REG-Zoetis Inc. Zoetis to Acquire Nexvet for US$6.72 in Cash Per Share <Origin Href="QuoteRef">ZTS.N</Origin> - Part 4

ZoetisAnnouncement

13/04/2017 14:30

- Part 4: For the preceding part double click  ID:nBw2hg9DYc 

of the Proxy
Statement comprising the scheme document), including any amendments or
supplements thereto, to be distributed as part of the Proxy Statement to
Target Shareholders and, for information only, to holders of the Target
Convertible Securities, containing:

(a) the Scheme;

(b) the notice or notices of the Scheme Meeting and the EGM;

(c) an explanatory statement as required by Section 452 of the Act with
respect to the Scheme;

(d) such other information as may be necessary or appropriate pursuant to the
Act, the Exchange Act or the Takeover Rules; and

(e) such other information as Target and Zoetis shall agree, each acting
reasonably;

“Scheme Meeting” means the meeting or meetings of the Target Shareholders
or, if applicable, any class or classes of Target Shareholders (including, but
not limited to, as may be directed by the High Court pursuant to
Section 450(5) of the Act) (and any adjournment of any such meeting or
meetings) convened by (i) resolution of the Target Board or (ii) order of
the High Court, in either case pursuant to Section 450 of the Act, to
consider and vote on the Scheme Meeting Resolution;

“Scheme Meeting Resolution” means the resolution to be considered and
voted on at the Scheme Meeting proposing that the Scheme, with or without
amendment (but subject to such amendment being acceptable to each of Target
and Zoetis, except for a technical or procedural amendment which is required
for the proper implementation of the Scheme and does not have a substantive
consequence on the implementation of the Scheme), be agreed to;

“Scheme Recommendation” means the unanimous recommendation of the Target
Board that Target Shareholders vote in favour of the Resolutions;

“SEC” means the United States Securities and Exchange Commission;

“Securities Act” means the United States Securities Act of 1933, as
amended;

“Software” means all computer software, programs and code, including
assemblers, applets, compilers, source code, object code, executable code, net
lists, development tools, design tools, user interfaces and data, databases in
any form or format, however fixed, and all related documentation;

“Study” has the meaning given to that term in Clause 6.1(p)(i);

“Study Materials” has the meaning given to that term in Clause 6.1(p)(v);

“Subsidiary” means in relation to any person, any corporation,
partnership, association, trust or other form of legal entity of which such
person directly or indirectly owns securities or other equity interests
representing more than 50% of the aggregate voting power;

“Superior Proposal Notice” has the meaning given to that term in
Clause 5.2(e);

“Takeover Offer” means an offer in accordance with Clause 3.7 for the
entire issued and to be issued ordinary share capital of Target (other than
any Target Shares beneficially owned by any member of Zoetis Group (if any)),
including any amendment or revision thereto pursuant to this Agreement, the
full terms of which would be set out in the Takeover Offer Documents or (as
the case may be) any revised offer document(s);

“Takeover Offer Documents” means if following the date hereof, Zoetis
elects to implement the Acquisition by way of Takeover Offer in accordance
with Clause 3.7, the documents to be despatched to Target Shareholders and
others by Zoetis Bidco containing, amongst other things, the Takeover Offer,
the Conditions (save insofar as not appropriate in the case of a Takeover
Offer, and as amended in such manner as Zoetis and Target shall determine, and
the Panel shall agree, to be necessary to reflect the terms of the Takeover
Offer) and certain information about Zoetis, Zoetis Bidco and Target and,
where the context so admits, includes any form of acceptance, election, notice
or other document reasonably required in connection with the Takeover Offer;

“Takeover Panel Act” means the Irish Takeover Panel Act 1997, as amended;

“Takeover Rules” means the Irish Takeover Panel Act 1997, Takeover Rules,
2013;

“Target” has the meaning given to that term in the introduction of this
Agreement;

“Target 2012 Plan” means the Nexvet Employee Share Plan governed by the
Employee Share Plan dated August 29, 2012 adopted by the board of directors of
Nexvet Biopharma Pty Limited on August 29, 2012;

“Target 2013 Australian Plan” means the Nexvet Long Term Incentive Plan
governed by the Long Term Incentive Plan Rules dated November 5, 2013 and
adopted by board of directors of Nexvet Biopharma Pty Limited on October 30,
2013;

“Target 2013 Plan” means the Nexvet Long Term Incentive Plan governed by
the Long Term Incentive Plan Rules dated September 4, 2014 and adopted by the
Target Board on September 18, 2014;

“Target 2015 Plan” means the Nexvet Biopharma Public Limited Company 2015
Equity Incentive Plan as adopted by the Target Board on October 14, 2014, as
amended by the Target Board on January 16, 2015 and as further amended by the
Compensation Committee (as defined therein) on September 2, 2015;

“Target 401(k) Plans” has the meaning given to that term in Clause 7.3(f);

“Target Alternative Proposal” means any bona fide proposal or bona fide
offer, which proposal or offer may be subject to due diligence, definitive
documentation or both, made by any person (other than a proposal or offer
pursuant to Rule 2.5 of the Takeover Rules by Zoetis or any of its Concert
Parties) for:

(a) a merger, reorganisation, share exchange, consolidation, business
combination, recapitalisation, dissolution, liquidation or similar transaction
involving Target that, if consummated, would result in any Person beneficially
owning shares with more than 20% of the voting power of Target;

(b) the direct or indirect acquisition by any Person of more than 20% of the
value of the assets of the Target Group, taken as a whole; or

(c) the direct or indirect acquisition by any Person of more than 20% of the
voting power or the issued share capital of Target, including any offer or
exchange offer that if consummated would result in any Person beneficially
owning shares with more than 20% of the voting power of Target;

“Target Associate” means any current employee, independent contractor,
consultant or director of or to any member of the Target Group;

“Target Benefit Plans” means any Benefit Plan (i) to which Target or any
of its Subsidiaries is a party, (ii) sponsored, maintained or contributed to,
or required to be maintained or contributed to by Target or any of its
Subsidiaries or (iii) with respect to which Target or any of its Subsidiaries
has or could reasonably be expected to have any obligation or liability; for
the avoidance of doubt, any Benefit Plan sponsored or maintained by Paychex,
pursuant to the Paychex Agreement, in which any current or former employee of
the Target Group or such employee’s dependents or beneficiaries participates
(such a Benefit Plan, a “Paychex Plan”) shall be a Target Benefit Plan;

