SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): October 16, 1998
Agri-Nutrition Group Limited
(Exact name of registrant as specified in its charter)
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Delaware 0-24312 43-1648680
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
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Riverport Executive Center II
13801 Riverport Drive, Suite 111
Maryland Heights, Missouri 63043
(Address of principal executive offices, including zip code)
(314) 298-7330
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On October 16, 1998, Agri-Nutrition Group Limited (the "Company")
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Virbac S.A., a French corporation ("VBSA"), and Virbac, Inc., a Delaware
corporation ("Virbac"), pursuant to which Virbac will be merged with and into
the Company (the "Merger") with the Company being the surviving corporation.
Pursuant to the Merger Agreement, VBSA will form a French subsidiary ("VBSA
Sub") that will become a party to the Merger Agreement. Upon consummation of the
Merger, the Company will issue shares of its common stock, par value $.01 per
share ("Common Stock"), that will constitute approximately 60% of its
outstanding Common Stock after the Merger, to VBSA Sub, thereby effecting a
change of control of the Company pursuant to which VBSA will become the indirect
majority stockholder of the Company. The Merger Agreement requires VBSA, prior
to the consummation of the Merger, to contribute to Virbac cash in an amount
equal to the sum of (i) $6.7 million, and (ii) the difference between (a)
Virbac's outstanding debt, including accrued interest thereon, plus certain
expenses incurred by Virbac in connection with the Merger and (b) Virbac's cash,
with each of such amounts to be calculated as of December 31, 1998. In addition,
following the Merger, the Company will complete one, and under certain
circumstances a second, tender offer for a portion of its outstanding Common
Stock at a price of $3.00 per share. The Company will change its name to Virbac
Corporation upon consummation of the Merger. It is expected that the Merger
will be consummated in January 1999, subject to approval by the Company's
stockholders, regulatory approval and other customary closing conditions.
VBSA, headquartered in Carros, France, is a manufacturer of veterinary
pharmaceuticals and has operations throughout the world. Virbac, headquartered
in Fort Worth, Texas, is the U.S. subsidiary of VBSA and is a manufacturer and
distributor of a wide variety of animal health products focusing on
dermatological, parasiticide and dental products.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Statement Information.
None.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated October 16, 1998, by and
among the Company, VBSA and Virbac.
99.1 Press release of the Company dated October 19, 1998.
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Agri-Nutrition Group Limited
By: /S/ ROBERT J. ELFANBAUM
Robert J. Elfanbaum
Chief Financial Officer
Date: November 17, 1998
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TABLE OF CONTENTS
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ARTICLE I THE MERGER.............................................................................................1
Section 1.1. The Merger.............................................................................1
Section 1.2. Effective Time.........................................................................1
Section 1.3. Closing................................................................................2
Section 1.4. Effects of the Merger..................................................................2
Section 1.5. Certificate of Incorporation and Bylaws................................................2
Section 1.6. Directors..............................................................................2
Section 1.7. Officers...............................................................................2
Section 1.8. Alternative Structure..................................................................3
ARTICLE II CONVERSION OF SECURITIES..............................................................................3
Section 2.1. Effect on Capital Stock................................................................3
Section 2.2. Adjustments of Parent's Share Ownership in AGNU........................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND VIRBAC...................................................3
Section 3.1. Organization and Authority.............................................................4
Section 3.2. Subsidiaries...........................................................................4
Section 3.3. Capitalization.........................................................................4
Section 3.4. Authorization..........................................................................5
Section 3.5. Consent and Approvals; No Violations...................................................5
Section 3.6. Financial Statements...................................................................5
Section 3.7. Absence of Certain Changes or Events...................................................6
Section 3.8. No Undisclosed Liabilities.............................................................6
Section 3.9. Proxy Statement........................................................................7
Section 3.10. Benefit Plans..........................................................................7
Section 3.11. Litigation.............................................................................8
Section 3.12. Compliance with Applicable Law.........................................................9
Section 3.13. Tax Matters............................................................................9
Section 3.14. Customer Warranties...................................................................11
Section 3.15. Brokers...............................................................................11
Section 3.16. Material Contracts....................................................................11
Section 3.17. Labor Matters.........................................................................12
Section 3.18. Environmental Matters.................................................................12
Section 3.19. Virbac Intellectual Property..........................................................13
Section 3.20. Year 2000 Issues......................................................................13
Section 3.21. Regulatory Compliance.................................................................14
Section 3.22. State Takeover Statutes Inapplicable..................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF AGNU................................................................14
Section 4.1. Organization and Authority............................................................14
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Section 4.2. Subsidiaries..........................................................................15
Section 4.3. Capitalization........................................................................15
Section 4.4. Authorization.........................................................................15
Section 4.5. Consents and Approvals; No Violations.................................................16
Section 4.6. SEC Reports and Financial Statements..................................................16
Section 4.7. Absence of Certain Changes or Events..................................................17
Section 4.8. No Undisclosed Liabilities............................................................17
Section 4.9. Proxy Statement.......................................................................18
Section 4.10. Benefit Plans.........................................................................18
Section 4.11. Litigation............................................................................19
Section 4.12. Compliance with Applicable Law........................................................20
Section 4.13. Tax Matters...........................................................................20
Section 4.14. Customer Warranties...................................................................22
Section 4.15. Brokers...............................................................................22
Section 4.16. Material Contracts....................................................................22
Section 4.17. Labor Matters.........................................................................22
Section 4.18. Environmental Matters.................................................................23
Section 4.19. AGNU Intellectual Property............................................................23
Section 4.20. Year 2000 Issues......................................................................24
Section 4.21. Regulatory Compliance.................................................................24
Section 4.22. Voting Requirements...................................................................24
Section 4.23. Issuance of Merger Shares.............................................................24
ARTICLE V COVENANTS.............................................................................................25
Section 5.1. Affirmative Covenants of Virbac.......................................................25
Section 5.2. Negative Covenants of Virbac..........................................................25
Section 5.3. Affirmative Covenants of AGNU.........................................................27
Section 5.4. Negative Covenants of AGNU............................................................28
ARTICLE VI ADDITIONAL AGREEMENTS................................................................................30
Section 6.1. Access and Information................................................................30
Section 6.2. Confidentiality.......................................................................30
Section 6.3. Proxy Statement.......................................................................31
Section 6.4. AGNU Stockholder Approval.............................................................32
Section 6.5. Further Action; Commercially Reasonable Best Efforts..................................32
Section 6.6. Public Announcements..................................................................33
Section 6.7. Directors' and Officers' Insurance and Indemnification................................33
Section 6.8. HSR Act Matters.......................................................................34
Section 6.9. No Solicitation.......................................................................34
Section 6.10. Affiliate Agreements..................................................................36
Section 6.11. Conduct of Business of Parent and Surviving Corporation...............................36
Section 6.12. Expenses..............................................................................36
Section 6.13. Termination Fee.......................................................................37
Section 6.14. Tax Treatment.........................................................................37
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Section 6.15. Assumption of Certain Obligations.....................................................37
Section 6.16. No Action.............................................................................37
Section 6.17. Employment Agreements Undertaking........................................................37
Section 6.18. Cash Infusion............................................................................37
ARTICLE VII CLOSING CONDITIONS..................................................................................38
Section 7.1. Conditions to Obligations of AGNU, Parent and Virbac to Effect the
Merger.........................................................................................38
(a) Stockholder Approval..................................................................38
(b) No Order..............................................................................38
(c) Regulatory Approvals..................................................................38
(d) Third Party Consents..................................................................38
(e) Tax Opinion of Virbac's Counsel.......................................................38
(f) Non-Competition Agreement.............................................................39
Section 7.2. Additional Conditions to Obligations of AGNU..........................................39
(a) Representations and Warranties........................................................39
(b) Agreements and Covenants..............................................................39
(c) No Material Adverse Effect............................................................39
(d) Cash Infusion by Parent...............................................................39
(e) Fairness Opinion......................................................................39
(f) Supply Agreement......................................................................40
Section 7.3. Additional Conditions to Obligations of Parent and Virbac.............................40
(a) Representations and Warranties........................................................40
(b) Agreements and Covenants..............................................................40
(c) No Material Adverse Effect............................................................40
(d) Stockholders' Agreements..............................................................40
ARTICLE VIII POST-CLOSING COVENANTS.............................................................................40
Section 8.1. Stock Repurchase......................................................................40
Section 8.2. Contingent Stock Repurchase...........................................................40
(a) Contingent Repurchase.................................................................40
(b) Contingent Capital Contribution.......................................................41
(c) Adjustments...........................................................................41
(d) Board Discretion......................................................................41
Section 8.3. Minority Stockholder Director Nominee.................................................41
Section 8.4. Release of VBSA Guarantee.............................................................42
Section 8.5. Fiscal Year of Surviving Corporation..................................................42
Section 8.6. Further Assurances....................................................................42
ARTICLE IX REGISTRATION RIGHTS..................................................................................42
Section 9.1. Demand Registration...................................................................42
Section 9.2. Indemnification by the Surviving Corporation..........................................43
Section 9.3. Indemnification by Parent.............................................................44
Section 9.4. Notices of Claims, Etc................................................................44
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Section 9.5. Other Indemnification.................................................................45
Section 9.6. Contribution..........................................................................45
Section 9.7. Registration Covenants of the Surviving Corporation...................................45
Section 9.8. Expenses..............................................................................48
Section 9.9. Rule 145..............................................................................48
Section 9.10. Limitation on Requirement to File or Amend Registration Statement.....................48
ARTICLE X TERMINATION, AMENDMENT AND WAIVER.....................................................................49
Section 10.1. Termination...........................................................................49
Section 10.2. Effect of Termination.................................................................51
Section 10.3. Amendment, Extension and Waiver.......................................................51
ARTICLE XI GENERAL PROVISIONS...................................................................................51
Section 11.1. Nonsurvival of Representations, Warranties and Agreements.............................51
Section 11.2. Notices...............................................................................52
Section 11.3. Certain Definitions...................................................................53
Section 11.4. Headings..............................................................................54
Section 11.5. Entire Agreement......................................................................54
Section 11.6. Severability..........................................................................55
Section 11.7. No Third Party Beneficiaries..........................................................55
Section 11.8. Governing Law.........................................................................55
Section 11.9. Disclosure Schedules..................................................................55
Section 11.10. Counterparts..........................................................................55
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Exhibit A Restated Certificate of Incorporation of AGNU
Exhibit B Restated Bylaws of AGNU
Exhibit C Virbac Affiliate Agreement
Exhibit D VBSA Affiliate Agreement
Exhibit E Addendum to Agreement
Exhibit F Employment Agreements Undertaking
Exhibit G Noncompetition Agreement
Exhibit H Supply Agreement
Exhibit I Form of Stockholder's Agreement
Exhibit J Opinion of Environmental Counsel of AGNU
Schedule 1.6 Directors of Surviving Corporation
Schedule 1.7 Officers of Surviving Corporation
Schedule 7.3 Parties to Stockholders' Agreements
Appendix A Virbac Disclosure Schedule
Appendix B AGNU Disclosure Schedule
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TABLE OF DEFINED TERMS
Term Location
Acquisition Agreement 6.9(b)
Acquisition Proposal 6.9(e)
Affiliate 11.3(a)
AGNU Preamble
AGNU 1997 l0-K 4.13(a)
AGNU Benefit Plans 4.10(a)
AGNU Common Stock 2.1
AGNU Compensation Agreements 4.10(a)
AGNU Disclosure Schedule Article IV
AGNU Fairness Opinion 5.3(c)
AGNU Intellectual Property 4.19
AGNU Options 2.2
AGNU Pension Plans 4.10(b)
AGNU Permits 4.12
AGNU Preferred Stock 4.3
AGNU Required Consents 4.5
AGNU SEC Documents 4.6
AGNU Stockholders' Meeting 3.9
AGNU Stockholder Approval 4.4
AGNU's Systems 4.20(a)
AGNU Termination Breach 10.1(c)
Agreement Preamble
Bargaining Agreements 10.1(j)
Blue Sky Laws 11.3(b)
Broker Fee 3.5
Business Day 11.3(c)
Cash Infusion 6.18
Certificate of Merger 1.2
Claim 6.7(a)
Closing 1.3
Closing Date 1.3
Code Recitals
Confidentiality Agreement 11.1
Constituent Corporations 1.1
Contingent Contribution 8.2(b)
Contingent Period 8.2(a)
Contingent Price 8.2(a)
Contingent Repurchase 8.2(a)
Control 11.3(d)
Controlled by 11.3(d)
DGCL Recitals
Drug Regulatory Agency 3.21(a)
Effective Time 1.2
Environmental Law 3.18
Environmental Permits 3.18
EPA 3.21(a)
ERISA 3.10(b)
Exchange Act 3.5
FDA 3.21(a)
GAAP 3.6
Governmental Entity 3.5
Hazardous Substance 3.18
HSR Act 3.5
Indemnified Party 6.7(a)
Liens 3.2
Material Adverse Effect 11.3(e)
Merger Recitals
Merger Shares 2.1
Merger Sub 1.8
Order 10.1(d)
Ordinary Course of Business 11.3(f)
Parent Recitals
Person 11.3(g)
Proxy Statement 3.9
Registrable Securities 9.1(e)
Registration Demand 9.1(a)
Registration Statement 9.7(a)
Representatives 6.1
Repurchase Price 8.2(a)
SEC 4.6
Securities Act 3.5
Share Adjustment 2.2
Stock Repurchase 8.1
Subsidiary 11.3(h)
Superior Proposal 6.9(e)
Surviving Corporation 1.1
Surviving Corporation Bylaws 1.5(b)
Surviving Corporation Certificate 1.5(a)
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Termination Date 10.1(h)
Termination Fee 6.13
under Common Control with 11.3(d)
USDA 3.21(a)
VBSA Preamble
Virbac Preamble
Virbac Benefit Plans 3.10(a)
Virbac Compensation Agreements 3.10(a)
Virbac Debt 6.18
Virbac Disclosure Schedule Article III
Virbac Financial Statements 3.6
Virbac Intellectual Property 3.19
Virbac Material Contracts 3.16
Virbac Pension Plans 3.10(b)
Virbac Permits 3.12
Virbac Required Approvals 3.5
Virbac Stockholders 2.1
Virbac's Systems 3.20(a)
Virbac Termination Breach 10.1(b)
Year 2000 Compliant 3.20(c)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October
16, 1998, among Agri-Nutrition Group Limited, a Delaware corporation ("AGNU"),
Virbac S.A., a French corporation ("VBSA"), and Virbac, Inc., a Delaware
corporation ("Virbac").
WHEREAS, the respective Boards of Directors of AGNU and Virbac deem it
advisable, consistent with their respective long-term business strategies and in
the best interests of their respective stockholders, that Virbac merge with and
into AGNU, or at Virbac's sole discretion a newly formed subsidiary of AGNU (the
"Merger"), pursuant to the terms and subject to the conditions set forth in this
Agreement and in accordance with the Delaware General Corporation Laws (the
"DGCL"), and such Boards of Directors have approved the Merger and this
Agreement;
WHEREAS, for federal income tax purposes, it is intended that the
Merger will qualify as a tax-free reorganization pursuant to Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement
is intended to be and is hereby adopted as a plan of reorganization;
WHEREAS, as promptly as possible after the date hereof VBSA will form a
direct or indirect wholly owned subsidiary, which will be incorporated under the
laws of France or another jurisdiction selected by VBSA ("Parent") for the
purpose of holding the shares of AGNU to be issued in the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, AGNU, VBSA and Virbac hereby agree as
follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, at the Effective
Time (as defined in Section 1.2), AGNU and Virbac will consummate the Merger. At
the Effective Time, Virbac will be merged with and into AGNU, the separate
corporate existence of Virbac will cease, AGNU will continue as the surviving
corporation (AGNU and Virbac are sometimes referred to herein as the
"Constituent Corporations" and AGNU is sometimes referred to herein as the
"Surviving Corporation") and AGNU will succeed to and assume all the rights and
obligations of Virbac in accordance with the DGCL. Following consummation of the
Merger, the Surviving Corporation will change its name to "Virbac Corporation."
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Section 1.2. Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
will cause the Merger to be consummated by filing a certificate of merger (the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL, together with any required related certificates, with the Secretary of
State of the State of Delaware in such form as required by the DGCL and in such
form as approved by Virbac and AGNU prior to such filing. The Merger will become
effective (the "Effective Time") at the time the original, properly executed
Certificate of Merger is accepted for filing by the office of the Secretary of
State of the State of Delaware in accordance with the DGCL or at such other time
which the parties hereto agree upon and designate in the Certificate of Merger
as the Effective Time. AGNU will submit a Certificate of Merger for filing at
the time of the Closing and may submit a draft thereof prior thereto for
pre-clearance.
Section 1.3. Closing. Upon the terms and subject to the conditions of
this Agreement, the closing of the Merger (the "Closing") will take place at a
time, on a date and at a place to be mutually agreed by AGNU and Virbac or,
failing such agreement, on the second Business Day after satisfaction or waiver
of the conditions set forth in Article VII (the "Closing Date").
Section 1.4. Effects of the Merger. The Merger has the effects set
forth in this Agreement, the Certificate of Merger and the applicable provisions
of the DGCL.
Section 1.5. Certificate of Incorporation and Bylaws. At the Effective
Time:
(a) The Restated Certificate of Incorporation of AGNU will be
amended and restated in its entirety to read as set forth in Exhibit A
attached hereto and, as so amended and restated, will be the
certificate of incorporation of the Surviving Corporation (the
"Surviving Corporation Certificate") until amended in accordance with
the terms thereof and applicable law.
(b) The By-Laws of AGNU will be amended and restated in their
entirety to read as set forth in Exhibit B attached hereto and, as so
amended and restated, will be the bylaws of the Surviving Corporation
(the "Surviving Corporation Bylaws") until amended in accordance with
the terms thereof and applicable law.
Section 1.6. Directors. All of the directors of AGNU will resign
effective as of the Effective Time. The number of directors to serve on the
Board of Directors of the Surviving Corporation as of the Effective Time will be
five, the members of each class of which will be the individuals set forth on
Schedule 1.6 hereto. The individual who will serve as Chairman of the Board of
Directors of the Surviving Corporation will be designated by Virbac. Such
individuals will hold office from the Effective Time until his or her successor
is duly appointed and qualified or until his or her earlier death, resignation
or removal in accordance with the Surviving Corporation Certificate and
Surviving Corporation Bylaws.
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Section 1.7. Officers. The officers of the Surviving Corporation will
be the individuals to be set forth on Schedule 1.7 by Virbac. Such individuals
will hold office from the Effective Time until his or her successor is duly
appointed and qualified or until his or her earlier death, resignation or
removal in accordance with the Surviving Corporation Certificate and Surviving
Corporation Bylaws.
