REG-Zoetis Inc. Zoetis to Acquire Nexvet for US$6.72 in Cash Per Share <Origin Href="QuoteRef">ZTS.N</Origin> - Part 7

ZoetisAnnouncement

13/04/2017 14:30

- Part 7: For the preceding part double click  ID:nBw2hg9DYf 

Agreement shall therefore be brought in the courts of Ireland.

(c) Each of the Parties hereto hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
Action (whether at law, in equity, in contract, in tort or otherwise) arising
out of, or in any way relating to, this Agreement, any of the Transactions or
the performance of services thereunder or related thereto.

10.15 Non-Survival of Representations and Warranties

None of the representations and warranties in this Agreement shall survive the
Effective Time or the termination of this Agreement.

IN WITNESS WHEREOF, the Parties have entered into this Agreement on the date
specified above.

Schedule 1

TARGET CONDUCT

At all times from the execution of this Agreement until the earlier of the
Effective Time and the date, if any, on which the Agreement is terminated
pursuant to Clause 9, except as may be required by applicable Law, or as
expressly contemplated or expressly permitted elsewhere in this Agreement or
in Part B of the Target Disclosure Letter, or as expressly agreed to in
writing by Zoetis (Zoetis acting reasonably at all times and such agreement
not to be unreasonably withheld, conditioned or delayed), Target undertakes to
and covenants with Zoetis that it:

1. shall, and shall procure that its Subsidiaries shall, take all actions
described in Section 1 of Part B of the Disclosure Letter;

2. shall not, and shall procure that its Subsidiaries shall not, authorise or
pay any dividends on or make any distribution with respect to the outstanding
shares in its capital (whether in cash, assets, shares or other securities of
any member of the Target Group);

3. shall not, and shall procure that its Subsidiaries shall not, split,
combine or reclassify any of its shares of capital in issue, or issue or
authorise the issuance of any other securities in respect of, in lieu of or in
substitution for, shares in its capital;

4. shall not, and shall procure that its Subsidiaries shall not:

(a) except pursuant to any pre-existing contractual obligations owed to any
Target Associate, increase the compensation (including bonus and equity
opportunities), severance or termination pay, modify the benefits payable or
provided to any Target Associate or former employee, independent contractor or
director of or to any member of the Target Group, other than to the extent
required by the terms of a Target Benefit Plan or applicable Law; provided
that, in respect of short-term incentive compensation for the year ending June
30, 2017, Target will limit its cash bonus pool to US$970,000;

(b) hire any individual or terminate the employment or service of any
individual (whether as an Executive Officer, employee, independent contractor
or consultant), in each case, other than in the ordinary course of business
consistent with past practice;

(c) enter into any employment, consulting, change of control, severance or
retention agreement or arrangement with any Target Associate or former
employee, independent contractor, consultant or director of or to any member
of the Target Group, other than amounts required to be paid under applicable
Law or an existing Target Benefit Plan;

(d) establish, adopt, enter into, amend or terminate any Target Benefit Plan
or any other plan, trust, fund, policy or arrangement for the benefit of any
Target Associate or former employee, independent contractor, consultant or
director of or to any member of the Target Group or any of their
beneficiaries, except as required to comply with applicable Law;

(e) fund any rabbi trust or similar arrangement or otherwise take any action
to fund or in any other way secure the payment of compensation or benefits
under any Target Benefit Plan or other plan, policy, agreement or arrangement,
except as required by applicable Law or an existing Target Benefit Plan;

(f) exercise any discretion to pay or accelerate the vesting or payment of, or
otherwise increase or accelerate other rights or benefits with respect to, any
compensation or benefit under any Target Benefit Plan or other plan, policy,
agreement or arrangement, except as required by applicable Law or an existing
Target Benefit Plan; or

(g) change any actuarial assumptions used to calculate the funding obligations
with respect to any Target Benefit Plan or change the manner in which
contributions to such plans are made or the basis on which such contributions
are determined, except as may be required by US GAAP or applicable Law or any
Target Benefit Plan in effect as of the date hereof);

5. shall not, and shall not permit any of its Subsidiaries to, make any change
in financial accounting policies or procedures or any of its methods of
reporting income, deductions or other material items for financial accounting
purposes, except as required by a change in US GAAP, applicable Law or SEC
policy;

