CONFORMED COPY
EXHIBIT A
RESTRUCTURING AGREEMENT
by and between
Apothekernes Laboratorium A.Sand
A. L. Laboratories, Inc.
Dated as of May 16, 1994
TABLE OF CONTENTS
ARTICLE ITHE RESTRUCTURING A-7
Section 1.1 International Holding Company A-7
Section 1.2 The Demerger A-8
Section 1 .3 Exchange Offer A-8
Section 1 .4 Reasonable Efforts A-10
Section 1 .5 The Closing A-10
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY A-10
Section 2. 1 Corporate Organization and Qualification A-10
Section 2.2 Authorized Capital A-11
Section 2.3 Corporate Authority A-11
Section 2.4 Proxy Statement A-11
Section 2.5 Governmental Filings: No Violations; PermitsA-12
Section 2.6 Company Reports; Financial Statements A-13
Section 2.7 Absence of Certain Changes A-13
Section 2.8 Liabilities A-13
Section 2.9 Opinion of Financial Advisor A-13
Section 2.10 Taxes A-14
Section 2. 11 Brokers and Finders A-14
Section 2.12 Warrants A-14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF A.L. OSLO A-14
Section 3. 1 Corporate Organization and Qualification A-14
Section 3.2 Authorized Capital A-14
Section 3.3 Corporate Authority A-15
Section 3.4 Proxy Statement; Norwegian Materials A-15
Section 3.5 Governmental Filings; No Violations; Permits A-15
Section 3.6 Financial Statements; Projections A-17
Section 3.7 Absence of Certain Changes A-18
Section 3.8 Litigation and Liabilities A-18
Section 3.9 Business of New A.L. Oslo; Indebtedness A-19
Section 3.10 Employee Plans A-19
Section 3. 11 Intellectual Property A-20
Section 3.12 Taxes A-20
Section 3.13 Brokers and Finders A-21
Section 3.14 Opinion of Financial Advisor A-21
Section 3.15 Insurance A-21
Section 3.16 Material Contracts A-21
ARTICLE IV COVENANTS A-21
Section 4.1 Interim Operations of the Company A-21
Section 4.2 Interim Operations of the Related Norwegian BusinessesA-22
Section 4.3 Additional Agreements A-23
Section 4.4 Meeting of Stockholders A-24
Section 4.5 Filings; Other Action A-24
Section 4.6 Access A-24
Section 4.7 Notification of Certain Matters A-25
Section 4.8 Publicity A-25
Section 4.9 Governance; Corporate Headquarters A-25
Section 4.10 Reasonable Efforts A-26
Section 4.11 Capital Expenditures A-26
Section 4. 12 A.L. Oslo Finances A-26
Section 4.13 Skøyen Lease A-27
Section 4.14 A.L. Pharma A-27
Section 4. 15 [Reserved] A-27
Section 4.16 Non-compete A-27
ARTICLE V CONDITIONS A-28
Section 5. 1 Conditions to Obligations of Each Party A-28
Section 5.2 Additional Conditions to Obligations of the Company A-28
Section 5.3 Additional Conditions to Obligations of A.L. Oslo A-29
ARTICLE VI TERMINATION A-30
Section 6. 1 Termination by Mutual Consent A-30
Section 6.2 Termination by the Company or A.L. Oslo A-30
Section 6.3 Termination by A.L. Oslo A-30
Section 6.4 Termination by the Company A-30
Section 6.5 Effect of Termination and Abandonment A-31
ARTICLE VII INDEMNIFICATION A-31
Section 7.1 General A-31
Section 7.2 Indemnification A-31
Section 7.3 Third Party Claims A-33
ARTICLE VIII MISCELLANEOUS AND GENERAL A-33
Section 8.1 Payment of Expenses A-33
Section 8.2 Survival A-33
Section 8.3 Other Definitional Provisions A-34
Section 8.4 Modification or Amendment A-34
Section 8.5 Waiver of Conditions A-35
Section 8.6 Counterparts A-35
Section 8.7 Governing Law A-35
Section 8.8 Notices A-35
Section 8.9 Entire Agreement, etc A-36
Section 8.10 Captions A-36
Section 8. 11 Dispute Resolution A-37
EXHIBITS
1. Form of Demerger Agreement
2. Form of Charter Amendments to the Company's Restated Certificate of Incorporation
3. Form of Warrant Agreement
4. Selected Combined Financial Data of A.L. Oslo
5. Form of Shareholder Affidavit
6. Form of Administrative Services Agreement
7. Form of Letter from Managing Director of A.L. Oslo
8. Form of Skøyen Lease
9. Form of Opinion of counsel to A.L. Oslo
10. Form of Opinion of counsel to the Company INDEX
OF DEFINED TERMS 483 Matters A-32
1983 Stock Option Plan A-11
1994 Budget for Related Norwegian Businesses A-22
A.L. Industrier A.S A-8
A.L. Laboratories, Inc A-7
A.L. Labs Transfer A-7
A.L. Oslo A-7
A.L. Oslo Benefit Plans A-19
A.L. Oslo Indemnified Parties A-31
A.L. Oslo information A-11
A.L. Oslo Regulatory Approvals A-15
AL. Oslo Shares A-7
A.L Pharma Transfer A-27
Affiliate A-34
Agreement A-7
Apothekernes Laboratorium A.S A-7
Average Closing NOK Rate A-9
Average Closing Price A-9
Business Day A-34
Cash Purchase Price A-8
Charter Amendments A-7
Class A Stock A-7
Class B Stock A-11
Closing A-10
Closing Date A-10
Code A-9
Company A-7
Company Indemnified Parties A-32
Company Permits A-12
Company Regulatory Approvals A-12
Company Reports A-13
Contracts A-12
Damages A-3 1
Demerger A-8
DGCL A-7
Employee Stock Purchase Plan A-11
Encumbrances A-15
Environmental Laws A-17
Exchange Act A-Il
Exchange Offer A-7
Exchange Offer Documents A-12
Exercise Price A-9
FDA A-17
ICC A-37
Indebtedness A-19
Intellectual Property Rights A-20
Investigatory New Animal Drug Application A-17
Investigatory New Drug Application A-17
Management Committee A-26
Material Adverse Effect A-b
Minimum Condition A-28
NCA A-S
New A.L. Labs A-7
New A.L. Oslo A-7
New A.L. Oslo Permits A-16
New A.L. Oslo Shares A-7
New Animal Drug Application A-17
New Drug Application A-17
NOK A-34
Norwegian Transactions A-10
Opening Related Norwegian Businesses Balance Sheet A-9
Order A-28
Person A-34
Proxy Statement A-12
Related Norwegian Businesses A-8
Related Norwegian Businesses Financial Statements A-17
Related Norwegian Businesses Insurance Policies A-21
Related Norwegian Businesses Intellectual Property Rights A-20
Representatives A-24
Restructuring A-10
RNB Material Adverse Effect A-16
SEC A-11
Securities Act A-12
Shareholder Affidavit A-9
Skøyen Amount A-33
Special Committee A-13
Stockholders Meeting A-11
Subsidiary A-34
Tax Return A-34
Taxes A-34
Transfer Expenses A-33
Warrant Agreement A-9
Warrants A-8
RESTRUCTURING AGREEMENT (hereinafter the "Agreement"), dated as of May
16, 1994, by and among Apothekernes Laboratorium A. 5, a corporation
organized and existing under the laws of the Kingdom of Norway ("A.L. Oslo")
and A. L. Laboratories, Inc., a Delaware
corporation (the "Company").WHEREAS, the Boards of Directors of A.L. Oslo and the Company have each
unanimously determined that it is in the best interests of their respective
stockholders to engage in the transactions contemplated hereby to restructure