“Target Board” means the board of directors of Target from time to time
and for the time being;

“Target Change of Recommendation” has the meaning given to that term in
Clause 5.2(d)(ii);

“Target Convertible Securities” means all issued and outstanding
securities (including, but not limited to, all options, restricted share
units, warrants and/or other convertible securities issued pursuant the Target
Plans) which are convertible, exchangeable or exercisable into Target Shares;

“Target Disclosure Letter” means the disclosure letter delivered by Target
to Zoetis on the date hereof;

“Target Employee” means an employee of any member of the Target Group who
remains employed after the Effective Time;

“Target Group” means Target and all of its Subsidiaries;

“Target Intellectual Property” has the meaning given to that term in
Clause 6.1(m)(i);

“Target Options” means options to purchase Target Shares granted pursuant
to the Buyback Options, the Target 2013 Plan or the Target 2015 Plan;

“Target Plans” means the Target 2012 Plan, the Buyback Options, the Target
2013 Australian Plan, the Target 2013 Plan and the Target 2015 Plan;

“Target Products” means any product or service made, marketed, sold,
licensed or in development by any member of the Target Group;

“Target RSUs” means restricted share units granted pursuant to the Target
2013 Plan or the Target 2015 Plan;

“Target SEC Documents” means all forms, documents and reports (including
exhibits and other information incorporated therein) filed or furnished by
Target with the SEC;

“Target Shares” means the existing unconditionally allotted or issued and
fully paid ordinary shares with a nominal value of US$ 0.125 each in the
capital of Target and any further such shares which are unconditionally
allotted or issued before the date on which the Scheme is effective;

“Target Shareholders” means the holders of the Target Shares;

“Target Shareholder Approval” means:

(a) the approval of the Scheme Meeting Resolution by a majority in number of
Target Shareholders representing at least 75% or more in value of Target
Shares held by such Target Shareholders, present and voting either in person
or by proxy, at the requisite Scheme Meeting (or at any adjournment of such
meeting); and

(b) the EGM Resolutions being duly passed by the requisite majorities of
Target Shareholders present and voting either in person or by proxy at the EGM
(or at any adjournment of such meeting);

“Target Superior Proposal” means a written bona fide Target Alternative
Proposal (where each reference to 20% set forth in the definition of such term
shall be deemed to refer to 50%, but provided that such Target Alternative
Proposal may not be subject to due diligence or definitive documentation
(other than the execution thereof)) that the Target Board determines in good
faith (after consultation with Target’s financial advisers and outside legal
counsel) is more favourable to the Target Shareholders than the Transactions,
taking into account such financial, regulatory, legal, structuring, timing and
other aspects of such proposal as the Target Board considers to be
appropriate;

“Tax” (or “Taxes” and, with correlative meaning, the term
“Taxable”) means all national, federal, state, local or other taxes
imposed by the United States, Ireland, and any other Governmental Body or Tax
Authority, including income, gain, profits, windfall profits, franchise, gross
receipts, environmental, customs duty, capital stock, severances, stamp,
payroll, universal social charge, pay related social insurance and other
similar contributions, sales, employment, unemployment, disability, use,
property, gift tax, inheritance tax, unclaimed property, escheat, withholding,
excise, production, value added, goods and services, trading, occupancy and
other taxes, duties or assessments of any nature whatsoever, or state aid
related thereto, together with all interest, penalties, surcharges and
additions imposed with respect to such amounts and any interest in respect of
such penalties and additions, whether disputed or not, and any liability in
respect of any of the foregoing items payable by reason of contract,
assumption, transferee or successor liability;

“Tax Authority” means any Governmental Body responsible for the
assessment, collection or enforcement of laws relating to Taxes or for making
any decision or ruling on any matter relating to Tax (including the US
Internal Revenue Service and the Irish Revenue Commissioners);

“Tax Return” means any return (including any information return), report,
statement, declaration, estimate, schedule, or information, including any
amendments thereof, filed with, or required to be filed with, any Tax
Authority in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration, implementation or
enforcement of or compliance with any Law relating to any Tax;

“Trade Secrets” mean any information in all forms and types of financial,
business, scientific, technical, economic, or engineering information,
including patterns, plans, compilations, program, devices, formulas, designs,
prototypes, methods, techniques, processes, procedures, programs, algorithm
used in research, developments, products, design, and the use thereof, or
codes, whether tangible or intangible, and whether or how stored, compiled, or
memorialised physically, electronically, graphically, photographically, or in
writing, that derives its value in part because it is not generally known by
others and that is the subject of reasonable efforts to maintain its secrecy;

“Transactions” means the transactions contemplated by this Agreement,
including the Acquisition;

“UK” means the United Kingdom of Great Britain and Northern Ireland;

“US$”, “$” or “USD” means United States dollars, the lawful
currency of the United States of America;

“US” or “United States” means the United States, its territories and
possessions, any State of the United States and the District of Columbia, and
all other areas subject to its jurisdiction;

“USDA” means the United States Department of Agriculture;

“US GAAP” means US generally accepted accounting principles;

“WARN Act” means collectively, the United States Worker Adjustment and
Retraining Notification Act and its regulations and any other similar Laws;

“Warrants” means all warrants which are currently in issue and which give,
or potentially give, the right to any person to subscribe for (or otherwise
acquire or call for delivery of) Target Shares and which were issued pursuant
to the Target Warrant terms of issue (specifying an exercise price of
US$8.625), the first Target Warrant terms of issue (specifying an exercise
price of US$7.50) or the second Target Warrant terms of issue (specifying an
exercise price of US$7.50), in each case, as amended by the First Amendment to
Warrant Terms of Issue dated September 3, 2015, where applicable;

“Zoetis” has the meaning given to that term in the introduction of this
Agreement;

“Zoetis Board” means the board of directors of Zoetis;

“Zoetis Confidentiality Agreement” means the confidentiality agreement
between Target and Zoetis dated February 22, 2017 and as it may be further
amended in writing by Zoetis and Target from time to time;

“Zoetis Group” means collectively, Zoetis and all of its Subsidiaries,
including Zoetis Bidco; and

“€” means the lawful currency of Ireland.

