shall knowingly take any action, or knowingly fail to
take any action, that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or as a pooling
of interests under applicable accounting standards.
ARTICLE VII
COVENANTS OF IBAH
Section 7.1. Operation of the Business. Except as set forth on Section
7.1 of the IBAH Disclosure Schedule, as contemplated by this Agreement or as
expressly agreed to in writing by Omnicare, during the period from the date of
this Agreement to the Effective Time, IBAH and its Subsidiaries will conduct
their operations only in the ordinary course of business consistent with sound
financial, operational and regulatory practice (as used in Section 4.18 and 7.1,
the "ordinary course of business"), and will take no action which would
materially adversely affect their ability to consummate the Transactions.
Without limiting the generality of the foregoing, except as otherwise expressly
provided in this Agreement or except as disclosed in the IBAH Disclosure
Schedule, prior to the Effective Time, neither IBAH nor any of its Subsidiaries
will, without the prior written consent of Omnicare:
(a) amend its Charter Documents or bylaws (or similar
organizational documents);
(b) authorize for issuance, issue, sell, deliver, grant any
options for, or otherwise agree or commit to issue, sell or deliver any shares
of its capital stock or any other securities, other than pursuant to and in
accordance with the terms of the IBAH Employee Stock Purchase Plan in the
ordinary course of business, the Stock Option Agreement, any Existing Options,
or outstanding IBAH Preferred Shares or IBAH Warrants listed on the IBAH
Disclosure Schedule;
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(c) recapitalize, split, combine or reclassify any shares of
its capital stock; declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; or purchase, redeem or otherwise acquire any of its or its
Subsidiaries' securities or modify any of the terms of any such securities;
(d) (i) create, incur, assume, maintain or permit to exist any
long-term debt or any short-term debt for borrowed money other than under
existing notes payable, lines of credit or other credit facilities or in the
ordinary course of business, or with respect to its Wholly-Owned Subsidiaries in
the ordinary course of business; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other Person except its Wholly-Owned Subsidiaries in the
ordinary course of business or as otherwise may be contractually required and
disclosed in the IBAH Disclosure Schedule; or (iii) make any loans, advances or
capital contributions to, or investments in, any other Person except its
Wholly-Owned Subsidiaries;
(e) (i) amend any IBAH Benefit Plan or (ii) except in the
ordinary course of business consistent with usual practice or established policy
(a) increase in any manner the rate of compensation of any of its directors,
officers or other employees everywhere, except for increases that do not exceed
15%of the base salary or in the ordinary course of business; (b) pay or agree to
pay any bonus, pension, retirement allowance, severance or other employee
benefit except as required under currently existing IBAH Benefit Plans disclosed
in the IBAH Disclosure Schedule; or (c) amend, terminate or enter into any
employment, consulting, severance, change in control or similar agreements or
arrangements with any of its directors, officers or other employees;
(f) enter into any material agreement, commitment or contract,
except agreements, commitments or contracts for the purchase, sale or lease of
goods or services in the ordinary course of business;
(g) other than in the ordinary course of business, authorize,
recommend, propose or announce an intention to authorize, recommend or propose,
or enter into any Contract with respect to, any (i) plan of liquidation or
dissolution, (ii) acquisition of a material amount of assets or securities,
(iii) disposition or Encumbrance of a material amount of assets or securities,
(iv) merger or consolidation or (v) material change in its capitalization;
(h) change any material accounting or Tax procedure or
practice;
(i) take any action the taking of which, or omit to take any
action the omission of which, would cause any of the representations and
warranties herein to fail to be true and correct in all material respects as of
the date of such action or omission as though made at and as of the date of such
action or omission;
(j) compromise, settle or otherwise modify any material claim
or litigation not identified in the IBAH Disclosure Schedule; or
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(k) commit or agree to do any of the foregoing.
Section 7.2. IBAH Stockholder Meeting. IBAH shall cause a meeting of
its stockholders (the "IBAH Stockholder Meeting") to be duly called and held as
soon as reasonably practicable for the purpose of voting on the adoption of this
Agreement and the Merger as required by the DGCL. Subject to their fiduciary
duties, the directors of IBAH shall recommend such adoption of this Agreement
and the Merger by IBAH's stockholders. In connection with such meeting, IBAH (a)
will mail to its stockholders as promptly as practicable the Proxy Statement and
all other proxy materials for such meeting, (b) will use all reasonable efforts
to obtain the necessary approvals by its stockholders of this Agreement and the
Transactions, and (c) will otherwise comply with all legal requirements
applicable to such meeting.
Section 7.3. Maintenance of the Assets. IBAH shall, and shall cause
each other IBAH Company to, continue to maintain and service the IBAH Assets
consistent with past practice. IBAH shall not, and shall cause each other IBAH
Company not to, directly or indirectly, sell or encumber all or any part of the
IBAH Assets, other than sales in the ordinary course of business or sales to or
Encumbrances in favor of any other IBAH Company, or initiate or participate in
any discussions or negotiations or enter into any agreement to do any of the
foregoing.
Section 7.4. Employees and Business Relations. IBAH shall, and shall
cause each other IBAH Company to, use commercially reasonable efforts to keep
available the services of its current employees and agents and to maintain its
relations and goodwill with its suppliers, customers, distributors and any
others having business relations with it.
Section 7.5. Rule 145 Affiliates. No later than 45 days prior to the
Effective Time, IBAH shall identify in a letter to Omnicare all Persons who
might, at the time of the IBAH Stockholder Meeting, be deemed to be "affiliates"
of Omnicare for the purposes of Rule 145 under the Securities Act or applicable
pooling standards (the "Securities Act Affiliates"). IBAH shall use commercially
reasonable efforts to cause each Person who is identified as a possible
Securities Act Affiliate to enter into at least 30 days prior to the Effective
Time an agreement in the form of Exhibit A hereto.
Section 7.6. Expenses. Subject to Section 8.2, IBAH shall pay all of
the legal, accounting and other expenses incurred by any IBAH Company in
connection with the Transactions, including any amounts payable to Smith Barney.
Section 7.7. Certain Tax Matters. From the date hereof until the
Effective Time, (a) IBAH and each of its Subsidiaries will prepare and file, in
the manner required by applicable Law, all Tax Returns (the "Post-Signing
Returns") required to be filed under applicable Law; (b) IBAH and each of its
Subsidiaries will timely pay all Taxes shown as due and payable on such
Post-Signing Returns that are so filed; (c) IBAH and each of its Subsidiaries
will make provision for all Taxes payable by IBAH and/or any such Subsidiary
under applicable Law for which no Post-Signing Return is due prior to the
Effective Time; and (d) IBAH will promptly notify Omnicare in writing of any
action, suit, proceeding, claim or audit pending against or with respect to IBAH
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or any of its Subsidiaries in respect of any Tax that is not disclosed on the
IBAH Disclosure Schedule.
Section 7.8. Employment Arrangements. IBAH will use commercially
reasonable efforts to cause the Persons listed in Section 7.8 of the IBAH
Disclosure Schedule to enter into employment agreements in substantially the
form set forth in Exhibit B hereto, containing the terms set forth opposite such
Person's name in such Section 7.8 of the IBAH Disclosure Schedule.
Section 7.9. State Anti-Takeover Law. If any "business combination,"
"moratorium," "control share," "fair price," "interested shareholder,"
"affiliated transaction" or other anti-takeover statute or regulation (including
Section 203 of the DGCL) (i) prohibits or restricts IBAH's ability to perform
its obligations under this Agreement (or any party's ability to perform its
obligations under the Voting Agreement or Stock Option Agreement) or any party's
ability to consummate the Merger or the other transactions contemplated hereby
or thereby, or (ii) would have the effect of invalidating or voiding this
Agreement, the Voting Agreement, Stock Option Agreement or any provision hereof
or thereof, then IBAH shall use its best efforts to obtain any necessary
consents or approvals so that the foregoing shall not apply.