and integrate their respective related businesses;
WHEREAS, the Company shall become a holding company by transferring
substantially all of its assets and liabilities (except for the capital stock
of its Subsidiaries or as otherwise agreed by the parties) to a newly
organized wholly owned subsidiary incorporated under Delaware law to be named
"A. L. Laboratories, Inc." and by changing its name to reflect the increased
international scope of the Company's business, upon the terms and subject to
the conditions of this Agreement;
WHEREAS, pursuant to the terms and conditions of the form of Demerger
Agreement attached hereto as Exhibit 1, (i) the assets and liabilities of
A.L. Oslo that comprise its related businesses including its Pharmaceutical
(including, bulk antibiotics), Animal Health and
Aquatic Animal Health divisions and its subsidiaries Apolab OY, Norgesplaster
A/S and A.L. Lakemedel AB shall be demerged into a new corporation to be
organized under the laws of the Kingdom of Norway ("New A.L. Oslo") and (ii)
each holder of the outstanding ordinary shares of A.L. Oslo (the "A.L. Oslo
Shares") shall receive one ordinary share of New A.L. Oslo for each A.L. Oslo
Share held by such holder;
WHEREAS, the Company shall commence an offer to the prospective
shareholders of New A.L. Oslo to exchange (the "Exchange Offer") for each of
the New A.L. Oslo ordinary shares to be issued upon consummation of the
demerger (the "New A.L. Oslo Shares") a pro
rats portion of certain cash consideration and warrants to purchase 3,600,000
shares of the Company's Class A Common Stock, par value $0.20 per share (the
"Class A Stock"), upon the terms and subject to the conditions of this
Agreement; and
WHEREAS, A.L. Oslo and the Company desire to make certain
representations, warranties and agreements in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE RESTRUCTURING
Section 1.1 International Holding Company. Prior to the Closing (as
defined below), the Company shall form a new wholly owned subsidiary under
the Delaware General Corporation Law (the "DGCL") to be named "A.L.
Laboratories, Inc." ("New A.L. Labs"). Subject to the terms and conditions of
this Agreement, at the Closing the Company shall transfer its officers and
other employees to New A.L. Labs and as soon as reasonably practicable after
the Closing the Company shall contribute substantially all of its assets and
liabilities, including its animal health business (including related assets
and liabilities), to New A.L. Labs (together, the "A.L. Labs Transfer"),
except for the capital stock of its Subsidiaries or as may be agreed to by
A.L. Oslo and the Company. At the Stockholders Meeting of the Company at
which this Agreement (and the transactions contemplated hereby) shall be
submitted for approval, the Company shall also present to its shareholders a
resolution to amend the Company's Restated Certificate of Incorporation (the
"Charter Amendments") to (a) increase the representation of the holders of
Class A Stock on the Board of Directors from 25% to 33?% of the Board of
Directors (rounded
to the nearest whole number, but not less than 2 members of the Board of
Directors) and (b) change the name of the Company to reflect the increased
international scope of the Company's business. The form of Charter Amendments
to the Company's Restated Certificate of Incorporation is attached hereto as
Exhibit 2.Section 1.2 The Demerger. As soon as practicable after the execution of
this Agreement, A.L. Oslo and New A.L. Oslo shall execute and deliver the
form of Demerger Agreement attached hereto as Exhibit 1 (or a Norwegian
translation thereof) and shall submit to the stockholders of A.L. Oslo (in
the written materials provided to such stockholders in connection with the
Demerger) a resolution for the Demerger for adoption and approval by such
stockholders as required under the Norwegian Joint Stock Act of 1976, as
amended ("NCA"). A.L. Oslo and New A.L. Oslo shall not modify or amend the
Demerger Agreement without the express consent of the Company, which consent
shall not be unreasonably withheld. Pursuant to the terms and conditions of
the Demerger Agreement and the conditions set forth in Sections 5.1 and 5.3,
immediately prior to the consummation of the Exchange Offer the assets and
liabilities of A.L. Oslo that comprise its Pharmaceutical (including, bulk
antibiotics), Animal Health and Aquatic Animal Health Divisions, and its
subsidiaries Apolab OY, Norgesplaster A/S and A. L. Lakemedel AB and any
other businesses whose results of operations are included in the Related
Norwegian Businesses Financial Statements (as defined herein) (the "Related
Norwegian Businesses") shall be demerged into New A.L. Oslo (the "Demerger").
Upon the consummation of the Demerger, New A.L. Oslo shall issue to each
holder of A.L. Oslo Shares (other than ordinary shares of A.L. Oslo held by
A/S Wangs Fabrik) one New A.L. Oslo Share for each A.L. Oslo Share held by
such holder. A.L. Oslo will use its reasonable best efforts to obtain
approval to permit New A.L. Oslo to use the name "Apothekernes Laboratorium
A.S" and in the event that such approvals are obtained, New A.L. Oslo shall
be renamed "Apothekernes Laboratorium A.S" and A.L. Oslo shall be renamed
"A.L. Industrier A.S." Section 1.3 Exchange Offer.
(a) At or about the time of the mailing of the proxy materials
relating to the Demerger
to the holders of A.L. Oslo Shares and the mailing of the Proxy Statement (as
defined in Section 2.4) to the holders of Class A Stock and subject to the
receipt of all governmental and regulatory approvals necessary to its
commencement, the Company shall commence the Exchange Offer. The obligations
of the Company to accept for payment and exchange the New A.L. Oslo Shares
tendered pursuant to the Exchange Offer at the Closing shall be subject only
to the conditions set forth in Sections 5.1 and 5.2 (and other customary
procedural conditions), and without the written consent of A.L. Oslo, the
Company shall not decrease the number of New A.L. Oslo Shares being sought,
change the form of consideration payable in the Exchange Offer, add
additional material conditions to the Exchange Offer or waive the Minimum
Condition (as defined in Section 5.1(d)). The Company shall not consummate
the Exchange Offer unless and until the Demerger shall have been consummated.
