Document:

exhibit10-1consultagmtallen.htm

 

Exhibit 10.1

 

August 23, 2011

 

 

A. William Allen, III

1300 Dove Street

Suite 105

Newport Beach, CA 92600

 

Dear Bill,

This letter will evidence our agreement pursuant to which you will investigate, evaluate and recommend to OSI investment opportunities in the restaurant business.  You will provide to OSI, as an independent contractor, consulting services to identify, evaluate and recommend acquisition and investment opportunities for OSI in the restaurant business (the “Project”).  Such services will be rendered on a non-exclusive basis and OSI acknowledges that you may be performing comparable services for other companies.  You acknowledge that OSI does not have an exclusivity obligation to you and OSI may engage others to perform services the same as or similar to the Project or may make acquisitions or investments separate from the Project.   In performing these services you will report to me.

The Project will be considered complete when OSI has closed on an acquisition of or investment in a restaurant business identified, evaluated and recommended by you (“Completion of the Project”).   The date of Completion of the Project will be the date of closing of OSI’s acquisition or investment; provided that if OSI is pursuing acquisitions of or investments in more than one such business identified by you, the Completion of the Project will be the date of closing of all such acquisitions or investments.

 

For so long as you are receiving your current fees for serving on the OSI Board, you will not receive any compensation for your consulting services other than, if applicable, the Equity Incentive (defined below).  You will be reimbursed for appropriate expenses with respect to the Project subject to my approval.

 

In the event you are no longer receiving fees for serving on the OSI Board, then you will receive a consulting fee at the rate of $50,000 per calendar quarter, payable in advance, until the earlier of (i) Completion of the Project or (ii) termination of the Project.  The quarterly consulting fee will be pro-rated for the calendar quarter in which Completion of the Project or termination of the Project occurs.

 

 

  

  

  

 

The Project will continue until the earlier of (i) Completion of the Project or (ii) termination of the Project by either party.   Either party will have the right to terminate the Project on ten (10) business days notice.  Notwithstanding any such Completion of the Project or termination, OSI shall remain obligated under the terms of this letter to pay you the Equity Incentive (as defined below) with respect to each acquisition of or investment in a restaurant business identified, evaluated and recommended by you that OSI or its affiliates makes within 12 months of the Completion of the Project or termination.

 

In the event OSI or its affiliates makes an acquisition of or investment in a restaurant business identified, evaluated and recommended by you, you will receive the following (the “Equity Incentive”) with respect to each such acquisition or investment: 10% of the excess of OSI’s Value over OSI’s Investment as of the Valuation Date (defined below) determined as provided below and 10% of the excess of the OSI Interim Unit Value over OSI’s Investment with respect to Interim Units. For purposes of determining the Equity Incentive the term “Interim Units” shall mean restaurants open for business for less than twelve full calendar months as of the Valuation Date.

 

Except as provided below with respect to Interim Units, OSI’s Value shall be determined as of the seventh anniversary of the Completion of the Project for such acquisition or investment (“Valuation Date”).  OSI’s Value shall be equal to the sum of (a) EBITDA of the entire business (excluding the EBITDA of Interim Units) for the twelve full calendar months immediately preceding the Valuation Date multiplied by 7, and then multiplied by a percentage equal to the fully diluted ownership percentage of OSI in the business (such product is referred to as the “Initial OSI Value”), and (b) EBITDA of the Interim Units only  for the twelve full calendar months immediately following the Valuation Date multiplied by 7, and then multiplied by a percentage equal to the fully diluted ownership percentage of OSI in the business as of the first anniversary of the Valuation Date (such product is referred to as the “OSI Interim Unit Value”).  For purposes of clarity, in no event will EBITDA or the Equity Incentive include units that were not open for business on the Valuation Date for such acquisition or investment.

 

For example, if OSI’s fully diluted ownership percentage in the business is 35%; and the EBITDA of the entire business for the 12 full calendar months preceding the Valuation Date is $5,000,000 (assuming no Interim Units) – then OSI’s Value is equal to $12,250,000 ($5,000,000 x 7 x .35). EBITDA of the business shall be determined by OSI using OSI’s standard methodology. EBITDA of the business shall be normalized for any non-recurring events.