Section 7.10. Preferred and Warrant Consent. At Omnicare's request,
IBAH will enforce the Preferred and Warrant Consent against the parties thereto.
IBAH will not waive any provisions of such consent. Omnicare may enforce such
consents against the parties thereto to the extent IBAH fails to do so.
ARTICLE VIII
COVENANTS OF OMNICARE
Section 8.1. Appointment to the Board of Directors of Omnicare. At the
Effective Time, Omnicare shall include Geraldine A. Henwood in its program under
which certain nominations for membership on the Omnicare Board of Directors are
on occasion rotated among senior operating executives of the Omnicare Companies.
Subject to the prior consummation of the Merger, Omnicare shall nominate
Geraldine A. Henwood for election as a director at its 1999 Annual Meeting of
shareholders.
Section 8.2. Expenses. Omnicare shall pay all of the legal, accounting
and other expenses incurred by any Omnicare Company in connection with the
Transactions, including any amounts payable to Morgan Stanley, fees of
Omnicare's transfer agent, fees of the Exchange Agent and fees related to
listing the Omnicare Shares on securities exchanges. The following shall be paid
50% by IBAH and 50% by Omnicare: SEC filing fees and printing and mailing costs
payable with respect to the Proxy/Registration Statement.
Section 8.3. Indemnification, Directors' and Officers' Insurance. For
a period of six years after the Effective Time, Omnicare shall cause the
Surviving Corporation to (a) maintain in effect the current provisions regarding
indemnification of officers and directors contained in the Charter Documents and
bylaws of IBAH and in any indemnification agreements of IBAH and (b)
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indemnify the directors and officers of IBAH to the fullest extent to which IBAH
is permitted to indemnify such officers and directors under its Charter
Documents and bylaws and applicable Law. For a period of six years after the
Effective Time, Omnicare shall cause the Surviving Corporation to maintain in
effect the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by IBAH (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are, in the aggregate, no less
advantageous to the insured in any material respect) with respect to claims
arising from facts or events which occurred on or before the Effective Time,
provided that in no event shall Surviving Corporation be required to pay more
than 150% of the current annual premium (which IBAH represents is no more than
$125,000).
Section 8.4. Stock Exchange Listing. Omnicare shall use commercially
reasonable efforts to obtain, prior to the Effective Time, the approval for
listing on the NYSE, effective upon official notice of issuance, of the Omnicare
Shares into which the IBAH Shares will be converted pursuant to Article II
hereof and of the Omnicare Shares which will be issuable upon exercise of the
Assumed Options and the Omnicare Warrants to be outstanding at the Effective
Time in accordance with Section 2.8 hereof.
Section 8.5. Interim Financial Report. Omnicare shall provide within
20 days after the end of the first full monthly period following the Closing a
financial report regarding the combined operation of Omnicare and IBAH that
satisfies the requirements of Financial Reporting Release No. 1, ASR 135.
Section 8.6. Registration. Omnicare shall take any actions required to
be taken by it following the Effective Time pursuant to the registration rights
provisions contained in the Preferred Stock and Warrant Purchase Agreement dated
August 10, 1995. Within 20 days of the date hereof, IBAH shall deliver to
Omnicare a true and complete list of all agreements which may require Omnicare
to register any securities of IBAH or any Omnicare securities issued in respect
thereof.
Section 8.7. Employee Benefit Plans. Omnicare presently intends to
cause the IBAH Companies to provide employee benefit plans which are, in the
aggregate, no less favorable to the employees than current plans.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES
The respective obligations of each Party to consummate the Merger and
the other Transactions shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
Section 9.1. Legality. All required governmental approvals shall have
been obtained and any applicable waiting periods, including those under the HSR
Act, shall have expired. No Law or Court Order shall have been enacted, entered,
promulgated or enforced by any court or governmental entity that is in effect
and that has the effect of making the Merger illegal or
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otherwise prohibiting the consummation of the Merger and no legal action shall
be pending or threatened which is reasonably likely to have a Material Adverse
Effect on either Party.
Section 9.2. Registration Statement. The Registration Statement shall
have become effective under the Securities Act, no stop order suspending the
effectiveness of the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been instituted.
Section 9.3. New York Stock Exchange. The Omnicare Shares issuable in
connection with the Transactions shall have been duly approved for listing on
the NYSE, subject to official notice of issuance.
Section 9.4. Pooling. IBAH shall receive a poolability letter from
Arthur Andersen LLP dated as of the Closing Date to the effect that IBAH
qualifies as a combining company, as the term is used in Accounting Principles
Board Opinion No. 16 ("APB 16") to describe the criteria necessary for the use
of the pooling of interest method of accounting. Omnicare shall receive a
pooling letter from Price Waterhouse LLP dated as of the Closing Date to the
effect that Omnicare and the Transactions qualify for pooling of interest
accounting treatment as defined in APB 16.
Section 9.5. Approval by IBAH Stockholders. This Agreement shall have
been approved and adopted by the stockholders of IBAH in accordance with the
DGCL and its Charter Documents.
Section 9.6. Tax Opinions. Omnicare shall have received an opinion of
Omnicare's counsel, in form and substance reasonably satisfactory to Omnicare,
and IBAH shall have received an opinion of IBAH's counsel, in form and substance
reasonably satisfactory to IBAH, each dated as of the Closing Date, to the
effect that the Merger will constitute a reorganization within the meaning of
Code Section 368(a) and that Omnicare, Merger Subsidiary and IBAH shall each be
a party to that reorganization within the meaning of Code Section 368(b). In
rendering such tax opinions, such counsel may require and rely upon reasonably
requested representations contained in certificates of Omnicare, IBAH and Merger
Subsidiary.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF IBAH
The obligations of IBAH to consummate the Merger and the Transactions
shall be subject to the satisfaction or waiver, on or before the Effective Time,
of each of the following conditions:
Section 10.1. Representations and Warranties. The representations and
warranties of the Omnicare Parties contained in this Agreement shall be true and
correct on the date hereof and (except to the extent such representations and
warranties speak as of an earlier date) shall also be true and correct on and as
of the Closing Date, except for changes contemplated by this Agreement, with the
same force and effect as if made on and as of the Closing Date; provided,
however, that for purposes of this Section 10.1 only, such representations and
warranties shall be
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deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on Omnicare.
Section 10.2. Agreements, Conditions and Covenants. The Omnicare
Parties shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by them on or before the Effective Time.
Section 10.3. Certificates. IBAH shall have received a certificate of
an executive officer of Omnicare to the effect set forth in Sections 10.1 and
10.2.
Section 10.4. Material Adverse Effect. There shall have been no
Material Adverse Effect on the Omnicare Companies taken as a whole.
Section 10.5. Ancillary Documents. Each Omnicare Party shall have
tendered executed copies of the respective Transaction Documents to which it is
intended to be a party, including the Employment Agreements, Voting Agreements
and the Stock Option Agreement
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE OMNICARE PARTIES
The obligations of the Omnicare Parties to consummate the Merger and
the Transactions shall be subject to the satisfaction or waiver, on or before
the Effective Time, of each of the following conditions:
Section 11.1. Representations and Warranties. The representations and
warranties of IBAH contained in this Agreement shall be true and correct on the
date hereof and (except to the extent such representations and warranties speak
as of an earlier date) shall also be true and correct on and as of the Closing
Date, except for changes contemplated by this Agreement, with the same force and
effect as if made on and as of the Closing Date; provided, however, that for
purposes of this Section 11.1 only, such representations and warranties shall be
deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on IBAH.
Section 11.2. Agreements, Conditions and Covenants. IBAH shall have
performed or complied in all material respects with all agreements, conditions
and covenants required by this Agreement to be performed or complied with by it
on or before the Effective Time.
Section 11.3. Certificates. Omnicare shall have received a certificate
of an executive officer of IBAH to the effect set forth in Sections 11.1 and
11.2.