The Exchange Offer shall be made by means of a written offer to exchange and
related letter of transmittal and shall be made in accordance with applicable
Norwegian law and regulations. The written Exchange Offer materials shall
contain a statement indicating that tendering shareholders shall be obligated
to reimburse A.L. Oslo for any amounts paid on their behalf by A.L. Oslo
pursuant to Section 7.2(b)(ii) of this Agreement.(b) Pursuant to the Exchange Offer, each holder of New A.L. Oslo
Shares whose shares are accepted for payment pursuant to the Exchange Offer
shall receive a pro rata portion (based upon the number of New A. L. Oslo
Shares validly tendered (and not withdrawn) by
such holder and the number of New A. L. Oslo Shares outstanding on the date
the Exchange Offer is consummated) of the Cash Purchase Price (as defined
below) and warrants to purchase 3,600,000 shares of Class A Stock (the
"Warrants"). The Managing Director of A.L. Oslo shall certify to A.L. Labs
the number of New A.L. Oslo Shares outstanding on the date of the
consummation of the Exchange Offer and eligible to be tendered in the
Exchange Offer.
(i) The "Cash Purchase Price," which shall be paid in Norwegian
Kroner, shall be NOK 170,000,000; provided, however, that if the arithmetic
average of the closing U.S. dollar exchange rate of the Norwegian Krone as
published by The Wall Street Journal in its "Exchange Rates" table for the 10
Business Days prior to the fifth Business Day prior to Closing (the "Average
Closing NOK Rate") (x) exceeds NOK 7.5 to U.S. $1.00 then the Cash Purchase
Price shall be an amount equal to NOK 170,000,000 divided by 7.5 and
multiplied by the Average
Closing NOK Rate and (y) is less than NOK 6.5 to U.S. $1.00 then the Cash
Purchase Price shall be an amount equal to NOK 170,000,000 divided by 6.5 and
multiplied by the Average Closing NOK Rate; provided, further, that the Cash
Purchase Price shall be reduced on a Krone for Krone basis to the extent that
A.L. Oslo shall pay a dividend on the A.L. Oslo Shares that would have the
effect of reducing the equity of New A.L. Oslo or the Related Norwegian
Businesses. The Managing Director of A.L. Oslo shall certify to A.L. Labs the
amount of any such reduction on the date of the consummation of the Exchange Offer.
(ii) The Warrants shall have the terms and conditions set forth in the
form of Warrant Agreement attached hereto as Exhibit 3 (the "Warrant
Agreement"), except that the exercise price for the Warrants (the "Exercise
Price") shall initially be determined pursuant to this Section 1 .3(b)(ii).
The initial Exercise Price for the Warrants shall be equal to the arithmetic average
of the daily closing price of the Class A Stock on the New York Stock
Exchange (the "Average Closing Price") for the period beginning on the date
the Proxy Statement (as defined in Section 2.4) is first mailed to
stockholders of the Company and ending on the last trading day that is at
least five trading days prior to the date of the Stockholders Meeting (as
defined in Section 2.4) multiplied by 1.4; provided, however, (w) if the
Average Closing Price is greater than or equal to $23.00 then the Exercise
Price shall equal the Average Closing Price plus $7.00, (x) if the Average
Closing Price is greater than $21 .4286 and less than $23.00 then the
Exercise Price shall equal $30.00, (y) if the Average Closing Price is less
than $14.2857 and greater than or equal to $13.00, then the Exercise Price
shall equal $20.00 and (z) if the Average Closing Price is less than $13.00
then the Exercise Price shall equal the Average Closing Price plus $7.00. The
Warrants shall expire on December 31, 1998; provided, however, if the Closing
Date shall occur after September 30, 1994 then the Warrants shall expire on
the date that is fifty-one (51) months
from the Closing Date.(c) The Company agrees to extend the Exchange Offer from time to time
until the conditions of the Exchange Offer are satisfied or this Agreement
shall have been terminated in accordance with its terms. The Company and, if
applicable, A.L. Oslo agree to make all filings and to obtain all consents
with respect to the Exchange Offer required by applicable Norwegian law. Upon
the terms and subject to the conditions of the Exchange Offer, on the Closing
Date the Company shall exchange, for the consideration set forth in Section
1.3(b) above, all the New A.L. Oslo Shares which are validly tendered and not
withdrawn on or prior to the expiration of the Exchange Offer.
(d) A.L. Oslo has delivered to the Company an audited combined
balance sheet for the Related Norwegian Businesses as of December 31, 1993
(the "Opening Related Norwegian Businesses Balance Sheet"), a copy of which
is included in Exhibit 4 hereto.
(e) The Exchange Offer materials shall require each accepting holder
of New A.L. Oslo Shares to certify to the information necessary to enable the
Company to determine the extent of any U.S. tax withholding obligations. The
payment of the Cash Purchase Price and Warrants to each holder of New A.L.
Oslo Shares by the Company shall be made free and clear of, and without
deduction for, any and all U.S. withholding Taxes (as defined in Section
8.3(g); unless (i) the Company shall not have received from such holder a
duly completed and executed affidavit in the form attached as Exhibit 5
hereto (the "Shareholder Affidavit") (which shall be provided to the holders
of A.L. Oslo Shares together with the materials referenced in Section 1.3),
or (ii) the Company shall have received the Shareholder Affidavit, but shall
have made a good faith determination that as a result of the Restructuring
(as defined in Section 1.4), such
holder may not have experienced a "substantially disproportionate redemption"
within the meaning of Section 302(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), as such section is applied pursuant to Section 304
of the Code; provided, that the Company may, in its sole discretion, waive
application of the preceding clause (ii) in the case of any holder who,
immediately before the Closing, owns directly, indirectly or constructively
(talcing into account the rules of Section 318 of the Code, applied without
regard to the 50% limitation contained in
Sections 3 18(a)(2)(C) and 3 18(a)(3)(C) of the Code) less than 100 New A.L.
