Exhibit 2
STOCKHOLDERS AGREEMENT
DATED JULY 28, 1995
The parties to this agreement are Schein Pharmaceutical, Inc., a
Delaware corporation (the "Parent"), SM Acquiring Co., Inc., a Delaware
corporation and a subsidiary of the Parent (the "Sub"), and the other parties to
this agreement (each, a "Stockholder", and, collectively, the "Stockholders").
Simultaneously with the execution and delivery of this agreement and
in reliance on the parties entering into this agreement, the Parent, the Sub and
Marsam Pharmaceuticals, Inc., a Delaware corporation (the "Company"), are
entering into an agreement and plan of merger (the "Merger Agreement"), pursuant
to which the Sub will merge into the Company (the "Merger"). Under the Merger
Agreement, the Parent or Sub will commence a cash tender offer to purchase all
the outstanding shares of common stock of the Company (the "Shares").
The parties agree as follows:
1. TENDER OF SHARES. Each Stockholder shall validly tender (and not
withdraw) pursuant to and in accordance with the Offer (as defined in the Merger
Agreement), not later than the tenth business day after commencement of the
Offer pursuant to section 1.1 of the Merger Agreement, the number of shares of
common stock of the Company set forth opposite that Stockholder's name on
schedule 1 (the "Existing Shares") beneficially owned by the Stockholder. Each
Stockholder agrees that the Parent's obligation to accept for payment and pay
for Shares in the Offer is subject to the terms and conditions of the Offer.
The Parent and Sub agree that Shares (as such term is defined in the Merger
Agreement) may not be accepted for payment in the Offer in violation of the
terms of the Merger Agreement. The Stockholders shall have no obligation under
this section 1 after the earliest of (a) the termination, expiration,
abandonment or withdrawal of the Offer, (b) December 30, 1995 and (c) the
termination of the Merger Agreement in accordance with clause (a), (b), (c),
(d), (e) or (h) of section 8.1 of the Merger Agreement. In addition, no
Stockholder shall have any obligation under this section 1 in the event that the
Parent has taken any action with respect to or in connection with the Offer
that, pursuant to the provisions of section 1.1(a) of the Merger Agreement, the
Parent is prohibited from taking without the prior written consent of the
Company, unless such Stockholder has given its written consent to such action.
2. VOTING OF SHARES. At any meeting of stockholders of the Company
or in connection with any written consent of
stockholders of the Company, each Stockholder shall vote (or cause to be voted)
all the Shares beneficially owned by that Stockholder as of the applicable
record date (other than Shares that are not outstanding) (a) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval of the terms of the Merger Agreement; (b) against any action or
agreement that would result in a breach of any agreement of the Company under
the Merger Agreement; and (c) against any other action that could reasonably be
expected to interfere with, delay or otherwise adversely affect the Merger and
the transactions contemplated by the Merger Agreement. The Stockholders shall
have no obligation under this section 2 or under section 8 after the earlier of
(a) December 30, 1995 and (b) the termination of the Merger Agreement in
accordance with its terms. In addition, no Stockholder shall have any
obligation under this section 2 or under section 8 following any decrease in, or
change in the form of, the consideration payable to stockholders of the Company
in the Merger, unless that Stockholder shall have given its consent to the
decrease or change.
3. OPTIONS
(a) Each Stockholder grants the Parent an irrevocable option
(collectively, the "Stock Options") to purchase the number of Shares set forth
opposite that Stockholder's name on schedule 1 (the "Option Shares") at a
purchase price per Share equal to the price per Share payable in the Offer (the
"Purchase Price"). If (a) the Offer is terminated, abandoned or withdrawn by
the Parent or Sub due to the failure of the condition to the Offer set forth in
clause (1) or in sub-clause (C), (D), (F) or (G) of clause (3) of exhibit A to
the Merger Agreement, (b) the Offer is terminated, abandoned or withdrawn by the
Parent or Sub in a circumstance referred to in section 8.1(d) of the Merger
Agreement that involves a suit, action or proceeding by a party that has made an
Acquisition Proposal (as defined in the Merger Agreement) or (c) the Offer is
consummated but the Parent or the Sub has not accepted for payment and paid for
the aggregate number of Shares set forth opposite each Stockholder's name on
schedule 1 and such non-acceptance and non-payment is not in contravention of
the Parent's or Sub's obligations under the Merger Agreement or the Offer, the
Stock Options shall, in each case, become exercisable, in whole but not in part,
upon the first to occur of any such event and remain exercisable in whole but
not in part until 30 days after the date of the occurrence of that event, as
long as: (y) all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") required for the purchase of the Option
Shares upon such exercise shall have expired or been waived, and (z) there shall
not be in effect any injunction or other order issued by any court or
governmental, administrative or regulatory agency or authority prohibiting the
exercise of the Stock Options. If the Parent wishes to exercise
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the Stock Options, the Parent shall send a written notice to the Stockholders
identifying the place and date (not fewer than two nor more than 10 business
days from the date of the notice) for the closing of the purchase.