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Section 11.4. Required Consents. IBAH shall have obtained all consents
from third parties listed in Section 4.3 of the IBAH Disclosure Schedule and all
other consents the absence of which would result in a Material Adverse Effect.
Section 11.5. Material Adverse Effect. There shall have been no
Material Adverse Effect on the IBAH Companies taken as a whole.
Section 11.6. Ancillary Documents. IBAH shall have tendered executed
copies of the Transaction Documents to which it is intended to be a party.
Section 11.7. Consent of Holders of IBAH Preferred Shares and IBAH
Warrants. The consents of the Holders of IBAH Preferred Shares and IBAH
Warrants described in Sections 2.8 and 4.2 shall have been received by IBAH
prior to the Effective Time, or if such consents have not been received at or
prior to the Effective Time, all such Holders shall have approved the
Transactions.
Section 11.8. Employment Agreements. Each Person listed in Section 7.8
of the IBAH Disclosure Schedule shall have entered into an Employment Agreement
as contemplated by Section 7.8.
ARTICLE XII
TERMINATION
Section 12.1. Grounds for Termination. This Agreement may be
terminated at any time before the Effective Time, in each case as authorized by
the respective Boards of Directors of Omnicare and IBAH:
(a) By mutual written consent of each of Omnicare and IBAH;
(b) By either Omnicare or IBAH if the Merger shall not have
been consummated on or before the Termination Date; provided, however, that the
right to terminate this Agreement under this Section 12.1(b) shall not be
available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before the Termination Date;
(c) By either Omnicare or IBAH if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued a Court Order (which Court Order the Parties shall use
commercially reasonable efforts to lift) that permanently restrains, enjoins or
otherwise prohibits the Transactions, and such Court Order shall have become
final and nonappealable;
(d) By Omnicare if IBAH shall have breached, or failed to
comply with, in any material respect, any of its obligations under this
Agreement or any representation or warranty
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made by IBAH shall have been incorrect in any material respect when made, and
such breach, failure or misrepresentation is not cured within 20 days after
notice thereof, and in either case, any such breaches, failures or
misrepresentations, individually or in the aggregate, results or would
reasonably be expected to result in a failure to satisfy a condition to IBAH's
obligations to consummate the transactions contemplated hereby;
(e) By IBAH if any Omnicare Party shall have breached, or
failed to comply with, in any material respect, any of its obligations under
this Agreement or any representation or warranty made by it shall have been
incorrect in any material respect when made, and such breach, failure or
misrepresentation is not cured within 20 days after notice thereof, and in
either case, any such breaches, failures or misrepresentations, individually or
in the aggregate, results or would reasonably be expected to result in a failure
to satisfy a condition to Omnicare's obligations to consummate the transactions
contemplated hereby;
(f) By IBAH if at the IBAH Stockholder Meeting (including any
adjournment thereof) this Agreement and the Merger shall fail to be approved and
adopted by the affirmative vote of the stockholders of IBAH as required under
the DGCL;
(g) By IBAH, prior to the approval of this Agreement by the
stockholders of IBAH, upon five days notice to Omnicare, if, as a result of an
Acquisition Proposal received by IBAH from a Person other than a Party to this
Agreement or any of its Affiliates, the Board of Directors of IBAH determines in
good faith that its fiduciary obligations under applicable Law require that such
Acquisition Proposal be accepted; provided, however, that (i) immediately
following such termination IBAH executes with such third party a definitive
agreement to implement such Acquisition Proposal, (ii) the Board of Directors of
IBAH shall have concluded in good faith, after considering applicable provisions
of applicable Law and after giving effect to all concessions which may be
offered by Omnicare pursuant to clause (iii) below, on the basis of advice of
counsel, that such action is necessary for the Board of Directors to act in a
manner consistent with its fiduciary duties under applicable Law, (iii) prior to
any such termination, (x) IBAH shall have provided Omnicare with five days'
notice of the terms of the proposal and otherwise complied with Section 6.3
hereof (including making the finding contemplated by Section 6.3(i)(x) hereof)
and (y) IBAH shall, and shall cause its financial and legal advisors to,
negotiate with Omnicare to make such adjustments in the terms and conditions of
this Agreement as would enable IBAH to proceed with the Transactions and (iv)
IBAH shall have paid Omnicare the Termination Fee; or
(h) By Omnicare if the Board of Directors of IBAH shall
withdraw, modify or change its recommendation of this Agreement or the Merger or
shall have failed to reaffirm its recommendation within five business days of
Omnicare's request that it do so or shall have recommended or issued a neutral
recommendation (or taken no position) with respect to any Acquisition Proposal.
(i) By IBAH, pursuant to Section 2.6(c) hereof.
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Section 12.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 12.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of any of the Parties; notwithstanding the foregoing, nothing herein
shall relieve any Party from liability for any willful breach hereof; provided
that the provisions of Sections 6.3, 6.5(b), 7.6, 7.10, 8.2 and this Section
12.2 shall survive the termination hereof.
(b) If following an Acquisition Proposal, this Agreement is
terminated by either Omnicare or IBAH pursuant to Section 12.1(b), and within 12
months after such termination IBAH executes with a third party a definitive
agreement to implement an Acquisition Proposal, then IBAH shall pay to Omnicare
a Termination Fee within two business days after the execution of such
agreement.
(c) If this Agreement is terminated by Omnicare pursuant to
Section 12.1(d), then IBAH shall reimburse Omnicare for its reasonable
out-of-pocket expenses in connection with the Transactions, including, without
limitation, attorneys', accountants' and investment bankers' fees and expenses
("Transaction Fees") up to an aggregate of $1,500,000. If within 12 months after
such termination IBAH executes with a third party a definitive agreement to
implement an Acquisition Proposal, then IBAH shall pay to Omnicare a Termination
Fee (less any Transaction Fees previously paid to Omnicare) within two business
days after the execution of such agreement.
(d) If this Agreement is terminated by IBAH pursuant to
Section 12.1(e), then Omnicare shall reimburse IBAH for its Transaction Fees up
to an aggregate of $1,500,000.
(e) If following an Acquisition Proposal, this Agreement is
terminated by either Omnicare or IBAH pursuant to Section 12.1(f), and within 12
months after such termination IBAH executes with a third party a definitive
agreement to implement an Acquisition Proposal, then IBAH shall pay to Omnicare
a Termination Fee within two business days after the execution of such
agreement.
(f) If this Agreement is terminated by IBAH pursuant to
Section 12.1(g), then IBAH shall pay to Omnicare a Termination Fee prior to such
termination.
(g) If this Agreement is terminated by Omnicare pursuant to
Section 12.1(h), then IBAH shall pay to Omnicare a Termination Fee within two
business days after the execution of such agreement.
(h) For purposes of this Section 12.2(b), "Termination Fee"
shall mean $5 million for the period from the termination of the Agreement until
the Option Termination Date (as defined in the Stock Option Agreement) and
$8.366 million for the period, if any, after the Option Termination Date until
12 months after the termination of the Agreement.
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IBAH acknowledges that the agreements contained in this Section 12.2
are an integral part of the Transactions, and that, without these agreements,
Omnicare would not enter into this Agreement; accordingly, if IBAH fails to
promptly pay the amount due pursuant to this Section 12.2, and, in order to
obtain such payment, Omnicare commences a suit which results in a judgment
against IBAH for the fee set forth in this Section 12.2, IBAH shall pay to
Omnicare its costs and expenses (including reasonable attorneys' fees) in
connection with such suit, together with interest on the amount of the fee at a
rate equal to the prime rate of First Chicago NBD at the time of payment from
the date such fee was required to be paid.
ARTICLE XIII
GENERAL MATTERS
Section 13.1. Survival of Representations and Warranties. The
representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
12.1.