Oslo Shares. If the Company does not intend to waive application of clause
(ii) in the preceding sentence with respect to any holder of New A.L. Oslo
Shares, it shall prior to making any final determinations thereof consult in
good faith with counsel to A.L. Oslo. In the event that the Company
determines that it is required by law to withhold any Taxes, the Company
shall, to the extent allowable by law, reduce the amount of any Taxes
otherwise imposed upon such payment pursuant to the terms of any applicable
income tax convention between the United States of America and the country in
which such holder is resident.Section 1.4 Reasonable Efforts. A.L. Oslo and the Company shall each
use all reasonable efforts to cause (i) the A.L. Labs Transfer and the
Charter Amendments to be consummated in accordance with this Agreement, (ii)
the Demerger to be consummated in accordance with the Demerger Agreement and
this Agreement and (iii) the Exchange Offer to be consummated in accordance
with this Agreement. The Demerger and the Exchange Offer are sometimes
referred to herein as the "Norwegian Transactions." The Norwegian
Transactions, the A.L. Labs Transfer and the Charter Amendments are sometimes
referred to herein as the "Restructuring." Contemporaneously herewith, the
Company has received a letter from A.L. Oslo's Managing Director, in the form
set forth in Exhibit 7 hereto, expressing his agreement (i) to vote, or cause
to be voted, all A.L. Oslo Shares owned of record by him or by A/S Swekk, in
favor of the transactions contemplated hereby and to tender, or cause to be
tendered, all New A.L. Oslo Shares to be issued to him or A/S Swekk pursuant
to the Exchange Offer and (ii) to use his reasonable efforts to obtain
similar assurances from his wife and children. In addition, A.L. Oslo shall
use its reasonable efforts to cause Nopal International AG to tender all New
A.L. Oslo Shares owned of record by it, pursuant to the Exchange Offer.Section 1.5 The Closing. The closing of the Restructuring (the
"Closing") shall take place (a) at the offices of A.L. Oslo, at 3:00 p.m.,
Oslo, Norway time, on the fifth business day after the date on which the last
to be fulfilled or waived of the conditions set forth in Article V hereof
shall be fulfilled or waived in accordance herewith, or (b)at such other time
and place and/or on such other date as A.L. Oslo and the Company may agree.
The date on which the Closing occurs is referred to herein as the "Closing Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANYThe Company hereby represents and warrants to A.L. Oslo that:
Section 2.1 Corporate Organization and Qualification. Each of the
Company and its Subsidiaries (as defined in Section 8.3) is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and is in good standing as a foreign
corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted, by it require such qualification, except
for such failure to so qualify or be in such good standing, which, when taken
together with all other such failures, is not reasonably likely to have a
material adverse effect on the financial condition, properties, business or
results of operations of the Company and its Subsidiaries, taken as a whole
as currently conducted (a "Material Adverse Effect"). Each of the Company and
its Subsidiaries has the requisite corporate power and authority to carry on
its respective businesses as they are now being conducted. The Company has
provided to A. L. Oslo a complete and correct copy of the Company's
Certificate of Incorporation and By-Laws, each as amended to date. The
Company's Certificate of Incorporation and By-Laws so delivered are in full
force and effect.Section 2.2 Authorized Capital. The authorized capital stock of the
Company consists of: (i) 40,000,000 shares of Class A Stock of which, as of
December 31, 1993, 13,320,473 shares (not including treasury shares) were
issued and outstanding, (ii) 15,000,000 shares of Class B Common Stock, par
value $.20 per share (the "Class B Stock") of which, as of December 31, 1993,
8,226,562 shares were issued and outstanding and (iii) 500,000 shares of
Preferred Stock, par value $1.00 per share, of which, as of the date hereof,
none are outstanding. All of the outstanding shares of Class A Stock and
shares of Class B Stock have been duly authorized and are validly issued,
fully paid and non-assessable. The Company has no shares of its capital stock
reserved for issuance, except that, as of December 31, 1993, there were
972,648 shares of Class A Stock reserved for issuance under the Company's
benefit plans including options to purchase 489,900 shares of Class A Stock
outstanding pursuant to the 1983 Incentive Stock Option Plan, as amended (the
"1983 Stock Option Plan") and there are no shares of Class A Stock reserved
for issuance pursuant to the Company's Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan"). Each of the outstanding shares of capital
stock of each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and non-assessable and all such shares owned, either
directly or indirectly, by the Company are owned free and clear of all liens,
pledges, security interests, claims or other encumbrances. Except as set
forth above, there are no, and on the Closing Date there will be no, shares
of capital stock of the Company authorized, issued or outstanding and, except
as set forth above or as contemplated by this Agreement, there are no, and on
the Closing Date there will be no, preemptive rights nor any outstanding
subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company or any of its Subsidiaries.Section 2.3 Corporate Authority. The Company has the requisite
corporate power and authority to execute and deliver this Agreement. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized and approved
by its Board of Directors and no other action on the part of the Company is
necessary to authorize the execution, delivery and performance of this
Agreement by the Company (other than the approval of the stockholders of the
Company). This Agreement has been duly executed and delivered by the Company
and is a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms.
Section 2.4 Proxy Statement.
(a) The Proxy Statement (as defined below) to be used by the Company
in soliciting proxies with respect to the meeting of the Company's
stockholders to be held in connection with the Agreement (the "Stockholders
Meeting") will not, on the date the Proxy Statement is mailed to stockholders
and on the date of such Stockholders Meeting, contain any statement which, at
the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact or omit to state any material
fact necessary in order to make the statements therein (at the time and in
the light of the circumstances under which they were made) not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for such Stockholders Meeting
that has become false or misleading at that time; provided, however, the
Company makes no representations as to the information contained in or
omitted from the Proxy Statement in reliance upon and in conformance with
information furnished to the Company by A.L. Oslo, New A.L. Oslo or any
Subsidiaries or Affiliates thereof (excluding the Company and its
Subsidiaries, but including any principal stockholders of A. L. Oslo and New
A. L. Oslo while acting solely in such capacity) with respect to A. L. Oslo
and its Subsidiaries and Affiliates (excluding the Company and its
Subsidiaries, but including any principal stockholders of A.L. Oslo and New
A.L. Oslo while acting solely in such capacity) or the Related Norwegian
Businesses (the "A.L. Oslo Information"). The Proxy Statement will comply as
to form and otherwise in all material respects, with the applicable
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the Securities and Exchange
Commission (the "SEC"). The letters and notices of meeting to the
stockholders of the Company, the proxy statement (and any amendments or
supplements thereto), the form of proxy to be distributed to the stockholders
of the Company in connection with the Restructuring and any schedules
required to be filed with the SEC in connection therewith, are collectively
referred to herein as the "Proxy Statement."
(b) The written materials furnished by the Company to the holders of
A.L. Oslo Shares (or New A.L. Oslo Shares, as the case may be) in connection
with the Exchange Offer (the "Exchange Offer Documents") and the information
relating to the Company and its Subsidiaries furnished by the Company for use
in the written materials provided to the holders of A.L. Oslo Shares in the
Demerger (i) shall be accurate and complete in all material respects, (ii)
shall be prepared in accordance with applicable law and (iii) shall not
contain any statement which, at the time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact or omit to state any material fact necessary in order to make the
statements therein (at the time and in the light of the circumstances under
which they were made) not false or misleading; provided, that the Company
makes no representation or warranty as to the A.L. Oslo Information contained
in or omitted from such written materials.
Section 2.5 Governmental Filings: No Violations: Permits.