Section 1.8. Alternative Structure. Virbac may elect in its sole
discretion to effect the Merger with a newly formed wholly owned subsidiary of
AGNU ("Merger Sub"), with either Virbac or Merger Sub as the "Surviving
Corporation", in which event AGNU agrees to form Merger Sub, change AGNU's name
to "Virbac Corporation" and execute, deliver an file such further documents and
do all acts necessary, desirable or proper to effect such structure.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1. Effect on Capital Stock. At the Effective Time and without
any action on the part of AGNU, Parent, Virbac or any holders of shares of the
Constituent Corporations, all of the issued and outstanding shares of Virbac
Common Stock immediately prior to the Effective Time will be automatically
converted into the right to receive that number of duly authorized, validly
issued, fully paid and nonassessable shares (the "Merger Shares") of the common
stock, par value $.01 per share, of AGNU (the "AGNU Common Stock"), equal to the
product of (a) the difference between (i) the number of shares of AGNU Common
Stock issued and outstanding immediately prior to the Effective Time and (ii)
1,000,000 and (b) 1.5. All of the shares of Virbac Common Stock to be converted
into AGNU Common Stock pursuant to this Section 2.1 will cease to be
outstanding, will automatically be canceled and retired and will cease to exist
as of the Effective Time. At the Closing, AGNU will deliver or cause to be
delivered to the holders of Virbac Common Stock (the "Virbac Stockholders")
stock certificates of AGNU representing such Virbac Stockholders' proportionate
amount of Merger Shares.
Section 2.2. Adjustments of Parent's Share Ownership in AGNU. After the
Effective Time and until the final Share Adjustment (as defined below) is made
following the expiration, termination or exercise of all options (the "AGNU
Options") to purchase AGNU Common Stock that are outstanding as of the Effective
Time, AGNU will, contemporaneously with the issuance of AGNU Common Stock upon
the exercise of an AGNU Option or pursuant to that certain Agreement and Plan of
Merger dated as of July 16, 1997 among AGNU, Mardel Acquisition Corporation and
Mardel Laboratories, Inc., issue to Parent (a "Share Adjustment") an additional
number of shares of AGNU Common Stock, if any, equal to the product of (a) the
aggregate number of shares of AGNU Common Stock issued upon the exercise of such
AGNU Option and (b) 1.5.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND VIRBAC
Subject to the exceptions set forth and identified in the disclosure
schedule attached hereto as Appendix A (the "Virbac Disclosure Schedule"),
Parent and Virbac represent and warrant to AGNU as follows:
Section 3.1. Organization and Authority. Each of Virbac and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now being
conducted. Each of Virbac and its Subsidiaries is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary (each of which jurisdictions is
identified in Item 3.1 of the Virbac Disclosure Schedule) other than in such
jurisdictions where the failure to be so qualified or licensed or to be in good
standing would not, in the aggregate, have a Material Adverse Effect (as defined
in Section 11.3(e). Virbac has delivered to AGNU complete and correct copies of
its certificate of incorporation and bylaws, in each case, as in effect on the
date hereof.
Section 3.2. Subsidiaries. Item 3.2 of the Virbac Disclosure Schedule
lists each direct and indirect Subsidiary of Virbac. Except as set forth in Item
3.2 of the Virbac Disclosure Schedule, all the outstanding shares of capital
stock of each Subsidiary are owned, directly or indirectly, by Virbac, free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens"), and are duly
authorized, validly issued, fully paid and nonassessable. Except for the capital
stock of its Subsidiaries and except as otherwise indicated in Item 3.2 of the
Virbac Disclosure Schedule, Virbac does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership, joint
venture or other entity.
Section 3.3. Capitalization. As of the date of this Agreement, the
authorized capital stock of Virbac consists of 10,000,000 shares of Virbac
Common Stock. At the close of business on October 16, 1998, (i) 8,399,810 shares
of Virbac Common Stock were issued and outstanding and (ii) no shares of Virbac
Common Stock were held by Virbac in its treasury. Except as set forth above, as
of October 16, 1998, no shares of capital stock or other voting securities of
Virbac are issued, reserved for issuance or outstanding. Of the issued and
outstanding shares of capital stock of Virbac, 8,346,347 shares of Virbac Common
Stock are owned by VBSA (and, upon formation of Parent, will be owned by Parent)
and 53,463 shares of Virbac Common Stock are owned by Mr. Roger D. Brandt. All
outstanding shares of Virbac Common Stock are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of Virbac having the right to
vote (or convertible into, or exercisable or exchangeable for, securities having
the right to vote) on any matters on which stockholders of Virbac may vote. As
of the date hereof, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Virbac or any of its Subsidiaries is a party or by which any of them is bound
4
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obligating Virbac or any of its Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or other
voting securities of Virbac or of any of its Subsidiaries or obligating Virbac
or any of its Subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no outstanding
contractual obligations of Virbac or any of its Subsidiaries to vote or to
dispose of any shares of the capital stock of any of Virbac's Subsidiaries.
Section 3.4. Authorization. Virbac 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 and the consummation by Virbac of the Merger and of the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Virbac and no other corporate proceedings on the
part of Virbac are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Virbac and, assuming this Agreement constitutes a valid and binding
obligation of AGNU, constitutes a valid and binding obligation of Virbac,
enforceable against Virbac in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity.
Section 3.5. Consent and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), the Securities Act of 1933 (the
"Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), the
AGNU Stockholder Approval, applicable requirements of the National Association
of Securities Dealers or the Nasdaq, foreign laws, the filing of the Certificate
of Merger and any required related certificates under the DGCL, and the other
matters referred to in Item 3.5 of the Virbac Disclosure Schedule (collectively,
the "Virbac Required Approvals"), neither the execution, delivery or performance
of this Agreement by Virbac nor the consummation by Virbac of the transactions
contemplated hereby will (i) conflict with or result in the breach of any
provision of the certificate of incorporation or bylaws of Virbac, (ii) require
any permit, authorization, consent or approval of, or any filing with, any
federal, state or local government or any court, tribunal, administrative agency
or commission or other governmental or other regulatory authority or agency,
domestic or foreign (a "Governmental Entity"), except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings would not have, individually or in the aggregate, a Material Adverse
Effect, (iii) result in a violation or breach of, or constitute, with or without
due notice or lapse of time or both, a default, or give rise to any right of
termination, amendment, cancellation or acceleration under, any of the material
terms, conditions or provisions of any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession, franchise, license, contract,
agreement or other instrument or obligation to which Virbac or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Virbac, any of its Subsidiaries or any
of their
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respective properties or assets, except in the case of clauses (iii) or (iv) for
violations, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 3.6. Financial Statements. Virbac has heretofore made available
to AGNU true and complete copies of the following financial statements of Virbac
(the "Virbac Financial Statements"): (i) audited balance sheet as of December
31, 1997 and related notes thereto, (ii) audited statement of operations for the
two years ended December 31, 1997 and December 31, 1996, and related notes
thereto, (iii) audited statement of cash flows for the two years ended December
31, 1997 and December 31, 1996, and related notes thereto, (iv) unaudited
balance sheet as of August 31, 1998 and (v) the unaudited statement of
operations for the eight months ended August 31, 1998. The Virbac Financial
Statements, as of the respective dates thereof, (i) complied as to form in all
material respects with applicable accounting requirements, (ii) have been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved and (iii) fairly
present (subject, in the case of the unaudited statements, to normal, recurring,
year-end audit adjustments) the consolidated financial position of Virbac and
its consolidated Subsidiaries as at the dates thereof and the consolidated
results of their operations and cash flows for the periods indicated therein.
The unaudited financial statements by Virbac referred to in this Section 3.6 are
attached hereto as Item 3.6 of the Virbac Disclosure Schedule, provided however,
that Virbac will make available to AGNU, by October 30, 1998, true and complete
copies of an unaudited statement of cash flows for the eight months ended August
31, 1998, which shall then be deemed to be included in the Virbac Financial
Statements.
Section 3.7. Absence of Certain Changes or Events. Except as set forth
in Item 3.7 of the Virbac Disclosure Schedule, since December 31, 1997, Virbac
and its Subsidiaries have conducted their respective businesses only in the
Ordinary Course of Business, and there has not been, in the aggregate, (1) any
changes that have had a Material Adverse Effect, (2) any declaration, setting
aside or payment of any dividend or other distribution with respect to its
capital stock or any redemption, purchase or other acquisition of any of its
capital stock, (3) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any
capital stock or any options, warrants, rights or other securities in respect
of, in lieu of or in substitution for, shares of its capital stock, (4) (A) any
granting by Virbac or any of its Subsidiaries to any officer or employee of
Virbac or any of its Subsidiaries of any increase in compensation, except in the
Ordinary Course of Business, including in connection with promotions consistent
with past practice or as was required under employment agreements in effect as
of December 31, 1997, (B) any granting by Virbac or any of its Subsidiaries to
any such officer or employee of any increase in severance or termination pay,
except as was required under employment, severance or termination agreements in
effect as of December 31, 1997 and previously made available to AGNU, or (C) any
entry by Virbac or any of its Subsidiaries into any employment, severance or
termination agreement with any such officer or employee, (5) any event,
circumstance, damage, destruction or loss, whether or not covered by insurance,
that has, or reasonably could be expected to have, a Material Adverse Effect,
(6) any revaluation by Virbac of any of its material assets that has, or
reasonably could be expected to have, a Material Adverse Effect in the
aggregate, (7) any material change in
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accounting methods, principles or practices by Virbac or (8) any adoption,
amendment or termination of any bonus, profit sharing, incentive, severance or
other plan, contract or commitment for the benefit of any of its directors,
officers or employees.
Section 3.8. No Undisclosed Liabilities. Except as set forth in the
Virbac Financial Statements or in Item 3.8 of the Virbac Disclosure Schedule,
neither Virbac nor any of its Subsidiaries has any material liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise.
Since December 31, 1997, except for liabilities incurred by Virbac or its
Subsidiaries in the Ordinary Course of Business, neither Virbac nor any of its
Subsidiaries has incurred any material liabilities of any nature, whether or not
accrued, contingent or otherwise, and that in the aggregate would be reasonably
expected to have a Material Adverse Effect.
Section 3.9. Proxy Statement. None of the information supplied or to be
supplied by Virbac specifically for inclusion or incorporation by reference in
the Proxy Statement (the "Proxy Statement"), will, at the time the Proxy
Statement is first mailed to the stockholders of AGNU and at the time of the
special meeting of stockholders of AGNU (the "AGNU Stockholders' Meeting")
called for the purpose of approving the Merger and the issuance of the Merger
Shares, 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. Notwithstanding the foregoing, no representation or warranty is made
by Virbac with respect to statements made or incorporated by reference therein
based on information supplied by AGNU specifically for inclusion or
incorporation by reference in the Proxy Statement.
Section 3.10. Benefit Plans.
(a) Except as disclosed in Item 3.10(a) of the Virbac
Disclosure Schedule, since December 31, 1997, there has not been any
adoption or amendment in any material respect by Virbac or any of its
Subsidiaries of any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, restricted stock, phantom stock, retirement, severance,
disability, hospitalization, medical or other plan, arrangement or
understanding providing benefits to any current or former employee,
officer or director of Virbac or any of its Subsidiaries (collectively,
"Virbac Benefit Plans"). Except as disclosed in Item 3.10(a) of the
Virbac Disclosure Schedule, there exist no employment, consulting,
severance, change in control, termination, rabbi trust or
indemnification agreements, arrangements or understandings between
Virbac or any of its Subsidiaries and any current or former employee,
officer or director of Virbac or any of its Subsidiaries (collectively,
"Virbac Compensation Agreements").
(b) Item 3.10(b) of the Virbac Disclosure Schedule contains a
list of all "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (sometimes referred to herein as "Virbac Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
and all other Virbac Benefit Plans maintained, or contributed to, by
Virbac or
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any of its Subsidiaries for the benefit of any current or former
employees, officers or directors of Virbac or any of its Subsidiaries.
Virbac has delivered to AGNU true, complete and correct copies of (i)
each Virbac Benefit Plan (or, in the case of any unwritten Virbac
Benefit Plans, descriptions thereof) and all amendments thereto, (ii)
the most recent annual report on Form 5500 filed with the Internal
Revenue Service with respect to each Virbac Benefit Plan (if any such
report was required), (iii) the most recent summary plan description
for each Virbac Benefit Plan for which such summary plan description is
required, (iv) each trust agreement and group annuity contract relating
to any Virbac Benefit Plan and (v) each Compensation Agreement (or in
the case of any unwritten Virbac Compensation Agreements, descriptions
thereof) and all amendments thereto.
(c) Except as disclosed in Item 3.10(b) of the Virbac
Disclosure Schedule, all Virbac Pension Plans intended to qualify under
the Code have been the subject of determination letters from the
Internal Revenue Service to the effect that such Virbac Pension Plans
are qualified under Section 401(a) of the Code, and no such
determination letter has been revoked nor, to the best knowledge of
Virbac, has revocation been threatened, nor has any such Virbac Pension
Plan been amended since the date of its most recent determination
letter in any respect that would adversely affect its qualification.
Except as disclosed in Item 3.10(a) of the Virbac Disclosure Schedule,
there is no material pending or, to Virbac's knowledge, threatened
litigation relating to any of the Virbac Benefit Plans or the Virbac
Compensation Agreements.
(d) No Virbac Pension Plan is subject to Title IV of ERISA.
None of Virbac, any of its Subsidiaries, any officer of Virbac or, to
the knowledge of Virbac, any trustee or administrator of an Virbac
Benefit Plan that is subject to ERISA, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) or any other breach of fiduciary
responsibility involving such Virbac Benefit Plan that could subject
Virbac, any of its Subsidiaries or any officer of Virbac or any of its
Subsidiaries to any material tax or penalty on prohibited transactions
imposed by such Section 4975 or to any material liability under Section
502(i) or (1) of ERISA.
(e) With respect to any Virbac Benefit Plan that is an
employee welfare benefit plan, except as disclosed in Item 3.10(b) of
the Virbac Disclosure Schedule, (i) no such Virbac Benefit Plan is
unfunded or funded through a "welfare benefits fund," as such term is
defined in Section 419(e) of the Code, (ii) each such Virbac Benefit
Plan that is a "group health plan," as such term is defined in Section
5000(b)(1) of the Code, complies in all material respects with the
applicable requirements of Section 4980B(f) of the Code and (iii) each
such Virbac Benefit Plan (including any such Plan covering retirees or
other former employees) may be amended or terminated without material
liability to Virbac or any of its Subsidiaries at any time. Except as
disclosed in Item 3.10(b) of the Virbac Disclosure Schedule, there has
been no written or, to Virbac's knowledge, oral communication to
employees by Virbac or any of its Subsidiaries that
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would reasonably be expected to promise or guarantee such employees
retiree health or life insurance or other retiree death benefits on a
permanent basis.
(f) Except as disclosed in Item 3.10(f) of the Virbac
Disclosure Schedule, the consummation of the transactions contemplated
by this Agreement will not (i) entitle any employees of Virbac or any
of the Subsidiaries to severance pay, (ii) accelerate the time of
payment or vesting or trigger any payment of compensation or benefits
under, or increase the amount payable or trigger any other material
obligation pursuant to, any of the Virbac Benefit Plans or the Virbac
Compensation Agreements or (iii) result in any material breach or
violation of, or a default under, any of the Virbac Benefit Plans or
the Virbac Compensation Agreements.
Section 3.11. Litigation. Except as set forth in Item 3.11 of the
Virbac Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the best knowledge of Virbac, threatened against
Virbac or any of its Subsidiaries that could reasonably be expected to have,
directly or indirectly or in the aggregate, a Material Adverse Effect. Except as
set forth in Item 3.11 of the Virbac Disclosure Schedule, neither Virbac nor any
of its Subsidiaries is subject to any outstanding order, writ, injunction or
decree that could reasonably be expected to have, directly or indirectly, in the
aggregate, a Material Adverse Effect.
Section 3.12. Compliance with Applicable Law. Except as disclosed in
Item 3.12 of the Virbac Disclosure Schedule, Virbac and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders, concessions, franchises
and approvals of all Governmental Entities necessary to own or lease their
respective assets and to conduct their respective businesses (the "Virbac
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders, concessions, franchises and approvals that would not, in the
aggregate, have a Material Adverse Effect. Virbac and its Subsidiaries are in
compliance with the terms of the Virbac Permits, except where the failure so to
comply would not have a Material Adverse Effect. Except as disclosed in Item
3.12 of the Virbac Disclosure Schedule, to the best knowledge of Virbac and its
Subsidiaries, Virbac and its Subsidiaries are in compliance with all laws,
ordinances or regulations of any Governmental Entity, except for such possible
violations or failures of compliance that would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Item 3.12 of the Virbac Disclosure Schedule, as of the date of this Agreement,
to the best knowledge of Virbac or any of its Subsidiaries, no investigation or
review by any Governmental Entity with respect to Virbac or any of its
Subsidiaries is pending, threatened, nor has any Governmental Entity indicated
an intention to conduct any such investigation or review, other than, in each
case, those the outcome of which would not be reasonably expected, in the
aggregate, to have a Material Adverse Effect.