Section 13.2. Contents of Agreement. This Agreement and the
Confidentiality Agreement, together with the other Transaction Documents, set
forth the entire understanding of the Parties hereto with respect to the
Transactions and supersede all prior agreements or understandings among the
Parties regarding those matters.
Section 13.3. Amendment, Parties in Interest, Assignment, Etc. This
Agreement may be amended, modified or supplemented only by a written instrument
duly executed by each of the Parties hereto. If any provision of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and
permitted assigns of the Parties hereto. No Party hereto shall assign this
Agreement or any right, benefit or obligation hereunder. Any term or provision
of this Agreement may be waived at any time by the Party entitled to the benefit
thereof by a written instrument duly executed by such Party. The Parties hereto
shall execute and deliver any and all documents and take any and all other
actions that may be deemed reasonably necessary by their respective counsel to
complete the Transactions. Nothing in this Agreement is intended or will be
construed to confer on any Person other than the Parties hereto any rights or
benefits hereunder.
Section 13.4. Interpretation. Unless the context of this Agreement
clearly requires otherwise, (a) references to the plural include the singular,
the singular the plural, the part the whole, (b) references to any gender
include all genders, (c) "or" has the inclusive meaning frequently identified
with the phrase "and/or," (d) "including," "includes" or similar words has the
inclusive meaning frequently identified with the phrase "but not limited to" and
(e) references to "hereunder" or "herein" relate to this Agreement. The section
and other headings contained in this Agreement are for reference purposes only
and shall not control or affect the construction of this Agreement or the
interpretation thereof in any respect. Section, subsection, Disclosure
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Schedule and Exhibit references are to this Agreement unless otherwise
specified. The Exhibits and Schedules referred to in this Agreement will be
deemed to be a part of this Agreement. Each accounting term used herein that is
not specifically defined herein shall have the meaning given to it under GAAP.
Section 13.5. Notices. All notices that are required or permitted
hereunder shall be in writing and shall be sufficient if personally delivered or
sent by mail, facsimile message or Federal Express or other delivery service.
Any notices shall be deemed given upon receipt at the address or fax number set
forth below, unless such address or fax number is changed by notice to the other
Party hereto:
If to Omnicare or Merger Subsidiary:
Omnicare, Inc.
2800 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45203
FAX: 513-762-6678
Attention: Cheryl D. Hodges
with a required copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
FAX: 212-259-6333
Attention: Morton A. Pierce and Richard D. Pritz
If to IBAH:
IBAH, Inc.
Four Valley Square
512 Township Line Road
Blue Bell, PA 19422
FAX: 215-542-2726
Attention: Jane Hollingsworth
with a required copy to:
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
FAX: 215-963-5299
Attention: Thomas J. Sharbaugh, Esquire
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Section 13.6. Governing Law. This Agreement shall be construed and
interpreted in accordance with the Laws of the State of Delaware without regard
to its provisions concerning conflict of laws.
Section 13.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be binding as of the date first written
above, and all of which shall constitute one and the same instrument. Each such
copy shall be deemed an original, and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such counterpart.
Section 13.8. Waivers. Compliance with the provisions of this Agreement
may be waived only by a written instrument specifically referring to this
Agreement and signed by the Party waiving compliance. No course of dealing, nor
any failure or delay in exercising any right, will be construed as a waiver, and
no single or partial exercise of a right will preclude any other or further
exercise of that or any other right.
Section 13.9. Modification. No supplement, modification or amendment of
this Agreement will be binding unless made in a written instrument that is
signed by all of the Parties hereto and that specifically refers to this
Agreement.
Section 13.10. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any Delaware Chancery Court,
this being in addition to any other remedy to which they are entitled at law or
equity. Notwithstanding the foregoing, if jurisdiction does not properly lie in
the Delaware Chancery Court, the parties shall submit to the jurisdiction of
Delaware federal courts. The parties agree that such courts shall have exclusive
jurisdiction to consider any claims hereunder or relating hereto.
Section 13.11. Waiver of Jury Trial. Each party acknowledges and agrees
that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement, or the Transactions contemplated by this Agreement.
Each party certifies and acknowledges that (i) no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver, (ii) each party understands and has considered the implications of this
waiver, (iii) each party makes this waiver voluntarily, and (iv) each party has
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 13.11.
Section 13.12. 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. Upon such
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<PAGE> 49
determination that any term or other provision is invalid, illegal or incapable
of being enforced, 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 to the fullest extent permitted by applicable Law in an acceptable
manner to the end that the Transactions are fulfilled to the extent possible.
45
<PAGE> 50
IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto as of the day and year first written above.
OMNICARE, INC.
By: /s/ JOEL F. GEMUNDER
--------------------------------
Name: Joel F. Gemunder
Title: President
IMPALA ACQUISITION CORP.
By: /s/ L. TRACY FINN
--------------------------------
Name: L. Tracy Finn
Title: President
IBAH, INC.
By: /s/ Geraldine A. Henwood
--------------------------------
Name:
Title:
46
<PAGE> 1
Exhibit 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of March 30, 1998 (the
"Agreement"), between Omnicare, Inc. a Delaware corporation ("Grantee"), and
IBAH, Inc., a Delaware corporation ("Grantor").
WHEREAS, Grantee and Grantor are entering into an Agreement and Plan
of Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, for the merger of Grantor with and into a wholly owned
subsidiary of Grantee (the "Merger");
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Grantee has requested that Grantor grant to Grantee an option
to purchase up to 4,685,315 (the "Option Number") shares of Common Stock, par
value $0.01 per share, of Grantor (the "Common Stock"), upon the terms and
subject to the conditions hereof; and
WHEREAS, in order to induce Grantee to enter into the Merger
Agreement, Grantor is willing to grant Grantee the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments; Payment of Spread.
(a) Subject to the other terms and conditions set forth herein, Grantor
hereby grants to Grantee an irrevocable option (the "Option") to purchase up to
the Option Number shares of Common Stock (the "Shares") at a cash purchase price
equal to $5.75 per share (the "Purchase Price"). The Option may be exercised by
Grantee, in whole or in part, at any time, or from time to time, following the
occurrence of one of the events set forth in Section 2(c) hereof, and prior to
the termination of the Option in accordance with the terms of this Agreement.
(b) In the event Grantee wishes to exercise the Option, Grantee
shall send a written notice to Grantor (the "Stock Exercise Notice") specifying
a date (subject to the HSR Act, as defined below) not later than 10 business
days and not earlier than three business days following the date such notice is
given for the closing of such purchase. In the event of any change in the number
of issued and outstanding shares of Common Stock by reason of any stock
dividend, stock split, split-up, recapitalization, merger or other change in the
corporate or capital structure of Grantor, the number of Shares subject to this
Option and the purchase price per Share shall be appropriately adjusted to
restore Grantee to its rights hereunder, including its right to purchase Shares
representing 19.9% of the capital stock of Grantor entitled to vote generally
for the election of the directors of Grantor which is issued and outstanding
immediately prior to the exercise of the Option
<PAGE> 2
at an aggregate purchase price equal to the Purchase Price multiplied by the
Option Number.