Notwithstanding the foregoing, if the Parent exercises the Stock Options, (i)
the Parent shall, within 30 calendar days after the date of exercise, offer to
all other stockholders of the Company the opportunity to sell their shares of
common stock of the Company to the Parent on the same terms provided in this
section 3 with respect to the purchase of Shares upon the exercise of Stock
Options, subject only to the conditions set forth in clauses (y) and (z) in this
section 3 and in clause (3)(I) of exhibit A to the Merger Agreement, and (ii) if
the amount of cash or fair value of consideration per share paid in that tender
offer or otherwise (including, without limitation, in a merger) for the
acquisition of Shares by the Parent or any of its affiliates (as defined in
section 3(b)) at any time within 183 days after the purchase of Shares pursuant
to the Stock Options exceeds the amount per Share paid upon the purchase of
Shares pursuant to the Stock Options, the Parent shall promptly pay each
Stockholder an amount equal to the product of that excess and the number of
Shares sold by that Stockholder pursuant to the Stock Options. Anything in this
agreement to the contrary notwithstanding, (i) no Stockholder shall have any
obligation under this section 3(a) if the Stock Options have not been exercised
in accordance with this section 3(a) on or prior to December 30, 1995, and (ii)
no Stock Option may be exercised in respect of the Option Shares of any
Stockholder on or after the date, if any, on which such Stockholder has no
obligation under section 1 of this agreement by reason of the provisions of the
last sentence of section 1 of this agreement.
(b) If the Parent purchases Shares pursuant to the Stock Options,
and, at any time(s) within 183 days after the consummation of the purchase, the
Parent or any of its affiliates (as such term is defined in Rule 405 under the
Securities Act of 1933) sells, exchanges or otherwise disposes of any of those
Shares, or agrees to sell, exchange or otherwise dispose of any of those Shares,
voluntarily or otherwise (including, without limitation, pursuant to a merger),
and if the cash or fair value of the consideration per Share received in
exchange exceeds the Purchase Price, then the Parent shall promptly pay or
deliver an aggregate of 60% of that excess to the respective Stockholders pro
rata in relation to the number of Shares sold by them pursuant to the Stock
Options.
(c) The Parent shall not offer, sell or otherwise dispose of any
Shares purchased pursuant to the Stock Options in violation of applicable
federal or state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder represents and warrants to the Parent as follows:
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(a) OWNERSHIP OF SHARES. That Stockholder is the beneficial owner of
not fewer than the number of Shares set forth opposite that Stockholder's name
on schedule 1. That Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1 and 2, sole
power of disposition, sole power to demand appraisal rights and sole power to
agree to all the matters set forth in this agreement, in each case with respect
to all the Existing Shares set forth opposite that Stockholder's name on
schedule 1. That Stockholder's Existing Shares are held by that Stockholder, or
by a nominee or custodian for the benefit of that Stockholder, free and clear of
all liens, claims, security interests and other encumbrances, except for
encumbrances arising under this agreement.
(b) POWER; BINDING AGREEMENT. That Stockholder has the legal
capacity to enter into and perform all of that Stockholder's obligations under
this agreement. The execution, delivery and performance of this agreement by
that Stockholder will not violate any other agreement to which that Stockholder
is a party, including, without limitation, any voting agreement, stockholders
agreement or voting trust. This agreement has been duly and validly executed
and delivered by that Stockholder and constitutes a valid and binding obligation
of that Stockholder, enforceable against that Stockholder in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and subject to
general principles of equity. There is no other person or entity whose consent
is required for the execution and delivery of this agreement by that Stockholder
or the consummation by that Stockholder of the transactions contemplated by this
agreement. If that Stockholder is married and that Stockholder's Shares
constitute community property, this agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding obligation of, that
Stockholder's spouse, enforceable against that spouse in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and subject to
general principles of equity.
(c) CONSENTS AND APPROVALS; NO VIOLATION. Assuming the compliance by
the Parent with section 3(c), neither the execution and delivery of this
agreement by that Stockholder nor the consummation by that Stockholder of the
transactions contemplated by this agreement will: (i) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except in connection with the HSR Act or
pursuant to the Securities Exchange Act of 1934; (ii) result in a default (or
give rise to a right of termination, cancellation or acceleration) under any of
the terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which that
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Stockholder is a party or by which that Stockholder or any of that Stockholder's
assets may be bound; or (iii) violate any order, writ injunction, decree,
statute, rule or regulation applicable to that Stockholder or by which any of
that Stockholder's assets are bound.