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Section 3.13. Tax Matters. Except as set forth in Item 3.13 of the
Virbac Disclosure Schedule:
(a) Each of Virbac and its Subsidiaries has filed all tax
returns and reports required to be filed by it, or requests for
extensions to file such returns or reports have been timely filed and
granted and have not expired, and all tax returns and reports are
complete and accurate in all respects, except to the extent that such
failures to file or be complete and accurate in all respects, as
applicable, individually or in the aggregate, would not have a Material
Adverse Effect on Virbac. Virbac and each of its Subsidiaries has paid
(or Virbac has paid on its behalf) or made provision for all taxes
shown as due on such tax returns and reports. No claim has been made
since December 31, 1997 by an authority in a jurisdiction where Virbac
or any of its Subsidiaries does not file tax returns that it is or may
be subject to taxation by that jurisdiction. The most recent financial
statements of Virbac reflect adequate reserves for all taxes payable by
Virbac and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements, and no
deficiencies for any taxes have been proposed, asserted or assessed
against Virbac or any of its Subsidiaries that are not adequately
reserved for, except for inadequately reserved taxes and inadequately
reserved deficiencies that would not, individually or in the aggregate,
have a Material Adverse Effect on Virbac. There are no liens for taxes
(other than for current taxes not yet due and payable) on the assets of
Virbac or its Subsidiaries. No requests for waivers of the time to
assess any taxes against Virbac or any of its Subsidiaries have been
granted or are pending, except for requests with respect to such taxes
that have been adequately reserved for in the most recent financial
statements of Virbac, or, to the extent not adequately reserved, the
assessment of which would not, individually or in the aggregate, have a
Material Adverse Effect on Virbac. Neither Virbac nor any of its
Subsidiaries is a party to or bound by any agreement providing for the
allocation or sharing of taxes. Neither Virbac nor any of its
Subsidiaries has filed a consent pursuant to or agreed to the
application of Section 341(f) of the Code. Each of Virbac and its
Subsidiaries has disclosed on its federal income tax returns all
positions taken therein that could give rise to a substantial
understatement of federal income tax within the meaning of Section 6662
of the Code. All taxes that are required by the laws of the United
States, any state or political subdivision thereof, or any foreign
country to be withheld or collected by Virbac or any of its
Subsidiaries have been duly withheld or collected and, to the extent
required, have been paid to the proper governmental authorities or
properly deposited as required by applicable laws. None of Virbac and
its Subsidiaries (i) has been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common
parent of which was Virbac), or (ii) has any liability for the taxes of
any person (other than any of Virbac and its Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract or otherwise. For purposes of this Agreement, the term tax
(including, with correlative meaning, the terms "taxes" and "taxable")
will include all federal, state, local, and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, property,
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withholding, excise, and other taxes, duties, or assessments of any
nature whatsoever, together with all interest, penalties, and additions
imposed with respect to such amounts.
(b) No claim has been made since August 31, 1998 by an
authority in a jurisdiction where Virbac or any of its Subsidiaries
does not pay sales and/or use taxes that it is or may be subject to a
requirement to remit such taxes in that jurisdiction. Since August 31,
1998 Virbac and its Subsidiaries have collected and/or remitted any
sales and/or use taxes required to be collected and/or remitted by all
states in which Virbac or its Subsidiaries conduct business activities,
except to the extent that a failure to collect and/or remit such sales
and/or use taxes would not have a Material Adverse Effect on Virbac.
(c) None of the compensation paid by Virbac since January 1,
1997, and none of the compensation, if any, that may be payable as a
result of the Merger will be subject to the limitations set forth in
Section 162(m) of the Code.
(d) No amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or
director of Virbac or any of its Subsidiaries who is a "disqualified
individual" (as such term is defined in Section 280G(c) of the Code or
proposed Treasury Regulation Section 1.280G-1) under any Virbac
Compensation Agreement or Virbac Benefit Plan currently in effect would
be an "excess parachute payment" (as such term is defined in Section
280G(b)(l) of the Code).
(e) Virbac is not aware of any circumstance or event that is
reasonably likely to prevent the Merger from being treated as a
tax-free reorganization pursuant to Section 368(a) of the Code.
Section 3.14. Customer Warranties. Except as disclosed in Item 3.14 of
the Virbac Disclosure Schedule, there are no pending, nor are there to the best
knowledge of Virbac any threatened, material claims under or pursuant to any
warranty, whether expressed or implied, on products or services sold prior to
the date of this Agreement by Virbac or any of its Subsidiaries. Item 3.14 of
the Virbac Disclosure Schedule identifies all such claims asserted from December
31, 1997 to the date of this Agreement and describes the resolution or status of
each such claim.
Section 3.15. Brokers. No broker, investment banker, financial advisor
or other Person other than Fountain Agricounsel, LCC, whose fee (the "Broker
Fee") will be paid by Virbac, 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
Virbac. A true and complete copy of Virbac's engagement letter with Fountain
Agricounsel, LCC is set forth as Item 3.15 of the Virbac Disclosure Schedule.
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Section 3.16. Material Contracts. Item 3.16 to this Agreement
constitutes a complete and accurate list of each of the following contracts or
agreements, whether oral or written, express or implied, to which Virbac or any
of its Subsidiaries is a party, or by which Virbac or any of its Subsidiaries
may be bound involving the payment of (a) any note, bond, mortgage or other
instrument which evidences or secures indebtedness of Virbac with a balance
outstanding of $25,000 or more, which cannot be redeemed or prepaid at the
option of Virbac for an amount which, when added to the outstanding principal
balance, would be less than $50,000, (b) any lease of real or personal property,
or any sublease of real property, by Virbac, as lessee, pursuant to which Virbac
reasonably anticipates the payment of aggregate rent, taxes, insurance,
utilities (if applicable) and other charges in excess of $25,000 over the
remaining term of the lease, exclusive of all optional renewal periods and
optional extensions of the term (provided, however, that any such lease will not
be deemed a Virbac Material Contract in the event Virbac has the contractual
right to terminate the lease in question on 30 days' notice or less, without
incurring a penalty or premium in excess of $50,000), or (c) any lease of real
or personal property, or any sublease of real property, by Virbac, as lessor,
pursuant to which Virbac reasonably anticipates the collection of aggregate rent
in excess of $50,000 over the remaining term of the lease, exclusive of all
optional renewal periods and extensions of the term (provided, however, that any
such lease will not be deemed a Virbac Material Contract in the event Virbac has
the contractual right to terminate the lease in question on 30 days' notice or
less without incurring a penalty or premium in excess of $25,000 (the "Virbac
Material Contracts"). True and correct copies of the Virbac Material Contracts
and any agreements or amendments thereto have been made available for review by
AGNU. None of the Virbac Material Contracts is currently subject to
renegotiation or other adjustment of its terms either in whole or in part. None
of Virbac or its Subsidiaries is in default under any contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it
is a party, by which its respective assets, business or operations may be bound
or affected, or under which it or any of its respective assets, business or
operations receives benefits, which default, in the aggregate, is reasonably
likely to have a Material Adverse Effect, and there has not occurred any event
that, with lapse of time or giving of notice or both, would constitute such a
default. Except as disclosed in Item 3.16 of the Virbac Disclosure Schedule,
neither Virbac nor any of its Subsidiaries is subject to, or bound by, any
contract containing covenants which (i) limit the ability of Virbac or any of
its Subsidiaries to compete in any line of business or against any Person or
entity, or (ii) involve any restriction of the method by which, or the
geographical area in which, Virbac or any of its Subsidiaries may carry on its
business, other than as may be required by law or any applicable Governmental
Entity.
Section 3.17. Labor Matters. Neither Virbac nor any of its Subsidiaries
is a party to, or is bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is Virbac or any of its Subsidiaries the subject of a proceeding asserting that
it or any such Subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel it or such
Subsidiary to bargain with any labor organization as to wages and conditions of
employment, nor is there any strike or other labor dispute involving Virbac or
any of its Subsidiaries, pending or, to the best of its knowledge, threatened,
nor is it aware of any activity involving its or any of the Subsidiaries'
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employees seeking to certify a collective bargaining unit or engaging in any
other organization activity. Neither Virbac nor any of its Subsidiaries has
been, within the last three years, nor, to the knowledge of Virbac and its
Subsidiaries, are they likely to become the subject of, or involved in, any
investigation, complaint or proceeding by the United States Department of Labor,
the Office of Federal Contract Compliance, the Equal Employment Opportunity
Commission or any similar federal, state or local body dealing with any
employment policies and practices of Virbac or such Subsidiaries or any Person
currently employed by them, except for any such investigation, complaint or
proceeding that, in the aggregate, would not be reasonably likely to have a
Material Adverse Effect.
Section 3.18. Environmental Matters. Except as set forth in Item 3.18
of the Virbac Disclosure Schedule and except for matters which are not
reasonably likely, in the aggregate, to have a Material Adverse Effect: (i)
neither the businesses of Virbac and its Subsidiaries nor the operation thereof
violates any applicable environmental law and no condition or event has occurred
which, with notice or the passage of time or both, would constitute a violation
of any Environmental Law; (ii) Virbac and each of its Subsidiaries are in
possession of all permits required under any applicable Environmental Law
("Environmental Permits") for the conduct or operation of the businesses of
Virbac and each of its Subsidiaries, (iii) Virbac and each of its Subsidiaries
are in compliance in all material respects with all of the requirements and
limitations included in the Environmental Permits, (iv) none of Virbac or any of
its Subsidiaries has stored or used any Hazardous Substance; (v) neither Virbac
nor any of its Subsidiaries has received any written notice, demand letter,
claim or request for information alleging any violation of, or liability under,
any Environmental Law; and (vi) none of Virbac or any of its Subsidiaries has
buried, dumped, disposed, spilled or released any pollutants, contaminants or
hazardous wastes, substances or materials on, beneath or adjacent to any of its
property or any property adjacent thereto.
As used herein, the term "Environmental Law" means any federal, state
or local law, regulation, order, decree, permit, authorization, common law or
agency requirement relating to: (A) the protection of the environment, health,
safety, or natural resources, (B) the handling, use, presence, disposal, release
or threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
indoor air, pollution, contamination or any injury or threat of injury to
persons or property involving any Hazardous Substance. The term "Hazardous
Substance" means any substance in any concentration that is listed, classified
or regulated pursuant to any Environmental Law.
Section 3.19. Virbac Intellectual Property. The term "Virbac
Intellectual Property" means all of Virbac's and its Subsidiaries' (i)
registered or unregistered trademarks and other marks, service marks, trade
names or other trade rights, and pending applications for any such registration,
(ii) rights in or to patents and copyrights and pending applications therefor
and (iii) rights to other trademarks, service marks and other marks, trade names
and other trade rights and all other trade secrets, designs, plans,
specifications, technology, know-how, methods, designs, concepts, and other
proprietary rights, whether or not registered. Except as set forth in Item 3.19
of the Virbac Disclosure Schedule, (a) Virbac and each of its Subsidiaries is
the sole
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owner of and has the exclusive right to use its Virbac Intellectual Property
free from any Liens, (b) no Person has a right to receive a royalty or similar
payment in respect of any Virbac Intellectual Property, whether pursuant to any
contractual arrangements entered into by Virbac or any of its Subsidiaries or
otherwise, (c) to Virbac's knowledge, none of the Virbac Intellectual Property,
nor Virbac's or any of its Subsidiaries' use thereof, infringe or otherwise
violate the rights of any third party, and (d) to Virbac's knowledge, Virbac is
not aware of any infringement or violation of Virbac's or any of its
Subsidiaries' rights in or to the Virbac Intellectual Property by any third
party. Virbac and its Subsidiaries have the exclusive right to use, sell,
license and dispose of, and has the right to bring actions for infringement of,
the Virbac Intellectual Property.
Section 3.20. Year 2000 Issues.
(a) Virbac has conducted an inventory and assessment of all
software, computers, network equipment, technical infrastructure,
production equipment and other equipment and systems that are material
to the operation of the business of Virbac and that rely on, utilize or
perform date or time processing ("Virbac's Systems").
(b) Any failure of any of Virbac's Systems to be Year 2000
Complaint will not cause a Material Adverse Effect.
(c) "Year 2000 Compliant" means the party's system will at all
times: (1) consistently and accurately handle and process date and time
information and data values before, during and after January 1, 2000,
including but not limited to accepting date input, providing date
output, and performing calculations on or utilizing dates or portions
of dates; (2) function accurately and in accordance with its
specifications without interruption, abnormal endings, degradation,
change in operation or other impact, or disruption of other systems,
resulting from processing date or time data with values, before, during
and after January 1, 2000; (3) respond to and process two-digit date
input in a way that resolves any ambiguity as to century; and (4) store
and provide output of date information in ways that are unambiguous as
to century.
Section 3.21. Regulatory Compliance.
(a) To Virbac's knowledge, since the most recent audit, if
any, by the United States Department of Agriculture ("USDA"), Food and
Drug Administration ("FDA"), Environmental Protection Agency ("EPA") or
any other federal, state, local or foreign governmental entity that is
concerned with the safety, efficacy, reliability or manufacturing of
animal health or pharmaceutical products (each, a "Drug Regulatory
Agency"), no act or omission has occurred at Virbac's facilities which
would subject Virbac to noncompliance with the standards of the USDA,
FDA, EPA or any other applicable Drug Regulatory Agency.
(b) Item 3.21 of the Virbac Disclosure Schedule sets forth a
list, for the period between August 31, 1998 and the date hereof, of
(i) all regulatory or warning letters,
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notices of adverse findings and similar letters or notices issued by
the USDA, FDA, EPA or Drug Regulatory Agency, if any, to Virbac or any
of its Subsidiaries that would have a Material Adverse Effect, (ii) all
product recalls, notifications and safety alerts conducted by Virbac or
any of its Subsidiaries, whether or not required by the USDA, FDA or
EPA or Drug Regulatory Agency, and any request from the USDA, FDA, EPA
or any Drug Regulatory Agency requesting Virbac or any of its
Subsidiaries to cease to investigate, test or market any product, which
recalls, notifications, safety alerts or requests would have a Material
Adverse Effect, and (iii) any criminal injunctive, seizure or civil
penalty actions begun or threatened by the USDA, FDA, EPA or any Drug
Regulatory Agency against Virbac or any of its Subsidiaries and known
by Virbac or any of its Subsidiaries and all related consent decrees
issued with respect to Virbac or any of its Subsidiaries. Copies of all
documents referred to in Item 3.21 have been made available to AGNU.
Section 3.22. State Takeover Statutes Inapplicable. As of the date
hereof and at all times on or prior to the Effective Time, Section 203 of the
DGCL is, and will be, inapplicable to the Merger and the transactions
contemplated thereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AGNU
Subject to the exceptions set forth and identified in the disclosure
schedule attached hereto as Appendix B (the "AGNU Disclosure Schedule"), AGNU
represents and warrants to Parent and Virbac as follows:
Section 4.1. Organization and Authority. AGNU is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted. AGNU is duly
qualified or licensed to do business and in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary other
than in such jurisdictions where any failure to be so duly qualified or licensed
and in good standing would not, in the aggregate, have a Material Adverse
Effect. AGNU has delivered to Virbac complete and correct copies of its
certificate of incorporation and bylaws, in each case, as in effect on the date
hereof.
Section 4.2. Subsidiaries. Item 4.2 of the AGNU Disclosure Schedule
lists each direct and indirect Subsidiary of AGNU. Except as set forth in Item
4.2 of the AGNU Disclosure Schedule, all the outstanding shares of capital stock
of each Subsidiary are owned, directly or indirectly, by AGNU, free and clear of
all Liens, and are duly authorized, validly issued, fully paid and
nonassessable. Except for the capital stock of its Subsidiaries and except as
otherwise indicated in Item 4.2 of the AGNU Disclosure Schedule, AGNU does not
own, directly or indirectly, any capital stock or other ownership interest in
any corporation, partnership, joint venture or other entity.
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Section 4.3. Capitalization. The authorized capital stock of AGNU
consists of 20,000,000 shares of AGNU Common Stock and 2,000,000 shares of
preferred stock, par value $.01 per share ("AGNU Preferred Stock"), of AGNU. At
the close of business on October 16, 1998, (i) 9,384,480 shares of the AGNU
Common Stock were issued, (ii) no shares of the AGNU Preferred Stock were issued
and outstanding, (iii) 129,961 shares of AGNU Common Stock were held by AGNU in
its treasury (none of which will be held in Treasury as of the Effective Time),
and (iv) no shares of AGNU Preferred Stock were held by AGNU in its treasury.
Except as set forth above and in Item 4.3 of the AGNU Disclosure Schedule, as of
October 16, 1998, no shares of capital stock or other voting securities of AGNU
are issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of AGNU are duly authorized, validly issued, fully paid and
nonassessable and not issued in violation of any preemptive rights. There are no
bonds, debentures, notes or other indebtedness of AGNU having the right to vote
(or convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which stockholders of AGNU may vote. Attached
to Item 4.3 of the AGNU Disclosure Schedule is a schedule of (i) shares of AGNU
Common Stock reserved for issuance upon exercise of options pursuant to the AGNU
Stock Option Plans and (ii) options to purchase shares of AGNU Common Stock
containing the name of each Optionee, the date of grant, vesting schedule,
exercise price and option termination date.
Section 4.4. Authorization. AGNU has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to the approval and
adoption of this Agreement and the issuance of the Merger Shares pursuant to
this Agreement by the holders of a majority of the votes of the holders of
shares of AGNU Common Stock cast thereon (the "AGNU Stockholder Approval"), to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation by AGNU of the Merger and of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of AGNU and no other corporate proceedings on the
part of AGNU are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by AGNU and, assuming this Agreement constitutes a valid and binding
obligation of Parent and Virbac, constitutes a valid and binding obligation of
AGNU, enforceable against AGNU in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and to general principles of equity.
Section 4.5. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, the HSR
Act, the filing of the Certificate of Merger and any required related
certificate under the DGCL, the laws of other states in which AGNU is
incorporated or qualified to do or is doing business and state takeover laws,
such filings and approvals as may be required under state laws in those
jurisdictions in which Virbac or any of its Subsidiaries is licensed or holds a
permit to engage in business and the other matters referred to in Item 4.5 of
the AGNU Disclosure Schedule (collectively, the "AGNU Required Consents"),
neither the execution, delivery or performance of this Agreement by AGNU nor the
consummation by AGNU of the transactions contemplated hereby will (i) conflict
with or result
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in any breach of any provision of the certificate of incorporation or bylaws of
AGNU, (ii) require any permit, authorization, consent or approval of, or any
filing with, any Governmental Entity, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would not
have, individually or in the aggregate, a Material Adverse Effect, (iii) result
in a violation or breach of, or constitute, with or without due notice or lapse
of time or both, a default, or give rise to any right of termination, amendment,
cancellation or acceleration, under, any of the terms, conditions or provisions
of any loan or credit agreement, note, bond, mortgage, indenture, permit,
concession, franchise, license, lease, contract, agreement or other instrument
or obligation to which AGNU or any of its Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
AGNU, any of its Subsidiaries or any of their properties or assets, except in
the case of clauses (iii) and (iv) for violations, breaches or defaults which
would not, individually or in the aggregate, have a Material Adverse Effect.
Section 4.6. SEC Reports and Financial Statements. AGNU has filed with
the SEC, and has heretofore made available to Virbac, true and complete copies
of all forms, reports, schedules, statements and other documents required to be
filed with the Securities and Exchange Commission (the "SEC") by it since
January 1, 1996 under the Exchange Act or the Securities Act (such forms,
reports, schedules, statements and other documents, including any financial
statements or schedules included therein, are referred to as (the "AGNU SEC
Documents"). Except to the extent revised or superseded by a subsequently filed
AGNU SEC Document, the AGNU SEC Documents, at the time filed, (i) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (ii) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. The financial
statements of AGNU included or incorporated by reference in the AGNU SEC
Documents (i) as of the time filed, complied as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, (ii) have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and (iii) fairly
present (subject, in the case of the unaudited statements, to normal, recurring,
year-end audit adjustments) the consolidated financial position of AGNU and its
consolidated Subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods indicated therein.