(c) If at any time the Option is then exercisable pursuant to the
terms of Section 1(a) hereof, Grantee may elect, in lieu of exercising the
Option to purchase Shares provided in Section 1(a) hereof, to send a written
notice to Grantor (the "Cash Exercise Notice") specifying a date not later than
20 business days and not earlier than 10 business days following the date such
notice is given on which date Grantor shall pay to Grantee an amount in cash
equal to the Spread (as hereinafter defined) multiplied by all or such portion
of the Shares subject to the Option as Grantee shall specify. As used herein
"Spread" shall mean the excess, if any, over the Purchase Price of the higher of
(x) if applicable, the highest price per share of Common Stock (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid or
proposed to be paid by any person pursuant to one of the transactions enumerated
in Section 2(c) hereof (the "Alternative Purchase Price") or (y) the average of
the closing prices (or the average of the closing bid and asked prices if
closing prices are unavailable) of the shares of Common Stock as reported on
Nasdaq on the last trading day immediately prior to the date of the Cash
Exercise Notice (the "Closing Price"). If the Alternative Purchase Price
includes any property other than cash, the Alternative Purchase Price shall be
the sum of (i) the fixed cash amount, if any, included in the Alternative
Purchase Price plus (ii) the fair market value of such other property. If such
other property consists of securities with an existing public trading market,
the average of the closing prices (or the average of the closing bid and asked
prices if closing prices are unavailable) for such securities in their principal
public trading market on the five trading days ending five days prior to the
date of the Cash Exercise Notice shall be deemed to equal the fair market value
of such property. If such other property consists of something other than cash
or securities with an existing public trading market and, as of the payment date
for the Spread, agreement on the value of such other property has not been
reached, the Alternative Purchase Price shall be deemed to equal the Closing
Price. Upon exercise of its right to receive cash pursuant to this Section 1(c),
the obligations of Grantor to deliver Shares pursuant to Section 3 shall be
terminated with respect to such number of Shares for which Grantee shall have
elected to be paid the Spread.
2. Conditions to Delivery of Shares. The Grantor's obligation to
deliver Shares upon exercise of the Option is subject only to the conditions
that:
(a) No preliminary or permanent injunction or other order
issued by any federal or state court of competent jurisdiction in the
United States prohibiting the delivery of the Shares shall be in
effect; and
(b) Any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") shall have expired
or been terminated; and
(c) (i) any person (other than Grantee or any of its
subsidiaries) shall have commenced (as such term is defined in Rule
14d-2 under the Securities Exchange
2
<PAGE> 3
Act of 1934 (the "Exchange Act")) a tender offer, or shall have filed
a registration statement under the Securities Act of 1933 (the
"Securities Act") with respect to an exchange offer, to purchase any
shares of Common Stock such that, upon consummation of such offer,
such person or a "group" (as such term is defined under the Exchange
Act) of which such person is a member shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 of the Exchange Act),
or the right to acquire beneficial ownership, of 25% or more of the
then outstanding Common Stock; (ii) any person (other than Grantee or
any of its subsidiaries) shall have publicly announced or delivered to
Grantor a proposal, or disclosed publicly or to Grantor an intention
to make a proposal, to purchase 25% or more of the assets or any
equity securities of, or to engage in a merger, reorganization, tender
offer, share exchange, consolidation or similar transaction involving
the Grantor or any of its subsidiaries (an "Acquisition Transaction");
(iii) Grantor or any of its subsidiaries shall have authorized,
recommended, proposed or publicly announced an intention to authorize,
recommend or propose, or entered into, an agreement, including without
limitation, an agreement in principle, with any person (other than
Grantee or any of its subsidiaries) to effect or provide for an
Acquisition Transition; (iv) any person (other than Grantee or any of
its subsidiaries) shall solicit proxies or consents or announce a bona
fide intention to solicit proxies or consents from Grantor's
stockholders (y) in opposition to the Merger, the Merger Agreement or
any related transactions or (z) relating to an Acquisition Transaction
(other than solicitations of stockholders seeking approval of the
Merger, the Merger Agreement or any related transactions), and the
stockholders of the Company shall have failed to approve the Merger;
or (v) any person (other than Grantee or any of its subsidiaries)
shall have acquired beneficial ownership (as such term is defined in
Rule 13d-3 under the Exchange Act) or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under the
Exchange Act) shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of, shares of Common Stock
(other than trust account shares) aggregating 25% or more of the then
outstanding Common Stock. As used in this Agreement, "person" shall
have the meaning specified in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act.
3. The Closing. (a) Any closing hereunder shall take place on the
date specified by Grantee in its Stock Exercise Notice or Cash Exercise Notice,
as the case may be, at 9:00 a.m., local time, at the offices of Dewey Ballantine
LLP, 1301 Avenue of the Americas, New York, New York, or, if the conditions set
forth in Section 2(a) or (b) have not then been satisfied, on the second
business day following the satisfaction of such conditions, or at such other
time and place as the parties hereto may agree (the "Closing Date"). On the
Closing Date, (i) in the event of a closing pursuant to Section 1(b) hereof,
Grantor will deliver to Grantee a certificate or certificates, representing the
Shares in the denominations designated by Grantee in its Stock Exercise Notice
and Grantee will purchase such Shares from Grantor at the price per Share equal
to the Purchase Price or (ii) in the event of a closing pursuant to Section 1(c)
hereof, Grantor will deliver to Grantee cash in an amount determined pursuant to
Section 1(c) hereof. Any payment
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<PAGE> 4
made by Grantee to Grantor, or by Grantor to Grantee, pursuant to this Agreement
shall be made by certified or official bank check or by wire transfer of
immediately available funds to a bank designated by the party receiving such
funds.
(b) The certificates representing the Shares shall bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act.
4. Representations and Warranties of Grantor. The Grantor represents
and warrants to Grantee that (a) Grantor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to enter into and perform
this Agreement; (b) the execution and delivery of this Agreement by Grantor and
the consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Grantor and this Agreement has been duly
executed and delivered by a duly authorized officer of Grantor and constitutes a
valid and binding obligation of Grantor, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; (c) Grantor has taken all
necessary corporate action to authorize and reserve the Shares issuable upon
exercise of the Option and the Shares, when issued and delivered by Grantor upon
exercise of the Option and paid for by Grantee as contemplated hereby, will be
duly authorized, validly issued, fully paid and non-assessable and free of
preemptive rights; (d) except as otherwise required by the HSR Act, the
execution and delivery of this Agreement by Grantor and the consummation by it
of the transactions contemplated hereby do not require the consent, waiver,
approval or authorization of or any filing with any person or public authority
and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of Grantor's
charter or by-laws, or any material indenture, mortgage, lien, lease, agreement,
contract, instrument, order, law, rule, regulation, judgment, ordinance, or
decree, or restriction by which Grantor or any of its subsidiaries or any of
their respective properties or assets is bound; (e) Grantor (i) will not,
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act, avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or performed
hereunder by Grantor and (ii) will promptly take all action provided herein to
protects the rights of Grantee against dilution as set forth in Section 1(b)
hereof and (f) no "fair price", "moratorium", "control share acquisition,"
"interested shareholder" or other form of antitakeover statute or regulation,
including without limitation, Section 203 of the Delaware General Corporation
Act, or similar provision contained in the charter or by-laws of Grantor, is or
shall be applicable to the acquisition of Shares pursuant to this Agreement.
5. Representations and Warranties of Grantee. The Grantee represents
and warrants to Grantor that (a) the execution and delivery of this Agreement by
Grantee and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Grantee
and this Agreement has been duly executed and delivered by a duly authorized
officer of Grantee and
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<PAGE> 5
constitutes a valid and binding obligation of Grantee; and (b) Grantee is
acquiring the Option and, if and when it exercises the Option, will be acquiring
the Shares issuable upon the exercise thereof for its own account and not with a
view to distribution or resale in any manner which would be in violation of the
Securities Act.
6. Listing of Shares; Filings; Governmental Consents. Grantor will
promptly file an application to list the Shares on the Nasdaq National Market
("Nasdaq") and will use its reasonable best efforts to obtain approval of such
listing and to effect all necessary filings by Grantor under the HSR Act;
provided, however, that if Grantor is unable to effect such listing on Nasdaq by
the Closing Date, Grantor will nevertheless be obligated to deliver the Shares
upon the Closing Date. Each of the parties hereto will use its reasonable best
efforts to obtain consents of all third parties and governmental authorities, if
any, necessary to the consummation of the transactions contemplated.