(d) BROKERS. No broker, finder or other investment banker (with the
possible exception of Bear, Stearns & Co. Inc.) is entitled to any broker's,
finder's or other similar fee or commission in connection with this agreement or
the sale of that Stockholder's Option Shares pursuant to this agreement based
upon agreements made by or on behalf of that Stockholder.
5. REPRESENTATIONS AND WARRANTIES OF THE PARENT. The Parent
represents and warrants to the Stockholders as follows:
(a) POWER; BINDING AGREEMENT. The Parent has the corporate power and
authority to enter into and perform all its obligations under this agreement.
The execution, delivery and performance of this agreement by the Parent will not
violate any other agreement to which the Parent is a party. This agreement has
been duly and validly authorized, executed and delivered by the Parent and
constitutes a valid and binding obligation of the Parent, enforceable against
the Parent in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject to general principles of equity. There is no other
person or entity whose consent is required for the execution and delivery of
this agreement by the Parent or the consummation by the Parent of the
transactions contemplated by this agreement.
(b) CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this agreement by the Parent nor the consummation by the Parent of
the transactions contemplated by this agreement will: (i) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except in connection with the HSR Act or
pursuant to the Securities Exchange Act of 1934; (ii) result in a default (or
give rise to a right of termination, cancellation or acceleration) under any of
the terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which the Parent is a party or by which the Parent
or any of its assets may be bound; or (iii) violate any order, writ injunction,
decree, statute, rule or regulation applicable to the Parent or by which any of
its assets are bound.
(c) BROKERS. No broker, finder or other investment banker (other
than Tanner & Co., Inc.) is entitled to any broker's, finder's or other similar
fee or commission in connection with this agreement or the transactions
contemplated
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by this agreement based upon agreements made by or on behalf of the Parent.
6. NO SOLICITATION. Prior to December 31, 1995, no Stockholder
shall, in that Stockholder's capacity as such, directly or indirectly, initiate,
solicit or knowingly encourage (including by way of furnishing non-public
information or assistance), or take any other action knowingly to facilitate,
any inquiries or the making of any proposal that constitutes, or reasonably may
be expected to lead to, an Acquisition Proposal (as defined in the Merger
Agreement), or enter into or maintain or continue discussions or negotiate with
any person or entity in furtherance of such inquiries or to obtain an
Acquisition Proposal, or agree to or endorse an Acquisition Proposal, or
authorize or permit any person or entity acting on behalf of that Stockholder to
do any of the foregoing. If any Stockholder receives any inquiry or proposal
regarding any Acquisition Proposal, that Stockholder shall promptly inform the
Parent of that inquiry or proposal. Anything in this agreement to the contrary
notwithstanding, the sole and exclusive remedy for any nonperformance or breach
by any Stockholder or Stockholders of the provisions of this section 6 shall be
an injunction or injunctions to prevent the breach of this section 6 and/or to
enforce specifically the terms and provisions of this section 6. Without
limiting the generality of the preceding sentence, it is expressly understood
and agreed that monetary damages shall not be awarded for any nonperformance or
breach of this section 6.
7. RESTRICTIONS ON TRANSFER, ETC. Except as provided in this
agreement, prior to the earliest of (a) December 31, 1995, (b) the termination,
abandonment, withdrawal or consummation of the Offer under circumstances other
than those referred to in clause (a), (b) or (c) of the second sentence of
section 3(a) of this agreement or (c) the 30th day after the termination of the
Merger Agreement in accordance with its terms, no Stockholder shall, directly
or indirectly: (i) except for transfers to that Stockholder's family or trusts
for the benefit of that Stockholder's family (provided that the transferee of
the Shares agrees in writing, in form reasonably satisfactory to the Parent, to
be bound by the terms of this agreement), offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter into any
agreement, arrangement or understanding with respect to, or consent to the offer
for sale, transfer, tender, pledge, encumbrance, assignment or other disposition
of, any or all of that Stockholder's Existing Shares or any interest in those
Shares; or (ii) take any action (including the grant of any proxies or powers of
attorney with respect to any Shares, the deposit of any Shares into a voting
trust or the entry into a voting agreement with respect to any Shares) that
would make any representation or warranty of that Stockholder in this agreement
untrue in any material respect or have the effect of preventing or disabling
that Stockholder from performing that Stockholder's obligations under this
agreement.
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8. WAIVER OF APPRAISAL RIGHTS. Each Stockholder waives any rights
of appraisal or rights to dissent from the Merger that Stockholder may have.
9. STOCKHOLDER CAPACITY. No person executing this agreement who is
or becomes during the term of this agreement a director of the Company makes any
agreement in his or her capacity as a director. Each Stockholder is executing
and delivering this agreement solely in that Stockholder's capacity as the
record and beneficial owner of, or the trustee of a trust whose beneficiaries
are the beneficial owners of, that Stockholders' Shares. Notwithstanding
anything to the contrary in this agreement, no action or inaction by a
Stockholder in his capacity as a director of the Company shall be deemed to
contravene section 6, as long as the action or inaction does not contravene
section 6.2 of the Merger Agreement.