 

If prior to the Valuation Date, OSI or its affiliates sells an acquired business or its entire investment, distributes such business or investment by dividend or otherwise, or conducts a public offering of such business, then OSI’s Value shall instead be determined as follows: (i) in the event of a sale, OSI’s Value shall be equal to the net amount received by OSI or its affiliates from such sale, (ii) in the event of a distribution, the appraised fair market value of

 

A. William Allen, III

August 23, 2011

  

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the property distributed to OSI or its affiliates as of the date of such distribution, and (iii) in the event of a public offering, the value of OSI’s or its affiliates’ interest in such business or interest based on the initial public offering price.

 

 OSI’s Investment shall be equal to the total amount of funds OSI has invested in the business, including initial ownership purchase price, subsequent equity purchases, loans and additional capital contributions.  OSI’s Investment shall not include amounts reinvested in the business from the business’s cash flow.  OSI’s investment shall be reduced by the total amount of all dividends and other distributions actually received by OSI from the business.  OSI’s Investment as of the Valuation Date shall not include capital expenditures relating to Interim Units. OSI’s Investment with respect to Interim Units shall include all capital expenditures for Interim Units as of the date of calculation of the value of Interim Units and shall not include any amounts included in determining OSI’s Investment as of the Valuation Date.   If as of the Valuation Date the dividends and other distributions actually received by OSI from the business exceed the amount of OSI’s Investment, then such 10% of such excess shall be added to the Equity Incentive as otherwise calculated herein.

 

The Equity Incentive will be paid to you in cash not later than 90 days after the Valuation Date (or in the case of an event described in clauses (i)-(iii) above, the date of such event), provided, that the Equity Incentive for Interim Units shall be paid in cash not later than 90 days after the first anniversary of the Valuation Date. If, after Completion of the Project, we request you to provide services to the business, you agree to do so on a non-exclusive basis as an independent contractor, without restriction as to services that can be provided to other parties, subject to negotiate of mutually acceptable compensation.

 

You acknowledge and agree that the Equity Incentive is payable only in connection with an OSI acquisition or investment identified, evaluated and recommended by you. No Equity Incentive or other payment or compensation will be due to you as a result of an OSI acquisition or investment that is sourced directly by OSI or from someone other than you.  No Equity Incentive or other payment or compensation will be due to you as a result of an OSI acquisition or investment in any restaurant brand that has engaged an investment banker to contact potential investors seeking investment funds on their behalf.

 

Unless otherwise agreed by OSI in writing, you will limit the Project to restaurant brands with no more than 20 units currently operating.  To avoid any dispute or conflict, you will submit to me in writing, from time to time, those restaurant brands you have, in good faith have identified and are actively evaluating as part of the Project. Similarly, OSI will submit to you in writing, from time to time, those restaurant brands that OSI, in good faith, is evaluating for acquisition or investment that have been sourced directly by OSI or from someone other than you and are therefore not eligible for the Project or the Equity Incentive. Neither party shall submit a restaurant brand to the other unless they are in good faith actively evaluating the brand for acquisition or investment.

 

A. William Allen, III

August 23, 2011

  

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This letter contains our complete agreement and supersedes any prior communications or agreements relating to the subject matter of this letter.  If the above accurately reflects our agreement, please so indicate by signing below and returning the original to me.

 

 

Sincerely,

      /s/ Elizabeth Smith

 

Elizabeth Smith

 

 

Agreed and Accepted:

 

 

/s/ A. William Allen, III______

 

A. William Allen, III

 

 

Date: _8-23-11____________

 

A. William Allen, III

August 23, 2011

 4Converted by EDGARwiz

  EXHIBIT 10.1
 

 VOTING AGREEMENT
 

 This VOTING AGREEMENT (this “Agreement”), dated effective as of August 23, 2011, is entered into by and between CHIH-MING CHEN, PH.D. (the "Holder") as a stockholder of ANCHEN INCORPORATED, a Delaware corporation (the "Company" or "Anchen"), and PAR PHARMACEUTICAL, INC., a Delaware corporation (“Par”). 
 