Section 4.7. Absence of Certain Changes or Events. Except (i) as
disclosed in the AGNU SEC Documents filed and publicly available prior to the
date of this Agreement and (ii) as set forth in Item 4.7 of the AGNU Disclosure
Schedule, since the date of the most recent financial statements included in the
AGNU SEC Documents, AGNU and its Subsidiaries have conducted their respective
businesses only in the Ordinary Course of Business, and there has not been, in
the aggregate, (1) any changes that have had a Material Adverse Effect, (2) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock or any redemption, purchase or other acquisition of
any of its capital stock (except
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for its ordinary quarterly cash dividends with respect to the AGNU Common
Stock), (3) any split, combination or reclassification of any of its capital
stock or any issuance or the authorization of any issuance of any capital stock
or any options, warrants, rights or other securities in respect of, in lieu of
or in substitution for, shares of its capital stock, (4) (A) any granting by
AGNU or any of its Subsidiaries to any officer or employee of AGNU or any of its
Subsidiaries of any increase in compensation, except in the Ordinary Course of
Business, including in connection with promotions consistent with past practice
or as was required under employment agreements in effect as of the date of the
most recent financial statements included in the AGNU SEC Documents, (B) any
granting by AGNU or any of its Subsidiaries to any such officer or employee of
any increase in severance or termination pay, except as was required under
employment, severance or termination agreements in effect as of the date of the
most recent financial statements included in the AGNU SEC Documents and
previously made available to AGNU, or (C) any entry by AGNU or any of its
Subsidiaries into any employment, severance or termination agreement with any
such officer or employee, (5) any event, circumstance, damage, destruction or
loss, whether or not covered by insurance, that has, or reasonably could be
expected to have, a Material Adverse Effect, (6) any material change in
accounting methods, principles or practices by AGNU or (7) any adoption,
amendment or termination of any bonus, profit sharing, incentive, severance or
other plan, contract or commitment for the benefit of any of its directors,
officers or employees.
Section 4.8. No Undisclosed Liabilities. Except as set forth in AGNU's
audited, consolidated financial statements included in AGNU's Annual Report on
Form 10-K filed for the fiscal year ended October 31, 1997 or in Item 4.8 of the
AGNU Disclosure Schedule, neither AGNU nor any of its Subsidiaries has any
material liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise. Since the date of the most recent financial statements
included in the AGNU SEC Documents, except as set forth in the AGNU SEC
Documents and except for liabilities incurred by AGNU and its Subsidiaries in
the Ordinary Course of Business, neither AGNU nor any of its Subsidiaries has
incurred any material liabilities of any nature, whether or not accrued,
contingent or otherwise that would be reasonably expected to have a Material
Adverse Effect.
Section 4.9. Proxy Statement. None of the information supplied or to be
supplied by AGNU specifically for inclusion or incorporation by reference in the
Proxy Statement, will, at the time the Proxy Statement is first mailed to the
stockholders of AGNU and at the time of the AGNU Stockholders' 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 Proxy Statement will comply with the Exchange Act and the rules
and regulations thereunder. Notwithstanding the foregoing, no representation or
warranty is made by AGNU with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Virbac specifically
for inclusion or incorporation by reference in the Proxy Statement.
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Section 4.10. Benefit Plans.
(a) Except as disclosed in Item 4.10 of the AGNU Disclosure
Schedule, since February 11, 1998, there has not been any adoption or
amendment in any material respect by AGNU or any of its Subsidiaries of
any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, restricted
stock, phantom stock, retirement, severance, disability,
hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former employee, officer or
director of AGNU or any of its Subsidiaries (collectively, "AGNU
Benefit Plans"). Except as disclosed in Item 4.10 of the AGNU
Disclosure Schedule, there exist no employment, consulting, severance,
change in control, termination or indemnification agreements, rabbi
trust, arrangements or understandings between AGNU or any of its
Subsidiaries and any current or former employee, officer or director of
AGNU or any of its Subsidiaries (collectively, "AGNU Compensation
Agreements").
(b) Item 4.10 of the AGNU Disclosure Schedule contains a list
of all "employee pension benefit plans" (as defined in Section 3(2) of
ERISA) (sometimes referred to herein as "AGNU Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
and all other AGNU Benefit Plans maintained, or contributed to, by AGNU
or any of its Subsidiaries for the benefit of any current or former
employees, officers or directors of AGNU or any of its Subsidiaries.
AGNU has delivered to Virbac true, complete and correct copies of (i)
each AGNU Benefit Plan (or, in the case of any unwritten AGNU Benefit
Plans, descriptions thereof) and all amendments thereto, (ii) the most
recent annual report on Form 5500 filed with the Internal Revenue
Service with respect to each AGNU Benefit Plan (if any such report was
required), (iii) the most recent summary plan description for each AGNU
Benefit Plan for which such summary plan description is required, (iv)
each trust agreement and group annuity contract relating to any AGNU
Benefit Plan and (v) each Compensation Agreement (or in the case of any
unwritten AGNU Compensation Agreements, descriptions thereof) and all
amendments thereto.
(c) Except as disclosed in Item 4.10 of the AGNU Disclosure
Schedule, all AGNU Pension Plans intended to qualify under the Code
have been the subject of determination letters from the Internal
Revenue Service to the effect that such AGNU Pension Plans are
qualified under Section 401(a) of the Code, and no such determination
letter has been revoked nor, to the best knowledge of AGNU, has
revocation been threatened, nor has any such AGNU Pension Plan been
amended since the date of its most recent determination letter in any
respect that would adversely affect its qualification. Except as
disclosed in Item 4.10 of the AGNU Disclosure Schedule, there is no
material pending or, to AGNU's knowledge, threatened litigation
relating to any of the AGNU Benefit Plans or the AGNU Compensation
Agreements.
(d) No AGNU Pension Plan is subject to Title IV of ERISA. None
of AGNU, any of its Subsidiaries, any officer of AGNU or, to the
knowledge of AGNU, any trustee
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or administrator of an AGNU Benefit Plan that is subject to ERISA, has
engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) or any other breach
of fiduciary responsibility involving such AGNU Benefit Plan that could
subject AGNU, any of its Subsidiaries or any officer of AGNU or any of
its Subsidiaries to any material tax or penalty on prohibited
transactions imposed by such Section 4975 or to any material liability
under Section 502(i) or (1) of ERISA.
(e) With respect to any AGNU Benefit Plan that is an employee
welfare benefit plan, except as disclosed in Item 4.10 of the AGNU
Disclosure Schedule, (i) no such AGNU Benefit Plan is unfunded or
funded through a "welfare benefits fund," as such term is defined in
Section 419(e) of the Code, (ii) each such AGNU Benefit Plan that is a
"group health plan," as such term is defined in Section 5000(b)(1) of
the Code, complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code and (iii) each such AGNU
Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without material liability to
AGNU or any of its Subsidiaries at any time. Except as disclosed in
Item 4.10 of the AGNU Disclosure Schedule, there has been no written
or, to AGNU's knowledge, oral communication to employees by AGNU or any
of its Subsidiaries that would reasonably be expected to promise or
guarantee such employees retiree health or life insurance or other
retiree death benefits on a permanent basis.
(f) Except as disclosed in Item 4.10 of the AGNU Disclosure
Schedule, the consummation of the transactions contemplated by this
Agreement will not (i) entitle any employees of AGNU or any of the
Subsidiaries to severance pay, (ii) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation
pursuant to, any of the AGNU Benefit Plans or the AGNU Compensation
Agreements or (iii) result in any material breach or violation of, or a
default under, any of the AGNU Benefit Plans or the AGNU Compensation
Agreements.
Section 4.11. Litigation. Except as set forth in Item 4.11 of the AGNU
Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the best knowledge of AGNU, threatened against AGNU
or any of its Subsidiaries that could reasonably be expected to have, directly
or indirectly or in the aggregate, a Material Adverse Effect. Except as set
forth in Item 4.11 of the AGNU Disclosure Schedule, neither AGNU nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
that could reasonably be expected to have, directly or indirectly, or in the
aggregate, a Material Adverse Effect.
Section 4.12. Compliance with Applicable Law. AGNU and its Subsidiaries
hold all permits, licenses, variances, exemptions, orders, concessions,
franchises and approvals of all Governmental Entities necessary to own or lease
their respective assets and to conduct their respective businesses (the "AGNU
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders, concessions, franchises and approvals that would not, in the
aggregate, have a Material Adverse Effect. AGNU and its Subsidiaries are in
compliance with
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the terms of the AGNU Permits, except where the failure so to comply would not
have a Material Adverse Effect. Except as disclosed in Item 4.12 of the AGNU
Disclosure Schedule, to the best knowledge of AGNU and its Subsidiaries, AGNU
and its Subsidiaries are in compliance with all laws, ordinances or regulations
of any Governmental Entity, except for such possible violations or failures of
compliance that would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as set forth in Item 4.12 of the AGNU Disclosure
Schedule, as of the date of this Agreement, to the best knowledge of AGNU or any
of its Subsidiaries, no investigation or review by any Governmental Entity with
respect to AGNU or any of its Subsidiaries is pending or threatened, nor has any
Governmental Entity indicated an intention to conduct any such investigation or
review, other than, in each case, those the outcome of which would not be
reasonably expected, in the aggregate, to have a Material Adverse Effect.
Section 4.13. Tax Matters. Except as set forth in Item 4.13 of the
AGNU Disclosure Schedule:
(a) Each of AGNU and its Subsidiaries has filed all tax
returns and reports required to be filed by it, or requests for
extensions to file such returns or reports have been timely filed and
granted and have not expired, and all tax returns and reports are
complete and accurate in all respects, except to the extent that such
failures to file or be complete and accurate in all respects, as
applicable, individually or in the aggregate, would not have a Material
Adverse Effect on AGNU. AGNU and each of its Subsidiaries has paid (or
AGNU has paid on its behalf) or made provision for all taxes shown as
due on such tax returns and reports. No claim has been made since July
31, 1998 by an authority in a jurisdiction where AGNU or any of its
Subsidiaries does not file tax returns that it is or may be subject to
taxation by that jurisdiction. The most recent financial statements
contained in AGNU's Annual Report on Form 10-K ("AGNU 1997 10-K") for
the fiscal year ended October 31, 1997 reflect adequate reserves for
all taxes payable by AGNU and its Subsidiaries for all taxable periods
and portions thereof accrued through the date of such financial
statements, and no deficiencies for any taxes have been proposed,
asserted or assessed against AGNU or any of its Subsidiaries that are
not adequately reserved for, except for inadequately reserved taxes and
inadequately reserved deficiencies that would not, individually or in
the aggregate, have a Material Adverse Effect on AGNU. There are no
liens for taxes (other than for current taxes not yet due and payable)
on the assets of AGNU or its Subsidiaries. No requests for waivers of
the time to assess any taxes against AGNU or any of its Subsidiaries
have been granted or are pending, except for requests with respect to
such taxes that have been adequately reserved for in the most recent
financial statements contained in the AGNU SEC Documents, or, to the
extent not adequately reserved, the assessment of which would not,
individually or in the aggregate, have a Material Adverse Effect on
AGNU. Except as set forth in the AGNU 1997 10-K, neither AGNU nor any
of its Subsidiaries is a party to or bound by any agreement providing
for the allocation or sharing of taxes. Neither AGNU nor any of its
Subsidiaries has filed a consent pursuant to or agreed to the
application of Section 341(f) of the Code. Each of AGNU and its
Subsidiaries has disclosed on its federal income tax returns all
positions taken therein that could give rise to a substantial
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understatement of federal income tax within the meaning of Section 6662
of the Code. All taxes that are required by the laws of the United
States, any state or political subdivision thereof, or any foreign
country to be withheld or collected by AGNU or any of its Subsidiaries
have been duly withheld or collected and, to the extent required, have
been paid to the proper governmental authorities or properly deposited
as required by applicable laws. None of AGNU and its Subsidiaries (i)
has been a member of an affiliated group filing a consolidated federal
income tax return (other than a group the common parent of which was
AGNU), or (ii) has any liability for the taxes of any person (other
than any of AGNU and its Subsidiaries) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract or otherwise. For
purposes of this Agreement, the term tax (including, with correlative
meaning, the terms "taxes" and "taxable") includes all federal, state,
local, and foreign income, profits, franchise, gross receipts, payroll,
sales, employment, use, property, withholding, excise, and other taxes,
duties, or assessments of any nature whatsoever, together with all
interest, penalties, and additions imposed with respect to such
amounts.
(b) No claim has been made since July 31, 1998 by an authority
in a jurisdiction where AGNU or any of its Subsidiaries does not pay
sales and/or use taxes that it is or may be subject to a requirement to
remit such taxes in that jurisdiction. Since July 31, 1998, AGNU and
its Subsidiaries have collected and/or remitted all sales and/or use
taxes required to be collected and/or remitted by all states in which
AGNU or its Subsidiaries conduct business activities, except to the
extent that a failure to collect and/or remit such sales and/or use
taxes would not have a Material Adverse Effect on AGNU.
(c) None of the compensation paid by AGNU since January 1,
1997, and none of the compensation, if any, that may be payable as a
result of the Merger will be subject to the limitations set forth in
Section 162(m) of the Code.
(d) No amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or
director of AGNU or any of its Subsidiaries who is a "disqualified
individual" (as such term is defined in Section 280G(c) of the Code or
proposed Treasury Regulation Section 1.280G-1) under any AGNU
Compensation Agreement or AGNU Benefit Plan currently in effect would
be an "excess parachute payment" (as such term is defined in Section
280G(b)(l) of the Code).
(e) AGNU is not aware of any circumstance or event that is
reasonably likely to prevent the Merger from being treated as a
tax-free reorganization pursuant to Section 368(a) of the Code.
Section 4.14. Customer Warranties. Except as disclosed in Item 4.14 of
the AGNU Disclosure Schedule, there are no pending, nor are there to the best
knowledge of AGNU any
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threatened, material claims under or pursuant to any warranty, whether expressed
or implied, on products or services sold prior to the date of this Agreement by
AGNU or any of its Subsidiaries. Item 4.14 of the AGNU Disclosure Schedule
identifies all such claims asserted from December 31, 1997 to the date of this
Agreement and describes the resolution or status of each such claim.
Section 4.15. 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 AGNU.
Section 4.16. Material Contracts. None of AGNU or its Subsidiaries, nor
any of their respective assets, business or operations, is a party to, or is
bound or affected by, or receives benefits under, any contract or agreement or
amendment thereto that in each case is required to be filed as an exhibit to an
Annual Report on Form 10-K filed by AGNU that has not been filed as an exhibit
to AGNU's Annual Report on Form 10-K filed for the fiscal year ended October 31,
1997 or as an exhibit to another filed AGNU SEC Document. True and correct
copies of such contracts, and any agreements or amendments thereto, have been
made available for review by Virbac. None of the Material Contracts is currently
subject to renegotiation or other adjustment of its terms either in whole or in
part. None of AGNU or its Subsidiaries is in default under any contract,
agreement, commitment, arrangement, lease, insurance policy or other instrument
to which it is a party, by which its respective assets, business or operations
may be bound or affected, or under which it or any of its respective assets,
business or operations receives benefits, which default, in the aggregate, is
reasonably likely to have a Material Adverse Effect, and there has not occurred
any event that, with lapse of time or giving of notice or both, would constitute
such a default. Except as disclosed in Item 4.16 of the AGNU Disclosure
Schedule, neither AGNU nor any of its Subsidiaries is subject to, or bound by,
any contract containing covenants which (i) limit the ability of AGNU or any of
its Subsidiaries to compete in any line of business or against any Person or
entity, or (ii) involve any restriction of the method by which, or the
geographical area in which, AGNU or any of its Subsidiaries may carry on its
business, other than as may be required by law or any applicable Governmental
Entity.
Section 4.17. Labor Matters. Except as disclosed in the AGNU SEC
Documents filed and publicly available prior to the date of this Agreement,
neither AGNU nor any of its Subsidiaries is a party to, or is bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is AGNU or any of its Subsidiaries
the subject of a proceeding asserting that it or any such Subsidiary has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel it or such Subsidiary to bargain with any
labor organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving AGNU or any of its Subsidiaries, pending
or, to the best of its knowledge, threatened, nor is it aware of any activity
involving its or any of the Subsidiaries' employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
Neither AGNU nor any of its Subsidiaries has been, within the last three years,
nor, to the knowledge of AGNU and its Subsidiaries, are they
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likely to become the subject of, or involved in, any investigation, complaint or
proceeding by the United States Department of Labor, the Office of Federal
Contract Compliance, the Equal Employment Opportunity Commission or any similar
federal, state or local body dealing with any employment policies and practices
of AGNU or such Subsidiaries or any Person currently employed by them, except
for any such investigation, complaint or proceeding that, in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
Section 4.18. Environmental Matters. Except as set forth in Item 4.18
of the AGNU Disclosure Schedule and except for matters which are not reasonably
likely, in the aggregate, to have a Material Adverse Effect: (i) neither the
businesses of AGNU and its Subsidiaries nor the operation thereof violates any
applicable environmental law and no condition or event has occurred which, with
notice or the passage of time or both, would constitute a violation of any
Environmental Law; (ii) AGNU and each of its Subsidiaries are in possession of
all Environmental Permits for the conduct or operation of the businesses of AGNU
and each of its Subsidiaries, (iii) AGNU and each of its Subsidiaries are in
compliance in all material respects with all of the requirements and limitations
included in the Environmental Permits, (iv) none of AGNU or any of its
Subsidiaries has stored or used any Hazardous Substance; (v) neither AGNU nor
any of its Subsidiaries has received any written notice, demand letter, claim or
request for information alleging any violation of, or liability under, any
Environmental Law; and (vi) none of AGNU or any of its Subsidiaries has buried,
dumped, disposed, spilled or released any pollutants, contaminants or hazardous
wastes, substances or materials on, beneath or adjacent to any of its property
or any property adjacent thereto.