10. MISCELLANEOUS
(a) DEFINITION. The terms "beneficially own" and "beneficial
ownership" with respect to any securities shall have the same meaning as in, and
shall be determined in accordance with, Rule 13d-3 under the Securities Exchange
Act of 1934.
(b) LIABILITY AFTER TRANSFER. Each Stockholder agrees that,
notwithstanding any transfer of that Stockholder's Existing Shares in accordance
with section 7, that Stockholder shall remain liable for his or her performance
of all obligations under this agreement.
(c) AMENDMENTS, WAIVERS, ETC. This agreement may not be amended,
changed, supplemented, waived or otherwise modified or, except as otherwise
provided in this agreement, terminated with respect to any party, except upon
the execution and delivery of a written agreement executed by the party to be
charged (it being understood, however, that schedule 1 may be supplemented
unilaterally by the Parent adding the name and other relevant information
concerning any stockholder of the Company who agrees to be bound by this
agreement, and thereafter the added stockholder shall be treated as a
"Stockholder" for all purposes of this agreement).
(d) NOTICES. All notices, requests, claims, demands and other
communications in this agreement shall be in writing and shall be deemed to have
been duly given when delivered in person, by facsimile transmission with
confirmation of receipt or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
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If to a Stockholder: At the address set forth on schedule 1
If to the Parent or Sub: Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, New Jersey 07932
Telecopier: (201) 593-5590
Attention: Mr. Martin Sperber
Chairman and Chief
Executive Officer
copy to: Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Telecopier: (212) 969-2900
Attention: Richard L. Goldberg, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt of notice of the change).
(e) SEVERABILITY. If any provision of this agreement is invalid,
illegal or unenforceable, the invalidity, illegality or unenforceability shall
not affect any other provision.
(f) SPECIFIC PERFORMANCE. Each party agrees that irreparable damage
would occur in the event that any of the provisions of this agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this agreement and to enforce specifically
the terms and provisions of this agreement, this being (except as provided in
section 6) in addition to any other remedy to which they are entitled at law or
in equity.
(g) NO WAIVER. The failure of any party to exercise any right, power
or remedy under this agreement or otherwise available in respect of this
agreement at law or in equity, or to insist upon compliance by any other party
with that party's obligations under this agreement, shall not constitute a
waiver of any right to exercise any such or other right, power or remedy or to
demand such compliance.
(h) GOVERNING LAW. This agreement shall be governed and construed in
accordance with the law of the state of Delaware, regardless of the law that
might otherwise govern under principles of conflicts of laws applicable thereto.
(i) HEADINGS. The headings in this agreement are for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this agreement
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(j) COUNTERPARTS. This agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same agreement.
(k) ENTIRE AGREEMENT. This agreement constitutes the entire
agreement among the parties with respect to its subject matter and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to that subject matter.
SCHEIN PHARMACEUTICAL, INC.
By:
-----------------------------
Name:
Title:
SM ACQUIRING CO., INC.
By:
-----------------------------
Name:
Title:
STOCKHOLDERS:
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SCHEDULE 1
Number of
Name of Stockholder Address for Notices Shares
- ------------------- ------------------- --------
Agvar Chemicals Inc. Agvar Chemicals Inc. 1,322,566
96 Route 23
Little Falls, NJ 07424
ATTN: Agnes Varis
Tel: (201) 256-3232
Fax: (201) 256-6526
Agnes Varis and Agvar Chemicals Inc. 92,500
Karl Leichtman (jointly) 96 Route 23
Little Falls, NJ 07424
ATTN: Agnes Varis
Tel: (201) 256-3232
Fax: (201) 256-6526
Agnes Varis Agvar Chemicals Inc. 5,625
96 Route 23 plus any
Little Falls, NJ 07424 shares issued
ATTN: Agnes Varis upon exercise
Tel: (201) 256-3232 of options
Fax: (201) 256-6526
FOR ALL THREE ABOVE,
WITH A COPY TO:
Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
ATTN: Martin Balsam, Esq.
Tel: (212) 715-9100
Fax: (212) 715-8000
Marvin Samson Marsam Pharmaceuticals Inc. 1,450,441
24 Olney Avenue, Bldg. 31 plus any
Cherry Hill, NJ 08034 shares issued
Tel: (609) 424-5600 upon exercise
Fax: (609) 751-8784 of options
WITH A COPY TO:
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, Pennsylvania
19103-7396
ATTN: Frederick W. Dreher,
Esq.
Fax: (215) 979-1213
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