1.2 Construction

(a) In this Agreement, words such as “hereunder”, “hereto”,
“hereby”, “hereof” and “herein” and other words of similar meaning
when used in this Agreement shall, unless the context clearly indicates to the
contrary, refer to the whole of this Agreement and not to any particular
section or clause thereof.

(b) In this Agreement, save as otherwise provided herein, any reference herein
to a section, clause, schedule or paragraph shall be a reference to a section,
subsection, clause, sub-clause, paragraph or sub-paragraph (as the case may
be) of this Agreement.

(c) In this Agreement, any reference to any provision of any legislation shall
include any amendment, modification, re-enactment or extension thereof and
shall also include any subordinate legislation made from time to time under
such provision, and any reference to any provision of any legislation, unless
the context clearly indicates to the contrary, shall be a reference to
legislation of Ireland.

(d) In this Agreement, the masculine gender shall include the feminine and
neuter and the singular number shall include the plural and vice versa.

(e) In this Agreement, the term “officers” shall be construed to mean
corporate officers and executive officers.

(f) In this Agreement, any phrase introduced by the terms “including”,
“include”, “in particular” or any similar expression shall be
construed as illustrative and shall not limit the sense of the words preceding
those terms.

(g) In this Agreement, any agreement or instrument defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified or
supplemented, including by waiver or consent, and all attachments thereto and
instruments incorporated therein.

(h) In this Agreement, the phrase “all reasonable endeavours” and words of
similar import shall not be construed to mean that a Party must take, or
procure the taking of, any action that would be commercially unreasonable
under the circumstances.

1.3 Captions

The table of contents and the headings or captions to the clauses in this
Agreement are inserted for convenience of reference only and shall not affect
the interpretation or construction thereof.

1.4 Time

References to times are to US Eastern times unless otherwise specified.

2. Rule 2.5 Announcement and Scheme Document

2.1 Rule 2.5 Announcement

(a) Each Party confirms that its respective board of directors (or a duly
authorised committee or management team acting under the authority thereof)
has approved the contents and release of the Rule 2.5 Announcement.

(b) On the execution of this Agreement, the Parties shall, in accordance with,
and for the purposes of, the Takeover Rules, procure the release of the
Rule 2.5 Announcement to a Regulatory Information Service by no earlier than
5:00 a.m. and no later than 5:00 p.m. on April 13, 2017, or such later time on
that date as may be agreed between the Parties in writing.

(c) The obligations of the Parties under this Agreement, other than the
obligations under Clause 2.1(b), shall be conditional on the release of the
Rule 2.5 Announcement to a Regulatory Information Service in accordance with
clause 2.1(b).

(d) Target confirms that, as of the date hereof, the Target Board unanimously
considers that the terms of the Scheme as contemplated by this Agreement are
fair and reasonable to the Target Shareholders and that the Target Board has
unanimously resolved to recommend to the Target Shareholders that they vote in
favour of the Resolutions. The unanimous recommendation of the Target Board
that the Target Shareholders vote in favour of the Resolutions, and the
related opinion of the financial advisers to the Target Board, are set out in
the Rule 2.5 Announcement and, subject to Clause 5.2, shall be incorporated
in the Scheme Document and the Proxy Statement, and, to the extent required by
the Takeover Rules, in any other document sent to Target Shareholders in
connection with the Acquisition.

(e) The Conditions are hereby incorporated in, and shall constitute a part of,
this Agreement.

2.2 Scheme

(a) Target agrees that it shall put the Scheme to the Target Shareholders in
the manner set out in Clause 3 and, subject to the satisfaction or waiver
(where permissible pursuant to the provisions of the Rule 2.5 Announcement
and/or the Scheme Document) of the Conditions (with the exception of
Conditions 2(c) and 2(d) and any other Conditions that by their nature are to
be satisfied on the Sanction Date, but subject to the satisfaction or waiver
(where permissible pursuant to the provisions of the Rule 2.5 Announcement
and/or the Scheme Document) of such Conditions), shall, in the manner set out
in Clause 3, petition the High Court to sanction the Scheme so as to
facilitate the implementation of the Acquisition.

(b) Each of the Zoetis Parties agrees, subject to Clause 3.6, that it shall
participate in the Scheme and agrees to be bound by its terms and that it
shall, subject to the satisfaction or waiver (where permissible pursuant to
the provisions of the Rule 2.5 Announcement and/or the Scheme Document) of the
Conditions, effect the Acquisition through the Scheme on the terms set out in
this Agreement and the Scheme.

(c) Each of the Parties agrees that it shall fully and promptly perform all of
the obligations required of it in respect of the Acquisition on the terms set
out in this Agreement and/or the Scheme and each shall, subject to the terms
and conditions of this Agreement, use all reasonable endeavours (including by
causing its controlled Concert Parties to, and using all reasonable endeavours
to cause its Representatives and non-controlled Concert Parties) to act in a
manner consistent with the terms of this Agreement pertinent to such Party and
take such other steps as are reasonably required for the proper implementation
of the Scheme and in connection with Completion.

3. Implementation of the Scheme

3.1 Preparation of Proxy Statement

As soon as reasonably practicable, but in any event within 28 days following
the date hereof, Target shall, with the assistance and approval (not to be
unreasonably withheld or delayed) of Zoetis prepare and file with the SEC a
proxy statement, which shall include the Scheme Document (as may be amended or
supplemented, the “Proxy Statement”), relating to the matters to be
submitted to the Target Shareholders at the Scheme Meeting and the EGM. Target
shall use all reasonable endeavours to resolve all SEC comments and have the
Proxy Statement cleared by the SEC as promptly as is reasonably practicable
following filing with the SEC and to mail the Proxy Statement to its
shareholders as promptly as is reasonably practicable after such clearance, to
the extent required by applicable Law. Target shall, as promptly as is
reasonably practicable after receipt thereof, provide Zoetis with copies of
any written comments and advise Zoetis of any oral comments with respect to
the Proxy Statement received from the SEC. Each Party shall cooperate and
Target shall provide Zoetis with a reasonable opportunity (which shall not be
less than two Business Days from receipt of written notice from Target) to
review and comment on any amendment or supplement to the Proxy Statement prior
to filing such with the SEC, which comments shall be reasonably considered by
Target, and Target will provide Zoetis with a copy of all such filings made
with the SEC (to the extent not otherwise made publicly available). Target
will advise Zoetis, promptly after it receives notice thereof, of SEC
clearance of the Proxy Statement. If, at any time prior to the Effective Time,
an amendment or supplement to the Proxy Statement is necessary so that such
documents would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, Target shall
promptly notify Zoetis and, to the extent required by Law an appropriate
amendment or supplement describing such information shall be promptly filed
with the SEC and, to the extent required by Law, disseminated to the Target
Shareholders. To the extent that clearance of the Proxy Statement by the SEC
might require that waivers and/or derogations in respect of the Takeover Rules
be sought and obtained from the Panel, following discussion with Zoetis,
Target shall make a submission for such waiver or derogation at the earliest
opportunity after having provided Zoetis with a reasonable opportunity to
review and comment on such submission, which comments shall be reasonably
considered and accommodated by Target.