Section 4.19. AGNU Intellectual Property. The term "AGNU Intellectual
Property" means all of AGNU's and its Subsidiaries' (i) registered or
unregistered trademarks and other marks, service marks, trade names or other
trade rights, and pending applications for any such registration, (ii) rights in
or to patents and copyrights and pending applications therefor and (iii) rights
to other trademarks, service marks and other marks, trade names and other trade
rights and all other trade secrets, designs, plans, specifications, technology,
know-how, methods, designs, concepts, and other proprietary rights, whether or
not registered. Except as set forth in Item 4.19 of the AGNU Disclosure Schedule
and except with respect to the representation and warranty in Section 4.19(b),
which AGNU will not make as of the date hereof but will make as of October 30,
1998 (and, if necessary, will update by such date Item 4.19 of the AGNU
Disclosure Schedule with respect thereto), (a) AGNU and each of its Subsidiaries
is the sole owner of and has the exclusive right to use its AGNU Intellectual
Property free from any Liens, (b) no Person has a right to receive a royalty or
similar payment in respect of any AGNU Intellectual Property, whether pursuant
to any contractual arrangements entered into by AGNU or any of its Subsidiaries
or otherwise, (c) to AGNU's knowledge, none of the AGNU Intellectual Property,
nor AGNU's or any of its Subsidiaries' use thereof, infringe or otherwise
violate the rights of any third party, and (d) to AGNU's knowledge, AGNU is not
aware of any infringement or violation of AGNU's or any of its Subsidiaries'
rights in or to the AGNU Intellectual Property by any third party. AGNU and its
Subsidiaries has the exclusive right to use, sell, license and dispose of, and
has the right to bring actions for infringement of, the AGNU Intellectual
Property.
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Section 4.20. Year 2000 Issues.
(a) AGNU has conducted an inventory and assessment of all
software, computers, network equipment, technical infrastructure,
production equipment and other equipment and systems that are material
to the operation of the business of AGNU and that rely on, utilize or
perform date or time processing ("AGNU's Systems");
(b) Any failure of any of AGNU's Systems to be Year 2000
Complaint will not cause a Material Adverse Effect.
Section 4.21. Regulatory Compliance.
(a) To AGNU's knowledge, since the most recent audit by the
USDA, FDA, EPA or any Drug Regulatory Agency, no act or omission has
occurred at AGNU's facilities which would subject AGNU to noncompliance
with the standards of the USDA, FDA, EPA or any other applicable Drug
Regulatory Agency.
(b) Item 4.21 of the AGNU Disclosure Schedule sets forth a
list, for the period between July 31, 1998 and the date hereof, of (i)
all regulatory or warning letters, notices of adverse findings and
similar letters or notices issued by the USDA, FDA, EPA or Drug
Regulatory Agency, if any, to AGNU or any of its Subsidiaries that
would have a Material Adverse Effect, (ii) all product recalls,
notifications and safety alerts conducted by AGNU or any of its
Subsidiaries, whether or not required by the USDA, FDA, EPA or Drug
Regulatory Agency, and any request from the USDA, FDA, EPA or any Drug
Regulatory Agency requesting AGNU or any of its Subsidiaries to cease
to investigate, test or market any product, which recalls,
notifications, safety alerts or requests would have a Material Adverse
Effect, and (iii) any criminal injunctive, seizure or civil penalty
actions begun or threatened by the USDA, FDA, EPA or any Drug
Regulatory Agency against AGNU or any of its Subsidiaries and known by
AGNU or any of its Subsidiaries and all related consent decrees issued
with respect to AGNU or any of its Subsidiaries. Copies of all
documents referred to in Item 4.21 have been made available to Virbac.
Section 4.22. Voting Requirements. The affirmative vote of the holders
of a majority of the voting power of all outstanding shares of the AGNU Common
Stock at the AGNU Stockholders' Meeting to approve this Agreement and the
issuance of the Merger Shares is the only vote of the holders of any class or
series of the AGNU's capital stock necessary to approve this Agreement, the
issuance of the Merger Shares and the transactions contemplated by this
Agreement.
Section 4.23. Issuance of Merger Shares. The Merger Shares have been
duly authorized by the AGNU Board of Directors and, when issued as contemplated
by this Agreement, will be validly issued, fully paid and nonassessable, free of
any preemptive rights created by, and not in violation of, any statute, the
certificate of incorporation of AGNU, the
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bylaws of AGNU or any agreement to which AGNU is a party or by which AGNU is
bound. The Merger Shares will be exempt from registration under the Securities
Act and under applicable Blue Sky Laws. The offering or sale of any of the
Merger Shares as contemplated by this Agreement does not give rise to any
rights, other than those which have been waived or satisfied, for or relating to
the registration of any securities of AGNU.
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Virbac. Virbac hereby covenants
and agrees that, prior to the Effective Time or earlier termination of this
Agreement, unless otherwise expressly contemplated by this Agreement or
consented to in writing by AGNU, which consent will not be unreasonably
withheld, Virbac will, and will cause each of Virbac's Subsidiaries to:
(a) operate its business in the Ordinary Course of Business
and in accordance, in all material respects, with applicable laws and
regulations;
(b) use its commercially reasonable best efforts to preserve
substantially intact its business organization, maintain its rights and
franchises, use its commercially reasonable best efforts to retain the
services of its respective principal officers and key employees and
maintain its relationships with its respective principal suppliers,
contractors, distributors, customers and others having material
business relationships with it to the effect that the goodwill and
ongoing businesses of Virbac and its Subsidiaries is not impaired in
any material respect at the Effective Time;
(c) maintain and keep its properties and assets in as good
repair and condition as at present, ordinary wear and tear excepted;
and
(d) keep in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained;
provided, however, that the loss of any officers, employees, consultants,
customers, payors or suppliers prior to the Effective Time will not constitute a
breach of this Section 5.1 unless such loss would have a Material Adverse
Effect.
Section 5.2. Negative Covenants of Virbac. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by AGNU or
as set forth in Item 5.2 of the Virbac Disclosure Schedule, from the date hereof
until the Effective Time or earlier termination of this Agreement, Virbac will
not and will cause its Subsidiaries not to:
(a) (i) increase the compensation payable to or to become
payable to any of its directors, officers or employees; (ii) grant any
severance or termination pay to, or enter into or modify any employment
or severance agreement with, any of its directors, officers
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or employees; or (iii) adopt or amend any employee benefit plan or
arrangement, except as may be required by applicable law;
(b) declare, set aside or pay any dividend on, or make any
other distribution in respect of, any of its capital stock; provided,
however, that this Section 5.2(b) will not prohibit any wholly owned
(directly or indirectly) Subsidiary of Virbac from declaring, setting
aside or paying any dividend on, or making any distribution in respect
of, its capital stock;
(c) (i) redeem, repurchase or otherwise reacquire any share of
its capital stock or any securities or obligations convertible into or
exercisable or exchangeable for any share of its capital stock, or any
options, warrants or conversion or other rights to acquire any shares
of its capital stock or any such securities or obligations; (ii) effect
any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of
any class of its capital stock (including shares held in treasury) or
other equity securities, any securities or obligations directly or
indirectly convertible into or exercisable or exchangeable for any such
shares, or any rights (including, without limitation, stock
appreciation or stock depreciation rights), warrants or options to
acquire, any such shares or securities or any rights, warrants or
options directly or indirectly to acquire any such shares or
securities; or (ii) amend or otherwise modify the terms of any such
securities, obligations, rights, warrants or options;
(e) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets
of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire or agree to acquire all or substantially
all assets of any other Person (other than the purchase of receivables
in the Ordinary Course of Business);
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any of its assets, except for
dispositions of assets in the Ordinary Course of Business and sales of
receivables in the Ordinary Course of Business;
(g) propose or adopt any amendments to its certificate of
incorporation or bylaws;
(h) (i) change any of its methods of accounting in effect as
of the date of this Agreement or (ii) make or rescind any material
election relating to taxes, settle or
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compromise any material claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or
change any of its methods of reporting income or deductions for Federal
income tax purposes from those employed in the preparation of the
Federal income tax returns for the taxable year ended December 31,
1997, except, in the case of clause (i) or clause (ii), as may be
required by law or GAAP, consistently applied;
(i) prepay, before the scheduled maturity thereof, any of its
long-term debt, or incur any obligation for borrowed money, whether or
not evidenced by a note, bond, debenture or similar instrument, other
than (i) intercompany indebtedness and indebtedness incurred in the
Ordinary Course of Business under the existing loan agreements
described in Item 5.2 of the Virbac Disclosure Schedule or under any
refinancing, renewal or refunding thereof, and (ii) trade payables
incurred in the Ordinary Course of Business;
(j) take any action that would prevent the Merger from being
treated as a tax-free reorganization pursuant to Section 368(a) of the
Code;
(k) take any action that would or could reasonably be expected
to result in any of its representations and warranties set forth in
this Agreement being untrue in any material respect (but without
duplication of any standard of materiality set forth in such
representation or warranty) or in any of the conditions to the Merger
set forth in Article VII not being satisfied in any material respect;
or
(l) agree in writing or otherwise to do any of the foregoing.
Section 5.3. Affirmative Covenants of AGNU. AGNU hereby covenants and
agrees that, unless otherwise expressly contemplated by this Agreement or
consented to in writing by Parent and Virbac, which consent will not be
unreasonably withheld, AGNU will, and will cause each of AGNU's Subsidiaries to:
(a) prior to the Effective Time or earlier termination of this
Agreement:
(i) operate its business in the Ordinary Course of
Business and in accordance, in all material respects, with
applicable laws and regulations;
(ii) use its commercially reasonable best efforts to
preserve substantially intact its business organization,
maintain its rights and franchises, use its commercially
reasonable best efforts to retain the services of its
respective principal officers and key employees and maintain
its relationships with its respective principal suppliers,
contractors, distributors, customers and others having
material business relationships with it to the effect that the
goodwill and ongoing businesses of AGNU and its Subsidiaries
is not impaired in any material respect at the Effective Time;
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(iii) maintain and keep its properties and assets in
as good repair and condition as at present, ordinary wear and
tear excepted; and
(iv) keep in full force and effect insurance
comparable in amount and scope of coverage to that currently
maintained;
provided, however, that the loss of any officers, employees,
consultants, customers, payors or suppliers prior to the
Effective Time will not constitute a breach of this Section
5.3 unless such loss would have a Material Adverse Effect; and
(b) within 60 days after the Effective Time, complete a tender
offer to repurchase up to $3,000,000 of AGNU Common Stock (other than
the Merger Shares) at a price per share of $3.00, which price has been
determined by AGNU's Board of Directors.
(c) AGNU will obtain an opinion of Duff & Phelps LLC, dated
the date the Proxy Statement is first mailed to the Stockholders of
AGNU, to the effect that, as of such date, the financial terms of the
Merger are fair to AGNU's stockholders from a financial point of view
(the "AGNU Fairness Opinion") and will promptly deliver a complete and
correct signed copy of such opinion to Virbac.
(d) AGNU will take any appropriate actions required so that no
shares of AGNU Common Stock are held in its treasury as of the
Effective Time.
Section 5.4. Negative Covenants of AGNU. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by Virbac or
as set forth in Item 5.4 of the AGNU Disclosure Schedule, from the date hereof
until the Effective Time, AGNU will not:
(a) (i) increase the compensation payable to or to become
payable to any of its directors, officers or employees (other than
through executive bonuses consistent with past practice and, with
respect to Bruce G. Baker and Robert J. Elfanbaum, to be payable in
cash or stock options not in excess of 50% of the maximum amount
allowable in their respective employment agreements currently in effect
with AGNU); (ii) grant any severance or termination pay to, or enter
into or modify any employment or severance agreement with, any of its
directors, officers or employees; or (iii) adopt or amend any employee
benefit plan or arrangement, except as may be required by applicable
law;
(b) declare, set aside or pay any dividend on, or make any
other distribution in respect of, any of its capital stock; provided,
however, that this Section 5.4(b) will not prohibit any wholly owned
(directly or indirectly) Subsidiary of AGNU from declaring, setting
aside or paying any dividend on, or making any distribution in respect
of, its capital stock;
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(c) (i) redeem, repurchase or otherwise reacquire any share of
its capital stock or any securities or obligations convertible into or
exercisable or exchangeable for any share of its capital stock, or any
options, warrants or conversion or other rights to acquire any shares
of its capital stock or any such securities or obligations; (ii) effect
any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its capital stock;
(d) (i) except as set forth in Section 5.4(a) and except for
issuance of shares pursuant to options outstanding on the date hereof,
issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale of, any shares of any class of
its capital stock (including shares held in treasury) or other equity
securities, any securities or obligations directly or indirectly
convertible into or exercisable or exchangeable for any such shares, or
any rights (including, without limitation, stock appreciation or stock
depreciation rights), warrants or options to acquire, any such shares
or securities or any rights, warrants or options directly or indirectly
to acquire any such shares or securities; or (ii) amend or otherwise
modify the terms of any such securities, obligations, rights, warrants
or options;
(e) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets
of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire or agree to acquire all or substantially
all assets of any other Person (other than the purchase of receivables
in the Ordinary Course of Business);
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any of its assets, except for
dispositions of assets in the Ordinary Course of Business and sales of
receivables in the Ordinary Course of Business;
(g) propose or adopt any amendments to its Restated
Certificate of Incorporation or By-Laws;
(h) (i) change any of its methods of accounting in effect as
of the date of this Agreement or (ii) make or rescind any material
election relating to taxes, settle or compromise any material claim,
action, suit, litigation, proceeding, arbitration, investigation, audit
or controversy relating to taxes, or change any of its methods of
reporting income or deductions for Federal income tax purposes from
those employed in the preparation of the Federal income tax returns for
the taxable year ended October 31, 1997, except, in the case of clause
(i) or clause (ii), as may be required by law or GAAP, consistently
applied;
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(i) prepay, before the scheduled maturity thereof, any of its
long-term debt, or incur any obligation for borrowed money, whether or
not evidenced by a note, bond, debenture or similar instrument, other
than (i) indebtedness incurred in the Ordinary Course of Business under
the existing loan agreements described in Item 5.4 of the AGNU
Disclosure Schedule or under any refinancing, renewal or refunding
thereof, and (ii) trade payables incurred in the Ordinary Course of
Business;
(j) take any action that would prevent the Merger from being
treated as a tax-free reorganization pursuant to Section 368(a) of the
Code;
(k) take any action that would or could reasonably be expected
to result in any of its representations and warranties set forth in
this Agreement being untrue in any material respect (but without
duplication of any standard of materiality set forth in such
representation or warranty) or in any of the conditions to the Merger
set forth in Article VII not being satisfied in any material respect;
or
(l) agree in writing or otherwise to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1. Access and Information. From the date hereof to the
Effective Time or earlier termination of this Agreement, each party will, and
will cause its Subsidiaries to, afford to the other party and its officers,
employees, accountants, consultants, legal counsel and other representatives of
the other party (collectively, the "Representatives") reasonable access during
normal business hours to the properties, executive personnel and all information
concerning the business, properties, contracts, records and personnel of such
party and its Subsidiaries as the other party may reasonably request; provided,
however, that no investigation pursuant to this Section 6.1 or otherwise will
alter any representation or warranty of any party hereto or the conditions to
the obligations of the parties hereto.
Section 6.2. Confidentiality. Each party agrees that it will not, and
will cause its Affiliates and Representatives not to, use, directly or
indirectly, any information obtained pursuant to Section 6.1 (as well as any
other information obtained prior to the date hereof in anticipation of entering
into this Agreement, which is subject to a Confidentiality and Non-Solicitation
Agreement dated as of April 3, 1998 among AGNU and Virbac (the "Confidentiality
Agreement")) for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of law, each party
will keep confidential, and will cause its Affiliates and Representatives to
keep confidential, all information and documents obtained pursuant to Section
6.1 (as well as any other information obtained prior to the date hereof in
anticipation of entering into this Agreement) unless such information (i) was
already known to such party, (ii) becomes available to such party from other
sources not known by such party to be bound by a confidentiality obligation,
(iii) is disclosed with the prior written approval
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of the party to which such information pertains or (iv) is or becomes readily
ascertainable from published information or trade sources. In the event that
this Agreement is terminated or the transactions contemplated by this Agreement
otherwise fail to be consummated, each party will promptly cause all copies of
documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same.
Section 6.3. Proxy Statement.
(a) As promptly as practicable after the execution of this
Agreement, AGNU will prepare and file with the SEC preliminary proxy
materials which will consist of the preliminary Proxy Statement in
connection with the vote of AGNU's stockholders with respect to the
Merger and the issuance of the Merger Shares. No amendment or
supplement to the Proxy Statement that amends or supplements
information relating to Virbac or AGNU will be made by the applicable
party without the approval of the other party, such approval not to be
unreasonably withheld. As promptly as practicable after all comments
are received from the SEC with respect to the preliminary Proxy
Statement and after the furnishing by AGNU of all information required
to be contained therein, AGNU will file with the SEC the definitive
Proxy Statement to be sent or given in connection with the vote of the
AGNU stockholders at the AGNU Stockholders' Meeting. AGNU will take any
action required to be taken under any applicable Federal or state
securities or Blue Sky Laws in connection with the issuance of the
Merger Shares. Virbac will furnish all information concerning it and
the holders of its capital stock as AGNU may reasonably request in
connection with such actions.
(b) The information supplied by Virbac for inclusion in the
Proxy Statement to be sent to the stockholders of AGNU in connection
with the AGNU Stockholders' Meeting will not, at the date the Proxy
Statement (or any amendment thereof or supplement thereto) is first
mailed to stockholders of Virbac or, except to the extent amended or
supplemented, at the time of the AGNU Stockholders' 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 the light of the circumstances under which they
are made, not misleading. If, at any time prior to the AGNU
Stockholders' Meeting, any event or circumstance relating to Virbac or
any of its Affiliates, or its or their respective officers or
directors, is discovered by Virbac which should be set forth in a
supplement to the Proxy Statement, Virbac will promptly inform AGNU.
(c) The information supplied by AGNU for inclusion in the
Proxy Statement to be sent to the stockholders of AGNU for the AGNU
Stockholders' Meeting will not, at the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to
stockholders of AGNU or, except to the extent amended or supplemented,
at the time of the AGNU Stockholders' 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 the light of the circumstances under which they
are made,
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not misleading. All documents that AGNU is responsible for filing with
the SEC in connection with the transactions contemplated herein will
comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act.
(d) Notwithstanding the foregoing, no party makes any
representations or warranties with respect to any information that has
been supplied by the other party or by its auditors, attorneys,
financial advisors, other consultants or advisors specifically for use
in any "blue sky" filing, the Proxy Statement, or any other documents
to be filed with the SEC or any regulatory agency in connection with
the transactions contemplated hereby.