(a) Other than filings, notices, consents, registrations, approvals,
permits or authorizations set forth on Schedule 2.5 (the "Company Regulatory
Approvals") or those required under the DGCL, the Exchange Act, the
Securities Act of 1933, as amended (the "Securities Act"), or Norwegian law,
no notices, reports or other filings are required to be made by the Company
or any of its Subsidiaries, with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by the Company
or any of its Subsidiaries, from, any governmental or regulatory authority of
the United States, the several states or any foreign jurisdiction in
connection with the execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby,
the failure to make or obtain any or all of which is reasonably likely to
have a Material Adverse Effect or prevent, materially delay or materially
burden the transactions contemplated by this Agreement.(b) The execution and delivery of this Agreement by the Company does
not, and the consummation by the Company of the transactions contemplated by
this Agreement will not, constitute or result in (A) a breach or violation
of, or a default under, the Certificate of Incorporation or By-Laws of the
Company or the respective governing instruments of any of its Subsidiaries,
(B) a material breach or violation of, a default under or the triggering of
any material payment or other obligations pursuant to, any of the existing
Company employee benefit plans or any grant or award made under any of the
foregoing, (C) a breach or violation of, or a default under, the acceleration
of or the creation of a lien, pledge, security interest or other encumbrance
on assets (with or without the giving of notice or the lapse of time)
pursuant to, (x) except as set forth in Schedule 2.5(b), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement, guarantee
or other obligation ("Contracts") of the Company or any of its Subsidiaries
or (y) any law, rule, ordinance or regulation or judgment, decree, order,
injunction, award or governmental or non-governmental permit or license to
which the Company or any of its Subsidiaries is subject or (D) any change in
the rights or obligations of any party under any of the Contracts; except, in
the case of clauses (B), (C) or (D) above, for such breaches, violations,
defaults, triggering, accelerations or changes that, alone or in the
aggregate, are not reasonably likely to have a Material Adverse Effect or to
prevent, materially delay or materially burden the transactions contemplated
by this Agreement.
(c) The Company and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities
which are material to the operation of the business of the Company and its
Subsidiaries taken as a whole (collectively, the "Company Permits") and the
Company Permits are in full force and effect.
(d) The Company and its Subsidiaries are being, and have been
operated, in compliance with all applicable laws, regulations, orders,
judgments and decrees except where the failure to do so would not have a
Material Adverse Effect.
Section 2.6 Company Reports: Financial Statements. The Company has
filed with the SEC all registration statements, quarterly and annual reports,
proxy statements, forms, schedules and other material documents required to
be filed by it since January 1, 1991 under the Exchange Act or the Securities
Act (including exhibits and any amendments thereto) (collectively, the
"Company Reports"). At the time filed, the Company Reports (A) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not
misleading, and (B) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act and the applicable
rules and regulations of the SEC thereunder. Each of the consolidated balance
sheets included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents in all material
respects the consolidated financial position of the Company and its
Subsidiaries as of its date and each of the consolidated statements of income
and cash flow included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly presents in all
material respects the results of operations, retained earnings and cash
flows, as the case may be, of the Company and its Subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which were not or will not be material in
amount or effect), in each case in accordance with United States generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein.Section 2.7 Absence of Certain Changes. Except as disclosed in the
Company Reports or in Schedule 2.7, since December 31, 1993, (i) the Company
and its Subsidiaries have conducted their respective businesses only in the
ordinary and usual course of such businesses and (ii) there has not been (A)
any change, or any development or combination of developments involving a
prospective change of which management of the Company has knowledge, which
has had or is reasonably likely to have a Material Adverse Effect (other than
changes or developments that generally affect the businesses in which the
Company competes); or (B) any material change by the Company in accounting
principles, practices or methods (except to the extent required by U.S.
generally accepted accounting. principles). Since December 31, 1993, and
prior to the date hereof, the Company has not taken any action which, if
taken after the date hereof, would be prohibited by Section 4.1 hereof. Section 2.8 Liabilities. Except as disclosed in the Company Reports or
as disclosed on Schedule 2.8, there are no obligations or liabilities (other
than those incurred in the ordinary course of business), whether or not
accrued, contingent or otherwise, including, without limitation, those
relating to environmental and occupational safety and health matters, that
may reasonably be expected to result in any claims against or obligations or
liabilities of the Company or any of its Subsidiaries that, alone or in the
aggregate, are reasonably likely to have a Material Adverse Effect.Section 2.9 Opinion of Financial Advisor. The Special Committee of the
Board of Directors of the Company established with respect to the
transactions contemplated hereunder (the "Special Committee") has determined
(at meetings duly called and held) that the transactions contemplated hereby
are fair to the Company and the holders of Class A Stock and the Board of
Directors of the Company has determined (at meetings duly called and held)
that the transactions contemplated hereby are fair to and in the best
interest of the Company and fair to the holders of Class A Stock. The Board
of Directors and the Special Committee of the Company has received the
opinion of Lehman Brothers dated as of the date hereof to the effect that the
consideration to be paid by the Company in the Exchange Offer is fair from a
financial point of view to the Company and the holders of Class A Stock, a
copy of which opinion has been delivered to A.L. Oslo. Section 2.10 Taxes.
(a) Each of the Company and its Subsidiaries has duly and timely
filed all U.S. federal, state, local and foreign Tax Returns required to be
filed by it and such Tax Returns were true, correct and complete in all
material respects, and has duly paid, caused to be paid or made adequate
provision for the payment of all Taxes required to be paid in respect of the
periods covered by such returns. There are no tax liens upon the assets of
the Company or any of the Subsidiaries other than liens for Taxes not yet due.
(b) The Company and the Subsidiaries have not filed any consent
pursuant to Section 34 1(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset owned by the
Company or any of its Subsidiaries.
Section 2.11 Brokers and Finders. Other than (i) Lehman Brothers, who
was retained by the Special Committee in connection with the transactions
contemplated by this Agreement, and (ii) a Norwegian stockbroker to be
retained in connection with the Exchange Offer, the Company has not engaged
any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who would be entitled to a
broker's, finder's or similar fee or commission in connection therewith or
upon the consummation thereof.Section 2.12 Warrants. The Company has the requisite corporate power
and authority to execute and deliver the Warrant Agreement. The execution,
delivery and performance of the Warrant Agreement has been duly authorized
and approved by the Board of Directors and no other action on the part of the
Company (except for approval of the stockholders of the Company) is necessary
to authorize the execution, delivery, or performance of the Warrant
Agreement. The Warrant Agreement, when properly executed and delivered by the
Company, will be a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms. The Warrants, upon issuance
pursuant to the provisions of the Warrant Agreement, will be duly authorized
and validly issued. The underlying shares of Class A Stock to be issued upon
exercise of the Warrants shall be duly authorized and upon the exercise as
provided in the Warrant Agreement, will be validly issued, fully paid and non-assessable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF A.L. OSLOA. L. Oslo represents and warrants to the Company that:
Section 3.1 Corporate Organization and Qualification. Each of A. L.