3.2 Responsibilities of Target in respect of the Scheme

Target shall:

(a) be responsible for the preparation of the Scheme Document (subject to
Clause 3.3(f)) and all other documentation necessary to effect the Scheme and
to convene the Scheme Meeting and the EGM and Target shall provide Zoetis with
drafts of the Scheme Document and such other documents and afford Zoetis
reasonable opportunities (which shall not be less than two Business Days from
receipt of written notice from Target) to review and make comments on the
Scheme Document and such other documents and shall give due consideration to
and where reasonable accommodate such comments and subject to the foregoing
provisions, unless otherwise agreed by the Panel, Target shall cause the
Scheme Document to be delivered to the Panel at least ten Business Days before
the Scheme Documents are considered by the High Court in accordance with
Rule 41.1(b) of the Takeover Rules;

(b) for the purpose of implementing the Scheme, instruct a barrister (of
senior counsel standing, the identity of whom shall be reasonably acceptable
to Zoetis) and provide Zoetis and its advisers with the opportunity to attend
any meetings with such barrister to discuss substantive matters pertaining to
the Scheme and any issues arising in connection with it (except to the extent
that the barrister is to advise on matters relating to the fiduciary duties of
the directors of Target or their responsibilities under the Takeover Rules);

(c) as promptly as is reasonably practicable after the Proxy Statement is
filed with the SEC, or, if the Proxy Statement is reviewed and commented upon
by the SEC, after the filing of the first amendment to the preliminary Proxy
Statement with the SEC, Target shall cause the Proxy Statement to be delivered
to the Panel;

(d) notify Zoetis as promptly as is reasonably practicable in writing upon the
receipt of any comments from the Panel on, or any request from the Panel for
amendments or supplements to, the Scheme Document and the related forms of
proxy to be so filed or furnished;

(e) prior to filing or despatch of any amendment or supplement to the Scheme
Document requested by the Panel, or responding in writing to any comments of
the Panel with respect thereto, Target shall:

(i) as promptly as is reasonably practicable provide Zoetis with a reasonable
opportunity to review and comment on such document or response; and

(ii) as promptly as is reasonably practicable discuss with Zoetis and include
in such document or response all comments reasonably proposed by Zoetis as
promptly as is reasonably practicable to the extent that such comments are
required in order to ensure that such document is consistent with the
Rule 2.5 Announcement;

(f) provide Zoetis with drafts of pleadings, affidavits, petitions and other
filings prepared by Target for submission to the High Court in connection with
the Scheme prior to their filing or submission, and afford Zoetis reasonable
opportunities to review and make comments on all such documents, and shall
give due consideration to and where reasonable accommodate such comments prior
to any such filing or submission;

(g) as promptly as is reasonably practicable (taking into account any
requirements of the Panel with respect to the Scheme Document and the
clearance process of the SEC with respect to the Proxy Statement, that must be
satisfied prior to the release of the Scheme Document) make all necessary
applications to the High Court in connection with the implementation of the
Scheme where so resolved by the Target Board or required to implement the
Scheme and in particular Target will promptly after the date of the Rule 2.5
Announcement issue appropriate proceedings requesting the High Court to give
directions under Section 450(5) of the Act as to what are the appropriate
Scheme Meetings to be held and to order that the Scheme Meeting be convened as
promptly as is reasonably practicable following the publication of the
Rule 2.5 Announcement and clearance of the Proxy Statement by the SEC, and
use all reasonable endeavours so as to ensure that the hearing of such
proceedings occurs as promptly as is reasonably practicable in order to
facilitate the despatch of the Scheme Document as promptly as is reasonably
practicable after such hearing and seek such directions of the High Court as
it (or Zoetis) considers necessary or desirable to facilitate the convening of
such Scheme Meeting and thereafter comply with such directions;

(h) procure the publication of the requisite advertisements and posting of the
Scheme Document (in a form acceptable to the Panel) and the forms of proxy for
the use at the Scheme Meeting and the EGM (the forms of which shall be agreed
between the Parties) to Target Shareholders on the register of members of
Target (and, for information purposes only, the holders of Target Convertible
Securities) on the record date as agreed with the High Court, as promptly as
is reasonably practicable after the approval of the High Court to despatch the
documents being obtained and thereafter shall publish and/or post such other
documents and information (the form of which shall be agreed between the
Parties) as the High Court and/or the Panel may approve or direct from time to
time in connection with the implementation of the Scheme in accordance with
applicable Law as promptly as is reasonably practicable after the approval or
(as the case may be) direction of the High Court and/or the Panel to publish
or post such documents being obtained;

(i) unless the Target Board has effected a Target Change of Recommendation
pursuant to Clause 5.2, procure that the Scheme Document and the Proxy
Statement shall include the Scheme Recommendation;

(j) include in the Scheme Document a notice convening the EGM to be held
immediately following the Scheme Meeting to consider and, if thought fit,
approve the EGM Resolutions;

(k) keep Zoetis informed on a daily basis, from the date falling 14 days
before the Scheme Meeting and the EGM, of the number of proxy votes received
in respect of the Resolutions;