7. Sale of Shares. At any time prior to the first anniversary of the
termination of the Merger Agreement in accordance with its terms (such
anniversary, the "Merger Termination Date"), Grantee shall have the right to
sell (the "Sale Right") to Grantor all, but not less than all, of the Shares at
the average of the last sales prices for shares of Common Stock on the ten
trading days ending five days prior to the date Grantee gives written notice of
its intention to exercise the Sale Right. If Grantee does not exercise the Sale
Right prior to the first anniversary of the Merger Termination Date, the Sale
Right terminates. In the event Grantee wishes to exercise the Sale Right,
Grantee shall send a written notice to Grantor specifying a date not later than
20 business days and not earlier than 10 business days following the date such
notice is given for the closing of such sale.
8. Registration Rights. (a) In the event that Grantee shall desire
to sell any of the Shares, Grantor will cooperate with Grantee and any
underwriters in registering such Shares for resale, including, without
limitation, promptly filing a registration statement which complies with the
requirements of applicable federal and state securities laws, and entering into
an underwriting agreement with such underwriters upon such terms and conditions
as are customarily contained in underwriting agreements with respect to
secondary distributions; provided that Grantor shall not be required to have
declared effective more than two registration statements hereunder and shall be
entitled to delay the filing or effectiveness of any registration statement for
up to 60 days if the offering would, in the judgment of the Board of Directors
of Grantor, require premature disclosure of any material corporate development
or material transaction involving Grantor or interfere with any previously
planned securities offering by the Company. Grantee shall use reasonable efforts
to cause, and to cause any underwriters of any sale or other disposition to use
reasonable efforts to cause, any sale or other disposition pursuant to such
registration statement to be effected on a widely distributed basis.
(b) If the Common Stock is registered pursuant to the provisions of
this Section 8, Grantor agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as Grantee may from time to time reasonably request and (ii) if any
event shall occur as a result of which it becomes necessary to amend or
supplement any registration statement or prospectus, to prepare
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<PAGE> 6
and file under the applicable securities laws such amendments and supplements as
may be necessary to keep available for at least 45 days a prospectus covering
the Common Stock meeting the requirements of such securities laws, and to
furnish Grantee such numbers of copies of the registration statement and
prospectus as amended or supplemented as may reasonably be requested. The
Grantor shall bear the cost of the registration, including, but not limited to,
all registration and filing fees, printing expenses, and fees and disbursements
of counsel and accountants for Grantor, except that Grantee shall pay the fees
and disbursements of its counsel, and the underwriting fees and selling
commissions applicable to the shares of Common Stock sold by Grantee. The
Grantor shall indemnify and hold harmless (i) Grantee, its affiliates and its
officers and directors and (ii) each underwriter and each person who controls
any underwriter within the meaning of the Securities Act or the Exchange Act
(collectively, the "Underwriters") ((i) and (ii) being referred to as
"Indemnified Parties") against any losses, claims, damages, liabilities or
expenses, to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
registration statement filed pursuant to this paragraph, or arise out of or are
based upon 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; provided, however, that Grantor will not be liable in any such case
to the extent that any such loss, liability, claim, damage or expense arises out
of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any such documents in reliance upon and in
conformity with written information furnished to Grantor by the Indemnified
Parties expressly for use or incorporation by reference therein.
(c) The Grantee and the Underwriters shall indemnify and hold
harmless Grantor, its affiliates and its officers and directors against any
losses, claims, damages, liabilities or expenses to which Grantor, its
affiliates and its officers and directors may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement of any material
fact contained or incorporated by reference in any registration statement filed
pursuant to this paragraph, or arise out of or are based upon 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to Grantor by Grantee or the
Underwriters, as applicable, specifically for use or incorporation by reference
therein.
9. Expenses. Each party hereto shall pay its own expenses incurred
in connection with this Agreement, except as otherwise specifically provided
herein.
10. Specific Performance. The Grantor acknowledges that if Grantor
fails to perform any of its obligations under this Agreement immediate and
irreparable harm or injury would be caused to Grantee for which money damages
would not be an
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<PAGE> 7
adequate remedy. In such event, Grantor agrees that Grantee shall have the
right, in addition to any other rights it may have, to specific performance of
this Agreement.
11. Notice. All notices, requests, demands and other communications
hereunder shall be in writing deemed to have been duly given upon receipt by the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
If to Grantee:
Attention:
Telecopy:
With a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attn: Morton A. Pierce and Richard D. Pritz
Telecopy: (212) 259-6333
If to Grantor:
Attention:
Telecopy:
With a copy to:
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Thomas J. Sharbaugh
Telecopy: (215) 963-5299
12. Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties named herein and their respective successors
and assigns; provided, however, that such successor in interest or assigns shall
agree to be bound by the provisions of this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
Grantor or Grantee, or their successors or assigns, any rights or remedies under
or by reason of this Agreement.
13. Entire Agreement; Amendments. This Agreement, together with the
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally,
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<PAGE> 8
but may be changed only by an agreement in writing signed by the party against
whom any waiver, change, amendment, modification or discharge may be sought.
14. Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, except that Grantee may assign its rights and
obligations hereunder to any of its direct or indirect wholly owned
subsidiaries, but no such transfer shall relieve Grantee of its obligations
hereunder if such transferee does not perform such obligations.
15. Headings. The section headings herein are for convenience only
and shall not affect the construction of this Agreement.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
17. Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
(regardless of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law). Each of the parties hereto waives any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
THE GRANTOR AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR
PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
AND AGREES TO VENUE IN SUCH COURTS. THE GRANTOR HEREBY APPOINTS THE SECRETARY OF
THE GRANTOR AS ITS AGENT FOR SERVICE OF PROCESS FOR PURPOSES OF THE FOREGOING
SENTENCE ONLY.
18. Termination. The right to exercise the Option granted pursuant
to this Agreement shall terminate (the "Option Termination Date") at the earlier
of (i) the Effective Time (as defined in the Merger Agreement), (ii) 90 days
after the Merger Termination Date, (iii) six months from the latest date a
shareholder vote occurs or is scheduled and (iv) the termination of the Merger
Agreement under Section 12.1(i); provided that, if the Option cannot be
exercised or the Shares cannot be delivered to Grantee upon such exercise
because the conditions set forth in Section 2(a) or (b) hereof have not yet been
satisfied, the Option Termination Date shall be extended until thirty days after
such impediment to exercise or delivery has been removed.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
19. Profit Limitation. (a) Notwithstanding any other provision of
this Agreement, in no event shall Grantee's Total Profit (as hereinafter
defined) exceed $8.366 million
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<PAGE> 9
(the "Cap") and, if it otherwise would exceed such amount, Grantee, at its sole
election, shall either (a) deliver to Grantor for cancellation Shares previously
purchased by Grantee, (b) pay cash or other consideration to Grantor or (c)
undertake any combination thereof, so that Grantee's Total Profit shall not
exceed the Cap after taking into account the foregoing actions.
Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of Shares as would, as of the date of the
Stock Exercise Notice, result in a Notional Total Profit (as defined below) of
more than the Cap and, if exercise of the Option otherwise would exceed such
amount, Grantee, at its discretion, may increase the Purchase Price for that
number of Shares set forth in the Stock Exercise Notice so that the Notional
Total Profit shall not exceed the Cap; provided, that nothing in this sentence
shall restrict any exercise of the Option permitted hereby on any subsequent
date at the Purchase Price set forth in Section 1(a) hereof.
As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section 12.2(b) of the Merger Agreement and Section 1(c)
hereof, (ii) (x) the amount received by Grantee pursuant to Grantor's repurchase
of Shares pursuant to Section 7 hereof, less (y) Grantee's purchase price for
such Shares, and (iii) (x) the net cash amounts received by Grantee pursuant to
the sale of Shares (or any other securities into which such Shares are converted
or exchanged) to any unaffiliated party, less (y) Grantee's purchase price for
such Shares.
As used herein, the term "Notional Total Profit" with respect to any
number of Shares as to which Grantee may propose to exercise this Option shall
be the Total Profit determined as of the date of the Stock Exercise Notice
assuming that this Option were exercised on such date for such number of Shares
and assuming that such Shares, together with all other Shares held by Grantee
and its affiliates as of such date, were sold for cash at the closing market
price for the Common Stock as of the close of business on the preceding trading
day (less customary brokerage commissions).
20. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
21. Public Announcement. The Grantee will consult with Grantor and
Grantor will consult with Grantee before issuing any press release with respect
to the initial announcement of this Agreement, the Option or the transactions
contemplated hereby and neither party shall issue any such press release prior
to such consultation except as may be required by law or the applicable rules
and regulations of Nasdaq or the NYSE.
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<PAGE> 10
IN WITNESS WHEREOF, Grantee and Grantor have caused this Agreement
to be duly executed and delivered on the day and year first above written.
OMNICARE, INC.
By: /s/ Joel F. Gemunder
----------------------
Name:
Title: President
IBAH, INC.
By: /s/ Geraldine A. Henwood
--------------------------
Name:
Title: Chief Executive Officer
10
<PAGE> 1
Exhibit 3
VOTING AGREEMENT
VOTING AGREEMENT, dated as of March 30, 1998, between
Omnicare, Inc. a Delaware corporation ("Omnicare"), and the persons listed on
Schedule A hereto (collectively, the "Securityholders").
WHEREAS, Omnicare and IBAH, Inc., a Delaware corporation (the
"Company"), propose to enter into an Agreement and Plan of Merger, dated the
date hereof (as the same may be amended or supplemented, the "Merger Agreement")
providing for the merger of a subsidiary of Omnicare with the Company (the
"Merger");
WHEREAS, each Securityholder is the record and beneficial owner of the
number of (i) shares of common stock, par value $.01 per share, of the Company
(the "Common Shares"), (ii) shares of preferred stock, par value $.01 per share,
of the Company (the "Preferred Shares") or (iii) warrants to purchase Common
Shares (the "Warrants") set forth opposite such Securityholder's name on
Schedule A hereto; such securities, as they may be adjusted by stock dividend,
stock split, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or other change or transaction of or by the
Company, together with securities that may be acquired after the date hereof by
such Securityholder, including Common Shares issuable upon the exercise of
options to purchase Common Shares (as the same may be adjusted as aforesaid),
being collectively referred to herein as the "Securities"; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Omnicare has requested that the Securityholders enter into this
Agreement (capitalized terms not otherwise defined herein shall have the
meanings set forth in the Merger Agreement);
NOW, THEREFORE, to induce Omnicare to enter into, and in consideration
of it entering into, the Merger Agreement, and in consideration of the premises
and the representations, warranties and agreements contained herein, the parties
agree as follows:
1. Covenants of the Securityholders. Each Securityholder, severally and
not jointly, agrees as follows:
(a) The Securityholder shall not, except as contemplated by the terms
of this Agreement, (i) sell, transfer, pledge, assign or otherwise dispose of,
or enter into any Contract (as defined below), option or other arrangement
(including any profit sharing arrangement) or understanding with respect to the
sale, transfer, pledge, assignment or other disposition of, the Securities to
any person other than Omnicare or Omnicare's designee, (ii) enter into any
voting arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney or otherwise, with respect to the Securities or (iii) take any
other action that would in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated
hereby; provided, however,
<PAGE> 2
that any Securityholder that is an individual may transfer all or any part of
his or her Securities to any sibling or any other member of his or her immediate
family, any of his or her lineal descendants or any trust for the benefit of any
of them, if the recipient of the Securities agrees in advance in writing
delivered to Omnicare to be bound by this Agreement; provided, further, however
that Vector Later-Stage Equity Fund, L.P. may exercise any of its Warrants and
sell the underlying Common Stock at any time prior to 30 days preceding the
Effective Date of the Merger (as such term is defined in the Merger Agreement).
(b) Until the Merger is consummated or the Merger Agreement is
terminated, the Securityholder shall not, nor shall the Securityholder permit
any investment banker, financial adviser, attorney, accountant or other
representative or agent of the Securityholder to, directly or indirectly (i)
solicit, initiate or encourage (including by way of furnishing information), or
take any other action designed or reasonably likely to facilitate, any inquiries
or the making of any proposal which constitutes, or may reasonably be expected
to lead to, any Acquisition Proposal (as defined in the Merger Agreement) or
(ii) participate in any discussions or negotiations regarding any Acquisition
Proposal. Without limiting the foregoing, it is understood that any violation of
the restrictions set forth in the preceding sentence by an investment banker,
financial advisor, attorney, accountant or other representative or agent of the
Securityholder shall be deemed to be a violation of this Section 1(b) by the
Securityholder.
(c) At any meeting of Securityholders of the Company called to vote
upon the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Merger Agreement is sought,
each Securityholder shall, including by initiating a written consent
solicitation if requested by Omnicare, vote (or cause to be voted) such
Securityholder's Securities in favor of the Merger, the adoption of the Merger
Agreement and the approval of the other transactions contemplated by the Merger
Agreement. At any meeting of Securityholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Securityholder's vote, consent or other approval is sought, such Securityholder
shall vote (or cause to be voted) such Securityholder's Securities against (i)
any merger agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company or
any other Acquisition Proposal (collectively, "Alternative Transactions") or
(ii) any amendment of the Company's Certificate of Incorporation or by-laws or
other proposal or transaction involving the Company or any of its subsidiaries,
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, the Merger, the Merger Agreement or any of the
other transactions contemplated by the Merger Agreement including any consent to
the treatment of any Securities in or in connection with such transaction
(collectively, "Frustrating Transactions"). The Securityholder hereby consents
to the transactions contemplated by Section 2.8 of the Merger Agreement.
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<PAGE> 3
2. Grant of Irrevocable Proxy Coupled with an Interest; Appointment of
Proxy.
(a) Each Securityholder hereby irrevocably grants to, and appoints, any
individual who shall be designated by Omnicare, and each of them, such
Securityholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of such Securityholder, to vote such
Securityholder's Securities, or grant a consent or approval in respect of such
Securities, at any meeting of Securityholders of the Company or at any
adjournment thereof or in any other circumstances upon which their vote, consent
or other approval is sought, (i) in favor of the Merger, the adoption by the
Company of the Merger Agreement and the approval of the other transactions
contemplated by the Merger Agreement, and (ii) against any Alternative
Transaction or Frustrating Transaction.
(b) Each Securityholder represents that any proxies heretofore given in
respect of such Securityholder's Securities are not irrevocable, and that any
such proxies are hereby revoked.
(c) EACH SECURITYHOLDER HEREBY AFFIRMS THAT THE PROXY SET FORTH IN THIS
SECTION 2 IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME AS THIS
AGREEMENT TERMINATES IN ACCORDANCE WITH ITS TERMS. Such Securityholder hereby
further affirms that the irrevocable proxy is given in connection with the
execution of the Merger Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of such Securityholder under this
Agreement. Such Securityholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
the provisions of Section 212 of the DGCL. Such irrevocable proxy shall be valid
until the later to occur of (i) one year from the date hereof or (ii) the
termination of this Agreement in accordance with its terms.
3. Representations and Warranties of the Securityholders. Each
Securityholder hereby, severally and not jointly, represents and warrants to
Omnicare as follows:
(a) Authority. The Securityholder has all requisite power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Securityholder. This Agreement has been duly executed and
delivered by the Securityholder and, assuming this Agreement constitutes a valid
and binding obligation of Omnicare, constitutes a valid and binding obligation
of the Securityholders enforceable against the Securityholder in accordance with
its terms. Except for the informational filings with the Securities and Exchange
Commission, neither the execution, delivery or performance of this Agreement by
the Securityholder nor the consummation by the Securityholder of the
transactions contemplated hereby will (i) require any filing with, or permit,
authorization, consent or approval of, any federal, state, local or municipal
foreign or other government or subdivision, branch, department or agency thereof
or any governmental or quasi-governmental authority of any nature, including any
court or other tribunal, (a
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"Governmental Entity"), (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default under, or give
rise to any right of termination, amendment, cancellation or acceleration under,
or result in the creation of any Lien upon any of the properties or assets of
the Securityholder under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, permit, concession, franchise,
contract, agreement or other instrument or obligation (a "Contract") to which
the Securityholder is a party or by which the Securityholder or any of the
Securityholder's properties or assets, including the Securityholder's
Securities, may be bound or (iii) violate any judgment, order, writ, preliminary
or permanent injunction or decree (an "Order") or any statute, law, ordinance,
rule or regulation of any Governmental Entity (a "Law") applicable to the
Securityholder or any of the Securityholder's properties or assets, including
the Securityholder's Securities.