Oslo, Norgesplaster A/S, Apolab OY and A. L. Lakemedel AB is a corporation
duly organized and validly existing under the laws of the jurisdiction of its
incorporation. Each of A.L. Oslo and its Subsidiaries has (and, on the
Closing Date, New A.L. Oslo and its Subsidiaries will have) the requisite
corporate power and authority to carry on the businesses of the Related
Norwegian Businesses as they are now being conducted. New A.L. Oslo will be
duly organized and validly existing under the laws of the Kingdom of Norway
on the Closing Date. Prior to the Closing, A.L. Oslo shall provide to the
Company a complete and correct copy of New A.L. Oslo's organizational
documents, as amended to date, and such organizational documents shall be in
full force and effect. Section 3.2 Authorized Capital. As of the date hereof, the authorized
share capital of A.L. Oslo is NOK 40,000,000 divided into 400,000 issued and
outstanding ordinary shares, NOK 100 per share (including 17,420 shares held
by A/S Wangs Fabrik and Nopal International AG) and A.L. Oslo has no shares
of capital stock reserved for issuance. The certificate referenced in Section
1.3(b) shall be true and correct as of its date. Except as set forth in such
certificate, at the Closing, there will be no shares of capital stock of New
A.L. Oslo authorized, issued or outstanding, and except as set forth under
the NCA, there will be no preemptive rights nor any outstanding
subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of New A.L. Oslo. Except as set forth on
Schedule 3.2, the outstanding shares that constitute all the share capital of
Norgesplaster A/S, Apolab OY and A.L. Lakemedel A.B have been fully paid;
and, all of such shares are owned, directly or indirectly, by A.L. Oslo (and
will be owned, directly or indirectly, immediately after the Closing by New
A.L. Oslo) free and clear of all liens, pledges, security interests, claims
or other encumbrances ("Encumbrances"), other than Encumbrances reflected on
the Related Norwegian Businesses Financial Statements or the Opening Related
Norwegian Businesses Balance Sheet or Encumbrances relating to indebtedness
that may be refinanced or modified as contemplated by Section 4.12(c) hereof.
Section 3.3 Corporate Authority. A.L. Oslo has the requisite corporate
power and authority to execute and deliver this Agreement. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and approved by
the Board of Directors of A. L. Oslo, and no other action on the part of A.L.
Oslo is necessary to authorize the execution, delivery and performance of
this Agreement by A.L. Oslo (other than (i) the approval of the stockholders
of A.L. Oslo to the extent required by applicable law, and (ii) the
certifications of the Board of Directors of A.L. Oslo with respect to the
Demerger and the Exchange Offer required under the NCA). This Agreement has
been duly executed and delivered by A.L. Oslo and is a valid and binding
agreement of A.L. Oslo enforceable against A.L. Oslo in accordance with its
terms. The lease referenced in Section 4.13 hereof relating to the Skøyen
facility, will be a valid and binding agreement of A.L. Oslo enforceable
against A.L. Oslo in accordance with its terms.Section 3.4 Proxy Statement: Norwegian Materials.
(a) The A.L. Oslo Information contained in the Proxy Statement will
not on the date the Proxy Statement is first mailed to stockholders, nor on
the date of the Stockholders Meeting, contain any statement which, at the
time and in light of the circumstances under which it is made, is false or
misleading with respect to any material fact or omit to state any material
fact necessary in order to make the statements therein (at the time and in
the light of the circumstances under which they were made) not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for such Stockholders Meeting
that has become false or misleading at the time.(b) The A.L. Oslo Information contained in the Exchange Offer
Documents (i) shall be accurate and complete in all material respects, (ii)
shall be prepared in accordance with applicable law and (iii) shall not
contain any statement which, at the time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact or omit to state any material fact necessary in order to make the
statements therein (at the time and in the light of the circumstances under
which they were made) not false or misleading. The written materials provided
to the holders of A.L. Oslo Shares in connection with the Demerger shall be
accurate and complete in all material respects and shall be prepared in
accordance with applicable law; provided, that A. L. Oslo makes no
representations as to information contained in or omitted from such materials
relating to the Company and its Subsidiaries.
Section 3.5 Governmental Filings: No Violations: Permits.
(a) Other than filings, notices, consents, registrations, approvals,
permits or authorizations set forth on Schedule 3.5 hereto (the "A.L. Oslo
Regulatory Approvals") or required under the NCA, the Exchange Act and the
Securities Act, no notices, reports or other filings are required to be made
by A.L. Oslo or New A.L. Oslo with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by A.L. Oslo or
New A.L. Oslo from, any governmental or regulatory authority of the United
States, the several states or any foreign jurisdictions (including, without
limitation, Norway) in connection with the execution and delivery of this
Agreement by A.L. Oslo, and the consummation of the transactions contemplated
hereby by A.L. Oslo and New A.L. Oslo, the failure to make or obtain any or
all of which is reasonably likely to (A) have a material adverse effect on
the financial condition, properties, business, or results of operations of
the Related Norwegian Businesses, taken as a whole as currently conducted (a
"RNB Material Adverse Effect") or (B) prevent, materially delay or materially
burden the transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement by A.L. Oslo does
not, and the consummation of the transactions contemplated hereby by A.L.
Oslo and New A.L. Oslo will not, constitute or result in (A) a breach or
violation of, or a default under, the Articles of Association, of A.L. Oslo,
New A.L. Oslo or any of their respective Subsidiaries, (B) a material breach
or violation of, a default under or the triggering of any material payment or
other material obligations pursuant to, any of the existing A.L. Oslo Benefit
Plans (as defined in Section 3.10) or any grant or award made under any of
the foregoing, (C) except to the extent the transactions contemplated hereby
may require the consents set forth on Schedule 3.5, a breach or violation of,
a default under, the acceleration of or the creation of a lien, pledge,
security interest or other encumbrances on assets (with or without the giving
of notice or the lapse of time) pursuant to, any provision of any Contract of
A.L. Oslo, New A.L. Oslo or any of their respective Subsidiaries or any law,
ordinance, rule or regulation or judgment, injunctions, decree, order, award
or governmental or non-governmental permit or license to which A.L. Oslo, New
A. L. Oslo or any of their respective Subsidiaries is subject or (D) any
change in any of the rights or obligations of any party under such Contracts,
except, in the case of clauses (B), (C) or (D) above, for such breaches,
violations, defaults, accelerations or changes that, alone or in the
aggregate, are not reasonably likely to (x) have an RN B Material Adverse
Effect or (y) prevent or materially delay or materially burden the
transactions contemplated by this Agreement.(c) Except as set forth in Schedule 3.5(c), upon the consummation of
the Demerger, New A.L. Oslo (A) will hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
necessary for the operation of the Related Norwegian Businesses as currently
conducted (collectively, the "New A.L. Oslo Permits"), (B) will be in
compliance with the terms of the New A.L. Oslo Permits and with all
representations (such as master file descriptions) that have been made to
governmental regulatory officials (foreign and domestic including, without
limitation, Norwegian) and upon which the compliance status of products made
from A.L. Oslo's materials are based, and (C) except for the Skøyen facility
(in which New A.L. Oslo will hold a valid leasehold interest in accordance
with the terms of the form of lease referenced in Section 4.13), will hold
good, valid and marketable title to all real properties reflected as owned on
the Opening Related Norwegian Businesses Balance Sheet, except where the
failure to so hold or so comply would not have a RNB Material Adverse Effect.