(l) keep Zoetis reasonably informed and, as reasonably requested by Zoetis,
consult with Zoetis, as to the performance of the obligations and
responsibilities required of Target pursuant to this Agreement and/or the
Scheme and as to any material developments (other than as to a Target
Alternative Proposal, the timing and scope of provision of information about
which are governed by Clause 5.2) relevant to the proper implementation of
the Scheme, including the satisfaction of the Conditions;

(m) notwithstanding any Target Change of Recommendation, unless this Agreement
has been terminated pursuant to Clause 9, hold the Scheme Meeting and the EGM
on the date set out in the Scheme Document, or such later date as may be
agreed in writing between the Parties (such agreements not to be unreasonably
withheld, conditioned or delayed), and in such a manner as shall be approved,
if necessary, by the High Court and/or the Panel and propose the Resolutions
without any amendments, unless such amendments have been agreed to in writing
with Zoetis, such agreement not to be unreasonably withheld, conditioned or
delayed;

(n) afford all such cooperation and assistance as may reasonably be requested
of it by Zoetis in respect of the preparation and verification of any document
or in connection with any Clearance or confirmation reasonably required for
the implementation of the Scheme, including the provision to Zoetis of such
information and confirmation relating to it, its Subsidiaries and any of its
or their respective directors or employees as Zoetis may reasonably request
(and shall do so in a reasonably timely manner) and assume responsibility only
for the information relating to it contained in the Scheme Document, the Proxy
Statement or any other document sent to Target Shareholders or filed with the
High Court or in any announcement;

(o) review and provide comments (if any) in a reasonably timely manner on all
documentation submitted to it;

(p) following the Scheme Meeting and EGM, provided that the Resolutions are
duly passed (including by the requisite majorities required under Section 453
of the Act in the case of the Scheme Meeting) and all other Conditions are
satisfied or waived (where permissible pursuant to the provisions of the Rule
2.5 Announcement and/or the Scheme Document (with the exception of
Conditions 2(c) and 2(d) and any other Conditions that by their nature are to
be satisfied on the Sanction Date, but subject to the satisfaction or waiver
(where permissible pursuant to the provisions of the Rule 2.5 Announcement
and/or the Scheme Document) of such Conditions), take all necessary steps on
the part of Target to prepare and issue, serve and lodge all such court
documents as are required to seek the sanction of the High Court to the Scheme
as soon as possible thereafter;

(q) take all such steps as may reasonably be required to cause any
dispositions of Target Shares (including derivative securities with respect to
Target Shares) resulting from the Scheme by each member of the Target Board or
Executive Officer subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to Target immediately prior to the Effective
Time to be exempt under Rule 16b-3 promulgated under the Exchange Act; and

(r) give such undertakings as are required by the High Court as are reasonably
necessary for the proper implementation of the Scheme.

3.3 Responsibilities of Zoetis and Zoetis Bidco in Respect of the Scheme

Zoetis and Zoetis Bidco shall:

(a) instruct counsel to appear on its behalf at the Court Hearing and
undertake to the High Court to be bound by the terms of the Scheme insofar as
it relates to Zoetis or Zoetis Bidco;

(b) if, and to the extent that, it or any of its Concert Parties owns or is
interested in Target Shares, exercise all rights, and, insofar as lies within
its powers, procure that each of its Concert Parties shall exercise all
rights, in respect of such Target Shares so as to implement, and otherwise
support the implementation of, the Scheme, including by voting (and, in
respect of interests in Target held via contracts for difference or other
derivative instruments, insofar as lies with its powers, procuring that
instructions are given to the holder of the underlying Target Shares to vote)
in favour of the Resolutions or, if required by Law, the High Court, the
Takeover Rules or other rules, refraining from voting, at any Scheme Meeting
and/or EGM as the case may be;

(c) procure that the other members of the Zoetis Group and, so far as lies
within its power or procurement, their Representatives, use reasonable
endeavours to take all such steps as are reasonably necessary in order to
implement the Scheme including the giving by Zoetis Bidco to the High Court of
any customary undertakings which the High Court requires Zoetis Bidco to give
to it;

(d) keep Target reasonably informed and, as reasonably requested by Target,
consult with Target, as to the performance of the obligations and
responsibilities required of Zoetis and/or Zoetis Bidco pursuant to this
Agreement and/or the Scheme and as to any material developments relevant to
the proper implementation of the Scheme, including the satisfaction of the
Conditions;

(e) afford (and shall use all reasonable endeavours to procure that its
Concert Parties shall afford) all such cooperation and assistance as may
reasonably be requested of it by Target in respect of the preparation and
verification of any document or in connection with any Clearance or
confirmation required for the implementation of the Scheme, including the
provision to Target of such information and confirmation relating to it, its
Subsidiaries and any of its or their respective directors or employees as
Target may reasonably request (and shall do so in a reasonably timely manner)
and assume responsibility only for the information relating to it contained in
the Scheme Document, the Proxy Statement or any other document sent to Target
Shareholders or filed with the High Court or in any announcement;

(f) review and provide comments (if any) in a reasonably timely manner on all
documentation submitted to it; and

(g) provide Target, in a reasonably prompt manner, with such information
regarding the Zoetis Group that may reasonably be required for inclusion in
the Scheme Document or the Proxy Statement and provide such other assistance
as Target may reasonably require in connection with the preparation of the
Scheme Document or the Proxy Statement.

3.4 Mutual Responsibilities of the Parties

(a) If any of the Parties becomes aware of any information that, pursuant to
the Takeover Rules, the Act or the Exchange Act should be disclosed in an
amendment or supplement to the Scheme Document or the Proxy Statement, or that
is required to be included therein in order that the information therein shall
not contain an 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 not false or misleading at the time and in light of the
circumstances under which such statements are made, then the Party becoming so
aware shall promptly inform the other Party thereof and the Parties shall
cooperate with each other in submitting or filing such amendment or supplement
with the Panel, and, if required, the SEC and/or the High Court and, if
required, in mailing such amendment or supplement to the Target Shareholders
and, for information only, if required, to the holders of Target Convertible
Securities.

(b) Each Party shall take, or cause to be taken, such other steps as are
reasonably required of it for the proper implementation of the Scheme,
including those required of it pursuant to Clause 8 in connection with
Completion.

(c) Each Party shall, as promptly as is reasonably practicable, notify the
other of any matter of which it becomes aware which would reasonably be
expected to materially delay or prevent filing of the Scheme Document, the
Scheme or the Acquisition as the case may be.