6. shall not, and shall not permit any of its Subsidiaries to, authorise or
announce an intention to authorise, or enter into agreements with respect to,
any acquisitions of an equity interest in any joint venture arrangement, or
acquisitions of an equity interest in or a substantial portion of the assets
of any person or any business or division thereof, or any mergers,
consolidations or business combinations (for the purpose of this paragraph 6,
each such event an “Investment”), other than (i) as expressly permitted
by Clause 5.2 of the Agreement, or (ii) in respect of any Investment which
relates to a minority investment by any member of the Target Group, for
consideration of not more than US$150,000 for each Investment (so long as it
is an Investment which results in Target’s and its Subsidiaries’ ownership
being less than 20% of the equity interests of the invested entity and Target
cannot consolidate such entity for financial reporting or tax purposes) and
limited to no more than five such Investments;

7. shall not amend the Articles of Association or any other Organisational
Documents and shall not permit any of its Subsidiaries to adopt any material
amendments to its Organisational Documents;

8. shall not, and shall procure that its Subsidiaries shall not, enter into
any Contract (other than (a) amendments to Contracts in the ordinary course
of business, (b) any standard terms and conditions or amendments thereto, or
(c) Contracts in connection with Target’s planned clinical studies for
ranevetmab or frunevetmab) that would be a Material Contract if such Contract
had been entered into prior to the date hereof (and where agreement to effect
any of the matters set out in this paragraph 8 is sought from Zoetis, Zoetis
shall have 72 hours from receipt of any written request from Target to respond
in writing to such request, failing which Zoetis shall be deemed to have
agreed to such action);

9. shall not, and shall not permit any of its Subsidiaries to, issue, deliver,
grant, sell, pledge, dispose of or encumber, or authorise the issuance,
delivery, grant, sale, pledge, disposition or encumbrance of, any shares in
its capital, voting securities or other equity interest in any member of the
Target Group or any securities convertible into or exchangeable for any such
shares, voting securities or equity interest, or any rights, restricted share
units, warrants or options to acquire any such shares in its capital, voting
securities or equity interest or any “phantom” stock, “phantom” stock
rights, stock units, stock appreciation rights or stock based performance
units or take any action to cause to be exercisable any otherwise
un-exercisable Target Convertible Security (except as otherwise provided by
the express terms of any Target Convertible Securities outstanding on the date
hereof);

10. shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, purchase, redeem or otherwise acquire any shares in its capital or
any rights, warrants or options to acquire any such shares in its capital,
other than in relation to the valid exercise of any Target Convertible
Security or as otherwise may be agreed with Zoetis;

11. shall not, and shall not permit any of its Subsidiaries to, redeem,
repurchase, prepay (other than prepayments of revolving loans), defease,
incur, assume, endorse, guarantee or otherwise become liable for or modify in
any material respects the terms of any Indebtedness for borrowed money or
issue or sell any debt securities or calls, options, warrants or other rights
to acquire any debt securities (directly, contingently or otherwise), provided
that the foregoing shall not prohibit Target and its Subsidiaries from making
guarantees or obtaining letters of credit or surety bonds for the benefit of
commercial counterparties in the ordinary course of business consistent with
past practices;

12. shall not, and shall not permit any of its Subsidiaries to, acquire,
lease, license or otherwise obtain any of its material properties or assets,
or to sell, lease, exclusively license, transfer, exchange, swap or otherwise
dispose of, or subject to any Encumbrance (other than Permitted Encumbrances),
any of its material properties or assets, other than:

(a) dispositions of inventory or equipment in the ordinary course of business;

(b) non-exclusive Intellectual Property licences in connection with product
development, publishing or brand licensing for the benefit of Target, or
exclusive Intellectual Property licences in connection with brand licences, in
each case in the ordinary course of business consistent with past practices;

(c) for transactions among Target and its wholly-owned Subsidiaries or among
its wholly-owned Subsidiaries in the ordinary course of business consistent
with past practices; or

(d) for transactions (excluding transactions for the purchase or sale of
Intellectual Property) in the ordinary course of business consistent with past
practice involving less than US$250,000 individually or in the aggregate;

13. shall not, and shall procure that its Subsidiaries shall not, enter into a
new line of business that is material to the Target Group;

14. shall not, and shall procure that its Subsidiaries shall not, (A) other
than in the ordinary course of business consistent with past practice, enter
into any Contract pursuant to which any member of the Target Group grants to
any other Person any non-competition, “most-favoured nation”, exclusive
marketing or other exclusive rights (other than exclusive brand licences, and
non-solicitation agreements with respect to employees) of any type or scope,
or that otherwise restricts or purports on its face to restrict in a material
respect any member of the Target Group from engaging or competing in any
material line of business in any location; or (B) enter into any Contract
that, upon completion of the Acquisition, would restrict or purport on its
face to restrict Zoetis or any of its Subsidiaries (including any member of
the Target Group) from engaging or competing in any line of business in any
location;