Section 6.4. AGNU Stockholder Approval. AGNU, acting through its Board
of Directors, will, in accordance with applicable law and its Restated
Certificate of Incorporation and By-Laws, duly call, give notice of, convene and
hold one or more meetings of AGNU's stockholders as soon as practicable
following the date on which the definitive Proxy Statement is filed to approve
and adopt this Agreement and the Merger and to approve the issuance of the
Merger Shares. AGNU will, through its Board of Directors, recommend to AGNU's
stockholders that AGNU's stockholders approve and adopt this Agreement and the
Merger and approve the issuance of the Merger Shares, except where required
otherwise by the fiduciary duties of the Board of Directors of AGNU under
applicable law. In the event that AGNU's Board of Directors withdraws or
modifies its recommendation, AGNU nonetheless will cause the AGNU Stockholders'
Meeting to be convened and a vote taken with respect to the Merger and the
issuance of the Merger Shares and the Board of Directors may communicate to
AGNU's stockholders its basis for such withdrawal or modification. Subject to
the preceding sentence, AGNU will use its commercially reasonable best efforts
to solicit from stockholders of AGNU proxies in favor of the approval and
adoption of this Agreement and the Merger and approval of the issuance of the
Merger Shares and to take all other actions reasonably necessary or in AGNU's
reasonable judgment advisable to secure the AGNU Stockholder Approval as
promptly as practicable.
Section 6.5. Further Action; Commercially Reasonable Best Efforts.
(a) Each of the parties will use its commercially reasonable
best efforts to take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things necessary, proper or advisable
under applicable laws or otherwise to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable,
including, without limitation, using its commercially reasonable best
efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and
parties to contracts with Virbac and AGNU as are necessary for the
transactions contemplated herein.
(b) From the date of this Agreement until the Effective Time
or earlier termination of this Agreement, each of the parties will
promptly notify the other in writing of any pending or, to the
knowledge of such party, threatened action, proceeding
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or investigation by any Governmental Entity or any other Person (i)
challenging or seeking damages in connection with the Merger, or (ii)
seeking to restrain or prohibit the consummation of the Merger or
otherwise limit the right of AGNU to own or operate all or any portion
of the business or assets of Virbac.
(c) Parent and Virbac will give prompt written notice to AGNU,
and AGNU will give prompt written notice to Virbac, of the occurrence,
or failure to occur, of any event, which occurrence or failure to occur
would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at
any time from the date of this Agreement to the Effective Time or
earlier termination of this Agreement. Each party will use its
commercially reasonable best efforts to not take any action, or enter
into any transaction, which would cause any of its representations or
warranties contained in this Agreement to be untrue or result in a
breach of any covenant made by it in this Agreement.
(d) Parent, Virbac and AGNU will cooperate with one another to
lift any injunctions or remove any other impediments to the
consummation of the transactions contemplated herein.
Section 6.6. Public Announcements. AGNU, on the one hand, and VBSA, on
the other hand, (a) will consult with each other before issuing, and give each
other the opportunity to review and comment upon, any press release or other
written public statements with respect to the transactions contemplated by this
Agreement, including the Merger, (b) will agree to coordinate the timing of the
announcement and not issue any such press release or make any such written
public statement prior to such consultation, except as may be required by Law or
any listing agreement with any exchange on which the respective securities of
AGNU and VBSA are traded.
Section 6.7. Directors' and Officers' Insurance and Indemnification.
(a) From and after the Effective Time and for not less than
five years, AGNU will indemnify, defend and hold harmless each person
who on or prior to the Effective Time was an officer, director or
employee of Virbac and its Subsidiaries and who on or prior to the
Effective Time was entitled to indemnification pursuant to the
certificate of incorporation or bylaws of Virbac or an indemnity
agreement with Virbac (individually, an "Indemnified Party" and
collectively, the "Indemnified Parties"), against all losses, claims,
damages, liabilities, costs or expenses (including attorneys' fees),
judgments, fines, penalties and amounts paid in settlement of or
otherwise in connection with any claim, action, suit, proceeding or
investigation (a "Claim") arising out of or pertaining to acts or
omissions, or alleged acts or omissions, by them in their capacities as
such occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the
same extent that such Indemnified Parties are so entitled to
indemnification as of the Effective Time under the DGCL, the
certificate of incorporation and the bylaws of Virbac. In the event of
any such Claim, AGNU will pay
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expenses in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted
under the DGCL, upon receipt from the Indemnified Party to whom
expenses are advanced of an undertaking to repay such advances
contemplated by the DGCL. AGNU also will cause the Surviving
Corporation to honor any agreement in effect as of the date hereof and
previously disclosed to AGNU providing for the indemnification of any
director, officer or employee or agent, in accordance with the terms
and conditions of such agreement.
(b) AGNU will cause to be maintained in effect for not less
than five years after the Effective Time the current policies of
directors' and officers' liability insurance and fiduciary liability
insurance maintained by Virbac with respect to Claims arising from
facts or events which occurred prior to the Effective Time; provided,
however, that AGNU may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions that are no
less advantageous for the officers, directors and other persons covered
thereby.
(c) This Section 6.7 will survive the consummation of the
Merger, is intended to benefit the Indemnified Parties and their
respective heirs and personal representatives, is binding on all
successors and assigns of AGNU and the Surviving Corporation and is
enforceable by the foregoing parties as third party beneficiaries.
Section 6.8. HSR Act Matters. AGNU, VBSA, Parent and Virbac, as may be
required pursuant to the HSR Act, promptly will complete all documents required
to be filed with the Federal Trade Commission and the United States Department
of Justice in order to comply with the HSR Act and, not later than thirty days
after the date hereof, together with the Persons who are required to join in
such filings, will file the same with the appropriate Governmental Entities.
AGNU, Parent and Virbac will promptly furnish all materials thereafter required
by any of the Governmental Entities having jurisdiction over such filings, and
will take all reasonable actions and will file and use their commercially
reasonable best efforts to have declared effective or approved all documents and
notifications with any such Governmental Entity, as may be required under the
HSR Act or other Federal antitrust laws for the consummation of the Merger and
the other transactions contemplated hereby. Virbac will pay all costs associated
with the HSR Act filings.
Section 6.9. No Solicitation.
(a) AGNU, Virbac, their respective Subsidiaries and their
respective officers, directors, employees, representatives, agents or
Affiliates will cease any discussion or negotiations with any parties
that may be ongoing with respect to an Acquisition Proposal (as defined
below). AGNU and Virbac will not, nor will they permit any of their
Subsidiaries to, and they will use their commercially reasonable best
efforts to cause their officers, directors, employees, agents or
Affiliates not to, directly or indirectly, (i) solicit, initiate or
knowingly encourage (including by way of furnishing information), or
knowingly take any other action to facilitate, any inquiries or the
making of any proposal
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which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, or (ii) participate in any discussions or
negotiations regarding any Acquisition Proposal; provided, however,
that if the Board of Directors of AGNU or Virbac determines in good
faith, after consultation with, and based on the advice of legal
counsel, that it is required to do so in order to comply with its
fiduciary duties to its stockholders under applicable law, it may, in
response to an unsolicited Acquisition Proposal, and subject to
compliance with Section 6.9(c), (1) furnish information with respect to
AGNU or Virbac, as the case may be, to any Person making such
unsolicited Acquisition Proposal pursuant to an executed
confidentiality agreement with such Person, and (2) participate in
discussions or negotiations regarding such Acquisition Proposal.
(b) Except as set forth in this Section 6.9, neither the Board
of Directors of AGNU nor any committee thereof will (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to
Virbac, the approval or recommendation by such Board of Directors or
such committee of the Merger or this Agreement, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition
Proposal, or (iii) cause AGNU to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") with respect to any
Acquisition Proposal. Notwithstanding the foregoing, in the event that
the Board of Directors of AGNU determines in good faith, after
consultation with and based on the advice of legal counsel, that it is
required to do so in order to comply with its fiduciary duties to
AGNU's stockholders under applicable law, the Board of Directors of
AGNU may (subject to the following sentences) (1) withdraw or modify
its approval or recommendation of the Merger and this Agreement (or
decide not to recommend it before the Proxy Statement is sent to the
stockholders of AGNU) only at a time that is after the fifth Business
Day following Virbac's receipt of written notice advising Virbac that
the Board of Directors of AGNU has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal
and identifying the Person making such Superior Proposal or (2)
terminate this Agreement by exercising its termination right under
Section 10.1(h), as applicable. In addition, if AGNU proposes to
terminate this Agreement pursuant to Section 10.1(h), it will pay to
Virbac the Termination Fee (as defined in Section 6.13) at the time
prescribed in Section 6.13.
(c) In addition to the obligations of AGNU set forth in
paragraphs (a) and (b) of this Section 6.9, AGNU will promptly advise
Virbac orally and in writing of any request for information of a nature
which would assist a potential bidder in preparing an Acquisition
Proposal or of any Acquisition Proposal, the material terms and
conditions of such request or Acquisition Proposal and the identity of
the Person making such request or Acquisition Proposal. AGNU will keep
Virbac fully informed on a prompt and current basis of the status and
details (including amendments or proposed amendments) of any such
request or Acquisition Proposal.
(d) Nothing contained in this Section 6.9 prohibits AGNU from
taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated
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under the Exchange Act or from making any disclosure to AGNU's
stockholders if, in the good faith judgment of the Board of Directors
of AGNU, after consultation with and based on the advice of legal
counsel, failure so to disclose would be inconsistent with its
fiduciary duties to AGNU's stockholders under applicable law; provided,
however, neither AGNU, its Board of Directors nor any committee thereof
will, except as permitted by Section 6.9(b), withdraw or modify, or
propose to withdraw or modify, its position with respect to this
Agreement or the Merger or approve or recommend, or propose to approve
or recommend, an Acquisition Proposal.
(e) For purposes of this Agreement, "Acquisition Proposal"
means any bona fide proposal or offer from any Person relating to any
merger, consolidation, business combination, sale of a significant
amount of assets outside of the Ordinary Course of Business, sale of
shares of capital stock outside of the Ordinary Course of Business,
tender or exchange offer or similar transaction involving AGNU or any
of its Subsidiaries. For purposes of this Agreement, a "Superior
Proposal" means an Acquisition Proposal made by a third party after
October 16, 1998 which, in the good faith judgment of the Board of
Directors of AGNU taking into account, to the extent deemed appropriate
by the Board of Directors, the various legal, financial and regulatory
aspects of the proposal and the Person making such proposal, (i) if
accepted, is reasonably likely to be consummated, and (ii) if
consummated, is reasonably likely to result in a more favorable
transaction to AGNU's stockholders from a financial point of view than
the transaction contemplated hereunder considering, among other things,
and to the extent deemed appropriate in good faith by the Board of
Directors, the long-term prospects and interests of AGNU and its
stockholders and other relevant constituencies.
Section 6.10. Affiliate Agreements. Parent will execute and deliver to
AGNU on or before the date of mailing of the Proxy Statement an agreement in the
form attached hereto as Exhibit C with regard to the fact that, at the time
Parent consented to the Merger and approved this Agreement, Parent is an
"affiliate" of AGNU for purposes of Rule 145 under the Securities Act and
applicable SEC rules and regulations. At the Closing, VBSA will execute and
deliver to AGNU an agreement in the form attached hereto as Exhibit D.
Section 6.11. Conduct of Business of Parent and Surviving Corporation.
VBSA will, as promptly as practicable, cause Parent to be duly incorporated and
to execute and deliver an addendum to this Agreement in the form attached hereto
as Exhibit E making it a party hereto and take all other action necessary to
cause Parent to perform its obligations hereunder (including, but not limited
to, consummation of the Merger and all applicable covenants) and to otherwise
comply with the terms hereof. VBSA will also take all commercially reasonable
actions necessary to cause Parent to cause Surviving Corporation to perform its
obligations arising hereunder (including, but not limited to, obligations
arising under Section 8.2 of this Agreement).
Section 6.12. Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby will be paid by the
party incurring such
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expenses; provided, however, that all costs and expenses relating to printing,
filing and mailing the Proxy Statement and any other filings with the SEC, and
all SEC and other regulatory filing fees incurred in connection with such
filings will be borne by AGNU; provided further, that if this Agreement is
terminated pursuant to Section 10.1(a), (d), or (e) hereof, the parties shall
share equally the cost of filing fees for any filings required under Section 6.8
of the Agreement and any fees incurred by AGNU in connection with the fairness
opinion referred to in Section 7.2(e) of the Agreement.
Section 6.13. Termination Fee. If (i) Virbac terminates this Agreement
pursuant to Section 10.1(f) or AGNU terminates this Agreement pursuant to
Section 10.1(g), then, within five Business Days of such termination, AGNU will
pay Virbac by wire transfer in immediately available funds a fee of $800,000
(the "Termination Fee"); provided that, if an AGNU Stockholders' Meeting is held
pursuant to the second sentence of Section 6.4 and the stockholders of AGNU do
not approve and adopt this Agreement and the Merger, the Termination Fee will be
payable upon the first Business Day following the AGNU Stockholders' Meeting.
Section 6.14. Tax Treatment. This Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date of this
Agreement until the Effective Time or termination of this Agreement, each party
hereto will use its commercially reasonable best efforts to cause the Merger to
qualify as a reorganization within the meaning of Section 368(a) of the Code,
and will not, without the prior written consent of the other parties hereto,
knowingly take any actions or cause any actions to be taken which could
reasonably be expected to prevent the Merger from so qualifying. AGNU will
provide Virbac with such representations as are reasonably requested in order to
enable Virbac's counsel to render the opinions set forth in Sections 7.3(d). In
the event counsel for Virbac is unable to render the opinions set forth in
Section 7.3(d), the parties hereto agree to negotiate in good faith to
restructure the Merger in order to permit such counsel to render such opinion.
Following the Effective Time, and consistent with any such consent, neither the
Surviving Corporation nor AGNU nor any of their respective Affiliates knowingly
and voluntarily will take any action or cause any action to be taken which could
reasonably be expected to cause the Merger to fail to qualify as a
reorganization under Section 368(a) of the Code.
Section 6.15. Assumption of Certain Obligations. To the extent
necessary, AGNU will, or will cause the Surviving Corporation to, enter into
supplemental indentures or otherwise affirmatively assume in writing the
obligations of Virbac under those indentures or other financing agreements as
set forth on Item 6.15 of the Virbac Disclosure Schedule.
Section 6.16. No Action. Except as contemplated by this Agreement, no
party hereto will, nor will any such party permit any of its Subsidiaries to,
take or agree or commit to take any action that is reasonably likely to make any
of its representations or warranties hereunder inaccurate in any material
respect at the date made (to the extent so limited) or as of the Effective Time.
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Section 6.17. Employment Agreements Undertaking. On the date hereof,
Virbac will enter into a letter agreement in the form attached hereto as Exhibit
F undertaking to enter into negotiations with Bruce G. Baker and Robert J.
Elfanbaum with the intent to mutually agree upon new employment agreements to be
entered into with the Surviving Corporation.
Section 6.18. Cash Infusion. Virbac will prepare and provide to AGNU
not less than five days prior to the Effective Time a schedule certified by
Arthur Andersen LLP setting forth the sum of (a) $6,700,000 plus (b) the
difference between (i) Notes Payable to Bank plus Notes Payable to VBSA,
together with accrued interest on each of the foregoing Notes Payable, plus 60%
of the Broker Fee ("Virbac Debt"), and (ii) Cash, each as accrued on the books
of Virbac as of December 31, 1998 (the "Cash Infusion"). Immediately prior to
the Effective Time, Parent will contribute cash in an amount equal to the Cash
Infusion to Virbac.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1. Conditions to Obligations of AGNU, Parent and Virbac to
Effect the Merger. The respective obligations of AGNU, Parent and Virbac to
effect the Merger and the other transactions contemplated herein will be subject
to the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) Stockholder Approval. The Board of Directors of Parent
will have approved in accordance with applicable law the Merger and
this Agreement. AGNU will have obtained the AGNU Stockholder Approval
by the requisite vote in accordance with applicable law.
(b) No Order. No Governmental Entity or Federal or state court
of competent jurisdiction enacts, issues, promulgates, enforces or
enters any statute, rule, regulation, executive order, decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent), in any case which is in effect and which prevents or
prohibits consummation of the Merger or any other transactions
contemplated in this Agreement; provided, however, that the parties
will use their commercially reasonable best efforts to cause any such
decree, judgment, injunction or other order to be vacated or lifted.
(c) Regulatory Approvals. All regulatory approvals necessary
to consummate the transactions contemplated hereby are obtained and
remain in full force and effect and all statutory waiting periods in
respect thereof have expired or been terminated and no such approval
contains a condition or requirement that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on
Parent, Virbac, AGNU or the Surviving Corporation.
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(d) Third Party Consents. All consents or approvals of third
parties (other than the regulatory approvals referred to in the
preceding paragraph) required for consummation of the Merger are
obtained and are in full force and effect, except for any such consents
or approvals the absence of which is not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on
Parent, Virbac, AGNU or the Surviving Corporation.
(e) Tax Opinion of Virbac's Counsel. Virbac has received an
opinion of Jones, Day, Reavis & Pogue, counsel to Virbac, dated the
Effective Date, substantially to the effect that, for federal income
tax purposes, (i) the Merger will be treated as a reorganization within
the meaning of Section 368(a) of the Code, (ii) each of Virbac and AGNU
will be a party to the reorganization within the meaning of Section
368(b) of the Code, (iii) no gain or loss will be recognized by Virbac
or AGNU as a result of the Merger, (iv) no gain or loss will be
recognized by Parent upon the exchange pursuant to the Merger of Virbac
Common Stock solely for AGNU Common Stock, (v) the basis of the Merger
Shares received by the Parent pursuant to the Merger will be the same
as the basis of Virbac Common Stock exchanged therefor, and (vi) the
holding period of the Merger Shares received by Parent pursuant to the
Merger will include the holding period of Virbac Common Stock exchanged
therefor, provided those shares of Virbac Common Stock were held as
capital assets as of the Effective Time of the Merger. In rendering its
opinion, Jones, Day, Reavis & Pogue may require and rely upon
representations contained in letters from Parent, Virbac and AGNU.
(f) Non-Competition Agreement. VBSA will have entered into a
non-competition agreement with AGNU, substantially in the form attached
as Exhibit G hereto.
Section 7.2. Additional Conditions to Obligations of AGNU. The
obligations of AGNU to effect the Merger and the other transactions contemplated
in this Agreement are also subject to the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by applicable
law:
(a) Representations and Warranties. The representations and
warranties of Parent and Virbac made in this Agreement are true and
correct in all material respects on and as of the Effective Time with
the same effect as though such representations and warranties had been
made on and as of the Effective Time, except for representations and
warranties that speak as of a specific date or time other than the
Effective Time (which need only be true and correct in all material
respects as of such date or time). AGNU will have received a
certificate of each of the Chief Executive Officer or Chief Financial
Officer of Parent and Virbac to that effect.