3.5 Dealings with the Panel

(a) Each of the Parties shall promptly provide such assistance and information
as may reasonably be requested by the other Party for the purposes of, or in
connection with, any correspondence or discussions with the Panel in
connection with the Acquisition and/or the Scheme.

(b) Save in each case where not reasonably practicable owing to time
restraints imposed by the Panel or where prohibited by the Panel, each of the
Parties shall give the other reasonable prior notice of any proposed meeting
or material substantive discussion or correspondence between it or its
Representatives with the Panel, or amendment to be proposed to the Scheme in
connection therewith, and shall afford the other reasonable opportunities to
review and make comments and suggestions with respect to the same and
accommodate such comments and suggestions to the extent that such Party,
acting reasonably, considers these to be appropriate, and shall keep the other
reasonably informed of all such meetings, discussions or correspondence that
it or its Representative(s) have with the Panel and not participate in any
meeting or discussion with the Panel concerning this Agreement or the
Transactions unless it consults with the other Party in advance, and, unless
prohibited by the Panel, gives such other Party the opportunity to attend such
meetings and provide advance copies of all written submissions it intends to
make to the Panel and afford the other reasonable opportunities to review and
make comments and suggestions with respect to the same and give due
consideration to and where reasonable accommodate such comments and
suggestions to the extent that such Party, acting reasonably, considers these
to be appropriate, copies of the submissions made and copies (or, where oral,
an oral or written summary of the substance) of the Panel responses thereto,
provided always that any correspondence or other information required to be
provided under this Clause 3.5(b) may be redacted:

(i) by either party, to remove references concerning the valuation of the
business of Target;

(ii) by Zoetis, to remove references to its strategic rationale for the
Acquisition;

(iii) by Zoetis, in connection to a switch to a Takeover Offer;

(iv) as necessary to comply with legal or contractual obligations; and

(v) as necessary to address reasonable privilege or confidentiality concerns
(provided that the redacting party shall use its reasonable endeavours to
cause such information to be provided in a manner that would not result is
such privilege or confidentiality concerns).

(c) Target undertakes, if so requested by Zoetis, to issue as promptly as is
reasonably practicable its written consent to Zoetis and to the Panel in
respect of any application made by Zoetis to the Panel:

(i) seeking confirmation that there is no requirement under the Takeover Rules
to disclose Zoetis’ financing arrangements for the Acquisition and related
transactions (the “Zoetis Financing Information”) in the Scheme Document,
any supplemental document or other document sent to Target Shareholders, the
holders of Target Convertible Securities or, alternatively, seeking a waiver
of or derogation from such requirement;

(ii) to redact any commercially sensitive or confidential information specific
to the Zoetis Financing Information from any documents that Zoetis is required
to display pursuant to Rule 26(b)(xi) of the Takeover Rules; and

(iii) requesting a derogation from the disclosure requirements of Rule 24.3
of the Takeover Rules and seeking consent to the aggregation of dealings for
the purposes of disclosure in the Scheme Document.

(d) Target and Zoetis undertake, if so requested by the other Party, to issue
as promptly as is reasonably practicable its written consent to the other
Party and to the Panel in respect of any application made by Target or Zoetis,
as applicable, to the Panel:

(i) requesting a derogation from the timing requirement pursuant to Rule 30.2
of the Takeover Rules in connection with the despatch of the Scheme Document
or the Takeover Offer Document to Target Shareholders and the despatch of the
Rule 15 Proposals to the holders of Target Convertible Securities, in each
case where compliance with such timing requirement will not be possible within
the 28 day period after the date of the Rule 2.5 announcement; and

(ii) requesting consent under Rule 21.1 of the Takeover Rules to permit the
issuance of Target Shares and implementation of any associated matters
(including the grant of equity awards) in connection with the matters
contemplated by paragraph 4 of Schedule 1 and/or as set out in Clause
3.5(d)(ii) of Part A of the Target Disclosure Letter;

(iii) requesting a derogation from the disclosure requirements of Rule 25.3
of the Takeover Rules and seeking consent to the aggregation of dealings for
the purposes of disclosure in the Scheme Document or the Takeover Offer
Document.

(e) Notwithstanding anything to the contrary in the foregoing provisions of
this Clause 3.5, neither Target nor Zoetis shall be required to take any
action pursuant to such provisions if (i) such action is prohibited by the
Panel or (ii) such action relates to a matter involving a person who has made
a Target Alternative Proposal (or any Affiliate, or person Acting in Concert
with such a Person), or (iii) Target has provided to Zoetis a Final
Recommendation Change Notice.

(f) Nothing in this Agreement shall in any way limit the Parties’
obligations under the Takeover Rules.

3.6 No Scheme Amendment by Target

Save as required by Law, the High Court and/or the Panel, Target shall not, in
each case, after despatch of the Scheme Document without the prior written
consent of Zoetis:

(a) amend the Scheme;

(b) adjourn, cancel or postpone the Scheme Meeting or the EGM; provided,
however, that Target may, without the consent of Zoetis, adjourn, cancel or
postpone the Scheme Meeting or the EGM:

(i) in the case of adjournment, if directed by Target Shareholders to do so
pursuant to Article 89 of the Articles of Association (other than pursuant to
a proposal by Target or any of its directors or officers), or

(ii) to permit dissemination of information which is material to shareholders
voting at the Scheme Meeting or the EGM, but only for so long as the Target
Board determines in good faith, after having consulted with outside counsel,
that such action is reasonably necessary or advisable to give Target
Shareholders sufficient time to evaluate any such disclosure or information so
provided or disseminated; or

(iii) if, as of the time for which the Scheme Meeting or the EGM is scheduled
(as set forth in the Scheme Document), there are insufficient Target Shares
represented (either in person or by proxy) (i) to constitute a quorum
necessary to conduct the business of the Scheme Meeting or the EGM, but only
until a meeting can be held at which there are a sufficient number of Target
Shares represented to constitute a quorum or (ii) voting for the approval of
the Scheme Meeting Resolution or the EGM Resolutions, as applicable (but only
until Target determines in good faith that a meeting can be held at which
there are a sufficient number of votes of holders of Target Shares to approve
the Scheme Meeting Resolution or the EGM Resolutions, as applicable); or

(c) amend the Resolutions (in each case, in the form set out in the Scheme
Document).