15. shall not, and shall procure that its Subsidiaries shall not, adopt,
approve or implement any “poison pill” or similar rights plan or related
agreement;

16. shall not, and shall procure that its Subsidiaries shall not, announce,
implement or effect any reduction in labour force, lay-off, early retirement
program, severance program or other program or effort concerning the
termination of employment of Target Associates, other than, to the extent
permitted by Section 3.2, routine employee terminations in the ordinary
course of business consistent with past practices;

17. shall not, and shall procure that its Subsidiaries shall not, engage in
any merger;

18. shall not, and shall not permit any of its Subsidiaries to, compromise or
settle any material claim, litigation, investigation or proceeding, in each
case made or pending against any member of the Target Group or any of their
officers and directors in their capacities as such, other than the compromise
or settlement of claims, litigation, investigations or proceedings where any
such compromise or settlement results in the actual expense to be incurred
being no greater, individually or in the aggregate, than US$150,000; and does
not impose any injunctive relief or otherwise limit any action or inaction
other than the payment of monetary relief as set forth in this paragraph 18 by
Target and its Subsidiaries;

19. shall not, and shall not permit any of its Subsidiaries to, (i) make,
change or revoke any material Tax election, change any annual Tax accounting
period or method of Tax accounting unless in each case required by applicable
Law, (ii) settle or compromise any corporate income tax audit or proceeding
relating to a material amount of Taxes, or material claim for refund, or enter
into any closing or similar agreement with any Tax Authority other than
entering into the process for claiming tax credits in the ordinary course
consistent with past practice, or (iii) make, change or revoke any Tax
election which results in any modification of the pass through or transparency
status, or lack thereof, of any entity in any jurisdiction, and where such
agreement to effect any of the matters set out in this paragraph 19 is sought
from Zoetis, Zoetis will have 72 hours from receipt of any written request
from Target to respond in writing to such request, failing which Zoetis will
be deemed to have agreed to such action;

20. shall not, and shall not permit any of its Subsidiaries to, make any new
capital expenditure, or commit to do so, except as permitted, in excess of
US$250,000 in aggregate;

21. shall not, and shall not permit any of its Subsidiaries to, alter any
intercompany arrangements or agreements or the ownership structure among
Target and its wholly-owned Subsidiaries or among Target’s wholly-owned
Subsidiaries;

22. to the extent permitted by applicable Law, shall, and shall procure that
its Subsidiaries shall, upon request by Zoetis reasonably in advance, provide
Zoetis with reasonable access, during normal business hours and where not
unduly disruptive to Target’s business, to the Target Group’s personnel,
assets, properties, offices and other facilities, and books and records, and
shall furnish Zoetis and Zoetis’ Representatives with such financial,
operating and other information as reasonably requested by Zoetis which is not
subject to legal privilege, any confidentiality or non-disclosure provisions
in favour of a third party or in relation to any Target Alternative Proposal;

23. shall, and shall procure that its Subsidiaries shall, perform obligations
under all Material Contracts;

24. shall not, and shall not permit any of its Subsidiaries to, adopt a plan
of complete or partial liquidation, dissolution, restructuring,
recapitalisation or other reorganization of Target or its Subsidiaries;

25. shall, and shall procure that its Subsidiaries shall, promptly notify
Zoetis orally and in writing: upon an Executive Officer becoming actually
aware: (i) that any representation or warranty made by it in this Agreement
has become untrue or inaccurate in any material respect, or of any failure by
Target to comply in any material respect with any material covenant or
condition of this Agreement required to be complied with by it pursuant to
this Agreement; and (ii) of any material Action commenced against Target or
any of its Subsidiaries; it being acknowledged and agreed by each of the
Parties that one or more breaches of this paragraph 25 shall not permit Zoetis
to terminate this Agreement or constitute a failure of any Condition unless
the cumulative effect of such matters not disclosed would have or would
reasonably be expected have a material adverse effect on the Target Group; and

26. shall, provide Zoetis as soon as reasonably practicable after receipt or
delivery thereof, copies of all written correspondence and any other written
material exchanged between any member of the Target Group (or any of their
respective Representatives) and any Governmental Body.