Except as set forth on Schedule 3.5, all such real property referred to in
clause (C) of the preceding sentence is in good operating condition and,
subject to normal maintenance, is available for continuing use by the Related
Norwegian Businesses in the manner in which it has previously been used.
(d) Except as set forth in Schedule 3.5(d), A.L. Oslo and its
Subsidiaries are being, and have been operated, in compliance with all
applicable A.L. Oslo Permits, judgments, laws, regulations, orders and
decrees that relate to the Related Norwegian Businesses except where the
failure to do so would not have an RNB Material Adverse Effect. To the
knowledge of A.L. Oslo and except as set forth in Schedule 3.5(d), the
Related Norwegian Businesses hold and are in substantial compliance with, all
material permits, licenses and governmental authorizations required for A.L.
Oslo to conduct the Related Norwegian Businesses under applicable
Environmental Laws (as defined below), and are otherwise in compliance with
such laws, except where the failure to be in compliance would not have an RNB
Material Adverse Effect. To the knowledge of A.L. Oslo and except as set
forth in Schedule 3.5(d), A.L. Oslo has not received any request for
information from a governmental entity or third person with respect to the
potential liability of the Related Norwegian Businesses for environmental
pollution, and has not received any written notification from a governmental
entity or a third person alleging that the Related Norwegian Businesses are
or may be liable for the cost of remediating environmental pollution, under
any applicable Environmental Laws. To the knowledge of A.L. Oslo, there are
no facts, events or circumstances that would reasonably be expected to cause
liability for remediating environmental pollution under existing
Environmental Laws. For purposes of this Section 3.5(d), the term
"Environmental Laws" means all legal requirements (including laws, codes,
rules, regulations, orders, decrees, permits, licenses and other governmental
authorizations) applicable to the Related Norwegian Businesses relating to
pollution, the preservation of the environment or the discharge, emission,
disposal or escape of materials into the environment.(e) Except as set forth in Schedule 3.5(e), A.L. Oslo is not aware of
any facts (i) which could furnish a basis for the recall, withdrawal or
suspension of any approved new drug application (a "New Drug Application" or
"New Animal Drug Application") or other pre-market product notification or
approval, or any investigatory new drug application (an "Investigatory New
Drug Application" or "Investigatory New Animal Drug Application") or other
application for exemption from pre-market approval for the purpose of
conducting investigations on the product by the U.S. Food and Drug
Administration (the "FDA") or any other governmental regulatory agency
(foreign or domestic including, without limitation, Norwegian) insofar as the
status of the requested product is affected by any product being sold (as of
the date hereof) or proposed to be sold by any of the Related Norwegian
Businesses (including, any product proposed to be sold by the Biotechnical
division) being in compliance with representations or filings of any type
(including Master File or similar submissions which are not approved, per se)
made to any governmental regulatory agency) or (ii) which could otherwise
cause A.L. Oslo or its Subsidiaries (or New A.L. Oslo or any of its
Subsidiaries after the Closing Date) to withdraw any product sold by any of
them as of the date hereof (including any product sold by the Biotechnical
division) from the market or to change the marketing classification of any
such product or to terminate or suspend clinical testing of any such product
(including, without limitation, with respect to each of the foregoing clauses
(i) and (ii), any pending or threatened safety or efficacy hearing with
respect to a product not required to have obtained any such pre-market
approval); except for such recalls, withdrawals, suspensions, changes in
marketing, terminations, suspensions or pending or threatened efficacy
hearings which would not have a RNB Material Adverse Effect.
Section 3.6 Financial Statements: Projections.
(a) Set forth as Exhibit 4 hereto are (x) the audited Combined
Balance Sheets of the Related Norwegian Businesses for the years ended
December 31, 1992, and December 31, 1993, and the unaudited Interim Combined
Balance Sheet of the Related Norweigan Businesses for the three months ended
March 31,1994; (y) the audited Combined Statements of Income for the years
ended December 31, 1991, December 31, 1992, and December 31, 1993, the
unaudited Interim Combined Statement of Income for the three months ended
March 31, 1994, and the unaudited Interim Combined Statement of Cash Flows
for the three months ended March 31, 1994; and (z) the Combined Statements of
Cash Flows for the years ended December 31, 1991, December 31, 1992, and
December 31, 1993 (including any related notes and schedules) (together, the
"Related Norwegian Businesses Financial Statements"). Each such combined
balance sheet set forth in the Related Norwegian Businesses Financial
Statements has been prepared in accordance with the books and records of A.L.
Oslo kept in the normal course of business and fairly presents in all
material respects the combined financial position of the Related Norwegian
Businesses as of its date, in each case in accordance with U.S. generally
accepted accounting principles consistently applied during the periods
involved (except as may be noted therein and, in the case of the unaudited
Interim Combined Balance Sheet, for normal year-end audit adjustments and for
the absence of footnotes that may be required by U.S. generally accepted
accounting principles). Each of the combined statements of income and
combined statements of cash flow included in the Related Norwegian Businesses
Financial Statements (including any related notes and schedules) has been
prepared in accordance with the books and records of A.L. Oslo, which books
and records are accurate and complete and kept in the normal course of
business, and fairly presents in all material respects the results of
operations and changes in cash flow, respectively, of the Related Norwegian
Businesses for the periods set forth therein, in each case in accordance with
U.S. generally accepted accounting principles consistently applied
(including, without limitation, principles relating to the reflection of
assets (including accounts receivable, inventory and prepaid expenses) and
liabilities) during the periods involved (except as may be noted therein and,
in the case of the unaudited Interim Combined Statement of Income and the
unaudited Combined Statement of Cash Flows, for normal year-end audit
adjustments and for the absence of footnotes that may be required by U.S.
generally accepted accounting principles).(b) Except as set forth in the Related Norwegian Businesses Financial
Statements, Schedule 4.2(g), or as otherwise contemplated hereunder, as of
the date hereof none of A.L. Oslo, Apolab OY, Norgesplaster A/S nor A.L.
Lakemedel AB is a party to transactions with Affiliates.
(c) The financial projections for the Related Norwegian Businesses
attached as Schedule 3.6(c) hereto were prepared by A.L. Oslo in good faith
based upon certain estimates and assumptions that A.L. Oslo in good faith
believed to be reasonable both on the date such financial projections were
prepared and, except as modified by the 1994 Budget for the Related Norwegian
Businesses (as hereinafter defined), as of the date of this Agreement. The
Company acknowledges and agrees that such financial projections were not
prepared with a view toward compliance with published guidelines of the SEC
or the American Institute of Certified Public Accountants regarding forecasts
or Norwegian or U.S. generally accepted accounting principles, and that such
financial projections necessarily make numerous estimates and assumptions
with respect to industry performance, general business and economic
conditions, taxes and other matters, which are beyond the control of A. L.