3.7 Switching to a Takeover Offer

(a) Zoetis may elect (with the Panel’s consent, if required) to implement
the Acquisition by way of a Takeover Offer (rather than the Scheme), whether
or not the Scheme Document has been posted, subject to the terms of this
Clause 3.7, and Zoetis shall notify Target promptly of any such election
(whether or not the implementation thereof is subject to the consent of the
Panel) made by it to implement the Acquisition by way of a Takeover Offer
(rather than the Scheme).

(b) Save where there has been a Target Change of Recommendation, if Zoetis
elects to implement the Acquisition by way of a Takeover Offer, Target
undertakes to provide Zoetis as promptly as is reasonably practicable with all
such information about Target (including directors and their Concert Parties)
as may be reasonably required for inclusion in the Takeover Offer Documents
and to provide all such other assistance as may be reasonably required by the
Takeover Rules in connection with the preparation by Zoetis or Zoetis Bidco of
the Takeover Offer Documents, including access to, and ensuring the provision
of reasonable assistance by, Target’s Representatives.

(c) If Zoetis elects to implement the Acquisition by way of a Takeover Offer,
Target agrees:

(i) that the Takeover Offer Documents shall contain provisions in accordance
with the terms and conditions set out in the Rule 2.5 Announcement, the
relevant Conditions and such other further terms and conditions as agreed
(including any modification thereto) between Zoetis and Target; provided,
however, that the terms and conditions of the Takeover Offer shall be at least
as favourable to the Target Shareholders (except for the 80% acceptance
condition, which may be waived down to “50% plus one Target Share” by
Zoetis);

(ii) to co-operate and consult with Zoetis in the preparation by Zoetis of the
Takeover Offer Documents or any other document or filing which is required for
the purposes of implementing the Acquisition; and

(iii) unless the Target Board has effected a Target Change of Recommendation
pursuant to Clause 5.2, to incorporate in the Rule 2.5 Announcement and the
Takeover Offer Documents a recommendation to the holders of Target Shares from
the Target Board to accept the Takeover Offer, and such recommendation shall
not be withdrawn, adversely modified or qualified except as contemplated by
Clause 5.2.

(d) If Zoetis elects to implement the Acquisition by way of the Takeover Offer
in accordance with Clause 3.7(a), the Parties mutually agree:

(i) to prepare and file with, or submit to, the SEC and, to the extent
necessary, the Panel and the High Court, all documents, amendments and
supplements required to be filed therewith or submitted thereto pursuant to
the Takeover Rules, the Securities Act or the Exchange Act or otherwise
required by Law, and to make any applications or initiate any appearances that
may be required by or desirable to the High Court for the purpose of
discontinuance of High Court proceedings initiated in connection with the
Scheme, and each Party shall have reasonable opportunities to review and
comment on all such documents, amendments and supplements and, following
reasonable accommodation of such comments and approval of such documents,
amendments and supplements by the other Party, which shall not be unreasonably
withheld, conditioned or delayed, file or submit, as the case may be, such
documents, amendments and supplements with or to the SEC;

(ii) to promptly use all reasonable endeavours to discontinue any High Court
proceedings relating to the Scheme including, but not limited to, ensuring:
(i) the cancellation or indefinite postponement (as the case may be) of the
Scheme Meeting before it is commenced; and (ii) that the Scheme Resolution is
not put to a vote of the Target Shareholders;

(iii) to provide the other Party with any comments received from the SEC on
any documents filed by it with or furnished by it to the SEC as promptly as is
reasonably practicable after receipt thereof; and

(iv) to the extent reasonably practicable, to provide the other Party with
reasonable prior notice of any proposed oral communication with the SEC and
afford the other Party reasonable opportunity to participate therein.

(e) If the Takeover Offer is consummated, Zoetis shall or shall cause Zoetis
Bidco to, use reasonable endeavours to effect as promptly as is reasonably
practicable a compulsory acquisition of any Target Shares under Section 457
of the Act not acquired in the Takeover Offer for the same consideration per
share as under the Takeover Offer.

(f) For the avoidance of doubt and except as may be required by the Takeover
Rules (and without limiting any other provision of this Agreement), nothing in
this Agreement (save as provided in Clause 5.2) shall require Target to
provide Zoetis with any information with respect to, or to otherwise take or
fail to take any action in connection with Target’s consideration of or
response to, any Target Alternative Proposal.

4. Rule 15 Proposals

4.1 Making of Rule 15 Proposals

The Rule 15 Proposals will be made jointly by Zoetis and Target, by a letter
or letters to be issued no later than five Business Days after the issuance of
the Scheme Document, to all the holders of the Target Convertible Securities
on the following basis:

(a) Target shall do everything necessary (except with respect to the Warrants)
to procure that with effect from the Effective Time:

(i) all Target Plans shall be terminated by Target and/or any of its
Affiliates;

(ii) all Target Convertible Securities, whether vested or unvested, that are
outstanding and unexercised as of immediately prior to the Effective Time
shall, at the Effective Time, automatically (and without any action on the
part of any holder thereof) be cancelled and terminated and shall no longer be
exercisable for or convertible into Target Shares except that:

(A) if the exercise or conversion price per ordinary share of any Target
Convertible Security (whether or not vested) that is outstanding as of
immediately prior to the Effective Time is less than the Consideration, it
shall be converted into the right of the holder thereof to receive the Rule 15
Consideration set forth in Clause 4.1(b) less such taxes, levies and/or
withholding as are required to be made by Law if any and as applicable, upon
the terms and subject to the conditions set forth in this Agreement; and

(B) if the exercise or conversion price per ordinary share of any Target
Convertible Security (whether or not vested) that is outstanding as of
immediately prior to the Effective Time is equal to or exceeds the
Consideration, such Target Convertible Security shall be cancelled as of the
Effective Time without the payment of any amount or other consideration in
respect thereof.

(b) For each Target ordinary share issuable upon exercise or conversion of a
Target Convertible Security, the Rule 15 Consideration shall be the
Consideration less the exercise or option price payable by or on behalf of the
holder for the purpose of exercising or converting such Target Convertible
Security.