 WHEREAS, concurrently with the effectiveness of this Agreement, the Company, Holder, Par and ADMIRAL ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary of Par (“Merger Sub”), have entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated the date hereof, pursuant to which Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Par (the "Merger"). 
 

 WHEREAS, the consummation of the Merger and the other transactions contemplated by the Merger Agreement (the "Transaction") are subject to certain conditions, including the approval of the Merger Agreement and the Merger by the holders of at least a majority of the outstanding shares of common stock, par value $0.0001 per share, of Anchen ("Anchen Common Stock").
 

 WHEREAS, Holder, as a stockholder of the Company and as controlling person of the entities identified on Schedule A attached hereto and made a part hereof, is the direct and indirect beneficial owner of 19,973,419 shares of Anchen Common Stock (the "Owned Shares") representing approximately 83.8% of the shares of Anchen Common Stock outstanding as of the date hereof. Such 19,973,419 shares of Anchen Common Stock, together with any other shares of capital stock of Anchen acquired by Holder or the entities identified on Schedule A attached hereto (or any other entity owned or controlled by Holder) after the date hereof and during the term of this Agreement, including as the result of a stock dividend or distribution of voting securities of the Anchen or any change in the capitalization of Anchen by reason of any split-up, recapitalization, combination, exchange of shares or the like, and any voting securities into which or for which any or all of such shares may be changed or exchanged, are collectively referred to herein as the "Shares". 
 

 WHEREAS, as a condition to the willingness of Par to enter into the Merger Agreement, and as an inducement to Par to do so, Holder has agreed for the benefit of Par as set forth in this Agreement. 
 

 NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties hereby agree as follows: 
 

 

 

 
 ARTICLE I
 COVENANTS OF HOLDER
 

 Section 1.1 Agreement to Vote.  Holder shall attend all meetings of the stockholders of Anchen held prior to the Termination Date (as defined in Section 4.4 below), however called, including every reconvened meeting following any adjournment thereof prior to the Termination Date (or, in lieu of any such meeting, shall execute all written consents of the stockholders of the Company prepared prior to the Termination Date) and, at each meeting called for such purpose (or in each such written consent), Holder shall vote the Shares (i) in favor of the approval of the Merger Agreement, the Transaction and any amendment to the Certificate of Incorporation of the Company proposed by management of Par as is necessary to consummate the Transaction, (ii) in favor of authorizing the appropriate officers of the Company to execute any documents and instruments and take any and all actions necessary to consummate the Transaction; and (iii) against any action or agreement submitted for adoption by the stockholders of the Company that, to Holder’s knowledge, relates to any Acquisition Proposal (as defined in the Merger Agreement) other than the Transaction.  Prior to the Termination Date and subject to Section 1.3 below, Holder shall not enter into any agreement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of the Shares in any manner inconsistent with the preceding sentence.  Notwithstanding the foregoing, Holder may vote the Shares at any time in a manner that directs the Company, its officers and/or its directors to terminate the Merger Agreement and the Transaction pursuant to any right or authority granted to the Company in Article X or otherwise in the Merger Agreement to terminate the Agreement and Transaction, or that directs the Company, its officers and/or its directors to exercise any other right or authority granted to, allowed to, or not prohibited as to, the Company under the Merger Agreement.
 

 

 Section 1.2 Proxies. 
 

 (a) Holder hereby revokes any and all previous proxies granted with respect to matters set forth in Section 1.1 for the Shares. 
 

 (b) Prior to the Termination Date, Holder shall not grant any proxies or powers of attorney with respect to matters set forth in Section 1.1, deposit any of the Shares into a voting trust or enter into a voting agreement, with respect to any of the Shares, in each case with respect to such matters. 
 

 Section 1.3 Transfer of Shares by Holder.  Prior to the Termination Date, Holder shall not (a) pledge or place any encumbrance on any Shares, other than pursuant to this Agreement or pursuant to that certain Stock Pledge Agreement made in favor of Anchen and attached hereto as Exhibit A (the “Anchen Pledge”), or (b) transfer, sell, exchange or otherwise dispose of any Shares, in each case unless the pledgee (other than Anchen in connection with the Anchen Pledge), encumbrance holder, transferee, purchaser or acquiror of such Shares enters into a Voting Agreement with Par containing substantially 
 

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 the same terms as this Agreement.  Any attempted transfer, sale, exchange or other disposition in violation of this Section 1.3 shall be null and void.  
 