(b) The Securities. The Securityholder's Securities and the
certificates representing such Securities are now, and at all times during the
term hereof will be, held by such Securityholder, or by a nominee or custodian
for the benefit of such Securityholder, and the Securityholder has good and
marketable title to such Securities, free and clear of any Liens, proxies,
voting trusts or agreements, understandings or arrangements, except for any such
Liens or proxies arising hereunder. The Securityholder owns of record or
beneficially no securities of the Company, or any options, warrants or rights
exercisable for securities of the Company, other than such Securityholder's
Securities and shares of Company Common Stock issuable upon the exercise of
Existing Options (as defined in the Merger Agreement), in each case as set forth
on Schedule A hereto.
(c) Brokers. No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of such
Securityholder.
(d) Merger Agreement. The Securityholder understands and acknowledges
that Omnicare is entering into, the Merger Agreement in reliance upon the
Securityholder's execution and delivery of this Agreement.
4. Board Approval. The Board of Directors of the Company has duly and
validly authorized and approved by all necessary corporate action, this
Agreement, the Merger Agreement and the transactions contemplated hereby and
thereby, so that by the execution and delivery hereof no restrictive provision
of any "fair price," "moratorium," "control-share acquisition," "interested
shareholders" or other similar anti-takeover statute or regulation (including,
without limitation, Section 203 of the DGCL) or restrictive provision of any
applicable anti-takeover provision in the Articles of Incorporation or by-laws
of the Company is, or at the closing of the transactions contemplated hereby
will be, applicable to the Company, Omnicare, the Securities, the Merger or any
other transaction contemplated by this Agreement.
4
<PAGE> 5
5. Representations and Warranties of Omnicare. Omnicare hereby
represents and warrants to the Securityholders as follows:
(a) Authority. Omnicare has the requisite corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Omnicare and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Omnicare.
This Agreement has been duly executed and delivered by Omnicare and, assuming
this Agreement constitutes a valid and binding obligation of the
Securityholders, constitutes a valid and binding obligation of Omnicare
enforceable in accordance with its terms.
(b) Securities Act. The Securities will be acquired in compliance with,
and Omnicare will not offer to sell or otherwise dispose of any Securities so
acquired by it in violation of any of, the Securities Exchange Act of 1934, or
the registration requirements of the Securities Act of 1933.
6. Further Assurances. Each Securityholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Omnicare may reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement and to vest the power to vote such
Securityholder's Securities as contemplated by Section 2. Omnicare agrees to use
reasonable efforts to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements that may be imposed with respect to
the transactions contemplated by this Agreement.
7. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
5
<PAGE> 6
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate upon the first anniversary of the date of any
termination of the Merger Agreement in accordance with its terms. Nothing in
this Section 8 shall relieve any party from liability for willful breach of this
Agreement.
9. Stop Transfer. The Company agrees with, and covenants to, Omnicare
that the Company shall not register the transfer of any certificate representing
any Securityholder's Securities unless such transfer is made in accordance with
the terms of this Agreement.
10. General Provisions.
(a) Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense.
(b) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(c) Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given upon receipt to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(i) if to Omnicare, to
Facsimile:
with a copy to:
Morton A. Pierce and Richard D. Pritz
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 259-6333
and
(ii) if to a Securityholder, to the address set forth under the name of such
Securityholder on Schedule A hereto
with a copy to:
Thomas J. Sharbaugh
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
6
<PAGE> 7
Facsimile: (215) 963-5299
(d) 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. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Wherever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(e) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(f) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
(g) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law.
(h) Publicity. Except as otherwise required by law, court process or
the rules of a national securities exchange or the Nasdaq National Market or as
contemplated or provided in the Merger Agreement, for so long as this Agreement
is in effect, neither any Securityholder nor Omnicare shall issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement or the Merger Agreement without
the consent of the other parties, which consent shall not be unreasonably
withheld.
11. Securityholder Capacity. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director or
officer. Each Securityholder signs solely in his or her capacity as the record
holder and beneficial owner of, or the trustee of a trust whose beneficiaries
are the beneficial owners of, such Securityholder's Securities and nothing
herein shall limit or affect any actions taken by a Securityholder in its
capacity as an officer or director of the Company to the extent specifically
permitted by the Merger Agreement.
12. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties 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 a court of the United
7
<PAGE> 8
States. This being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto waives any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
EACH SECURITYHOLDER AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR PROCEEDING
ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE AND AGREES TO
VENUE IN SUCH COURTS. EACH SECURITYHOLDER HEREBY APPOINTS THE SECRETARY OF THE
COMPANY AS ITS AGENT FOR SERVICE OF PROCESS FOR PURPOSES OF THE FOREGOING
SENTENCE ONLY. EACH PARTY HERETO WAIVES ANY RIGHT TO JURY TRIAL IN CONNECTION
WITH ANY SUCH SUIT OR PROCEEDING.
8
<PAGE> 9
IN WITNESS WHEREOF, Omnicare has caused this Agreement to be signed
by its officer thereunto duly authorized and each Securityholder has signed this
Agreement, all as of the date first written above.
OMNICARE, INC.
By: /s/ DAVID W. FROESEL, JR.
------------------------------------
Name: David W. Froesel, Jr.
Title: Senior Vice President and
Chief Financial Officer
SECURITYHOLDER
By: /s/ WINSTON J. CHURCHILL
------------------------------------
Name: Winston J. Churchill,
Individual
Churchill Foundation
CIP Capital, L.P.
SECURITYHOLDER
By: /s/ SIDNEY JEVONS, PH.D.
------------------------------------
Name: Sidney Jevons, Ph.D.
SECURITYHOLDER
By: /s/ SANDRA PANEM, PH.D.
------------------------------------
Name: Sandra Panem, Ph.D.,
Individual
Vector Later-Stage Equity
Fund, L.P.
SECURITYHOLDER
By: /s/ THOMAS F. HENWOOD
------------------------------------
Name: Thomas F. Henwood
9
<PAGE> 10
SECURITYHOLDER
By: /s/ RICHARD L. SHERMAN
----------------------------------
Name: CIP Capital, L.P.
SECURITYHOLDER
By: /s/ THOMAS J. SHARBAUGH
----------------------------------
Name: Thomas J. Sharbaugh,
Trustee for the
Son of Winston J. Churchill
SECURITYHOLDER
By: /s/ GERALDINE A. HENWOOD
----------------------------------
Name: Geraldine A. Henwood
10
<PAGE> 11
SCHEDULE A
<TABLE>
<CAPTION>
[need addresses]
Common Preferred
Name and Address Shares Shares Warrants Options
---------------- ------ ------ -------- -------
<S> <C> <C> <C> <C>
Winston J. Churchill(1) 1,277,917 106,000
Trust for Son of Winston J.
Churchill 159,750
Churchill Foundation 171,000
Geraldine A. Henwood 2,670,058 92,500
Thomas F. Henwood 378,055
Vector Later-Stage Equity
Fund 356,984 1,070,952
Sandra Panem, Ph.D. 20,000
Sidney Jevons, Ph.D. 540,399 23,760
</TABLE>
- --------------------
(1) Includes 673, 371 Common Shares owned by CIP Capital, L.P.
11