(c) Zoetis may cause Target, after the Effective Date, to deliver the Rule 15
Consideration to the applicable former holder of Target Convertible Securities
via Target’s payroll system where doing so is necessary to ensure the
payment of all taxes, levies and/or withholding as are required to be made by
Law;

(d) Subject only to the payment of the Rule 15 Consideration, neither Zoetis
nor any of its Affiliates shall be required:

(i) to replace, assume or adopt any Target Plan;

(ii) to replace, assume or adopt any Target Convertible Securities, whether
vested or unvested, in connection with the Transactions.

(e) Prior to the Effective Time, Target shall take all necessary actions,
including obtaining appropriate resolutions of the Target Board (or applicable
committee thereof), providing all notices, obtaining any necessary consents
(except as to the Warrants), and taking all other actions necessary or
desirable to effect the termination of the Target Plans and all Target
Convertible Securities (except as to the Warrants) outstanding thereunder and
to provide for and give effect to the provisions of Clause 4, which notices,
resolutions, consents and other written materials shall be subject to the
review and approval of Zoetis, who shall be provided a reasonable opportunity
for such review and approval, which shall not be unreasonably withheld,
conditioned or delayed.

4.2 Amendments to Rule 15 Proposals

Neither Party shall amend the Rule 15 Proposals without the consent of the
other Party (such consent not to be unreasonably withheld, conditioned or
delayed).

4.3 Amendment of Articles

Target shall procure that a resolution is put to the Target Shareholders at
the EGM proposing that the Articles of Association be amended so that any
Target Shares allotted and issued following the EGM will either be subject to
the terms of the Scheme or will be acquired by Zoetis Bidco for the same
consideration per Target Share as shall be payable to Target Shareholders by
Zoetis Bidco under the Scheme on the basis that such consideration shall
become payable in respect of each Target Share within fourteen calendar days
following the allotment of such Target Shares. Target shall not allot and
issue any Target Shares between the voting record time for the EGM and the EGM
or, other than pursuant to options or other awards that are fully exercisable
under the terms of the Target Plans or the Warrants, between the Court Hearing
Record Time and the Effective Time.

5. Target and Zoetis Conduct

5.1 Conduct of Business by Target

(a) At all times from the execution of this Agreement until the earlier of the
Effective Time and the date, if any, on which this Agreement is terminated
pursuant to Clause 9, except as may be required by Law, or as required or
expressly permitted by this Agreement, or with the prior written consent of
Zoetis, Target shall, and shall cause each of its Subsidiaries to, conduct its
business in the ordinary course of business consistent with past practice in
all material respects.

(b) Target covenants with Zoetis in the manner set forth in Schedule 1.

5.2 Non-Solicitation

(a) Subject to any actions which Target is required to take so as to comply
with the requirements of the Takeover Rules, Target agrees that neither it nor
any member of the Target Group shall, and that it shall use all reasonable
endeavours to cause its and their respective Representatives and any Concert
Party of Target not to, directly or indirectly:

(i) solicit, initiate, facilitate or encourage any enquiry with respect to, or
the making or submission of, any Target Alternative Proposal or any proposal
which would reasonably be expected to lead to a Target Alternative Proposal;

(ii) participate in any discussions or negotiations regarding a Target
Alternative Proposal with, or, save as required by Law, furnish any non-public
information regarding Target to, any person that has made or, to the Knowledge
of Target, is considering making a Target Alternative Proposal, except to
notify such person as to the existence of this Section 5.2; or

(iii) expressly waive, terminate, amend or modify any provision of any
“standstill” or similar obligation of any person with respect to any
member of the Target Group; provided that Target shall not be (i) prohibited
from permitting any person to make a Target Alternative Proposal privately to
the Target Board or (ii) required to take, or be prohibited from taking, any
action otherwise prohibited or required by this sub-Clause (iii) if the
Target Board determines, in good faith (after consultation with its outside
legal counsel), that failure to take such action or permit such inaction would
be inconsistent with the directors’ fiduciary duties under applicable Law.

Target shall, and shall cause its Subsidiaries and its and their respective
Representatives and shall use all reasonable endeavours to cause its and their
Concert Parties to, immediately cease and cause to be terminated all existing
discussions or negotiations with any person conducted heretofore with respect
to any Target Alternative Proposal, or any enquiry or proposal that may
reasonably be expected to lead to a Target Alternative Proposal, request the
prompt return or destruction of all confidential information previously
furnished in connection therewith and immediately terminate all physical and
electronic data room access previously granted to any such person or its
Representatives. Target shall be responsible for any act done by one of its
Concert Parties which, if done by Target, would constitute a breach of the
foregoing provisions of this Clause 5.2(a).

(b) Notwithstanding the limitations set forth in Clause 5.2(a), if Target
receives a written Target Alternative Proposal which did not or does not
result from a knowing or intentional breach of Clause 5.2(a), Target may take
any or all of the following actions:

(i) contact the person who makes such Target Alternative Proposal to
understand the terms and conditions thereof;

(ii) furnish non-public information to the third party (and any persons Acting
in Concert with such third party and to their respective potential financing
sources and Representatives) making such Target Alternative Proposal (provided
that all such information has previously been provided to Zoetis or is
provided to Zoetis concurrently with the time it is provided to such
person(s)), if, and only if, prior to so furnishing such information, Target
receives from the third party an executed confidentiality agreement, or as of
the date hereof such third party is party to such a confidentiality agreement,
containing terms no less restrictive on such third party than the terms in the
Zoetis Confidentiality Agreement are restrictive on Zoetis; provided, however,
that if such confidentiality agreement is executed after the date hereof, such
confidentiality agreement shall permit Target to disclose all information
contemplated by Clause 5.2(c) to Zoetis); and

(iii) engage in discussions or negotiations with the third party (and such
other persons) with respect to such Target Alternative Proposal;

provided that Target shall not be permitted to take the action set forth in
sub-clauses 5.2(b)(ii) or 5.2(b)(iii) unless the Target Board has
determined in good faith (after consultation with Target’s financial
advisers and outside legal counsel) that such Target Alternative Proposal is,
or would reasonably be expected to lead to, a Target Superior Proposal.

(c) Target shall promptly (and in any event within 24 hours of receipt of any
Target Alternative Proposal) notify Zoetis of the receipt of any 

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