(b) Agreements and Covenants. The agreements and covenants of
Parent and Virbac required to be performed on or before the Effective
Time have been performed in
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all material respects. AGNU will have received a certificate of each of
the Chief Executive Officer or Chief Financial Officer of Parent and
Virbac to that effect.
(c) No Material Adverse Effect. At any time on or after the
date of this Agreement there has been no Material Adverse Effect on
Virbac or any of its Subsidiaries, in the aggregate.
(d) Cash Infusion by Parent. Parent will have contributed the
Cash Infusion to Virbac.
(e) Fairness Opinion. AGNU's Board of Directors will have
received the AGNU Fairness Opinion.
(f) Supply Agreement. VBSA will have entered into a Supply
Agreement with Virbac substantially in the form attached hereto as
Exhibit H.
Section 7.3. Additional Conditions to Obligations of Parent and Virbac.
The obligations of Parent and Virbac to effect the Merger and the other
transactions contemplated in this Agreement are also subject to the following
conditions any or all of which may be waived, in whole or in part, to the extent
permitted by applicable law:
(a) Representations and Warranties. The representations and
warranties of AGNU made in this Agreement are true and correct in all
material respects on and as of the Effective Time with the same effect
as though such representations and warranties had been made on and as
of the Effective Time, except for representations and warranties that
speak as of a specific date or time other than the Effective Time
(which need only be true and correct in all material respects as of
such date or time). Virbac will have received a certificate of the
Chief Executive Officer or Chief Financial Officer of AGNU to that
effect.
(b) Agreements and Covenants. The agreements and covenants of
AGNU required to be performed on or before the Effective Time have been
performed in all material respects. Virbac will have received a
certificate of the Chief Executive Officer or Chief Financial Officer
of AGNU to that effect.
(c) No Material Adverse Effect. At any time on or after the
date of this Agreement there has been no Material Adverse Effect on
AGNU or any of its Subsidiaries, in the aggregate.
(d) Stockholders' Agreements. The individuals listed on
Schedule 7.3(d) will have entered into a stockholder's agreement in the
form attached hereto as Exhibit I.
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ARTICLE VIII
POST-CLOSING COVENANTS
Section 8.1. Stock Repurchase. Within 60 days after the Effective Time,
AGNU will make and complete a tender offer to repurchase (the "Stock
Repurchase") up to 1,000,000 shares of the issued and outstanding shares of AGNU
Common Stock, except for the Merger Shares, which the Virbac Stockholders may
not tender, at a price of $3.00 per share, which price has been determined by
the Board of Directors of AGNU.
Section 8.2. Contingent Stock Repurchase.
(a) Contingent Repurchase. If, during the period ending on the
second anniversary of the Closing Date (the "Contingent Period"), the
closing sale price as reported under the Nasdaq National Market Issues
in The Wall Street Journal of the AGNU Common Stock (or such other
exchange on which such shares are listed) does not equal or exceed
$3.00 per share (the "Contingent Price") for any period of 40
consecutive trading days, AGNU will, within 10 business days of the
termination of the Contingent Period, commence a tender offer to
repurchase (the "Contingent Repurchase"), at $3.00 per share (the
"Repurchase Price"), up to $4,185,000 of the issued and outstanding
shares of AGNU Common Stock, except for (i) shares held by the Virbac
Stockholders, which Virbac Stockholders agree not to tender in the
Contingent Repurchase, (ii) Merger Shares transferred pursuant to the
Affiliate Agreement, attached hereto as Exhibit C, as to which the
transferee has agreed not to tender in the Contingent Repurchase, and
(iii) shares issued during the Contingent Period (other than shares
issued pursuant to the exercise of options outstanding as of the
Effective Time, which will be included in the Contingent Repurchase),
if any, which Surviving Corporation agrees to issue only if the
transferee thereof agrees not to tender such shares in the Contingent
Repurchase.
(b) Contingent Capital Contribution. If, upon the termination
of the Contingent Period, AGNU is required to make the Contingent
Repurchase, Parent will, within 10 business days of the termination of
the Contingent Period, make a capital contribution (the "Contingent
Contribution") to AGNU in the amount of $4,185,000 in exchange for a
number of newly issued shares of AGNU Common Stock equal to such
contribution divided by the Repurchase Price.
(c) Adjustments. The Board of Directors of the Surviving
Corporation will make or provide for such adjustments in the Contingent
Price, and Repurchase Price as such Board, in its sole discretion
exercised in good faith, determines is equitably required to prevent
dilution or enlargement of the Contingent Price, the number of shares
subject to the Contingent Repurchase and the cost to AGNU to conduct
such Contingent Repurchase that otherwise would result from any stock
dividend, stock split, reverse stock split or
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other change in the capital structure of AGNU or event having a similar
effect. Any fractional shares resulting from the foregoing adjustments
will be eliminated.
(d) Board Discretion. The Board of Directors of the Surviving
Corporation may, in its sole discretion, determine to permit Parent to
make the Contingent Repurchase as required under Section 8.2, in which
event Parent would not be required to make the Contingent Contribution.
Section 8.3. Minority Stockholder Director Nominee. Parent agrees to
cause its representatives on the Surviving Corporation's Board of Directors to
nominate, and further agrees to vote the shares of AGNU Common Stock it holds at
such time in favor of, Bruce G. Baker, if he is then serving as a director of
the Surviving Corporation, or if he is not, then Alec L. Poitevint, II, for
election to a successive three-year term commencing at the annual meeting of
stockholders in 2002. If Mr. Poitevint is not then serving as a director of the
Surviving Corporation and the individuals listed on Schedule 7.3 then own in the
aggregate 40% of the shares such individuals own as of the Effective Time, then
Parent will cause its representatives on the Surviving Corporation's Board of
Directors to nominate, and Parent agrees to vote its shares in favor of, Robert
E. Hormann, or if he is not then available to serve or otherwise has a conflict
of interest, then Robert W. Schlutz, or if he is not then available to serve or
otherwise has a conflict of interest, then W. M. Jones, Jr. (unless he is
unavailable or has a conflict of interest, in which event Parent will have no
further obligation hereunder to nominate and vote its shares in favor of a
minority stockholder representative), for election to a three-year term
commencing at the annual meeting of stockholders in 2002.
Section 8.4. Release of VBSA Guarantee. If, as of the Effective Time,
the Virbac Debt is not paid in full and all obligations under the promissory
notes or loan agreements relating thereto released, the Surviving Corporation
will take all actions necessary to cause the indirect guarantees issued by VBSA
of such Virbac Debt, which are described on Item 8.4 of the Virbac Disclosure
Schedule, to be released.
Section 8.5. Fiscal Year of Surviving Corporation. Within 30 days after
the Effective Time, the Surviving Corporation will change its fiscal year to be
based upon a calendar year such that the fiscal year will be from January 1
through December 31.
Section 8.6. Further Assurances. If, at any time after the Effective
Time, the Surviving Corporation considers or is advised that any further deeds,
assignments or assurances in law or any other acts are necessary, desirable or
proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, the title to any property or right of Virbac acquired or to be
acquired by reason of, or as a result of, the Merger, or (b) otherwise to carry
out the purposes of this Agreement, AGNU and Virbac agree that the Surviving
Corporation and its proper officers and directors will execute and deliver all
such deeds, assignments and assurances in law and do all acts necessary,
desirable or proper to vest, perfect or confirm title to such property or right
in the Surviving Corporation and otherwise to carry out the purposes of this
Agreement, and that the
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proper officers and directors of the Surviving Corporation are fully authorized
in the name of AGNU and Virbac to take any and all such action.
ARTICLE IX
REGISTRATION RIGHTS
Section 9.1. Demand Registration. (a) At any time and from time to time
after the third anniversary of the Effective Time, the Surviving Corporation
will, upon the written demand (the "Registration Demand") of Parent, use its
commercially reasonable best efforts to effect the registration under the
Securities Act (by means of a "shelf" registration statement pursuant to Rule
415 under the Securities Act, if so requested by the Parent and if the Surviving
Corporation is eligible therefore at such time) of such number of Registrable
Securities (as defined below) as indicated in the Registration Demand. Such
Registration Demand will specify the intended method or methods of disposition
of such Registrable Securities (subject to modification as otherwise
contemplated in this Agreement).
(b) If a Registration Demand is initiated and the Surviving
Corporation wishes to offer any of its securities in connection with
the registration, no such securities may be offered by the Surviving
Corporation without the consent of Parent (such consent not to be
unreasonably withheld).
(c) Upon receipt of the Demand Registration, the Surviving
Corporation will expeditiously effect the registration under the Act of
the Registrable Securities and use its reasonable best efforts to have
such registration become and remain effective as provided in Section
9.6.
(d) Parent has the right to select the underwriters for any
underwritten offering pursuant to this Section 9.1 as long as such
underwriters are reasonably acceptable to the Surviving Corporation and
any Registration Demand pursuant to this Section 9.1 may, at the
election of Parent, be in the form of a "firm commitment" underwritten
offering; provided, however, that no such offering may be in the form
of a "best efforts" or similar type offering. In this regard, if the
Surviving Corporation has established a "shelf" registration statement
pursuant to Section 9.1(a), upon the request of Parent, the Surviving
Corporation will amend the shelf registration to provide for an
underwritten offering otherwise consistent with the provisions herein,
the provisions of such underwritten offering to be in effect for at
least 120 days (or such lesser time as Parent requests) whereupon, at
the request of Parent or the election of the Surviving Corporation,
such "shelf" registration will be amended to no longer reference an
underwritten offering.
(e) As used in this Agreement, "Registrable Securities" means
the Merger Shares or any securities issued or issuable with respect to
any Merger Shares by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.
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Section 9.2. Indemnification by the Surviving Corporation. In the event
of any registration of any Registrable Securities under the Securities Act, the
Surviving Corporation will, and hereby does, indemnify and hold harmless Parent,
its directors, officers, each other Person who participates as an underwriter in
the offering or sale of such Registrable Securities and each other Person, if
any, who controls Parent or any such underwriter within the meaning of Section
15 and Section 20 of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which Parent or any such director or officer
or underwriter or controlling Person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which the
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading. The Surviving Corporation will reimburse Parent, and each such
director, officer, underwriter and controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding. However, the
Surviving Corporation will not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Surviving Corporation through an instrument duly executed by or on behalf
of such Parent, specifically stating that it is for use in the preparation
thereof. Such indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of Parent or any such director, officer or
controlling Person and will survive the transfer of the Registrable Securities
by Parent.
Section 9.3. Indemnification by Parent. The Surviving Corporation may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to Section 9.1 that the Surviving
Corporation will receive an undertaking satisfactory to it from Parent to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 9.2) the Surviving Corporation, each director of the Surviving
Corporation, each officer of the Surviving Corporation signing such registration
statement, each other Person who participates as an underwriter in the offering
or sale of such Registrable Securities and each other Person, if any, who
controls the Surviving Corporation within the meaning of Section 15 and Section
20 of the Securities Act (other than Parent) with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein or any amendment or supplement thereto, if
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 the Surviving Corporation through an instrument duly executed by
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Parent, specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity will remain in full force
and effect regardless of any investigation made by or on behalf of the Surviving
Corporation or any such director, officer or controlling Person (other than
Parent) and will survive the transfer by Parent of the securities of the
Surviving Corporation being registered.
Section 9.4. Notices of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 9.2 or 9.3, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give notice to the latter of the commencement of such action; provided, however,
that the failure of any indemnified party to give notice as provided herein will
not relieve the indemnifying party of its obligations under Section 9.2 or 9.3,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
that would make such separate representation advisable or the indemnified party
may have defenses not available to the indemnifying party in respect of such
claim, the indemnifying party will be entitled to participate in and to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party. After notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party will be liable for any
settlement of any action or proceeding effected without its written consent. No
indemnifying party will, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. The indemnification required in connection with the Registration
Demand will be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
Section 9.5. Other Indemnification. Indemnification similar to that
specified in Sections 9.2 and 9.3 (with appropriate modifications) will be given
by the Surviving Corporation and Parent with respect to any required
registration or other qualification of Registrable Securities under any federal
or state law or regulation of any governmental authority other than the
Securities Act.
Section 9.6. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 9.2 and 9.3 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms in respect
of any losses, claims, damages or liabilities suffered by an indemnified party
referred to therein, each applicable indemnifying party, in lieu of indemnifying
such indemnified party, will contribute to the amount paid or payable by such
indemnified party as a result of such
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losses, claims, damages or liabilities, in such proportion as is appropriate to
reflect the relative fault of the Surviving Corporation on the one hand and of
the Parent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Surviving
Corporation on the one hand and of the Parent (including, in each case, that of
their respective officers, directors, employees, agents and controlling Persons)
on the other will be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Surviving Corporation, on the one hand, or by or on behalf of
Parent, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Section 9.7. Registration Covenants of the Surviving Corporation. In
the event that any Registrable Securities of Parent are to be registered
pursuant to Section 9.1(e) the Surviving Corporation covenants and agrees that
it will use its reasonable best efforts to effect the registration and cooperate
in the sale of the Registrable Securities to be registered and will as
expeditiously as possible:
(a) (i) prepare and file with the SEC a registration statement
with respect to the Registrable Securities (as well as any necessary
amendments or supplements thereto) (a "Registration Statement") and
(ii) use its reasonable best efforts to cause the Registration
Statement to become effective as promptly as practicable and in any
event within 90 days of receipt of the Registration Demand (subject,
however, to the provisions of Section 9.9;
(b) prior to the filing described above in Section 9.7(a),
furnish to Parent copies of the Registration Statement and any
amendments or supplements thereto and any prospectus forming a part
thereof with respect to which (i) Parent will be afforded a reasonable
opportunity to review and comment thereon prior to filing and (ii) the
Surviving Corporation will not unreasonably decline to make such
changes thereto required by the Act;
(c) notify Parent, promptly after the Surviving Corporation
receives notice thereof, of the time when the Registration Statement
becomes effective or when any amendment or supplement or any prospectus
forming a part of the Registration Statement has been filed;
(d) notify Parent promptly of any request by the SEC for the
amending or supplementing of the Registration Statement or prospectus
or for additional information and promptly deliver to Parent copies of
any comments received from the SEC;
(e) (i) advise Parent after the Surviving Corporation receives
notice or otherwise obtains knowledge of the issuance of any order by
the SEC suspending the effectiveness of the Registration Statement or
any amendment thereto or of the initiation or threatening of any
proceeding for that purpose and (ii) promptly use its best efforts to
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prevent the issuance of any stop order or to obtain its withdrawal
promptly if a stop order is issued;
(f) (i) subject to Section 9.9, prepare and file with the SEC
such amendments and supplements to the Registration Statement and each
prospectus forming a part thereof as may be necessary to keep the
Registration Statement continuously effective for the period of time
necessary to permit Parent to dispose of all its Registrable
Securities, provided, however, that the Surviving Corporation is not
required to keep the Registration Statement effective if all of the
Registrable Securities held by Parent could be sold without restriction
pursuant to the provision of Rule 144(k) under the Securities Act and
(ii) comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by the
Registration Statement during such period in accordance with the
intended methods of disposition by Parent set forth in the Registration
Statement;
(g) furnish to Parent such number of copies of the
Registration Statement, each amendment and supplement thereto, the
prospectus included in the Registration Statement (including each
preliminary prospectus) and such other documents as Parent may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Parent;
(h) use its reasonable best efforts to register or qualify
such Registrable Securities under such other securities or blue sky
laws of such jurisdictions as determined by the underwriters after
consultation with the Surviving Corporation and Parent and do any and
all other acts and things which may be reasonably necessary or
advisable to enable Parent to consummate the disposition in such
jurisdictions of the Registrable Securities (provided that the
Surviving Corporation is not required to (i) qualify generally to do
business in any jurisdiction in which it would not otherwise be
required to qualify but for this Section 9.7 (h), (ii) subject itself
to taxation in any such jurisdiction, or (iii) consent to general
service of process in any such jurisdiction);
(i) notify Parent, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the Registration Statement
would contain an 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 not misleading;
(j) if the Common Stock is not then listed on a securities
exchange, use its reasonable best efforts, consistent with the
then-current corporate structure of the Surviving Corporation, to
facilitate the listing of the Common Stock on the Nasdaq Stock Market;
(k) provide a transfer agent and registrar, which may be a
single entity, for all the Registrable Securities not later than the
effective date of the Registration Statement; it
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being hereby agreed that Parent will furnish to the Surviving
Corporation such information regarding Parent and the plan and method
of distribution of Registrable Securities intended by Parent as the
Surviving Corporation may from time to time reasonably request in
writing and is required by law or by the SEC in connection therewith;
(l) with respect to a firm commitment underwritten offering,
enter into such customary agreements (including, as appropriate, an
underwriting agreement in customary form) and take all such other
action, if any, as Parent or the underwriters reasonably request in
order to expedite or facilitate the disposition of the Registrable
Securities pursuant to this Agreement;
(m) (i) make available for inspection by Parent, any
underwriter participating in any disposition pursuant to the
Registration Statement and any attorney, accountant or other agent
retained by Parent or any such underwriter all relevant financial and
other records, pertinent corporate documents and properties of the
Surviving Corporation and (ii) cause the Surviving Corporation's
officers, directors and employees to supply all relevant information
reasonably requested by Parent or any such underwriter, attorney,
account or agent in connection with the Registration Statement;
(n) use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by such other governmental authorities as may be necessary
to enable Parent to consummate the disposition of such Registrable
Securities;
(o) cause the Surviving Corporation's independent public
accountants to provide to the underwriters, if any, and Parent, if
permissible, a comfort letter in customary form and covering such
matters of the type customarily covered by comfort letters;
(p) cooperate and assist in any filings required to be made
with the NASD or Nasdaq and in the performance of any due diligence
investigation by an underwriter in an underwritten offering; and
(q) use all reasonable efforts to facilitate the distribution
and sale of any Registrable Securities to be offered pursuant to this
Agreement, including without limitation, by making road show
presentations, holding meetings with potential investors and taking
such other actions as are appropriate or as are requested by the lead
managing underwriter of an underwritten offering.
Section 9.8. Expenses. In connection with any Registration Demand pursuant
to Section 9.1, the Surviving Corporation will pay all registration, filing and
NASD or Nasdaq fees, all fees and expenses of complying with securities or "blue
sky" laws and any commissions, fees and disbursements of underwriters
customarily paid by sellers of securities (based upon offering proceeds to be
received by it). In any Registration Demand, the Surviving Corporation will be
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responsible for the fees and disbursements of counsel for the Surviving
Corporation and if its independent public accountants and premiums and other
costs of policies of insurance, if any, against liabilities arising out of the
public offering of the Registrable Securities; provided, that the Surviving
Corporation will not be required to obtain such insurance. The Parent will pay
for underwriting discounts and commissions customarily paid by sellers of
securities (based upon offering proceeds to be received by Parent).