 Section 1.4 Action in Stockholder Capacity Only. Holder makes no agreement or understanding herein in any capacity other than his capacity as a beneficial owner of the Shares, and nothing herein shall limit or affect any actions taken in any other capacity. 
 

 ARTICLE II
 

 REPRESENTATIONS, WARRANTIES AND ADDITIONAL 
 COVENANTS OF HOLDER
 

  Holder represents, warrants and covenants to Par that: 
 

 Section 2.1 Ownership.  Holder is, as of the date hereof, the beneficial owner (either directly or through his ownership and control of the entities identified on Schedule A attached hereto) of 19,973,419 shares of Anchen Common Stock and has the sole right to vote such shares, and there are no restrictions on rights of disposition or other liens (other than the pledge to Anchen contemplated by the Anchen Pledge) pertaining to such shares. None of such shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of such shares. 
 

 Section 2.2 Authority and Non-Contravention.  Holder has the right, power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by Holder and constitutes a valid and binding obligation of Holder, enforceable against Holder in accordance with its terms, subject to general principles of equity and as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors' rights generally. Neither the execution and delivery of this Agreement by Holder nor the consummation by Holder of the transactions contemplated hereby will (i) violate, or require any consent, approval or notice under, any provision of any judgment, order, decree, statute, law, rule or regulation applicable to Holder or the Shares or (ii) constitute a violation of or default under any contract, commitment, agreement, understanding, arrangement or other restriction of any kind to which Holder is a party or by which Holder or his assets are bound. 
 

 Section 2.3 Total Shares.  Holder does not have any option to purchase or right to subscribe for or otherwise acquire any securities of Anchen and, other than with respect to the Owned Shares, and has no other interest in or voting rights with respect to any other securities of Anchen. 
 

 Section 2.4 Reasonable Efforts.  Prior to the Termination Date, Holder shall use reasonable efforts to cooperate with Anchen and Par to consummate the Transaction. 
 

 Section 2.6 HSR Requirements. If required, Holder hereby agrees promptly to make all filings and take all other actions that are reasonably necessary or desirable in order to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with the Merger. 
 

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 ARTICLE III
 

 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PAR 
 

  
 Par represents, warrants and covenants to Holder that: 
 

 Section 3.1 Authority and Non-Contravention. 
 Par has the right, power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Par and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Par. This Agreement has been duly executed and delivered by Par and constitutes a valid and binding obligation of Par, enforceable against Par in accordance with its terms, subject to general principles of equity and as may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights generally. Neither the execution and delivery of this Agreement nor the consummation by Par of the transactions contemplated hereby will (i) violate, or require any consent, approval or notice under, any provision of any judgment, order, decree, statute, law, rule or regulation applicable to Par or (ii) violate or conflict with the certificate of incorporation or bylaws of Par or constitute a violation of or default under any contract, commitment, agreement, understanding, arrangement or other restriction of any kind to which Par is a party or by which Par or its assets are bound. 
 

 ARTICLE IV
 

 MISCELLANEOUS
 

 Section 4.1 Expenses. 
 All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs or expenses. 
 

 Section 4.2 Further Assurances. 
 From time to time, at the request of Par, in the case of Holder, or at the request of Holder, in the case of Par, and without further consideration, each party shall execute and deliver or cause to be executed and delivered such additional documents and instruments and take all such further action as may be reasonably necessary or desirable to consummate the transactions contemplated by this Agreement. 
 

 Section 4.3 Specific Performance. 
 Holder agrees that Par would be irreparably damaged if for any reason Holder fails to perform any of Holder's obligations under this Agreement, and that Par would not have an adequate remedy at law for money damages in such event. Accordingly, Par shall be entitled to seek specific performance and injunctive and other equitable relief to enforce the performance of this Agreement by Holder. This provision is without prejudice to any other rights that Par may have against Holder for any failure to perform its obligations under this Agreement. 
 