Nothing contained in this Agreement shall give Zoetis or Zoetis Bidco,
directly or indirectly, the right to control or direct the Target Group
operations prior to the Effective Date.

Schedule 2

SEVERANCE FORMULA

Australia

a) Where a Target Employee’s employment is terminated by reason of
redundancy, then the following severance entitlements shall apply as set out
in the Fair Work Act 2009 (Cth) Section 119 (2).
 Redundancy pay period                                                                     
     Employee's period of continuous service with the employer on   Redundancy pay period  
          termination                                                                      
 1   At least 1 year but less than 2 years                          4 weeks                
 2   At least 2 years but less than 3 years                         6 weeks                
 3   At least 3 years but less than 4 years                         7 weeks                
 4   At least 4 years but less than 5 years                         8 weeks                
 5   At least 5 years but less than 6 years                         10 weeks               
 6   At least 6 years but less than 7 years                         11 weeks               
 7   At least 7 years but less than 8 years                         13 weeks               
 8   At least 8 years but less than 9 years                         14 weeks               
 9   At least 9 years but less than 10 years                        16 weeks               
 10  At least 10 years                                              12 weeks               


Severance pay is payable on the Target Employee’s base salary

b) Long Service leave in accordance with the Victorian (Australia) Long
Service Leave Act (Vic) 1992

c) All accrued annual leave will be payable at the then current base salary
rate.

d) Notice period and other benefits in accordance with Target Employee
employment contract.

Ireland

a) Where a Target Employee’s employment is terminated by reason of
redundancy, then the following severance entitlements shall apply in
accordance with the Irish Redundancy Payments Act 1967.

An employee with 104 weeks (two years) continuous service will be eligible for
two weeks’ base pay for each year of service (with a weeks’ pay being
capped at EUR€600.00 gross).

b) All accrued Annual Leave will be payable at the then current base rate.

c) Notice period and other benefits in accordance with Target Employee’s
employment contract.

United States

Where a Target Employee’s employment is involuntary termination then the
following entitlements shall apply.

a) Notice period and other benefits in accordance with Target Employee’s
employment contract.

b) All accrued Paid Time Off will be payable at the then current base salary
rate.

Outplacement Program

Prior to the Effective Date the Target Group provides an Outplacement Program
to terminated Target Employees as part of the severance benefit.

Schedule 3

RULE 2.5 ANNOUNCEMENT

Zoetis Inc.

By:

Name: Juan Ramón Alaix

Title: Chief Executive Officer

[Transaction Agreement - Signature Page]

On behalf of Zoetis Belgium S.A.

By: _____________________________

Name: Roman Trawicki

Title: Director

[Transaction Agreement - Signature Page]
                                                                
 
                                
                             
                                                                
 
                                
                             
 Signed by ____________________                                 
 
                                
                             
 Duly authorised on behalf of                                   
 
                                
                             
 NEXVET BIOPHARMA PUBLIC                                        
 
                                
                             
 LIMITED COMPANY                                                
                                  
                             
                                  ___________________________   
                                  
                             
                                  Director                      


[Transaction Agreement - Signature Page]

Media Contacts Zoetis and Zoetis Bidco Elinore White, +1 973 443 2835
elinore.y.white@zoetis.com (mailto:elinore.y.white@zoetis.com) Bill Price, +1
973 443 2742 william.price@zoetis.com (mailto:william.price@zoetis.com) or
Nexvet Mark Heffernan, +1 415 602 5587 mark.heffernan@nexvet.com
(mailto:mark.heffernan@nexvet.com) Damian Lismore, +61 417 351 272
damian.lismore@nexvet.com (mailto:damian.lismore@nexvet.com) or Investor
Contacts Zoetis and Zoetis Bidco Steve Frank, +1 973 822 7141
steve.frank@zoetis.com (mailto:steve.frank@zoetis.com) or Nexvet Mark
Heffernan, +1 415 602 5587 mark.heffernan@nexvet.com
(mailto:mark.heffernan@nexvet.com) Damian Lismore, +61 417 351 272
damian.lismore@nexvet.com (mailto:damian.lismore@nexvet.com) or Financial
Adviser Contacts Zoetis and Zoetis Bidco Goldman Sachs Nick Harper, +44 20
7774 1000 Jo Natauri, +1 212 902 1000 or Nexvet Evercore John Honts, +1 212
857 3100 Simon Elliott, +44 20 7653 6000 or Cowen and Company George Milstein,
+1 415 646 7394 Michael Campbell, +1 415 646 7262





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