Oslo. The Company also acknowledges and agrees that such financial
projections are not necessarily indicative of current values or the future
performance of the Related Norwegian Businesses, which may be significantly
different as compared to such financial projections, and that A.L. Oslo makes
no representation or warranty that the results set forth in such financial
projections will be achieved.
Section 3.7 Absence of Certain Changes. Except as set forth in Schedule
3.7(a) or as contemplated by this Agreement or the Demerger Agreement, since
December 31, 1993 (i) the Related Norwegian Businesses have been operated
only in the ordinary course of business, consistent with past practice; and
(ii) there has not been (A) any change, or any development or combination of
developments involving a prospective change which has had or is reasonably
likely to have an RNB Material Adverse Effect (other than changes or
developments that generally affect the businesses in which A.L. Oslo
competes); (B) any declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of A.L. Oslo other than
regular annual cash dividends on its ordinary shares not in excess of NOK
10,000,000; (C) extraordinary increases in indebtedness; or (D) any material
change by A.L. Oslo in accounting principles, practices or methods (except as
required by U.S. or Norwegian generally accepted accounting principles).
Since December 31, 1993, other than in the ordinary course of business, there
has not been any material increase in the compensation payable or which could
become payable by A.L. Oslo and its Subsidiaries to their key employees, or
any material amendment of any A.L. Oslo Benefit Plan (as defined in Section
3.10(a)). Except as set forth on Schedule 3.7(b) since December 31, 1993, and
prior to the date hereof, A.L. Oslo has not taken any action which, if taken
after the date hereof, would have been prohibited by Section 4.2 hereof.Section 3.8 Litigation and Liabilities. Except as disclosed in the
Related Norwegian Businesses Financial Statements, in the Opening Related
Norwegian Businesses Balance Sheet or in Schedule 3.8, there are no (i)
actions, suits or proceedings or investigations pending or, to the knowledge
of the management of A.L. Oslo, threatened against or affecting New A.L. Oslo
or its Subsidiaries (at the time of the Closing) or the Related Norwegian
Businesses or (ii) obligations or liabilities (other than those incurred in
the ordinary course of business consistent with past practice), whether or
not accrued, contingent or otherwise, relating to the Related Norwegian
Businesses, or for which New A.L. Oslo or its Subsidiaries shall be liable
following the Demerger including, without limitation, those relating to
environmental and occupational safety and health matters, that may reasonably
be expected to result in any claims against or obligations or liabilities of
New A.L. Oslo or any of its Subsidiaries or the Related Norwegian Businesses
that, alone or in the aggregate, are reasonably likely to have an RNB
Material Adverse Effect.Section 3.9 Business of New A.L. Oslo: Indebtedness. Upon consummation
of the Demerger, New A. L. Oslo shall hold or have appropriate rights to use
all the assets (including contracts), property, real and personal, tangible
and intangible (including, without limitation, technology), used or held for
use by the Related Norwegian Businesses immediately prior to the Demerger or
otherwise necessary for the conduct of the Related Norwegian Businesses as
they are being conducted by A.L. Oslo on the date hereof (except as otherwise
contemplated under Section 4.13), including the assets which are reflected on
the Opening Related Norwegian Businesses Balance Sheet (except for assets
thereafter disposed of in the ordinary course of business consistent with
past practice). As of the Closing Date, the total indebtedness associated
with the Related Norwegian Businesses shall not be in excess of NOK
490,000,000. Upon consummation of the Demerger, all of the assets of New A.L.
Oslo will be owned free and clear of all Encumbrances except for Encumbrances
evidenced by indebtedness reflected on the Opening Related Norwegian
Businesses Balance Sheet (or the refinancing or modification of such
indebtedness) or Encumbrances which do not materially interfere with the use
and enjoyment of such assets. Except as contemplated hereunder or under the
Demerger Agreement, prior to the Closing Date New A.L. Oslo shall not have
engaged in any businesses. Upon the consummation of the Demerger, New A.L.
Oslo shall not have assumed or otherwise be liable for any liabilities other
than contemplated herein or under the Demerger Agreement. Except as set forth
in Schedule 3.9 and Schedule 4.16, upon the consummation of the Demerger A.L.
Oslo shall not have retained any pharmaceutical-related (including, bulk
antibiotics), animal health, aquatic animal health businesses or any other
business similar to those whose results of operations are included in the
Related Norwegian Businesses Financial Statements. For purposes of this
Section 3.9, the term "indebtedness" shall include indebtedness for money
borrowed (including, current portion of long term debt, long term debt and
short term debt), capitalized leases, guarantees of the indebtedness of third
parties and amounts not drawn on open letters of credit for the benefit of
A.L. Oslo; and shall not include accounts payable, accrued expenses, accrued
and deferred income taxes, other current liabilities or other non-current liabilities.Section 3.10 Employee Plans.
(a) A. L. Oslo has made available to the Company a true and complete
copy of each material deferred compensation, incentive compensation, stock
purchase, stock option, employment, severance, health, life or other
insurance, supplemental unemployment benefits, profit-sharing, or retirement
plan, program, agreement or arrangement, and each other employee benefit
plan, program, agreement or arrangement, sponsored, maintained or contributed
to or required to be contributed to by A.L. Oslo or any of its Subsidiaries
for the benefit of any employee or former employee of A.L. Oslo or any of its
Subsidiaries (the "A.L. Oslo Benefit Plans").
(b) Except as set forth on Schedule 3.10, after the consummation of
the Demerger, neither New A.L. Oslo nor any of its Subsidiaries will have any
material unfunded liabilities (not otherwise set forth on the Opening Related
Norwegian Businesses Balance Sheet) with respect to any A.L. Oslo Benefit Plan.
(c) Neither A.L. Oslo nor any of its Subsidiaries has engaged in a
transaction with respect to any A.L. Oslo Benefit Plan in connection with
which A.L. Oslo or any of its Subsidiaries could be subject to either a civil
penalty assessed pursuant to or a tax imposed pursuant to applicable law.
(d) Each A.L. Oslo Benefit Plan has been operated and administered in
all material respects in accordance with its terms and applicable law. There
are no material pending or, to the best knowledge of the A. L. Oslo,
threatened claims involving any A. L. Oslo Benefit Plan.
(e) Except as provided pursuant to applicable law or in Schedule
3.10(e), no A.L. Oslo Benefit Plan provides benefits, including without
limitation death or medical benefits (whether or not insured), with respect
to current or former employees of A.L. Oslo or any of its Subsidiaries
beyond their retirement or other termination of service.
(f) Except as provided in Schedule 3.10(f), the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current
or former employee or officer of A.L. Oslo or any of its Subsidiaries to
severance pay, unemployment compensation or any other payment or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer.
Sectio