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 Section 4.4 Amendments, Termination. 
 This Agreement may not be modified or amended except by an instrument or instruments in writing signed by each party hereto. The representations, warranties, covenants and agreements of Holder set forth in Article I, Article II and Article III, including the obligation of Holder to vote the Shares in favor of the Merger Agreement, shall terminate, except with respect to liability for prior breaches thereof, upon the earliest to occur of (i) termination of the Merger Agreement in accordance with its terms, and (ii) the Closing under the Merger Agreement (the "Termination Date"). 
 

 Section 4.5 Assignment. 
 Subject to Section 1.3 hereof, neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by either of the parties without the prior written consent of the other party. Subject to the preceding sentence, this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. 
 

 Section 4.6 Certain Events. 
 Holder agrees that this Agreement and the obligations hereunder shall attach to the Shares and shall be binding upon any person to which legal or beneficial ownership of such shares shall pass, whether by operation of law or otherwise. 
 

 Section 4.7 Entire Agreement.
 This Agreement (including the documents referred to herein) (a) constitutes the entire agreement, and supersedes all prior agreements and understanding, both oral and written between the parties with respect to the subject matter of this Agreement and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies. 
 

 Section 4.8 Notices. 
 All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, sent by documented overnight delivery service or telecopied with confirmation of receipt, to the parties at the addresses specified below (or at such other address or telecopy or telex number for a party as shall be specified by like notice):
 

  If to Par to: 
 

 Par Pharmaceutical, Inc.
 One Ram Ridge Road
 Spring Valley, NY 10977
 Attn.: President, Par Pharmaceutical
 Fax:
 

 with a copy (which shall not constitute notice) to:
 

 Par Pharmaceutical, Inc.
 300 Tice Boulevard
 

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 Woodcliff Lake, NJ 07677
 Attn.: General Counsel
 Fax: (201) 802-4600
 

 with a copy to: 
 

 Orrick, Herrington & Sutcliffe LLP
 51 West 52nd Street
 New York, NY 10019
 Attn.: R. King Milling, Jr., Esq. 
 Fax: (212) 506-5151
 

 If to Holder, to:
 

 Dr. Chih-Ming J. Chen, Ph.D.
 c/o TWI Pharmaceuticals, Inc.
 4th Floor, No. 41
 Lane 221, Kang Chien Road
 Nei Hu District
 Taipei 114, Taiwan
 Fax:  886-2-26573595
 

 with a copy (which shall not constitute notice) to:
 John E. Mooney, Esquire
 One Northfield Plaza, Suite 300
 Northfield, Illinois 60093
 Fax:  312-533-4443
 with a copy to: 
 

 Winston & Strawn LLP
 35 W. Wacker Drive
 Chicago, IL 60601
 Attn.: R. Cabell Morris, Jr., Esq. 
 Fax: (312) 558-5700
 

 

 Section 4.9 Governing Law. 
 This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 
 

 Section 4.10 Counterparts. 
 This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, and, shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties in original or facsimile form. 
 

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 Section 4.11 Interpretation. 
 The headings contained in this Agreement are inserted for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 
 

 Section 4.12 Severability. 
 If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) such provision will be fully severable, (b) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by such provision or its severance herefrom and (c) in lieu of such provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such provision as may be possible.
 

 Section 4.13 Consent to Jurisdiction. Each party hereto irrevocably submits to the nonexclusive jurisdiction of (a) the state courts of the State of Delaware and (b) the United States federal district courts located in the State of Delaware for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. 
 

 Section 4.14 Attorney's Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements, in addition to any other relief to which such party may be entitled. 
 

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 IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the parties as of the date first above written. 
 

 

  
 CHIH-MING CHEN, PH.D.  
 

 

 /s/ Chih-Ming Chen, Ph.D.
 

 : 
 

 

 

 PAR PHARMACEUTICAL, INC. 
 

 

 By:/s/  Patrick G. LePore
  
 Name: Patrick G. LePore
 Title:   Chief Executive Officer and
 President
 

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 Schedule A
 

 Chih-Ming Revocable Trust u/a/d October 7, 2005
 

 Delightful Cheers Limited
 

 2004 Anchen Gift Trust, Pauline S. Yip, Trustee
 

 

 9
 

 

 
 Exhibit A
 

 Stock Pledge Agreement
 

 (see attached)
 

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