Section 9.9. Rule 145. So long as the Surviving Corporation is subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Surviving Corporation will take all actions reasonably necessary to enable
Parent to sell the Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 145
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC, including filing on a
timely basis all reports required to be filed by the Exchange Act.
Section 9.10. Limitation on Requirement to File or Amend Registration
Statement. Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that the Surviving Corporation will not be required to
file a Registration Statement, amendment or post-effective amendment thereto or
prospectus supplement or to supplement or amend any Registration Statement if
the Surviving Corporation is then involved in discussions concerning, or
otherwise engaged in, an acquisition, disposition, financing or other material
transaction and the Surviving Corporation determines in good faith that the
making of such a filing, supplement or amendment at such time would materially
adversely affect or interfere with such transaction so long as the Surviving
Corporation will, as soon as practicable thereafter, make such filing,
supplement or amendment, to the extent then practicable; provided, however, that
in no event will any delay in filing pursuant to this Section 9.10 be for a
period in excess of 60 days or be exercised by the Surviving Corporation more
than twice during any 365 day period (and, at least 70 days must pass after the
end of any such delay period prior to the date the Surviving Corporation may
exercise its second delay period in any 365 day period) without a written waiver
executed and delivered by the holders of a majority of the Merger shares. The
Surviving Corporation will promptly give each Purchaser written notice of any
such postponement, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay; provided, however,
that nothing herein requires the Surviving Corporation to disclose any terms of
any such transaction or the identity of any party thereto. Upon receipt by
Parent of notice of an event of the kind described in this Section 9.10, Parent
will forthwith discontinue any disposition of Registrable Securities until
receipt of notice from the Surviving Corporation that such disposition may
continue and of any supplemented or amended prospectus indicated in such notice.
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ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after approval of the plan of merger contained in this Agreement and the Merger
by the stockholders of AGNU:
(a) by mutual written consent of each of AGNU, Parent and
Virbac;
(b) by AGNU if VBSA, Parent or Virbac breaches, or fails to
comply with, in any material respect any of its obligations under this
Agreement or any representation or warranty made by Parent or Virbac in
this Agreement is incorrect in any material respect when made or has
since ceased to be true and correct in any material respect, such that
as a result of such breach, failure or misrepresentation of the
conditions set forth in 7.2(a) or 7.2(b) would not be satisfied (a
"Virbac Termination Breach"); provided, however, that if such Virbac
Termination Breach is curable by VBSA, Parent or Virbac within 45 days
through the exercise of its commercially reasonable best efforts and
for so long as VBSA, Parent or Virbac continues to exercise such
commercially reasonable best efforts after notice of such breach, AGNU
may not terminate this Agreement pursuant to this Section 10.1(b);
(c) by Virbac if AGNU breaches, or fails to comply with, in
any material respect any of its obligations under this Agreement or any
representation or warranty made by AGNU is incorrect in any material
respect when made or has since ceased to be true and correct in any
material respect, such that as a result of such breach, failure or
misrepresentation of the conditions set forth in Section 7.3(a) or
7.3(b) would not be satisfied (an "AGNU Termination Breach"); provided,
however, that if such AGNU Termination Breach is curable by AGNU within
45 days through the exercise of its commercially reasonable best
efforts and for so long as AGNU continues to exercise such commercially
reasonable best efforts after notice of such breach, Virbac may not
terminate this Agreement pursuant to this Section 10.1(c);
(d) by either AGNU or Virbac if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Corporation preventing or prohibiting
consummation of the Merger (an "Order") becomes final and
nonappealable; provided, that, the party seeking to terminate this
Agreement pursuant to this Section 10.1(d) must have used all
commercially reasonable best efforts to remove such Order;
(e) by either AGNU or Virbac if the plan of merger contained
in this Agreement fails to receive the requisite vote of the
stockholders of AGNU at the AGNU Stockholders' Meeting;
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(f) by Virbac if the Board of Directors of AGNU or any
committee thereof withdraws or modifies in any manner adverse to Virbac
its approval or recommendation of the Merger or this Agreement or
approves, recommends or announces an intention to approve or recommend
any Acquisition Proposal;
(g) by AGNU upon five Business Days' notice and in accordance
with Section 6.9, provided it has complied with the provisions thereof
and that it complies with the provisions of Section 6.13 related
thereto;
(h) by either Virbac or AGNU if the Merger has not been
consummated before February 28, 1999 (the "Termination Date");
provided, however, that (i) the right to terminate this Agreement under
this Section 10.1(h) will not be available to Virbac if Parent's or
Virbac's failure to use its commercially reasonable best efforts 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, and (ii) the right to terminate this Agreement
under this Section 10.1(h) is not available to AGNU if AGNU's failure,
or the failure of its stockholders who are subject to the Stockholders'
Agreements set forth as Exhibit I hereto, to use their commercially
reasonable best efforts 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;
(i) by (A) either Virbac or AGNU on or before the date which
is 30 days from the date hereof if such party objects to any of the
matters reviewed pursuant to Section 6.1, provided, however, that any
objection rendered by such party is based on reasonable and prudent
business judgment and not made in an arbitrary and capricious manner,
or (B) Virbac if it fails to receive an opinion of AGNU's environmental
counsel in the form attached as Exhibit J hereto or assessment of an
environmental engineering firm acceptable to Virbac, as the case may
be; provided further, that if Virbac is unable to complete its
investigation as a result of AGNU's failure to afford reasonable access
to the properties and executive personnel of AGNU or promptly provide
all information requested by Virbac pursuant to Section 6.1, then
Virbac may extend the termination date under this Section 10.1(i) to a
date which is not more than 45 days from the date hereof; or
(j) by Virbac in the event (A) there is any strike or work
stoppage involving AGNU or any of its Subsidiaries or (B) AGNU enters
into collective bargaining agreements with the International
Longshoremen's Association or International Brotherhood of Electrical
Workers, including extensions of existing collective bargaining
agreements with such unions ("Bargaining Agreements"), on terms that
differ materially or are otherwise less favorable to AGNU from the
terms in the Bargaining Agreements.
Section 10.2. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 10.1, this Agreement will forthwith become
void, there will be no liability on the part of AGNU, Parent or Virbac or any of
their respective officers or directors to the other parties hereto and all
rights and obligations of any party hereto will cease except as otherwise
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provided in Sections 6.12, 6.13 and 10.1; provided, however, that nothing herein
will relieve any party from liability for the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement; provided, further, that if Virbac has received the Termination Fee
contemplated by Section 6.13, AGNU will not assert or pursue in any manner,
directly or indirectly, any claim or cause of action against Virbac or any of
its officers or directors based upon the exercise of the right of Virbac to
terminate this Agreement under Section 10.1(f) (other than claims based on
Virbac's failure to act in good faith or based on an alleged knowing or willful
breach of this Agreement by Virbac or any of its officers, directors, employees,
agents or Affiliates).
Section 10.3. Amendment, Extension and Waiver. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto. Any agreement on the part of a party hereto to any extension or
waiver will be valid only if set forth in writing executed on behalf of such
party, but such waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition will not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Subject to applicable
law, at any time prior to the Effective Time (whether before or after approval
by the stockholders of AGNU), the parties may (a) amend this Agreement, (b)
extend the time for the performance of any of the obligations or other acts of
any other party hereto, (c) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or (d)
waive compliance with any of the agreements or conditions contained herein;
provided, however, that following approval of this Agreement and the
transactions contemplated hereby by the stockholders of AGNU, there may not be,
without further approval of such stockholders, any waiver or amendment of this
Agreement that alters or reduces the amount of consideration to be delivered to
AGNU pursuant to Section 7.2(d) of this Agreement, modifies the obligations of
AGNU to effect tender offers pursuant to Sections 8.1 and 8.2 of this Agreement
or reduces or changes the consideration to be paid to stockholders in connection
with such tender offers.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1. Nonsurvival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement,
the Confidentiality Agreement, and in any certificate delivered in connection
with the Closing will be deemed to be conditions to the Merger and will not
survive the Effective Time, except for (i) Section 6.7 (Indemnification and
Insurance), which section will, to the extent contemplated, survive the
Effective Time or earlier termination of this Agreement, (ii) Section 6.2
(Confidentiality), Section 6.11 (Conduct of Business), Section 6.12 (Expenses),
Section 6.13 (Termination Fee) Article IX (Registration Rights) and Section 10.2
(Effect of Termination) of this Agreement, each section of which will, to the
extent contemplated therein, survive termination of this Agreement indefinitely,
(iii) Article VIII (Post-Closing Covenants) and (iv) the Confidentiality
Agreement, which will, to the extent contemplated therein, survive termination
of this Agreement.
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Section 11.2. Notices. All notices and other communications given or
made pursuant hereto will be in writing and will be deemed to have been duly
given or made as of the date delivered, mailed or transmitted, and will be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as will be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified below:
(a) If to AGNU:
Agri-Nutrition Group Limited
13801 Riverport Drive, Suite 111
Maryland Heights, MO 63043
Telecopier: (314) 298-0902
Attention: Bruce Baker, CEO and President
With a copy (which will not constitute notice) to:
Dyer, Ellis & Joseph
Watergate, Suite 1100
600 New Hampshire Avenue, N.W.
Washington, D.C. 20037
Telecopier: (202) 944-3068
Attention: Michael Joseph, Esq.
(b) If to VBSA or Parent:
Virbac S.A.
13 emme rue - L.I.D.
06517 Carros Cedex
France
Telecopier: 011 33 4 92 08 71 75
Attention: Pascal Boissy, President
(c) If to Virbac:
Virbac, Inc.
3200 Meachum Blvd.
Fort Worth, TX 76137
Telecopier: 817-831-8327
Attention: Brian A. Crook, D.V.M., CEO
With a copy (which will not constitute notice) to:
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
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2001 Ross Avenue
Dallas, Texas 75201
Telecopier: 214-969-5100
Attention: Richard K. Kneipper, Esq.
Section 11.3. Certain Definitions. For purposes of this Agreement, the
term:
(a) "Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is
under Common Control with, the first mentioned Person;
(b) "Blue Sky Laws" means state securities or "blue sky" laws;
(c) "Business Day" means any day other than a Saturday or a
day on which banks in the State of Texas are authorized or obligated to
be closed;
(d) "Control" (including the terms "Controlled by" and "under
Common Control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management or policies of a Person, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "Material Adverse Effect" on a party means an event,
change or occurrence which, individually or together with any other
event, change or occurrence, which is or could reasonably be expected
to be so adverse as to result in a severe and critical impairment of
(i) the business, properties, prospects, assets, financial condition or
results of operations of such party and its Subsidiaries taken as a
whole, or (ii) the ability of such party to perform its obligations
under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement; provided, however,
"Material Adverse Effect" does not include the effect of (1) changes in
the economy of the United States generally, (2) general changes in the
availability of credit, general changes in interest rates, money supply
levels or the discount rate of the Federal Reserve System or changes in
laws or regulations of general applicability or interpretations thereof
by courts or governmental authorities affecting animal health care
companies or the animal health industry generally, (3) changes in GAAP
or regulatory accounting principles generally applicable to animal
health care companies or companies engaged in a business which is the
same or similar to that of the parties hereto, (4) changes in the
condition (financial or otherwise) or results of operations of the
party and its Subsidiaries taken as a whole that are caused directly,
substantially and primarily by the general changes specified in (1)
through (3) above, (5) actions and omissions of a party or any of its
Subsidiaries taken with the prior informed consent of the other party
in contemplation of the transactions contemplated hereby, and (6) the
Merger and the reasonable expenses incurred in connection therewith and
compliance with the provisions of this Agreement on the operating
performance of such party.
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(f) "Ordinary Course of Business" means the ordinary and
normal course of the conduct of the business of the party consistent
with past practices;
(g) "Person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d) of the Exchange Act); and
(h) "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or
unincorporated, of which (i) such party or any other subsidiary of such
party is a general partner (excluding partnerships, the general
partnership interests of which held by such party or any subsidiary of
such party do not have a majority of the voting interest in such
partnership), or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or Controlled by such party and/or by any
one or more of its subsidiaries.
Section 11.4. Headings. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
Section 11.5. Entire Agreement. This Agreement and the Confidentiality
Agreement (together with the Exhibits, the Schedules and the other documents
delivered pursuant to this Agreement) constitute the entire agreement of the
parties and supersedes all prior agreements and undertakings, both written and
oral, between the parties, or any of them, with respect to the subject matter
hereof.
Section 11.6. 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 will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
Section 11.7. No Third Party Beneficiaries. Except as otherwise
provided in Section 6.7 hereof, this Agreement is binding upon and inure solely
to the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or means confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
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Section 11.8. Governing Law. This Agreement is governed by, and construed
in accordance with, the laws of the State of Delaware without giving effect to
applicable principles of conflicts of law.
Section 11.9. Disclosure Schedules. The disclosures made on any
disclosure schedule, including the Virbac Disclosure Schedule and the AGNU
Disclosure Schedule, with respect to any representation or warranty are deemed
to be made with respect to any other representation or warranty requiring the
same or similar disclosure to the extent that the relevance of such disclosure
to other representations and warranties is evident from the information included
in such disclosure schedule. The inclusion of any matter on any such disclosure
schedule will not be deemed an admission by any party that such listed matter is
material or that such listed matter has or would have a Material Adverse Effect
on Parent, Virbac or AGNU.
Section 11.10. Counterparts. This Agreement may be executed and
delivered in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered means be deemed
to be an original but all of which taken together constitute one and the same
agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
57
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be executed and delivered as of the date first written above.
AGRI-NUTRITION GROUP LIMITED
Bruce G. Baker
President and Chief Executive Officer
VIRBAC S.A.
By:
Name:
Title:
VIRBAC, INC.
Brian A. Crook
Chief Executive Officer
58
FOR IMMEDIATE RELEASE
Contact:
For Agri-Nutrition Group Limited: For Virbac, Inc.:
Robert J. Elfanbaum Dr. Brian Crook
Chief Financial Officer President and Chief Executive Officer
(314) 298-7330 (817) 831-5030
AGRI-NUTRITION GROUP AND VIRBAC
ANNOUNCE MERGER AGREEMENT
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Combination to Create Major Companion Animal Business
MARYLAND HEIGHTS, Missouri, and FORT WORTH, Texas (October 19, 1998) --
Agri-Nutrition Group Limited (Nasdaq/NM:AGNU) and Virbac, Inc. jointly announced
today the signing of a definitive merger agreement. Under the terms of the
agreement, Virbac, Inc., a subsidiary of the French public animal health company
Virbac, S.A. (Second Marche/SICOVAM:3157), will merge with Agri-Nutrition Group
Limited, creating a companion animal health company with combined 1998 U.S.
sales of approximately $50 million. Virbac, S.A. will hold approximately 60% of
the outstanding stock of the combined companies, which will be renamed Virbac
Corporation. The transaction, which is subject to approval by Agri-Nutrition's
stockholders, government approval and other customary conditions, is expected to
close in January 1999.
In addition to combining its U.S. operating subsidiary with
Agri-Nutrition Group, Virbac, S.A. will fund the purchase of approximately 10%
of Agri-Nutrition's outstanding common stock at $3.00 per share pursuant to a
public tender offer. Two years after the merger, if the market price of the
stock has not been at least $3.00 per share for 40 consecutive trading days,
Virbac will invest additional capital in the merged company to fund a second
tender offer for an additional 15% of the outstanding shares at $3.00 per share.
Virbac, S.A. will also invest approximately $13 million working capital and debt
retirement funds in the combined company at closing.
Commenting on the transaction, Bruce G. Baker, president and chief
executive officer of Agri-Nutrition Group Limited, said, "During the last year,
we completed a major acquisition and a number of other initiatives which
strengthened our platform for future growth. Teaming with Virbac advances our
growth timetable significantly and capitalizes on the platform that is already
in place. The combination creates a very strong company with the critical mass,
resources and skills necessary to take advantage of the changing needs of the
rapidly consolidating companion animal industry. By combining our expertise and
resources with those of Virbac, we are delivering better value to our
shareholders and the customers of both companies."
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<PAGE>
Pascal Boissy, president of Virbac, S.A. added, "This merger is a key
element of Virbac Group's strategy which focuses on reinforcing its position in
the companion animal market, especially in the U.S., to gain significant size to
respond to the market needs and opportunities. The synergies, complementary
products, and the potential economies of scale between the companies will enable
the new entity to achieve the profitability available in this dynamic and
growing industry. We are very confident of the success of this merger and the
improved value it will bring to all shareholders."
Brian A. Crook, D.V.M., chief executive officer of Virbac, Inc., said,
"A significant strength for the merged entity will be the ability to have the
size and resource base required to bring the R&D technologies and pharmaceutical
pipeline of Virbac, S.A. to the United States, as well as provide a magnet for
marketing of third-party products. The new company will also capitalize on the
global marketing strengths of Virbac, S.A. and aggressively expand current
Agri-Nutrition products internationally. In addition, we will aggressively seek
acquisition and alignment candidates in support of our core business to deliver
continually improving value to customers and stockholders."
Pascal Boissy will serve as chairman of the board of the combined company,
Brian A. Crook, D.V.M. will serve as chief executive officer, and Bruce G. Baker
will serve as executive vice president. Both Dr. Crook and Mr. Baker will hold
seats on the combined company's Board of Directors as will Mr. Alec Poitevint,
current chairman of Agri-Nutrition Group. In addition, Robert J. Elfanbaum,
chief financial officer of Agri-Nutrition Group, will continue to serve as chief
financial officer for the new company.
Virbac, Inc., located in Fort Worth, Texas, is a wholly owned
subsidiary of Virbac, S.A., located in Carros, France. With 1997 sales of $241
million, Virbac, S.A. is the 11th largest veterinary pharmaceutical company in
the world and is the largest veterinary-only company. Virbac, Inc. was
originally founded in the United States in 1982 as Allerderm, Inc., focusing on
unique and innovative products for veterinary dermatology, and was purchased by
Virbac, S.A. in 1987. Today, Virbac's Allerderm brand is the United States and
Canadian market leader in veterinary dermatology.
Agri-Nutrition Group Limited is a world leader in pet oral hygiene and
dental care and produces, markets and distributes the St. JON, Mardel and Zema
lines of health, grooming, and nutritional products for the pet industry through
its Pet Health Care Division as well as pet, animal health and chemical
specialty products through its PM Resources private label/contract manufacturing
division.
This press release contains forward-looking information made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements may be affected by certain risks and
uncertainties described in the Company's filings with the Securities and
Exchange Commission. The Company's actual results could differ materially from
such forward-looking statements. -###-
